As filed with the Securities and Exchange Commission
on April 30, 1999
Registration No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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)
------------------------
THE CAPITOL MUTUAL FUNDS
(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. Robert B. Carroll, Esq.
Marco E. Adelfio, Esq. Brian F. McNally, Esq.
Morrison & Foerster LLP BankAmerica Corporation
2000 Pennsylvania Ave., N.W. One Bank of America Plaza
Suite 5500 101 South Tryon Street
Washington, D.C. 20006 Charlotte, NC 28255-0001
It is proposed that this filing will become effective on May 30, 1999 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 July 10, 1998, the
notice required by Rule 24f-2 for its fiscal year ended April 30, 1998 (File No.
33-33144; 811-6030).
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NATIONS INSTITUTIONAL RESERVES
CROSS-REFERENCE SHEET
PART A
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ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
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1 Beginning of Registration COVER PAGE OF REGISTRATION STATEMENT;
Statement and Outside Front CROSS-REFERENCE SHEET; FRONT COVER PAGE OF
Cover Page of Prospectus PROXY STATEMENT/PROSPECTUS
2 Beginning and Outside Back TABLE OF CONTENTS
Cover Page of Prospectus
3 Fee Table, Synopsis APPENDIX II -- EXPENSE SUMMARIES OF THE
Information, and Risk Factors FUNDS; SUMMARY -- ABOUT THE PROPOSED
CONSOLIDATION; SUMMARY-- ABOUT THE PROPOSED
CONSOLIDATION: FEES AND EXPENSES; SUMMARY
-- ABOUT THE PROPOSED CONSOLIDATION: THE
CONSOLIDATION AGREEMENT; SUMMARY -- ABOUT
THE PROPOSED CONSOLIDATION: PURPOSE OF
THE CONSOLIDATION; SUMMARY -- ABOUT THE
PROPOSED CONSOLIDATION: OVERVIEW OF THE
FUNDS; SUMMARY -- ABOUT THE PROPOSED
CONSOLIDATION: RISK FACTORS; SUMMARY --
ABOUT THE PROPOSED CONSOLIDATION: FEDERAL
INCOME TAX CONSEQUENCES; SUMMARY -- ABOUT
THE PROPOSED CONSOLIDATION: BOARD
CONSIDERATION; SUMMARY -- VOTING
INFORMATION
<PAGE>
4 Information About the THE CONSOLIDATION - DESCRIPTION OF THE
Transaction CONSOLIDATION AGREEMENT; THE CONSOLIDATION
- PURPOSE OF THE CONSOLIDATION;
THE CONSOLIDATION - COMPARISON OF
CORPORATE/TRUST STRUCTURE; THE
CONSOLIDATION - CAPITALIZATION OF
EACH FUND; THE CONSOLIDATION -
COMPARISON OF INVESTMENT
OBJECTIVES AND POLICIES; THE
CONSOLIDATION - COMPARISON OF
TOTAL EXPENSE RATIONS; THE
CONSOLIDATION INVESTMENT ADVISER
AND OTHER SERVICE PROVIDERS; THE
CONSOLIDATION - SALES LOADS,
SHAREHOLDER TRANSACTIONS AND
SERVICES; THE CONSOLIDATION -
DISTRIBUTION AND SHAREHOLDER
SERVICING ARRANGEMENTS; THE
CONSOLIDATION - FEDERAL INCOME TAX
CONSEQUENCES; THE CONSOLIDATION -
BOARD CONSIDERATIONS; THE
CONSOLIDATION - OTHER INFORMATION
5 Information About the OTHER INFORMATION - HOW TO OBTAIN
Registrant ADDITIONAL INFORMATION ABOUT THE FUNDS;
OTHER INFORMATION - FINANCIAL STATEMENTS;
OTHER INFORMATION - SHAREHOLDER INQUIRIES
6 Information About the Company OTHER INFORMATION - HOW TO OBTAIN
Being Acquired ADDITIONAL INFORMATION ABOUT THE FUNDS;
OTHER INFORMATION - FINANCIAL STATEMENTS;
OTHER INFORMATION - SHAREHOLDER INQUIRIES
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7 Voting Information INFORMATION RELATING TO VOTING MATTERS -
GENERAL INFORMATION; INFORMATION RELATING
TO VOTING MATTERS - QUORUM; INFORMATION
RELATING TO VOTING MATTERS - ANNUAL
MEETINGS AND SHAREHOLDER MEETINGS;
INFORMATION RELATING TO VOTING MATTERS -
SHAREHOLDER APPROVAL; INFORMATION RELATING
TO VOTING MATTERS - OTHER BUSINESS
8 Interest of Certain Persons NOT APPLICABLE
and Experts
9 Additional Information NOT APPLICABLE
Required for Reoffering by
Persons Deemed to be
Underwriters
PART B
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STATEMENT OF ADDITIONAL
ITEM NO. ITEM CAPTION INFORMATION CAPTION
- -------- ------------ -------------------
10 Cover Page COVER PAGE
11 Table of Contents TABLE OF CONTENTS
12 Additional Information About INCORPORATION OF DOCUMENTS BY REFERENCE IN
the Registrant STATEMENT OF ADDITIONAL INFORMATION
13 Additional Information About NOT APPLICABLE
the Company Being Acquired
14 Financial Statements EXHIBITS TO STATEMENT OF ADDITIONAL
INFORMATION
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PART C
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ITEM NO.
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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>
THE FOLLOWING ITEMS ARE HEREBY INCORPORATED BY REFERENCE INTO VARIOUS PARTS OF
THIS REGISTRATION STATEMENT:
NATIONS INSTITUTIONAL RESERVES ("RESERVES")
From Post-Effective Amendment No. 22 of Reserves' Registration Statement, filed
August 27, 1998 (SEC File Nos. 33-33144; 811-6030):
Prospectuses for the Trust, Investor, Market and Daily Shares of Nations
Cash Reserves, Nations Treasury Reserves, Nations Government Reserves
and Nations Municipal Reserves and the Marsico shares of Nations Cash
Reserves, dated September 1, 1998, as supplemented.
Statement of Additional Information for Nations Cash Reserves,
Nations Treasury Reserves, Nations Government Reserves
and Nations Municipal Reserves, dated September 1, 1998.
The audited financial statements and related independent accountants' reports
for the Nations Government Reserves and Nations Municipal Reserves, contained in
the Annual Report for the fiscal year ended March 31, 1999.
NATIONS FUND TRUST ("NATIONS")
From Post-Effective Amendment No. 57 of Nations' Registration Statement, filed
July 31, 1998 (SEC File Nos. 002-97817; 811-4305):
Prospectuses for the Primary A, Primary B, Investor A, Investor B,
Investor C, and Daily Shares of Nations Government Fund and Nations
Tax-Exempt Fund, dated August 1, 1998, as supplemented.
Statement of Additional Information for Nations Government Fund and
Nations Tax-Exempt Fund, dated August 1, 1998.
The audited financial statements and related independent accountants' reports
for the Nations Government Fund and Nations Tax-Exempt Fund, contained in the
Annual Report for the fiscal year ended March 31, 1999.
NATIONS FUND, INC. ("NATIONS")
From Post-Effective Amendment No. 37 of Nations' Registration Statement, filed
July 31, 1998 (SEC File Nos. 33-4038; 811-4614):
Prospectuses for the Primary A, Primary B, Investor A, Investor B,
Investor C, Daily and Marsico Shares of Nations Prime Fund, dated August
1, 1998, as supplemented.
Prospectuses for the Primary A, Primary B, Investor A, Investor B,
Investor C, and Daily Shares of Nations Treasury Fund, dated August 1,
1998, as supplemented.
Statement of Additional Information for Nations Prime Fund and Nations
Treasury Fund, dated August 1, 1998.
The audited financial statements and related independent accountants' reports
for the Nations Prime Fund and Nations Treasury Fund, contained in the Annual
Report for the fiscal year ended March 31, 1999.
<PAGE>
NATIONS FUND, INC.
NATIONS FUND TRUST
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
TELEPHONE: 800-652-5096
June 9, 1999
Dear Shareholder:
On behalf of the Board of Directors of Nations Fund, Inc. and the Board
of Trustees of Nations Fund Trust (together, the "Companies"), we are pleased to
invite you to a special meeting of shareholders of the Companies' Nations Prime
Fund, Nations Treasury Fund, Nations Government Money Market Fund and Nations
Tax-Exempt Fund (collectively, the "Money Market 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 consolidation (the "Consolidation") of your Money
Market Fund into a corresponding money market fund of Nations Institutional
Reserves (collectively, the "Reserves Money Market Funds").
The Reserves Money Market Funds have substantially similar investment
objectives and are managed in substantially the same way as their corresponding
Money Market Funds. They are managed by the same investment adviser and
investment sub-adviser, and have the same service providers. In addition, with
the exception of Investor B shareholders of Nations Tax-Exempt Fund, their total
operating expense ratios (after waivers) are the same as those of the shares you
hold today, and the features and services that will be available to you
following the Consolidation will be similar to those available to you today.
The Consolidation is intended to benefit shareholders by:
o improving efficiency in the operation of the combined funds, including
potentially achieving economies of scale and greater portfolio
diversification;
o facilitating investment management, administration and marketing of the
combined funds; and
o eliminating duplicative shareholder costs and portfolio holdings.
The Consolidation is also being proposed in connection with an effort to
streamline the operations of the Nations Funds family, which currently includes
six open-end registered investment companies, including the Companies. If the
Consolidation is approved and other necessary approvals are obtained, the number
of open-end registered investment companies would be reduced by two. Management
believes that this streamlining could provide additional cost savings to Money
Market Fund shareholders by potentially lowering expense ratios and enhancing
returns.
If shareholder approval is obtained and the other conditions to the
Consolidation are satisfied, it is anticipated that the Money Market Funds will
be consolidated into the Reserves Money Market Funds on or about August 20,
1999, when your Money Market Fund shares will be exchanged for shares of a
designated class of a corresponding Reserves Money Market Fund of equal dollar
value.
THE COMPANIES' BOARDS OF DIRECTORS AND TRUSTEES UNANIMOUSLY RECOMMEND
THAT YOU VOTE TO APPROVE THE PROPOSED CONSOLIDATION.
The formal Notice of Special Meeting, a Combined Proxy
Statement/Prospectus and a Proxy Ballot are enclosed. The proposed Consolidation
and the reasons for the unanimous recommendation of each of the Companies'
Boards are discussed in more detail in the enclosed materials, which you should
read carefully. If you
1
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have any questions about the Consolidation, please do not
hesitate to contact the Companies 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 Boards of the Companies
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
PLEASE VOTE BY RETURNING YOUR PROXY BALLOT(S) TODAY, EITHER IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE AT (704) 388-2641. YOU MAY ALSO VOTE
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 Vote Your Proxy
As a valued Time Horizon Funds shareholder, your proxy vote is important to us.
That's why we've made it faster and easier to vote your proxy at your
convenience, 24 hours a day. After reviewing the enclosed Proxy
Statement/Prospectus ("Proxy Statement"), which outlines important issues
affecting your funds, select one of the following quick and easy methods to
register your vote - accurately and quickly.
Vote On-Line Vote By Toll-Free Phone Call
1. Read the enclosed Proxy Statement and 1. Read the enclosed Proxy Statement and have
have your Proxy Ballot(s)* at hand. your Proxy Ballot(s)* at hand.
2. Go to Web site www.proxyvote.com 2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number found 3. Enter the 12-digit Control Number found on
on your Proxy Ballot(s). your Proxy Ballot(s).
4. Cast your vote using the easy-to-follow 4. Cast your vote using the easy-to-follow
instructions. instructions.
* Do not mail the Proxy Ballot(s) if voting by Internet or telephone.
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NATIONS FUND TRUST
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 Money Market Fund Shareholders:
PLEASE TAKE NOTE THAT a special meeting of the shareholders (the
"Meeting") of the Nations Government Money Market Fund and Nations Tax-Exempt
Fund, each a series of Nations Fund Trust (the "Trust"), and Nations Prime Fund
and Nations Treasury Fund, each a series 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 Consolidation, dated as of June
2, 1999 (the "Consolidation Agreement"), by and among the Trust and the
Company, on behalf of their respective money market funds (the "Money
Market Funds"), and Nations Institutional Reserves, on behalf of Nations
Cash Reserves, Nations Treasury Reserves, Nations Government Reserves
and Nations Municipal Reserves (collectively, the "Reserves Money Market
Funds"). The Consolidation Agreement provides for the transfer of the
assets and liabilities of the Money Market Funds to corresponding
Reserves Money Market Funds, in exchange for shares of equal value of
corresponding classes of Reserves Money Market Funds (the
"Consolidation").
ITEM 2. Such other business as may properly come before the Meeting or
any adjournment(s).
Item 1 is described in the attached Combined Proxy Statement/Prospectus.
YOUR DIRECTORS AND TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR
OF THE PROPOSAL.
Shareholders of record as of the close of business on May 13, 1999 are
entitled to notice of, and to vote at, the Meeting or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE EACH ACCOMPANYING PROXY BALLOT, WHICH IS BEING SOLICITED
BY THE TIME HORIZON BOARD OF TRUSTEES. THIS IS IMPORTANT TO ENSURE A QUORUM AT
THE MEETING. SHAREHOLDERS ALSO MAY RETURN PROXIES BY: 1) FACSIMILE AT (704)
388-2641; OR 2) TOUCHTONE VOTING BY DIALING (800) 690-6903; OR 3) VOTING ON-LINE
AT WEBSITE WWW.PROXYVOTE.COM. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE
EXERCISED BY SUBMITTING TO THE COMPANY OR THE TRUST A WRITTEN NOTICE OF
REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING THE MEETING AND
VOTING IN PERSON.
By Order of the Boards of Directors and Trustees,
Richard H. Blank, Jr.
Secretary
June 9, 1999
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COMBINED PROXY STATEMENT/PROSPECTUS
Dated June 9, 1999
NATIONS INSTITUTIONAL RESERVES
NATIONS FUND TRUST
NATIONS FUND, INC.
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
1-800-652-5096
This combined proxy statement/prospectus ("Proxy/Prospectus") is
furnished in connection with the solicitation of proxies by the Board of
Directors/Trustees of Nations Fund, Inc. and Nations Fund Trust (collectively,
the "Companies") for a Special Meeting of Shareholders of the Companies' Nations
Prime Fund ("Prime Fund"), Nations Treasury Fund ("Treasury Fund"), Nations
Government Money Market Fund ("Government Fund") and Nations Tax-Exempt Fund
("Tax-Exempt Fund")(collectively, the "Money Market 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, and to conduct such other business as may
come before the Meeting.
Proposal: To approve an Agreement and Plan of Consolidation, dated as of
June 9, 1999 (the "Consolidation Agreement"), by and among the
Companies, on behalf of their respective Money Market Funds, and Nations
Institutional Reserves, on behalf of Nations Cash Reserves, Nations
Treasury Reserves, Nations Government Reserves and Nations Municipal
Reserves (collectively, the "Reserves Money Market Funds"). The
Consolidation Agreement provides for the transfer of the assets and
liabilities of the Money Market Funds to corresponding Reserves Money
Market Funds, in exchange for shares of equal value of corresponding
classes of the Reserves Money Market Funds (the "Consolidation").
This Proxy/Prospectus is the Money Market Funds' proxy statement for the
Meeting and will be mailed to shareholders on or about June 2, 1999. It is also
a prospectus for shares of the Reserves Money Market Funds. The Proxy/Prospectus
sets forth concisely the information that a Money Market Fund shareholder should
know before voting and should be retained for future reference.
Additional information about the Consolidation is set forth in the
Statement of Additional Information dated June 2, 1999. The information
contained in the current Reserves Money Market Fund prospectuses is incorporated
by reference into this Proxy/Prospectus. In addition, a copy of the appropriate
Reserves Money Market Fund prospectus accompanies this Proxy/Prospectus. These
documents also are available on the website of the Securities and Exchange
Commission (the "SEC") at www.sec.gov.
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE RESERVES MONEY MARKET FUNDS ARE NOT DEPOSITS OR
OBLIGATIONS OF OR GUARANTEED OR ENDORSED BY BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, NATIONSBANK, N.A. OR ANY OF THEIR AFFILIATES OR ANY OTHER
BANK. SUCH SHARES ARE NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY.
MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL. THE DISTRIBUTOR OF THE RESERVES MONEY MARKET FUNDS IS STEPHENS
INC.
4
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TABLE OF CONTENTS
PAGE
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I. SUMMARY
About the Proposed Consolidation................................. X
A. Fees and Expenses......................................... X
B. The Consolidation Agreement............................... X
C. Purpose of the Consolidation.............................. X
D. Overview of the Funds..................................... X
E. Risk Factors.............................................. X
F. Federal Income Tax Consequences........................... X
G. Board Consideration....................................... X
. Voting Information............................................... X
II. THE CONSOLIDATION
Description of the Consolidation Agreement....................... X
Purpose of the Consolidation..................................... X
Comparison of Corporate/Trust Structure.......................... X
Capitalization of Each Fund...................................... X
Comparison of Investment Objectives and Policies................. X
Comparison of Total Expense Ratios............................... X
Investment Adviser and Other Service Providers................... X
Distribution and Shareholder Servicing Arrangements.............. X
Sales Loads, Shareholder Transactions and Services............... X
Federal Income Tax Consequences.................................. X
Board Consideration.............................................. X
Other Information................................................ X
III. INFORMATION RELATING TO VOTING MATTERS
General Information.............................................. X
Quorum........................................................... X
Annual Meetings and Shareholder Meetings......................... X
Shareholder Approval............................................. X
Other Business................................................... X
IV. OTHER INFORMATION
How to Obtain Additional Information About the Funds............. X
Financial Statements............................................. X
Shareholder Inquiries............................................ X
APPENDICES
I. FORM OF THE CONSOLIDATION AGREEMENT
II. EXPENSE SUMMARIES OF THE FUNDS
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I. SUMMARY
The following is a summary of certain information relating to the
proposal to be considered at the Meeting. More complete information about the
proposal is contained throughout the Proxy/Prospectus.
About the Proposed Consolidation
A. Fees and Expenses.
The following table shows, as of February 28, 1999, (i) the current
annualized total operating expense ratio of each class of the Money Market Funds
and the Reserves Money Market Funds before and after fee waivers and/or expense
reimbursements, and (ii) the pro forma annualized total operating expense ratio
of the Reserves Money Market Funds, before and after fee waivers and/or expense
reimbursements, based upon the fee arrangements that are expected to be in place
upon consummation of the Consolidation. The table shows that, with one
exception, the pro forma total operating expense ratio for each class of the
Reserves Money Market Funds, taking into account voluntary fee waivers and/or
expense reimbursements, is the same of that of the corresponding class of shares
of the Money Market Funds. The table also shows that a majority of Money Market
Fund classes will experience lower total operating expense ratios even without
taking into account voluntary fee waivers and/or expense reimbursements. For
more detail concerning fund expense ratios, see Appendix II.
Total Expense Information
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Money Market Fund/ Total Reserves Money Market Fund/ Total Reserves Money Market Fund/ Pro Forma
Share Class Operating Share Class Operating Class Post-Consolidation Total
Expenses Expenses Operating
Before/After Before/After Expenses
Waivers Waivers Before/After
Waivers
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Prime Fund Cash Reserves Cash Reserves
Primary A Shares 0.34%/0.30% Trust Shares 0.39%/0.30% Trust Shares 0.39%/0.30%
Primary B Shares 0.59%/0.55% Investor Shares 0.64%/0.55% Investor Shares 0.64%/0.55%
Investor A Shares 0.69%/0.65% Market Shares 0.74%/0.65% Market Shares 0.74%/0.65%
Investor B Shares 0.69%/0.50% Investor Shares 0.64%/0.55% Investor Shares 0.64%/0.55%
Investor C Shares 0.59%/0.55% Investor Shares 0.64%/0.55% Investor Shares 0.64%/0.55%
Daily Shares 1.04%/0.80% Daily Shares 0.89%/0.80% Daily Shares 0.89%/0.80%
Marsico Shares 0.59%/0.55% Marsico Shares 0.64%/0.55% Marsico Shares 0.64%/0.55%
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Treasury Fund Treasury Reserves Treasury Reserves
Primary A Shares 0.35%/0.30% Trust Shares 0.40%/0.30% Trust Shares 0.40%/0.30%
Primary B Shares 0.60%/0.55% Investor Shares 0.65%/0.55% Investor Shares 0.65%/0.55%
Investor A Shares 0.70%/0.65% Market Shares 0.75%/0.65% Market Shares 0.75%/0.65%
Investor B Shares 0.70%/0.55% Investor Shares 0.65%/0.55% Investor Shares 0.65%/0.55%
Investor C Shares 0.60%/0.55% Investor Shares 0.65%/0.55% Investor Shares 0.65%/0.55%
Daily Shares 1.05%/0.80% Daily Shares 0.90%/0.80% Daily Shares 0.90%/0.80%
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Government Fund Government Reserves Government Reserves
Primary A Shares 0.59%/0.30% Trust Shares 0.39%/0.30% Trust Shares 0.39%/0.30%
Primary B Shares 0.84%/0.55% Investor Shares 0.64%/0.55% Investor Shares 0.64%/0.55%
Investor A Shares 0.94%/0.65% Market Shares 0.74%/0.65% Market Shares 0.74%/0.65%
Investor B Shares 0.94%/0.55% Investor Shares 0.64%/0.55% Investor Shares 0.64%/0.55%
Investor C Shares 0.84%/0.55% Investor Shares 0.64%/0.55% Investor Shares 0.64%/0.55%
Daily Shares 1.29%/0.80% Daily Shares 0.89%/0.80% Daily Shares 0.89%/0.80%
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6
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Money Market Fund/ Total Reserves Money Market Fund/ Total Reserves Money Market Fund/ Pro Forma
Share Class Operating Share Class Operating Class Post-Consolidation Total
Expenses Expenses Operating
Before/After Before/After Expenses
Waivers Waivers Before/After
Waivers
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Tax-Exempt Fund Municipal Reserves Municipal Reserves
Primary A Shares 0.54%/0.30% Trust Shares 0.42%/0.30% Trust Shares 0.39%/0.30%
Primary B Shares 0.79%/0.55% Investor Shares 0.67%/0.55% Investor Shares 0.64%/0.55%
Investor A Shares 0.89%/0.65% Market Shares 0.77%/0.65% Market Shares 0.74%/0.65%
Investor B Shares 0.89%/0.50% Investor Shares 0.67%/0.55% Investor Shares 0.64%/0.55%
Investor C Shares 0.79%/0.55% Investor Shares 0.67%/0.55% Investor Shares 0.64%/0.55%
Daily Shares 1.24%/0.80% Daily Shares 0.92%/0.80% Daily Shares 0.89%/0.80%
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B. The Consolidation Agreement.
The Companies' Boards of Directors and Trustees have unanimously
approved the Consolidation Agreement and recommend that shareholders vote for
the Consolidation. If approved by shareholders and all conditions to the
proposed consolidation have been satisfied, consummation of the Consolidation
will result in shareholders of each class of the Money Market Funds becoming
shareholders of a corresponding Reserves Money Market Fund class. The
Consolidation Agreement provides for (i) the transfer of all of the assets and
liabilities of the Money Market Funds to corresponding Reserves Money Market
Funds, as set forth below, in exchange for shares of designated classes of the
Reserves Money Market Funds; and (ii) the distribution of such Reserves Money
Market Fund shares to shareholders of the Money Market Funds in liquidation of
the Money Market Funds. Upon completion of the Consolidation, each Money Market
Fund shareholder will hold shares of a corresponding Reserves Money Market Fund
that are equal in value to the shares of the Money Market Fund held by the
shareholder immediately before the Consolidation. The Consolidation also
contemplates the dissolution under state law and the deregistration under the
1940 Act, of Nations Fund, Inc.
The map below shows each class of each Money Market Fund and the
designated class of each corresponding Reserves Money Market Fund that
shareholders would receive as a result of the Consolidation:
CONSOLIDATION MAP
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MONEY MARKET FUND SHAREHOLDERS WOULD RECEIVE SHARES OF THE
OWNING SHARES OF THE FOLLOWING FOLLOWING RESERVES MONEY
FUNDS AND CLASSES: MARKET FUNDS AND CLASSES:
Nations Prime Fund Nations Cash Reserves
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
Daily Shares Daily Shares
Marsico Class Marsico Class (New)
Nations Treasury Fund Nations Treasury Reserves
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
Daily Shares Daily Shares
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MONEY MARKET FUND SHAREHOLDERS OWNING WOULD RECEIVE SHARES OF THE
SHARES OF THE FOLLOWING FUNDS AND FOLLOWING RESERVES MONEY MARKET
CLASSES: FUNDS AND CLASSES:
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<S> <C>
Nations Gov't Money Market Fund Nations Government Reserves
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
Daily Shares Daily Shares
Nations Tax-Exempt Fund Nations Municipal Reserves
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
Daily Shares Daily Shares
</TABLE>
The Consolidation Agreement must be approved by a vote of a majority of
the shareholders of each Money Market Fund. In addition, for shareholders of the
Nations Prime Fund and Nations Treasury Fund only, in order for Nations Fund,
Inc. to dissolve and de-register, a majority of all Nations Fund, Inc.
shareholders voting in the aggregate must approve such actions. Accordingly, a
vote for the Consolidation Agreement by Nations Prime Fund and Nations Treasury
Fund shareholders includes a vote for the dissolution of Nations Fund, Inc.
Other Nations Fund, Inc. shareholders are receiving proxy materials relating to
types of transactions similar to the Consolidation and will likewise be voting
on the dissolution and the deregistration of Nations Fund, Inc. However, the
Consolidation is not contingent upon the approval of the dissolution and
deregistration of Nations Fund, Inc.
The Meeting of the Money Market Funds' shareholders is scheduled for
August 13, 1999. The Consolidation, if approved, is expected to occur on or
about August 20, 1999. For more information about the Consolidation Agreement,
see "The Consolidation--Description of the Consolidation Agreement."
C. Purpose of the Consolidation.
Because the Money Market Funds and their corresponding Reserves Money
Market Funds have substantially similar investment objectives and are managed in
substantially the same way, management believes that it makes sense to combine
like Funds. Except for Investor B shares of the Nations Tax-Exempt Fund, the
total operating expense ratio (after waivers) for the Reserves Money Market Fund
shares will be the same as the total operating expense ratio of the Money Market
Fund shares that are currently held. It is anticipated that assuming necessary
approvals are obtained, the features and services that will be available to
shareholders of a Reserves Money Market Fund will be similar to those available
to Money Market Fund shareholders.
The Consolidation is intended to benefit shareholders by:
o improving efficiency in the operation of the combined funds,
including potentially achieving economies of scale and greater
portfolio diversification;
o facilitating investment management, administration and marketing of
the combined funds;
o eliminating duplicative shareholder costs and portfolio holdings.
The Consolidation is also being proposed in connection with an effort to
streamline the operations of the Nations Funds family, which currently includes
six open-end registered investment companies, including the Companies. If the
Consolidation is approved and other necessary approvals are obtained, the number
of open-end registered investment companies would be reduced by two. Management
believes that this streamlining could provide additional cost savings to Money
Market Fund shareholders by potentially lowering expense ratios and enhancing
returns. Over time, if various requisite shareholder approvals are obtained,
Nations Fund, Inc. and other
8
<PAGE>
registered investment companies in the Nations Funds family will de-register and
be dissolved under state law. This streamlining should provide additional future
benefits to Money Market Fund shareholders by way of potentially lower expense
ratios and enhanced returns through elimination of class and fund redundancy and
the achievement of greater economies of scale and larger portfolios.
For more information about the purpose of the Consolidation, including
expected benefits of the Consolidation, see "The Consolidation--Purpose of the
Consolidation."
D. Overview of the Funds.
Set forth below is a brief comparison of certain key features of the
Funds.
Investment Objectives and Policies. The investment objective and policies of the
Money Market Funds are substantially similar to the investment objective and
policies of the corresponding Reserves Money Market Funds.
Comparison of Investment Objectives
<TABLE>
<CAPTION>
<S> <C>
- ------------------------------------------------------------------------------------------
Money Market Fund Corresponding Reserves Money Market Fund
Nations Prime Fund: seeks the maximization Nations Cash Reserves: seeks to preserve
of current income to extent consistent with principal value and maintain a high
the preservation of capital and the degree of liquidity while providing
maintenance of liquidity. current income.
- ------------------------------------------------------------------------------------------
Nations Treasury Fund: seeks the Nations Treasury Reserves: seeks to
maximization of current income to the extent preserve principal value and maintain a
consistent with the preservation of capital high degree of liquidity while providing
and the maintenance of liquidity. current income.
- ------------------------------------------------------------------------------------------
Nations Tax-Exempt Fund: seeks a high level Nations Municipal Reserves: seeks to
of current interest income exempt from preserve principal value and maintain a
Federal income taxes as is consistent with high degree of liquidity while providing
liquidity and stability of principal. current income exempt from Federal income
taxes.
- ------------------------------------------------------------------------------------------
Nations Government Money Market Fund: seeks Nations Government Reserves: seeks to
a high level of current income as is preserve principal value and maintain a
consistent with liquidity and stability of high degree of liquidity while providing
principal. current income.
- ------------------------------------------------------------------------------------------
</TABLE>
All of the Money Market Funds and Reserves Money Market Funds are money
market mutual funds which are operated in accordance with Rule 2a-7 under the
1940 Act. As noted, the investment policies of the Money Market Funds and
corresponding Reserves Money Market Funds are substantially similar. There are
some differences, however. For example, while Nations Government Reserves,
effective May 1999, does not engage in repurchase agreements, the Nations
Government Money Market Mutual Fund may do so. For additional information about
the similarities and differences between the investment objectives and policies
of the Funds, see "The Consolidation--Comparison of Investment Objectives and
Policies."
Operating Expenses. Taking into account voluntary fee waivers and/or expense
reimbursements, total operating expense ratios of each class of shares of the
Money Market Funds, with the exception of Investor B shares of Nations
Tax-Exempt Fund, are currently, and after the Consolidation are expected to be,
identical to the total operating expense ratios of the designated class of
shares of the corresponding Reserves Money Market Funds. In addition, a
substantial majority of Money Market Fund classes involved in the Consolidation
will experience lower total operating expense ratios without taking into account
any fee waivers and/or expense reimbursements. The current and pro forma total
operating expense ratios (before and after waivers) for each Fund and class are
shown on page 4. For more detailed expense information, see "Appendix II."
9
<PAGE>
Service Providers. The Funds have the same investment adviser, investment
sub-adviser, co-administrators, distributor, custodian transfer agent and
independent accountants, as discussed under "The Consolidation--Investment
Adviser and Other Service Providers."
Purchase, Redemption and Other Procedures. It is expected that, assuming
necessary approvals are obtained, the purchase, redemption, dividend, exchange
and other policies and procedures of the Reserves Money Market Funds will be
similar to those of the Money Market Funds as of the closing of the
Consolidation. Please note that no front-end or contingent deferred sales loads
will be imposed on any shareholder of the Money Market Funds as a result of the
exchange of shares in the Consolidation. For more information concerning these
policies and procedures, see "The Consolidation--Shareholder Transactions and
Services."
E. Risk Factors.
Because of the substantial similarities in the investment objectives and
policies of the Money Market Funds and their corresponding Reserves Money Market
Funds, an investment in the Money Market Funds will generally involve risks that
are substantially similar to those of the corresponding Reserves Money Market
Funds. Because all of the funds are money market funds, the risks are those
typically associated with investing in a portfolio of high quality, short-term
money market instruments. For example, while all of the Funds attempt to
maintain a stable net asset value of $1.00, there is no assurance that they will
be able to do so. Additionally, while the Funds all may invest in instruments
backed by the full faith and credit of the U.S. Government, the shares of the
Funds are not themselves issued or guaranteed by the U.S.
Government or any of its agencies.
F. Federal Income Tax Consequences.
The exchange of shares in the Consolidation is not expected to result in
the recognition, for federal income tax purposes, of gain or loss by the Money
Market Funds, the Reserves Money Market Funds or their respective shareholders.
For more information about the tax consequences of the Consolidation, see "The
Consolidation--Federal Income Tax Consequences."
G. Board Consideration.
In considering the Consolidation Agreement, the Board of Directors of
the Company and the Board of Trustees of the Trust, including the non-interested
Directors and Trustees, were advised by their legal counsel as to their
fiduciary duties under Maryland law, Massachusetts law and the Investment
Company Act of 1940, as amended (the "1940 Act"), and the required
determinations that Board should make under the Act in connection with the
Consolidation. After considering the relevant factors, the Board of Directors of
the Company, including all of the non-interested Directors/Trustees, found on
behalf of the Money Market Funds that participation in the Consolidation, as
contemplated by the Consolidation Agreement, is in the best interests of the
Money Market Funds and that the interests of the shareholders of the Money
Market Funds will not be diluted as a result of the Consolidation. Similarly,
the Board of Nations Institutional Reserves found on behalf of the Reserves
Money Market Funds that participation in the Consolidation, as contemplated by
the Consolidation Agreement, is in the best interests of the Reserves Money
Market Funds and that the interests of the shareholders of the Reserves Money
Market Funds will not be diluted as a result of the Consolidation. For more
information on the Board's considerations, see "The Consolidation--Board
Consideration."
The Companies' Boards of Directors/Trustees unanimously recommend that
Money Market Fund shareholders vote FOR the Consolidation Agreement.
Voting Information.
This Proxy/Prospectus is being furnished in connection with the
solicitation of proxies by the Companies' Boards of Directors/Trustees. Only
Money Market Fund shareholders of record at the close of business on May 13,
1999 will be entitled to vote at the Meeting. Each whole or fractional share is
entitled to a whole or fractional vote. Shares represented by a properly
executed proxy will be voted in accordance with the instructions thereon or, if
no specification is made, the persons named as proxies will vote in favor of
each proposal set forth in the Notice of Meeting. Proxies may be revoked at any
time before they are exercised by attending the meeting and voting in person or
by submitting to the Company (i) a written notice of revocation or (ii) a
subsequently executed proxy. For additional information, including a description
of the shareholder votes required for approval of the proposal to be considered
at the Meeting, see "Information Relating to Voting Matters."
10
<PAGE>
II. THE CONSOLIDATION
Important additional information about the Consolidation and the
Consolidation Agreement is set forth below. This description is qualified by
reference to the Appendices at the end of this document.
Description of the Consolidation Agreement. The Consolidation Agreement
provides that at the Closing, the assets and liabilities of each Money Market
Fund will be transferred to a corresponding Reserves Money Market Fund in
exchange for full and fractional shares of designated classes of such Reserves
Money Market Fund.
The shares issued by the Reserves Money Market Funds in the
Consolidation will have an aggregate value equal to the aggregate value of the
shares of the Money Market Funds that are outstanding immediately before the
Closing.
Immediately after the transfer of its assets and liabilities in exchange
for Reserves Money Market Fund shares, the Money Market Funds will distribute
the shares of the corresponding Reserves Money Market Funds received in the
Consolidation to its shareholders in liquidation of the Money Market Funds. The
Reserves Money Market Fund will establish an account for each former shareholder
of the Money Market Funds reflecting the appropriate number of Reserves Money
Market Fund shares distributed. These accounts will be identical in all material
respects to the accounts currently maintained by the Money Market Funds for each
shareholder.
Upon completion of the Consolidation, all outstanding shares of the
Money Market Funds will be canceled, and the Money Market Funds will wind up
their affairs and be dissolved under Maryland law and/or Massachusetts law. In
addition, if requisite approvals are obtained from other shareholders of series
of Nations Fund, Inc. voting on similar proposals, Nations Fund, Inc. will wind
up its affairs, be de-registered under the 1940 Act and be dissolved under
Maryland law. Exchange or redemption requests received thereafter will be deemed
to be exchange or redemption requests for shares of the Reserves Money Market
Fund distributed to the former shareholders of the Money Market Funds.
NationsBanc Advisors, Inc. ("NBAI") or its affiliates will bear all
customary expenses associated with the Consolidation, including the costs
associated with the Meeting and the Voting Materials.
Purpose of the Consolidation. As discussed above, because the Money
Market Funds and their respective corresponding Reserves Money Market Funds are
managed almost identically, management believes that it makes sense to combine
like Funds.
The Consolidation is intended to benefit shareholders by:
o improving efficiency in the operation of the combined funds,
including potentially achieving economies of scale and greater
portfolio diversification;
o facilitating investment management, administration and marketing of
the combined funds; and
o eliminating duplicative shareholder costs and portfolio holdings.
The Consolidation is also being proposed in connection with an effort to
streamline the operations of the Nations Funds family, which currently includes
six open-end registered investment companies, including the Companies. If the
Consolidation is approved and other necessary approvals are obtained, the number
of open-end registered investment companies would be reduced by two. Management
believes that this streamlining could provide additional cost savings to Money
Market Fund shareholders by potentially lowering expense ratios and enhancing
returns.
11
<PAGE>
After fee waivers and/or expense reimbursements, the total operating
expense ratios of the classes of the Money Market Funds are equal to those of
the designated classes of the corresponding Reserves Money Market Fund. Although
some of these benefits will accrue to the investment adviser, administrator and
distributor of the funds, some are expected to accrue to the benefit of
shareholders over time. For example, shareholders may benefit from lower
operating expense ratios and greater portfolio diversification.
Comparison of Corporate/Trust Structure. The Companies and Nations
Institutional Reserves are registered as an open-end management investment
companies under the 1940 Act and are three of several registered investment
companies in the Nations Funds Family, which collectively offer over seventy
separate mutual funds. Nations Fund, Inc. is organized as a Maryland
corporation. Both Nations Fund Trust and Nations Institutional Reserves are
organized as Massachusetts business trusts. In general, the charter documents
governing Nations Fund, Inc. are similar to those documents governing Nations
Fund Trust and Nations Institutional Reserves. Although the rights of a
shareholder of a Maryland corporation vary in certain respects from the rights
of an interestholder of a Massachusetts business trust, 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.
