FORM OF PORTFOLIO MANAGEMENT AGREEMENT
_____________, 2005
[Name]
[Address]
Re: PORTFOLIO MANAGEMENT AGREEMENT
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Ladies and Gentlemen:
Liberty All-Star Mid-Cap Fund (the "Fund") is a diversified closed-end
investment company registered under the Investment Company Act of 1940 (the
"Act"), and is subject to the rules and regulations promulgated thereunder.
Banc of America Investment Advisors, Inc. (the "Fund Manager") evaluates
and recommends portfolio managers for the assets of the Fund, and is responsible
for the day-to-day corporate management and Fund administration of the Fund.
1. EMPLOYMENT AS A PORTFOLIO MANAGER. The Fund Manager being duly
authorized hereby employs [_________________] ("Portfolio Manager") as a
discretionary portfolio manager, on the terms and conditions set forth herein,
of that portion of the Fund's assets which the Fund Manager determines to assign
to the Portfolio Manager (those assets being referred to as the "Portfolio
Manager Account"). The Fund Manager may, from time to time, allocate and
reallocate the Fund's assets among the Portfolio Manager and the other portfolio
managers of the Fund's assets. The Fund Manager will be an independent
contractor and will have no authority to act for or represent the Fund or the
Fund Manager in any way or otherwise be deemed to be an agent of the Fund or the
Fund Manager except as expressly authorized in this Agreement or in another
writing by the Fund Manager and the Portfolio Manager.
2. ACCEPTANCE OF EMPLOYMENT; STANDARD OF PERFORMANCE. The Portfolio Manager
accepts its employment as a discretionary portfolio manager and agrees to use
its best professional judgment to make timely investment decisions for the
Portfolio Manager Account in accordance with the provisions of this Agreement.
3. PORTFOLIO MANAGEMENT SERVICES OF PORTFOLIO MANAGER.
A. In providing portfolio management services to the Portfolio Manager
Account, the Portfolio Manager shall be subject to the investment
objectives, policies and restrictions of the Fund as set forth in its
Prospectus and Statement of Additional Information, as the same may be
modified from time to time (together, the "Prospectus"), the policies
and restrictions of the Fund as determined from time to time by the
Board of Trustees, and the investment restrictions set forth in the
Act and the rules and regulations thereunder, to the supervision and
control of the Board of Trustees of the Fund, and to instructions from
the Fund Manager. The Portfolio Manager shall not, without the prior
approval of the Fund or the Fund Manager, effect any transactions
which would cause the Portfolio Manager Account, treated as a separate
fund, to be out of compliance with any of such restrictions or
policies. The Portfolio Manager shall not consult with any other
portfolio manager of the Fund concerning transactions for the Fund in
securities or other assets.
B. As part of the services it will provide hereunder, the Portfolio
Manager will:
(i) formulate and implement a continuous investment program for the
Program Manager Account;
(ii) take whatever steps are necessary to implement the investment
program for the Portfolio Manager Account by arranging for the
purchase and sale of securities and other investments;
(iii) keep the Fund Manager and the Board of Trustees of the Fund
fully informed in writing on an ongoing basis, as agreed by the
Fund Manager and the Portfolio Manager, of all material facts
concerning the investment and reinvestment of the assets in the
Portfolio Manager Account, the Portfolio Manager and its key
investment personnel and operations, make regular and periodic
special written reports of such additional information concerning
the same as may reasonably be requested from time to time by the
Fund Manager or the Trustees of the Fund, and the Portfolio
Manager will attend meetings with the Fund Manager and/or
Trustees, as reasonably requested, to discuss the foregoing;
(iv) in accordance with procedures and methods established by the
Trustees of the Fund, which may be amended from time to time,
provide assistance in determining the fair value of all
securities and other investments/assets in the Portfolio Manager
Account, as necessary, and use reasonable efforts to arrange for
the provision of valuation information or a price(s) from a
party(ies) independent of the Portfolio Manager for each security
or other investment/asset in the Portfolio Manager Account for
which market prices are not readily available;
(v) cooperate with and provide reasonable assistance to the Fund
Manager, the Fund's custodian, transfer agent and pricing agents
and all other agents and representatives of the Fund and the Fund
Manager, keep all such persons fully informed as to such matters
as they may reasonably deem necessary to the performance of their
obligations to the Fund and the Fund Manager, provide prompt
responses to reasonable requests made by such persons and
maintain any appropriate interfaces with each so as to promote
the efficient exchange of information.
