SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
(X) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NAME OF REGISTRANT
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The Capitol Mutual Funds (a/k/a Nations Reserves)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) No fee required
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies: N/A
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2) Aggregate number of securities to which transaction applies: N/A
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction: N/A
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5) Total fee paid: N/A
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( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: N/A
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2) Form, Schedule, or Registration Statement No.: N/A
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3) Filing Party: N/A
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4) Date Filed: N/A
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NATIONS RESERVES
NATIONS ANNUITY TRUST
One Bank of America Plaza
101 South Tryon Street
Charlotte, N.C. 28255
TELEPHONE: 800-653-9427
June 9, 2000
Dear Shareholder:
On behalf of the Board of Trustees of Nations Reserves and Nations
Annuity Trust, we are pleased to invite you to special meetings of shareholders
of Nations International Equity Fund, Nations Emerging Markets Fund and Nations
International Growth Portfolio (each a "Fund" and together the "Funds") to be
jointly held at 10:00 a.m., Eastern time, on August 1, 2000, at One Bank of
America Plaza, 33rd Floor, Charlotte, North Carolina (the "Meetings").
At the Meetings, you will be asked to approve investment sub-advisory
agreements that relate to the investment sub-advisory arrangement that each of
the Funds has with Gartmore Global Partners ("Gartmore"). Gartmore has recently
experienced three changes in ownership. These changes relate only to the
corporate ownership of Gartmore's parent companies and have not resulted, and
are not expected to result, in any significant change to the Gartmore personnel
who manage the Funds or in the way that the Funds are managed. Nevertheless, the
federal securities laws require that shareholders of each Fund be given the
opportunity to approve new investment sub-advisory agreements in order to allow
Gartmore to continue to serve as investment sub-adviser to the Funds whenever
this type of change occurs.
Accordingly, we are soliciting your vote on three interim investment
sub-advisory agreements that have been put in place as a result of each of the
three changes. Each interim agreement is substantially similar to the investment
sub-advisory agreement previously approved by shareholders. Additionally, we are
soliciting your vote on a definitive investment sub-advisory agreement that will
serve as the agreement governing the sub-advisory relationship with Gartmore on
a going-forward basis. Although some of the terms of this agreement differ from
those contained in the agreement previously approved by shareholders, the
aggregate fees payable by each Fund for advisory services remains unchanged.
Shareholders of Nations (Annuity Trust) International Growth Portfolio
will also be asked to authorize such Fund to convert to a feeder fund in a
master/feeder structure.
All of the costs associated with this proxy solicitation are being
borne by Banc of America Advisors, Inc., Gartmore and/or their affiliates. The
Funds will not bear any of these expenses.
THE BOARDS OF TRUSTEES OF NATIONS RESERVES AND NATIONS ANNUITY TRUST
UNANIMOUSLY RECOMMEND THAT YOU VOTE TO APPROVE EACH INVESTMENT SUB-ADVISORY
AGREEMENT. THE BOARD OF NATIONS ANNUITY TRUST UNANIMOUSLY RECOMMENDS THAT YOU
VOTE TO AUTHORIZE NATIONS (ANNUITY TRUST) INTERNATIONAL GROWTH PORTFOLIO TO
CONVERT TO A FEEDER FUND IN A MASTER/FEEDER STRUCTURE.
The formal Notice of Special Meeting, Proxy Statement and Proxy Ballot
are enclosed. The proposed items and the reasons for the unanimous
recommendations of the Boards of Trustees are discussed in detail in the
enclosed materials, which you should read carefully. If you have any questions
about the proposals, please do not hesitate to contact us at the toll-free
number set forth above.
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We look forward to your attendance at the Meetings or to receiving your
Proxy Ballot(s) so that your shares may be voted at the Meetings.
Sincerely,
A. Max Walker
President and Chairman of the Board of Trustees of
Nations Reserves and Nations Annuity Trust
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT
YOU OWN. PLEASE VOTE BY SUBMITTING YOUR PROXY BALLOT(S) TODAY, EITHER IN THE
ENCLOSED POSTAGE-PAID ENVELOPE OR BY FAX AT (704) 388-2641. YOU MAY ALSO SUBMIT
YOUR PROXY BY A TOLL-FREE PHONE CALL OR BY VOTING ON-LINE, AS INDICATED BELOW.
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TWO QUICK AND EASY WAYS TO SUBMIT YOUR PROXY
As a valued Fund shareholder, your proxy vote is important to us. That's why
we've made it faster and easier to submit your proxy at YOUR convenience, 24
hours a day. After reviewing the enclosed PROXY STATEMENT select one of the
following quick and easy methods to submit your proxy - ACCURATELY and QUICKLY.
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<CAPTION>
VOTE ON-LINE VOTE BY TOLL-FREE PHONE CALL
<S> <C>
1. Read the enclosed PROXY STATEMENT and have 1. Read the enclosed PROXY STATEMENT and have your
your PROXY BALLOT(S)* at hand. PROXY BALLOT(S)* at hand.
2. Go to Web site WWW.PROXYVOTE.COM 2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number found on 3. Enter the 12-digit Control Number found on your
your PROXY BALLOT(S). PROXY BALLOT(S).
4. Submit your proxy using the easy-to-follow 4. Submit your proxy using the easy-to-follow
instructions. instructions.
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* DO NOT MAIL THE PROXY BALLOT(S) IF SUBMITTING YOUR PROXY BY INTERNET, FAX OR
TELEPHONE.
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NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
TO BE HELD ON AUGUST 1, 2000
NATIONS RESERVES and NATIONS ANNUITY TRUST
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
1-800-653-9427
TO NATIONS INTERNATIONAL EQUITY FUND SHAREHOLDERS:
PLEASE TAKE NOTE THAT a special meeting of shareholders of Nations
International Equity Fund of Nations Reserves will be held at 10:00 a.m.,
Eastern time, on August 1, 2000, at One Bank of America Plaza, 33rd Floor,
Charlotte, North Carolina, for the purpose of considering and voting upon:
ITEM 1. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
March 6, 2000 and ending on May 15, 2000.
ITEM 2. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on May
15, 2000 and ending on June [ ], 2000.