It should be noted that under Maryland law, Nations Fund, Inc.
shareholders have no personal liability for Nations Fund, Inc.'s acts or
obligations. By contrast, under Massachusetts law, interestholders of a
Massachusetts business trust like Nations Fund Trust or Nations Institutional
Reserves could, under certain circumstances, be held personally liable for the
obligations of the trust. However, both Nations Fund Trust and Nations
Institutional Reserves have provisions in their Declarations of Trust that
endeavor 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.
In addition, all shareholders in the Nations Funds family may be asked
to approve certain changes to the corporate structure of Nations Fund Trust and
Nations Institutional Reserves, including, possibly changing Nations from a
Massachusetts business trust to a Delaware business trust. This change, if
required approvals are obtained, will allow the several registered investment
companies in the Nations Funds Family to operate under a single registered
investment company thereby permitting the Nations Funds Family to operate with
increased efficiency. It is expected that if all shareholder approvals are
obtained that Nations Fund, Inc. will be dissolved on or about the Fall of 1999.
Capitalization of Each Fund. The following table shows the total net
assets, number of shares outstanding and net asset value per share of each Money
Market Fund and each corresponding Reserves Money Market Fund. This information
is generally referred to as the "capitalization" of each Fund. The term "pro
forma capitalization" simply means the expected capitalization of the Reserves
Money Market Funds after they have combined with the Money Market Funds, i.e.,
as if the Consolidation had already occurred.
The following table sets forth as of March 31, 1999 the capitalization
of each Money Market Fund, the Reserves Money Market Funds and the pro forma
capitalization of each Reserves Money Market Fund adjusted to give effect to the
Consolidation. The ongoing investment performance and daily share purchase and
redemption activity of each fund affects capitalization. Therefore, the
capitalization of each fund on the closing date is likely to vary from the
capitalization shown in the following table.
As of March 31, 1999, there were no assets in the Trust Class, Investor
Class and Daily Class of shares of the Reserves Money Market Funds. The tables
below reflect this fact. However, in May 1999, certain of these and other
existing Money Market funds of Nations Institutional Reserves share classes
received substantial additional assets as a result of the reorganization of the
Pacific Horizon Money Market Funds, a former family of funds advised by Bank of
America, into the Reserves Money Market Funds. The following tables do not
reflect the inflow of such assets.
12
<PAGE>
Pro Forma Capitalization Table As of March 31, 1999
1. The table below reflects current and pro forma capitalization information for
the combination of the Nations Prime Fund and Nations Cash Reserves.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Net Asset Value
Total Net Assets Shares Per Share
Outstanding
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nations Prime Fund $3,079,750,399 3,080,222,092 $1.00
(Primary A Shares) (Primary A (Primary A Shares)
$81,735,577 Shares) $1.00
(Primary B Shares) 81,739,046 (Primary B Shares)
$694,162,132 (Primary B $1.00
(Investor A Shares) Shares) (Investor A
$737,463,225 694,263,771 Shares)
(Investor B Shares) (Investor A $1.00
$11,083,981 Shares) (Investor B
(Investor C Shares) 737,571,824 Shares)
$2,693,887,910 (Investor B $1.00
(Daily Shares) Shares) (Investor C
$17,440,039 11,085,909 Shares)
(Marsico Shares) (Investor C $1.00
Shares) (Daily Shares)
2,694,279,930 $1.00
(Daily Shares) (Marsico Shares)
17,440,039
(Marsico Shares)
- -----------------------------------------------------------------------------------------------
Nations Cash Reserves $0 0 $0
(Trust Shares) (Trust Shares) (Trust Shares)
$0 0 $0
(Investor Shares) (Investor Shares) (Investor Shares)
$1,529,501,565 1,529,500,010 $1.00
(Market Shares) (Market Shares) (Market Shares)
$0 0 $0
(Investor Shares) (Investor (Investor Shares)
$0 Shares) $0
(Investor Shares) 0 (Investor Shares)
$0 (Investor Shares) $0
(Daily Shares) 0 (Daily Shares)
(Daily Shares)
- -----------------------------------------------------------------------------------------------
Pro Forma Cash Reserves $3,079,750,399 3,080,222,092 $1.00
(Trust Shares) (Trust Shares) (Trust Shares)
$81,735,577 81,739,046 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$2,223,663,697 2,223,763,781 $1.00
(Market Shares) (Market Shares) (Market Shares)
$737,463,225 737,571,824 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$11,083,981 11,085,909 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$2,693,887,910 2,694,279,930 $1.00
(Daily Shares) (Daily Shares) (Daily Shares)
$17,440,039 $17,440,039 $1.00
(Marsico Shares) (Marsico Shares) (Marsico Shares)
- -----------------------------------------------------------------------------------------------
</TABLE>
13
<PAGE>
2. The table below reflects current and pro forma capitalization information for
the combination of the Nations Treasury Fund and Nations Treasury Reserves.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Net Asset Value
Total Net Assets Shares Per Share
Outstanding
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nations Treasury Fund $745,637,802 745,934,155 $1.00
(Primary A Shares) (Primary A (Primary A Shares)
$19,572,609 Shares) $1.00
(Primary B Shares) 19,579,273 (Primary B Shares)
$1,480,321,761 (Primary B $1.00
(Investor A Shares) Shares) (Investor A
$269,399,679 1,480,901,458 Shares)
(Investor B Shares) (Investor A $1.00
$174,960 Shares) (Investor B
(Investor C Shares) 269,513,193 Shares)
$217,961,481 (Investor B $1.00
(Daily Shares) Shares) (Investor C
175,014 Shares)
(Investor C $1.00
Shares) (Daily Shares
218,054,631
(Daily Shares)
- -----------------------------------------------------------------------------------------------
Nations Treasury Reserves $0 0 $0
(Trust Shares) (Trust Shares) (Trust Shares)
$0 0 $0
(Investor Shares) (Investor Shares) (Investor Shares)
$1,175,931,309 1,176,000,010 $1.00
(Market Shares) (Market Shares) (Market Shares)
$0 0 $0
(Investor Shares) (Investor (Investor Shares)
$0 Shares) $0
(Investor Shares) 0 (Investor Shares)
$0 (Investor Shares) $0
(Daily Shares) 0 (Daily Shares)
(Daily Shares)
- -----------------------------------------------------------------------------------------------
Pro Forma Treasury Reserves $745,637,802 745,934,155 $1.00
(Trust Shares) (Trust Shares) (Trust Shares)
$19,572,609 19,579,273 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$2,656,253,070 2,656,901,468 $1.00
(Market Shares) (Market Shares) (Market Shares)
$269,399,679 269,513,193 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$174,960 175,014 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$217,961,481 218,054,631 $1.00
(Daily Shares) (Daily Shares) (Daily Shares)
- -----------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
3. The table below reflects current and pro forma capitalization information for
the combination of the Nations Government Money Market Fund and Nations
Government Reserves.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Net Asset Value
Total Net Assets Shares Per Share
Outstanding
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nations Government Money Market $268,868,419 268,908,080 $1.00
Fund (Primary A Shares) (Primary A (Primary A Shares)
$1,293,058 Shares) $1.00
(Primary B Shares) 1,293,415 (Primary B Shares)
$12,178,109 (Primary B $1.00
(Investor A Shares) Shares) (Investor A
$80,253,066 12,180,399 Shares)
(Investor B Shares) (Investor A $1.00
$42,483 Shares) (Investor B
(Investor C Shares) 80,267,966 Shares)
$47,356,001 (Investor B $1.00
(Daily Shares) Shares) (Investor C
42,491 Shares)
(Investor C $1.00
Shares) (Daily Shares
49,359,847
(Daily Shares)
- -----------------------------------------------------------------------------------------------
Nations Government Reserves $0 0 $0
(Trust Shares) (Trust Shares) (Trust Shares)
$0 0 $0
(Investor Shares) (Investor Shares) (Investor Shares)
$324,500,127 324,500,010 $1.00
(Market Shares) (Market Shares) (Market Shares)
$0 0 $0
(Investor Shares) (Investor (Investor Shares)
$0 Shares) $0
(Investor Shares) 0 (Investor Shares)
$0 (Investor Shares) $0
(Daily Shares) 0 (Daily Shares)
(Daily Shares)
- -----------------------------------------------------------------------------------------------
Pro Forma Government Reserves $268,868,419 268,908,080 $1.00
(Trust Shares) (Trust Shares) (Trust Shares)
$1,293,058 1,293,415 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$336,678,236 336,680,409 $1.00
(Market Shares) (Market Shares) (Market Shares)
$80,253,066 80,267,966 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$42,483 42,491 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$47,356,001 47,359,847 $1.00
(Daily Shares) (Daily Shares) (Daily Shares)
- -----------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
4. The table below reflects current and pro forma capitalization information for
the combination of the Nations Tax-Exempt Fund and Nations Municipal Reserves.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
Net Asset Value
Total Net Assets Shares Per Share
Outstanding
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Nations Tax-Exempt Fund $2,083,237,842 2,083,804,338 $1.00
(Primary A Shares) (Primary A (Primary A Shares)
$9,844,126 Shares) $1.00
(Primary B Shares) 9,836,560 (Primary B Shares)
$53,591,782 (Primary B $1.00
(Investor A Shares) Shares) (Investor A
$255,562,123 53,557,196 Shares)
(Investor B Shares) (Investor A $1.00
$217,788 Shares) (Investor B
(Investor C Shares) 255,425,959 Shares)
$332,727,815 (Investor B $1.00
(Daily Shares) Shares) (Investor C
217,642 Shares)
(Investor C $1.00
Shares) (Daily Shares
332,560,709
(Daily Shares)
- -----------------------------------------------------------------------------------------------
Nations Municipal Reserves $0 0 $0
(Trust Shares) (Trust Shares) (Trust Shares)
$0 0 $0
(Investor Shares) (Investor Shares) (Investor Shares)
$160,999,271 161,000,010 $1.00
(Market Shares) (Market Shares) (Market Shares)
$0 0 $0
(Investor Shares) (Investor (Investor Shares)
$0 Shares) $0
(Investor Shares) 0 (Investor Shares)
$0 (Investor Shares) $0
(Daily Shares) 0 (Daily Shares)
(Daily Shares)
- -----------------------------------------------------------------------------------------------
Pro Forma Municipal Reserves $2,083,237,842 2,083,804,338 $1.00
(Trust Shares) (Trust Shares) (Trust Shares)
$9,844,126 9,836,560 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$214,591,053 214,557,206 $1.00
(Market Shares) (Market Shares) (Market Shares)
$255,562,123 255,425,959 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$217,788 217,642 $1.00
(Investor Shares) (Investor Shares) (Investor Shares)
$332,727,815 332,560,709 $1.00
(Daily Shares) (Daily Shares) (Daily Shares)
- -----------------------------------------------------------------------------------------------
</TABLE>
Comparison of Investment Objectives and Policies. The investment
objectives and policies of the funds, except as described below, are
substantially similar. The chart below highlights the investment objective and
policies of each Fund and some of each Fund's key investment policies.
Each Fund is a money market fund, and in accordance with Rule 2a-7 under
the 1940 Act, will invest in instruments with remaining maturity not exceeding
397 days. Each Fund's dollar-weighted average portfolio maturity may not exceed
90 days. Rule 2a-7 would permit the Funds to invest their assets in both First
Tier Securities and Second Tier Securities, as those terms are defined by the
SEC. However, the Funds invest only in First Tier Securities. Additional
information about each Fund's investment objective and policies is contained in
its prospectus and statement of additional information.
16
<PAGE>
<TABLE>
<CAPTION>
Nations Prime Fund Nations Cash Reserves
------------------ ---------------------
<S> <C> <C>
Investment Seeks the maximization of current Seeks to preserve principal value and
Objective: income to extent consistent with the maintain a high degree of liquidity
preservation of capital and the while providing current income.
maintenance of liquidity.
Investment The Fund may invest in U.S. Treasury The Fund may invest in U.S. Treasury
Policies: bills, notes and bonds and other Obligations; U.S. Government
instruments issued directly by the U.S. Obligations; commercial paper;
Government ("U.S. Treasury obligations of thrift institutions;
Obligations"), and other obligations U.S. commercial banks and U.S. and
issued or guaranteed as to payment of London branches of foreign banks,
principal and interest by the U.S. provided such institutions have total
Government, its agencies or assets greater than $1 billion;
instrumentalities (together with U.S. short-term corporate obligations of
Treasury Obligations, "U.S. Government issuers of commercial paper; high
Obligations"), bank and commercial quality short-term taxable obligations
instruments that may be available in issued by state and local governments,
the money markets, high quality their agencies and instrumentalities;
short-term taxable obligations issued repurchase and reverse repurchase
by state and local governments, their agreements secured by the above
agencies and instrumentalities and instruments. The Fund also may invest
repurchase agreements relating to U.S. in guaranteed investment contracts,
Government Obligations and qualified instruments issued by certain trusts,
first tier money market collateral. partnerships or other special purpose
The Fund also may invest in guaranteed issuers.
investment contracts, instruments
issued by certain trusts, partnerships The Fund also reserves the right to
or other special purpose issuers. The concentrate more than 25% of its
Fund also may lend its portfolio investments in U.S. dollar denominated
securities. obligations of U.S. banks, foreign
branches of U.S. banks and U.S.
branches of foreign banks.
Nations Treasury Fund Nations Treasury Reserves
--------------------- -------------------------
Investment Seeks the maximization of current Seeks to preserve principal value and
Objective: income to the extent consistent with maintain a high degree of liquidity
the preservation of capital and the while providing current income.
maintenance of liquidity.
Investment The Fund under normal circumstances The Fund under normal circumstances
Policies: will invest at least 65% of its assets will invest at least 65% of its assets
in U.S. Treasury Obligations and in U.S. Treasury Obligations and
repurchase agreements secured by such repurchase agreements secured by such
obligations. The Fund also may obligations. The Fund also may invest
purchase securities issued by other in Separately Traded Registered
investment companies, consistent with Interest and Principal Securities, or
the Fund's investment objective and STRIPS. The Fund also may purchase
policies, and may engage in reverse securities issued by other investment
repurchase agreements. The Fund also companies, consistent with the Fund's
may lend its portfolio securities. investment objective and policies, and
may engage in reverse repurchase
agreements. The Fund also may lend
its portfolio securities.
17
<PAGE>
Nations Government Money Market Fund Nations Government Reserves
------------------------------------ ---------------------------
Investment Seeks a high level of current income as Seeks to preserve principal value and
Objective: is consistent with liquidity and maintain a high degree of liquidity
stability of principal. while providing current income.
Investment The Fund may invest in U.S. Government The Fund may invest in U.S. Government
Policies: Obligations. Although the Fund may Obligations. The Fund may not invest
invest in repurchase agreements it does in repurchase agreements. The Fund
not currently intend to do so. The also may purchase securities issued by
Fund also may purchase securities other investment companies, consistent
issued by other investment companies, with the Fund's investment objective
consistent with the Fund's investment and policies, and may engage in
objective and policies, and may engage reverse repurchase agreements. The
in reverse repurchase agreements. The Fund also may lend its portfolio
Fund also may lend its portfolio securities. The Fund also may lend
securities. its portfolio securities.
Nations Tax-Exempt Fund Nations Municipal Reserves
----------------------- --------------------------
Investment Seeks a high level of current interest Seeks to preserve principal value and
Objective: income exempt from Federal income taxes maintain a high degree of liquidity
as is consistent with liquidity and while providing current income exempt
stability of principal. from Federal income taxes.
Investment The Fund under normal conditions The Fund under normal conditions
Policies: invests at least 80% of its assets in a invests at least 80% of its assets in
diversified portfolio of obligations Municipal Securities. A portion of
issued by or on behalf of states, the Fund's assets, however, may be
territories and possessions of the invested in private activity bonds,
United States, the District of the interest on which may be treated
Columbia, and their political as a specific tax preference item
subdivisions, agencies, under the Federal alternative minimum
instrumentalities and authorities, the tax. The Fund also may purchase
interest on which, in the opinion of securities issued by other investment
bond counsel or counsel to the issuer, companies, consistent with the Fund's
is exempt from regular Federal income investment objective and policies.
tax ("Municipal Securities"). A The Fund also may invest in
portion of the Fund's assets, however, instruments issued by certain trusts,
may be invested in private activity partnerships or other special purpose
bonds, the interest on which may be issuers, including pass-through
treated as a specific tax preference certificates representing
item under the Federal alternative participations in, or debt instruments
minimum tax. The Fund also may backed by, the securities and other
purchase securities issued by other assets owned by such issuers.
investment companies, consistent with
the Fund's investment objective and
policies. The Fund also may invest in
instruments issued by certain trusts,
partnerships or other special purpose
issuers, including pass-through
certificates representing
participations in, or debt instruments
backed by, the securities and other
assets owned by such issuers.
</TABLE>
Investment Adviser and Other Service Providers. The Funds have the same
investment adviser, investment sub-adviser and service providers. Upon
completion of the Consolidation, these entities will continue to serve the Funds
in the capacities indicated below.
18
<PAGE>
Service Providers for the Funds
-------------------------------
Investment Adviser NBAI
Investment Sub-Adviser TradeStreet
Distributor Stephens Inc. ("Stephens")
Co-Administrator NBAI
Co-Administrator Stephens
Sub-Administrator The Bank of New York
Custodian The Bank of New York
Transfer Agent First Data Investor
Services Group, Inc.
Sub-Transfer Agent NationsBank, N.A. (for
Primary A and B shares
only)
Independent Accountants PricewaterhouseCoopers LLP
Investment Advisory Services. NBAI is the investment adviser for each
fund. Each fund pays an advisory fee, computed daily and paid monthly, to NBAI
based on the fund's average daily net assets. Currently, the maximum advisory
fee rate is 0.40% for the Nations Government Money Market Fund and Nations
Tax-Exempt Fund; 0.20% for the Nations Prime Fund and Nations Treasury Fund and
0.15% for the Reserves Money Market Funds. TradeStreet is the investment
sub-adviser for each Fund. NBAI pays TradeStreet sub-advisory fees, computed
daily and paid monthly, at the maximum annual rate of 0.055% of the Money Market
Funds' average daily net assets and 0.033% of the Reserves Money Market Funds'
average daily net assets.
Distribution and Shareholder Servicing Arrangements.
All Funds. Shares of the Money Market Funds and Reserves Money Market
Funds are distributed by Stephens Inc. ("Stephens"), a broker-dealer registered
with the Commission under the Securities and Exchange Act of 1934 (the "1934
Act"). Pursuant to distribution plans ("Distribution Plans") adopted by certain
classes of the Funds, such Funds may compensate or reimburse Stephens for any
activities or expenses primarily intended to result in the sale of such Funds
shares, including sales related services provided by banks, broker/dealers or
other financial institutions ("Selling Agents") that have entered into a Sales
Support Agreement with Stephens. Pursuant to shareholder servicing plans
("Shareholder Servicing Plans") adopted by certain classes of the Funds, such
Funds may compensate or reimburse broker/dealers, banks and other financial
institutions ("Servicing Agents") that provide shareholder support services to
their customers who own shares of such Funds. Pursuant to administration plans
adopted by certain classes of the Funds, such Funds may compensate or reimburse
broker/dealers, banks and other financial institutions ("Administration Agents")
that provide support services to Servicing Agents or provide shareholder support
services to their customers who own shares of such Funds.
Money Market Funds.
Primary A Shares. Primary A Shares of the Money Market Funds do not pay
any fees under a Distribution Plan or a Shareholder Servicing Plan.
Primary B and Investor C Shares. Primary B and Investor C Shares of the
Money Market Funds do not pay any fees under a Distribution Plan. The Companies
have adopted a Shareholder Servicing Plan with respect to the Primary B and
Investor C Shares of the Funds. Pursuant to the Shareholder Servicing Plan, each
Fund may compensate or reimburse Servicing Agents that provide shareholder
support services to their customers who own shares of a Fund. Payments under the
Shareholder Servicing Plan will be calculated daily and paid monthly and may not
exceed 0.25% (on an annual basis) of the average daily net assets of the Primary
B and Investor C Shares of the Funds.
19
<PAGE>
Investor A and Investor B Shares. The Companies have adopted a
Distribution Plan pursuant to Rule 12b-1 with respect to each Money Market
Fund's Investor A and Investor B Shares. This Distribution Plan provides that
each Fund may pay Stephens, Selling Agents that have entered into a Sales
Support Agreement with Stephens, or Servicing Agents that have entered into a
Shareholder Servicing Agreement with the Funds up to 0.10% (on an annual basis)
of the average daily net asset value of the Investor A and Investor B Shares of
the Funds. In addition, the Companies have adopted a Shareholder Servicing Plan
with respect to the Investor A and Investor B Shares of the Funds. Pursuant to
the Shareholder Servicing Plan, each Fund may compensate or reimburse Servicing
Agents that provide shareholder support services to their customers who own
shares of a Fund. Payments under the Shareholder Servicing Plan will be
calculated daily and paid monthly and may not exceed 0.25% (on an annual basis)
of the average daily net assets of the Investor A and Investor B Shares of the
Funds.
Daily Shares. The Companies have adopted a Distribution Plan and a
Shareholder Servicing Plan with respect to Daily Shares of the Money Market
Funds. Pursuant to the Distribution Plan, the Funds may compensate or reimburse
Stephens for any activities or expenses primarily intended to result in the sale
of the Funds' Daily Shares. Payments under the Distribution Plan will be
calculated daily and paid monthly at annual rates not to exceed 0.45% of the
average daily net asset value of the Funds' Daily Shares. The Companies also
have approved a Shareholder Servicing Plan for the Funds that permit the Funds
to compensate Servicing Agents for services provided to their customers that own
Daily Shares. Payments under the Shareholder Servicing Plan are calculated daily
and paid monthly at annual rates not to exceed 0.25% of the average daily net
asset value of the Funds' Daily Shares.
Marsico Shares. Nations Fund, Inc. has adopted a Shareholder
Administration Plan pursuant to which institutions provide shareholder
administration services to their customers who from time to time beneficially
own Marsico Shares of Nations Prime Fund. Payments under the Shareholder
Administration Plan will be calculated daily and paid monthly and may not exceed
0.10% (on an annual basis) of the average daily net assets of the Marsico Shares
of Nations Prime Fund. Nations Fund, Inc. has also adopted a Shareholder
Servicing Plan with respect to the Marsico Shares of Nations Prime Fund.
Pursuant to the Shareholder Servicing Plan, Nations Prime Fund may compensate or
reimburse Servicing Agents that provide shareholder support services to their
customers who own shares of the fund. Payments under the Shareholder Servicing
Plan will be calculated daily and paid monthly and may not exceed 0.25% (on an
annual basis) of the average daily net assets of the Marsico Shares of Nations
Prime Fund.
Reserves Money Market Funds.
Trust Shares. Trust Shares of the Reserves Money Market Funds do not pay
any fees under a Distribution Plan. Nations Institutional Reserves has adopted a
Shareholder Servicing Plan with regard to the Trust Shares of the Funds. The
Shareholder Servicing Plan provides that each Fund may pay Servicing Agents that
have entered into a Shareholder Servicing Agreement with a Fund up to 0.10% (on
an annual basis) of the average daily net asset value of the Trust Shares of the
Funds.
Investor Shares. Nations Institutional Reserves has adopted a
Distribution Plan pursuant to Rule 12b-1 with respect to the Investor Shares of
the Reserves Money Market Funds. Pursuant to the Distribution Plan, each Fund
may pay Stephens for expenses incurred in connection with the marketing or
distribution of the Fund's shares, including sales-related services provided by
Selling Agents that have entered into a Sales Support Agreement with Stephens.
Payments under the Distribution Plan will be calculated daily and paid monthly
and may not exceed 0.10% (on an annual basis) of the average daily net assets of
Investor Shares of the Funds. Nations Institutional Reserves has also adopted a
Shareholder Servicing Plan with respect to the Investor Shares of the Funds.
Pursuant to the Shareholder Servicing Plan, each Fund may compensate or
reimburse Servicing Agents that provide shareholder support services to their
customers who own shares of a Fund. Payments under the Shareholder Servicing
Plan will be calculated daily and paid monthly and may not exceed 0.25% (on an
annual basis) of the average daily net assets of the Investor Shares of the
Funds.
20
<PAGE>
Market Shares. Nations Institutional Reserves has adopted a Distribution
Plan pursuant to Rule 12b-1 with respect to the Market Shares of the Reserves
Money Market Funds. Pursuant to the Distribution Plan, each Fund may pay
Stephens for expenses incurred in connection with the marketing or distribution
of the Fund's shares, including sales related services provided by Selling
Agents that have entered into a Sales Support Agreement with Stephens. Payments
under the Distribution Plan will be calculated daily and paid monthly and may
not exceed 0.20% (on an annual basis) of the average daily net assets of the
Market Shares of the Funds. Nations Institutional Reserves has also adopted a
Shareholder Servicing Plan with respect to the Market Shares of the Funds.
Pursuant to the Shareholder Servicing Plan, each Fund may compensate or
reimburse Servicing Agents that provide shareholder support services to their
customers who own shares of a Fund. Payments under the Shareholder Servicing
Plan will be calculated daily and paid monthly and may not exceed 0.25% (on an
annual basis) of the average daily net assets of the Market Shares of the Funds.
Daily Shares. Nations Institutional Reserves has adopted a Distribution
Plan pursuant to Rule 12b-1 with respect to the Daily Shares of the Reserves
Money Market Funds. Pursuant to the Distribution Plan, each Fund may pay
Stephens for expenses incurred in connection with the marketing or distribution
of the Fund's shares, including sales related services provided by Selling
Agents that have entered into a Sales Support Agreement with Stephens. Payments
under the Distribution Plan will be calculated daily and paid monthly and may
not exceed 0.35% (on an annual basis) of the average daily net assets of Daily
Shares of a Fund. Nations Institutional Reserves has also adopted a Shareholder
Servicing Plan with respect to the Daily Shares of the Funds. Pursuant to the
Shareholder Servicing Plan, each Fund may compensate or reimburse Servicing
Agents that provide shareholder support services to their customers who own
shares of a Fund. Payments under the Shareholder Servicing Plan will be
calculated daily and paid monthly and may not exceed 0.25% (on an annual basis)
of the average daily net assets of the Daily Shares of the Funds.
Marsico Shares. Nations Institutional Reserves has adopted an
Administration Plan pursuant to which institutions provide administration
support services to Servicing Agents whose customers own Marsico Shares of
Nations Cash Reserves. Payments under the Administration Plan will be calculated
daily and paid monthly and may not exceed 0.10% (on an annual basis) of the
average daily net assets of the Marsico Shares of Nations Cash Reserves. In
addition, Nations Cash Reserves has adopted a Shareholder Servicing Plan with
respect to the Marsico Shares of the fund. Pursuant to the Shareholder Servicing
Plan, Nations Cash Reserves may compensate or reimburse Servicing Agents that
provide shareholder support services to their customers who own shares of the
fund. Payments under the Shareholder Servicing Plan will be calculated daily and
paid monthly and may not exceed 0.25% (on an annual basis) of the average daily
net assets of the Marsico Shares of Nations Cash Reserves.
Sales Loads, Shareholder Transactions and Services. Shares of the Money
Market Funds and Reserves Money Market Funds are sold without any front-end or
contingent deferred sales charges.
It is anticipated that, assuming necessary approvals are obtained, that
the purchase, redemption, exchange, dividend and other policies and procedures
of the classes of the Reserves Money Market Funds will be similar to those of
the corresponding classes of the Money Market Funds as of the closing of the
Consolidation. [Please see Appendix ___ for more details concerning these
policies and procedures].
Federal Income Tax Consequences. Each Money Market Fund and Reserves
Money Market Fund intends to qualify, as of the Closing, as a separate
"regulated investment company" under the Internal Revenue Code of 1986, as
amended (the "Code"). Accordingly, each Money Market Fund and each corresponding
Reserves Money Market Fund has been, and expects to continue to be, relieved of
federal income tax liability.
Consummation of the Consolidation with respect to each Money Market Fund
and the corresponding Reserves Money Market Fund is subject to the condition
that the Companies 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 Money Market Fund to the corresponding
Reserves Money Market Fund in exchange for the Reserves Money Market Fund
shares, and the distribution of those shares to shareholders of the Money Market
Fund, will constitute a "reorganization" within the meaning of Section 368(a) of
the Code, and the Money Market Fund and the Reserves Money Market Fund will each
be a "party to a reorganization" within the meaning of Section 368(b) of the
Code in respect of the Consolidation; (ii) no gain or loss will be recognized by
the Money Market Fund upon the transfer of its assets and liabilities to the
Reserves Money Market Fund solely in exchange for the Reserves Money Market Fund
shares; (iii) no gain or loss will be recognized by the Money Market Fund upon
the receipt of the assets and assumption of liabilities of the Money Market Fund
solely in exchange for the Reserves Money Market Fund shares; (iv) the basis of
the Money Market Fund's assets received by the pursuant to the Consolidation
will be the same as the basis of those assets in the hands of the Money Market
Fund immediately prior to the Consolidation; (v) the holding period of the Money
Market Fund's assets in the hands of the Reserves Money Market Fund will include
the period for which such assets have been held by the Money Market Fund; (vi)
no gain or loss will be recognized by the Money Market Fund on the distribution
to its shareholders of the Reserves Money Market Fund shares; (vii) no gain or
loss will be recognized by the shareholders of the Money Market Fund upon their
receipt of the Reserves Money Market Fund shares in exchange for such
shareholders' shares of the Money Market Fund; (viii) the basis of the Reserves
Money Market Fund shares received by the shareholders of the Money Market Fund
will be the same as the basis of the Money Market Fund shares surrendered by
such shareholders pursuant to the Consolidation; (ix) the holding period for the
Reserves Money Market Fund shares received by a Money Market Fund shareholder
will include the period during which such shareholders held the Money Market
Fund shares surrendered in exchange therefor, provided that such Money Market
Fund shares are held as a capital asset in the hands of the Money Market Fund
shareholder on the date of the exchange; and (x) the Reserves Money Market Fund
will succeed to and take into account the tax attributes described in Section
381(c) of the Code of the corresponding Money Market Fund as of the Closing
Date, subject to the conditions and limitations specified in the Code.
21
<PAGE>
The opinion of Morrison & Foerster LLP will be based on the Code,
applicable U.S. Treasury Regulations, judicial authority, and administrative
rulings and practice, all as of the date of the opinion. These laws and
authorities are subject to change, possibly with retroactive effect. The opinion
will also not address any state, local or foreign tax consequences of
Consolidation. In addition, the Internal Revenue Service is not bound by the
opinion, and neither of the Companies has requested or will request an advance
ruling from the Internal Revenue Service as to any of the tax consequences of
the Consolidation. Accordingly, the Internal Revenue Service could take
different positions concerning the tax consequences of Consolidation and such
positions could be sustained.
Furthermore, a Money Market Fund shareholder's tax treatment of the
Consolidation will vary depending upon its particular situation. A Money Market
Fund shareholder may also be subject to special rules not addressed in the
opinion of Morrison & Foerster LLP if it is a certain kind of shareholder of a
Money Market Fund, including:
o an insurance company;
o a tax-exempt organization;
o a financial institution or broker-dealer;
o a person who is neither a citizen nor resident of the United States; or
o a holder of Money Market Fund shares as part of a hedge, straddle or
conversion transaction.
Money Market Fund shareholders are urged to consult with their own tax
advisors regarding the particular tax consequences of the Consolidation to them,
including the applicability and effect of any state, local or foreign laws, and
the effect of possible changes in applicable tax laws.
Board Consideration. At a series of meetings held in the Spring of 1999,
the Companies' Boards of Directors/Trustees considered and then unanimously
voted to approve the Consolidation Agreement. In reviewing the proposed
Consolidation, the Boards considered the potential impact of the Consolidation
on each fund's shareholders. In particular, the Board considered the fact that
certain redundancies were created because the Money Market Funds and the
Reserves Money Market Funds were managed in a substantially similar manner. The
Boards (with the advice and assistance of independent counsel) also reviewed,
among other things: (1) the Consolidation as part of the proposed streamlining
of all or a part of the Nations Funds family; (2) the future expected costs
savings to fund shareholders as a result of the Consolidation; (3) the
investment objective, policies and limitations of the Money Market Funds, their
compatibility with those of the Reserves Money Market Funds and the relative
performance of the funds; (4) the anticipated tax-free nature of the
Consolidation; (5) the investment advisory and other fees paid by the funds, and
the historical and projected expense ratios of the Money Market Funds as
compared with those of the Reserves Money Market Funds, including the fact that
total operating expense ratios (after fee waivers and/or expense reimbursements)
would be, with one exception, the same for Money Market Funds and the Reserves
Money Market Funds, and that a substantial majority of Money Market Fund classes
involved in the Consolidation would experience lower total operating expense
ratios (before any waivers and/or expense reimbursements) after the
Consolidation; and (6) the fact that the customary expenses associated with the
Consolidation would not be borne by fund shareholders. Based upon its evaluation
of these factors, and in light of their fiduciary duties under federal and state
law, the Companies' Boards of Directors/Trustees, including all of the
non-interested members of the Boards, has determined that the proposed
Consolidation is in the best interests of the shareholders of each fund and that
the interests of the shareholders of the respective funds will not be diluted as
a result of the Consolidation.
22
<PAGE>
The Companies' Boards of Directors/Trustees unanimously recommends that
shareholders vote FOR the Consolidation Agreement.
Other Information. The Consolidation may be abandoned at any time before
the Closing upon the mutual consent of both funds. At any time before or (to the
extent permitted by law) after approval of the agreement by the shareholders of
the Money Market Funds (i) the parties may, by written agreement authorized by
the Companies' Boards of Directors/Trustees and with or without the approval of
their shareholders, amend any of the provisions of the Consolidation Agreement
and (ii) either party may waive any default by the other party or the failure to
satisfy any of the conditions to its obligations (the waiver to be in writing
and authorized by the Companies Boards of Directors/Trustees with or without the
approval of such party's shareholders).
III. INFORMATION RELATING TO VOTING MATTERS
General Information. The Proxy/Prospectus is being furnished in
connection with the solicitation of proxies for the Meeting by the Companies'
Boards of Directors/Trustees. It is expected that the solicitation of proxies
will be primarily by mail. Officers and agents of the Companies also may solicit
proxies by telephone, telegraph or personal interview. Any third party retained
to assist in the solicitation will be paid by NBAI or its affiliates. Any
shareholder giving a proxy may revoke it at any time before it is exercised (i)
by submitting to the relevant Company a written notice of revocation, (ii) by
submitting to the relevant Company a subsequently executed 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
Money Market Fund shares were outstanding and entitled to be voted.
Money Market Fund Shares Entitled to be Voted
----------------- ---------------------------
Nations Prime Fund
Primary A shares xx
Primary B shares xx
Investor A shares xx
Investor B shares xx
Investor C shares xx
Daily Shares xx
Marsico shares xx
Nations Treasury Fund
Primary A shares xx
Primary B shares xx
Investor A shares xx
Investor B shares xx
Investor C shares xx
Daily Shares xx
Nations Tax-Exempt Fund
Primary A shares xx
Primary B shares xx
Investor A shares xx
Investor B shares xx
Investor C shares xx
Daily Shares xx
Nations Government Money Market Fund
Primary A shares xx
Primary B shares xx
Investor A shares xx
Investor B shares xx
Investor C shares xx
Daily Shares xx
23
<PAGE>
Each whole and fractional share is entitled to a whole or fractional
vote.
If the accompanying proxy 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
show of the Company as a group owned less than 1% of any of the funds. The
tables below show the name, address and share ownership of each person known to
the Company to have beneficial or record ownership with respect to 5% or more of
a class of a fund as of May 13, 1999.
<TABLE>
<CAPTION>
Class; Amount Percentage
Name and of Shares Percentage Percentage of Fund
Fund Address Owned; of Class of Fund Post-Closing
Type of Ownership
<S> <C> <C> <C> <C> <C>
- ------------------- ---------------------- --------------- ----------- ---------- ---------
- ------------------- ---------------------- --------------- ----------- ---------- ---------
- ------------------- ---------------------- --------------- ----------- ---------- ---------
</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 Consolidation Agreement are not received, one or more adjournment(s)
may be proposed to permit further solicitation of proxies. For Nations Fund,
Inc., 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. For Nations Fund
Trust, 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
its Declaration of Trust and By-Laws, may adjourn for a reasonable period after
the date of the Meeting. Any such adjournment(s) will require the affirmative
vote of a majority of those shares affected by the adjournment(s) that are
represented at the Meeting in person or by proxy. If a quorum is present, the
persons named as proxies will vote those proxies which they are entitled to vote
FOR the particular proposal for which a quorum exists in favor of such
adjournment(s), and will vote those proxies required to be voted AGAINST such
proposal against any adjournment(s).
A quorum is constituted with respect to the Money Market Funds by the
presence in person or by proxy of the holders of more than one-third of the
outstanding shares of the Money Market Funds 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 Consolidation
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.
24
<PAGE>
Annual Meetings and Shareholder Meetings. The Companies do not presently
intend to hold annual meetings of shareholders for the election of directors and
other business unless otherwise required by the 1940 Act. Under certain
circumstances, however, holders of at least 10% of the outstanding shares of the
Money Market Funds have the right to call a meeting of shareholders.
Shareholder Approval. The Consolidation Agreement is being submitted for
approval at the Meeting by the Money Market Fund's shareholders pursuant to the
Nations Fund, Inc.'s Articles of Incorporation and By-Laws and Nations Fund
Trust's Declaration of Trust and By-Laws, and was unanimously approved by the
Companies' Boards of Directors/Trustees. The Consolidation Agreement must be
approved by a majority of a Money Market Fund's shares voted at the meeting.
