As filed with the Securities and Exchange Commission
on March 7, 2000
Registration No. 33-33144; 811-6030
-----------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [_]
Post-Effective Amendment No. 30 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [_]
Amendment No. 31 [X]
(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) 321-7854
Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(Name and Address of Agent for Service)
With copies to:
Robert M. Kurucza, Esq. Carl Frischling, Esq.
Marco E. Adelfio, Esq. Kramer, Levin, Naftalis
Morrison & Foerster LLP & Frankel
2000 Pennsylvania Ave., N.W., Suite 5500 919 Third Avenue
Washington, D.C. 20006 New York, New York 10022
It is proposed that this filing will become effective (check appropriate box):
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[X] Immediately upon filing pursuant to Rule 485(b); or [_] on (date) pursuant to Rule 485(b), or
[_] 60 days after filing pursuant to Rule 485(a), or [_] on (date) pursuant to Rule 485(a)(1)
[_] 75 days after filing pursuant to paragraph (a)(2) [_] on (date) pursuant to paragraph (a)(2) of Rule 485
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If appropriate, check the following box:
[_] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
<PAGE>
EXPLANATORY NOTE
The Registrant is filing this Post-Effective Amendment No.
30 to the Trust's Registration Statement for the purpose of filing all
corporate documents and agreements of the Trust. The prospectuses and
Statement of Additional Information is hereby incorporated by reference
to Post-Effective Amendment No. 29, filed on July 30, 1999.
<PAGE>
NATIONS RESERVES
CROSS REFERENCE SHEET
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Part A
Item No. Prospectus
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1. Front and Back Cover Pages ................................ Front and Back Cover Pages
2. Risk/Return Summary: Investments, Risks
and Performance............................................. About this Prospectus
3. Risk/Return Summary: Fee Tables............................. About the Funds; Financial Highlights
4. Investment Objectives, Principal
Investment Strategies, and Related Risks.................... About the Funds; Other Important
Information
5. Management's Discussion of Fund
Performance.................................................. About the Funds
6. Management, Organization, and
Capital Structure........................................... What's Inside; About the Funds;
How the Funds Are Managed;
About your Investment
7. Shareholder Information..................................... About the Funds; About your
Investment
8. Distribution Arrangements................................... Information for Investors
9. Financial Highlights Information............................ Financial Highlights; About the Funds
Part B
Item No.
- --------
10. Cover Page and Table of Contents............................ Cover Page and Table of Contents
11. Fund History................................................ Introduction
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12. Description of the Fund and Its
Investments and Risks....................................... Additional Information on Portfolio
Investments
13. Management of the Funds..................................... Trustees And Officers; Investment
Advisory, Administration, Custody Transfer
Agency, Shareholder Servicing and
Distribution Agreements
14. Control Persons and Principal
Holders of Securities....................................... Not Applicable
15. Investment Advisory and Other Services...................... Investment Advisory,
Administration, Custody, Transfer Agency,
Shareholder Servicing And Distribution
Agreements
16. Brokerage Allocation and Other Practices.................... Portfolio Transactions and
Brokerage--General Brokerage Policy
17. Capital Stock and Other
Securities.................................................. Description Of Shares;
Investment Advisory, Administration,
Custody, Transfer Custody, Transfer
Agency, Shareholder Servicing And
Distribution Agreements
18. Purchase, Redemption and Pricing
of Shares................................................... Net Asset Value -- Purchases
And Redemptions; Distributor
19. Taxation of the Fund........................................ Additional Information Concerning
Taxes
20. Underwriters................................................ Investment Advisory,
Administration Custody, Transfer Agency
Shareholder Servicing And Distribution
Agreements; Distributor
21. Calculation of Performance Data............................. Additional Information on
Performance
22. Financial Statements........................................ Independent Accountant and
Reports
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Part C
<PAGE>
Item No. Other Information
- -------- -----------------
Information required to be included in Part C
is set forth under the appropriate Item, so
numbered, in Part C of this Document
<PAGE>
NATIONS RESERVES
ONE BANK OF AMERICA PLAZA
33RD FLOOR
CHARLOTTE, NC 28255
1-800-626-2275
FORM N-1A
PART C
OTHER INFORMATION
ITEM 23. EXHIBITS
All references to the "Registration Statement" in the following
list of Exhibits refer to the Registrant's Registration Statement on Form N-1A
(File Nos. 33-33144; 811-6030)
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EXHIBIT LETTER DESCRIPTION
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(a) ARTICLES OF INCORPORATION:
(a)(1) Declaration of Trust dated January 22, 1990, filed herewith.
(a)(2) Classification of Shares dated February 4, 1998, filed herewith.
(a)(3) Classification of Shares dated December 2, 1998, filed herewith.
(a)(4) Classification of Shares dated March 31, 1999, filed herewith.
(a)(5) Classification of Shares dated May 26, 1999, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
(b) BYLAWS:
(b)(1) Amended and Restated Bylaws dated January 22, 1990, last
amended May 26, 1999, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
(c) INSTRUMENTS DEFINING RIGHTS OF SECURITIES HOLDERS:
Not Applicable
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EXHIBIT LETTER DESCRIPTION
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(d) INVESTMENT ADVISORY CONTRACTS:
(d)(1) Investment Advisory Agreement between Banc of America Advisors, Inc. (formerly
NationsBanc Advisors, Inc.) ("BAAI") and Nations Reserves (formerly known as
Nations Institutional Reserves) ("Registrant") dated January 1, 1996, Schedule I
dated October 15, 1999, filed herewith.
(d)(2) Sub-Advisory Agreement among BAAI, Banc of America Capital Management, Inc.
(formerly TradeStreet Investment Associates, Inc.) ("BACAP") and the Registrant
dated January 1, 1996, Schedule I dated May 21, 1999, filed herewith.
(d)(3) Sub-Advisory Agreement among BAAI, Chicago Equity Partners Corporation
("Chicago Equity") and the Registrant dated May 21, 1999, filed herewith.
(d)(4) Sub-Advisory Agreement among BAAI, Gartmore Global Partners ("Gartmore")
and the Registrant dated August 19, 1999, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
(e) UNDERWRITING CONTRACT:
(e)(1) Distribution Agreement between the Registrant and Stephens Inc. ("Stephens") dated
May 1, 1994, Schedule I amended August 19, 1999, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
(f) BONUS OR PROFIT SHARING CONTRACTS:
(f)(1) Deferred Compensation Plan dated January 26, 1995, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
(g) CUSTODIAN AGREEMENT:
(g)(1) Custody Agreement between the Registrant and The Bank of
New York ("BNY") dated October 19, 1998, Schedule I dated
August 19, 1999, filed herewith.
(g)(2) Amendment to the Custody Agreement dated September 1, 1999, filed herewith.
(g)(3) Amendment to the Custody Agreement dated February 14, 2000, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
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EXHIBIT LETTER DESCRIPTION
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(h) OTHER MATERIAL CONTRACTS:
(h)(1) Co-Administration Agreement among the Registrant,
Stephens and BAAI dated December 1, 1998, Schedule I
dated August 19, 1999, Schedule A dated November 18,
1999, filed herewith.
(h)(2) Sub-Administration Agreement among the Registrant, BNY
and BAAI dated December 1, 1998, Schedule I dated August
19, 1999, filed herewith.
(h)(3) Shareholder Servicing Plan relating to Adviser Shares,
Exhibit I amended February 24, 1999, filed herewith.
(h)(4) Shareholder Servicing Plan relating to Investor B Shares,
Exhibit I amended August 19, 1999, filed herewith.
(h)(5) Shareholder Servicing Plan relating to Investor C Shares,
Exhibit I amended August 19, 1999, filed herewith.
(h)(6) Shareholder Servicing Plan relating to Daily Shares,
Exhibit I amended February 24, 1999, filed herewith.
(h)(7) Shareholder Servicing Plan relating to Investor Shares,
Exhibit I amended February 24, 1999, filed herewith.
(h)(8) Shareholder Servicing Plan relating to Liquidity Shares,
Exhibit I amended February 24, 1999, filed herewith.
(h)(9) Shareholder Servicing Plan relating to Market Shares,
Exhibit I amended February 24, 1999, filed herewith.
(h)(10) Shareholder Servicing Plan relating to Seafirst Shares,
Exhibit I amended December 2, 1998, filed herewith.
(h)(11) Shareholder Servicing Plan relating to Service Shares,
Exhibit I amended February 24, 1999, filed herewith.
(h)(12) Shareholder Administration Plan relating to Trust Shares,
Exhibit I amended February 24, 1999, filed herewith.
(h)(13) Transfer Agency and Services Agreement between PFPC Inc. (formerly First Data
Investor Services Group) ("PFPC") and the Nations Funds family dated June 1, 1995,
Schedule G dated February 14, 2000, filed herewith.
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EXHIBIT LETTER DESCRIPTION
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(h)(14) Amendment to Transfer Agency and Services Agreement dated January 1, 1999, filed
herewith.
(h)(15) Sub-Transfer Agency Agreement between PFPC and Bank of
America, N.A. ("Bank of America") dated September 11,
1995, Schedule A dated February 14, 2000, filed herewith.
(h)(16) Cross Indemnification Agreement among Nations Fund Trust, Nations Fund, Inc.,
Nations Master Investment Trust, Nations Funds Trust and the Registrant dated
February 14, 2000, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
(i) LEGAL OPINION
Not Applicable
- ---------------------- -------------------------------------------------------------------------------------
(j) OTHER OPINIONS
Not Applicable
- ---------------------- -------------------------------------------------------------------------------------
(k) OMITTED FINANCIAL STATEMENTS
Not Applicable
- ---------------------- -------------------------------------------------------------------------------------
(l) INITIAL CAPITAL AGREEMENTS:
Not Applicable
- ---------------------- -------------------------------------------------------------------------------------
(m) RULE 12B-1 PLANS:
(m)(1) Shareholder Administration Plan relating to Primary B Shares,
Exhibit I amended August 19, 1999, filed herewith.
(m)(2) Shareholder Administration Plan relating to Investor B
and Investor C Shares, Exhibit I dated May 26, 1999,
filed herewith.
(m)(3) Shareholder Servicing and Distribution Plan relating to
Investor A Shares, Exhibit A amended August 19, 1999,
filed herewith.
(m)(4) Distribution Plan relating to Investor B Shares, Exhibit
A amended August 19, 1999, filed herewith.
(m)(5) Distribution Plan relating to Investor C Shares, Exhibit
A amended August 19, 1999, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
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EXHIBIT LETTER DESCRIPTION
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(m)(6) Distribution Plan relating to Daily Shares, Exhibit A
amended February 24, 1999, filed herewith.
(m)(7) Distribution Plan relating to Investor Shares, Exhibit A
amended February 24, 1999, filed herewith.
(m)(8) Distribution Plan relating to Liquidity Shares, Exhibit A
amended February 24, 1999, filed herewith.
(m)(9) Distribution Plan relating to Market Shares, Exhibit A
amended February 24, 1999, filed herewith.
(m)(10) Distribution Plan relating to Service Shares, Exhibit A
amended February 24, 1999, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
(n) FINANCIAL DATA SCHEDULE:
Not Applicable
- ---------------------- -------------------------------------------------------------------------------------
(o) RULE 18F-3 PLAN:
(o)(1) Rule 18f-3 Multi-Class Plan amended August 19, 1999, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
(p) Powers of Attorney for Edmund L. Benson, Charles B. Walker, A. Max
Walker, Thomas S. Word, Jr., William H. Grigg, James Ermer, Thomas F.
Keller, Carl E. Mundy, Jr., James B. Sommers and Cornelius J. Pings,
filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
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ITEM 24. PERSONS CONTROLLED BY OF UNDER COMMON CONTROL WITH THE FUND
No person is controlled by or under common control with the
Registrant.
ITEM 25. INDEMNIFICATION
Article VIII of the Agreement of Declaration of Trust provides for the
indemnification of the Registrant's trustees, officers, employees and other
agents. Indemnification of the Registrant's administrators, distributor,
custodian and transfer agents is provided for, respectively, in the
Registrant's:
1. Co-Administration Agreement with Stephens and BAAI;
2. Sub-Administration Agreement with BNY and BAAI;
3. Distribution Agreement with Stephens;
4. Custody Agreement with BNY;
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5. Transfer Agency and Services Agreement with PFPC; and
6. Sub-Transfer Agency and Services Agreement with PFPC and Bank
of America.
The Registrant has entered into a Cross Indemnification Agreement with
Nations Fund Trust (the "Trust"), Nations Fund, Inc. (the "Company"), Nations
Master Investment Trust ("Master Trust") and Nations Funds Trust ("Funds
Trust") dated February 14, 2000. The Trust, the Company, Master Trust and/or
Funds Trust will indemnify and hold harmless the Registrant against any losses,
claims, damages or liabilities, to which the Registrant may become subject,
under the Securities Act of 1933, as amended (the "1933 Act") and the Investment
Company Act of 1940, as amended (the "1940 Act") or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any prospectuses, any preliminary prospectuses, the
registration statements, any other prospectuses relating to the securities, or
any amendments or supplements to the foregoing (hereinafter referred to
collectively as the "Offering Documents"), or arise out of or are based upon the
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Offering Documents in
reliance upon and in conformity with written information furnished to the
Registrant by the Trust, the Company, Master Trust, and/or Funds Trust expressly
for use therein; and will reimburse the Registrant for any legal or other
expenses reasonably incurred by the Registrant in connection with investigating
or defending any such action or claim; provided, however, that the Trust, the
Company, Master Trust and/or Funds Trust shall not be liable in any such case to
the extent that any such loss, claim, damage, or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Offering Documents in reliance upon and in
conformity with written information furnished to the Trust, the Company, Master
Trust and/or Funds Trust by the Registrant expressly for use in the Offering
Documents.
Promptly after receipt by an indemnified party above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the
omission to so notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.
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The Registrant has obtained from a major insurance carrier a trustees'
and officers' liability policy covering certain types of errors and omissions.
In no event will the Registrant indemnify any of its trustees, officers,
employees, or agents against any liability to which such person would otherwise
be subject by reason of his/her willful misfeasance, bad faith, gross negligence
in the performance of his/her duties, or by reason of his/her reckless disregard
of the duties involved in the conduct of his/her office or arising under his
agreement with the Registrant. The Registrant will comply with Rule 484 under
the 1933 Act and Release No. 11330 under the 1940 Act, in connection with any
indemnification.
Insofar as indemnification for liabilities arising under the 1933 Act
may be permitted to trustees, officers and controlling persons of the Registrant
pursuant to the foregoing provisions or otherwise, the Registrant is aware that
in the opinion of the Securities and Exchange Commission ("SEC") such
indemnification is against public policy as expressed in the 1933 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, officers or controlling persons of the Registrant
with the successful defense of any action, suit or proceeding) is asserted by
such trustee, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the 1933 Act and will be governed by the
final adjudication of such issues.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
To the knowledge of the Registrant, none of the directors or officers
of BAAI, the adviser to the Registrant's portfolios, or BACAP, Chicago Equity or
Gartmore, the investment sub-advisers, except those set forth below, are or have
been, at any time during the past two calendar years, engaged in any other
business, profession, vocation or employment of a substantial nature, except
that certain directors and officers also hold various positions with, and engage
in business for, the company that owns all the outstanding stock (other than
directors' qualifying shares) of BAAI, BACAP, Chicago Equity or Gartmore,
respectively, or other subsidiaries of Bank of America Corporation.
(a) BAAI performs investment advisory services for the Registrant and
certain other customers. BAAI is a wholly-owned subsidiary of Bank of America,
which in turn is a wholly-owned banking subsidiary of Bank of America
Corporation. Information with respect to each director and officer of the
investment adviser is incorporated by reference to Form ADV filed by BAAI with
the SEC pursuant to the Investment Advisers Act of 1940, as amended (the
"Advisers Act") (file no. 801-49874).
(b) BACAP performs investment sub-advisory services for the Registrant
and certain other customers. BACAP is a wholly-owned subsidiary of Bank of
America Corporation. Information with respect to each director and officer of
the investment sub-adviser is incorporated by reference to Form ADV filed by
BACAP (formerly TradeStreet Investment Associates, Inc.) with the SEC pursuant
to the Advisers Act (file no. 801-50372).
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(d) Chicago Equity performs investment sub-advisory services for the
Registrant and certain other customers. Chicago Equity is a wholly-owned
subsidiary of Bank of America Corporation. Information with respect to each
director and officer of the investment sub-adviser is incorporated by reference
to Form ADV filed by Chicago Equity with the SEC pursuant to the Advisers Act
(file no. 801-55997).
(e) Gartmore performs investment sub-advisory services for the
Registrant and certain other customers. Gartmore is a joint venture structured
as a general partnership between NB Partner Corp., a wholly-owned subsidiary of
Bank of America, and Gartmore U.S. Limited, an indirect, wholly-owned subsidiary
of Gartmore Investment Management plc, a UK Company which is the holding company
for a leading UK based international fund management group of companies.
Information with respect to each director and officer of the investment
sub-adviser is incorporated by reference to Form ADV filed by Gartmore with the
SEC pursuant to the Advisers Act (file no. 801-48811).
ITEM 27. PRINCIPAL UNDERWRITERS
(a) Stephens, distributor for the Registrant, does not presently act as
investment adviser for any other registered investment companies, but does act
as distributor for Nations Fund Trust, Nations Fund, Inc., Nations LifeGoal
Funds, Inc., Nations Annuity Trust, Nations Funds Trust, Wells Fargo Trust,
Wells Fargo Variable Trust, and is the exclusive placement agent for Master
Investment Trust, Managed Series Investment Trust, Wells Fargo Core Trust,
Nations Master Investment Trust and Master Investment Portfolio, all of which
are registered open-end management investment companies, and has acted as
principal underwriter for the Liberty Term Trust, Inc., Nations Government
Income Term Trust 2003, Inc., Nations Government Income Term Trust 2004, Inc.
and the Managed Balanced Target Maturity Fund, Inc., closed-end management
investment companies.
(b) Information with respect to each director and officer of the
principal underwriter is incorporated by reference to Form ADV filed by Stephens
with the SEC pursuant to the 1940 Act (file No. 501-15510).
(c) Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS
(1) BAAI, One Bank of America Plaza, Charlotte, NC 28255 (records
relating to its function as investment adviser and
co-administrator).
(2) BACAP, One Bank of America Plaza, Charlotte, NC 28255 (records
relating to its function as investment sub-adviser).
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(3) Chicago Equity, 231 South LaSalle, Chicago, IL 60697 (records
relating to its function as investment sub-advisor).
(4) Gartmore, One Bank of America Plaza, Charlotte, NC 28255
(records relating to its function as investment sub-adviser).
(5) Stephens, 111 Center Street, Little Rock, AR 72201 (records
relating to its function as distributor and co-administrator).
(6) PFPC, 400 Bellevue Parkway, Wilmington, DE 19809 (records
relating to its function as transfer agent).
(7) BNY, 100 Church Street, New York, NY 10286 (records relating
to its function as custodian and sub-administrator).
(8) Bank of America, One Bank of America Plaza, Charlotte, NC
28255 (records relating to its function as sub-transfer
agent).
ITEM 29. MANAGEMENT SERVICES
Not Applicable
ITEM 30. UNDERTAKINGS
Not Applicable
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SIGNATURES
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Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Little
Rock, State of Arkansas on the 6th day of March, 2000.
NATIONS 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
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the date indicated:
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SIGNATURES TITLE DATE
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* President and Chairman March 6, 2000
-------------------------------- of the Board of Trustees
(A. Max Walker) (Principal Executive Officer)
/s/ Richard H. Blank, Jr. Treasurer March 6, 2000
- --------------------------------- and Secretary
(Richard H. Blank, Jr.) (Principal Financial and Accounting Officer)
* Trustee March 6, 2000
- ---------------------------------
(Edmund L. Benson, III)
* Trustee March 6, 2000
- ---------------------------------
(James Ermer)
* Trustee March 6, 2000
- ---------------------------------
(William H. Grigg)
* Trustee March 6, 2000
- ---------------------------------
(Thomas F. Keller)
* Trustee March 6, 2000
- ---------------------------------
(Carl E. Mundy, Jr.)
* Trustee March 6, 2000
- ---------------------------------
(Cornelius J. Pings)
* Trustee March 6, 2000
- ---------------------------------
(Charles B. Walker)
* Trustee March 6, 2000
- ---------------------------------
(Thomas S. Word)
* Trustee March 6, 2000
- ---------------------------------
(James P. Sommers)
/s/ Richard H. Blank, Jr.
- ---------------------------------
Richard H. Blank, Jr.
*Attorney-in-Fact
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Nations Reserves
Exhibit Index
Exhibit No. Description
- ----------- -----------
EX-99.A1 Declaration of Trust
EX-99.A2 Classification of Shares (2/4/98)
EX-99.A3 Classification of Shares (12/2/98)
EX-99.A4 Classification of Shares (3/31/99)
EX-99.A5 Classification of Shares (5/26/99)
EX-99.B1 Amended and Restated Bylaws
EX-99.D1 Investment Advisory Agreement
EX-99.D2 Sub-Advisory Agreement - TradeStreet Investment Associates, Inc.
EX-99.D3 Sub-Advisory Agreement - Chicago Equity Partners Corporation
EX-99.D4 Sub-Advisory Agreement - Gartmore Global Partners
EX-99.E1 Distribution Agreement
EX-99.F1 Nations Funds Deferred Compensation Plan
EX-99.G1 Custody Agreement
EX-99.G2 Amendment to the Custody Agreement
EX-99.G3 Amendment No. 2 to the Custody Agreement
EX-99.H1 Co-Administration Agreement
EX-99.H2 Sub-Administration Agreement
EX-99.H3 Shareholder Servicing Plan--Adviser Shares
EX-99.H4 Shareholder Servicing Plan--Investor B Shares
EX-99.H5 Shareholder Servicing Plan--Investor C Shares
EX-99.H6 Shareholder Servicing Plan--Daily Shares
EX-99.H7 Shareholder Servicing Plan--Investor Shares
EX-99.H8 Shareholder Servicing Plan--Liquidity Shares
EX-99.H9 Shareholder Servicing Plan--Market Shares
EX-99.H10 Shareholder Servicing Plan--Seafirst Shares
EX-99.H11 Shareholder Servicing Plan--Service Shares
EX-99.H12 Shareholder Servicing Plan--Trust Shares
EX-99.H13 Transfer Agency Agreement
EX-99.H14 Amendment to Transfer Agency Agreement
EX-99.H15 Sub-Transfer Agency Agreement
EX-99.H16 Cross Indemnification Agreement
EX-99.M1 Shareholder Administration Plan--Primary B Shares
EX-99.M2 Shareholder Administration Plan--Inv. B and Inv. C Shares
EX-99.M3 Shareholder Servicing and Distribution Plan--Investor A Shares
EX-99.M4 Distribution Plan--Investor B Shares
EX-99.M5 Distribution Plan--Investor C Shares
EX-99.M6 Distribution Plan--Daily Shares
EX-99.M7 Distribution Plan--Investor Shares
EX-99.M8 Distribution Plan--Liquidity Shares
EX-99.M9 Distribution Plan--Market Shares
EX-99.M10 Distribution Plan--Service Shares
<PAGE>
EX-99.O1 Rule 18f-3 Plan
EX-99.P Powers of Attorney
THE CAPITOL FUNDS
-----------------
AGREEMENT AND DECLARATION OF TRUST
----------------------------------
AGREEMENT AND DECLARATION OF TRUST dated the 22nd day of January, 1990,
by the Trustees hereunder, and by the holders of Shares of beneficial interest
to be issued hereunder as hereinafter provided.
WITNESSETH that
WHEREAS, this Trust has been formed to carry on the business of an
investment company: and
WHEREAS, the Trustees have agreed to manage all property coming into
their hands as trustees of a Massachusetts voluntary association with
transferable Shares in accordance with the provisions hereinafter set forth.
NOW, THEREFORE, the Trustees hereby declare that they will hold all
cash, securities and other assets, which they may from time to time acquire in
any manner as Trustees hereunder IN TRUST to manage and dispose of the same upon
the following terms and conditions for the pro rata benefit of the holders from
time to time of Shares in this Trust as hereinafter set forth.
ARTICLE I
Name and Definitions
--------------------
Name
- ----
Section 1. This Trust shall be known as "The Capitol Funds," and the
Trustees shall conduct the business of the Trust under that name or any other
name as they may from time to time determine.
Definitions
- -----------
Section 2. Whenever used herein, unless otherwise required by the
context or specifically provided:
(a) The "Trust" refers to the Massachusetts voluntary
association established by this Agreement and Declaration of Trust, as
amended from time to time;
(b) "Trustees" refers to the Trustees of the Trust named
herein or elected in accordance with Article IV and then in office;
(c) The term "Shares" means the equal proportionate
transferable units of interest into which the beneficial interest in
the Trust shall be divided from time to time or, if more than one
series or class of Shares is authorized by the Trustees, the equal
proportionate transferable units into which each series or class of
Shares shall be divided from time to time;
<PAGE>
(d) "Shareholder" means a record owner of Shares;
(e) The terms "Affiliated Person," "Assignment," "Commission,"
"Interested Person," "Principal Underwriter" and "Majority Shareholder
Vote" (the 67% or 50% requirement of the third sentence of Section 2(a)
(42) of the Investment Company Act of 1940 (the "1940 Act") and the
rules and Regulations thereunder, all as amended from time to time,
whichever may be applicable) shall have the meanings given them in the
1940 Act;
(f) "Declaration of Trust" shall mean this Agreement and
Declaration of Trust as amended or restated from time to time; and
(g) "By-Laws" shall mean the By-Laws of the Trust as amended
from time to time.
(h) The "1940 Act" refers to the Investment Company Act of
1940 and the Rules and Regulations thereunder, all as amended from time
to time.
ARTICLE II
Purpose
-------
The purpose of the Trust is to provide investors with one or more
investment portfolios consisting primarily of securities, including debt
instruments or obligations.
ARTICLE III
Shares
------
Division of Beneficial Interest
- -------------------------------
Section 1. The Shares of the Trust shall be issued in one or more
series as the Trustees may, without shareholder approval, authorize. Each series
shall be preferred over all other series in respect of the assets allocated to
that series. The beneficial interest in each series shall at all times be
divided into Shares, without par value, each of which shall represent an equal
proportionate interest in the series with each other Share of the same series,
none having priority or preference over another. Each series shall be
represented by one or more classes of Shares, with each class possessing such
rights (including, notwithstanding any contrary provision herein, voting rights)
as the Trustees may, without shareholder approval, authorize. The number of
Shares authorized shall be unlimited, and the Shares so authorized may be
represented in part by fractional Shares. The Trustees may from time to time
divide or combine the Shares of any series into a greater or lesser number
without thereby changing the proportionate beneficial interests in the series.
Ownership of Shares
- -------------------
Section 2. The ownership of Shares shall be recorded on the books of
the Trust or its transfer or similar agent. No certificates certifying the
ownership of Shares shall be issued except as the Trustees may otherwise
determine from time to time The Trustees may make such rules as they consider
appropriate for the issuance of Share certificates, the transfer of Shares and
similar matters. The record books of the Trust as kept by the Trust or any
transfer or similar agent of the Trust, as the case may be, shall be conclusive
as to who are the Shareholders of each series and as to the number of Shares of
each series held from time to time by each Shareholder.
2
<PAGE>
Investments in the Trust: Assets of the Series
- ----------------------------------------------
Section 3. The Trustees may accept investments in the Trust from such
persons and on such terms and, subject to any requirements of law, for such
consideration, which may consist of cash or tangible or intangible property or a
combination thereof, they may from time to time authorize.
All consideration received by the Trust for the issue or sale of
Shares of each series, together with all income, earnings, profits, and proceeds
thereof, including any proceeds derived from the sale, exchange or liquidation
thereof, and any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably belong to the
series of Shares with respect to which the same were received by the Trust for
all purposes, subject only to the rights of creditors, and shall be so recorded
upon the books of account of the Trust and are herein referred to as "assets of"
such series. In addition, any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as belonging to
any particular series shall be allocated by the Trustees between and among one
or more of the series in such manner as they, in their sole discretion, deem
fair and equitable. Each such allocation shall be conclusive and binding upon
the Shareholders of all series for all purposes, and shall be referred to as
assets belonging to that series.
No Preemptive Rights
- --------------------
Section 4. Shareholders shall have no preemptive or other right to
receive, purchase or subscribe for any additional Shares or other securities
issued by the Trust.
Status of Shares and Limitation of Personal Liability
- -----------------------------------------------------
Section 5. Shares shall be deemed to be personal property giving only
the rights provided in this instrument. Every Shareholder by virtue of having
become a Shareholder shall be held to have expressly assented and agreed to the
terms of this Declaration of Trust and to have become a party thereto. The death
of a Shareholder during the continuance of the Trust shall not operate to
terminate the same nor entitle the representative of any deceased Shareholder to
an accounting or to take any action in court or elsewhere against the Trust or
the Trustees, but only to the rights of said decendent under this Trust.
Ownership of Shares shall not entitle the Shareholder to any title in or to the
whole or any part of the Trust property or right to call for a partition or
division of the same or for an accounting, nor shall the ownership of Shares
constitute the Shareholders partners. Neither the Trust nor the Trustees, nor
any officer, employee or agent of the Trust shall have any power to bind
personally any Shareholder, nor, except as specifically provided herein, to call
upon any Shareholder for the payment of any sum of money or assessment
whatsoever other than such as the Shareholder may at any time personally agree
to pay.
3
<PAGE>
Trustees and Officers as Shareholders
- -------------------------------------
Section 6. Any Trustee, officer or other agent of the Trust may
acquire, own and dispose of Shares of the Trust to the same extent as if he were
not a Trustee, officer or agent; and the Trustees may issue and sell or cause to
be issued and sold Shares to and buy such Shares from any such person of any
firm or company in which he is interested, subject only to the general
limitations herein contained as to the sale and purchase of such Shares; and all
subject to any restrictions which may be contained in the By-Laws.
ARTICLE IV
The Trustees
------------
Election
- --------
Section 1. The number of Trustees shall be fixed by the Trustees,
except that, commencing with the first shareholders meeting at which Trustees
are elected, there shall be not less than three nor more than fifteen Trustees,
each of whom shall hold office during the lifetime of this Trust or until the
election and qualification of his or her successor, or until he or she sooner
dies, resigns or is removed. The number of Trustees so fixed may be increased
either by the Shareholders or by the Trustees by a vote of a majority of the
Trustees then in office. The number of Trustees so fixed may be decreased either
by the Shareholders or by the Trustees by vote of a majority of the Trustees
then in office, but only to eliminate vacancies existing by reason of the death,
resignation or removal of one or more Trustees.
The initial Trustees, each of whom shall serve until the first meeting
of Shareholders at which Trustees are elected and until his or her successor is
elected and qualified, or until he or she sooner dies, resigns or is removed,
shall be Robert A. Nesher and such other persons as the Trustee or Trustees then
in office shall, prior to any sale of Shares pursuant to public offering,
appoint. By vote of the Shareholders holding a majority of the shares entitled
to vote, the Shareholders may remove a Trustee with or without cause. By vote of
a majority of the Trustees then in office, the Trustees may remove a Trustee for
cause. Any Trustee may, but need not, be a Shareholder.
In case of the declination, death, resignation, retirement, removal,
incapacity, or inability of any of the Trustees, or in case a vacancy shall
exist by reason of an increase in number, or for any other reason, the remaining
Trustees shall fill such vacancy by appointing such other person as they in
their discretion shall see fit consistent with the limitations under the 1940
Act. Such appointment shall be evidenced by a written instrument signed by a
majority of the Trustees in office or by recording in the records of the Trust,
whereupon the appointment shall take effect. An appointment of a Trustee may be
made by the Trustees then in office in anticipation of a vacancy to occur by
reason of retirement, resignation or increase in number of Trustees effective at
a later date, provided that said appointment shall become effective only at or
after the effective date of said retirement, resignation or increase in number
of Trustees As soon as any Trustee so appointed shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder. The power of appointment is subject to the
provisions of Section 16(a) of the 1940 Act. In the event that at any time after
the commencement of public sales of Trust Shares less than a majority of the
Trustees then holding office were elected to such office by the Shareholders,
the Trustees or the Trust's President promptly shall call a meeting of
Shareholders for the purpose of electing Trustees. Each Trustee elected by the
Shareholders or by the Trustees shall serve until the election or qualification
of his or her successor, or until he or she sooner dies, resigns or is removed.
4
<PAGE>
Effect of Death, Resignation, Etc. of a Trustee
- -----------------------------------------------
Section 2. The death, declination, resignation, retirement, removal, or
incapacity of the Trustees, or any one of them, shall not operate to annul the
Trust or to revoke any existing agency created pursuant to the terms of this
Declaration of Trust.
Powers
- ------
Section 3. Subject to the provisions of this Declaration of Trust, the
business of the Trust shall be managed by the Trustees, and they shall have all
powers necessary or convenient to carry out that responsibility. Without
limiting the foregoing, the Trustees may adopt By-Laws not inconsistent with
this Declaration of Trust providing for the conduct of the business of the Trust
and may amend and repeal them to the extent that such By-Laws do not reserve
that right to the Shareholders; they may fill vacancies in their number,
including vacancies resulting from increases in their number, and may elect and
remove such officers and appoint and terminate such agents as they consider
appropriate; they may appoint from their own number, and terminate, any one or
more committees consisting of two or more Trustees, including an executive
committee which may, when the Trustees are not in session, exercise some or all
of the powers and authority of the Trustees as the Trustees may determine; they
may appoint an advisory board, the members of which shall not be Trustees and
need not be Shareholders; they may employ one or more investment advisers or
managers as provided in Section 7 of this Article IV; they may employ one or
more custodians of the assets of the trust and may authorize such custodians to
employ subcustodians and to deposit all or any part of such assets in a system
or systems for the central handling of securities, retain a transfer agent or a
Shareholder servicing agent, or both, provide for the distribution of Shares by
the Trust, through one or more principal underwriters or otherwise, set record
dates for the determination of Shareholders with respect to various matters, and
in general delegate such authority as they consider desirable to any officer of
the Trust, to any committee of the Trustees and to any agent. or employee of the
Trust or to any such custodian or underwriter; and they may elect and remove
such officers and appoint and terminate such agents as they consider
appropriate.
Without limiting the foregoing, the Trustees shall have power and
authority:
(a) To invest and reinvest cash, and to hold cash uninvested;
(b) To sell, exchange, lend, pledge, mortgage, hypothecate, write
options on and lease any or all of the assets of the Trust;
(c) To vote or give assent, or exercise any rights of ownership, with
respect to stock or other securities or property, and to execute and deliver
proxies or powers of attorney to such person or persons as the Trustees shall
deem proper, granting to such person or persons such power and discretion with
relation to securities or property as the Trustees shall deem proper;
5
<PAGE>
(d) To exercise powers and rights of subscription or otherwise which in
any manner arise out of ownership of securities;
(e) To hold any security or property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, or in the name
of the Trustees or of the Trust or in the name of a custodian, subcustodian or
other depositary or a nominee or nominees or otherwise;
(f) To establish separate and distinct series of shares with separately
defined investment objectives, policies and purposes, and to allocate assets,
liabilities and expenses of the Trust to a particular series of Shares or to
apportion the same among two or more series, provided that any liability or
expense incurred by a particular series of Shares shall be payable solely out of
the assets of that series and to establish separate classes of shares of each
series;
(g) To consent to or participate in any plan for the reorganization,
consolidation or merger of any corporation or issuer, any security or property
of which is or was held in the Trust; to consent to any contract, lease,
mortgage, purchase or sale of property by such corporation or issuer, and to pay
calls or subscriptions with respect to any security held in the Trust;
(h) To join with other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit any
security with, or transfer any security to, any such committee, depositary or
trustee, and to delegate to them such power and authority with relation to any
security (whether or not so deposited or transferred) as the Trustees shall deem
proper, and to agree to pay, and to pay, such portion of the expenses and
compensation of such committee, depositary or trustee as the Trustees shall deem
proper;
(i) To compromise, arbitrate or otherwise adjust claims in favor of or
against the Trust or any matter in controversy, including but not limited to
claims for taxes;
(j) To enter into joint ventures, general or limited partnerships and
any other combinations or associations;
(k) To borrow funds from a bank for temporary or emergency purposes and
not for investment purposes;
(1) To endorse or guarantee the payment of any notes or other
obligations of any person; to make contracts of guaranty or suretyship, or
otherwise assume liability for payment thereof; and to mortgage and pledge the
Trust property or any part thereof to secure any or all of such obligations;
(m) To purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or manager, principal underwriter, or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against such liability;
6
<PAGE>
(n) To pay pensions for faithful service, as deemed appropriate by the
Trustees, and to adopt, establish and carry out pension, profit-sharing, share
bonus, share purchase, savings, thrift and other retirement, incentive and
benefit plans, trusts and provisions, including the purchasing of life insurance
and annuity contracts as a means of providing such retirement and other
benefits, for any or all of the Trustees, officers, employees and agents of the
Trust; and
(o) To establish, from time to time, a minimum total investment for
Shareholders, and to require the redemption of the Shares of any Shareholders
whose investment is less than such minimum upon giving notice to such
Shareholder.
The Trustees shall not in any way be bound or limited by any present or
future law or custom in regard to investments by Trustees. Except as otherwise
provided herein or from time to time in the By-Laws, any action to be taken by
the Trustees may be taken by a majority of the Trustees present at a meeting of
Trustees (if a quorum be present), within or without Massachusetts, including
any meeting held by means of a conference telephone or other communications
equipment by which all persons participating in the meeting can communicate with
each other simultaneously and participation by such means shall constitute
presence in person at a meeting, or by written consent of a majority of the
Trustees then in office.
Payment of Expenses by the Trust
- --------------------------------
Section 4. The Trustees are authorized to pay or to cause to be paid
out of the principal or income of the Trust, or partly out of principal and
partly out of income, as they deem fair, all expenses, fees, charges, taxes and
liabilities incurred or arising in connection with the Trust, or in connection
with the management thereof, including, but not limited to, the Trustees'
compensation and such expenses and charges for the services of the Trust's
officers, employees, investment adviser or manager, principal underwriter,
auditor, counsel, custodian, transfer agent, Shareholder servicing agent, and
such other agents or independent contractors and such other expenses and charges
as the Trustees may deem necessary or proper to incur, provided, however, that
all expenses, fees, charges, taxes and liabilities incurred or arising in
connection with a particular series of Shares as determined by the Trustees,
shall be payable solely out of the assets of that Series. Any general
liabilities, expenses, costs, charges or reserves of the Trust which are not
readily identifiable as belonging to any particular series shall be allocated
and charged by the Trustees between or among any one or more of the series in
such manner as the Trustees in their sole discretion deem fair and equitable.
Each such allocation shall be conclusive and binding upon the Shareholders of
all series for all purposes. Any creditor of any series may look only to the
assets of that series to satisfy such creditor's debt.
Section 5. The Trustees shall have the power, as frequently as they may
determine, to cause each Shareholder to pay directly, in advance or arrears, for
any and all expenses of the Trust, an amount fixed from time to time by the
Trustees, by setting off such charges from such Shareholder from declared but
unpaid dividends owed such Shareholder and/or by reducing the number of Shares
in the account of such Shareholder by that number of full and/or fractional
Shares which represents the outstanding amount of such charges due from such
Shareholder.
7
<PAGE>
Ownership of Assets of the Trust
- --------------------------------
Section 6. Title to all of the assets of each series of Shares and the
Trust shall at all times be considered as vested in the Trustees.
Advisory, Management and Distribution
- -------------------------------------
Section 7. The Trustees may, at any time and from time to time,
contract with respect to the Trust or any series thereof for exclusive or
nonexclusive advisory; and/or management services with SEI Financial Management
Corporation, a Delaware corporation, and/or any other corporation, trust,
association or other organization, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws; and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine, including, without
limitation, authority to determine from time to time what investments shall be
purchased, held, sold or exchanged and what portion, if any, of the assets of
the Trust shall be held uninvested and to make changes in the Trust's
investments. Any contract for advisory services shall be subject to such
Shareholder approval as is required by the 1940 Act. The Trustees may also, at
any time and from time to time, contract with SEI Financial Services Company, a
Pennsylvania corporation, and/or any other corporation, trust, association or
other organization, appointing it exclusive or nonexclusive distributor or
principal underwriter for the Shares, every such contract to comply with such
requirements and restrictions as may be set forth in the By-Laws, and any such
contract may contain such other terms interpretive of or in addition to said
requirements and restrictions as the Trustees may determine.
The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust
is a shareholder, director, officer, partner, trustee, employee,
manager, adviser, principal underwriter, or distributor or agent of or
for any corporation, trust, association, or other organization, or of
or for any parent or affiliate of any organization, with which an
advisory or management or principal underwriter's or distributor's
contract, or transfer, Shareholder servicing or other agency contract
may have been or may hereafter be made, or that any such organization,
or any parent or affiliate thereof, is a Shareholder or has an interest
in the Trust, or that
(ii) any corporation, trust, association or other organization
with which an advisory or management or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract may have been or may hereafter be made also has an
advisory or management contract, or principal underwriter's or
distributor's contract, or transfer, Shareholder servicing or other
agency contract with one or more other corporations, trusts,
associations, or other organizations, or has other businesses or
interests shall not affect the validity of any such contract or
disqualify any Shareholder, Trustee or officer of the Trust from voting
upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
8
<PAGE>
Action by the Trustees
- ----------------------
Section 8. The Trustees shall act by majority vote at a meeting duly
called or by unanimous written consent without a meeting or by telephone consent
provided a quorum of Trustees participates in any such telephonic meeting,
unless the 1940 Act requires that a particular action be taken only at a meeting
in person of the Trustees.
ARTICLE V
Shareholders' Voting Powers and Meetings
----------------------------------------
Voting Powers
- -------------
Section 1. The Shareholders shall have power to vote only (i) for the
election or removal of Trustees as provided in Article IV, Section 1, (ii) with
respect to any investment adviser as provided in Article IV, Section 7, (iii)
with respect to any termination of the Trust or any series to the extent and as
provided in Article IX, Section 4, (iv) with respect to any amendment of this
Declaration of Trust to the extent and as provided in Article IX, Section 7, (v)
to the same extent as the stockholders of a Massachusetts business corporation
as to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (vi) with respect to such additional matters relating
to the Trust as may be required by law, by this Declaration of Trust, by the
By-Laws or by any registration of the Trust with the Securities and Exchange
Commission or any state, or as the Trustees may consider necessary or desirable.
Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provisions of this
Declaration of Trust, or any matter submitted to a vote of Shareholders, all
Shares of the Trust then entitled to vote shall be voted by individual series,
except (1) when required by the 1940 Act, Shares shall be voted in the aggregate
and not by individual series, and (2) when the Trustees have determined that the
matter affects only the interests of one or more series, then only Shareholders
of such series shall be entitled to vote thereon. There shall be no cumulative
voting in the election of Trustees. Shares may be voted in person or by proxy.
A proxy with respect to Shares held in the name of two or more persons
shall be valid if executed by any one of them unless at or prior to the exercise
of the proxy the Trust receives a specific written notice to the contrary from
any one of them. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger.
Until Shares are issued, the Trustees may exercise all rights of
Shareholders and may take any action required by law, this Declaration of Trust
or the By-Laws to be taken by Shareholders.
9
<PAGE>
Voting Power and Meetings
- -------------------------
Section 2. Meetings of Shareholders of the Trust or of any series or
class may be called by the Trustees, or such other person or persons as may be
specified in the By-Laws, and held from time to time for the purpose of taking
action upon any matter requiring the vote or the authority of the Shareholders
of the Trust or any series or class as herein provided or upon any other matter
deemed by the Trustees to be necessary or desirable. Meetings of Shareholders of
the Trust or of any series or class shall be called by the Trustees or such
other person or persons as may be specified in the By-Laws upon written
application requesting that a meeting be called for a purpose requiring action
by the Shareholders as provided herein or in the By-Laws by Shareholders holding
at least 10% of the outstanding Shares of the Trust if Shareholders of all
series are required hereunder to vote in the aggregate and not by individual
series at such meeting, or Shareholders holding at least 10% of the outstanding
shares of a series or class if Shareholders of such series or class are entitled
hereunder to vote by individual series or class at such meeting. The
Shareholders shall be entitled to at least seven days' written notice of any
meeting of the Shareholders.
Quorum and Required Vote
- ------------------------
Section 3. A majority of the Shares entitled to vote shall be a quorum
for the transaction of business at a Shareholders' meeting, except that where
any provision of law or of this Declaration of Trust permits or requires that
holders of any series or class shall vote as a series or class, then a majority
of the aggregate number of Shares of that series or class entitled to vote shall
be necessary to constitute a quorum for the transaction of business by that
series or class. Any lesser number, however, shall be sufficient for
adjournments. Any adjourned session or sessions may be held within a reasonable
time after the date set for the original meeting without the necessity of
further notice.
Except when a larger vote is required by any provisions of this
Declaration of Trust or the By-Laws, a majority of the Shares voted on any
matter shall decide such matter and a plurality shall elect a Trustee, provided
that where any provision of law or of this Declaration of Trust permits or
requires that the holders of any series or class shall vote as a series or
class, then a majority of the Shares of that series or class voted on the matter
shall decide that matter insofar as that series or class is concerned.
Action by Written Consent
- -------------------------
Section 4. Any action taken by Shareholders may be taken without a
meeting if a majority of Shareholders entitled to vote on the matter (or such
larger vote as shall be required by any provision of this Declaration of Trust
or the By-Laws) consent to the action in writing and such written consents are
filed with the records of the meetings of Shareholders. Such consent shall be
treated for all purposes as a vote taken at a meeting of Shareholders.
Additional Provisions
- ---------------------
Section 5. The By-Laws may include further provisions for Shareholders'
votes and meetings and related matters.
10
<PAGE>
ARTICLE VI
Distributions, Redemptions, Repurchases
---------------------------------------
and Determination of Net Asset Value
------------------------------------
Distributions
- -------------
Section 1. The Trustees may, but need not, distribute each year to the
Shareholders of each series such income and gains, accrued or realized, as the
Trustees may determine, after providing for actual and accrued expenses and
liabilities (including such reserves as the Trustees may establish) determined
in accordance with good accounting practices. The Trustees shall have full
discretion to determine which items shall be treated as income and which items
as capital and their determination shall be binding upon the Shareholders.
Distributions of each year's income of each series, if any be made, may be made
in one or more payments, which shall be in Shares, in cash or otherwise and on a
date or dates determined by the Trustees. At any time and from time to time in
their discretion, the Trustees may distribute to the Shareholders of any one or
more series as of a record date or dates determined by the Trustees, in shares,
in cash or otherwise, all or part of any gains realized on the sale or
disposition of property of the series or otherwise, or all or part of any other
principal of the Trust attributable to the series. Each distribution pursuant to
this Section 1 shall be made ratably according to the number of Shares of the
series or class held by the several Shareholders on the applicable record date
thereof, provided that no distributions need be made on Shares purchased
pursuant to orders received, or for which payment is made, after such time or
times as the Trustees may determine. Any such distribution paid in Shares will
be paid at the net asset value thereof as determined in accordance with this
Declaration of Trust.
Redemptions and Repurchases
- ---------------------------
Section 2. Any holder of Shares of the Trust may by presentation of a
written request, together with his certificates, if any, for such Shares, in
proper form for transfer, at the office of the Trust, the adviser, the
underwriter or the distributors, or at a principal office of a transfer or
Shareholder services agent appointed by the Trust (as the Trustees may
determine), redeem his Shares for the net asset value thereof determined and
computed in accordance with the provisions of this Section 2 and the provisions
of Section 5 of Article VI of this Declaration of Trust, less any redemption
charge which the Trustees may establish. Upon receipt of such written request
for redemption of Shares by the Trust, the adviser, the underwriter or the
distributor, or the Trust's transfer or Shareholder services agent, such Shares
shall be redeemed at the net asset value per share of the particular series next
determined after such Shares are tendered in proper form for transfer to the
Trust or determined as of such other time fixed by the Trustees, as may be
permitted or required by the 1940 Act, provided that no such tender shall be
required in the case of Shares for which a certificate or certificates have not
been issued, and in such case such Shares shall be redeemed at the net asset
value per share of the particular series next determined after such demand has
been received or determined at such other time fixed by the Trustees, as may be
permitted or required by the 1940 Act.
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<PAGE>
The obligation of the Trust to redeem its Shares of each series as set
forth above in this Section 2 shall be subject to the condition that, during any
time of emergency, as hereinafter defined, such obligation may be suspended by
the Trust by or under authority of the Trustees for such period or periods
during such time of emergency as shall be determined by or under authority of
the Trustees. If there is such a suspension, any Shareholder may withdraw any
demand for redemption and any tender of Shares which has been received by the
Trust during any such period and any tender of Shares the applicable net asset
value of which would but for such suspension be calculated as of a time during
such period. Upon such withdrawal, the trust shall return to the Shareholder the
certificates therefor, if any. For the purposes of any such suspension "time of
emergency" shall mean, either with respect to all Shares or any series of
Shares, any period during which:
(a) the New York Stock Exchange is closed other than for
customary weekend and holiday closings; or
(b) the Trustees or authorized officers of the Trust shall
have determined, in compliance with any applicable rules and
regulations or orders of the Commission, either that trading on the New
York Stock Exchange is restricted, or that an emergency exists as a
result of which (i) disposal by the Trust of securities owned by it is
not reasonably practicable or (ii) it is not reasonably practicable for
the Trust fairly to determine the current value of its net assets; or
(c) the suspension or postponement of such obligations is
permitted by order of the Commission.
The Trust may also purchase, repurchase or redeem Shares in accordance
with such other methods, upon such other terms and subject to such other
conditions as the Trustees may from time to time authorize at a price not
exceeding the net asset value of such Shares in effect when the purchase or
repurchase or any contract to purchase or repurchase is made.
Payment in Kind
- ---------------
Section 3. Subject to any generally applicable limitation imposed by
the Trustees, any payment on redemption, purchase or repurchase by the Trust of
Shares may, if authorized by the Trustees, be made wholly or partly in kind,
instead of in cash. Such payment in kind shall be made by distributing
securities or other property, constituting, in the opinion of the Trustees, a
fair representation of the various types of securities and other property then
held by the series of Shares being redeemed, purchased or repurchased (but not
necessarily involving a portion of each of the series' holdings) and taken at
their value used in determining the net asset value of the Shares in respect of
which payment is made.
Additional Provisions Relating to Redemptions and Repurchases
- -------------------------------------------------------------
Section 4. The completion of redemption, purchase or repurchase of
Shares shall constitute a full discharge of the Trust and the Trustees with
respect to such Shares and the Trustees may require that any certificate or
certificates issued by the Trust to evidence the ownership of such Shares shall
be surrendered to the Trustees for cancellation or notation.
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<PAGE>
Determination of Net Asset Value
- --------------------------------
Section 5. The term "net asset value" of the Shares of each series
shall mean: (i) the value of all the assets of such series; (ii) less total
liabilities of such series; (iii) divided by the number of Shares of such series
outstanding, in each case at the time of each determination. The "number of
Shares of such series outstanding" for the purpose of such computation shall be
exclusive of any Shares of such series to be redeemed, purchased or repurchased
by the Trust and not then redeemed, purchased or repurchased as to which the
price has been determined, but shall include Shares of such series presented for
redemption, purchase or repurchase by the Trust and not then redeemed, purchased
or repurchased as to which the price has not been determined and Shares of such
series the sale of which has been confirmed. Any fractions involved in the
computation of net asset value per share shall be adjusted to the nearer cent
unless the Trustees shall determine to adjust such fractions to a fraction of a
cent.
The Trustees or any officer, officers or agent of the Trust designated
for the purpose by the Trustees shall determine the net asset value of the
Shares of each series, and the Trustees shall fix the times as of which the net
asset value of the Shares of each series shall be determined and shall fix the
periods during which any such net asset value shall be effective as to sales,
redemptions and repurchases of, and other transactions in, the Shares of such
series, except as such times and periods for any such transaction may be fixed
by other provisions of this Declaration of Trust or the By-Laws. In valuing the
portfolio investments of any series for determination of net asset value per
Share of such series, securities for which market quotations are readily
available shall be valued at prices which, in the opinion of the Trustees any
officer, officers or agent of the Trust designated for the purpose by the
Trustees, most nearly represent the market value of such securities, which may,
but need not, be the most recent bid price obtained from one or more of the
market makers for such securities; other securities and assets shall be valued
at fair value as determined by or pursuant to the direction of the Trustees.
Notwithstanding the foregoing, short-term debt obligations, commercial paper,
and repurchase agreements may be, but need not be, valued on the basis of quoted
yields for securities of comparable maturity, quality and type, or on the basis
of amortized cost. In the determination of net asset value of any series,
dividends receivable and accounts receivable for investments sold and for Shares
sold shall be stated at the amounts to be received therefor; and income
receivable accrued daily on bonds and notes owned shall be stated at the amount
to be received. Any other assets shall be stated at fair value as determined by
the Trustees or such officer, officers or agent pursuant to the Trustees'
authority, except that no value shall be assigned to good will, furniture,
lists, reports, statistics or other noncurrent assets other than real estate.
Liabilities of any series for accounts payable, for investments purchased and
for Shares tendered for redemption, purchase or repurchase by the Trust and not
then redeemed, purchased or repurchased as to which the price has been
determined shall be stated at the amounts payable therefor. In determining net
asset value of any series, the person or persons making such determination on
behalf of the Trust may include in liabilities such reserves, estimated accrued
expenses and contingencies as such person or persons may in its, his or their
best judgment deem fair and reasonable under the circumstances. Any income
dividends and gains distributions payable by the Trust shall be deducted as of
such time or times on the record date therefor as the Trustees shall determine.
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The manner of determining the net assets of any series or of
determining the net asset value of the Shares of any series may from time to
time be altered as necessary or desirable in the judgment of the Trustee to
conform to any other method prescribed or permitted by any applicable law or
regulation or generally accepted accounting practice.
Determinations in accordance with Section 5 made in good faith shall be
binding on all parties concerned.
Redemptions at the Option of the Trust
- --------------------------------------
Section 6. The Trust shall have the right at its option and at any time
to redeem Shares at the net asset value thereof (i) if such Shares are not held
in an account of a customer of SEI Corporation or any of its affiliated
companies or in such other account as the Trustee may determine from time to
time; (ii) if at such time such Shareholder owns fewer Shares than, or Shares
having an aggregate net asset value of less than, an amount determined from time
to time by the Trustees; (iii) to the extent that such Shareholder owns Shares
of a particular series of Shares equal to or in excess of a percentage of the
outstanding Shares of that series determined from time to time by the Trustees;
or (iv) to the extent that such Shareholder owns Shares of the Trust
representing a percentage equal to or in excess of such percentage of the
aggregate number of outstanding Shares of the Trust or the aggregate net asset
value of the Trust determined from time to time by the Trustees.
Dividends, Distributions, Redemptions and Repurchases
- -----------------------------------------------------
Section 7. No dividend or distribution (including, without limitation,
any distribution paid upon termination of the Trust or of any series) with
respect to, nor any redemption or repurchase of, the Shares of any series shall
be effected by the Trust other than from the assets of such series.
Maintenance of Constant Net Asset Value - Money Market Series
- -------------------------------------------------------------
Section 8. The Trust will use its best efforts to maintain the net
asset value per Share of each money market series at $1.00. In the event that
the Trust, or any series, incurs a loss or liability, which the Trustees, in
their sole discretion, determine to be significant with respect to the
maintenance by the Trust of a constant net asset value of $l.00 per Share for
each series, the Trustees shall have the power (i) to reduce the number of
Shares of the Trust, or the series, as the case may be, by that number of full
and fractional Shares which represent the amount of such loss or liability, by
reducing the number of Shares in the account of each Shareholder of the Trust or
the series, as the case may be, on a pro rata basis; (ii) to offset the pro rata
share of such loss or liability from the accrued dividend account of each
Shareholder of the Trust or the series, as the case may be, and/or (iii) to
cause to be recorded on the books of the Trust or the series, as the case may
be, an asset account in the amount of any such loss or liability, which account
may be reduced by the amount of dividends declared thereafter upon the Shares of
the Trust or the series, as the case may be, outstanding on the day any such
loss or liability is incurred, until such asset account is reduced to zero.
14
<PAGE>
ARTICLE VII
Compensation and Limitation
---------------------------
of Liability of Trustees
------------------------
Compensation
- ------------
Section 1. The Trustees as such shall be entitled to reasonable
compensation from the Trust; they may fix the amount of their compensation.
Nothing herein shall in any way prevent the employment of any Trustee for
advisory, management, legal, accounting, investment banking or other services
and payment for the same by the Trust.
Limitation of Liability
- -----------------------
Section 2. The Trustees shall not be responsible or liable in any event
for any neglect or wrongdoing of any officer, agent, employee, investment
adviser or manager, principal underwriter or custodian, nor shall any Trustee be
responsible for the act or omission of any other Trustee, but nothing herein
contained shall protect any Trustee against any liability to which he or she
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his or
her office.
Every note, bond, contract, instrument, certificate, Share or
undertaking and every other act or thing whatsoever executed or done by or on
behalf of the Trust or the Trustees or any of them in connection with the Trust
shall be conclusively deemed to have been executed or done only in or with
respect to their or his or her capacity as Trustees or Trustee, and such
Trustees or Trustee shall not be personally liable thereon.
ARTICLE VIII
Indemnification
---------------
Subject to the exceptions and limitations contained in this Article,
every person who is, or has been, a Trustee or officer of the Trust shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid by him in
connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in settlement thereof.
No indemnification shall be provided hereunder to a Trustee or officer:
(a) against any liability to the Trust or its Shareholders by
reason of a final adjudication by the court or other body before which
the proceeding was brought that he engaged in willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved
in the conduct of his office;
(b) with respect to any matter as to which he shall have been
finally adjudicated not to have acted in good faith in the reasonable
belief that his action was in the best interests of the Trust;
15
<PAGE>
(c) in the event of a settlement or other disposition not
involving a final adjudication (as provided in paragraph (a) or (b))
and resulting in a payment by a Trustee or officer, unless there has
been either a determination that such Trustee or officer did not
engage in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office by the
court or other body approving the settlement or other disposition or a
reasonable determination, based on a review of readily available facts
(as opposed to a full trial-type inquiry) that he did not engage in
such conduct:
(i) by a vote of a majority of the Disinterested
Trustees acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter); or
(ii) by written opinion of independent legal counsel.
The rights of indemnification hereinafter provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors and
administrators of such a person. Nothing contained herein shall affect any
rights to indemnification to which Trust personnel other than Trustees and
officers may be entitled by contract or otherwise under law.
Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in the next to the last
paragraph of this Article shall be advanced by the Trust prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Article, provided that either:
(a) such undertaking is secured by a surety bond or some other
appropriate security or the Trust shall be insured against losses
arising out of any such advances; or
(b) a majority of the Disinterested Trustees acting on the
matter (provided that a majority of the Disinterested Trustees then in
office act on the matter) or independent legal counsel in a written
opinion shall determine, based upon a review of the readily available
facts (as opposed to a full trial-type inquiry), that there is reason
to believe that the recipient ultimately will be found entitled to
indemnification.
As used in this Article, a "Disinterested Trustee" is one (i) who is
not an "interested person of the Trust (as defined by the 1940 Act) (including
anyone who has been exempted from being an "interested person:" by any rule,
regulation or order of the Securities and Exchange Commission), and (ii) against
whom none of such actions, suits or other proceedings or another action, suit or
other proceeding on the same or similar grounds is then or has been pending.
As used in this Article, the words "claim," "action," "suit" or
"proceeding" shall apply to all claims, actions, suits or proceedings (civil,
criminal or other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include without limitation, attorney's fees,
costs, judgments, amounts paid in settlement, fines, penalties and other
liabilities.
16
<PAGE>
In case any Shareholder or former Shareholder shall be held to be
personally liable solely by reason of his or her being or having been a
shareholder and not because of his or her acts or omissions or for some other
reason, the shareholder or former Shareholder (or his or her heirs, executors,
administrators or other legal representatives or in the case of a corporation or
other entity, its corporate or other general successor) shall be entitled to be
held harmless from and indemnified against all loss and expenses arising from
such liability, but only out of the assets of the particular series of Shares of
which he or she is or was a Shareholder.
ARTICLE IX
Miscellaneous
-------------
Trustees, Shareholders, Etc. Not Personally Liable; Notice
- ----------------------------------------------------------
Section 1. All persons extending credit to, contracting with or having
any claim against the Trust or a particular series of Shares shall look only to
the assets of the Trust or the assets of that particular series of Shares for
payment under such credit, contract or claim; and neither the Shareholders nor
the Trustees, nor any of the Trust's officers, employees or agents, whether
past, present or future, shall be personally liable therefor. Nothing in this
Declaration of Trust shall protect any Trustee against any liability to which
such Trustee would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee.
Every note, bond, contract, instrument, certificate or undertaking made
or issued by the Trustees or by any officers or officer shall give notice that
this Declaration of Trust is on file with the Secretary of the Commonwealth of
Massachusetts and shall recite that the same was executed or made by or on
behalf of the Trust or by them as Trustees or Trustee or as officers or officer
and not individually and that the obligations of such instrument are not binding
upon any of them or the Shareholders individually but are binding only upon the
assets and property of the Trust, and may contain such further recital as he or
she or they may deem appropriate, but the omission thereof shall not operate to
bind any Trustees or Trustee or officers or officer or Shareholders or
Shareholder individually.
Trustees' Good Faith Action, Expert Advice; No Bond or Surety
- -------------------------------------------------------------
Section 2. The exercise by the Trustees of their powers and discretions
hereunder shall be binding upon everyone interested. A Trustee shall be liable
for his or her own willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee, and
for nothing else, and shall not be liable for errors of judgment or mistakes of
fact or law. The Trustees may take advice of counsel or other experts with
respect to the meaning and operation of this Declaration of Trust, and shall be
under no liability for any act or omission in accordance with such advice or for
failing to follow such advice. The Trustees shall not be required to give any
bond as such, nor any surety if a bond is required.
Liability of Third Persons Dealing with Trustees
- ------------------------------------------------
Section 3. No person dealing with the Trustees shall be bound to make
any inquiry concerning the validity of any transaction made or to be made by the
Trustees or to see to the application of any payments made or property
transferred to the Trust or upon its order.
17
<PAGE>
Duration and Termination of Trust
- ---------------------------------
Section 4. Unless terminated as provided herein, the Trust shall
continue without limitation of time. The Trust may be terminated at any time by
vote of Shareholders holding at least a majority of the Shares entitled to vote
or by the Trustees by written notice to the Shareholders. Any series of Shares
may be terminated at any time by vote of Shareholders holding at least a
majority of the Shares of such series entitled to vote or by the Trustees by
written notice to the Shareholders of such series.
Upon termination of the Trust or of any one or more series of Shares,
after paying or otherwise providing for all charges, taxes, expenses and
liabilities, whether due or accrued or anticipated, of the Trust or of the
particular series as may be determined by the Trustees, the Trust shall, in
accordance with such procedures as the Trustees consider appropriate, reduce the
remaining assets to distributable form in cash or Shares or other securities, or
any combination thereof, and distribute the proceeds to the Shareholders of the
series involved, ratably according to the number of Shares of such series held
by the several Shareholders of such series on the date of termination.
Section 5. The original or a copy of this instrument and of each
amendment hereto shall be kept at the office of the Trust where it may be
inspected by any Shareholder. A copy of this instrument and of each amendment
hereto shall be filed by the Trust with the Secretary of the Commonwealth of
Massachusetts and with the Boston City Clerk, as well as any other governmental
office where such filing may from time to time be required. Anyone dealing with
the Trust may rely on certificate by an officer of the Trust as to whether or
not any such amendments have been made and as to any matters in connection with
the Trust hereunder; and, with the same effect as if it were the original, may
rely on a copy certified by an officer of the Trust to be a copy of this
instrument or of any such amendments. In this instrument and in such amendment,
references to this instrument, and the expression "herein," "hereof," and
"hereunder," shall be deemed to refer to this instrument as amended from time to
time. Headings are placed herein for convenience of reference only and shall not
be taken as part hereof or control or affect the meaning, construction or effect
of this instrument. This instrument may be executed in any number of
counterparts each of which shall be deemed an original.
Applicable Law
- --------------
Section 6. The Trust shall be of the type commonly called a
Massachusetts business trust, and without limiting the provisions hereof, the
Trust may exercise all powers which are ordinarily exercised by such a trust.
This Declaration of Trust is to be governed by and construed and administered
according to the laws of said Commonwealth.
18
<PAGE>
Amendments
- ----------
Section 7. This Declaration of Trust may be amended at any time by an
instrument in writing signed by a majority of the then Trustees when authorized
to do so by a vote of Shareholders holding a majority of the Shares entitled to
vote, except that an amendment which shall affect the holders of one or more
series or classes of Shares but not the holders of all outstanding series or
classes shall be authorized by vote of the Shareholders holding a majority of
the Shares entitled to vote of each series or classes affected and no vote of
Shareholders of a series or classes not affected shall be required. Amendments
having the purpose of changing the name of the Trust or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained herein shall not require
authorization by Shareholder vote.
IN WITNESS WHEREOF, the undersigned being the sole initial Trustee of
the Trust has executed this document this 18th day of January, 1990.
/s/Robert A. Nesher
Robert A. Nesher
c/o SEI Financial Services Company
680 East Swedesford Road
Wayne, PA 19087
19
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
COUNTY OF PHILADELPHIA
I, the undersigned authority, hereby certify that the foregoing is a
true and correct copy of the instrument presented to me by Robert A. Nesher as
the original of such instrument.
WITNESS my hand and official seal, this 18th day of January, 1990.
/s/James E. Howard Esq.
Notary Public
My commission expires: May 6, 1991
Resident Agent:
James E. Howard, Esquire
Kirkpatrick & Lockhart
Exchange Place, 53 State Street
Boston, MA 02109
(617) 277-6000
20
NATIONS INSTITUTIONAL RESERVES
(A Massachusetts Business Trust)
CERTIFICATE: CLASSIFICATION OF SHARES
The undersigned, Secretary of Nations Institutional Reserves
("Reserves"), hereby certifies that the Board of Trustees of Reserves duly
adopted the following votes at a meeting held on February 4, 1998:
WHEREAS, certain information has been provided to the Board of
Trustees concerning the approach to marketing and distributing the Funds of
Reserves and various methods generally available to investment companies to
market and distribute their shares to investors;
WHEREAS, the Trustees of Reserves approved a multi-class plan
pursuant to Rule 18f-3 under the 1940 Act on April 12, 1995, as amended (the
"Multi-Class Plan"), which describes the terms of Reserves multiple class share
distribution system; and
WHEREAS, it has been recommended that Reserves establish one new
investment portfolio, Nations Money Market Reserves, which is to have the
following characteristics:
(i) Adviser Class Shares of Nations Money Market Reserves: to be
offered to customers of certain financial institutions and
broker-dealers that have entered into a Shareholder
Servicing Agreement with Servicing Agents and a Shareholder
Servicing Plan with Reserves pursuant to a Shareholder
Servicing and Rule 12b-1 Plan authorizing payment of a
combined distribution and shareholder servicing fee not to
exceed 0.25% (on an annual basis) of the average daily net
assets attributable to Adviser Shares of Nations Money
Market Reserves; and to be subject to certain retail
transfer agency fees;
(ii) Liquidity Class Shares of Nations Money Market Reserves: to
be offered to customers of certain financial institutions
and broker-dealers that have entered into a Shareholder
Servicing Agreement with Servicing Agents and a Shareholder
Servicing Plan with Reserves, pursuant to a Shareholder
Servicing and Rule 12b-1 Plan, authorizing the payment of a
distribution fee not to exceed 0.30% (on an annual basis) of
the average daily net assets attributable to Liquidity Class
Shares of Nations Money Market Reserves and, (B) a
Shareholder Servicing Plan with Reserves authorizing payment
of a shareholder servicing fee not to exceed 0.25% (on an
annual basis) of the average daily net assets attributable
to Liquidity Class Shares of Nations Money Market Reserves;
and to be subject to certain retail transfer agency fees;
1
<PAGE>
(iii) Market Class Shares of Nations Money Market Reserves: to be
offered to customers of certain financial institutions and
broker-dealers that have entered into a Shareholder
Servicing Agreement with Servicing Agents and a Shareholder
Servicing Plan with Reserves, pursuant to a Rule 12b-1 Plan,
authorizing the payment of a distribution fee not to exceed
0.20% (on an annual basis) of the average daily net assets
attributable to Market Class Shares of Nations Money Market
Reserves, and (B) a Shareholder Servicing Plan with Reserves
authorizing payment of a shareholder servicing fee not to
exceed 0.25% (on an annual basis) of the average daily net
assets attributable to Market Class Shares of Nations Money
Market Reserves; and to be subject to certain retail
transfer agency fees;
(iv) Capital Class Shares of Nations Money Market Reserves: to be
offered to customers of certain banks and other financial
institutions; and
NOW THEREFORE BE IT:
VOTED, that pursuant to Article III, Section 1 and Article IV,
Section 3 of Reserves' Agreement and Declaration of Trust, an unlimited number
of authorized, unissued shares be, and they hereby are, allocated to Nations
Money Market Reserves and divided into and classified as a separate class or
classes of Nations Money Market Reserves as follows:
(i) Nations Money Market Reserves - Adviser Shares;
(ii) Nations Money Market Reserves - Capital Shares;
(iii) Nations Money Market Reserves - Liquidity Shares;
(iv) Nations Money Market Reserves - Market Shares;
FURTHER VOTED, that the Board of Trustees of Reserves, including a
majority of the Trustees who are not interested persons of Reserves, hereby find
that an amendment to the Multi-Class Plan for Reserves, as presented at this
meeting, including the method contained therein for allocating expenses among
the classes in a single Fund, is in the best interests of each class of shares
of Reserves individually and Reserves as a whole;
FURTHER VOTED, that the amendment to the Multi-Class Plan for
Reserves, as presented to this meeting, be, and it hereby is, ratified and
approved by the Board of Trustees, including a majority of the Trustees who are
not interested persons of Reserves; and
FURTHER VOTED, that consideration received by Reserves for the
issue or sale of any class of Nations Money Market Reserves' shares
(individually, a "Class" and collectively the "Classes") shall be invested and
reinvested with the consideration received by Reserves for the issue and sale of
all of such Nations Money Market Reserves' other classes, together with all
income, earnings, profits and proceeds thereof, including the proceeds derived
from the sale, exchange or liquidation thereof, any funds or payments derived
from any reinvestment of such proceeds in whatever form the same may be, and any
general assets of Reserves allocated to such Nations Money Market Reserves by
the Board of Trustees in accordance with Reserves' Agreement and Declaration of
Trust, and each share of any class of such Nations Money Market Reserves
(individually, a "Share" and collectively, the "Shares") shall share equally
with each Share of all the classes of such Nations Money Market Reserves in such
consideration and other assets, income, earnings, profits and proceeds thereof.
; and
2
<PAGE>
FURTHER VOTED, that the Officers of Reserves be, and each hereby
is, authorized and directed to take all such actions as and when the officers
taking such action, in consultation with Reserves' counsel, deem necessary or
appropriate to effect establishment of the New Fund, including, but not limited
to, executing, sealing, delivering and filing a Certificate and/or Amendment to
the Reserves' Agreement and Declaration of Trust, and any and all other
documents, instruments, papers and writings as he or she may deem necessary or
appropriate to perform and carry out the preceding votes, such determination to
be conclusively evidenced by such acts.
The foregoing votes remain in full force and effect as of the date
hereof.
/s/ Richard H. Blank, Jr.
Dated: February 4, 1998 _________________________
Richard H. Blank, Jr.
