Exhibit 99.23(h)(3)
SUB-ADMINISTRATION AGREEMENT
NATIONS FUNDS TRUST
This SUB-ADMINISTRATION AGREEMENT (the "Agreement") is made as of February
14, 2000 by and among THE BANK OF NEW YORK ("BNY"), BANC OF AMERICA ADVISORS,
INC. ("BAAI") and NATIONS FUNDS TRUST (the "Trust").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, BAAI serves as the Co-Administrator for the investment portfolios
of the Trust pursuant to a separate Co-Administration Agreement; and
WHEREAS, BAAI desires to retain BNY to render certain sub-administrative
services to the Trust and to BAAI, as Co-Administrator of the Trust, and BNY is
willing to render such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. Appointment and Duties as Sub-Administrator.
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(a) BAAI hereby appoints BNY to act as Sub-Administrator of the Trust and
to render sub-administrative services for each portfolio of the Trust listed on
Schedule I (individually, a "Fund" and collectively, the "Funds") and BNY hereby
accepts such appointment and agrees to render the services and duties set forth
in Schedule II as it may be amended from time to time, for the compensation and
on the terms herein provided. Each new investment portfolio established in the
future by the Trust or BAAI will become a "Fund" for all purposes hereunder when
BNY receives a revised Schedule I from BAAI or the Trust that includes such new
portfolio.
(b) Subject to the other provisions of this Section 1, in performing all
services under this Agreement, BNY shall (i) act in conformity with the Trust's
Declaration of Trust, the 1940 Act and the rules thereunder, including but not
limited to Rules 31a-1 to 31a-3, and other applicable laws and regulations, as
the same may be amended from time to time, and the Trust's Registration
Statement (defined below) as such Registration Statement may be amended from
time to time; (ii) consult and coordinate with BAAI and the Trust, as necessary
and appropriate; and (iii) advise and report to BAAI and the Trust, as necessary
or appropriate, with respect to any compliance matters that come to its
attention. In performing all services under this Agreement BNY shall meet the
minimum quality of service standards set forth on Schedule III.
(c) The Trust has furnished BNY and BAAI with copies properly certified or
authenticated of each of the following: (i) the Trust's Declaration of Trust or
other organizational document and all amendments thereto (the "Declaration");
(ii) votes of the Trust's
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Board of Trustees or other governing body (the "Board") authorizing the
execution, delivery and performance of this Agreement by the Trust; (iii) the
Trust's Registration Statement on Form N-1A (the "Registration Statement") under
the Securities Act of 1933, as amended, and under the 1940 Act (File Nos.
333-89661 and 881-09645), as filed with the Securities and Exchange Commission
(the "SEC") relating to the Funds' shares of beneficial interest (the "Shares");
(iv) the Funds' current prospectus(es); (v) the Funds' current statement(s) of
additional information; and (v) the pricing procedures applicable to the
calculation of the Funds' net asset values as approved by the Trust's Board (the
"Pricing Procedures"). It is solely the Trust's responsibility to furnish BNY
from time to time with copies, properly certified or authenticated, of all
amendments of or supplements to the foregoing, and BNY will not be held to have
knowledge of any such amendments or supplements until the same are actually
received by BNY. Furthermore, the Trust will provide BNY with any other
documents that BNY and BAAI may reasonably request and will notify BNY and BAAI
as soon as possible of any matter materially affecting either BNY's or BAAI's
performance of its services under this Agreement.
(d) Subject to the direction and approval of the Trust's Board and
appropriate officers and the provisions of this Agreement, BNY shall provide to
each Fund the administrative services set forth on Schedule II attached hereto.
In performing such services hereunder, BNY shall provide, at its expense, office
space, facilities, equipment and personnel. BNY shall not provide any services
relating to the management, investment advisory or sub-advisory functions of any
Fund, distribution of shares of any Fund, maintenance of any Fund's financial
records (except as otherwise agreed by the parties) or any services normally
performed by the Funds' counsel or independent accountants. Upon receipt of the
Trust's prior written consent, BNY may delegate any of its duties and
obligations hereunder to any delegee or agent whenever and on such terms and
conditions as it deems necessary or appropriate. Unless expressly agreed in
writing, BNY shall not be relieved of liability or responsibility for the
performance of any duties or obligations delegated to a delegee or agent,
provided that BNY shall have no liability for duties or obligations that are
delegated to a delegee or agent at the instruction of the Trust or BAAI. The
Trust and BAAI shall cause their respective officers, and shall use reasonable
efforts to cause the Trust's or BAAI's legal counsel, independent accountants,
and transfer agent to cooperate with BNY and to provide BNY, upon BNY's
reasonable written request, such information, documents and advice relating to
such Fund as is within the possession or knowledge of such persons, in order to
enable BNY to perform its duties hereunder. Such cooperation or provision of
information, documents or advice shall be at no cost to BNY, provided BNY's
request is reasonable and BAAI shall have been notified of the request. In
connection with its duties hereunder, BNY shall be entitled to reasonably rely
upon any documents relating to a Fund provided to BNY by any of the
aforementioned persons. BNY may apply to the Trust or BAAI for written
instructions with respect to any matter arising in connection with BNY's
performance hereunder. If, after a reasonable period of time, BNY receives no
response to any such application, BNY may then notify the Trust or BAAI of
reasonable action that BNY shall take if written instructions are not received
within a stated period of time after such notice, and then BNY shall not be
liable for taking such reasonable action as if written instructions had been
provided. BNY is entitled to reasonably rely and act in accordance with written
instructions believed to have been given by authorized persons and shall incur
no costs for such reasonable reliance. BNY shall have no duties or
responsibilities
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whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement and Schedule II hereto, and no covenant or obligation shall be
implied against BNY in connection with this Agreement.
(e) The Trust and BAAI, for itself and not for the others, hereby
represents and warrants to BNY, which representations and warranties shall be
deemed to be continuing, that: (i) it is duly organized and existing under the
laws of the jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to perform its
obligations hereunder; (ii) this Agreement has been duly authorized, executed
and delivered by it in accordance with all requisite action and constitutes a
valid and legally binding obligation, enforceable in accordance with its terms;
(iii) it is conducting its business substantially in compliance with all
applicable laws and regulations, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted; (iv) there is no statute, regulation, rule, order or judgment
binding on it and no provision of its Declaration, nor of any mortgage,
indenture, credit agreement or other contract binding on it or affecting its
property which would prohibit its execution or performance of this Agreement;
and (v) the Trust and BAAI will use reasonable efforts to promptly notify BNY of
any errors or omissions contained in any reports, calculations, valuations and
other items of information, provided that any failure by the Trust or BAAI to
detect any such errors or omissions shall not relieve BNY of any resulting
liability therefrom. To the extent that BAAI has actual knowledge of any such
error or omission and fails to use reasonable efforts to promptly notify BNY,
BNY shall be relieved of any liability that BNY may have mitigated had BAAI
provided notice of such error or omission to BNY.
(f) BNY hereby represents and warrants to the Trust and BAAI, which
representations and warranties shall be deemed to be continuing, that: (i) it is
duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted, to
enter into this Agreement and to perform its obligations hereunder; (ii) this
Agreement has been duly authorized, executed and delivered by it in accordance
with all requisite action and constitutes a valid and legally binding
obligation, enforceable in accordance with its terms; and (iii) it is conducting
its business substantially in compliance with all applicable laws and
regulations, both state and federal, and has obtained all regulatory licenses,
approvals and consents necessary to carry on its business as now conducted;
there is no statute, regulation, rule, order or judgment binding on it and no
provision of its Charter, nor of any mortgage, indenture, credit agreement or
other contract binding on it or affecting its property which would prohibit its
execution or performance of this Agreement.