With respect to the approval of the Consolidation Agreement, the term
"majority of the outstanding shares" of a Money Market Fund means more than 50%
of the shares of the Money Market Fund voted at the Meeting. A vote of the
shareholders of the Reserves Money Market Funds is not being solicited, since
their approval or consent is not necessary for the Consolidation.
For shareholders of Nations Prime Fund and Nations Treasury Fund: The
Consolidation Agreement contemplates the dissolution of Nations Fund, Inc.
Accordingly, a vote for the Consolidation Agreement includes a vote for the
dissolution of Nations Fund, Inc. The dissolution of Nations Fund, Inc. must be
approved by a majority of the outstanding shares of all of the mutual funds of
Nations Fund, Inc., including those mutual funds not part of this
Proxy/Prospectus. Separate proxy solicitation materials are being mailed to the
shareholders of all other series of Nations Fund, Inc. seeking the approval of
similar proposals.
Other Business. The Company's Board of Directors 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.
IV. OTHER INFORMATION
How to Obtain Additional Information About The Funds. Additional
information about each Fund is included in its most recent prospectus 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 Companies at: Nations Fund, Inc./Nations Fund Trust, c/o Stephens Inc.,
NationsBank, One Bank of America Plaza, 33rd Floor, Charlotte, North Carolina
28255.
This Proxy/Prospectus is accompanied by a current prospectus for the
Reserves Money Market Funds.
Reports and other information filed by the Companies 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.
The information contained in each fund's prospectus is incorporated by
reference into this Proxy/Prospectus.
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 the
Statement of Additional Information related to this Proxy/Prospectus. The
Financial Highlights included therein are incorporated by reference into this
Proxy/Prospectus.
Shareholder Inquiries. For additional information call 1-800-652-5096
or write to the Companies at the address on the cover page of this
Proxy/Prospectus.
25
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* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE
REQUESTED TO MARK, SIGN AND DATE THE ENCLOSED PROXY AND RETURN IT BY
TELEFACSIMILE (FRONT AND BACK) AT (704) 388-2641 OR IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
26
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APPENDIX I
FORM OF AGREEMENT AND PLAN OF
CONSOLIDATION
FOR
NATIONS FUND TRUST, NATIONS FUND, INC. AND
NATIONS INSTITUTIONAL RESERVES
June 9, 1999
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This AGREEMENT AND PLAN OF CONSOLIDATION (the "Agreement") is made as of
this ____ day of June, 1999 by: Nations Fund Trust (the "Trust"), a
Massachusetts business trust, for itself and on behalf of Nations Government
Money Market Mutual Fund and Nations Tax-Exempt Fund; Nations Fund, Inc. (the
"Company"), a Maryland corporation, for itself and on behalf of Nations Prime
Fund and Nations Treasury Fund; and Nations Institutional Reserves ("Reserves"),
a Massachusetts business trust, for itself and on behalf of Nations Cash
Reserves, Nations Treasury Reserves, Nations Municipal Reserves and Nations
Government Reserves.
WHEREAS, the Trust, the Company and Reserves are open-end management
investment companies registered with the Securities and Exchange Commission (the
"SEC") under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the parties desire that the Fund Assets and Liabilities (as
defined below) of the Nations Prime Fund, Nations Treasury Fund, Nations
Tax-Exempt Fund and Nations Government Money Market Fund (collectively, the
"Acquired Funds") be conveyed to and be acquired and assumed, respectively, by
Nations Cash Reserves, Nations Treasury Reserves, Nations Municipal Reserves and
Nations Government Reserves (collectively, the "Acquiring Funds") in exchange
for shares of equal U.S. dollar value of such Acquiring Fund which shall
thereafter promptly be distributed to the shareholders of the corresponding
Acquired Fund in connection with its liquidation as described in this Agreement
and set forth in Schedule A attached hereto (the "Consolidation"); and
WHEREAS, the parties intend that the Consolidation qualify as a
"reorganization," within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that the Acquiring Funds and the
Acquired Funds will each be a "party to a reorganization," within the meaning of
Section 368(b) of the Code, with respect to the Consolidation.
NOW, THEREFORE, in accordance with the terms and conditions described
herein, the Acquired Funds and Acquiring Funds shall be consolidated as follows:
1. Conveyance of Fund Assets and Liabilities of the Acquired Funds.
(a) Except as provided below, at the Effective Time of the
Consolidation (as defined in Section 8) all assets of every kind,
and all interests, rights, privileges and powers of the Acquired
Funds (the "Fund Assets"), subject to all liabilities of the
Acquired Funds existing as of the Effective Time of the
Consolidation (the "Liabilities"), shall be transferred by each
Acquired Fund to each corresponding Acquiring Fund and shall be
accepted and assumed by such Acquiring Fund, as more particularly
set forth in this Agreement, such that at and after the Effective
Time of the Consolidation: (i) all Fund Assets of the Acquired
Funds shall become the assets of the Acquiring Funds; and (ii)
all Liabilities of the Acquired Funds shall attach to the
Acquiring Funds, enforceable against the Acquiring Funds to the
same extent as if originally incurred by it.
(b) It is understood and agreed that the Fund Assets shall include
all property and assets of any nature whatsoever, including,
without limitation, all cash, cash equivalents, securities,
claims (whether absolute or contingent, known or unknown, accrued
or unaccrued) and receivables (including dividend and interest
receivables) owned or exercisable by the Acquired Funds, and any
deferred or prepaid expenses shown as an asset on the Acquired
Funds' books, that the Liabilities of the Acquired Funds shall
include all liabilities, whether known or unknown, accrued or
unaccrued, absolute or contingent, in all cases, existing at the
Effective Time of the Consolidation.
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(c) At least fifteen (15) business days prior to the Closing Date (as
defined in Section 8), the Acquired Funds will provide to, or
cause to be provided to, the Acquiring Funds, a schedule of its
securities, other assets and its known liabilities. It is
understood and agreed that the Acquired Funds may sell any of the
securities or other assets shown on such schedule prior to the
Effective Time of the Consolidation but will not, without the
prior approval of the Acquiring Funds, acquire any additional
securities other than securities that the Acquiring Funds is not
permitted to purchase in accordance with its stated investment
objective and policies. At least ten (10) business days prior to
the Closing Date, the Acquiring Funds will advise the Acquired
Funds of any investments of the Acquired Funds shown on such
schedule that the Acquiring Funds would not be permitted to hold,
pursuant to its stated investment objective and policies or
otherwise. The Acquired Funds, if requested by the Acquiring
Funds, will dispose of any such securities prior to the Closing
Date to the extent practicable and consistent with applicable
legal requirements. In addition, if it is determined that the
investment portfolios of the Acquired Funds and Acquiring Funds,
when aggregated, would contain investments exceeding certain
percentage limitations applicable to the Acquiring Funds, the
Acquired Funds, if requested by the Acquiring Funds, will dispose
of a sufficient amount of such investments as may be necessary to
avoid violating such limitations as of the Effective Time of the
Consolidation.
(d) The Fund Assets shall be transferred and conveyed to the
Acquiring Funds on the following basis:
(1)In exchange for the transfer of the Fund Assets, the Acquiring
Funds shall simultaneously issue to the Acquired Funds at the
Effective Time of the Consolidation full and fractional Shares
of the Acquiring Funds, as set forth in Schedule A attached
hereto, having an aggregate net asset value equal to the net
value of the Fund Assets minus Liabilities so conveyed and
assumed, all determined in accordance with this Agreement. In
this regard, the number of full and fractional shares of the
Acquiring Funds delivered to the Acquired Funds shall be
determined by dividing the value of the Fund Assets minus
Liabilities, computed in the manner and as of the time and
date set forth in this Agreement, by the net asset value of
one Acquiring Funds share of such designated class, computed
in the manner and as of the time and date set forth in this
Agreement.
(2)The net asset value of shares to be delivered by the Acquiring
Funds, and the net value of the Fund Assets minus Liabilities
to be conveyed by the Acquired Funds and assumed by the
Acquiring Funds, shall, in each case, be determined as of the
Valuation Time as defined in Section 3. The net asset value of
Shares of the Acquiring Funds shall be computed in accordance
with its then current valuation procedures. In determining the
value of the Fund Assets, each security to be included in the
Fund Assets shall be priced in accordance with the Acquiring
Funds' then current valuation procedures.
2. Liquidation of the Acquired Funds. At the Effective Time of the
Consolidation, the Acquired Funds shall make a liquidating
distribution to their shareholders as follows: Shareholders of record
of the Acquired Funds shall be credited with full and fractional
shares of the respective Shares that are issued by the Acquiring
Funds in connection with the Consolidation corresponding to the
Acquired Funds shares that are held of record by the shareholder at
the Effective Time of the Consolidation. Each such shareholder also
shall have the right to receive any unpaid dividends or other
distributions which were declared before the Effective Time of the
Consolidation with respect to the Acquired Funds shares that are held
of record by the shareholder at the Effective Time of the
Consolidation, and Reserves shall record on its books the ownership
of the respective Acquiring Funds shares by such shareholders (the
"Transferor Record Holders"). All of the issued and outstanding
shares of the Acquired Funds at the Effective Time of the
Consolidation shall be redeemed and canceled on the books of Reserves
at such time. As soon as reasonably possible after the Effective Time
of the Consolidation, the Trust and the Company shall wind up the
affairs of their respective Acquired Funds and shall file any final
regulatory reports, including but not limited to any Form N-SAR and
Rule 24f-2 filings, with respect to the Acquired Funds, and also
shall take all other steps as are necessary and proper to effect the
termination or declassification of the Acquired Funds in accordance
with all applicable laws.
3. Valuation Time. The "Valuation Time" shall be the time as of which
the net asset value of each class of shares of each of the Acquired
Funds and the Acquiring Funds is determined pursuant to their
respective valuation procedures on the Closing Date or such earlier
or later time as may be mutually agreed to in writing by the parties
hereto.
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4. Certain Representations, Warranties and Agreements of the Trust on
behalf of its Acquired Funds. The Trust, on behalf of itself and,
where appropriate, its respective Acquired Funds, represents and
warrants to, and agrees with, Reserves on behalf of the corresponding
Acquiring Funds as follows, with such representations, warranties and
agreements made on behalf of the Acquired Funds on a several (and not
joint, or joint and several) basis:
(a) The Trust is a business trust, duly created, validly existing and
in good standing under the laws of the Commonwealth of
Massachusetts. The Trust is registered with the SEC as an
open-end management investment company under the 1940 Act, and
such registration is in full force and effect.
(b) The Trust has the power to own all of its properties and assets
and to consummate the transactions contemplated herein, and has
all necessary federal, state and local authorizations to carry on
its business as now being conducted and to consummate the
transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized by the Board of Trustees
of the Trust on behalf of its respective Acquiring Funds, and has
been executed and delivered by duly authorized officers of the
Trust, and represents a valid and binding contract, enforceable
in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, arrangement, moratorium,
and other similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles. The
execution and delivery of this Agreement does not, and, subject
to the approval of shareholders referred to in Section 6, the
consummation of the transactions contemplated by this Agreement
will not, violate the Declaration of Trust or By-Laws of the
Trust, or any material agreement or arrangement to which the
Trust is a party or by which it is bound.
(d) The Trust's Acquired Funds have elected to qualify and have
qualified as regulated investment companies under Part I of
Subchapter M of Subtitle A, Chapter 1, of the Code, as of and
since their first taxable year; have been regulated investment
companies under such Part of the Code at all times since the end
of their first taxable year when they so qualified; and qualify
and shall continue to qualify as regulated investment companies
for their taxable year ending upon its liquidation.
(e) The Trust has valued, and will continue to value, the portfolio
securities and other assets of its Acquired Funds in accordance
with applicable legal requirements.
(f) The proxy materials included within the Registration Statement on
Form N-14 (the "N-14 Registration Statement") from its effective
date with the SEC, through the time of the shareholders meeting
referred to in Section 6 and the Effective Time of the
Consolidation, insofar as they relate to the Trust, (i) shall
comply in all material respects with the provisions of the
Securities Exchange Act of 1934 as amended (the "1934 Act") and
the 1940 Act, the rules and regulations thereunder, and state
securities laws, and (ii) shall not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made
therein not misleading.
(g) All of the issued and outstanding shares of the Trust's Acquired
Funds have been validly issued and are fully paid and
non-assessable, and were offered for sale and sold in conformity
with the registration requirements of all applicable federal and
state securities laws.
(h) The Trust shall operate the business of its Acquired Funds in the
ordinary course between the date hereof and the Effective Time of
the Consolidation, it being agreed that such ordinary course of
business will include the declaration and payment of customary
dividends and distributions and any other dividends and
distributions deemed advisable in anticipation of the
Consolidation. Notwithstanding anything herein to the contrary,
the Trust may take all appropriate action necessary in order for
the Trust to receive the opinion provided for in Sections 9(e)
and 10(g).
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(i) At the Effective Time of the Consolidation, the Trust's Acquired
Funds will have good and marketable title to the Fund Assets and
full right, power and authority to assign, deliver and otherwise
transfer such assets.
(j) At the Effective Time of the Consolidation, all federal and other
tax returns and reports of the Acquired Funds required by law to
have been filed by such time shall have been filed, and all
federal and other taxes shall have been paid so far as due, or
provision shall have been made for the payment thereof and, to
the best knowledge of management of the Trust, no such return or
report shall be currently under audit and no assessment shall
have been asserted with respect to such returns or reports.
5. Certain Representations, Warranties and Agreements of the Company on
behalf of its Acquired Funds. The Company, on behalf of itself and,
where appropriate, its respective Acquired Funds, represents and
warrants to, and agrees with, Reserves on behalf of the corresponding
Acquiring Funds as follows, with such representations, warranties and
agreements made on behalf of the Acquired Funds on a several (and not
joint, or joint and several) basis:
(a) The Company is a corporation, duly created, validly existing and
in good standing under the laws of the State of Maryland. The
Company is registered with the SEC as an open-end management
investment company under the 1940 Act, and such registration is
in full force and effect.
(b) The Company has the power to own all of its properties and assets
and to consummate the transactions contemplated herein, and has
all necessary federal, state and local authorizations to carry on
its business as now being conducted and to consummate the
transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized by the Board of Directors
of the Company on behalf of its respective Acquiring Funds, and
has been executed and delivered by duly authorized officers of
the Company, and represents a valid and binding contract,
enforceable in accordance with its terms, subject as to
enforcement to bankruptcy, insolvency, reorganization,
arrangement, moratorium, and other similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles. The execution and delivery of this
Agreement does not, and, subject to the approval of shareholders
referred to in Section 7, the consummation of the transactions
contemplated by this Agreement will not, violate the Articles of
Incorporation or By-Laws of the Company, or any material
agreement or arrangement to which the Company is a party or by
which it is bound.
(d) The Company's Acquired Funds have elected to qualify and have
qualified as regulated investment companies under Part I of
Subchapter M of Subtitle A, Chapter 1, of the Code, as of and
since their first taxable year; have been regulated investment
companies under such Part of the Code at all times since the end
of their first taxable year when they so qualified; and qualify
and shall continue to qualify as regulated investment companies
for their taxable year ending upon its liquidation.
(e) The Company has valued, and will continue to value, the portfolio
securities and other assets of its Acquired Funds in accordance
with applicable legal requirements.
(f) The proxy materials included within the Registration Statement on
Form N-14 (the "N-14 Registration Statement") from its effective
date with the SEC, through the time of the shareholders meeting
referred to in Section 7 and the Effective Time of the
Consolidation, insofar as they relate to the Company, (i) shall
comply in all material respects with the provisions of the
Securities Exchange Act of 1934 as amended (the "1934 Act") and
the 1940 Act, the rules and regulations thereunder, and state
securities laws, and (ii) shall not contain any untrue statement
of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made
therein not misleading.
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(g) All of the issued and outstanding shares of the Company's
Acquired Funds have been validly issued and are fully paid and
non-assessable, and were offered for sale and sold in conformity
with the registration requirements of all applicable federal and
state securities laws.
(h) The Company shall operate the business of its Acquired Funds in
the ordinary course between the date hereof and the Effective
Time of the Consolidation, it being agreed that such ordinary
course of business will include the declaration and payment of
customary dividends and distributions and any other dividends and
distributions deemed advisable in anticipation of the
Consolidation. Notwithstanding anything herein to the contrary,
the Company may take all appropriate action necessary in order
for the Company to receive the opinion provided for in Sections
9(e) and 10(g).
(i) At the Effective Time of the Consolidation, the Company's
Acquired Funds will have good and marketable title to the Fund
Assets and full right, power and authority to assign, deliver and
otherwise transfer such assets.
(j) At the Effective Time of the Consolidation, all federal and other
tax returns and reports of the Acquired Funds required by law to
have been filed by such time shall have been filed, and all
federal and other taxes shall have been paid so far as due, or
provision shall have been made for the payment thereof and, to
the best knowledge of management of the Company, no such return
or report shall be currently under audit and no assessment shall
have been asserted with respect to such returns or reports.
6. Certain Representations, Warranties and Agreements of Reserves on
behalf of the Acquiring Funds. Reserves, on behalf of itself and
where appropriate, the Acquiring Funds, represents and warrants to,
and agrees with each of the Trust and the Company on behalf of their
respective Acquired Funds as follows, with such representations,
warranties and agreements made on behalf of the Acquiring Funds on a
several (and not joint, or joint and several) basis:
(a) Reserves is a business trust duly created, validly existing and
in good standing under the laws of the Commonwealth or
Massachusetts. Nations Portfolios is registered with the SEC as
an open-end management investment company under the 1940 Act and
such registration is in full force and effect.
(b) Reserves has the power to own all of its properties and assets
and to consummate the transactions contemplated herein, and has
all necessary federal, state and local authorizations to carry on
its business as now being conducted and to consummate the
transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized by the Board of Trustees
of Reserves on behalf of the Acquiring Funds, and executed and
delivered by duly authorized officers of Reserves, and represents
a valid and binding contract, enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights
and to general equity principles. The execution and delivery of
this Agreement does not, and the consummation of the transactions
contemplated by this Agreement will not, violate the Articles of
Incorporation or By-Laws of Nations Portfolios or any material
agreement or arrangement to which it is a party or by which it is
bound.
(d) The Acquiring Funds has elected to qualify and has qualified as a
regulated investment company under Part I of Subchapter M of
Subtitle A, Chapter 1, of the Code, as of and since its first
taxable year; has been a regulated investment company under such
Part of the Code at all times since the end of its first taxable
year when it so qualified; and qualifies and shall continue to
qualify as a regulated investment company for its current taxable
year.
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(e) Nations Portfolios has valued, and will continue to value, the
portfolio securities and other assets of the Acquiring Funds in
accordance with applicable legal requirements.
(f) The N-14 Registration Statement, including the proxy materials
contained therein, from its effective date with the SEC through
the time of the shareholders meeting referred to in Section 6 and
at the Effective Time of the Consolidation, insofar as it relates
to Nations Portfolios, or the Acquiring Funds, or the Primary A
Shares, Primary B Shares, Investor A Shares, Investor B Shares or
Investor C Shares of the Acquiring Funds to be issued pursuant
thereto (i) shall comply in all material respects with the
provisions of the Securities Act of 1933, as amended, (the "1933
Act"), the 1934 Act and the 1940 Act, the rules and regulations
thereunder, and state securities laws, and (ii) shall not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements made therein not misleading.
(g) The shares of the Acquiring Funds to be issued and delivered to
the Acquired Funds for the account of the shareholders of the
Acquired Funds, pursuant to the terms hereof, shall have been
duly authorized as of the Effective Time of the Consolidation
and, when so issued and delivered, shall be duly and validly
issued, fully paid and non-assessable, and no shareholder of the
Acquiring Funds shall have any preemptive right of subscription
or purchase in respect thereto.
(h) All of the issued and outstanding shares of the Acquiring Funds
have been validly issued and are fully paid and non-assessable,
and were offered for sale and sold in conformity with the
registration requirements of all applicable federal and state
securities laws.
(i) Nations Portfolios shall operate the business of the Acquiring
Funds in the ordinary course between the date hereof and the
Effective Time of the Consolidation, except that Nations
Portfolios shall complete all measures in respect of the
Acquiring Funds prior to the Effective Time of the Consolidation
to ensure that the Consolidation does not qualify as a
"reorganization" within the meaning of Section 368 of the Code,
regardless of whether such measures are in the ordinary course.
It is understood that such ordinary course of business will
include the declaration and payment of customary dividends and
distributions and any other dividends and distributions deemed
advisable in anticipation of the Consolidation.
(j) At the Effective Time of the Consolidation, all federal and other
tax returns and reports of the Acquiring Funds required by law to
have been filed by such time shall have been filed, and all
federal and other taxes shall have been paid so far as due, or
provision shall have been made for the payment thereof and, to
the best knowledge of management of Nations Portfolios, no such
return or report shall be currently under audit and no assessment
shall have been asserted with respect to such returns or reports.
7. Shareholder Action. As soon as practicable after the effective date
of the N-14 Registration Statement each the Trust and the Company
shall hold a meeting(s) of the shareholders of each's respective
Acquired Funds for the purpose of considering and voting upon:
(a) approval of this Agreement and the Consolidation contemplated
hereby; and
(b) such other matters as may be determined by the Board of Directors
of the Company or the Board of Trustees of the Trust.
8. Regulatory Filings. As soon as practicable, each of the Trust and the
Company shall file an N-14 Registration Statement with the SEC, which
shall include all proxy materials required in connection with the
Acquired Funds shareholder approval referenced in Section 7, and,
where required, with appropriate state securities regulatory
authorities.
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9. Closing Date, Effective Time of the Consolidation. The "Closing Date"
shall be August 20, 1999, or such earlier or later date as may be
mutually agreed in writing by the parties hereto. Delivery of the
Fund Assets and the shares of the Acquiring Funds to be issued
pursuant to Section 1 and the liquidation of the Acquired Funds
pursuant to Section 2 shall occur on the day following the Closing
Date, whether or not such day is a business day, or on such other
date, and at such place and time, as may be mutually agreed in
writing, by the parties hereto. The date and time at which such
actions are taken are referred to herein as the "Effective Time of
the Consolidation." To the extent any Fund Assets are, for any
reason, not transferred at the Effective Time of the Consolidation,
the Trust and the Company shall cause such Fund Assets to be
transferred in accordance with this Agreement at the earliest
practicable date thereafter.
10.Conditions to the Trust's Obligations on Behalf of its Acquired
Funds. The obligations of the Trust hereunder shall be subject to the
following conditions precedent:
(a) This Agreement and the Consolidation shall have been approved by
the Board of Trustees of the Trust and by a majority of the
shareholders of its Acquired Funds in the manner required by
applicable law and this Agreement.
(b) All representations and warranties of the Trust made in this
Agreement shall be true and correct in all material respects as
if made at and as of the Valuation Time and the Effective Time of
the Consolidation.
(c) The Trust shall have delivered a certificate executed in its name
by its President or Vice President and its Treasurer or Assistant
Treasurer, in a form reasonably satisfactory and dated as of the
Closing Date, to the effect that the representations and
warranties of the Acquiring Funds made in this Agreement are true
and correct at and as of the Valuation Time and that, to the best
of its knowledge, the Fund Assets include only assets which the
Trust's Acquiring Funds may properly acquire under its investment
objectives, policies and limitations and may otherwise be
lawfully acquired by such Acquiring Funds.
(d) The Trust shall have received an opinion of Morrison & Foerster
LLP, as counsel to the Trust in form reasonably satisfactory to
Reserves and dated the Closing Date, substantially to the effect
that (i) the Trust is a business trust duly established and
validly existing under the laws of the Commonwealth of
Massachusetts; (ii) the shares of the corresponding Acquiring
Funds to be delivered to the Trust's Acquired Funds as provided
for by this Agreement are duly authorized and upon delivery will
be validly issued, fully paid and non-assessable by the Trust;
(iii) this Agreement has been duly authorized, executed and
delivered by the Trust, and represents a legal, valid and binding
contract, enforceable in accordance with its terms, subject to
the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance and similar laws relating to or affecting creditors'
rights generally and court decisions with respect thereto, and
such counsel shall express no opinion with respect to the
application of equitable principles in any proceeding whether at
law or in equity; (iv) the execution and delivery of this
Agreement did not, and the consummation of the transactions
contemplated by this Agreement will not, violate the Declaration
of Trust or By-Laws of the Trust or any material contract known
to such counsel to which the Trust is a party or by which it is
bound; and (v) no consent, approval, authorization or order of
any court or governmental authority is required for the
consummation by the Trust of the transactions contemplated by
this Agreement, except such as have been obtained under the 1933
Act, the 1934 Act, the 1940 Act, the rules and regulations under
those Acts and such as may be required by state securities laws
or such as may be required subsequent to the Effective Time of
the Consolidation. Such opinion may rely on the opinion of other
counsel to the extent set forth in such opinion, provided such
other counsel is reasonably acceptable to Reserves.
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(e) The Trust shall have received an opinion of Morrison & Foerster
LLP, based upon reasonable representations made in certificates
provided by the Trust, its affiliates and/or principal
shareholders of the Trust's Acquired Funds and/or the
corresponding Acquiring Funds, addressed to the Trust in a form
reasonably satisfactory to them, and dated the Closing Date, with
respect to the matters specified in Subsection 11(g).
(f) The Trust shall have received (i) a memorandum addressed to the
Trust, in a form reasonably satisfactory to them, prepared by
Morrison & Foerster LLP, or another person approved by the
parties, concerning the registration of shares to be issued by
Trust pursuant to this Agreement under applicable state
securities laws or the exemption from registration under such
laws, and (ii) assurance reasonably satisfactory to it that all
permits and other authorizations necessary under state securities
laws to consummate the transactions contemplated by this
Agreement have been obtained.
(g) The N-14 Registration Statement shall have become effective under
the 1933 Act and no stop order suspending the effectiveness shall
have been instituted, or to the knowledge of the Trust,
contemplated by the SEC.
(h) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief
in connection with, this Agreement or the transactions
contemplated herein.
(i) The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any proceeding
seeking to enjoin consummation of the transactions contemplated
by this Agreement under Section 25(c) of the 1940 Act.
(j) The Trust on behalf of the Acquired Funds shall have performed
and complied in all material respects with each of its agreements
and covenants required by this Agreement to be performed or
complied with by it prior to or at the Valuation Time and the
Effective Time of the Consolidation.
(k) The Trust shall have received a duly executed instrument whereby
the corresponding Acquiring Funds assume all of the liabilities
of the Trust's Acquired Funds.
11.Conditions to the Company's Obligations on Behalf of its Acquired
Funds. The obligations of the Company hereunder shall be subject to
the following conditions precedent:
(a) This Agreement and the Consolidation shall have been approved by
the Board of Directors of the Company and by a majority of the
shareholders of its Acquired Funds in the manner required by
applicable law and this Agreement.
(b) All representations and warranties of the Company made in this
Agreement shall be true and correct in all material respects as
if made at and as of the Valuation Time and the Effective Time of
the Consolidation.
(c) The Company shall have delivered a certificate executed in its
name by its President or Vice President and its Treasurer or
Assistant Treasurer, in a form reasonably satisfactory and dated
as of the Closing Date, to the effect that the representations
and warranties of the Acquiring Funds made in this Agreement are
true and correct at and as of the Valuation Time and that, to the
best of its knowledge, the Fund Assets include only assets which
the Company's Acquiring Funds may properly acquire under its
investment objectives, policies and limitations and may otherwise
be lawfully acquired by such Acquiring Funds.
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(d) The Company shall have received an opinion of Morrison & Foerster
LLP, as counsel to the Company in form reasonably satisfactory to
Reserves and dated the Closing Date, substantially to the effect
that (i) the Company is a business trust duly established and
validly existing under the laws of the Commonwealth of
Massachusetts; (ii) the shares of the corresponding Acquiring
Funds to be delivered to the Company's Acquired Funds as provided
for by this Agreement are duly authorized and upon delivery will
be validly issued, fully paid and non-assessable by the Company;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company, and represents a legal, valid and
binding contract, enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, moratorium,
fraudulent conveyance and similar laws relating to or affecting
creditors' rights generally and court decisions with respect
thereto, and such counsel shall express no opinion with respect
to the application of equitable principles in any proceeding
whether at law or in equity; (iv) the execution and delivery of
this Agreement did not, and the consummation of the transactions
contemplated by this Agreement will not, violate the Articles of
Incorporation or By-Laws of the Company or any material contract
known to such counsel to which the Company is a party or by which
it is bound; and (v) no consent, approval, authorization or order
of any court or governmental authority is required for the
consummation by the Company of the transactions contemplated by
this Agreement, except such as have been obtained under the 1933
Act, the 1934 Act, the 1940 Act, the rules and regulations under
those Acts and such as may be required by state securities laws
or such as may be required subsequent to the Effective Time of
the Consolidation. Such opinion may rely on the opinion of other
counsel to the extent set forth in such opinion, provided such
other counsel is reasonably acceptable to Reserves.
(e) The Company shall have received an opinion of Morrison & Foerster
LLP, based upon reasonable representations made in certificates
provided by the Company, its affiliates and/or principal
shareholders of the Company's Acquired Funds and/or the
corresponding Acquiring Funds, addressed to the Company in a form
reasonably satisfactory to them, and dated the Closing Date, with
respect to the matters specified in Subsection 11(g).
(f) The Company shall have received (i) a memorandum addressed to the
Company, in a form reasonably satisfactory to them, prepared by
Morrison & Foerster LLP, or another person approved by the
parties, concerning the registration of shares to be issued by
Company pursuant to this Agreement under applicable state
securities laws or the exemption from registration under such
laws, and (ii) assurance reasonably satisfactory to it that all
permits and other authorizations necessary under state securities
laws to consummate the transactions contemplated by this
Agreement have been obtained.
(g) The N-14 Registration Statement shall have become effective under
the 1933 Act and no stop order suspending the effectiveness shall
have been instituted, or to the knowledge of the Company,
contemplated by the SEC.
(h) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit, or obtain damages or other relief
in connection with, this Agreement or the transactions
contemplated herein.
(i) The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any proceeding
seeking to enjoin consummation of the transactions contemplated
by this Agreement under Section 25(c) of the 1940 Act.
(j) The Company on behalf of the Acquired Funds shall have performed
and complied in all material respects with each of its agreements
and covenants required by this Agreement to be performed or
complied with by it prior to or at the Valuation Time and the
Effective Time of the Consolidation.
(k) The Company shall have received a duly executed instrument
whereby the corresponding Acquiring Funds assume all of the
liabilities of the Company's Acquired Funds.
12.Conditions to Reserves's Obligations on behalf of the Acquiring
Funds. The obligations of Reserves hereunder shall be subject to the
following conditions precedent:
I-10
<PAGE>
(a) This Agreement and the Consolidation shall have been approved by
the Board of Trustees of Reserves on behalf of the Acquiring
Funds and by a majority of the shareholders of the Acquired Funds
in the manner required by applicable law and this Agreement.
(b) Reserves shall have delivered to each of the Trust and the
Company a statement of assets and liabilities of the Acquired
Funds, showing the tax costs of such securities by lot and the
holding periods of such securities, as of the Valuation Time,
certified by the Treasurer or Assistant Treasurer of Nations
Reserves as having been prepared in accordance with generally
accepted accounting principles consistently applied.
(c) Reserves shall have duly executed and delivered to each of the
Trust and the Company such bills of sale, assignments,
certificates and other instruments of transfer ("Transfer
Documents") as the Trust and/or the Company may deem necessary or
desirable to transfer all of the Acquired Funds' right, title and
interest in and to the Fund Assets.
(d) All representations and warranties of Reserves made in this
Agreement shall be true and correct in all material respects as
if made at and as of the Valuation Time and the Effective Time of
the Consolidation.
(e) Reserves shall have delivered a certificate executed in its name
by its President or Vice President and its Treasurer or Assistant
Treasurer, in a form reasonably satisfactory to each of the Trust
and the Company and dated as of the Closing Date, to the effect
that the representations and warranties of the Acquired Funds
made in this Agreement are true and correct at and as of the
Valuation Time.
(f) Reserves shall have received an opinion of Morrison & Foerster
LLP, as counsel to Reserves, in a form reasonably satisfactory to
the Trust and the Company and dated the Closing Date,
substantially to the effect that (i) Reserves is a business trust
duly established and validly existing under the laws of the
Commonwealth of Massachusetts; (ii) this Agreement has been duly
authorized, executed and delivered by Reserves and represents a
legal, valid and binding contract, enforceable in accordance with
its terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance and similar laws relating to or
affecting creditors' rights generally and court decisions with
respect thereto, and such counsel shall express no opinion with
respect to the application of equitable principles in any
proceeding, whether at law or in equity; (iii) the execution and
delivery of this Agreement did not, and the consummation of the
transactions contemplated by this Agreement will not, violate the
Declaration of Trust or By-Laws of Reserves or any material
contract known to such counsel to which Reserves is a party or by
which it is bound; and (iv) no consent, approval, authorization
or order of any court or governmental authority is required for
the consummation by Reserves of the transactions contemplated by
this Agreement, except such as have been obtained under the 1933
Act, the 1934 Act, the 1940 Act, the rules and regulations under
those Acts and such as may be required under the state securities
laws or such as may be required subsequent to the Effective Time
of the Consolidation. Such opinion may rely on the opinion of
other counsel to the extent set forth in such opinion, provided
such other counsel is reasonably acceptable to Reserves.
(g) Reserves shall have received an opinion of Morrison & Foerster
LLP, based upon reasonable representations made in certificates
provided by Reserves, its affiliates and/or principal
shareholders of the Acquired Funds and/or the Acquiring Funds,
addressed to Reserves in a form reasonably satisfactory to the
Trust and the Company, and dated the Closing Date, substantially
to the effect that, for federal income tax purposes, the
Consolidation will qualify as a "reorganization," within the
meaning of Section 368(a) of the Code, and the Acquired Funds and
the Acquiring Funds will each be a "party to a reorganization,"
within the meaning of Section 368(b) of the Code, with respect to
the Consolidation.
I-11
<PAGE>
(h) The Fund Assets to be transferred to the Acquiring Funds under
this Agreement shall include no assets which the Acquiring Funds
may not properly acquire pursuant to its investment objectives,
policies or restrictions or may not otherwise lawfully acquire.
(i) The N-14 Registration Statement shall have become effective under
the 1933 Act and no stop order suspending such effectiveness
shall have been instituted or, to the knowledge of Reserves,
contemplated by the SEC.
(j) No action, suit or other proceeding shall be threatened or
pending before any court or governmental agency in which it is
sought to restrain or prohibit or obtain damages or other relief
in connection with this Agreement or the transactions
contemplated herein.
(k) The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any proceeding
seeking to enjoin consummation of the transactions contemplated
by this Agreement under Section 25(c) of the 1940 Act.
(l) Reserves on behalf of the Acquiring Funds shall have performed
and complied in all material respects with each of its agreements
and covenants required by this Agreement to be performed or
complied with by it prior to or at the Valuation Time and the
Effective Time of the Consolidation.
13.Survival of Representations and Warranties. The representations and
warranties of Reserves on behalf of the Acquiring Funds set forth in
this Agreement shall survive the delivery of the Fund Assets to the
Acquiring Funds and the issuance of the shares of the Acquiring Funds
at the Effective Time of the Consolidation.
14.Termination of Agreement. This Agreement may be terminated by a party
at or, in the case of Subsection 12(c), below, at any time prior to,
the Effective Time of the Consolidation by a vote of a majority of
its Board members as provided below:
(a) By Reserves on behalf of the Acquiring Funds if the conditions
set forth in Section 10 and 11 are not satisfied as specified in
said Section;
(b) By the Trust on behalf of its Acquired Funds if the conditions
set forth in Section 12 are not satisfied as specified in said
Section;
(c) By the Company on behalf of its Acquired Funds if the conditions
set forth in Section 12 are not satisfied as specified in said
Section; and
(c) By mutual written consent of Reserves, the Company and the Trust.
15.Governing Law. This Agreement and the transactions contemplated
hereby shall be governed, construed and enforced in accordance with
the laws of the State of Maryland, except to the extent preempted by
federal law.
16.Brokerage Fees and Expenses.
(a) Reserves represents and warrants that there are no brokers or
finders entitled to receive any payments in connection with the
transactions provided for herein.
(b) NationsBanc Advisors, Inc. or its affiliates will be responsible
for the customary expenses related to entering into and carrying
out the provisions of this Agreement, whether or not the
transactions contemplated hereby are consummated.
I-12
<PAGE>
17.Amendments
This Agreement may be amended, modified or supplemented in such
manner as may be mutually agreed upon in writing by the authorized
officers of the Trust, acting on behalf of its Acquired Funds or the
Company, acting on behalf of its Acquired Funds, and Reserves, acting
on behalf of the Acquiring Funds; provided, however, that following
the meetings of the shareholders of the Acquired Funds, no such
amendment may have the effect of changing the provisions for
determining the number of shares of the Acquiring Funds to be issued
to the Transferor Record Holders under this Agreement to the
detriment of such Transferor Record Holders, or otherwise materially
and adversely affecting the Acquired Funds, without the Acquired
Funds obtaining its shareholders' further approval.
At any time prior to or (to the fullest extent permitted by law)
after approval of this Agreement by the shareholders of the Acquired
Funds, the Trust on behalf of its Acquired Funds, or the Company, on
behalf of its Acquiring Funds, may waive any breach by Reserves, on
behalf of the Acquiring Funds, or the failure to satisfy any of the
conditions to its obligations (such waiver to be in writing and
signed by an officer of such registered investment companies).
At any time prior to or (to the fullest extent permitted by law)
after approval of this Agreement by the shareholders of the Acquired
Funds, Reserves, on behalf of the Acquiring Funds, may waive any
breach by the Trust on behalf of its Acquired Funds, or the Company,
on behalf of its Acquiring Funds, or the failure to satisfy any of
the conditions to either of their obligations (such waiver to be in
writing and signed by an officer of such registered investment
companies).
18. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
I-13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers designated below as of the date first
written above.
NATIONS FUND, INC.
On behalf of its Acquired Funds identified on Schedule A
By:____________________________________________
Richard H. Blank, Jr.
Secretary and Treasurer
NATIONS FUND TRUST
On behalf of its Acquired Funds identified on Schedule A
By:____________________________________________
Richard H. Blank, Jr.
Secretary and Treasurer
NATIONS INSTITUTIONAL RESERVES
On behalf of its Acquiring Funds identified on
Schedule A
By:____________________________________________
Richard H. Blank, Jr.
Secretary and Treasurer
I-14
<PAGE>
SCHEDULE A
SHAREHOLDERS OWNING SHARES OF THE WOULD RECEIVE SHARES OF THE
FOLLOWING TRUST'S ACQUIRED FUNDS FOLLOWING RESERVES ACQUIRING
AND CLASSES: FUNDS AND CLASSES:
Nations Gov't Money Market Fund Nations Government Reserves
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
Daily Shares Daily Shares
Nations Tax-Exempt Fund Nations Municipal Reserves
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
Daily Shares Daily Shares
SHAREHOLDERS OWNING SHARES OF THE WOULD RECEIVE SHARES OF THE
FOLLOWING COMPANY'S ACQUIRED FOLLOWING RESERVES ACQUIRING
FUNDS AND CLASSES: FUNDS AND CLASSES:
Nations Prime Fund Nations Cash Reserves
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
Daily Shares Daily Shares
Marsico Class Marsico Class
Nations Treasury Fund Nations Treasury Reserves
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
Daily Shares Daily Shares
I-15
<PAGE>
APPENDIX II
Expense Summaries of the Money Market Funds
and Reserves Money Market Funds
-----------------------------------------------
The following tables (a) compare the fees and expenses as of February
28, 1999, for each class of the Money Market Funds and the designated classes of
the corresponding Reserves Money Market Funds; and (b) show the estimated fees
and expenses for the combined Fund on a pro forma basis after giving effect to
the Consolidation. The fees and expenses, as of February 28, 1999, for the
Reserves Money Market Funds have been adjusted to reflect changes in investment
advisory and administration fee rates that are expected to become effective in
May, 1999. As of February 28, 1999, there were no assets in the Trust Class,
Investor Class and Daily Class of shares of the Reserves Money Market Funds.
However, in May 1999, the Reserves Money Market Funds received substantial
additional assets as a result of the reorganization of the Pacific Horizon Money
Market Funds, a former family of funds advised by Bank of America, into the
Reserves Money Market Funds. The pro forma expense ratios in the following
tables do reflect the inflow of such assets.
The purpose of these tables is to assist shareholders in understanding
the various costs and expenses that investors in these portfolios will bear as
shareholders. The tables do not reflect any charges that may be imposed by
institutions directly on their customer accounts in connection with investments
in the portfolios. The fund operating expense levels shown in this
Proxy/Prospectus assume current net asset levels; pro forma expense levels shown
should not be considered an actual representation of future expenses or
performance. Such pro forma expense levels project anticipated levels but actual
expense levels may be greater or less than those shown.
II-1
<PAGE>
NATIONS GOVERNMENT FUND-PRIMARY A SHARES
NATIONS GOVERNMENT RESERVES-TRUST SHARES
<TABLE>
<CAPTION>
Nations Nations
Government Government Combined
Fund Reserves Fund
Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.13% 0.10% 0.10%
Shareholder Servicing Plan................. 0.00% 0.10% 0.10%
Other Expenses (after waivers)**........... 0.17% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.30% 0.30% 0.30%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Government
Fund, and 0.15% for Nations Government Reserves and the Combined Fund.
** Other Expenses (absent waivers) would be 0.19% for Nations Government
Fund, and 0.14% for Nations Government Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.59% for
Nations Government Fund, and 0.39% for Nations Government Reserves and
the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations
Government Government Combined
Fund Reserves Fund
Pro Forma
<S> <C> <C> <C>
1 year ................................... $3 $3 $3
3 years .................................. $10 $10 $10
5 years .................................. $17 $17 $17
10 years ................................. $38 $38 $38
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-2
<PAGE>
NATIONS GOVERNMENT FUND-PRIMARY B SHARES
NATIONS GOVERNMENT RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Nations
Government Government Combined
Fund Reserves Fund
Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.13% 0.10% 0.10%
12b-1 Fees................................. 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.17% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Government
Fund, and 0.15% for Nations Government Reserves and the Combined Fund.
** Other Expenses (absent waivers) would be 0.19% for Nations Government
Fund, and 0.14% for Nations Government Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.84% for
Nations Government Fund, and 0.64% for Nations Government Reserves and
the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Government Government Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-3
<PAGE>
NATIONS GOVERNMENT FUND-INVESTOR A SHARES
NATIONS GOVERNMENT RESERVES-MARKET SHARES
<TABLE>
<CAPTION>
Nations Nations
Government Government Combined
Fund Reserves Fund
Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.13% 0.10% 0.10%
12b-1 Fees................................. 0.10% 0.20% 0.20%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.17% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.65% 0.65% 0.65%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Government
Fund, and 0.15% for Nations Government Reserves and the Combined Fund.
** Other Expenses (absent waivers) would be 0.19% for Nations Government
Fund, and 0.14% for Nations Government Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.94% for
Nations Government Fund, and 0.74% for Nations Government Reserves and
the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations
Government Government Combined
Fund Reserves Fund
Pro Forma
<S> <C> <C> <C>
1 year ................................... $7 $7 $7
3 years .................................. $21 $21 $21
5 years .................................. $36 $36 $36
10 years ................................. $81 $81 $81
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-4
<PAGE>
NATIONS GOVERNMENT FUND-INVESTOR B SHARES
NATIONS GOVERNMENT RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Nations
Government Government Combined
Fund Reserves Fund
Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.13% 0.10% 0.10%
12b-1 Fees**............................... 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)***.......... 0.17% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):**** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Government
Fund, and 0.15% for Nations Government Reserves and the Combined Fund.
** 12b-1 Fees (absent waivers) would be 0.10% for Nations Government Fund.
*** Other Expenses (absent waivers) would be 0.19% for Nations Government
Fund, and 0.14% for Nations Government Reserves and the Combined Fund.
**** Total Fund Operating Expenses (absent waivers) would be 0.94% for
Nations Government Fund, and 0.64% for Nations Government Reserves and
the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Government Government Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-5
<PAGE>
NATIONS GOVERNMENT FUND-INVESTOR C SHARES
NATIONS GOVERNMENT RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Nations Combined
Government Government Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.13% 0.10% 0.10%
12b-1 Fees................................. 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.17% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Government
Fund, and 0.15% for Nations Government Reserves and the Combined Fund.
** Other Expenses (absent waivers) would be 0.19% for Nations Government
Fund, and 0.14% for Nations Government Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.84% for
Nations Government Fund, and 0.64% for Nations Government Reserves and
the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Government Government Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-6
<PAGE>
NATIONS GOVERNMENT FUND-DAILY SHARES
NATIONS GOVERNMENT RESERVES-DAILY SHARES
<TABLE>
<CAPTION>
Nations Nations Combined
Government Government Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.13% 0.10% 0.10%
12b-1 Fees**............................... 0.25% 0.35% 0.35%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)***.......... 0.17% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):**** 0.80% 0.80% 0.80%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Government
Fund, and 0.15% for Nations Government Reserves and the Combined Fund.
** 12b-1 Fees (absent waivers) would be 0.45% for Nations Government Fund.
*** Other expenses (absent waivers) would be 0.19% for Nations Government
Fund, and 0.14% for Nations Government Reserves and the Combined Fund.
**** Total Fund Operating Expenses (absent waivers) would be 1.29% for
Nations Government Fund, and 0.89% for Nations Government Reserves and
the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Government Government Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $8 $8 $8
3 years .................................. $26 $26 $26
5 years .................................. $44 $44 $44
10 years ................................. $99 $99 $99
</TABLE>
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-7
<PAGE>
NATIONS TAX EXEMPT FUND-PRIMARY A SHARES
NATIONS MUNICIPAL RESERVES-TRUST SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Tax Municipal Fund
Exempt Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
Shareholder Servicing Plan***.............. 0.00% 0.10% 0.10%
Other Expenses (after waivers)***.......... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.30% 0.30% 0.30%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Tax Exempt
Fund, and 0.15% for Nations Municipal Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.14% for Nations Tax-Exempt
Fund, 0.17% for Nations Municipal Reserves and 0.14% for the Combined
Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.54% for
Nations Tax Exempt Fund, 0.42% for Nations Municipal Reserves, and 0.39%
for the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Tax Exempt Municipal Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $3 $3 $3
3 years .................................. $10 $10 $10
5 years .................................. $17 $17 $17
10 years ................................. $38 $38 $38
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-8
<PAGE>
NATIONS TAX EXEMPT FUND-PRIMARY B SHARES
NATIONS MUNICIPAL RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Tax Municipal Fund
Exempt Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees................................. 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Tax Exempt
Fund, and 0.15% for Nations Municipal Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.14% for Nations Tax-Exempt
Fund, 0.17% for Nations Municipal Reserves and 0.14% for the Combined
Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.79% for
Nations Tax Exempt Fund, 0.67% for Nations Municipal Reserves, and 0.64%
for the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Tax Exempt Municipal Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years.................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-9
<PAGE>
NATIONS TAX EXEMPT FUND-INVESTOR A SHARES
NATIONS MUNICIPAL RESERVES-MARKET SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Tax Municipal Fund
Exempt Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees................................. 0.10% 0.20% 0.20%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.65% 0.65% 0.65%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Tax Exempt
Fund, and 0.15% for Nations Municipal Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.14% for Nations Tax-Exempt
Fund, 0.17% for Nations Municipal Reserves and 0.14% for the Combined
Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.89% for
Nations Tax Exempt Fund, 0.77% for Nations Municipal Reserves, and 0.74%
for the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Tax Exempt Municipal Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $7 $7 $7
3 years .................................. $21 $21 $21
5 years .................................. $36 $36 $36
10 years ................................. $81 $81 $81
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-10
<PAGE>
NATIONS TAX EXEMPT FUND-INVESTOR B SHARES
NATIONS MUNICIPAL RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Tax Municipal Fund
Exempt Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees**............................... 0.00% 0.10% 0.10%
Shareholder Servicing Plan***.............. 0.20% 0.25% 0.25%
Other Expenses (after waivers)****......... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):***** 0.50% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Tax Exempt
Fund, and 0.15% for Nations Municipal Reserves and the Combined Fund.
** 12b-1 Fees (absent waivers) would be 0.10% for Nations Tax Exempt Fund.
*** Shareholder Servicing Fees (absent waivers) would be 0.25% for Nations
Tax Exempt Fund.
**** Other expenses (absent waivers) would be 0.14% for Nations Tax-Exempt
Fund, 0.17% for Nations Municipal Reserves and 0.14% for the Combined
Fund.
***** Total Fund Operating Expenses (absent waivers) would be 0.89% for
Nations Tax Exempt Fund, 0.67% for Nations Municipal Reserves, and 0.64%
for the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Tax Exempt Municipal Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $5 $6 $6
3 years .................................. $16 $18 $18
5 years .................................. $28 $31 $31
10 years ................................. $63 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-11
<PAGE>
NATIONS TAX EXEMPT FUND-INVESTOR C SHARES
NATIONS MUNICIPAL RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Tax Municipal Fund
Exempt Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees................................. 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Tax Exempt
Fund, and 0.15% for Nations Municipal Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.14% for Nations Tax-Exempt
Fund, 0.17% for Nations Municipal Reserves and 0.14% for the Combined
Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.79% for
Nations Tax Exempt Fund, 0.67% for Nations Municipal Reserves, and 0.64%
for the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Tax Exempt Municipal Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-12
<PAGE>
NATIONS TAX EXEMPT FUND-DAILY SHARES
NATIONS MUNICIPAL RESERVES-DAILY SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Tax Municipal Fund
Exempt Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees**............................... 0.25% 0.35% 0.35%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)***.......... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):**** 0.80% 0.80% 0.80%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.40% for Nations Tax Exempt
Fund, and 0.15% for Nations Municipal Reserves and the Combined Fund.
** 12b-1 Fees (absent waivers) would be 0.45% for Nations Tax Exempt Fund.
*** Other expenses (absent waivers) would be 0.14% for Nations Tax-Exempt
Fund, 0.17% for Nations Municipal Reserves and 0.14% for the Combined
Fund.
**** Total Fund Operating Expenses (absent waivers) would be 1.24% for
Nations Tax Exempt Fund, 0.92% for Nations Municipal Reserves, and 0.89%
for the Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Government Government Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $8 $8 $8
3 years .................................. $26 $26 $26
5 years .................................. $44 $44 $44
10 years ................................. $99 $99 $99
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-13
<PAGE>
NATIONS PRIME FUND-PRIMARY A SHARES
NATIONS CASH RESERVES-TRUST SHARES
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Fund Cash Fund
Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
Shareholder Servicing Plan................. 0.00% 0.10% 0.10%
Other Expenses (after waivers)**........... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.30% 0.30% 0.30%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Prime Fund,
and 0.15% for Nations Cash Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.14% for Nations Prime Fund
and 0.14% for Nations Cash Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.34% for
Nations Prime Fund, and 0.39% for Nations Cash Reserves and the Combined
Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $3 $3 $3
3 years .................................. $10 $10 $10
5 years .................................. $17 $17 $17
10 years ................................. $38 $38 $38
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-14
<PAGE>
NATIONS PRIME FUND-PRIMARY B SHARES
NATIONS CASH RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Cash Fund
Prime Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees................................. 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Prime Fund,
and 0.15% for Nations Cash Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.14% for Nations Prime Fund
and 0.14% for Nations Cash Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.59% for
Nations Prime Fund, and 0.64% for Nations Cash Reserves and the Combined
Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-15
<PAGE>
NATIONS PRIME FUND-INVESTOR A SHARES
NATIONS CASH RESERVES-MARKET SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Cash Fund
Prime Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees................................. 0.10% 0.20% 0.20%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.65% 0.65% 0.65%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Prime Fund,
and 0.15% for Nations Cash Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.14% for Nations Prime Fund
and 0.14% for Nations Cash Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.69% for
Nations Prime Fund, and 0.74% for Nations Cash Reserves and the Combined
Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $7 $7 $7
3 years .................................. $21 $21 $21
5 years .................................. $36 $36 $36
10 years ................................. $81 $81 $81
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-16
<PAGE>
NATIONS PRIME FUND-INVESTOR B SHARES
NATIONS CASH RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Cash Fund
Prime Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees (after waivers)**............... 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)***.......... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):**** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Prime Fund,
and 0.15% for Nations Cash Reserves and the Combined Fund.
** 12b-1 Fees (absent waivers) would be 0.10% for Nations Prime Fund.
*** Other expenses (absent waivers) would be 0.14% for Nations Prime Fund
and 0.14% for Nations Cash Reserves and the Combined Fund.
**** Total Fund Operating Expenses (absent waivers) would be 0.69% for
Nations Prime Fund, and 0.64% for Nations Cash Reserves and the Combined
Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-17
<PAGE>
NATIONS PRIME FUND-INVESTOR C SHARES
NATIONS CASH RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Fund Cash Fund
Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees................................. 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Prime Fund,
and 0.15% for Nations Cash Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.14% for Nations Prime Fund
and 0.14% for Nations Cash Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.59% for
Nations Prime Fund, and 0.64% for Nations Cash Reserves and the Combined
Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-18
<PAGE>
NATIONS PRIME FUND-DAILY SHARES
NATIONS CASH RESERVES-DAILY SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Cash Fund
Prime Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
12b-1 Fees**............................... 0.25% 0.35% 0.35%
Shareholder Servicing Plan***.............. 0.25% 0.25% 0.25%
Other Expenses (after waivers)****......... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):**** 0.80% 0.80% 0.80%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Prime Fund,
and 0.15% for Nations Cash Reserves and the Combined Fund.
** 12b-1 Fees (absent waivers) would be 0.45% for Nations Prime Fund.
*** Other expenses (absent waivers) would be 0.14% for Nations Prime Fund
and 0.14% for Nations Cash Reserves and the Combined Fund.
**** Total Fund Operating Expenses (absent waivers) would be 1.04% for
Nations Prime Fund, and 0.89% for Nations Cash Reserves and the Combined
Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $8 $8 $8
3 years .................................. $26 $26 $26
5 years .................................. $44 $44 $44
10 years ................................. $99 $99 $99
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-19
<PAGE>
NATIONS PRIME FUND-MARSICO SHARES
NATIONS CASH RESERVES-MARSICO SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Cash Fund
Prime Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.18% 0.10% 0.10%
Administration Plan........................ 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.12% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Prime Fund,
and 0.15% for Nations Cash Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.14% for Nations Prime Fund
and 0.14% for Nations Cash Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.59% for
Nations Prime Fund, and 0.64% for Nations Cash Reserves and the Combined
Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-20
<PAGE>
NATIONS TREASURY FUND-PRIMARY A SHARES
NATIONS TREASURY RESERVES-TRUST SHARES
<TABLE>
<CAPTION>
Nations Nations Combined
Treasury Fund Treasury Fund
Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.17% 0.10% 0.10%
Shareholder Servicing Plan................. 0.00% 0.10% 0.10%
Other Expenses (after waivers)**........... 0.13% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.30% 0.30% 0.30%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Treasury
Fund, and 0.15% for Nations Treasury Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.15% for Nations Treasury Fund
and 0.15% for Nations Treasury Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.35% for
Nations Treasury Fund, and 0.40% for Nations Treasury Reserves and the
Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Treasury Treasury Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $3 $3 $3
3 years .................................. $10 $10 $10
5 years .................................. $17 $17 $17
10 years ................................. $38 $38 $38
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-21
<PAGE>
NATIONS TREASURY FUND-PRIMARY B SHARES
NATIONS TREASURY RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Treasury Fund
Treasury Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.17% 0.10% 0.10%
12b-1 Fees................................. 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.13% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses:*** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Treasury
Fund, and 0.15% for Nations Treasury Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.15% for Nations Treasury Fund
and 0.15% for Nations Treasury Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.60% for
Nations Treasury Fund, and 0.65% for Nations Treasury Reserves and the
Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-22
<PAGE>
NATIONS TREASURY FUND-INVESTOR A SHARES
NATIONS TREASURY RESERVES-MARKET SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Treasury Fund
Treasury Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.17% 0.10% 0.10%
12b-1 Fees................................. 0.10% 0.20% 0.20%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.13% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.65% 0.65% 0.65%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Treasury
Fund, and 0.15% for Nations Treasury Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.15% for Nations Treasury Fund
and 0.15% for Nations Treasury Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.70% for
Nations Treasury Fund, and 0.75% for Nations Treasury Reserves and the
Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Treasury Treasury Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $7 $7 $7
3 years .................................. $21 $21 $21
5 years .................................. $36 $36 $36
10 years ................................. $81 $81 $81
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-23
<PAGE>
NATIONS TREASURY FUND-INVESTOR B SHARES
NATIONS TREASURY RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Combined
Nations Treasury Fund
Treasury Fund Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.17% 0.10% 0.10%
12b-1 Fees (after waivers)**............... 0 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)***.......... 0.13% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses:**** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Treasury
Fund, and 0.15% for Nations Treasury Reserves and the Combined Fund.
** 12b-1 Fees (absent waivers) would be 0.10% for Nations Treasury Fund.
*** Other expenses (absent waivers) would be 0.15% for Nations Treasury Fund
and 0.15% for Nations Treasury Reserves and the Combined Fund.
**** Total Fund Operating Expenses (absent waivers) would be 0.70% for
Nations Treasury Fund, and 0.65% for Nations Treasury Reserves and the
Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-24
<PAGE>
NATIONS TREASURY FUND-INVESTOR C SHARES
NATIONS TREASURY RESERVES-INVESTOR SHARES
<TABLE>
<CAPTION>
Nations Nations Combined
Treasury Fund Treasury Fund
Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.17% 0.10% 0.10%
12b-1 Fees................................. 0.00% 0.10% 0.10%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)**........... 0.13% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses (after waivers):*** 0.55% 0.55% 0.55%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Treasury
Fund, and 0.15% for Nations Treasury Reserves and the Combined Fund.
** Other expenses (absent waivers) would be 0.15% for Nations Treasury Fund
and 0.15% for Nations Treasury Reserves and the Combined Fund.
*** Total Fund Operating Expenses (absent waivers) would be 0.60% for
Nations Treasury Fund, and 0.65% for Nations Treasury Reserves and the
Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $6 $6 $6
3 years .................................. $18 $18 $18
5 years .................................. $31 $31 $31
10 years ................................. $69 $69 $69
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in understanding
the various costs and expenses that an investor in the Funds will bear directly
or indirectly.
II-25
<PAGE>
NATIONS TREASURY FUND-DAILY SHARES
NATIONS TREASURY RESERVES-DAILY SHARES
<TABLE>
<CAPTION>
Nations Nations Combined
Treasury Fund Treasury Fund
Reserves Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases ... None None None
Maximum Sales Load Imposed on
Reinvested Dividends................... None None None
Deferred Sales Load(as a percentage of None None None
redemption proceeds) ..................
Redemption Fees ........................... None None None
Exchange Fee .............................. None None None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees (after waivers)* .......... 0.17% 0.10% 0.10%
12b-1 Fees (after waivers)**............... 0.25% 0.35% 0.35%
Shareholder Servicing Plan................. 0.25% 0.25% 0.25%
Other Expenses (after waivers)***.......... 0.13% 0.10% 0.10%
---- ---- ----
Total Fund Operating Expenses:**** 0.80% 0.80% 0.80%
==== ==== ====
</TABLE>
- --------------------
* Management Fees (absent waivers) would be 0.20% for Nations Treasury
Fund, and 0.15% for Nations Treasury Reserves and the Combined Fund.
** 12b-1 Fees (absent waivers) would be 0.45% for Nations Treasury Fund.
*** Other expenses (absent waivers) would be 0.15% for Nations Treasury Fund
and 0.15% for Nations Treasury Reserves and the Combined Fund.
**** Total Fund Operating Expenses (absent waivers) would be 1.05% for
Nations Treasury Fund, and 0.90% for Nations Treasury Reserves and the
Combined Fund.
Example:*
You would pay the following expenses on a $1,000 investment, assuming
(1) 5% gross annual return and (2) redemption at the end of each time period:
<TABLE>
<CAPTION>
Nations Nations Combined
Prime Cash Fund
Fund Reserves Pro Forma
<S> <C> <C> <C>
1 year ................................... $8 $8 $8
3 years .................................. $26 $26 $26
5 years .................................. $44 $44 $44
10 years ................................. $99 $99 $99
</TABLE>
- --------------------
* This example should not be considered a representation of future expenses
which may be more or less than those shown. The assumed 5% annual return is
hypothetical and should not be considered a representation of past or future
annual return; actual return may be greater or less than the assumed amount.
This example assumes that all dividends and other distributions are
reinvested and that the percentage amounts listed under Total Fund Operating
Expenses above remain the same in the years shown.
The purpose of the foregoing tables is to assist an investor in
understanding the various costs and expenses that an investor in the Funds will
bear directly or indirectly.
II-26
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
DATED JUNE 9, 1999
NATIONS INSTITUTIONAL RESERVES
NATIONS FUND TRUST
NATIONS FUND, INC.
One Bank of America Plaza, 33rd Floor
Charlotte, North Carolina 28255
1-800-321-7854
(AUGUST 13, 1999 SPECIAL MEETING OF SHAREHOLDERS OF NATIONS FUND TRUST AND
NATIONS FUND, INC.)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Proxy/Prospectus dated the date hereof, for the
Special Meeting of Shareholders of Nations Fund Trust and Nations Fund, Inc. to
be held on August 13, 1999. Copies of the Proxy/Prospectus may be obtained at no
charge by writing or calling Nations Fund Trust, Nations Institutional Reserves
or Nations Fund, Inc. 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 Proxy/Prospectus.
INCORPORATION OF DOCUMENTS BY REFERENCE IN STATEMENT OF ADDITIONAL INFORMATION
Further information about the Primary A, Primary B, Investor A, Investor
B, Investor C, and Daily Class Shares of Nations Government Money Market Fund
and Nations Tax-Exempt Fund is contained in and incorporated herein by reference
to the Statement of Additional Information for Nations Fund Trust dated August
1, 1998, as supplemented.
Further information about the Trust, Investor, Market, and Daily Class
Shares of Nations Cash Reserves, Nations Treasury Reserves, Nations Government
Reserves and Nations Municipal Reserves is contained in and incorporated herein
by reference to the Statement of Additional Information for Nations
Institutional Reserves dated September 1, 1998, as supplemented.
Further information about the Primary A, Primary B, Investor A, Investor
B, Investor C, Daily, and Marsico Class Shares of Nations Prime Fund and the
Primary A, Primary B, Investor A, Investor B, Investor C, and Daily Class Shares
of Nations Treasury Fund is contained in and incorporated herein by reference to
the Statement of Additional Information for Nations Fund, Inc. dated August 1,
1998, as supplemented.
The audited financial statements and related Report of Independent
Accountants for the year ended March 31, 1999 for the Nations Government Money
Market Fund and Nations Tax-Exempt Fund are incorporated herein by reference. No
other parts of the annual and semi-annual reports are incorporated herein by
reference.
The audited financial statements and related Report of Independent
Accountants for the year ended March 31, 1999 for Nations Cash Reserves,
Nations Treasury Reserves, Nations Government Reserves and Nations
Municipal Reserves are incorporated herein by reference. No other parts
of the annual reports are incorporated herein by reference.
The audited financial statements and related Report of Independent
Accountants for the year ended March 31, 1999 for the Nations Prime Fund and
Nations Treasury Fund are incorporated herein by reference. No other parts of
the annual reports are incorporated herein by reference.
The audited financial statements and related Report of Independent
Accountants for the year ended March 31, 1999 for the Nations Prime Fund and
Nations Treasury Fund are incorporated herein by reference. No other parts of
the annual reports are incorporated herein by reference.
1
<PAGE>
TABLE OF CONTENTS
General Information................................................. 3
Introductory Note to PRO FORMA Financial Information................ 4
2
<PAGE>
GENERAL INFORMATION
The Consolidation contemplates the transfer of all of the assets and
liabilities of each money market fund of Nations Fund Trust and Nations Fund,
Inc. (the "Money Market Funds") to a corresponding money market fund of Nations
Institutional Reserves (the "Reserves Money Market Funds") in exchange for
shares of designated classes of the Reserves Money Market Funds.
The shares issued by the Reserves Money Market Funds will have an
aggregate value equal to the aggregate value of the shares of the respective
Money Market Funds that were outstanding immediately before the closing of the
Consolidation.
After the transfer of their assets and liabilities in exchange for
shares of the Reserves Money Market Funds, the Money Market Funds will
distribute the shares of the Reserves Money Market Funds to their shareholders
in liquidation of the Money Market Funds. Each shareholder owning shares of the
Money Market Fund at the closing will receive shares of the corresponding
Reserves Money Market Fund of equal value, and will receive any unpaid dividends
or distributions that were declared before the closing. Nations Institutional
Reserves will establish an account for each former shareholder of the Money
Market Funds reflecting the appropriate number of Reserves Money Market Funds
shares distributed to the shareholder. These accounts will be substantially
identical to the accounts maintained by the Money Market Funds for each
shareholder. Upon completion of the consolidation with respect to the Money
Market Funds, all outstanding shares of the Money Market Funds will have been
redeemed and cancelled in exchange for shares of the Reserves Money Market Funds
distributed, and the Money Market Funds will wind up their affairs.
Other than in the normal course of business, it is not expected that
there will be any material realignment of the portfolio holdings of the Money
Market Funds after the Consolidation.
For further information about the transaction, see the Proxy/Prospectus.
3
<PAGE>
INTRODUCTORY NOTE TO PRO FORMA FINANCIAL INFORMATION
The following unaudited PRO FORMA information gives effect to the
proposed transfer of the assets and liabilities of Nations Prime Fund, Nations
Treasury Fund, Nations Government Money Market Fund and Nations Tax-Exempt Fund
to Nations Cash Reserves, Nations Treasury Reserves, Nations Government Reserves
and Nations Municipal Reserves, respectively, accounted for as if each transfer
had occurred as of March 31, 1999. In addition, each PRO FORMA combined
statement has been prepared based upon the proposed fee and expense structure of
Nations Cash Reserves, Nations Treasury Reserves, Nations Government Reserves
and Nations Municipal Reserves.
In addition, the following unaudited PRO FORMA information does not reflect
the consummation of the reorganization of the Pacific Horizon Government Fund
and Pacific Horizon Treasury Only Fund into Nations Government Reserves, nor
does it reflect the consummation of the reorganization of the Pacific Horizon
Tax-Exempt Money Fund into Nations Municipal Reserves. These reorganizations are
expected to take place in May 1999. Accordingly, it is anticipated that as of
the consummation of the Consolidation of the Money Market Funds and the Reserves
Money Market Funds, a significant level of assets will be invested in the
Reserves Money Market Funds.
In addition, the following unaudited PRO FORMA information does not reflect
the consummation of the reorganization of the Pacific Horizon Prime Fund into
Nations Cash Reserves, nor does it reflect the consummation of the
reorganization of the Pacific Horizon Treasury Fund into Nations Treasury
Reserves. These reorganizations are expected to take place in May 1999.
Accordingly, it is anticipated that as of the consummation of the Consolidation
of the Money Market Funds and the Reserves Money Market Funds, a significant
level of assets will be invested in the Reserves Money Market Funds.
The PRO FORMA financial information should be read in conjunction with the
historical financial statements and notes thereto of Nations Prime Fund, Nations
Treasury Fund, Nations Government Money Market Fund and Nations Tax-Exempt Fund
included or incorporated herein by reference in this Statement of Additional
Information. Each combination of the above money market funds of Nations Fund
Trust and Nations Fund, Inc. with those of Nations Institutional
Reserves will be accounted for as a tax-free consolidation.