Secretary
Subscribed and sworn to before
me this 4TH day of FEBRUARY, 1998
/s/ Lynn Broadaway
___________________________________
Lynn Broadaway
Name:______________________________
Notary Public
9/14/2006
Commission Expires:________________
3
NATIONS INSTITUTIONAL RESERVES
(A Massachusetts Business Trust)
CERTIFICATE: CLASSIFICATION OF SHARES
The undersigned, Secretary of Nations Institutional Reserves
("Reserves"), hereby certifies that the Board of Trustees of Reserves duly
adopted the following votes at a meeting held on December 2, 1998:
WHEREAS, the Trustees of Reserves approved a multi-class plan
pursuant to Rule 18f-3 under the 1940 Act on April 12, 1995, as amended (the
"Multi-Class Plan"), which describes the terms of Reserves multiple class share
distribution system;
WHEREAS, it has been recommended that Reserves establish six new
investment portfolios, Nations California Tax-Exempt Reserve, Nations Asset
Allocation Fund, Nations Capital Income Fund, Nations California Municipal Bond
Fund, Nations Intermediate Bond Fund and Nations Blue Chip Fund which are to
have the following characteristics; and
WHEREAS, it has been recommended that Reserves establish four new
classes of shares, Trust Class Shares, Investor Class Shares, Daily Class Shares
and Service Class Shares which are to have the following characteristics:
(i) Adviser Class Shares of Nations California Tax-Exempt
Reserves: to be offered to customers of certain financial
institutions and broker-dealers that have entered into a
Shareholder Servicing Agreement and a Shareholder Servicing
Plan with Reserves authorizing payment of a shareholder
servicing fee not to exceed 0.25% (on an annual basis) of
the average daily net assets attributable to Adviser Shares
of Nations California Tax-Exempt Reserves; and to be subject
to certain retail transfer agency fees;
(ii) Liquidity Class Shares of Nations California Tax-Exempt
Reserves: to be offered to customers of certain financial
institutions and broker-dealers that have entered into: a
Sales Support Agreement under the Distribution Plan with
Reserves, pursuant to a Rule 12b-1 Plan, authorizing the
payment of a distribution fee not to exceed 0.30% (on an
annual basis) of the average daily net assets attributable
to Liquidity Class Shares of Nations California Tax-Exempt
Reserves and; a Shareholder Servicing Agreement under the
Shareholder Servicing Plan with Reserves authorizing payment
of a shareholder servicing fee not to exceed 0.25% (on an
annual basis) of the average daily net assets attributable
to Liquidity Class Shares of Nations California Tax-Exempt
Reserves; and to be subject to certain retail transfer
agency fees;
1
<PAGE>
(iii) Market Class Shares of Nations California Tax-Exempt
Reserves: to be offered to customers of certain financial
institutions and broker-dealers that have entered into: a
Sales Support Agreement under the Distribution Plan with
Reserves, pursuant to a Rule 12b-1 Plan, authorizing the
payment of a distribution fee not to exceed 0.20% (on an
annual basis) of the average daily net assets attributable
to Market Class Shares of Nations California Tax-Exempt
Reserves and; a Shareholder Servicing Agreement under the
Shareholder Servicing Plan with Reserves authorizing payment
of a shareholder servicing fee not to exceed 0.25% (on an
annual basis) of the average daily net assets attributable
to Market Class Shares of Nations California Tax-Exempt
Reserves; and to be subject to certain retail transfer
agency fees;
(iv) Capital Class Shares of Nations California Tax-Exempt
Reserves: to be offered to customers of certain banks and
other financial institutions;
(v) Trust Class Shares of Nations California Tax-Exempt
Reserves, Nations Cash Reserves, Nations Money Market
Reserves, Nations Government Reserves, Nations Treasury
Reserves and Nations Municipal Reserves: to be offered to
certain banks and other financial institutions, for the
investment of funds for which they act in a fiduciary,
agency or custodial capacity, that have entered into: a
Shareholder Servicing Agreement under the Shareholder
Servicing Plan with Reserves authorizing payment of a
shareholder servicing fee not to exceed 0.10% (on an annual
basis) of the average daily net assets attributable to Trust
Class Shares of Nations California Tax-Exempt Reserves,
Nations Cash Reserves, Nations Money Market Reserves,
Nations Government Reserves, Nations Treasury Reserves and
Nations Municipal Reserves; and to be subject to certain
retail transfer agency fees;
(vi) Investor Class Shares of Nations California Tax-Exempt
Reserves, Nations Cash Reserves, Nations Money Market
Reserves, Nations Government Reserves, Nations Treasury
Reserves and Nations Municipal Reserves: to be offered to
retail customers of certain financial institutions and
broker-dealers that have entered into: a Sales Support
Agreement under the Distribution Plan with Reserves,
pursuant to a Rule 12b-1 Plan, authorizing the payment of a
distribution fee not to exceed 0.10% (on an annual basis) of
the average daily net assets attributable to Investor Class
Shares of Nations California Tax-Exempt Reserves, Nations
Cash Reserves, Nations Money Market Reserves, Nations
Government Reserves, Nations Treasury Reserves and Nations
Municipal Reserves and; a Shareholder Servicing Agreement
under the Shareholder Servicing Plan with Reserves
authorizing payment of a shareholder servicing fee not to
exceed 0.25% (on an annual basis) of the average daily net
assets attributable to Investor Class Shares of Nations
California Tax-Exempt Reserves, Nations Cash Reserves,
Nations Money Market Reserves, Nations Government Reserves,
Nations Treasury Reserves and Nations Municipal Reserves;
and to be subject to certain retail transfer agency fees;
2
<PAGE>
(vii) Daily Class Shares of Nations California Tax-Exempt
Reserves, Nations Cash Reserves, Nations Money Market
Reserves, Nations Government Reserves, Nations Treasury
Reserves and Nations Municipal Reserves: to be offered to
retail sweep customers of certain banks and other financial
institutions and broker-dealers that have entered into: a
Sales Support Agreement under the Distribution Plan with
Reserves, pursuant to a Rule 12b-1 Plan, authorizing the
payment of a distribution fee not to exceed 0.35% (on an
annual basis) of the average daily net assets attributable
to Daily Class Shares of Nations California Tax-Exempt
Reserves, Nations Cash Reserves, Nations Money Market
Reserves, Nations Government Reserves, Nations Treasury
Reserves and Nations Municipal Reserves and; a Shareholder
Servicing Agreement under the Shareholder Servicing Plan
with Reserves authorizing payment of a shareholder servicing
fee not to exceed 0.25% (on an annual basis) of the average
daily net assets attributable to Daily Class Shares of
Nations California Tax-Exempt Reserves, Nations Cash
Reserves, Nations Money Market Reserves, Nations Government
Reserves, Nations Treasury Reserves and Nations Municipal
Reserves; and to be subject to certain retail transfer
agency fees;
(viii)Service Class Shares of Nations California Tax-Exempt
Reserves, Nations Cash Reserves, Nations Government
Reserves, Nations Treasury Reserves and Nations Municipal
Reserves: to be offered to retail and institutional
customers of certain banks and other financial institutions
and broker-dealers that have entered into: a Sales Support
Agreement and Shareholder Servicing Agreement under the
Shareholder Servicing and Distribution Plan with Reserves,
pursuant to a Rule 12b-1 Plan, authorizing the payment of a
distribution fee not to exceed 0.25% (on an annual basis) of
the average daily net assets attributable to Service Class
Shares of Nations California Tax-Exempt Reserves, Nations
Cash Reserves, Nations Government Reserves, Nations Treasury
Reserves and Nations Municipal Reserves; and to be subject
to certain retail transfer agency fees;
(ix) Investor A Shares of Nations Asset Allocation Fund, Nations
Capital Income Fund, Nations California Municipal Bond Fund,
Nations Intermediate Bond Fund and Nations Blue Chip Fund:
to be offered to retail and institutional customers of
certain banks and other financial institutions and
broker-dealers that have entered into: a Sales Support
Agreement under the Distribution Plan with Reserves,
pursuant to a Rule 12b-1 Plan, authorizing the payment of a
distribution fee not to exceed 0.75% (on an annual basis) of
the average daily net assets attributable to Investor A
Shares of Nations Asset Allocation Fund, Nations Capital
Income Fund, Nations California Municipal Bond Fund, Nations
Intermediate Bond Fund and Nations Blue Chip Fund and; a
Shareholder Servicing Plan with Reserves authorizing payment
of a shareholder servicing fee not to exceed 0.25% (on an
annual basis) of the average daily net assets attributable
to Investor A Shares of Nations Asset Allocation Fund,
Nations Capital Income Fund, Nations California Municipal
Bond Fund, Nations Intermediate Bond Fund and Nations Blue
Chip Fund; and to be subject to certain retail transfer
agency fees;
3
<PAGE>
(x) Investor B Shares of Nations Asset Allocation Fund, Nations
Capital Income Fund, Nations California Municipal Bond Fund,
Nations Intermediate Bond Fund and Nations Blue Chip Fund:
to be offered to retail and institutional customers of
certain banks and other financial institutions and
broker-dealers that have entered into: a Sales Support
Agreement under the Distribution Plan with Reserves,
pursuant to a Rule 12b-1 Plan, authorizing the payment of a
distribution fee not to exceed 0.75% (on an annual basis) of
the average daily net assets attributable to Investor B
Shares of Nations Asset Allocation Fund, Nations Capital
Income Fund, Nations California Municipal Bond Fund, Nations
Intermediate Bond Fund and Nations Blue Chip Fund and; a
Shareholder Servicing Plan with Reserves authorizing payment
of a shareholder servicing fee not to exceed 0.25% (on an
annual basis) of the average daily net assets attributable
to Investor B Shares of Nations Asset Allocation Fund,
Nations Capital Income Fund, Nations California Municipal
Bond Fund, Nations Intermediate Bond Fund and Nations Blue
Chip Fund; and to be subject to certain retail transfer
agency fees;
(xi) Investor C Shares of Nations Asset Allocation Fund, Nations
Capital Income Fund, Nations California Municipal Bond Fund,
Nations Intermediate Bond Fund and Nations Blue Chip Fund:
to be offered to retail and institutional customers of
certain banks and other financial institutions and
broker-dealers that have entered into: a Sales Support
Agreement under the Distribution Plan with Reserves,
pursuant to a Rule 12b-1 Plan, authorizing the payment of a
distribution fee not to exceed 0.75% (on an annual basis) of
the average daily net assets attributable to Investor C
Shares of Nations Asset Allocation Fund, Nations Capital
Income Fund, Nations California Municipal Bond Fund, Nations
Intermediate Bond Fund and Nations Blue Chip Fund and; a
Shareholder Servicing Plan with Reserves authorizing payment
of a shareholder servicing fee not to exceed 0.25% (on an
annual basis) of the average daily net assets attributable
to Investor C Shares of Nations Asset Allocation Fund,
Nations Capital Income Fund, Nations California Municipal
Bond Fund, Nations Intermediate Bond Fund and Nations Blue
Chip Fund; and to be subject to certain retail transfer
agency fees;
(xii) Primary A Shares of Nations Asset Allocation Fund, Nations
Capital Income Fund, Nations California Municipal Bond Fund,
Nations Intermediate Bond Fund and Nations Blue Chip Fund:
to be offered to retail and institutional customers of
certain banks and other financial institutions;
(xiii)Primary B Shares of Nations Asset Allocation Fund and
Nations Blue Chip Fund: to be offered to retail and
institutional customers of certain banks and other financial
institutions and broker-dealers that have entered into: a
Shareholder Administration Agreement under the Shareholder
Administration Plan with Reserves, pursuant to a Rule 12b-1
Plan, authorizing the payment of a distribution fee not to
exceed 0.60% (on an annual basis) of the average daily net
assets attributable to Primary B Shares of Nations Asset
Allocation Fund, Nations Capital Income Fund, Nations
California Municipal Bond Fund, Nations Intermediate Bond
Fund and Nations Blue Chip Fund and; to be subject to
certain retail transfer agency fees; and
4
<PAGE>
(xiv) Seafirst Class Shares of Nations Asset Allocation Fund,
Nations Intermediate Bond Fund and Nations Blue Chip Fund:
to be offered to retail and institutional customers of
certain banks and other financial institutions;
NOW THEREFORE BE IT:
VOTED, that pursuant to Article III, Section 1 and Article IV,
Section 3 of Reserves' Agreement and Declaration of Trust, an unlimited number
of authorized, unissued shares be, and they hereby are, allocated to Nations
California Tax-Exempt Reserves, Nations Cash Reserves, Nations Money Market
Reserves, Nations Government Reserves, Nations Treasury Reserves and Nations
Municipal Reserves, Nations Asset Allocation Fund, Nations Capital Income Fund,
Nations California Municipal Bond Fund, Nations Intermediate Bond Fund and
Nations Blue Chip Fund and divided into and classified as a separate class or
classes of Nations California Tax-Exempt Reserves, Nations Cash Reserves,
Nations Money Market Reserves, Nations Government Reserves, Nations Treasury
Reserves and Nations Municipal Reserves, Nations Asset Allocation Fund, Nations
Capital Income Fund, Nations California Municipal Bond Fund, Nations
Intermediate Bond Fund and Nations Blue Chip Fund as follows:
(i) Nations California Tax-Exempt Reserves - Adviser Shares,
Liquidity Shares, Capital Shares, Market Shares, Trust
Shares, Investor Shares, Daily Shares and Service Shares;
(ii) Nations Cash Reserves - Trust Shares, Investor Shares, Daily
Shares and Service Shares;
(iii) Nations Money Market Reserves - Trust Shares, Investor
Shares, Daily Shares and Service Shares;
(iv) Nations Government Reserves - Trust Shares, Investor Shares,
Daily Shares and Service Shares;
(v) Nations Treasury Reserves - Trust Shares, Investor Shares,
Daily Shares and Service Shares;
(vi) Nations Municipal Reserves - Trust Shares, Investor Shares,
Daily Shares and Service Shares;
(vii) Nations Asset Allocation Fund - Investor A Shares, Investor
B Shares, Investor C Shares, Primary A Shares, Primary B
Shares and Seafirst Shares;
(viii)Nations Capital Income Fund - Investor A Shares, Investor B
Shares, Investor C Shares and Primary A Shares;
5
<PAGE>
(ix) Nations California Municipal Bond Fund - Investor A Shares,
Investor B Shares, Investor C Shares and Primary A Shares;
(x) Nations Intermediate Bond Fund - Investor A Shares, Investor
B Shares, Investor C Shares, Primary A Shares and Seafirst
Shares;
(xi) Nations Blue Chip Fund - Investor A Shares, Investor B
Shares, Investor C Shares, Primary A Shares and Primary B
Shares;
FURTHER VOTED, that the Board of Trustees of Reserves, including a
majority of the Trustees who are not interested persons of Reserves, hereby find
that an amendment to the Multi-Class Plan for Reserves, as presented at this
meeting, including the method contained therein for allocating expenses among
the classes in a single Fund, is in the best interests of each class of shares
of Reserves individually and Reserves as a whole;
FURTHER VOTED, that the amendment to the Multi-Class Plan for
Reserves, as presented to this meeting, be, and it hereby is, ratified and
approved by the Board of Trustees, including a majority of the Trustees who are
not interested persons of Reserves; and
FURTHER VOTED, that consideration received by Reserves for the
issue or sale of any class of each of Nations California Tax-Exempt Reserves,
Nations Cash Reserves, Nations Money Market Reserves, Nations Government
Reserves, Nations Treasury Reserves and Nations Municipal Reserves, Nations
Asset Allocation Fund, Nations Capital Income Fund, Nations California Municipal
Bond Fund, Nations Intermediate Bond Fund and Nations Blue Chip Fund shares
(individually, a "Class" and collectively the "Classes") shall be invested and
reinvested with the consideration received by Reserves for the issue and sale of
all of the other classes of each of Nations California Tax-Exempt Reserves,
Nations Cash Reserves, Nations Money Market Reserves, Nations Government
Reserves, Nations Treasury Reserves and Nations Municipal Reserves, Nations
Asset Allocation Fund, Nations Capital Income Fund, Nations California Municipal
Bond Fund, Nations Intermediate Bond Fund and Nations Blue Chip Fund, together
with all income, earnings, profits and proceeds thereof, including the proceeds
derived from the sale, exchange or liquidation thereof, any funds or payments
derived from any reinvestment of such proceeds in whatever form the same may be,
and any general assets of Reserves allocated to such Nations California
Tax-Exempt Reserves, Nations Cash Reserves, Nations Money Market Reserves,
Nations Government Reserves, Nations Treasury Reserves and Nations Municipal
Reserves, Nations Asset Allocation Fund, Nations Capital Income Fund, Nations
California Municipal Bond Fund, Nations Intermediate Bond Fund and Nations Blue
Chip Fund by the Board of Trustees in accordance with Reserves' Agreement and
Declaration of Trust, and each share of any class of such Nations California
Tax-Exempt Reserves, Nations Cash Reserves, Nations Money Market Reserves,
Nations Government Reserves, Nations Treasury Reserves and Nations Municipal
Reserves, Nations Asset Allocation Fund, Nations Capital Income Fund, Nations
California Municipal Bond Fund, Nations Intermediate Bond Fund and Nations Blue
Chip Fund (individually, a "Share" and collectively, the "Shares") shall share
equally with each Share of all the classes of such Nations California Tax-Exempt
Reserves, Nations Cash Reserves, Nations Money Market Reserves, Nations
Government Reserves, Nations Treasury Reserves and Nations Municipal Reserves,
Nations Asset Allocation Fund, Nations Capital Income Fund, Nations California
Municipal Bond Fund, Nations Intermediate Bond Fund and Nations Blue Chip Fund,
respectively, in such consideration and other assets, income, earnings, profits
and proceeds thereof; and
6
<PAGE>
FURTHER VOTED, that the Officers of Reserves be, and each hereby
is, authorized and directed to take all such actions as and when the officers
taking such action, in consultation with Reserves' counsel, deem necessary or
appropriate to effect establishment of the new series, including, but not
limited to, executing, sealing, delivering and filing the Certificate of
Classification of Shares, and any and all other documents, instruments, papers
and writings as he or she may deem necessary or appropriate to perform and carry
out the preceding votes, such determination to be conclusively evidenced by such
acts.
The foregoing votes remain in full force and effect as of the date
hereof.
/s/ Richard H. Blank, Jr.
Dated: December 2, 1998 _________________________
Richard H. Blank, Jr.
Secretary
Subscribed and sworn to before
me this 2ND day of DECEMBER, 1998
___________________________________
Name:______________________________
Notary Public
Commission Expires:________________
7
NATIONS INSTITUTIONAL RESERVES
(A Massachusetts Business Trust)
CERTIFICATE: CLASSIFICATION OF SHARES
The undersigned, Secretary of Nations Institutional Reserves
("Reserves"), hereby certifies that the Board of Trustees of Reserves duly
adopted the following votes at a meeting held on March 31, 1999:
WHEREAS, the Trustees of Reserves approved a multi-class plan
pursuant to Rule 18f-3 under the 1940 Act on April 12, 1995, as amended (the
"Multi-Class Plan"), which describes the terms of Reserves multiple class share
distribution system;
WHEREAS, it has been recommended that Reserves establish ten new
investment portfolios, Nations Marsico Focused Equities Fund, Nations Marsico
Growth & Income Fund, Nations International Equity Fund, Nations International
Growth Fund, Nations Equity Income Fund, Nations International Value Fund,
Nations U.S. Government Bond Fund, Nations Small Company Fund, Nations
Government Securities Fund and Nations Emerging Markets Fund which are to have
the following characteristics; and
WHEREAS, it has been recommended that Reserves establish one new
class of shares, Marsico Shares which are to have the following characteristics:
(i) Investor A Shares of Nations Marsico Focused Equities Fund,
Nations Marsico Growth & Income Fund, Nations International
Equity Fund, Nations International Growth Fund, Nations
Equity Income Fund, Nations International Value Fund,
Nations U.S. Government Bond Fund, Nations Small Company
Fund, Nations Government Securities Fund and Nations
Emerging Markets Fund: to be offered to retail and
institutional customers of certain banks and other financial
institutions and broker-dealers that have entered into: a
Sales Support Agreement under the Distribution Plan with
Reserves, pursuant to a Rule 12b-1 Plan, authorizing the
payment of a distribution fee not to exceed 0.75% (on an
annual basis) of the average daily net assets attributable
to Investor A Shares of Nations Asset Allocation Fund,
Nations Capital Income Fund, Nations California Municipal
Bond Fund, Nations Intermediate Bond Fund and Nations Blue
Chip Fund and; a Shareholder Servicing Plan with Reserves
authorizing payment of a shareholder servicing fee not to
exceed 0.25% (on an annual basis) of the average daily net
assets attributable to Investor A Shares of Nations Asset
Allocation Fund, Nations Capital Income Fund, Nations
California Municipal Bond Fund, Nations Intermediate Bond
Fund and Nations Blue Chip Fund; and to be subject to
certain retail transfer agency fees;
1
<PAGE>
(ii) Investor B Shares of Nations Marsico Focused Equities Fund,
Nations Marsico Growth & Income Fund, Nations International
Equity Fund, Nations International Growth Fund, Nations
Equity Income Fund, Nations International Value Fund,
Nations U.S. Government Bond Fund, Nations Small Company
Fund, Nations Government Securities Fund and Nations
Emerging Markets Fund: to be offered to retail and
institutional customers of certain banks and other financial
institutions and broker-dealers that have entered into: a
Sales Support Agreement under the Distribution Plan with
Reserves, pursuant to a Rule 12b-1 Plan, authorizing the
payment of a distribution fee not to exceed 0.75% (on an
annual basis) of the average daily net assets attributable
to Investor B Shares of Nations Asset Allocation Fund,
Nations Capital Income Fund, Nations California Municipal
Bond Fund, Nations Intermediate Bond Fund and Nations Blue
Chip Fund and; a Shareholder Servicing Plan with Reserves
authorizing payment of a shareholder servicing fee not to
exceed 0.25% (on an annual basis) of the average daily net
assets attributable to Investor B Shares of Nations Asset
Allocation Fund, Nations Capital Income Fund, Nations
California Municipal Bond Fund, Nations Intermediate Bond
Fund and Nations Blue Chip Fund; and to be subject to
certain retail transfer agency fees;
(iii) Investor C Shares of Nations Marsico Focused Equities Fund,
Nations Marsico Growth & Income Fund, Nations International
Equity Fund, Nations International Growth Fund, Nations
Equity Income Fund, Nations International Value Fund,
Nations U.S. Government Bond Fund, Nations Small Company
Fund, Nations Government Securities Fund and Nations
Emerging Markets Fund: to be offered to retail and
institutional customers of certain banks and other financial
institutions and broker-dealers that have entered into: a
Sales Support Agreement under the Distribution Plan with
Reserves, pursuant to a Rule 12b-1 Plan, authorizing the
payment of a distribution fee not to exceed 0.75% (on an
annual basis) of the average daily net assets attributable
to Investor C Shares of Nations Asset Allocation Fund,
Nations Capital Income Fund, Nations California Municipal
Bond Fund, Nations Intermediate Bond Fund and Nations Blue
Chip Fund and; a Shareholder Servicing Plan with Reserves
authorizing payment of a shareholder servicing fee not to
exceed 0.25% (on an annual basis) of the average daily net
assets attributable to Investor C Shares of Nations Asset
Allocation Fund, Nations Capital Income Fund, Nations
California Municipal Bond Fund, Nations Intermediate Bond
Fund and Nations Blue Chip Fund; and to be subject to
certain retail transfer agency fees;
(iv) Primary A Shares of Nations Marsico Focused Equities Fund,
Nations Marsico Growth & Income Fund, Nations International
Equity Fund, Nations International Growth Fund, Nations
Equity Income Fund, Nations International Value Fund,
Nations U.S. Government Bond Fund, Nations Small Company
Fund, Nations Government Securities Fund and Nations
Emerging Markets Fund: to be offered to retail and
institutional customers of certain banks and other financial
institutions;
2
<PAGE>
(v) Primary B Shares of Nations Marsico Focused Equities Fund,
Nations Marsico Growth & Income Fund, Nations International
Equity Fund, Nations International Growth Fund, Nations
Equity Income Fund, Nations International Value Fund,
Nations U.S. Government Bond Fund, Nations Small Company
Fund, Nations Government Securities Fund and Nations
Emerging Markets Fund: to be offered to retail and
institutional customers of certain banks and other financial
institutions and broker-dealers that have entered into: a
Shareholder Administration Agreement under the Shareholder
Administration Plan with Reserves, pursuant to a Rule 12b-1
Plan, authorizing the payment of a distribution fee not to
exceed 0.60% (on an annual basis) of the average daily net
assets attributable to Primary B Shares of Nations Asset
Allocation Fund, Nations Capital Income Fund, Nations
California Municipal Bond Fund, Nations Intermediate Bond
Fund and Nations Blue Chip Fund and; to be subject to
certain retail transfer agency fees; and
(vi) Marsico Shares of Nations Cash Reserves: to be offered to
investors and prospective investors of the portfolios of The
Marsico Investment Fund, currently consisting of Marsico
Focus Fund and Marsico Growth & Income Fund;
NOW THEREFORE BE IT:
VOTED, that pursuant to Article III, Section 1 and Article IV,
Section 3 of Reserves' Agreement and Declaration of Trust, an unlimited number
of authorized, unissued shares be, and they hereby are, allocated to Nations
Marsico Focused Equities Fund, Nations Marsico Growth & Income Fund, Nations
International Equity Fund, Nations International Growth Fund, Nations Equity
Income Fund, Nations International Value Fund, Nations U.S. Government Bond
Fund, Nations Small Company Fund, Nations Government Securities Fund and Nations
Emerging Markets Fund and divided into and classified as a separate class or
classes of Nations Marsico Focused Equities Fund, Nations Marsico Growth &
Income Fund, Nations International Equity Fund, Nations International Growth
Fund, Nations Equity Income Fund, Nations International Value Fund, Nations U.S.
Government Bond Fund, Nations Small Company Fund, Nations Government Securities
Fund, Nations Emerging Markets Fund and Nations Cash Reserves as follows:
(i) Nations Marsico Focused Equities Fund - Investor A Shares,
Investor B Shares, Investor C Shares, Primary A Shares and
Primary B Shares;
(ii) Nations Marsico Growth & Income Fund - Investor A Shares,
Investor B Shares, Investor C Shares, Primary A Shares and
Primary B Shares;
(iii) Nations International Equity Fund - Investor A Shares,
Investor B Shares, Investor C Shares, Primary A Shares and
Primary B Shares;
3
<PAGE>
(iv) Nations International Growth Fund - Investor A Shares,
Investor B Shares, Investor C Shares, Primary A Shares and
Primary B Shares;
(v) Nations Equity Income Fund - Investor A Shares, Investor B
Shares, Investor C Shares, Primary A Shares and Primary B
Shares;
(vi) Nations International Value Fund - Investor A Shares,
Investor B Shares, Investor C Shares, Primary A Shares and
Primary B Shares;
(vii) Nations U.S. Government Bond Fund - Investor A Shares,
Investor B Shares, Investor C Shares, Primary A Shares and
Primary B Shares;
(viii)Nations Small Company Fund - Investor A Shares, Investor B
Shares, Investor C Shares, Primary A Shares and Primary B
Shares;
(ix) Nations Government Securities Fund - Investor A Shares,
Investor B Shares, Investor C Shares, Primary A Shares and
Primary B Shares;
(x) Nations Emerging Markets Fund - Investor A Shares, Investor
B Shares, Investor C Shares, Primary A Shares and Primary B
Shares;
(xi) Nations Cash Reserves - Marsico Shares;
FURTHER VOTED, that the Board of Trustees of Reserves, including a
majority of the Trustees who are not interested persons of Reserves, hereby find
that an amendment to the Multi-Class Plan for Reserves, as presented at this
meeting, including the method contained therein for allocating expenses among
the classes in a single Fund, is in the best interests of each class of shares
of Reserves individually and Reserves as a whole;
FURTHER VOTED, that the amendment to the Multi-Class Plan for
Reserves, as presented to this meeting, be, and it hereby is, ratified and
approved by the Board of Trustees, including a majority of the Trustees who are
not interested persons of Reserves; and
4
<PAGE>
FURTHER VOTED, that consideration received by Reserves for the
issue or sale of any class of each of Nations Marsico Focused Equities Fund,
Nations Marsico Growth & Income Fund, Nations International Equity Fund, Nations
International Growth Fund, Nations Equity Income Fund, Nations International
Value Fund, Nations U.S. Government Bond Fund, Nations Small Company Fund,
Nations Government Securities Fund, Nations Emerging Markets Fund and Nations
Cash Reserves shares (individually, a "Class" and collectively the "Classes")
shall be invested and reinvested with the consideration received by Reserves for
the issue and sale of all of the other classes of each of Nations Marsico
Focused Equities Fund, Nations Marsico Growth & Income Fund, Nations
International Equity Fund, Nations International Growth Fund, Nations Equity
Income Fund, Nations International Value Fund, Nations U.S. Government Bond
Fund, Nations Small Company Fund, Nations Government Securities Fund, Nations
Emerging Markets Fund and Nations Cash Reserves, together with all income,
earnings, profits and proceeds thereof, including the proceeds derived from the
sale, exchange or liquidation thereof, any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, and any general
assets of Reserves allocated to such Nations Marsico Focused Equities Fund,
Nations Marsico Growth & Income Fund, Nations International Equity Fund, Nations
International Growth Fund, Nations Equity Income Fund, Nations International
Value Fund, Nations U.S. Government Bond Fund, Nations Small Company Fund,
Nations Government Securities Fund, Nations Emerging Markets Fund and Nations
Cash Reserves by the Board of Trustees in accordance with Reserves' Agreement
and Declaration of Trust, and each share of any class of such Nations Marsico
Focused Equities Fund, Nations Marsico Growth & Income Fund, Nations
International Equity Fund, Nations International Growth Fund, Nations Equity
Income Fund, Nations International Value Fund, Nations U.S. Government Bond
Fund, Nations Small Company Fund, Nations Government Securities Fund, Nations
Emerging Markets Fund and Nations Cash Reserves (individually, a "Share" and
collectively, the "Shares") shall share equally with each Share of all the
classes of such Nations Marsico Focused Equities Fund, Nations Marsico Growth &
Income Fund, Nations International Equity Fund, Nations International Growth
Fund, Nations Equity Income Fund, Nations International Value Fund, Nations U.S.
Government Bond Fund, Nations Small Company Fund, Nations Government Securities
Fund, Nations Emerging Markets Fund and Nations Cash Reserves, respectively, in
such consideration and other assets, income, earnings, profits and proceeds
thereof; and
FURTHER VOTED, that the Officers of Reserves be, and each hereby
is, authorized and directed to take all such actions as and when the officers
taking such action, in consultation with Reserves' counsel, deem necessary or
appropriate to effect establishment of the new series, including, but not
limited to, executing, sealing, delivering and filing the Certificate of
Classification of Shares, and any and all other documents, instruments, papers
and writings as he or she may deem necessary or appropriate to perform and carry
out the preceding votes, such determination to be conclusively evidenced by such
acts.
The foregoing votes remain in full force and effect as of the date
hereof.
/s/ Richard H. Blank, Jr.
Dated: March 31, 1999 _________________________
Richard H. Blank, Jr.
Secretary and Treasurer
Subscribed and sworn to before
me this _____ day of ___________, 1999
___________________________________
Name:______________________________
Notary Public
Commission Expires:________________
5
NATIONS INSTITUTIONAL RESERVES
(A Massachusetts Business Trust)
CERTIFICATE: CLASSIFICATION OF SHARES
The undersigned, Secretary of Nations Institutional Reserves
("Reserves"), hereby certifies that the Board of Trustees of Reserves duly
adopted the following votes at a meeting held on May 26, 1999:
WHEREAS, the Trustees of Reserves approved a Multi-Class Plan
pursuant to Rule 18f-3 under the 1940 Act on April 12, 1995, as amended (the
"Multi-Class Plan"), which describes the terms of Reserves' multiple class share
distribution system; and
WHEREAS, it has been recommended that Reserves establish two new
classes of shares, designated as the Investor B Shares and Investor C Shares of
the Money Market Funds of Reserves (the "Exchange Shares");
NOW THEREFORE BE IT:
VOTED, that pursuant to Article III, Section 1 of Reserves'
Agreement and Declaration of Trust, an unlimited number of authorized, unissued
shares be, and they hereby are, allocated to the Money Market Funds of Reserves
and divided into and classified as a separate class of each Fund as follows:
(i) Nations Cash Reserves -- Investor B Shares and Investor C
Shares;
(ii) Nations Money Market Reserves -- Investor B Shares and
Investor C Shares;
(iii) Nations Treasury Reserves -- Investor B Shares and Investor
C Shares;
(iv) Nations Government Reserves -- Investor B Shares and
Investor C Shares;
(v) Nations Municipal Reserves -- Investor B Shares and Investor
C Shares; and
(vi) Nations California Tax Exempt Reserves -- Investor B Shares
and Investor C Shares;
FURTHER VOTED, that the Board of Trustees of Reserves, including a
majority of the Trustees who are not interested persons of the Trust, hereby
find that the amendments to the Multi-Class Plan for Reserves, in substantially
the form presented at this meeting, including the method contained herein for
allocating expenses among the classes in a single Fund, are in the best
interests of each class of shares of each Fund of Reserves individually and
Reserves as a whole;
1
<PAGE>
FURTHER VOTED, that the amendments to the Multi-Class Plan for
Reserves, in substantially the form presented at this meeting, be, and they
hereby are, ratified and approved by the Board of Trustees, including a majority
of the Trustees who are not interested persons of Reserves; and
FURTHER VOTED, that consideration received by Reserves for the
issue or sale of the Exchange Shares of the Money Market Funds of Reserves shall
be invested and reinvested with the consideration received by Reserves for the
issue and sale of all of the Funds' other classes (individually a "Class" and
collectively the "Classes"), together with all income, earnings, profits and
proceeds thereof, including the proceeds derived from the sale, exchange or
liquidation thereof, any funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, and any general assets of Reserves
allocated to the Money Market Funds of Reserves by the Board of Trustees in
accordance with Reserves' Agreement and Declaration of Trust, and each share of
any Class of the Funds (individually, a "Share" and collectively, the "Shares")
shall share equally with each share of all the Classes of such Fund of Reserves
in such consideration and other assets, income, earnings, profits and proceeds
thereof; and
FURTHER VOTED, that the Officers of Reserves be, and each hereby
is, authorized and directed to take all such actions as and when the officers
taking such action, in consultation with Reserves' counsel, deem necessary or
appropriate to effect establishment of the new series, including, but not
limited to, executing, sealing, delivering and filing the Certificate of
Classification of Shares, and any and all other documents, instruments, papers
and writings as he or she may deem necessary or appropriate to perform and carry
out the preceding votes, such determination to be conclusively evidenced by such
acts.
The foregoing votes remain in full force and effect as of the date
hereof.
/s/ Richard H. Blank, Jr.
Dated: May 26, 1999 _________________________
Richard H. Blank, Jr.
Secretary and Treasurer
Subscribed and sworn to before
me this _____ day of ___________, 1999
___________________________________
Name:______________________________
Notary Public
Commission Expires:________________
2
AMENDED AND RESTATED
BY-LAWS
OF
THE CAPITOL MUTUAL FUNDS
Section 1. Agreement and Declaration of Trust and Principal Office
- --------- -------------------------------------------------------
1.1 AGREEMENT AND DECLARATION OF TRUST. These By-Laws shall be subject to the
Agreement and Declaration of Trust, as from time to time in effect (the
"Declaration of Trust"), of The Capitol Mutual Funds, the Massachusetts business
trust established by the Declaration of Trust (the "Trust").
1.2 PRINCIPAL OFFICE OF THE TRUST. The principal office of the Trust shall be
located at such place as a majority of the Board of Trustees may designate from
time to time.
Section 2. Shareholders
- ------------------------
2.1 SPECIAL MEETINGS. A special meeting of the shareholders may be called at any
time by the Trustees, by the president or, if the Trustees and the president
shall fail to call any meeting of shareholders for a period of 30 days after
written application of one or more shareholders who hold at least 10% of all
shares issued and outstanding and entitled to vote at the meeting, then such
shareholders may call such meeting. If the meeting is a meeting of shareholders
of one or more series or classes of shares, but not a meeting of all
shareholders of the Trust. then only the shareholders of such one or more series
or classes shall be entitled to notice of and to vote at the meeting. Each call
of a meeting shall state the place, date, hour and purposes of the meeting.
2.2 PLACE OF MEETINGS. All meetings of the shareholders shall be held at the
principal office of the Trust, or, to the extent permitted by the Declaration of
Trust, at such other place within the United States as shall be designated by
the Trustees or the president of the Trust.
2.3 NOTICE OF MEETINGS. A written notice of each meeting of shareholders,
stating the place, date and hour and the purposes of the meeting, shall be given
at least seven days before the meeting to each shareholder entitled to vote
thereat by leaving such notice with him or at his residence or usual place of
business or by mailing it, postage prepaid, and addressed to such shareholder at
his address as it appears in the records of the Trust. Such notice shall be
given by the secretary or an assistant secretary or by an officer designated by
the Trustees. No notice of any meeting of shareholders need be given to a
shareholder if a written waiver of notice, executed before or after the meeting
by such shareholder or his attorney thereunto duly authorized, is filed with the
records of the meeting.
2.4 BALLOTS. No ballot shall be required for any election unless requested by a
shareholder present or represented at the meeting and entitled to vote in the
election.
<PAGE>
2.5 PROXIES. Shareholders entitled to vote may vote either in person or by proxy
in writing dated not more than six months before the meeting named therein,
which proxies shall be filed with the secretary or other person responsible to
record the proceedings of the meeting before being voted. Unless otherwise
specifically limited by their terms, such proxies shall entitle the holders
thereof to vote at any adjournment of such meeting but shall not be valid after
the final adjournment of such meeting.
Section 3. Trustees
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3.1 COMMITTEES AND ADVISORY BOARD. The Trustees may appoint from their number an
executive committee and other committees. Except as the Trustees may otherwise
determine, any such committee may make rules for conduct of its business. The
Trustees may appoint an advisory board to consist of not less than two nor more
than five members. The members of the advisory board shall be compensated in
such manner as the Trustees may determine and shall confer with and advise the
Trustees regarding the investments and other affairs of the Trust. Each member
of the advisory board shall hold office until the first meeting of the Trustees
following the next annual meeting of the shareholders and until his successor is
elected and qualified, or until he sooner dies, resigns, is removed, or becomes
disqualified, or until the advisory board is sooner abolished by the Trustees.
3.2 REGULAR MEETINGS. Regular meetings of the Trustees may be held without call
or notice at such places and at such times as the Trustees may from time to time
determine, provided that notice of the first regular meeting following any such
determination shall be given to absent Trustees. A regular meeting of the
Trustees may be held without call or notice immediately after and at the same
place as the annual meeting of the shareholders.
3.3 SPECIAL MEETINGS. Special meetings of the Trustees may be held at any time
and at any place designated in the call of the meeting, when called by the
Chairman of the Board, the president or the treasurer or by two or more
Trustees, sufficient notice thereof being given to each Trustee by the secretary
or an assistant secretary or by the officer or one of the Trustees calling the
meeting.
3.4 NOTICE. It shall be sufficient notice to a Trustee to send notice by mail at
least forty-eight hours or by telegram at least twenty-four hours before the
meeting addressed to the Trustee at his or her usual or last known business or
residence address or to give notice to him or her in person or by telephone at
least twenty-four hours before the meeting. Notice of a meeting need not be
given to any Trustee if a written waiver of notice, executed by him or her
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him or her. Neither notice of a meeting nor a
waiver of a notice need specify the purposes of the meeting.
3.5 QUORUM. At any meeting of the Trustees sixty percent (60%) of the Trustees
then in office shall constitute a quorum; provided, however, a quorum shall not
be less than three. Any meeting may be adjourned from time to time by a majority
of the votes cast upon the question, whether or not a quorum is present, and the
meeting may be held as adjourned without further notice.
3.6 QUALIFICATIONS OF TRUSTEES. Except as provided in the following sentence, no
person shall be qualified to stand for election or appointment as a Trustee if
such person has already reached the age of 70. Each Trustee shall retire from
service on the Board of Trustees no later than the end of the calendar year in
which such Trustee reaches age 70, provided that (i) any Trustee who is a
Trustee as of January 25, 1995 and who had reached the age of 70 prior to such
date may continue to serve as a Trustee of the Company until the end of the
calendar year in which such Trustee reaches age 75 and may continue to serve for
successive annual periods thereafter upon the vote of a majority of the other
Trustees; and (ii) any person who has already reached the age of 70 may stand
for election or appointment, pursuant to a vote of the Trustees, in connection
with an investment company reorganization or merger, and any such person may
continue to serve for successive annual periods thereafter upon the vote of a
majority of the other Trustees.
<PAGE>
Section 4. Officers and Agents
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4.1 ENUMERATION: QUALIFICATION. The officers of the Trust shall be a president,
a treasurer, a secretary and such other officers, if any, as the Trustees from
time to time may in their discretion elect or appoint. The Trust may also have
such agents, if any, as the Trustees from time to time may in their discretion
appoint. Any officer may be but none need be a Trustee or shareholder. Any two
or more offices may be held by the same person.
4.2 POWERS. Subject to the other provisions of these By-Laws, each officer shall
have, in addition to the duties and powers herein and in the Declaration of
Trust set forth, such duties and powers as are commonly incident to his or her
office as if the Trust were organized as a Massachusetts business corporation
and such other duties and powers as the Trustees may from time to time
designate.
4.3 ELECTION. The president, the treasurer and the secretary shall be elected
annually by the Trustees at their first meeting following the annual meeting of
the shareholders. Other officers, if any, may be elected or appointed by the
Trustees at said meeting or at any other time.
4.4 TENURE. The president, the treasurer and the secretary shall hold office
until the first meeting of Trustees following the next annual meeting of the
shareholders and until their respective successors are chosen and qualified, or
in each case until he or she sooner dies, resigns, is removed or becomes
disqualified. Each agent shall retain his or her authority at the pleasure of
the Trustees.
4.5 PRESIDENT AND VICE PRESIDENTS. The president shall be the chief executive
officer of the Trust. The president shall, subject to the control of the
Trustees, have general charge and supervision of the business of the Trust. Any
vice president shall have such duties and powers as shall be designated from
time to time by the Trustees.
4.6 CHAIRMAN OF THE BOARD. If a Chairman of the Board of Trustees is elected, he
shall have the duties and powers specified in these By-Laws and, except as the
Trustees shall otherwise determine, preside at all meetings of the shareholders
and of the Trustees at which he or she is present and have such other duties and
powers as may be determined by the Trustees.
4.7 TREASURER AND CONTROLLER. The treasurer shall be the chief financial officer
of the Trust and subject to any arrangement made by the Trustees with a bank or
trust company or other organization as custodian or transfer or shareholder
services agent, shall be in charge of its valuable papers and shall have such
other duties and powers as may be designated from time to time by the Trustees
or by the president. If at any time there shall be no controller, the treasurer
shall also be the chief accounting officer of the Trust and shall have the
duties and powers prescribed the Trust and shall have the duties and powers
prescribed herein for the controller. Any assistant treasurer shall have such
duties and powers as shall be designated from time to time by the Trustees. The
controller, if any be elected, shall be the chief accounting officer of the
Trust and shall be in charge of its books of account and accounting records. The
controller shall be responsible for preparation of financial statements of the
Trust and shall have such other duties and powers as may be designated from time
to time by the Trustees or the president.
<PAGE>
4.8 SECRETARY AND ASSISTANT SECRETARIES. The secretary shall record all
proceedings of the shareholders and the Trustees in books to be kept therefor,
which books shall be kept at the principal office of the Trust. In the absence
of the secretary from any meeting of shareholders or Trustees, an assistant
secretary, or if there be none or he or she is absent, a temporary clerk chosen
at the meeting shall record the proceedings thereof in the aforesaid books.
Section 5. Resignation and Removals
- -----------------------------------
Any Trustee, officer or advisory board member may resign at any time by
delivering his or her resignation in writing to the Chairman of the Board, the
president, the treasurer or the secretary or to a meeting of the Trustees. The
Trustees may remove any officer elected by them with or without cause by the
vote of a majority of the Trustees then in office. Except to the extent
expressly provided in a written agreement with the Trust, no Trustee, officer,
or advisory board member resigning, and no officer or advisory board member
removed shall have any right to any compensation for any period following his or
her resignation or removal, or any right to damages on account of such removal.
Section 6. Vacancies
- --------------------
A vacancy in any office may be filled at any time. Each successor shall hold
office for the unexpired term, and in the case of the president, the treasurer
and the secretary, until his or her successor is chosen and qualified, or in
each case until he or she sooner dies, resigns, is removed or becomes
disqualified.
Section 7. Shares of Beneficial Interest
- ----------------------------------------
7.1 SHARE CERTIFICATES. No certificates certifying the ownership of shares shall
be issued except as the Trustees may otherwise authorize. In the event that the
Trustees authorize the issuance of share certificates, subject to the provisions
of Section 7.3, each shareholder shall be entitled to a certificate stating the
number of shares owned by him or her, in such form as shall be prescribed from
time to time by the Trustees. Such certificate shall be signed by the president
or a vice president and by the treasurer or an assistant treasurer. Such
signatures may be facsimiles if the certificate is signed by a transfer or
shareholder services agent or by a registrar, other than a Trustee, officer or
employee of the Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the Trust with
the same effect as if he or she were such officer at the time of its issue. In
lieu of issuing certificates for shares, the Trustees or the transfer or
shareholder services agent may either issue receipts therefor or may keep
accounts upon the books of the Trust for the record holders of such shares, who
shall in either case be deemed, for all purposes hereunder, to be the holders of
certificates for such shares as if they had accepted such certificates and shall
be held to have expressly assented and agreed to the terms hereof.
7.2 LOSS OF CERTIFICATES. In the case of the alleged loss or destruction or the
mutilation of a share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
7.3 DISCONTINUANCE OF ISSUANCE OF CERTIFICATES. The Trustees may at any time
discontinue the issuance of share certificates and may, by written notice to
each shareholder, require the surrender of share certificates to the Trust for
cancellation. Such surrender and cancellation shall not affect the ownership of
shares in the Trust.
<PAGE>
Section 8. Record Date
- ----------------------
The Trustees may fix in advance a time, which shall not be more than 90 days
before the date of any meeting of shareholders or the date for the payment of
any dividend or making of any other distribution to shareholders, as the record
date for determining the shareholders having the right to notice and to vote at
such meeting and any adjournment thereof or the right to receive such dividend
or distribution, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date.
Section 9. Seal
- ---------------
The seal of the Trust shall, subject to alteration by the Trustees, consist of a
flat-faced circular die with the word "Massachusetts", together with the name of
the Trust and the year of its organization, cut or engraved thereon; but, unless
otherwise required by the Trustees, the seal shall not be necessary to be placed
on, and its absence shall not impair the validity of, any document, instrument
or other paper executed and delivered by or on behalf of the Trust.
Section 10. Execution of Papers
- -------------------------------
Except as the Trustees may generally or in particular cases authorize the
execution thereof in some other manner, all deeds, leases, transfers, contracts,
bonds, notes, checks, drafts and other obligations made, accepted or endorsed by
the Trust shall be signed, and any transfers of securities standing in the name
of the Trust shall be executed, by the president or by one of the vice
presidents or by the treasurer or by whomsoever else shall be designated for
that purpose by the vote of the Trustees and need not bear the seal of the
Trust.
Section 11. Fiscal Year
- -----------------------
The fiscal year of the Trust shall end on such date in each year as the Trustees
shall from time to time determine.
Section 12. Provisions Relating to the Conduct of the Trust's Business
- ----------------------------------------------------------------------
12.1 DEALINGS WITH AFFILIATES. The Trust shall not purchase or retain securities
issued by any issuer if one or more of the holders of the securities of such
issuer or one or more of the officers or directors of such issuer is an officer
or Trustee of the Trust or officer or director of any organization, association
or corporation with which the Trust has an investment advisor's contract
("investment advisor"), if to the knowledge of the Trust one or more of such
officers or Trustees of the Trust or such officers or directors of such
investment advisors owns beneficially more than one-half of one percent of the
shares or securities of such issuer and such officers, Trustees and directors
owning more than one-half of one percent of such shares or securities together
own beneficially more than five percent of such outstanding shares or
securities.
Each Trustee and officer of the Trust shall give notice to the secretary of the
identity of all issuers whose securities are held by the Trust of which such
officer or Trustee owns as much as one half of one percent of the outstanding
securities, and the Trust shall not be charged with the knowledge of such
holdings in the absence of receiving such notice if the Trust has requested such
information not less often than quarterly.
<PAGE>
Subject to the provisions of the preceding paragraph, no officer, Trustee or
agent of the Trust and no officer, director or agent of any investment advisor
shall deal for or on behalf of the Trust with himself as principal or agent, or
with any partnership, association or corporation in which he has a material
financial interest; provided that the foregoing provisions shall not prevent (a)
officers and Trustees of the Trust from buying, holding or selling shares in the
Trust, or from being partners, officers or directors of or financially
interested in any investment advisor to the Trust or in any corporation, firm or
association which may at any time have a distributor's or principal
underwriter's contract with the Trust; (b) purchases or sales of securities or
other property if such transaction is permitted by or is exempt or exempted from
the provisions of the Investment Company Act of 1940 or any Rule or Regulation
thereunder and if such transaction does not involve any commission or profit to
any security dealer who is, or one or more of whose partners, shareholders,
officers or directors is, an officer or Trustee of the Trust or an officer or
director of the investment advisor, manager or principal underwriter of the
Trust; (c) employment of legal counsel, registrar, transfer agent, shareholder
services, dividend disbursing agent or custodian who is, or has a partner,
stockholder, officer or director who is, an officer or Trustee of the Trust; (d)
sharing statistical, research and management expenses, including office hire and
services, with any other company in which an officer or Trustee of the Trust is
an officer or director or financially interested.
12.2 RIGHT TO ENGAGE IN BUSINESS. Any officer or Trustee of the Trust, the
investment adviser, the manager, and any officers or directors of the investment
adviser or manager may have personal business interests and may encase in
personal business activities.
12.3 DEALING IN SECURITIES OF THE TRUST. The Trust, the investment advisor, any
corporation, firm or association which may at any time have an exclusive
distributor's or principal underwriter's contract with the Trust (the
"distributor") and the officers and Trustees of the Trust and officers and
directors of every investment advisor and distributor, shall not take long or
short positions in the securities of the Trust, except that:
(a) the distributor may place orders with the Trust for its shares equivalent to
orders received by the distributor;
(b) shares of the Trust may be purchased at not less than net asset value for
investment by the investment advisor and by officers and directors of the
distributor, investment advisor, or the Trust and by any trust, pension,
profit-sharing or other benefit plan for such persons, no such purchase to be in
contravention of any applicable state or federal requirement.
12.4 LIMITATION ON CERTAIN LOANS. The Trust shall not make loans to any officer,
Trustee or employee of the Trust or any investment advisor or distributor or
their respective officers, directors or partners or employees.
12.5 CUSTODIAN. All securities and cash owned by the Trust shall be maintained
in the custody of one or more banks or trust companies having (according to its
last published report) not less than two million dollars ($2,000,000) aggregate
capital, surplus and undivided profits (any such bank or trust company is
hereinafter referred to as the "custodian"); provided, however, the custodian
may deliver securities as collateral on borrowings effected by the Trust,
provided, that such delivery shall be conditioned upon receipt of the borrowed
funds by the custodian except where additional collateral is being pledged on an
outstanding loan and the custodian may deliver securities lent by the trust
against receipt of initial collateral specified by the Trust. Subject to such
rules, regulations and orders, if any, as the Securities and Exchange Commission
may adopt, the Trust may, or may not permit any custodian to, deposit all or any
part of the securities owned by the Trust in a system for the central handling
of securities operated by the Federal Reserve Banks, or established by a
national securities exchange or national securities association registered with
said Commission under the Securities Exchange Act of 1934, or such other person
as may be permitted by said Commission, pursuant to which system all securities
of any particular class or series of any issue deposited with the system are
treated as fungible and may be transferred or pledged by bookkeeping entry,
without physical delivery of such securities.
<PAGE>
The Trust shall upon the resignation or inability to serve of its custodian or
upon change of the custodian:
(a) in the case of such resignation or inability to serve use its best efforts
to obtain a successor custodian;
(b) require that the cash and securities owned by this corporation be delivered
directly to the successor custodian; and
(c) in the event that no successor custodian can be found, submit to the
shareholders, before permitting delivery of the cash and securities owned by
this Trust otherwise than to a successor custodian, the question whether or not
this Trust shall be liquidated or shall function without a custodian.
12.6 LIMITATIONS ON INVESTMENT. Investment limitations are those set forth in
the Trust's Prospectus and Statement of Additional Information.
12.7 REPORTS TO SHAREHOLDERS. Distributions from Realized Gains. The Trust shall
send to each shareholder of record at least annually a statement of the
condition of the Trust and of the results of its operation, containing all
information required by applicable laws or regulations.
Section 13. Amendments
- ----------------------
These By-Laws may be amended or repealed, in whole or in part, by a majority of
the Trustees then in office at any meeting of the Trustees, or by one or more
writings signed by such majority.
Last Amended: May 26, 1999
INVESTMENT ADVISORY AGREEMENT
NATIONS INSTITUTIONAL RESERVES
THIS AGREEMENT is made as of this 1st day of January, 1996, by and between
NATIONS INSTITUTIONAL RESERVES, a Massachusetts business trust (the "Trust") and
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"), on
behalf of those portfolios of the Trust now or hereafter identified on Schedule
I hereto (each a "Fund" and collectively, the "Funds").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end, management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser; and
WHEREAS, the Trust and the Adviser desire to enter into an agreement to
provide for investment advisory services to the Trust upon the terms and
conditions hereinafter set forth; and
WHEREAS, the Trust and the Adviser contemplate that certain duties of the
Adviser under this Agreement will be delegated to one or more sub-investment
adviser(s) (the "Sub-Adviser(s)") pursuant to separate sub-advisory agreement(s)
(the "Sub-Advisory Agreement(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints the Adviser to act as investment
adviser to each Fund for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided. In the event
that the Trust establishes one or more portfolios other than the Funds with
respect to which it desires to retain the Adviser to act as investment adviser
hereunder, it shall notify the Adviser in writing. If the Adviser is willing to
render such services under this Agreement it shall notify the Trust in writing
whereupon such portfolio shall become a Fund hereunder and shall be subject to
the provisions of this Agreement except to the extent that said provisions
(including those relating to the compensation payable by the Fund to the
Adviser) are modified with respect to such Fund in writing by the Trust and the
Adviser at the time.
2. DELEGATION OF RESPONSIBILITIES. Subject to the approval of the Trust's
Board of Trustees and, if required, the shareholders of the Funds, the Adviser
may, pursuant to the Sub-Advisory Agreement(s), delegate to the Sub-Adviser(s)
those of its duties hereunder identified in the Sub-Advisory Agreement(s),
provided that the Adviser shall continue to supervise and monitor the
performance of the duties delegated to the Sub-Adviser(s) and any such
delegation shall not relieve the Adviser of its duties and obligations under
this Agreement. The Adviser shall be solely responsible for compensating the
Sub-Adviser(s) for services rendered under the Sub-Advisory Agreement(s).
-1-
<PAGE>
3. DELIVERY OF DOCUMENTS. The Trust has furnished the Adviser with copies,
properly certified or authenticated, of each of the following:
(a) The Trust's Declaration of Trust dated January 22, 1990, and
all amendments thereto (such Declaration of Trust, as presently in effect and as
it shall from time to time be amended, is herein called the "Declaration of
Trust");
(b) The Trust's By-Laws and amendments thereto (such By-Laws, as
presently in effect and as they shall from time to time be amended, are herein
called the "By-Laws");
(c) Votes of the Trust's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
(d) The Trust's Registration Statement, as amended, on Form N-1A
under the Securities Act of 1933, as amended (the "1933 Act") (File No.
33-33144) and under the 1940 Act (File No. 811-6030); and
(e) The most recent prospectus(es) of the Trust relating to each
Fund (such prospectus(es) together with the related statement(s) of additional
information, as presently in effect and all amendments and supplements thereto,
are herein called the "Prospectus").
The Trust will furnish the Adviser from time to time with copies of all
amendments of or supplements to the foregoing, if any.
4. MANAGEMENT. Subject to the supervision of the Trust's Board of
Trustees, the Adviser will provide a continuous investment program for each
Fund, including investment research and management with respect to all
securities, investments, cash and cash equivalents in each Fund. The Adviser
will determine from time to time what securities and other investments will be
purchased, retained or sold by the Funds and will place the daily orders for the
purchase or sale of securities. The Adviser will provide the services rendered
by it under this Agreement in accordance with each Fund's investment objective,
policies and restrictions as stated in the Prospectus and votes of the Trust's
Board of Trustees. The Adviser further agrees that it will:
(a) Update each Fund's cash availability throughout the day as
required;
(b) Maintain historical tax lots for each portfolio security held
by each Fund;
(c) Transmit trades to the Trust's custodian for proper
settlement;
(d) Maintain all books and records with respect to each Fund's
securities and transactions;
-2-
<PAGE>
(e) Supply the Trust and its Board of Trustees with reports and
statistical data as requested; and
(f) Prepare a quarterly broker security transaction summary and
monthly security transaction listing for each Fund.
5. OTHER COVENANTS. The Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Commission and will in addition conduct its activities under this Agreement in
accordance with other applicable law, including but not limited to the 1940 Act
and the Advisers Act;
(b) will use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has investment
responsibilities;
(c) will not make loans to any person to purchase or carry Fund
shares;
(d) will place orders pursuant to its investment determinations
for the Funds either directly with the issuer or with any broker or dealer.
Subject to the other provisions of this paragraph, in executing portfolio
transactions and selecting brokers or dealers, the Adviser will use its best
efforts to seek on behalf of each Fund the best overall terms available. In
assessing the best overall terms available for any transaction, the Adviser
shall consider all factors that it deems relevant, including any brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended) provided to the Fund and/or other accounts
over which the Adviser or an affiliate of the Adviser exercises investment
discretion. The Adviser is authorized to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for any Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if, but only
if, the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer -- viewed in terms of that particular transaction or in terms
of the overall responsibilities of the Adviser to its clients, including the
Fund and the Trust. In addition, the Adviser is authorized to take into account
the sale of shares of the Trust in allocating purchase and sale orders for
portfolio securities to brokers or dealers (including brokers and dealers that
are affiliated with the Adviser or the Trust's principal underwriter), provided
that the Adviser believes that the quality of the transaction and the commission
are comparable to what they would be with other qualified firms. In no instance,
however, will portfolio securities be purchased from or sold to the Adviser or
the Trust's principal underwriter for the Funds or an affiliated person of
either acting as principal or broker, except as permitted by the Commission or
applicable law;
(e) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. In making investment recommendations for a Fund,
its investment advisory personnel will not inquire or take into consideration
whether the issuer (or related supporting institution) of securities proposed
-3-
<PAGE>
for purchase or sale for the Fund's account are customers of the commercial
departments of its affiliates. In dealing with commercial customers, such
commercial departments will not inquire or take into consideration whether
securities of those customers are held by the Fund; and
(f) will treat confidentially and as proprietary information of
the Trust all records and other information relative to the Trust and prior,
present or potential shareholders, and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder (except after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld and may not be withheld
and will be deemed granted where the Adviser may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Trust).
6. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser hereunder
are deemed not to be exclusive, and the Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby. To the extent that the purchase or sale of securities or other
investments of the same issuer may be deemed by the Adviser to be suitable for
two more accounts managed by the Adviser, the available securities or
investments may be allocated in a manner believed by the Adviser to be equitable
to each account. It is recognized that in some cases this procedure may
adversely affect the price paid or received by a Fund or the size of the
position obtainable for or disposed of by a Fund.
7. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for each Fund are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
8. EXPENSES. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased or sold
for the Funds. In addition, if the aggregate expenses borne by any Fund in any
fiscal year exceed the applicable expense limitations imposed by the securities
laws or regulations of any state in which its shares are registered or qualified
for sale to the public, the Adviser together with the Fund's administrator(s)
shall reimburse such Fund for such excess in proportion to the fees otherwise
payable to them for such year. The obligation of the Adviser to reimburse the
Trust hereunder is limited in any fiscal year to the amount of its fee hereunder
for such fiscal year; provided, however, that notwithstanding the foregoing, the
Adviser shall reimburse the Trust for the full amount of its share of any such
excess expenses regardless of the fees paid to it during such fiscal year to the
extent that the securities laws or regulations of any state having jurisdiction
over the Trust so require. Such expense reimbursement, if any, will be
estimated, reconciled and paid on a monthly basis.
-4-
<PAGE>
9. COMPENSATION. For the services provided to each Fund and the expenses
assumed pursuant to this Agreement, the Trust will pay the Adviser and the
Adviser will accept as full compensation therefor a fee for that Fund determined
in accordance with Schedule I attached hereto. The fee attributable to each Fund
shall be a separate charge to such Fund and shall be the several (and not joint
or joint and several) obligation of each such Fund. The Trust and the Adviser
may, from time to time, agree to reduce, limit or waive the amounts payable
hereunder with respect to one or more Funds for such period or periods they deem
advisable.
10. LIMITATION OF LIABILITY. The Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser or any of its officers, directors,
employees or agents, in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
11. DURATION AND TERMINATION. This Agreement shall become effective with
respect to a Fund when approved in accordance with the requirements of the 1940
Act, and shall thereafter continue from year to year, provided that the
continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the
vote of "a majority of the outstanding voting securities" of the
Fund (as defined in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Trust's
Trustees who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of a party to this Agreement
(other than as Trustees of the Trust), by votes cast in person at
a meeting specifically called for such purpose.
Notwithstanding the foregoing, this Agreement may be terminated as to any Fund
at any time, without the payment of any penalty, by the Trust (by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding voting
securities of the particular Fund), or by the Adviser on sixty (60) days'
written notice. The notice provided for herein may be waived by the party
entitled to receipt thereof. This Agreement will immediately terminate in the
event of its assignment. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meanings as such terms have in the 1940 Act.
12. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement affecting a
Fund shall be effective until approved by vote of a majority of the outstanding
voting securities of such Fund. However, this shall not prevent the Adviser from
reducing, limiting or waiving its fee.
-5-
<PAGE>
13. CAPACITY. The names "Nations Institutional Reserves" and "Trustees of
Nations Institutional Reserves" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated January 22, 1990, which is hereby
referred to and a copy of which is on file at the office of the Secretary of The
Commonwealth of Massachusetts and the principal office of the Trust. The
obligations of "Nations Institutional Reserves" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust Property, and all persons dealing with any class of shares of the
Trust must look solely to the Trust Property belonging to such class for the
enforcement of any claims against the Trust.
14. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and shall be
governed by Delaware law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
NATIONS INSTITUTIONAL RESERVES
on behalf of the Funds
By: /s/ A. Max Walker
------------------------
A. Max Walker
President and Chairman of
the Board of Directors
NATIONSBANC ADVISORS, INC.
By: /s/ Mark. H. Williamson
------------------------
Mark H. Williamson
President and Director
-6-
<PAGE>
SCHEDULE I
The Trust shall pay the Adviser as full compensation for services provided
and expenses assumed hereunder an advisory fee for each Fund, computed daily and
payable monthly at the annual rates listed below as a percentage of the average
daily net assets of the Fund:
- --------------------------------------------------------------------------------
Fund Rate of Compensation
- --------------------------------------------------------------------------------
Nations Cash Reserves .15%
- --------------------------------------------------------------------------------
Nations Treasury Reserves .15%
- --------------------------------------------------------------------------------
Nations Municipal Reserves .15%
- --------------------------------------------------------------------------------
Nations Government Reserves .15%
- --------------------------------------------------------------------------------
Nations Money Market Reserves .15%
- --------------------------------------------------------------------------------
Nations California Tax Exempt Reserves .15%
- --------------------------------------------------------------------------------
Nations Asset Allocation Fund .65%
- --------------------------------------------------------------------------------
Nations Capital Income Fund .65%
- --------------------------------------------------------------------------------
Nations California Municipal Bond Fund .50%
- --------------------------------------------------------------------------------
Nations Emerging Markets Fund 1.00%
- --------------------------------------------------------------------------------
Last Amended: October 15, 1999
IN WITNESS WHEREOF, the parties hereto have caused this amended Schedule I
to be executed by their officers designated below as of the 15th day of October,
1999.
NATIONS RESERVES
on behalf of the Funds
By: /s/ James E. Banks, Jr.
------------------------
James E. Banks, Jr.
Assistant Secretary
BANC OF AMERICA ADVISORS, INC.
(Formerly, NationsBanc Advisors,
Inc.)
By: /s/ Robert H. Gordon
---------------------------
Robert H. Gordon
President
-7-
SUB-ADVISORY AGREEMENT
NATIONS INSTITUTIONAL RESERVES
THIS AGREEMENT is made as of this 1st day of January, 1996, by and between
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
TRADESTREET INVESTMENT ASSOCIATES, INC., a Maryland corporation (the
"Sub-Adviser"), and NATIONS INSTITUTIONAL RESERVES, a Massachusetts business
trust (the "Trust"), on behalf of those portfolios of the Trust now or hereafter
identified on Schedule I hereto (each a "Fund" and collectively, the "Funds").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission ("Commission") as an open-end, management investment company under
the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser; and
WHEREAS, the Sub-Adviser also is registered with the Commission under the
Advisers Act as an investment adviser; and
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement (the "Investment Advisory Agreement"), pursuant to which the
Adviser shall act as investment adviser with respect to the Funds; and
WHEREAS, pursuant to such Investment Advisory Agreement, the Adviser, with
the approval of the Trust, wishes to retain the Sub-Adviser for purposes of
rendering advisory services to the Adviser and the Trust in connection with the
Funds upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. APPOINTMENT OF SUB-ADVISER. The Adviser hereby appoints, and the Trust
hereby approves, the Sub-Adviser to render investment research and advisory
services to the Adviser and the Trust with respect to the Funds, under the
supervision of the Adviser and subject to the policies and control of the
Trust's Board of Trustees, and the Sub-Adviser hereby accepts such appointment,
all subject to the terms and conditions contained herein.
2. INVESTMENT SERVICES. Subject to the supervision of the Adviser and the
Trust's Board of Trustees, the Sub-Adviser will provide a continuous investment
program for each Fund, including investment research and management with respect
to all securities, investments, cash and cash equivalents in each Fund. The
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold by the Funds and will place the
daily orders for the purchase or sale of securities. The Sub-Adviser will
provide the services rendered by it under this Agreement in accordance with each
-1-
<PAGE>
Fund's investment objective, policies and restrictions as stated in the
Prospectus and votes of the Trust's Board of Trustees. The Sub-Adviser shall
provide such additional services related to the continuous investment program,
including recordkeeping services, as may reasonably be requested from time to
time by the Trust or Adviser.
3. CONTROL BY BOARD OF TRUSTEES. As is the case with respect to the
Adviser under the Investment Advisory Agreement, any investment activities
undertaken by the Sub-Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser with respect to the Trust, shall at all
times be subject to any directives of the Board of Trustees of the Trust.
4. OTHER COVENANTS. In carry out its obligations under this Agreement, the
Sub-Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Commission and will in addition conduct its activities under this Agreement in
accordance with other applicable law, including but not limited to the 1940 Act
and the Advisers Act;
(b) will use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has investment
responsibilities;
(c) will not make loans to any person to purchase or carry Fund
shares;
(d) will place orders pursuant to its investment determinations
for the Funds either directly with the issuer or with any broker or dealer.
Subject to the other provisions of this paragraph, in executing portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its best
efforts to seek on behalf of each Fund the best overall terms available. In
assessing the best overall terms available for any transaction, the Sub-Adviser
shall consider all factors that it deems relevant, including any brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934, as amended) provided to the Fund and/or other accounts
over which the Sub-Adviser or an affiliate of the Sub-Adviser exercises
investment discretion. The Sub-Adviser is authorized to pay to a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for any Fund which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer -- viewed in terms of that particular
transaction or in terms of the overall responsibilities of the Sub-Adviser to
its clients, including the Fund and the Trust. In addition, the Sub-Adviser is
authorized to take into account the sale of shares of the Trust in allocating
purchase and sale orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with the Sub-Adviser or the
Trust's principal underwriter), provided that the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what they would
be with other qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Sub-Adviser or the Trust's principal
underwriter for the Funds or an affiliated person of either acting as principal
or broker, except as permitted by the Commission or applicable law;
-2-
<PAGE>
(e) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. In making investment recommendations for a Fund,
its investment advisory personnel will not inquire or take into consideration
whether the issuer (or related supporting institution) of securities proposed
for purchase or sale for the Fund's account are customers of the commercial
departments of its affiliates. In dealing with commercial customers, such
commercial departments will not inquire or take into consideration whether
securities of those customers are held by the Fund; and
(f) will treat confidentially and as proprietary information of
the Trust all records and other information relative to the Trust and prior,
present or potential shareholders, and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder (except after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld and may not be withheld
and will be deemed granted where the Sub-Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Trust).
6. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-Adviser
hereunder are deemed not to be exclusive, and the Sub-Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. To the extent that the purchase or sale of securities
or other investments of the same issuer may be deemed by the Sub-Adviser to be
suitable for two more accounts managed by the Sub-Adviser, the available
securities or investments may be allocated in a manner believed by the
Sub-Adviser to be equitable to each account. It is recognized that in some cases
this procedure may adversely affect the price paid or received by a Fund or the
size of the position obtainable for or disposed of by a Fund.
7. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for each Fund are the property of the Trust and further agrees to
surrender promptly to the Adviser or the Trust any of such records upon request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
8. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased or sold for the Funds. In addition, the Sub-Adviser acknowledges that
the Adviser has agreed, pursuant to the Investment Advisory Agreement, that, if
the aggregate expenses borne by any Fund in any fiscal year exceed the
applicable expense limitations imposed by the securities laws or regulations of
any state in which its shares are registered or qualified for sale to the
-3-
<PAGE>
public, the Adviser together with the Fund's administrator(s) shall reimburse
such Fund for such excess in proportion to the fees otherwise payable to them
for such year. If , for any fiscal year of a Fund, the amount of the aggregate
advisory fee which the Trust would otherwise be obligated to pay is reduced
pursuant to expense limitation provisions of the Investment Advisory Agreement,
the fee which the Sub-Adviser would otherwise receive pursuant to this Agreement
shall be reduced proportionately.
9. COMPENSATION. For the services provided to each Fund and the expenses
assumed pursuant to this Agreement, the Adviser will pay the Sub-Adviser and the
Sub-Adviser will accept as full compensation therefor a fee for that Fund
determined in accordance with Schedule I attached hereto. The Adviser and the
Sub-Adviser may, from time to time, agree to reduce, limit or waive the amounts
payable hereunder with respect to one or more Funds for such period or periods
they deem advisable. It is understood that the Adviser shall be responsible for
the Sub-Adviser's fee for its services hereunder, and the Sub-Adviser agrees
that it shall have no claim against the Trust or the Fund with respect to
compensation under this Agreement.
10. LIABILITY OF SUB-ADVISER. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Adviser or
the Company in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Sub-Adviser in the performance of
its duties or from reckless disregard by it of its obligations and duties under
this Agreement.
11. DURATION AND TERMINATION. This Agreement shall become effective with
respect to a Fund when approved by the Trustees of the Trust, and if so
approved, this Agreement shall thereafter continue from year to year, provided
that the continuation of the Agreement is specifically approved at least
annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the
vote of "a majority of the outstanding voting securities" of a
Fund (as defined in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Trust's
Trustees who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of a party to this Agreement
(other than as Trustees of the Trust), by votes cast in person at
a meeting specifically called for such purpose.
Notwithstanding the foregoing, this Agreement may be terminated as to any Fund
at any time, without the payment of any penalty, by the Trust (by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding voting
securities of the particular Fund), or by the Sub-Adviser or Adviser on sixty
(60) days' written notice to the other parties to this Agreement. The notice
provided for herein may be waived by the party entitled to receipt thereof. This
Agreement will immediately terminate in the event of its assignment. As used in
this Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as such terms
have in the 1940 Act.
-4-
<PAGE>
12. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement affecting a
Fund shall be effective until approved by vote of a majority of the outstanding
voting securities of such Fund. However, this shall not prevent the Sub-Adviser
from reducing, limiting or waiving its fee.
13. CAPACITY. The names "Nations Institutional Reserves" and "Trustees of
Nations Institutional Reserves" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated January 22, 1990, which is hereby
referred to and a copy of which is on file at the office of the Secretary of The
Commonwealth of Massachusetts and the principal office of the Trust. The
obligations of "Nations Institutional Reserves" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust property, and all persons dealing with any class of shares of the
Trust must look solely to the property belonging to such class for the
enforcement of any claims against the Trust.
14. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and shall be
governed by Delaware law.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
NATIONS INSTITUTIONAL RESERVES
on behalf of the Funds
By: /s/ A. Max Walker
------------------------
A. Max Walker
President and Chairman of
the Board of Directors
NATIONSBANC ADVISORS, INC.
By: /s/ Mark H. Williamson
------------------------
Mark H. Williamson
President and Director
-5-
<PAGE>
TRADESTREET INVESTMENT
ASSOCIATES, INC.
By: /s/ Andrew M. Silton
------------------------
Andrew M. Silton
President and Director
-6-
<PAGE>
SCHEDULE I
The Adviser shall pay the Sub-Adviser as full compensation for services
provided and expenses assumed hereunder a sub-advisory fee for each Fund,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Fund:
Fund Rate of Compensation
---- --------------------
Nations Cash Reserves .033%
Nations Treasury Reserves .033%
Nations Municipal Reserves .033%
Nations Government Reserves .033%
Nations Money Market Reserves .033%
Nations California Tax Exempt Reserves .033%
Nations Capital Income Fund .250%
Nations California Municipal Bond Fund .070%
Nations Asset Allocation Fund (non-equity portion) .250%
Last Amended: May 21, 1999
IN WITNESS WHEREOF, the parties hereto have caused this amended Schedule I
to be executed by their officers designated below as of the 21st day of May,
1999.
NATIONS INSTITUTIONAL RESERVES
on behalf of the Funds
By: /s/ James E. Banks, Jr.
-----------------------
James E. Banks, Jr.
Assistant Secretary
NATIONSBANC ADVISORS, INC.
By: /s/ Robert H. Gordon
-----------------------
Robert H. Gordon
President
TRADESTREET INVESTMENT
ASSOCIATES, INC.
By: /s/ Holly D. Deem
-----------------------
Holly D. Deem
President and Director
-7-
SUB-ADVISORY AGREEMENT
NATIONS INSTITUTIONAL RESERVES
THIS AGREEMENT is made as of this 21st day of May, 1999, by and between
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
CHICAGO EQUITY PARTNERS CORPORATION, a Delaware corporation (the "Sub-Adviser"),
and NATIONS INSTITUTIONAL RESERVES, a Massachusetts business trust (the
"Trust"), on behalf of those portfolios of the Trust now or hereafter identified
on Schedule I hereto (each a "Fund" and collectively, the "Funds").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission ("Commission") under the Investment Company Act of 1940, as amended
("1940 Act") as an open-end, management investment company;
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of acting as an investment adviser;
WHEREAS, the Sub-Adviser is also registered with the Commission under
the Advisers Act as an investment adviser and engages in the business of acting
as an investment adviser;
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement (the "Investment Advisory Agreement"), pursuant to which the
Adviser acts as investment adviser with respect to the Funds; and
WHEREAS, pursuant to such Investment Advisory Agreement, the Adviser,
with the approval of the Trust, wishes to retain the Sub-Adviser for purposes of
rendering advisory services to the Adviser and the Trust in connection with the
Funds upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed between the parties hereto as follows:
1. APPOINTMENT OF SUB-ADVISER. The Adviser hereby appoints the Sub-Adviser
to act as investment sub-adviser or co-investment sub-adviser with respect to
the Funds, under the supervision of the Adviser and subject to the policies and
control of the Trust's Board of Trustees, and the Sub-Adviser hereby accepts
such appointment, all subject to the terms and conditions contained herein.