ITEM 3. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
June [ ], 2000 and ending on the date shareholders approve a definitive
agreement (or, if a definitive agreement is not approved, on June [ ],
2001).
ITEM 4. Approval of a definitive investment sub-advisory agreement with
Gartmore Global Partners.
ITEM 5. Such other business as may properly come before the Meetings or
any adjournment(s).
TO NATIONS EMERGING MARKETS FUND SHAREHOLDERS:
PLEASE TAKE NOTE THAT a special meeting of shareholders of Nations
Emerging Markets Fund of Nations Reserves will be held at 10:00 a.m., Eastern
time, on August 1, 2000, at One Bank of America Plaza, 33rd Floor, Charlotte,
North Carolina, for the purpose of considering and voting upon:
ITEM 1. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
March 6, 2000 and ending on May 15, 2000.
ITEM 2. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on May
15, 2000 and ending on June [ ], 2000.
ITEM 3. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
June [ ], 2000 and ending on the date shareholders approve a definitive
agreement (or, if a definitive agreement is not approved, on June [ ],
2001).
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ITEM 4. Approval of a definitive investment sub-advisory agreement with
Gartmore Global Partners.
ITEM 5. Such other business as may properly come before the Meetings or
any adjournment(s).
TO NATIONS (ANNUITY TRUST) INTERNATIONAL GROWTH PORTFOLIO SHAREHOLDERS:
PLEASE TAKE NOTE THAT a special meeting of shareholders of Nations
International Growth Portfolio of Nations Annuity Trust will be held at 10:00
a.m., Eastern time, on August 1, 2000, at One Bank of America Plaza, 33rd Floor,
Charlotte, North Carolina, for the purpose of considering and voting upon:
ITEM 1. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
March 6, 2000 and ending on May 15, 2000.
ITEM 2. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on May
15, 2000 and ending on June [ ], 2000.
ITEM 3. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
June [ ], 2000 and ending on the date shareholders approve a definitive
agreement (or, if a definitive agreement is not approved, on June [ ],
2001).
ITEM 4. Approval of a definitive investment sub-advisory agreement with
Gartmore Global Partners.
ITEM 5. Authorization for Nations International Growth Portfolio to
convert to a feeder fund in a master/feeder structure.
ITEM 6. Such other business as may properly come before the Meetings or
any adjournment(s).
YOUR TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF THE
PROPOSALS.
Shareholders of record as of the close of business on June 5, 2000 are
entitled to notice of, and to vote at, the Meetings or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE THE ACCOMPANYING PROXY BALLOT(S), WHICH IS BEING SOLICITED
BY THE BOARD OF TRUSTEES OF NATIONS RESERVES AND NATIONS ANNUITY TRUST. THIS IS
IMPORTANT TO ENSURE A QUORUM AT THE MEETINGS. SHAREHOLDERS ALSO MAY SUBMIT THEIR
PROXIES: 1) BY FAX AT (704) 388-2641; 2) BY TELEPHONE AT (800) 690-6903; OR 3)
ON-LINE AT WEBSITE WWW.PROXYVOTE.COM. PROXIES MAY BE REVOKED AT ANY TIME BEFORE
THEY ARE EXERCISED BY SUBMITTING TO NATIONS RESERVES OR NATIONS ANNUITY TRUST,
AS APPLICABLE, A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY DATED PROXY OR
BY ATTENDING THE MEETING AND VOTING IN PERSON.
By Order of the Boards of Trustees,
Richard H. Blank, Jr.
Secretary of Nations Reserves and Nations Annuity Trust
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PROXY STATEMENT
Dated June 9, 2000
NATIONS RESERVES and NATIONS ANNUITY TRUST
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
1-800-653-9427
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of Nations Reserves ("Reserves") and the
Board of Trustees of Nations Annuity Trust ("Annuity Trust") at special meetings
of shareholders of Nations International Equity Fund, Nations Emerging Markets
Fund and Nations International Growth Portfolio (each, a "Fund" and
collectively, the "Funds"). The Board of Trustees of Reserves and the Board of
Trustees of Annuity Trust are sometimes collectively referred to as the
"Boards." The special meetings and any adjournment(s) are referred to as the
"Meetings." The Meetings have been called to consider the proposals described in
the formal Notice of Meetings and in this Proxy Statement.
Additional information about the Funds is available in their:
o Prospectuses;
o Statements of Additional Information, or SAIs; and
o Annual Reports to shareholders.
All of this information is in documents filed with the Securities and
Exchange Commission (the "SEC"). The annual reports to shareholders for the
fiscal year ended March 31, 2000 have previously been mailed to shareholders.
Additional copies are available without charge by writing the address given
above or by calling 1-800-321-7854. Documents also are available on the website
of the SEC at www.sec.gov.
It is expected that this Proxy will be mailed to shareholders on or
about June 9, 2000.
APPROVAL OF THE SUB-ADVISORY AGREEMENTS
Overview
The investment sub-adviser that manages the Funds on a day-to-day basis
is Gartmore Global Partners ("Gartmore"). As described below in more detail,
Gartmore has recently experienced three changes in ownership. These changes
relate only to the ownership of Gartmore's parent companies and have not
resulted, and are not expected to result, in any significant change in the
Gartmore personnel who manage the Funds or in the way that the Funds are
managed.
The Investment Company Act of 1940 (the "1940 Act") requires that
shareholders approve a mutual fund's investment sub-advisory contract. In order
to protect investors, the 1940 Act also requires that any time an investment
sub-adviser undergoes a change in ownership or control, the investment
sub-advisory agreement is automatically terminated. Shareholders must then
approve a new agreement in order for the fund to continue to receive contractual
sub-advisory services. In order to ensure that a fund is not left without
contractual sub-advisory services after the termination of a sub-advisory
agreement, but before shareholders can approve the new agreement, the 1940 Act
allows a mutual fund's board of directors to approve and put into place an
interim investment sub-advisory agreement, subject to certain conditions.