2. Compensation. For the services to be rendered, the facilities to be
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furnished and the compensation and other expenses to be borne by BNY, as
provided for in this Agreement, BNY shall be entitled to receive a monthly fee
from BAAI and reimbursement for out-of-pocket expenses as set forth in Schedule
IV to this Agreement. It is understood that BAAI shall be responsible for BNY's
monthly fee for its services hereunder, and BNY agrees that it shall have no
claim against the Trust or the Funds with respect to compensation under this
Agreement.
3. Recordkeeping. BNY shall, as agent for the Trust, and subject to the
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direction and approval of the Trust's Board and the provisions of this
Agreement, maintain and keep current
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the books, accounts and other documents, if any, pursuant to the services and
duties provided by BNY as set forth in Schedule II of this Agreement, and
preserve any such books, accounts and other documents in accordance with the
applicable provisions of Rule 31a-2 of the 1940 Act. Such books, accounts and
other documents shall be made available upon reasonable request for inspection
by officers, employees and auditors of the Trust and BAAI during BNY's normal
business hours. All records maintained and preserved by BNY pursuant to this
Agreement which the Trust is required to maintain and preserve in accordance
with Rule 31a-2 of the 1940 Act shall be and remain the property of the Trust
and shall be surrendered to the Trust promptly upon request in the form in which
such records have been maintained and preserved. Upon reasonable request of the
Trust, BNY shall provide in data files or hard copy, whichever the Trust shall
reasonably elect, any records included in any such delivery which are maintained
by BNY on a computer disc, or are similarly maintained, and the Trust shall
reimburse BNY for its expenses of providing such hard copy.
4. Standard of Care; Indemnification.
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(a) BNY shall at all times act in good faith and agrees to use its best
efforts to fulfill its obligations under this Agreement, but assumes no
responsibility for loss or damage to the Trust unless such loss or damage is
caused by BNY's own negligence, bad faith or willful misconduct or that of its
directors, officers or employees. BNY shall be responsible hereunder for all
direct damages resulting from its own negligence, bad faith or willful
misconduct, provided however that it shall not be responsible for lost profits
or lost business arising under or in connection with this Agreement. It is
understood and agreed that for purposes of this Section 4(a), "direct damages"
shall include, but shall not be limited to, all legal costs, penalties,
reimbursement for excess distribution and redemption payments, repurchasing
costs for servicing agents and reimbursement to the Funds for net asset value
breaks (as calculated under the Pricing Procedures).
(b) The Trust, on behalf of each Fund, will indemnify BNY against and hold
it harmless from any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses of a defense against any claim,
demand, action or suit), relating to the particular Fund and arising from any
one or more of the following: (i) errors in records or instructions,
explanations, information, specifications or documentation of any kind, as the
case may be, supplied to BNY by any person described in Section 1 hereof or by
any third party described in Section 5; (ii) action or inaction taken or omitted
to be taken by BNY pursuant to written or oral instructions described in this
Agreement (or otherwise without bad faith, negligence or willful misconduct);
(iii) any action taken or omitted to be taken by BNY in good faith in accordance
with the advice or opinion of counsel for a Fund, the Trust, BAAI (obtained in
accordance with the procedures set forth in this Agreement) or its own counsel;
(iv) any improper use by the Fund, the Trust, BAAI or their respective agents,
of any valuations or computations supplied by BNY pursuant to this Agreement;
(v) the method of valuation of the securities and the method of computing a
Fund's net asset value or any other amount computed by BNY hereunder, provided
BNY has followed the Pricing Procedures; and (vi) any valuation of securities,
net asset value or other amount provided by a Fund or BAAI. BNY will not confess
any claim or settle or make any compromise in any instance in which the Trust
will be asked to provide indemnification, except with the Trust's prior written
consent. Any amounts payable by
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the Trust under this Section 4(b) shall be satisfied only against the assets of
the Fund involved in the claim, demand, action or suit and not against the
assets of any other investment portfolio of the Trust.
5. Fund Accounting Services.
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(a) BNY, in performing the services required of it under the terms of this
Agreement, shall be entitled to rely fully on the accuracy and validity of any
and all instructions, explanations, information, specifications and
documentation furnished to it by a Fund and shall have no duty or obligation to
review the accuracy, validity or propriety of such instructions, explanations,
information, specifications or documentation, including, without limitation,
evaluations of securities; the amounts or formula for calculating the amounts
and times of accrual of Fund's liabilities and expenses; the amounts receivable
and the amounts payable on the sale or purchase of securities; and amounts
receivable or amounts payable for the sale or redemption of Fund shares effected
by or on behalf of the Fund. In the event BNY's computations hereunder rely, in
whole or in part, upon information, including, without limitation, bid, offer or
market values of securities or other assets, or accruals of interest or earnings
thereon, from a pricing or similar service utilized, or subscribed to, by BNY
which BNY in its judgment deems reliable, or any other third party pricing
source designated by the Trust, BNY shall not be responsible for, under any duty
to inquire into, or deemed to make any assurances with respect to, the accuracy
or completeness of such information. BNY shall not be required to inquire into
any valuation of securities or other assets by the Fund or any third party
described in this Section, even though BNY in performing services similar to the
services provided pursuant to this Agreement for others may receive different
valuations of the same or different securities of the same issuers.
(b) Subject to the provisions of this Agreement and the direction and
approval of the Trust's Board, BNY shall perform the computations described in
Schedule II at such times and dates and in the manner specified or described in
the then-current prospectus(es) of a Fund. To the extent valuation of securities
or a computation specified or described in a Fund's Pricing Procedures or
then-current effective prospectus(es) is at any time inconsistent with any
applicable laws or regulations, the Trust or BAAI shall immediately so notify
BNY in writing and thereafter shall furnish BNY at all appropriate times with
the values of such securities and such Fund's net asset value or other amounts
otherwise to be calculated by BNY, or, subject to the prior approval of BNY,
instruct BNY in writing to value securities and make such computations in a
manner which the Trust or BAAI then represents in writing to be consistent with
all applicable laws and regulations. The Trust or BAAI may also from time to
time, subject to the prior approval of BNY, instruct BNY in writing to make
computations other than as specified in this Section of this Agreement. By
giving such instruction, the Trust or BAAI shall be deemed to have represented
that such instruction is consistent with all applicable laws and regulations and
the then-current effective prospectus(es) of the particular Fund. The Trust or
BAAI shall have sole responsibility for determining the method of valuation of
securities and the method of computations, and all computations, valuation of
securities and the method of computing each Fund's net asset value shall be
subject to approval by the Trust and BAAI. BNY shall not be liable for relying
on any price provided by any pricing service believed by BNY to be reliable, and
the Trust or BAAI shall furnish values when the same are not available from a
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pricing service utilized by BNY, with such furnishing to constitute an
instruction to BNY to rely on the provided values.
(c) BNY shall be responsible for determining and properly reflecting in the
computations made by it under this Agreement: (i) the taxable nature of any
distribution or amount received or deemed received by, or payable to, a Fund;
(ii) the taxable nature or effect on a Fund or its shareholders of any corporate
actions, class actions, tax reclaims, tax refunds, or similar events; (iii) the
taxable nature or taxable amount of any distribution or dividend paid, payable
or deemed paid, by a Fund to its shareholders; (iv) the effect under any
federal, state, or foreign income tax laws of a Fund making or not making any
distribution or dividend payment, or any election with respect thereto; or (v)
any tax accounting; provided, however, that if BNY is not certain of the taxable
nature, amount or effect of any such item, it may seek instructions regarding
the proper treatment of such item from the Trust or BAAI in accordance with the
procedures set forth in Section 1(e), above, and shall have no liability for
acting in reliance on such instructions.