4. TRANSACTION PROCEDURES. All portfolio transactions for the Portfolio
Manager Account will be consummated by payment to or delivery by the custodian
of the Fund (the "Custodian"), or such depositories or agents as may be
designated by the Custodian in writing, as custodian for the Fund, of all cash
and/or securities due to or from the Portfolio Manager Account, and the
Portfolio Manager shall not have possession or custody thereof or any
responsibility or liability with respect to such custody. The Portfolio Manager
shall advise and confirm in writing to the Custodian all investment orders for
the Portfolio Manager Account placed by it with brokers and dealers at the time
and in the manner set forth in Schedule A hereto (as amended from time to time
by the Fund Manager). The Fund shall issue to the Custodian such instructions as
may be appropriate in connection with the settlement of any transaction
initiated by the Portfolio Manager. The Fund shall be responsible for all
custodial arrangements and the payment of all custodial charges and fees, and,
upon giving proper instructions to the Custodian, the Portfolio Manager shall
have no responsibility or liability with respect to custodial arrangements or
the acts, omissions or other conduct of the Custodian.
5. ALLOCATION OF BROKERAGE. The Portfolio Manager shall have authority and
discretion to select brokers and dealers to execute portfolio transactions
initiated by the Portfolio Manager for the Portfolio Manager Account, and to
select the markets on or in which the transaction will be executed.
A. In doing so, the Portfolio Manager's primary responsibility shall be
to seek to obtain best net price and execution for the Fund. However,
this responsibility shall not obligate the Portfolio Manager to
solicit competitive bids for each transaction or to seek the lowest
available commission cost to the Fund, so long as the Portfolio
Manager reasonably believes that the broker or dealer selected by it
can be expected to obtain a "best execution" market price on the
particular transaction and determines in good faith that the
commission cost is reasonable in relation to the value of the
brokerage and research services (as defined in Section 28(e)(3) of the
Securities Exchange Act of 1934) provided by such broker or dealer to
the Portfolio Manager viewed in terms of either that particular
transaction or of the Portfolio Manager's overall responsibilities
with respect to its clients, including the Fund, as to which the
Portfolio Manager exercises investment discretion, notwithstanding
that the Fund may not be the direct or exclusive beneficiary of any
such services or that another broker may be willing to charge the Fund
a lower commission on the particular transaction.
B. Subject to the requirements of paragraph A above, the Fund Manager
shall have the right to request that transactions giving rise to
brokerage commissions, in an amount to be agreed upon by the Fund
Manager and the Portfolio Manager, shall be executed by brokers and
dealers that provide brokerage or research services to the Fund
Manager, or as to which an on-going relationship will be of value to
the Fund in the management of its assets, which services and
relationship may, but need not, be of direct benefit to the Portfolio
Manager Account. Notwithstanding any other provision of this
Agreement, the Portfolio Manager shall not be responsible under
paragraph A above with respect to transactions executed through any
such broker or dealer.
C. The Portfolio Manager shall not execute any portfolio transactions for
the Portfolio Manager Account with a broker or dealer which is an
"affiliated person" (as defined in the Act) of the Fund, the Portfolio
Manager or any other portfolio manager of the Fund without the prior
written approval of the Fund. The Fund Manager will provide the
Portfolio Manager with a list of brokers and dealers which are
"affiliated persons" of the Fund or its portfolio managers.