2. SERVICES OF SUB-ADVISER. Subject to the oversight and supervision of
the Adviser and the Trust's Board of Trustees, the Sub-Adviser will provide a
continuous investment program for the Funds, including investment research and
management with respect to all equity securities and investments; provided,
however, that with respect to Nations Asset Allocation Fund, the Sub-Adviser
-1-
<PAGE>
will manage such Fund's equity investments, as a percentage of such Fund as may
be determined from time-to-time by TradeStreet Investment Associates, Inc.
Pursuant to the foregoing, the Sub-Adviser will determine from time to time what
securities and other investments will be purchased, retained or sold by the
Funds. The Sub-Adviser will provide the services rendered by it under this
Agreement in accordance with the investment criteria and policies established
from time to time for the Funds by the Adviser, the Funds' investment
objectives, strategies and restrictions as stated in the Funds' Prospectuses and
Statement of Additional Information, the operating policies and procedures of
the Funds, and resolutions of the Trust's Board of Trustees.
The Sub-Adviser further agrees that it will:
(a) Provide information to the Funds' accountant for the
purpose of updating the Funds' cash availability
throughout the day as required;
(b) Maintain historical tax lots for each portfolio
security held by the Funds;
(c) Transmit trades to the Trust's custodian for proper
settlement in accordance with the Trust's procedures
and as may be directed by the Trust or the Adviser;
(d) Maintain all books and records with respect to the
Funds that are required to be maintained under Rule
31a-l(f) under the 1940 Act;
(e) Supply the Adviser, the Trust and the Trust's Board of
Trustees with reports, statistical data and economic
information as requested; and
(f) Prepare a quarterly broker security transaction summary
and, if requested in advance, monthly security
transaction listing for the Funds.
3. CONTROL BY BOARD OF TRUSTEES. As is the case with respect to the
Adviser under the Investment Advisory Agreement, any investment activities
undertaken by the Sub-Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser with respect to the Trust, shall at all
times be subject to any directives of the Board of Trustees of the Trust.
4. OTHER COVENANTS. In carrying out its obligations under this Agreement,
the Sub-Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations
of the Commission and will in addition conduct its
activities under this Agreement in accordance with
other applicable law, including but not limited to the
1940 Act and the Advisers Act;
(b) will use the same skill and care in providing such
services as it uses in providing services to fiduciary
accounts for which it has investment responsibilities;
-2-
<PAGE>
(c) will not make loans to any person to purchase or carry
Fund shares;
(d) will place orders pursuant to its investment
determinations for the Funds either directly with the
issuer or with any broker or dealer. Subject to the
other provisions of this paragraph, in executing
portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to
seek on behalf of each Fund the best overall terms
available. In assessing the best overall terms
available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, including
the breadth of the market in the security, the price of
the security, the financial condition and execution
capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the
specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in
selecting the broker/dealer to execute a particular
transaction, the Sub-Adviser may also consider any
brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act
of 1934, as amended) provided to the Fund and/or other
accounts over which the Sub-Adviser or an affiliate of
the Sub-Adviser exercises investment discretion. The
Sub-Adviser is authorized, subject to prior approval of
the Trust's Board of Trustees, to pay to a broker or
dealer who provides such brokerage and research
services a commission for executing a portfolio
transaction for any Fund which is in excess of the
amount of commission another broker or dealer would
have charged for effecting that transaction if, but
only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value
of the brokerage and research services provided by such
broker or dealer -- viewed in terms of that particular
transaction or in terms of the overall responsibilities
of the Sub-Adviser to its clients, including the
particular Fund and to the Trust. In addition, the
Sub-Adviser is authorized to take into account the sale
of shares of the Trust in allocating purchase and sale
orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with
the Sub-Adviser or the Trust's principal underwriter),
provided that the Sub-Adviser believes that the quality
of the transaction and the commission are comparable to
what they would be with other qualified firms. In no
instance, however, will portfolio securities be
purchased from or sold to the Adviser, Sub-Adviser or
the Trust's principal underwriter for the Funds or an
affiliated person of either acting as principal or
broker, except as permitted by the Commission or
applicable law;
(e) will adhere to the policies and procedures of the Trust
adopted on behalf of the Funds;
(f) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of
the commercial banking operations of its affiliates. In
making investment recommendations for a Fund, its
investment advisory personnel will not inquire or take
into consideration whether the issuer (or related
-3-
<PAGE>
supporting institution) of securities proposed for
purchase or sale for the Fund's account are customers
of the commercial departments of its affiliates;
(g) will use reasonable efforts to perform its duties and
obligations under this Agreement without: (a) any
failure of its computer systems, or those used by it in
the performance of its duties hereunder, properly to
record, store, process, calculate or present calendar
dates falling on and after, and time spans including,
September 9, 1999, January 1, 2000 or February 29, 2000
(the "Subject Dates") as a result of the occurrence, or
use of data containing any such Subject Dates; (b) any
failure of its computer systems, or those used by it in
the performance of its duties hereunder, to calculate
any information dependent on or relating to dates on or
after the Subject Dates; or (c) any loss of
functionality or performance with respect to the
maintenance of records or processing of data containing
dates falling on or after the Subject Dates ((a), (b),
and (c) above shall be referred to as "Y2K Failures").
Notwithstanding the above, the Sub-Adviser shall not be
liable for any Y2K Failures caused by Y2K Failures in a
third party system with which the Sub-Adviser
interfaces or from which the Sub-Adviser receives data
in connection with the performance of its duties
hereunder; and
(h) will treat confidentially and as proprietary
information of the Trust all records and other
information relative to the Trust and prior, present or
potential shareholders, and will not use such records
and information for any purpose other than performance
of its responsibilities and duties hereunder (except
after prior notification to and approval in writing by
the Trust, which approval shall not be unreasonably
withheld and may not be withheld and will be deemed
granted where the Sub-Adviser may be exposed to civil
or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly
constituted authorities, or when so requested by the
Trust).
5. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-Adviser
hereunder are deemed not to be exclusive, and the Sub-Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. To the extent that the purchase or sale of securities
or other investments of the same issuer may be deemed by the Sub-Adviser to be
suitable for two more accounts managed by the Sub-Adviser, the available
securities or investments may be allocated in a manner believed by the
Sub-Adviser to be equitable to each account. It is recognized that in some cases
this procedure may adversely affect the price paid or received by a Fund or the
size of the position obtainable for or disposed of by a Fund.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for each Fund are the property of the Trust and further agrees to
surrender promptly to the Adviser or the Trust any of such records upon request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
-4-
<PAGE>
7. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased or sold for the Funds.
8. COMPENSATION. For the services provided to each Fund and the expenses
assumed pursuant to this Agreement, the Adviser will pay the Sub-Adviser and the
Sub-Adviser will accept as full compensation therefor a fee for that Fund
determined in accordance with Schedule I attached hereto. The Adviser and the
Sub-Adviser may, from time to time, agree to reduce, limit or waive the amounts
payable hereunder with respect to one or more Funds for such period or periods
they deem advisable. It is understood that the Adviser shall be responsible for
the Sub-Adviser's fee for its services hereunder, and the Sub-Adviser agrees
that it shall have no claim against the Trust or the Fund with respect to
compensation under this Agreement.
9. LIABILITY OF SUB-ADVISER. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Adviser or
the Company in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or negligence on the part of the Sub-Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
10. DURATION AND TERMINATION. This Agreement shall become effective when
approved, and shall continue in effect until the second anniversary of its
effective date. Thereafter, if not terminated, this Agreement shall continue in
effect for successive annual periods ending on January 1, provided that the
continuation of the Agreement is specifically approved at least annually:
(a)(i) by the Trust's Board of Trustees or (ii) by the vote
of "a majority of the outstanding voting securities"
of the Fund (as defined in Section 2(a)(42) of the
1940 Act); and
(b) by the affirmative vote of a majority of the Trustees
of the Trust who are not parties to this Agreement or
"interested persons" (as defined in the 1940 Act) of
a party to this Agreement (other than as Trustees of
the Trust), by votes cast in person at a meeting
specifically called for such purpose.
Notwithstanding the foregoing, this Agreement may be terminated as to any Fund
at any time, without the payment of any penalty, by the Trust (by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding voting
securities of the particular Fund), or by the Sub-Adviser or Adviser on sixty
(60) days' written notice to the other parties to this Agreement. The notice
provided for herein may be waived by the party entitled to receipt thereof. This
Agreement will immediately terminate in the event of its assignment. As used in
this Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as such terms
have in the 1940 Act.
-5-
<PAGE>
11. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement affecting a
Fund shall be effective until approved by vote of a majority of the outstanding
voting securities of such Fund. However, this shall not prevent the Sub-Adviser
from reducing, limiting or waiving its fee.
12. RELEASE. The names "Nations Institutional Reserves" and "Trustees of
Nations Institutional Reserves" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated January 22, 1990, which is hereby
referred to and a copy of which is on file at the office of the Secretary of The
Commonwealth of Massachusetts and the principal office of the Trust. The
obligations of "Nations Institutional Reserves" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust property, and all persons dealing with any class of shares of the
Trust must look solely to the property belonging to such class for the
enforcement of any claims against the Trust.
13. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and shall be
governed by Delaware law.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
NATIONS INSTITUTIONAL RESERVES
on behalf of the Funds
By: /s/ A. Max Walker
--------------------------
A. Max Walker
President and Chairman of
the Board of Trustees
NATIONSBANC ADVISORS, INC.
By: /s/ Robert H. Gordon
--------------------------
Robert H. Gordon
President
CHICAGO EQUITY PARTNERS
CORPORATION
By: /s/ James D. Miller
--------------------------
James D. Miller
Executive Vice President
-7-
<PAGE>
SCHEDULE I
The Adviser shall pay the Sub-Adviser as full compensation for services
provided and expenses assumed hereunder, a sub-advisory fee for each Fund,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Fund under the Sub-Adviser's
management:
Fund Rate of Compensation
---- --------------------
Nations Asset Allocation Fund 0.25%
(equity portion)
-8-
SUB-ADVISORY AGREEMENT
NATIONS INSTITUTIONAL RESERVES
THIS AGREEMENT is made this 19th day of August, 1999, by and among
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
GARTMORE GLOBAL PARTNERS, a general partnership organized under the laws of the
State of Delaware (the "Sub-Adviser"), and NATIONS INSTITUTIONAL RESERVES (the
"Trust"), on behalf of the portfolio or portfolios of the Trust as now or
hereafter may be identified on Schedule I hereto (each a "Fund" and
collectively, the "Funds").
RECITALS
WHEREAS, the Trust is a Massachusetts business trust registered
under the Investment Company Act of 1940, as amended (the "1940 Act") as an
open-end, series management investment company; and
WHEREAS, the Adviser is a national bank that serves as investment
adviser to other registered investment companies and various investment
accounts; and
WHEREAS, the Sub-Adviser is registered under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), as an investment adviser
and engages in the business of acting as an investment adviser, and is regulated
by the Investment Management Regulatory Organization Limited ("IMRO") of the
United Kingdom in the conduct of its investment business and is a member of
IMRO; and
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement of even date herewith (the "Investment Advisory Agreement"),
pursuant to which the Adviser shall act as investment adviser with respect to
the Funds; and
WHEREAS, pursuant to such Investment Advisory Agreement, the
Adviser, with the approval of the Trust, wishes to retain the Sub-Adviser for
purposes of rendering advisory services to the Adviser and the Trust in
connection with the Funds upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT OF SUB-ADVISER. The Adviser hereby appoints, and
the Trust hereby approves, the Sub-Adviser to render investment research and
advisory services to the Adviser and the Trust with respect to the Funds, under
the supervision of the Adviser and subject to the policies and control of the
Trust's Board of Trustees, and the Sub-Adviser hereby accepts such appointment,
all subject to the terms and conditions contained herein.
<PAGE>
2. INVESTMENT SERVICES. The specific duties of the Adviser
delegated to the Sub-Adviser shall be the following:
(a) obtaining and evaluating pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally
or the Funds specifically, and whether concerning the individual issuers
whose securities are included in the Funds or the activities in which
such issuers engage, or with respect to securities which the Adviser or
Sub-Adviser considers desirable for inclusion in the Funds;
(b) investing and reinvesting, on an ongoing basis, assets
held in the Funds in strict accordance with the investment policies of
the Funds as set forth in the registration statement of the Trust with
respect to the Funds, as the same may be amended from time to time;
(c) in accordance with policies and procedures established
by the Board of Trustees of the Trust and the Adviser, selecting brokers
and dealers to execute portfolio transactions for the Funds and
selecting the markets on or in which the transactions will be executed;
(d) voting, either in person or by general or limited
proxy, or refraining from voting, any securities held in the Funds for
any purposes; exercising or selling any subscription or conversion
rights; consenting to and joining in or opposing any voting trusts,
reorganizations, consolidations, mergers, foreclosures and liquidations
and in connection therewith, depositing securities, and accepting and
holding other property received therefor, all as may be considered
appropriate by the Sub-Adviser; and
(e) performing other acts necessary or appropriate in
connection with the proper management of the Funds, consistent with its
obligations hereunder, and as may be directed by the Adviser and/or the
Trust's Board of Trustees.
In carrying out its obligations under clauses (b) to (e),
inclusive, of this Paragraph 2, the Sub-Adviser shall act only as agent of the
Trust and/or the Fund and shall not act as principal. The Sub-Adviser shall not
be responsible for the administration of the Fund, for the execution and
settlement of transactions in securities or derivative instruments nor for the
custody of any such securities or instruments or documents of title and the
Sub-Adviser shall not hold any money or other assets of the Fund or the Trust.
3. CONTROL BY BOARD OF TRUSTEES. As is the case with respect to
the Adviser under the Investment Advisory Agreement, any investment activities
undertaken by the Sub-Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser with respect to the Funds, shall at all
times be subject to any directives of the Board of Trustees of the Trust.
Without limiting the right of the Board of Trustees of the Trust to issue
directives, the Board of Trustees shall take into consideration any views or
opinions that may be expressed by the Adviser of the Sub-Adviser in formulating
2
<PAGE>
policies, procedures and directives. The Sub-Adviser shall not be obligated to
conform its activities to any directive of the Board of Trustees of the Trust to
the extent that compliance with such directive would be in contravention of any
law, rule or regulation applicable to the Sub-Adviser.
4. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, the Sub-Adviser shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules
and regulations adopted thereunder;
(b) the provisions of the registration statement of the
Trust applicable to the Funds, as the same may be amended from time to
time, under the Securities Act of 1933 and the 1940 Act;
(c) the Conduct of Business Rules of IMRO ("IMRO Rules") to
the extent that the IMRO Rules are not inconsistent with any applicable
requirements under the 1940 Act, the Advisers Act or other United States
federal or state law; and
(d) such policies and procedures that may be established by
the Board of Trustees of the Trust and communicated to the Sub-Adviser
from time to time.
In addition, any code of ethics adopted by the Sub-Adviser
pursuant to Rule 17j-1 under the 1940 Act shall include policies, prohibitions
and procedures which substantially conform to the recommendations regarding
personal investing approved by the Board of Governors of the Investment Company
Institute on June 30, 1994, as such recommendations may be amended from time to
time.
5. COMPENSATION. The Adviser shall pay the Sub-Adviser, as
compensation for services rendered hereunder, fees, payable monthly, at the
annual rates indicated on Schedule I hereto, as such Schedule may be
supplemented and amended from time to time. It is understood that the Adviser
shall be responsible for the Sub-Adviser's fee for its services hereunder, and
the Sub-Adviser agrees that it shall have no claim against the Trust or the Fund
with respect to compensation under this Agreement. The Sub-Adviser's fees shall
be pro-rated for portions of months in which sub-advisory services are provided.
The average daily net asset value of the Funds shall be determined
in the manner set forth in the Articles of Incorporation and registration
statement of the Trust, as amended from time to time.
6. EXPENSES OF THE FUNDS. All of the ordinary business expenses
incurred by the Sub-Adviser in the operations of the Funds and the offering of
their shares shall be borne by the Funds unless specifically provided otherwise
in this Agreement. These expenses borne by the Funds include but are not limited
to brokerage commissions, taxes, legal, auditing, or governmental fees, the cost
of preparing share certificates, custodian, transfer agent and shareholder
service agent costs, expenses of issue, sale, redemption and repurchase of
3
<PAGE>
shares, Trustees and shareholder meetings, the cost of preparing and
distributing reports and notices to shareholders, the fees and other expenses
incurred by the Funds in connection with membership in investment company
organizations and the cost of printing copies of prospectuses and statements of
additional information distributed to the Funds' shareholders.
7. EXPENSE LIMITATION. If, for any fiscal year a Fund, the amount
of the aggregate advisory fee which the Trust would otherwise be obligated to
pay with respect to the Fund is reduced pursuant to expense limitation
provisions of the Investment Advisory Agreement, the fee which the Sub-Adviser
would otherwise receive pursuant to this Agreement shall be reduced
proportionately.
8. NON-EXCLUSIVITY. The services of the Sub-Adviser to the Adviser
and the Trust with respect to the Fund are not to be deemed to be exclusive, and
the Sub-Adviser shall be free to render investment advisory and administrative
or other services to others (including other investment companies) and to engage
in other activities. It is understood and agreed that the officers and directors
of the Sub-Adviser are not prohibited from engaging in any other business
activity or from rendering services to any other person, or from serving as
partners, officers, directors or trustees of any other firm or trust, including
other investment advisory companies.
9. RECORDS. The Sub-Adviser shall provide to the Adviser, with
respect to the orders the Sub-Adviser places for the purchases and sales of
portfolio securities of the Funds, the documents and records required pursuant
to Rule 31a-1 under the 1940 Act as well as such records as the Funds'
administrator reasonably requests to be maintained, including, but not limited
to, trade tickets and confirmations for portfolio trades. All such records shall
be maintained in a form acceptable to the Funds and in compliance with the
provisions of Rule 31a-1. All such records will be the property of the Funds and
will be available for inspection and use by the Funds. The Sub-Adviser will
promptly notify the Adviser and the Fund's administrator if it experiences any
difficulty in providing the records in an accurate and complete manner.
10. TERM AND APPROVAL. This Agreement shall become effective when
approved, and shall continue in effect until the second anniversary of its
effective date. Thereafter, if not terminated, this Agreement shall continue in
effect for successive annual periods ending on January 1, provided that the
continuation of the Agreement is specifically approved at least annually:
(a)(i) by the Trust's Board of Trustees or (ii) by the vote
of "a majority of the outstanding voting securities" of the Master
Portfolio (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the Trustees
of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of a party to this Agreement
(other than as Trustees of the Trust), by votes cast in person at a
meeting specifically called for such purpose.
4
<PAGE>
11. TERMINATION. This Agreement may be terminated at any time with
respect to a Fund, without the payment of any penalty, by vote of the Trust's
Board of Trustees or by vote of a majority of the Fund's outstanding voting
securities, or by the Adviser, or by the Sub-Adviser on sixty (60) days' written
notice to the other parties to this Agreement. Any party entitled to notice may
waive the notice provided for herein. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
This Agreement shall automatically terminate 120 days after its effectiveness if
the Fund's shareholders have not ratified and approved it within such period.
The Agreement shall automatically terminate upon the effectiveness of a
Sub-Advisory Agreement between the Trust on behalf of the Fund and Gartmore
Global Partners.
12. LIABILITY OF SUB-ADVISER. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Sub-Adviser or any of its officers,
directors, employees or agents, the Sub-Adviser shall not be subject to
liability to the Adviser or to the Trust for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security. For purposes of
this paragraph and paragraph 13, brokers or dealers selected to execute
portfolio transactions for the Fund in accordance with Paragraph 2(c) hereof
shall not be considered agents of the Sub-Adviser.
13. INDEMNIFICATION. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of duties hereunder on the part of
the Sub-Adviser, or any officers, directors, employees or agents thereof, the
Trust hereby agrees to indemnify and hold harmless the Sub-Adviser against all
claims, actions, suits or proceedings at law or in equity whether brought by a
private party or a governmental department, commission, board, bureau, agency or
instrumentality of any kind, (a) arising from the advertising, solicitation,
sale, purchase or pledge of securities, whether of the Funds or other
securities, undertaken by the Funds or the Trust's officers, Trustees,
employees, agents or affiliates, or (b) resulting from any violations of the
securities laws, rules, regulations, statutes and codes, whether federal or of
any state, by the Funds, or the Trust's officers, Trustees, employees or
affiliates.
14. NOTICES. Any notices under this Agreement shall be in writing
and shall be duly given if delivered, mailed (postage prepaid, effective upon
receipt) or telegraphed, telexed or transmitted by similar telecommunications
device (effective upon completion of transmission, with a confirming copy
delivered or mailed postage prepaid) to such address or number as may be
designated for the receipt of such notice, with a copy to the Trust. Until
further notice, it is agreed that the address and telefax number of the Trust
shall be 111 Center Street, Little Rock, Arkansas 72201, Fax No. (501) 377-2331;
that of the Sub-Adviser shall be Gartmore House, 16-18 Monument Street, London
EC3R 8AJ, England, Fax No. 71-782-2075; and that of the Adviser shall be c/o
Mutual Fund Group, 33rd Floor, One Bank of America Plaza, Charlotte, North
Carolina 28255, Fax No. (704) 388-2187.
15. QUESTIONS OF INTERPRETATION. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
5
<PAGE>
to such term or provision of the 1940 Act and to interpretations thereof, if
any, by the United States courts or in the absence of any controlling decision
of any such court, by rules, regulations or orders of the Securities and
Exchange Commission issued pursuant to the 1940 Act. In addition, where the
effect of a requirement of the 1940 Act reflected in any provision of this
Agreement is revised by rule, regulation or order of the Securities and Exchange
Commission, such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
16. IMRO RULES. Addendum A attached hereto sets forth certain
requirements under the IMRO Rules which are applicable to the Sub-Adviser, that
are expressly incorporated herein and made a part hereof, but only to the extent
that such requirements are not inconsistent with any applicable requirements
under the 1940 Act, the Advisers Act or other United States federal or state
law.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in triplicate by their respective officers on the day and year first written
above.
NATIONS INSTITUTIONAL RESERVES,
on behalf of the Funds
By: /s/ A. Max Walker
--------------------------------
A. Max Walker
President and Chairman of the
Board of Trustees
NATIONSBANC ADVISORS, INC.
By: /s/ Robert H. Gordon
--------------------------------
Robert H. Gordon
President
GARTMORE GLOBAL PARTNERS
By: /s/ Chris Russell
--------------------------------
Name: Chris Russell
Title: Member of Management
Committee
7
<PAGE>
SCHEDULE I
Fund Rate of Compensation
---- --------------------
1. Nations Emerging Markets Fund 0.85% of average daily net assets
8
<PAGE>
ADDENDUM A
-----------
1. To the extent that the Sub-Adviser receives any commissions or other forms
of remuneration, directly or indirectly, in connection with Fund
transactions, no portion of the Sub-Adviser's accrued investment advisory
fee shall be abated thereby.
2. Subject to the supervision of the Adviser and the policies and ultimate
control of the Trust's Board of Trustees, the Sub-Adviser shall advise the
Trust and the Adviser on the management of the Funds' investments in
accordance with the terms of this Agreement and in accordance with the
investment parameters (including, inter alia, percentage limitations,
quality standards, investment selection criteria and types of permissible
investments and investment techniques, such as borrowing, options and
futures transactions, portfolio securities lending, etc.) established
pursuant to the investment objectives, policies and restrictions
specifically embodied in the Trust's Registration Statement on Form N-1A,
and any amendments thereto, under the Securities Act of 1933 and the 1940
Act (the "Fund's Registration Statement").
3. The Sub-Adviser shall not have or maintain custody of any securities, cash
or other assets of the Funds. Custody of the Funds' assets will be
maintained by the custodian bank pursuant to an agreement approved by the
Funds' Board of Trustees. It is expected that such custodian, or any
successor thereto, will not be an "Associate" of the Sub-Adviser as that
term is defined under IMRO Rules.
4. In the event the Funds or the Adviser has a significant complaint regarding
the services provided by the Sub-Adviser under the Sub-Advisory Agreement
by and among the Trust, the Adviser and the Sub-Adviser, a Fund officer
should communicate such complaint to the Sub-Adviser, whereupon such
complaint will be recorded on a standard form prepared by the Sub-Adviser
for such purposes. The Sub-Adviser's complaints procedure requires that if
a complaint has not been cleared within twenty-one (21) days, the
Sub-Adviser must so advise IMRO and the Fund also must be advised that it
has the right to issue its complaint directly with a referee appointed by
IMRO.
5. The Sub-Adviser will provide to the Funds' Board of Trustees written
financial reports and analyses on the Funds' securities transactions and
the operations of comparable investment companies on a quarterly basis or
more frequently as requested by the Board of Trustees. Such reports and
analyses shall include information as at the last day of an applicable
reporting period.
6. The Funds may from time to time request or instruct the Sub-Adviser,
directly or through the Adviser, to act or not to act regarding certain
Fund-related investment and/or operational matters. Such request or
instructions will be communicated orally or in writing to the Sub-Adviser,
directly or through the Adviser and will be acknowledged in the same manner
in which they are communicated. To the extent that a particular request or
instruction is, or may be, refused (i.e., because it (a) is in
contravention of (i) a law or regulation, (ii) an investment policy of the
Fund, or (iii) a provision of this Agreement or (b) is not operationally
feasible), such refusal shall be communicated by the Sub-Adviser, including
through the Adviser, and the Fund and the Sub-Adviser, upon advice of
counsel, shall discuss alternatives and determine an appropriate course of
action which will be reported to the full Board at the next meeting of the
Fund's Board of Trustees for its approval.
9
<PAGE>
7. Notwithstanding that all required disclosure concerning the risks
associated with the Funds' permissible investments and investment
techniques is included in the Funds' Registration Statement, which
Statement is intended for review by the investors in the Funds and to be
retained by them for future reference, with respect to the Funds' specified
use of options and futures transactions, the following shall be
specifically noted herein:
"Options and futures markets can be highly volatile and transactions of
this type carry a high risk of loss. Moreover, a relatively small
adverse market movement with respect to these types of transactions may
result not only in loss of the original investment but also in
unquantifiable further loss exceeding any margin deposited."
Further, in managing the Funds' assets, the Sub-Adviser shall consider the
risks associated with the Fund's permissible investments and investment
techniques.
8. The Sub-Adviser or its representatives may from time to time recommend to
the Funds or effect on behalf of the Funds with respect to Fund
transactions in securities the subject of a recent new issue, the price of
which transactions may have been influenced by bids made or transactions
effected for the purpose of stabilizing the price of those securities. Such
transactions would at all times be effected in accordance with the
provisions of IMRO Rule 14 and, in particular, with the conditions of the
IMRO Rule 14.02, including the requirement that the Sub-Adviser, with
respect to any specific transaction, communicate to the Fund orally or in
writing a statement in a form substantially similar to that which is set
forth in IMRO Rule 14.02(c). In addition, with respect to these
transactions, it is understood when executing this Agreement and thereafter
when approving the continuance of this Agreement in accordance with its
terms, that management of the Fund has carefully read the following
paragraphs in order to enable Fund management to judge whether it wishes a
Fund's assets to be invested at all in such securities or, if so, whether
it wishes to authorize the Sub-Adviser generally to effect transactions in
such securities on behalf of the Fund without further reference to Fund
management or whether Fund management wishes to be consulted before any
particular transaction is effected on behalf of the Fund.
Stabilization is a process whereby the market price of a security is pegged
or fixed during the period in which a new issue of securities is sold to
the public. Stabilization may take place in the new issue or in other
securities related to the new issue in such a way that the price of the
other securities may affect the price of the new issue or vice versa.
The reason stabilization is permitted is that when a new issue is brought
to market the sudden glut will sometimes force the price lower for a period
of time before buyers are found for the securities on offer.
10
<PAGE>
As long as it obeys a strict set of rules, the "stabilizing manager,"
normally the issuing house chiefly responsible for bringing a new issue to
market, is entitled to buy securities in the market that it has previously
sold to investors or allotted to institutions who were included in the new
issue but who have decided not to continue participating. The effect of
this may be to keep the price at a higher level than would otherwise be the
case during the period of stabilizing.
The rules referred to above in the immediately preceding paragraph limit
the period in which the stabilizing manager may stabilize, fix the price at
which it may stabilize (in the case of shares and warrants, but not bonds),
and require the stabilizing manager to disclose that it may be (but not
that it is) stabilizing. The fact that a new issue or a related security is
being stabilized does not in itself mean that investors are not interested
in the issue, but neither should the existence of transactions in an issue
where the stabilizing may take place be relied upon as an indication that
investors are interested in the new issue or interested in purchasing at
the price at which transactions are taking place.
9. A report containing the Funds' financial statements (including the contents
and valuation of the Funds) shall be submitted to shareholders and to the
Securities and Exchange Commission at least semi-annually. Such reports
shall include information as at the last day of any semi-annual period for
which such reports relate. To the extent that any performance information
is included in such report, it shall conform to the standards set forth in
the Funds' Registration Statement.
10. Except as permitted by or pursuant to Section 17 of the 1940 Act and the
Rules promulgated thereunder, the Sub-Adviser, or an "affiliate" thereof
(as that term is defined in the 1940 Act), may not effect transactions: (i)
with or for the Funds in which the Sub-Adviser or such affiliate has
directly or indirectly a material interest or a relationship of any kind
with another party which may involve a conflict with the Sub-Adviser's
responsibilities to the Funds as a sub-investment adviser; or (ii) with or
through the agency or another person with whom the Sub-Adviser or such
affiliate maintains an arrangement as described in Rule 6.01 of Chapter IV
of the IMRO Rules.
11. Upon termination of the Sub-Advisory Agreement by and among the Trust, the
Adviser and the Sub-Adviser, unless otherwise directed by the Fund's Board
of Trustees, all securities positions and other portfolio transactions then
in progress shall be transferred to the successor investment adviser
selected by the Board of Trustees.
12. The Sub-Adviser shall be entitled at its discretion to disclose any
information known to it relating to the Fund's business or affairs to the
Securities and Investment Board or to IMRO on the terms that the
information so disclosed shall not without its consent be further disclosed
otherwise than is permitted in respect of Restricted Information under the
provisions of Part VIII of the Financial Services Act of 1986.
11
DISTRIBUTION AGREEMENT
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Gentlemen:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, The Capitol Mutual Funds ("Capitol
Funds"), a Massachusetts business trust, has agreed that Stephens Inc. (the
"Distributor") shall be, for the period of this Agreement, the exclusive
distributor of the units of beneficial interest in all classes of shares
("Shares") of the investment portfolios of Capitol Funds listed on Schedule I
(individually, a "Fund" and collectively the "Funds"). Absent written
notification to the contrary by either Capitol Funds or the Distributor, each
new investment portfolio of Capitol Funds established in the future shall
automatically become a "Fund" for all purposes hereunder and shares of each new
class established in the future shall automatically become "Shares" for all
purposes hereunder as if set forth on Schedule I.
1. Services as Distributor.
-----------------------
1.1 The Distributor will act as agent for the distribution of
Shares in accordance with the instructions of Capitol Funds' Board of Trustees
and Capitol Funds' registration statement and prospectus then in effect under
the Securities Act of 1933, as amended, and will transmit promptly any orders
received by it for the purchase or redemption of Shares to Capitol Funds or its
transfer agent.
1.2 The Distributor agrees to use appropriate efforts to solicit
orders for the sale of Shares and will undertake such advertising and promotion
as it believes appropriate in connection with such solicitation. Capitol Funds
understands that the Distributor is and may in the future be the distributor of
shares of other investment company portfolios ("Portfolios") including
Portfolios having investment objectives similar to those of the Funds. Capitol
Funds further understands that existing and future investors in the Funds may
invest in shares of such other Portfolios. Capitol Funds agrees that the
Distributor's duties to such Portfolios shall not be deemed in conflict with its
duties to Capitol Funds under this paragraph 1.2.
1.3 The Distributor shall, at its own expense, finance such
activities as it deems reasonable and which are primarily intended to result in
the sale of Shares, including, but not limited to, advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing of
prospectuses to other than current shareholders, and the printing and mailing of
sales literature. The Distributor shall be responsible for reviewing and
providing advice and counsel on all sales literature (e.g., advertisements,
brochures and shareholder communications) with respect to each of the Funds. In
addition, the Distributor will provide one or more persons, during normal
business hours, to respond to telephone questions with respect to the Funds.
1
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1.4 All activities by the Distributor and its agents and employees
as distributor of Shares shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940 ("1940 Act") by the
Securities and Exchange Commission (the "SEC") or any securities association
registered under the Securities Exchange Act of 1934.
1.5 Whenever in their judgment such action is warranted by unusual
market, economic or political conditions, or by other circumstances of any kind,
Capitol Funds' officers may decline to accept any orders for, or make any sales
of Shares until such time as those officers deem it advisable to accept such
orders and to make such sales.
1.6 Capitol Funds agrees at its own expense to execute any and all
documents and to furnish any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the registration or
qualification of Shares for sale in such states as the Distributor may designate
to Capitol Funds and Capitol Funds may approve, and Capitol Funds shall pay all
fees and other expenses incurred in connection with such registration or
qualification.
1.7 Capitol Funds shall furnish from time to time, for use in
connection with the sale of Shares, such information with respect to the Funds
and Shares as the Distributor may reasonably request; and Capitol Funds warrants
that the statements contained in any such information shall fairly show or
represent what they purport to show or represent. Capitol Funds shall also
furnish the Distributor upon request with: (a) audited annual and unaudited
semi-annual statements of Capitol Funds' books and accounts with respect to each
Fund, and, (b) from time to time such additional information regarding the
Funds' financial condition as the Distributor may reasonably request.
1.8 The Distributor may be compensated or reimbursed for all or a
portion of the expenses described above to the extent permitted by a
distribution plan adopted by Capitol Funds on behalf of a Fund pursuant to Rule
12b-1 under the 1940 Act. No provision of this Agreement shall be deemed to
prohibit any payments by a Fund to the Distributor or by a Fund or the
Distributor to investment dealers, banks or other financial institutions through
whom shares of the Fund are sold where such payments are made under a
distribution plan adopted by Capitol Funds on behalf of such Fund pursuant to
Rule 12b-1 under the 1940 Act. In addition, Capitol Funds shall pay to the
Distributor the proceeds from any contingent deferred sales charge imposed on
the redemption of the shares as specified in the Fund's Registration Statement.
1.9 The Distributor will execute and deliver agreements with
broker/dealers, financial institutions and other industry professionals based on
the forms attached hereto or based on the additional forms of agreement approved
from time to time by Capitol Funds' Board of Trustees with respect to the
various classes of shares of the Funds, including but not limited to forms of
sales support agreements and shareholder servicing agreements approved in
connection with a distribution and/or servicing plan approved in accordance with
Rule 12b-1 under the 1940 Act.
2
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2. Representations; Indemnification.
--------------------------------
2.1 Capitol Funds represents to the Distributor that all
registration statements and prospectuses filed by Capitol Funds with the SEC
under the Securities Act of 1933, as amended ("Act"), with respect to Shares
have been prepared in conformity with the requirements of said Act and rules and
regulations of the SEC thereunder. As used in this Agreement, the terms
"registration statement" and "prospectus" shall mean any registration statement
and then current prospectus (together with any related then current statement of
additional information) filed with the SEC with respect to Shares, and any
amendments and supplements thereto which at any time shall have been filed
therewith. Capitol Funds represents and warrants to the Distributor that any
registration statement and prospectus, when such registration statement becomes
effective, will contain all statements required to be stated therein in
conformity with said Act and the rules and regulations of the SEC; that all
statements of fact contained in any such registration statement and prospectus
will be true and correct when such registration statement and prospectus become
effective; and that neither any registration statement nor any prospectus when
any registration statement becomes effective will include an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading to a purchaser of
Shares. Capitol Funds may, but shall not be obligated to, propose from time to
time such amendment or amendments to any registration statement and such
supplement or supplements to any prospectus which in light of future
developments, may, in the opinion of Capitol Funds' counsel, be necessary or
advisable. Capitol Funds shall promptly notify the Distributor of any advice
given to it by Capitol Funds' counsel regarding the necessity or advisability so
to amend or supplement such registration statement or prospectus. If Capitol
Funds shall not propose such amendment or amendments and/or supplement or
supplements within fifteen days after receipt by Capitol Funds of a written
request from the Distributor to do so, the Distributor may, at its option,
terminate this Agreement. Capitol Funds shall not file any amendment to any
registration statement or supplement to any prospectus without giving the
Distributor reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit Capitol Funds' right
to file at any time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as Capitol Funds may deem
advisable, such right being in all respects absolute and unconditional.
2.2 Capitol Funds authorizes the Distributor and dealers to use
any prospectus in the form furnished from time to time in connection with the
sale of Shares and represented by Capitol Funds as being the then current form
of prospectus. Capitol Funds agrees to indemnify, defend and hold the
Distributor, its several officers and directors, and any person who controls the
Distributor within the meaning of Section 15 of the Act free and harmless from
and against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Distributor, its
officers and directors, or any such controlling person, may incur under the Act
or under common law or otherwise, arising out of or based upon any untrue
statement, or alleged untrue statement, of a material fact contained in any
registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to state a material fact required to be stated in
any registration statement or prospectus or necessary to make any statement in
3
<PAGE>
such documents not misleading; provided, however, that Capitol Funds' agreement
to indemnify the Distributor, its officers or directors, and any such
controlling person shall not be deemed to cover any claims, demands, liabilities
or expenses arising out of any untrue statement or alleged untrue statement or
omission or alleged omission made in any registration statement or prospectus or
in any financial or other statements, in reliance upon and in conformity with,
any information furnished to Capitol Funds by the Distributor or any affiliate
thereof and used in the preparation thereof; and further provided that Capitol
Funds' agreement to indemnify the Distributor and Capitol Funds' representations
and warranties herein set forth shall not be deemed to cover any liability to
Capitol Funds or its shareholders to which the Distributor would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of the Distributor's reckless disregard
of its obligations and duties under this Agreement. Capitol Funds' agreement to
indemnify the Distributor, its officers and directors, and any such controlling
person, as aforesaid, is expressly conditioned upon Capitol Funds' being
notified of any action brought against the Distributor, its officers or
directors, or any such controlling person, such notification to be given by
letter or by telegram addressed to Capitol Funds at its principal office and
sent to Capitol Funds by the person against whom such action is brought, within
a reasonable period of time after the summons or other first legal process shall
have been served. The failure to so notify Capitol Funds of any such action
shall not relieve Capitol Funds from any liability which Capitol Funds may have
to the person against whom such action is brought by reason of any such untrue,
or allegedly untrue, statement or omission, or alleged omission, otherwise than
on account of Capitol Funds' indemnity agreement contained in this paragraph
2.2. Capitol Funds will be entitled to assume the defense of any suit brought to
enforce any such claim, demand or liability, but, in such case, such defense
shall be conducted by counsel of good standing chosen by Capitol Funds and
approved by the Distributor, which approval shall not unreasonably be withheld.
In the event Capitol Funds elects to assume the defense of any such suit and
retain counsel of good standing approved by the Distributor, the defendant or
defendants in such suit shall bear the fees and expenses of any additional
counsel retained by any of them; but in case Capitol Funds does not elect to
assume the defense of any such suit, or in case the Distributor reasonably does
not approve of counsel chosen by Capitol Funds, Capitol Funds will reimburse the
Distributor, its officers and directors, or the controlling person or persons
named as defendant or defendants in such suit, for the fees and expenses of any
counsel retained by the Distributor or them. Capitol Funds' indemnification
agreement contained in this paragraph 2.2 and Capitol Funds' representations and
warranties in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Distributor, its
officers and directors, or any controlling person, and shall survive the
delivery of any Shares. This agreement of indemnity will inure exclusively to
the Distributor's benefit, to the benefit of its several officers and directors,
and their respective estates, and to the benefit of the controlling persons and
their successors. Capitol Funds agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against Capitol Funds or any of
its officers or trustees in connection with the issue and sale of any Shares.
2.3 The Distributor agrees to indemnify, defend and hold Capitol
Funds, its several officers and trustees, and any person who controls Capitol
Funds within the meaning of Section 15 of the Act free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigation or defending such claims, demands or liabilities and any
4
<PAGE>
counsel fees incurred in connection therewith) which Capitol Funds, its officers
or trustees or any such controlling person, may incur under the Act or under
common law or otherwise, but only to the extent that such liability or expense
incurred by Capitol Funds, its officers or trustees, or such controlling person
resulting from such claims or demands, shall arise out of or be based upon any
untrue, or alleged untrue, statement of a material fact contained in information
furnished by the Distributor or any affiliate thereof to Capitol Funds or its
counsel and used in Capitol Funds' registration statement or corresponding
statements made in the prospectus, or shall arise out of or be based upon any
omission, or alleged omission, to state a material fact in connection with such
information furnished by the Distributor or any affiliate thereof to Capitol
Funds or its counsel required to be stated in such answers or necessary to make
such information not misleading. The Distributor's agreement to indemnify
Capitol Funds, its officers and trustees, and any such controlling person, as
aforesaid, is expressly conditioned upon the Distributor's being notified of any
action brought against Capitol Funds, its officers or trustees, or any such
controlling person, such notification to be given by letter or telegram
addressed to the Distributor at its principal office in Little Rock, Arkansas
and sent to the Distributor by the person against whom such action is brought,
within a reasonable period of time after the summons or other first legal
process shall have been served. The Distributor shall have the right to control
the defense of such action, with counsel of its own choosing, satisfactory to
Capitol Funds, if such action is based solely upon such alleged misstatement or
omission on the Distributor's part or any affiliate thereof, and in any other
event Capitol Funds, its officers or trustees or such controlling person shall
each have the right to participate in the defense or preparation of the defense
of any such action. The failure so to notify the Distributor of any such action
shall not relieve the Distributor or any affiliate thereof from any liability
which the Distributor or any affiliate thereof may have to Capitol Funds, its
officers or trustees, or to such controlling person by reason of any such untrue
or alleged untrue statement, or omission or alleged omission, otherwise than on
account of the Distributor's indemnity agreement contained in this paragraph
2.3.
2.4 No Shares shall be offered by either the Distributor or
Capitol Funds under any of the provisions of this Agreement and no orders for
the purchase or sale of Shares hereunder shall be accepted by Capitol Funds if
and so long as the effectiveness of the registration statement then in effect or
any necessary amendments thereto shall be suspended under any of the provisions
of the Act, or if and so long as a current prospectus, as required by Section
10(b) of said Act, as amended, is not on file with the SEC; provided, however,
that nothing contained in this paragraph 2.4 shall in any way restrict or have
any application to or bearing upon Capitol Funds' obligation to repurchase
Shares from any shareholder in accordance with the provisions of Capitol Funds'
prospectus or Declaration of Trust.
2.5 Capitol Funds agrees to advise the Distributor as soon as
reasonably practical:
(a) of any request by the SEC for amendments to the
registration statement or prospectus then in effect;
(b) of the issuance by the SEC of any stop order suspending
the effectiveness of the registration statement or prospectus then in effect or
of the initiation of any proceeding for that purpose;
5
<PAGE>
(c) of the happening of any event that makes untrue any
statement of a material fact made in the registration statement or prospectus
then in effect or which requires the making of a change in such registration
statement or prospectus in order to make the statements therein not misleading;
(d) of all actions of the SEC with respect to any amendment
to any registration statement or prospectus which may from time to time be filed
with the SEC; and
(e) if a current prospectus is not on file with the SEC.
For purposes of this section, informal requests by or acts of the
Staff of the SEC shall not be deemed actions of or requests by the SEC.
3. Confidentiality.
---------------
The Distributor agrees on behalf of itself and its employees to
treat confidentially and as proprietary information of Capitol Funds, all
records and other information relative to the Funds and/or Capitol Funds and its
prior, present or potential shareholders, and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
Capitol Funds, which approval shall not be unreasonably withheld and may not be
withheld where the Distributor may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by Capitol Funds.
4. Limitations of Liability.
------------------------
4.1 Except as provided in paragraph 2.3, the Distributor shall not
be liable for any error of judgment or mistake or law or for any loss suffered
by Capitol Funds or any Fund in connection with matters to which this agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard of its obligations and duties under this agreement.
4.2 The names "The Capitol Mutual Funds" and "Trustees of The
Capitol Mutual Funds" refer respectively to the Trust created and the Trustees,
as trustees but not individually or personally, acting from time to time under
an Agreement and Declaration of Trust dated January 22, 1990, which is hereby
referred to and a copy of which is on file at the office of the State Secretary
of the Commonwealth of Massachusetts and at the principal office of Capitol
Funds. The obligations of "The Capitol Mutual Funds" entered into, in the name
or on behalf thereof, by any of Capitol Funds' representatives or agents are
made not individually, but in such capacities, and are not binding upon any of
Capitol Funds' Shareholders, or representatives of Capitol Funds personally, but
bind only Capitol Funds Property, and all persons dealing with any class of
Shares of Capitol Funds Property, and all persons dealing with any class of
Shares of Capitol Funds must look solely to Capitol Funds Property belonging to
such class for the enforcement of any claims against Capitol Funds.
6
<PAGE>
5. Term.
----
This agreement shall become effective on the date of its execution
and, unless sooner terminated as provided herein, shall continue thereafter with
respect to each Fund for successive annual periods, provided such continuance is
specifically approved at least annually by (i) Capitol Funds' Board of Trustees
or (ii) by a vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities of the Fund, provided that in either event the continuance is
also approved by the majority of Capitol Funds' Trustees who are not parties to
this agreement or interested persons (as defined in the 1940 Act) of any such
party, by vote cast in person at a meeting called for the purpose of voting on
such approval. This agreement is not assignable and is terminable with respect
to a Fund, without penalty, on not less than sixty days' notice, by Capitol
Funds' Board of Trustees, by vote of a majority (as defined in the 1940 Act) of
the outstanding voting securities of such Fund, or by the Distributor. This
agreement will also terminate automatically in the event of its assignment (as
defined in the 1940 Act).
6. Miscellaneous.
-------------
6.1 No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought.
6.2 This agreement shall be governed by the laws of the State of
Arkansas.
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place indicated below,
whereupon it shall become a binding agreement between us.
7
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Yours very truly,
THE CAPITOL MUTUAL FUNDS
By: /s/ A. Max Walker
------------------------------
Name: A. Max Walker
Title: President and Chairman
of the Board
Accepted:
STEPHENS INC.
By: /s/ R. Greg Feltus
------------------
Name: R. Greg Feltus
Title: Senior Vice President
Dated as of : May 1, 1994
8
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SCHEDULE I
Cash Reserves
Money Market Reserves
Treasury Reserves
Government Reserves
Municipal Reserves
Nations California Tax Exempt Reserves
Nations Asset Allocation Fund
Nations Capital Income Fund
Nations California Municipal Bond Fund
Nations Intermediate Bond Fund
Nations Blue Chip Fund
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations International Equity Fund
Nations International Value Fund
Nations Emerging Markets Fund
Dated: May 1, 1994
Last Amended: August 19, 1999
9
NATIONS FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
PREAMBLE
Effective on or before January 26, 1995, the regulated investment
companies advised by NationsBank, N.A. (Carolinas) or its affiliates (the
"Nations Funds") have adopted THE NATIONS FUNDS RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES (the "Plan") for the benefit of each of the directors and
trustees of each of the Nations Funds who is not an employee of any of the
Nations Funds, or their distributor, administrator or advisor, or any of their
affiliates. As the Plan does not benefit any employees of the Nations Funds, it
is not intended to be classified as an employee benefit plan within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended.
ARTICLE I
DEFINITION OF TERMS AND CONSTRUCTION
1.1 Definitions.
-----------
Unless a different meaning is plainly implied by the context; the
following terms as used in this Plan shall have the following meanings;
(a) "Accrued Benefit" shall mean, as of any date prior to a
Participant's Normal Retirement Date, his Retirement Benefit, determined as of,
and commencing on, his Normal Retirement Date, but based upon his Compensation
and Years of Service computed as of such date of determination.
(b) "Administrator" shall mean the administrative committee
provided for in Article VI.
(c) "Board of Directors" shall mean the Board of Directors of each
of the Nations Funds.
(d) "Compensation" shall mean, for any Director, the aggregate
amount of director's fees paid or accrued by the Nations Funds for such Director
during the calendar year during which the Director's Retirement occurs,
including amounts of director's fees deferred during such fiscal year under a
separate agreement between the Nations Funds and the Director. In addition, for
purposes of this Plan, "Compensation" shall include fees which would have been
paid or accrued by the Nations Funds for such Director during the calendar year
during which the Director's Retirement occurs but for the execution of a waiver
1
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of such fees by the Director. In the event the Director's Retirement occurs on
other than the last day of the calendar year, his Compensation for such calendar
year shall be annualized, if necessary, to reflect the amount he would have
received (including deferred amounts) had his Retirement occurred on the last
day of such calendar year. The amount of such annualized Compensation shall be
determined by the Administrator.
(e) "Deferred Retirement Date" shall mean the first day of the
month coincident with or next following the date on which a Participant
terminated Service after his Normal Retirement Date.
(f) "Director" shall mean an individual who is a director or
trustee of one or more of the Nations Funds which have adopted the Plan but who
is not an employee of any of the Nations Funds, or their distributor,
administrator or advisor, or any of their affiliates. A director or trustee
shall not be considered to be an employee of any of the Nations Funds for
purposes of this Plan solely by reason of holding a position as an officer of a
Fund, provided the director or trustee receives no compensation from the Fund
other than director's or trustee's fees.
(g) "Disability" shall mean the inability of the Participant to
participate in meetings of the Board of Directors, either in person or by
telephone, for a period of at least nine (9) consecutive months.
(h) "Effective Date" shall mean, with respect to each of the
Nations Funds, the date on which this Plan was adopted (as shown on the last
page hereof).
(i) "Fund" shall mean a Nations Fund which has adopted this Plan.
(j) "Nations Funds" shall mean the regulated investment companies
advised by NationsBank, N.A. (Carolinas), or its affiliates.
(k) "Normal Retirement Date" shall mean the date on which a
Participant has both attained age 65 and has completed at least five continuous
and non-forfeited Years of Service with one or more of the Nations Funds.
(l) "Participant" shall mean a Director who has met all of the
eligibility requirements of the Plan and who is currently included in the Plan
as provided in Article II hereof.
(m) "Plan" shall mean the "Nations Funds Retirement Plan for
Eligible Directors/ Trustees" as described herein or as hereafter amended from
time to time.
(n) "Plan Year" shall mean a calendar year.
2
<PAGE>
(o) "Retirement" shall mean a Director's termination of his active
Service with the Nations Funds on or after his Normal Retirement Date, due to
his death, Disability, or voluntary or involuntary termination of his Service.
(p) "Retirement Benefit" shall mean the benefit described under
Sections 3.1 or 3.2 hereof to which a Participant is entitled on or after his
Normal or Deferred Retirement Date.
(q) "Service" shall mean an individual's serving as a Director of
one or more of the Nations Funds.
(r) "Year of Service" shall mean each complete calendar year
during which the Director was a Director for the entirety of such calendar year,
including years of unbroken service prior to the Effective Date. For all
purposes of this Plan, in the event a Director ceases to serve as a Director
prior to his Normal Retirement Date, he shall forfeit credit for all Years of
Service completed prior to such cessation even if he subsequently again becomes
a Director. Furthermore, any unbroken service provided by a Participant (i) to a
Nations Fund immediately prior to its being advised by NationsBank, N.A.
(Carolinas) (or any of its affiliates) or (ii) to a predecessor of a Nations
Fund immediately prior to its being merged into such Nations Fund, will be taken
into account in determining such Participant's Years of Service, subject to all
restrictions and other forfeiture provisions contained herein.
1.2 Plurals and Gender.
------------------
Where appearing in the Plan, the masculine gender shall include
the feminine and neuter genders, and the singular shall include the plural, and
vice versa, unless the context clearly indicates a different meaning.
1.3 Directors/Trustees.
------------------
Where appropriate, the term "director" shall also refer to
"trustee," "directorship" shall also refer to "trusteeship" and "Board of
Directors" shall also refer to "Board of Trustees."
1.4 Headings.
--------
The headings and sub-headings in this Plan are inserted for the
convenience of reference only and are to be ignored in any construction of the
provisions hereof.
1.5 Severability.
------------
In case any provision of this Plan shall be held illegal or void,
such illegality or invalidity shall not affect the remaining provisions of this
Plan, but shall be fully severable, and the Plan shall be construed and enforced
as if said illegal or invalid provisions had never been inserted herein.
3
<PAGE>
ARTICLE II
PARTICIPATION
-------------
2.1 Commencement of Participation.
-----------------------------
Each Director shall become a Participant hereunder on the later of
the Effective Date or the date his directorship of one or more of the Nations
Funds commences.
2.2 Termination of Participation.
----------------------------
After commencement or resumption of his participation, a Director
shall remain a Participant until the earliest of the following dates:
(a) His actual Retirement date;
(b) His date of death;
(c) The date on which he otherwise incurs a termination of
Service; or
(d) The effective date of the termination of the Plan.
2.3 Resumption of Participation.
---------------------------
Any Participant whose Service terminates and who thereafter again
becomes a Director shall resume participation immediately upon again becoming a
Director except that, as provided in Section 1.1(t) hereof, if his Service is
terminated prior to his Normal Retirement Date, for all purposes of this Plan he
shall forfeit credit for all Years of Service completed prior to such
termination of his Service.
2.4 Determination of Eligibility.
----------------------------
The Administrator shall determine the eligibility of Directors in
accordance with the provisions of this Article.
4
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ARTICLE III
BENEFITS UPON RETIREMENT
------------------------
AND OTHER TERMINATION OF SERVICE
--------------------------------
3.1 Normal Retirement.
-----------------
Upon Retirement a Participant shall be entitled to receive an
annual benefit from the Nations Fund commencing on the first day of the calendar
quarter coincident with or next following his date of Retirement, payable in
quarterly installments for a period of no more than five (5) years (thus
equaling no more than twenty (20) quarterly installments) equal to five percent
(5%) of his Compensation paid by the Nations Fund multiplied by the number of
his non-forfeited Years of Service (not in excess of ten (10) Years of Service)
completed with respect to any of the Nations Funds.
3.2 Deferred Retirement.
-------------------
In the event that a Participant remains in Service with the
Nations Funds after his Normal Retirement Date, he shall not be entitled to any
benefits hereunder until his Deferred Retirement Date. Commencing on the first
day of the calendar quarter following his Deferred Retirement Date, a
Participant shall be entitled to receive a Retirement Benefit from the Nations
Funds paid in twenty (20) quarterly installments in an amount equal to the
quarterly Retirement Benefit he would have received from the Nations Funds under
Section 3.1 hereof had his Retirement occurred on his Normal Retirement Date,
except that such quarterly benefit shall be computed by including the number of
any additional Years of Service which have accrued since his Normal Retirement
Date (subject to the ten (10) Years of Service limitation set forth under
Section 3.1 hereof) and by taking into account any increases in Compensation
received since his Normal Retirement Date.
3.3 Other Termination of Service.
----------------------------
Upon termination of his participation in this Plan for any reason
prior to his Normal Retirement Date, a Participant shall not be entitled to any
benefit hereunder.
3.4 Benefits Calculated in the Aggregate for all of the Nations Funds.
-----------------------------------------------------------------
With respect to each Participant, the benefits payable hereunder
shall be based on the aggregate Compensation paid by the Nations Funds and on
the Participant's non-forfeited Years of Service. Each Fund's share of the
obligation to provide such benefits shall be determined by use of accounting
methods adopted by the Administrator.
5
<PAGE>
ARTICLE IV
DEATH BENEFITS
--------------
4.1 Death Prior to Commencement of Benefits.
---------------------------------------
In the event of a Participant's death on or after his Normal
Retirement Date, but prior to the commencement of his Retirement Benefits under
Article III hereof, the surviving spouse (if any) of such Participant shall be
entitled to receive a quarterly survivor's benefit for no more than five (5)
years (thus, not exceeding twenty (20) quarterly installments) beginning on the
first day of the calendar quarter next following the date of the Participant's
death equal to fifty percent (50%) of the amount of the quarterly installments
of Retirement Benefits that would have been paid to the Participant under
Sections 3.1 or 3.2 hereof based upon the Participant's Compensation and Years
of Service as of his date of death.
4.2 Death Subsequent to Commencement of Benefits.
--------------------------------------------
In the event a Participant dies after the commencement of his
Retirement Benefit under Article III, but prior to the cessation of the payment
of such Retirement Benefits, the surviving spouse (if any) of such Participant
shall be entitled to receive survivor's benefits equal to fifty percent (50%) of
the amount of the annual Retirement Benefits payable to the Participant under
Article III hereunder, paid at such times, and for such period, as such
Retirement Benefits would have continued to have been paid to the Participant
had he not died.
4.3 Death of Spouse.
---------------
(a) In the event a Participant is not survived by a spouse, no
benefits will be paid hereunder upon the Participant's death.
(b) If a deceased Participant's surviving spouse dies while
receiving survivor's benefits hereunder, any installments not paid at the time
of the surviving spouse's death shall be forfeited.
ARTICLE V
SUSPENSION OF BENEFITS
-----------------------
5.1 Suspension of Benefits Upon Resumption of Service.
-------------------------------------------------
In the case of a Participant who, at a time when he is receiving
Retirement Benefits under Article III of this Plan, resumes Service with any
Nations Fund, such Retirement Benefits shall be suspended until his subsequent
Retirement, termination of Service, or death. Subject to the Years of Service
limitations of Section 3.1 hereof, in the event of his Retirement or termination
of Service following such a suspension, the quarterly amount of his remaining
Retirement Benefits shall thereafter be adjusted to reflect any additional Years
of Service completed by, or a higher rate of Compensation received by, such
Participant.
6
<PAGE>
ARTICLE VI
ADMINISTRATOR
-------------
6.1 Appointment of Administrator.
----------------------------
This plan shall be administered by the Nominating and Compensation
Committees of the Boards of Directors of the Nations Funds. The members of such
committees are not "interested persons" (within the meaning of Section 2(a)(19)
of the Investment Company Act of 1940, as amended) of any of the Nations Funds.
The term "Administrator" as used in this Plan shall refer to the members of such
committees, either individually or collectively, as appropriate.
6.2 Powers and Duties of Administrator.
----------------------------------
Except as provided below, the Administrator shall be authorized in
connection with the administration of this Plan:
(a) To promulgate and enforce such rules, regulations and
procedures as shall be proper for the efficient administration of the Plan;
(b) To determine all questions arising in the administration,
interpretation and application of the Plan, including questions of eligibility
and of the status and rights of the Participants and any other persons
hereunder;
(c) To decide any dispute arising hereunder; provided, however,
that no Administrator shall participate in any matter involving any questions
relating solely to his own participation or benefits under this Plan;
(d) To advise the Boards of Directors of the Nations Funds
regarding the known future need for funds to be available for distribution;
(e) To correct defects, supply omissions and reconcile
inconsistencies to the extent necessary to effectuate the Plan;
(f) To compute the amount of benefits and other payments which
shall be payable to any Participant or surviving spouse in accordance with the
provisions of the Plan and to determine the person or persons to whom such
benefits shall be paid;
(g) To make recommendations to the Boards of Directors of the
Nations Funds with respect to proposed amendments to the Plan;
7
<PAGE>
(h) To file all reports with government agencies; Participants and
other parties as may be required by law, whether such reports are initially the
obligation of the Nations Funds, or the Plan;
(i) To engage an independent actuary on behalf of the Plan and to
cause the liabilities of the Plan to be evaluated by the actuary; and
(j) To have all such other powers as may be necessary to discharge
its duties hereunder.
6.3 Action by Administrator.
-----------------------
The Administrator may elect a Chairman and Secretary from among
its members and may adopt rules for the conduct of its business. A majority of
the members then serving shall constitute a quorum for the transaction of
business. All resolutions or other action taken by the Administrator shall be by
vote of a majority of those present at such meeting and entitled to vote.
Resolutions may be adopted or other action taken without a meeting upon written
consent signed by at least a majority of the members. All documents,
instruments, orders, requests, directions, instructions and other papers shall
be executed on behalf of the Administrator by either the Chairman or the
Secretary of the Administrator, if any, or by any member or agent of the
Administrator duly authorized to act on the Administrator's behalf.
6.4 Participation by Administrators.
-------------------------------
No Administrator shall be precluded from becoming a Participant in
the Plan if he would be otherwise eligible, but he shall not be entitled to vote
or act upon matters or to sign any documents relating specifically to his own
participation under the Plan, except when such matters or documents relate to
benefits generally. If this disqualification results in the lack of a quorum,
then the Boards of Directors, by majority vote of the members of a majority of
such Boards of Directors (a "Majority Vote"), shall appoint a sufficient number
of temporary Administrators, who shall serve for the sole purpose of determining
such a question.
6.5 Agents and Expenses.
-------------------
The Administrator may employ agents and provide for such clerical,
legal, actuarial, accounting, medical, advisory or other services as it deems
necessary to perform its duties under this Plan. The cost of such services and
all other expenses incurred by the Administrator in connection with the
administration of the Plan shall be allocated to each Fund pursuant to the
method utilized under Section 3.4 hereof with respect to costs related to
benefit accruals. For purposes of the preceding sentence, if an individual
serves as a Director for more than one Fund, he shall be deemed to be a separate
Director for each such Fund in determining the aggregate number of Directors of
the Nations Funds.
8
<PAGE>
6.6 Allocation of Duties.
--------------------
The duties, powers and responsibilities reserved to the
Administrator may be allocated among its members so long as such allocation is
pursuant to written procedures adopted by the Administrator, in which case no
Administrator shall have any liability, with respect to any duties, powers or
responsibilities not allocated to him, for the acts or omissions of any other
Administrator.
6.7 Delegation of Duties.
--------------------
The Administrator may delegate any of its duties to employees of
the Nations Funds' distributor, administrator or adviser, or any of their
affiliates, or to any other person or firm, provided that the Administrator
shall prudently choose such agents and rely in good faith on their actions.
6.8 Records and Reports.
-------------------
The Administrator shall maintain adequate records of its actions
and proceedings in administering this Plan and shall file all reports and take
all other actions as it deems appropriate in order to comply with any federal or
state law.
6.9 Information from the Nations Funds.
----------------------------------
The Nations Funds shall promptly furnish all necessary information
to the Administrator to permit it to perform its duties under this Plan. The
Administrator shall be entitled to rely upon the accuracy and completeness of
all information furnished to it by the Nations Funds, unless it knows or should
have know that such information is erroneous.
6.10 Reservation of Rights by Boards of Directors.
--------------------------------------------
When rights are reserved in this plan to the Boards of Directors,
such rights shall be exercised only by Majority Vote of the Boards of Directors,
except where the Boards of Directors, by unanimous written resolution, delegate
any such rights to one or more persons or to the Administrator. Subject to the
rights reserved to the Boards of Directors as set forth in this Plan, no member
of the Boards of Directors shall have any duties or responsibilities under this
Plan, except to the extent he shall be acting in the capacity of an
Administrator.
6.11 Liability and Indemnification.
-----------------------------
(a) The Administrator shall perform all duties required of it
under this Plan in a prudent manner. The Administrator shall not be responsible
in any way for any action or omission of the Nations Funds or any other
fiduciaries in the performance of their duties and obligations as set forth in
this Plan. The Administrator also shall not be responsible for any act or
omission of any of its agents provided that such agents were prudently chosen by
the Administrator and that the Administrator relied in good faith upon the
action of such agents.
9
<PAGE>
(b) The Administrator shall not be relieved from responsibility or
liability for any responsibility, obligation or duty imposed upon it under this
Plan. Except for its own gross negligence, willful misconduct or willful breach
of the terms of this Plan, the Administrator shall be indemnified and held
harmless by the Nations Funds against liability or losses occurring by reason of
any act or omission of the Administrator.
ARTICLE VII
AMENDMENTS AND TERMINATION
--------------------------
7.1 Amendments.
----------
The Boards of Directors reserve the right at any time and from
time to time, and retroactively, if deemed necessary or appropriate by them, to
amend in whole or in part by Majority Vote any or all of the provisions of this
Plan, provided that:
(a) No amendment shall make it possible for any part of a
Participant's Accrued Benefit or Retirement Benefit to be used for, or diverted
to, purposes other than for the exclusive benefit of Participants or their
surviving spouses, except to the extent otherwise provided in this Plan;
(b) No amendment may reduce any Participant's Accrued Benefit as
of the effective date of the amendment;
Amendments may be made in the form of Board of Directors'
resolutions or separate written document.
7.2 Termination.
-----------
Except as provided below, the Boards of Directors reserve the
right to terminate this Plan at any time by Majority Vote by giving to the
Administrator notice in writing of such desire to terminate. The Plan shall
terminate upon the date of receipt of such notice and the rights of all
Participants to their Accrued Benefits (determined as of the date the Plan is
terminated) shall become payable upon the earlier of the effective date of the
termination of the Plan, or, with respect to each Participant, upon his Normal
Retirement Date in quarterly installments or in an actuarially equivalent lump
sump as determined by the Administrator.
7.3 Change in Control.
-----------------
In the event of the voluntary resignation of, or a vote or action
to replace, or a decision not to stand for re-election by, two or more of the
directors of a Nations Fund, in connection with a transaction that involves a
change in control or management of a Nations Fund or an affiliated person of a
Nations Fund, the Plan shall terminate with respect to the directors of the
Nations Fund who have resigned, been replaced or declined to stand for
re-election, on the date they cease being directors and the rights of all such
directors to their Accrued Benefits (determined as of the date of termination of
the Plan) shall become payable in quarterly installments or in an actuarially
equivalent lump sum as determined by the Administrator.
10
<PAGE>
ARTICLE VIII
MISCELLANEOUS
-------------
8.1 Rights of Creditors.
-------------------
(a) The Plan is unfunded. Neither the Participant nor any other
persons shall have any interest in any fund or in any specific asset or assets
of any of the Nations Funds by reason of any Accrued Benefit or Retirement
Benefit hereunder, nor any rights to receive distribution of any Retirement
Benefit except as and to the extent expressly provided hereunder.
(b) The Accrued Benefits and Retirement Benefits of each
Participant are unsecured and shall be subject to the claims of the general
creditors of the Nations Funds.
8.2 Liability Limited.
-----------------
Neither the Nations Funds, the Administrator, nor any agents,
employees, officers, directors or shareholders of any of them, nor any other
person shall have any liability or responsibility with respect to this Plan,
except as expressly provided herein.
8.3 Incapacity.
----------
If the Administrator shall receive evidence satisfactory to it
that a Participant or surviving spouse entitled to any benefit under the Plan
is, at the time when such benefit becomes payable, physically or mentally
incompetent to give a valid release therefor, and that another person or an
institution is then maintaining or has custody of such Participant or surviving
spouse and that no guardian, committee or other representative of the estate of
such Participant or surviving spouse shall have been duly appointed, the
Administrator may make payment of such benefit otherwise payable to such
Participant or surviving spouse to such other person or institution, and the
release of such other person or institution shall be a valid and complete
discharge for the payment of such benefit.
8.4 Cooperation of Parties.
----------------------
All parties to this Plan and any person claiming any interest
hereunder agree to perform any and all acts and execute any and all documents
and papers which are necessary or desirable for carrying out this Plan or any of
its provisions.
11
<PAGE>
8.5 Governing Law.
-------------
This Plan has been adopted in the State of North Carolina and all
questions pertaining to its validity, construction and administration shall be
determined in accordance with the laws of that State.
8.6 No Guarantee of Directorship.
----------------------------
Nothing contained in this Plan shall be construed as a guaranty or
right of any Participant to be continued as a Director of one or more of the
Nations Funds (or of a right of a Director to any specific level of
Compensation) or as a limitation of the right of any of the Nations Funds, by
shareholder action or otherwise, to remove any of its directors.
8.7 Counsel.
-------
The Administrator may consult with legal counsel, who may be
counsel for one or more of the Board of Directors of the Nations Funds and for
the Administrator, with respect to the meaning or construction of this Plan, its
obligations or duties hereunder or with respect to any action or proceeding or
any question of law, and they shall be fully protected with respect to any
action taken or omitted by them in good faith pursuant to the advice of legal
counsel.
8.8 Spendthrift Provision.
---------------------
A Participant's interest in his Accrued Benefit or Retirement
Benefit and the interest of a surviving spouse of a Participant in any benefit
payable under Article IV hereof shall not be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charges and any
attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge the same shall be void; nor shall any portion of any such right hereunder
be in any manner payable to any assignee, receiver or trustee, or be liable for
such person's debts, contracts, liabilities, engagements or torts, or be subject
to any legal process to levy upon or attach.
8.9 Forfeiture for Cause.
--------------------
Notwithstanding any other provision of this Plan to the contrary,
any benefits to which a Participant (or his surviving spouse) may otherwise be
entitled hereunder will be forfeited in the event the Administrator, in its sole
discretion, determines that a Participant's termination of Service is due to
such Participant's willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Director.
12
<PAGE>
ARTICLE IX
CLAIMS PROCEDURE
----------------
9.1 Notice of Denial.
----------------
If a Participant is denied any Retirement Benefit (or a surviving
spouse is denied a survivor's benefit) under this Plan, either in total or in an
amount less than the full Retirement Benefit to which he would normally be
entitled, the Administrator shall advise the Participant (or surviving spouse)
in writing of the amount of his Retirement Benefit (or survivor's benefit), if
any, and the specific reasons for the denial. The Administrator shall also
furnish the Participant (or surviving spouse) at that time with a written notice
containing:
(a) A specific reason with reference to pertinent Plan
provisions.
(b) A description of any additional material or information
necessary for the Participant (or surviving spouse) to perfect his claim, if
possible, and an explanation of why such material or information is needed.
(c) An explanation of the Plan's claim review procedure.
9.2 Right to Reconsideration.
------------------------
Within 60 days of receipt of the information stated in Section 9.1
above, the Participant (or surviving spouse) shall, if he desires further
review, file a written request for reconsideration with the Administrator.
9.3 Review of Documents.
-------------------
So long as the Participant's (or surviving spouse's) request for
review is pending (including the 60-day period in 9.2 above), the Participant
(or surviving spouse) or his duly authorized representative may review pertinent
Plan documents and may submit issues and comments in writing to the
Administrator.
9.4 Decision by Administrator.
-------------------------
A final and binding decision shall be made by the Administrator
within 60 days of the filing by the Participant (or surviving spouse) of his
request for reconsideration, provided, however, that if the Administrator, in
its discretion, feels that a hearing with the Participant (or surviving spouse)
or his representative present is necessary or desirable, this period shall be
extended an additional 60 days.
13
<PAGE>
9.5 Notice by Administrator.
-----------------------
The Administrator's decision shall be conveyed to the Participant
(or surviving spouse) in writing and shall include specific reasons for the
decision and the provisions of the Plan on which the decision is based.
Adopted on January 26, 1995 by:
Nations Fund, Inc.
Nations Fund Trust
The Capitol Mutual Funds
Adopted on January 25, 1995 by:
Nations Fund Portfolios, Inc.
Amended on July 13, 1995 by:
Nations Fund, Inc.
Nations Fund Trust
The Capitol Mutual Funds
Nations Fund Portfolios, Inc.
Adopted on August 6, 1997 by:
Nations Annuity Trust
Adopted on February 24, 1999 by:
Nations Master Investment Trust
Adopted on December 9, 1999 by:
Nations Funds Trust
14
CUSTODY AGREEMENT
-----------------
THIS AGREEMENT is made as of the 19th day of October, 1998 by
and between The Bank of New York, a New York corporation authorized to do a
banking business ("Custodian"), and Nations Institutional Reserves, a
Massachusetts business trust (the "Trust").
W I T N E S S E T H
-------------------
WHEREAS, the Trust is a registered open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust desires to retain Custodian to serve as
custodian for the Trust, on behalf of its portfolios listed on Schedule I
(individually a "Fund" and collectively the "Funds") and to provide the services
described herein, and Custodian is willing to serve and to provide such
services; and
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the Trust and Custodian hereby agree as follows:
1. Appointment. The Trust hereby appoints Custodian to act as custodian
of its portfolio securities, cash and other property on the terms set forth in
this Agreement. Custodian accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Paragraph 23 hereof. Custodian agrees to comply with all relevant provisions of
the 1940 Act and applicable rules and regulations thereunder.
The Trust may from time to time issue separate series or classes, and
classify and reclassify shares of any such series or class. The Trust shall
promptly specify to Custodian in writing such series or classes, or any
reclassification and thereafter Custodian shall identify to each such series or
class Property, as hereinafter defined, belonging to such series or class, and
such reports, confirmations and notices to the Trust as are called for under
this Agreement shall identify the series or class to which such report,
confirmation or notice pertains.
2. Delivery of Documents. The Trust has furnished Custodian with copies
properly certified or authenticated of each of the following:
(a) votes of the Trust's Board of Trustees authorizing the
appointment of Custodian as custodian of portfolio securities, cash and other
property of the Trust, respectively, and approving and consenting to this
Agreement;
(b) schedules identifying and containing the signatures of all
of the Trust's officers and any other persons authorized to issue Oral
Instructions and to sign Written Instructions, as hereinafter defined, on behalf
of the Funds of the Trust;
(c) the Trust's current Registration Statement on Form N-1A
under the 1940 Act and the Securities Act of 1933, as amended (the "1933 Act"),
as filed with the Securities and Exchange Commission (the "SEC"), relating to
shares of beneficial interest of the Trust, without par value (the "Shares");
1
<PAGE>
(d) the current prospectuses and statement of additional
information of each of the Funds, including all amendments and supplements
thereto (the "Prospectuses"); and
(e) a copy of the opinion of counsel for the Trust, filed with
the SEC as part of the Trust's current registration statement.