6. Termination of Agreement.
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(a) This Agreement shall become effective as of the date first set forth
above and shall remain in full force and effect unless terminated pursuant to
the provisions of Section 6(b).
(b) This Agreement may be terminated at any time without payment of any
penalty, upon 60 days' written notice to BNY, by BAAI or by vote of the Board of
the Trust, or upon 180 days' written notice to BAAI and the Trust, by BNY. Upon
any such termination, BNY will cooperate with and assist the Trust, BAAI, their
agents and any successor administrator(s) or sub-administrator(s) in the
substitution/conversion process. In connection with any termination of this
Agreement, unless BNY is in breach of this Agreement, the Funds and BAAI agree
to pay BNY any compensation and reimbursement for out-of-pocket expenses as may
then be due and payable, as well as agreed-upon out-of-pocket expenses incurred
in connection with a termination. If BNY is in breach of this Agreement, the
Funds and BAAI may offset any compensation or reimbursement amounts owed to BNY
by the amount of damages, costs and expenses incurred as a result of BNY's
breach, including costs, expenses and reasonable incremental fees for a period
not to exceed one year incurred in connection with a conversion by the Trust and
BAAI to a successor service provider. In the event of a dispute as to the amount
of such damages, the Funds and BAAI agree to escrow the set-off amount.
(c) Sections 4 and 8 shall survive this Agreement's termination.
7. Amendments. Except as expressly provided in the first paragraph of
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Section 1, no provision of this Agreement may be amended or modified orally, but
only by an instrument in writing signed by the party against which enforcement
of the amendment or modification is sought.
8. Confidentiality. All books, records, information and data pertaining to
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the business of the Trust, or its prior, present or potential shareholders that
are exchanged or received in connection with the performance of BNY's duties
under this Agreement shall remain
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confidential and shall not be disclosed to any other person, except as
specifically authorized by the Trust or as may be required by law, and shall not
be used for any purpose other than performance of its responsibilities and
duties hereunder, and except that BNY retains the right to disclose matters
subject to confidentiality to its examiners, regulators, internal or external
auditors, its accountants, its internal and external counsel, and to any other
entity whenever it is advised by its internal or external counsel that it is
reasonably likely that BNY would be liable for a failure to do so. BNY will
endeavor to provide written notice to the Trust and BAAI at least five business
days prior to any disclosures pursuant to this Section 8, but, provided it shall
have provided as much notice as is reasonably practicable under the
circumstances, BNY shall have no liability for any failure to do so.
9. Service to Other Companies. The Trust and BAAI acknowledge that BNY now
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provides, will continue to provide and may in the future provide administrative
or other services to other investment companies or series of investment
companies, and the Trust and BAAI have no objection to BNY so doing. The Trust
and BAAI further acknowledge that the persons employed by BNY to assist in the
performance of BNY's duties under this Agreement may not devote their full time
to such service and nothing contained in this Agreement shall be deemed to limit
or restrict the right of BNY or any affiliate of BNY to engage in and devote
time and attention to other businesses or to render services of whatever kind or
nature.
10. Miscellaneous.
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(a) This Agreement shall be construed in accordance with the laws of the
State of New York, without regard to conflict of laws principles thereof. Each
Fund, the Trust and BAAI hereby consent to the jurisdiction of a state or
federal court situated in New York City, New York in connection with any dispute
arising hereunder. To the extent that in any such jurisdiction any of the
aforementioned persons may now or hereafter be entitled to claim, for itself or
its assets, immunity from suit, execution, attachment (before or after judgment)
or other legal process, each irrevocably agrees not to claim, and it hereby
waives, such immunity.
(b) In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby, and if any provision is inapplicable to any
person or circumstances, it shall nevertheless remain applicable to all other
persons and circumstances.
(c) Each and every right granted to BNY, the Trust or BAAI hereunder or
under any other document delivered hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be exercised from time
to time. No failure on the part of BNY, the Trust or BAAI to exercise, and no
delay in exercising, any right will operate as a waiver thereof, nor will any
single or partial exercise by BNY, the Trust or BAAI of any right preclude any
other or future exercise thereof or the exercise of any other right.
(d) BNY shall not be responsible for delays or errors that occur by reason
of circumstances beyond its reasonable control in the performance of its duties
under this Agreement, provided that reasonable back-up and disaster recovery
systems are in place,
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including, without limitation, labor difficulties, mechanical breakdowns,
computer breakdowns or malfunctions (hardware or software), flood or
catastrophe, acts of God, failures of transportation, communication or power
supply, or other similar circumstances. Nor shall BNY be responsible for delays
or failures to supply the information or services specified in this Agreement
where such delays or failures are caused by the failure of any person(s) other
than BNY to supply any instructions, explanations, information, specifications
or documentation deemed necessary by BNY in the performance of its duties under
this Agreement.
(e) Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Trust, BNY and/or BAAI shall be sufficiently given
if addressed to that party and received by it at its office set forth below or
at such other place as it may from time to time designate in writing.
To the Trust:
Nations Funds Trust
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
To BAAI:
Banc of America Advisors, Inc.
One Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
To BNY:
The Bank of New York
00 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Grunston
(f) This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement may not be assigned by BNY, nor may BNY delegate responsibility for
the performance of any of its duties hereunder, without the written consent of
the other parties hereto.
(g) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and which collectively shall be deemed
to constitute only one instrument.
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(h) The captions of 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.
(i) This Agreement constitutes the entire agreement between the parties
hereto with respect to the provision by BNY of sub-administrative services and
the receipt of fees therefor, and supersedes all prior arrangements or
understandings, written or oral, with respect to the provision by BNY of such
services and the receipt of fees therefor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
THE BANK OF NEW YORK
By: /s/ Xxxxxxx X. Grunston
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Xxxxxxx X. Grunston
Vice President
BANC OF AMERICA ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Senior Vice President and
Chief Operating Officer
NATIONS FUNDS TRUST
By: /s/ Xxxxx X. Xxxxx, Xx.
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Xxxxx X. Xxxxx, Xx.
Assistant Secretary
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SCHEDULE I
1. Nations High Yield Bond Fund
2. Nations Kansas Municipal Income Fund
3. Nations MidCap Index Fund
4. Nations Xxxxxxx 21st Century Fund
5. Nations Xxxxxxx International Opportunities Fund
6. Nations Financial Services Fund
7. Nations Classic Value Fund
8. Nations Global Value Fund
9. Nations Asset Allocation Fund
10. Nations Government Securities Fund
11. Nations Xxxxxxx Focused Equities Fund
12. Nations Xxxxxxx Growth & Income Fund
13. Nations LifeGoal Growth Portfolio
14. Nations LifeGoal Balanced Growth Portfolio
15. Nations LifeGoal Income and Growth Portfolio
16. Nations MidCap Value Fund
17. Nations LargeCap Value Fund
18. Nations New York Tax-Exempt Reserves
19. Nations Research Fund
20. Nations SmallCap Value Fund
Approved: December 9, 1999
Last Amended: April 30, 2002
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IN WITNESS WHEREOF, the parties hereto have caused this amended Schedule I
to be executed by their officers designated below as of the 30th day of April,
2002.
THE BANK OF NEW YORK
By: /s/ Xxxxxxx X. Grunston
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Xxxxxxx X. Grunston
Vice President
NATIONS FUNDS TRUST
on behalf of the Funds
By: /s/ Xxxxxxx X. Xxxxx, Xx.
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Xxxxxxx X. Xxxxx, Xx.
Secretary
BANC OF AMERICA ADVISORS, LLC
(formerly Banc of America Advisors,
Inc.)