6. PROXIES. The Fund Manager will vote all proxies solicited by or with
respect to the issuers of securities in which assets of the Portfolio Manager
Account may be invested from time to time in accordance with such policies as
shall be determined by the Fund Manager. Upon the written request of the Fund
Manager, Portfolio Manager will vote all proxies solicited by or with respect to
the issuers of securities in which assets of the Portfolio Manager Account may
be invested from time to time in accordance with such policies as shall be
determined by the Fund Manager.
7. FEES FOR SERVICES. The compensation of the Portfolio Manager for its
services under this Agreement shall be calculated and paid by the Fund Manager
in accordance with the attached Schedule C. Pursuant to the Fund Management
Agreement between the Fund and the Fund Manager, the Fund Manager is solely
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responsible for the payment of fees to the Portfolio Manager, and the Portfolio
Manager agrees to seek payment of its fees solely from the Fund Manager.
8. OTHER INVESTMENT ACTIVITIES OF PORTFOLIO MANAGER. The Fund acknowledges
that the Portfolio Manager or one or more of its affiliates has investment
responsibilities, renders investment advice to and performs other investment
advisory services for other individuals or entities ("Client Accounts"), and
that the Portfolio Manager, its affiliates or any of its or their directors,
officers, agents or employees may buy, sell or trade in any securities for its
or their respective accounts ("Affiliated Accounts"). Subject to the provisions
of paragraph 2 hereof, the Fund agrees that the Portfolio Manager or its
affiliates may give advice or exercise investment responsibility and take such
other action with respect to other Client Accounts and Affiliated Accounts which
may differ from the advice given or the timing or nature of action taken with
respect to the Portfolio Manager Account, provided that the Portfolio Manager
acts in good faith, and provided further, that it is the Portfolio Manager's
policy to allocate, within its reasonable discretion, investment opportunities
to the Portfolio Manager Account over a period of time on a fair and equitable
basis relative to the Client Accounts and the Affiliated Accounts, taking into
account the cash position and the investment objectives and policies of the Fund
and any specific investment restrictions applicable thereto. The Fund
acknowledges that one or more Client Accounts and Affiliated Accounts may at any
time hold, acquire, increase, decrease, dispose of or otherwise deal with
positions in investments in which the Portfolio Manager Account may have an
interest from time to time, whether in transactions which involve the Portfolio
Manager Account or otherwise. The Portfolio Manager shall have no obligation to
acquire for the Portfolio Manager Account a position in any investment which any
Client Account or Affiliated Account may acquire, and the Fund shall have no
first refusal, co-investment or other rights in respect of any such investment,
either for the Portfolio Manager Account or otherwise.
9. LIMITATION OF LIABILITY. The Portfolio Manager shall not be liable for
any action taken, omitted or suffered to be taken by it in its reasonable
judgment, in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement, or in
accordance with (or in the absence of) specific directions or instructions from
the Fund, provided, however, that such acts or omissions shall not have resulted
from the Portfolio Manager's willful misfeasance, bad faith or gross negligence,
a violation of the standard of care established by and applicable to the
Portfolio Manager in its actions under this Agreement or breach of its duty or
of its obligations hereunder (provided, however, that the foregoing shall not be
construed to protect the Portfolio Manager from liability in violation of
Section 17(i) of the Act).
10. CONFIDENTIALITY. Subject to the duty of the Portfolio Manager and the
Fund to comply with applicable law, including any demand of any regulatory or
taxing authority having jurisdiction, the parties hereto shall treat as
confidential all information pertaining to the Portfolio Manager Account and the
actions of the Portfolio Manager and the Fund in respect thereof.
11. ASSIGNMENT. This Agreement shall terminate automatically in the event
of its assignment, as that term is defined in Section 2(a)(4) of the Act. The
Portfolio Manager shall notify the Fund in writing sufficiently in advance of
any proposed change of control, as defined in Section 2(a)(9) of the Act, as
will enable the Fund to consider whether an assignment as defined in Section
2(a)(4) of the Act will occur, and whether to take the steps necessary to enter
into a new contract with the Portfolio Manager.
12. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE FUND MANAGER. The
Fund Manager represents, warrants and agrees that:
A. The Portfolio Manager has been duly appointed to provide investment
services to the Portfolio Manager Account as contemplated hereby.
B. The Fund Manager will deliver to the Portfolio Manager a true and
complete copy of the Fund's then current Prospectus as effective from
time to time and such other documents governing the investment of the
Fund Account and such other information as is necessary for the
Portfolio Manager to carry out its obligations under this Agreement.
13. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE PORTFOLIO MANAGER.
The Portfolio Manager represents, warrants and agrees that:
A. It is registered as an "investment adviser" under the Investment
Advisers Act of 1940 ("Advisers Act").
B. It will maintain, keep current and preserve on behalf of the Fund, in
the manner required or permitted by the Act and the rules and
regulations thereunder, the records required to be so kept by an
investment adviser of the Fund in accordance with applicable law,
including without limitation those identified in Schedule B (as
Schedule B may be amended from time to time by the Fund Manager). The
Portfolio Manager agrees that such records are the property of the
Fund, and will be surrendered to the Fund promptly upon request.
C. It will adopt a written code of ethics complying with the requirements
of Rule 204A-1 under the Advisers Act and Rule 17j-1 under the 1940
Act and will provide the Fund Manager and the Board of Trustees with a
copy of its code of ethics and evidence of its adoption. Within 45
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days of the end of each year while this Agreement is in effect, or at
any other time requested by the Fund Manager, an officer, director or
general partner of the Portfolio Manager shall certify to the Fund
that the Portfolio Manager has complied with the requirements of Rule
17j-1 and Rule 204A-1 during the previous year and that there has been
no violation of its code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to such
violation. It will promptly notify the Fund Manager of any material
change to its code of ethics or material violation of its code of
ethics.
D. Upon request, the Portfolio Manager will promptly supply the Fund with
any information concerning the Portfolio Manager and its stockholders,
partners, employees and affiliates which the Fund may reasonably
request in connection with the preparation of its Prospectus or
amendments thereto, proxy material, reports and other documents
required to be filed under the Act, the Securities Act of 1933, or
other applicable securities laws.
E. Reference is xxxxxx made to the Declaration of Trust dated March 22,
2005 establishing the Fund, a copy of which has been filed with the
Secretary of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or
hereafter filed. The name Liberty All-Star Mid-Cap Fund refers to the
Trustees under said Declaration of Trust, as Trustees and not
personally, and no Trustee, shareholder, officer, agent or employee of
the Fund shall be held to any personal liability hereunder or in
connection with the affairs of the Fund, but only the trust estate
under said Declaration of Trust is liable under this Agreement.
Without limiting the generality of the foregoing, neither the
Portfolio Manager nor any of its officers, directors, partners,
shareholders, agents or employees shall, under any circumstances, have
recourse or cause or willingly permit recourse to be had directly or
indirectly to any personal, statutory, or other liability of any
shareholder, Trustee, officer, agent or employee of the Fund or of any
successor of the Fund, whether such liability now exists or is
hereafter incurred for claims against the trust estate, but shall look
for payment solely to said trust estate, or the assets of such
successor of the Fund.
F. The Portfolio Manager shall maintain and implement compliance
procedures that are reasonably designed to ensure its compliance with
Rile 206(4)-7 of the Advisers Act and to prevent violations of the
Federal Securities Laws (as defined in Rule 38a-1 under the Act).
G. The Portfolio Manager will: (i) on the cover page of each Form 13F
that the Portfolio Manager files with the Securities and Exchange
Commission (the "SEC"), check the "13F Combination Report" box and on
the Form 13F Summary Page identify "Banc of America Investment
Advisors, Inc." as another manager for which the Portfolio Manager is
filing the From 13F report; (ii) within 60 days after the end of each
calendar year, provide the Fund Manager with a certification that the
Portfolio Manager's Form 13F was filed with the SEC on a timely basis
and included all of the securities required to be reported by the SEC;
(iii) within 60 days after the end of each calendar year, provide to
the Fund Manager a copy of each Form 13F, or amendment to a Form 13F
filed by it during the prior four quarters; and (iv) notify the Fund
Manager in the event the Portfolio Manager determines that it has
failed to comply with Section 13(f) in a material respect, or receives
a comment letter from the SEC raising a question with respect to
compliance.