On March 6, 2000, May 15, 2000 and June [ ], 2000, Gartmore underwent
separate changes in ownership. The first two changes led to the Royal Bank of
Scotland plc becoming the indirect parent of Gartmore. The third and last change
led to Nationwide Mutual Insurance Company becoming the indirect parent of
Gartmore. These changes were the types of changes that could be deemed to have
caused the
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termination of the then current investment sub-advisory agreement that each Fund
had in place with Gartmore. Accordingly, interim investment sub-advisory
agreements ("Interim Agreements") were approved by the Boards and put in place,
as described below in more detail, and Fund shareholders are now being asked to
approve and ratify each applicable Interim Agreement.
Each Interim Agreement is substantially identical to the corresponding
investment sub-advisory agreement previously approved by Fund shareholders
(each, a "Previous Agreement" and collectively, the "Previous Agreements"),
except with respect to certain differences required by federal securities laws
that are explained below, and also except with respect to the fact that the
investment sub-advisory fee rates payable under the second and third Interim
Agreements are lower than those payable under both the first Interim Agreements
and the Previous Agreements.
Fund shareholders also are being solicited on a proposed definitive
investment sub-advisory agreement (each, a "Definitive Agreement" and
collectively, the "Definitive Agreements") for their Fund. If approved by
shareholders, each Definitive Agreement will be the contract that governs the
sub-advisory relationship with Gartmore after the shareholder meetings.. The
Definitive Agreements are different in form than the Interim Agreements,
although the basic array of sub-advisory services that Gartmore is required to
provide under the Definitive Agreements is largely unchanged from that which
Gartmore provides currently under the Interim Agreements. Additionally, the
investment sub-advisory fee rates payable under the Definitive Agreements are
the same as those payable under the second and third Interim Agreements.
It is important to note that the changes in Gartmore's ownership and
the related Interim and Definitive Agreements will not result in any change to
the aggregate advisory fees payable by each Fund.
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SPECIAL NOTE FOR NATIONS INTERNATIONAL EQUITY FUND SHAREHOLDERS ONLY
Shareholders of Nations International Equity Fund may recall that the
Fund is a "feeder" fund in a master/feeder structure where Nations International
Equity Master Portfolio of Nations Master Investment Trust serves as the
"master" portfolio (the "Master Portfolio"). Because the assets of the Fund are
invested in the Master Portfolio, investment advisory and sub-advisory services
are provided at the Master Portfolio level. Therefore, the Interim Agreements
and Definitive Agreement affecting the Fund are not contracts with the Fund
directly but rather contracts with the Master Portfolio. As an interestholder in
the Master Portfolio, the Fund is "passing-through" the vote to Fund
shareholders via this proxy solicitation, and will vote its interests in the
Master Portfolio in the same proportion as Fund shareholders vote.
In addition, in order to avoid confusion of terms, throughout this
Proxy Statement, the terms Fund (or Nations International Equity Fund) and
Master Portfolio (or Nations International Equity Master Portfolio) are
sometimes used interchangeably.
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THE BOARDS UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE TO APPROVE EACH
INTERIM AGREEMENT AND DEFINITIVE AGREEMENT APPLICABLE TO THEIR FUND.
TRANSACTION 1 AND THE INTERIM 1 AGREEMENTS
As of March 6, 2000, Gartmore was a joint venture, structured as a
50/50 general partnership between NB Partner Corp. and Gartmore U.S. Limited. As
of that date, NB Partner Corp. was a wholly-owned subsidiary of Bank of America
Corporation and Gartmore U.S. Limited was an indirect wholly-owned subsidiary of
Asset Management Holdings plc ("AMH").
Until March 6, 2000, AMH was a wholly-owned subsidiary of National
Westminster Bank plc ("NatWest"), which was owned by public shareholders. On
that date, the Royal Bank of Scotland Group plc ("RBS") acquired NatWest in a
tender-offer transaction ("Transaction 1"). As a result of Transaction 1, RBS
acquired indirect ownership of 50% of Gartmore. Accordingly, Transaction 1 was
treated as a "change in control" of Gartmore, which effected an assignment and
termination of the Previous Agreements.
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The Previous Agreement for Nations International Equity Master
Portfolio was last approved by shareholders on [ ]. Under that Previous
Agreement, BAAI paid Gartmore at an annual rate of 0.70% of the average daily
net assets of the Fund. The Previous Agreement for Nations Emerging Markets Fund
was last approved by shareholders on [ ]. Under that Previous Agreement, BAAI
paid Gartmore at an annual rate of 0.85% of the average daily net assets of the
Fund. The Previous Agreement for Nations International Growth Portfolio was last
approved by shareholders at a meeting held on [ ]. Under that Previous
Agreement, BAAI paid Gartmore at an annual rate of 0.70% of the average daily
net assets of the Fund.
Rule 15a-4 under the 1940 Act allows a mutual fund's board of directors
to approve and put into place an interim investment sub-advisory agreement,
subject to certain conditions. On March 3, 2000, the Boards approved an interim
agreement among BAAI, Gartmore and Reserves or Annuity Trust (as applicable), on
behalf of each Fund (the "Interim 1 Agreements"). In accordance with the terms
of Rule 15a-4, the Interim 1 Agreements (i) do not provide for any increase in
the compensation to be received by Gartmore from that provided in corresponding
Previous Agreements; (ii) provide that the Boards, or a majority of the Funds'
outstanding shares, may terminate the Interim 1 Agreements at any time, without
payment of any penalty, on ten (10) days written notice to Gartmore; (iii)
contain the same terms and conditions as the corresponding Previous Agreements,
except for required exceptions; and (iv) provide that compensation earned by
Gartmore under the Interim 1 Agreements be held in an interest-bearing escrow
account to be paid to Gartmore only if the shareholders of the applicable Fund
ratify their Fund's Interim 1 Agreement, and that if shareholders do not ratify
such Interim 1 Agreement, Gartmore shall be entitled to a portion of such
compensation that equals its costs incurred in providing services under that
Interim 1 Agreement (plus interest earned on that amount while in escrow). The
investment sub-advisory fee rates payable to Gartmore under the Interim 1
Agreements are at the following rates: an annual rate of 0.70% of the average
daily net asset value of each Fund, except Nations Emerging Markets Fund, for
which the annual rate is 0.85% of that Fund's average daily net asset value.