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President
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SCHEDULE II
FUND ADMINISTRATION SERVICES
BNY shall perform the following sub-administrative services, in addition to
any other services agreed to from time to time:
.. Monitor and document compliance by the Funds with their policies and
restrictions as delineated in their prospectuses and statements of
additional information, including any supplements or amendments thereto,
and with the rules and regulations under the 1940 Act utilizing Xxxxxxx
River Development's compliance monitoring system or by such other means as
the parties may agree. BAAI shall be responsible for communicating such
policies and restrictions, including any changes thereto, to BNY by such
means as the parties agree.
.. Provide income attribution summary schedules necessary for year-end tax
reporting, including the attached examples. Provide a gross up for foreign
taxes on a per share basis and the redesignation of income and capital
gains on a per share basis.
.. Prepare federal, state, excise and local income tax returns for the Funds
and file such returns upon the approval of the Funds' independent
accountants; monitor, report on and prepare periodic worksheet and tax
provision packages with respect to Sub-Chapter M qualifications; prepare
and file all Form 1099s with respect to the Funds' Trustees; monitor
compliance with Section 4982 of the Internal Revenue Code; calculate and
maintain records pertaining to original issue discount and premium
amortization as required; identify wash sales and all other book/tax
differences, and report results to the Funds' independent accountants and
Funds management; and such other duties relating to federal and/or state
tax compliance as the parties may agree. BNY shall be responsible for
providing all pertinent tax information to the Funds' independent
accountants.
.. Prepare Return of Capital Statement of Position 93-2 adjustments.
.. Support BAAI in its preparation of the schedules and provide BAAI unaudited
quarterly and semi-annual and audited annual financial statements and
schedules of Fund investments by providing, without limitation, each Funds'
schedule of investments and general ledger in electronic format and/or hard
copy, as required, and such other information as may be necessary to
complete such financial reports.
.. Prepare statistical reports for outside information services (referenced in
Schedule V), and such other information services as the parties may agree,
including the ICI expense survey.
.. Prepare calculations for capital gains pursuant to IRS rules in conjunction
with BAAI and the Funds' independent accountant.
.. Attend Fund shareholder and Board of Trustees meetings as requested by
BAAI, including making such presentations as are appropriate, and, with
respect to the Fund administration
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services described herein, provide such periodic and special reports to the
Trust and BAAI as the Trust and BAAI shall reasonably request.
FUND ACCOUNTING SERVICES
BNY shall provide all accounting and recordkeeping services necessary and
appropriate for the business of the Funds, including but not limited to those
set forth below.
Required Records; Ledgers and Journals
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BNY shall keep current the following accounts and records relating to the
business of the Funds, in such form as is required by the 1940 Act and the rules
thereunder, and generally accepted accounting principles, to support all filings
under applicable federal and state tax laws and regulations and as may be
mutually agreed to among the Trust, BAAI and BNY, and shall make available to
BAAI and/or the Trust upon request:
1. Cash Receipts Journal
2. Cash Disbursements Journal
3. Dividends Paid and Payable Schedule (book vs. tax basis)
4. Purchase and Sales Journals - Portfolio Securities
5. Realized/Unrealized Gain (Loss) Reports
6. Subscription and Redemption Journals
7. Security Ledgers - Transaction Report and Tax Lot Holdings Report
8. Broker Ledger - Commission Report
9. Daily Expense Accruals
10. Daily Interest Accruals
11. Daily Trial Balance
12. Portfolio Interest Receivable and Income Journal
13. Portfolio Dividend Receivable and Income Register
14. Listing of Portfolio Holdings - showing cost, market value and percentage
of portfolio comprised of each security
15. Aged Receivables (dividends, interest, tax reclaiming)
16. Portfolio Turnover Rate
17. Cash reconciliations
18. Position reconciliations
BNY will be responsible for maintaining, in accordance with Section 31 and
the rules thereunder of the 1940 Act, all books and records so required and
generated in the course of performing their duties under this agreement.
Further, at a minimum, BNY shall maintain on-site the above referenced reports
as of each month end for the most recent fiscal year-ended and the current
fiscal year.
II-2
Daily Accounting Services
-------------------------
BNY shall perform the following services on each Business Day:
1. Calculate Net Asset Value (NAV), and Public Offering Price (POP) Per Share
--------------------------------------------------------------------------
Pursuant to SEC formulas:
------------------------
. Update the valuation of security positions held by each Fund's
portfolio in accordance with the Fund's Pricing Procedures and any
other appropriate procedures established by the Board and BAAI as BAAI
shall provide BNY in writing
. When instructed by BAAI, enter manual prices supplied by broker and
link to pricing procedures
. Calculate each Fund's NAV/POP in accordance with the applicable
Pricing Procedures approved by the Trust's Board of Trustees and
prepare NAV proof sheet. Review components of change in NAV for
reasonableness based on the tolerance levels as BAAI shall direct BNY
in writing
. Review variance reporting for price changes in individual securities
using variance levels established by Fund and report to Fund portfolio
managers and to BAAI
. Review for ex-dividend items indicated by pricing sources; trace to
general ledger for agreement
. Communicate required pricing and yield information (NAV/POP), as
appropriate, to BAAI, the Funds' transfer agent and sub-transfer agent
and, electronically, to NASDAQ and to such other third parties as
designated by the Funds with respect to its various distribution
channels. In addition, provide Fund share activity to BAAI.
2. Dividend Rates/Yields/Dollar Weighted Average Maturity:
------------------------------------------------------
. Calculate, subject to the approval of BAAI, net investment income
available for distribution daily as appropriate
. Calculate daily dividend rate, and 1, 7, 30-day yields/SEC yields
. Calculate dollar weighted average maturity
3. Determine and Report Cash Availability:
--------------------------------------
. Receive daily cash and transaction statements from the Funds'
custodian
. Complete daily bank cash reconciliations (including documentation of
any reconciling items) and notify the Funds' custodian
. Report investable cash to BAAI and Fund sub-advisers
4. Daily Expense Accruals:
----------------------
. Accrue individual expenses on a daily basis based on Instructions
provided by BAAI, except for those instances where such an adjustment
would cause a full xxxxx break in NAV, in which case such adjustment
will be included in the calculation of NAV on the day received
. If applicable, accrue daily amortization of organization expense as
instructed by BAAI
II-3
. If applicable, accrue daily Rule 12b-1 Plan expenses
. Adjust expense accruals as instructed by BAAI and provide reports as
requested by XXXX
0. Verify and Record All Daily Income Accruals for Debt Issues:
-----------------------------------------------------------
. Track income and provide year end tax schedules
. Review and verify all interest and amortization reports
. Periodic tie-out of receivables
. Ensure security masters denote proper interest and amortization
methods as per the fund set up sheets as instructed by BAAI
6. Monitor Securities:
------------------
. Review each Fund's portfolio holdings and current day's security
trades for dividend activity
. Interface with Funds' custodian for timely collection and postings of
corporate actions, dividends and interest pre-payments
7. Enter All Security Trades:
-------------------------
. Review verification of trade and interest calculations
. Verify settlement through custodian statements
. Maintain security ledger transaction reporting
. Maintain tax lot holdings
. Determine realized gains or losses on security trades
. Provide broker commission information
8. Enter All Fund Share Transactions:
---------------------------------
. Periodically reconcile dividend payable amounts with the Funds'
transfer agent
. Process activity identified on transfer agent reports
. Verify settlement through custodian statements
. Reconcile to transfer agency report balances