H. The Portfolio Manager has adopted written compliance policies and
procedures reasonably designed to prevent violations of the Advisers
Act and the rules promulgated thereunder and the Portfolio Manager
agrees to provide: (a) from time to time, a copy and/or summary of
such compliance policies and procedures and an accompanying
certification certifying that the Portfolio Manager's compliance
policies and procedures comply with the Advisers Act; (b) a report of
the annual review determining the adequacy and effectiveness of the
Portfolio Manager's compliance policies and procedures; and (c) the
name of the Portfolio Manager's Chief Compliance Officer to act as a
liaison for compliance matters that may arise between the Fund and the
Portfolio Manager.
I. The Portfolio Manager will notify the Fund and the Fund Manager of any
assignment of this Agreement or change of control of the Portfolio
Manager, as applicable, and any changes in the key personnel who are
either the portfolio manager(s) of the Portfolio Manager Account or
senior management of the Portfolio Manager, in each case prior to or
promptly after, such change. The Portfolio Manager agrees to bear all
reasonable expenses of the Fund, if any, arising out of an assignment
or change in control.
X. The Portfolio Manager agrees to maintain an appropriate level of
errors and omissions or professional liability insurance coverage.
14. AMENDMENT. This Agreement may be amended at any time, but only by
written agreement among the Portfolio Manager, the Fund Manager and the Fund,
which amendment, other than amendments to Schedules A, B and C, is subject to
the approval of the Board of Trustees and the shareholders of the Fund as and to
the extent required by the Act, the rules thereunder or exemptive relief granted
by the SEC, provided that Schedules A and B may be amended by the Fund Manager
without the written agreement of the Fund or the Portfolio Manager.
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15. EFFECTIVE DATE; TERM. This Agreement shall become effective upon the
date first above written, provided that this Agreement shall not take effect
unless it has first been approved: (i) by a vote of a majority of the Trustees
who are not "interested persons" (as defined in the Act) of any party to this
Agreement ("Independent Trustees"), cast in person at a meeting called for the
purpose of voting on such approval, and (ii) by vote of a majority of the
outstanding voting securities of the Fund(as defined in the Act). This Agreement
shall continue until ______, 2007, and from year to year thereafter provided
such continuance is specifically approved at least annually by (i) the Fund's
Board of Trustees or (ii) a vote of a majority of the outstanding voting
securities of the Fund, provided that in either event such continuance is also
approved by a majority of the Independent Trustees of any party to this
Agreement, by vote cast in person at a meeting called for the purpose of voting
on such approval. The aforesaid requirement that continuance of this Agreement
be "specifically approved at least annually" shall be construed in a manner
consistent with the Act and the rules and regulations thereunder.
16. TERMINATION. This Agreement may be terminated at any time by any party,
without penalty, immediately upon written notice to the other parties in the
event of a breach of any provision thereof by a party so notified, or otherwise
upon not less than thirty (30) days' written notice to the Portfolio Manager in
the case of termination by the Fund or the Fund Manager, or ninety (90) days'
written notice to the Fund and the Fund Manager in the case of termination by
the Portfolio Manager, but any such termination shall not affect the status,
obligations or liabilities of any party hereto to the other parties.
17. APPLICABLE LAW. To the extent that state law is not preempted by the
provisions of any law of the United States heretofore or hereafter enacted, as
the same may be amended from time to time, this Agreement shall be administered,
construed and enforced according to the laws of the Commonwealth of
Massachusetts.
18. SEVERABILITY. If any term or condition of this Agreement shall be
invalid or unenforceable to any extent or in any application, then the remainder
of this Agreement, and such term or condition except to such extent or in such
application, shall not be affected thereby, and each and every term and
condition of this Agreement shall be valid and enforced to the fullest extent
and in the broadest application permitted by law.