The Trust will furnish Custodian from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to any of the foregoing, if any.
3. Definitions.
-----------
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means any of the Trust's officers, and any other person,
whether or not any such person is an officer or employee of the Trust, duly
authorized by the Board of Trustees of the Trust to give Oral and Written
Instructions to Custodian on behalf of the Trust and listed on a schedule
provided to Custodian pursuant to Section 2 of this Agreement. Authorized
Persons duly authorized by the Board of Trustees of the Trust to buy and sell
foreign currency on a spot and forward basis and options to buy and sell foreign
currency are denoted by an asterisk thereon.
(b) "Book-Entry System". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees and any book-entry system maintained by a clearing agency
registered with the SEC under Section 17A of the Securities Exchange Act of 1934
(the "1934 Act").
(c) "Composite Currency Unit". Shall mean the European
Currency Unit or any other composite unit consisting of the aggregate of
specified amounts of specified Currencies as such unit may be constituted from
time to time.
(d) "Currency". Shall mean money denominated in a lawful
currency of any country or the European Currency Unit.
(e) "FX Transaction". Shall mean any transaction for the
purchase by one party of an agreed amount in one Currency against the sale by it
to the other party of an agreed amount in another Currency.
(f) "Instructions". Shall mean instruction communications
transmitted by appropriately safeguarded (whether by password protection or
other means) electronic or telecommunications media including but not limited to
S.W.I.F.T., LASER, computer-to-computer interface, dedicated transmission line
and tested telex.
(g) "Oral Instructions". As used in this Agreement, the term
"Oral Instructions" means oral instructions actually received by Custodian from
an Authorized Person or from a person reasonably believed by Custodian to be an
Authorized Person.
2
<PAGE>
(h) "Officer's Certificate". The term "Officer's Certificate"
as used in this Agreement means instructions delivered by hand, mail, tested
telegram, cable, telex, or facsimile sending device, and actually received by
Custodian signed or reasonably believed by Custodian to be signed by two
officers of the Trust listed on a schedule provided to Custodian pursuant to
Section 2 of this Agreement.
(i) "Property". The term "Property", as used in this
Agreement, means:
(i) any and all securities and other property of the Trust
which the Trust may from time to time deliver to Custodian, as applicable, or
which Custodian may from time to time hold for the Trust;
(ii) all income in respect of any securities or other property
described in immediately preceding clause (i);
(iii) all proceeds of sales of any of such securities or other
property described in preceding clause (i) actually received by Custodian; and
(iv) proceeds of the sale of Shares received by Custodian from
time to time from or on behalf of the Trust.
(j) "Securities Depository". As used in this Agreement, the
term "Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC or its successor or successors and its nominee or
nominees; and shall also mean any other registered clearing agency, its
successor or successors specifically identified in a certified copy of a
resolution of the Trust's Board of Trustees approving deposits by Custodian
therein.
(k) "Written Instructions". As used in this Agreement,
"Written Instructions" means instructions delivered by hand, mail, tested
telegram, cable, telex, or facsimile sending device, and actually received by
Custodian, signed or reasonably believed by Custodian to be signed by an
appropriate number of Authorized Person(s), and the term Written Instructions
shall also include Instructions, except that Instructions need not be signed or
reasonably believed to be signed by any Authorized Person(s) where such
Instructions are transmitted by Software pursuant to Paragraph 26A. A fax
receipt or comparable confirmation of transmission of any Written Instructions
shall be deemed evidence of actual receipt by Custodian.
4. Delivery and Registration of the Property. The Trust shall deliver
or cause to be delivered to Custodian all securities and all monies owned by the
Funds, including cash received for the issuance of Shares, at any time during
the period of this Agreement, except for securities and monies to be delivered
to any sub-custodian appointed, with approval of the Trust, by Custodian
pursuant to Paragraphs 7, 27, or 28(g) hereof. Custodian will not be responsible
for such securities and such monies until actually received by it. All
securities delivered to Custodian or any such sub-custodian (other than in
bearer form) shall be registered in the name of the Fund or in the name of a
nominee of a Fund or in the name of Custodian or any nominee of Custodian (with
or without indication of fiduciary status) or in the name of any sub-custodian
or any nominee of such sub-custodian appointed, with approval of the Trust,
pursuant to Paragraphs 7, 27, or 28(g) hereof or shall be properly endorsed and
in form for transfer satisfactory to Custodian.
3
<PAGE>
5. Voting and Other Rights. With respect to all securities, however
registered, it is understood that the voting and other rights and powers shall
be exercised by the Trust. Custodian's only duty with respect to such rights
shall be to mail to the Trust within two (2) business days following receipt by
Custodian any documents received by Custodian as custodian, including notices of
corporate action, proxies, proxy soliciting materials and offering circulars,
with any elections or proxies for securities registered in a nominee name
executed by such nominee. In addition, Custodian shall provide notice of
Custodian's receipt of such documents by electronic means (e.g., posting notice
on LASER), as agreed between the parties. Where warrants, options, tenders or
other securities have fixed expiration dates, the Trust understands that in
order for Custodian to act, Custodian must receive the Trust's instructions at
its offices in New York, addressed as Custodian may from time to time request,
by no later than noon (New York City time) at least one (1) business day prior
to the last scheduled date to act with respect thereto (or such earlier date or
time as Custodian may reasonably notify the Trust). Absent Custodian's timely
receipt of such instructions, such instructions will expire without liability to
Custodian. Custodian shall have no duty to forward to the Trust any annual,
quarterly or special reports issued by companies whose securities are held by
Custodian hereunder.
6. Receipt and Disbursement of Money.
---------------------------------
(a) Custodian shall open and maintain a custody account for
each Fund of the Trust, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement, and, subject to Paragraphs 7, 27, or
28(g) hereof, shall hold in such account, subject to the provisions hereof, all
cash received by it from or for the Funds. Custodian shall make payments of cash
to, or for the account of, each Fund from such cash only (i) for the purchase of
securities for the Funds as provided in Paragraph 14 hereof; (ii) upon receipt
of an Officer's Certificate for the payment of dividends or other distributions
on or with respect to Shares, or for the payment of interest, taxes,
administration, distribution or advisory fees or expenses which are to be borne
by the Funds under the terms of this Agreement and, with respect to each Fund,
and under the terms of any investment advisory agreements, administration
agreements or distribution agreements; (iii) upon receipt of Written
Instructions for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Funds and held by or to be
delivered to Custodian; (iv) to a sub-custodian pursuant to Paragraphs 7, 27, or
28(g) hereof; or (v) for the redemption of Shares; or (vi) upon receipt of an
Officer's Certificate for other corporate purposes.
(b) Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received as Custodian
for the Funds.
7. Receipt of Securities.
---------------------
(a) Except as provided by Paragraphs 7(c), 8, 27, or 28(g)
hereof, and except as otherwise directed by Oral or Written Instructions
described in Paragraph 11 hereof, Custodian shall hold and physically segregate
in a separate account with respect to each Fund, identifiable from those of any
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other person, all securities and non-cash property received by it for the Funds.
All such securities and non-cash property are to be held or disposed of by
Custodian for each Fund pursuant to the terms of this Agreement. In the absence
of Written Instructions accompanied by a certified resolution authorizing the
specific transaction by the Trust's Board of Trustees, and subject to Paragraph
25 hereof, Custodian shall have no power or authority to withdraw, deliver,
assign, hypothecate, pledge or otherwise dispose of any such securities and
investments, except in accordance with the express terms provided for in this
Agreement. In no case may any trustee, officer, employee or agent of the Trust
withdraw any securities. In connection with its duties under this Paragraph
7(a), Custodian may enter into sub-custodian agreements with other banks or
trust companies for the receipt of certain securities and cash to be held by
Custodian for the account of a Fund pursuant to this Agreement, provided
Custodian obtains the prior written approval of the Trust to any such
sub-custody arrangement. Custodian will provide the Trust with a copy of each
sub-custodian agreement it executes pursuant to this Paragraph 7(a). Custodian
shall be liable for acts or omissions of any such sub-custodian selected by it
pursuant to this Paragraph 7(a), under the standards of care provided for
herein, except for any such sub-custodian engaged at the specific direction of
the Funds. Notwithstanding anything herein to the contrary, this Paragraph 7(a)
shall not apply to Custodian's engagement of foreign sub-custodians, which shall
instead be governed by Paragraph 27 hereof.
(b) Promptly after the close of business on each day,
Custodian shall furnish the Trust with confirmations and a summary of all
transfers to or from the account of each Fund during said day. Where securities
are transferred to the account of any Fund established at a Securities
Depository or the Book Entry System pursuant to Paragraph 8 herein, Custodian
shall also, by book-entry or otherwise, identify as belonging to such Fund the
quantity of securities in a fungible bulk of securities registered in the name
of Custodian (or its nominee) or shown in Custodian's account on the books of a
Securities Depository or the Book-Entry System. At least monthly and from time
to time, Custodian shall furnish the Trust with a detailed statement of the
Property held for each Fund under this Agreement.
(c) Notwithstanding any provision elsewhere contained herein,
Custodian shall not be required to obtain possession of any instrument or
certificate representing any futures contract, any option, or any futures
contract option until after it shall have determined, or shall have received an
Officer's Certificate from the Trust stating that any such instruments or
certificates are available. The Trust shall deliver to Custodian such an
Officer's Certificate no later than the business day preceding the availability
of any such instrument or certificate. Prior to such availability, Custodian
shall comply with the 1940 Act in connection with the purchase, sale,
settlement, closing out or writing of futures contracts, options, or futures
contract options by making payments or deliveries specified in such Officer's
Certificates or Written Instructions received by Custodian in connection with
any such purchase, sale, writing, settlement or closing out upon its receipt
from a broker, dealer, or futures commission merchant of a statement or
confirmation reasonably believed by Custodian to be in the form customarily used
by brokers, dealers, or future commission merchants with respect to such futures
contracts, options, or futures contract options, as the case may be, confirming
that the same is held by such broker, dealer or futures commission merchant, in
book-entry form or otherwise, in the name of Custodian (or any nominee of
Custodian) as Custodian for the Fund, provided, however, that notwithstanding
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the foregoing, and subject to Paragraph 13(b) hereof, payments to or deliveries
from any margin account, and payments with respect to future contracts, options,
or future contract options to which a margin account relates, shall be made in
accordance with the terms and conditions of the Trust's relevant margin account
agreement. Whenever any such instruments or certificates are available,
Custodian shall, notwithstanding any provision in this Agreement to the
contrary, make payment for any futures contract, option, or futures contract
option for which such instruments or such certificates are available against the
delivery to Custodian of such instrument or such certificate, and deliver any
futures contract, option or futures contract option for which such instruments
or such certificates are available only against receipt by Custodian of payment
therefor. Any such instrument or certificate delivered to Custodian shall be
held by Custodian hereunder in accordance with, and subject to, the provisions
of this Agreement.
8. Use of Securities Depository or the Book-Entry System. The Trust
shall deliver to Custodian a certified vote of the Board of Trustees of the
Trust approving, authorizing and instructing Custodian on a continuous and
ongoing basis until instructed to the contrary by Written Instructions (i) to
deposit in a Securities Depository or the Book-Entry System all securities of
the Funds held hereunder eligible for deposit therein and (ii) to utilize a
Securities Depository or the Book-Entry System to the extent possible in
connection with the performance of its duties hereunder, including without
limitation settlements of purchases and sales of securities by the Funds, and
deliveries and returns of securities loaned, subject to repurchase agreements or
used as collateral in connection with borrowings. Without limiting the
generality of such use, the following provisions shall apply thereto:
(a) Securities and any cash of the Funds deposited by
Custodian in a Securities Depository or the Book-Entry System will at all times
be segregated from any assets and cash controlled by Custodian in other than a
fiduciary or custodian capacity. Subject to Paragraph 28(m) hereof, Custodian
and its sub-custodians, if any, will pay out money only upon receipt of
securities and will deliver securities only upon receipt of money, absent
Written Instructions to the contrary.
(b) All books and records maintained by Custodian that relate
to the Funds' participation in a Securities Depository or the Book-Entry System
will at all times during Custodian's regular business hours be open to
inspection by the Trust's duly authorized employees or agents and the Trust's
independent auditors in accordance with applicable regulations, it being
understood, however, that such records may be kept in an off site Custodian
storage location and the Trust will be furnished with all information in respect
of the services rendered to it as it may require.
(c) Custodian will provide the Trust with copies of any report
obtained by Custodian on the system of internal accounting control of the
Securities Depository or Book-Entry System promptly after receipt of such a
report by Custodian. Custodian will also provide the Trust with such reports on
its own system of internal control as the Trust may reasonably request from time
to time.
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9. Instructions Consistent With the Charter, Etc. Unless otherwise
provided in this Agreement, Custodian shall act only upon Officer's
Certificates, Oral Instructions and/or Written Instructions. Custodian may
assume that any Officer's Certificate, Oral Instructions or Written Instructions
received hereunder are not in any way inconsistent with any provision of the
Declaration of Trust or Code of Regulations or any vote of the Trust's Board of
Trustees, or any committee thereof. Custodian shall be entitled to rely upon any
Oral Instructions or Written Instructions actually received by Custodian
pursuant to this Agreement, and upon any certificate, oral instructions, or
written instructions reasonably believed by Custodian to be an Officer's
Certificate, Oral Instructions or Written Instructions. The Trust agrees to
forward to Custodian Written Instructions confirming Oral Instructions in such
manner that the Written Instructions are received by Custodian at the close of
business of the same day that such Oral Instructions are given to Custodian. The
Trust agrees that the fact that such confirming Written Instructions are not
received by Custodian shall in no way affect the validity of any of the
transactions authorized by the Trust by giving Oral Instructions, and that
Custodian's records with respect to the content of Oral Instructions shall be
controlling.
10. Transactions-Not Requiring Instructions. Custodian is authorized to
take the following action without Oral Instructions, Written Instructions, or an
Officer's Certificate:
(a) Collection of Income and Other Payments. Custodian shall
subject to Paragraph 28(f) hereof:
(i) Collect and receive for the account of any Fund,
all income and other payments and distributions, including (without limitation)
stock dividends, rights, warrants and similar items, included or to be included
in the Property of any Fund, and promptly advise the Trust of such receipt and
shall credit such income, as collected, to such Fund of the Trust. From time to
time, Custodian may elect, but shall not be so obligated, to credit the account
with interest, dividends or principal payments on payable or contractual
settlement date, in anticipation of receiving same from a payor, central
depository, Securities Depository, broker or other agent employed by the Trust
or Custodian. Any such crediting and posting shall be at the Trust's sole risk,
and Custodian shall be authorized to reverse (A) any such advance posting in the
event it does not receive good funds from any such payor, central depository,
Securities Depository, broker or agent, and (B) any other payment or crediting,
including, without limitation, payments made by check or draft, in the event it
does not receive good funds or final payment;
(ii) With respect to securities of foreign issue, and
subject to Paragraph 27 hereof, effect collection of dividends, interest and
other income, and to promptly transmit to the Trust all reports, written
information or notices actually received by Custodian as Custodian, including
notices of any call for redemption, offer of exchange, right of subscription,
reorganization, or other proceedings affecting such securities, or any default
in payments due thereon. It is understood, however, that Custodian shall be
under no responsibility for any failure or delay in effecting such collections
or giving such notice with respect to securities of foreign issue, regardless of
whether or not the relevant information is published in any financial service
available to it unless such failure or delay is due to Custodian's own
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negligence. Collections of income in foreign currency are, to the extent
possible, to be converted into United States dollars unless otherwise instructed
in writing, and in effecting such conversion Custodian may use such methods or
agencies as it may see fit, including the facilities of its own foreign division
at customary rates. All risk and expenses incident to such collection and
conversion are for the account of the Funds and Custodian shall have no
responsibility for fluctuations in exchange rates affecting any such
conversions;
(iii) Endorse and deposit for collection in the name
of the Trust and each of its Funds, checks, drafts, or other orders for the
payment of money on the same day as received;
(iv) Receive and hold for the account of each of the
Fund's securities received by the Funds as a result of a stock dividend, share
split-up or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued with
respect to any portfolio securities of the Funds held by Custodian hereunder;
(v) Present for payment and collect the amount
payable upon all securities which may mature or be called, redeemed or retired,
or otherwise become payable on the date such securities become payable, but,
with respect to calls, early redemptions, or early retirements, only if
Custodian either (i) receives a written notice of the same or (ii) notice of the
same appears in one or more of the publications then listed in Appendix A
hereto, which Appendix may be amended to add other publications at any time by
Custodian without prior notice to or consent from the Trust and which may be
amended to delete a publication with the prior notice and consent from the
Trust;
(vi) Subject to Paragraphs 28(e) and (f) hereof, take
any action which may be necessary and proper in connection with the collection
and receipt of such income and other payments and the endorsement for collection
of checks, drafts and other negotiable instructions; and
(vii) With respect to domestic securities, to
exchange securities in temporary form for securities in definitive form, to
effect an exchange of the shares where the par value of stock is changed, and to
surrender securities at maturity or when advised by the Trust or the investment
adviser to the Trust of an earlier call for redemption, against payment therefor
in accordance with accepted industry practice. When fractional shares of stock
of a declaring corporation are received as a stock distribution, Custodian is
authorized to sell the fraction received and credit the Trust's account. Unless
specifically instructed to the contrary in writing, Custodian is authorized to
exchange securities in bearer form for securities in registered form. If any
Property registered in the name of a nominee of Custodian is called for partial
redemption by the issuer of such Property, Custodian is authorized to allot the
called portion to the respective beneficial holders of the Property in such
manner deemed to be fair and equitable by Custodian in its reasonable
discretion.
(b) Miscellaneous Transactions. Custodian is authorized to
deliver or cause to be delivered Property against payment or other consideration
or written receipt therefor in the following cases:
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(i) for examination by a broker selling for the
account of the Trust in accordance with street delivery custom;
(ii) for the exchange for interim receipts or
temporary securities for definitive securities;
(iii) for transfer of securities into the name of the
Funds or Custodian or a nominee of either, or for exchange of securities for a
different number of bonds, certificates, or other evidence, representing the
same aggregate face amount or number of units bearing the same interest rate,
maturity date and call provisions, if any; provided that, in any such case, the
new securities are to be delivered to Custodian.
11. Transactions Requiring Instructions. Upon receipt of Oral or
Written Instructions, and not otherwise, Custodian, directly or through the use
of a Securities Depository or the Book-Entry System, shall:
(a) execute and deliver to such persons as may be designated
in such Oral or Written Instructions, proxies, consents, authorizations, and any
other instruments whereby the authority of the Funds as owners of any securities
may be exercised;
(b) deliver any securities held for any Fund against receipt
of other securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(c) deliver any securities held for any Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, against receipt of such certificates or deposit,
interim receipts or other instruments or documents as may be issued to it to
evidence such delivery;
(d) make such transfers or exchanges of the assets of any Fund
and take such other steps as shall be stated in said instructions to be for the
purposes of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Funds;
(e) subject to Paragraph 25(b) hereof, release securities
belonging to any Fund to any bank or trust company for the purpose of pledge or
hypothecation to secure any loan incurred by such Fund; provided, however, that
securities shall be released only upon payment to Custodian of the monies
borrowed, except that in cases where additional collateral is required to secure
a borrowing already made, subject to proper prior authorization, further
securities may be released for that purpose; and pay such loan upon redelivery
to it of the securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
(f) deliver any securities held for any Fund upon the exercise
of a covered call option written by such Fund on such securities;
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(g) release and deliver securities owned by a Fund in
connection with any repurchase agreement entered into on behalf of such Fund,
but subject to Paragraph 28(m) hereof, only on receipt of payment therefor; and
pay out monies of such Fund in connection with such repurchase agreements, but
only upon the delivery of the securities;
(h) otherwise transfer, exchange or deliver securities in
accordance with Oral or Written Instructions specifying the purpose of such
transfer, including without limitation, loans of securities, short sales, or
reverse repurchase agreements, and subject to Paragraph 7(a) hereof.
12. Segregated Accounts. Custodian shall upon receipt of Written or
Oral Instructions establish and maintain a segregated account or accounts on its
records for and on behalf of any Fund, into which account or accounts shall be
credited, but only pursuant to an Officer's Certificate or Written Instructions
specifying the particular securities and/or amount of cash, cash and/or
securities, including securities in the Book-Entry System (i) for the purposes
of compliance by the Funds and the Trust with the procedures required by a
securities or option exchange, (ii) for the purpose of compliance by the Funds
and the Trust with the 1940 Act and Release No. 10666 or any subsequent release
or releases of the SEC relating to the maintenance of segregated accounts by
registered investment companies, and (iii) for other proper corporate purposes.
13. Dividends and Distributions.
(a) The Trust shall furnish Custodian with appropriate
evidence of action by the Trust's Board of Trustees declaring and authorizing
the payment of any dividends and distributions. Upon receipt by Custodian of an
Officer's Certificate with respect to dividends and distributions declared by
the Trust's Board of Trustees and payable to shareholders of any Fund who are
entitled to receive cash for fractional shares and those who have elected in the
proper manner to receive their distributions on dividends in cash, and in
conformance with procedures mutually agreed upon by Custodian and the Trust, and
the Trust's administrator or transfer agent, Custodian shall pay to the Fund's
transfer agent, as agent for the shareholders, an amount equal to the amount
indicated in said Officer's Certificate as payable by the Fund to such
shareholders for distribution in cash by the transfer agent to such
shareholders.
(b) Custodian may enter into separate custodial agreements
with various futures commission merchants ("FCMs") that the Trust uses (each an
"FCM Agreement"), pursuant to which the Funds' margin deposits in any
transactions involving futures contracts and options on futures contracts will
be held by Custodian in accounts (each an "FCM Account") subject to the
disposition by the FCM involved in such contracts in accordance with the
customer contract between the FCM and the Trust ("FCM Contract"), SEC rules
governing such segregated accounts, Commodity Futures Trading Commission
("CFTC") rules and the rules of the applicable commodities exchange. Such FCM
Agreements shall only be entered into by Custodian upon receipt by Custodian of
Written Instructions from the Trust which state that (i) an FCM Contract has
been entered into; (ii) the Trust is in compliance with all the rules and
regulations of the CFTC; and (iii) the FCM Agreement is acceptable to the Trust.
Transfers of initial margin shall be made into an FCM Account only upon Written
Instructions; transfers of premium and variation margin may be made into an FCM
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Account pursuant to Oral Instructions. Transfers of funds from an FCM Account to
the FCM for which Custodian holds such an account may only occur in accordance
with the terms of the FCM Agreement.
14. Purchase of Securities. Promptly after each purchase of securities
by the Trust on behalf of any Fund, the Trust shall deliver to Custodian Oral or
Written Instructions specifying with respect to each such purchase: (a) the name
of the issuer and the title of the securities, (b) the number of shares of the
principal amount purchased and accrued interest, if any, (c) the dates of
purchase and settlement, (d) the purchase price per unit, (e) the total amount
payable upon such purchase, (f) the name of the person from whom or the broker
through whom the purchase was made and (g) the Fund for which the purchase was
made. Custodian shall upon receipt of securities purchased by or for the Trust
pay out of the monies held for the account of the Trust the total amount payable
to the person from whom or the broker through whom the purchase was made,
provided that the same conforms to the total amount payable as set forth in such
Oral or Written Instructions.
15. Sales of Securities. Promptly after each sale of securities by the
Funds, the Trust shall deliver to Custodian Oral or Written Instructions,
specifying with respect to each such sale: (a) the name of the issuer and the
title of the security, (b) the number of shares or principal amount sold, and
accrued interest, if any, (c) the dates of sale, (d) the sale price per unit,
(e) the total amount payable to the Trust upon such sale, (f) the name of the
broker through whom or the person to whom the sale was made and (g) the Fund for
which the sale was made. Custodian shall, subject to Paragraph 28(m) hereof,
deliver the securities against payment of the total amount payable to the Trust
upon such sale, provided that the same conforms to the total amount payable as
set forth in such Oral and Written Instructions.
16. Records. The books and records pertaining to the Funds and the
Trust which are in the possession of Custodian shall be the property of the
Trust. Such books and records shall be prepared and maintained as required by
the 1940 Act and other applicable securities laws and rules and regulations. The
SEC, the Trust, or the Trust's authorized representatives, shall have access to
such books and records at all times during Custodian's normal business hours.
Upon the reasonable request of the Trust, copies of any such books and records
shall be provided by Custodian to the Trust or the Trust's authorized
representative, and the Trust shall reimburse Custodian reasonable expenses for
providing such copies. Upon reasonable request of the Trust, Custodian shall
provide in hard copy, tape or on micro-film, or such other medium as agreed to
among the Trust and Custodian, and any books and records maintained by
Custodian.
17. Reports.
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(a) Custodian shall furnish the Trust the following reports:
(i) such periodic and special reports as the Trust
may reasonably request from time to time;
(ii) a monthly statement summarizing all transactions
and entries for the account of each Fund;
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(iii) a monthly report of portfolio securities
belonging to each Fund showing the adjusted average cost of each issue and
market value at the end of such month;
(iv) a monthly report of the cash account of each
Fund showing disbursements;
(v) the reports to be furnished to the Trust pursuant
to Rule 17f-4 under the 1940 Act; and
(vi) such other information as may be agreed upon
from time to time between the Trust and Custodian.
(b) Subject to Paragraphs 5 and 27(g) hereof, Custodian shall
transmit promptly to the Trust any proxy statement, proxy materials, notice of a
call or conversion or similar communications actually received by Custodian as
custodian of the Property.
(c) Custodian shall report as the market value at the end of
each month the last closing bid, offer or sale price to the extent, and as the
same, is furnished to Custodian by a pricing or similar service utilized or
subscribed to by Custodian. Custodian shall not be responsible for, have any
liability with respect to, or be under any duty to inquire into, nor deemed to
make any assurances with respect to, the accuracy or completeness of such
information, even if The Bank of New York in performing services for others,
including services similar to those performed hereunder, receives different
valuations of the same or different securities of the same issuer.
18. Cooperation with Accountants. Custodian shall cooperate with the
Trust's independent certified public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement, to assure
that the necessary information is made available to such accountants.
19. Confidentiality. Custodian agrees on behalf of itself and its
employees to treat all record and other information relative to the Trust, its
prior, present or potential shareholders, its service providers and its prior,
present or potential customers, as confidential information, and to protect and
safeguard the same to the extent required by applicable law, provided, however,
that Custodian may make such disclosure as required by applicable law,
regulation, court order, decrees or legal process and upon receipt of any of the
foregoing requiring such disclosure, Custodian's only obligation shall be to
notify the Trust thereof. Custodian further agrees not to otherwise use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust.
20. Equipment Failures. In the event of equipment failures beyond
Custodian's control, Custodian shall take reasonable steps to minimize service
interruptions but shall not have any further liability with respect thereto.
Notwithstanding the foregoing, Custodian shall maintain sufficient back up
electronic data processing equipment to enable Custodian to fulfill its
obligations under this Agreement consistent with standard industry practices.
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21. Right to Receive Advice.
-----------------------
(a) Advice of Fund. If Custodian shall be in doubt as to any
action to be taken or omitted by it, either may request, and shall receive, from
the Trust clarification or advice, including Oral or Written Instructions.
(b) Advice of Counsel. If Custodian shall be in doubt as to
any question of law involved in any action to be taken or omitted by Custodian,
it may request at its option advice from its own counsel, at its own expense, or
advice from the Trust's counsel.
(c) Conflicting Advice. In case of conflict between
directions, advice or Oral or Written Instructions received by Custodian
pursuant to subparagraph (a) of this paragraph and advice received by Custodian
pursuant to subparagraph (b) of this paragraph, Custodian shall be entitled to
rely on and follow the advice received pursuant to subparagraph (b) alone.
(d) Protection of Custodian. Custodian shall be protected in
any action or inaction which it takes or omits to take in reliance on any
directions, advice or Oral or Written Instructions received pursuant to
subparagraphs (a) or (b) of this section which it, after receipt of any such
directions, advice or Oral or Written Instructions, in good faith reasonably
believes to be consistent with such directions, advice or Oral or Written
Instructions, as the case may be. Nothing in this Paragraph 21 shall be
construed as imposing upon Custodian any obligation (i) to seek such directions,
advice or Oral or Written Instructions, or (ii) to act in accordance with such
directions, advice or Oral or Written Instructions when received, unless, under
the terms or another provision of this Agreement, the same is a condition to
Custodian's properly taking or omitting to take such action. Nothing in this
Paragraph 21(d) shall excuse Custodian when an action or omission on the part of
Custodian constitutes willful misfeasance or bad faith, or negligence or
reckless disregard by Custodian of its duties under this Agreement.
22. Compliance with Governmental Rules and Regulations. Custodian
undertakes to comply with the laws, rules and regulations of governmental
authorities having jurisdiction over Custodian and its express duties hereunder.
23. Compensation. As compensation for the services rendered by
Custodian during the term of this Agreement, the Trust shall pay to Custodian,
in addition to reimbursement of its out-of-pocket expenses, such compensation as
may be agreed upon from time to time in writing by the Trust and Custodian as
set forth in Schedule III.
24. Indemnification. The Trust agrees to indemnify Custodian against,
and hold harmless from all taxes, charges, expenses (including reasonable fees
and expenses of counsel), assessments, claims, losses, demands and liabilities
whatsoever (including, without limitation, liabilities arising under the 1933
Act, the 1934 Act and the 1940 Act, and any state and foreign securities laws,
all as currently in effect or as may be amended from time to time) and expenses,
including without limitation, reasonable attorney's fees and disbursements,
howsoever arising or incurred because of or in connection with this Agreement,
except for such liability, claim, loss, demand, charge, expense, tax or
assessment arising out of Custodian's, or such nominees', willful misconduct or
negligence or reckless disregard of its duties under this Agreement. For the
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purposes of this Agreement, including, without limitation, for purposes of
Paragraphs 24 and 28, neither Custodian's acceptance of Instructions in
accordance with Paragraph 26A nor Custodian's use of Foreign Sub-Custodians
pursuant to agreements that do not permit actual examination by independent
public accountants, nor the denial of examination by any Foreign Sub-Custodian
as defined in Paragraph 27, shall, in and of itself, constitute, or be deemed to
constitute, a breach by Custodian of this Agreement or negligence, willful
misconduct, or reckless disregard of its duties by Custodian, provided the
relevant agreement between Custodian and a Foreign Sub-Custodian satisfies the
requirements of Rule 17f-5.
25. Overdrafts or Indebtedness.
--------------------------
(a) Custodian shall advance funds under this Agreement with
respect to any Fund which results in an overdraft because the moneys held by
Custodian in the separate account for such Fund shall be insufficient to pay the
total amount payable upon a purchase of securities by such Fund, as set forth in
an Officer's Certificate or Oral or Written Instructions, or which results in an
overdraft in the separate account of such Fund for some other reason, or if the
Trust is for any other reason indebted to Custodian, including any indebtedness
to The Bank of New York under the Trust's Cash Management and Related Services
Agreement, (except a borrowing for investment or for temporary or emergency
purposes using securities as collateral pursuant to a separate agreement and
subject to the provisions of Paragraph 25(b) hereof), such overdraft or
indebtedness shall be deemed to be a loan made by Custodian to the Trust for
such Fund payable on demand and shall bear interest from the date incurred at a
rate per annum (based on a 360-day year for the actual number of days involved)
equal to the overdraft rate specified in Schedule III to this Agreement. In
addition, the Trust hereby agrees that Custodian shall have a continuing lien,
security entitlement and security interest in and to any property at any time
held by it for the benefit of such Fund or in which the Fund may have an
interest which is then in Custodian's possession or control or in possession or
control of any third party acting on Custodian's behalf. The Trust authorizes
Custodian, in its sole discretion, at any time to charge any such overdraft or
indebtedness together with interest due thereon against any balance of account
standing to such Fund's credit on Custodian's books. In addition, the Trust
hereby covenants that on each Business Day on which either it intends to enter a
Reverse Repurchase Agreement and/or otherwise borrow from a third party, or
which next succeeds a Business Day on which at the close of business the Trust
had outstanding a Reverse Repurchase Agreement or such a borrowing, it shall
prior to 1:00 p.m., New York City time, advise Custodian, in writing, of each
such borrowing, shall specify the Fund to which the same relates, and shall not
incur any indebtedness not so specified other than from Custodian.
(b) The Trust will cause to be delivered to Custodian by any
bank (including, if the borrowing is pursuant to a separate agreement,
Custodian) from which it borrows money for investment or for temporary or
emergency purposes using securities held by Custodian hereunder as collateral
for such borrowings, a notice or undertaking in the form currently employed by
such bank setting forth the amount which such bank will loan to the Trust
against delivery of a stated amount of collateral. The Trust shall promptly
deliver to Custodian Written Instruction specifying with respect to each such
borrowing: (a) the Fund to which such borrowing relates; (b) the name of the
bank, (c) the amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly endorsed by the
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Fund, or other loan agreement, (d) the time and date, if known, on which the
loan is to be entered into, (e) the date on which the loan becomes due and
payable, (f) the total amount payable to the Fund on the borrowing date, (g) the
market value of securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal amount of any particular securities, and (h) a statement specifying
whether such loan is for investment purposes or for temporary or emergency
purposes and that such loan is in conformance with the 1940 Act and the Fund's
prospectus. Custodian shall deliver on the borrowing date specified in Written
Instructions the specified collateral and the executed promissory note, if any,
against delivery by the lending bank of the total amount of the loan payable,
provided that the same conforms to the total amount payable as set forth in such
Written Instructions. Custodian may, at the option of the lending bank, keep
such collateral in its possession, but such collateral shall be subject to all
rights therein given the lending bank by virtue of any promissory note or loan
agreement. Custodian shall deliver such securities as additional collateral as
may be specified in Written Instructions to collateralize further any
transaction described in this Paragraph 25(b). The Trust shall cause all
securities released from collateral status to be returned directly to Custodian,
and Custodian shall receive from time to time such return of collateral as may
be tendered to it. In the event that the Trust fails to specify in Written
Instructions the Fund, the name of the issuer, the title and number of shares or
the principal amount of any particular securities to be delivered as collateral
by Custodian, Custodian shall not be under any obligation to deliver any
securities.
26A. Instructions.
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(a) It is understood and agreed that Custodian may, from time
to time, provide software to the Trust for purposes of enabling a Fund to
transmit Instructions to Custodian (the "Software"). Such Software has been
designed to include password protection or other features to restrict the use of
the Software to Authorized Persons; provided, however, that the Custodian makes
no warranty or representations of any kind with respect to such protections or
features, express or implied, including, but not limited to, any implied
warranties of merchantability or fitness for a particular purpose. The Trust and
the Custodian shall use commercially reasonable efforts to develop other
mechanisms (i) to enable the Trust to restrict the use of the Software to
Authorized Persons, (ii) to identify transmissions from a terminal other than an
authorized terminal, and (iii) for the prompt and accurate transmission of
Instructions by Authorized Persons to Custodian. It is further understood and
agreed that Custodian may provide specialized hardware or other equipment to
enable the Trust and the Funds to utilize the Software. With respect to any such
Software, Custodian grants to the Trust and its service providers a personal,
nontransferable and nonexclusive license to use the Software solely for the
purpose of transmitting Instructions to, and receiving communications from,
Custodian in connection with its account(s). The Trust and its service providers
agree not to sell, reproduce, lease or otherwise provide, directly or
indirectly, the Software or any portion thereof to any third party without the
prior written consent of Custodian. At no time shall the Trust be obligated to
use the Software to transmit Instructions to Custodian.
(b) The Trust shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and transmit Instructions to
Custodian; provided, however, that the parties acknowledge and agree that if any
specialized equipment is necessary to enable the Trust to utilize the Software,
Custodian shall, at its own expense, provide and maintain such equipment.
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(c) The Trust acknowledges that the Software, all data bases
made available to the Trust by utilizing the Software (other than data bases
relating solely to the assets of the Funds and transactions with respect
thereto), and any proprietary data, processes, information and documentation
(other than those which are or become part of the public domain or are legally
required to be made available to the public) (collectively, the "Information"),
are the exclusive and confidential property of Custodian. The Trust shall keep
the Information confidential by using the same care and discretion that the
Trust uses with respect to its own confidential property and trade secrets and
shall neither make nor permit any disclosure without the prior written consent
of Custodian. Upon termination of this Agreement or the Software license granted
hereunder for any reason, the Trust shall return to Custodian all copies of the
Information which are in its possession or under its control or which the Trust
distributed to third parties.
(d) Custodian reserves the right to modify the Software from
time to time upon reasonable prior notice and the Trust shall, if it desires in
its sole discretion to continue to use the Software, install new releases of the
Software as Custodian may direct. The Trust agrees not to modify or attempt to
modify the Software without Custodian's prior written consent. The Trust
acknowledges that any modifications to the Software, whether by the Trust or
Custodian and whether with or without Custodian's consent, shall become the
property of Custodian.
(e) Where the method for transmitting Instructions by the
Trust involves an automatic systems acknowledgment to the Trust by Custodian of
its receipt of such Instructions, including any transmission of Instructions
using the Software, then (i) if an acknowledgment is not actually received by
the Trust, Custodian shall not be deemed to have received any such Instructions,
and (ii) if an acknowledgment is actually received by the Trust, the Custodian
shall be deemed to have received such Instructions and shall be responsible for
any error, omission, interruption or delay in connection with the transmission
of such Instructions; provided, however, that the Trust shall promptly review
all acknowledgments actually received and notify the Custodian in the event of
any apparent discrepancy.
(f) (i) The Trust agrees that where it delivers to Custodian
Instructions hereunder using the Software, it shall be the Trust's sole
responsibility to ensure that only persons duly authorized by the Trust and the
correct number of such persons transmit such Instructions to Custodian and the
Trust will cause all such persons to treat applicable use and authorization
codes, passwords and authentication keys with extreme care, and authorizes
Custodian to act in accordance with and rely upon Instructions received by it
pursuant hereto using the Software.
(ii) The Trust hereby represents, acknowledges and agrees that
it is fully informed of the protections and risks associated with the various
methods of transmitting Instructions to Custodian and that there may be more
secure methods of transmitting Instructions to Custodian than the method(s)
selected by the Trust.
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(iii) With respect to all Oral Instructions and all Written
Instructions other than Instructions delivered to Custodian using the Software
provided by Custodian, Custodian shall exercise all commercially reasonable
efforts to form a reasonable belief that each such instruction has been given by
an Authorized Person and, where required, signed by an appropriate number of
Authorized Person(s).
(g) The Trust shall notify Custodian of any errors, omissions
or interruptions in, or delay or unavailability of, its ability to send
Instructions using the Software provided by Custodian as promptly as
practicable, and in any event within 24 hours after the earliest of (i)
discovery thereof, (ii) the business day on which discovery should have occurred
through the exercise of reasonable care and (iii) in the case of any error, the
date of actual receipt of the earliest notice which reflects such error, it
being agreed that discovery and receipt of notice may only occur on a business
day. Custodian shall, as promptly as practicable, and in any event within 24
hours after the earliest of (i) discovery thereof, (ii) the business day on
which discovery should have occurred through the exercise of reasonable care and
(iii) in the case of any error, the date of actual receipt of the earliest
notice which reflects such error, it being agreed that discovery and receipt of
notice may only occur on a business day, advise the Trust whenever Custodian
learns or reasonably should have learned, of any errors, omissions or
interruption in, or delay or unavailability of, the Trust's ability to send
Instructions using the Software provided by Custodian.
26B. FX Transactions
(a) Whenever a Fund shall enter into an FX Transaction, the
Fund shall promptly deliver to Custodian a Certificate or Oral Instructions
specifying with respect to such FX Transaction: (a) the Series to which such FX
Transaction is specifically allocated; (b) the type and amount of Currency to be
purchased by the Fund; (c) the type and amount of Currency to be sold by the
Fund; (d) the date on which the Currency to be purchased is to be delivered; (e)
the date on which the Currency to be sold is to be delivered; and (f) the name
of the person from whom or through whom such Currencies are to be purchased and
sold. Unless otherwise instructed by a Certificate or Oral Instructions,
Custodian shall deliver, or shall instruct a Foreign Sub-Custodian to deliver,
the Currency to be sold on the date on which such delivery is to be made, as set
forth in the Certificate, and shall receive, or instruct a Foreign Sub-Custodian
to receive, the Currency to be purchased on the date as set forth in the
Certificate.
(b) Where the Currency to be sold is to be delivered on the
same day as the Currency to be purchased, as specified in the Certificate or
Oral Instructions, Custodian or a Foreign Sub-Custodian may arrange for such
deliveries and receipts to be made in accordance with the customs prevailing
from time to time among brokers or dealers in Currencies, and such receipt and
delivery may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
such receipts and deliveries, which responsibility and liability shall continue
until the Currency to be received by the Fund has been received in full.
(c) Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian, any office, branch
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or subsidiary of The Bank of New York, or any Foreign Sub-Custodian (as defined
below) acting as principal or otherwise through customary banking channels. The
Fund may issue a standing Certificate with respect to foreign exchange
transactions but Custodian may establish rules or limitations concerning any
foreign exchange facility made available to the Fund. The Fund shall bear all
risks of investing in securities or holding Currency. Without limiting the
foregoing, the Fund shall bear the risks that rules or procedures imposed by a
Foreign Sub-Custodian or foreign depositories, exchange controls, asset freezes
or other laws, rules, regulations or orders shall prohibit or impose burdens or
costs on the transfer to, by or for the account of the Fund of Securities or any
cash held outside the Fund's jurisdiction or denominated in Currency other than
its home jurisdiction or the conversion of cash from one Currency into another
Currency. Custodian shall not be obligated to substitute another Currency for a
Currency (including a Currency that is a component of a Composite Currency Unit)
whose transferability, convertibility or availability has been affected by such
law, regulation, rule or procedure. Neither Custodian nor any Foreign
Sub-Custodian shall be liable to the Fund for any loss resulting from any of the
foregoing events.
27. Duties of Custodian with Respect to Property of any Fund Held
Outside of the United States.
(a) Custodian is authorized and instructed to employ, as
sub-custodian for each Fund's foreign securities and other assets, the foreign
banking institutions and foreign securities depositories and clearing agencies
selected from time to time by Custodian as the Foreign Custody Manager appointed
by the Trust's Board of Trustees ("Foreign Sub-Custodians") to carry out their
respective responsibilities in accordance with the terms of the sub-custodian
agreement between each such Foreign Sub-Custodian and Custodian (each such
agreement, a "Foreign Sub-Custodian Agreement"). Upon receipt of an Officer's
Certificate, the Trust may designate any additional foreign sub-custodian with
which Custodian has an agreement for such entity to act as Custodian's agent, as
its sub-custodian and any such additional foreign sub-custodian shall be deemed
a Foreign Sub-Custodian hereunder. Upon receipt of an Officer's Certificate,
Custodian shall cease using any one or more Foreign Sub-Custodians for the
Funds' assets.
(b) Each Foreign Sub-Custodian Agreement shall be
substantially in the form delivered to the Trust herewith and will not be
amended in a way that materially adversely affects the Trust without the Trust's
prior written consent.
(c) Custodian shall identify on its books as belonging to each
Fund the Foreign Securities of such Fund held by each Foreign Sub-Custodian. At
the election of the Trust, it shall be entitled to be subrogated to any claims
by the Trust or any Fund against a Foreign Sub-Custodian as a consequence of any
loss, damage, cost, expense, liability or claim sustained or incurred by the
Trust or any Fund if and to the extent that the Trust or such Fund has been made
whole by Custodian for any such loss, damage, cost, expense, liability or claim.
(d) Upon request of the Trust, Custodian will, consistent with
the terms of the applicable Foreign Sub-Custodian Agreement, use reasonable
efforts to arrange for the independent accountants of the Trust to be afforded
access to the books and records of any Foreign Sub-Custodian insofar as such
books and records relate to the performance of such Foreign Sub-Custodian under
its agreement with Custodian on behalf of the Trust.
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(e) Custodian will supply to the Trust from time to time, as
mutually agreed upon, statements in respect of the securities and other assets
of each Fund held by Foreign Sub-Custodians, including but not limited to, an
identification of entities having possession of each Fund's Foreign Securities
and other assets, and advices or notifications of any transfers of Foreign
Securities to or from each custodial account maintained by a Foreign
Sub-Custodian for Custodian on behalf of the Fund.
(f) Custodian agrees that it will use reasonable care in
monitoring compliance by each Foreign Sub-Custodian with the terms of the
relevant Foreign Sub-Custodian Agreement and that if it learns of any breach of
such Foreign Sub-Custodian Agreement believed by Custodian to have a material
adverse effect on the Trust or any Fund it will promptly notify the Trust in
writing of such breach. Custodian also agrees to use reasonable and diligent
efforts to enforce its rights under the relevant Foreign Sub-Custodian
Agreement.
(g) Custodian shall transmit promptly to the Trust all
notices, reports or other written information received pertaining to the Trust's
Foreign Securities, including without limitation, notices of corporate action,
proxies and proxy solicitation materials.
(h) Notwithstanding any provision of this Agreement to the
contrary, settlement and payment for securities received for the account of the
Trust or any Fund and delivery of securities maintained for the account of the
Trust or any Fund may be effected in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivery of securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such securities from such
purchaser or dealer.
(i) With respect to any losses or damages arising out of or
relating to any actions or omissions of any Foreign Sub-Custodian, the sole
responsibility and liability of Custodian shall be to take all appropriate and
reasonable action at the Trust's expense to recover such loss or damage from the
Foreign Sub-Custodian. It is expressly understood and agreed that Custodian's
sole responsibility and liability shall be limited to amounts so recovered from
the Foreign Sub-Custodian.
28. Concerning Custodian.
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(a) (i) Custodian shall exercise care and diligence and act in
good faith and use all commercially reasonable efforts in the performance of its
duties hereunder. Custodian shall be responsible to the Trust for its own
failure or the failure of any sub-custodian that it shall appoint (other than a
foreign sub-custodian referred to in Paragraph 27 or a sub-custodian appointed
by Custodian at the specific direction of the Trust) or that of its employees or
agents, to perform its duties, obligations or responsibilities in accordance
with this Agreement, but only to the extent that such failure results from acts
or omissions that constitute willful misfeasance, bad faith or negligence on the
part of Custodian, or on the part of its employees or agents, or reckless
disregard of such duties, obligations and responsibilities.
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(ii) Without limiting the generality of the foregoing
or any other provision of this Agreement, in no event shall Custodian be liable
to the Fund or any third party nor, except as otherwise provided in this
subparagraph for special, indirect or consequential damages or lost profits or
loss of business, arising under or in connection with this Agreement, even if
previously informed of the possibility of such damages and regardless of the
form of action. Custodian may, with respect to questions of law arising under
any FCM Agreement, apply for and obtain the advice and opinion of counsel to the
Trust at the expense of the Trust, or of its own counsel at its own expense, and
shall be fully protected with respect to anything done or omitted by it in good
faith in conformity with such advice or opinion. Custodian shall be liable to
the Trust for any loss or damage resulting from the use of the Book-Entry System
or any Securities Depository arising by reason of any negligence or willful
misconduct on the part of Custodian or any of its employees or agents.
(iii) Custodian's liability pursuant to the last
sentence of subparagraph (a)(i) shall include, but not be limited to,
reimbursing the Trust for court-ordered damage awards, fines, penalties, and
judicially-approved settlements (and attorney's fees and disbursements relating
thereto) arising out of or in connection with the conduct giving rise to such
liability.
(iv) If the Trust receives notice of the commencement of any
action, suit, or proceeding (an "Action"), or notice that any Action may be
commenced, for which Custodian may be liable to the Trust pursuant to this
Paragraph 28, the Trust shall give notice to Custodian of the commencement of
the Action or of the possibility that an Action will be commenced. Any omission
to notify Custodian will not relieve Custodian from any liability which it may
have under this Paragraph, except to the extent the failure to notify Custodian
prejudices the rights of Custodian. Custodian will be entitled at its sole
expense and liability, to exercise full control of the defense, compromise or
settlement of any such Action, provided that Custodian (1) notifies the Trust in
writing of Custodian's intention to assume such defense; and (2) retains legal
counsel reasonably satisfactory to the Trust to conduct the defense of such
Action. If Custodian advises the Trust that it does not wish to exercise full
control of any defense, compromise or settlement of any Action, Custodian shall
be responsible for the fees and expenses of counsel selected by the Trust, in
addition to any other amounts for which Custodian may be liable pursuant to this
Paragraph 28. The other person will cooperate with the person assuming the
defense, compromise or settlement of any Action in accordance with this
Paragraph in any manner that such person reasonably may request. If Custodian so
assumes the defense of any such Action, the Trust will have the right to employ
a separate counsel and to participate in (but not control) the defense,
compromise or settlement of the Action, but the fees and expenses of such
counsel will be at the expense of the Trust unless (a) Custodian has agreed to
pay such fees and expenses, (b) any relief other than the payment of money
damages is sought against the Trust, or (c) the Trust has been advised by its
counsel that there may be one or more defenses available to it which are
different from or additional to those available to Custodian and that a conflict
of interest therefore exists, and in any such case that portion of the fees and
expenses of such separate counsel that are reasonably related to matters for
which Custodian is liable pursuant to this Paragraph will be paid by Custodian.
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The Trust will not settle or compromise any such Action for which Custodian is
liable pursuant to this Paragraph without the prior written consent of
Custodian, unless Custodian has failed, after reasonable notice, to undertake
control of such Action in the manner provided in this Paragraph. Custodian will
not settle or compromise any such Action in which any relief other than the
payment of money damages is sought against the Trust without the consent of the
Trust, such consent not to be unreasonably withheld. In the event that Custodian
intends to settle or compromise any Action in which solely money damages are
sought, Custodian shall give the Trust fifteen (15) business days prior written
notice.
(b) Without limiting the generality of the foregoing,
Custodian shall be under no obligation to inquire into, and shall not be liable
for:
(i) the validity of the issue of any securities
purchased, sold, or written by or for the Trust or any Fund, the legality of the
purchase, sale or writing thereof, or the propriety of the amount paid or
received therefor;
(ii) the legality of the sale or redemption of any
Shares, or the propriety of the amount to be received or paid therefor;
(iii) the legality of the declaration or payment of
any dividend by the Trust;
(iv) the legality of any borrowing by the Trust using
securities as collateral;
(v) the legality of any loan of portfolio securities,
or under any duty or obligation to see to it that any cash collateral delivered
to it by a broker, dealer, or financial institution or held by it at any time as
a result of such loan of portfolio securities is adequate collateral for or
against any loss Custodian, the Trust or any Fund might sustain as a result of
such loan. Custodian specifically, but not by way of limitation, shall not be
under any duty or obligation periodically to check or notify the Trust or any
Fund that the amount of such cash collateral held by Custodian for the Trust is
sufficient collateral for the Trust, but such duty or obligation shall be the
sole responsibility of the Trust. In addition, Custodian shall be under no duty
or obligation to see that any broker, dealer or financial institution to which
portfolio securities are lent makes payment to it of any dividends or interest
which are payable to or for the account of the Trust during the period of such
loan or at the termination of such loan, provided, however, that Custodian shall
promptly notify the Trust in the event that such dividends or interest are not
paid and received when due; or
(vi) the sufficiency or value of any amounts of money
and/or securities held in any segregated account described in Paragraph 12(a)
hereof in connection with transactions by the Funds, or whether such segregated
account provides the compliance intended to be achieved. In addition, Custodian
shall not be under any duty or obligation to see that any broker, dealer, FCM or
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Clearing Member makes payment to the Fund of any variation margin payment or
similar payment which the Fund may be entitled to receive from such broker,
dealer, FCM or Clearing Member, to see that any payment received by Custodian
from any broker, dealer, FCM or Clearing Member is the amount the Trust is
entitled to receive, or to notify the Trust or a Fund of Custodian's receipt or
non-receipt of any such payment.
(c) Custodian shall not be liable for, or considered to be
sub-custodian or custodian of, any money, whether or not represented by any
check, draft, or other instrument for the payment of money, received by
Custodian on behalf of the Trust until Custodian actually receives and collects
such money directly or by the final crediting of the account representing the
Fund's interest at the Book-Entry System or a Securities Depository.
(d) Custodian shall not have any responsibility or be liable
for ascertaining or acting upon any calls, conversions, exchange offers,
tenders, interest rate changes or similar matters relating to securities held in
a Securities Depository, unless Custodian shall have actually received timely
notice from such Securities Depository. In no event shall Custodian have any
responsibility or liability for the failure of any Securities Depository to
collect, or for the late collection or late crediting by a Securities Depository
of any amount payable upon securities deposited in a Securities Depository which
may mature or be redeemed, retired, called or otherwise become payable. Upon
receipt of Written Instructions from the Trust of an overdue amount on
securities held in a Securities Depository Custodian shall make a claim against
a Securities Depository on behalf of the Trust, except that Custodian shall not
be under any obligation to appear in, prosecute or defend any action suit or
proceeding in respect to any securities held by a Securities Depository which in
its opinion may involve it in expense or liability, unless indemnity
satisfactory to it against all expense and liability be furnished as often as
may be required.
(e) Custodian shall not be under any duty or obligation to
take action to effect collection of any amount due to the Trust from a transfer
agent of the Trust nor to take any action to effect payment or distribution by
the transfer agent of the Trust of any amount paid by Custodian to the transfer
agent of the Trust in accordance with this Agreement.
(f) Custodian shall not be under any duty or obligation to
take action to effect collection of any amount, if the securities upon which
such amount is payable are in default, or if payment is refused after due demand
or presentation, unless and until (i) it shall be directed to take such action
by Written Instructions and (ii) it shall be assured to its reasonable
satisfaction of reimbursement of its costs and expenses in connection with any
such action.
(g) Custodian may in addition to the employment of Foreign
Sub-Custodians pursuant to Paragraphs 7 and 27, hereof appoint one or more
banking institutions as Depository or Depositories, as a sub-custodian or as
sub-custodians, or as a co-custodian or as co-custodians, including, but not
limited to, banking institutions located in foreign countries, of securities and
moneys at any time owned by the Fund, upon such terms and conditions as may be
approved in an Officer's Certificate or contained in an agreement executed by
Custodian and the Trust and the appointed institution.
(h) Custodian shall not be under any duty or obligation (i) to
ascertain whether any securities at any time delivered to, or held by it or by
any Foreign Sub-Custodian, for the account of the Trust and specifically
allocated to a Fund are such as properly may be held by the Trust or such Fund
under the provisions of its Prospectus, or (ii) to ascertain whether any
transactions by the Fund, whether or not involving Custodian, are such
transactions as may properly be engaged in by the Fund.
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(i) Custodian shall charge its compensation and any expenses
with respect to the Funds of the Trust incurred by Custodian in the performance
of its duties under this Agreement only against the money of the Fund or Funds
of the Trust from which such compensation or expenses is actually due and
payable, and under no circumstances shall any compensation or expenses due to
Custodian be considered to be a joint, or joint and several, obligation of the
Funds of the Trust. To the extent that Custodian is entitled to recover from the
Trust any loss, damage, liability or expense (including counsel fees) under this
Agreement, Custodian shall charge the amount due in respect of such loss,
damage, liability or expense (including counsel fees) only against the money
held by it for the Fund or Funds of the Trust that is/are identified by the
Trust in an Officer's Certificate, unless and until the Trust instructs
Custodian by an Officer's Certificate to charge against money held by it for the
account of a Fund such Fund's pro rata share (based on such Fund's net asset
value at the time of the charge in proportion to the aggregate net asset value
of all Funds at that time) of the amount of such loss, damage, liability or
expense (including counsel fees).
(j) Custodian shall be entitled to rely upon any Officer's
Certificate, Written Instructions, notice or other instrument in writing
received by Custodian and reasonably believed by Custodian to be an Officer's
Certificate or Written Instructions. Custodian shall be entitled to rely upon
any Oral Instructions actually received by Custodian. The Trust agrees to
forward to Custodian Written Instructions confirming such Oral Instructions in
such manner so that such Written Instructions are received by Custodian, whether
by hand delivery, telecopier or other similar device, or otherwise, by the close
of business of the same day that such Oral Instructions are received by
Custodian. The Trust agrees that the fact that such confirming instructions are
not received, or that contrary instructions are received, by Custodian shall in
no way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Trust. The Trust agrees that Custodian
shall not incur any liability to the Trust in acting upon Oral Instructions
given to Custodian hereunder concerning such transactions provided such
instructions reasonably appear to have been received from an Authorized Person.
(k) Custodian shall be entitled to rely upon any instrument,
instruction or notice received by it and reasonably believed by it to be given
in accordance with the terms and conditions of any FCM Agreement. Without
limiting the generality of the foregoing, Custodian shall not be under any duty
to inquire into, and Custodian shall not be liable for, the accuracy of any
statements or representations contained in any such instrument or other notice
including, without limitation, any specification of any amount to be paid to a
broker, dealer, futures commission merchant or clearing member.
(l) Custodian shall provide the Trust with any report obtained
by Custodian on the system of internal accounting control of the Book-Entry
System, any Securities Depository utilized hereunder the Depository or the
Options Clearing Corporation, and with such reports on its own systems of
internal accounting control as the Trust may reasonably request from time to
time.
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(m) Subject to the foregoing provisions of this Agreement,
including, without limitation, those contained in Paragraph 27 hereof, Custodian
may deliver and receive securities, and receipts with respect to such
securities, and arrange for payments to be made and received by Custodian in
accordance with the customs prevailing from time to time among brokers or
dealers in such securities. When Custodian is instructed to deliver securities
against payment, delivery of such securities and receipt of payment therefor may
not be completed simultaneously. The Fund assumes all responsibility and
liability for all credit risks involved in connection with Custodian's delivery
of securities pursuant to proper instructions of the Fund, which responsibility
and liability shall continue until final payment in full has been received by
Custodian.
(n) Custodian shall not have any duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against Custodian.
29. Termination. Any of the parties hereto may terminate this Agreement
by giving to the other parties a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving of such notice. Upon the date set forth in such notice this Agreement
shall terminate, and Custodian shall on that date deliver directly to the Trust
or a successor custodian designated by the Trust all securities and moneys then
owned by the Trust and held by Custodian, after deducting all fees, expenses and
other amounts for the payment or reimbursement of which it shall then be
entitled; provided, however, that transaction fees and expenses payable by the
Trust in connection with a deconversion to a successor custodian shall be
limited to Custodian's actual direct cost.
30. Notices. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirm in telegram, cable, telex, or facsimile sending device.
Notices shall be addressed (a) if to Custodian, at Custodian's address, 90
Washington Street, (22nd Floor), New York, New York 10286, Attention: Frank
Ajosa; (b) if to the Trust, at the address of the Trust, 111 Center Street,
Little Rock, Arkansas 72201, Attention: Richard H. Blank, Jr., Secretary; or (c)
if to none of the foregoing, at such other address as shall have been notified
to the sender of any such Notice or other communication. Notice shall be deemed
to have been given when actually received by the other party. All postage,
cable, telegram, telex and facsimile sending device charges arising from the
sending of a Notice hereunder shall be paid by the sender.
31. Further Actions. Each party agrees to perform such further acts and
execute such further documents as it deems necessary to effectuate the purposes
hereof.
32. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
24
<PAGE>
33. Miscellaneous.
(a) The Trust agrees that Custodian may be a counterparty in
any purchase or sale of foreign currency by or for the Trust on a spot or
forward basis, and on any option to buy or sell foreign currency.
(b) This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
34. Release. The names "Nations Funds" and "Trustees of Nations Funds"
refer respectively to the Trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated January 22, 1990, which is hereby referred to and a copy of which is
on file at the office of the State Secretary of The Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of
"Nations Funds" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders, or
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of Shares of the Trust Property, and all
persons dealing with any class of Shares of the Trust must look solely to the
Trust Property belonging to such class for the enforcement of any claims against
the Trust.
35. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below as of the day and
year first above written.
THE BANK OF NEW YORK
By:/s/ Stephen E. Grunston
------------------------
Stephen E. Grunston
Vice-President
NATIONS INSTITUTIONAL RESERVES
By:/s/ Richard H. Blank, Jr.
-------------------------
Richard H. Blank, Jr.
Secretary
25
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SCHEDULE I
----------
The Custody Agreement among Nations Institutional Reserves and
Custodian, applies to the following funds of the Trust:
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Nations Asset Allocation Fund
Nations Capital Income Fund
Nations California Municipal Bond Fund
Nations Intermediate Bond Fund
Nations Blue Chip Fund
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations International Equity Fund
Nations International Value Fund
Nations Emerging Markets Fund
Last Amended August 19, 1999
IN WITNESS WHEREOF, the parties hereto have caused this
amended Schedule I to be executed by their duly authorized officers designated
below as of the 19th day of August, 1999.
NATIONS INSTITUTIONAL RESERVES
By: /s/ James E. Banks, Jr.
-----------------------
James E. Banks, Jr.
Assistant Secretary
THE BANK OF NEW YORK
By: /s/ Stephen E. Grunston
------------------------
Stephen E. Grunston
Vice President
26
<PAGE>
SCHEDULE II
PUBLICATIONS
I, Ira Rosner, a Vice President with THE BANK OF NEW YORK do hereby
designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
27
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SCHEDULE III
DOMESTIC CUSTODIAN FEE SCHEDULE
FOR
NATIONS INSTITUTIONAL RESERVES
MONEY MARKET FUNDS
SAFEKEEPING/INCOME COLLECTION/REPORTING DTC-ID AFFIRMATION
ALL SYSTEMS DEVELOPMENT AND USAGE CHARGES
- -----------------------------------------
1/2 of one basis point per annum on the aggregate net assets of
all Nations' Money Market Funds.
SECURITY TRANSACTION CHARGES
- ----------------------------
$ 7 DTC/FRB/PTC
$15 Physicals
$40 Euro C/D's
OTHER CHARGES
- -------------
$ 5 Bank official checks
$ 2 Money transfers in/out of the Fund's custodian account not
related to securities transactions.
EARNINGS CREDITS ON BALANCES/INTEREST ON OVERDRAFTS
- ---------------------------------------------------
Earnings credits are provided to each Fund on 80% of the daily balance in the
domestic custodian account computed at the 90-day T-bill rate on the day of the
balance.
Overdrafts, excluding bank errors, will cause a reduction of earnings credits
daily, computed at 1% above the average Federal Funds rate on the day of the
overdraft.
Credits and debits will be accumulated daily and offset monthly against the
Bank's domestic custodian fees. To the extent a net debit is accumulated, each
Fund will be billed for the expense. To the extent a net earnings credit is
generated, such excess earnings credit can be carried forward to the next
succeeding month. However, no earnings credit will be carried forward after
year-end.
28
<PAGE>
DOMESTIC CUSTODIAN FEE SCHEDULE
FOR
NATIONS INSTITUTIONAL RESERVES
NON-MONEY MARKET FUNDS
SAFEKEEPING/INCOME COLLECTION/REPORTING DTC-ID AFFIRMATION
ALL SYSTEMS DEVELOPMENT AND USAGE CHARGES
- -----------------------------------------
3/4ths of one basis point per annum on the aggregate net assets of
all Nations' Non-Money Market Funds up to $10 billion.
1/2 of a basis point on the excess.
SECURITY TRANSACTION CHARGES/PAYDOWNS
- --------------------------------------
$ 5 Paydowns
$ 7 DTC/FRB/PTC
$15 Physicals, options and futures
$40 Euro C/D's
OTHER CHARGES
- -------------
$ 5 Bank official checks
$ 2 Money transfers in/out of the Fund's custodian account not
related to securities transactions.
EARNINGS CREDITS ON BALANCES/INTEREST ON OVERDRAFTS
- ---------------------------------------------------
Earnings credits are provided to each Fund on 80% of the daily balance in the
domestic custodian account computed at the 90-day T-bill rate on the day of the
balance.
Overdrafts, excluding bank errors, will cause a reduction of earnings credits
daily, computed at 1% above the average Federal Funds rate on the day of the
overdraft.
Credits and debits will be accumulated daily and offset monthly against the
Bank's domestic custodian fees. To the extent a net debit is accumulated, each
Fund will be billed for the expense. To the extent a net earnings credit is
generated, such excess earnings credit can be carried forward to the next
succeeding month. However, no earnings credit will be carried forward after
year-end.
OUT-OF-POCKET EXPENSES
- ----------------------
None.
BILLING CYCLE
- -------------
The above fees are billed monthly.
29
<PAGE>
SCHEDULE IV
-----------
OVERDRAFT RATE
30
AMENDMENT TO THE
CUSTODY AGREEMENT
THIS AMENDMENT is made as of September 1, 1999, to the Custody
Agreement dated as of October 19, 1998 (the "Agreement"), by and between The
Bank of New York ("Custodian") and Nations Reserves, formerly Nations
Institutional Reserves ("Reserves"), on behalf of its respective portfolios
listed on Schedule I attached thereto.
RECITALS
WHEREAS, the parties hereto desire to amend certain schedules
underlying the provisions of the Agreement.
NOW THEREFORE, the Custodian and Reserves agree that the Agreement
shall be amended as follows:
1. Pursuant to Paragraph 23 of the Agreement, the underlying Schedule III to the
Custody Agreement for Reserves is revised. The revised Schedule III reflects a
modification in fees that Reserves will pay for the Custodian's services as they
relate to securities of foreign issue. Specifically, Schedule III is amended by
the addition of the Global Fee Schedule attached hereto, which may be amended
from time to time by mutual consent of the parties hereto.
The terms and provisions of this Amendment shall be deemed a part of
the Agreement for all purposes. To the extent that any provisions of the
Amendment modify or are otherwise inconsistent with any provisions of the
Agreement, the terms of this Amendment shall control. In all other respects, the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first written
above.
THE BANK OF NEW YORK
By: /s/ Stephen E. Grunston
------------------------------
Stephen E. Grunston
Vice President
NATIONS RESERVES
By: /s/ James E. Banks, Jr.
-----------------------
James E. Banks, Jr.
Assistant Secretary
AMENDMENT TO THE
CUSTODY AGREEMENT
THIS AMENDMENT is made as of February 14, 2000, to the Custody
Agreement dated as of October 19, 1998 (the "Agreement"), by and between The
Bank of New York ("Custodian") and Nations Reserves (formerly Nations
Institutional Reserves) (the "Trust"), on behalf of its respective portfolios
listed on Schedule I attached thereto.
RECITALS
WHEREAS, the parties hereto desire to amend certain provisions of the
Agreement.
NOW THEREFORE, the Custodian and the Trust agree that the Agreement
shall be amended as follows:
1. Paragraph 25 is hereby amended by deleting subsection (a) in its entirety and
inserting the following:
"(a) Custodian shall advance funds under this Agreement with
respect to any Fund which results in an overdraft because the moneys
held by Custodian in the separate account for such Fund shall be
insufficient to pay the total amount payable upon a purchase of
securities by such Fund, as set forth in an Officer's Certificate or
Oral or Written Instructions, or which results in an overdraft in the
separate account of such Fund for some other reason, or if the Trust is
for any other reason indebted to Custodian, including any indebtedness
to The Bank of New York under the Trust's Cash Management and Related
Services Agreement, (except a borrowing for investment or for temporary
or emergency purposes using securities as collateral pursuant to a
separate agreement and subject to the provisions of Paragraph 25(b)
hereof), such overdraft or indebtedness shall be deemed to be a loan
made by Custodian to the Trust for such Fund payable on demand and
shall bear interest from the date incurred at a rate per annum (based
on a 360-day year for the actual number of days involved) equal to the
overdraft rate specified in Schedule III to this Agreement. In
addition, the Trust hereby agrees that to the extent of such overdraft
or indebtedness, Custodian shall have a continuing lien, security
entitlement and security interest in and to any property at any time
held by it for the benefit of such Fund or in which the Fund may have
an interest which is then in Custodian's possession or control or in
possession or control of any third party acting on Custodian's behalf.
The Trust authorizes Custodian, in its sole discretion, at any time to
charge any such overdraft or indebtedness together with interest due
thereon against any balance of account standing to such Fund's credit
on Custodian's books. In addition, the Trust hereby covenants that on
each Business Day on which either it intends to enter a Reverse
Repurchase Agreement and/or otherwise borrow from a third party, or
which next succeeds a Business Day on which at the close of business
the Trust had outstanding a Reverse Repurchase Agreement or such a
<PAGE>
borrowing, it shall prior to 1:00 p.m., New York City time, advise
Custodian, in writing, of each such borrowing, shall specify the Fund
to which the same relates, and shall not incur any indebtedness not so
specified other than from Custodian."
The terms and provisions of this Amendment shall be deemed a part of
the Agreement for all purposes. To the extent that any provisions of the
Amendment modify or are otherwise inconsistent with any provisions of the
Agreement, the terms of this Amendment shall control. In all other respects, the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first written
above.
THE BANK OF NEW YORK
By: /s/ Stephen E. Grunston
-----------------------
Stephen E. Grunston
Vice President
NATIONS RESERVES (Formerly Nations Institutional Reserves)
By: /s/ James E. Banks, Jr.
-----------------------
James E. Banks, Jr.
Assistant Secretary
CO-ADMINISTRATION AGREEMENT
This CO-ADMINISTRATION AGREEMENT (the "Agreement") is made as of
December 1, 1998 by and among STEPHENS INC. ("Stephens"), NATIONSBANC ADVISORS,
INC. ("NBAI") and NATIONS INSTITUTIONAL RESERVES ("Reserves").
WHEREAS, Reserves is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, Reserves desires to retain Stephens and NBAI to render certain
administrative services for the investment portfolios of Reserves listed on
Schedule I (individually, a "Fund" and collectively, the "Funds"), and Stephens
and NBAI are willing to render such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. Appointment.
(a) Reserves hereby appoints Stephens to act as Co-Administrator
of the Funds and Stephens hereby accepts such appointment and agrees to render
such services and duties set forth in Paragraph 3, for the compensation and on
the terms herein provided. Absent written notification to the contrary by
Reserves, NBAI or Stephens, each new investment portfolio established in the
future by Reserves shall automatically become a "Fund" for all purposes
hereunder as if listed on Schedule I.
(b) Reserves also hereby appoints NBAI to act as Co-Administrator
of the Funds, and NBAI hereby accepts such appointment and agrees to render such
services and duties set forth in Paragraph 4, for the compensation and on the
terms herein provided. Absent written notification to the contrary by either
Reserves or NBAI, each new investment portfolio established in the future by
Reserves shall automatically become a "Fund" for all purposes hereunder as if
listed on Schedule I.
2. Delivery of Documents. Reserves has furnished Stephens and NBAI with
copies properly certified or authenticated of each of the following:
(a) Reserves' most recent Post-Effective Amendment to its Registration
Statement on Form N-1A (the "Registration Statement") under the Securities Act
of 1933, as amended, and under the 1940 Act (File Nos. 33-33144 and 811-6030),
as filed with the Securities and Exchange Commission (the "SEC") relating to the
Funds' shares (the "Shares");
(b) The Funds' most recent Prospectus(es); and
(c) The Funds' most recent Statement(s) of Additional Information.
1
<PAGE>
Reserves will furnish Stephens and NBAI from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing. Furthermore, Reserves will provide Stephens and NBAI with any other
documents that Stephens and NBAI may reasonably request and will notify Stephens
and NBAI as soon as possible of any matter materially affecting either Stephens'
or NBAI's performance of its services under this Agreement.
3. Duties as Co-Administrator. Subject to the supervision and direction
of the Board of Trustees of Reserves, Stephens, as Co-Administrator, will assist
in supervising various aspects of Reserves' administrative operations and
undertakes to perform the following specific services from and after the
effective date of this Agreement:
(a) Maintaining office facilities for Reserves (which may be in
the offices of Stephens or a corporate affiliate);
(b) Furnishing clerical services, internal executive and
administrative services and stationery and office supplies in connection with
the foregoing;
(c) Assist in furnishing statistical and research data and data
processing services in connection with the foregoing;
(d) Furnishing corporate secretarial services, including assisting
in the coordination of the preparation and distribution of materials for Board
of Trustees meetings;
(e) Providing the services of certain persons who may be appointed
as officers of Reserves by Reserves' Board of Trustees;
(f) Assist in coordinating the provision of legal advice and
counsel to Reserves with respect to regulatory matters, including monitoring
regulatory and legislative developments which may affect Reserves and assisting
in the strategic response to such developments, counseling and assisting
Reserves in routine regulatory examinations or investigations of Reserves, and
working closely with outside counsel to Reserves in connection with any
litigation in which Reserves is involved;
(g) Assist in coordinating the preparation of reports to Reserves'
shareholders of record and the SEC including, but not necessarily limited to,
Annual Reports and Semi-Annual Reports to Shareholders and on Form N-SAR and
Notices pursuant to Rule 24f-2 under the 1940 Act;
(h) Coordinating with Reserves regarding the jurisdictions in
which the Shares shall be registered or qualified for sale and, in connection
therewith, being responsible for the registration or qualification and the
maintenance of such registration or qualification of Shares for sale under the
securities laws of any state. Payment of share registration fees and any fees
for qualifying or continuing the qualification of Reserves or any Fund as a
dealer or broker shall be made or reimbursed by Reserves or that Fund,
respectively;
2
<PAGE>
(i) Assisting in the preparation and filing on a timely basis of
various reports, registration statements and post-effective amendments thereto,
and other documents required by federal, state and other applicable laws and
regulations, other than those filed or required to be filed by NBAI or the
Funds' Sub-Advisers, Transfer Agent, Sub-Transfer Agent or Custodian;
(j) Performing certain compliance procedures for Reserves which
will include, among other matters, monitoring compliance with personal trading
guidelines by Reserves' Board of Trustees; and
(k) Generally assisting in all aspects of Reserves' operations.