These rates are the same as those payable under the corresponding Previous
Agreements. The term of the Interim 1 Agreements is from March 6, 2000 through
May 15, 2000.
TRANSACTION 2 AND THE INTERIM 2 AGREEMENTS; AND TRANSACTION 3 AND THE
INTERIM 3 AGREEMENTS
Prior to the closing of Transaction 1, RBS expressed interest in
selling the entire Gartmore advisory business to a third-party. Subsequently,
Gartmore U.S. Limited and NB Partner Corp. entered into an agreement whereby NB
Partner Corp. agreed to transfer its 50% interest in Gartmore to Gartmore
Securities Limited ("Transaction 2"). Transaction 2 resulted in AMH indirectly
owning 100% of Gartmore; accordingly, a sale of AMH by RBS would convey the
entire Gartmore advisory business to the buyer. Following Transaction 2, Bank of
America Corporation no longer held any direct or indirect interest in Gartmore.
On March 30, 2000, RBS announced the sale of AMH to Nationwide Mutual Insurance
Company ("Nationwide") ("Transaction 3"). Consequently, upon the closing of
Transaction 3, Nationwide indirectly owned 100% of Gartmore. Transaction 2
closed on May 15, 2000 and Transaction 3 closed on June [ ], 2000.
At special meetings held on April 26, 2000, the Boards approved an
interim agreement among BAAI, Gartmore and Reserves or Annuity Trust (as
applicable), on behalf of each Fund ("Interim 2 Agreements") in connection with
Transaction 2, and an interim agreement among BAAI, Gartmore and Reserves or
Annuity Trust (as applicable), on behalf of each Fund ("Interim 3 Agreements")
in connection with Transaction 3, in accordance with the terms of Rule 15a-4,
even though the Previous Agreements had already been terminated by Transaction
1.
The Interim 2 Agreements and Interim 3 Agreements are identical in all
material respects to their corresponding Interim 1 Agreements except for their
effective dates, termination dates and sub-advisory fee rates. The investment
sub-advisory fee rates payable to Gartmore under the Interim 2 Agreements and
Interim 3 Agreements are at the following annual rates, all of which are less
than the rates payable under the corresponding Previous Agreement and Interim 1
Agreement: (i) for Nations International Equity Master Portfolio--0.65% of the
first $60,000,000 of the Master Portfolio's average daily net assets; plus,
0.55% of the next $130,000,000 of the Master Portfolio's average daily net
assets; plus 0.45% of the next $200,000,000 of the Master Portfolio's average
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daily net assets; plus 0.40% of the Master Portfolio's average daily net assets
in excess of $390,000,000; (ii) for Nations Emerging Markets Fund--0.66% of the
average daily net assets of the Fund; and (iii) for Nations International Growth
Portfolio--0.54% of the average daily net assets of the Fund.
The term of each Interim 2 Agreement is from May 15, 2000 through June
[ ], 2000, and the term of each Interim 3 Agreement is from June [ ], 2000
through the date that Fund shareholders approve a Definitive Agreement (or, if a
Definitive Agreement is not approved, through June [ ], 2001 and continuing
indefinitely thereafter so long as the Boards approve it annually).
THE DEFINITIVE AGREEMENTS
At the same special meetings held on April 26, 2000, the Boards also
approved the Definitive Agreements. The Definitive Agreements are based on a new
uniform form of agreement that the entire Nations Funds complex is in the
process of implementing. Accordingly, each Definitive Agreement will be
different in form than its corresponding Previous Agreement and Interim
Agreements, although the scope and type of services under each Definitive
Agreement are substantially the same as those provided under the corresponding
Interim Agreements and Previous Agreements.
This new form of agreement is more efficient for the Funds and BAAI to
utilize because of its standardization. In addition, the Definitive Agreements
benefit the Funds by providing for the indemnification of the Funds by Gartmore
under certain circumstances. Specifically, Gartmore agrees to hold the Funds
harmless from any and all direct or indirect claims, losses, liabilities or
damages resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services, (i) from willful misfeasance, bad faith or negligence
on the part of Gartmore or any of its officers, directors, employees or agents
in connection with their duties under the Definitive Agreements, (ii) from
reckless disregard by Gartmore or its officers, directors, employees or agents
of any of their obligations and duties under the Definitive Agreements, or (iii)
from any violations of federal or state securities laws, rules, regulations,
statutes and codes by Gartmore or any of its officers, directors, employees or
agents. In an attempt to further protect the Funds, the Definitive Agreements
require Gartmore to maintain a blanket bond and professional liability insurance
in an amount acceptable to BAAI.
The Definitive Agreements contain additional provisions that are
intended to ensure continued consistency in the services provided to the Funds.
For example, if Gartmore becomes aware of any event or occurrence that could
have a material impact on the performance of its duties, the Definitive
Agreements require Gartmore to provide notice of such event to BAAI and the
Funds. This will enable the Funds and BAAI to avoid any interruptions in the
sub-advisory services provided to the Funds that might result from events beyond
the control of the Funds. Further, the Definitive Agreements allow for Gartmore
to enter into certain commission agreements whereby Gartmore may conduct part of
its business through brokers on an agency basis because of the benefits of the
services that such brokers provide, as opposed to dealing directly with market
makers.
The investment sub-advisory fee rates payable to Gartmore under the
Definitive Agreements are at the same rates shown above for the Interim 2
Agreements and Interim 3 Agreements. The term of the Definitive Agreements will
be two years beginning on the date that they are approved by shareholders and
may continue in effect indefinitely after that initial two year period so long
as the Boards approve them annually thereafter.
BOARD CONSIDERATION
At in-person meetings held on March 3, 2000, the Boards considered
matters relating to Transaction 1 and approved the Interim 1 Agreements. Such
approvals were made by the Boards, including a majority of the Trustees who were
not parties to the Interim 1 Agreements or "interested persons," as such term is
defined under Section 2(a)(19) of the 1940 Act, of any party to such Agreements.
Specifically, the Boards determined that the compensation payable under the
Interim 1 Agreements was fair and reasonable and did not reflect an increase in
compensation from the corresponding Previous Agreements. The Boards also
determined that the scope and quality of services to be provided to the Funds
under the Interim 1 Agreements
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would be at least equivalent to the scope and quality of services provided under
the corresponding Previous Agreements.