19. USE OF NAME. The Portfolio Manager agrees and acknowledges that the
Fund Manager is the sole owner of the names and marks "Liberty All-Star" and
"All-Star", and that all use of any designation comprised in whole or in part of
these names and marks shall inure to the benefit of the Fund Manager. Except as
used to identify the Fund to third parties as a client, the use by the Portfolio
Manager on its own behalf of such marks in ay advertisement or sales literature
or other materials promoting the Portfolio Manager shall be with the consent of
the Fund Manager. The Portfolio Manager shall not, without the consent of the
Fund Manager, make representations regarding the Fund or the Fund Manager in any
disclosure document, advertisement or sales literature or other materials
promoting the Portfolio Manager. Consent by the Fund Manager shall not be
unreasonably withheld. Upon termination of this Agreement for any reason, the
Portfolio Manager shall cease any and all use of these marks as soon as
reasonably practicable.
LIBERTY ALL-STAR MID-CAP FUND
By:
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Name:
Title:
BANC OF AMERICA INVESTMENT ADVISORS, INC.
By:
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Name:
Title:
ACCEPTED:
[ ]
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By:
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Name:
Title:
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SCHEDULES: A. Operational Procedures For Portfolio Transactions
B. Record Keeping Requirements
C. Fee Schedule
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LIBERTY ALL-STAR MID-CAP FUND
OPERATIONAL PROCEDURES
SCHEDULE A
In order to minimize operational problems, the following represents a
standard flow of information requirements. The Portfolio Manager (advisor) must
furnish State Street Corporation (accounting agent) with daily information as to
executed trades, no later than 12:00 p.m. (EST) on trade date plus one day to
ensure the information is processed in time for pricing. If there are no trades,
a report must be sent to State Street stating there were no trades for that day.
The necessary information must be transmitted via facsimile machine to
State Street at _________ and contain an authorized signature.
Liberty Trade reporting requirements:
1. Name of fund & advisor
2. Trade date
3. Settlement date
4. Purchase or sale.
5. Security name/description
6. Cusip/sedol/ or other numeric identifier
7. Purchase/sale price per share or unit
8. Interest purchased/sold (if applicable)
9. Aggregate commission amount
10. Indication as to whether or not commission amounts are LAMCO Directed.
11. Executing broker and clearing bank (if applicable)
12. Total net amount of the transaction
13. Sale lot disposition method, if different from the established policy.
(HIGHEST COST)
14. Confirmation of DTC trades, advise brokers to use the custodian's DTC ID
system number to facilitate the receipt of information by the custodian. The
Portfolio Manager will not affirm trades to the custodian.
Commission Reporting
The investment advisor is responsible for reporting the correct broker for all
direct-commission trades on the trade tickets. As a follow-up procedure, Xxxxxxx
will summarize the accounting records and forward to the investment advisor
monthly. The investment advisor is responsible for comparing their records to
the accounting records and contacting Liberty regarding discrepancies.
Trade Exception Processing
1. Revised or cancelled trades: the investment advisor is responsible for
notifying State Street Fund Accounting of revisions and/or cancellations on a
timely basis. In addition, the investment advisor is responsible for notifying
State Street if the revised or cancelled trade pertains to a next day or current
day settlement.
2. In the event, trades are sent after the 12:00 EST deadline, the investment
advisor is responsible for notifying the appropriate contact at State Street. If
trades are received after 4:00 PM EST, State Street Fund Accounting will book
trades on a "best efforts" basis.