In performing all services under this Agreement, Stephens shall (i) act
in conformity with: Reserves' Declaration of Trust and Bylaws, the 1940 Act and
the rules thereunder, and other applicable laws and regulations, as the same may
be amended from time to time, and Reserves' Registration Statement, as such
Registration Statement may be amended from time to time; (ii) consult and
coordinate with Reserves, as necessary and appropriate; and (iii) advise and
report to Reserves, as necessary or appropriate, with respect to any compliance
matters that come to its attention.
Stephens represents and warrants to Reserves that it will use
reasonable efforts to perform its duties and obligations under this Agreement
without: (a) any failure of its computer systems, or those used by it in the
performance of its duties hereunder, to properly record, store, process,
calculate or present calendar dates falling on and after, and time spans
including, January 1, 2000 as a result of the occurrence of, or use of data
containing, such date; (b) any failure of its computer systems, or those used by
it in the performance of its duties hereunder, to calculate any information
dependent on or relating to dates on or after January 1, 2000; or (c) any loss
of functionality or performance with respect to the maintenance of records or
processing of data containing dates falling on or after January 1, 2000 ((a),
(b), and (c) above shall be referred to as "Y2K Failures"). Notwithstanding the
above, Stephens shall not be liable for any Y2K Failures caused by Y2K Failures
in a third party system with which Stephens interfaces or from which Stephens
receives data in connection with the performance of its duties hereunder.
In performing its services under this Agreement, Stephens shall
cooperate and coordinate with NBAI as necessary and appropriate and shall
provide such information as is reasonably necessary or appropriate for NBAI to
perform its responsibilities to Reserves.
4. Duties as Co-Administrator. Subject to the supervision and direction
of the Board of Trustees of Reserves, NBAI, as Co-Administrator, will assist in
supervising various aspects of Reserves' administrative operations and
undertakes to perform the following specific services, from and after the
effective date of this Agreement:
(a) providing accounting and bookkeeping services (including the
maintenance for the periods prescribed by Rule 31a-2 under the 1940 Act of such
accounts, books and records of Reserves as may be required by Section 31(a) of
the 1940 Act and the rules thereunder). NBAI further agrees that all such
3
<PAGE>
records which it maintains for Reserves are the property of Reserves and further
agrees to surrender promptly to Reserves any of such records upon Reserves'
request;
(b) valuing each Fund's assets and calculating the net asset value
and the net income of the shares of each Fund in accordance with Reserves'
current Prospectus(es), applicable pricing procedures and resolutions of
Reserves' Board of Trustees, provided, that in performing such services, NBAI
shall obtain security market quotes from independent pricing services, or if
such quotes are unavailable, obtain such prices from the Funds' Sub-Advisers;
(c) accumulating information for reports to Reserves' shareholders
of record and the SEC including, but not necessarily limited to, Annual Reports
and Semi-Annual Reports to Shareholders and on Form N-SAR and Notices pursuant
to Rule 24f-2 under the 1940 Act;
(d) preparing and filing on a timely basis Reserves' tax returns
and other tax filings;
(e) monitoring the development and implementation of certain
compliance procedures for Reserves including, but not limited to, monitoring (i)
each Fund's status as a regulated investment company under Sub-Chapter M of the
Internal Revenue Code of 1986, as amended, including performing, on a monthly
basis and based upon information provided by the Fund's Sub-Advisers, the 90%
gross income and asset diversification tests derived from such Sub-Chapter; and
(ii) compliance by each Fund with its investment objective, policies and
restrictions, and applicable laws and regulations;
(f) preparing and furnishing to Reserves monthly broker security
transaction summaries and monthly security transaction listings and (at
Reserves' request) performance information (including yield and total return
information) calculated in accordance with applicable U.S. securities laws and
reporting to external databases such information as may reasonably be requested;
(g) assisting Reserves and its agents in their accumulation and
preparation of materials for the Board of Trustees' meetings and for regulatory
examinations and inspections of Reserves, to the extent such materials relate to
the services being performed for Reserves by NBAI; and
(h) coordinate the provisions of services to Reserves by other
service providers to Reserves, including the transfer agent, sub-transfer agent
and custodian.
In performing all services under this Agreement, NBAI shall (i) act in
conformity with Reserves' Declaration of Trust and Bylaws; the 1940 Act and the
rules thereunder, and other applicable laws and regulations, as the same may be
amended from time to time; and Reserves' Registration Statement, as such
Registration Statement may be amended from time to time, (ii) consult and
coordinate with Reserves, as necessary and appropriate, and (iii) advise and
report to Reserves, as necessary or appropriate, with respect to any compliance
matters that come to its attention.
4
<PAGE>
NBAI represents and warrants to Reserves that it will use reasonable
efforts to perform its duties and obligations under this Agreement without: (a)
any failure of its computer systems to properly record, store, process,
calculate or present calendar dates falling on and after, and time spans
including, January 1, 2000 as a result of the occurrence of, or use of data
containing, such date; (b) any failure of its computer systems to calculate any
information dependent on or relating to dates on or after January 1, 2000; or
(c) any loss of functionality or performance with respect to the maintenance of
records or processing of data containing dates falling on or after January 1,
2000 ((a), (b), and (c) above shall be referred to as "Y2K Failures").
Notwithstanding the above, NBAI shall not be liable for any Y2K Failures caused
by Y2K Failures in a third party system with which NBAI interfaces or from which
NBAI receives data in connection with the performance of its duties hereunder
including, without limitation, the system of any sub-administrator engaged
pursuant to Paragraph 4.
In connection with its duties under this Paragraph 4, it is understood
and agreed that NBAI may, at its own expense, enter into sub-administration
agreements with other service providers and the Fund(s), provided that each such
service provider agrees with NBAI and the Fund(s) to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder. In
addition, upon notice to the Board of Trustees of Reserves, the parties agree
that NBAI may from time to time assume some or all of Stephens' duties set forth
in Paragraph 3 above.
In performing its responsibilities under this Agreement, NBAI shall
cooperate and coordinate with Stephens as necessary and appropriate and shall
provide such information within its possession or control as is reasonably
necessary or appropriate to Stephens to enable it to perform its
responsibilities to Reserves.
5. Compensation.
(a) Stephens shall bear all expenses in connection with the
performance of its services under this Agreement, except those enumerated in
Paragraph 5(a)(2) below.
(1) Stephens will from time to time employ or associate with
such person or persons as Stephens may believe to be particularly suited to
assist it in performing services under this Agreement. Such person or persons
may be officers and employees of both Stephens and Reserves. The compensation of
such person or persons shall be paid by Stephens and no obligation shall be
incurred on behalf of Reserves or NBAI in such respect.
(2) Stephens shall not be required to pay any of the following
expenses incurred by Reserves: investment advisory expenses; costs of printing
and mailing stock certificates, prospectuses, reports and notices; interest on
borrowed money; brokerage fees and commissions; taxes and fees payable to
federal, state and other governmental agencies; fees of Trustees of Reserves who
are not affiliated with Stephens; outside auditing expenses; outside legal
expenses; fees of any other service provider to Reserves; or other expenses not
specified in this Section 5(a) which may be properly payable by Reserves and
which are approved by Reserves' President or Treasurer.
5
<PAGE>
(3) Reserves will compensate Stephens for its services rendered pursuant to this
Agreement in accordance with Schedule A. In addition, Reserves shall reimburse
Stephens for certain reasonable out-of-pocket distributions made in connection
with fulfilling its obligations under the Agreement. The items eligible for
reimbursement are set forth on Schedule A.
(b) NBAI shall bear all expenses in connection with the
performance of its services under this Agreement, except those enumerated in
5(b)(2) below.
(1) NBAI will from time to time employ or associate with such
person or persons as NBAI may believe to be particularly suited to assist it in
performing services under this Agreement. Such person or persons may be officers
and employees of both NBAI and Reserves. The compensation of such person or
persons shall be paid by NBAI and no obligation shall be incurred on behalf of
Reserves or Stephens in such respect.
(2) NBAI shall not be required to pay any of the following
expenses incurred by Reserves: investment advisory expenses; costs of printing
and mailing stock certificates, prospectuses, reports and notices; interest on
borrowed money; brokerage fees and commissions; taxes and fees payable to
federal, state and other governmental agencies; fees of Trustees of Reserves who
are not affiliated with NBAI; outside auditing expenses; outside legal expenses;
fees of independent pricing services utilized by NBAI to value each Fund's
assets; fees of any other service provider to Reserves (other than a
sub-administrator engaged pursuant to Paragraph 4); or other expenses not
specified in this Section 5(b) which may be properly payable by Reserves and
which are approved by Reserves' President or Treasurer.
(3) Reserves will compensate NBAI for its services rendered
pursuant to this Agreement in accordance with Schedule A. In addition, Reserves
shall reimburse NBAI for certain reasonable out-of pocket distributions made in
connection with fulfilling its obligations under the Agreement. The items
eligible for reimbursement are set forth on Schedule A.
6. Limitation of Liability; Indemnification.
(a) Stephens shall not be liable for any error of judgment or
mistake of law or for any loss suffered by Reserves in connection with the
performance of its obligations and duties under this Agreement, except a loss
resulting from Stephens' willful misfeasance, bad faith or gross negligence in
the performance of such obligations and duties, or by reason of its reckless
disregard thereof.
(b) NBAI shall not be liable for any error of judgment or mistake
of law or for any loss suffered by Reserves in connection with the performance
of its obligations and duties under this Agreement, except a loss resulting from
NBAI's willful misfeasance, bad faith or gross negligence in the performance of
such obligations and duties, or by reason of its reckless disregard thereof.
(c) Reserves, on behalf of each Fund, will indemnify Stephens
and/or NBAI against and hold each harmless from any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
6
<PAGE>
expenses) resulting from any claim, demand, action or suit relating to the
particular Fund and not resulting from the willful misfeasance, bad faith or
gross negligence of Stephens and/or NBAI in the performance of such obligations
and duties or by reason of their reckless disregard thereof. Stephens and/or
NBAI will not confess any claim or settle or make any compromise in any instance
in which Reserves will be asked to provide indemnification, except with
Reserves' prior written consent. Any amounts payable by Reserves under this
Section 6(c) shall be satisfied only against the assets of the Fund involved in
the claim, demand, action or suit and not against the assets of any other
investment portfolio of Reserves.
7. Effective Date; Termination of Agreement.
(a) This Agreement shall become effective, on a Fund by Fund
basis, upon the completion of the transfer of a Fund's accounting function to
The Bank of New York, notice of which shall be provided by Reserves to Stephens
and NBAI for each Fund. This Agreement shall remain in full force and effect
with respect to such Fund(s) unless terminated pursuant to the provisions of
Section 7(c).
(b) The parties agree that the administration arrangements between
Stephens and Reserves, dated September 1, 1993, and the sub-administration
arrangements between Stephens and NBAI, dated November 18, 1997, with respect to
the Funds shall be terminated on a Fund by Fund basis upon the effectiveness of
this Agreement.
(c) This Agreement may be terminated at any time without payment
of any penalty, upon 60 days' written notice, by vote of the Board of Trustees
of Reserves, by Stephens or by NBAI. Stephens and NBAI will each cooperate with
and assist Reserves, its agents and any successor administrator or
administrators in the substitution/conversion process.
(d) Sections 6 and 9 shall survive this Agreement's termination.
8. Amendments. No provision of this Agreement may be changed,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, discharge or termination is
sought.
9. Confidentiality. All books, records, information and data pertaining
to the business of Reserves, its prior, present or potential shareholders and
NBAI's customers that are exchanged or received pursuant to the performance of
Stephens' and/or NBAI's duties under this Agreement shall remain confidential
and shall not be disclosed to any other person, except as specifically
authorized by Reserves or as may be required by law, and shall not be used for
any purpose other than performance of NBAI's and Stephens' responsibilities and
duties hereunder.
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10. Service to Other Companies or Accounts. Reserves acknowledges that
both Stephens and NBAI now act, will continue to act and may act in the future
as investment adviser to fiduciary and other managed accounts, and as investment
adviser, investment sub-adviser and/or administrator to other investment
companies or series of investment companies, and Reserves has no objection to
either Stephens or NBAI so acting. Reserves further acknowledges that the
persons employed by both Stephens and NBAI to assist in the performance of their
duties under this Agreement may not devote their full time to such service and
nothing contained in this Agreement shall be deemed to limit or restrict the
right of Stephens or NBAI or any affiliate of either to engage in and devote
time and attention to other businesses or to render services of whatever kind or
nature.
11. Miscellaneous.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to Reserves, Stephens or NBAI shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To Reserves:
Nations Institutional Reserves
111 Center Street, Suite 3000
Little Rock, Arkansas 72201
Attention: Secretary
To Stephens:
Stephens Inc.
111 Center Street, Suite 3000
Little Rock, Arkansas 72201
Attention: Richard H. Blank, Jr.
To NBAI:
NationsBanc Advisors, Inc.
One Bank of America Plaza
33rd Floor
Charlotte, NC 28255
Attention: Edward D. Bedard
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable without the written consent of the
other parties.
(c) This Agreement shall be construed in accordance with the laws
of the Commonwealth of Massachusetts.
(d) This Agreement may be executed in any number of counterparts
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
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(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(f) This Agreement constitutes the entire agreement between the
parties hereto with respect to the matters described herein.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
STEPHENS INC.
By: /s/ Richard H. Blank, Jr.
-------------------------
Richard H. Blank, Jr.
Senior Vice President
NATIONSBANC ADVISORS, INC.
By: /s/ Edward D. Bedard
-------------------------
Edward D. Bedard
Senior Vice President and
Chief Operating Officer
NATIONS INSTITUTIONAL RESERVES
By: /s/ James E. Banks, Jr.
-----------------------
James E. Banks, Jr.
Assistant Secretary
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SCHEDULE I
1. Cash Reserves
2. Treasury Reserves
3. Municipal Reserves
4. Government Reserves
5. Money Market Reserves
6. California Tax Exempt Reserves
7. California Municipal Bond Fund
8. Asset Allocation Fund
9. Capital Income Fund
10. Intermediate Bond Fund
11. Blue Chip Fund
12. Emerging Markets Fund
13. International Value Fund
14. Marsico Growth & Income Fund
15. Marsico Focused Equities Fund
16. International Equity Fund
Amended: August 19, 1999
I-1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this amended
Schedule I to be executed by their duly authorized officers designated below as
of the 19th day of August, 1999.
STEPHENS INC.
By: /s/ Richard H. Blank, Jr.
--------------------------
Richard H. Blank, Jr.
Senior Vice President
NATIONSBANC ADVISORS, INC.
By /s/ Robert H. Gordon
--------------------------
Robert H. Gordon
President
NATIONS RESERVES
By: /s/ James E. Banks, Jr.
--------------------------
James E. Banks, Jr.
Assistant Secretary
I-2
<PAGE>
SCHEDULE A
For services rendered pursuant to this Agreement, Reserves will pay
Stephens and NBAI, in the aggregate, an administration fee, computed daily and
payable monthly, based on annual rate of each Fund's daily net assets as
follows:
1. Money Market Funds: 0.10%
2. Fixed Income Funds (except
Nations Intermediate Bond Fund): 0.22%
3. Nations Intermediate Bond Fund: 0.17%
4. International Funds (except
Nations International Equity Fund and
Nations International Value Fund): 0.22%
5. Nations International Equity Fund and
Nations International Value Fund: 0.17%
6. Domestic Equity Funds (except
Nations Blue Chip Fund, Nations
Marsico Focused Equities Fund and
Nations Marsico Growth & Income Fund): 0.23%
7. Nations Blue Chip Fund: 0.18%
8. Nations Marsico Focused Equities Fund and
Nations Marsico Growth & Income Fund: 0.13%
It is understood and agreed among the parties that the aggregate
administration fee payable hereunder shall be divided by and between Stephens
and NBAI, as they may agree from time to time.
In addition to the asset-based fee set forth above, Reserves shall
reimburse Stephens, NBAI and any sub-administrator engaged pursuant to Paragraph
4 for certain reasonable out-of-pocket expenses incurred by them in connection
with the performance of their respective duties hereunder.
Reimbursable out-of-pocket expenses shall include the following:
reasonable costs associated with postage (including overnight services),
telephone, telecommunications (including facsimiles), duplicating, pricing
services, and forms and supplies.
A-1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this amended
Schedule A to be executed by their duly authorized officers designated below as
of the 18th day of November, 1999.
STEPHENS INC.
By: /s/ Richard H. Blank, Jr.
-------------------------
Richard H. Blank, Jr.
Senior Vice President
BANC OF AMERICA ADVISORS, INC.
(Formerly, NationsBanc Advisors,
Inc.)
By: /s/ Edward D. Bedard
-------------------------
Edward D. Bedard
Senior Vice President and
Chief Operating Officer
NATIONS RESERVES
on behalf of the Funds
By: /s/ James E. Banks, Jr.
-----------------------
James E. Banks, Jr.
Assistant Secretary
B-1
SUB-ADMINISTRATION AGREEMENT
This SUB-ADMINISTRATION AGREEMENT (the "Agreement") is made as of
December 1, 1998 by and among THE BANK OF NEW YORK ("BNY"), NATIONSBANC
ADVISORS, INC. ("NBAI") and NATIONS INSTITUTIONAL RESERVES ("Reserves").
WHEREAS, Reserves is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, NBAI serves as the Co-Administrator for the investment
portfolios of Reserves pursuant to a separate Co-Administration Agreement; and
WHEREAS, NBAI desires to retain BNY to render certain
sub-administrative services to Reserves and to NBAI, as Co-Administrator of
Reserves, and BNY is willing to render such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. Appointment and Duties as Sub-Administrator.
(a) NBAI hereby appoints BNY to act as Sub-Administrator of Reserves
and to render sub-administrative services for each portfolio of Reserves listed
on Schedule I (individually, a "Fund" and collectively, the "Funds") and BNY
hereby accepts such appointment and agrees to render the services and duties set
forth in Schedule II as it may be amended from time to time, for the
compensation and on the terms herein provided. Each new investment portfolio
established in the future by Reserves or NBAI will become a "Fund" for all
purposes hereunder when BNY receives a revised Schedule I from NBAI or Reserves
that includes such new portfolio.
(b) Subject to the other provisions of this Section 1, in performing
all services under this Agreement, BNY shall (i) act in conformity with
Reserves' Agreement and Declaration of Trust and Bylaws (the "Bylaws"), the 1940
Act and the rules thereunder, including but not limited to Rules 31a-1 to 31a-3,
and other applicable laws and regulations, as the same may be amended from time
to time, and Reserves' Registration Statement, as such Registration Statement
may be amended from time to time; (ii) consult and coordinate with NBAI and
Reserves, as necessary and appropriate; and (iii) advise and report to NBAI and
Reserves, as necessary or appropriate, with respect to any compliance matters
that come to its attention. In performing all services under this Agreement BNY
shall meet the minimum quality of service standards set forth on Schedule III.
(c) Reserves has furnished BNY and NBAI with copies properly certified
or authenticated of each of the following: (i) Reserves' Agreement and
Declaration of Trust or other organizational document and all amendments thereto
(the "Declaration"); (ii) Reserves' Bylaws; (iii) resolutions of Reserves' Board
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<PAGE>
of Trustees or other governing body (the "Board") authorizing the execution,
delivery and performance of this Agreement by Reserves; (iv) Reserves' most
recent Post-Effective Amendment to its Registration Statement on Form N-1A (the
"Registration Statement") under the Securities Act of 1933, as amended, and
under the 1940 Act (File Nos. 33-33144 and 811-6030), as filed with the
Securities and Exchange Commission (the "SEC") relating to the Funds' shares
(the "Shares"); (iv) the Funds' current Prospectus(es); (v) the Funds' current
Statement(s) of Additional Information; and (vi) the pricing procedures
applicable to the calculation of the Funds' net asset values as approved by
Reserves' Board (the "Pricing Procedures"). It is solely Reserves'
responsibility to furnish BNY from time to time with copies, properly certified
or authenticated, of all amendments of or supplements to the foregoing, and BNY
will not be held to have knowledge of any such amendments or supplements until
the same are actually received by BNY. Furthermore, Reserves will provide BNY
with any other documents that BNY and NBAI may reasonably request and will
notify BNY and NBAI as soon as possible of any matter materially affecting
either BNY's or NBAI's performance of its services under this Agreement.
(d)(i) BNY undertakes to report on a regular basis to NBAI and Reserves
regarding: (A) the readiness of its computer systems, or those used by it in the
performance of its duties hereunder, properly to record, store, process,
calculate or present calendar dates falling on and after, and time spans
including, September 9, 1999, January 1, 2000 or February 29, 2000 (the "Subject
Dates") as a result of the occurrence, or use of data containing any such
Subject Dates; (B) the readiness of its computer systems or those used by it in
the performance of its duties hereunder, to calculate any information dependent
on or relating to dates on or after the Subject Dates; and (C) its ability to
perform the administration and fund accounting services set forth in Schedule II
(the "Services") in accordance with any applicable performance standards set
forth in Schedule III (the "Standards") with respect to the maintenance of
records or processing of data containing dates falling on or after the Subject
Dates, provided that, with respect to computers used but not owned by BNY and
third-party computer systems other than InvestOne, BNY's responsibility shall be
limited to seeking similar reports from such owners or third parties and
promptly forwarding such reports to NBAI. Without limiting the foregoing, BNY
undertakes to notify NBAI and Reserves, in writing, of any concerns believed by
BNY to be material regarding the events described in this paragraph, provided
that, with respect to computers owned by others and third-party computer systems
other than InvestOne, BNY's responsibility shall be limited to seeking similar
notice from such owners or third parties and promptly forwarding such
notifications to NBAI.
(ii) NBAI or Reserves shall have the right to terminate this Agreement
if there is a "material failure" by BNY to perform any of the Services in
accordance with the Standards due to a failure by computers owned or used by BNY
in performing its duties hereunder to properly process the occurrence of the
Subject Dates or data containing the Subject Dates. As used in this Section
1(d), the term "material failure" shall be limited to a failure to provide any
of the Services in accordance with the Standards, provided that no such failure
shall be deemed a "material failure" if such failure occurs at or about the time
other major financial institutions similar to BNY providing similar services in
a similar volume to investment companies similar to Reserves are experiencing
similar failures, and, provided further, that no failure by BNY shall be or be
2
<PAGE>
deemed a "material failure" if BNY substantially provides the Services under a
contingency plan, it being agreed that, to the extent that the parties mutually
agree, the time frames and deadlines set forth in Schedule III of this Agreement
and elsewhere shall not be considered in determining whether BNY is
substantially providing the Services in accordance with the Standards. NBAI and
Reserves agree to act reasonably and in good faith in considering any request by
BNY to extend time frames and deadlines.
(iii) In the event there is a "material failure" by BNY to provide the
Services and such "material failure" is not cured by BNY within 10 days after
such material failure arises, NBAI or Reserves shall have the right to terminate
this Agreement upon the giving of 60 days written notice to BNY. BNY shall,
notwithstanding any other provision contained in this Agreement, have no
liability to Reserves or NBAI under this Agreement if such "material failure"
initially arose out of or was caused by a failure of a computer used but not
owned by BNY or owned by a third party (other than InvestOne) to properly
process the Subject Dates or data containing the Subject Dates, and BNY shall be
entitled to any compensation and reimbursement for out-of-pocket expense as may
then be due and payable, as well as agreed-upon out-of-pocket expenses incurred
in connection with such a termination. If such a termination is the result of a
"material failure" initially arising out of, or caused by a failure of computers
owned by BNY or a failure by InvestOne, then, first, BNY's liability hereunder
for such failure shall, notwithstanding any other provision contained in this
Agreement to the contrary, be limited to the lesser of (x) the fees paid to a
successor service provider during the six months next succeeding the date of
termination to the extent such fees exceed the fees that would have been paid to
BNY hereunder, and (y) $1,000,000; and second, BNY shall not be entitled to
out-of-pocket expenses incurred in connection with such a termination.
(iv) In the event of conflict between this Section 1(d) and any other
provision contained in this Agreement, this Section 1(d) shall control.
(v) NBAI and Reserves each agree to hold all of the provisions of this
Section 1(d) in strict confidence and not to disclose, nor permit disclosure of,
such provisions.
(e) Subject to the direction and approval of Reserves' Board and
appropriate officers and the provisions of this Agreement, BNY shall provide to
each Fund the administrative services set forth on Schedule II attached hereto.
In performing such services hereunder, BNY shall provide, at its expense, office
space, facilities, equipment and personnel. BNY shall not provide any services
relating to the management, investment advisory or sub-advisory functions of any
Fund, distribution of shares of any Fund, maintenance of any Fund's financial
records (except as otherwise agreed by the parties) or any services normally
performed by the Funds' counsel or independent accountants. Upon receipt of
Reserves' prior written consent, BNY may delegate any of its duties and
obligations hereunder to any delegee or agent whenever and on such terms and
conditions as it deems necessary or appropriate. Unless expressly agreed in
writing, BNY shall not be relieved of liability or responsibility for the
performance of any duties or obligations delegated to a delegee or agent,
provided that BNY shall have no liability for duties or obligations that are
delegated to a delegee or agent at the instruction of Reserves or NBAI. Reserves
and NBAI shall cause their respective officers, and shall use reasonable efforts
to cause Reserves' or NBAI's legal counsel, independent accountants, and
3
<PAGE>
transfer agent to cooperate with BNY and to provide BNY, upon BNY's reasonable
written request, such information, documents and advice relating to such Fund as
is within the possession or knowledge of such persons, in order to enable BNY to
perform its duties hereunder. Such cooperation or provision of information,
documents or advice shall be at no cost to BNY, provided BNY's request is
reasonable and NBAI shall have been notified of the request. In connection with
its duties hereunder, BNY shall be entitled to reasonably rely upon any
documents relating to a Fund provided to BNY by any of the aforementioned
persons. BNY may apply to Reserves or NBAI for written instructions with respect
to any matter arising in connection with BNY's performance hereunder. If, after
a reasonable period of time, BNY receives no response to any such application,
BNY may then notify Reserves or NBAI of reasonable action that BNY shall take if
written instructions are not received within a stated period of time after such
notice, and then BNY shall not be liable for taking such reasonable action as if
written instructions had been provided. BNY is entitled to reasonably rely and
act in accordance with written instructions believed to have been given by
authorized persons and shall incur no costs for such reasonable reliance. BNY
shall have no duties or responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agreement and Schedule II
hereto, and no covenant or obligation shall be implied against BNY in connection
with this Agreement.
(f) Reserves and NBAI, for itself and not for the others, hereby
represents and warrants to BNY, which representations and warranties shall be
deemed to be continuing, that: (i) it is duly organized and existing under the
laws of the jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to perform its
obligations hereunder; (ii) this Agreement has been duly authorized, executed
and delivered by it in accordance with all requisite action and constitutes a
valid and legally binding obligation, enforceable in accordance with its terms;
(iii) it is conducting its business substantially in compliance with all
applicable laws and regulations, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted; (iv) there is no statute, regulation, rule, order or judgment
binding on it and no provision of its Declaration or Bylaws, nor of any
mortgage, indenture, credit agreement or other contract binding on it or
affecting its property which would prohibit its execution or performance of this
Agreement; and (v) Reserves and NBAI will use reasonable efforts to promptly
notify BNY of any errors or omissions contained in any reports, calculations,
valuations and other items of information, provided that any failure by Reserves
or NBAI to detect any such errors or omissions shall not relieve BNY of any
resulting liability therefrom. To the extent that NBAI has actual knowledge of
any such error or omission and fails to use reasonable efforts to promptly
notify BNY, BNY shall be relieved of any liability that BNY may have mitigated
had NBAI provided notice of such error or omission to BNY.
(g) BNY hereby represents and warrants to Reserves and NBAI, which
representations and warranties shall be deemed to be continuing, that: (i) it is
duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted, to
enter into this Agreement and to perform its obligations hereunder; (ii) this
Agreement has been duly authorized, executed and delivered by it in accordance
with all requisite action and constitutes a valid and legally binding
obligation, enforceable in accordance with its terms; and (iii) it is conducting
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<PAGE>
its business substantially in compliance with all applicable laws and
regulations, both state and federal, and has obtained all regulatory licenses,
approvals and consents necessary to carry on its business as now conducted;
there is no statute, regulation, rule, order or judgment binding on it and no
provision of its Declaration or Bylaws, nor of any mortgage, indenture, credit
agreement or other contract binding on it or affecting its property which would
prohibit its execution or performance of this Agreement.
2. Compensation. For the services to be rendered, the facilities to be
furnished and the compensation and other expenses to be borne by BNY, as
provided for in this Agreement, BNY shall be entitled to receive a monthly fee
from NBAI and reimbursement for out-of-pocket expenses as set forth in Schedule
IV to this Agreement. It is understood that NBAI shall be responsible for BNY's
monthly fee for its services hereunder, and BNY agrees that it shall have no
claim against Reserves or the Funds with respect to compensation under this
Agreement.
3. Recordkeeping. BNY shall, as agent for Reserves, and subject to the
direction and approval of the Reserves' Board and the provisions of this
Agreement, maintain and keep current the books, accounts and other documents, if
any, pursuant to the services and duties provided by BNY as set forth in
Schedule II of this Agreement, and preserve any such books, accounts and other
documents in accordance with the applicable provisions of Rule 31a-2 of the 1940
Act. Such books, accounts and other documents shall be made available upon
reasonable request for inspection by officers, employees and auditors of
Reserves and NBAI during BNY's normal business hours. All records maintained and
preserved by BNY pursuant to this Agreement which Reserves is required to
maintain and preserve in accordance with Rule 31a-2 of the 1940 Act shall be and
remain the property of Reserves and shall be surrendered to Reserves promptly
upon request in the form in which such records have been maintained and
preserved. Upon reasonable request of Reserves, BNY shall provide in data files
or hard copy, whichever Reserves shall reasonably elect, any records included in
any such delivery which are maintained by BNY on a computer disc, or are
similarly maintained, and Reserves shall reimburse BNY for its expenses of
providing such hard copy.
4. Standard of Care; Indemnification.
(a) BNY shall at all times act in good faith and agrees to use its best
efforts to fulfill its obligations under this Agreement, but assumes no
responsibility for loss or damage to Reserves unless such loss or damages is
caused by BNY's own negligence, bad faith or willful misconduct or that of its
directors, officers or employees. BNY shall be responsible hereunder for all
direct damages resulting from its own negligence, bad faith or willful
misconduct, provided however that it shall not be responsible for lost profits
or lost business arising under or in connection with this Agreement. It is
understood and agreed that for purposes of this Section 4(a), "direct damages"
shall include, but shall not be limited to, all legal costs, penalties,
reimbursement for excess distribution and redemption payments, repurchasing
costs for servicing agents and reimbursement to the Funds for net asset value
breaks (as calculated under the Pricing Procedures).
(b) Reserves, on behalf of each Fund, will indemnify BNY against and
hold it harmless from any and all losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses of a defense against
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<PAGE>
any claim, demand, action or suit), relating to the particular Fund and arising
from any one or more of the following: (i) errors in records or instructions,
explanations, information, specifications or documentation of any kind, as the
case may be, supplied to BNY by any person described in Section 1 hereof or by
any third party described in Section 5; (ii) action or inaction taken or omitted
to be taken by BNY pursuant to written or oral instructions described in this
Agreement (or otherwise without bad faith, negligence or willful misconduct);
(iii) any action taken or omitted to be taken by BNY in good faith in accordance
with the advice or opinion of counsel for a Fund, Reserves, NBAI (obtained in
accordance with the procedures set forth in this Agreement) or its own counsel;
(iv) any improper use by the Fund, Reserves, NBAI or their respective agents, of
any valuations or computations supplied by BNY pursuant to this Agreement; (v)
the method of valuation of the securities and the method of computing a Fund's
net asset value or any other amount computed by BNY hereunder, provided BNY has
followed the Pricing Procedures; and (vi) any valuation of securities, net asset
value or other amount provided by a Fund or NBAI. BNY will not confess any claim
or settle or make any compromise in any instance in which Reserves will be asked
to provide indemnification, except with Reserves' prior written consent. Any
amounts payable by Reserves under this Section 4(b) shall be satisfied only
against the assets of the Fund involved in the claim, demand, action or suit and
not against the assets of any other investment portfolio of Reserves.
5. Fund Accounting Services.
(a) BNY, in performing the services required of it under the terms of
this Agreement, shall be entitled to rely fully on the accuracy and validity of
any and all instructions, explanations, information, specifications and
documentation furnished to it by a Fund and shall have no duty or obligation to
review the accuracy, validity or propriety of such instructions, explanations,
information, specifications or documentation, including, without limitation,
evaluations of securities; the amounts or formula for calculating the amounts
and times of accrual of Fund's liabilities and expenses; the amounts receivable
and the amounts payable on the sale or purchase of securities; and amounts
receivable or amounts payable for the sale or redemption of Fund shares effected
by or on behalf of the Fund. In the event BNY's computations hereunder rely, in
whole or in part, upon information, including, without limitation, bid, offer or
market values of securities or other assets, or accruals of interest or earnings
thereon, from a pricing or similar service utilized, or subscribed to, by BNY
which BNY in its judgment deems reliable, or any other third party pricing
source designated by Reserves, BNY shall not be responsible for, under any duty
to inquire into, or deemed to make any assurances with respect to, the accuracy
or completeness of such information. BNY shall not be required to inquire into
any valuation of securities or other assets by the Fund or any third party
described in this Section, even though BNY in performing services similar to the
services provided pursuant to this Agreement for others may receive different
valuations of the same or different securities of the same issuers.
(b) Subject to the provisions of this Agreement and the direction and
approval of Reserves' Board, BNY shall perform the computations described in
Schedule II at such times and dates and in the manner specified or described in
the then-current Prospectus(es) of a Fund. To the extent valuation of securities
or a computation specified or described in a Fund's Pricing Procedures or
then-current effective Prospectus is at any time inconsistent with any
6
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applicable laws or regulations, Reserves or NBAI shall immediately so notify BNY
in writing and thereafter shall furnish BNY at all appropriate times with the
values of such securities and such Fund's net asset value or other amounts
otherwise to be calculated by BNY, or, subject to the prior approval of BNY,
instruct BNY in writing to value securities and make such computations in a
manner which Reserves or NBAI then represents in writing to be consistent with
all applicable laws and regulations. Reserves or NBAI may also from time to
time, subject to the prior approval of BNY, instruct BNY in writing to make
computations other than as specified in this Section of this Agreement. By
giving such instruction, Reserves or NBAI shall be deemed to have represented
that such instruction is consistent with all applicable laws and regulations and
the then-current effective Prospectus of the particular Fund. Reserves or NBAI
shall have sole responsibility for determining the method of valuation of
securities and the method of computations, and all computations, valuation of
securities and the method of computing each Fund's net asset value shall be
subject to approval by Reserves and NBAI. BNY shall not be liable for relying on
any price provided by any pricing service believed by BNY to be reliable, and
Reserves or NBAI shall furnish values when the same are not available from a
pricing service utilized by BNY, with such furnishing to constitute an
instruction to BNY to rely on the provided values.
(c) BNY shall be responsible for determining and properly reflecting in
the computations made by it made by it under this Agreement: (i) the taxable
nature of any distribution or amount received or deemed received by, or payable
to, a Fund; (ii) the taxable nature or effect on a Fund or its shareholders of
any corporate actions, class actions, tax reclaims, tax refunds, or similar
events; (iii) the taxable nature or taxable amount of any distribution or
dividend paid, payable or deemed paid, by a Fund to its shareholders; (iv) the
effect under any federal, state, or foreign income tax laws of a Fund making or
not making any distribution or dividend payment, or any election with respect
thereto; or (v) any tax accounting; provided, however, that if BNY is not
certain of the taxable nature, amount or effect of any such item, it may seek
instructions regarding the proper treatment of such item from Reserves or NBAI
in accordance with the procedures set forth in Section 1(e), above, and shall
have no liability for acting in reliance on such instructions.
6. Termination of Agreement.
(a) This Agreement shall become effective as of the date first set
forth above and shall remain in full force and effect unless terminated pursuant
to the provisions of Section 6(b).
(b) This Agreement may be terminated at any time without payment of any
penalty, upon 60 days' written notice to BNY by NBAI or by vote of the Board of
Reserves; or upon 180 days' written notice to NBAI and Reserves by BNY. Upon any
such termination, BNY will cooperate with and assist Reserves, NBAI, their
agents and any successor administrator(s) or sub-administrator(s) in the
substitution/conversion process. In connection with any termination of this
Agreement, unless BNY is in breach of this Agreement, the Funds and NBAI agree
to pay BNY any compensation and reimbursement for out-of-pocket expenses as may
then be due and payable, as well as agreed-upon out-of-pocket expenses incurred
in connection with a termination. If BNY is in breach of this Agreement, the
Funds and NBAI may offset any compensation or reimbursement amounts owed to BNY
by the amount of damages, costs and expenses incurred as a result of BNY's
7
<PAGE>
breach, including costs, expenses and reasonable incremental fees for a period
not to exceed one year incurred in connection with a conversion by Reserves and
NBAI to a successor service provider. In the event of a dispute as to the amount
of such damages, the Funds and NBAI agree to escrow the set-off amount.
(c) Sections 4 and 8 shall survive this Agreement's termination.
7. Amendments. Except as expressly provided in the first paragraph of
Section 1, no provision of this Agreement may be amended or modified orally, but
only by an instrument in writing signed by the party against which enforcement
of the amendment or modification is sought.
8. Confidentiality. All books, records, information and data pertaining
to the business of Reserves, or its prior, present or potential shareholders
that are exchanged or received in connection with the performance of BNY's
duties under this Agreement shall remain confidential and shall not be disclosed
to any other person, except as specifically authorized by Reserves or as may be
required by law, and shall not be used for any purpose other than performance of
its responsibilities and duties hereunder, and except that BNY retains the right
to disclose matters subject to confidentiality to its examiners, regulators,
internal or external auditors, its accountants, its internal and external
counsel, and to any other entity whenever it is advised by its internal or
external counsel that it is reasonably likely that BNY would be liable for a
failure to do so. BNY will endeavor to provide written notice to Reserves and
NBAI at least five business days prior to any disclosures pursuant to this
Section 8, but, provided it shall have provided as much notice as is reasonably
practicable under the circumstances, BNY shall have no liability for any failure
to do so.
9. Service to Other Companies. Reserves and NBAI acknowledge that BNY
now provides, will continue to provide and may in the future provide
administrative or other services to other investment companies or series of
investment companies, and Reserves and NBAI have no objection to BNY so doing.
Reserves and NBAI further acknowledge that the persons employed by BNY to assist
in the performance of BNY's duties under this Agreement may not devote their
full time to such service and nothing contained in this Agreement shall be
deemed to limit or restrict the right of BNY or any affiliate of BNY to engage
in and devote time and attention to other businesses or to render services of
whatever kind or nature.
10. Conversion Schedule. If Reserves and NBAI, in the exercise of their
reasonable judgment, cannot meet the conversion schedule set forth in Schedule
VI as a result of BNY's inability to provide, or to confirm that it is capable
of providing, the services described in Schedule II or to meet the quality of
service standards set forth in Schedule III with respect to one or more Funds in
accordance with the conversion schedule attached as Schedule VI, then BNY shall
be obligated to pay any resulting incremental costs incurred by Reserves or
NBAI, including any incremental fees payable to First Data Investors Services
Group by Reserves or NBAI.
11. Miscellaneous.
-------------
8
<PAGE>
(a) This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflict of laws principles thereof.
Each Fund, Reserves and NBAI hereby consent to the jurisdiction of a state or
federal court situated in New York City, New York in connection with any dispute
arising hereunder. To the extent that in any such jurisdiction any of the
aforementioned persons may now or hereafter be entitled to claim, for itself or
its assets, immunity from suit, execution, attachment (before or after judgment)
or other legal process, each irrevocably agrees not to claim, and it hereby
waives, such immunity.
(b) In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby, and if any provision is inapplicable to any
person or circumstances, it shall nevertheless remain applicable to all other
persons and circumstances.
(c) Each and every right granted to BNY, Reserves or NBAI hereunder or
under any other document delivered hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be exercised from time
to time. No failure on the part of BNY, Reserves or NBAI to exercise, and no
delay in exercising, any right will operate as a waiver thereof, nor will any
single or partial exercise by BNY, Reserves or NBAI of any right preclude any
other or future exercise thereof or the exercise of any other right.
(d) BNY shall not be responsible for delays or errors that occur by
reason of circumstances beyond its reasonable control in the performance of its
duties under this Agreement, provided that reasonable back-up and disaster
recovery systems are in place, including, without limitation, labor
difficulties, mechanical breakdowns, computer breakdowns or malfunctions
(hardware or software), flood or catastrophe, acts of God, failures of
transportation, communication or power supply, or other similar circumstances.
Nor shall BNY be responsible for delays or failures to supply the information or
services specified in this Agreement where such delays or failures are caused by
the failure of any person(s) other than BNY to supply any instructions,
explanations, information, specifications or documentation deemed necessary by
BNY in the performance of its duties under this Agreement.
(e) Any notice or other instrument authorized or required by this
Agreement to be given in writing to Reserves, BNY and/or NBAI shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
9
<PAGE>
To Reserves:
Nations Institutional Reserves
111 Center Street
Little Rock, Arkansas 72201
Attention: Richard H. Blank, Jr.
To NBAI:
NationsBanc Advisors, Inc.
One Bank of America Plaza
101 South Tryon Street, NC1-002-33-31
Charlotte, NC 28255-0001
Attention: Edward D. Bedard
To BNY:
The Bank of New York
90 Washington Street
22nd Floor
New York, NY 10286
Attention: Stephen E. Grunston
(f) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement may not be assigned by BNY, nor may BNY delegate
responsibility for the performance of any of its duties hereunder, without the
written consent of the other parties hereto.
(g) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(h) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(i) This Agreement constitutes the entire agreement between the parties
hereto with respect to the provision by BNY of sub-administrative services and
the receipt of fees therefor, and supersedes all prior arrangements or
understandings, written or oral, with respect to the provision by BNY of such
services and the receipt of fees therefor.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
THE BANK OF NEW YORK
By: /s/ Stephen E. Grunston
----------------------------------
Name: Stephen E. Grunston
Title: Vice President
NATIONSBANC ADVISORS, INC.
By: /s/ Edward D. Bedard
----------------------------------
Name: Edward D. Bedard
Title: Senior Vice President and
Chief Operating Officer
NATIONS INSTITUTIONAL RESERVES
By: /s/ James E. Banks, Jr.
----------------------------------
Name: James E. Banks, Jr.
Title: Assistant Secretary
11
<PAGE>
SCHEDULE I
1. Cash Reserves
2. Treasury Reserves
3. Municipal Reserves
4. Government Reserves
5. Money Market Reserves
6. California Tax Exempt Reserves
7. California Municipal Bond Fund
8. Asset Allocation Fund
9. Capital Income Fund
10. Intermediate Bond Fund
11. Blue Chip Fund
12. Emerging Markets Fund
13. International Value Fund
14. International Equity Fund
15. Marsico Focused Equities Fund
16. Marsico Growth & Income Fund
Last Amended: August 19, 1999
I-1
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this amended
Schedule I to be executed by their duly authorized officers as of the 19th day
of August, 1999.
THE BANK OF NEW YORK
By: /s/ Stephen E. Grunston
---------------------------
Name: Stephen E. Grunston
Title: Vice President
NATIONSBANC ADVISORS, INC.
By: /s/ Robert H. Gordon
---------------------------
Name: Robert H. Gordon
Title: President
NATIONS INSTITUTIONAL RESERVES
By: /s/ James E. Banks, Jr.
---------------------------
Name: James E. Banks, Jr.
Title: Assistant Secretary
I-2
<PAGE>
SCHEDULE II
FUND ADMINISTRATION SERVICES
BNY shall perform the following sub-administrative services, in
addition to any other services agreed to from time to time:
o Monitor and document compliance by the Funds with their policies and
restrictions as delineated in their Prospectuses and Statements of
Additional Information, including any supplements or amendments thereto,
and with the rules and regulations under the 1940 Act utilizing Charles
River Development's compliance monitoring system or by such other means as
the parties may agree. NBAI shall be responsible for communicating such
policies and restrictions, including any changes thereto, to BNY by such
means as the parties agree.
o Provide income attribution summary schedules necessary for year-end tax
reporting, including the attached examples. Provide a gross up for foreign
taxes on a per share basis and the redesignation of income and capital
gains on a per share basis.
o Prepare federal, state, excise and local income tax returns for the Funds
and file such returns upon the approval of the Funds' independent
accountants; monitor, report on and prepare periodic worksheet and tax
provision packages with respect to Sub-Chapter M qualifications; prepare
and file all Form 1099s with respect to the Funds' Trustees; monitor
compliance with Section 4982 of the Internal Revenue Code; calculate and
maintain records pertaining to original issue discount and premium
amortization as required; identify wash sales and all other book/tax
differences, and report results to the Funds' independent accountants and
Funds management; and such other duties relating to federal and/or state
tax compliance as the parties may agree. BNY shall be responsible for
providing all pertinent tax information to the Funds' independent
accountants.
o Prepare Return of Capital Statement of Position 93-2 adjustments.
o Support NBAI in its preparation of the schedules and provide NBAI unaudited
quarterly and semi-annual and audited annual financial statements and
schedules of Fund investments by providing, without limitation, each Funds'
schedule of investments and general ledger in electronic format and/or hard
copy, as required, and such other information as may be necessary to
complete such financial reports.
o Prepare statistical reports for outside information services (referenced in
Schedule V), and such other information services as the parties may agree,
including the ICI expense survey.
o Prepare calculations for capital gains pursuant to IRS rules in conjunction
with NBAI and the Funds' independent accountants.
o Attend Fund shareholder and Board of Trustees meetings as requested by
NBAI, including making such presentations as are appropriate, and, with
respect to the Fund administration services described herein, provide such
II-1
<PAGE>
periodic and special reports to Reserves and NBAI as Reserves and NBAI
shall reasonably request.
FUND ACCOUNTING SERVICES
BNY shall provide all accounting and recordkeeping services necessary
and appropriate for the business of the Funds, including but not limited to
those set forth below.
Required Records; Ledgers and Journals
BNY shall keep current the following accounts and records relating to
the business of the Funds, in such form as is required by the 1940 Act and the
rules thereunder, and generally accepted accounting principles, to support all
filings under applicable federal and state tax laws and regulations and as may
be mutually agreed to among Reserves, NBAI and BNY, and shall make available to
NBAI and/or Reserves upon request:
1. Cash Receipts Journal
2. Cash Disbursements Journal
3. Dividends Paid and Payable Schedule (book vs. tax basis)
4. Purchase and Sales Journals - Portfolio Securities
5. Realized/Unrealized Gain (Loss) Reports
6. Subscription and Redemption Journals
7. Security Ledgers - Transaction Report and Tax Lot Holdings Report
8. Broker Ledger - Commission Report
9. Daily Expense Accruals
10. Daily Interest Accruals
11. Daily Trial Balance
12. Portfolio Interest Receivable and Income Journal
13. Portfolio Dividend Receivable and Income Register
14. Listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security
15. Aged Receivables (dividends, interest, tax reclaiming)
16. Portfolio Turnover Rate
17. Cash reconciliations
18. Position reconciliations
BNY will be responsible for maintaining, in accordance with Section 31
and the rules thereunder of the 1940 Act, all books and records so required and
generated in the course of performing their duties under this agreement.
Further, at a minimum, BNY shall maintain on-site the above referenced reports
as of each month end for the most recent fiscal year-ended and the current
fiscal year.
II-2
<PAGE>
Daily Accounting Services
BNY shall perform the following services on each Business Day:
1. Calculate Net Asset Value (NAV), and Public Offering Price (POP) Per Share
Pursuant to SEC formulas:
o Update the valuation of security positions held by each Fund's
portfolio in accordance with the Fund's Pricing Procedures and any
other appropriate procedures established by the Board and NBAI as NBAI
shall provide BNY in writing
o When instructed by NBAI, enter manual prices supplied by broker and
link to pricing procedures
o Calculate each Fund's NAV/POP in accordance with the applicable Pricing
Procedures approved by Reserves' Board of Trustees and prepare NAV
proof sheet. Review components of change in NAV for reasonableness
based on the tolerance levels as NBAI shall direct BNY in writing
o Review variance reporting for price changes in individual securities
using variance levels established by Fund and report to Fund portfolio
managers and to NBAI
o Review for ex-dividend items indi cated by pricing sources; trace to
general ledger for agreement
o Communicate required pricing and yield information (NAV/POP), as
appropriate, to NBAI, the Funds' Transfer Agent and Sub-Transfer Agent
and, electronically, to NASDAQ and to such other third parties as
designated by the Funds with respect to its various distribution
channels. In addition, provide Fund share activity to NBAI.
2. Dividend Rates/Yields/Dollar Weighted Average Maturity:
o Calculate, subject to the approval of NBAI, net investment income
available for distribution daily as appropriate
o Calculate daily dividend rate, and 1, 7, 30-day yields/SEC yields
o Calculate dollar weighted average maturity
3. Determine and Report Cash Availability:
o Receive daily cash and transaction statements from the Funds' Custodian
o Complete daily bank cash reconciliations (including documentation of
any reconciling items) and notify the Funds' Custodian
o Report investable cash to NBAI and Fund sub-advisers
4. Daily Expense Accruals:
o Accrue individual expenses on a daily basis based on Instructions
provided by NBAI, except for those instances where such an adjustment
would cause a full penny break in NAV, in which case such adjustment
will be included in the calculation of NAV on the day received
o If applicable, accrue daily amortization of organization expense as
instructed by NBAI
II-3
<PAGE>
o If applicable, accrue daily Rule 12b-1 Plan expenses
o Adjust expense accruals as instructed by NBAI and provide reports as
requested by NBAI
5. Verify and Record All Daily Income Accruals for Debt Issues:
o Track income and provide year end tax schedules
o Review and verify all interest and amortization reports
o Periodic tie-out of receivables
o Ensure security masters denote proper interest and amortization methods
as per the fund set up sheets as instructed by NBAI
6. Monitor Securities:
o Review each funds portfolio holding and current days security trades
for dividend activity
o Interface with Funds' Custodian for timely collection and postings of
corporate actions, dividends and interest pre-payments
7. Enter All Security Trades:
o Review verification of trade and interest calculations
o Verify settlement through custodian statements
o Maintain security ledger transaction reporting
o Maintain tax lot holdings
o Determine realized gains or losses on security trades
o Provide broker commission information
8. Enter All Fund Share Transactions:
o Periodically reconcile dividend payable amounts with the Funds'
Transfer Agent
o Process activity identified on transfer agent reports
o Verify settlement through custodian statements
o Reconcile to transfer agency report balances
o Process and track capital stock gain/loss activity
9. Prepare Daily Trial Balance:
o Post manual entries to general ledger
o Post custodian bank activity
o Require automated settled transactions between custody and activity
records (prepare, clear and post)
o Post shareholder and security transactions
o Post and verify income and expense accruals and resolve differences
o Prepare general ledger
o Post corporate action activity
II-4
<PAGE>
10. Review and Reconcile Custodian Statements:
o Verify all posted interest, dividends, expenses, and shareholder and
security payments/receipts, etc. when requested
o Post all cash settlement activity to trial balance
o Reconcile to ending cash balance accounts
o Report to NBAI the status of past due items and failed trades with the
custodian
o Reconcile cash exception Income items, tax reclaims and past due income
items with custody area
11. Preparation of Accounting Reports:
o Price Variance Report
o Trial Balance
o Portfolio Valuation
o NAV Calculation Report
o Cash Availability
o Change in NAV
o Non-standard entries
o Stale Price Report
o Other such reports as may be reasonably be requested by NBAI
Monthly/Quarterly Services
BNY shall provide the following services on a monthly or quarterly
basis, within such timeframe as may be mutually agreed upon by BNY, Reserves and
NBAI:
1. Submission of Monthly Accounting Reports as mutually agreed upon
2. Reconcile Asset Listing to Custodian Asset Listing
3. Provide Monthly Analysis and Reconciliation of Trial Balance Accounts
4. Prepare Documentation Supporting the Preparation of:
o SEC yield reporting
o Income by state reporting
o Standard Industry Code Valuation Report (please provide NBAI's industry
code classifications/is there a standard for all funds)
o Alternative Minimum Tax Income segregation schedule
II-5
<PAGE>
5. Provide Upon Request Broker Commission and Net Trade Reports
Annual (and Semi-Annual) Accounting Services
BNY shall provide the following services on an annual and semi-annual
basis:
1. Supply auditors InvestOne reports supporting securities and shareholder
transactions, income and expense accruals, etc. during the year in
accordance with standard audit assistance requirements
2. Provide NBAI with information to assist NBAI in the preparation of NSAR
filings
Other Core Services
BNY shall provide the following services:
o Accrete discounts and amortize premiums to put and call events as
directed by NBAI and in a manner acceptable under generally accepted
accounting principles
o Process principal repayments on mortgage backed securities
o Update variable securities with current rates
o Process corporate action events through a primary vender feed, and
monitor results via Reuters, Bloomberg, or other available sources as
the parties may agree
o Perform automated portfolio pricing with a second vendor as requested
by NBAI
o Produce documents and respond to inquiries during account and SEC
examinations
Money Market Funds: Prepare daily mark to market reports and analysis
in compliance with Rule 2a-7 including:
o Calculating the daily portfolio weighted average maturity
o Report portfolio diversification based on trade/security information
provided by NBAI by:
Country, State, Tier, Liquidity, Asset Backed Securities,
Industry, Letter of Credit
o Listing percentage of portfolio maturing in specified intervals (I.E.,
number of days)
o Providing issuer and guarantor diversification exception reporting
International Funds: BNY shall provide the following services:
o Report in base and local currency
II-6
<PAGE>
o Processing of tax liability on foreign income subject to approval of
NBAI
o Daily variance analysis performed on FX rates for security position
held
o Produce automated bifurcation reporting in compliance with IRC Section
988
o Mark to market security receivables and payables on a daily basis
o Determine portfolio exposure by country and currency
In addition to the above, BNY will provide additional support as agreed
upon from time to time (i.e., financial statement production).
II-7
<PAGE>
SCHEDULE III
SERVICE LEVEL PERFORMANCE STANDARDS
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------------
SERVICE STANDARD
- ------------------------------------------------------------ ---------------------------------------------------------------
<S> <C> <C>
1. Daily Cash Availability |_| 100% accuracy and delivery by 9:00 a.m. EST for
Money Market Funds and 9:30 a.m. EST for all
others
|_| Compensation for uninvested cash at Nations Cash
Reserves' mill rate
- ------------------------------------------------------------ ---------------------------------------------------------------
2. Calculation of daily NAVs |_| 100% accuracy by 5:00 p.m. EST including pricing,
expense accruals, cash activity, manual entries,
S/H activity. Delivery by 5:45 p.m. EST
- ------------------------------------------------------------ ---------------------------------------------------------------
3. Review of daily NAVs |_| 100% review by 5:30 p.m. EST
|_| Review of NAV components for reasonableness including
analysis of the change in the NAV and the change in
mill rates.
|_| Review of price variance report
|_| Review of manual proof
- ------------------------------------------------------------ ---------------------------------------------------------------
4. NASDAQ Reporting |_| 100% accuracy and communication by 5:45 p.m. EST
- ------------------------------------------------------------ ---------------------------------------------------------------
5. Daily Pricing and Rate Report (DPRR) |_| 100% accuracy in nightly transmission of DPRRs
|_| Money Market Funds-5:30 p.m. EST
|_| All other funds- 6:00 p.m. EST
- ------------------------------------------------------------ ---------------------------------------------------------------
6. FundStation Report (SubM) |_| 100% accuracy and nightly transmission by 7:00 p.m.
EST
- ------------------------------------------------------------ ---------------------------------------------------------------
7. Processing of trade tickets |_| 100% accuracy and processed by T+1 if received by
the following cut-off times:
|_| All Funds (except International) - 10:00 am (T+1)
|_| International - 12:00 p.m. (T+1)
|_| Same day settlements - 1:30 p.m.
- ------------------------------------------------------------ ---------------------------------------------------------------
</TABLE>
III-1
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------------
SERVICE STANDARD
- ------------------------------------------------------------ ---------------------------------------------------------------
<S> <C> <C>
8. Problem Resolution (general) |_| NAV impact analysis within 1 day
|_| Clear and timely communication of 100% of issues
|_| Ongoing Tracking
- ------------------------------------------------------------ ---------------------------------------------------------------
9. Cash reconciliations |_| Performed daily and sent daily to NBAI (Money Market
Funds) and sent weekly to NBAI (all other funds)
|_| Issues communicated to NBAI same day
|_| Outstanding items addressed within 1 business day
- ------------------------------------------------------------ ---------------------------------------------------------------
10. Position Reconciliations |_| Performed daily and sent weekly to NBAI
|_| Issues communicated to NBAI same day
|_| Open issues addressed within 2 business days
- ------------------------------------------------------------ ---------------------------------------------------------------
11. Tax reporting
|_| Federal, state, tax returns |_| Tax provision package prepared within time
parameters as set by NBAI/Independent tax
|_| Tax provision packages including personnel (PWC)
Sub-M and excise tax amounts/
distributions
|_| Estimates of tax requirements prepared as required
|_| Identification of all book/tax by NBAI for proper tax planning
differences
|_| Capital gain estimate preparations
- ------------------------------------------------------------ ---------------------------------------------------------------
12. Statistical Reports |_| Filed within the time parameters as set forth by
each statistical service
- ------------------------------------------------------------ ---------------------------------------------------------------
13. Expense accruals/payments |_| Payments made on the business day written
instructions from an authorized signator received
|_| Expense accruals made with 100% accuracy based upon
written instructions from NBAI
- ------------------------------------------------------------ ---------------------------------------------------------------
14. Management Reports |_| Provided to NBAI within 10 business days of month end
- ------------------------------------------------------------ ---------------------------------------------------------------
</TABLE>
III-2
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------------
SERVICE STANDARD
- ------------------------------------------------------------ ---------------------------------------------------------------
<S> <C> <C>
15. Year end tax reports |_| Provided to NBAI within the time frame agreed to
- ------------------------------------------------------------ ---------------------------------------------------------------
16. Annual/Semi-Annual Reports |_| Provide Trial Balance within 5 business days after
annual/semi-annual period
|_| Provide additional financial statement support as
agreed to
- ------------------------------------------------------------ ---------------------------------------------------------------
17. Daily Reports |_| To be provided on the following day
|_| Provide detailed portfolio valuation
|_| Trial Balance
- ------------------------------------------------------------ ---------------------------------------------------------------
18. Daily Cash Sweep |_| 100% accuracy and communication by 2:00 p.m. EST
|_| Nations Cash Reserves
|_| AIM
|_| Nuveen
- ------------------------------------------------------------ ---------------------------------------------------------------
19. Post Dividends / Corporate Actions |_| 100% accuracy and posted on effective date
- ------------------------------------------------------------ ---------------------------------------------------------------
20. Monthly Reconciliations |_| Complete reconciliations within 10 business days
- ------------------------------------------------------------ ---------------------------------------------------------------
21. Reporting to Sub-Advisors |_| Provide nightly and other periodic reporting to
Nations Funds Sub-Advisors
- ------------------------------------------------------------ ---------------------------------------------------------------
22. Compliance |_| Provide compliance reports as requested by NBAI
- ------------------------------------------------------------ ---------------------------------------------------------------
</TABLE>
III-3
<PAGE>
SCHEDULE IV
(ATTACHED)
IV-1
<PAGE>
SCHEDULE V
All Database Companies Quarterly List
AMG Data Services Lipper
Barron's Morningstar
Bloomberg CDA Wiesenberger
CDA Wiesenberger Investment Company Institute
Commerce Clearing House (CCH) S&P Micropal
Forbes Institute for Economic Research
Institute for Economic Research Value Line
Interactive Data Services Media General Financial Services
Investment Company Institute LCG Associates
LCG Associates Closed End Fund Digest (Closed End
Lipper Only)
Media General Lipper - International (Closed End
Moody's Investors Service Only)
Morningstar
S&P Micropal
Strategic Insights
Value Line
V-1
<PAGE>
SCHEDULE VI
Conversion Schedule
- --------------------------------------------------------------------------------
Fund Type Number of Funds No Later Than
- --------------------------------------------------------------------------------
Money Market Funds 9 Funds 12/1/98
- --------------------------------------------------------------------------------
Variable Annuity Funds 8 Funds 12/31/98
- --------------------------------------------------------------------------------
International Funds: 8 Funds 12/31/98
- Global Government
- Emerging Markets
- Pacific Growth
- International Equity
- International Growth
- International Value
- 2 Marsico Funds
- --------------------------------------------------------------------------------
All Remaining Funds 44 Funds 2/15/99
- --------------------------------------------------------------------------------
VI-1
NATIONS RESERVES
SHAREHOLDER SERVICING PLAN ("PLAN")
FOR ADVISER CLASS SHARES
Section 1. Each of the proper officers of The Capitol Mutual Funds,
doing business as Nations Reserves, (the "Trust") is authorized to execute and
deliver, in the name and on behalf of the Trust, written agreements based
substantially on the form attached hereto as Appendix A or any other form duly
approved by the Trust's Board of Trustees ("Agreements") with broker/dealers,
banks and other financial institutions that are dealers of record or holders of
record or which have a servicing relationship with the beneficial owners of
Adviser Class Shares ("Servicing Agents") in any of the Trust's Funds set forth
on Exhibit I attached hereto, provided that any material modifications of
services listed in the Agreement shall be presented for approval or ratification
by the Trustees at the next regularly scheduled Board Meeting. Pursuant to such
Agreements, Servicing Agents shall provide shareholder support services as set
forth therein to their clients who beneficially own Adviser Class Shares of the
Funds in consideration of a fee, computed monthly in the manner set forth in the
applicable Fund's then current prospectus, at an annual rate of up to 0.25% of
the average daily net asset value of the Adviser Class Shares beneficially owned
by or attributable to such clients. Affiliates of the Trust's distributor,
administrator, co-administrator and adviser are eligible to become Servicing
Agents and to receive fees under this Plan. All expenses incurred by a Fund in
connection with the Agreements and the implementation of this Plan shall be
borne entirely by the holders of the Adviser Class Shares of the particular Fund
involved. If more than one Fund is involved and these expenses are not directly
attributable to Adviser Class Shares of a particular Fund, then the expenses may
be allocated between or among the Adviser Class Shares of the Funds in a fair
and equitable manner.
Section 2. The Trust's administrator and/or co-administrator shall
monitor the arrangements pertaining to the Trust's Agreements with Servicing
Agents. The Trust's administrator and co-administrator shall not, however, be
obligated by this Plan to recommend, and the Trust shall not be obligated to
execute, any Agreement with any qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, the Trust's administrator
and/or co-administrator shall provide to the Trust's Board of Trustees, and the
Trustees shall review, at least quarterly, a written report of the amounts
expended pursuant to this Plan and the purposes for which such expenditures were
made.
Section 4. To the extent any portion of the fees payable under the
Agreements is deemed to be for services primarily intended to result in the sale
of Fund shares, such fees are deemed approved and may be paid pursuant to the
Plan and in accordance with Rule 12b-1 under the Act, provided that the
Agreements, to the extent they are deemed to relate to services primarily
intended to result in the sale of Fund shares, are approved and otherwise
treated in all respects as agreements related to the Plan.
<PAGE>
Section 5. This Plan will become effective immediately, as to any
Fund's Adviser Class Shares, upon its approval by (a) a majority of the
outstanding Adviser Class Shares of such Fund, and (b) a majority of the Board
of Trustees, including a majority of the Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust and who have no direct or
indirect financial interest in the operation of this Plan or in any agreements
entered into in connection with this Plan, pursuant to a vote cast in person at
a meeting called for the purpose of voting on the approval of this Plan.
Section 6. This Plan shall continue in effect for so long as its
continuance is specifically approved at least annually by the Trust's Board of
Trustees in the manner described in Section 5.
Section 7. This Plan may be amended at any time by the Board of
Trustees provided that (a) any amendment to increase materially the costs which
a Fund's Adviser Class Shares may bear for distribution pursuant to this Plan
shall be effective only upon approval by a vote of a majority of the outstanding
Adviser Class Shares of such Fund, and (b) any material amendments of the terms
of this Plan shall become effective only upon approval as provided in Section 5
hereof.
Section 8. This Plan is terminable, as to a Fund's Adviser Class
Shares, without penalty at any time by (a) a vote of a majority of the Trustees
who are not "interested persons" (as defined in the 1940 Act) of the Trust and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreements entered into in connection with this Plan, or (b) a vote of
a majority of the outstanding Adviser Class Shares of such Fund.
Section 9. While this Plan is in effect, the selection and nomination
of those Trustees who are not "interested persons" (as defined in the 1940 Act)
of the Trust shall be committed to the discretion of such non-interested
Trustees.
Section 10. The names "Nations Reserves" and "Trustees of Nations
Reserves" refer respectively to the trust created and the Trustees, as Trustees
but not individually or personally, acting from time to time under an Agreement
and Declaration of Trust dated January 22, 1990, which is hereby referred to and
a copy of which is on file at the office of the State Secretary of The
Commonwealth of Massachusetts and at the principal office of the Trust. The
obligations of "Nations Reserves" entered into in the name or on behalf thereof
by any of the Trustees, officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders, officers, representatives or agents of the Trust
personally, but bind only the Trust Property, and all persons dealing with a
Fund's Adviser Class Shares of the Trust must look solely to the Trust property
belonging to such Fund's Adviser Class Shares for the enforcement of any claims
against the Trust.
Section 11. The Trust will preserve copies of this Plan, and any
Agreements and written reports regarding this Plan presented to the Board of
Trustees for a period of not less than six years.
2
<PAGE>
EXHIBIT I
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Amended: February 24, 1999
NATIONS RESERVES
SHAREHOLDER SERVICING PLAN ("PLAN")
INVESTOR B SHARES
Section 1. Each of the proper officers of Nations Reserves
("Reserves") is authorized to execute and deliver, in the name and on behalf of
Reserves, written agreements based substantially on the form attached hereto as
Appendix A or any other form duly approved by Reserves' Board of Trustees
("Agreements") with broker/dealers, banks and other financial institutions that
are dealers of record or holders of record or which have a servicing
relationship ("Servicing Agents") with the beneficial owners of Investor B
Shares of Reserves (collectively, "Shares") provided that any material
modifications of services listed in the Agreement shall be presented for
approval or ratification by the Trustees at the next regularly scheduled Board
Meeting. Pursuant to such Agreements, Servicing Agents shall provide shareholder
support services as set forth therein to their clients who beneficially own
Shares of the portfolios listed on Exhibit I (the "Funds") in consideration of a
fee, computed monthly in the manner set forth in the applicable Fund's then
current prospectus, at an annual rate of up to 0.25% of the average daily net
asset value of the Shares beneficially owned by or attributable to such clients.
Affiliates of Reserves' distributor, administrator, co-administrator and adviser
are eligible to become Servicing Agents and to receive fees under this Plan. All
expenses incurred by a Fund in connection with the Agreements and the
implementation of this Plan shall be borne either by the holders of the Shares
of the particular Fund involved. If more than one Fund is involved and these
expenses are not directly attributable to Shares of a particular Fund, then the
expenses may be allocated between or among the Shares of the Funds in a fair and
equitable manner.
Section 2. Reserves' administrator and/or co-administrator shall
monitor the arrangements pertaining to Reserves' Agreements with Servicing
Agents. Reserves' administrator and co-administrator shall not, however, be
obligated by this Plan to recommend, and Reserves' shall not be obligated to
execute, any Agreement with any qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, Reserves'
distributor shall provide to Reserves' Board of Trustees, and the Trustees shall
review, at least quarterly, a written report of the amounts expended pursuant to
this Plan and the purposes for which such expenditures were made.
Section 4. Unless sooner terminated, this Plan shall continue in
effect for a period of one year from its date of execution and shall continue
thereafter for successive annual periods, provided that such continuance is
specifically approved by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, of Reserves' and have no direct or indirect
financial interest in the operation of this Plan or in any Agreement related to
this Plan (the "Disinterested Trustees") cast in person at a meeting called for
the purpose of voting on this Plan.
<PAGE>
Section 5. This Plan may be amended at any time with respect to
any Fund by Reserves' Board of Trustees, provided that any material amendment of
the terms of this Plan (including a material increase of the fee payable
hereunder) shall become effective only upon the approvals set forth in Section
4.
Section 6. This Plan is terminable at any time with respect to any
Fund by vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and
nomination of the Disinterested Trustees shall be committed to the discretion of
such Disinterested Trustees.
Section 8. Reserves will preserve copies of this Plan, Agreements,
and any written reports regarding this Plan presented to the Board of Trustees
for a period of not less than six years.
2
<PAGE>
EXHIBIT I
Nations Asset Allocation Fund
Nations Capital Income Fund
Nations California Municipal Bond Fund
Nations Intermediate Bond Fund
Nations Blue Chip Fund
Nations Cash Reserves
Nations Treasury Reserves
Nations Municipal Reserves
Nations Government Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations International Equity Fund
Nations International Value Fund
Nations Emerging Markets Reserves
Dated: December 2, 1998
Last Amended: August 19, 1999
3
NATIONS RESERVES
SHAREHOLDER SERVICING PLAN ("PLAN")
INVESTOR C SHARES
Section 1. Each of the proper officers of Nations Reserves
("Reserves") is authorized to execute and deliver, in the name and on behalf of
Reserves, written agreements based substantially on the form attached hereto as
Appendix A or any other form duly approved by Reserves' Board of Trustees
("Agreements") with broker/dealers, banks and other financial institutions that
are dealers of record or holders of record or which have a servicing
relationship ("Servicing Agents") with the beneficial owners of Investor C
Shares of Reserves (as listed on Schedule 1) (collectively, the "Shares") in any
of Reserves' portfolios listed on Schedule 1 (the "Funds") provided that any
material modifications of services listed in the Agreement shall be presented
for approval or ratification by the Trustees at the next regularly scheduled
Board Meeting. Pursuant to such Agreements, Servicing Agents shall provide
shareholder support services as set forth therein to their clients who
beneficially own Shares of the Funds in consideration of a fee, computed monthly
in the manner set forth in the applicable Fund's then current prospectus, at an
annual rate of up to 0.25% of the average daily net asset value of the Shares
beneficially owned by or attributable to such clients. Affiliates of Reserves'
distributor, administrator, co-administrator and adviser are eligible to become
Servicing Agents and to receive fees under this Plan. All expenses incurred by a
Fund in connection with the Agreements and the implementation of this Plan shall
be borne entirely by the holders of the Shares of the particular Fund involved.
If more than one Fund is involved and these expenses are not directly
attributable to Shares of a particular Fund, then the expenses may be allocated
between or among the Shares of the Funds in a fair and equitable manner.
Section 2. Reserves' administrator and/or co-administrator shall
monitor the arrangements pertaining to Reserves' Agreements with Servicing
Agents. Reserves' administrator and co-administrator shall not, however, be
obligated by this Plan to recommend, and Reserves shall not be obligated to
execute, any Agreement with any qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, Reserves'
distributor shall provide to Reserves' Board of Trustees, and the Trustees shall
review, at least quarterly, a written report of the amounts expended pursuant to
this Plan and the purposes for which such expenditures were made.
Section 4. Unless sooner terminated, this Plan shall continue in
effect for a period of one year from its date of execution and shall continue
thereafter for successive annual periods, provided that such continuance is
specifically approved by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, of Reserves and have no direct or indirect
financial interest in the operation of this Plan or in any Agreement related to
this Plan (the "Disinterested Trustees") cast in person at a meeting called for
the purpose of voting on this Plan.
1
<PAGE>
Section 5. This Plan may be amended at any time with respect to
any Fund by Reserves' Board of Trustees, provided that any material amendment of
the terms of this Plan (including a material increase of the fee payable
hereunder) shall become effective only upon the approvals set forth in Section
4.
Section 6. This Plan is terminable at any time with respect to any
Fund by vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and
nomination of the Disinterested Trustees shall be committed to the discretion of
such Disinterested Trustees.
Section 8. Reserves will preserve copies of this Plan, Agreements,
and any written reports regarding this Plan presented to the Board of Trustees
for a period of not less than six years.
2
<PAGE>
SCHEDULE I
Nations Asset Allocation Fund
Nations Capital Income Fund
Nations California Municipal Bond Fund
Nations Intermediate Bond Fund
Nations Blue Chip Fund
Nations Cash Reserves
Nations Treasury Reserves
Nations Municipal Reserves
Nations Government Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations International Equity Fund
Nations International Value Fund
Nations Emerging Markets Reserves
Dated: December 2, 1998
Last Amended: August 19, 1999
3
NATIONS RESERVES
SHAREHOLDER SERVICING PLAN ("PLAN")
DAILY CLASS SHARES
Section 1. Each of the proper officers of Nations Reserves
("Reserves") is authorized to execute and deliver, in the name and on behalf of
Reserves, written agreements based substantially on the form attached hereto as
Appendix A or any other form duly approved by Reserves' Board of Trustees
("Agreements") with broker/dealers, banks and other financial institutions that
are dealers of record or holders of record or which have a servicing
relationship ("Servicing Agents") with the beneficial owners of Daily Class
Shares in any of Reserves' Funds (as defined on Exhibit I) (collectively,
"Shares") provided that any material modifications of services listed in the
Agreement shall be presented for approval or ratification by the Trustees at the
next regularly scheduled Board Meeting. Pursuant to such Agreements, Servicing
Agents shall provide shareholder support services as set forth therein to their
clients who beneficially own Shares of the portfolios listed on Exhibit I (the
"Funds") in consideration of a fee, computed monthly in the manner set forth in
the applicable Fund's then current prospectus, at an annual rate of up to 0.25%
of the average daily net asset value of the Shares beneficially owned by or
attributable to such clients. Affiliates of Reserves' distributor,
co-administrators and adviser are eligible to become Servicing Agents and to
receive fees under this Plan. All expenses incurred by a Fund in connection with
the Agreements and the implementation of this Plan shall be borne either by the
holders of the Shares of the particular Fund involved. If more than one Fund is
involved and these expenses are not directly attributable to Shares of a
particular Fund, then the expenses may be allocated between or among the Shares
of the Funds in a fair and equitable manner.
