EXHIBIT 99.B5(d)
SUB-ADVISORY AGREEMENT
NATIONS ANNUITY TRUST
THIS AGREEMENT is made as of this ____day of February, 1998, by
and among NATIONSBANC ADVISORS, INC., a North Carolina corporation (the
"Adviser"), XXXXXXX CAPITAL MANAGEMENT, INC., a Delaware corporation
(the "Sub-Adviser"), and NATIONS ANNUITY TRUST, a Delaware business
trust (the "Trust"), on behalf of those portfolios of the Trust now or
hereafter identified on Schedule I hereto (each a "Portfolio" and
collectively, the "Portfolios").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser;
WHEREAS, the Sub-Adviser also is registered with the Commission
under the Advisers Act as an investment adviser;
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 Portfolios; and
WHEREAS, pursuant to such Investment Advisory Agreement, the
Adviser, with the approval of the Trust, wishes to retain the
Sub-Adviser for purposes of rendering advisory services to the Adviser
and the Trust in connection with the Portfolios upon the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints, and
the Trust hereby approves, the Sub-Adviser to render investment research
and advisory services to the Adviser and the Trust with respect to the
Portfolios, under the supervision of the Adviser and subject to the
policies and control of the Trust's Board of Trustees, and the
Sub-Adviser hereby accepts such appointment, all subject to the terms
and conditions contained herein.
2. Investment Services. Subject to the supervision of the Adviser
and the Trust's Board of Trustees, the Sub-Adviser will provide a
continuous investment program for each Portfolio, including investment
research and management with respect to all securities, investments,
cash and cash equivalents in each Portfolio. The Sub-Adviser will
determine from time to time what securities and other investments will
be purchased, retained or sold by the Portfolios and will
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place the daily orders for the purchase or sale of securities. The
Sub-Adviser will provide the services rendered by it under this
Agreement in accordance with each Portfolio's investment objective,
policies and restrictions as stated in the Prospectus and votes of the
Trust's Board of Trustees. The Sub-Adviser shall provide such additional
services related to the continuous investment program, including
recordkeeping services, as may reasonably be requested from time to time
by the Trust or the Adviser.
3. Control by Board of Trustees. As is the case with respect to
the Adviser under the Investment Advisory Agreement, any investment
activities undertaken by the Sub-Adviser pursuant to this Agreement, as
well as any other activities undertaken by the Sub-Adviser with respect
to the Trust, shall at all times be subject to any directives of the
Board of Trustees of the Trust.
4. Other Covenants. In carrying out its obligations under this
Agreement, the Sub-Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations
of the Commission and will in addition conduct its activities under this
Agreement in accordance with other applicable law, including but not
limited to the 1940 Act and the Advisers Act;
(b) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for
which it has investment responsibilities;
(c) will not make loans to any person to purchase or
carry Portfolio shares;
(d) will place orders pursuant to its investment
determinations for the Portfolios either directly with the issuer or
with any broker or dealer. Subject to the other provisions of this
paragraph, in executing portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to seek on behalf of
each Portfolio the best overall terms available. In assessing the best
overall terms available for any transaction, the Sub-Adviser shall
consider all factors that it deems relevant, including the breadth of
the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the broker/dealer to execute a
particular transaction, the Sub-Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of
the Securities Exchange Act of 1934, as amended) provided to the
Portfolio and/or other accounts over which the Sub-Adviser or an
affiliate of the Sub-Adviser exercises investment discretion. The
Sub-Adviser is authorized, subject to the prior approval of the Trust's
Board of Trustees, to pay to a broker or dealer who provides such
brokerage and research services a commission for executing a portfolio
transaction for any Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if, but only if, the Sub-Adviser determines in good
faith that such commission was reasonable in relation to the value of
the brokerage and research services provided by such broker or
dealer-viewed in terms of that particular transaction or in terms of the
overall responsibilities of the Sub-Adviser to the particular Portfolio
and to the Trust. In
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addition, the Sub-Adviser is authorized to take into account the sale of
shares of the Trust in allocating purchase and sale orders for portfolio
securities to brokers or dealers (including brokers and dealers that are
affiliated with the Sub-Adviser or the Trust's principal underwriter),
provided that the Sub-Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with
other qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Sub-Adviser or the Trust's
principal underwriter for the Portfolios or an affiliated person of
either acting as principal or broker, except as permitted by the
Commission or applicable law;
(e) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial
banking operations of its affiliates. In making investment
recommendations for a Portfolio, its investment advisory personnel will
not inquire or take into consideration whether the issuer (or related
supporting institution) of securities proposed for purchase or sale for
the Portfolio's account are customers of the commercial departments of
its affiliates. In dealing with commercial customers, such commercial
departments will not inquire or take into consideration whether
securities of those customers are held by the Portfolio; and
(f) will treat confidentially and as proprietary
information of the Trust all records and other information relative to
the Trust and prior, present or potential shareholders, and will not use
such records and information for any purpose other than performance of
its responsibilities and duties hereunder (except after prior
notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld and will be
deemed granted where the Sub-Adviser may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested
by the Trust).
5. Services Not Exclusive. The services furnished by the
Sub-Adviser hereunder are deemed not to be exclusive, and the
Sub-Adviser shall be free to furnish similar services to others so long
as its services under this Agreement are not impaired thereby. To the
extent that the purchase or sale of securities or other investments of
the same issuer may be deemed by the Sub-Adviser to be suitable for two
or more accounts managed by the Sub-Adviser, the available securities or
investments may be allocated in a manner believed by the Sub-Adviser to
be equitable to each account. It is recognized that in some cases this
procedure may adversely affect the price paid or received by a Portfolio
or the size of the position obtainable for or disposed of by a
Portfolio.
