EX-99.B5(j)
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made as of this 1st day of January, 1996, by and
among NationsBanc Advisors, Inc., a North Carolina corporation (the
"Adviser"), TradeStreet Investment Associates, Inc., a Maryland
corporation (the "Sub-Adviser"), and Nations Fund Trust, a
Massachusetts business trust (the "Trust"), on behalf of those
portfolios of the Trust now or hereafter identified on Schedule I
hereto (each a "Fund" and collectively, the "Funds").
RECITALS
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end, series management
investment company; and
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and
engages in the business of acting as an investment adviser; and
WHEREAS, the Sub-Adviser also is registered with the Commission
under the Advisers Act as an investment adviser; and
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement of even date herewith (the "Investment Advisory
Agreement"), pursuant to which the Adviser shall act as investment
adviser with respect to the Funds; and
WHEREAS, pursuant such Investment Advisory Agreement, the Adviser,
with the approval of the Trust, wishes to retain the Sub-Adviser for
purposes of rendering advisory services to the Adviser and the Trust
in connection with the Funds upon the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints, and
the Trust hereby approves, the Sub-Adviser to render investment
research and advisory services to the Adviser and the Trust with
respect to the Funds, under the supervision of the Adviser and subject
to the policies and control of the Trust's Board of Trustees, and the
Sub-Adviser hereby accepts such appointment, all subject to the terms
and conditions contained herein.
1
2. Investment Services. The specific duties of the Adviser
delegated to the Sub-Adviser shall be the following:
(a) obtaining and evaluating pertinent information about
significant developments and economic, statistical and
financial data, domestic, foreign or otherwise, whether
affecting the economy generally or the Funds specifically, and
whether concerning the individual issuers whose securities are
included in the Funds or the activities in which such issuers
engage, or with respect to securities which the Adviser or
Sub-Adviser considers desirable for inclusion in the Funds;
(b) investing and reinvesting, on an ongoing basis,
assets held in the Funds in strict accordance with the
investment policies of the Funds as set forth in the
registration statement of the Trust with respect to the Funds,
as the same may be amended from time to time;
(c) in accordance with policies and procedures
established by the Board of Trustees of the Trust and the
Adviser, selecting brokers and dealers to execute portfolio
transactions for the Funds and selecting the markets on or in
which the transactions will be executed;
(d) voting, either in person or by general or limited
proxy, or refraining from voting, any securities held in the
Funds for any purposes; exercising or selling any subscription
or conversion rights; consenting to and joining in or opposing
any voting trusts, reorganizations, consolidations, mergers,
foreclosures and liquidations and in connection therewith,
depositing securities, and accepting other property received
therefor; and
(e) performing other acts necessary or appropriate in
connection with the proper management of the Funds, consistent
with its obligations hereunder, and as may be directed by the
Adviser and/or the Trust's Board of Trustees.
3. Control by Board of Trustees. As is the case with
respect to the Adviser under the Investment Advisory Agreement, any
investment activities undertaken by the Sub-Adviser pursuant to this
Agreement, as well as any other activities undertaken by the
Sub-Adviser with respect to the Funds, shall at all times be subject
to any directives of the Board of Trustees of the Trust.
4. Compliance with Applicable Requirements. In carrying out
its obligations under this Agreement, the Sub-Adviser shall at all
times conform to:
(a) all applicable provisions of the 1940 Act, the Advisers
Act and any rules and regulations adopted thereunder;
2
(b) the provisions of the registration statement of the
Trust applicable to the Funds, as the same may be amended from
time to time, under the Securities Act of 1933 and the 1940
Act;
(c) the provisions of the Declaration of Trust of the
Trust, as the same may be amended from time to time;
(d) the provisions of the Code of Regulations of the
Trust, as the same may be amended from time to time;
(e) any other applicable provisions of state or federal
law.
In addition, any code of ethics adopted by the Sub-Adviser
pursuant to Rule 17j-1 under the 1940 Act shall include policies,
prohibitions and procedures which substantially conform to the
recommendations regarding personal investing approved by the Board of
Governors of the Investment Company Institute on June 30, 1994, as
such recommendations may be amended from time to time.