Section 2. Reserves' or co-administrators shall monitor the
arrangements pertaining to Reserves' Agreements with Servicing Agents. Reserves'
co-administrators shall not, however, be obligated by this Plan to recommend,
and Reserves' shall not be obligated to execute, any Agreement with any
qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, Reserves'
distributor shall provide to Reserves' Board of Trustees, and the Trustees shall
review, at least quarterly, a written report of the amounts expended pursuant to
this Plan and the purposes for which such expenditures were made.
Section 4. Unless sooner terminated, this Plan shall continue in
effect for a period of one year from its date of execution and shall continue
thereafter for successive annual periods, provided that such continuance is
specifically approved by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, as amended, of Reserves and have no direct or
indirect financial interest in the operation of this Plan or in any Agreement
related to this Plan (the "Disinterested Trustees") cast in person at a meeting
called for the purpose of voting on this Plan.
<PAGE>
Section 5. This Plan may be amended at any time with respect to
any Fund by Reserves' Board of Trustees, provided that any material amendment of
the terms of this Plan (including a material increase of the fee payable
hereunder) shall become effective only upon the approvals set forth in Section
4.
Section 6. This Plan is terminable at any time with respect to any
Fund by vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and
nomination of the Disinterested Trustees shall be committed to the discretion of
such Disinterested Trustees.
Section 8. Reserves will preserve copies of this Plan, Agreements,
and any written reports regarding this Plan presented to the Board of Trustees
for a period of not less than six years.
2
<PAGE>
EXHIBIT I
NATIONS RESERVES
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Dated: December 2, 1998
Last Amended: February 24, 1999
NATIONS RESERVES
SHAREHOLDER SERVICING PLAN ("PLAN")
INVESTOR CLASS SHARES
Section 1. Each of the proper officers of Nations Reserves (the
"Reserves") is authorized to execute and deliver, in the name and on behalf of
Reserves, written agreements based substantially on the form attached hereto as
Appendix A or any other form duly approved by Reserves' Board of Trustees
("Agreements") with broker/dealers, banks and other financial institutions that
are dealers of record or holders of record or which have a servicing
relationship with the beneficial owners of Investor Shares ("Servicing Agents")
in any of Reserves' Funds set forth on Exhibit I attached hereto, provided that
any material modifications of services listed in the Agreement shall be
presented for approval or ratification by the Trustees at the next regularly
scheduled Board Meeting. Pursuant to such Agreements, Servicing Agents shall
provide shareholder support services as set forth therein to their clients who
beneficially own Investor Shares of the Funds in consideration of a fee,
computed monthly in the manner set forth in the applicable Fund's then current
prospectus, at an annual rate of up to 0.25% of the average daily net asset
value of the Investor Shares beneficially owned by or attributable to such
clients. Affiliates of Reserves' distributor, co-administrators and adviser are
eligible to become Servicing Agents and to receive fees under this Plan. All
expenses incurred by a Fund in connection with the Agreements and the
implementation of this Plan shall be borne entirely by the holders of the
Investor Shares of the particular Fund involved. If more than one Fund is
involved and these expenses are not directly attributable to Investor Shares of
a particular Fund, then the expenses may be allocated between or among the
Investor Shares of the Funds in a fair and equitable manner.
Section 2. Reserves' co-administrators shall monitor the arrangements
pertaining to Reserves' Agreements with Servicing Agents. Reserves'
co-administrators shall not, however, be obligated by this Plan to recommend,
and Reserves shall not be obligated to execute, any Agreement with any
qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, Reserves' co-administrators
shall provide to Reserves' Board of Trustees, and the Trustees shall review, at
least quarterly, a written report of the amounts expended pursuant to this Plan
and the purposes for which such expenditures were made.
Section 4. Unless sooner terminated, this Plan shall continue in effect
for a period of one year from its date of execution and shall continue
thereafter for successive annual periods, provided that such continuance is
specifically approved by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, of Reserves and have no direct or indirect
financial interest in the operation of this Plan or in any Agreement related to
this Plan (the "Disinterested Trustees") cast in person at a meeting called for
the purpose of voting on this Plan.
1
<PAGE>
Section 5. This Plan may be amended at any time with respect to any Fund
by Reserves' Board of Trustees, provided that any material amendment of the
terms of this Plan (including a material increase of the fee payable hereunder)
shall become effective only upon the approvals set forth in Section 4.
Section 6. This Plan is terminable at any time with respect to any Fund by
vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and nomination of
the Disinterested Trustees shall be committed to the discretion of such
Disinterested Trustees.
Section 8. Reserves will preserve copies of this Plan, Agreements, and any
written reports regarding this Plan presented to the Board of Trustees for a
period of not less than six years.
2
<PAGE>
EXHIBIT I
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Dated: December 2, 1998
Last Amended: February 24, 1999
3
NATIONS RESERVES
SHAREHOLDER SERVICING PLAN ("PLAN")
LIQUIDITY CLASS SHARES
Section 1. Each of the proper officers of Nations Reserves (the
"Trust") is authorized to execute and deliver, in the name and on behalf of the
Trust, written agreements based substantially on the form attached hereto as
Appendix A or (a) duly approved by the Trust's Board of Trustees or (b) approved
and entered into by the officers of the Trust, with advice of counsel, and
ratified by the Board of Trustees ("Agreements") with broker/dealers, banks and
other financial institutions that are dealers of record or holders of record or
which have a servicing relationship ("Servicing Agents") with the beneficial
owners of Liquidity Class Shares in any of the Trust's Funds (collectively,
"Shares") provided that any material modifications of services listed in the
Agreement shall be presented for approval or ratification by the Trustees at the
next regularly scheduled Board Meeting. Pursuant to such Agreements, Servicing
Agents shall provide shareholder support services as set forth therein to their
clients who beneficially own Shares of the portfolios listed on Exhibit I (the
"Funds") in consideration of a fee, computed monthly in the manner set forth in
the applicable Fund's then current prospectus, at an annual rate of up to 0.25%
of the average daily net asset value of the Shares beneficially owned by or
attributable to such clients. Affiliates of the Trust's distributor,
administrator, co-administrator and adviser are eligible to become Servicing
Agents and to receive fees under this Plan. All expenses incurred by a Fund in
connection with the Agreements and the implementation of this Plan shall be
borne either by the holders of the Shares of the particular Fund involved. If
more than one Fund is involved and these expenses are not directly attributable
to Shares of a particular Fund, then the expenses may be allocated between or
among the Shares of the Funds in a fair and equitable manner.
Section 2. The Trust's administrator and/or co-administrator shall
monitor the arrangements pertaining to the Trust's Agreements with Servicing
Agents. The Trust's administrator and co-administrator shall not, however, be
obligated by this Plan to recommend, and the Trust shall not be obligated to
execute, any Agreement with any qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, the Trust's
distributor shall provide to the Trust's Board of Trustees, and the Trustees
shall review, at least quarterly, a written report of the amounts expended
pursuant to this Plan and the purposes for which such expenditures were made.
Section 4. This Plan may be amended at any time with respect to
any Fund by the Trust's Board of Trustees, provided that any material amendment
of the terms of this Plan (including a material increase of the fee payable
hereunder) shall become effective only upon approved by a majority of the Board
of Trustees, including a majority of the Trustees who are not "interested
persons," as defined in the Investment Company Act of 1940, of the Trust and
have no direct or indirect financial interest in the operation of this Plan or
in any Agreement related to this Plan (the "Disinterested Trustees") cast in
person at a meeting called for the purpose of voting on this Plan.
<PAGE>
Section 5. This Plan is terminable at any time with respect to any
Fund by vote of a majority of the Disinterested Trustees.
Section 6. While this Plan is in effect, the selection and
nomination of the Disinterested Trustees shall be committed to the discretion of
such Disinterested Trustees.
Section 7. The Trust will preserve copies of this Plan,
Agreements, and any written reports regarding this Plan presented to the Board
of Trustees for a period of not less than six years.
Adopted, as revised, on July 10, 1996
2
<PAGE>
EXHIBIT I
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Adopted: July 10, 1996
Last Amended: February 24, 1999
NATIONS RESERVES
SHAREHOLDER SERVICING PLAN ("PLAN")
FOR MARKET CLASS SHARES
Section 1. Each of the proper officers of The Capitol Mutual Funds, doing
business as Nations Reserves, (the "Trust") is authorized to execute and
deliver, in the name and on behalf of the Trust, written agreements based
substantially on the form attached hereto as Appendix A or any other form duly
approved by the Trust's Board of Trustees ("Agreements") with broker/dealers,
banks and other financial institutions that are dealers of record or holders of
record or which have a servicing relationship with the beneficial owners of
Market Class Shares ("Servicing Agents") in any of the Trust's Funds set forth
on Exhibit I attached hereto, provided that any material modifications of
services listed in the Agreement shall be presented for approval or ratification
by the Trustees at the next regularly scheduled Board Meeting. Pursuant to such
Agreements, Servicing Agents shall provide shareholder support services as set
forth therein to their clients who beneficially own Market Class Shares of the
Funds in consideration of a fee, computed monthly in the manner set forth in the
applicable Fund's then current prospectus, at an annual rate of up to 0.25% of
the average daily net asset value of the Market Class Shares beneficially owned
by or attributable to such clients. Affiliates of the Trust's distributor,
administrator, co-administrator and adviser are eligible to become Servicing
Agents and to receive fees under this Plan. All expenses incurred by a Fund in
connection with the Agreements and the implementation of this Plan shall be
borne entirely by the holders of the Market Class Shares of the particular Fund
involved. If more than one Fund is involved and these expenses are not directly
attributable to Market Class Shares of a particular Fund, then the expenses may
be allocated between or among the Market Class Shares of the Funds in a fair and
equitable manner.
Section 2. The Trust's administrator and/or co-administrator shall monitor
the arrangements pertaining to the Trust's Agreements with Servicing Agents. The
Trust's administrator and co-administrator shall not, however, be obligated by
this Plan to recommend, and the Trust shall not be obligated to execute, any
Agreement with any qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, the Trust's administrator
and/or co-administrator shall provide to the Trust's Board of Trustees, and the
Trustees shall review, at least quarterly, a written report of the amounts
expended pursuant to this Plan and the purposes for which such expenditures were
made.
Section 4. This Plan will become effective immediately, as to any Fund's
Market Class Shares, upon its approval by (a) a majority of the outstanding
Market Class Shares of such Fund, and (b) a majority of the Board of Trustees,
including a majority of the Trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements entered
into in connection with this Plan, pursuant to a vote cast in person at a
meeting called for the purpose of voting on the approval of this Plan.
<PAGE>
Section 5. This Plan shall continue in effect for so long as its
continuance is specifically approved at least annually by the Trust's Board of
Trustees in the manner described in Section 4.
Section 6. This Plan may be amended at any time by the Board of Trustees
provided that (a) any amendment to increase materially the costs which a Fund's
Market Class Shares may bear for distribution pursuant to this Plan shall be
effective only upon approval by a vote of a majority of the outstanding Market
Class Shares of such Fund, and (b) any material amendments of the terms of this
Plan shall become effective only upon approval as provided in Section 4 hereof.
Section 7. This Plan is terminable, as to a Fund's Market Class Shares,
without penalty at any time by (a) a vote of a majority of the Trustees who are
not "interested persons" (as defined in the 1940 Act) of the Trust and who have
no direct or indirect financial interest in the operation of this Plan or in any
agreements entered into in connection with this Plan, or (b) a vote of a
majority of the outstanding Market Class Shares of such Fund.
Section 8. While this Plan is in effect, the selection and nomination of
those Trustees who are not "interested persons" (as defined in the 1940 Act) of
the Trust shall be committed to the discretion of such non-interested Trustees.
Section 9. The names "Nations Reserves" and "Trustees of Nations Reserves"
refer respectively to the trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under an Agreement and
Declaration of Trust dated January 22, 1990, which is hereby referred to and a
copy of which is on file at the office of the State Secretary of The
Commonwealth of Massachusetts and at the principal office of the Trust. The
obligations of "Nations Reserves" entered into in the name or on behalf thereof
by any of the Trustees, officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders, officers, representatives or agents of the Trust
personally, but bind only the Trust Property, and all persons dealing with a
Fund's Market Class Shares of the Trust must look solely to the Trust property
belonging to such Fund's Market Class Shares for the enforcement of any claims
against the Trust.
Section 10. The Trust will preserve copies of this Plan, and any
Agreements and written reports regarding this Plan presented to the Board of
Trustees for a period of not less than six years.
2
<PAGE>
EXHIBIT I
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Dated: February 24, 1999
NATIONS RESERVES
SHAREHOLDER SERVICING PLAN ("PLAN")
SEAFIRST SHARES
Section 1. Each of the proper officers of Nations Reserves
("Reserves") is authorized to execute and deliver, in the name and on behalf of
Reserves, written agreements based substantially on the form attached hereto as
Appendix A or any other form duly approved by Reserves' Board of Trustees
("Agreements") with broker/dealers, banks and other financial institutions that
are dealers of record or holders of record or which have a servicing
relationship ("Servicing Agents") with the beneficial owners of Seafirst Shares
of Reserves (as listed on Schedule 1) (collectively, the "Shares") in any of
Reserves' portfolios listed on Schedule 1 (the "Funds") provided that any
material modifications of services listed in the Agreement shall be presented
for approval or ratification by the Trustees at the next regularly scheduled
Board Meeting. Pursuant to such Agreements, Servicing Agents shall provide
shareholder support services as set forth therein to their clients who
beneficially own Shares of the Funds in consideration of a fee, computed monthly
in the manner set forth in the applicable Fund's then current prospectus, at an
annual rate of up to 0.25% of the average daily net asset value of the Shares
beneficially owned by or attributable to such clients. Affiliates of Reserves'
distributor, administrator, co-administrator and adviser are eligible to become
Servicing Agents and to receive fees under this Plan. All expenses incurred by a
Fund in connection with the Agreements and the implementation of this Plan shall
be borne entirely by the holders of the Shares of the particular Fund involved.
If more than one Fund is involved and these expenses are not directly
attributable to Shares of a particular Fund, then the expenses may be allocated
between or among the Shares of the Funds in a fair and equitable manner.
Section 2. Reserves' administrator and/or co-administrator shall
monitor the arrangements pertaining to Reserves' Agreements with Servicing
Agents. Reserves' administrator and co-administrator shall not, however, be
obligated by this Plan to recommend, and Reserves shall not be obligated to
execute, any Agreement with any qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, Reserves'
distributor shall provide to Reserves' Board of Trustees, and the Trustees shall
review, at least quarterly, a written report of the amounts expended pursuant to
this Plan and the purposes for which such expenditures were made.
Section 4. Unless sooner terminated, this Plan shall continue in
effect for a period of one year from its date of execution and shall continue
thereafter for successive annual periods, provided that such continuance is
specifically approved by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, of Reserves and have no direct or indirect
financial interest in the operation of this Plan or in any Agreement related to
this Plan (the "Disinterested Trustees") cast in person at a meeting called for
the purpose of voting on this Plan.
1
<PAGE>
Section 5. This Plan may be amended at any time with respect to
any Fund by Reserves' Board of Trustees, provided that any material amendment of
the terms of this Plan (including a material increase of the fee payable
hereunder) shall become effective only upon the approvals set forth in Section
4.
Section 6. This Plan is terminable at any time with respect to any
Fund by vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and
nomination of the Disinterested Trustees shall be committed to the discretion of
such Disinterested Trustees.
Section 8. Reserves will preserve copies of this Plan, Agreements,
and any written reports regarding this Plan presented to the Board of Trustees
for a period of not less than six years.
2
<PAGE>
SCHEDULE I
Nations Asset Allocation Fund
Nations Intermediate Bond Fund
Nations Blue Chip Fund
Dated: December 2, 1998
3
NATIONS RESERVES
SHAREHOLDER SERVICING PLAN ("PLAN")
SERVICE CLASS SHARES
Section 1. Each of the proper officers of Nations Reserves
("Reserves") is authorized to execute and deliver, in the name and on behalf of
Reserves, written agreements based substantially on the form attached hereto as
Appendix A or any other form duly approved by Reserves' Board of Trustees
("Agreements") with broker/dealers, banks and other financial institutions that
are dealers of record or holders of record or which have a servicing
relationship ("Servicing Agents") with the beneficial owners of Service Shares
of the Funds of Reserves (as listed on Schedule 1) (collectively, the "Shares")
in any of Reserves' portfolios listed on Schedule 1 (the "Funds") provided that
any material modifications of services listed in the Agreement shall be
presented for approval or ratification by the Trustees at the next regularly
scheduled Board Meeting. Pursuant to such Agreements, Servicing Agents shall
provide shareholder support services as set forth therein to their clients who
beneficially own Shares of the Funds in consideration of a fee, computed monthly
in the manner set forth in the applicable Fund's then current prospectus, at an
annual rate of up to 0.25% of the average daily net asset value of the Shares
beneficially owned by or attributable to such clients. Affiliates of Reserves'
distributor, co-administrators and adviser are eligible to become Servicing
Agents and to receive fees under this Plan. All expenses incurred by a Fund in
connection with the Agreements and the implementation of this Plan shall be
borne entirely by the holders of the Shares of the particular Fund involved. If
more than one Fund is involved and these expenses are not directly attributable
to Shares of a particular Fund, then the expenses may be allocated between or
among the Shares of the Funds in a fair and equitable manner.
Section 2. Reserves' co-administrators shall monitor the
arrangements pertaining to Reserves' Agreements with Servicing Agents. Reserves'
co-administrators shall not, however, be obligated by this Plan to recommend,
and Reserves shall not be obligated to execute, any Agreement with any
qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, Reserves'
distributor shall provide to Reserves' Board of Trustees, and Trustees shall
review, at least quarterly, a written report of the amounts expended pursuant to
this Plan and the purposes for which such expenditures were made.
Section 4. Unless sooner terminated, this Plan shall continue in
effect for a period of one year from its date of execution and shall continue
thereafter for successive annual periods, provided that such continuance is
specifically approved by a majority of the Board of Trustees, including a
majority of Trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, as amended, of Reserves and have no direct or
indirect financial interest in the operation of this Plan or in any Agreement
related to this Plan (the "Disinterested Trustees") cast in person at a meeting
called for the purpose of voting on this Plan.
1
<PAGE>
Section 5. This Plan may be amended at any time with respect to
any Fund by Reserves' Board of Trustees, provided that any material amendment of
the terms of this Plan (including a material increase of the fee payable
hereunder) shall become effective only upon the approvals set forth in Section
4.
Section 6. This Plan is terminable at any time with respect to any
Fund by vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and
nomination of the Disinterested Trustees shall be committed to the discretion of
such Disinterested Trustees.
Section 8. Reserves will preserve copies of this Plan, Agreements,
and any written reports regarding this Plan presented to the Board of Trustees
for a period of not less than six years.
2
<PAGE>
SCHEDULE I
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Dated: December 2, 1998
Last Amended: February 24, 1999
3
NATIONS RESERVES
SHAREHOLDER ADMINISTRATION PLAN ("PLAN")
TRUST CLASS SHARES
Section 1. Each of the proper officers of Nations Reserves ("Reserves")
is authorized to execute and deliver, in the name and on behalf of Reserves,
written agreements based substantially on the form attached hereto as Appendix A
or any other form duly approved by Reserves' Board of Trustees ("Agreements")
with broker/dealers, banks and other financial institutions that are dealers of
record or holders of record or which have a servicing relationship with the
beneficial owners of Trust Shares ("Administration Agents") in certain of
Reserves' Funds (as listed on Exhibit I) offering such shares provided that any
material modifications of services listed in the Agreement shall be presented
for approval or ratification by the Trustees at the next regularly scheduled
Board Meeting. Pursuant to such Agreements, Administration Agents shall provide
shareholder support services as set forth therein to their clients who
beneficially own Trust Shares of the Funds in consideration of a fee, computed
monthly in the manner set forth in the applicable Fund's then current
prospectus, at an annual rate of up to 0.10% of the average daily net asset
value of the Trust Shares beneficially owned by or attributable to such clients.
Affiliates of Reserves' distributor, co-administrators and adviser are eligible
to become Administration Agents and to receive fees under this Plan. All
expenses incurred by a Fund in connection with the Agreements and the
implementation of this Plan shall be borne entirely by the holders of the Trust
Shares of the particular Fund involved. If more than one Fund is involved and
these expenses are not directly attributable to Trust Shares of a particular
Fund, then the expenses may be allocated between or among the Trust Shares of
the Funds in a fair and equitable manner.
Section 2. Reserves' co-administrators shall monitor the arrangements
pertaining to Reserves' Agreements with Administration Agents. Reserves'
co-administrators shall not, however, be obligated by this Plan to recommend,
and Reserves shall not be obligated to execute, any Agreement with any
qualifying Administration Agents.
Section 3. So long as this Plan is in effect, Reserves' distributor
shall provide to Reserves' Board of Trustees, and the Trustees shall review, at
least quarterly, a written report of the amounts expended pursuant to this Plan
and the purposes for which such expenditures were made.
Section 4. Unless sooner terminated, this Plan shall continue in effect
for a period of one year from its date of execution and shall continue
thereafter for successive annual periods, provided that such continuance is
specifically approved by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, as amended, of Reserves and have no direct or
indirect financial interest in the operation of this Plan or in any Agreement
related to this Plan (the "Disinterested Trustees") cast in person at a meeting
called for the purpose of voting on this Plan.
1
<PAGE>
Section 5. This Plan may be amended at any time with respect to any
Fund by Reserves' Board of Trustees, provided that any material amendment of the
terms of this Plan (including a material increase of the fee payable hereunder)
shall become effective only upon the approvals set forth in Section 4.
Section 6. This Plan is terminable at any time with respect to any Fund
by vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and nomination
of the Disinterested Trustees shall be committed to the discretion of such
Disinterested Trustees.
Section 8. Reserves will preserve copies of this Plan, Agreements, and
any written reports regarding this Plan presented to the Board of Trustees for a
period of not less than six years.
2
<PAGE>
EXHIBIT I
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Dated: December 2, 1998
Last Amended: February 24, 1999
3
TRANSFER AGENCY AND SERVICES AGREEMENT
(With Facilities Management Arrangement)
THIS AGREEMENT, dated as of this first day of June, 1995 between
NATIONS FUND, INC., a Maryland corporation, NATIONS FUND TRUST, a Massachusetts
business trust, THE CAPITOL MUTUAL FUNDS, a Massachusetts business trust,
NATIONS FUND PORTFOLIOS, INC., a Maryland corporation, and each other investment
company which may become a party hereto pursuant to the terms of this Agreement
(individually a "Fund", and collectively, the "Funds"), each with its principal
place of business at 111 Center Street, Little Rock, Arkansas 72201 and
additional offices at 101 South Tryon Street, Charlotte, North Carolina 28255,
and THE SHAREHOLDER SERVICES GROUP, INC. (the "Transfer Agent"), a Massachusetts
corporation with principal offices at One Exchange Place, 53 State Street,
Boston, Massachusetts 02109.
WITNESSETH
WHEREAS, each Fund desires to appoint the Transfer Agent as its
transfer agent, dividend disbursing agent and agent in connection with certain
other activities and the Transfer Agent desires to accept such appointment;
WHEREAS, each Fund may authorize the issuance of Shares in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets ("Portfolio");
WHEREAS, each Fund and each Portfolio of a Fund subject to this
Agreement, including any investment company or Portfolio as may be added to this
Agreement pursuant to Section 17, shall be identified in the attached Schedule
G; and
WHEREAS, the Transfer Agent and NationsBank, N.A. (Carolinas)
("NationsBank") have entered into a Facilities Management Agreement ("Facilities
Agreement") dated June 1, 1995 pursuant to which the Transfer Agent has
established a servicing and processing center to provide transfer agent services
on behalf of the Funds in Charlotte, North Carolina (the "Charlotte Facility").
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Funds and the Transfer Agent agree as follows:
Article 1 Definitions
1.1 Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of a Fund as the same may be amended from
time to time.
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(b) "Authorized Person" of a Fund shall be deemed to include (i)
any authorized officer of the Fund; (ii) the members of the Joint
Operations Board (as hereinafter defined); or (iii) any person, whether
or not such person is an officer or employee of the Fund, duly
authorized to give Oral Instructions or Written Instructions on behalf
of the Fund as indicated in writing to the Transfer Agent from time to
time.
(c) "Board of Directors" of a Fund shall mean the Board of
Directors or Board of Trustees of the Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Custodian" of a Fund refers to any custodian or subcustodian
of securities and other property which the Fund may from time to time
deposit, or cause to be deposited or held under the name or account of
such a custodian pursuant to a Custodian Agreement.
(f) "Joint Operations Board" shall mean the joint board comprised
of one senior representative from the Transfer Agent, one individual
designated by the Funds jointly to represent their respective interests
and the most senior Transfer Agent manager of the Charlotte Facility.
(g) "1940 Act" shall mean the Investment Company Act of 1940 and
the rules and regulations promulgated thereunder, all as amended from
time to time.
(h) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by the Transfer Agent from a
person reasonably believed by the Transfer Agent to be an Authorized
Person;
(i) "Prospectus" of a Fund shall mean collectively the most
recently dated Fund Prospectuses and Statements of Additional
Information, including any supplements thereto, if any, with respect to
each Portfolio of the Fund which have become effective under the
Securities Act of 1933 and the 1940 Act.
(j) "Shares" of a Fund refers collectively to such shares of
capital stock or beneficial interest, as the case may be, or class
thereof, of the Fund as may be issued from time to time.
(k) "Shareholder" shall mean a record owner of Shares.
(l) "Written Instructions" shall mean a written communication
signed by a person reasonably believed by the Transfer Agent to be an
Authorized Person and actually received by the Transfer Agent. Written
Instructions shall include manually executed originals and authorized
electronic transmissions, including telefacsimile of a manually
executed original or other process.
2
<PAGE>
Article 2 Appointment of the Transfer Agent
2.1 Each Fund hereby appoints and constitutes the Transfer Agent as
transfer agent and dividend disbursing agent for Shares of the Fund and the
Transfer Agent hereby accepts such appointments and agrees to perform the duties
hereinafter set forth.
Article 3 Duties of the Transfer Agent
3.1 The Transfer Agent shall be responsible for:
(a) Administering and performing the customary services of a
transfer agent; agent in connection with dividend and distribution
functions; and agent in connection with shareholder account and
administrative functions in connection with the issuance, transfer and
redemption or repurchase (including coordination with the Custodian) of
Shares, as more fully described in the written schedule of Duties of
the Transfer Agent annexed hereto as Schedule A and incorporated
herein, and in accordance with the terms of each Fund's Prospectus,
applicable law and the procedures established from time to time between
the Transfer Agent and the Funds.
(b) Recording the issuance of Shares and maintaining pursuant
to Commission Rule 17Ad-10(e) a record of the total number of Shares
which are authorized, based upon data provided to it by each Fund, and
issued and outstanding. The Transfer Agent shall provide each Fund on a
regular basis with the total number of Shares which are authorized and
issued and outstanding and shall have no obligation, when recording the
issuance of Shares, to monitor the issuance of such Shares or to take
cognizance of any laws relating to the legality or validity of the
issue or sale of such Shares, which functions shall be the sole
responsibility of the Fund.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for: (i) the legality of the
issuance or sale of any Shares or the sufficiency of the amount to be
received therefor; (ii) the legality of the redemption of any Shares,
or the propriety of the amount to be paid therefor; (iii) the legality
of the declaration of any dividend by the Board of Directors, or the
legality of the issuance of any Shares in payment of any dividend; or
(iv) the legality of any recapitalization or readjustment of the
Shares.
3.2 In addition, each Fund shall verify the establishment of shares or
share transactions for each State prior to activation on the Transfer Agent's
system and thereafter monitor the daily activity of shares for each State based
upon daily transactions recorded by the Transfer Agent and transmitted to the
Fund or its designated agent. The responsibility of the Transfer Agent for a
Fund's blue sky State registration status is solely limited to the initial
establishment of shares or share transactions subject to blue sky compliance by
the Fund and the reporting of such transactions to the Fund as provided above.
3
<PAGE>
3.3 In addition to the duties set forth herein, the Transfer Agent
shall perform such other duties and functions, and shall be paid such amounts
therefor, as may from time to time be agreed upon in writing between the Funds
and the Transfer Agent.
Article 4 Duties of the Joint Operations Board
4.1 The Joint Operations Board will be responsible for the following
with respect to the services to be performed by the Transfer Agent under this
Agreement (the "Services"):
(a) General oversight of the provision of Services by the
Transfer Agent, including, but not limited to, the creation and
quarterly review of quality standards governing the Services pursuant
to Article 5 hereof, the establishment of strategic and/or operational
goals with respect to the Services to be provided at the Charlotte
Facility, and addressing such issues and concerns that may arise from
time to time amongst the Funds and the Transfer Agent under this
Agreement.
(b) Review and approval of, from a technical feasibility
standpoint, imaging and other new technologies proposed to be used by
the Transfer Agent in performing the Services at the Charlotte
facility.
(c) Review and approval of the Charlotte Facility budget and
expense statements, including those costs for which compensation is
sought by the Transfer Agent pursuant to Article 8 hereof.
(d) Review of those costs incurred by the Transfer Agent,
other than in connection with the Charlotte Facility, for which
compensation is sought by the Transfer Agent pursuant to Article 8
hereof.
4.2 With respect to matters described in Section 4.1 above, the
decision of the Funds' representative on the Joint Operations Board shall
control.
4.3 On a monthly basis, the Transfer Agent shall provide to the Joint
Operations Board a statement of the internal and external costs incurred by the
Transfer Agent in connection with the provision of Services for which the
Transfer Agent will seek reimbursement under Article 8 hereof.
Article 5 Quality Standards
5.1 The quality of service provided by the Transfer Agent hereunder
shall be maintained at or above the levels set forth in Schedule B hereto. Such
quality standards shall govern the Services provided by the Transfer Agent until
a new set of quality standards is established pursuant to Section 5.2 hereof.
5.2 As soon as practicable after the first ninety (90) days of
operation of the Charlotte Facility, the Joint Operations Board shall establish
a new set of quality standards reasonably acceptable to the Funds and the
Transfer Agent.
4
<PAGE>
5.3 The Joint Operations Board shall review and update, if necessary,
the quality standards on a semi-annual basis.
5.4 If, at any time during the term of this Agreement, 20% or more of
the then-current quality standards (e.g., 2 or more out of 10 standards) are not
met by the Transfer Agent during any month (as evidenced by monthly reports),
the Funds shall promptly notify the Transfer Agent in writing of such failure
and the details relating to such failure. If, any of the failed quality
standards are not met by the Transfer Agent during the three month period
commencing thirty (30) days after the Transfer Agent receives such notice, the
Funds shall have the right to terminate this Agreement on thirty (30) days
notice.
5.5 Notwithstanding the foregoing, the Funds shall not have the right
to terminate this Agreement based on the failure by the Transfer Agent to have
satisfied a quality standard if such failure was caused directly by the negative
vote of the Funds' representative on the Joint Operations Board with respect to
a commercially reasonable funding request of the Transfer Agent for the
Charlotte Facility.
Article 6 Recordkeeping and Other Information
6.1 The Transfer Agent shall create and maintain all records required
of it pursuant to its duties hereunder and as set forth in Schedule A in
accordance with all applicable laws, rules and regulations, including records
required by Section 31(a) of the 1940 Act. All records shall be available during
regular business hours for inspection and use by the Funds. Where applicable,
such records shall be maintained by the Transfer Agent for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
6.2 To the extent required by Section 31 of the 1940 Act, the Transfer
Agent agrees that all such records prepared or maintained by the Transfer Agent
relating to the Services are the property of the relevant Fund and will be
preserved, maintained and made available in accordance with such section, and
will be surrendered promptly to such Fund on and in accordance with the Fund's
request.
6.3 In case of any requests or demands for the inspection of
Shareholder records of a Fund, the Transfer Agent will endeavor to notify the
Fund of such request and secure Written Instructions as to the handling of such
request. The Transfer Agent reserves the right, upon prior notice to the Fund,
to exhibit the Shareholder records to any person whenever it is advised by its
counsel that it may be held liable for the failure to comply with such request.
6.4 Upon reasonable notice by a Fund, the Transfer Agent shall make
available during regular business hours such of its facilities and premises
employed in connection with the performance of its duties under this Agreement
for reasonable visitation by the Fund, or any person retained by the Fund as may
be necessary for the Fund to evaluate the quality of the Services performed by
the Transfer Agent pursuant hereto.
5
<PAGE>
Article 7 Fund Instructions
7.1 The Transfer Agent will have no liability when acting for a Fund in
accordance with Written or Oral Instructions believed to have been executed or
orally communicated by an Authorized Person of the Fund and will not be held to
have any notice of any change of authority of any person until receipt of a
Written Instruction thereof from the Fund. The Transfer Agent will also have no
liability when processing Share certificates for a Fund which it reasonably
believes to bear the proper manual or facsimile signatures of the officers of
the Fund and the proper countersignature of the Transfer Agent.
7.2 The Transfer Agent may request Written Instructions from a Fund and
may seek advice from legal counsel for the Fund with prior notice to the Fund,
or its own legal counsel, with respect to any matter arising in connection with
this Agreement, and it shall not be liable for any action taken or not taken or
suffered by it in good faith in accordance with such Written Instructions or in
accordance with the opinion of counsel for the Fund or for the Transfer Agent.
Written Instructions requested by the Transfer Agent will be provided by the
Fund within a reasonable period of time.
7.3 The Transfer Agent, its officers, agents or employees, shall accept
Oral Instructions or Written Instructions given to them with respect to a Fund
by any person representing or acting on behalf of the Fund only if said
representative is an Authorized Person of the Fund. The Funds agree that all
Oral Instructions shall be followed within one business day by confirming
Written Instructions, and that the Funds' failure to so confirm shall not impair
in any respect the Transfer Agent's right to reply on Oral Instructions.
Article 8 Compensation
8.1 The Funds shall reimburse the Transfer Agent for all the Transfer
Agent's "Costs" incurred in connection with the provision of Services as set
forth in the written Schedule of Costs annexed hereto as Schedule C and
incorporated herein and in addition the Funds shall compensate the Transfer
Agent for the following amounts (the "Margin");
(a) During the first 36 months of the Initial Term (as defined
below), an amount equal to 15% of such Costs during each month.
(b) During the last 24 months of the Initial Term and during
each Renewal Term (as defined below), an amount equal to 12.5% of such
Costs during each month.
8.2 Notwithstanding the foregoing, the charges incurred by the Transfer
Agent under the Facilities Agreement with NationsBank and such other expenses
set forth in the written schedule of Non-Margin Expenses annexed hereto as
Schedule D shall not be included as Costs in connection with the calculation of
the Margin amounts set forth in Subsections 8.1(a) and (b).
6
<PAGE>
8.3 In addition to the Costs and Margin described above, the Fund shall
reimburse the Transfer Agent, and will be billed separately for, those
out-of-pocket expenses incurred by the Transfer Agent in the performance of its
duties hereunder as specified in the written schedule of out-of-pocket expenses
annexed hereto as Schedule E and incorporated herein.
8.4 The Funds agree to pay all fees and out-of-pocket expenses within
thirty (30) days following the receipt of the respective invoice. The Funds
shall not be obligated to pay amounts that are reasonably in dispute until such
dispute is resolved.
Article 9 Documents
9.1 In connection with the appointment of the Transfer Agent, each Fund
shall, on or before the date this Agreement goes into effect, but in any case
within a reasonable period of time for the Transfer Agent to prepare to perform
its duties hereunder, deliver or cause to be delivered to the Transfer Agent the
documents set forth in the written schedule of Fund Documents annexed hereto as
Schedule F.
Article 10 Transfer Agent System
10.1 The Transfer Agent shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade secrets,
and other related legal rights utilized by the Transfer Agent in connection with
the services provided by the Transfer Agent to the Fund herein (the "Transfer
Agent System").
10.2 The Transfer Agent hereby grants to each Fund a limited license to
the Transfer Agent System for the sole and limited purpose of having the
Transfer Agent provide the services contemplated hereunder and nothing contained
in this Agreement shall be construed or interpreted otherwise and such license
shall immediately terminate upon the termination of this Agreement.
10.3 The Transfer Agent agrees to provide the Funds with full access to
the Transfer Agent System and all enhancements thereto to the same extent that
such is made available to other Transfer Agent clients.
10.4 In the event the Funds desire the Transfer Agent to develop any
enhancements for the Transfer Agent System, the parties shall agree on the
staffing requirements which will be subject to the approval of the Joint
Operations Board.
10.5 In the event the Funds request an enhancement to the Transfer
Agent System which is estimated to require 5,000 programming hours or more
("Enhancement Project") and the Funds agree to assume the cost of such
Enhancement Project, the Funds and the Transfer Agent shall agree in writing on
any restrictions imposed on the Transfer Agent with respect to the use of such
enhancement prior to commencement of the Enhancement Project.
7
<PAGE>
10.6 Each Fund reserves the right to review and examine "imaging" and
significant other technological developments to be implemented with the Transfer
Agent System from a technical feasibility standpoint.
Article 11 Representations and Warranties of the Transfer Agent
11.1 The Transfer Agent represents and warrants to each Fund that:
(a) It is a corporation duly organized and existing and in
good standing under the laws of the Commonwealth of Massachusetts;
(b) It is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement;
(c) All requisite corporate proceedings have been taken to
authorize it to enter into this Agreement;
(d) It is duly registered with the appropriate regulatory
agencies as a transfer agent and such registration will remain in
effect for the duration of this Agreement;
(e) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
Article 12 Representations and Warranties of the Funds
12.1 Each Fund represents and warrants to the Transfer Agent that:
(a) It is duly organized and existing and in good standing
under the laws of the jurisdiction in which it is organized;
(b) It is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into this Agreement;
(c) All corporate proceedings required by said Articles of
Incorporation, By-Laws and applicable laws have been taken to authorize
it to enter into this Agreement;
(d) A registration statement under the Securities Act of 1933,
as amended, is currently effective and will remain effective, and all
appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of the Fund being
offered for sale;
(e) All outstanding Shares are validly issued, fully paid and
non-assessable and that, when Shares are hereafter issued in accordance
with the terms of the Fund's Articles of Incorporation and its
Prospectus, such Shares shall be validly issued, fully paid and
non-assessable.
8
<PAGE>
Article 13 Indemnification
13.1 The Transfer Agent shall not be responsible for and each Fund
shall indemnify and hold the Transfer Agent harmless from and against any and
all claims, costs, expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or kind which may be
asserted against the Transfer Agent or for which the Transfer Agent may be held
to be liable (a "Claim") arising out of or attributable to any of the following:
(a) Any actions of the Transfer Agent required to be taken
pursuant to this Agreement for the Fund unless such Claim resulted from
a negligent act or failure to act or bad faith by the Transfer Agent in
the performance of its duties hereunder.
(b) The Transfer Agent's reasonable reliance on, or reasonable
use of information, data, records and documents (including but not
limited to magnetic tapes, computer printouts, hard copies and
microfilm copies) received by the Transfer Agent from the Fund, or any
authorized third party acting on behalf of the Fund, including but not
limited to the prior transfer agent for the Fund, in the performance of
the Transfer Agent's duties and obligations hereunder.
(c) The reliance on, or the implementation of, any Written or
Oral Instructions or any other instructions or requests of the Fund
which are deemed to be provided by an Authorized Person of the Fund.
(d) The offer or sales of Shares by the Fund in violation of
any requirement under the securities laws or regulations of any state
that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any state with respect
to the offer or sale of such Shares in such state.
(e) The Fund's refusal or failure to comply with the terms of
this Agreement, or any Claim which arises out of the Fund's negligence
or misconduct or the breach of any representation or warranty of the
Fund made herein.
13.2 In any case in which a Fund may be asked to indemnify or hold the
Transfer Agent harmless, the Transfer Agent will notify the Fund promptly after
identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the Fund although the failure to do
so shall not prevent recovery by the Transfer Agent, unless the Fund is actually
prejudiced thereby, and the Transfer Agent shall keep the Fund advised with
respect to all developments concerning such situation. The Fund shall have the
option to defend the Transfer Agent against any Claim which may be the subject
of this indemnification, and, in the event that the Fund so elects, such defense
shall be conducted by counsel chosen by the Fund and satisfactory to the
Transfer Agent, and thereupon the Fund shall take over complete defense of the
Claim and the Transfer Agent shall sustain no further legal or other expenses in
respect of such Claim. The Transfer Agent will not confess any Claim or make any
compromise in any case in which the Fund will be asked to provide
indemnification, except with the Fund's prior written consent. The obligations
of the parties hereto under this Article shall survive the termination of this
Agreement, so long as the Transfer Agent and the Fund act in good faith and are
not negligent in their actions.
9
<PAGE>
Article 14 Standard of Care
14.1 The Transfer Agent shall at all times act in good faith and agrees
to use its best efforts within commercially reasonable limits to ensure the
accuracy of all services performed under this Agreement, but assumes no
responsibility for loss or damage to the Funds unless said errors are caused by
the Transfer Agent's own negligence, bad faith or willful misconduct or that of
its employees.
Article 15 Consequential Damages
15.1 In no event and under no circumstances shall either a Fund or the
Transfer Agent be liable to another party for consequential or indirect loss of
profits, reputation or business or any other special damages under any provision
of this Agreement or for any act or failure to act hereunder.
Article 16 Term and Termination
16.1 This Agreement shall be effective on the date first written above
and shall continue for a period of sixty (60) months (the "Initial Term"),
unless earlier terminated pursuant to the terms of this Agreement. Thereafter,
this Agreement shall automatically be renewed for successive terms of
twenty-four (24) months ("Renewal Terms") each, unless terminated pursuant to
this Agreement.
16.2 The Funds or the Transfer Agent may terminate this Agreement at
the end of the Initial Term or at the end of any subsequent Renewal Term upon
not less than nine (9) months prior written notice to the other parties.
16.3 Upon a minimum of nine (9) months prior written notice from the
Boards of Directors of the Funds, the Funds may terminate this Agreement at the
end of the thirty-sixth (36th) or forty-eighth (48th) month of the Initial Term.
16.4 The Funds shall have the right to terminate this Agreement
immediately upon the insolvency or bankruptcy of the Transfer Agent or the
appointment of a receiver for the Transfer Agent, or with respect to any of its
assets, or any change in the financial condition of the Transfer Agent which
impedes the ability of the Transfer Agent to perform any of its obligations
hereunder which is not cured by the Transfer Agent within thirty (30) days of
such occurrence. The Funds shall have the right to seek to renegotiate this
Agreement and, if such negotiations are not successful within a reasonable
period of time, not to exceed ninety (90) days, to terminate this Agreement upon
the transfer of ownership of a controlling interest in the Transfer Agent by or
to any person other than a person who was an affiliate of the Transfer Agent or
its parent company immediately before the transfer.
10
<PAGE>
16.5 In the event that the total number of combined Shareholder
accounts for the Funds and any other open-end investment companies affiliated
with the Funds by reason of having a common investment adviser exceeds three
times the 1994 Shareholder account base of 130,000 due to merger or acquisition
activity involving the investment adviser or any affiliates of the adviser, the
Funds shall have the right to terminate this Agreement upon nine (9) months
prior written notice to the Transfer Agent. As used in this Article 16,
"affiliates of the adviser" shall mean (i) a direct or indirect owner of 50% or
more of the outstanding common stock of the adviser (a "parent") or (ii) any
company or association whose outstanding common stock is at least 50% owned,
directly or indirectly, by the adviser or by a parent.
16.6 In the event this Agreement is terminated by the Funds pursuant to
Section 5.4, all expenses associated with the movement of records and materials
to a successor transfer agent will be borne by the Transfer Agent. In the event
of a termination pursuant to any other sections, all expenses associated with
conversion will be borne by the Funds. The Transfer Agent shall cooperate with
any such conversion to a successor transfer agent and shall use its best efforts
to mitigate the costs associated with such transfer.
16.7 If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party,
and if such material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of such termination to
the Defaulting Party. If the Transfer Agent is the Non-Defaulting Party, its
termination of this Agreement shall not constitute a waiver of any other rights
or remedies of the Transfer Agent with respect to services performed prior to
such termination or rights of the Transfer Agent to be reimbursed for
out-of-pocket expenses incurred prior to such termination. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this Agreement or
otherwise against the Defaulting Party. The Defaulting Party shall not be
released from any liability with respect to such services performed prior to
such termination.
16.8 In the event of termination of this Agreement by the Funds
pursuant to Sections 16.3 or 16.5:
(a) Prior to the effective date of the termination, the Funds
shall reimburse the Transfer Agent for all unamortized costs incurred
by the Transfer Agent in establishing the Charlotte Facility.
(b) Prior to the effective date of the termination, the Funds
shall assume any and all obligations that the Transfer Agent may have
to third parties arising out of or in connection with the Transfer
Agent's operations at the Charlotte Facility and that the Transfer
Agent is not able to terminate prior to the effective date of the
termination of this Agreement.
11
<PAGE>
(c) Prior to the effective date of the termination, the Funds
shall pay the Transfer Agent an amount equal to 80% of the cumulative
Margin (as defined in Section 8.1) paid by the Funds to the Transfer
Agent for the twelve months preceding the notice of termination, unless
the Funds' investment adviser or any affiliate of the adviser has
acquired an entity providing comparable transfer agency services to
those provided under this Agreement.
(d) The Funds shall reimburse the Transfer Agent for all
reasonable expenses (other than accrued vacation, sick or other leave)
incurred by the Transfer Agent in connection with the termination of
the Transfer Agent's employees located at the Charlotte Facility, or,
at the option of the Funds, the transfer of such employees to another
entity providing services to the Funds. The Transfer Agent shall be
obligated to seek to minimize any such expenses to the extent
commercially practicable.
(e) The Transfer Agent shall transfer to the Funds all
physical assets located at the Charlotte Facility.
Article 17 Additional Portfolios and Funds
17.1 In the event that a Fund establishes one or more Portfolios in
addition to those identified initially on Schedule G, with respect to which the
Fund desires to have the Transfer Agent render services as transfer agent under
the terms hereof, the Fund shall so notify the Transfer Agent in writing, and if
the Transfer Agent agrees in writing to provide such services (such agreement
not to be withheld unreasonably), Schedule G shall be amended to include such
additional Portfolios.
17.2 Subsequent to the effective date of this Agreement, one or more
registered investment companies (a "New Fund") for which NationsBank or any of
its affiliates acts as investment adviser may become a party to this Agreement
upon execution of a written adoption agreement by such New Fund pursuant to
which such New Fund agrees to be bound by the terms of this Agreement (an
"Adoption Agreement"). Following the execution of an Adoption Agreement by a New
Fund, such New Fund shall be deemed a Fund for all purposes of this Agreement
and shall have all the rights, obligations and duties of a Fund under this
Agreement.
Article 18 Confidentiality
18.1 In connection with the services provided by the Transfer Agent
hereunder, certain confidential and proprietary information regarding the
Transfer Agent and the Fund may be disclosed to the other. In connection
therewith, the parties agree as follows:
(a) "Confidential Information" shall mean:
(i) any data or information that is competitively
sensitive material, and not generally known to the public,
including, but not limited to, information about product
plans, marketing strategies, finance, operations, customer
relationships, customer profiles, sales estimates,
business plans, and internal performance results relating
to the past, present or future business activities of the
Transfer Agent or the Fund, their respective parent
corporation, their respective subsidiaries and affiliated
companies and the customers, clients and suppliers of any
of the foregoing;
12
<PAGE>
(ii) any scientific or technical information, design,
process, procedure, formula, or improvement that is
commercially valuable and secret in the sense that its
confidentiality affords the Transfer Agent or the Fund a
competitive advantage over its competitors; and
(iii) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer
software, source code, object code, flow charts,
databases, inventions, know-how, show-how and trade
secrets, whether or not patentable or copyrightable.
(b) Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory
notebooks, drawings, diagrams, specifications, bills of material,
equipment, prototypes and models, and any other tangible manifestation
of the foregoing which now exist or come into the control or possession
of the party.
18.2 Except as expressly authorized by prior written consent of the
disclosing party ("Discloser"), the party receiving Confidential Information
("Recipient") shall:
(a) limit access to Discloser's Confidential Information to
Recipient's employees and agent who have a need-to-know in connection
with the subject matter thereof;
(b) advise those employees and agents who have access to the
Confidential Information of the proprietary nature thereof and of the
obligations set forth in this Confidential Agreement;
(c) take appropriate action by instruction or agreement with
the employees and agents having access to Discloser's Confidential
Information to fulfill Recipient's obligations under this
Confidentiality Agreement;
(d) safeguard all of Discloser's Confidential Information by
using a reasonable degree of care, but not less than that degree of
care used by Recipient in safeguarding its own similar confidential
information or material;
(e) use all of Discloser's Confidential Information solely for
purposes for which the Confidential Information was conveyed; and
(f) not disclose any of Discloser's Confidential Information,
or information derived therefrom, to third parties.
13
<PAGE>
18.3 Upon Discloser's request, Recipient shall surrender to Discloser
all memoranda, notes, records, drawings, manuals, and other documents or
materials (and all copies of same) relating to or containing Discloser's
Confidential Information. When Recipient returns the materials, Recipient shall
certify in writing that it has returned all materials containing or relating to
the Confidential Information.
18.4 The obligations of confidentiality and restriction on use in this
Article 18 shall not apply to any Confidential Information that Recipient
proves:
(a) Was in the public domain prior to the date of this
Agreement or subsequently came into the public domain through no fault
of Recipient; or
(b) Was received by Recipient from a third party without
Recipient's knowledge that the third party was not legally entitled to
disclose such information; or
(c) Was already in Recipient's possession prior to receipt
from Discloser; or
(d) Is required to be disclosed in a judicial or
administrative proceeding after reasonable legal remedies for
maintaining such information in confidence have been exhausted
including, but not limited to, giving Discloser as much advance notice
as practical of the possibility of disclosure to allow Discloser to
take appropriate legal action to seek to prevent such disclosure; or
(e) Is subsequently and independently developed by Recipient's
employees, consultants or agents without reference to Confidential
Information.
18.5 The Funds and the Transfer Agent agree that money damages would
not be a sufficient remedy to an injured party for breach of this Article 18.
Accordingly, in addition to all other remedies that a party may have, a party
shall be entitled to specific performance and injunctive or other equitable
relief against another party as a remedy for any breach of the obligations set
forth in this Article 18. The parties agree to waive any requirement for a bond
in connection with any such injunctive or other equitable relief.
18.6 The rights and obligations established by this Article 18 shall
survive the termination of this Agreement.
Article 19 Force Majeure
19.1 In the event a party is unable to perform its obligations under
the terms of this Agreement because of acts of God or by reason of circumstances
beyond its control, including war, national emergencies, strikes, labor
difficulties, insurrection, riots or the failure or unavailability of
transportation or communication services or power supplies, such party shall not
be liable for damages incurred by any other party resulting from such failure to
perform. The above in no way relieves the Transfer Agent or the Funds of
responsibility for exercising all backup and contingency plans available and in
effect at such time and does not affect any other remedies that a party may have
under this Agreement.
14
<PAGE>
Article 20 Amendments
20.1 This Agreement may only be amended or modified by a written
instrument executed by all parties except that Schedule A may be amended in the
manner set forth in Section 17.1.
Article 21 Subcontracting
21.1 Each Fund agrees that the Transfer Agent, in its discretion, may
after notification to the Funds, subcontract for certain of the services to be
provided by the Transfer Agent under this Agreement or the Schedules hereto;
provided that the appointment of any such subcontractor shall not relieve the
Transfer Agent of its responsibilities hereunder.
Article 22 Arbitration
22.1 Any claim or controversy arising out of or relating to this
Agreement, or breach hereof, shall be settled by arbitration administered by the
American Arbitration Association in Charlotte, North Carolina in accordance with
its applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply.
22.2 The parties hereby agree that judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.
22.3 The parties acknowledge and agree that the performance of the
obligations under this Agreement necessitates the use of instrumentalities of
interstate commerce and, notwithstanding other general choice of law provisions
in this Agreement, the parties agree that the Federal Arbitration Act shall
govern and control with respect to the provisions of this Article 22.
Article 23 Notice
23.1 Any notice or other instrument authorized or required by this
Agreement to be given in writing to a party, shall be sufficiently given if
addressed to that party and received by it at its office set forth below or at
such other place as such party may from time to time designate in writing.
To either of the Funds:
[Name of Applicable Fund]
111 Center Street
Little Rock, Arkansas 72201
Attention: Corporate Secretary
15
<PAGE>
To the Transfer Agent:
The Shareholder Services Group
One Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: President
with a copy to:
General Counsel (same address)
Article 24 Successors
24.1 This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns, provided, however,
that this Agreement shall not be assigned to any person other than a person
controlling, controlled by or under common control with the assignor without the
written consent of the other party, which consent shall not be unreasonably
withheld.
Article 25 Governing Law
25.1 This Agreement shall be governed exclusively by the laws of the
Commonwealth of Massachusetts without reference to the choice of law provisions
thereof. Subject to Article 22 hereof, each party hereto hereby (i) consents to
the personal jurisdiction of the Commonwealth of Massachusetts courts over the
parties hereto, hereby waiving any defense of lack of personal jurisdiction; and
(ii) appoints the person to whom notices hereunder are to be sent as agent for
service of process.
Article 26 Counterparts
26.1 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.
Article 27 Captions
27.1 The captions of this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
Article 28 Use of Transfer Agent/Fund Name
28.1 The Funds shall not use the name of the Transfer Agent in any
Prospectus, Statement of Additional Information, Shareholders' report, sales
literature or other material relating to the Fund in a manner not approved prior
thereto in writing by the Transfer Agent; provided, that the Transfer Agent need
only receive notice of all reasonable uses of its name which merely refer in
accurate terms to its appointment hereunder or which are required by any
government agency or applicable law or rule.
16
<PAGE>
28.2 The Transfer Agent shall not use the name of a Fund or material
relating to a Fund on any documents or forms for other than internal use in a
manner not approved prior thereto in writing by such Fund; provided, that the
Fund need only receive notice of all reasonable uses of its name which merely
refer in accurate terms to the appointment of the Transfer Agent as transfer
agent for the Fund or which are required by any government agency or applicable
law or rule.
Article 29 Relationship of Parties
29.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
29.2 The parties hereby acknowledge and agree that each Fund has
entered into this Agreement independently on behalf of itself and its Portfolios
which are now or may hereafter be identified on Schedule G. Notwithstanding
anything to the contrary contained in this Agreement, (i) each Fund individually
shall have the rights and obligations of a Fund as set forth in this Agreement,
(ii) any action by a Fund in violation of this Agreement shall not affect the
rights and obligations of any other Fund under this Agreement, and (iii) the
Transfer agent, in seeking to enforce any provisions of this Agreement with
respect to a Portfolio, shall look solely to the assets and revenues of such
Portfolio and that in no event shall the Transfer Agent in seeking to enforce
such obligation have recourse to the independent assets or revenues of any other
Portfolio.
Article 30 Entire Agreement; Severability
30.1 This Agreement and the Schedules attached hereto constitute the
entire agreement of the parties hereto relating to the matters covered hereby
and supersede any previous agreements. If any provision is held to be illegal,
unenforceable or invalid for any reason, the remaining provisions shall not be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
NATIONS FUND, INC.
By: /s/ Richard H. Blank, Jr.
----------------------------------
Title: Secretary
-------------------------------
NATIONS FUND TRUST
By: /s/ Richard H. Blank, Jr.
----------------------------------
Title: Secretary
-------------------------------
17
<PAGE>
THE CAPITOL MUTUAL FUNDS
By: /s/ Richard H. Blank, Jr.
----------------------------------
Title: Secretary
-------------------------------
NATIONS FUND PORTFOLIOS, INC.
By: /s/ Richard H. Blank, Jr.
----------------------------------
Title: Secretary
-------------------------------
THE SHAREHOLDER SERVICES
GROUP, INC.
By: /s/ (Illegible)
----------------------------------
Title: (Illegible)
-------------------------------
18
<PAGE>
Schedule A
DUTIES OF THE TRANSFER AGENT
1. Shareholder Information. The Transfer Agent shall maintain a record of the
number of Shares held by each Shareholder of record which shall include full
registration information, including, but not limited to, name, address and
taxpayer identification number and which shall indicate whether such Shares are
held in certificated or uncertificated form.
2. Shareholder Services. The Transfer Agent shall respond as appropriate to all
inquiries and communications from Shareholders relating to Shareholder accounts
with respect to its duties hereunder and as may be from time to time mutually
agreed upon between the Transfer Agent and the Funds.
3. Share Certificates.
(a) At the expense of the appropriate Fund, each Fund shall supply the
Transfer Agent with adequate supply of blank share certificates to meet the
Transfer Agent's requirements therefor. Such Share certificates shall be
properly signed by facsimile. Each Fund agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund whose signature appears on
such certificates, the Transfer Agent or its agent may continue to countersign
certificates which bear such signatures until otherwise directed by Written
Instructions.
(b) The Transfer Agent shall issue replacement Share certificates in lieu
of certificates which have been lost, stolen or destroyed, upon receipt by the
Transfer Agent of properly executed affidavits and lost certificate bonds, in
form satisfactory to the Transfer Agent, with the appropriate Fund and the
Transfer Agent as obligees under the bond.
(c) The Transfer Agent shall also maintain a record of each certificate
issued, the number of Shares represented thereby and the Shareholder of record.
With respect to Shares held in open accounts or in uncertificated form (i.e., no
certificate being issued with respect thereto) the Transfer Agent shall maintain
comparable records of the Shareholders thereof, including their names, addresses
and taxpayer identification number. The Transfer Agent shall further maintain a
stop transfer record on lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials. The Transfer Agent
will address and mail to Shareholders of the Funds, all reports to Shareholders,
dividend and distribution notices and proxy material for the Funds' meetings of
Shareholders. In connection with meetings of Shareholders, the Transfer Agent
will prepare Shareholder lists, mail and certify as to the mailing of proxy
materials, process and tabulate returned proxy cards, report on proxies voted
prior to meetings, act as inspector of election at meetings and certify Shares
voted at meetings.
1
<PAGE>
5. Sales of Shares
(a) The Transfer Agent shall not be required to issue any Shares of a Fund
where it has received a Written Instruction from the Fund or official notice
from any appropriate authority that the sale of the Shares of the Fund has been
suspended or discontinued. The existence of such Written Instructions or such
official notice shall be conclusive evidence of the right of the Transfer Agent
to rely on such Written Instructions or official notice.
(b) In the event that any check or other order for the payment of money is
returned unpaid for any reason, the Transfer Agent will endeavor to: (i) give
prompt notice of such return to the Fund or its designee; (ii) place a stop
transfer order against all Shares issued as a result of such check or order; and
(iii) take such actions as the Transfer Agent may from time to time deem
appropriate.
6. Transfer and Repurchase
(a) The Transfer Agent shall process all requests to transfer or redeem
Shares in accordance with the transfer or repurchase procedures set forth in the
Funds' Prospectus.
(b) The Transfer Agent will transfer or repurchase Shares upon receipt of
Oral or Written Instructions or otherwise pursuant to the Prospectus and Share
certificates, if any, properly endorsed for transfer or redemption, accompanied
by such documents as the Transfer Agent reasonably may deem necessary.
(c) The Transfer Agent reserves the right to refuse to transfer or
repurchase Shares until it is satisfied that the endorsement on the instructions
is valid and genuine. The Transfer Agent also reserves the right to refuse to
transfer or repurchase Shares until it is satisfied that the requested transfer
or repurchase is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or repurchases which the Transfer
Agent, in its good judgment, deems improper or unauthorized, or until it is
reasonably satisfied that there is no basis to any claims adverse to such
transfer or repurchase.
(d) When Shares are redeemed, the Transfer Agent shall, upon receipt of the
instructions and documents in proper form, deliver to the Custodian and the
appropriate Fund or its designee a notification setting forth the number of
Shares to be redeemed. Such redeemed Shares shall be reflected on appropriate
accounts maintained by the Transfer Agent reflecting outstanding Shares of the
Fund and Shares attributed to individual accounts.
(e) The Transfer Agent, upon receipt of the monies paid to it by the
Custodian for the redemption of Shares, pay such monies as are received from the
Custodian, all in accordance with the procedures described in the Written
Instructions received by the Transfer Agent from the Funds.
2
<PAGE>
(f) The Transfer Agent shall not process or effect any repurchase with
respect to Shares of the Fund after receipt by the Transfer Agent or its agent
of notification of the suspension of the determination of the net asset value of
the Fund.
7. Dividends
(a) Upon the declaration of each dividend and each capital gains
distribution by the Board of Directors of a Fund with respect to Shares of the
Fund, the Fund shall furnish or cause to be furnished to the Transfer Agent
Written Instructions setting forth the date of the declaration of such dividend
or distribution, the ex-dividend date, the date of payment thereof, the record
date as of which Shareholders entitled to payment shall be determined, the
amount payable per Share to the Shareholders of record as of that date, the
total amount payable to the Transfer Agent on the payment date and whether such
dividend or distribution is to be paid in Shares at net asset value.
(b) On or before the payment date specified in such resolution of the Board
of Directors, the Fund will pay to the Transfer Agent sufficient cash to make
payment on such payment date to the Shareholders of record on the record date.
(c) If, prior to the payment date, the Transfer Agent does not receive
sufficient cash from the Fund to make total dividend and/or distribution
payments to all Shareholders of the Fund of the record date, the Transfer Agent
will, upon notifying the Fund, withhold payment to all Shareholders of record as
of the record date until sufficient cash is provided to the Transfer Agent.
8. In addition to and neither in lieu nor in contravention of the services set
forth above, the Transfer Agent shall: (i) perform all the customary services of
a transfer agent, registrar, dividend disbursing agent and agent of the dividend
reinvestment and cash purchase plan as described herein consistent with those
requirements in effect as at the date of this Agreement. The detailed
definition, frequency, limitations and associated costs (if any) set out in the
attached fee schedule, include but are not limited to: maintaining all
Shareholder accounts, preparing Shareholder meeting lists, mailing proxies,
tabulating proxies, mailing Shareholder reports to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts where
applicable, preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders.
3
<PAGE>
Schedule B
Quality Standards
(Effective October 2, 1995 as updated on September 25, 1995)
For all funds, open-end and closed-end, serviced by TSSG, under the Transfer
Agency and Services Agreement (with Facilities Management Arrangement) dated
June 1, 1995, the following quality standards shall apply. This schedule shall
replace the temporary quality standard Schedule B in the original agreement as
referenced in Section 5.2.
Financials:
- -----------
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials:
- ---------------
Maintenances 98%
Transfers 98%
Correspondence 98%
Adjustments 98%
Telephone Calls 98%
New Accounts:
- -------------
New Account Set-ups 98%
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Performance Standards
- ---------------------------------------------------------------------------------------------------
Telephone Performance Standards
===================================================================================================
<S> <C>
Average speed of answer 20 seconds or less
- ------------------------------------------------------- -------------------------------------------
Calls abandoned 2% of calls that wait 20 second or more
- ------------------------------------------------------- -------------------------------------------
Service level* 80%
- ------------------------------------------------------- -------------------------------------------
</TABLE>
Article 1 _____________________
*Represents the percentage of calls answered within 20 seconds.
<PAGE>
Schedule B
[List of Initial Quality Standards based on
1994 quarterly senior management reports]
Nations Fund
-------------
Financial Transactions
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials
--------------
Maintenance 98%
Transfers 98%
New Accounts 98%
% = minimum acceptable levels
Closed End Funds
----------------
Financials 98%
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials
Certificate Processing 98%
Maintenance 98%
Transfers 98%
New Accounts 98%
% = minimum acceptable levels
Capitol Funds
-------------
Financials
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials
Maintenance 98%
Transfers 98%
1
<PAGE>
New Accounts 98%
% = minimum acceptable levels
2
<PAGE>
Schedule C
Schedule of Costs
1. For purposes of this Agreement, "Costs" shall mean all internal and external
costs incurred by the Transfer Agent in connection with and properly allocated
to the Services provided under the Agreement, including, but not limited to, the
costs involved with the operation of the Charlotte Facility, those costs
reasonably incurred by the Transfer Agent to achieve the quality standards
imposed on it under the terms of this Agreement and the Transfer Agent's
overhead, depreciation and amortization costs, excepting out-of-pocket expenses
and such other costs agreed to in writing by the Transfer Agent and the Funds.
2. The Funds shall have the right to audit, at their own expense, the books and
records of the Transfer Agent with respect to the Costs for which the Transfer
Agent seeks reimbursement under Article 8 on an annual basis, or more frequently
if the Funds have a reasonable basis to dispute any cost for which the Transfer
Agent seeks reimbursement.
3. The Transfer Agent shall use its best efforts to minimize the costs incurred
by it in connection with the provisions of services under this Agreement to the
extent such action is commercially reasonable and consistent with the quality
standards imposed under this Agreement.
<PAGE>
Schedule D
Non-Margin Expenses
- - Facilities related expenses as incurred by the Transfer Agent
under the Facilities Management Agreement between the Transfer
Agent and NationsBank
- - Out-of-Pocket expenses
- - Sub-Transfer Agent Fees and Expenses
- - Any other expenses agreed to in writing by the Transfer Agent and the Funds
<PAGE>
Schedule E
OUT-OF-POCKET EXPENSES
The Funds shall reimburse the Transfer Agent monthly for reasonable
out-of-pocket expenses incurred in connection with the provision of Services
under this Agreement, including, but not limited to the following items:
- - Microfiche/microfilm production
- - Magnetic media tapes and freight
- - Printing costs, including certificates, envelopes, checks and stationery
- - Postage (bulk, pre-sort, ZIP+4, barcoding, first class) direct pass through
to the Funds
- - Due diligence mailings
- - Telephone and telecommunication costs, including all lease, maintenance and
line costs (excluding such telephone and telecommunications costs provided
by NationsBank pursuant to the Facilities Agreement)
- - Ad hoc reports
- - Proxy solicitations, mailings and tabulations
- - Daily & Distribution advice mailings (including all periodic statements)
- - Shipping, Certified and Overnight mail and insurance
- - Year-end form production and mailings
- - Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
- - Duplicating services
- - Courier services
- - Incoming and outgoing wire charges
- - Federal Reserve charges for check clearance
- - Overtime, as approved by the Funds
- - Temporary staff, as approved by the Funds
- - Travel and entertainment, as approved by the Funds
- - Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party record keeping vendors
- - Third party audit reviews
- - All conversion costs: including System start up costs
- - Insurance
- - Such other miscellaneous expenses reasonably incurred by the Transfer Agent
in performing its duties and responsibilities under this Agreement.
- - Systems Programming utilizing non-dedicated systems resources at $100 per
hour
The Funds agree that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with the Transfer Agent. In addition, the
Funds will promptly reimburse the Transfer Agent for any other unscheduled
expenses incurred by the Transfer Agent whenever the Funds and the Transfer
Agent mutually agree that such expenses are not otherwise properly borne by the
Transfer Agent as part of its duties and obligations under the Agreement.
1
<PAGE>
Schedule F
Fund Documents
- - Certified copy of the Articles of Incorporation of the Fund, as amended
- - Certified copy of the By-laws of the Fund, as amended
- - Copy of the resolution of the Board of Directors authorizing the execution
and delivery of this Agreement
- - Specimens of the certificates for Shares of the Fund, if applicable, in the
form approved by the Board of Directors of the Fund, with a certificate of
the Secretary of the Fund as to such approval
- - All account application forms and other documents relating to Shareholder
accounts or to any plan, program or service offered by the Fund
- - Certified list of Shareholders of the Fund with the name, address and
taxpayer identification number of each Shareholder, and the number of
Shares of the Fund held by each, certificate numbers and denominations (if
any certificates have been issued), lists of any accounts against which
stop transfer orders have been placed, together with the reasons therefore,
and the number of Shares redeemed by the Fund.
- - All notices issued by the Fund with respect to the Shares in accordance
with and pursuant to the Articles of Incorporation or By-laws of the Fund
or as required by law and shall perform such other specific duties as are
set forth in the Articles of Incorporation including the giving of notice
of any special or annual meetings of shareholders and any other notices
required thereby.
<PAGE>
SCHEDULE G
FUND PORTFOLIOS
NATIONS FUND TRUST:
1. Nations Government Money Market Fund
2. Nations Tax Exempt Fund
3. Nations Value Fund
4. Nations Strategic Growth Fund
5. Nations Capital Growth Fund
6. Nations Emerging Growth Fund
7. Nations Equity Index Fund
8. Nations Managed Index Fund
9. Nations Managed SmallCap Index Fund
10. Nations Managed Value Index Fund
11. Nations Managed SmallCap Value Index Fund
12. Nations Disciplined Equity Fund
13. Nations Balanced Assets Fund
14. Nations Short-Intermediate Government Fund
15. Nations Short-Term Income Fund
16. Nations Diversified Income Fund
17. Nations Strategic Fixed Income Fund
18. Nations Municipal Income Fund
19. Nations Short-Term Municipal Income Fund
20. Nations Intermediate Municipal Bond Fund
21. Nations Florida Intermediate Municipal Bond Fund
22. Nations Florida Municipal Bond Fund
23. Nations Georgia Intermediate Municipal Bond Fund
24. Nations Georgia Municipal Bond Fund
25. Nations Maryland Intermediate Municipal Bond Fund
26. Nations Maryland Municipal Bond Fund
27. Nations North Carolina Intermediate Municipal Bond Fund
28. Nations North Carolina Municipal Bond Fund
29. Nations South Carolina Intermediate Municipal Bond Fund
30. Nations South Carolina Municipal Bond Fund
31. Nations Tennessee Intermediate Municipal Bond Fund
32. Nations Tennessee Municipal Bond Fund
33. Nations Texas Intermediate Municipal Bond Fund
34. Nations Texas Municipal Bond Fund
35. Nations Virginia Intermediate Municipal Bond Fund
36. Nations Virginia Municipal Bond Fund
NATIONS FUND, INC.:
1. Nations Prime Fund
2. Nations Treasury Fund
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<PAGE>
3. Nations Equity Income Fund
4. Nations U.S. Government Bond Fund
5. Nations Small Company Growth Fund
6. Nations Government Securities Fund
7. Nations International Growth Fund
NATIONS RESERVES:
1. Nations Government Reserves
2. Nations Municipal Reserves
3. Nations Cash Reserves
4. Nations Treasury Reserves
5. Nations Money Market Reserves
6. Nations California Tax Exempt Reserves
7. Nations Asset Allocation Fund
8. Nations Capital Income Fund
9. Nations California Municipal Bond Fund
10. Nations Intermediate Bond Fund
11. Nations Blue Chip Fund
12. Nations Marsico Focused Equities Fund
13. Nations Marsico Growth & Income Fund
14. Nations International Equity Fund
15. Nations International Value Fund
16. Nations Emerging Markets Fund
NATIONS LIFEGOAL FUNDS, INC.
1. Nations LifeGoal Growth Portfolio
2. Nations LifeGoal Balanced Growth Portfolio
3. Nations LifeGoal Income and Growth Portfolio
NATIONS ANNUITY TRUST:
1. Nations Value Portfolio
2. Nations International Growth Portfolio
3. Nations Disciplined Equity Portfolio
4. Nations Marsico Focused Equities Portfolio
5. Nations Marsico Growth & Income Portfolio
6. Nations Managed Index Portfolio
7. Nations Managed SmallCap Index Portfolio
8. Nations Balanced Assets Portfolio
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NATIONS FUNDS TRUST:
1. Nations High Yield Bond Fund
2. Nations Kansas Municipal Income Fund
3. Nations MidCap Index Fund
CLOSED END FUNDS:
1. Nations Balanced Target Maturity Fund
2. Nations Government Income Term Trust 2003, Inc.
3. Nations Government Income Term Trust 2004, Inc.
Last Amended: February 14, 2000
3
Amendment to the
TRANSFER AGENCY AND SERVICES AGREEMENT
(With Facilities Management Arrangement)
THIS AMENDMENT dated as of this 1st day of January, 1999 is made to the
Transfer Agency and Services Agreement dated as of June 1, 1995, as amended (the
"Agreement"), by and among Nations Fund, Inc., Nations Fund Trust, the Capitol
Mutual Funds, d/b/a Nations Institutional Reserves, Nations Fund Portfolios,
Inc., Nations Life Goal Funds, Inc. and each other investment company which may
become a party hereto pursuant to the terms of this Agreement (individually a
"Fund", and collectively, the "Funds"), and First Data Investor Services Group,
Inc. f/k/a The Shareholder Services Group, Inc. (the "Transfer Agent").
RECITALS
WHEREAS, the parties hereto desire to amend certain provisions of the
Agreement.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the Funds and the Transfer Agent agree that the Agreement
shall be amended as follows:
1. Article 3 is hereby amended by adding the following new Section 3.4:
"3.4 In addition, the Transfer Agent shall perform the related
print mail services in connection with the services set forth herein.
Fees for such services shall be agreed upon from time to time by the
parties."
2. Section 8.1 is hereby amended by deleting subsections (a) and (b) in
their entirety and inserting the following:
"(a) For the period December 1, 1998 through December 31, 1999, an
amount equal to 22.5% of such Costs during each month.
(b) For the period from January 1, 2000 through December 31, 2002 and
during each Renewal Term (as defined below), an amount equal to 15% of
such Costs during each month."
3. Article 16 - Term and Termination is hereby amended as follows:
(a) The first sentence of Section 16.1 is deleted in its entirety and
replaced with "This Agreement shall be effective on the date first
written above and shall continue through December 31, 2002 (the
"Initial Term"), unless earlier terminated pursuant to terms of this
Agreement."
(b) Section 16.3 is deleted in its entirety.