. Process and track capital stock gain/loss activity
9. Prepare Daily Trial Balance:
---------------------------
. Post manual entries to general ledger
. Post custodian bank activity
. Require automated settled transactions between custody and activity
records (prepare, clear and post)
. Post shareholder and security transactions
. Post and verify income and expense accruals and resolve differences
. Prepare general ledger
. Post corporate action activity
II-4
10. Review and Reconcile Custodian Statements:
-----------------------------------------
. Verify all posted interest, dividends, expenses, and shareholder and
security payments/receipts, etc. when requested
. Post all cash settlement activity to trial balance
. Reconcile to ending cash balance accounts
. Report to BAAI the status of past due items and failed trades with the
custodian
. Reconcile cash exception Income items, tax reclaims and past due
income items with custody area
11. Preparation of Accounting Reports:
---------------------------------
. Price Variance Report
. Trial Balance
. Portfolio Valuation
. NAV Calculation Report
. Cash Availability
. Change in NAV
. Non-standard entries
. Stale Price Report
. Other such reports as may be reasonably requested by BAAI
Monthly/Quarterly Services
--------------------------
BNY shall provide the following services on a monthly or quarterly basis,
within such timeframe as may be mutually agreed upon by BNY, the Trust and BAAI:
1. Submission of Monthly Accounting Reports as mutually agreed upon
----------------------------------------------------------------
2. Reconcile Asset Listing to Custodian Asset Listing
--------------------------------------------------
3. Provide Monthly Analysis and Reconciliation of Trial Balance Accounts
---------------------------------------------------------------------
4. Prepare Documentation Supporting the Preparation of:
---------------------------------------------------
. SEC yield reporting
. Income by state reporting
. Standard Industry Code Valuation Report (please provide BAAI's
industry code classifications/is there a standard for all Funds)
. Alternative Minimum Tax Income segregation schedule
II-5
5. Provide Upon Request Broker Commission and Net Trade Reports
------------------------------------------------------------
Annual (and Semi-Annual) Accounting Services
--------------------------------------------
BNY shall provide the following services on an annual and semi-annual
basis:
1. Supply auditors InvestOne reports supporting securities and shareholder
transactions, income and expense accruals, etc. during the year in
accordance with standard audit assistance requirements
2. Provide BAAI with information to assist BAAI in the preparation of NSAR
-----------------------------------------------------------------------
filings
-------
Other Core Services
-------------------
BNY shall provide the following services:
. Accrete discounts and amortize premiums to put and call events as
directed by BAAI and in a manner acceptable under generally accepted
accounting principles
. Process principal repayments on mortgage backed securities
. Update variable securities with current rates
. Process corporate action events through a primary vender feed, and
monitor results via Reuters, Bloomberg, or other available sources as
the parties may agree
. Perform automated portfolio pricing with a second vendor as requested
by BAAI
. Produce documents and respond to inquiries during account and SEC
examinations
Money Market Funds: Prepare daily xxxx to market reports and analysis
------------------
in compliance with Rule 2a-7 including:
. Calculating the daily portfolio weighted average maturity
. Report portfolio diversification based on trade/security information
provided by BAAI by:
Country, State, Tier, Liquidity, Asset Backed Securities,
Industry, Letter of Credit
. Listing percentage of portfolio maturing in specified intervals (i.e.,
number of days)
. Providing issuer and guarantor diversification exception reporting
International Funds: BNY shall provide the following services:
-------------------
. Report in base and local currency
II-6
. Processing of tax liability on foreign income subject to approval of
BAAI
. Daily variance analysis performed on FX rates for security position
held
. Produce automated bifurcation reporting in compliance with IRC
Section 988
. Xxxx to market security receivables and payables on a daily basis
. Determine portfolio exposure by country and currency
In addition to the above, BNY will provide additional support as
agreed upon from time to time (i.e., financial statement production).
II-7
Federal Obligation Percentage
The following is federal obligation information on the Nations Funds
portfolio earnings credited to your account in 1997. This information is
provided to enable you to calculate your state tax liability if you live in a
state which does not tax income from U.S. government obligations. We recommend
that you consult your tax adviser if you have questions regarding the
requirements for reporting this information as the requirements vary from state
to state.
----------------------------------------------------------------------------------------------------------------------
FUND Direct and Government Non-Qualifying Total
Agency Obligations/1/ Income/2/
----------------------------------------------------------------------------------------------------------------------
Nations Balanced Assets Fund 3.30% 96.70% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Capital Growth Fund 0.00% 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Cash Reserves 1.26% 98.74% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Disciplined Equity Fund 0.00% 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Diversified Income Fund 28.86% 71.14% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Emerging Growth Fund 0.00% 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Equity Income Fund 2.36% 97.64% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Equity Index Fund 0.09% 99.91% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Global Government Income Fund 9.21% 90.79% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Government Money Market Fund 99.78% 0.22% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Government Reserves 31.19% 68.81% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Government Securities Fund 35.09% 64.91% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations International Growth Fund 0.00% 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations LifeGoal Balanced Growth Portfolio 12.65% 87.35% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations LifeGoal Growth Portfolio 0.10% 99.90% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations LifeGoal Income and Growth Portfolio 16.36% 83.64% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Managed Index Fund 0.33% 99.67% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Managed SmallCap Index Fund 0.00% 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Managed SmallCap Value Index Fund 0.00% 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Managed Value Index Fund 0.00% 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Pacific Growth Fund 1.73% 98.27% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Prime Fund 5.52% 94.48% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Short-Intermediate Government Fund 66.12% 33.88% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Short-Term Income Fund 10.64% 89.36% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Small Company Growth Fund 0.16% 99.84% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Strategic Fixed Income Fund 20.21% 79.79% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Treasury Fund 21.25% 78.75% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Treasury Reserves 17.46% 82.45% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations U.S. Government Bond Fund 90.51% 9.49% 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Value Fund 0.00% 100.00% 100.00%
----------------------------------------------------------------------------------------------------------------------
/1/ "Direct Obligations" include U.S. Treasury bills, notes, and bonds.
"Government Agency" covers those non-mortgage related obligations issued by
federal agencies including but not limited to, the Student Loan Marketing
Association (SLMA), the Federal Farm Credit Bank, the Federal Deposit Insurance
Corporation (FDIC), and the Federal Financing Bank. These obligations are backed
by the full faith and credit of the U.S. government.
II-8
/2/ "Non-Qualifying Income" includes earnings derived from repurchase
agreements, money market instruments such as agency-issued commercial paper,
other regulated investment companies, corporate obligations, and obligations
issued by the Government National Mortgage Association (GNMA), the Federal
National Mortgage Association (FNMA), and the Federal Home Loan Mortgage Corp.
(FHLMC).