5. Broker-Dealer Relationships. The Sub-Adviser is responsible
for the purchase and sale of securities for the Funds, broker-dealer
selection, and negotiation of brokerage commission rates. The
Sub-Adviser's primary consideration in effecting a security
transaction will be to obtain the best price and execution. In
selecting a broker-dealer to execute each particular transaction for a
Fund, the Sub-Adviser will take the following into consideration: the
best net price available, the reliability, integrity and financial
condition of the broker-dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the Fund on a continuing basis. Accordingly, the
price to the Fund in any transaction may be less favorable than that
available from another broker-dealer if the difference is reasonably
justified by other aspects of the portfolio execution services
offered. Subject to such policies as the Adviser or the Trust's Board
of Trustees may from time to time determine, the Sub-Adviser shall not
be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of having
caused a Fund to pay a broker or dealer that provides brokerage and
research services to the Sub-Adviser an amount of commission for
effecting a portfolio investment transaction in excess of the amount
of commission another broker or dealer would have charged for
effecting that transaction, if the Sub-Adviser determines in good
faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker
or dealer, viewed in terms of either that particular transaction or
the overall responsibilities of the Sub-Adviser with respect to the
Fund and to other clients of the Sub-Adviser. The Sub-Adviser is
further authorized to allocate the orders placed by it on behalf of
the Funds to brokers and dealers who also provide research or
statistical material, or other services to the Funds or to the
Sub-Adviser. Such allocation shall be in such amounts and proportions
as the Sub-Adviser shall determine and the Sub-Adviser will report on
said allocations regularly to the Adviser and to the Board of Trustees
of the
3
Trust indicating the brokers to whom such allocations have been made
and the basis therefor.
6. Compensation. The Adviser shall pay the Sub-Adviser, as
compensation for services rendered hereunder, fees, payable monthly,
at the annual rates indicated on Schedule I hereto, as such Schedule
may be amended or supplemented from time to time. It is understood
that the Adviser shall be responsible for the Sub-Adviser's fee for
its services hereunder, and the Sub-Adviser agrees that it shall have
no claim against the Trust or the Fund with respect to compensation
under this Agreement.
The average daily net asset value of the Funds shall be
determined in the manner set forth in the Declaration of Trust and
registration statement of the Trust, as amended from time to time.
7. Expenses of the Funds. All of the ordinary business
expenses incurred by the Trust in the operations of the Funds and the
offering of their shares shall be borne by the Funds unless
specifically provided otherwise in this Agreement. These expenses
borne by the Funds include but are not limited to brokerage
commissions, taxes, legal, auditing, or governmental fees, the cost of
preparing share certificates, custodian, transfer agent and
shareholder service agent costs, expenses of issue, sale, redemption
and repurchase of shares, trustees and shareholder meetings, the cost
of preparing and distributing reports and notices to shareholders, the
fees and other expenses incurred by the Funds in connection with
membership in investment company organizations and the cost of
printing copies of prospectuses and statements of additional
information distributed to the Funds' shareholders.
8. Expense Limitation. If, for any fiscal year of a Fund, the
amount of the aggregate advisory fee which the Trust would otherwise
be obligated to pay with respect to the Fund is reduced pursuant to
expense limitation provisions of the Investment Advisory Agreement,
the fee which the Sub-Adviser would otherwise receive pursuant to this
Agreement shall be reduced proportionately.
9. Non-Exclusivity. The services of the Sub-Adviser to the
Adviser and the Trust with respect to the Fund are not to be deemed to
be exclusive, and the Sub-Adviser shall be free to render investment
advisory and administrative or other services to others (including
other investment companies) and to engage in other activities. It is
understood and agreed that the officers and directors of the
Sub-Adviser are not prohibited from engaging in any other business
activity or from rendering services to any the person, or from serving
as partners, officers, directors or trustees of any other firm or
trust, including other investment advisory companies.
10. Records. The Sub-Adviser shall provide to the Adviser, with
respect to the orders the Sub-Adviser places for the purchases and
sales of portfolio securities of the Funds, the documents and records
required pursuant to Rule 31a-1 under the 1940 Act as well as such
records as the Funds' administrator reasonably requests to be
maintained,
4
including, but not limited to, trade tickets and confirmations for
portfolio trades. All such records shall be maintained in a form
acceptable to the Funds and in compliance with the provisions of Rule
31a-1. All such records will be the property of the Funds and will be
available for inspection and use by the Funds. The Sub-Adviser will
promptly notify the Adviser and the Fund's administrator if it
experiences any difficulty in providing the records in an accurate and
complete manner.
11. Term and Approval. This Agreement shall become effective
with respect to each Fund as of the date first set forth above and
shall thereafter continue in force and effect for one year, and may be
continued from year to year with respect to each Fund thereafter,
provided that the continuation of the Agreement is specifically
approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the
vote of "a majority of the outstanding voting securities" of
the Fund (as defined in Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the
Trustees of the Trustees who are not parties to this Agreement
or "interested persons" (as defined in the 0000 Xxx) of a
party to this Agreement (other than as Trustees of the Trust),
by votes cast in person at a meeting specifically called for
such purpose.