4
<PAGE>
NATIONS CASH RESERVES / NATIONS PRIME FUND
Pro Forma Combining Schedule of Investments (unaudited)
March 31,1999
<TABLE>
<CAPTION>
<S> <C>
Nations Nations Pro Forma Description Coupon Maturity Nations Nations Pro Forma
Cash Reserves Prime Combined Rate Date Cash Reserves Prime Value
Shares/Par Shares/Par Shares/Par Value Value
BANK OBLIGATIONS - 11.39%
CERTIFICATES OF DEPOSIT - DOMESTIC -
0.28%
BANKERS TRUST 5.770 04/28/1999
23,500,000 20,000,000 43,500,000 23,497,838 19,998,160 43,495,998
----------------------------------------
TOTAL CERTIFICATES OF DEPOSIT -
DOMESTIC 23,497,838 19,998,160 43,495,998
CERTIFICATES OF DEPOSIT - YANKEE -
4.88%
BANK OF NOVA SCOTIA 5.330 03/03/2000
35,000,000 20,000,000 55,000,000 34,987,573 19,992,899 54,980,472
BAYERISCHE VEREINSBANK, (NEW YORK) 5.075 02/10/2000
50,000,000 40,000,000 90,000,000 49,983,365 39,986,692 89,970,057
COMMEZBANK, (NEW YORK) 5.270 03/01/2000
50,000,000 35,000,000 85,000,000 49,995,242 34,996,670 84,991,912
CREDIT AGRICOLE, (NEW YORK) 5.750 04/01/1999
40,000,000 50,000,000 90,000,000 40,000,000 50,000,000 90,000,000
DEUTSCHE BANK, (NEW YORK) 5.120 01/10/2000
50,000,000 40,000,000 90,000,000 50,000,000 40,000,000 90,000,000
DEUTSCHE BANK, (NEW YORK) 5.160 01/12/2000
50,000,000 40,000,000 90,000,000 50,000,000 40,000,000 90,000,000
DEUTSCHE BANK, (NEW YORK) 5.100 02/18/2000
50,000,000 40,000,000 90,000,000 49,985,078 39,988,062 89,973,140
SOCIETE GENERALE, (NEW YORK) 5.750 04/16/1999
30,000,000 30,000,000 60,000,000 29,985,630 29,985,630 59,971,260
SOCIETE GENERALE, (NEW YORK) 5.800 04/28/1999
30,000,000 30,000,000 29,985,630 29,985,630
UNION BANK OF SWITZERLAND, (NEW YORK) 5.080 01/13/2000
50,000,000 25,000,000 75,000,000 49,988,631 24,994,315 74,982,946
----------------------------------------
TOTAL CERTIFICATES OF DEPOSIT - YANKEE
434,911,149 319,944,268 754,855,417
TIME DEPOSITS - EURO - 6.23%
CREDIT AGRICOLE 5.125 04/01/1999
200,000,000 200,000,000 200,000,000 200,000,000
FIRST CHICAGO 5.125 04/01/1999
100,000,000 100,000,000 200,000,000 100,000,000 100,000,000 200,000,000
SOCIETE GENERALE 5.125 04/01/1999
90,000,000 135,000,000 225,000,000 90,000,000 135,000,000 225,000,000
WESTDEUTCHE LANDESBANKEN 5.188 04/01/1999
190,000,000 150,000,000 340,000,000 190,000,000 150,000,000 340,000,000
----------------------------------------
TOTAL TIME DEPOSITS - EURO
580,000,000 385,000,000 965,000,000
TOTAL BANK OBLIGATIONS
1,038,408,987 724,942,428 1,763,351,415
CORPORATE OBLIGATIONS - 71.53%
COMMERCIAL PAPER - 44.98%
ALEX BROWN, INC. 05/04/1999
50,000,000 50,000,000 49,775,417 49,775,417
AON CORPORATION 04/07/1999
13,000,000 12,000,000 25,000,000 12,989,383 11,990,200 24,979,583
AON CORPORATION 04/27/1999
10,309,000 10,309,000 10,272,667 10,272,667
AON CORPORATION 05/12/1999
50,000,000 32,139,000 82,139,000 49,720,972 31,959,647 81,680,619
BANKERS TRUST COMPANY OF NEW YORK 04/12/1999
35,000,000 35,000,000 34,944,389 34,944,389
BANKERS TRUST COMPANY OF NEW YORK 04/15/1999
25,000,000 25,000,000 50,000,000 24,949,444 24,949,444 49,898,889
BANKERS TRUST COMPANY OF NEW YORK 06/29/1999
30,000,000 30,000,000 29,628,425 29,628,425
BANKERS TRUST COMPANY OF NEW YORK 07/20/1999
50,000,000 25,000,000 75,000,000 49,251,389 24,625,694 73,877,083
BARTON CAPITAL 04/27/1999
36,648,000 35,000,000 71,648,000 36,518,307 34,876,139 71,394,446
BARTON CAPITAL 05/21/1999
28,332,000 28,332,000 28,140,759 28,140,759
BETA FINANCE 06/22/1999
15,500,000 15,500,000 15,328,768 15,328,768
CIESCO LP 05/19/1999
50,000,000 50,000,000 49,678,000 49,678,000
COUNTRYWIDE HOME LOAN 05/19/1999
25,000,000 50,000,000 75,000,000 24,836,333 49,672,667 74,509,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
COUNTRYWIDE HOME LOAN 05/24/1999
115,000,000 50,000,000 165,000,000 114,169,225 49,638,569 163,807,794
EDISON SECURITIZATION 04/23/1999
45,000,000 30,000,000 75,000,000 44,862,500 29,908,333 74,770,833
EDISON SECURITIZATION 05/11/1999
95,084,000 35,000,000 130,084,000 94,567,987 34,809,444 129,377,432
EDISON SECURITIZATION 05/12/1999
60,000,000 40,000,000 100,000,000 59,644,667 39,763,111 99,407,778
EDISON SECURITIZATION 06/30/1999
87,100,000 87,100,000 86,037,460 86,037,460
EDISON SECURITIZATION 08/27/1999
57,786,000 57,786,000 56,614,806 56,614,806
FINOVA CAPITAL CORPORATION 05/04/1999
25,000,000 25,000,000 50,000,000 24,888,625 24,888,625 49,777,250
FINOVA CAPITAL CORPORATION 05/24/1999
25,000,000 25,000,000 50,000,000 24,819,653 24,819,653 49,639,306
FINOVA CAPITAL CORPORATION 06/09/1999
50,000,000 50,000,000 100,000,000 49,529,458 49,529,458 99,058,917
FINOVA CAPITAL CORPORATION 06/10/1999
20,000,000 20,000,000 19,809,056 19,809,056
FINOVA CAPITAL CORPORATION 06/15/1999
20,000,000 15,000,000 35,000,000 19,795,833 14,846,875 34,642,708
FINOVA CAPITAL 06/16/1999
50,000,000 35,000,000 85,000,000CORPORATION 49,482,778 34,637,944 84,120,722
FINOVA CAPITAL CORPORATION 06/25/1999
20,000,000 20,000,000 19,767,667 19,767,667
FINOVA CAPITAL CORPORATION 06/28/1999
50,000,000 50,000,000 49,398,667 49,398,667
GENERAL ELECTRIC CAPITAL CORPORATION 10/04/1999
60,000,000 40,000,000 100,000,000 58,527,500 39,018,333 97,545,833
GOLDMAN SACHS 04/14/1999
120,000,000 60,000,000 180,000,000 119,776,707 59,888,417 179,665,124
HITACHI AMERICA 04/13/1999
9,000,000 10,000,000 19,000,000 8,983,500 9,981,667 18,965,167
HITACHI AMERICA 05/11/1999
12,000,000 13,000,000 25,000,000 11,927,333 12,921,278 24,848,611
HITACHI AMERICA 05/14/1999
16,000,000 17,000,000 33,000,000 15,896,418 16,889,944 32,786,362
INTERNATIONAL SECURITIZATION CORP. 04/15/1999
50,000,000 50,000,000 100,000,000 49,905,306 49,905,306 99,810,611
INTERNATIONAL SECURITIZATION CORP. 04/22/1999
35,250,000 50,000,000 85,250,000 35,147,188 49,854,167 85,001,354
INTERNATIONAL SECURITIZATION CORP. 04/29/1999
55,050,000 45,000,000 100,050,000 54,839,536 44,827,994 99,667,531
INTERNATIONAL SECURITIZATION CORP. 04/30/1999
75,000,000 75,000,000 150,000,000 74,704,965 74,704,965 149,409,931
INTERNATIONAL SECURITIZATION CORP. 06/09/1999
14,585,000 14,585,000 14,445,227 14,445,227
INTERNATIONAL SECURITIZATION CORP. 06/17/1999
50,000,000 41,680,000 91,680,000 49,480,250 41,246,736 90,726,986
LEHMAN BROTHERS HOLDINGS 04/26/1999
60,000,000 57,000,000 117,000,000 59,791,667 56,801,080 116,592,747
LEHMAN BROTHERS HOLDINGS 04/27/1999
50,000,000 23,000,000 73,000,000 49,816,375 22,915,533 72,731,908
LEHMAN BROTHERS HOLDINGS 05/03/1999
110,000,000 90,000,000 200,000,000 109,506,222 89,596,000 199,102,222
LEHMAN BROTHERS HOLDINGS 05/05/1999
60,000,000 40,000,000 100,000,000 59,712,700 39,808,467 99,521,167
LEHMAN BROTHERS HOLDINGS 05/18/1999
50,000,000 35,000,000 85,000,000 49,668,389 34,767,872 84,436,261
LEHMAN BROTHERS HOLDINGS 09/22/1999
50,000,000 50,000,000 100,000,000 48,774,750 48,774,750 97,549,500
LEXINGTON PARKER CAPITAL CO. 06/22/1999
56,306,000 56,306,000 55,683,975 55,683,975
LEXINGTON PARKER CAPITAL CO. 09/02/1999
214,878,000 214,878,000 210,346,342 210,346,342
MITSUBISHI INTERNATIONAL CORP. 04/23/1999
21,572,000 21,572,000 21,504,767 21,504,767
MITSUBISHI INTERNATIONAL CORP. 05/18/1999
33,100,000 33,100,000 32,870,966 32,870,966
MITSUBISHI INTERNATIONAL CORP. 05/26/1999
20,000,000 20,000,000 19,845,389 19,845,389
MITSUBISHI INTERNATIONAL CORP. 06/30/1999
5,000,000 5,000,000 4,936,500 4,936,500
MOAT FUNDING LLC 04/07/1999
53,688,000 79,460,000 133,148,000 53,643,886 79,394,612 133,038,499
MOAT FUNDING LLC 04/12/1999
28,545,000 20,000,000 48,545,000 28,502,175 19,969,994 48,472,169
MOAT FUNDING LLC 05/17/1999
32,287,000 30,000,000 62,287,000 32,084,848 29,812,167 61,897,014
MOAT FUNDING LLC 05/28/1999
26,643,000 25,000,000 51,643,000 26,438,404 24,808,021 51,246,425
MOAT FUNDING LLC 06/07/1999
35,000,000 15,000,000 50,000,000 34,679,517 14,862,650 49,542,167
MOAT FUNDING LLC 06/14/1999
25,000,000 25,000,000 24,742,028 24,742,028
MOAT FUNDING LLC 06/14/1999
25,000,000 25,000,000 24,742,028 24,742,028
MOAT FUNDING LLC 06/21/1999
20,000,000 21,571,000 41,571,000 19,778,600 21,332,209 41,110,809
MOAT FUNDING LLC 06/28/1999
29,270,000 29,270,000 28,920,126 28,920,126
MOAT FUNDING LLC 06/29/1999
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
13,511,000 50,000,000 63,511,000 13,350,001 49,404,194 62,754,196
MOAT FUNDING LLC 08/24/1999
29,851,000 20,000,000 49,851,000 29,261,857 19,605,278 48,867,135
MOAT FUNDING LLC 09/21/1999
15,000,000 13,889,000 28,889,000 14,647,513 13,562,620 28,210,133
MOAT FUNDING LLC 10/20/1999
50,000,000 23,349,000 73,349,000 48,611,250 22,700,482 71,311,732
NATIONAL BANK OF CANADA 08/23/1999
20,000,000 20,000,000 40,000,000 19,608,000 19,608,000 39,216,000
NATIONAL BANK OF CANADA 09/01/1999
25,000,000 20,000,000 45,000,000 24,475,125 19,580,100 44,055,225
NATIONAL BANK OF CANADA 09/08/1999
25,000,000 20,000,000 45,000,000 24,460,000 19,568,000 44,028,000
NEW CENTER ASSET TRUST 04/15/1999
40,000,000 25,000,000 65,000,000 39,924,556 24,952,847 64,877,403
PHH CORPORATION 05/11/1999
25,000,000 25,000,000 24,860,833 24,860,833
PHH CORPORATION 05/13/1999
25,000,000 25,000,000 24,853,875 24,853,875
PHH CORPORATION 08/10/1999
25,000,000 25,000,000 50,000,000 24,540,590 24,540,590 49,081,181
PHH CORPORATION 08/11/1999
25,000,000 25,000,000 50,000,000 24,538,000 24,538,000 49,076,000
PHH CORPORATION 08/25/1999
50,000,000 50,000,000 48,959,750 48,959,750
PHH CORPORATION 08/30/1999
50,000,000 50,000,000 48,924,125 48,924,125
SAFECO CORPORATION 04/30/1999
12,300,000 20,000,000 32,300,000 12,250,260 19,919,122 32,169,382
SAFECO CORPORATION 05/12/1999
25,000,000 38,000,000 63,000,000 24,859,063 37,785,776 62,644,839
SAFECO CORPORATION 05/17/1999
20,000,000 20,000,000 40,000,000 19,872,733 19,872,733 39,745,467
SAFECO CORPORATION 06/10/1999
45,000,000 45,000,000 90,000,000 44,567,000 44,567,000 89,134,000
SAFECO CORPORATION 06/10/1999
31,000,000 65,000,000 96,000,000 30,700,517 64,368,444 95,068,961
SAFECO CORPORATION 06/23/1999
24,000,000 24,000,000 48,000,000 23,724,993 23,724,993 47,449,987
SAFECO CORPORATION 06/28/1999
30,000,000 30,000,000 29,642,133 29,642,133
SAFECO CORPORATION 07/08/1999
45,000,000 45,000,000 44,400,975 44,400,975
SIGMA FINANCE CORPORATION 06/09/1999
15,000,000 15,000,000 14,859,988 14,859,988
SIGMA FINANCE CORPORATION 06/23/1999
60,000,000 50,000,000 110,000,000 59,329,083 49,440,903 108,769,986
SIGMA FINANCE CORPORATION 06/30/1999
35,000,000 35,000,000 34,573,875 34,573,875
SIGMA FINANCE CORPORATION 07/07/1999
43,987,000 43,987,000 43,409,805 43,409,805
SPICE TRUST 04/28/1999
275,000,000 275,000,000 273,972,750 273,972,750
SPICE TRUST 04/28/1999
30,000,000 30,000,000 29,887,725 29,887,725
SPICE TRUST 04/28/1999
360,000,000 360,000,000 358,655,400 358,655,400
TULIP FUNDING CORPORATION 04/23/1999
100,000,000 100,000,000 99,703,611 99,703,611
TULIP FUNDING CORPORATION 04/26/1999
67,064,000 67,064,000 66,838,125 66,838,125
TULIP FUNDING CORPORATION 05/19/1999
64,084,000 75,000,000 139,084,000 63,666,172 74,511,000 138,177,172
TULIP FUNDING CORPORATION 06/04/1999
36,638,000 20,000,000 56,638,000 36,318,842 19,825,778 56,144,620
VARIABLE FUNDING CAPITAL CORPORATION 04/01/1999
74,609,000 100,000,000 174,609,000 74,609,000 100,000,000 174,609,000
VICTORY REC 04/19/1999
50,000,000 50,000,000 49,878,750 49,878,750
VICTORY REC 04/26/1999
34,426,000 34,426,000 34,310,051 34,310,051
VICTORY REC 05/12/1999
17,095,000 34,077,000 51,172,000 17,000,379 33,888,384 50,888,763
VICTORY REC 05/17/1999
30,000,000 55,296,000 85,296,000 29,813,700 54,952,612 84,766,312
VICTORY REC 05/18/1999
32,235,000 50,000,000 82,235,000 32,030,469 49,682,750 81,713,219
VICTORY REC 06/14/1999
28,035,000 28,035,000 27,754,354 27,754,354
VICTORY REC 06/15/1999
15,082,000 10,000,000 25,082,000 14,928,981 9,898,542 24,827,522
VICTORY REC 06/16/1999
37,972,000 37,972,000 37,582,407 37,582,407
WCP FUNDING 04/28/1999
25,000,000 25,000,000 24,909,063 24,909,063
WCP FUNDING 04/28/1999
22,500,000 22,500,000 22,418,156 22,418,156
WCP FUNDING 06/04/1999
50,000,000 50,000,000 49,568,000 49,568,000
-----------------------------------------
TOTAL COMMERCIAL PAPER
3,784,842,772 3,174,751,395 6,959,594,168
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
CORPORATE BONDS & NOTES - 26.55%
BANKERS TRUST COMPANY OF NEW YORK 5.780 04/28/1999
45,000,000 32,000,000 77,000,000 44,998,407 31,998,867 76,997,274
BANKERS TRUST COMPANY OF NEW YORK 4.860 04/30/1999
40,000,000 40,000,000 80,000,000 39,998,082 39,998,082 79,996,163
BANKERS TRUST COMPANY OF NEW YORK 4.920 08/06/1999
40,000,000 60,000,000 100,000,000 39,998,608 59,997,912 99,996,521
BANKERS TRUST COMPANY OF NEW YORK 4.919 09/14/1999
45,000,000 50,000,000 95,000,000 45,000,000 50,000,000 95,000,000
BEAR STEARNS AND COMPANY INC. 5.800 06/14/1999
48,000,000 48,000,000 48,022,697 48,022,697
BEAR STEARNS AND COMPANY INC. 4.907 07/28/1999
50,000,000 50,000,000 100,000,000 50,000,000 50,000,000 100,000,000
BEAR STEARNS AND COMPANY INC. 5.396 11/04/1999
69,000,000 50,000,000 119,000,000 69,000,000 50,000,000 119,000,000
BEAR STEARNS AND COMPANY INC. 5.374 11/04/1999
75,000,000 50,000,000 125,000,000 75,000,000 50,000,000 125,000,000
BEAR STEARNS AND COMPANY INC. 5.150 01/25/2000
40,000,000 40,000,000 80,000,000 40,000,000 40,000,000 80,000,000
BEAR STEARNS AND COMPANY INC. 5.170 02/10/2000
50,000,000 40,000,000 90,000,000 50,000,000 40,000,000 90,000,000
BEAR STEARNS AND COMPANY INC. 5.180 02/18/2000
30,000,000 40,000,000 70,000,000 30,000,000 40,000,000 70,000,000
BEAR STEARNS AND COMPANY INC. 5.340 03/02/2000
60,000,000 40,000,000 100,000,000 60,000,000 40,000,000 100,000,000
CHASE MANHATTAN BANK 5.685 08/03/1999
20,000,000 25,000,000 45,000,000 19,995,769 24,994,711 44,990,480
CHRYSLER FINANCE COMPANY 12.750 11/01/1999
8,250,000 8,250,000 8,618,226 8,618,226
CREDIT SUISSE FIRST BOSTON 5.100 05/17/1999
50,000,000 50,000,000 50,000,000 50,000,000
CREDIT SUISSE FIRST BOSTON 4.965 11/09/1999
70,000,000 30,000,000 100,000,000 69,958,162 29,982,069 99,940,231
FIRST UNION 5.010 10/27/1999
110,000,000 90,000,000 200,000,000 110,000,000 90,000,000 200,000,000
FIRST UNION 5.300 03/01/2000
60,000,000 40,000,000 100,000,000 60,000,000 40,000,000 100,000,000
GOLDMAN SACHS 4.995 05/10/1999
100,000,000 100,000,000 200,000,000 100,000,000 100,000,000 200,000,000
GOLDMAN SACHS 5.260 01/07/2000
100,000,000 100,000,000 200,000,000 100,000,000 100,000,000 200,000,000
GOLDMAN SACHS 5.280 02/24/2000
50,000,000 35,000,000 85,000,000 49,999,099 34,999,369 84,998,468
LEHMAN BROTHERS 10.000 05/15/1999
13,500,000 13,500,000 13,563,354 13,563,354
LEXINGTON PARKER CAPITAL COMPANY 4.905 04/27/1999
75,000,000 50,000,000 125,000,000 75,000,000 50,000,000 125,000,000
LIBERTY LIGHTHOUSE FUNDING 5.760 07/23/1999
25,000,000 25,000,000 50,000,000 24,999,226 24,999,226 49,998,452
LIBERTY LIGHTHOUSE FUNDING 4.920 08/06/1999
50,000,000 50,000,000 100,000,000 50,000,000 50,000,000 100,000,000
LIBERTY LIGHTHOUSE FUNDING 4.920 08/27/1999
50,000,000 50,000,000 100,000,000 50,000,000 50,000,000 100,000,000
LIBERTY LIGHTHOUSE FUNDING 4.919 09/15/1999
125,000,000 125,000,000 250,000,000 124,991,206 124,991,206 249,982,412
LIBERTY LIGHTHOUSE FUNDING 4.960 11/05/1999
25,000,000 25,000,000 50,000,000 25,000,000 25,000,000 50,000,000
LIBERTY LIGHTHOUSE FUNDING 5.260 02/10/2000
35,000,000 35,000,000 35,000,000 35,000,000
MERRILL LYNCH 4.961 05/11/1999
50,000,000 50,000,000 100,000,000 50,000,000 50,000,000 100,000,000
MERRILL LYNCH 4.900 06/11/1999
70,000,000 80,000,000 150,000,000 70,000,000 80,000,000 150,000,000
MERRILL LYNCH 4.970 10/08/1999
67,000,000 25,000,000 92,000,000 67,000,000 25,000,000 92,000,000
MORGAN STANLEY DEAN WITTER 5.100 03/15/2001
50,000,000 50,000,000 50,000,000 50,000,000
PHH CORPORATION 5.009 06/14/1999
50,000,000 50,000,000 100,000,000 50,000,000 50,000,000 100,000,000
PHH CORPORATION 4.995 07/06/1999
40,000,000 60,000,000 100,000,000 39,998,948 59,998,422 99,997,370
SIGMA FINANCE CORP 5.190 02/18/2000
45,000,000 40,000,000 85,000,000 45,000,000 40,000,000 85,000,000
SIGMA FINANCE CORP 5.220 02/23/2000
50,000,000 40,000,000 90,000,000 50,000,000 40,000,000 90,000,000
SIGMA FINANCE CORP 5.330 03/01/2000
60,000,000 40,000,000 100,000,000 60,000,000 40,000,000 100,000,000
SMM TRUST 5.449 03/15/2000
100,000,000 50,000,000 150,000,000 100,000,000 50,000,000 150,000,000
SOCIETE GENERALE 4.855 06/01/1999
100,000,000 100,000,000 99,936,727 99,936,727
SOCIETE GENERALE 4.853 08/11/1999
125,000,000 65,000,000 190,000,000 124,954,996 64,974,365 189,929,361
TRAVELERS GROUP 7.000 05/15/1999
7,000,000 7,000,000 7,015,927 7,015,927
-----------------------------------------
TOTAL CORPORATE BONDS & NOTES
2,131,096,780 1,978,886,883 4,109,983,663
TOTAL CORPORATE OBLIGATIONS
5,915,939,552 5,153,638,27811,069,577,830
GUARANTEED INVESTMENT CONTRACT - 8.06
ALLSTATE INSURANCE 5.107 11/01/1999
25,000,000 25,000,000 25,000,000 25,000,000
ALLSTATE INSURANCE 5.107 01/01/2050
25,000,000 25,000,000 25,000,000 25,000,000
ANCHOR NATIONAL LIFE 5.070 07/01/2030
50,000,000 50,000,000 50,000,000 50,000,000
ANCHOR NATIONAL LIFE 5.136 01/01/2050
25,000,000 25,000,000 25,000,000 25,000,000
COMMONWEALTH LIFE INSURANCE CO 5.060 04/05/1999
75,000,000 50,000,000 125,000,000 75,000,000 50,000,000 125,000,000
COMMONWEALTH LIFE INSURANCE COMPANY 5.160 01/01/2050
62,000,000 62,000,000 62,000,000 62,000,000
COMMONWEALTH LIFE INSURANCE COMPANY 5.160 01/01/2050
10,000,000 10,000,000 10,000,000 10,000,000
FIRST ALLMERICA FINANCIAL LIFE 5.070 11/24/2000
50,000,000 50,000,000INSURANCE 50,000,000 50,000,000
FIRST ALLMERICA FINANCIAL LIFE 5.090 05/15/2003
50,000,000 50,000,000INSURANCE 50,000,000 50,000,000
FIRST ALLMERICA FINANCIAL LIFE 5.120 09/22/2003
50,000,000 50,000,000INSURANCE 50,000,000 50,000,000
FIRST ALLMERICA FINANCIAL LIFE 5.140 05/25/2004
50,000,000 50,000,000INSURANCE 50,000,000 50,000,000
GENERAL AMERICAN LIFE INSURANCE 5.140 04/08/2008
50,000,000 50,000,000COMPANY 50,000,000 50,000,000
GENERAL AMERICAN LIFE INSURANCE 5.140 01/01/2050
50,000,000 50,000,000COMPANY 50,000,000 50,000,000
JACKSON NATIONAL LIFE 5.180 01/03/2000
50,000,000 50,000,000 50,000,000 50,000,000
JACKSON NATIONAL LIFE 5.090 01/01/2050
50,000,000 50,000,000 50,000,000 50,000,000
LIFE INSURANCE COMPANY OF VIRGINIA 4.951 09/01/1999
50,000,000 50,000,000 50,000,000 50,000,000
LIFE INSURANCE COMPANY OF VIRGINIA 4.951 03/01/2000
25,000,000 25,000,000 25,000,000 25,000,000
LIFE INSURANCE COMPANY OF VIRGINIA 4.951 03/01/2000
25,000,000 25,000,000 25,000,000 25,000,000
LIFE OF GEORGIA INSURANCE 5.176 01/01/2050
60,000,000 60,000,000 60,000,000 60,000,000
NEW YORK LIFE 5.106 11/15/1999
100,000,000 50,000,000 150,000,000 100,000,000 50,000,000 150,000,000
PEOPLES SECURITY LIFE INSURANCE 5.210 12/04/2040
20,000,000 20,000,000COMPANY 20,000,000 20,000,000
PEOPLES SECURITY LIFE INSURANCE 5.160 01/01/2050
20,000,000 20,000,000COMPANY 20,000,000 20,000,000
PEOPLES SECURITY LIFE INSURANCE 5.010 01/01/2050
25,000,000 25,000,000COMPANY 25,000,000 25,000,000
SUNAMERICA LIFE INSURANCE 5.166 01/01/2050
50,000,000 50,000,000 50,000,000 50,000,000
TRAVELERS INSURANCE 5.040 09/30/1999
50,000,000 25,000,000 75,000,000 50,000,000 25,000,000 75,000,000
TRAVELERS INSURANCE 5.013 02/03/2000
25,000,000 25,000,000 25,000,000 25,000,000
-----------------------------------------
TOTAL GUARANTEED INVESTMENT CONTRACT
500,000,000 747,000,000 1,247,000,000
MUNICIPAL BONDS & NOTES - 1.22%
ILLINOIS STUDENT 4.930 05/01/2010
28,800,000 28,800,000 28,800,000 28,800,000
MISSOURI ST 5.000 09/01/2004
20,600,000 20,600,000 20,600,000 20,600,000
VIRGINIA ST HSG 4.950 01/01/2046
40,000,000 100,000,000 140,000,000 40,000,000 100,000,000 140,000,000
-----------------------------------------
TOTAL MUNICIPAL BONDS & NOTES
40,000,000 149,400,000 189,400,000
REPURCHASE AGREEMENT - 6.36%
AGREEMENT WITH ABN-AMRO 5.050 04/01/1999
240,000,000 240,000,000 240,000,000 240,000,000
AGREEMENT WITH DEUTSCHE BANK 5.230 04/01/1999
100,000,000 100,000,000 200,000,000 100,000,000 100,000,000 200,000,000
AGREEMENT WITH FIRST BOSTON 5.120 04/01/1999
30,000,000 30,000,000 30,000,000 30,000,000
AGREEMENT WITH LEHMAN BROTHERS 5.150 04/01/1999
140,000,000 140,000,000 140,000,000 140,000,000
AGREEMENT WITH MERRILL LYNCH 5.200 04/01/1999
100,000,000 100,000,000 200,000,000 100,000,000 100,000,000 200,000,000
AGREEMENT WITH SALOMON SMITH BARNEY 5.050 04/01/1999
175,000,000 175,000,000 175,000,000 175,000,000
-----------------------------------------
TOTAL REPURCHASE AGREEMENT
545,000,000 440,000,000 985,000,000
INVESTMENT COMPANIES - 1.44%
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
AIM LIQUID ASSET 4.900
107,496,559 10,462,000 117,958,559 107,496,559 10,462,000 117,958,559
AIM PRIME FUND 4.875
18,474,000 2,917,000 21,391,000 18,474,000 2,917,000 21,391,000
DREYFUS CASH MGMT PLUS 4.863
31,484,000 52,280,000 83,764,000 31,484,000 52,280,000 83,764,000
-----------------------------------------
TOTAL INVESTMENT COMPANIES
157,454,559 65,659,000 223,113,559
TOTAL INVESTMENTS - 100%
15,477,442,804
NATIONS CASH RESERVES / NATIONS PRIME FUND
Pro Forma Combining Statement of Net Assets (Unaudited)
March 31, 1999
tions Prime Nations Cash Adjustments to Pro Forma Pro Forma Combined
Resreves
in 000's) (in 000's) (in 000's) (in 000's)
----------------------------------------------------- --------------------
TOTAL INVESTMENTS $ 7,280,640 $8,196,803 $ - $ 15,477,443
OTHER ASSETS AND
LIABILITIES:
Receivable for investments sold
- - - -
Payable for investments purchased
- - - -
Other assets and liabilities, net 135,794 (37,320) - 98,474
---------------------------------------------------------- --------------------
Total Other Assets and Liabilities 135,794 (37,320) - 98,474
---------------------------------------------------------- --------------------
========================================================== ====================
NET ASSETS 7,416,434 8,159,483 - 15,575,917
========================================================== ====================
NET ASSETS BY CLASS:
Daily\Daily 2,718,028 - - 2,718,028
Primary B\Investor B\Investor C\Investor 831,359 - - 831,359
Primary A\Trust 3,153,372 - - 3,153,372
Service - - - -
Capital - 4,379,430 - 4,379,430
Liquidity - 1,423,382 - 1,423,382
Advisor - 870,170 - 870,170
Investor A\Market 695,703 1,486,502 - 2,182,205
Marsico 17,970 - - 17,970
---------------------------------------------------------- --------------------
7,416,434 8,159,483 - 15,575,917
---------------------------------------------------------- --------------------
SHARES OUTSTANDING BY CLASS:
Daily\Daily
2,718,420 - - 2,718,420
Primary B\Investor B\Investor C\Investor
831,473 - - 831,473
Primary A\Trust
3,153,844 - - 3,153,844
Service
- - - -
Capital
- 4,379,424 - 4,379,424
Liquidity
- 1,423,380 - 1,423,380
Advisor
- 870,169 - 870,169
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Investor A\Market
695,805 1,486,500 - 2,182,305
Marsico
17,970 - - 17,970
---------------------------------------------------------- --------------------
15,576,986
7,417,513 8,159,473 -
---------------------------------------------------------- --------------------
NET ASSET VALUE PER SHARE BY CLASS:
Daily\Daily $1.00 n/a $ - 1.00
Primary B\Investor B\Investor C\Investor $1.00 n/a $ - $1.00
Primary A\Trust $1.00 n/a $ - $1.00
Service n/a n/a $ - n/a
Capital n/a $1.00 $ - $1.00
Liquidity n/a $1.00 $ - $1.00
Advisor n/a $1.00 $ - $1.00
Investor A\Market $1.00 $1.00 $ - $1.00
Marsico $1.00 n/a $ - $1.00
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
NATIONS CASH RESERVES / NATIONS PRIME FUND
Pro Forma Combining Statement of Operations (Unaudited)
For the Twelve Month Period Ending March 31, 1999
INVESTMENT INCOME:
Interest $369,451 $377,289 $ - $746,740
Dividends - 10,550 - 10,550
---------------------------------------------------- --------------------
Total Investment Income 369,451 387,839 - 757,290
---------------------------------------------------- --------------------
EXPENSES:
(a)
Investment Advisory 13,566 21,328 (14,106) 20,788
Administration 6,749 7,109 - 13,858
Transfer Agent 1,067 161 - 1,228
Custodian 363 474 - 837
Legal and Audit Fees 428 192 (30) (b) 590
Registration & Filing 161 1,192 - 1,353
Trustees' Fees 15 5 - 20
Interest Expense - - - -
Other expenses 339 87 - 425
---------------------------------------------------- --------------------
Subtotal
22,688 30,548 (14,136) 39,100
---------------------------------------------------- --------------------
SHAREHOLDER SERVICING AND DISTRIBUTION FEES
Daily\Daily 10,025 - (1,432) (a) 8,593
Primary B\Investor B\Investor C\Investor 2,647 - 74 (a) 2,721
Primary A\Trust - - 2,779 (a) 2,779
Service - - - -
Liquidity - 11,252 - 11,252
Advisor - 1,937 - 1,937
Investor A\Market 6,155 4,952 1,758 (a) 12,866
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Marsico 5 - 1 (a) 6
---------------------------------------------------- --------------------
18,832 18,141 3,181 40,154
---------------------------------------------------- --------------------
Fees waived and/or reimbursed by investment
-
Advisor, administrator and/or distributor (6,001) (25,852) 20,765 (c) (11,087)
---------------------------------------------------- --------------------
TOTAL EXPENSES 35,519 22,837 9,810 68,166
---------------------------------------------------- --------------------
---------------------------------------------------- --------------------
NET INVESTMENT INCOME 333,932 365,002 (9,810) 689,124
---------------------------------------------------- --------------------
NET REALIZED GAIN/(LOSS) ON
---------------------------------------------------- --------------------
INVESTMENTS:
17 23 - 40
---------------------------------------------------- --------------------
NET INCREASE/(DECREASE) IN NET ASSETS
==================================================== ====================
RESULTING FROM OPERATIONS: $333,949 365,025 $ (9,810) $689,164
==================================================== ====================
</TABLE>
Nations Cash Reserves
Nations Prime Fund
Notes to Pro Forma Combining Financial Statements (unaudited)
1. Basis of Combination
Nations Institutional Reserves (the "Trust") and Nations Funds, Inc. (the
"Company") are registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as open-end investment companies. As of March 31, 1999 the
Trust offered five separate portfolios and the Company offered nine portfolios.
The unaudited Pro Forma Combining Statement of Net Assets assumes the exchange
described in the next paragraph occurred as of March 31, 1999 and the unaudited
Pro Forma Combining Statement of Operations assumes the exchange occurred as of
April 1,1999. These statements have been derived from books and records utilized
in calculating daily net asset value of each fund at March 31, 1999 and for the
twelve month period then ended.
The pro forma statements give effect to the proposed transfer of the assets and
stated liabilities of the Nations Prime Fund in exchange for shares of Nations
Cash Reserves. Under generally accepted accounting principles, the historical
cost of investment securities will be carried forward to the surviving entity
and the results of operations of the Nations Prime Fund for pre-combination
periods will not be restated. The pro forma statements do not reflect the
expenses of either fund in carrying out its obligations under the proposed
Agreement and Plan of Reorganization.
The unaudited Pro Forma combining Financial Statements should be read in
conjunction with the historical financial statements of the funds incorporated
by reference in the Statement of Additional Information.
2. Pro Forma Operations
Pro forma operating expenses include the actual expenses of each fund and the
combined fund, with certain expenses adjusted to reflect the expected expenses
of the combined entity. The investment advisory and administration fees have
been calculated for the combined fund based on the contractual rates expected to
<PAGE>
be in effect for the Nations Cash Reserves at the time of the Reorganization at
the combined level of average net assets for the twelve month period ended March
31, 1999.
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Nations Treasury Reserves / Nations Treasury Fund
Pro Forma Combining Schedule of Investments (unaudited)
March 31,1999
Nations Nations Pro Forma Description Coupon Maturity
Treasury Res Treasury Combined Rate Date
Shares/Par Shares/Par Shares/Par
U.S. GOVERNMENT AND AGENCY OBLIGATIONS
U.S. Treasury Notes - 20.91%
75,000,000 125,000,000 200,000,000 US T-NOTE 6.375% 4/30/99 6.375 04/30/1999
100,000,000 25,000,000 125,000,000 US T-NOTE 6.25% 5/31/99 6.250 05/31/1999
30,000,000 20,000,000 50,000,000 U.S T-NOTE 6% 6/30/99 6.000 06/30/1999
65,000,000 60,000,000 125,000,000 US T-NOTE 5.875% 07/31/99 5.875 07/31/1999
50,000,000 50,000,000 100,000,000 US T-NOTE 5.875% 8/31/99 5.875 08/31/1999
25,000,000 25,000,000 US T-NOTE 5.75% 9/30/99 5.750 09/30/1999
90,000,000 110,000,000 200,000,000 US T-NOTE 5.625% 11/30/99 5.625 11/30/1999
73,000,000 80,000,000 153,000,000 US T-NOTE 5.875% 2/15/00 5.875 02/15/2000
50,000,000 75,000,000 125,000,000 US T-NOTE 5.5% 02/29/00 5.500 02/29/2000
Total U.S. Government and Agency Obligations
REPURCHASE AGREEMENTS - 77.64%
638,000,000 660,000,000 1,298,000,000Agreement with ABN-AMRO Bank 4.970 04/01/1999
127,000,000 130,000,000 257,000,000 Agreement with Barclays Capital 4.900 04/01/1999
127,000,000 130,000,000 257,000,000 Agreement with Bear Stearns and Company, Inc 4.900 04/01/1999
125,000,000 125,000,000 250,000,000 Agreement with CIBC Wood Gundy Securities Corp 5.000 04/01/1999
127,000,000 130,000,000 257,000,000 Agreement with Deutsche Bank 5.000 04/01/1999
16,000,000 16,000,000 Agreement with Dresdner Klein 5.000 04/01/1999
127,000,000 130,000,000 257,000,000 Agreement with First Union Capital Corporation 4.970 04/01/1999
127,000,000 130,000,000 257,000,000 Agreement with J.P. Morgan Securities Inc. 5.050 04/01/1999
112,000,000 113,000,000 225,000,000 Agreement with Lehman Brothers Inc. 4.880 04/06/1999
90,000,000 90,000,000 180,000,000 Agreement with Morgan Stanley Group Inc. 4.810 04/30/1999
127,000,000 130,000,000 257,000,000 Agreement with Salomon Smith Barney, Inc. 5.050 04/01/1999
127,000,000 130,000,000 257,000,000 Agreement with Societe Generale 5.050 04/01/1999
86,000,000 86,000,000 Agreement with Warburg Dillon 5.100 04/01/1999
127,000,000 130,000,000 257,000,000 Agreement with Westdeutsch5.000desbanken,
Girozentrale 04/01/1999
Total Repurchase Agreements
INVESTMENT COMPANIES - 1.45%
17,175,000 22,032,000 39,207,000 AIM TREASURY FUND #812 4.801
17,328,000 20,151,000 37,479,000 DREYFUS TREASURY CASH 4.631
Total Investment Companies
TOTAL INVESTMENTS - 100.00%
<CAPTION>
Nations Nations Pro Forma Description Nations Nations Pro Forma
Treasury Res Treasury Combined Treasury Treasury Value
Res
Shares/Par Shares/Par Shares/Par Value Value
U.S. GOVERNMENT AND AGENCY OBLIGATIONS
U.S. Treasury Notes - 20.91%
75,000,000 125,000,000 200,000,000 US T-NOTE 6.375% 4/30/99 75,071,359 125,092,127 200,163,486
100,000,000 25,000,000 125,000,000 US T-NOTE 6.25% 5/31/99 100,263,248 25,065,644 125,328,892
30,000,000 20,000,000 50,000,000 U.S T-NOTE 6% 6/30/99 30,033,365 20,022,244 50,055,609
65,000,000 60,000,000 125,000,000 US T-NOTE 5.875% 07/31/99 65,169,954 60,164,297 125,334,250
50,000,000 50,000,000 100,000,000 US T-NOTE 5.875% 8/31/99 50,075,908 50,075,908 100,151,816
25,000,000 25,000,000 US T-NOTE 5.75% 9/30/99 25,125,591 25,125,591
90,000,000 110,000,000 200,000,000 US T-NOTE 5.625% 11/30/99 90,576,769 110,713,067 201,289,836
73,000,000 80,000,000 153,000,000 US T-NOTE 5.875% 2/15/00 73,652,798 80,696,938 154,349,736
50,000,000 75,000,000 125,000,000 US T-NOTE 5.5% 02/29/00 50,289,476 75,423,471 125,712,947
----------------------------------------
Total U.S. Government and Agency Obligations 535,132,877 572,379,287 1,107,512,164
REPURCHASE AGREEMENTS - 77.64%
638,000,000 660,000,000 1,298,000,000Agreement with ABN-AMRO Bank 638,000,000 660,000,000 1,298,000,000
127,000,000 130,000,000 257,000,000 Agreement with Barclays Capital 127,000,000 130,000,000 257,000,000
127,000,000 130,000,000 257,000,000 Agreement with Bear Stearns and Company, Inc 127,000,000 130,000,000 257,000,000
125,000,000 125,000,000 250,000,000 Agreement with CIBC Wood Gundy Securities Corp 125,000,000 125,000,000 250,000,000
127,000,000 130,000,000 257,000,000 Agreement with Deutsche Bank 127,000,000 130,000,000 257,000,000
16,000,000 16,000,000 Agreement with Dresdner Klein 16,000,000 16,000,000
127,000,000 130,000,000 257,000,000 Agreement with First Union Capital Corporation 127,000,000 130,000,000 257,000,000
127,000,000 130,000,000 257,000,000 Agreement with J.P. Morgan Securities Inc. 127,000,000 130,000,000 257,000,000
112,000,000 113,000,000 225,000,000 Agreement with Lehman Brothers Inc. 112,000,000 113,000,000 225,000,000
90,000,000 90,000,000 180,000,000 Agreement with Morgan Stanley Group Inc. 90,000,000 90,000,000 180,000,000
127,000,000 130,000,000 257,000,000 Agreement with Salomon Smith Barney, Inc. 127,000,000 130,000,000 257,000,000
127,000,000 130,000,000 257,000,000 Agreement with Societe Generale 127,000,000 130,000,000 257,000,000
86,000,000 86,000,000 Agreement with Warburg Dillon 86,000,000 86,000,000
127,000,000 130,000,000 257,000,000 Agreement with Westdeutsch5.000desbanken,
Girozentrale 127,000,000 130,000,000 257,000,000
----------------------------------------
Total Repurchase Agreements 1,997,000,00 2,114,000,000 4,111,000,000
INVESTMENT COMPANIES - 1.45%
17,175,000 22,032,000 39,207,000 AIM TREASURY FUND #812 17,175,000 22,032,000 39,207,000
17,328,000 20,151,000 37,479,000 DREYFUS TREASURY CASH 17,328,000 20,151,000 37,479,000
----------------------------------------
Total Investment Companies 34,503,000 42,183,000 76,686,000
TOTAL INVESTMENTS - 100.00% 5,295,198,164
Nations Treasury Reserves / Nations Treasury Fund
Pro Forma Combining Statement of Net Assets (Unaudited)
March 31,1999
Nations Treasury Treasury Reserves Adjustments to Pro Forma Pro Forma Combined
(in 000's) (in 000's) (in 000's) (in 000's)
--------------------------------------------------------- -------------------
Total Investments $ 2,728,562 $ 2,566,636 $- $ 5,295,198
Other Assets and
Liabilities:
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Receivable for investments sold - - - -
Payable for investments purchased - - - -
Other assets and liabilities, net (283,952) 635,276 - 351,324
--------------------------------------------------------- -------------------
Total Other Assets and Liabilities (283,952) 635,276 - 351,324
--------------------------------------------------------- -------------------
========================================================= ===================
Net Assets 2,444,610 3,201,912 - 5,646,522
========================================================= ===================
Net Assets by Class:
Daily\Daily
219,592 - - 219,592
Primary B\Investor B\Investor C\Investor
282,329 - - 282,329
Primary A\Trust
766,456 - - 766,456
Service
- - - -
Capital
- 1,382,687 - 1,382,687
Liquidity
- 304,387 - 304,387
Advisor
- 344,906 - 344,906
Investor A\Market
1,176,233 1,169,931 - 2,346,164
--------------------------------------------------------- -------------------
2,444,610 3,201,912 - 5,646,522
--------------------------------------------------------- -------------------
Shares Outstanding by Class:
Daily\Daily
219,685 - - 219,685
Primary B\Investor B\Investor C\Investor
282,449 - - 282,449
Primary A\Trust
766,752 - - 766,752
Service
- - - -
Capital
- 1,382,716 - 1,382,716
Liquidity
- 304,406 - 304,406
Advisor
- 344,926 - 344,926
Investor A\Market 1,176,813 1,170,000 - 2,346,813
--------------------------------------------------------- -------------------
2,445,699 3,202,048 - 5,647,747
--------------------------------------------------------- -------------------
Net Asset Value per Share by Class:
Daily\Daily $1.00 n/a $ - $1.00
Primary B\Investor B\Investor C\Investor $1.00 n/a $ - $1.00
Primary A\Trust $1.00 n/a $ - $1.00
Service n/a n/a $ - n/a
Capital n/a $1.00 $ - $1.00
Liquidity n/a $1.00 $ - $1.00
Advisor n/a $1.00 $ - $1.00
Investor A\Market $1.00 $1.00 $ - $1.00
See Notes to Pro Forma Financial Statements
Nations Treasury Reserves / Nations Treasury Fund
Pro Forma Combining Statement of Operations (Unaudited)
For the Twelve Month Period Ending March 31, 1999
INVESTMENT INCOME:
Interest $146,302 $102,822 $ - $249,123
Dividends - 1,979 - 1,979
-------------------------------------------------- ----------------
Total Investment Income 146,302 104,800 - 251,102
-------------------------------------------------- ----------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
EXPENSES:
Investment Advisory 5,535 6,034 (4,421) (a) 7,147
Administration 2,754 2,011 - 4,765
Transfer Agent 500 19 - 519
Custodian 218 162 - 380
Legal and Audit Fees 307 65 (30) (b) 342
Registration & Filing 203 559 - 761
Trustees' Fees 15 21 - 36
Interest Expense - - - -
Other expenses 168 20 - 188
-------------------------------------------------- ----------------
Subtotal 9,699 8,892 (4,451) 14,139
-------------------------------------------------- ----------------
Shareholder Servicing and Distribution Fees
Daily\Daily 1,273 (182) (a) 1,091
Primary B\Investor B\Investor C\Investor 1,203 19 (a) 1,223
Primary A\Trust - 719 (a) 719
Service - -
Capital
- - -
Liquidity
3,390 - 3,390
Advisor
- 770 - 770
Investor A\Market 5,262 3,660 1,504 (a) 10,426
-------------------------------------------------- ----------------
7,739 7,820 2,060 17,619
-------------------------------------------------- ----------------
Fees waived and/or reimbursed by investment
-
advisor, administrator and/or distributor (2,123) (7,898) 5,256 (4,765)
-------------------------------------------------- ----------------
Total Expenses 15,315 8,814 2,865 26,994
-------------------------------------------------- ----------------
-------------------------------------------------- ----------------
NET INVESTMENT INCOME 130,987 95,987 (2,865) 224,109
-------------------------------------------------- ----------------
NET REALIZED GAIN/(LOSS) ON
-------------------------------------------------- ----------------
INVESTMENTS: (9) (2) - (11)
-------------------------------------------------- ----------------
NET INCREASE/(DECREASE) IN NET ASSETS
================================================== ================
RESULTING FROM OPERATIONS: $130,978 $95,985 $ (2,865) $224,098
================================================== ================
</TABLE>
Legend:
(a) Reflects adjustment to the acquiring fund contractual fee obligation.