State Street delivery instructions
DTC INSTRUCTIONS:
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For Liberty All Star Mid-Cap Fund - _________
Depository Trust Company (DTC)
Participant # ___
Agent Bank# ______
Ref: _____
Physical Securities DVP/RVP
Physical Securities Free Receipts/Free Deliveries:
DTC/New York Window
Attn: Xxxxxx Xxxxxx for the account of ____
Acct: State Street
00 Xxxxx Xxxxxx
Xxxxx Xxxxx 0xx Xxxxx
Xxx Xxxx, XX 00000
Government issues delivered through Fed Book Entry
Boston Federal Reserve Bank
ABA _____________
STATE ST _______________
PTC Ref: _____________
Wire Instructions:
State Street Bank
ABA # ___________--
Ref: Liberty All-Star Mid-Cap Fund
Fund Number: _____
DDA ______________-
Custodian (State Street Corporation)
Cash Availability: State Street will supply the Portfolio Manager with a cash
availability report by 11:00 AM EST on a daily basis. This will be done by fax
so that the Portfolio Manager will know the amount available for investment
purposes.
Voluntary Corporate Actions
State Street will be responsible for notifying the investment advisor of all
voluntary corporate actions. The investment advisor will fax instructions back
to State Street at (fax number ___________).
Other Custodian Requirements
All trades must be transmitted to the custodian bank, State Street, via signed
facsimile to ___________.
In the event there are no trades on a given day State Street needs to receive a
signed fax indicating this.
State Street needs to receive an authorized signature list from the investment
manager.
State Street will need the daily contacts for corporate actions and trading.
LIBERTY ALL-STAR MID-CAP FUND
PORTFOLIO MANAGEMENT AGREEMENT
SCHEDULE B
RECORDS TO BE MAINTAINED BY THE PORTFOLIO MANAGER
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1. (Rule 31a-1(b)(5) and (6)) A record of each brokerage order, and all other
portfolio purchases and sales, given by the Portfolio Manager on behalf of
the Fund for, or in connection with, the purchase or sale of securities,
whether executed or unexecuted. Such records shall include:
A. The name of the broker;
B. The terms and conditions of the order and of any modifications or
cancellation thereof;
C. The time of entry or cancellation;
D. The price at which executed;
E. The time of receipt of a report of execution; and
X. The name of the person who placed the order on behalf of the Fund.
2. (Rule 31a-1(b)(9)) A record for each fiscal quarter, completed within ten
(10) days after the end of the quarter, showing specifically the basis or
bases upon which the allocation of orders for the purchase and sale of
portfolio securities to named brokers or dealers was effected, and the
division of brokerage commissions or other compensation on such purchase
and sale orders. Such record:
A. Shall include the consideration given to:
(i) The sale of shares of the Fund by brokers or dealers.
(ii) The supplying of services or benefits by brokers or dealers to:
(a) The Fund;
(b) The Manager (Banc of America Investment Advisors, Inc.);
(c) The Portfolio Manager; and
(d) Any person affiliated with any of the foregoing.
(iii) Any other consideration other than the technical qualifications
of the brokers and dealers as such.
B. Shall show the nature of the services or benefits made available.
X. Xxxxx describe in detail the application of any general or specific
formula or other determinant used in arriving at such allocation of
purchase and sale orders and such division of brokerage commissions or
other compensation.
D. The name of the person responsible for making the determination of
such allocation and such division of brokerage commissions or other
compensation.
3. (Rule 31a-1(b)(10)) A record in the form of an appropriate memorandum
identifying the person or persons, committees or groups authorizing the
purchase or sale of portfolio securities. Where an authorization is made by
a committee or group, a record shall be kept of the names of its members
who participate in the authorization. There shall be retained as part of
this record: any memorandum, recommendation or instruction supporting or
authorizing the purchase or sale of portfolio securities and such other
information as is appropriate to support the authorization.(1)
4. (Rule 31a-1(f)) Such accounts, books and other documents as are required to
be maintained by registered investment advisers by rule adopted under
Section 204 of the Investment Advisers Act of 1940, to the extent such
records are necessary or appropriate to record the Portfolio Manager's
transactions with the Fund.
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(1) Such information might include: the current Form 10-K, annual and quarterly
reports, press releases, reports by analysts and from brokerage firms
(including their recommendation: i.e., buy, sell, hold) or any internal
reports or Portfolio Manager reviews.