At in-person meetings held on April 26, 2000, the Boards considered
matters relating to Transactions 2 and 3 and approved the Interim 2 Agreements,
Interim 3 Agreements and Definitive Agreements. Such approvals were made by the
Boards, including a majority of the Trustees who were not parties to such
Interim Agreements or Definitive Agreements or "interested persons," as such
term is defined under Section 2(a)(19) of the 1940 Act, of any party to such
Agreements. Specifically, the Boards determined that the compensation payable
under the Interim 2 Agreements, Interim 3 Agreements and Definitive Agreements
was fair and reasonable and did not reflect an increase in compensation from the
corresponding Interim 1 Agreements. The Boards also determined that the scope
and quality of services to be provided to the Funds under the Interim 2
Agreements, Interim 3 Agreements and Definitive Agreements would be at least
equivalent to the scope and quality of services provided under the Interim 1
Agreements. With respect to the Master Portfolio, these same determinations and
approvals were made by the Board of Trustees of Nations Master Investment Trust.
INFORMATION REGARDING GARTMORE
Gartmore is registered as an investment adviser under the Investment
Advisers Act of 1940, with principal offices at Gartmore House, 8 Fenchurch
Place, London EC3M 4PH England. It currently serves as investment sub-adviser to
the Funds pursuant to the Interim 3 Agreements.
Under the Interim 1 Agreements, Gartmore's indirect parents were Bank
of America Corp. and RBS. Bank of America Corp. is a Delaware financial holding
company that provides banking and non-banking financial services and products
through various subsidiaries. Its subsidiary Bank of America, N.A. is the
nations largest banking institution. Under the Interim 2 Agreements, Gartmore's
indirect parent was RBS. RBS is a publicly owned company with its registered
office at 36 St. Andrew Square, Edinburgh EH2 2YB, which provides banking,
insurance, and related financial services with a core market in the United
Kingdom, but is also active in Europe and the north-eastern United States.
Under the Interim 3 Agreements, Gartmore's indirect parent was
Nationwide. Nationwide is an Ohio mutual insurance company with its principal
executive offices located at One Nationwide Plaza, Columbus, Ohio 43215.
Nationwide is the controlling company of the Nationwide Insurance Enterprise, an
insurance and financial services organization (the "Enterprise"). In 1997,
Nationwide had $5.1 billion of net written premium. Nationwide is a party to the
Nationwide Intercompany Pooling Agreement (the "Nationwide Pooling Agreement")
with 12 other property and casualty insurance companies within the Enterprise
which provides that Nationwide shares in a specified percentage of the combined
underwriting results and dividends to policyholders incurred by such companies
(the "Nationwide Pool"). The insurance companies comprising the Nationwide Pool
were the sixth largest property and casualty insurance group and were the fourth
largest automobile insurance group in the United States, with approximately $8.4
billion in total net written premium at December 31, 1997 and approximately a
3.3% market share. Nationwide was originally chartered in the State of Ohio in
1925 as the Farm Bureau Mutual Automobile Insurance Company and it adopted its
present name in 1955.
As of the date of this Proxy Statement, Gartmore is an indirect
subsidiary of AMH, which in turn, is an indirect subsidiary of Nationwide.
Nationwide is headquartered at One Nationwide Plaza, Columbus, Ohio 43215-2200.
[GARTMORE IS MANAGED BY A FOUR-PERSON MANAGEMENT COMMITTEE, WITH TWO MEMBERS
APPOINTED BY EACH PARTNER, AND DAY-TO-DAY AFFAIRS ARE MANAGED BY A CHIEF
EXECUTIVE OFFICER AND A CHIEF INVESTMENT OFFICER.]
The principal executive officers of Gartmore are listed below.
Name and Address Position at Gartmore Principal Occupation
The aggregate amount paid to Gartmore by BAAI for each Fund for the
period March 31, 1999 through March 31, 2000 was as follows: $xxx for Nations
International Equity Master Portfolio; $xxx for Nations Emerging Markets Fund
and $xxx for Nations International Growth Portfolio. The aggregate amount paid
to Gartmore by BAAI for all of the mutual funds in the Nations Funds family for
the period March 31, 1999 through March 31, 2000 was $3,477,041.
Gartmore also serves as investment sub-adviser to one other
international portfolio in the Nations Funds family: Nations International
Growth Fund. For services provided pursuant to its investment sub-advisory
agreement, BAAI pays Gartmore sub-advisory fees, computed daily and paid
monthly, at the annual rate of 0.54% of the average daily net assets of such
fund. As of March 31, 2000, Nations International Growth Fund had assets of
xxxx. Shareholders of Nations International Growth Fund are being solicited
separately to approve similar interim investment sub-advisory agreements and
also a reorganization of that fund into Nations International Equity Fund.
7
<PAGE>
For the fiscal year ended March 31, 2000, Gartmore waived or otherwise
reduced its compensation entitled to it for providing investment sub-advisory
services to the Funds in an amount equal to $223,410.
No officer or trustee of Reserves, Annuity Trust or Nations Master
Investment Trust is an officer, employee, director, general partner or
shareholder of BAAI, Gartmore or any of their affiliates.
FOR NATIONS (ANNUITY TRUST) INTERNATIONAL GROWTH PORTFOLIO SHAREHOLDERS
ONLY--AUTHORIZATION OF THE FUND TO CONVERT TO A MASTER/FEEDER STRUCTURE
Overview of the Proposal
The Nations (Annuity Trust) International Growth Portfolio currently is
a stand-alone mutual fund--that is to say, it invests directly in a portfolio of
securities. In contrast, a "feeder" fund in a master/feeder structure is a
mutual fund that does not invest directly in a portfolio of securities but
rather invests all of its assets in another mutual fund called a master
portfolio, which has an identical investment objective and principal investment
strategies. As detailed below, a master/feeder structure can be used to pool
assets from multiple feeders into a larger master portfolio which can be managed
more efficiently. The Nations (Annuity Trust) International Growth Portfolio may
decide to convert to a feeder fund in the future, and accordingly, Fund
shareholders are being asked now to authorize the Fund to do so at some future
date. If shareholder approval is obtained, there is no guarantee that the Fund
would exercise such authority within a specific period of time or even exercise
the authority at all. Nevertheless, if the Fund did convert to a feeder fund,
Fund shareholders would not be re-solicited but would be made aware of the
change by a supplement to the Fund's prospectus.