(b) Adjustment reflects expected savings when the two funds become one.
(c) Reflects adjustment to the level of the acquiring fund's voluntary expense
reimbursement.
(d) Net of expense offset arrangements amounts to less than .01% of average net
assets.
See Notes to Pro Forma Financial Statements
<PAGE>
Nations Treasury Reserves
Nations Treasury Money Market Fund
Notes to Pro Forma Combining Financial Statements (unaudited)
1. Basis of Combination
Nations Institutional Reserves (the "Trust") and Nations Funds, Inc. (the
"Company") are registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as open-end investment companies. As of March 31, 1999 the
Trust offered five separate portfolios and the Company offered nine portfolios.
The unaudited Pro Forma Combining Statement of Net Assets assumes the exchange
described in the next paragraph occurred as of March 31, 1999 and the unaudited
Pro Forma Combining Statement of Operations assumes the exchange occurred as of
April 1,1999. These statements have been derived from books and records utilized
in calculating daily net asset value of each fund at March 31, 1999 and for the
twelve month period then ended.
The pro forma statements give effect to the proposed transfer of the assets and
stated liabilities of the Nations Treasury Fund in exchange for shares of
Nations Tresury Reserves. Under generally accepted accounting principles, the
historical cost of investment securities will be carried forward to the
surviving entity and the results of operations of the Nations Treasury Fund for
pre-combination periods will not be restated. The pro forma statements do not
reflect the expenses of either fund in carrying out its obligations under the
proposed Agreement and Plan of Reorganization.
The unaudited Pro Forma combining Financial Statements should be read in
conjunction with the historical financial statements of the funds incorporated
by reference in the Statement of Additional Information.
2. Pro Forma Operations
Pro forma operating expenses include the actual expenses of each fund and the
combined fund, with certain expenses adjusted to reflect the expected expenses
of the combined entity. The investment advisory and administration fees have
been calculated for the combined fund based on the contractual rates expected to
be in effect for the Nations Treasury Reserves at the time of the Reorganization
at the combined level of average net assets for the twelve month period ended
March 31, 1999.
<PAGE>
NATIONS GOVERNMENT RESERVES/NATIONS GOVERNMENT MONEY MARKET FUND
Pro Forma Combining Schedule of Investments (unaudited)
March 31,1999
<TABLE>
<CAPTION>
Nations Nation Pro Forma Description Coupon Maturity Nations Nations Pro Forma
Gov't Reserves Gov't MM Combined Rate Date Gov't Reserves Gov't MM Value
Shares/Par Shares/Par Shares/Par Value Value
U.S. Government and Agency Obligations- 63.97%
Federal Farm Credit Bank (FFCB)- 1.54%
5,000,000 5,000,000 Federal Farm Credit Bank 04/12/1999 4,992,743 4,992,743
6,000,000 6,000,000 12,000,000 Federal Farm Credit Bank 5.500 04/01/1999 6,000,000 6,000,000 12,000,000
---------------------------------------
Total Federal Farm Credit Bank 6,000,000 10,992,743 16,992,743
Federal Home Loan Bank (FHLB) 48.98%
<S> <C> <C> <C> <C> <C> <C>
70,000,000 70,000,000 Federal Home Loan Bank 04/01/1999 70,000,000 70,000,000
6,000,000 6,000,000 Federal Home Loan Bank 04/05/1999 5,996,833 5,996,833
6,000,000 6,000,000 Federal Home Loan Bank 04/07/1999 5,995,250 5,995,250
6,000,000 6,000,000 Federal Home Loan Bank 04/09/1999 5,993,840 5,993,840
6,901,000 10,000,000 16,901,000 Federal Home Loan Bank 04/14/1999 6,889,487 9,982,883 16,872,370
6,000,000 6,000,000 12,000,000 Federal Home Loan Bank 04/15/1999 5,988,707 5,988,707 11,977,413
15,000,000 15,000,000 Federal Home Loan Bank 04/23/1999 14,957,161 4,957,161
8,000,000 8,000,000 Federal Home Loan Bank 04/30/1999 7,969,711 7,969,711
15,000,000 15,000,000 Federal Home Loan Bank 05/05/1999 14,933,211 4,933,294
4,850,000 4,850,000 Federal Home Loan Bank 05/12/1999 4,823,487 4,823,487
10,000,000 10,000,000 Federal Home Loan Bank 05/19/1999 9,936,800 9,936,800
10,000,000 10,000,000 20,000,000 Federal Home Loan Bank 05/21/1999 9,934,167 9,934,167 19,868,333
8,000,000 8,000,000 16,000,000 Federal Home Loan Bank 05/26/1999 7,941,211 7,941,211 15,882,422
8,000,000 8,000,000 16,000,000 Federal Home Loan Bank 05/28/1999 7,939,960 7,939,960 15,879,920
8,000,000 8,000,000 16,000,000 Federal Home Loan Bank 06/15/1999 7,921,167 7,921,167 15,842,333
10,000,000 8,000,000 18,000,000 Federal Home Loan Bank 06/25/1999 9,887,611 7,910,089 17,797,700
8,000,000 8,000,000 16,000,000 Federal Home Loan Bank 07/14/1999 7,893,920 7,893,920 15,787,840
8,000,000 8,000,000 16,000,000 Federal Home Loan Bank 08/04/1999 7,869,444 7,869,444 15,738,889
8,000,000 8,000,000 Federal Home Loan Bank 08/06/1999 7,867,356 7,867,356
10,000,000 10,000,000 Federal Home Loan Bank 08/13/1999 9,823,939 9,823,939
10,000,000 10,000,000 Federal Home Loan Bank 5.570 04/07/1999 9,999,859 9,999,859
9,000,000 9,000,000 18,000,000 Federal Home Loan Bank 5.650 04/09/1999 8,999,948 8,999,941 7,999,896
4,000,000 4,000,000 8,000,000 Federal Home Loan Bank 5.705 05/05/1999 4,002,395 4,002,395 8,004,789
8,000,000 8,000,000 Federal Home Loan Bank 5.723 05/05/1999 7,999,735 7,999,735
13,000,000 12,000,000 25,000,000 Federal Home Loan Bank 4.781 06/17/1999 12,999,314 11,999,367 4,998,682
12,000,000 8,000,000 20,000,000 Federal Home Loan Bank 5.510 07/06/1999 11,997,002 7,998,001 19,995,003
12,000,000 12,000,000 24,000,000 Federal Home Loan Bank 4.770 10/21/1999 12,000,000 12,000,000 24,000,000
10,000,000 10,000,000 20,000,000 Federal Home Loan Bank 4.770 11/09/1999 9,995,828 9,995,828 19,991,655
12,000,000 12,000,000 24,000,000 Federal Home Loan Bank 4.900 01/14/2000 11,999,258 11,999,258 23,998,516
10,000,000 10,000,000 20,000,000 Federal Home Loan Bank 4.910 02/09/2000 9,999,484 9,999,484 19,998,968
10,000,000 10,000,000 20,000,000 Federal Home Loan Bank 4.950 02/24/2000 9,994,321 19,994,321 19,988,642
12,000,000 8,000,000 20,000,000 Federal Home Loan Bank 5.100 03/03/2000 11,995,745 7,997,163 19,992,908
14,000,000 8,000,000 22,000,000 Federal Home Loan Bank 5.150 03/08/2000 13,988,938 7,993,678 21,982,617
--------------------------------------------
Total Federal Home Loan Bank 190,237,908 352,658,258 542,896,162
Federal Home Loan Mortgage Corporation (FHLMC)- 3.86%
6,000,000 6,000,000 Federal Home Loan Mortgage Corporation 04/09/1999 5,993,520 5,993,520
8,500,000 8,500,000 Federal Home Loan Mortgage Corporation 04/12/1999 8,487,222 8,487,222
5,653,000 5,653,000 Federal Home Loan Mortgage Corporation 04/15/1999 5,642,558 5,642,558
5,300,000 5,300,000 Federal Home Loan Mortgage Corporation 04/16/1999 5,289,510 5,289,510
7,450,000 7,450,000 Federal Home Loan Mortgage Corporation 04/26/1999 7,425,167 7,425,167
10,000,000 10,000,000 Federal Home Loan Mortgage Corporation 05/06/1999 9,953,819 9,953,819
--------------------------------------
Total Federal Home Loan Mortgage Corporation 42,791,796 42,791,796
Federal National Mortgage Association
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
(FNMA)- 3.06%
6,000,000 6,000,000 Federal National Mortgage Association 04/01/1999 6,000,000 6,000,000
3,916,000 3,916,000 Federal National Mortgage Association 04/02/1999 3,915,472 3,915,472
8,000,000 8,000,000 Federal National Mortgage Association 04/07/1999 7,993,533 7,993,533
8,000,000 8,000,000 Federal National Mortgage Association 5.002 04/28/1999 7,999,704 7,999,704
8,000,000 8,000,000 Federal National Mortgage Association 5.630 05/05/1999 7,999,571 7,999,571
-------------------------------------
Total Federal National Mortgage Association 33,908,281 33,908,281
Student Loan Marketing Association
(SLMA)- 6.53%
8,000,000 8,000,000 Student Loan Marketing Association 06/30/1999 7,907,000 7,907,000
4,500,000 4,500,000 Student Loan Marketing Association 4.992 04/16/1999 4,499,908 4,499,908
<PAGE>
12,000,000 8,000,000 20,000,000 Student Loan Marketing Association 5.202 05/20/1999 12,000,000 8,000,000 20,000,000
12,000,000 8,000,000 20,000,000 Student Loan Marketing Association 4.720 09/15/1999 11,995,679 7,997,119 19,992,798
10,000,000 10,000,000 20,000,000 Student Loan Marketing Association 4.930 02/08/2000 9,999,485 9,999,485 19,998,971
----------------------------------
Total Student Loan Marketing Association 33,995,164 38,403,512 72,398,676
----------------------------------
Total U.S. Government and Agency Obligations 708,987,658
Repurchase Agreements-34.73%
170,000,000 170,000,000 ABN-AMRO Bank 5.050 04/01/1999 170,000,000 170,000,000
170,000,000 170,000,000 Credit Suisse First Boston Corp. 5.120 04/01/1999 170,000,000 170,000,000
30,000,000 30,000,000 Lehman Brothers, Inc. 5.250 04/01/1999 30,000,000 30,000,000
15,000,000 15,000,000 Societe Generale 5.200 04/01/1999 15,000,000 15,000,000
---------------------------------
Total Repurchase Agreements 385,000,000 385,000,000
</TABLE>
<TABLE>
<CAPTION>
Investment Companies- 1.30%
<S> <C> <C> <C> <C> <C> <C> <C>
6,851,000 6,851,000 DREYFUS TREASURY CASH 4.631 6,851,000 6,851,000
7,554,300 7,554,300 DREYFUS TREASURY PRIME 4.479 7,554,300 7,554,300
----------------------------------
Total Investment Companies 6,851,000 7,554,300 14,405,300
Total Investments- 100% 1,108,392,958
</TABLE>
NATIONS GOVERNMENT RESERVES/NATIONS GOVERNMENT MONEY MARKET FUND
Pro Forma Combining Statement of Net Assets (Unaudited)
March 31, 1999
<TABLE>
<CAPTION>
Government Government Adjustments to Pro Forma Pro Forma
Money Market Reserves Combined
(in 000's) (in 000's) (in 000's) (in 000's)
-------------------------------------- --------------
<S> <C>
TOTAL INVESTMENTS
$ 409,609 $ 698,784 $ - 1,108,393
OTHER ASSETS AND LIABILITIES:
Receivable for investments sold - - - -
Payable for investments purchased - - - -
Other assets and liabilities, net 6,842 13,164 - 20,006
-------------------------------------- --------------
Total Other Assets and Liabilities
6,842 13,164 - 20,006
-------------------------------------- --------------
====================================== ==============
NET ASSETS
416,451 711,948 - 1,128,399
====================================== ==============
NET ASSETS BY CLASS:
Daily\Daily 43,430 - 43,430
Primary B\Investor B\Investor C\Investor 83,420 - 83,420
Primary A\Trust 275,677 - 275,677
Service - -
Capital 229,561 - 229,561
Liquidity 59,551 - 59,551
<PAGE>
Advisor - 88,836 - 88,836
Investor A\Market 13,924 334,000 - 347,924
-------------------------------------- --------------
416,451 711,948 - 1,128,399
-------------------------------------- --------------
SHARES OUTSTANDING BY CLASS:
Daily\Daily 43,433 - 43,433
Primary B\Investor B\Investor C\Investor 83,436 - 83,436
Primary A\Trust 275,717 - 275,717
Service - -
Capital 229,561 - 229,561
Liquidity 59,551 - 59,551
Advisor - 88,836 - 88,836
Investor A\Market 13,926 334,000 - 347,926
-------------------------------------- --------------
416,512 711,948 - 1,128,460
-------------------------------------- --------------
NET ASSET VALUE PER SHARE BY CLASS:
Daily\Daily $1.00 n/a $ - $1.00
Primary B\Investor B\Investor C/Investor $1.00 n/a $ - $1.00
Primary A\Trust $1.00 n/a $ - $1.00
Service n/a n/a $ - n/a
Capital n/a $1.00 $ - $1.00
Liquidity n/a $1.00 $ - $1.00
Advisor n/a $1.00 $ - $1.00
Investor A\Market
$1.00 $ 1.00 $ - $1.00
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
NATIONS GOVERNMENT RESERVES/NATIONS GOVERNMENT MONEY MARKET FUND
Pro Forma Combining Statement of Operations (Unaudited)
For the Twelve Month Period Ending March 31, 1999
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C>
Interest 21,119 32,621 $ - 53,739
Dividends (14) 598 - 583
-------------------------------------- --------------
Total Investment
Income 21,104 33,218 - 54,323
-------------------------------------- --------------
EXPENSES:
<PAGE>
Investment Advisory 1,631 1,886 (1,962)(a) 1,554
Administration 408 629 - 1,036
Transfer Agent 51 25 - 76
Custodian 34 72 - 105
Legal and Audit Fees 76 54 (30)(b) 101
Registration & Filing 75 83 - 157
Trustees' Fees 15 24 - 39
Interest Expense - - - -
Other expenses 56 34 - 91
-------------------------------------- --------------
Subtotal 2,345 2,807 (1,992) 3,160
-------------------------------------- --------------
SHAREHOLDER SERVICING AND DISTRIBUTION FEES
Daily\Daily 247 - (35)(a) 212
Primary B\Investor B\Investor C\Investor 354 3 (a) 357
Primary A\Trust - 249 (a) 249
Service - -
Capital - -
Liquidity - 405 405
Advisor - 243 243
Investor A\Market 74 1,374 21 (a) 1,469
-------------------------------------- --------------
Fees waived and/or reimbursed by investment 675 2,022 238 2,935
-------------------------------------- --------------
advisor, administrator and/or distributor (1,290) (1,982) 2,236 (c) (1,036)
-------------------------------------- --------------
TOTAL EXPENSES 1,730 2,846 482 5,058
-------------------------------------- --------------
-------------------------------------- --------------
NET INVESTMENT INCOME
19,374 30,372 (482) 49,265
-------------------------------------- --------------
NET REALIZED GAIN/(LOSS) ON
-------------------------------------- --------------
INVESTMENTS:
2 1 - 3
-------------------------------------- --------------
NET INCREASE/(DECREASE) IN NET ASSETS
====================================== ==============
RESULTING FROM OPERATIONS:
19,376 30,373 (482) 49,267
====================================== ==============
</TABLE>
LEGEND:
(A) REFLECTS ADJUSTMENT TO THE ACQUIRING
FUND CONTRACTUAL FEE OBLIGATION.
(B) ADJUSTMENT REFLECTS EXPECTED SAVINGS
WHEN THE TWO FUNDS BECOME ONE.
(C) REFLECTS ADJUSTMENT TO THE LEVEL OF THE ACQUIRING FUND'S VOLUNTARY
<PAGE>
EXPENSE REIMBURSEMENT.
(D) NET OF EXPENSE OFFSET ARRANGEMENTS AMOUNTS TO LESS THAN .01%
OF AVERAGE NET ASSETS.
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
Nations Government Reserves
Nations Government Money Market Fund
Notes to Pro Forma Combining Financial Statements (unaudited)
1. Basis of Combination
Nations Institutional Reserves and Nations Funds Trust are registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as open-end
investment companies. As of March 31, 1999 the Nations Institutional Reserves
offered five separate portfolios and Nations Funds Trust offered thirty-eight
portfolios. The unaudited Pro Forma Combining Statement of Net Assets assumes
the exchange described in the next paragraph occurred as of March 31, 1999 and
the unaudited Pro Forma Combining Statement of Operations assumes the exchange
occurred as of April 1,1999. These statements have been derived from books and
records utilized in calculating daily net asset value of each fund at March 31,
1999 and for the twelve month period then ended.
The pro forma statements give effect to the proposed transfer of the assets and
stated liabilities of the Nations Government Money Market Fund in exchange for
shares of Nations Government Reserves. Under generally accepted accounting
principles, the historical cost of investment securities will be carried forward
to the surviving entity and the results of operations of the Nations Government
Money Market Fund for pre-combination periods will not be restated. The pro
forma statements do not reflect the expenses of either fund in carrying out its
obligations under the proposed Agreement and Plan of Reorganization.
The unaudited Pro Forma combining Financial Statements should be read in
conjunction with the historical financial statements of the funds incorporated
by reference in the Statement of Additional Information.
2. Pro Forma Operations
Pro forma operating expenses include the actual expenses of each fund and the
combined fund, with certain expenses adjusted to reflect the expected expenses
of the combined entity. The investment advisory and administration fees have
been calculated for the combined fund based on the contractual rates expected to
be in effect for the Nations Government Reserves, at the time of the
Reorganization at the combined level of average net assets for the twelve month
period ended March 31, 1999.
<PAGE>
NATIONS MUNICIPAL RESERVES/NATIONS TAX-EXEMPT FUND
Pro Forma Combining Schedule of Investments (unaudited)
March 31, 1999
<TABLE>
<CAPTION>
Nations Nations Pro Forma Description Coupon Maturity Nations Nations Pro Forma
Municipal Reserves Tax Exempt Combined Rate Date Municipal Reserves Tax Exempt Value
Shares/Par Shares/Par Shares/Par Value Value
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Municipal Bonds and Notes - 99.6%
Alabama - 2.3%
4,500,000 4,500,000 ALABAMA HSG FIN 6/15/26 3.000 06/15/26 4,500,000 4,500,000
6,765,000 6,765,000 ALABAMA HSG FIN 6/15/26 3.000 06/15/26 6,765,000 6,765,000
6,000,000 6,000,000 ALABAMA TURTLE 9/01/23 3.150 09/01/23 6,000,000 6,000,000
680,000 680,000 Arab, Alabama,Industrial 3.250 06/01/02 680,000 680,000
Development Board
9,640,000 9,640,000 ASMS PUB EDL BLDG 7/1/22 3.150 07/01/22 9,640,000 9,640,000
1,475,000 1,475,000 BIRMINGHAM AL VAR 6/1/00 3.400 06/01/00 1,475,000 1,475,000
5,000,000 5,000,000 Columbia, AL, Industrial 3.050 10/01/22 5,000,000 5,000,000
Development Board, IDR
2,800,000 2,800,000 COLUMBIA ALA 6/01/28 3.150 06/01/28 2,800,000 2,800,000
1,100,000 1,100,000 Foley, AL, Industrial 3.250 12/01/00 1,100,000 1,100,000
Development Board, IDR
1,150,000 1,150,000 GADSDEN AL VAR 6/1/15 3.100 06/01/15 1,150,000 1,150,000
2,700,000 2,700,000 GADSDEN AL INDL DEV 3.250 05/01/04 2,700,000 2,700,000
5/1/4
560,000 560,000 HOMEWOOD ALA INDL 3.100 11/01/04 560,000 560,000
11/1/04
2,600,000 3,300,000 5,900,000 Northern Alabama, 3.100 12/01/00 2,600,000 3,300,000 5,900,000
Pollution Control
Environmental
Improvement Authority
2,000,000 2,000,000 OPELIKA ALA INDL 3.100 12/01/99 2,000,000 2,000,000
12/01/99
3,850,000 3,850,000 PHENIX CNTY ALA VRN 3.100 12/01/15 3,850,000 3,850,000
12/1/
2,470,000 12,930,000 15,400,000 PHENIX CNT DEV 6/1/28 3.150 06/01/28 2,470,000 12,930,000 15,400,000
VR
3,800,000 3,800,000 PHENIX CNTY ALA 3/01/31 3.150 03/01/31 3,800,000 3,800,000
--------------------------------------
Alabama Total 15,700,000 57,620,000 73,320,000
Alaska - 1.5%
16,600,000 16,600,000 ALASKA DEV ATH 5/1/09 3.100 05/01/09 16,600,000 16,600,000
FRN
500,000 500,000 VALDEZ ALASKA 12/1/33 3.100 12/01/33 500,000 500,000
700,000 700,000 VALDEZ AK MARINE 3.100 12/01/33 700,000 700,000
12/1/33
29,550,000 29,550,000 VALDEZ ALASKA MAR 3.050 05/01/31 29,550,000 29,550,000
5/01/31
---------------------------------------
Alaska Total 0 47,350,000 47,350,000
Arizona - 1.4%
17,200,000 17,200,000 APACHE CNTY AZ 12/15/18 3.050 12/15/18 17,200,000 17,200,000
7,700,000 7,000,000 14,700,000 APACHE CNTY VRN 3.050 12/15/18 7,700,000 7,000,000 14,700,000
12/15/18
5,100,000 5,100,000 CASA GRANDE AZ 7/1/15 2.950 07/01/15 5,100,000 5,100,000
4,200,000 4,200,000 GOODYEAR AZ INDL 5/1/15 3.250 05/01/15 4,200,000 4,200,000
2,200,000 2,200,000 MARICOPA CO AZ 5/1/29 3.150 05/01/29 2,200,000 2,200,000
1,000,000 1,000,000 PINAL CNTY ARIZ VRN 3.000 12/01/11 1,000,000 1,000,000
12/1
----------------------------------------
Arizona Total 10,900,000 33,500,000 44,400,000
Arkansas - 0.7%
6,500,000 5,000,000 11,500,000 CROSSETT AR PCR 8/1/04 3.100 08/01/04 6,500,000 5,000,000 11,500,000
6,300,000 6,300,000 LITTLE ROCK ARK 3.150 12/01/25 6,300,000 6,300,000
12/01/25
3,250,000 3,250,000 LOWELL AR IDR VAR 3.100 06/01/31 3,250,000 3,250,000
6/1/31
-----------------------------------------
Arkansas Total 6,500,000 14,550,000 21,050,000
California - 2.7%
2,500,000 7,500,000 10,000,000 CA HIGHER ED LN 4/1/00 3.650 04/01/00 2,500,000 7,500,000 10,000,000
19,000,000 19,000,000 CA HIGHER ED LN 4/1/00 3.800 04/01/00 19,000,000 19,000,000
1,400,000 1,400,000 LA REGL ARPT VRN 3.100 12/01/24 1,400,000 1,400,000
12/1/24
1,800,000 1,800,000 LA CA APTS D-VAR 3.100 12/01/24 1,800,000 1,800,000
12/1/24
1,850,000 44,750,000 46,600,000 LA REGION AIRPORT 3.100 12/01/25 1,850,000 44,750,000 46,600,000
12/1/25
1,500,000 3,500,000 5,000,000 REG ARPT IMPR FRN (AMT) 3.150 12/01/25 1,500,000 3,500,000 5,000,000
------------------------------------------
California Total 7,650,000 76,150,000 83,800,000
Colorado - 2.8%
5,440,000 5,440,000 ARAPAHOE CNTY CO 5/1/23 3.150 05/01/23 5,440,000 5,440,000
1,300,000 1,300,000 COLORADO HLTH FACS 3.100 12/01/04 1,300,000 1,300,000
12/1/4
13,000,000 13,000,000 COLORADO HSG FIN 3.125 11/01/09 13,000,000 13,000,000
11/01/09
3,070,000 3,070,000 CO POSTSEC EDL 6/1/11 3.100 06/01/11 3,070,000 3,070,000
2,000,000 2,000,000 CO STUDENT OBLIG 7/1/20 3.100 07/01/20 2,000,000 2,000,000
3,600,000 3,600,000 COL STUDENT VAR 8/1/00 3.000 08/01/00 3,600,000 3,600,000
3,500,000 3,500,000 DENVER COLO VAR 3.100 11/15/25 3,500,000 3,500,000
11/15/25
5,000,000 5,000,000 DENVER CO VAR 11/15/25 3.100 11/15/25 5,000,000 5,000,000
5,305,000 5,305,000 EL PASO CNTY CO 12/1/24 3.050 12/01/24 5,305,000 5,305,000
1,035,000 1,035,000 LARIMER CNTY COL 3.100 06/01/10 1,035,000 1,035,000
6/01/10
3,000,000 39,300,000 42,300,000 MOFFAT CNTY COLO 3.050 07/01/10 3,000,000 39,300,000 42,300,000
7/01/10
<PAGE>
3,000,000 3,000,000 PITKIN CNTY COLO 3.250 04/01/14 3,000,000 3,000,000
4/01/14
----------------------------------------
Colorado Total 14,005,000 74,545,000 88,550,000
Delaware - 2.7%
12,000,000 12,000,000 DELAWARE ST VAR 8/1/29 3.150 08/01/29 12,000,000 12,000,000
10,000,000 10,000,000 DELAWARE ST ECON 8/1/29 3.000 08/01/29 10,000,000 10,000,000
17,300,000 17,300,000 DELAWARE ST ECON 8/1/29 3.050 08/01/29 17,300,000 17,300,000
10,550,000 10,550,000 DELWARE ST ECON 3.100 12/01/15 10,550,000 10,550,000
12/01/15
28,100,000 28,100,000 DELAWARE ST VRN 3.100 12/01/15 28,100,000 28,100,000
12/01/15
5,700,000 5,700,000 DELAWARE ST VAR 12/1/15 3.100 12/01/15 5,700,000 5,700,000
---------------------------------------
Delaware Total 0 83,650,000 83,650,000
District of Columbia - 0.3%
10,000,000 10,000,000 D C TAX 3.75% 9/30/99 3.750 09/30/99 10,031,547 10,031,547
----------------------------------------
District of Columbia Total 0 10,031,547 10,031,547
Florida - 4.2%
2,775,000 2,775,000 BREVARD CNTY FL 12/1/10 3.200 12/01/10 2,775,000 2,775,000
12,810,000 12,810,000 BROWARD CNTY FLA 3.050 11/01/07 12,810,000 12,810,000
11/1/07
6,500,000 6,500,000 DADE CNTY FL SPL 3.100 08/01/15 6,500,000 6,500,000
8/01/15
4,365,000 4,365,000 DADE CNTY FL INDL 3.200 11/01/14 4,365,000 4,365,000
11/1/14
14,800,000 14,800,000 FLORIDA HSG FIN 12/1/09 3.050 12/01/09 14,800,000 14,800,000
4,800,000 4,800,000 FLORIDA HSG FIN VAR 3.050 06/01/07 4,800,000 4,800,000
6/1/7
5,000,000 5,000,000 FLORIDA HSG VAR 8/1/06 3.125 08/01/06 5,000,000 5,000,000
14,998,500 14,998,500 FL ST BRD ED 6/1/21 3.200 06/01/21 14,998,500 14,998,500
1,845,000 1,845,000 FORT WALTON BEACH 3.300 10/01/11 1,845,000 1,845,000
10/1/11
7,000,000 7,500,000 14,500,000 INDIAN RIVER CNTY 3.000 10/01/15 7,000,000 7,500,000 14,500,000
10/1/15
3,645,000 3,645,000 MANATEE CNTY FL 6/1/07 3.050 06/01/07 3,645,000 3,645,000
12,500,000 12,500,000 MIAMI HLTH FACS 3.100 12/01/16 12,500,000 12,500,000
12/01/16
700,000 700,000 ORANGE CNTY FL VAR 3.100 03/01/18 700,000 700,000
3/1/18
3,000,000 3,000,000 PALM BEACH ECO 1/22/99 3.100 01/01/24 3,000,000 3,000,000
5,500,000 1,500,000 7,000,000 PALM BEACH CNTY 2.900 05/01/25 5,500,000 1,500,000 7,000,000
05/01/25
3,000,000 6,000,000 9,000,000 POLK CO FL 2/1/29 AMT"" 3.100 02/01/29 3,000,000 6,000,000 9,000,000
2,950,000 2,950,000 ST LUCIE CNTY FLA 3.050 01/01/11 2,950,000 2,950,000
1/01/11
1,900,000 1,900,000 UNIV ATHL ASSC VRN 3.150 02/01/20 1,900,000 1,900,000
2/1/20
9,500,000 9,500,000 UNIVERSITY N. FLA 3.050 11/01/27 9,500,000 9,500,000
11/1/27
----------------------------------------
Florida Total 38,120,000 94,468,500 132,588,500
Georgia - 10.9%
10,000,000 10,000,000 ALBANY DOUGH. GA 10/01/05 3.100 10/01/05 10,000,000 10,000,000
2,040,000 2,040,000 BARTOW CNTY GA 03/01/24 3.100 03/01/24 2,040,000 2,040,000
17,500,000 17,500,000 BURKE CTNY GA 07/01/24 3.050 07/01/24 17,500,000 17,500,000
585,000 7,900,000 8,485,000 BURKE CO PCR VRN 9/1/25 3.100 09/01/25 585,000 7,900,000 8,485,000
5,800,000 5,800,000 BURKE CO GA VRN 9/1/26 3.100 09/01/26 5,800,000 5,800,000
7,750,000 7,750,000 CLAYTON CNTY GA 8/1/19 3.100 08/01/19 7,750,000 7,750,000
1,140,000 6,385,000 7,525,000 CLAYTON CNTY GA 1/1/21 3.000 01/01/21 1,140,000 6,385,000 7,525,000
3,945,000 3,945,000 CLAYTON CNTY GA 1/1/21 3.000 01/01/21 3,945,000 3,945,000
3,380,000 3,380,000 CLAYTON CNTY GA 1/1/21 3.000 01/01/21 3,380,000 3,380,000
17,330,000 17,330,000 COBB MARIETTA GA 10/1/26 3.000 10/01/26 17,330,000 17,330,000
2,215,000 2,215,000 COBB CNTY GA DEV 05/01/05 3.350 05/01/05 2,215,000 2,215,000
2,000,000 2,000,000 COBB CNTY GA DEV 8/1/08 3.100 08/01/08 2,000,000 2,000,000
3,600,000 3,600,000 COBB CNTY GA 8/1/18 3.100 08/01/18 3,600,000 3,600,000
1,900,000 1,900,000 COBB CNTY GA VAR 8/1/15 3.100 08/01/15 1,900,000 1,900,000
3,260,000 3,260,000 COLLEGE PARK GA 6/1/14 3.000 06/01/14 3,260,000 3,260,000
3,585,000 12,415,000 16,000,000 COLUMBIA CNTY GA 1/1/21 3.100 01/01/21 3,585,000 12,415,000 16,000,000
2,250,000 2,250,000 COLUMBUS GA VAR 2/1/05 3.375 02/01/05 2,250,000 2,250,000
3,330,000 3,330,000 COLUMBUS GA INDL 04/01/07 3.400 04/01/07 3,330,000 3,330,000
7,600,000 7,600,000 DADE CNTY GA DEV 12/01/12 3.000 12/01/12 7,600,000 7,600,000
5,400,000 5,400,000 DE KALB CNTY GA 3/01/21 3.100 03/01/21 5,400,000 5,400,000
4,280,000 4,280,000 DEKALB CO 4/1/24 3.050 04/01/24 4,280,000 4,280,000
7,430,000 7,430,000 DEKALB CNTY DEV 5/01/13 3.100 05/01/13 7,430,000 7,430,000
3,000,000 3,000,000 DE KALB CNTY GA 3/01/24 3.100 03/01/24 3,000,000 3,000,000
4,800,000 4,800,000 DE KALB CNTY GA 12/1/07 3.150 12/01/07 4,800,000 4,800,000
2,800,000 2,800,000 DE KALB CNTY GA 6/15/25 3.050 06/15/25 2,800,000 2,800,000
6,875,000 6,875,000 DE KALB CNTY GA 8/01/27 3.200 08/01/27 6,875,000 6,875,000
1,400,000 1,400,000 DEKALB CNTY GA 12/1/20 3.200 12/01/20 1,400,000 1,400,000
5,430,000 5,430,000 DE KALB CNTY GA 12/1/20 3.200 12/01/20 5,430,000 5,430,000
14,935,000 14,935,000 DEKALB CNTY GA 12/15/15 3.000 12/15/15 14,935,000 14,935,000
5,250,000 5,250,000 DEKALB CNTY GA 3/1/05 3.000 03/01/05 5,250,000 5,250,000
3,460,000 3,460,000 DEKALB CNTY GA 9/1/09 3.100 09/01/09 3,460,000 3,460,000
5,000,000 5,000,000 FLOYD CNTY GA VAR 3/1/24 3.100 03/01/24 5,000,000 5,000,000
5,300,000 5,300,000 FULCO GA HOSP VAR 2/1/07 3.100 02/01/07 5,300,000 5,300,000
12,500,000 12,500,000 FULTON CNTY VAR 8/1/18 3.150 08/01/18 12,500,000 12,500,000
3,500,000 3,500,000 FULTON CNTY GA VRN 7/1/14 3.100 07/01/14 3,500,000 3,500,000
3,500,000 3,500,000 FULTON CNTY GA 12/01/10 3.100 12/01/10 3,500,000 3,500,000
3,000,000 3,000,000 FULTON CNTY GA VAR 6/1/16 3.100 06/01/16 3,000,000 3,000,000
3,000,000 3,000,000 FULTON CNTY GA 4/01/2017 3.100 04/01/17 3,000,000 3,000,000
4,500,000 4,500,000 FULTON CNTY GA 10/1/18 3.100 10/01/18 4,500,000 4,500,000
2,400,000 2,400,000 GREENE CNTY GA DEV 3/1/05 3.200 03/01/05 2,400,000 2,400,000
<PAGE>
5,800,000 5,800,000 GWINNET CNTY-GA. 08/01/06 3.200 08/01/06 5,800,000 5,800,000
7,500,000 7,500,000 GWINNETT CNTY GA 12/31/02 3.150 12/31/02 7,500,000 7,500,000
3,000,000 3,000,000 HENRY CNTY GA VAR 5/1/04 3.100 05/01/04 3,000,000 3,000,000
1,150,000 1,150,000 MUNI ELEC GA 01/01/22 3.050 01/01/22 1,150,000 1,150,000
35,000,000 35,000,000 MUNICIPAL ELEC 1/01/26 2.850 01/01/26 35,000,000 35,000,000
1,000,000 1,000,000 NEWTON GA INDL VAR 12/1/4 3.150 12/01/04 1,000,000 1,000,000
9,400,000 9,400,000 PUTNAM CNTY GA 9/01/29 3.100 09/01/29 9,400,000 9,400,000
7,000,000 7,000,000 SMYRNA GA HSG 6/01/25 3.000 06/01/25 7,000,000 7,000,000
1,000,000 16,300,000 17,300,000 SMYRNA GA HSG 06/01/25 3.000 06/01/25 1,000,000 16,300,000 17,300,000
7,900,000 7,900,000 SMYRNA GA HSG 6/01/25 3.000 06/01/25 7,900,000 7,900,000
4,000,000 4,000,000 TALLAPOOSA GA DEV 2/01/15 2.950 02/01/15 4,000,000 4,000,000
5,000,000 5,000,000 THOMASTON VAR 4/1/00 3.100 04/01/00 5,000,000 5,000,000
5,550,000 5,550,000 WORTH CNTY GA 8/1/23 3.100 08/01/23 5,550,000 5,550,000
----------------------------------------
Georgia Total 41,505,000 301,765,000 343,270,000
Hawaii - 0.3%
8,500,000 8,500,000 HAWAII ST HSG FIN 7/1/24 3.125 07/01/24 8,500,000 8,500,000
------------------------------------------
Hawaii Total 0 8,500,000 8,500,000
Idaho - 0.7%
22,275,000 22,275,000 IDAHO HSG FLT 7/1/29 3.120 07/01/29 22,275,000 22,275,000
------------------------------------------
Idaho Total 0 22,275,000 22,275,000
Illinois - 15.8%
2,600,000 2,600,000 CHICAGO ILL VAR 9/1/32 3.050 09/01/32 2,600,000 2,600,000
5,855,000 5,855,000 CHICAGO ILL IDR 11/1/26 3.250 11/01/26 5,855,000 5,855,000
2,900,000 3,100,000 6,000,000 CHICAGO OHARE VRN 12/1/17 3.100 12/01/17 2,900,000 3,100,000 6,000,000
2,700,000 2,700,000 CHICAGO ILL O HARE 3.100 12/01/17 2,700,000 2,700,000
2,700,000 1,300,000 4,000,000 CHICAGO ILL ARPT 12/1/17 3.100 12/01/17 2,700,000 1,300,000 4,000,000
13,400,000 13,400,000 CHICAGO O HARE 1/01/15 3.050 01/01/15 13,400,000 13,400,000
6,170,000 6,170,000 CHICAGO O HARE 1/01/15 3.050 01/01/15 6,170,000 6,170,000
7,200,000 7,200,000 CHICAGO O HARE 1/01/18 3.000 01/01/18 7,200,000 7,200,000
2,500,000 2,500,000 ILLINOIS DEV FIN 5/01/09 3.200 05/01/09 2,500,000 2,500,000
870,000 3,830,000 4,700,000 ILLINOIS DEV FIN 6/01/12 3.200 06/01/12 870,000 3,830,000 4,700,000
2,315,000 2,315,000 IL DEV FIN VAR 10/1/12 3.000 10/01/12 2,315,000 2,315,000
1,700,000 1,700,000 ILLINOIS DEV FIN 5/01/15 3.200 05/01/15 1,700,000 1,700,000
2,000,000 28,000,000 30,000,000 ILLINOIS DEV FIN 10/15/14 2.900 10/15/14 2,000,000 28,000,000 30,000,000
9,100,000 9,100,000 IL DEV FIN VAR 3/1/09 3.050 03/01/09 9,100,000 9,100,000
1,800,000 1,800,000 IL DEV FIN VAR 12/1/09 3.100 12/01/09 1,800,000 1,800,000
2,000,000 2,000,000 ILLINOIS DEV FIN 9/01/18 3.100 09/01/18 2,000,000 2,000,000
5,000,000 5,000,000 IL DEV FIN VAR 9/1/31 3.000 09/01/31 5,000,000 5,000,000
4,320,000 4,320,000 IL DEV FIN FIN 1/1/31 3.000 01/01/31 4,320,000 4,320,000
30,300,000 30,300,000 IL DEV FIN VAR 12/1/28 2.900 12/01/28 30,300,000 30,300,000
2,000,000 26,100,000 28,100,000 ILLINOIS DEV FIN 12/01/28 2.950 12/01/28 2,000,000 26,100,000 28,100,000
9,000,000 9,000,000 IL DEV FIN VAR 4/1/25 3.000 04/01/25 9,000,000 9,000,000
9,000,000 9,000,000 IL DEV FIN ADJ 6/1/26 2.950 06/01/26 9,000,000 9,000,000
14,500,000 14,500,000 IL EDL FACS VAR 9/1/25 3.000 09/01/25 14,500,000 14,500,000
4,000,000 4,000,000 ILL EDCL FACS VRN 4/1/26 2.950 04/01/26 4,000,000 4,000,000
6,000,000 6,000,000 IL EDL FACS VAR 10/1/26 2.950 10/01/26 6,000,000 6,000,000
1,400,000 1,400,000 ILLINOIS EDL FAC 12/01/25 3.000 12/01/25 1,400,000 1,400,000
11,090,000 11,090,000 ILL EDL FACS VAR 12/1/05 2.950 12/01/05 11,090,000 11,090,000
8,900,000 8,900,000 ILLINOIS EDL FACS 1/01/26 2.950 01/01/26 8,900,000 8,900,000
5,600,000 700,000 6,300,000 ILLINOIS EDL 12/01/25 2.950 12/01/25 5,600,000 700,000 6,300,000