Capital Gains Information For Residents Of South Carolina
For each of the Funds, the amount of capital gains distribution which is
from assets held two or more years can be determined by multiplying each capital
gain distribution from your year-end statement by the appropriate percentages:
----------------------------------------------------------------------------------------------------------------------
FUND May 30, 1997 Distribution November 7, 1997 Distribution
------------------------- -----------------------------
----------------------------------------------------------------------------------------------------------------------
Nations Balanced Assets Fund 5.80% 17.51%
----------------------------------------------------------------------------------------------------------------------
Nations Capital Growth Fund 46.05% 40.53%
----------------------------------------------------------------------------------------------------------------------
Nations Disciplined Equity Fund 0.00% 22.75%
----------------------------------------------------------------------------------------------------------------------
Nations Emerging Growth Fund 33.38% 21.24%
----------------------------------------------------------------------------------------------------------------------
Nations Equity Income Fund 37.09% 51.39%
----------------------------------------------------------------------------------------------------------------------
Nations Equity Index Fund 8.97% 13.84%
----------------------------------------------------------------------------------------------------------------------
Nations Georgia Intermediate Municipal Bond - 99.04%
Fund
----------------------------------------------------------------------------------------------------------------------
Nations Global Government Income Fund 0.00% -
----------------------------------------------------------------------------------------------------------------------
Nations Intermediate Municipal Bond Fund - 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations International Equity Fund - 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations International Growth Fund - 100.00%
----------------------------------------------------------------------------------------------------------------------
Nations Managed Index Fund 0.00% -
----------------------------------------------------------------------------------------------------------------------
Nations Municipal Income Fund - 98.42%
----------------------------------------------------------------------------------------------------------------------
Nations Small Company Growth Fund - 6.12%
----------------------------------------------------------------------------------------------------------------------
Nations South Carolina Intermediate - 79.38%
Municipal Bond Fund
----------------------------------------------------------------------------------------------------------------------
Nations South Carolina Municipal Bond Fund 93.25% -
----------------------------------------------------------------------------------------------------------------------
Nations U.S. Government Bond Fund - 46.40%
----------------------------------------------------------------------------------------------------------------------
Nations Value Fund 61.85% 66.01%
----------------------------------------------------------------------------------------------------------------------
II-9
Percentage Of Municipal Income By State and Territory
Many states do not tax income derived from investments in their own state
obligations or in investments subject to agreements between their state and
other states. The following chart shows the percentage of income excluding
capital gains in the various Nations Funds portfolios derived from investments
in municipal obligations. This percentage indicates the amount that may be
tax-exempt in your state.
Nations Nations Short-Term Nations Intermediate Nations Nations
STATE Tax-Exempt Municipal Income Municipal Bond Fund Municipal Municipal
Fund Fund Income Fund Reserves
-----------------------------------------------------------------------------------------------------------------------
Alabama 2.50% 0.00% 1.00% 2.93% 3.73%
-----------------------------------------------------------------------------------------------------------------------
Alaska 1.18% 4.04% 2.17% 3.38% 0.45%
-----------------------------------------------------------------------------------------------------------------------
Arizona 5.09% 3.42% 3.11% 1.74% 1.22%
-----------------------------------------------------------------------------------------------------------------------
Arkansas 0.17% 0.00% 0.65% 0.99% 0.23%
-----------------------------------------------------------------------------------------------------------------------
California 2.07% 0.00% 0.70% 2.63% 4.83%
-----------------------------------------------------------------------------------------------------------------------
Colorado 3.59% 0.00% 2.11% 1.15% 3.70%
-----------------------------------------------------------------------------------------------------------------------
Connecticut 0.03% 0.00% 1.24% 1.30% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Delaware 2.61% 0.00% 0.02% 0.00% 1.46%
-----------------------------------------------------------------------------------------------------------------------
District of Columbia 1.04% 1.64% 0.89% 1.34% 1.69%
-----------------------------------------------------------------------------------------------------------------------
Florida 7.25% 1.08% 6.75% 7.84% 4.89%
-----------------------------------------------------------------------------------------------------------------------
Georgia 6.06% 2.74% 4.02% 7.64% 8.30%
-----------------------------------------------------------------------------------------------------------------------
Guam 0.00% 3.70% 0.33% 0.52% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Hawaii 0.42% 0.81% 2.17% 1.50% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Idaho 0.25% 0.00% 0.00% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Illinois 14.19% 5.49% 8.18% 5.01% 9.66%
-----------------------------------------------------------------------------------------------------------------------
Indiana 2.84% 1.69% 0.94% 3.44% 1.54%
-----------------------------------------------------------------------------------------------------------------------
Iowa 0.25% 0.88% 0.70% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Kansas 2.42% 0.42% 0.65% 1.53% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Kentucky 3.80% 0.00% 0.04% 0.22% 2.53%
-----------------------------------------------------------------------------------------------------------------------
Louisiana 2.33% 0.41% 0.07% 0.00% 2.39%
-----------------------------------------------------------------------------------------------------------------------
Maine 0.37% 0.00% 0.61% 0.08% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Maryland 0.80% 1.76% 3.10% 0.00% 0.55%
-----------------------------------------------------------------------------------------------------------------------
Massachusetts 0.12% 2.40% 3.02% 3.85% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Michigan 2.34% 7.12% 1.82% 1.99% 2.99%
-----------------------------------------------------------------------------------------------------------------------
Minnesota 0.86% 0.43% 1.11% 0.14% 0.31%
-----------------------------------------------------------------------------------------------------------------------
Mississippi 0.80% 0.00% 2.11% 1.05% 0.32%
-----------------------------------------------------------------------------------------------------------------------
Missouri 7.88% 0.49% 2.60% 2.02% 1.69%
-----------------------------------------------------------------------------------------------------------------------
Montana 0.56% 0.00% 0.00% 0.00% 0.64%
-----------------------------------------------------------------------------------------------------------------------
Nebraska 0.22% 0.00% 0.22% 0.10% 0.21%
-----------------------------------------------------------------------------------------------------------------------
Nevada 0.00% 3.39% 2.61% 1.74% 0.00%
-----------------------------------------------------------------------------------------------------------------------
New Hampshire 0.00% 0.00% 0.00% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------------------------
New Jersey 0.32% 1.18% 2.76% 0.82% 0.00%
-----------------------------------------------------------------------------------------------------------------------
New Mexico 0.55% 3.04% 0.92% 0.38% 1.82%
-----------------------------------------------------------------------------------------------------------------------
New York 0.22% 3.45% 2.59% 4.28% 0.00%
-----------------------------------------------------------------------------------------------------------------------
II-10
Nations Nations Short-Term Nations Intermediate Nations Nations
STATE Tax-Exempt Municipal Income Municipal Bond Fund Municipal Municipal
Fund Fund Income Fund Reserves
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
North Carolina 2.48% 1.16% 2.47% 1.58% 0.42%
-----------------------------------------------------------------------------------------------------------------------
North Dakota 0.00% 0.25% 0.00% 0.00% 0.26%
-----------------------------------------------------------------------------------------------------------------------
Ohio 1.40% 0.15% 0.63% 1.54% 5.85%
-----------------------------------------------------------------------------------------------------------------------
Oklahoma 0.38% 0.42% 0.66% 0.00% 0.11%
-----------------------------------------------------------------------------------------------------------------------
Oregon 1.31% 0.00% 0.80% 1.18% 0.72%
-----------------------------------------------------------------------------------------------------------------------
Pennsylvania 3.17% 4.66% 2.81% 4.39% 2.43%
-----------------------------------------------------------------------------------------------------------------------
Puerto Rico 0.00% 1.07% 0.27% 0.09% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Rhode Island 0.21% 0.00% 0.39% 0.59% 0.00%
-----------------------------------------------------------------------------------------------------------------------
South Carolina 1.94% 2.13% 1.82% 2.79% 4.19%
-----------------------------------------------------------------------------------------------------------------------
South Dakota 0.00% 0.77% 0.00% 0.00% 0.46%
-----------------------------------------------------------------------------------------------------------------------
Tennessee 1.40% 4.86% 1.55% 2.77% 6.35%
-----------------------------------------------------------------------------------------------------------------------
Texas 5.07% 15.58% 11.44% 10.38% 9.72%
-----------------------------------------------------------------------------------------------------------------------
Utah 1.63% 0.00% 0.13% 2.01% 1.70%
-----------------------------------------------------------------------------------------------------------------------
Vermont 0.00% 0.00% 0.00% 0.00% 0.00%
-----------------------------------------------------------------------------------------------------------------------
Virginia 1.22% 2.51% 6.51% 1.48% 4.04%
-----------------------------------------------------------------------------------------------------------------------
Washington 2.17% 11.60% 7.18% 9.47% 1.15%
-----------------------------------------------------------------------------------------------------------------------
West Virginia 1.86% 0.00% 0.22% 0.57% 1.46%
-----------------------------------------------------------------------------------------------------------------------
Wisconsin 2.11% 2.67% 2.24% 0.41% 3.07%
-----------------------------------------------------------------------------------------------------------------------
Wyoming 0.01% 0.00% 0.00% 0.47% 0.85%
-----------------------------------------------------------------------------------------------------------------------
State Specific Tax-Exempt Funds
For residents of the following states, a portion of income (excluding
capital gains) derived from Nations Funds state-specific municipal bond funds
for the year ended December 31, 1997 is exempt from regular federal and state
income taxes. For certain investors, a portion of income may be subject to the
federal Alternative Minimum Tax.