6. Books and Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Sub-Adviser hereby agrees that all records
which it maintains for each Portfolio are the property of the Trust and
further agrees to surrender promptly to the Adviser or the Trust any of
such records upon request. The Sub-Adviser further agrees to preserve
for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
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7. Expenses. During the term of this Agreement, the Sub-Adviser
will pay all expenses incurred by it in connection with its activities
under this Agreement other than the cost of securities, commodities and
other investments (including brokerage commissions and other transaction
charges, if any) purchased or sold for the Portfolios. In addition, the
Sub-Adviser acknowledges that the Adviser has agreed, pursuant to the
Investment Advisory Agreement, that, if the aggregate expenses borne by
any Portfolio in any fiscal year exceed the applicable expense
limitations imposed by the securities regulations of any state in which
its shares are registered or qualified for sale to the public, the
Adviser together with the Portfolio's administrator(s) shall reimburse
such Portfolio for such excess in proportion to the fees otherwise
payable to them for such year.
8. Compensation. For the services provided to each Portfolio and
the expenses assumed pursuant to this Agreement, the Adviser will pay
the Sub-Adviser and the Sub-Adviser will accept as full compensation
therefor a fee for that Portfolio determined in accordance with Schedule
I attached hereto. The Adviser and the Sub-Adviser may, from time to
time, agree to reduce, limit or waive the amounts payable hereunder with
respect to one or more Portfolios for such period or periods they deem
advisable. It is understood that the Adviser shall be responsible for
the Sub-Adviser's fee for its services hereunder, and the Sub-Adviser
agrees that it shall have no claim against the Trust or the Portfolio
with respect to compensation under this Agreement.
9. Liability of Sub-Adviser. The Sub-Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by
the Adviser or the Trust in connection with the performance of this
Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting
from willful misfeasance, bad faith or gross negligence on the part of
the Sub-Adviser in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
10. Duration and Termination. This Agreement shall become
effective with respect to a Portfolio when approved by the Trustees of
the Trust, and shall continue in effect for a period of two years from
the date first written above. This Agreement shall thereafter continue
from year to year, provided that the continuation of the Agreement is
specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by
the vote of "a majority of the outstanding voting
securities" of a Portfolio (as defined in Section 2(a)(42)
of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the
Trust's Trustees who are not parties to this Agreement or
"interested persons" (as defined in the 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.
Notwithstanding the foregoing, this Agreement may be terminated as to
any Portfolio at any time, without the payment of any penalty, by the
Trust (by vote of the Trust's Board of Trustees or by vote of a majority
of the outstanding voting securities of the particular Portfolio), or by
the Sub-
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Adviser or Adviser on sixty (60) days' written notice to the other
parties to this Agreement. The notice provided for herein may be waived
by the party entitled to receipt thereof. This Agreement will
immediately terminate in the event of its assignment. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as
such terms have in the 1940 Act.
11. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought. No amendment of
this Agreement affecting a Portfolio shall be effective until approved
by vote of a majority of the outstanding voting securities of such
Portfolio. However, this shall not prevent the Sub-Adviser from
reducing, limiting or waiving its fee.
12. Release. The names "Nations Annuity Trust" and "Trustees of
Nations Annuity Trust" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from
time to time under a Declaration of Trust and the Certificate of Trust,
dated November 24, 1997, which is hereby referred to and a copy of which
is on file at the office of the Secretary of State of Delaware and the
principal office of the Trust. The obligations of "Nations Annuity
Trust" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees,
shareholders, or representatives of the Trust personally, but bind only
the Trust property, and all persons dealing with any class of shares of
the Trust must look solely to the property belonging to such class for
the enforcement of any claims against the Trust.
13. Use of the Name "Xxxxxxx". Sub-Adviser hereby consents to and
grants a non-exclusive license for the use by the Trust to the phrase
"Xxxxxxx Capital" and the identifying word "Xxxxxxx" in the name of the
Funds and any logo or symbol authorized by the Sub-Adviser. Such consent
is conditioned upon the Trust's employment of Sub-Adviser or its
affiliates as investment sub-adviser to the Funds. Sub-Adviser may from
time to time use the phrase "Xxxxxxx Capital" or the identifying word
"Xxxxxxx" or logos or symbols used by Sub-Adviser in other connections
and for other purposes, including without limitation in the names of
other investment companies, corporations or businesses that it may
manage, advise, sponsor or own or in which it may have a financial
interest. Sub-Adviser may require the Trust to cease using the phrase
"Xxxxxxx Capital" or the identifying word "Xxxxxxx" in the name of the
Funds or any logo or symbol authorized by Sub-Adviser if the Trust
ceases to employ Sub-Adviser or an affiliate thereof as investment
sub-adviser.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and shall be governed by Delaware law.
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15. Counterparts. This Agreement may be executed in any manner of
counterparts, each of which shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
NATIONS ANNUITY TRUST
on behalf of the Portfolios
By: _________________________________
A. Xxx Xxxxxx
President and Chairman of the
Board of Trustees
NATIONSBANC ADVISORS, INC.
By: _________________________________
Xxxx X. Xxxxxxxxxx
President and Director
XXXXXXX CAPITAL MANAGEMENT, INC.
By: _________________________________
Xxxxxx Xxxxxxx
President
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SCHEDULE I
The Adviser shall pay the Sub-Adviser as full compensation for
services provided and expenses assumed hereunder a sub-advisory fee for
each Portfolio, computed daily and payable monthly at the annual rates
listed below as a percentage of the average daily net assets of the
Portfolio:
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Rate of
Fund Compensation
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Nations Xxxxxxx Focused Equities Portfolio 0.45%
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Nations Xxxxxxx Growth & Income Portfolio 0.45%
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Approved: December 9, 1997
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