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