THE BOARD OF NATIONS ANNUITY TRUST UNANIMOUSLY RECOMMENDS THAT YOU VOTE
TO AUTHORIZE NATIONS (ANNUITY TRUST) INTERNATIONAL GROWTH PORTFOLIO TO CONVERT
TO A FEEDER FUND IN A MASTER FEEDER STRUCTURE.
Master/Feeder Structures
One potential advantage of a master/feeder structure is that feeder
funds investing in the same master portfolio can reduce their expenses through
sharing the costs of managing a larger combined pool of assets. Another
potential advantage of such a structure is that the master portfolio may have
opportunities to pursue other distribution channels--such as insurance company
separate accounts--that may not otherwise be available to the same extent as
stand-alone mutual funds. All feeders in a master portfolio typically invest on
the same terms and conditions and pay a proportionate share of the master
portfolio's expenses, although such expenses and fees are reflected in the total
operating expense ratios that are shown in a fund's prospectus. However, all
feeder funds in a master portfolio are not required to sell their shares at the
same offering price and may sell shares with different sales loads and on-going
administrative and other expenses. Therefore, one feeder fund's shareholders may
have different returns than shareholders in another feeder fund that all invest
in the same master portfolio.
If the Fund were to convert to a feeder fund, it could subsequently
withdraw its entire investment from a master portfolio and once again become a
stand-alone Fund if the Board of Trustees of Annuity Trust determines that such
course is in the best interests of the Fund to do so. Also, other investors
(e.g., other feeder funds) in a master portfolio may similarly withdraw their
investment at any time. The Fund might withdraw, for example, if the master
portfolio changed its investment objective, policies and limitations in a manner
unacceptable to the Board of Trustees of Annuity Trust. A withdrawal could
result in a distribution in kind of portfolio securities (as opposed to a cash
distribution) by the master portfolio to the Fund. That distribution could
result in a less diversified portfolio of investments for the Fund and could
adversely affect the liquidity of the Fund's investment portfolio. In addition,
if securities were distributed, the Fund generally would incur brokerage
commissions, capital gains or losses, and/or other charges in converting the
8
<PAGE>
securities to cash. This could result in a lower net asset value of a
shareholder's shares and/or certain adverse tax consequences for a shareholder.
None of the Fund's fundamental or non-fundamental policies currently
prohibit the Fund from converting to a master/feeder structure. However, the
Board has decided to seek shareholder authorization of the possible future
change in order to ensure that shareholders support a possible future
conversion. Among other things, this authorization will enable the Board to
convert the Fund without incurring the cost of a future proxy solicitation, even
if the features or service providers of the master portfolio differ from those
of the Fund, as long as the Board believes that such conversion is in the best
interest of the Fund and its shareholders at the time and in light of the
circumstances presented.
Again, if the Fund were to convert to a feeder fund, it would be an
interestholder in the master portfolio. This means that any matter upon which
all interestholders of the master portfolio would be entitled to vote (for
example, a new investment advisory contract) would be voted upon by each feeder
fund to the master portfolio. In determining how to vote its interests, the Fund
might either submit the matter to its shareholders and vote its interests in the
same proportion as its shareholders vote, or vote its interests in the same
proportion as other interests are voted.
Taxation of a Master/Feeder Structure
A master portfolio typically is treated as a partnership for federal
income tax purposes rather than as a regulated investment company or a
corporation under the Internal Revenue Code of 1986, as amended (the "Code").
Under the rules applicable to a partnership, a proportionate share of any
interest, dividends, gains and losses of the master portfolio will be deemed to
have been realized (I.E., "passed-through") to its interest holders, regardless
of whether any amounts are actually distributed by the master portfolio. Each
interestholder in the master portfolio, would be taxed on its share (as
determined in accordance with the governing instruments of the master portfolio,
the Code and applicable U.S. Treasury Regulations promulgated thereunder) of the
master portfolio's income and gains in determining such holder's taxable income.
It is intended that the master portfolio's assets, income and distributions will
be managed in such a way that an interestholder in the master portfolio will be
able to qualify as a regulated investment company.
VOTING MATTERS
General Information
This Proxy Statement is being furnished in connection with the
solicitation of proxies for the Meetings by the Boards. It is expected that the
solicitation of proxies will be primarily by mail. Officers and service
contractors of Reserves and Annuity Trust also may solicit proxies by telephone
or otherwise. In this connection, each has retained ADP Proxy Services to assist
in the solicitation of proxies. Shareholders may submit their proxy: (1) by
mail, by marking, signing, dating and returning the enclosed proxy ballot(s) in
the enclosed postage-paid envelope; (2) by fax, by marking, signing, dating and
faxing the enclosed proxy ballot(s) to ADP Proxy Services at (704) 388-2641; (3)
by phone at (800) 690-6903; or 4) by on-line voting at www.proxyvote.com. Any
shareholder submitting a proxy may revoke it at any time before it is exercised
at the Meetings by submitting to Reserves or Annuity Trust, as applicable, a
written notice of revocation addressed to Reserves or Annuity Trust, as
applicable, at the address shown on the cover page of this Proxy Statement, or a
subsequently executed proxy or by attending the Meetings and voting in person.
Any expenses incurred as a result of hiring ADP Proxy Services or any
other proxy solicitation agent will be borne by BAAI, Gartmore and/or their
affiliates.
Only shareholders of record at the close of business on June 5, 2000
will be entitled to vote at the Meetings. On that date, __________ shares of
Nations International Equity Fund, ___________ shares of Nations Emerging
Markets Fund and ____________ shares of Nations International Growth Portfolio
were outstanding and entitled to be voted. Each whole and fractional share of a
Fund is entitled to a whole or fractional vote.
9
<PAGE>
If the accompanying proxy ballot(s) is executed and returned in time
for the Meetings, the shares covered thereby will be voted in accordance with
the proxy on all matters that may properly come before the Meetings.