(c) Section 16.5 is deleted in its entirety and replaced with the
following new Section 16.5:
"16.5 In the event that the total combined assets of the Funds and any
other open end investment companies affiliated with the Funds by reason
of having a common investment advisor is increase by $18 billion or
more due to a merger or acquisition involving the investment advisor or
any affiliates of the investment advisor, the Funds shall have the
right to terminate this Agreement upon twelve (12) months prior written
notice to the Transfer Agent. As used in this Article 16, "affiliates
of the adviser" shall mean (i) a direct or indirect owner of 50% or
more of the outstanding common stock of the adviser (a "parent") or
(ii) any company or association whose outstanding common stock is at
least 50% owned, directly or indirectly, by the adviser or by a
parent."
<PAGE>
(d) Modify Section 16.8 by deleting the phrase "Sections 16.3 or" and
inserting the word "Section".
4. The following new provision is hereby added to Schedule A - Duties of
the Transfer Agent:
"Cash Management Services. (a) The Transfer Agent shall establish
demand deposit accounts (DDA's) with a cash management provider to facilitate
the receipt of purchase payments and the processing of other Shareholder-related
transactions. The Transfer Agent shall retain any excess balance credits earned
with respect to the amounts in such DDA's ("Balance Credits") after such Balance
Credits are first used to offset any banking service fees charged in connection
with banking services provided on behalf of the Fund. Balance Credits will be
calculated and applied toward the Fund's banking service charges regardless of
the withdrawal of DDA balances described in Section (b) below.
(b) DDA balances which cannot be forwarded on the day of receipt may be
withdrawn on a daily basis and invested in U.S. Treasury and Federal Agency
obligations, money market mutual funds, repurchase agreements, money market
preferred securities (rated A or better), commercial paper (rated A1 or P1),
corporate notes/bonds (rated A or better) and/or Eurodollar time deposits
(issued by banks rated A or better). Investor Services Group bears the risk of
loss on any such investment and shall retain any earnings generated thereby.
Other similarly rated investment vehicles may be used, provided however,
Investor Services Group shall first notify the Fund of any such change.
(c) The Transfer Agent may facilitate the payment of distributions from
the Fund which are made by check ("Distributions") through the "IPS Official
Check" program. "IPS Official Check" is a product and service provided by the
Transfer Agent's affiliate, Integrated Payment Systems ("IPS"). IPS is licensed
and regulated as an "issuer of payment instruments". In the event the IPS
Official Check program is utilized, funds used to cover such Distributions shall
be forwarded to and held by IPS. IPS may invest such funds while awaiting
presentment of items for payment. In return the services provided by IPS, IPS
imposes a $.07 per item charge which shall be paid by the Funds as out-of-pocket
expense and shall retain, and share with the Transfer Agent, the benefit of the
revenue generated from its investment practices."
<TABLE>
<CAPTION>
<S> <C> <C>
5. Schedule D - Non-Margin Expenses is amended by adding the following items:
- Print Mail Fees
- Systems Programming utilizing non-dedicated systems resources at $100 per/hr
- All conversion costs: including System start up costs
- Overtime, as approved by the Funds
- Travel and Entertainment, as approved by the Funds
6. Schedule E - Out-of-Pocket Expenses is amended by deleting the following items:
- Printing costs, including certificates, envelopes, checks and stationary
- Due diligence mailings
- Ad hoc reports
- Daily & Distribution advice mailings (including all periodic reports)
- Year-end for production and mailings
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- All conversion costs: including System start up costs
- Systems Programming utilizing non-dedicated systems resources at $100 per/hr
- Overtime, as approved by the Funds
- Travel and Entertainment, as approved by the Funds
</TABLE>
The terms and provisions of this Amendment shall be deemed a part of
the Agreement for all purposes. To the extent that any provisions of this
Amendment modify or are otherwise inconsistent with any provisions of the
Agreement, the terms of this Amendment shall control. In all other respects, the
Agreement shall remain in full force and effect.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first written
above.
FIRST DATA INVESTOR SERVICES GROUP, INC.
By:
Name: /s/ Jylanne M. Dunne
------------------------------
Title: Jylanne M. Dunne
-----------------------------
NATIONS FUND, INC.
By: /s/ James E. Banks, Jr.
------------------------------
Name: James E. Banks, Jr.
------------------------------
Title: Assistant Secretary
------------------------------
NATIONS FUND TRUST
By: /s/ James E. Banks, Jr.
------------------------------
Name: James E. Banks, Jr.
------------------------------
Title: Assistant Secretary
------------------------------
CAPITOL MUTUAL FUNDS, d/b/a NATIONS INSTITUTIONAL RESERVES
By: /s/ James E. Banks, Jr.
------------------------------
Name: James E. Banks, Jr.
------------------------------
Title: Assistant Secretary
------------------------------
NATIONS FUND PORTFOLIOS, INC.
By: /s/ James E. Banks, Jr.
------------------------------
Name: James E. Banks, Jr.
------------------------------
Title: Assistant Secretary
------------------------------
3
<PAGE>
NATIONS LIFEGOAL FUNDS, INC.
By: /s/ James E. Banks, Jr.
------------------------------
Name: James E. Banks, Jr.
------------------------------
Title: Assistant Secretary
------------------------------
4
SUB-TRANSFER AGENCY AND SERVICES AGREEMENT
THIS AGREEMENT, dated as of this 11th day of September, 1995, is by and
between THE SHAREHOLDER SERVICES GROUP, INC. ("TSSG", also referred to as the
"Transfer Agent"), a Massachusetts corporation and principal offices at One
Exchange Place, 53 State Street, Boston, Massachusetts 02109 and NATIONSBANK OF
TEXAS, N.A. ("NationsBank"), organized under the laws of Texas and having its
principal place of business at 1401 Elm Street, 11th Floor, Dallas, TX 75202.
WITNESSETH
WHEREAS, TSSG has been appointed transfer agent for those open-end
registered investment companies identified on the attached Schedule A
(individually the "Fund" and collectively the "Funds") pursuant to the terms of
the Transfer Agency and Services Agreement (the "Transfer Agent Agreement(s)")
with each such Fund;
WHEREAS, the Funds are authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets ("Portfolio"). Each such Portfolio shall also be
identified on Schedule A;
WHEREAS, each Portfolio is authorized to issue multiple classes of
shares including Trust A Shares and, in many cases, Trust B Shares (the "Trust
Shares"); and
WHEREAS, the Funds have authorized TSSG to subcontract with and appoint
NationsBank as its agent to perform certain administrative and ministerial
duties and obligations that the Transfer Agent has to the Funds with respect to
the Trust Shares and NationsBank desires to accept such appointment;
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, TSSG and NationsBank agree as follows:
Article 1 Definitions
1.1 Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of the Funds as the same may be amended
from time to time;
(b) "Authorized Person" shall be deemed to include (i) any
authorized Officer of the Fund; or (ii) any person, whether or not such
person is an Officer or employee of the Fund, duly authorized to give
Oral Instructions or Written Instructions on behalf of the Fund as
indicated in writing to the Transfer Agent from time to time;
<PAGE>
(c) "Board of Directors" shall mean the Board of Directors or
Board of Trustees of the Fund, as the case may be;
(d) "Commission" shall mean the Securities and Exchange
Commission;
(e) "Custodian" refers to any custodian or subcustodian of
securities and other property which the Fund may from time to time
deposit, or cause to be deposited or held under the name or account of
such a custodian pursuant to a Custodian Agreement;
(f) "1940 Act" shall mean the Investment Company Act of 1940, and
the rules and regulations promulgated thereunder, all as amended from
time to time;
(g) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by NationsBank from a person
reasonably believed by NationsBank to be an Authorized Person;
(h) "Prospectus" shall mean the most recently dated Fund
Prospectuses and Statements of Additional Information, including
supplements thereto if any, which have become effective under the
Securities Act of 1933 and the 1940 Act;
(i) "Shares" refers collectively to such Trust Shares of the
Portfolios as may be issued from time to time;
(j) "Shareholder" shall mean a record owner of Shares; and
(k) "Written Instructions" shall mean a written communication
signed by a person reasonably believed by NationsBank to be an
Authorized Person and actually received by the Transfer Agent. Written
Instructions shall include manually executed originals and authorized
electronic transmissions, including telefacsimile of a manually
executed original or other process.
Article 2 Appointment of NationsBank
2.1 TSSG hereby appoints NationsBank as its subcontractor and agent to
perform certain administrative and ministerial duties on behalf of the Funds,
and NationsBank hereby accepts such appointment and agrees to perform the duties
hereinafter set forth.
Article 3 Duties of NationsBank
3.1 NationsBank shall be responsible for administering and/or
performing the customary services of a transfer agent; for performing the
customary services of a service agent in connection with dividend and
distribution functions; and for performing shareholder account and
administrative agent functions in connection with the issuance, transfer and
redemption or repurchase (including coordination with the Custodian) of Shares,
as more fully described in the written Schedule of Duties of NationsBank annexed
hereto as Schedule B and incorporated herein, and in accordance with the terms
of the Prospectus, applicable law and the procedures established from time to
time between NationsBank and the Transfer Agent and/or the Funds.
2
<PAGE>
3.2 Notwithstanding any of the foregoing provisions of this Agreement,
NationsBank and the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for: (i) the legality of the issuance or
sale of any Shares or the sufficiency of the amount to be received therefor;
(ii) the legality of the redemption of any Shares, or the propriety of the
amount to be paid therefor; (iii) the legality of the declaration of any
dividend by the Board of Directors, or the legality of the issuance of any
shares in payment of any dividend; or (iv) the legality of any recapitalization
or readjustment of the Shares. It being understood that such shall be the
responsibility of the Funds.
3.3 In addition, the Funds shall verify the establishment of
transactions in Shares for each state on the system prior to activation and
thereafter monitor the daily activity for each state. The responsibility of
NationsBank for the Funds' blue sky state registration status is solely limited
to the initial establishment of transactions in Shares subject to blue sky
compliance by the Funds and the reporting of such transactions to the Funds as
provided above.
Article 4 Recordkeeping and Other Information
4.1 NationsBank shall create and maintain all records required of it
pursuant to its duties hereunder and as set forth in Schedule B in accordance
with all applicable laws, rules and regulations, including records required by
Section 31(a) of the 1940 Act. All records shall be available during regular
business hours for inspection and use by the Transfer Agent and the Funds. Where
applicable, such records shall be maintained by NationsBank for the periods and
in the places required by Rule 31a-2 under the 1940 Act.
4.2 To the extent required by Section 31 of the 1940 Act, NationsBank
agrees that all such records prepared or maintained by NationsBank relating to
the services to be performed by NationsBank hereunder are the property of the
Funds and will be preserved, maintained and made available in accordance with
such section, and will be surrendered promptly to the Funds on and in accordance
with the Funds' request.
4.3 In case of any requests or demands for the inspection of
Shareholder records of the Funds, NationsBank will endeavor to notify the
applicable Fund of such request and secure Written Instructions as to the
handling of such request. NationsBank reserves the right, however, to exhibit
the Shareholder records to any person whenever it is advised by its counsel that
it may be held liable for the failure to comply with such request.
4.4 Upon reasonable notice by the applicable Fund, NationsBank shall
make available during regular business hours such of its facilities and premises
employed in connection with the performance of its duties under this Agreement
for reasonable visitation by such Fund, or any person retained by the Fund as
may be necessary for the Fund to evaluate the quality of the services performed
by NationsBank pursuant hereto.
3
<PAGE>
Article 5 Fund Instructions
5.1 NationsBank will have no liability when acting upon Written or Oral
Instructions believed to have been executed or orally communicated by an
Authorized Person and will not be held to have any notice of any change of
authority of any person until it receives Written Instruction thereof from the
Fund. NationsBank will also have no liability when processing Share certificates
which it reasonably believes to bear the proper manual or facsimile signatures
of the Officers of the Fund and the proper countersignature of the Transfer
Agent.
5.2 At any time, NationsBank may request Written Instructions from the
Fund and may seek advice from legal counsel for the Funds, or its own legal
counsel, with respect to any matter arising in connection with this Agreement,
and it shall not be liable for any action taken or not taken or suffered by it
in good faith in accordance with such Written Instructions or in accordance with
the opinion of counsel for the Funds or for NationsBank. Written Instructions
requested by NationsBank will be provided by the Fund within a reasonable period
of time.
5.3 NationsBank, its Officers, agents or employees, shall accept Oral
Instructions or Written Instructions given to them by any person representing or
acting on behalf of a Fund only if said representative is an Authorized Person.
The Fund agrees that all Oral Instructions shall be followed, within one
business day, by confirming Written Instructions, and that the Fund's failure to
so confirm shall not impair in any respect NationsBank's right to reply on Oral
Instructions.
Article 6 Compensation
6.1 Upon receipt of the appropriate payment from the Funds, the
Transfer Agent will compensate NationsBank for the performance of its
obligations hereunder in accordance with the fees set forth in the written Fee
Schedule annexed hereto as Schedule C and incorporated herein. The Transfer
Agent's responsibility under this Section 6.1 is conditioned upon receipt of
such payment from the Funds.
Article 7 Representations and Warranties of NationsBank
7.1 NationsBank represents and warrants to the Transfer Agent that:
(a) it is a corporation duly organized and existing and in good
standing under the laws of Texas;
(b) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
4
<PAGE>
(c) all requisite corporate proceedings have been taken to
authorize it to enter into this Agreement;
(d) it is duly registered with its appropriate regulatory agency
as a transfer agent and such registration will remain in effect for the
duration of this Agreement;
(e) it has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
Article 8 Representations and Warranties of the Transfer Agent
8.1 The Transfer Agent represents and warrants to NationsBank that:
(a) it is duly organized and existing and in good standing under
the laws of the jurisdiction in which it is organized;
(b) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws and the Transfer Agent Agreement to enter
into this Agreement;
(c) all corporate proceedings required by said Articles of
Incorporation, By-Laws and applicable laws have been taken to authorize
it to enter into this Agreement.
Article 9 Indemnification
9.1 To, and only to, the extent the Transfer Agent is indemnified by
the Funds pursuant to the terms of the Transfer Agent Agreements, NationsBank
shall not be responsible for and the Transfer Agent shall indemnify and hold
NationsBank harmless from and against any and all claims, costs, expenses
(including reasonable attorneys' fees), losses, damages, charges, payments and
liabilities of any sort or kind which may be asserted against NationsBank or for
which NationsBank may be held to be liable (a "Claim") arising out of or
attributable to any of the following:
(a) Any actions of NationsBank required to be taken pursuant to
this Agreement unless such Claim resulted from a negligent act or
omission to act or bad faith by NationsBank in the performance of its
duties hereunder.
(b) NationsBank's reasonable reliance on, or reasonable use of
information, data, records and documents (including but not limited to
magnetic tapes, computer printouts, hard copies and microfilm copies)
received by NationsBank from the Funds, or any authorized third party
acting on behalf of the Funds, including but not limited to the
Transfer Agent or any prior transfer agent for the Funds, in the
performance of NationsBank's duties and obligations hereunder.
5
<PAGE>
(c) The reliance on, or the implementation of, any Written or Oral
Instructions or any other instructions or requests which are provided
by an Authorized Person of the Fund.
(d) The offer or sale of shares by the Fund in violation of any
requirement under the securities laws or regulations of any state that
such Shares be registered in such state or in violation of any stop
order or other determination or ruling by any state with the respect to
the offer or sale of such Shares in such state.
(e) The Transfer Agent's refusal or failure to comply with the
terms of this Agreement, or any Claim which arises out of this
Agreement, or any Claim which arises out of the Transfer Agent's
negligence or misconduct or the breach of which any representation or
warranty of the Transfer Agent made herein.
9.2 Notwithstanding the foregoing Section 9.1, the Transfer Agent shall
be responsible for and indemnify and hold NationsBank harmless from and against
any and all claims by third parties, including, costs, expenses (including
reasonable attorneys' fees), losses, damages, charges, payments and liabilities
of any sort or kind which may be asserted against NationsBank or for which
NationsBank may be held to be liable arising out of or attributable to a
negligent act or omission to act or bad faith by the Transfer Agent.
9.3 NationsBank shall indemnify and hold the Transfer Agent harmless
from and against any and all claims, costs, expenses (including reasonable
attorneys' fees), losses, damages, charges, payments and liabilities of any sort
or kind which may be asserted against the Transfer Agent or for which the
Transfer Agent may be held to be liable arising out of or attributable to any
negligent act or failure to act or bad faith or willful misconduct on the part
of NationsBank in connection with the performance of its duties under this
Agreement.
9.4 In any case in which either party (the "Indemnifying Party") may be
asked to indemnify or hold the other (the "Indemnified Party") harmless, the
Indemnified Party will notify the Indemnifying Party promptly after identifying
any situation which it believes presents or appears likely to present a claim
for indemnification against the Indemnifying Party although the failure to do so
shall not prevent recovery by the Indemnified Party and the Indemnified Party
shall keep the Indemnifying Party advised with respect to all developments
concerning such situation. The Indemnifying Party shall have the option to
defend the Indemnified Party against any Claim which may be the subject of this
indemnification, and, in the event that the Indemnifying Party so elects, such
defense shall be conducted by counsel chosen by the Indemnifying Party and
satisfactory to the Indemnified Party, and thereupon the Indemnifying Party
shall take over complete defense of the Claim and the Indemnified Party shall
sustain no further legal or other expenses in respect of such Claim. The
Indemnified Party will not confess any Claim or make any compromise in any case
in which the Indemnifying Party will be asked to provide indemnification, except
with the Indemnifying Party's prior written consent.
6
<PAGE>
9.5 The obligations of the parties hereto under this Article 9 shall
survive the termination of this Agreement.
Article 10 Standard of Care
10.1 NationsBank shall at all times, act in good faith and agrees to
use its best efforts within commercially reasonable limits to ensure the
accuracy of all services performed under this Agreement, but assumes no
responsibility for loss or damage to the Transfer Agent unless said errors are
caused by NationsBank's own negligence, bad faith or willful misconduct or that
of its employees.
Article 11 Consequential Damages
11.1 In no event and under no circumstances shall either party to this
Agreement be liable to the other party for consequential or indirect loss of
profits, reputation or business or any other special damages under any provision
of this Agreement or for any act or failure to act hereunder.
Article 12 Term and Termination
12.1 This Agreement shall be effective on the date first written above
and shall continue for a period of five (5) years (the "Initial Term"), unless
earlier terminated pursuant to the terms of this Agreement. Thereafter, this
Agreement shall automatically be renewed for successive terms of three (3) years
("Renewal Terms") each.
12.2 Either party may terminate this Agreement at the end of the
Initial Term or any subsequent Renewal Term upon not less than ninety (90) days,
or more than one-hundred eighty (180) days, prior written notice to the other
party.
12.3 In the event a termination notice is given by the Transfer Agent,
all expenses associated with movement of records and materials and conversion
thereof to the Transfer Agent or to a successor subcontractor, will be borne by
the Transfer Agent.
12.4 If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party,
and if such material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of such termination to
the Defaulting Party. If NationsBank is the Non-Defaulting Party, its
termination of this Agreement shall not constitute a waiver of any other rights
or remedies of NationsBank with respect to services performed prior to such
termination of rights of NationsBank to be reimbursed for out-of-pocket
expenses. In all cases, termination by the Non-Defaulting Party shall not
constitute a waiver by the Non-Defaulting Party of any other rights it might
have under this Agreement or otherwise against the Defaulting Party.
7
<PAGE>
12.5 Notwithstanding any provision of this Article 12 to the contrary,
this Agreement shall terminate simultaneously with any termination of the
Transfer Agent Agreement.
Article 13 Confidentiality
13.1 In connection with the services provided by NationsBank hereunder,
certain confidential and proprietary information regarding NationsBank and the
Transfer Agent may be disclosed to the other. In connection therewith, the
parties agree as follows:
(a) Confidential Information disclosed under this Agreement shall
mean:
(i) any data or information that is competitively sensitive
material, and not generally known to the public, including,
but not limited to, information about product plans, marketing
strategies, finance, operations, customer relationships,
customer profiles, sales estimates, business plans, and
internal performance results relating to the past, present or
future business activities of NationsBank, the Transfer Agent
or the Funds, their respective parent corporations, their
respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of the foregoing;
(ii) any scientific or technical information, design, process,
procedure, formula, or improvement that is commercially
valuable and secret in the sense that its confidentiality
affords NationsBank, the Transfer Agent or the Funds a
competitive advantage over its competitors; and
(iii) all confidential or proprietary concepts, documentation,
reports, data, specifications, computer software, source code,
object code, flow charts, databases, inventions, know-how,
show-how and trade secrets, whether or not patentable or
copyrightable.
(b) Confidential Information also includes, without limitation,
all documents, inventions, substances, engineering and laboratory
notebooks, drawings, diagrams, specifications, bills of material,
equipment, prototypes and models, and any other tangible manifestation
of the foregoing which now exist or come into the control or possession
of the party.
13.2 Except as expressly authorized by prior written consent of the
disclosing party ("Discloser"), the party receiving Confidential Information
("Recipient") shall:
(a) limit access to Discloser's Confidential Information to
Recipient's employees who have a need-to-know in connection with the
subject matter thereof;
8
<PAGE>
(b) advise those employees who have access to the Confidential
Information of the proprietary nature thereof and of the obligations
set forth in this Confidentiality Agreement;
(c) take appropriate action by instruction or agreement with the
employees having access to Discloser's Confidential Information to
fulfill Recipient's obligations under this Confidentiality Agreement;
(d) safeguard all of Discloser's Confidential Information by using
a reasonable degree of care, but not less than that degree of care used
by Recipient in safeguarding its own similar information or material;
(e) use all of Discloser's Confidential Information solely for
purposes that it was intended;
(f) not disclose any of Discloser's Confidential Information to
third parties.
13.3 Upon Discloser's request, Recipient shall surrender to Discloser
all memoranda, notes, records, drawings, manuals, records, and other documents
or materials (and all copies of same) relating to or containing Discloser's
Confidential Information. When Recipient returns the materials, Recipient shall
certify in writing that it has returned all materials containing or relating to
the Confidential Information.
13.4 The obligations of confidentiality and restriction on use in this
Article 13 shall not apply to any Confidential Information that Recipient
proves:
(a) Was in the public domain prior to the date of this Agreement
or subsequently came into the public domain through no fault of
Recipient;
(b) Was lawfully received by Recipient from a third party free of
any obligation of confidence to the third party;
(c) Was already in Recipient's possession prior to receipt from
Discloser;
(d) Is required to be disclosed in a judicial or administrative
proceeding after all reasonable legal remedies for maintaining such
information in confidence have been exhausted including, but not
limited to, giving Discloser as much advance notice as practical of the
possibility of disclosure to allow Discloser to stop such disclosure or
obtain a protective order concerning such disclosure; or
(e) Is subsequently and independently developed by Recipient's
employees, consultants or agents without reference to Confidential
Information.
13.5 NationsBank and the Transfer Agent agree that money damages would
not be a sufficient remedy for breach of this Article 13. Accordingly, in
addition to all other remedies that either party may have, a party shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy for any breach of this Agreement. The parties agree to waive any
requirement for a bond in connection with any such injunctive or other equitable
relief.
9
<PAGE>
Article 14 Force Majeure
14.1 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, labor
difficulties, mechanical breakdowns, equipment or transmission failure or damage
reasonably beyond its control, or other causes reasonably beyond its control,
such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes.
Article 15 Amendments
15.1 This Agreement may only be amended or modified by a written
instrument executed by both parties.
Article 16 Subcontracting
16.1 The Transfer Agent agrees that NationsBank may, in its discretion,
subcontract for certain of the services described under this Agreement or the
Schedules hereto; provided that the appointment of any such subcontractor shall
not relieve NationsBank of its responsibilities hereunder.
Article 17 Arbitration
17.1 Any Claim or controversy arising out of or relating to this
Agreement, or breach hereof, shall be settled by arbitration administered by the
American Arbitration Association in Boston, Massachusetts in accordance with its
applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply.
17.2 The parties hereby agree that judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.
17.3 The parties acknowledge and agree that the performance of the
obligations under this Agreement necessitates the use of instrumentalities of
interstate commerce and, notwithstanding other general choice of law provisions
in this Agreement, the parties agree that the Federal Arbitration Act shall
govern and control with respect to the provisions of this Article 17.
Article 18 Notice
18.1 Any notice or other instrument authorized or required by this
Agreement to be given in writing to NationsBank or the Transfer Agent, shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
10
<PAGE>
To the Transfer Agent:
The Shareholder Services Group, Inc.
One Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: President
with a copy to TSSG's General Counsel
To: NationsBank
NationsBank
NationsBank Plaza
101 S. Tryon Street, NC1-002-33-31
Charlotte, North Carolina 28255
Attention: Ted Johnson
Article 19 Successors
19.1 This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns, provided, however,
that this Agreement shall not be assigned to any person other than a person
controlling, controlled by or under common control with the assignor without the
written consent of the other party, which consent shall not be unreasonably
withheld.
Article 20 Governing Law
20.1 This Agreement shall be governed exclusively by the laws of the
Commonwealth of Massachusetts without reference to the choice of law provisions
thereof. Subject to Article 17, each party to this Agreement hereby (i) consents
to the personal jurisdiction of the Commonwealth of Massachusetts courts over
the parties hereto, hereby waiving any defense of lack of personal jurisdiction;
and (ii) appoints the person to whom notices hereunder are to be sent as agent
for service of process.
Article 21 Counterparts
21.1 This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument.
11
<PAGE>
Article 22 Captions
22.1 The captions included in this Agreement are for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
Article 23 Relationship of Parties
23.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
Article 24 Entire Agreement; Severability
24.1 This Agreement and the Schedules attached hereto constitute the
entire agreement of the parties hereto relating to the matters covered hereby
and supersede any previous agreements. If any provision is held to be illegal,
unenforceable or invalid for any reason, the remaining provisions shall not be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year written
above.
THE SHAREHOLDER SERVICES
GROUP, INC.
By: /s/ Jack P. Kurt
---------------------------------------
Title: Executive Vice President and Chief
Operating Officer
------------------------------------
NATIONSBANK OF TEXAS, N.A.
By: /s/ Mark H. Williamson
---------------------------------------
Title: Senior Vice President
------------------------------------
12
<PAGE>
SCHEDULE A
FUND PORTFOLIOS
NATIONS FUND TRUST:
1. Nations Government Money Market Fund
2. Nations Tax Exempt Fund
3. Nations Value Fund
4. Nations Strategic Growth Fund
5. Nations Capital Growth Fund
6. Nations Emerging Growth Fund
7. Nations Equity Index Fund
8. Nations Managed Index Fund
9. Nations Managed SmallCap Index Fund
10. Nations Managed Value Index Fund
11. Nations Managed SmallCap Value Index Fund
12. Nations Disciplined Equity Fund
13. Nations Balanced Assets Fund
14. Nations Short-Intermediate Government Fund
15. Nations Short-Term Income Fund
16. Nations Diversified Income Fund
17. Nations Strategic Fixed Income Fund
18. Nations Municipal Income Fund
19. Nations Short-Term Municipal Income Fund
20. Nations Intermediate Municipal Bond Fund
21. Nations Florida Intermediate Municipal Bond Fund
22. Nations Florida Municipal Bond Fund
23. Nations Georgia Intermediate Municipal Bond Fund
24. Nations Georgia Municipal Bond Fund
25. Nations Maryland Intermediate Municipal Bond Fund
26. Nations Maryland Municipal Bond Fund
27. Nations North Carolina Intermediate Municipal Bond Fund
28. Nations North Carolina Municipal Bond Fund
29. Nations South Carolina Intermediate Municipal Bond Fund
30. Nations South Carolina Municipal Bond Fund
31. Nations Tennessee Intermediate Municipal Bond Fund
32. Nations Tennessee Municipal Bond Fund
33. Nations Texas Intermediate Municipal Bond Fund
34. Nations Texas Municipal Bond Fund
35. Nations Virginia Intermediate Municipal Bond Fund
36. Nations Virginia Municipal Bond Fund
NATIONS FUND INC.
1. Nations Prime Fund
2. Nations Treasury Fund
3. Nations International Growth Fund
4. Nations Equity Income Fund
5. Nations U.S. Government Bond Fund
6. Nations Small Company Growth Fund
7. Nations Government Securities Fund
13
<PAGE>
NATIONS RESERVES:
1. Nations Asset Allocation Fund
2. Nations Capital Income Fund
3. Nations California Municipal Bond Fund
4. Nations Intermediate Bond Fund
5. Nations Blue Chip Fund
6. Nations Marsico Focused Equities Fund
7. Nations Marsico Growth & Income Fund
8. Nations International Equity Fund
9. Nations International Value Fund
10. Nations Emerging Markets Fund
NATIONS LIFEGOAL FUNDS, INC.:
1. Nations LifeGoal Growth Portfolio
2. Nations LifeGoal Balanced Growth Portfolio
3. Nations LifeGoal Income and Growth Portfolio
NATIONS FUNDS TRUST:
1. Nations High Yield Bond Fund
2. Nations MidCap Index Fund
3. Nations Kansas Municipal Income Fund
Last Amended: February 14, 2000
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused the amended Schedule
A to be executed by their Officers designated below as of the 14th day of
February, 2000.
PFPC Inc. (Formerly First Data Investor Services
Group, Inc. f/k/a The Shareholder Services Group,
Inc.)
By: /s/ Jylanne M. Dunne
-----------------------------------------
Name: Jylanne M. Dunne
Title: Senior Vice President
BANK OF AMERICA, N.A. (Formerly NationsBank of
Texas, N.A.)
By: /s/ Edward D. Bedard
------------------------------------------
Name: Edward D. Bedard
Title: Senior Vice President
15
<PAGE>
Schedule B
DUTIES OF NATIONSBANK
1. Shareholder Information. NationsBank shall maintain a record of the number of
Shares held by each Shareholder of record which shall include name, address, and
taxpayer identification number and which shall indicate whether such Shares are
held in certificates or uncertificated form.
2. Shareholder Services. NationsBank shall respond as appropriate to all
inquiries and communications from Shareholders relating to Shareholder accounts
with respect to its duties hereunder and as may be from time to time mutually
agreed upon between NationsBank and the Transfer Agent (or the Funds as the case
maybe).
3. Share Certificates.
(a) At the expense of the Funds, the Funds shall supply NationsBank
with an adequate supply of blank share certificates to meet NationsBank's
requirements therefor. Such Share certificates shall be properly signed by
facsimile. Notwithstanding the death, resignation, or removal of any Officer of
the Fund whose signature appears on such certificates, NationsBank or its agent
may continue to countersign certificates which bear such signatures until
otherwise directed by Written Instructions.
(b) NationsBank shall issue replacement Share certificates in lieu of
certificates which have been lost, stolen or destroyed, upon receipt by
NationsBank of properly executed affidavits and lost certificate bonds, in form
satisfactory to NationsBank, with the applicable Fund and NationsBank as
obligees under the bond.
(c) NationsBank shall also maintain a record of each certificate
issued, the number of Shares represented thereby and the Shareholder of record.
With respect to Shares held in open accounts or uncertificated form (i.e., no
certificate being issued with respect thereto) the Transfer Agent shall maintain
comparable records of the Shareholders thereof, including their names, addresses
and taxpayer identification numbers. NationsBank shall further maintain a stop
transfer record on lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials. NationsBank will
address and mail to Shareholders of the Funds, all reports to Shareholders,
dividend and distribution notices and proxy material for the Funds' meetings of
Shareholders. In connection with meetings of Shareholders, NationsBank will
prepare Shareholder lists, mail and certify as to the mailing of proxy
materials, process and tabulate returned proxy cards, report on proxies voted
prior to meetings, act as inspector of election at meetings and certify Shares
voted at meetings.
<PAGE>
5. Sales of Shares.
(a) NationsBank shall not be required to issue any Shares of the Funds
where it has received a Written Instruction from the applicable Fund or official
notice from any appropriate authority that the sale of the Shares of such Fund
has been suspended or discontinued. The existence of such Written Instructions
or such official notice shall be conclusive evidence of the right of NationsBank
to rely on such Written Instructions or official notice.
(b) In the event that any check or other order for the payment of money
is returned unpaid for any reason, NationsBank will endeavor to: (i) give prompt
notice of such return to the applicable Fund or its designee; (ii) place a stop
transfer order against all Shares issued as a result of such check or order; and
(iii) take such actions as NationsBank may from time to time deem appropriate.
6. Transfer and Repurchase.
(a) NationsBank shall process all requests to transfer or redeem Shares
in accordance with the transfer or repurchase procedures set forth in the
applicable Fund's Prospectus.
(b) NationsBank will transfer or repurchase Shares upon receipt of Oral
or Written Instructions or otherwise pursuant to the Prospectus and Share
certificates, if any, properly endorsed for transfer or redemption, accompanied
by such documents as NationsBank reasonably may deem necessary.
(c) NationsBank reserves the right to refuse to transfer or repurchase
Shares until it is satisfied that the endorsement on the instructions is valid
and genuine. NationsBank also reserves the right to refuse to transfer or
repurchase Shares until it is satisfied that the requested transfer or
repurchase is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or repurchases which NationsBank, in
its reasonable judgment, deems improper or unauthorized, or until it is
reasonably satisfied that there is no basis to any claims adverse to such
transfer or repurchase.
(d) When Shares are redeemed, NationsBank shall, upon receipt of the
instructions and documents in proper form, deliver to the Custodian and the
applicable Fund or its designee a notification setting forth the number of
Shares to be redeemed. Such redeemed Shares shall be reflected on appropriate
accounts maintained by NationsBank reflecting outstanding Shares of the
applicable Fund and Shares attributed to individual accounts.
(e) NationsBank shall, upon receipt of the monies paid to it by the
Custodian for the redemption of Shares, pay such monies as are received from the
Custodian, all in accordance with the procedures described in the Written
Instructions received by NationsBank from the Funds.
2
<PAGE>
(f) NationsBank shall not process or effect any repurchase with respect
to Shares of any Fund after receipt by NationsBank or its agent of notification
of the suspension of the determination of the net asset value of such Fund.
7. Dividends.
(a) Upon the declaration of each dividend and each capital gains
distribution by the Board of Directors of the Funds with respect to Shares of
the Funds, the Funds shall furnish or cause to be furnished to NationsBank
Written Instructions setting forth the date of the declaration of such dividend
or distribution, the ex-dividend date, the date of payment thereof, the record
date as of which Shareholders entitled to payment shall be determined, the
amount payable per Share to the Shareholders of record as of that date, the
total amount payable to NationsBank on the payment date and whether such
dividend or distribution is to be paid in Shares at net asset value.
(b) On or before the payment date specified in such resolution of the
Board of Directors, the applicable Fund will pay to NationsBank sufficient cash
to make payment on such payment date to the Shareholders of record on the record
date.
(c) If, prior to the payment date, NationsBank does not receive
sufficient cash from the applicable Fund to make total dividend and/or
distribution payments to all Shareholders of record of such Fund as of the
record date, NationsBank will, upon notifying such Fund, withhold payment to all
Shareholders of record as of the record date until sufficient cash is provided
to NationsBank.
8. Daily Activity. NationsBank will communicate via fax all "net" activity for
the day to TSSG. TSSG shall update the transfer agent system and notify fund
accounting of money movement based on such information.
9. In addition to and neither in lieu nor in contravention of the services set
forth above, NationsBank shall: (i) perform all the customary services of a
transfer agent, registrar, dividend disbursing agent and agent of the dividend
reinvestment and cash purchase plan as described herein consistent with those
requirements in effect as of the date of this Agreement. The detailed
definition, frequency, limitations and associated costs (if any) set out in the
attached fee schedule, include but are not limited to: maintaining all
Shareholder accounts, preparing Shareholder meeting lists, mailing proxies,
tabulating proxies, mailing Shareholder reports to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts where
applicable, preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders.
3
<PAGE>
Schedule C
Fee Schedule
Upon receipt of the appropriate payment from the Funds, the Transfer Agent will
compensate NationsBank for the performance of its obligations hereunder in
accordance with a flat fee of $251,000 per year ($20,916.67 per month).
CROSS INDEMNIFICATION AGREEMENT
THIS AGREEMENT is made as of the 14th day of February, 2000, by and
among Nations Fund, Inc. (the "Company"), a Maryland corporation, Nations Fund
Trust (the "Trust"), a Massachusetts business trust, Nations Reserves
("Reserves"), a Massachusetts business trust, Nations Master Investment Trust
(the "Master Trust"), a Delaware business trust and Nations Funds Trust ("Funds
Trust"), a Delaware business trust.
WHEREAS, the Company is an open-end management investment company
registered as such under the Investment Company Act of 1940 (the "1940 Act"),
currently consisting of seven operating investment portfolios, but which may
from time to time consist of a greater or lesser number of investment
portfolios; and
WHEREAS, the Trust is an open-end management investment company
registered as such under the 1940 Act, currently consisting of thirty-six
operating investment portfolios, but which may from time to time consist of a
greater or lesser number of investment portfolios; and
WHEREAS, Reserves is an open-end management investment company
registered as such under the 1940 Act, currently consisting of sixteen operating
investment portfolios, but which may from time to time consist of a greater or
lesser number of investment portfolios; and
WHEREAS, the Master Trust is an open-end management investment company
registered as such under the 1940 Act, currently consisting of seven operating
investment portfolios, but which may from time to time consist of a greater or
lesser number of investment portfolios; and
WHEREAS, Funds Trust is an open-end management investment company
registered as such under the Investment Company Act of 1940 (the "1940 Act"),
currently consisting of three operating investment portfolios, but which may
from time to time consist of a greater or lesser number of investment
portfolios; and
WHEREAS, the Company, the Trust, Reserves and Funds Trust plan to
offer, on a continuous basis, shares of common stock, units of beneficial
interest, units of beneficial interests and units of beneficial interests,
respectively, in their investment portfolios ("Securities") in a combined set of
prospectuses ("Prospectuses") and/or preliminary prospectuses ("Preliminary
Prospectuses") (such offering of Securities to be hereinafter referred to as the
"Joint Offering") and plan to file, from time to time, such combined set of
prospectuses and other materials with the Securities and Exchange Commission
("SEC") (such filings with the SEC to be referred to herein as the "Registration
Statements");
WHEREAS, certain information relating to the Master Trust must be
included in the prospectuses of Reserves and Funds Trust and therefore will be
included in the Joint Offerings and Registration Statements;
<PAGE>
NOW THEREFORE, the Company, the Trust, Reserves, the Master Trust and
Funds Trust hereby agree as follows:
(1) (a) The Company will indemnify and hold harmless the
Trust, Reserves, the Master Trust and Funds Trust against any
losses, claims, damages or liabilities, to which the Trust,
Reserves, the Master Trust or Funds Trust may become subject
under the Securities Act of 1933 (the "Act"), the 1940 Act or
otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Prospectuses, any
Preliminary Prospectuses, the Registration Statements, any
other Prospectuses relating to the Securities, or any
amendments or supplements to the foregoing (hereinafter
referred to collectively as the "Offering Documents"), or
arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Offering
Documents in reliance upon and in conformity with written
information furnished to the Trust, Reserves, the Master Trust
or Funds Trust by the Company expressly for use therein; and
will reimburse the Trust, Reserves, the Master Trust and Funds
Trust for any legal or other expenses reasonably incurred by
the Trust, Reserves, the Master Trust or Funds Trust in
connection with investigating or defending any such action or
claim; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim,
damage, or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in the Offering Documents in reliance upon and
in conformity with written information furnished to the
Company by the Trust, Reserves, the Master Trust or Funds
Trust expressly for use in the Offering Documents.
(b) The Trust will indemnify and hold harmless the Company,
Reserves, the Master Trust and Funds Trust against any losses,
claims, damages or liabilities to which the Company, Reserves,
the Master Trust or Funds Trust may become subject under the
Act, the 1940 Act, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon and untrue statement or alleged
untrue statement of a material fact contained in the Offering
Documents or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to
be stated or necessary to make the statements therein not
misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Offering
Documents in reliance upon and in conformity with written
information furnished to the Company, Reserves, the Master
Trust or Funds Trust by the Trust expressly for use therein;
and will reimburse the Company, Reserves, the Master Trust and
Funds Trust for any legal or other expenses reasonably
incurred by the Company, Reserves, the Master Trust or Funds
Trust in connection with investigating or defending any such
action or claim; provided, however, that the Trust shall not
be liable in any such case to the extent that any such loss,
claim, damage, or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in the Offering Documents in reliance
upon and in conformity with written information furnished to
the Trust by the Company, Reserves, the Master Trust or Funds
Trust expressly for use in the Offering Documents.
<PAGE>
(c) Reserves will indemnify and hold harmless the Company, the
Trust, the Master Trust and Funds Trust against any losses,
claims, damages or liabilities to which the Company, the
Trust, the Master Trust or Funds Trust may become subject
under the Act, the 1940 Act, or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in the
Offering Documents or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated or necessary to make the statements
therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the
Offering Documents in reliance upon and in conformity with
written information furnished to the Company, the Trust, the
Master Trust or Funds Trust by Reserves expressly for use
therein; and will reimburse the Company, the Trust, the Master
Trust and Funds Trust for any legal or other expenses
reasonably incurred by the Company, the Trust, the Master
Trust or Funds Trust in connection with investigating or
defending any such action or claim; provided, however, that
Reserves shall not be liable in any such case to the extent
that any such loss, claim, damage, or liability arises out of
or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Offering
Documents in reliance upon and in conformity with written
information furnished to Reserves by the Company, the Trust,
the Master Trust or Funds Trust for use in the Offering
Documents.
(d) The Master Trust will indemnify and hold harmless the
Company, the Trust, Reserves and Funds Trust against any
losses, claims, damages or liabilities to which the Company,
the Trust, Reserves or Funds Trust may become subject under
the Act, the 1940 Act, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Offering
Documents or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to
be stated or necessary to make the statements therein not
misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Offering
Documents in reliance upon and in conformity with written
information furnished to the Company, the Trust, Reserves or
Funds Trust by the Master Trust expressly for use therein; and
will reimburse the Company, the Trust, Reserves and Funds
Trust for any legal or other expenses reasonably incurred by
the Company, the Trust, Reserves or Funds Trust in connection
with investigating or defending any such action or claim;
provided, however, that the Master Trust shall not be liable
in any such case to the extent that any such loss, claim,
damage, or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in the Offering Documents in reliance upon and
in conformity with written information furnished to the Master
Trust by the Company, the Trust, Reserves or Funds Trust for
use in the Offering Documents.
<PAGE>
(e) Funds Trust will indemnify and hold harmless the Company,
the Trust, Reserves and the Master Trust against any losses,
claims, damages or liabilities to which the Company, the
Trust, Reserves or the Master Trust may become subject under
the Act, the 1940 Act, or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in the Offering
Documents or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to
be stated or necessary to make the statements therein not
misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Offering
Documents in reliance upon and in conformity with written
information furnished to the Company, the Trust, Reserves or
the Master Trust by Funds Trust expressly for use therein; and
will reimburse the Company, the Trust, Reserves and the Master
Trust for any legal or other expenses reasonably incurred by
the Company, the Trust, Reserves or the Master Trust in
connection with investigating or defending any such action or
claim; provided, however, that Reserves shall not be liable in
any such case to the extent that any such loss, claim, damage,
or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission made in the Offering Documents in reliance upon and
in conformity with written information furnished to Funds
Trust by the Company, the Trust, Reserves or the Master Trust
for use in the Offering Documents.
(f) Promptly after receipt by an indemnified party under
subsection (a), (b),(c), (d) or (e) above of notice of the
commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against an indemnifying
party or parties under such subsection, notify the
indemnifying party or parties in writing of the commencement
thereof; but the omission to so notify the indemnifying party
or parties shall not relieve it or them from any liability
which it or they may have to any indemnified party otherwise
than under such subsection. In case any such action shall be
brought against any indemnified party and it shall notify the
indemnifying party or parties of the commencement thereof, the
indemnifying party or parties shall be entitled to participate
therein and, to the extent that either indemnifying party or
both shall wish, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and, after notice from
the indemnifying party or parties to such indemnified part of
its or their election so to assume the defense thereof, the
indemnifying party or parties shall not be liable to such
indemnified party under such subsection for any legal expenses
of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of
investigation.
<PAGE>
(2) This agreement may be executed simultaneously in five or more
counterparts, each of which shall be deemed an original, but
all of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed by their authorized officers designated below as of the day and
year first written above.
NATIONS FUND, INC.
By:/s/ A. Max Walker
-------------------------------------
A. Max Walker
Chairman of the Board of Directors
NATIONS FUND TRUST
By:/s/ A. Max Walker
-------------------------------------
A. Max Walker
Chairman of the Board of Trustees
NATIONS RESERVES
By:/s/ A. Max Walker
-------------------------------------
A. Max Walker
Chairman of the Board of Trustees
<PAGE>
NATIONS MASTER INVESTMENT TRUST
By:/s/ A. Max Walker
-------------------------------------
A. Max Walker
Chairman of the Board of Trustees
NATIONS FUNDS TRUST
By:/s/ A. Max Walker
-------------------------------------
A. Max Walker
Chairman of the Board of Trustees
NATIONS RESERVES
SHAREHOLDER ADMINISTRATION
PLAN ("PLAN") FOR PRIMARY B SHARES
Section 1. Each of the proper officers of Nations Reserves ("Reserves")
is authorized to execute and deliver, in the name and on behalf of Reserves,
written agreements based substantially on the form attached hereto as Appendix A
or any other form duly approved by Reserves' Board of Trustees ("Agreements")
with broker/dealers, banks and other financial institutions that are dealers of
record or holders of record or which have a servicing relationship with the
beneficial owners of Primary B Shares ("Servicing Agents") in certain of
Reserves' Funds (as listed on Exhibit I) offering such shares provided that any
material modifications of services listed in the Agreement shall be presented
for approval or ratification by the Trustees at the next regularly scheduled
Board Meeting. Pursuant to such Agreements, Servicing Agents shall provide
shareholder support services as set forth therein to their clients who
beneficially own Primary B Shares of the Funds in consideration of a fee,
computed monthly in the manner set forth in the applicable Fund's then current
prospectus, at an annual rate of up to 0.60% of the average daily net asset
value of the Primary B Shares beneficially owned by or attributable to such
clients, provided that in no event may the portion of such fee that constitutes
a "service fee," as that term is defined in Rule 2830 of the Rules of the
National Association of Securities Dealers, Inc.'s Conduct Rules, exceed 0.25%
of the average daily net asset value of such Primary B Shares of a Fund.
Affiliates of Reserves' distributor, administrator, co-administrator and adviser
are eligible to become Servicing Agents and to receive fees under this Plan. All
expenses incurred by a Fund in connection with the Agreements and the
implementation of this Plan shall be borne entirely by the holders of the
Primary B Shares of the particular Fund involved. If more than one Fund is
involved and these expenses are not directly attributable to Primary B Shares of
a particular Fund, then the expenses may be allocated between or among the
Primary B Shares of the Funds in a fair and equitable manner.
Section 2. Reserves' administrator and/or co-administrator shall
monitor the arrangements pertaining to Reserves' Agreements with Servicing
Agents. Reserves' administrator and co-administrator shall not, however, be
obligated by this Plan to recommend, and Reserves shall not be obligated to
execute, any Agreement with any qualifying Servicing Agents.
Section 3. So long as this Plan is in effect, Reserves' distributor
shall provide to Reserves' Board of Trustees, and the Trustees shall review, at
least quarterly, a written report of the amounts expended pursuant to this Plan
and the purposes for which such expenditures were made.
1
<PAGE>
Section 4. Unless sooner terminated, this Plan shall continue in effect
for a period of one year from its date of execution and shall continue
thereafter for successive annual periods, provided that such continuance is
specifically approved by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
Investment Company Act of 1940 (the "Act"), of Reserves and have no direct or
indirect financial interest in the operation of this Plan or in any Agreement
related to this Plan (the "Disinterested Trustees") cast in person at a meeting
called for the purpose of voting on this Plan.
Section 5. This Plan may be amended at any time with respect to any
Fund by Reserves' Board of Trustees, provided that any material amendment of the
terms of this Plan (including a material increase of the fee payable hereunder)
shall become effective only upon the approvals set forth in Section 4.
Section 6. This Plan is terminable at any time with respect to any Fund
by vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and nomination
of the Disinterested Trustees shall be committed to the discretion of such
Disinterested Trustees.
Section 8. To the extent that any portion of the fees payable under the
Agreements is deemed to be for services primarily intended to result in the sale
of Fund shares, such fees are deemed approved and may be paid pursuant to the
Plan and in accordance with Rule 12b-1 under the Act, provided that the
Agreements, to the extent they are deemed to relate to services primarily
intended to result in the sale of Fund shares, are approved and otherwise
treated in all respects as agreements related to the Plan.
Section 9. Reserves will preserve copies of this Plan, Agreements, and
any written reports regarding this Plan presented to the Board of Trustees for a
period of not less than six years.
2
<PAGE>
EXHIBIT I
NATIONS RESERVES
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations International Equity Fund
Nations International Value Fund
Nations Emerging Markets Reserves
Nations Asset Allocation Fund
Nations Blue Chip Fund
Dated: December 2, 1998
Last Amended: August 19, 1999
3
NATIONS RESERVES
SHAREHOLDER ADMINISTRATION PLAN ("PLAN")
INVESTOR B SHARES AND INVESTOR C SHARES
Section 1. Each of the proper officers of Nations Reserves ("Reserves")
is authorized to execute and deliver, in the name and on behalf of Reserves,
written agreements based substantially on the form attached hereto as Appendix A
or any other form duly approved by Reserves' Board of Trustees ("Agreements")
with broker/dealers, banks and/or other financial institutions that are dealers
of record or holders of record or which have a servicing relationship with the
same or directly with the beneficial owners of Investor B Shares or Investor C
Shares ("Administration Agents") of certain of Reserves' Funds (as listed on
Exhibit I), provided that any material modifications to the services listed in
the Agreements shall be presented for approval or ratification by the Board of
Trustees at the next regularly scheduled Meeting. Pursuant to such Agreements,
Administration Agents shall provide shareholder administration services as set
forth therein, directly or indirectly, beneficial owners of Investor B Shares or
Investor C Shares of the Funds (as listed on Exhibit I) in consideration of a
fee, computed monthly in the manner set forth in the applicable Fund's then
current prospectus, at an annual rate of up to 0.10% of the average daily net
asset value of the Investor B Shares or Investor C Shares. Reserves'
distributor, co-administrators and investment adviser are eligible to become
Administration Agents and to receive fees under this Plan. All expenses incurred
by a Fund in connection with the Agreements and the implementation of this Plan
shall be borne entirely by the holders of the Investor B Shares and Investor C
Shares of the particular Fund involved. If more than one Fund is involved and
these expenses are not directly attributable to Investor B Shares or Investor C
Shares of a particular Fund, then the expenses may be allocated between or among
the Investor B Shares and Investor C Shares of the Funds in a fair and equitable
manner.
Section 2. Reserves' co-administrators shall monitor the arrangements
pertaining to Reserves' Agreements with Administration Agents. Reserves'
co-administrators shall not, however, be obligated by this Plan to recommend,
and Reserves shall not be obligated to execute, any Agreement with any
qualifying Administration Agents.
Section 3. Unless sooner terminated, this Plan shall continue in effect
for a period of one year from its date of execution and shall continue
thereafter for successive annual periods, provided that such continuance is
specifically approved by a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons," as defined in the
Investment Company Act of 1940, as amended, of Reserves and have no direct or
indirect financial interest in the operation of this Plan or in any Agreement
related to this Plan (the "Disinterested Trustees") cast in person at a meeting
called for the purpose of voting on this Plan.
1
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Section 5. This Plan may be amended at any time with respect to any
Fund by Reserves' Board of Trustees, provided that any material amendment of the
terms of this Plan (including a material increase of the fee payable hereunder)
shall become effective only upon the approvals set forth in Section 4.
Section 6. This Plan is terminable at any time with respect to any Fund
by vote of a majority of the Disinterested Trustees.
Section 7. While this Plan is in effect, the selection and nomination
of the Disinterested Trustees shall be committed to the discretion of such
Disinterested Trustees.
Section 8. Reserves will preserve copies of this Plan, Agreements, and
any written reports regarding this Plan presented to the Board of Trustees for a
period of not less than six years.
2
<PAGE>
EXHIBIT I
NATIONS RESERVES
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax-Exempt Reserves
Dated: May 26, 1999
3
NATIONS RESERVES
SHAREHOLDER SERVICING AND DISTRIBUTION PLAN
INVESTOR A SHARES
This amended and restated Investor A Shareholder Servicing and
Distribution Plan (the "Plan") has been adopted by the Board of Trustees of
Nations Reserves ("Reserves") in conformance with Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act").
Section 1. Payments for Services. Under the terms of this Plan,
Reserves may act as a distributor of the Shares of which a Fund is the issuer,
pursuant to Rule 12b-1 under the 1940 Act. Reserves may incur as a distributor
of the Investor A Shares of each Fund ("Shares") expenses of up to twenty-five
one-hundredths of one percent (0.25%) per annum of the average daily net assets
of Reserves attributable to the Shares of the Funds (as defined on Exhibit A).
Section 2. Expenses Covered by the Plan. Amounts set forth in
Section 1 may be expended when and if authorized in advance by Reserves' Board
of Trustees. Such amounts may be used to finance any activity which is primarily
intended to result in the sale of the Shares, including, but not limited to,
expenses of organizing and conducting sales seminars, printing of prospectuses
and statements of additional information (and supplements thereto) and reports
for other than existing shareholders, preparation and distribution of
advertising material and sales literature, supplemental payments to Reserves'
distributor (the "Distributor") and the cost of administering this Plan, as well
as, with respect to payments made under Section 1, above, the shareholder
servicing activities described below. All amounts expended pursuant to this Plan
shall be paid:
(i) to the Distributor for reimbursements of distribution-related
expenses actually incurred by the Distributor, including, but not limited
to, expenses of organizing and conducting sales seminars, printing of
prospectuses and statements of additional information (and supplements
thereto) and reports for other than existing shareholders, preparation and
distribution of advertising material and sales literature and costs of
administering this Plan, or
(ii) to certain broker/dealers and other financial institutions
("Agents") who offer shares to their customers and who have entered into
Shareholder Servicing Agreements substantially in the form of Exhibit C, and
Sales Support Agreements substantially in the form of Exhibit B with respect
to the Funds, for providing the services contemplated thereunder.
The shareholder servicing activities for which compensation may be
received under this Plan may include, among other things: (i) aggregating and
processing purchase and redemption requests and transmitting promptly net
purchase and redemption orders to the Distributor or transfer agent; (ii)
providing customers with a service that invests the assets of their accounts in
Shares pursuant to specific or pre-authorized instructions; (iii) processing
dividend and distribution payments; (iv) providing information periodically to
customers showing their positions in Shares; (v) arranging for bank wires; (vi)
responding to customers' inquiries concerning their investment in Shares; (vii)
providing subaccounting with respect to Shares beneficially owned by customers
or the information to Reserves necessary for subaccounting; (viii) if required
by law, forwarding shareholder communications (such as proxies, shareholder
reports, annual and semi-annual financial statements and dividend, distribution
and tax notices) to customers; (ix) forwarding to customers proxy statements and
proxies containing any proposals regarding the Shareholder Servicing Agreement;
(x) general shareholder liaison services; and (xi) providing such other similar
services as Reserves may reasonably request to the extent such firms are
permitted to do so under applicable statutes, rules or regulations.
1
<PAGE>
Section 3. Limitations on Payments. No additional payments are to
be made by Reserves on behalf of the Funds with respect to the Shares under this
Plan, provided that the Funds shall not be precluded from making the payments
such Fund is otherwise obligated to make (i) to NationsBank, N.A.
("NationsBank"), pursuant to the Investment Advisory Agreement, (ii) to The Bank
of New York ("BNY"), pursuant to the Custody Agreement, (iii) to "First Data
Investor Services Group, Inc. ("First Data"), pursuant to the Transfer Agency
and Registrar Agreement, (iv) to Stephens Inc. ("Stephens"), pursuant to the
Co-Administration Agreement, (v) to NationsBank Advisors, Inc. ("NBAI"),
pursuant to the Co-Administration Agreement, (vi) to Servicing Agents, pursuant
to Shareholder Servicing Agreements and (vii) for the expenses otherwise
incurred by a Fund and Reserves on behalf of the Shares in the normal conduct of
such Fund's business pursuant to the Investment Advisory Agreement, the Custody
Agreement, the Transfer Agency and Registrar Agreement, the Co-Administration
Agreement and the Shareholder Servicing Agreements. However, to the extent any
payments by Reserves on behalf of a Fund to NationsBank, BNY, First Data,
Stephens, NBAI or Servicing Agents; by NationsBank, BNY, First Data, Stephens,
NBAI or Servicing Agents or any affiliate thereof, to any party, pursuant to any
agreement; or, generally, by Reserves on behalf of a Fund to any party, are
deemed to be payments for the financing of any activity primarily intended to
result in the sale of the Shares within the context of Rule 12b-1 under the 1940
Act, then such payments shall be deemed to be approved pursuant to this Plan as
set forth herein.
Section 4. Reports of Distributor. The officers of Reserves shall
report quarterly in writing to the Board of Trustees on the amounts and purpose
of payments for any of the activities in Section 2 and shall furnish the Board
of Trustees with such other information as the Board may reasonably request in
connection with such payments in order to enable the Board to make an informed
determination on the nature and value of such expenditures.
Section 5. Approval of Plan. This Plan shall continue in effect
for a period of more than one year from the date written below only so long as
such continuance is specifically approved at least annually by Reserves' Board
of Trustees, including the Trustees who are not interested persons of Reserves
and have no direct or indirect financial interest in the operation of this Plan
or in any Agreements related to this Plan ("Disinterested Trustees"), by vote
cast in person at a meeting called for the purpose of voting on this Plan.
Section 6. Termination. This Plan may be terminated at any time by
vote of a majority of the Disinterested Trustees or with respect to a particular
Fund by vote of a majority of the outstanding voting securities of the Shares of
such Fund, on not more than sixty (60) days' written notice to any other party
to the Plan, and shall terminate automatically in the event of any act that
constitutes an assignment of the Distribution Agreement or the Investment
Advisory Agreement.
2
<PAGE>
Section 7. Amendments. This Plan may be amended at any time by the
Board of Trustees provided that (a) any amendment to increase materially the
costs which a Fund's Investor A Shares may bear for distribution pursuant to
this Plan shall be effective only upon approval by a vote of a majority of the
outstanding Investor A Shares of such Fund, and (b) any material amendments of
the terms of this Plan shall become effective only upon approval as provided in
Section 6 thereof.
Section 8. Selection/Nomination of Trustees. So long as this Plan
is in effect, the selection and nomination of Reserves' Disinterested Trustees
shall be committed to the discretion of such Disinterested Trustees.
Section 9. Governing Law. This Plan shall be subject to the laws
of The Commonwealth of Massachusetts and shall be interpreted and construed to
further promote the operation of Reserves as an open-end management investment
company. As used herein the terms "open-end management investment company,"
"assignment," "principal underwriter," "interested person," and "majority of the
outstanding voting securities" shall have the meanings set forth in the
Securities Act of 1933, as amended or the 1940 Act, and the rules and
regulations thereunder.
Section 10. Scope of Liability. Nothing herein shall be deemed to
protect the parties to any Agreement entered into pursuant to this Plan against
any liability to Reserves or its shareholders to which they would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of their duties hereunder, or by reason of their reckless disregard
of their obligations and duties hereunder.
Section 11. Records. Reserves will preserve copies of this Plan,
Agreements and any written reports regarding this Plan presented to the Board of
Trustees for a period of not less than six years.
Section 12. Limitation of Liability. The names "Nations Reserves"
and "Trustees of Nations Reserves" refer respectively to the trust created and
the Trustees, as trustees but not individually or personally, acting from time
to time under a Declaration of Trust dated April 1, which is hereby referred to
and a copy of which is on file at the office of the State Secretary of The
Commonwealth of Massachusetts and at the principal office of Reserves. The
obligations of "Nations Reserves" entered into in the name or on behalf thereof
by any of the Trustees, officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders, officers, representatives or agents of Reserves
personally, but bind only Reserves Property (as defined in the Declaration of
Trust), and all persons dealing with any class of shares of Reserves must look
solely to Reserves Property belonging to such class for the enforcement of any
claims against Reserves.
3
<PAGE>
EXHIBIT A
Nations Asset Allocation Fund
Nations Capital Income Fund
Nations California Municipal Bond Fund
Nations Intermediate Bond Fund
Nations Blue Chip Fund
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations International Equity Fund
Nations International Value Fund
Nations Emerging Markets Reserves
Dated: December 2, 1998
Last Amended: August 19, 1999
4
NATIONS RESERVES
INVESTOR B DISTRIBUTION PLAN
This Investor B Distribution Plan (the "Plan") has been adopted by the
Board of Trustees of Nations Reserves ("Reserves") in conformance with Rule
12b-1 under the Investment Company Act of 1940 (the "1940 Act").
Section 1. Payments for Distribution-Related Services. Reserves may
compensate or reimburse its Distributor for any activities or expenses primarily
intended to result in the sale of Investor B Shares of Reserves' Funds, as
listed on Exhibit A (collectively, the "Funds" or, individually, a "Fund").
Payments by Reserves under this Section of this Plan will be calculated daily
and paid monthly at a rate or rates set from time to time by Reserves' Board of
Trustees, provided that no rate set by the Board for any Fund may exceed, on an
annual basis, 0.75% of the average daily net asset value of a Fund's Investor B
Shares.
Section 2. Expenses Covered by Plan. The fees payable under Section 1 of
this Plan shall be used primarily to compensate or reimburse the Distributor for
distribution services provided by it, and related expenses incurred, including
payments by the Distributor to compensate or reimburse banks, broker/dealers or
other financial institutions that have entered into Sales Support Agreements
with the Distributor ("Selling Agents"), for sales support services provided,
and related expenses incurred, by such Selling Agents. Payments under Section 1
of this Plan may be made with respect to: preparation, printing and distribution
of prospectuses, sales literature and advertising materials by the Distributor
or, as applicable, Selling Agents, attributable to distribution or sales support
activities, respectively; commissions, incentive compensation or other
compensation to, and expenses of, account executives or other employees of the
Distributor or Selling Agents, attributable to distribution or sales support
activities, respectively; overhead and other office expenses of the Distributor
or Selling Agents, attributable to distribution or sales support activities,
respectively; opportunity costs relating to the foregoing (which may be
calculated as a carrying charge on the Distributor's or Selling Agents'
unreimbursed expenses incurred in connection with distribution or sales support
activities, respectively); and any other costs and expenses relating to
distribution or sales support activities. The overhead and other office expenses
referenced in this Section 2 may include, without limitation, (i) the expenses
of operating the Distributor's or Selling Agents' offices in connection with the
sale of Fund shares, including lease costs, the salaries and employee benefit
costs of administrative, operations and support personnel, utility costs,
communication costs and the costs of stationery and supplies, (ii) the costs of
client sales seminars and travel related to distribution and sales support
activities, and (iii) other expenses relating to distribution and sales support
activities.
Section 3. Distribution and Sales Support Agreements. Any officer of
Reserves is authorized to execute and deliver, in the name and on behalf of
Reserves, a written agreement with the Distributor in a form duly approved from
time to time by Reserves' Board of Trustees. Such agreement shall authorize the
Distributor to enter into written Sales Support Agreements, in substantially the
form attached hereto as Exhibit B ("Agreements"), with Selling Agents.
1
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Section 4. Limitations on Payments. Payment made by a particular Fund
under Section 1 must be for distribution or sales support services rendered for
or on behalf of such Fund. However, joint distribution or sales support
financing with respect to the Funds (which financing may also involve other
investment portfolios or companies that are affiliated persons of such a person,
or affiliated persons of the Distributor) shall be permitted in accordance with
applicable regulations of the Securities and Exchange Commission as in effect
from time to time.
Except for the payments specified in Section 1, no additional payments are
to be made by Reserves under this Plan, provided that nothing herein shall be
deemed to preclude the payments such Funds are otherwise obligated to make (i)
to NationsBank, N.A. ("NationsBank") pursuant to the Investment Advisory
Agreement, (ii) to The Bank of New York ("BNY"), pursuant to the Custody
Agreement, (iii) to First Data Investor Services Group, Inc. ("First Data"),
pursuant to the Transfer Agency and Registrar Agreement, (iv) to Stephens Inc.
("Stephens"), pursuant to the Administration Agreement, (v) to NationsBanc
Advisors, Inc. ("NBAI"), pursuant to the Co-Administration Agreement, (vi) to
Servicing Agents pursuant to Shareholder Servicing Agreements and (vii) for the
expenses otherwise incurred by a Fund and Reserves on behalf of the Investor B
Shares in the normal conduct of such Fund's business pursuant to the Investment
Advisory Agreement, the Custody Agreement, the Transfer Agency and Registrar
Agreement, the Co-Administration Agreement and the Shareholder Servicing
Agreements. To the extent any such payments by Reserves on behalf of a Fund to
NationsBank, BNY, First Data, NBAI, Stephens or Servicing Agents; by
NationsBank, BNY, First Data, NBAI, Stephens or Servicing Agents, or any
affiliate thereof, to any party pursuant to any agreement; or, generally, by
Reserves on behalf of a Fund to any party, are deemed to be payments for the
financing of any activity primarily intended to result in the sale of the
Investor B Shares within the context of Rule 12b-1 under the 1940 Act, then such
payments shall be deemed to have been approved pursuant to this Plan without
regard to Section 1.
With respect to Investor B Shares, actual distribution expenses incurred
by the Distributor (or sales support expenses incurred by Selling Agents) in a
given year may exceed the sum of the fees received by the Distributor pursuant
to this Plan and payments received by the Distributor pursuant to contingent
deferred sales charges. Any such excess may be recovered by the Distributor, and
retained by it or paid over to Selling Agents, as applicable, in future years as
long as this Plan is in effect. If this Plan is terminated or not continued,
Reserves shall not be obligated to pay the Distributor (or Selling Agents) for
any expenses not previously reimbursed by Reserves or recovered through
contingent deferred sales charges.
Notwithstanding anything herein to the contrary, no Fund shall be
obligated to make any payments under this Plan that exceed the maximum amounts
payable under Rule 2830, of the National Association of Securities Dealers, Inc.
Conduct Rules.
Section 5. Reports of Distributor. So long as this Plan is in effect, the
Distributor shall provide to Reserves' Officers and Board of Trustees, and the
Trustees shall review at least quarterly, a written report of the amounts
expended by it pursuant to the Distribution Agreement, or by Selling Agents
pursuant to Sales Support Agreements, and the purposes for which such
expenditures were made.
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<PAGE>
Section 6. Approval of Plan. This Plan will become effective immediately,
as to any Fund's Investor B Shares, upon its approval by (a) a majority of the
outstanding Investor B Shares of such Fund, and (b) a majority of the Board of
Trustees, including a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act) of Reserves and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements entered
into in connection with this Plan, pursuant to a vote cast in person at a
meeting called for the purpose of voting on the approval of this Plan.
Section 7. Continuance of Plan. This Plan shall continue in effect for so
long as its continuance is specifically approved at least annually by Reserves'
Board of Trustees in the manner described in Section 6.
Section 8. Amendments. This Plan may be amended at any time by the Board
of Trustees provided that (a) any amendment to increase materially the costs
which a Fund's Investor B Shares may bear for distribution pursuant to this Plan
shall be effective only upon approval by a vote of a majority of the outstanding
Investor B Shares of such Fund, and (b) any material amendments of the terms of
this Plan shall become effective only upon approval as provided in Section 6
hereof.
Section 9. Termination. This Plan is terminable, as to a Fund's Investor B
Shares, without penalty at any time by (a) a vote of a majority of the Trustees
who are not "interested persons" (as defined in the 1940 Act) of Reserves and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreements entered into in connection with this Plan, or (b) a vote of
a majority of the outstanding Investor B Shares of such Fund.
Section 10. Selection/Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those Trustees who are not "interested
persons" (as defined in the 1940 Act) of Reserves shall be committed to the
discretion of such non-interested Trustees.
Section 11. Limitation of Liability. The names "Nations Reserves" and
"Trustees of Nations Reserves" refer respectively to the trust created and the
Trustees, as Trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated April 1, 1985, which is hereby referred
to and a copy of which is on file at the office of the State Secretary of The
Commonwealth of Massachusetts and at the principal office of Reserves. The
obligations of "Nations Reserves" entered into in the name or on behalf thereof
by any of the Trustees, officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders, officers, representatives or agents of Reserves
personally, but bind only Reserves Property (as defined in the Declaration of
Trust), and all persons dealing with a Fund's Investor B Shares of Reserves must
look solely to the Trust property belonging to such Fund's Investor B Shares for
the enforcement of any claims against Reserves.
3
<PAGE>
Section 12. Records. Reserves will preserve copies of this Plan, and any
Agreements and written reports regarding this Plan presented to the Board of
Trustees for a period of not less than six years.
Section 13. Miscellaneous. The captions in this Plan are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
4
<PAGE>
EXHIBIT A
Nations Asset Allocation Fund
Nations Capital Income Fund
Nations California Municipal Bond Fund
Nations Intermediate Bond Fund
Nations Blue Chip Fund
Nations Cash Reserves
Nations Treasury Reserves
Nations Municipal Reserves
Nations Government Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations International Equity Fund
Nations International Value Fund
Nations Emerging Markets Reserves
Dated: December 2, 1998
Last Amended: August 19, 1999
5
NATIONS RESERVES
DISTRIBUTION PLAN
INVESTOR C SHARES
This Distribution Plan (this "Plan") has been adopted by the Board of
Trustees of Nations Reserves ("Reserves") in conformance with Rule 12b-1 under
the Investment Company Act of 1940 (the "1940 Act").
Section 1. Payments for Distribution-Related Services. Reserves may pay
its Distributor for certain expenses that are incurred in connection with the
support and distribution of Investor C Shares (the "Shares") of Reserves' Funds
(collectively the "Funds"). Payments by Reserves under the Plan will be
calculated daily and paid monthly at a rate or rates set from time to time by
Reserves' Board of Trustees, provided that no rate set by the Board for any Fund
may exceed the annual rate of 0.75% of the average daily net asset value of the
Investor C Shares of the Funds. For purposes of determining the payments payable
under this Plan, the net asset value of the outstanding Shares of the respective
Funds shall be computed in the manner specified in Reserves' then current
prospectuses and statement of additional information as amended or supplemented
from time to time for such Shares.
Section 2. Expenses Covered by Plan. Payments to the Distributor under
Section 1 of this Plan will be used by the Distributor (i) to compensate banks,
broker/dealers or other financial institutions that have entered into Sales
Support Agreements with the Distributor ("Selling Agents") for providing
distribution assistance relating to Shares, (ii) for promotional activities
intended to result in the sale of Shares such as by paying for the preparation,
printing and distribution of prospectuses for other than current Shareholders,
and (iii) to compensate Selling Agents for providing distribution services with
regard to their Customers who are, from time to time, beneficial, and record
owners of Shares.
Section 3. Distribution and Sales Support Agreements. Any officer of
Reserves is authorized to execute and deliver, in the name and on behalf of
Reserves, a written agreement with the Distributor in a form duly approved from
time to time by Reserves' Board of Trustees. Such agreement shall authorize the
Distributor to enter into written Sales Support Agreements, in substantially the
form attached hereto as Exhibit B ("Agreements"), with Selling Agents.
As used herein, promotional activities include, but are not limited to,
advertising via radio, television, newspapers, magazines and otherwise;
preparing, printing and mailing sales materials, brochures and prospectuses
(except for prospectuses used for regulatory purposes or for distribution to
existing shareholders).
Section 4. Limitations on Payments. Payment made by a particular Fund
under Section 1 must be for distribution or sales support services rendered for
or on behalf of such Fund. However, joint distribution or sales support
financing with respect to the Funds (which financing may also involve other
investment portfolios or companies that are affiliated persons of such a person,
or affiliated persons of the Distributor) shall be permitted in accordance with
applicable regulations of the Securities and Exchange Commission ("SEC") as in
effect from time to time.
<PAGE>
Upon proper authorization by Reserves' Trustees in accordance with Rule
12b-1 under the Act, expenses covered by this Plan may also include other
expenses the Distributor (or any other person) may incur in connection with the
distribution of Reserves' Shares including, without limitation, expenditures for
telephone facilities and in-house telemarketing, or in connection with
shareholder servicing. Distribution service fees will not be used to pay any
interest expenses, carrying charges or other financing costs (except to the
extent permitted by the SEC). Distribution service fees will not be used to pay
any general or administrative expenses of the Distributor.
Except for the payments specified in Section 1, no additional payments are
to be made by Reserves under this Plan, provided that nothing herein shall be
deemed to preclude the payments such Funds are otherwise obligated to make to
(i) NationsBank, N.A. ("NationsBank"), pursuant to the Investment Advisory
Agreement (ii) The Bank of New York ("BNY"), pursuant to the Custody Agreement,
(iii) First Data Investor Services Group, Inc. ("First Data"), pursuant to the
Transfer Agency and Registrar Agreement, (iv) Stephens Inc. ("Stephens"),
pursuant to the Co-Administration Agreement, (v) NationsBanc Advisors, Inc.
("NBAI"), pursuant to the Co-Administration Agreement, (vi) Servicing Agents,
pursuant to Shareholder Servicing Agreements and (vii) for the expenses
otherwise incurred by a Fund and Reserves on behalf of the Shares in the normal
conduct of such Fund's business pursuant to the Investment Advisory Agreement,
the Custody Agreement, the Transfer Agency and Registrar Agreement, the
Co-Administration Agreement and the Shareholder Servicing Agreements. To the
extent any such payments by Reserves on behalf of a Fund to NationsBank, BNY,
First Data, NBAI, Stephens or Servicing Agents; by NationsBank, NationsBank
Texas, TSSG, Stephens or Servicing Agents, or any affiliate thereof, to any
party pursuant to any agreement; or, generally, by Reserves on behalf of a Fund
to any party, are deemed to be payments for the financing of any activity
primarily intended to result in the sale of the Shares within the context of
Rule 12b-1 under the 1940 Act, then such payments shall be deemed to have been
approved pursuant to this Plan without regard to Section 1.