State Exempt Federal Exempt
FUND Percentage Percentage
-------------------------------------------------------------------------------------------------------------
Nations Florida Intermediate Municipal Bond Fund 98.26% 100.00%
-------------------------------------------------------------------------------------------------------------
Nations Florida Municipal Bond Fund 97.24% 99.71%
-------------------------------------------------------------------------------------------------------------
Nations Georgia Intermediate Municipal Bond Fund 98.93% 99.79%
-------------------------------------------------------------------------------------------------------------
Nations Georgia Municipal Bond Fund 97.35% 99.13%
-------------------------------------------------------------------------------------------------------------
Nations Maryland Intermediate Municipal Bond Fund 95.80% 100.00%
-------------------------------------------------------------------------------------------------------------
Nations Maryland Municipal Bond Fund 93.44% 99.48%
-------------------------------------------------------------------------------------------------------------
Nations North Carolina Intermediate Municipal Bond Fund 95.53% 99.87%
-------------------------------------------------------------------------------------------------------------
II-11
-------------------------------------------------------------------------------------------------------
Nations North Carolina Municipal Bond Fund 97.69% 99.53%
-------------------------------------------------------------------------------------------------------
Nations South Carolina Intermediate Municipal Bond Fund 98.72% 99.95%
-------------------------------------------------------------------------------------------------------
Nations South Carolina Municipal Bond Fund 93.76% 99.44%
-------------------------------------------------------------------------------------------------------
Nations Tennessee Intermediate Municipal Bond Fund 97.91% 99.89%
-------------------------------------------------------------------------------------------------------
Nations Tennessee Municipal Bond Fund 97.47% 100.00%
-------------------------------------------------------------------------------------------------------
Nations Texas Intermediate Municipal Bond Fund 81.38% 99.99%
-------------------------------------------------------------------------------------------------------
Nations Texas Municipal Bond Fund 83.51% 99.39%
-------------------------------------------------------------------------------------------------------
Nations Virginia Intermediate Municipal Bond Fund 97.87% 99.94%
-------------------------------------------------------------------------------------------------------
Nations Virginia Municipal Bond Fund 95.42% 99.73%
-------------------------------------------------------------------------------------------------------
Alternative Minimum Tax
This information is to be used to calculate your federal Alternative
Minimum Tax liability, if applicable. Multiply the percentage below by the Fund
distribution (excluding capital gains) to give you the distributions to be added
to your Alternative Minimum Taxable income.
FUND Percentage
-------------------------------------------------------------------------------------------------------
Nations Florida Intermediate Municipal Bond Fund 5.94%
-------------------------------------------------------------------------------------------------------
Nations Florida Municipal Bond Fund 17.79%
-------------------------------------------------------------------------------------------------------
Nations Georgia Intermediate Municipal Bond Fund 6.50%
-------------------------------------------------------------------------------------------------------
Nations Georgia Municipal Bond Fund 19.17%
-------------------------------------------------------------------------------------------------------
Nations Intermediate Municipal Bond Fund 6.28%
-------------------------------------------------------------------------------------------------------
Nations Maryland Intermediate Municipal Bond Fund 4.17%
-------------------------------------------------------------------------------------------------------
Nations Maryland Municipal Bond Fund 10.55%
-------------------------------------------------------------------------------------------------------
Nations Municipal Income Fund 12.44%
-------------------------------------------------------------------------------------------------------
Nations Municipal Reserves 9.79%
-------------------------------------------------------------------------------------------------------
Nations North Carolina Intermediate Municipal Bond Fund 4.23%
-------------------------------------------------------------------------------------------------------
Nations North Carolina Municipal Bond Fund 14.86%
-------------------------------------------------------------------------------------------------------
Nations Short-Term Municipal Income Fund 9.96%
-------------------------------------------------------------------------------------------------------
Nations South Carolina Intermediate Municipal Bond Fund 6.22%
-------------------------------------------------------------------------------------------------------
Nations South Carolina Municipal Bond Fund 15.57%
-------------------------------------------------------------------------------------------------------
Nations Tax-Exempt Fund 16.64%
-------------------------------------------------------------------------------------------------------
Nations Tennessee Intermediate Municipal Bond Fund 9.53%
-------------------------------------------------------------------------------------------------------
Nations Tennessee Municipal Bond Fund 16.04%
-------------------------------------------------------------------------------------------------------
Nations Texas Intermediate Municipal Bond Fund 4.09%
-------------------------------------------------------------------------------------------------------
Nations Texas Municipal Bond Fund 16.83%
-------------------------------------------------------------------------------------------------------
Nations Virginia Intermediate Municipal Bond Fund 6.83%
-------------------------------------------------------------------------------------------------------
Nations Virginia Municipal Bond Fund 14.66%
-------------------------------------------------------------------------------------------------------
II-12
Corporate Qualifying Dividends
The following information is provided to enable shareholders to calculate
the amount of dividends paid by the Fund which qualify for the corporate
dividend received deduction.