- --------------------------------------------------------------------------------
SPECIAL NOTE FOR SHAREHOLDERS OF NATIONS (ANNUITY TRUST) INTERNATIONAL
GROWTH PORTFOLIO
The Hartford Life Insurance Company ("The Hartford") is the legal owner
of all Fund shares held in the separate account, which is registered as a unit
investment trust under the 1940 Act and where The Hartford sets aside and
invests the assets of certain of its annuity contracts. Accordingly, The
Hartford has the right to vote at the Fund's shareholder meetings. To the extent
required by federal securities laws or regulations, The Hartford will: (i)
notify each annuity contract owner ("Owner") of the Meeting if the shares held
for that Owner's contract may be voted; (ii) send proxy materials and a form of
instructions that each Owner can use to tell The Hartford how to vote the Fund
shares held for such contract; (iii) arrange for the handling and tallying of
proxies received from Owners; (iv) vote all Fund shares attributable to such
Owner's contract according to instructions received from such Owner, and (iv)
vote all Fund shares for which no voting instructions are received in the same
proportion as shares for which instructions have been received.
- --------------------------------------------------------------------------------
Quorum
A quorum is constituted with respect to Nations International Equity
Fund and Nations Emerging Markets Fund by the presence in person or by proxy of
the holders of more than one-half of the outstanding shares of each Fund
entitled to vote at their Meetings. A quorum is constituted with respect to
Nations International Growth Portfolio by the presence in person or by proxy of
the holders of more than one-third of the outstanding shares of the Fund
entitled to vote at its Meeting.
For purposes of determining the presence of a quorum for transacting
business at the Meetings, abstentions will be treated as shares that are present
at the Meetings but which have not been voted. Accordingly, abstentions will
have the effect of a "no" vote for purposes of obtaining the requisite approvals
of the Interim Agreements and the Definitive Agreements. Broker "non-votes"
(that is, proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owners or other persons entitled to
vote shares on a particular matter with respect to which the brokers or nominees
do not have discretionary power) will be treated the same as abstentions.
In the event that a quorum is not present for any of the Meetings, or
in the event that a quorum is present at such Meetings but sufficient votes to
approve any proposed item are not received by a Fund, one or more adjournment(s)
may be proposed to permit further solicitation of proxies. Any such
adjournment(s) will require the affirmative vote of a majority of those shares
affected by the adjournment(s) that are represented at the Meetings in person or
by proxy. If a quorum is present, the persons named as proxies will vote those
proxies which they are entitled to vote FOR the particular proposal for which a
quorum exists in favor of such adjournment(s), and will vote those proxies
required to be voted AGAINST such proposal against any adjournment(s).
Shareholder Approval
The Interim Agreements and the Definitive Agreements are being
submitted for approval at the Meetings by each Fund's shareholders pursuant to
the respective charter documents of each of Reserves and Annuity Trust, and were
unanimously approved by the Boards at meetings held on March 3, 2000 and April
26, 2000. The 1940 Act requires that each Interim Agreement and Definitive
Agreement must be approved by a "majority of the outstanding shares" of a Fund.
The 1940 Act defines the term "majority of the outstanding shares" to mean the
lesser of: (i) 67% of the shares of the Fund present at the Meeting if the
holders of more than 50% of the outstanding shares of the Fund are present; or
(ii) more than 50% of the outstanding shares of the Fund.
If an Interim Agreement is not approved by shareholders, Gartmore would
be entitled to receive for the period covered by such Interim Agreement a
portion of such compensation that equals its costs incurred
10
<PAGE>
in providing services under the Interim Agreement (plus interest earned on that
amount while in escrow). If neither the Interim 3 Agreement nor a Definitive
Agreement is approved for a Fund, the relevant Board will consider what further
action is appropriate.
With respect to the proposal relating to Nations International Growth
Portfolio's authority to convert to a feeder fund in a master/feeder structure,
such proposal shall be deemed approved by shareholders if a majority of shares
voted at the Meeting vote to approve the item.
Principal Shareholders
The table below shows the name, address and share ownership of each
person known to Reserves and/or Annuity Trust to have ownership with respect to
5% or more of a class of a Fund as of June 5, 2000. Each shareholder is known to
own as of record the shares indicated below. Any shareholder known to Reserves
and/or Annuity Trust to own such shares beneficially is designated by an
asterisk.
<TABLE>
<CAPTION>
<S> <C>
CLASS/AMOUNT OF PERCENTAGE OF PERCENTAGE
FUND NAME AND ADDRESS SHARES OWNED CLASS OF FUND
NATIONS (ANNUITY TRUST)
INTERNATIONAL GROWTH
PORTFOLIO
NATIONS EMERGING MARKETS
FUND
NATIONS INTERNATIONAL
EQUITY FUND
</TABLE>
For purposes of the 1940 Act, any person who owns directly or through
one or more controlled companies more than 25% of the voting securities of a
company is presumed to "control" such company. Accordingly, to the extent that a
shareholder identified in the foregoing table is identified as the beneficial
holder of more than 25% of a class, or is identified as the holder of record of
more than 25% of a class and has voting and/or investment power, it may be
presumed to control such class. As of June 5, 2000, Bank of America had voting
control of xx.xx% of the _______ Fund's outstanding shares. Accordingly, the
Bank of America may be considered to "control" such Fund. The address of Bank of
America is: 1401 Elm Street, 11th Floor, Dallas, TX 75202-2911. Bank of
America's control is likely to increase the chance that a Fund's shareholders
will approve the proposed items.
As of June 5, 2000, the officers and trustees of Reserves and Annuity
Trust, as a group, owned less than 1% of any class of a Fund.
Annual Meetings and Shareholder Meetings
Neither Reserves nor Annuity Trust presently hold annual meetings of
shareholders for the election of Trustees and other business unless otherwise
required by the 1940 Act.
OTHER BUSINESS
The Boards know of no other business to be brought before the Meetings.