With respect to Shares, actual distribution expenses incurred by the
Distributor (or sales support expenses incurred by the Selling Agents) in a
given year may exceed the sum of the fees received by the Distributor pursuant
to this Plan and payments received by the Distributor pursuant to contingent
deferred sales charges. Any such excess may be recovered by the Distributor, and
retained by it or paid over to the Selling Agents, as applicable, in future
years as long as this Plan is in effect. If this Plan is terminated or not
continued, Reserves shall not be obligated to pay the Distributor (or Selling
Agents) for any expenses not previously reimbursed by Reserves or recovered
through contingent deferred sales charges.
Notwithstanding anything herein to the contrary, no Fund shall be
obligated to make any payments under this Plan that exceed the maximum amounts
payable under Rule 2830 of the National Association of Securities Dealers, Inc.
Conduct Rules.
2
<PAGE>
Section 5. Reports of Distributor. So long as this Plan is in effect, the
Distributor shall provide to Reserves' Officers and Board of Trustees, and the
Trustees shall review, at least quarterly, a written report of the amounts
expended by it pursuant to the Distribution Agreement, or by Selling Agents
pursuant to Sales Support Agreements, and the purposes for which such
expenditures were made.
Section 6. Approval of Plan. The Plan will become effective immediately,
as to any Fund's Shares, upon its approval by (a) a majority of the outstanding
Shares of such Fund, and (b) a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) of Reserves and who have no direct or indirect financial interest in
the operation of this Plan or in any agreements entered into in connection with
this Plan, pursuant to a vote cast in person at a meeting called for the purpose
of voting on the approval of this Plan.
Section 7. Continuance of Plan. The Plan shall continue in effect for so
long as its continuance is specifically approved at least annually by Reserves'
Board of Trustees in the manner described in Section 6.
Section 8. Amendments. The Plan may be amended at any time by the Board of
Trustees provided that (a) any amendment to increase materially the costs which
a Fund's Shares may bear for distribution pursuant to this Plan shall be
effective only upon approval by a vote of a majority of the outstanding Shares
of such Fund, and (b) any material amendments of the terms of this Plan shall
become effective only upon approval as provided in Section 6 hereof.
Section 9. Termination. The Plan is terminable, as to a Fund's Shares,
without penalty at any time by (a) a vote of a majority of the Trustees who are
not "interested persons" (as defined in the 1940 Act) of Reserves and who have
no direct or indirect financial interest in the operation of this Plan or in any
agreements entered into in connection with this Plan, or (b) a vote of a
majority of the outstanding Shares of such Fund.
Section 10. Selection/Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those Trustees who are not "interested
persons" (as defined in the 1940 Act) of Reserves shall be committed to the
discretion of such non-interested Trustees.
Section 11. Limitation of Liability. The names "Nations Reserves" and
"Trustees of Nations Reserves" refer respectively to the trust created and the
Trustees, as Trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated April 1, 1985, which is hereby referred
to and a copy of which is on file at the office of the State Secretary of The
Commonwealth of Massachusetts and at the principal office of Reserves. The
obligations of "Nations Reserves" entered into in the name or on behalf thereof
by any of the Trustees, officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders, officers, representatives or agents of Reserves
personally, but bind only Reserves Property (as defined in the Declaration of
Trust), and all persons dealing with a Fund's Shares of Reserves must look
solely to Reserves property belonging to such Fund's Shares for the enforcement
of any claims against Reserves.
3
<PAGE>
Section 12. Records. Reserves will preserve copies of this Plan,
Agreements, and any written reports regarding this Plan presented to the Board
of Trustees for a period of not less than six years.
Section 13. Miscellaneous. The captions in this Plan are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
4
<PAGE>
EXHIBIT A
Nations Asset Allocation Fund
Nations Capital Income Fund
Nations California Municipal Bond Fund
Nations Intermediate Bond Fund
Nations Blue Chip Fund
Nations Cash Reserves
Nations Treasury Reserves
Nations Municipal Reserves
Nations Government Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Nations Marsico Focused Equities Fund
Nations Marsico Growth & Income Fund
Nations International Equity Fund
Nations International Value Fund
Nations Emerging Markets Reserves
Dated: December 2, 1998
Last Amended: August 19, 1999
NATIONS INSTITUTIONAL RESERVES
DISTRIBUTION PLAN
DAILY CLASS SHARES
This Daily Class Distribution Plan (the "Plan") has been adopted by the
Board of Trustees of Nations Institutional Reserves ("Reserves") in conformance
with Rule 12b-1 under the Investment Company Act of 1940 (the "1940 Act").
Section 1. Payments for Distribution-Related Services. Reserves may
compensate or reimburse its Distributor for any activities or expenses primarily
intended to result in the sale of Daily Shares of Reserves' Funds, as listed on
Exhibit A (collectively, the "Funds" or, individually, a "Fund"). Payments by
Reserves under this Section of this Plan will be calculated daily and paid
monthly at a rate or rates set from time to time by Reserves' Board of Trustees,
provided that no rate set by the Board for any Fund may exceed, on an annual
basis, 0.35% of the average daily net asset value of a Fund's Daily Shares.
Section 2. Expenses Covered by Plan. The fees payable under Section 1 of
this Plan shall be used primarily to compensate or reimburse the Distributor for
distribution services provided by it, and related expenses incurred, including
payments by the Distributor to compensate or reimburse banks, broker/dealers or
other financial institutions that have entered into Sales Support Agreements
with the Distributor ("Selling Agents"), for sales support services provided,
and related expenses incurred, by such Selling Agents. Payments under Section 1
of this Plan may be made with respect to: preparation, printing and distribution
of prospectuses, sales literature and advertising materials by the Distributor
or, as applicable, Selling Agents, attributable to distribution or sales support
activities, respectively; commissions, incentive compensation or other
compensation to, and expenses of, account executives or other employees of the
Distributor or Selling Agents, attributable to distribution or sales support
activities, respectively; overhead and other office expenses of the Distributor
or Selling Agents, attributable to distribution or sales support activities,
respectively; opportunity costs relating to the foregoing (which may be
calculated as a carrying charge on the Distributor's or Selling Agents'
unreimbursed expenses incurred in connection with distribution or sales support
activities, respectively); and any other costs and expenses relating to
distribution or sales support activities. The overhead and other office expenses
referenced in this Section 2 may include, without limitation, (i) the expenses
of operating the Distributor's or Selling Agents' offices in connection with the
sale of Fund shares, including lease costs, the salaries and employee benefit
costs of administrative, operations and support personnel, utility costs,
communication costs and the costs of stationery and supplies, (ii) the costs of
client sales seminars and travel related to distribution and sales support
activities, and (iii) other expenses relating to distribution and sales support
activities.
Section 3. Distribution and Sales Support Agreements. Any officer of
Reserves is authorized to execute and deliver, in the name and on behalf of
Reserves, a written agreement with the Distributor in a form duly approved from
time to time by Reserves' Board of Trustees. Such agreement shall authorize the
Distributor to enter into written Sales Support Agreements, in substantially the
form attached hereto as Exhibit B ("Agreements"), with Selling Agents.
1
<PAGE>
Section 4. Limitations on Payments. Payment made by a particular Fund
under Section 1 must be for distribution or sales support services rendered for
or on behalf of such Fund. However, joint distribution or sales support
financing with respect to the Funds (which financing may also involve other
investment portfolios or companies that are affiliated persons of such a person,
or affiliated persons of the Distributor) shall be permitted in accordance with
applicable regulations of the Securities and Exchange Commission as in effect
from time to time.
Except for the payments specified in Section 1, no additional payments are
to be made by Reserves under this Plan, provided that nothing herein shall be
deemed to preclude the payments such Funds are otherwise obligated to make (i)
to NationsBanc Advisors, Inc. ("NBAI") pursuant to the Investment Advisory
Agreement, (ii) to The Bank of New York ("BNY"), pursuant to the Custody
Agreement, (iii) to First Data Investor Services Group, Inc. ("First Data"),
pursuant to the Transfer Agency and Registrar Agreement, (iv) to Stephens Inc.
("Stephens"), pursuant to the Co-Administration Agreement, (v) to NBAI, pursuant
to the Co-Administration Agreement, (vi) to Servicing Agents pursuant to
Shareholder Servicing Agreements and (vii) for the expenses otherwise incurred
by a Fund and Reserves on behalf of the Daily Shares in the normal conduct of
such Fund's business pursuant to the Investment Advisory Agreement, the Custody
Agreement, the Transfer Agency and Registrar Agreement, the Co-Administration
Agreement and the Shareholder Servicing Agreements. To the extent any such
payments by Reserves on behalf of a Fund to NBAI, BNY, First Data, Stephens, or
Servicing Agents; by NBAI, BNY, First Data, Stephens or Servicing Agents, or any
affiliate thereof, to any party pursuant to any agreement; or, generally, by
Reserves on behalf of a Fund to any party, are deemed to be payments for the
financing of any activity primarily intended to result in the sale of the Daily
Shares within the context of Rule 12b-1 under the 1940 Act, then such payments
shall be deemed to have been approved pursuant to this Plan without regard to
Section 1.
With respect to Daily Shares, actual distribution expenses incurred by the
Distributor (or sales support expenses incurred by Selling Agents) in a given
year may exceed the sum of the fees received by the Distributor pursuant to this
Plan and payments received by the Distributor pursuant to contingent deferred
sales charges. Any such excess may be recovered by the Distributor, and retained
by it or paid over to Selling Agents, as applicable, in future years as long as
this Plan is in effect. If this Plan is terminated or not continued, Reserves
shall not be obligated to pay the Distributor (or Selling Agents) for any
expenses not previously reimbursed by Reserves or recovered through contingent
deferred sales charges.
Notwithstanding anything herein to the contrary, no Fund shall be
obligated to make any payments under this Plan that exceed the maximum amounts
payable under Rule 2830 of the National Association of Securities Dealers, Inc.
Conduct Rules.
Section 5. Reports of Distributor. So long as this Plan is in effect, the
Distributor shall provide to Reserves' Officers and Board of Trustees, and the
Trustees shall review at least quarterly, a written report of the amounts
expended by it pursuant to the Distribution Agreement, or by Selling Agents
pursuant to Sales Support Agreements, and the purposes for which such
expenditures were made.
2
<PAGE>
Section 6. Approval of Plan. This Plan will become effective immediately,
as to any Fund's Daily Shares, upon its approval by (a) a majority of the
outstanding Daily Shares of such Fund, and (b) a majority of the Board of
Trustees, including a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act) of Reserves and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements entered
into in connection with this Plan, pursuant to a vote cast in person at a
meeting called for the purpose of voting on the approval of this Plan.
Section 7. Continuance of Plan. This Plan shall continue in effect for so
long as its continuance is specifically approved at least annually by Reserves
Board of Trustees in the manner described in Section 6.
Section 8. Amendments. This Plan may be amended at any time by the Board
of Trustees provided that (a) any amendment to increase materially the costs
which a Fund's Daily Shares may bear for distribution pursuant to this Plan
shall be effective only upon approval by a vote of a majority of the outstanding
Daily Shares of such Fund, and (b) any material amendments of the terms of this
Plan shall become effective only upon approval as provided in Section 6 hereof.
Section 9. Termination. This Plan is terminable, as to a Fund's Daily
Shares, without penalty at any time by (a) a vote of a majority of the Trustees
who are not "interested persons" (as defined in the 1940 Act) of Reserves and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreements entered into in connection with this Plan, or (b) a vote of
a majority of the outstanding Daily Shares of such Fund.
Section 10. Selection/Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust shall be committed to the
discretion of such non-interested Trustees.
Section 11. Limitation of Liability. The names "Nations Institutional
Reserves" and "Trustees of Nations Institutional Reserves" refer respectively to
the trust created and the Trustees, as Trustees but not individually or
personally, acting from time to time under an Agreement and Declaration of Trust
dated May 6, 1985, which is hereby referred to and a copy of which is on file at
the office of the State Secretary of The Commonwealth of Massachusetts and at
the principal office of Reserves. The obligations of "Nations Institutional
Reserves" entered into in the name or on behalf thereof by any of the Trustees,
officers, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders,
officers, representatives or agents of Reserves personally, but bind only
Reserves Property (as defined in the Agreement and Declaration of Trust), and
all persons dealing with a Fund's Daily Shares of Reserves must look solely to
Reserves property belonging to such Fund's Daily Shares for the enforcement of
any claims against Reserves.
3
<PAGE>
Section 12. Records. Reserves will preserve copies of this Plan, and any
Agreements and written reports regarding this Plan presented to the Board of
Trustees for a period of not less than six years.
Section 13. Miscellaneous. The captions in this Plan are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
4
<PAGE>
EXHIBIT A
NATIONS INSTITUTIONAL RESERVES
1. Nations Government Reserves
2. Nations Municipal Reserves
3. Nations Cash Reserves
4. Nations Treasury Reserves
5. Nations Money Market Reserves
6. Nations California Tax Exempt Reserves
Dated: December 2, 1998
Last Amended: February 24, 1999
5
NATIONS RESERVES
DISTRIBUTION PLAN
INVESTOR CLASS SHARES
This Investor Class Distribution Plan (the "Plan") has been adopted by the
Board of Trustees of Nations Reserves ("Reserves") in conformance with Rule
12b-1 under the Investment Company Act of 1940 (the "1940 Act").
Section 1. Payments for Distribution-Related Services. The Trust may
compensate or reimburse its Distributor for any activities or expenses primarily
intended to result in the sale of Investor Shares of Reserves' Funds, as listed
on Exhibit A (collectively, the "Funds" or, individually, a "Fund"). Payments by
Reserves under this Section of this Plan will be calculated daily and paid
monthly at a rate or rates set from time to time by Reserves' Board of Trustees,
provided that no rate set by the Board for any Fund may exceed, on an annual
basis, 0.10% of the average daily net asset value of a Fund's Investor Shares.
Section 2. Expenses Covered by Plan. The fees payable under Section 1 of
this Plan shall be used primarily to compensate or reimburse the Distributor for
distribution services provided by it, and related expenses incurred, including
payments by the Distributor to compensate or reimburse banks, broker/dealers or
other financial institutions that have entered into Sales Support Agreements
with the Distributor ("Selling Agents"), for sales support services provided,
and related expenses incurred, by such Selling Agents. Payments under Section 1
of this Plan may be made with respect to: preparation, printing and distribution
of prospectuses, sales literature and advertising materials by the Distributor
or, as applicable, Selling Agents, attributable to distribution or sales support
activities, respectively; commissions, incentive compensation or other
compensation to, and expenses of, account executives or other employees of the
Distributor or Selling Agents, attributable to distribution or sales support
activities, respectively; overhead and other office expenses of the Distributor
or Selling Agents, attributable to distribution or sales support activities,
respectively; opportunity costs relating to the foregoing (which may be
calculated as a carrying charge on the Distributor's or Selling Agents'
unreimbursed expenses incurred in connection with distribution or sales support
activities, respectively); and any other costs and expenses relating to
distribution or sales support activities. The overhead and other office expenses
referenced in this Section 2 may include, without limitation, (i) the expenses
of operating the Distributor's or Selling Agents' offices in connection with the
sale of Fund shares, including lease costs, the salaries and employee benefit
costs of administrative, operations and support personnel, utility costs,
communication costs and the costs of stationery and supplies, (ii) the costs of
client sales seminars and travel related to distribution and sales support
activities, and (iii) other expenses relating to distribution and sales support
activities. Payments under Section 1, above, shall not be made for personal
services and/or the maintenance of shareholder accounts as such terms are
interpreted by the National Association of Securities Dealers, Inc.
1
<PAGE>
Section 3. Distribution and Sales Support Agreements. Any officer of
Reserves is authorized to execute and deliver, in the name and on behalf of
Reserves, a written agreement with the Distributor in a form duly approved from
time to time by Reserves' Board of Trustees. Such agreement shall authorize the
Distributor to enter into written Sales Support Agreements, in substantially the
form attached hereto as Exhibit B ("Agreements"), with Selling Agents.
Section 4. Limitations on Payments. Payment made by a particular Fund
under Section 1 must be for distribution or sales support services rendered for
or on behalf of such Fund. However, joint distribution or sales support
financing with respect to the Funds (which financing may also involve other
investment portfolios or companies that are affiliated persons of such a person,
or affiliated persons of the Distributor) shall be permitted in accordance with
applicable regulations of the Securities and Exchange Commission as in effect
from time to time.
Except for the payments specified in Section 1, no additional payments are
to be made by Reserves under this Plan, provided that nothing herein shall be
deemed to preclude the payments such Funds are otherwise obligated to make (i)
to NationsBanc Advisors, Inc. ("NBAI") pursuant to the Investment Advisory
Agreement, (ii) to The Bank of New York ("BNY"), pursuant to the Custody
Agreement, (iii) to First Data Investor Services Group, Inc. ("First Data"),
pursuant to the Transfer Agency and Registrar Agreement, (iv) to Stephens Inc.
("Stephens"), pursuant to the Co-Administration Agreement, (v) to NBAI, pursuant
to the Co-Administration Agreement, (vi) to Servicing Agents pursuant to
Shareholder Servicing Agreements and (vii) for the expenses otherwise incurred
by a Fund and the Trust on behalf of the Investor shares in the normal conduct
of such Fund's business pursuant to the Investment Advisory Agreement, the
Custody Agreement, the Transfer Agency and Registrar Agreement, the
Co-Administration Agreement and the Shareholder Servicing Agreements. To the
extent any such payments by Reserves on behalf of a Fund to NBAI, BNY, First
Data, Stephens, or Servicing Agents; by NBAI, BNY, First Data, Stephens or
Servicing Agents, or any affiliate thereof, to any party pursuant to any
agreement; or, generally, by Reserves on behalf of a Fund to any party, are
deemed to be payments for the financing of any activity primarily intended to
result in the sale of the Investor shares within the context of Rule 12b-1 under
the 1940 Act, then such payments shall be deemed to have been approved pursuant
to this Plan without regard to Section 1.
With respect to Investor Shares, actual distribution expenses incurred by
the Distributor (or sales support expenses incurred by Selling Agents) in a
given year may exceed the sum of the fees received by the Distributor pursuant
to this Plan and payments received by the Distributor pursuant to contingent
deferred sales charges. Any such excess may be recovered by the Distributor, and
retained by it or paid over to Selling Agents, as applicable, in future years as
long as this Plan is in effect. If this Plan is terminated or not continued,
Reserves shall not be obligated to pay the Distributor (or Selling Agents) for
any expenses not previously reimbursed by Reserves or recovered through
contingent deferred sales charges.
Notwithstanding anything herein to the contrary, no Fund shall be
obligated to make any payments under this Plan that exceed the maximum amounts
payable under Rule 2830 of the National Association of Securities Dealers, Inc.
Conduct Rules.
2
<PAGE>
Section 5. Reports of Distributor. So long as this Plan is in effect, the
Distributor shall provide to Reserves' Officers and Board of Trustees, and the
Trustees shall review at least quarterly, a written report of the amounts
expended by it pursuant to the Distribution Agreement, or by Selling Agents
pursuant to Sales Support Agreements, and the purposes for which such
expenditures were made.
Section 6. Approval of Plan. This Plan will become effective immediately,
as to any Fund's Investor Shares, upon its approval by (a) a majority of the
outstanding Investor Shares of such Fund, and (b) a majority of the Board of
Trustees, including a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act) of the Trust and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements entered
into in connection with this Plan, pursuant to a vote cast in person at a
meeting called for the purpose of voting on the approval of this Plan.
Section 7. Continuance of Plan. This Plan shall continue in effect for so
long as its continuance is specifically approved at least annually by Reserves'
Board of Trustees in the manner described in Section 6.
Section 8. Amendments. This Plan may be amended at any time by the Board
of Trustees provided that (a) any amendment to increase materially the costs
which a Fund's Investor Shares may bear for distribution pursuant to this Plan
shall be effective only upon approval by a vote of a majority of the outstanding
Investor Shares of such Fund, and (b) any material amendments of the terms of
this Plan shall become effective only upon approval as provided in Section 6
hereof.
Section 9. Termination. This Plan is terminable, as to a Fund's Investor
Shares, without penalty at any time by (a) a vote of a majority of the Trustees
who are not "interested persons" (as defined in the 1940 Act) of Reserves and
who have no direct or indirect financial interest in the operation of this Plan
or in any agreements entered into in connection with this Plan, or (b) a vote of
a majority of the outstanding Investor Shares of such Fund.
Section 10. Selection/Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust shall be committed to the
discretion of such non-interested Trustees.
Section 11. Limitation of Liability. The names "Nations Reserves" and
"Trustees of Nations Reserves" refer respectively to the trust created and the
Trustees, as Trustees but not individually or personally, acting from time to
time under an Agreement and Declaration of Trust dated May 6, 1985, which is
hereby referred to and a copy of which is on file at the office of the State
Secretary of The Commonwealth of Massachusetts and at the principal office of
Reserves. The obligations of "Nations Reserves" entered into in the name or on
behalf thereof by any of the Trustees, officers, representatives or agents are
made not individually, but in such capacities, and are not binding upon any of
the Trustees, Shareholders, officers, representatives or agents of Reserves
personally, but bind only the Trust Property (as defined in the Agreement and
Declaration of Trust), and all persons dealing with a Fund's Investor Shares of
Reserves must look solely to Reserves property belonging to such Fund's Investor
Shares for the enforcement of any claims against Reserves.
3
<PAGE>
Section 12. Records. Reserves will preserve copies of this Plan, and any
Agreements and written reports regarding this Plan presented to the Board of
Trustees for a period of not less than six years.
Section 13. Miscellaneous. The captions in this Plan are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
4
<PAGE>
EXHIBIT A
1. Nations Government Reserves
2. Nations Municipal Reserves
3. Nations Cash Reserves
4. Nations Treasury Reserves
5. Nations Money Market Reserves
6. Nations California Tax Exempt Reserves
Dated: December 2, 1998
Last Amended: February 24, 1999
5
NATIONS RESERVES
DISTRIBUTION PLAN
LIQUIDITY SHARES
WHEREAS, Nations Reserves (the "Trust") is engaged in business as
a diversified, open-end investment company registered under the Investment
Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trustees of the Trust have determined that there is a
reasonable likelihood that the following Distribution Plan will benefit the
Trust and the owners of units of beneficial interest ("Unitholders") in
Liquidity Class Shares of Cash Reserves, Treasury Reserves, Government Reserves
and Tax Free Reserves of the Trust and such other funds as may be added to the
Trust (the "Liquidity Class Funds");
NOW THEREFORE, the Trustees of the Trust hereby adopt this
distribution plan pursuant to Rule 12b-1 under the 1940 Act.
Section 1. The Trust has adopted this distribution plan (the
"Plan") to enable the Trust to directly or indirectly bear expenses relating to
the distribution of Liquidity Class securities of which the Trust is the issuer.
Section 2. The Trust may incur expenses for the items stipulated
in Section 3 of this Plan, provided that in no event shall the Trust incur
reimbursable expenses for Liquidity Class Shares that exceed an annual rate of
.30% of the Trust's average daily net assets relating to the Class during any
fiscal year of the Trust. All expenditures pursuant to this Plan shall be made
only pursuant to authorization by the President, any Vice President or the
Treasurer of the Trust. If there should be more than one series of Trust units,
expenses incurred pursuant to this Plan shall be allocated among the several
series of the Trust on the basis of their relative net asset values, unless
otherwise determined by a majority of the Qualified Trustees. In addition, the
Trust will pay the Distributor a fee of up to .30% of the Liquidity Class funds'
(.35% with respect to Liquidity Class of the Treasury Reserves) average daily
net assets which the distributor can use to compensate certain financial
institutions which provide administrative and/or distribution services to
Liquidity Class unitholders relating to the Trust. The actual fee paid to the
administrators will be negotiated based on the extent and quality of services
provided.
Section 3. Reimbursable expenses permitted pursuant to this Plan
shall include the following expenses incurred with respect to the Liquidity
Class securities:
(a) the incremental printing costs incurred in producing for and
distributing to persons other than current Unitholders of
the Trust, the reports, prospectuses, notices and similar
materials that are prepared by the Trust for current
Unitholders;
(b) the cost of complying with state and federal laws pertaining
to the distribution of the Trust's units;
(c) advertising;
(d) the costs of preparing, printing and distributing any
literature used in connection with the offering of the
Trust's units and not covered by Section 3(a) of this Plan;
(e) expenses incurred in connection with the promotion and sale
of the Trust's units including, without limitation, travel
and communication expenses and expenses for the compensation
of and benefits for sales personnel; and
(f) any other expenses reasonably incurred in connection with
the distribution and marketing of the Liquidity Class
securities subject to approval of a majority of the
Qualified Trustees;
Section 4. This Plan shall not take effect until it has been
approved (a) by a vote of at least a majority of the outstanding voting
securities in Liquidity Class of the Trust; and (b) together with any related
agreements, by votes of the majority of both (i) the Trustees of the Trust and
(ii) the Qualified Trustees, cast in person at a Board of Trustees meeting
called for the purpose of voting on this Plan or such agreement.
Section 5. This Plan shall continue in effect for a period of more
than one year after it takes effect only for so long as such continuance is
specifically approved at least annually in the manner provided in Part (b) of
Section 4 herein for the approval of this Plan.
Section 6. Any person authorized to direct the disposition of
monies paid or payable by the Trust pursuant to this Plan or any related
agreement shall provide to the Trustees of the Trust, at least quarterly, a
written report of the amounts so expended and the purposes for which such
expenditures were made.
Section 7. This Plan may be terminated at any time by the vote of
a majority of the Qualified Trustees or by vote of a majority of the Trust's
outstanding voting securities.
Section 8. All agreements with any person relating to
implementation of this Plan shall be in writing, and any agreement related to
this Plan shall provide (a) that such agreement may be terminated at any time,
without payment of any penalty, by the vote of a majority of the Qualified
Trustees or by the vote of Unitholders holding a majority of the Trust's
outstanding voting securities, on not more than 60 days written notice to any
other party to the agreement; and (b) that such agreement shall terminate
automatically in the event of its assignment.
Section 9. This plan may not be amended to increase materially the
amount of distribution expenses permitted pursuant to Section 2 hereof without
the approval of Unitholders holding a majority of the outstanding voting
securities in the Liquidity Class of the Trust, and all material amendments to
this Plan shall be approved in the manner provided in Part (b) of Section 4
herein for the approval of this Plan.
2
<PAGE>
Section 10. As used in this Plan, (a) the term "Qualified
Trustees" shall mean those Trustees of the Trust who are not interested persons
of the Trust, and have no direct or indirect financial interest in the operation
of this Plan or any agreements related to it, and (b) the terms "assignment" and
"interested person" shall have the respective meanings specified in the 1940 Act
and the rules and regulations thereunder, subject to such exemptions as may be
granted by the Securities and Exchange Commission.
Section 11. Nothing in this Plan shall operate or be construed to
limit the extent to which the Trust's Sponsor, Manager, Distributor, or
Investment Adviser or any other person, other than the Trust, may incur costs
out of their own monies and bear expenses associated with the distribution of
securities of which the Trust is the issuer.
Section 12. While this Plan is in effect, the selection and
nomination of those Trustees who are not interested persons of the Trust within
the meaning of Section 2(a)(19) of the 1940 Act shall be committed to the
discretion of the Trustees then in office who are not interested persons of the
Trust.
Section 13. This Plan shall not obligate the Trust or any other
party to enter into an agreement with any particular person.
3
<PAGE>
EXHIBIT A
NATIONS RESERVES
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Last Amended: February 24, 1999
NATIONS RESERVES
DISTRIBUTION PLAN
MARKET SHARES
This Distribution Plan (the "Plan") has been adopted by the Board of
Trustees of Nations Reserves, doing business as Nations Reserves, (the "Trust")
on behalf of its Market Class Shares in conformance with Rule 12b-1 under the
Investment Company Act of 1940 (the "1940 Act").
Section 1. Payments for Distribution-Related Services. The Trust may
compensate or reimburse its Distributor for any activities or expenses primarily
intended to result in the sale of Market Class Shares of the Trust's Funds, as
listed on Exhibit A (collectively, the "Funds" or, individually, a "Fund").
Payments by the Trust under this Section of this Plan will be calculated daily
and paid monthly at a rate or rates set from time to time by the Trust's Board
of Trustees, provided that no rate set by the Board for any Fund may exceed, on
an annual basis, 0.20% of the average daily net asset value of a Fund's Market
Class Shares.
Section 2. Expenses Covered by Plan. The fees payable under Section 1 of
this Plan shall be used primarily to compensate or reimburse the Distributor for
distribution services provided by it, and related expenses incurred, including
payments by the Distributor to compensate or reimburse banks, broker/dealers or
other financial institutions that have entered into Sales Support Agreements
with the Distributor ("Selling Agents"), for sales support services provided,
and related expenses incurred, by such Selling Agents. Payments under Section 1
of this Plan may be made with respect to: preparation, printing and distribution
of prospectuses, sales literature and advertising materials by the Distributor
or, as applicable, Selling Agents, attributable to distribution or sales support
activities, respectively; commissions, incentive compensation or other
compensation to, and expenses of, account executives or other employees of the
Distributor or Selling Agents, attributable to distribution or sales support
activities, respectively; overhead and other office expenses of the Distributor
or Selling Agents, attributable to distribution or sales support activities,
respectively; opportunity costs relating to the foregoing (which may be
calculated as a carrying charge on the Distributor's or Selling Agents'
unreimbursed expenses incurred in connection with distribution or sales support
activities, respectively); and any other costs and expenses relating to
distribution or sales support activities. The overhead and other office expenses
referenced in this Section 2 may include, without limitation, (i) the expenses
of operating the Distributor's or Selling Agents' offices in connection with the
sale of Fund shares, including lease costs, the salaries and employee benefit
costs of administrative, operations and support personnel, utility costs,
communication costs and the costs of stationery and supplies, (ii) the costs of
client sales seminars and travel related to distribution and sales support
activities, and (iii) other expenses relating to distribution and sales support
activities.
Section 3. Distribution and Sales Support Agreements. Any officer of the
Trust is authorized to execute and deliver, in the name and on behalf of the
Trust, a written agreement with the Distributor in a form duly approved from
time to time by the Trust's Board of Trustees. Such agreement shall authorize
the Distributor to enter into written Sales Support Agreements, in substantially
the form attached hereto as Exhibit B ("Agreements"), with Selling Agents.
1
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Section 4. Limitations on Payments. Payment made by a particular Fund
under Section 1 must be for distribution or sales support services rendered for
or on behalf of such Fund. However, joint distribution or sales support
financing with respect to the Funds (which financing may also involve other
investment portfolios or companies that are affiliated persons of such a person,
or affiliated persons of the Distributor) shall be permitted in accordance with
applicable regulations of the Securities and Exchange Commission as in effect
from time to time.
Except for the payments specified in Section 1, no additional payments are
to be made by the Trust under this Plan, provided that nothing herein shall be
deemed to preclude the payments such Funds are otherwise obligated to make (i)
to their investment adviser, administrator, co-administrator, transfer agent or
custodian pursuant to their respective agreements with the Trust, (ii) to
Servicing Agents pursuant to Shareholder Servicing Agreements and (iii) for the
expenses otherwise incurred by a Fund and the Trust on behalf of the Market
Class Shares in the normal conduct of such Fund's business pursuant to the
agreements referenced above. To the extent any such payments by the Trust on
behalf of a Fund to the Fund's investment adviser, administrator,
co-administrator, transfer agent, custodian or a Servicing Agent, or any
affiliate thereof, to any party pursuant to any agreement, or, generally, by the
Trust on behalf of a Fund to any party, are deemed to be payments for the
financing of any activity primarily intended to result in the sale of the Market
Class Shares within the context of Rule 12b-1 under the 1940 Act, then such
payments shall be deemed to have been approved pursuant to this Plan without
regard to Section 1.
With respect to Market Class Shares, actual distribution expenses incurred
by the Distributor (or sales support expenses incurred by Selling Agents) in a
given year may exceed the sum of the fees received by the Distributor pursuant
to this Plan. Any such excess may be recovered by the Distributor, and retained
by it or paid over to Selling Agents, as applicable, in future years as long as
this Plan is in effect. If this Plan is terminated or not continued, the Trust
shall not be obligated to pay the Distributor (or Selling Agents) for any
expenses not previously reimbursed by the Trust.
Notwithstanding anything herein to the contrary, no Fund shall be
obligated to make any payments under this Plan that exceed the maximum amounts
payable under Article III, Section 26 of the Rules of Fair Practice of the
National Association of Securities Dealers, Inc.
Section 5. Reports of Distributor. So long as this Plan is in effect, the
Distributor shall provide to the Trust's Officers and Board of Trustees, and the
Trustees shall review at least quarterly, a written report of the amounts
expended by it pursuant to the Distribution Agreement, or by Selling Agents
pursuant to Sales Support Agreements, and the purposes for which such
expenditures were made.
Section 6. Approval of Plan. This Plan will become effective immediately,
as to any Fund's Market Class Shares, upon its approval by (a) a majority of the
outstanding Market Class Shares of such Fund, and (b) a majority of the Board of
Trustees, including a majority of the Trustees who are not "interested persons"
(as defined in the 1940 Act) of the Trust and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements entered
into in connection with this Plan, pursuant to a vote cast in person at a
meeting called for the purpose of voting on the approval of this Plan.
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<PAGE>
Section 7. Continuance of Plan. This Plan shall continue in effect for so
long as its continuance is specifically approved at least annually by the
Trust's Board of Trustees in the manner described in Section 6.
Section 8. Amendments. This Plan may be amended at any time by the Board
of Trustees provided that (a) any amendment to increase materially the costs
which a Fund's Market Class Shares may bear for distribution pursuant to this
Plan shall be effective only upon approval by a vote of a majority of the
outstanding Market Class Shares of such Fund, and (b) any material amendments of
the terms of this Plan shall become effective only upon approval as provided in
Section 6 hereof.
Section 9. Termination. This Plan is terminable, as to a Fund's Market
Class Shares, without penalty at any time by (a) a vote of a majority of the
Trustees who are not "interested persons" (as defined in the 1940 Act) of the
Trust and who have no direct or indirect financial interest in the operation of
this Plan or in any agreements entered into in connection with this Plan, or (b)
a vote of a majority of the outstanding Market Class Shares of such Fund.
Section 10. Selection/Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust shall be committed to the
discretion of such non-interested Trustees.
Section 11. Limitation of Liability. The names "Nations Reserves" and
"Trustees of Nations Reserves" refer respectively to the trust created and the
Trustees, as Trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated January 22, 1990, which is hereby
referred to and a copy of which is on file at the office of the State Secretary
of The Commonwealth of Massachusetts and at the principal office of the Trust.
The obligations of "Nations Reserves" entered into in the name or on behalf
thereof by any of the Trustees, officers, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders, officers, representatives or agents of the Trust
personally, but bind only the Trust property, and all persons dealing with a
Fund's Market Class Shares of the Trust must look solely to the Trust property
belonging to such Fund's Market Class Shares for the enforcement of any claims
against the Trust.
Section 12. Records. The Trust will preserve copies of this Plan, and any
Agreements and written reports regarding this Plan presented to the Board of
Trustees for a period of not less than six years.
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<PAGE>
Section 13. Miscellaneous. The captions in this Plan are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
4
<PAGE>
EXHIBIT A
NATIONS RESERVES
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Amended: February 24, 1999
5
NATIONS RESERVES
DISTRIBUTION PLAN
SERVICE CLASS SHARES
This Service Class Distribution Plan (this "Plan") has been adopted by the
Board of Trustees of Nations Reserves ("Reserves") in conformance with Rule
12b-1 under the Investment Company Act of 1940 (the "1940 Act").
Section 1. Payments for Distribution-Related Services. Reserves may pay
its Distributor for certain expenses that are incurred in connection with the
support and distribution of Service Shares of Reserves' Funds (collectively, the
"Shares"), as defined in Exhibit A (collectively the "Funds"). Payments by
Reserves under the Plan will be calculated daily and paid monthly at a rate or
rates set from time to time by Reserves' Board of Trustees, provided that no
rate set by the Board for any Fund may exceed the annual rate of 0.75% of the
average daily net asset value of the Service Shares of the Funds (as defined in
Exhibit A). For purposes of determining the payments payable under this Plan,
the net asset value of the outstanding Shares of the respective Funds shall be
computed in the manner specified in Reserves' then current prospectuses and
statement of additional information as amended or supplemented from time to time
for such Shares.
Section 2. Expenses Covered by Plan. Payments to the Distributor under
Section 1 of this Plan will be used by the Distributor (i) to compensate banks,
broker/dealers or other financial institutions that have entered into Sales
Support Agreements with the Distributor ("Selling Agents") for providing
distribution assistance relating to Shares, (ii) for promotional activities
intended to result in the sale of Shares such as by paying for the preparation,
printing and distribution of prospectuses for other than current Shareholders,
and (iii) to compensate Selling Agents for providing distribution services with
regard to their Customers who are, from time to time, beneficial, and record
owners of Shares.
Section 3. Distribution and Sales Support Agreements. Any officer of
Reserves is authorized to execute and deliver, in the name and on behalf of
Reserves, a written agreement with the Distributor in a form duly approved from
time to time by Reserves' Board of Trustees. Such agreement shall authorize the
Distributor to enter into written Sales Support Agreements, in substantially the
form attached hereto as Exhibit B ("Agreements"), with Selling Agents.
As used herein, promotional activities include, but are not limited to,
advertising via radio, television, newspapers, magazines and otherwise;
preparing, printing and mailing sales materials, brochures and prospectuses
(except for prospectuses used for regulatory purposes or for distribution to
existing shareholders).
Section 4. Limitations on Payments. Payment made by a particular Fund
under Section 1 must be for distribution or sales support services rendered for
or on behalf of such Fund. However, joint distribution or sales support
financing with respect to the Funds (which financing may also involve other
investment portfolios or companies that are affiliated persons of such a person,
or affiliated persons of the Distributor) shall be permitted in accordance with
applicable regulations of the Securities and Exchange Commission ("SEC") as in
effect from time to time.
<PAGE>
Upon proper authorization by Reserves' Trustees in accordance with Rule
12b-1 under the Act, expenses covered by this Plan may also include other
expenses the Distributor (or any other person) may incur in connection with the
distribution of Reserves' Shares including, without limitation, expenditures for
telephone facilities and in-house telemarketing, or in connection with
shareholder servicing. Distribution service fees will not be used to pay any
interest expenses, carrying charges or other financing costs (except to the
extent permitted by the SEC). Distribution service fees will not be used to pay
any general or administrative expenses of the Distributor.
Except for the payments specified in Section 1, no additional payments are
to be made by Reserves under this Plan, provided that nothing herein shall be
deemed to preclude the payments such Funds are otherwise obligated to make to
(i) NationsBanc Advisors, Inc. ("NBAI"), pursuant to the Investment Advisory
Agreement (ii) The Bank of New York ("BNY"), pursuant to the Custody Agreement,
(iii) First Data Investor Services Group, Inc. ("First Data"), pursuant to the
Transfer Agency and Registrar Agreement, (iv) Stephens Inc. ("Stephens"),
pursuant to the Co-Administration Agreement, (v) NBAI, pursuant to the
Co-Administration Agreement, (vi) Servicing Agents, pursuant to Shareholder
Servicing Agreements and (vii) for the expenses otherwise incurred by a Fund and
Reserves on behalf of the Shares in the normal conduct of such Fund's business
pursuant to the Investment Advisory Agreement, the Custody Agreement, the
Transfer Agency and Registrar Agreement, the Co-Administration Agreement and the
Shareholder Servicing Agreements. To the extent any such payments by Reserves on
behalf of a Fund to NBAI, BNY, First Data, Stephens or Servicing Agents; by
NBAI, BNY, First Data, Stephens or Servicing Agents, or any affiliate thereof,
to any party pursuant to any agreement; or, generally, by Reserves on behalf of
a Fund to any party, are deemed to be payments for the financing of any activity
primarily intended to result in the sale of the Shares within the context of
Rule 12b-1 under the 1940 Act, then such payments shall be deemed to have been
approved pursuant to this Plan without regard to Section 1.
With respect to Shares, actual distribution expenses incurred by the
Distributor (or sales support expenses incurred by the Selling Agents) in a
given year may exceed the sum of the fees received by the Distributor pursuant
to this Plan and payments received by the Distributor pursuant to contingent
deferred sales charges. Any such excess may be recovered by the Distributor, and
retained by it or paid over to the Selling Agents, as applicable, in future
years as long as this Plan is in effect. If this Plan is terminated or not
continued, Reserves shall not be obligated to pay the Distributor (or Selling
Agents) for any expenses not previously reimbursed by Reserves or recovered
through contingent deferred sales charges.
Notwithstanding anything herein to the contrary, no Fund shall be
obligated to make any payments under this Plan that exceed the maximum amounts
payable under Rule 2830 of the National Association of Securities Dealers, Inc.
Conduct Rules.
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<PAGE>
Section 5. Reports of Distributor. So long as this Plan is in effect, the
Distributor shall provide to Reserves' Officers and Board of Trustees, and
Trustees shall review, at least quarterly, a written report of the amounts
expended by it pursuant to the Distribution Agreement, or by Selling Agents
pursuant to Sales Support Agreements, and the purposes for which such
expenditures were made.
Section 6. Approval of Plan. The Plan will become effective immediately,
as to any Fund's Shares, upon its approval by (a) a majority of the outstanding
Shares of such Fund, and (b) a majority of the Board of Trustees, including a
majority of Trustees who are not "interested persons" (as defined in the 1940
Act) of Reserves and who have no direct or indirect financial interest in the
operation of this Plan or in any agreements entered into in connection with this
Plan, pursuant to a vote cast in person at a meeting called for the purpose of
voting on the approval of this Plan.
Section 7. Continuance of Plan. The Plan shall continue in effect for so
long as its continuance is specifically approved at least annually by Reserves'
Board of Trustees in the manner described in Section 6.
Section 8. Amendments. The Plan may be amended at any time by the Board of
Trustees provided that (a) any amendment to increase materially the costs which
a Fund's Shares may bear for distribution pursuant to this Plan shall be
effective only upon approval by a vote of a majority of the outstanding Shares
of such Fund, and (b) any material amendments of the terms of this Plan shall
become effective only upon approval as provided in Section 6 hereof.
Section 9. Termination. The Plan is terminable, as to a Fund's Shares,
without penalty at any time by (a) a vote of a majority of Trustees who are not
"interested persons" (as defined in the 1940 Act) of Reserves and who have no
direct or indirect financial interest in the operation of this Plan or in any
agreements entered into in connection with this Plan, or (b) a vote of a
majority of the outstanding Shares of such Fund.
Section 10. Selection/Nomination of Trustees. While this Plan is in
effect, the selection and nomination of those Trustees who are not "interested
persons" (as defined in the 1940 Act) of Reserves shall be committed to the
discretion of such non-interested Trustees.
Section 11. Limitation of Liability. The names "Nations Reserves" and
"Trustees of Nations Reserves" refer respectively to the trust created and
Trustees, as Trustees but not individually or personally, acting from time to
time under an Agreement and Declaration of Trust dated May 6, 1985, which is
hereby referred to and a copy of which is on file at the office of the State
Secretary of The Commonwealth of Massachusetts and at the principal office of
Reserves. The obligations of "Nations Reserves" entered into in the name or on
behalf thereof by any of Trustees, officers, representatives or agents are made
not individually, but in such capacities, and are not binding upon any of
Trustees, Shareholders, officers, representatives or agents of Reserves
personally, but bind only Reserves Property (as defined in the Agreement and
Declaration of Trust), and all persons dealing with a Fund's Shares of Reserves
must look solely to Reserves property belonging to such Fund's Shares for the
enforcement of any claims against Reserves.
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<PAGE>
Section 12. Records. Reserves will preserve copies of this Plan,
Agreements, and any written reports regarding this Plan presented to the Board
of Trustees for a period of not less than six years.
Section 13. Miscellaneous. The captions in this Plan are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
4
<PAGE>
EXHIBIT A
NATIONS RESERVES
Nations Government Reserves
Nations Municipal Reserves
Nations Cash Reserves
Nations Treasury Reserves
Nations Money Market Reserves
Nations California Tax Exempt Reserves
Dated: December 2, 1998
Last Amended: February 24, 1999
NATIONS RESERVES
RULE 18f-3 MULTI-CLASS PLAN
I. Introduction.
Pursuant to Rule 18f-3 under the Investment Company Act of 1940, as
amended (the "1940 Act"), the following sets forth the method for allocating
fees and expenses among each class of shares in the investment portfolios of The
Capitol Mutual Funds, doing business as Nations Reserves ("Reserves"). In
addition, this Rule 18f-3 Multi-Class Plan (the "Plan") sets forth the maximum
initial sales loads, contingent deferred sales charges, Rule 12b-1 distribution
fees, shareholder servicing fees, conversion features, exchange privileges and
other shareholder services, if any, applicable to a particular class of shares
of the portfolios. The Plan also identifies expenses that may be allocated to a
particular class of shares to the extent that they are actually incurred in a
different amount by the class or relate to a different kind or degree of
services provided to the class.
Reserves is an open-end series investment company registered under the
1940 Act, the shares of which are registered on Form N-1A under the Securities
Act of 1933 (Registration Nos. 33-33144 and 811-6030). Reserves elects to offer
multiple classes of shares in its investment portfolios pursuant to the
provisions of Rule 18f-3 and this Plan.
Reserves currently consists of the following sixteen separate
investment portfolios: Nations Cash Reserves, Nations Treasury Reserves, Nations
Government Reserves, Nations Municipal Reserves, Nations Money Market Reserves,
Nations California Tax-Exempt Reserves (the "Money Market Funds"), Nations Asset
Allocation Fund, Nations Capital Income Fund, Nations California Municipal Bond
Fund, Nations Intermediate Bond Fund, Nations Blue Chip Fund, Nations Marsico
Focused Equities Fund, Nations Marsico Growth & Income Fund, Nations
International Equity Fund, Nations International Value Fund and Nations Emerging
Markets Fund (the "Non-Money Market Funds").
The above-listed investment portfolios of Reserves (the "Funds") are
authorized to issue the following classes of shares representing interests in
the Funds:
(i) Nations Cash Reserves, Nations Treasury Reserves, Nations
Government Reserves, Nations Municipal Reserves, Nations
Money Market Reserves, Nations California Tax-Exempt
Reserves -- Capital Class Shares, Liquidity Class Shares,
Adviser Class Shares, Market Class Shares, Trust Class
Shares, Investor Class Shares, Daily Class Shares, Service
Class Shares, Investor B Shares and Investor C Shares.
(ii) Nations Cash Reserves -- Capital Class Shares, Liquidity
Class Shares, Adviser Class Shares, Market Class Shares,
Trust Class Shares, Investor Class Shares, Daily Class
Shares, Service Class Shares, Investor B Shares, Investor
C Shares and Marsico Shares.
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(iii) Nations Asset Allocation Fund and Nations Blue Chip Fund
-- Primary A Shares, Primary B Shares, Investor A Shares,
Investor B Shares, Investor C Shares and Seafirst Shares.
(iv) Nations Intermediate Bond Fund -- Primary A Shares,
Investor A Shares, Investor B Shares, Investor C Shares
and Seafirst Shares.
(v) Nations Marsico Focused Equities Fund, Nations Marsico
Growth & Income Fund, Nations International Equity Fund,
Nations International Value Fund and Nations Emerging
Markets Fund -- Primary A Shares, Primary B Shares,
Investor A Shares, Investor B Shares and Investor C
Shares.
(vi) Nations Capital Income Fund and Nations California
Municipal Bond Fund -- Primary A Shares, Investor A
Shares, Investor B Shares and Investor C Shares.
II. Allocation of Expenses.
A. Pursuant to Rule 18f-3 under the 1940 Act, Reserves shall allocate to
each class of shares in a Fund (i) any fees and expenses incurred by Reserves in
connection with the distribution of such class of shares under a distribution
plan adopted for such class of shares pursuant to Rule 12b-1, and (ii) any fees
and expenses incurred by Reserves under a shareholder servicing plan in
connection with the provision of shareholder services to the holders of such
class of shares.
B. In addition, pursuant to Rule 18f-3, Reserves may allocate the
following fees and expenses, if any, to a particular class of shares in a single
Fund:
(i) transfer agent fees identified by the transfer agent as
being attributable to such class of shares;
(ii) printing and postage expenses related to preparing and
distributing materials such as shareholder reports,
prospectuses, reports, and proxies to current shareholders
of such class of shares or to regulatory agencies with
respect to such class of shares;
(iii) blue sky registration or qualification fees incurred by
such class of shares;
(iv) Securities and Exchange Commission registration fees
incurred by such class of shares;
(v) the expense of administrative personnel and services
(including, but not limited to, those of a portfolio
accountant, custodian or dividend paying agent charged
with calculating net asset values or determining or paying
dividends) as required to support the shareholders of such
class of shares;
(vi) litigation or other legal expenses relating solely to such
class of shares;
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(vii) fees of the Trustees of Reserves incurred as result of
issues relating to such class of shares;
(viii) independent accountants' fees relating solely to such
class of shares; and
(ix) any other fees and expenses, not including advisory or
custodial fees or other expenses related to the management
of the Fund's assets, relating to (as defined below) such
class of shares.
C. For all purposes under this Plan, fees and expenses "relating to" a
class of shares are those fees and expenses that are actually incurred in a
different amount by the class or that relate to a different kind or degree of
services provided to the class. The proper officers of Reserves shall have the
authority to determine whether any or all of the fees and expenses described in
Section B of this Part II should be allocated to a particular class of shares.
The Board of Trustees will monitor such allocation to ensure that they comply
with the requirements of the Plan.
D. Income, realized and unrealized capital gains and losses, and any
expenses of a Fund not allocated to a particular class of any such Fund pursuant
to this Plan shall be allocated to each class of the Fund on the basis of the
relative net assets (settled shares), as defined in Rule 18f-3, of that class in
relation to the net assets of the Fund.
E. In certain cases, Banc of America Advisors, Inc., Banc of America
Capital Management, Inc., Chicago Equity Partners Corporation, Gartmore Global
Partners, Bank of America, N.A., Stephens Inc., PFPC Inc., or another service
provider for a Fund may waive or reimburse all or a portion of the expenses of a
specific class of shares of the Fund. The Board of Trustees will monitor any
such waivers or reimbursements to ensure that they do not provide a means for
cross-subsidization between classes.
III. Class Arrangements.
The following summarizes the maximum front-end sales charges, contingent
deferred sales charges, Rule 12b-1 distribution fees, shareholder servicing
fees, conversion features, exchange privileges and other shareholder services,
if any, applicable to each class of shares of Reserves. Additional details
regarding such fees and services are set forth in the relevant Fund's (or
Funds') current Prospectus(es) and Statement of Additional Information.
A. Capital Class Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: None
4. Maximum Shareholder Servicing Fees: None
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5. Conversion Features/Exchange Privileges: Capital Class
Shares of a Money Market Fund shall have such conversion
features and exchange privileges, if any, as are
determined by or ratified by the Board of Trustees of
Reserves and described in the then-current prospectus for
such shares of such Money Market Fund.
6. Other Shareholder Services: None
B. Liquidity Class Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Liquidity
Class Shares of each Money Market Fund may reimburse
Stephens for certain expenses incurred by Stephens in
connection with the distribution of Liquidity Class
Shares. Such reimbursement payments may not exceed 0.30%,
on an annual basis, of the average daily net assets of
such shares. In addition, the Distribution Plan permits
the Liquidity Class Shares of Nations Cash Reserves,
Nations Government Reserves, Nations Municipal Reserves,
Nations California Tax-Exempt Reserves and Nations Money
Market Reserves to pay Stephens up to 0.30% and Nations
Treasury Reserves to pay Stephens up to 0.35%, on an
annual basis, of the average daily net assets of such
shares which Stephens can use to compensate financial
institutions that provide administrative and/or
distribution services to the holders of Liquidity Class
Shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Liquidity Class Shares of each
Money Market Fund may pay shareholder servicing fees of up
to 0.25% of the average daily net assets of such shares.
5. Conversion Features/Exchange Privileges: Liquidity Class
Shares of a Money Market Fund shall have such conversion
features and exchange privileges, if any, as are
determined by or ratified by the Board of Trustees of
Reserves and described in the then-current prospectus for
such shares of such Money Market Fund.
6. Other Shareholder Services: None
C. Adviser Class Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
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3. Maximum Rule 12b-1 Distribution/Shareholder Servicing
Fees: Pursuant to a Shareholder Servicing Plan, Adviser
Class Shares of each Money Market Fund may pay shareholder
servicing fees of up to 0.25%, on an annual basis, of the
average daily net assets of such shares. The Adviser Class
Shareholder Servicing Plan provides that, to the extent
any portion of the fees payable under the Plan is deemed
to be primarily for distribution-related services, such
fees are deemed approved pursuant to the Shareholder
Servicing Plan and Rule 12b-1.
4. Conversion Features/Exchange Privileges: Adviser Class
Shares of a Money Market Fund shall have such conversion
features and exchange privileges, if any, as are
determined by or ratified by the Board of Trustees of
Reserves and described in the then-current prospectus for
such shares of such Money Market Fund.
5. Other Shareholder Services. None
D. Market Class Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Market Class
Shares of each Money Market Fund may pay distribution fees
of up to 0.20% of the average daily net assets of such
shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Market Class Shares of each
Money Market Fund may pay shareholder servicing fees of up
to 0.25% of the average daily net assets of such shares.
5. Conversion Features/Exchange Privileges: Market Class
Shares of a Money Market Fund shall have such conversion
features and exchange privileges, if any, as are
determined by or ratified by the Board of Trustees of
Reserves and described in the then-current prospectus for
such shares of such Money Market Fund.
6. Other Shareholder Services: None
E. Trust Class Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
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<PAGE>
3. Maximum Rule 12b-1 Distribution Fees: None
4. Maximum Shareholder Administration Fees: Pursuant to a
Shareholder Servicing Plan, Trust Class Shares of each
Money Market Fund may pay shareholder servicing fees of up
to 0.10% of the average daily net assets of such shares.
5. Conversion Features/Exchange Privileges: Trust Class
Shares of a Fund shall have such conversion features and
exchange privileges, if any, as are determined by or
ratified by the Board of Trustees of Reserves and
described in the then-current prospectus for such shares
of such Money Market Fund.
6. Other Shareholder Services: None
F. Investor Class Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Investor Class
Shares of each Money Market Fund may pay distribution fees
of up to 0.10% of the average daily net assets of such
shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Investor Class Shares of each
Money Market Fund may pay shareholder servicing fees of up
to 0.25% of the average daily net assets of such shares.
5. Conversion Features/Exchange Privileges: Investor Class
Shares of a Money Market Fund shall have such conversion
features and exchange privileges, if any, as are
determined by or ratified by the Board of Trustees of
Reserves and described in the then-current prospectus for
such shares of such Money Market Fund.
6. Other Shareholder Services: Reserves offers a Systematic
Investment Plan and an Automatic Withdrawal Plan to
holders of Investor Class Shares of the Funds. In
addition, Reserves offers checkwriting privileges to
holder of Investor Class Shares of the Money Market Funds.
G. Daily Class Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
6
<PAGE>
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Daily Class
Shares of each Money Market Fund may pay distribution fees
of up to 0.35% of the average daily net assets of such
shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Daily Class Shares of each
Money Market Fund may pay shareholder servicing fees of up
to 0.25% of the average daily net assets of such shares.
5. Conversion Features/Exchange Privileges: Daily Class
Shares of a Money Market Fund shall have such conversion
features and exchange privileges, if any, as are
determined by or ratified by the Board of Trustees of
Reserves and described in the then-current prospectus for
such shares of such Money Market Fund.
6. Other Shareholder Services: Reserves offers a Systematic
Investment Plan and an Automatic Withdrawal Plan to
holders of Daily Class Shares of the Funds. In addition,
Reserves offers checkwriting privileges to holder of Daily
Class Shares of the Money Market Funds.
H. Service Class Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Service Class
Shares of each Money Market Fund may pay distribution fees
of up to 0.75% of the average daily net assets of such
shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Service Class Shares of each
Money Market Fund may pay shareholder servicing fees of up
to 0.25% of the average daily net assets of such shares.
5. Conversion Features/Exchange Privileges: Service Class
Shares of a Money Market Fund shall have such conversion
features and exchange privileges, if any, as are
determined by or ratified by the Board of Trustees of
Reserves and described in the then-current prospectus for
such shares of such Money Market Fund.
6. Other Shareholder Services: Reserves offers a Systematic
Investment Plan and an Automatic Withdrawal Plan to
holders of Service Class Shares of the Funds. In addition,
Reserves offers checkwriting privileges to holder of
Service Class Shares of the Money Market Funds.
7
<PAGE>
I. Marsico Shares -- Nations Cash Reserves Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: None
4. Maximum Shareholder Servicing/Administration Fees:
Pursuant to a Shareholder Administration Plan, Marsico
Shares may pay shareholder administration fees of up to
0.10% of the average daily net assets of such shares.
Pursuant to a Shareholder Servicing Plan, Marsico Shares
of Nations Cash Reserves may pay shareholder servicing
fees of up to 0.25% of the average daily net assets of
such shares.
5. Conversion Features: Marsico Shares of the Fund shall have
such conversion features, if any, as are determined by or
ratified by the Board of Trustees of Reserves and
described in the then-current prospectus for such shares
of the Fund.
6. Exchange Privileges:
(a) Marsico Shares of the Fund may be acquired through
an exchange of shares from a fund, other than
Funds of Nations Fund, managed by Marsico Capital
Management, LLC.
(b) From time to time, the Board of Trustees of
Reserves may modify, or ratify modifications to,
the exchange privileges of Marsico Shares of the
Fund without amending this Plan, provided that
such exchange privileges, as modified, are
described in the then-current prospectus for such
shares of such Fund.
7. Other Shareholder Services: The Company offers a
Systematic Investment Plan and Automatic Withdrawal Plan
to holders of Marsico Shares of the Fund.
J. Primary A Shares -- Non-Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: None
4. Maximum Shareholder Servicing Fees: None
5. Conversion Features: None
8
<PAGE>
6. Exchange Privileges:
(a) Primary A Shares of a Fund may be exchanged for
Primary A Shares of any other Nations Fund. In
some cases, the only Money Market Fund option is
Trust Class Shares of Reserves Money Market Funds.
(b) From time to time, the Board of Trustees of
Reserves may modify, or ratify modifications to,
the exchange privileges of Primary A Shares of a
Fund without amending this Plan, provided that
such exchange privileges, as modified, are
described in the then-current prospectus for such
shares of such Fund.
7. Other Shareholder Services: None
K. Primary B Shares -- Non-Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: None
4. Maximum Shareholder Servicing/Administration Fees:
Pursuant to a Shareholder Administration Plan, Primary B
Shares of Nations Asset Allocation Fund, Nations Blue Chip
Fund, Nations Marsico Focused Equities Fund, Nations
Marsico Growth & Income Fund, Nations International Equity
Fund, Nations International Value Fund and Nations
Emerging Markets Fund each may pay shareholder
administration fees of up to 0.60% of the average daily
net assets of such shares, provided that in no event may
the portion of such fee that constitutes a "service fee,"
as that term is defined in Rule 2830 of the Conduct Rules
of the National Association of Securities Dealers, Inc.,
exceed 0.25% of the average daily net asset value of such
Primary B Shares of a Fund.
5. Conversion Features: Primary B Shares of a Fund shall have
such conversion features, if any, as are determined by or
ratified by the Board of Trustees of Reserves and
described in the then-current prospectus for such shares
of such Fund.
6. Exchange Privileges:
(a) Primary B Shares of a Fund may be exchanged for
Primary B Shares of any other Nations Fund.
(b) From time to time, the Board of Trustees of
Reserves may modify, or ratify modifications to,
the exchange privileges of Primary B Shares of a
9
<PAGE>
Fund without amending this Plan, provided that
such exchange privileges, as modified, are
described in the then-current prospectus for such
shares of such Fund.
7. Other Shareholder Services: None
L. Investor A Shares -- Non-Money Market Funds Only.
1. Maximum Initial Sales Load:
(a) Nations Blue Chip Fund, Nations Capital Income
Fund, Nations Emerging Growth Fund, Nations
Disciplined Equity Fund, Nations Asset Allocation
Fund, Nations Balanced Assets Fund, Nations
Marsico Focused Equities Fund, Nations Marsico
Growth & Income Fund: maximum of 5.75%.
(b) Nations California Municipal Bond Fund: maximum of
4.75%.
(c) Nations Intermediate Bond Fund: maximum of 3.25%.
2. Contingent Deferred Sales Charge (as a percentage of the
lower of the original purchase price or redemption
proceeds):
(a) 1.00% of purchases made before August 1, 1999 in
amounts over $1 million if redeemed within one
year of purchase, declining to 0.50% in the second
year after purchase and eliminated thereafter.
(b) 1.00% of purchases made on or after August 1, 1999
in amounts over $1 million if redeemed within 18
months of purchase and eliminated thereafter.
3. Redemption Fee:
(a) 1.00% of the current net asset value of shares
purchased in amounts of $1 million or more between
July 31, 1997 and November 15, 1998, and redeemed
within 18 months of purchase.
(b) 1.00% of the current net asset value of shares
purchased by an employee benefit plan that
initially invested in Investor A Shares between
July 31, 1997 and November 15, 1998, and redeemed
within 18 months of purchase in connection with
redemption of all Nations Funds holdings of the
employee benefit plan.
4. Maximum Rule 12b-1 Distribution/Shareholder Servicing
Fees: Pursuant to a Shareholder Servicing and Distribution
Plan adopted under Rule 12b-1, Investor A Shares of each
Non-Money Market Fund may pay a combined distribution and
shareholder servicing fee of up to 0.25% of the average
daily net assets of such shares.
10
<PAGE>
5. Conversion Features: Investor A Shares of a Fund shall
have such conversion features, if any, as are determined
by or ratified by the Board of Trustees of Reserves and
described in the then-current prospectus for such shares
of such Fund.
6. Exchange Privileges:
(a) Investor A Shares of the Non-Money Market Funds
may be exchanged for Investor A Shares of any
other Nations Fund, except Index Funds.
(b) From time to time, the Board of Trustees of
Reserves may modify, or ratify modifications to,
the exchange privileges of Investor A Shares of a
Fund without amending this Plan, provided that
such exchange privileges, as modified, are
described in the then-current prospectus for such
shares of such Fund.
7. Other Shareholder Services. Reserves offers a Systematic
Investment Plan, an Automatic Withdrawal Plan and an
Automatic Exchange Feature to holders of Investor A Shares
of the Money Market Funds.
M. Investor B Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge (as a percentage of the
lower of the original purchase price or redemption
proceeds): 5.00% if redeemed within one year of purchase,
declining to 1.00% in the sixth year after purchase and
eliminated thereafter.
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Investor B
Shares of each Money Market Fund may pay distribution fees
of up to 0.75% of the average daily net assets of such
shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Investor B Shares of each
Money Market Fund may pay shareholder servicing fees of up
to 0.25% of the average daily net assets of such shares.
5. Conversion Features: Investor B Shares of a Fund shall
have such conversion features, if any, as are determined
by or ratified by the Board of Trustees of Reserves and
described in the then-current prospectus for such shares
of such Fund.
11
<PAGE>
6. Exchange Privileges:
(a) Investor B Shares of a Money Market Fund may be
exchanged for Investor B Shares of any other
Nations Fund, except Nations Funds Money Market
Funds.
(b) Investor B Shares of a Money Market Fund may be
exchanged for Investor B Shares of any Reserves
Money Market Funds.
(c) From time to time, the Board of Trustees of
Reserves may modify, or ratify modifications to,
the exchange privileges of Investor B Shares of a
Fund without amending this Plan, provided that
such exchange privileges, as modified, are
described in the then-current prospectus for such
shares of such Fund.
7. Other Shareholder Services: Reserves offers a Systematic
Investment Plan, an Automatic Withdrawal Plan and an
Automated Dollar Cost Averaging Feature to holders of
Investor B Shares of the Money Market Funds.
N. Investor B Shares -- Non-Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge (as a percentage of the
lower of the original purchase price or redemption
proceeds):
(a) Nations Blue Chip Fund, Nations Capital Income
Fund, Nations California Municipal Bond Fund,
Nations Marsico Growth and Income Fund, Nations
Marsico Focused Equities Fund, Nations
International Equity Fund, Nations International
Value Fund, Nations Emerging Markets Fund and
Nations Asset Allocation Fund: 5.00% if redeemed
within one year of purchase, declining to 1.00% in
the sixth year after purchase and eliminated
thereafter.
(b) Nations Intermediate Bond Fund: 3.00% if redeemed
within one year of purchase, declining to 1.00% in
the fourth year after purchase and eliminated
thereafter.
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Investor B
Shares of each Non-Money Market Fund may pay distribution
fees of up to 0.75% of the average daily net assets of
such shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Investor B Shares of each
Non-Money Market Fund may pay shareholder servicing fees
of up to 0.25% of the average daily net assets of such
shares.
12
<PAGE>
5. Conversion Features: Investor B Shares of a Fund shall
have such conversion features, if any, as are determined
by or ratified by the Board of Trustees of Reserves and
described in the then-current prospectus for such shares
of such Fund.
6. Exchange Privileges:
(a) Investor B Shares of a Non-Money Market Fund may
be exchanged for Investor B Shares of any other
Nations Fund, except Money Market Funds.
(b) Investor B Shares of a Non-Money Market Fund may
be exchanged for Investor B Shares of any Reserves
Money Market Fund.
(c) From time to time, the Board of Trustees of
Reserves may modify, or ratify modifications to,
the exchange privileges of Investor B Shares of a
Fund without amending this Plan, provided that
such exchange privileges, as modified, are
described in the then-current prospectus for such
shares of such Fund.
7. Other Shareholder Services: Reserves offers a Systematic
Investment Plan, an Automatic Withdrawal Plan and an
Automatic Exchange Feature to holders of Investor B Shares
of the Non-Money Market Funds.
O. Investor C Shares -- Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge (as a percentage of the
lower of the original purchase price or redemption
proceeds): 1.00% if redeemed within one year of purchase
and eliminated thereafter.
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Investor C
Shares of each Money Market Fund may pay distribution fees
of up to 0.75% of the average daily net assets of such
shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Investor C Shares of each
Money Market Fund may pay shareholder servicing fees of up
to 0.25% of the average daily net assets of such shares.
13
<PAGE>
5. Conversion Features: Investor C Shares of a Fund shall
have such conversion features, if any, as are determined
by or ratified by the Board of Trustees of Reserves and
described in the then-current prospectus for such shares
of such Fund.
6. Exchange Privileges:
(a) Investor C Shares of a Money Market Fund may be
exchanged for Investor C Shares of any other
Nations Fund, except Nations Funds Money Market
Funds.
(b) Investor C Shares of a Money Market Fund may be
exchanged for Investor C Shares of any Reserves
Money Market Funds.
(c) From time to time, the Board of Trustees of
Reserves may modify, or ratify modifications to,
the exchange privileges of Investor C Shares of a
Fund without amending this Plan, provided that
such exchange privileges, as modified, are
described in the then-current prospectus for such
shares of such Fund.
7. Other Shareholder Services. Reserves offers a Systematic
Investment Plan, an Automatic Withdrawal Plan, an
Automatic Exchange Feature and an Automated Dollar cost
Averaging Feature to holders of Investor C Shares of the
Money Market Funds.
P. Investor C Shares -- Non-Money Market Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge (as a percentage of the
lower of the original purchase price or redemption
proceeds): 1.00% if redeemed within one year of purchase
and eliminated thereafter.
3. Maximum Rule 12b-1 Distribution Fees: Pursuant to a
Distribution Plan adopted under Rule 12b-1, Investor C
Shares of each Non-Money Market Fund may pay distribution
fees of up to 0.75% of the average daily net assets of
such shares.
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Investor C Shares of each
Non-Money Market Fund may pay shareholder servicing fees
of up to 0.25% of the average daily net assets of such
shares.
5. Conversion Features: Investor C Shares of a Fund shall
have such conversion features, if any, as are determined
by or ratified by the Board of Trustees of Reserves and
described in the then-current prospectus for such shares
of such Fund.
14
<PAGE>
6. Exchange Privileges:
(a) Investor C Shares of a Non-Money Market Fund may
be exchanged for Investor C Shares of any other
Nations Fund, except Money Market Funds.
(b) Investor C Shares of a Non-Money Market Fund may
be exchanged for Investor C Shares of any Reserves
Money Market Funds.
(c) Investor C Shares of a Non-Money Market Fund that
were originally obtained in an exchange of
Investor A Shares of a Managed Index Fund for
Investor C Shares of a Non-Money Market Fund may
be exchanged for Investor A Shares of any Index
Fund.
(d) From time to time, the Board of Trustees of
Reserves may modify, or ratify modifications to,
the exchange privileges of Investor C Shares of a
Fund without amending this Plan, provided that
such exchange privileges, as modified, are
described in the then-current prospectus for such
shares of such Fund.
7. Other Shareholder Services. Reserves offers a Systematic
Investment Plan, an Automatic Withdrawal Plan and an
Automatic Exchange Feature to holders of Investor C Shares
of the Non-Money Market Funds.
Q. Seafirst Class Shares -- Nations Asset Allocation, Nations Intermediate
Bond and Nations Blue Chip Funds Only.
1. Maximum Initial Sales Load: None
2. Contingent Deferred Sales Charge: None
3. Maximum Rule 12b-1 Distribution Fees: None
4. Maximum Shareholder Servicing Fees: Pursuant to a
Shareholder Servicing Plan, Seafirst Class Shares of each
Fund may pay shareholder servicing fees of up to 0.25% of
the average daily net assets of such shares.
5. Conversion Features: Seafirst Class Shares of a Fund will
convert to Investor A Shares of the same Fund on June 23,
2000.
6. Exchange Privileges: Seafirst Class Shares of a Fund may
be exchanged for Investor A Shares of any Nations Fund,
except Index Funds.
7. Other Shareholder Services. None
15
<PAGE>
IV. Board Review.
The Board of Trustees of Reserves shall review this Plan as frequently
as it deems necessary. Prior to any material amendment(s) to this Plan, the
Board of Trustees of Reserves, including a majority of the Trustees who are not
interested persons of Reserves, shall find that the Plan, as proposed to be
amended (including any proposed amendments to the method of allocating class
and/or fund expenses), is in the best interests of each class of shares of the
Fund individually, and the Fund as a whole. In considering whether to approve
any proposed amendment(s) to the Plan, the Trustees of Reserves shall request
and evaluate such information as they consider reasonably necessary to evaluate
the proposed amendment(s) to the Plan.
Adopted: April 12, 1995
Amended: August 19, 1999
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 Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Edmund L. Benson, III
----------------------
Edmund L. Benson, III
<PAGE>
POWER OF ATTORNEY
James Ermer, whose signature appears below, does hereby constitute
and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M. Kurucza, Marco
E. Adelfio and Steven G. Cravath, each individually, his true and lawful
attorneys and agents, with power of substitution or resubstitution, to do any
and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ James Ermer
-------------
James Ermer
<PAGE>
POWER OF ATTORNEY
William H. Grigg, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ William H. Grigg
-----------------
William H. Grigg
<PAGE>
POWER OF ATTORNEY
Thomas F. Keller, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Thomas F. Keller
----------------
Thomas F. Keller
<PAGE>
POWER OF ATTORNEY
Dr. Cornelius J. Pings, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., James E. Banks,
Jr., Robert M. Kurucza, Marco E. Adelfio and Steven G. Cravath, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, each individually, may
deem necessary or advisable or which may be required to enable Nations Fund
Trust, Nations Fund, Inc., Nations Reserves, Nations LifeGoal Funds, Inc.,
Nations Annuity Trust, Nations Master Investment Trust and Nations Funds Trust
(each a Company and collectively the "Companies"), to comply with the Investment
Company Act of 1940, as amended, and the Securities and Exchange Act of 1933, as
amended (together the "Acts"), and any other applicable federal securities laws,
or rules, regulations or requirements of the Securities and Exchange Commission
in respect thereof, in connection with the filing and effectiveness of each
Company's Registration Statement on Form N-1A pursuant to the Acts, and any and
all amendments thereto, and to determine the states in which appropriate filings
should be made and to take any and all necessary and appropriate actions to make
any and all such filings, and any and all amendments thereto, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a
director/trustee of the Companies, such Registration Statement and filings, any
and all exemptive applications under the Acts, and any and all amendments and
any other instruments or documents related thereto, and the undersigned does
hereby ratify and confirm all that said attorneys and agents, individually or
collectively, shall do or cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Dr. Cornelius J. Pings
-----------------------
Dr. Cornelius J. Pings
<PAGE>
POWER OF ATTORNEY
A. Max Walker, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ A. Max Walker
--------------
A. Max Walker
<PAGE>
POWER OF ATTORNEY
Charles B. Walker, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Charles B. Walker
-----------------
Charles B. Walker
<PAGE>
POWER OF ATTORNEY
Thomas S. Word, Jr., whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio, and Steven G. Cravath, each individually, his true
and lawful attorneys and agents, with power of substitution or resubstitution,
to do any and all acts and things and to execute any and all instruments which
said attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Thomas S. Word, Jr.
--------------------
Thomas S. Word, Jr.
<PAGE>
POWER OF ATTORNEY
Carl E. Mundy, Jr., whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Carl E. Mundy, Jr.
------------------
Carl E. Mundy, Jr.
<PAGE>
POWER OF ATTORNEY
James B. Sommers, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ James B. Sommers
------------------
James. B. Sommers