29,000,000 29,000,000 ILLINOIS EDL 11/01/32 2.950 11/01/32 29,000,000 29,000,000
1,200,000 1,200,000 IL HLTH FACS VAR 10/1/15 3.150 10/01/15 1,200,000 1,200,000
7,000,000 7,000,000 ILLINOIS HEALTH 8/15/15 3.550 08/15/15 7,000,000 7,000,000
8,000,000 8,000,000 ILLINOIS HEALTH 8/01/15 2.950 08/01/15 8,000,000 8,000,000
5,300,000 5,300,000 ILLINOIS HEALTH 11/01/15 2.950 11/01/15 5,300,000 5,300,000
7,100,000 7,100,000 ILLINOIS HEALTH 8/15/24 2.950 08/15/24 7,100,000 7,100,000
5,000,000 5,000,000 ILLINOIS HEALTH 11/15/24 2.950 11/15/24 5,000,000 5,000,000
11,000,000 11,000,000 IL HEALTH VAR 8/15/30 3.700 08/15/30 11,000,000 11,000,000
10,050,000 10,050,000 IL HLTH FACS VAR 9/15/20 2.950 09/15/20 10,050,000 10,050,000
45,400,000 45,400,000 IL HSG DEV VAR 1/1/08 3.200 01/01/08 45,400,000 45,400,000
7,000,000 7,000,000 JACKSON UNION CNTY 4/1/24 3.125 04/01/24 7,000,000 7,000,000
13,700,000 13,700,000 KANE CNTY IL REV 2/1/28 2.950 02/01/28 13,700,000 13,700,000
15,000,000 15,000,000 LISLE IL MFR VRN 12/15/25 3.100 12/15/25 15,000,000 15,000,000
1,500,000 1,500,000 LOMBARD ILL 10/01/13 3.350 10/01/13 1,500,000 1,500,000
8,000,000 8,000,000 LOMBARD IL 3.55%12/15/06 3.550 12/15/06 8,000,000 8,000,000
44,535,000 44,535,000 METROPOLITAN VAR 6/15/27 3.070 06/15/27 44,535,000 44,535,000
9,200,000 9,200,000 ORLAND PARK ILL 4/01/31 3.050 04/01/31 9,200,000 9,200,000
3,700,000 3,700,000 PALOS HILLS ILL 8/01/29 3.090 08/01/29 3,700,000 3,700,000
7,000,000 7,000,000 QUINCY ILL REV 6/01/22 3.100 06/01/22 7,000,000 7,000,000
7,195,000 7,195,000 RICHTON PK ILL 04/01/16 3.200 04/01/16 7,195,000 7,195,000
7,600,000 7,600,000 SAUGET ILL V/R 02/01/16 2.950 02/01/16 7,600,000 7,600,000
1,400,000 1,400,000 SWESTERN ILL DEV 12/01/06 3.100 12/01/06 1,400,000 1,400,000
5,000,000 5,000,000 WOODFORD IL VAR 3/1/13 3.200 03/01/13 5,000,000 5,000,000
-----------------------------------------
Illinois Total 36,870,000 462,960,000 499,830,000
Indiana - 2.6%
760,000 760,000 Auburn, IN, Economic 3.150 09/01/00 760,000 760,000
Development Revenue
505,000 505,000 EVANSVILLE IND 6/1/04 3.100 06/01/04 505,000 505,000
5,000,000 5,000,000 FORT WAYNE IN 12/1/15 3.000 12/01/15 5,000,000 5,000,000
3,495,000 3,495,000 HENDRICKS CNTY IND 1/1/22 3.100 01/01/22 3,495,000 3,495,000
1,995,000 1,995,000 INDIANA HEALTH 12/01/16 3.000 12/01/16 1,995,000 1,995,000
1,050,000 1,050,000 INDIANA HLTH VRN 01/01/12 2.950 01/01/12 1,050,000 1,050,000
8,500,000 8,500,000 IND HOSP REV VRN 12/1/15 2.950 12/01/15 8,500,000 8,500,000
9,700,000 9,700,000 IN ST DEV FIN VAR 8/1/18 3.100 08/01/18 9,700,000 9,700,000
1,300,000 1,300,000 IN ST DEV FIN 11/1/01 3.250 11/01/01 1,300,000 1,300,000
2,000,000 2,000,000 IN ST DEV FIN VAR 1/1/09 3.400 01/01/09 2,000,000 2,000,000
3,000,000 3,000,000 IN ST DEV FIN VAR 9/1/30 3.100 09/01/30 3,000,000 3,000,000
14,900,000 14,900,000 IN ST DEV FIN VAR 8/1/31 2.950 08/01/31 14,900,000 14,900,000
2,700,000 4,900,000 7,600,000 INDIANAPOLIS IND 12/01/08 2.950 12/01/08 2,700,000 4,900,000 7,600,000
3,000,000 3,000,000 INDIANAPOLIS IN 3/1/21 3.100 03/01/21 3,000,000 3,000,000
665,000 665,000 KENDALLVILLE IND 1/01/04 3.000 01/01/04 665,000 665,000
3,800,000 3,800,000 PRINCETON IND PCR 3/1/19 3.150 03/01/19 3,800,000 3,800,000
2,900,000 2,900,000 ROCKPORT IND POLL 8/01/14 3.050 08/01/14 2,900,000 2,900,000
265,000 265,000 ROCKPRT IN PCR VRN 7/1/25 3.150 07/01/25 265,000 265,000
5,380,000 5,380,000 ST JOSEPH CTY ECO 9/01/17 3.000 09/01/17 5,380,000 5,380,000
6,600,000 6,600,000 TERRE HAUTE IND 12/01/15 2.950 12/01/15 6,600,000 6,600,000
------------------------------------------
Indiana Total 10,185,000 72,230,000 82,415,000
Iowa - 0.2%
5,000,000 5,000,000 DAVENPORT IA SCH 07/01/99 3.950 07/01/99 5,001,920 5,001,920
2,000,000 2,000,000 IOWA FIN AUTH VAR 5/1/26 3.000 05/01/26 2,000,000 2,000,000
------------------------------------------
Iowa Total 0 7,001,920 7,001,920
Kansas - 1.6%
1,900,000 1,900,000 KANSAS CITY VRN 8/01/15 3.150 08/01/15 1,900,000 1,900,000
9,600,000 9,600,000 KANSAS ST DEV 12/01/25 3.200 12/01/25 9,600,000 9,600,000
5,523,500 5,523,500 MANHATTAN KS 3.5% 6/15/99 3.500 06/15/99 5,527,415 5,527,415
32,350,000 32,350,000 OLATHE KANS EDL 7/01/24 2.950 07/01/24 32,350,000 32,350,000
------------------------------------------
Kansas Total 0 49,377,415 49,377,415
Kentucky - 2.1%
11,015,000 11,015,000 GEORGETOWN KY 12/1/17 3.100 12/01/17 11,015,000 11,015,000
1,300,000 1,300,000 HOPKINSVILLE KY 6/1/04 3.200 06/01/04 1,300,000 1,300,000
1,092,000 1,092,000 JEFFERSON CNTY KY 12/1/14 2.950 12/01/14 1,092,000 1,092,000
1,440,000 1,440,000 JEFFERSON CNTY 6/01/11 3.000 06/01/11 1,440,000 1,440,000
1,700,000 1,700,000 JEFFERSONTOWN KY 4/01/20 3.250 04/01/20 1,700,000 1,700,000
2,550,000 2,550,000 KENTUCKY HSG 3.2% 7/1/00 3.200 07/01/00 2,550,000 2,550,000
3,500,000 3,500,000 LEBANON KY INDL 06/01/19 3.050 06/01/19 3,500,000 3,500,000
3,200,000 5,600,000 8,800,000 LEXINGTON URBAN 04/01/24 3.200 04/01/24 3,200,000 5,600,000 8,800,000
2,900,000 2,900,000 LEX FAYETTE CNTY 04/01/24 3.200 04/01/24 2,900,000 2,900,000
6,250,000 6,250,000 LOUISVL&JFRSN VRN 6/30/02 3.200 06/30/02 6,250,000 6,250,000
4,880,000 4,880,000 LOUISVILLE FLT 7/1/24 3.070 07/01/24 4,880,000 4,880,000
5,600,000 5,600,000 MASON CNTY KY 10/15/14 3.050 10/15/14 5,600,000 5,600,000
8,750,000 8,750,000 MASON CNTY KY 10/15/14 3.050 10/15/14 8,750,000 8,750,000
6,000,000 6,000,000 MIDDLETOWN KY REV 7/1/22 3.100 07/01/22 6,000,000 6,000,000
------------------------------------------
Kentucky Total 9,982,000 55,795,000 65,777,000
Louisiana - 3.6%
8,000,000 8,000,000 Ascension Parish, LA, PCR
Refunding 3.050 12/01/09 8,000,000 8,000,000
6,550,000 6,550,000 CADDO PARISH LA 1/1/03 3.000 01/01/03 6,550,000 6,550,000
23,300,000 23,300,000 JEFFERSON LA HOSP 1/01/26 3.000 01/01/26 23,300,000 23,300,000
2,300,000 2,300,000 LAKE CHARLES LA 8/01/07 3.050 08/01/07 2,300,000 2,300,000
25,000,000 25,000,000 LA PBLC FACS VRN 09/01/27 3.100 09/01/27 25,000,000 25,000,000
21,225,000 21,225,000 LA PUB FACS PCR 12/1/04 3.000 12/01/04 21,225,000 21,225,000
1,000,000 1,000,000 LOUISIANA ST OFSHR 9/1/08 3.150 09/01/08 1,000,000 1,000,000
1,200,000 5,800,000 7,000,000 ST CHRLS PCR VRN 10/1/25 3.100 10/01/25 1,200,000 5,800,000 7,000,000
4,500,000 4,500,000 SOUTH LA PORT 7/01/21 3.000 07/01/21 4,500,000 4,500,000
9,000,000 9,000,000 SOUTH LA PORT 01/01/27 3.100 01/01/27 9,000,000 9,000,000
5,200,000 5,200,000 UPPER PONTALBA 12/01/16 3.100 12/01/16 5,200,000 5,200,000
------------------------------------------
Louisiana Total 16,000,000 97,075,000 113,075,000
Maryland - 3.1%
3,300,000 3,300,000 BALTIMORE MD 10/14/11 3.000 10/14/11 3,300,000 3,300,000
15,000,000 70,700,000 85,700,000 BALTIMORE MD 8/01/16 2.950 08/01/16 15,000,000 70,700,000 85,700,000
2,300,000 2,300,000 MARYLAND ST INDL 5/01/06 3.200 05/01/06 2,300,000 2,300,000
6,900,000 6,900,000 MARYLAND ECO VRN 3/1/26 3.050 03/01/26 6,900,000 6,900,000
------------------------------------------
Maryland Total 15,000,000 83,200,000 98,200,000
Massachusetts - 0.1%
4,000,000 4,000,000 MASSACHUSETTS ST 5/01/27 3.100 05/01/27 4,000,000 4,000,000
-------------------------------------------
Massachusetts Total 0 4,000,000 4,000,000
<PAGE>
Michigan - 1.6%
7,500,000 7,500,000 GRAND RAPIDS MI 6/1/12 3.050 06/01/12 7,500,000 7,500,000
14,800,000 14,800,000 GREEN LAKE TWP 6/1/27 2.950 06/01/27 14,800,000 14,800,000
3,055,000 3,055,000 JACKSON CTY MICH 10/01/14 3.100 10/01/14 3,055,000 3,055,000
3,500,000 3,500,000 MI ST HSG DEV VAR 10/1/07 3.042 10/01/07 3,500,000 3,500,000
7,800,000 7,800,000 MICH ST HOSP VRN 7/1/17 3.000 07/01/17 7,800,000 7,800,000
1,000,000 1,000,000 MI ST JOB DEV VAR 8/1/15 3.000 08/01/15 1,000,000 1,000,000
2,400,000 1,800,000 4,200,000 UNIVERSITY MICH 12/01/19 3.150 12/01/19 2,400,000 1,800,000 4,200,000
3,200,000 900,000 4,100,000 UNIVERSITY MI 12/1/27 3.150 12/01/27 3,200,000 900,000 4,100,000
800,000 1,425,000 2,225,000 UNIV MICH 12/01/27 3.150 12/01/27 800,000 1,425,000 2,225,000
1,000,000 1,000,000 UNIVERSITY MI VAR 12/1/21 3.150 12/01/21 1,000,000 1,000,000
-------------------------------------------
Michigan Total 9,900,000 39,280,000 49,180,000
Minnesota - 0.5%
2,410,000 2,410,000 MINN MIN REV 11/01/16 3.100 11/01/16 2,410,000 2,410,000
6,160,000 6,160,000 MINNEAPOLIS MN 12/1/14 3.000 12/01/14 6,160,000 6,160,000
5,780,000 5,780,000 MINNEAPOLIS MN 10/1/24 3.050 10/01/24 5,780,000 5,780,000
-------------------------------------------
Minnesota Total 2,410,000 11,940,000 14,350,000
Mississippi - 1.8%
2,500,000 2,500,000 FLOWOOD MISS INDL 11/1/01 3.250 11/01/01 2,500,000 2,500,000
2,200,000 2,200,000 MI BUS FIN VAR 3/1/10 3.200 03/01/10 2,200,000 2,200,000
2,100,000 2,100,000 MI BUS FIN VAR 6/1/05 3.300 06/01/05 2,100,000 2,100,000
39,180,000 39,180,000 MS STATE VAR 11/1/11 3.100 11/01/11 39,180,000 39,180,000
11,300,000 11,300,000 PERRY CNTY MISS 10/01/12 3.100 10/01/12 11,300,000 11,300,000
-------------------------------------------
Mississippi Total 2,500,000 54,780,000 57,280,000
Missouri - 5.6%
5,000,000 5,000,000 BERKELEY MO 7/01/08 3.050 07/01/08 5,000,000 5,000,000
5,000,000 5,000,000 BERKELEY MO INDL 9/01/04 3.050 09/01/04 5,000,000 5,000,000
4,100,000 4,100,000 CITY OF COLUMBIA 6/1/08 2.950 06/01/08 4,100,000 4,100,000
10,800,000 10,800,000 COLUMBIA MO VRN 12/01/15 2.950 12/01/15 10,800,000 10,800,000
18,400,000 18,400,000 KANSAS CITY MO 06/01/27 3.110 06/01/27 18,400,000 18,400,000
6,700,000 6,700,000 MISSOURI ST HLTH 06/01/14 3.000 06/01/14 6,700,000 6,700,000
15,400,000 15,400,000 MO ST HLTH & EDL 6/1/19 3.000 06/01/19 15,400,000 15,400,000
6,100,000 6,100,000 MISS ST HLTH 06/01/19 3.000 06/01/19 6,100,000 6,100,000
11,590,000 11,590,000 MISSOURI ST VRN 12/1/15 3.000 12/01/15 11,590,000 11,590,000
2,700,000 2,700,000 MO ST HEALTH VAR 12/1/05 3.150 12/01/05 2,700,000 2,700,000
1,800,000 1,800,000 MISSOURI ST HLTH 09/01/10 3.000 09/01/10 1,800,000 1,800,000
7,400,000 7,400,000 MISSOURI ST HLTH 11/01/25 3.200 11/01/25 7,400,000 7,400,000
20,845,000 20,845,000 MISSOURI ST CP 06/01/15 3.000 06/01/15 20,845,000 20,845,000
12,000,000 12,000,000 MISSOURI ST ENVIRON IMPT 3.000 06/01/15 12,000,000 12,000,000
5,000,000 5,000,000 MISSOURI ST HLT 09/13/99 4.250 09/13/99 5,013,031 5,013,031
4,700,000 4,700,000 MISSOURI ST HLTH 09/13/99 4.250 09/13/99 4,712,248 4,712,248
9,380,000 9,380,000 PLATTE CNTY MO 4/01/28 3.100 04/01/28 9,380,000 9,380,000
3,070,000 3,070,000 ST CHARLES CNTY 09/01/25 3.050 09/01/25 3,070,000 3,070,000
8,000,000 8,000,000 ST LOUIS MO DEV 12/01/03 3.050 12/01/03 8,000,000 8,000,000
5,000,000 5,000,000 ST LOUIS MO DEV 05/01/09 3.050 05/01/09 5,000,000 5,000,000
5,505,000 5,505,000 ST LOUIS MO 12/01/05 3.150 12/01/05 5,505,000 5,505,000
7,000,000 7,000,000 MISS ENVIRON IMP 3.200 05/06/99 7,000,000 7,000,000
-------------------------------------------
Missouri Total 8,500,000 167,015,279 175,515,279
Montana - 0.5%
8,500,000 8,500,000 FORSYTH MONT MT 12/1/16 3.200 12/01/16 8,500,000 8,500,000
1,400,000 1,400,000 MONTANA HLTH FACS 12/1/15 3.100 12/01/15 1,400,000 1,400,000
4,925,000 4,925,000 MONTANA ST BRD 7/01/31 3.250 07/01/31 4,925,000 4,925,000
------------------------------------------
Montana Total 0 14,825,000 14,825,000
Nebraska - 0.4%
5,195,000 4,500,000 9,695,000 NEBHELP INC VAR 12/1/16 3.200 12/01/16 5,195,000 4,500,000 9,695,000
4,000,000 4,000,000 YORK NE IDR VAR 8/1/17 3.100 08/01/17 4,000,000 4,000,000
------------------------------------------
Nebraska Total 5,195,000 8,500,000 13,695,000
Nevada - 0.1%
2,800,000 2,800,000 CLARK CNTY NV VAR 11/1/21 3.300 11/01/21 2,800,000 2,800,000
------------------------------------------
Nevada Total 2,800,000 0 2,800,000
New Hampshire - 0.2%
7,000,000 7,000,000 MERRIMACK NH 12/30/99 3.130 12/30/99 7,001,528 7,001,528
------------------------------------------
New Hampshire Total 0 7,001,528 7,001,528
New Mexico - 0.3%
3,100,000 3,100,000 ALBUQUERQUE NM 3/01/14 3.000 03/01/14 3,100,000 3,100,000
5,900,000 5,900,000 DONA ANA CNTY NM 11/1/13 3.000 11/01/13 5,900,000 5,900,000
------------------------------------------
<PAGE>
New Mexico Total 5,900,000 3,100,000 9,000,000
New York - 2.0%
2,855,000 2,855,000 ERIE CNTY NY 11/01/16 3.000 11/01/16 2,855,000 2,855,000
6,845,000 6,845,000 MONROE CNTY NY 3.000 08/01/18 6,845,000 6,845,000
38,990,000 38,990,000 NEW YORK ST DORM 7/1/23 3.050 07/01/23 38,990,000 38,990,000
3,505,000 3,505,000 NIAGARA NY INDL 11/15/24 2.850 11/15/24 3,505,000 3,505,000
9,300,000 9,300,000 NORTHPORT-EAST 6/4/99 3.873 06/04/99 9,300,310 9,300,310
------------------------------------------
New York Total 0 61,495,310 61,495,310
North Carolina - 1.9%
600,000 600,000 CABBARUS NC VAR 1/1/00 3.100 01/01/00 600,000 600,000
5,000,000 5,000,000 CABARRUS CNTY NC 4/1/01 3.200 04/01/01 5,000,000 5,000,000
2,575,000 2,575,000 IREDELL CNTY NC 1/1/11 3.200 01/01/11 2,575,000 2,575,000
10,000,000 10,000,000 LENOIR CNTY NC 10/01/12 3.000 10/01/12 10,000,000 10,000,000
1,325,000 1,325,000 MECKLENBURG NC VAR 12/1/4 3.200 12/01/04 1,325,000 1,325,000
1,900,000 1,900,000 MECKLENBURG NC VAR 3/1/16 3.200 03/01/16 1,900,000 1,900,000
7,700,000 7,700,000 NEW HANOVER NC VAR 5/1/10 3.000 05/01/10 7,700,000 7,700,000
4,670,000 4,670,000 NC MED CARE VAR 3/1/18 3.000 03/01/18 4,670,000 4,670,000
7,700,000 7,700,000 NC MED CARE COMMN 10/1/18 3.000 10/01/18 7,700,000 7,700,000
3,900,000 3,900,000 RANDOLPH CNTY NC 09/01/05 3.200 09/01/05 3,900,000 3,900,000
7,500,000 7,500,000 WAKE CNTY NC INDL VRN 3/1 3.150 03/01/17 7,500,000 7,500,000
6,760,000 6,760,000 WINSTON SALEM 7/01/09 3.050 07/01/09 6,760,000 6,760,000
-----------------------------------------
North Carolina Total 7,500,000 52,130,000 59,630,000
North Dakota - 0.4%
12,025,000 12,025,000 GRAND FORKS, ND 12/1/16 3.100 12/01/16 12,025,000 12,025,000
900,000 500,000 1,400,000 GRAND FRKS ND VRN 12/1/25 3.100 12/01/25 900,000 500,000 1,400,000
------------------------------------------
North Dakota Total 900,000 12,525,000 13,425,000
Ohio - 2.7%
940,000 940,000 CENTERVILLE OH 11/1/13 3.050 11/01/13 940,000 940,000
5,000,000 5,000,000 CLINTON CNTY VAR 6/1/11 3.050 06/01/11 5,000,000 5,000,000
1,100,000 1,100,000 CUYAHOGA OH VAR 1/1/16 3.050 01/01/16 1,100,000 1,100,000
875,000 875,000 CUYAHOGA CNTY VAR 5/4/11 3.000 05/04/11 875,000 875,000
2,070,000 2,070,000 DEFIANCE CNTY OH 7/1/00 3.000 07/01/00 2,070,000 2,070,000
965,000 965,000 GREENE CNTY OHIO 9/01/16 3.100 09/01/16 965,000 965,000
2,020,000 2,020,000 LUCAS CNTY OHIO 07/01/09 3.250 07/01/09 2,020,000 2,020,000
10,000,000 3,000,000 13,000,000 LUCAS CNTY OHIO 10/01/05 2.950 10/01/05 10,000,000 3,000,000 13,000,000
8,000,000 8,000,000 MONTGOMERY CNTY 5/01/26 3.000 05/01/26 8,000,000 8,000,000
2,279,000 2,279,000 OHIO HSG FIN 12/01/15 3.000 12/01/15 2,279,000 2,279,000
10,000,000 10,000,000 OHIO ST. AIR QUAL.10/1/27 3.650 10/01/27 10,000,000 10,000,000
2,000,000 2,000,000 OHIO ST PCR VRN 5/1/22 3.100 05/01/22 2,000,000 2,000,000
7,675,000 7,675,000 OH ST WTR VAR 7/1/00 3.100 07/01/00 7,675,000 7,675,000
5,000,000 5,000,000 OTTAWA CNTY OHIO 08/06/99 4.000 08/06/99 5,005,358 5,005,358
995,000 995,000 SUMMIT CNTY OHIO 3/01/05 3.100 03/01/05 995,000 995,000
1,200,000 1,200,000 SUMMIT CNTY OH 02/01/07 3.200 02/01/07 1,200,000 1,200,000
20,000,000 20,000,000 TOLEDO LUCAS OH 1/1/18 3.150 01/01/18 20,000,000 20,000,000
1,055,000 1,055,000 TOLEDO-LUCAS CNTY 12/1/21 3.200 12/01/21 1,055,000 1,055,000
------------------------------------------
Ohio Total 30,439,358 53,740,000 84,179,358
Oklahoma - 0.3%
6,000,000 6,000,000 MUSKOGEE OK VAR 5/1/23 3.200 05/01/23 6,000,000 6,000,000
5,000,000 5,000,000 OK DEV FIN VAR 3/1/27 3.100 03/01/27 5,000,000 5,000,000
------------------------------------------
Oklahoma Total 0 11,000,000 11,000,000
Oregon - 0.9%
15,600,000 15,600,000 OR ST VAR 12/1/18 3.000 12/01/18 15,600,000 15,600,000
2,000,000 2,000,000 PORT PORTLAND ORE 11/1/07 3.000 11/01/07 2,000,000 2,000,000
4,300,000 4,300,000 PORTLD OR PCR VRN 12/1/09 3.100 12/01/09 4,300,000 4,300,000
2,100,000 2,000,000 4,100,000 PT PORTLAND ORE 06/15/27 3.150 06/15/27 2,100,000 2,000,000 4,100,000
2,000,000 2,000,000 WASHINGTON OR VAR 9/1/25 3.050 09/01/25 2,000,000 2,000,000
-------------------------------------------
Oregon Total 4,100,000 23,900,000 28,000,000
Pennsylvania - 2.8%
8,800,000 8,800,000 ALLEGHENY CNTY PA 9/01/11 2.900 09/01/11 8,800,000 8,800,000
5,000,000 5,000,000 ALLEGHANY CO. PA 9/1/11 2.900 09/01/11 5,000,000 5,000,000
8,865,000 8,865,000 ALLEGHENY CNTY 10/01/25 3.150 10/01/25 8,865,000 8,865,000
7,700,000 7,700,000 DELAWARE CNTY VRN 12/1/09 3.100 12/01/09 7,700,000 7,700,000
1,000,000 1,000,000 DELAW CNTY PA VRN 10/1/19 3.100 10/01/19 1,000,000 1,000,000
3,100,000 3,100,000 ELK CNTY PA VAR 3/1/09 3.250 03/01/09 3,100,000 3,100,000
5,000,000 5,000,000 MONTGOMERY CNTY 9/01/06 3.150 09/01/06 5,000,000 5,000,000
1,100,000 1,100,000 PENNSYLVANIA ECO 4/01/15 3.150 04/01/15 1,100,000 1,100,000
2,200,000 2,200,000 PHIL PA AUTH 07/01/25 3.100 07/01/25 2,200,000 2,200,000
16,300,000 16,300,000 PHILADELPHIA PA 12/01/03 3.150 12/01/03 16,300,000 16,300,000
5,900,000 5,900,000 PHILADELPHIA PA 7/01/28 3.150 07/01/28 5,900,000 5,900,000
<PAGE>
4,500,000 4,500,000 QUAKERTOWN PA VRN 7/1/26 3.100 07/01/26 4,500,000 4,500,000
1,240,000 1,240,000 SCHUYLILL CNTY PA 2/1/12 3.150 02/01/12 1,240,000 1,240,000
1,760,000 1,760,000 SCHUYLKILL CNTY 2/01/12 3.250 02/01/12 1,760,000 1,760,000
4,710,000 4,710,000 UNION CNTY PA VAR 10/1/23 3.050 10/01/23 4,710,000 4,710,000
4,310,000 4,310,000 WMORELAND CNTY PA 4/1/17 3.150 04/01/17 4,310,000 4,310,000
5,000,000 5,000,000 WMORELAND CNTY 2/01/18 3.250 02/01/18 5,000,000 5,000,000
-------------------------------------------
Pennsylvania Total 8,300,000 78,185,000 86,485,000
Rhode Island - 0.4%
7,925,000 7,925,000 RHODE ISLAND PORT 9/1/11 3.000 09/01/11 7,925,000 7,925,000
4,000,000 4,000,000 RI ST INDL FACS 04/01/04` 3.100 04/01/04 4,000,000 4,000,000
-------------------------------------------
Rhode Island Total 0 11,925,000 11,925,000
South Carolina - 1.4%
4,000,000 4,000,000 Anderson County, SC, IDR 3.200 11/01/12 4,000,000 4,000,000
1,000,000 1,000,000 CHEROKEE CNTY SC 11/1/04 3.500 11/01/04 1,000,000 1,000,000
5,945,000 5,945,000 KERSHAW CNTY SC 12/01/07 3.200 12/01/07 5,945,000 5,945,000
5,000,000 5,000,000 NEWBERRY SC 3.75% 4/1/99 3.750 04/01/99 5,000,000 5,000,000
1,740,000 1,740,000 SC JOBS ECO DEV 6/01/18 3.100 06/01/18 1,740,000 1,740,000
9,000,000 9,000,000 SC JOBS ECO DEV 4/01/12 3.150 04/01/12 9,000,000 9,000,000
5,660,000 5,660,000 SC JOBS ECO DEV 04/01/19 3.050 04/01/19 5,660,000 5,660,000
3,100,000 3,100,000 SC JOBS ECO DEV 10/01/19 3.050 10/01/19 3,100,000 3,100,000
1,000,000 1,000,000 SC JOBS ECO DEV 12/01/01 3.200 12/01/01 1,000,000 1,000,000
4,465,000 4,465,000 S C JOBS VAR 3/1/12 3.200 03/01/12 4,465,000 4,465,000
1,950,000 1,950,000 YORK CNTY SC VAR 9/15/14 3.050 09/15/14 1,950,000 1,950,000
700,000 700,000 YORK CNTY S C 9/15/14 3.050 09/15/14 700,000 700,000
-------------------------------------------
South Carolina Total 11,540,000 32,020,000 43,560,000
South Dakota - 1.2%
730,000 730,000 SOUTH DAKOTA ECO 8/01/08 3.350 08/01/08 730,000 730,000
3,410,000 3,410,000 SOUTH DAKOTA 7.65% 5/1/99 7.650 05/01/99 3,421,923 3,421,923
32,430,000 32,430,000 S DAKOTA HSG DEV 05/01/27 3.120 05/01/27 32,430,000 32,430,000
-------------------------------------------
South Dakota Total 4,151,923 32,430,000 36,581,923
Tennessee - 3.8%
1,100,000 3,600,000 4,700,000 CHATTANOOGA-HAM 10/1/17 F 3.100 10/01/17 1,100,000 3,600,000 4,700,000
5,250,000 5,250,000 CHATTANOOGA TENN 12/15/12 3.000 12/15/12 5,250,000 5,250,000
3,000,000 3,000,000 CHATTANOOGA TENN 6/01/04 3.100 06/01/04 3,000,000 3,000,000
6,969,000 6,969,000 CUMBERLAND CNTY 01/01/00 2.950 01/01/00 6,969,000 6,969,000
2,000,000 2,000,000 DICKSON CNTY TN 11/1/12 3.100 11/01/12 2,000,000 2,000,000
6,685,000 6,685,000 FRANKLIN CNTY TENN 9/1/18 3.050 09/01/18 6,685,000 6,685,000
1,265,000 1,265,000 JEFFERSON CITY 11/01/24 3.050 11/01/24 1,265,000 1,265,000
7,500,000 7,500,000 KNOX-TENN 144A VAR 3/1/19 3.100 03/01/19 7,500,000 7,500,000
3,575,000 3,575,000 LOUDON TN WTR & SWR 9/1/6 3.050 09/01/06 3,575,000 3,575,000
5,155,000 5,155,000 MET GOVT NASHVILLE 9/1/15 3.100 09/01/15 5,155,000 5,155,000
400,000 11,700,000 12,100,000 METRO NASH ARPT 10/1/12 3.100 10/01/12 400,000 11,700,000 12,100,000
15,600,000 15,600,000 METRO NASH ARPT 10/01/12 3.100 10/01/12 15,600,000 15,600,000
3,700,000 3,700,000 MONROE CNTY TENN VAR8/1/6 3.200 08/01/06 3,700,000 3,700,000
3,245,000 3,245,000 SHELBY CNTY TENN 01/01/23 3.150 01/01/23 3,245,000 3,245,000
1,600,000 1,600,000 SPRINGFIELD TENN 11/01/09 3.200 11/01/09 1,600,000 1,600,000
5,000,000 5,000,000 SULLIVAN TN FRN 7/1/10 3.150 07/01/10 5,000,000 5,000,000
10,000,000 10,000,000 TN HSG DEV 3.75% 1/1/30 3.750 01/01/30 10,000,000 10,000,000
23,500,000 23,500,000 TN HSG DEV 3.1% 1/1/31 3.100 01/01/31 23,500,000 23,500,000
-------------------------------------------
Tennessee Total 16,750,000 104,094,000 120,844,000
Texas - 6.4%
28,030,000 28,030,000 ALLIANCE ARPT VAR 4/1/21 3.170 04/01/21 28,030,000 28,030,000
3,460,000 3,460,000 BEXAR CNTY TEX 7/01/11 3.000 07/01/11 3,460,000 3,460,000
10,190,000 10,190,000 BEXAR CNTY TX HSG 6/01/35 3.260 06/01/35 10,190,000 10,190,000
1,000,000 1,000,000 BRAZOS RIV TEX HBR 4/1/02 3.225 04/01/02 1,000,000 1,000,000
8,185,000 8,185,000 EL PASO TEX HSG 09/01/23 3.250 09/01/23 8,185,000 8,185,000
1,000,000 1,600,000 2,600,000 GRAPEVINE TEX 12/01/24 3.100 12/01/24 1,000,000 1,600,000 2,600,000
1,000,000 2,300,000 3,300,000 GRAPEVINE TEX 12/01/24 3.100 12/01/24 1,000,000 2,300,000 3,300,000
2,000,000 2,000,000 GRAPEVINE TX IDR 12/1/24 3.100 12/01/24 2,000,000 2,000,000
2,700,000 2,700,000 GRAPEVINE TEX VRN 12/1/24 3.100 12/01/24 2,700,000 2,700,000
400,000 400,000 GRAPEVINE TX IDR 12/1/24 3.100 12/01/24 400,000 400,000
3,000,000 3,000,000 GRAPEVINE TEX 12/01/24 3.100 12/01/24 3,000,000 3,000,000
3,300,000 3,300,000 GRAPEVINE TX IDR 12/1/24 3.100 12/01/24 3,300,000 3,300,000
500,000 500,000 GRAPEVINE TEX 12/01/24 3.100 12/01/24 500,000 500,000
1,000,000 3,390,000 4,390,000 GUADALUPE TX VRN 11/1/15 3.150 11/01/15 1,000,000 3,390,000 4,390,000
2,000,000 2,000,000 GULF CST WST VRN 10/1/17 3.100 10/01/17 2,000,000 2,000,000
2,000,000 5,700,000 7,700,000 HARRIS CO TX VRN 12/01/25 3.100 12/01/25 2,000,000 5,700,000 7,700,000
3,100,000 3,050,000 6,150,000 HARRIS CO TEX VRN 12/1/26 3.100 12/01/26 3,100,000 3,050,000 6,150,000
3,340,000 3,340,000 HARRIS CNTY TEX 5/1/03 3.200 05/01/03 3,340,000 3,340,000
2,000,000 2,000,000 HARRIS CO PCR 3/1/24 3.050 03/01/24 2,000,000 2,000,000
2,200,000 2,200,000 HARRIS CO TX VRN 3/1/24 3.050 03/01/24 2,200,000 2,200,000
3,000,000 3,000,000 HILLSBORO TEX INDL 7/1/13 3.300 07/01/13 3,000,000 3,000,000
600,000 600,000 LONE STAR TEX 12/01/14 3.100 12/01/14 600,000 600,000
<PAGE>
700,000 1,200,000 1,900,000 LONE STAR TEX 12/01/14 3.100 12/01/14 700,000 1,200,000 1,900,000
300,000 1,200,000 1,500,000 LONE STAR TEX 12/01/14 3.100 12/01/14 300,000 1,200,000 1,500,000
930,000 930,000 LONE STAR TEX 12/01/14 3.100 12/01/14 930,000 930,000
900,000 1,200,000 2,100,000 LONE STAR TEX 12/01/14 3.100 12/01/14 900,000 1,200,000 2,100,000
700,000 700,000 LONE STAR TEX 12/01/14 3.100 12/01/14 700,000 700,000
1,100,000 1,100,000 LONE STAR TEX 12/01/14 3.100 12/01/14 1,100,000 1,100,000
500,000 2,200,000 2,700,000 LONE STAR, TX VRN 12/1/14 3.100 12/01/14 500,000 2,200,000 2,700,000
600,000 600,000 LONE STAR TEX 12/01/14 3.100 12/01/14 600,000 600,000
4,300,000 4,300,000 MC ALLEN TEX 12/01/24 3.150 12/01/24 4,300,000 4,300,000
7,300,000 7,300,000 MONTGOMERY CNTY 12/01/15 3.100 12/01/15 7,300,000 7,300,000
1,200,000 1,200,000 NUECES CNTY TEX 07/01/15 3.050 07/01/15 1,200,000 1,200,000
10,200,000 10,200,000 PORT DEV CORP 12/01/04 3.250 12/01/04 10,200,000 10,200,000
1,200,000 1,200,000 PORT ATHR TEX VRN 10/1/24 3.200 10/01/24 1,200,000 1,200,000
4,700,000 11,300,000 16,000,000 SABINE RIVER AUTH 4/1/30 3.300 04/01/30 4,700,000 11,300,000 16,000,000
8,000,000 8,000,000 SULPHUR SPRG TX VRN 12/1 3.150 12/01/13 8,000,000 8,000,000
5,000,000 25,000,000 30,000,000 TEXAS MUN GAS 1/15/23 3.000 01/15/23 5,000,000 25,000,000 30,000,000
3,300,000 3,300,000 TRINITY RIVER TX 7/1/22 3.100 07/01/22 3,300,000 3,300,000
1,000,000 1,000,000 TRINITY RIVER 11/01/14 3.125 11/01/14 1,000,000 1,000,000
5,100,000 3,200,000 8,300,000 W. SIDE CALHOUN VRN 12/1 3.100 12/01/15 5,100,000 3,200,000 8,300,000
-------------------------------------------
Texas Total 39,330,000 163,045,000 202,375,000
Utah - 1.1%
3,200,000 3,200,000 MURRAY CITY UT 9/1/14 3.200 09/01/14 3,200,000 3,200,000
1,900,000 1,900,000 MURRAY UT VAR 10/1/16 3.200 10/01/16 1,900,000 1,900,000
17,300,000 17,300,000 SALT LK CTY UT VRN 1/1/20 3.050 01/01/20 17,300,000 17,300,000
1,200,000 10,110,000 11,310,000 SALT LK CO PCR VRN 8/1/07 3.100 08/01/07 1,200,000 10,110,000 11,310,000
-------------------------------------------
Utah Total 1,200,000 32,510,000 33,710,000
Virginia - 1.4%
5,800,000 5,800,000 Albermarle County, VA, 3.050 02/01/26 5,800,000 5,800,000
Industrial Development
Authority
2,500,000 2,500,000 COLONIAL HGTS VA 03/01/05 3.050 03/01/05 2,500,000 2,500,000
2,000,000 2,000,000 FLUVANNA CNTY VA 12/1/09 3.000 12/01/09 2,000,000 2,000,000
3,900,000 3,900,000 GREENSVILLE VA 10/1/06 3.200 10/01/06 3,900,000 3,900,000
7,125,000 7,125,000 MADISON CNTY VA 06/01/13 3.150 06/01/13 7,125,000 7,125,000
5,200,000 5,200,000 NEWPORT NEWS VA 11/1/11 2.950 11/01/11 5,200,000 5,200,000
4,600,000 4,600,000 PENINSULA PORT FRN 7/1/16 3.100 07/01/16 4,600,000 4,600,000
3,595,000 3,595,000 RICHMOND VA 4.25% 5/15/99 4.250 05/15/99 3,596,884 3,596,884
2,000,000 2,000,000 SPOTSYLVANIA VA 06/01/08 3.100 06/01/08 2,000,000 2,000,000
5,500,000 5,500,000 VA COLLEGE BLDG 11/1/26 3.050 11/01/26 5,500,000 5,500,000
1,575,000 1,575,000 WINCHESTER VA 8/01/07 3.350 08/01/07 1,575,000 1,575,000
-------------------------------------------
Virginia Total 18,096,884 25,700,000 43,796,884
Washington - 0.1%
800,000 800,000 PORT SKAGIT WASH 12/01/20 3.100 12/01/20 800,000 800,000
------------------------------------------
Washington Total 800,000 0 800,000
West Virginia - 0.8%
1,500,000 1,500,000 MARSHALL CO VRN 12/1/20 3.100 12/01/20 1,500,000 1,500,000
1,200,000 1,200,000 OHIO CNTY W VA 12/01/01 3.150 12/01/01 1,200,000 1,200,000
22,650,000 22,650,000 W VIRGINIA ST 10/01/12 3.100 10/01/12 22,650,000 22,650,000
------------------------------------------
West Virginia Total 1,200,000 24,150,000 25,350,000
Wisconsin - 1.3%
3,000,000 3,000,000 MENASHA WIS JT 9/30/99 3.150 09/30/99 3,000,717 3,000,717
4,000,000 4,000,000 MENOMONEE FALLS WI 9/1/14 3.200 09/01/14 4,000,000 4,000,000
940,000 940,000 MILWAUKEE WIS INDL 4/1/07 3.350 04/01/07 940,000 940,000
4,600,000 4,600,000 PLEASANT PRAIRIE 2/01/22 3.050 02/01/22 4,600,000 4,600,000
3,000,000 3,000,000 WATERTOWN WIS 10/28/99 3.100 10/28/99 3,000,828 3,000,828
2,700,000 2,700,000 WI HLTH & EDL 1/1/19 3.125 01/01/19 2,700,000 2,700,000
12,000,000 12,000,000 WI ST HLTH VAR 8/15/16 3.050 08/15/16 12,000,000 12,000,000
11,400,000 11,400,000 WI ST HEALTH VAR 12/1/17 2.950 12/01/17 11,400,000 11,400,000
------------------------------------------
Wisconsin Total 6,941,546 34,700,000 41,641,546
Wyoming - 0.1%
500,000 500,000 SUBLETTE CNTY 07/01/17 3.200 07/01/17 500,000 500,000
3,700,000 3,700,000 SWEETWATER CNTY 7/01/15 2.900 07/01/15 3,700,000 3,700,000
------------------------------------------
Wyoming Total 0 4,200,000 4,200,000
Total Municipal Bonds &
Notes 410,871,711 2,720,235,499 3,131,107,210
Investment Companies - 0.4%
2,050,000 4,450,000 6,500,000 AIM TAX EXEMPT 2.876 2,050,000 4,450,000 6,500,000
4,125,000 2,725,000 6,850,000 FEDERATED TAX FREE FUND 2.929 4,125,000 2,725,000 6,850,000
-------------------------------------------
Investment Companies Total 6,175,000 7,175,000 13,350,000
Total Investments - 100.0% 3,144,457,210
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NATIONS MUNICIPAL RESERVES/NATIONS TAX-EXEMPT FUND
Pro Forma Combining Statement of Net Assets (Unaudited)
March 31,1999
Nations Tax-Exempt Municipal Resreves Adjustments to Pro Forma Pro Forma Combined
(in 000's) (in 000's) (in 000's) (in 000's)
----------------------------------------------------------------- ------------------
<S> <C> <C> <C>
TOTAL INVESTMENTS $ 2,727,410 $ 417,047 $ - $ 3,144,457
OTHER ASSETS AND LIABILITIES:
Receivable for investments sold - - - -
Payable for investments purchased - - - -
Other assets and liabilities, net 61,564 (11,952) - 49,612
----------------------------------------------------------------- ------------------
Total Other Assets and Liabilities 61,564 (11,952) - 49,612
----------------------------------------------------------------- ------------------
================================================================= ==================
NET ASSETS 2,788,974 405,095 - 3,194,069
================================================================= ==================
NET ASSETS BY CLASS:
Daily\Daily 333,210 - 333,210
Primary B\Investor B\Investor C\Investor 269,923 - 269,923
Primary A\Trust 2,132,148 - 2,132,148
Service - -
Capital 134,268 - 134,268
Liquidity 68,393 - 68,393
Advisor - 55,435 - 55,435
Investor A\Market 53,693 146,999 - 200,692
----------------------------------------------------------------- ------------------
2,788,974 405,095 - 3,194,069
----------------------------------------------------------------- ------------------
SHARES OUTSTANDING BY CLASS:
Daily\Daily 333,043 - 333,043
Primary B\Investor B\Investor C\Investor 269,779 - 269,779
Primary A\Trust 2,132,715 - 2,132,715
Service - -
Capital 134,269 - 134,269
Liquidity 68,393 - 68,393
Advisor - 55,435 - 55,435
Investor A\Market 53,658 147,000 - 200,658
----------------------------------------------------------------- ------------------
2,789,195 405,097 - 3,194,292
----------------------------------------------------------------- ------------------
NET ASSET VALUE PER SHARE BY CLASS:
Daily\Daily $ 1.00 n/a $ - $ 1.00
Primary B\Investor B\Investor C\Investor $ 1.00 n/a $ - $ 1.00
Primary A\Trust $ 1.00 n/a $ - $ 1.00
Service n/a n/a $ - n/a
Capital n/a $ 1.00 $ - $ 1.00
Liquidity n/a $ 1.00 $ - $ 1.00
Advisor n/a $ 1.00 $ - $ 1.00
Investor A\Market $ 1.00 $ 1.00 $ - $ 1.00
</TABLE>
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
<PAGE>
<TABLE>
<CAPTION>
NATIONS MUNICIPAL RESERVES/NATIONS TAX-EXEMPT FUND
Pro Forma Combining Statement of Operations (Unaudited)
For the Twelve Month Period Ending March 31, 1999
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $92,437 $11,258 $ - $103,696
Dividends (4) 175 - 171
--------------------------------------------------- ---------------
Total Investment Income 92,434 11,433 - 103,867
--------------------------------------------------- ---------------
EXPENSES:
Investment Advisory 10,886 1,028 (7,318)(a) 4,596
Administration 2,721 343 - 3,065
Transfer Agent 433 22 - 455
Custodian 170 36 - 206
Legal and Audit Fees 169 60 (30)(b) 199
Registration & Filing 192 109 - 300
Trustees' Fees 15 25 - 40
Interest Expense - - - -
Other expenses 242 10 - 252
--------------------------------------------------- ---------------
Subtotal 14,827 1,633 (7,348) 9,112
--------------------------------------------------- ---------------
SHAREHOLDER SERVICING AND DISTRIBUTION FEES
Daily\Daily 1,278 - (183)(a) 1,095
Primary B\Investor B\Investor C\Investor 1,000 41(a) 1,041
Primary A\Trust - 2,115(a) 2,115
Service - -
Capital - - -
Liquidity 483 - 483
Advisor - 134 - 134
Investor A\Market 443 572 127(a) 1,142
--------------------------------------------------- ---------------
2,721 1,189 2,100 6,010
--------------------------------------------------- ---------------
Fees waived and/or reimbursed by investment -
advisor, administrator and/or distributor (7,488) (1,386) 5,810(c) (3,064
--------------------------------------------------- ---------------
TOTAL EXPENSES 10,061 1,436 562 12,059
--------------------------------------------------- ---------------
--------------------------------------------------- ---------------
NET INVESTMENT INCOME 82,373 9,997 (562) 91,808
--------------------------------------------------- ---------------
NET REALIZED GAIN/(LOSS) ON
--------------------------------------------------- ---------------
INVESTMENTS: 165 (1) - 165
--------------------------------------------------- ---------------
NET INCREASE/(DECREASE) IN NET ASSETS
=================================================== ===============
RESULTING FROM OPERATIONS: $82,538 $9,996 $ (562) $91,973
=================================================== ===============
</TABLE>
LEGEND:
(A) REFLECTS ADJUSTMENT TO THE ACQUIRING FUND CONTRACTUAL FEE OBLIGATION.
(B) ADJUSTMENT REFLECTS EXPECTED SAVINGS WHEN THE TWO FUNDS BECOME ONE.
(C) REFLECTS ADJUSTMENT TO THE LEVEL OF THE ACQUIRING FUND'S VOLUNTARY EXPENSE
REIMBURSEMENT.
(D) NET OF EXPENSE OFFSET ARRANGEMENTS AMOUNTS TO LESS THAN .01% OF AVERAGE NET
ASSETS.
SEE NOTES TO PRO FORMA FINANCIAL STATEMENTS
<PAGE>
Nations Municipal Reserves
Nations Tax-Exempt Money Market Fund
Notes to Pro Forma Combining Financial Statements (unaudited)
1. Basis of Combination
Nations Institutional Reserves and Nations Funds Trust are registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as open-end
investment companies. As of March 31, 1999 the Nations Institutional Reserves
offered five separate portfolios and Nations Funds Trust offered thirty-eight
portfolios. The unaudited Pro Forma Combining Statement of Net Assets assumes
the exchange described in the next paragraph occurred as of March 31, 1999 and
the unaudited Pro Forma Combining Statement of Operations assumes the exchange
occurred as of April 1,1999. These statements have been derived from books and
records utilized in calculating daily net asset value of each fund at March 31,
1999 and for the twelve month period then ended.
The pro forma statements give effect to the proposed transfer of the assets and
stated liabilities of the Nations Tax-Exempt Money Market Fund in exchange for
shares of Nations Municipal Reserves. Under generally accepted accounting
principles, the historical cost of investment securities will be carried forward
to the surviving entity and the results of operations of the Nations Tax-Exempt
Money Market Fund for pre-combination periods will not be restated. The pro
forma statements do not reflect the expenses of either fund in carrying out its
obligations under the proposed Agreement and Plan of Reorganization.
The unaudited Pro Forma combining Financial Statements should be read in
conjunction with the historical financial statements of the funds incorporated
by reference in the Statement of Additional Information.
2. Pro Forma Operations
Pro forma operating expenses include the actual expenses of each fund and the
combined fund, with certain expenses adjusted to reflect the expected expenses
of the combined entity. The investment advisory and administration fees have
been calculated for the combined fund based on the contractual rates expected to
be in effect for the Nations Municipal Reserves, at the time of the
Reorganization at the combined level of average net assets for the twelve month
period ended March 31, 1999.
<PAGE>
NATIONS INSTITUTIONAL RESERVES
ONE BANK OF AMERICA PLAZA
33RD FLOOR
CHARLOTTE, NC 28255
1-800-626-2275
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification.
Article VIII of the Agreement and Declaration of Trust filed as
Exhibit 1 to the Registration Statement is incorporated by reference.
Indemnification of Registrant's administrators, principal underwriter, custodian
and transfer agent is provided for, respectively, in the:
1. Co-Administration Agreement with Stephens Inc. and NationsBank
Advisors, Inc.;
2. Distribution Agreement with Stephens Inc.;
3. Custody Agreement with The Bank of New York; and
4. Transfer Agency Agreement with First Data Investor Services Group,
Inc.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant by the Registrant pursuant to the Agreement and
Declaration of Trust or otherwise, the Registrant is aware that in the opinion
of the Securities and Exchange Commission, such indemnification is against
public policy as expressed in the Act and, therefore, is unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by trustees, directors,
officers or controlling persons of the Registrant in connection with the
successful defense of any act, suit or proceeding) is asserted by such trustees,
officers or controlling persons in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issues.
C-1
<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. 33-33144;811-6030). All references to the "Pacific Horizon Registration
Statement" in the following list of Exhibits refer to the Pacific Horizon Funds'
Registration Statement on Form N-1A (File Nos. ).
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION
<S> <C>
(1) Declaration of Trust date January 22, 1990, is incorporated by
reference to Post-Effective Amendment No. 22, filed on August
27, 1998.
(2) By-Laws dated January 22, 1990, are incorporated by
reference to Post-Effective Amendment No. 22, filed on
August 27, 1998.
(3) Not Applicable.
(4) Form of Agreement and Plan of Reorganization, filed
herewith as Appendix II to the Combined
Prospectus/Proxy Statement.
(5) Not Applicable.
(6)(a) Investment Advisory Agreement with NationsBanc
Advisors, Inc. incorporated by reference to
Post-Effective Amendment No. 17.
(6)(b) Sub-Advisory Agreement with TradeStreet Investment
Associates, Inc. incorporated by reference to Post-Effective
Amendment No. 17.
(7) Distribution Agreement with Stephens, Inc. incorporated by
reference to Post-Effective Amendment No. 22, filed on August
27, 1998.
(8) Not Applicable.
(9) Custody Agreement with The Bank of New York
incorporated by reference to Post-Effective Amendment
No. 20.
(10)(a) Shareholder Servicing Plan for Adviser Class Shares
incorporated by reference to Post-Effective Amendment No. 22,
filed on August 27, 1998.
(10)(b) Form of Shareholder Servicing Agreement for Adviser Class
Shares incorporated by reference to Post-Effective Amendment
No. 22, filed on August 27, 1998.
(10)(c) Form of Shareholder Servicing Plan for Market Class Shares
incorporated by reference to Post-Effective Amendment No. 22,
filed on August 27, 1998.
C-2
<PAGE>
(10)(d) Shareholder Servicing Agreement for Market Class Shares
incorporated by reference to Post-Effective Amendment No. 22,
filed on August 27, 1998.
(10)(e) Shareholder Servicing Plan for Liquidity Class Shares
incorporated by reference to Post-Effective Amendment No. 22,
filed on August 27, 1998.
(10)(f) Distribution Plan for Liquidity Class Shares incorporated by
reference to Post-Effective Amendment No. 22, filed on August
27, 1998.
(10)(g) Distribution Plan for Market Class Shares incorporated by
reference to Post-Effective Amendment No. 22, filed on August
27, 1998.
(10)(h) Form of Brokerage Agreement, dated November 18, 1994, is
incorporated by reference to Post-Effective Amendment No. 22,
filed on August 27, 1998.
(10)(i) Transfer Agency and Registrar Agreement with First Data
Investor Services Group, Inc., is incorporated by reference to
Post-Effective Amendment No. 22, filed on August 27, 1998.
(11) Opinion and Consent of Morrison & Foerster LLP, filed herewith.
(12) See Item 17(3) of this Part C.
(13)(a) Administration Agreement with Stephens Inc., dated May 1,
1994, is incorporated by reference to Post-Effective Amendment
No. 22, filed on August 27, 1998.
(13)(b) Co-Administration Agreement with The Boston Company
Advisors, Inc., dated May 1, 1994, is incorporated by
reference to Post-Effective Amendment No. 22, filed on
August 27, 1998.
(14) Consent of Independent Accountants-
PricewaterhouseCoopers LLP, to be filed in definitive
Rule 497 version.
(15) Not Applicable.
(16) Powers of Attorney, filed herewith.
C-3
<PAGE>
(17)(a) Plan entered into by Registrant pursuant to Rule 18f-3
under the Investment Company Act of 1940, dated April
12, 1995, is incorporated by reference to
Post-Effective Amendment No. 22, filed on August 27,
1998.
(17)(b) Form of Proxy Ballot, filed herewith.
17(c)(i) Prospectuses and Statements of Additional Information for
Primary A, Primary B, Investor A, Investor B, Investor
C, Daily and Marsico Shares of Nations Prime Fund and
Primary A, Primary B, Investor A, Investor B, Investor
C, and Daily Shares of Nations Treasury Fund, dated
August 1, 1998, as supplemented, are incorporated by
reference to Post-Effective Amendment No. 37 to the
Registration Statement, as filed on July 31, 1998.
17(c)(iii) Prospectuses and Statements of Additional Information
for the Trust, Investor, Market, Daily and Marsico
Shares of Nations Cash Reserves and Trust, Investor,
Market, and Daily Shares of Nations Treasury Reserves
dated September 1, 1998, as supplemented, filed as part
of Post-Effective Amendment No. 22 to Reserves'
Registration Statement on Form N-1A filed on August 27,
1998.
17(c)(iv) Annual Reports for Nations Prime Fund and Nations Treasury
Fund, dated March 31, 1999.
17(c)(v) Annual Reports for Nations Cash Reserves and Nations Treasury
Reserves, dated March 31, 1999.
17(c)(vi) Prospectuses for the Primary A, Primary B, Investor A,
Investor B, Investor C, and Daily Shares of the Nations
Government Fund and Nations Tax-Exempt Fund, dated August
1, 1998, as supplemented, filed as part of Post-Effective
Amendment No. 57 to Nations' Registration Statement on
Form N-1A filed on July 31, 1998.
17(c)(vii) Statement of Additional Information for the Primary A,
Primary B, Investor A, Investor B, Investor C, and Daily
Shares of the Nations Government Fund and Nations
Tax-Exempt Fund, dated August 1, 1998, as supplemented,
filed as part of Post-Effective Amendment No. 57 to
Nations' Registration Statement on Form N-1A filed on July
31, 1998.
C-4
<PAGE>
17(c)(viii) Prospectuses for the Trust, Investor, Market, and Daily
Shares of the Nations Government Reserves and Nations
Municipal Reserves, dated September 1, 1998, as
supplemented, filed as part of Post-Effective Amendment
No. 22 to Reserves' Registration Statement on Form N-1A
filed on August 27, 1998.
17(c)(ix) Statement of Additional Information for the Trust,
Investor, Market, and Daily Shares of the Nations
Government Reserves and Nations Municipal Reserves, dated
September 1, 1998, as supplemented, filed as part of
Post-Effective Amendment No. 22 to Reserves' Registration
Statement on
Form N-1A filed on August 27, 1998.
17(c)(x) Annual Report for Nations Government Fund and Nations Tax-Exempt Fund,
dated March 31, 1999.
17(c)(xi) Annual Report for the Nations Government Reserves and Nations Municipal
Reserves, dated March 31, 1999.
</TABLE>
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.
(3) The undersigned Registrant agrees to file, by
post-effective amendment, an opinion of counsel or a copy
of an IRS ruling supporting the tax consequences of the
Reorganization within a reasonable time after receipt of
such opinion or ruling.
C-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this 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 the 28th day of April, 1999.
NATIONS INSTITUTIONAL RESERVES
By: *
-------------------------------
A. Max Walker
President and Chairman
of the Board of Trustees
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 April 28, 1999
- ------------------------------- of the Board of Trustees
(A. Max Walker) (Principal Executive Officer)
/s/ Richard H. Blank, Jr. Treasurer and Secretary April 28, 1999
- ------------------------------- (Principal Financial and
(Richard H. Blank, Jr.) Accounting Officer)
* Trustee April 28, 1999
- -------------------------------
(Edmund L. Benson, III)
* Trustee April 28, 1999
- -------------------------------
(James Ermer)
* Trustee April 28, 1999
- -------------------------------
(William H. Grigg)
* Trustee April 28, 1999
- -------------------------------
(Thomas F. Keller)
* Trustee April 28, 1999
- -------------------------------
(Carl E. Mundy, Jr.)
* Trustee April 28, 1999
- -------------------------------
(Charles B. Walker)
* Trustee April 28, 1999
- -------------------------------
(Thomas S. Word)
* Trustee April 28, 1999
- -------------------------------
(James B. Sommers)
/s/ Richard H. Blank, Jr.
- -------------------------------
Richard H. Blank, Jr.
*Attorney-in-Fact
</TABLE>
<PAGE>
NATIONS INSTITUTIONAL RESERVES
FILE NOS. 33-33144; 811-6030
Exhibit Number Description
- -------------- -----------
Ex-99.11 Opinion and Consent of Morrison & Foerster LLP
Ex-99.16 Powers of Attorney
Ex-99.17 Form of Proxy Ballot
EXH. 99.11
[MORRISON & FOERSTER LLP LETTERHEAD]
April 30, 1999
Nations Institutional Reserves
One Bank of America Plaza
Charlotte, NC 28255
Re: Units of Beneficial Interest of Nations Institutional Reserves
Ladies/Gentlemen:
We refer to the Registration Statement on Form N-14 (the "Registration
Statement") of Nations Institutional Reserves ("Reserves") relating to the
registration of an indefinite number of units of beneficial interest (the
"Shares"), of certain Funds of Reserves (the "Funds").
We have been requested by Reserves to furnish this opinion as Exhibit 11
to the Registration Statement.
We have examined documents relating to the organization of Reserves and
the authorization and issuance of the Shares. We have also made such inquiries
of Reserves 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 Reserves has been duly and validly
authorized by all appropriate action and, assuming delivery in accordance with
the description set forth in the Combined Proxy Statement/Prospectus included in
the Registration Statement, the Shares will be legally issued, fully paid and
nonassessable by Reserves.
<PAGE>
Nations Institutional Reserves
April 30, 1999
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 and to the
description of advice rendered by our firm under the headings "The
Consolidation--Federal Income Tax Considerations" in the Combined Proxy
Statement/Prospectus, under the heading "How The Funds Are Managed" in the
Prospectuses, and under the heading "Counsel" in the Statement of Additional
Information, which are incorporated by reference into the Registration
Statement.
Very truly yours,
/s/ MORRISON & FOERSTER LLP
MORRISON & FOERSTER LLP
EX 99.16
POWER OF ATTORNEY
Edmund L. Benson, III, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Institutional Reserves (the "Trust") to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended (the "1933 Act"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Trust's Registration
Statement(s) on Form N-14 pursuant to the 1933 Act, and to qualify or register
for sale any securities in any state 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 Trust, such
Registration Statement(s), and any and all amendments thereto, filed with the
Securities and Exchange Commission under the 1933 Act, 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: April 22, 1999
/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, Richard H. Blank, Jr., Robert M. Kurucza, Marco
E. Adelfio and Steven G. Cravath, each individually, his true and lawful
attorneys and agents, with power of substitution or resubstitution, to do any
and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Institutional Reserves (the "Trust") to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended (the "1933 Act"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Trust's Registration
Statement(s) on Form N-14 pursuant to the 1933 Act, and to qualify or register
for sale any securities in any state 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 Trust, such
Registration Statement(s), and any and all amendments thereto, filed with the
Securities and Exchange Commission under the 1933 Act, 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: April 22, 1999
/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, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Institutional Reserves (the "Trust") to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended (the "1933 Act"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Trust's Registration
Statement(s) on Form N-14 pursuant to the 1933 Act, and to qualify or register
for sale any securities in any state 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 Trust, such
Registration Statement(s), and any and all amendments thereto, filed with the
Securities and Exchange Commission under the 1933 Act, 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: April 22, 1999
/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, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Institutional Reserves (the "Trust") to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended (the "1933 Act"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Trust's Registration
Statement(s) on Form N-14 pursuant to the 1933 Act, and to qualify or register
for sale any securities in any state 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 Trust, such
Registration Statement(s), and any and all amendments thereto, filed with the
Securities and Exchange Commission under the 1933 Act, 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: April 22, 1999
/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, Richard H. Blank, Jr., Robert M. Kurucza, Marco
E. Adelfio and Steven G. Cravath, each individually, his true and lawful
attorneys and agents, with power of substitution or resubstitution, to do any
and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Institutional Reserves (the "Trust") to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended (the "1933 Act"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Trust's Registration
Statement(s) on Form N-14 pursuant to the 1933 Act, and to qualify or register
for sale any securities in any state 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 Trust, such
Registration Statement(s), and any and all amendments thereto, filed with the
Securities and Exchange Commission under the 1933 Act, 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: April 22, 1999
/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, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Institutional Reserves (the "Trust") to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended (the "1933 Act"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Trust's Registration
Statement(s) on Form N-14 pursuant to the 1933 Act, and to qualify or register
for sale any securities in any state 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 Trust, such
Registration Statement(s), and any and all amendments thereto, filed with the
Securities and Exchange Commission under the 1933 Act, 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: April 22, 1999
/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, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio, and Steven G. Cravath, each individually, his true
and lawful attorneys and agents, with power of substitution or resubstitution,
to do any and all acts and things and to execute any and all instruments which
said attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Institutional Reserves (the "Trust") to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended (the "1933 Act"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Trust's Registration
Statement(s) on Form N-14 pursuant to the 1933 Act, and to qualify or register
for sale any securities in any state 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 Trust, such
Registration Statement(s), and any and all amendments thereto, filed with the
Securities and Exchange Commission under the 1933 Act, 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: April 22, 1999
/s/ Thomas S. Word, Jr.
---------------------------
Thomas S. Word, Jr.
<PAGE>
EX 99.16
POWER OF ATTORNEY
Carl E. Mundy, Jr., whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Institutional Reserves (the "Trust") to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended (the "1933 Act"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Trust's Registration
Statement(s) on Form N-14 pursuant to the 1933 Act, and to qualify or register
for sale any securities in any state 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 Trust, such
Registration Statement(s), and any and all amendments thereto, filed with the
Securities and Exchange Commission under the 1933 Act, 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: April 22, 1999
/s/ Carl E. Mundy, Jr.
---------------------------
Carl E. Mundy, Jr.
<PAGE>
EX 99.16
POWER OF ATTORNEY
James B. Sommers, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Institutional Reserves (the "Trust") to
comply with the Investment Company Act of 1940, as amended, and the Securities
Act of 1933, as amended (the "1933 Act"), and any rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of the Trust's Registration
Statement(s) on Form N-14 pursuant to the 1933 Act, and to qualify or register
for sale any securities in any state 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 Trust, such
Registration Statement(s), and any and all amendments thereto, filed with the
Securities and Exchange Commission under the 1933 Act, 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: April 22, 1999
/s/ James B. Sommers
---------------------------
James. B. Sommers
Please fold and detach card at perforation before mailing
NATIONS PRIME FUND
Special Meeting of Shareholders to be held on August 13, 1999
The undersigned hereby appoints Richard H. Blank, Jr. and Robert B.
Carroll (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
Prime Fund (the "Fund") of Nations Fund, Inc. ("Nations Fund") to be held at One
Bank of America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North
Carolina 28255, at 10:00 a.m. (Eastern time) on August 13, 1999, and at any
adjournment(s) thereof. The Proxies shall cast votes according to the number of
shares of the Fund which the undersigned may be entitled to vote with respect to
the proposal set forth on the reverse side, in accordance with the specification
indicated, if any, and shall have 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 Proxies, or
any of them, may lawfully do by virtue hereof or thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS OF THE FUND AND THE PROXY STATEMENT, DATED JUNE 9, 1999.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS ON BEHALF OF THE FUND AND
NATIONS FUND. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
EITHER BY THE ENCLOSED POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE (FRONT AND
BACK) AT (704) 388-2641.
---------------------------------
---------------------------------
Please sign above 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.
<PAGE>
Please fold and detach card at perforation before mailing
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSAL. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY
WILL BE VOTED IN FAVOR OF THE PROPOSAL.
1. To approve an Agreement and Plan of Consolidation, attached to the
Combined Proxy Statement/Prospectus for the Meeting, which provides for
and contemplates the transfer of all of the assets and liabilities of
Nations Prime Fund in exchange for shares of equal value of a
corresponding class of Nations Cash Reserves of Nations Institutional
Reserves.
FOR AGAINST ABSTAIN
|_| |_| |_|
In their discretion, the Proxies, and each 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>
Please fold and detach card at perforation before mailing
NATIONS TREASURY FUND
Special Meeting of Shareholders to be held on August 13, 1999
The undersigned hereby appoints Richard H. Blank, Jr. and Robert B.
Carroll (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
Treasury Fund (the "Fund") of Nations Fund, Inc. ("Nations Fund") to be held at
One Bank of America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North
Carolina 28255, at 10:00 a.m. (Eastern time) on August 13, 1999, and at any
adjournment(s) thereof. The Proxies shall cast votes according to the number of
shares of the Fund which the undersigned may be entitled to vote with respect to
the proposal set forth on the reverse side, in accordance with the specification
indicated, if any, and shall have 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 Proxies, or
any of them, may lawfully do by virtue hereof or thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS OF THE FUND AND THE PROXY STATEMENT, DATED JUNE 9, 1999.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS ON BEHALF OF THE FUND AND
NATIONS FUND. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
EITHER BY THE ENCLOSED POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE (FRONT AND
BACK) AT (704) 388-2641.
---------------------------------
---------------------------------
Please sign above 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.
<PAGE>
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSAL. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY
WILL BE VOTED IN FAVOR OF THE PROPOSAL.
1. To approve an Agreement and Plan of Consolidation, attached to the
Combined Proxy Statement/Prospectus for the Meeting, which provides for
and contemplates the transfer of all of the assets and liabilities of
Nations Treasury Fund in exchange for shares of equal value of a
corresponding class of Nations Treasury Reserves of Nations
Institutional Reserves.
FOR AGAINST ABSTAIN
|_| |_| |_|
In their discretion, the Proxies, and each 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>
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
NATIONS GOVERNMENT MONEY MARKET FUND
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 13, 1999
The undersigned hereby appoints Richard H. Blank, Jr. and Robert B.
Carroll (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
Government Money Market Fund (the "Fund") of Nations Fund Trust ("Nations Fund")
to be held at One Bank of America Plaza, 101 South Tryon Street, 33rd Floor,
Charlotte, North Carolina 28255, at 10:00 a.m. (Eastern time) on August 13,
1999, and at any adjournment(s) thereof. The Proxies shall cast votes according
to the number of shares of the Fund which the undersigned may be entitled to
vote with respect to the proposal set forth on the reverse side, in accordance
with the specification indicated, if any, and shall have 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 Proxies, or any of them, may lawfully do by virtue hereof
or thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS OF THE FUND AND THE PROXY STATEMENT, DATED JUNE 9, 1999.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS ON BEHALF OF THE FUND AND
NATIONS FUND. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
EITHER BY THE ENCLOSED POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE (FRONT AND
BACK) AT (704) 388-2641.
---------------------------------
---------------------------------
Please sign above 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.
<PAGE>
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSAL. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY
WILL BE VOTED IN FAVOR OF THE PROPOSAL.
1. To approve an Agreement and Plan of Consolidation, attached to the
Combined Proxy Statement/Prospectus for the Meeting, which provides for
and contemplates the transfer of all of the assets and liabilities of
Nations Government Money Market Fund in exchange for shares of equal
value of a corresponding class of Nations Government Reserves of Nations
Institutional Reserves.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the Proxies, and each 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>
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
NATIONS TAX-EXEMPT FUND
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 13, 1999
The undersigned hereby appoints Richard H. Blank, Jr. and Robert B.
Carroll (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
Tax-Exempt Fund (the "Fund") of Nations Fund Trust ("Nations Fund") to be held
at One Bank of America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte,
North Carolina 28255, at 10:00 a.m. (Eastern time) on August 13, 1999, and at
any adjournment(s) thereof. The Proxies shall cast votes according to the number
of shares of the Fund which the undersigned may be entitled to vote with respect
to the proposal set forth on the reverse side, in accordance with the
specification indicated, if any, and shall have 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 Proxies, or any of them, may lawfully do by virtue hereof or thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS OF THE FUND AND THE PROXY STATEMENT, DATED JUNE 9, 1999.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS ON BEHALF OF THE FUND AND
NATIONS FUND. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY,
EITHER BY THE ENCLOSED POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE (FRONT AND
BACK) AT (704) 388-2641.
---------------------------------
---------------------------------
Please sign above 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.
<PAGE>
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSAL. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY
WILL BE VOTED IN FAVOR OF THE PROPOSAL.
1. To approve an Agreement and Plan of Consolidation, attached to the
Combined Proxy Statement/Prospectus for the Meeting, which provides for
and contemplates the transfer of all of the assets and liabilities of
Nations Tax-Exempt Fund in exchange for shares of equal value of a
corresponding class of Nations Municipal Reserves.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
In their discretion, the Proxies, and each 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