However, if any other matters properly come before the Meetings, it is the
intention that proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
11
<PAGE>
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to Reserves or Annuity Trust in
writing at the address, or by phone at the phone number, on the cover page of
this Proxy Statement.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETINGS ARE
REQUESTED TO MARK, SIGN AND DATE THE ENCLOSED PROXY BALLOT(S) AND RETURN IT IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
SHAREHOLDERS ALSO MAY SUBMIT PROXIES BY FAX, TELEPHONE OR ON-LINE.
RESERVES AND/OR ANNUITY TRUST WILL FURNISH, WITHOUT CHARGE, COPIES OF
THE FUNDS' MARCH 31, 2000 ANNUAL REPORT TO ANY SHAREHOLDER UPON REQUEST
ADDRESSED TO: NATIONS RESERVES OR NATIONS ANNUITY TRUST, ONE BANK OF AMERICA
PLAZA, 101 SOUTH TRYON STREET, CHARLOTTE, N.C. 28255 OR BY TELEPHONE AT
1-800-321-7854.
<PAGE>
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
NATIONS INTERNATIONAL EQUITY FUND
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 1, 2000
The undersigned hereby appoints Richard H. Blank and Carolyn Wyse (the
"Proxies"), and each of them, attorneys and proxies of the undersigned, each
with power of substitution and resubstitution, to attend, vote and act for the
undersigned at the Special Meeting of Shareholders of Nations International
Equity Fund (the "Fund") of Nations Reserves ("Nations") to be held at One Bank
of America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina
28255, at 10:00 a.m. (Eastern time) on August 1, 2000, and at any adjournment(s)
thereof. The Proxies shall cast votes according to the number of shares of the
Fund which the undersigned may be entitled to vote with respect to the proposals
set forth on the reverse side, in accordance with the specification indicated,
if any, and shall have all the powers which the undersigned would possess if
personally present. The undersigned hereby revokes any prior proxy to vote at
such meeting, and hereby ratifies and confirms all that said Proxies, or any of
them, may lawfully do by virtue hereof or thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS OF THE FUND AND THE PROXY STATEMENT, DATED JUNE 9, 2000.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS ON BEHALF OF THE FUND AND
NATIONS. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, EITHER BY
THE ENCLOSED POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE (FRONT AND BACK) AT (704)
388-2641.
-------------------------------------
-------------------------------------
Please sign above exactly as your
name(s) appear(s) hereon. Corporate
proxies should be signed in full
corporate name by an authorized
officer. Each joint owner should
sign personally. Fiduciaries should
give full titles as such.
<PAGE>
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION, THIS
PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS.
ITEM 1. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
March 6, 2000 and ending on May 15, 2000.
FOR AGAINST ABSTAIN
|_| |_| |_|
ITEM 2. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
May 15, 2000 and ending on June [ ], 2000.
FOR AGAINST ABSTAIN
|_| |_| |_|
ITEM 3. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
June [ ], 2000 and ending on the date shareholders approve a
definitive agreement (or, if a definitive agreement is not approved,
on June [ ], 2001).
FOR AGAINST ABSTAIN
|_| |_| |_|
ITEM 4. Approval of a definitive investment sub-advisory agreement with
Gartmore Global Partners.
FOR AGAINST ABSTAIN
|_| |_| |_|
<PAGE>
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
In their discretion, the Proxies, and each of them, are authorized to vote
upon any other business that may properly come before the meeting, or any
adjournment(s) thereof, including any adjournment(s) necessary to obtain
requisite quorums and/or approvals.
----------------------- --------
Signature Date
----------------------- --------
Signature (Joint Owners) Date
<PAGE>
NATIONS EMERGING MARKETS FUND
SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 1, 2000
The undersigned hereby appoints Richard H. Blank and Carolyn Wyse (the
"Proxies"), and each of them, attorneys and proxies of the undersigned, each
with power of substitution and resubstitution, to attend, vote and act for the
undersigned at the Special Meeting of Shareholders of Nations Emerging Markets
Fund (the "Fund") of Nations Reserves ("Nations") to be held at One Bank of
America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina
28255, at 10:00 a.m. (Eastern time) on August 1, 2000, and at any adjournment(s)
thereof. The Proxies shall cast votes according to the number of shares of the
Fund which the undersigned may be entitled to vote with respect to the proposals
set forth on the reverse side, in accordance with the specification indicated,
if any, and shall have all the powers which the undersigned would possess if
personally present. The undersigned hereby revokes any prior proxy to vote at
such meeting, and hereby ratifies and confirms all that said Proxies, or any of
them, may lawfully do by virtue hereof or thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS OF THE FUND AND THE PROXY STATEMENT, DATED JUNE 9, 2000.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS ON BEHALF OF THE FUND AND
NATIONS. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, EITHER BY
THE ENCLOSED POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE (FRONT AND BACK) AT (704)
388-2641.
------------------------------------
------------------------------------
Please sign above exactly as your
name(s) appear(s) hereon. Corporate
proxies should be signed in full
corporate name by an authorized
officer. Each joint owner should
sign personally. Fiduciaries should
give full titles as such.
<PAGE>
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION, THIS
PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS.
ITEM 1. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
March 6, 2000 and ending on May 15, 2000.
FOR AGAINST ABSTAIN
|_| |_| |_|
ITEM 2. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
May 15, 2000 and ending on June [ ], 2000.
FOR AGAINST ABSTAIN
|_| |_| |_|
ITEM 3. Ratification and approval of an interim investment sub-advisory
agreement with Gartmore Global Partners for the period beginning on
June [ ], 2000 and ending on the date shareholders approve a
definitive agreement (or, if a definitive agreement is not approved,
on June [ ], 2001).
FOR AGAINST ABSTAIN
|_| |_| |_|
ITEM 4. Approval of a definitive investment sub-advisory agreement with
Gartmore Global Partners.
FOR AGAINST ABSTAIN
|_| |_| |_|
<PAGE>
PLEASE FOLD AND DETACH CARD AT PERFORATION BEFORE MAILING
In their discretion, the Proxies, and each of them, are authorized to vote
upon any other business that may properly come before the meeting, or any
adjournment(s) thereof, including any adjournment(s) necessary to obtain
requisite quorums and/or approvals.
----------------------- --------
Signature Date
----------------------- --------
Signature (Joint Owners) Date