12. Termination. This Agreement may be terminated at any
time with respect to a Fund, without the payment of any penalty, by
vote of the Trust's Board of Trustees or by vote of a majority of the
Fund's outstanding voting securities, or by the Adviser, or by the
Sub-Adviser on sixty (60) days' written notice to the other parties to
this Agreement. Any party entitled to notice may waive the notice
provided for herein. This Agreement shall automatically terminate in
the event of its assignment, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the
1940 Act.
13. Liability of Sub-Adviser. In the absence of willful
misfeasance, bad faith, negligence or reckless disregard of
obligations or duties hereunder on the part of the Sub-Adviser or any
of its officers, directors, employees or agents, the Sub-Adviser shall
not be subject to liability to the Adviser or to the Trustees for any
act or omission in the course of, or connected with, rendering
services hereunder or for any losses that may be sustained in the
purchase, holding or sale of any security.
14. Indemnification. In the absence of willful misfeasance, bad
faith, negligence or reckless disregard of duties hereunder on the
part of the Sub-Adviser, or any officers, directors, employees or
agents thereof, the Trust hereby agrees to indemnify and hold harmless
the Sub-Adviser against all claims, actions, suits or proceedings at
law or in equity whether brought by a private party or a governmental
department, commission, board, bureau, agency or instrumentality of
any kind, arising from the
5
advertising, solicitation, sale, purchase or pledge of securities,
whether of the Funds or other securities, undertaken by the Funds,
their officers, directors, employees, agents or affiliates, resulting
from any violations of the securities laws, rules, regulations,
statutes and codes, whether federal or of any state, by the Funds,
their officers, directors, employees or affiliates. Federal and state
securities laws impose liabilities under certain circumstances on
persons who act in good faith, and nothing herein shall constitute a
waiver or limitation of any rights which a Fund may have and which may
not be waived under any applicable federal and state securities laws.
15. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to such
address as may be designated for the receipt of such notice, with a
copy to the Trust. Until further notice, it is agreed that the
address of the Trust shall be 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000; that of the Sub-Adviser shall be Xxx XxxxxxxXxxx Xxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000; and that of the Adviser shall be Xxx
XxxxxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000.
16. Questions of Interpretation. Any question of interpretation
of any term or provision of this Agreement having a counterpart in or
otherwise derived from a term or provision of the 1940 Act or the
Advisers Act shall be resolved by reference to such term or provision
of the 1940 Act or the Advisers Act and to interpretations thereof, if
any, by the United States courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of the
Commission issued pursuant to the 1940 Act or the Advisers Act. In
addition, where the effect of a requirement of the 1940 Act or the
Advisers Act reflected in any provision of this Agreement is revised
by rule, regulation or order of the Commission, such provision shall
be deemed to incorporate the effect of such rule, regulation or order.
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in triplicate by their respective officers on the day
and year first written above.
NATIONS FUND TRUST
on behalf of the Funds
Attest:
_________________________ By: _________________________
Name:____________________ _________________________
A. Xxx Xxxxxx
President
NATIONSBANC ADVISORS, INC.
Attest:
_________________________ By: _________________________
Name:____________________ _________________________
Xxxx X. Xxxxxxxxxx
President and Director
TRADESTREET INVESTMENT
ASSOCIATES, INC.
Attest:
_________________________ By: _________________________
Name:____________________ _________________________
Xxxxxx X. Xxxxxx
President and Director
7
SCHEDULE I
Fund Rate of
Compensation
Nations Government Money Market Fund 0.055%
Nations Tax Exempt Fund 0.07%
Nations Value Fund 0.25%
Nations Capital Growth Fund 0.25%
Nations Emerging Growth Fund 0.25%
Nations Equity Index Fund 0.20%
Nations Disciplined Equity Fund 0.25%
Nations Balanced Assets Fund 0.25%
Nations Short-Intermediate Government Fund 0.15%
Nations Short-Term Income Fund 0.15%
Nations Diversified Income Fund 0.15%
Nations Strategic Fixed Income Fund 0.15%
Nations Municipal Income Fund 0.07%
Nations Short-Term Municipal Income Fund 0.07%
Nations Intermediate Municipal Bond Fund 0.07%
Nations Florida Municipal Bond Fund 0.07%
Nations Georgia Municipal Bond Fund 0.07%
Nations Maryland Municipal Bond Fund 0.07%
Nations North Carolina Municipal Bond Fund 0.07%
Nations South Carolina Municipal Bond Fund 0.07%
Nations Tennessee Municipal Bond Fund 0.07%
Nations Texas Municipal Bond Fund 0.07%
Nations Virginia Municipal Bond Fund 0.07%
Nations Florida Intermediate Municipal Bond Fund 0.07%
Nations Georgia Intermediate Municipal Bond Fund 0.07%
Nations Maryland Intermediate Municipal Bond Fund 0.07%
Nations North Carolina Intermediate Municipal Bond Fund 0.07%
Nations South Carolina Intermediate Municipal Bond Fund 0.07%
Nations Tennessee Intermediate Municipal Bond Fund 0.07%
Nations Texas Intermediate Municipal Bond Fund 0.07%
Nations Virginia Intermediate Municipal Bond Fund 0.07%