FUND Domestic Domestic & Foreign
Corporations Corporations
-------------------------------------------------------------------------------------------------------------
Nations Balanced Assets Fund 6.48% 6.82%
-------------------------------------------------------------------------------------------------------------
Nations Capital Growth Fund 32.82% 34.22%
-------------------------------------------------------------------------------------------------------------
Nations Disciplined Equity Fund 18.88% 19.50%
-------------------------------------------------------------------------------------------------------------
Nations Emerging Growth Fund 19.87% 19.95%
-------------------------------------------------------------------------------------------------------------
Nations Emerging Markets Fund 0.00% 100.00%
-------------------------------------------------------------------------------------------------------------
Nations Equity Income Fund 30.13% 30.70%
-------------------------------------------------------------------------------------------------------------
Nations Equity Index Fund 50.88% 52.15%
-------------------------------------------------------------------------------------------------------------
Nations International Equity Fund 0.00% 100.00%
-------------------------------------------------------------------------------------------------------------
Nations International Growth Fund 0.00% 100.00%
-------------------------------------------------------------------------------------------------------------
Nations Managed Index Fund 84.38% 85.49%
-------------------------------------------------------------------------------------------------------------
Nations Managed SmallCap Index Fund 22.43% 22.46%
-------------------------------------------------------------------------------------------------------------
Nations Managed SmallCap Value Index Fund 75.88% 75.88%
-------------------------------------------------------------------------------------------------------------
Nations Managed Value Index Fund 75.78% 75.78%
-------------------------------------------------------------------------------------------------------------
Nations Pacific Growth Fund 0.00% 100.00%
-------------------------------------------------------------------------------------------------------------
Nations Value Fund 44.32% 45.23%
-------------------------------------------------------------------------------------------------------------
Florida Intangibles Tax Percentage/3/
Exempt
FUND Percentage
Equity
Nations Balanced Assets Fund 19.37%
-------------------------------------------------------------------------------------------------------------
Nations Capital Growth Fund 0.00%
-------------------------------------------------------------------------------------------------------------
Nations Disciplined Equity Fund 0.00%
-------------------------------------------------------------------------------------------------------------
Nations Emerging Growth Fund 0.00%
-------------------------------------------------------------------------------------------------------------
Nations Emerging Markets Fund 0.00%
-------------------------------------------------------------------------------------------------------------
Nations Equity Income Fund 0.00%
-------------------------------------------------------------------------------------------------------------
Nations Equity Index Fund 0.11%
-------------------------------------------------------------------------------------------------------------
Nations International Equity Fund 0.00%
-------------------------------------------------------------------------------------------------------------
Nations International Growth Fund 0.00%
-------------------------------------------------------------------------------------------------------------
Nations LifeGoal Growth Portfolio 0.00%
-------------------------------------------------------------------------------------------------------------
Nations LifeGoal Balanced Growth Portfolio 0.00%
-------------------------------------------------------------------------------------------------------------
Nations LifeGoal Income and Growth Portfolio 0.00%
-------------------------------------------------------------------------------------------------------------
Nations Managed Index Fund 0.13%
-------------------------------------------------------------------------------------------------------------
II-13
Exempt
FUND Percentage
---------------------------------------------------------------------------------------------------------
Nations Managed SmallCap Index Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Managed SmallCap Value Index Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Managed Value Index Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Pacific Growth Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Value Fund 0.00%
---------------------------------------------------------------------------------------------------------
Fixed Income
Nations Diversified Income Fund 39.79%
---------------------------------------------------------------------------------------------------------
Nations Global Government Income Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Government Securities Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Short-Intermediate Government Fund 63.44%
---------------------------------------------------------------------------------------------------------
Nations Short-Term Income Fund 8.01%
---------------------------------------------------------------------------------------------------------
Nations Strategic Fixed Income Fund 8.28%
---------------------------------------------------------------------------------------------------------
Nations U.S. Government Bond Fund 0.00%
---------------------------------------------------------------------------------------------------------
Money Market
Nations Cash Reserves 0.46%
---------------------------------------------------------------------------------------------------------
Nations Government Money Market Fund 100.00%
---------------------------------------------------------------------------------------------------------
Nations Government Reserves 24.61%
---------------------------------------------------------------------------------------------------------
Nations Prime Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Treasury Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Treasury Reserves 12.56%
---------------------------------------------------------------------------------------------------------
Municipal
Nations Florida Intermediate Municipal Bond Fund 100.00%
---------------------------------------------------------------------------------------------------------
Nations Florida Municipal Bond Fund 100.00%
---------------------------------------------------------------------------------------------------------
Nations Georgia Intermediate Municipal Bond Fund 0.72%
---------------------------------------------------------------------------------------------------------
Nations Georgia Municipal Bond Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Intermediate Municipal Bond Fund 0.18%
---------------------------------------------------------------------------------------------------------
Nations Maryland Intermediate Municipal Bond Fund 1.30%
---------------------------------------------------------------------------------------------------------
Nations Maryland Municipal Bond Fund 9.92%
---------------------------------------------------------------------------------------------------------
Nations Municipal Income Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations North Carolina Intermediate Municipal Bond Fund 0.93%
---------------------------------------------------------------------------------------------------------
Nations North Carolina Municipal Bond Fund 2.06%
---------------------------------------------------------------------------------------------------------
Nations Short-Term Municipal Income Fund 2.44%
---------------------------------------------------------------------------------------------------------
Nations South Carolina Intermediate Municipal Bond Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations South Carolina Municipal Bond Fund 5.29%
---------------------------------------------------------------------------------------------------------
Nations Tax-Exempt Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Municipal Reserves 0.00%
---------------------------------------------------------------------------------------------------------
II-14
FUND Exempt
Percentage
---------------------------------------------------------------------------------------------------------
Nations Tennessee Intermediate Municipal Bond Fund 4.25%
---------------------------------------------------------------------------------------------------------
Nations Tennessee Municipal Bond Fund 7.81%
---------------------------------------------------------------------------------------------------------
Nations Texas Intermediate Municipal Bond Fund 0.26%
---------------------------------------------------------------------------------------------------------
Nations Texas Municipal Bond Fund 3.06%
---------------------------------------------------------------------------------------------------------
Nations Virginia Intermediate Municipal Bond Fund 0.00%
---------------------------------------------------------------------------------------------------------
Nations Virginia Municipal Bond Fund 0.00%
---------------------------------------------------------------------------------------------------------
/3/ If any portion of a fund's shares is subject to the Florida Intangibles
Tax, then only U.S. government obligations will retain their tax-exempt status.
Obligations issued by Florida would lose their exempt status and be subject to
the intangibles tax.
Additional Information:
As a shareholder of Nations International Equity Fund, Nations Emerging
Markets Fund, Nations Pacific Growth Fund and or Nations Global Government
Income Fund who received dividends, you are entitled to receive your choice of
either a foreign tax credit or an itemized deduction for foreign taxes paid by
the Fund. Your portion of the foreign taxes paid by the Fund in 1997 is reported
in Box 3 of your Form 1099-DIV.
To take an itemized deduction for your share of the foreign taxes paid by
the Fund, include the amount in Box 3 of Form 1099-DIV on Schedule A, Line 8 of
your Form 1040.
The TaxPayer Relief Act of 1997 has modified the flow-through status of
Foreign Tax Credits ("FTCs"). As a result, a percentage of FTC might not be
eligible for credit. In order to assist you in determining the amount of Foreign
Tax Paid which is not eligible for a credit, multiply the percentage listed in
Column A below, by the Foreign Tax Paid ("FTP") amount reported on Form
1099-DIV, box 3. For each fund, deduct this amount from the FTP (box 3) and
report the total resulting amounts in Form 1040, Line 43.
To compute the allowable credit, individual shareholders must complete IRS
Form 1116 and attach it to their Form 1040. Corporate shareholders should
complete Form 1118. The chart below should be used to prepare either of these
Forms.
Although it will generally be more advantageous to claim a credit for the
foreign taxes paid, the ability to claim a credit depends on your individual tax
situation. We suggest that you consult your tax adviser to determine your best
course of action.
II-15
Fund (A) Amount Not Eligible For (B) Foreign Source
Foreign Tax Credit Income Factor
Nations Emerging Markets Fund 0.00% .38792129
Nations International Equity Fund 0.00% .51953104
Nations Pacific Growth Fund 0.00% .48509903
Foreign Tax Factor (C) and Foreign Income Factor (D)
-------------------------------------------------------------------------------------------------------------
Nations International Nations Emerging Markets Fund Nations Pacific Growth
Country Equity Fund Fund
C D C D C D
Argentina 0.00% 0.42% 0.00% 5.08% 0.00% 0.00%
Australia 2.83% 5.71% 0.00% 0.00% 22.12% 10.08%
Belgium 2.22% 1.65% 0.00% 0.00% 0.00% 0.00%
Brazil 1.05% 3.15% 21.05% 28.62% 0.00% 0.00%
Egypt 0.00% 0.00% 0.00% 1.40% 0.00% 0.00%
Switzerland 4.80% 4.68% 0.00% 0.00% 0.00% 0.00%
Chile 1.68% 1.38% 15.27% 7.20% 0.00% 0.00%
Germany 4.00% 4.46% 0.00% 0.00% 0.00% 0.00%
Spain 3.46% 2.60% 0.00% 0.00% 0.00% 0.00%
France 10.81% 8.22% 0.00% 0.00% 0.00% 0.00%
Great Britain 33.23% 26.80% 2.78% 1.05% 0.00% 0.00%
Greece 0.00% 0.00% 12.75% 3.69% 0.00% 0.00%
Hungary 0.00% 0.00% 0.00% 0.52% 0.00% 0.00%
Hong Kong 0.00% 9.85% 0.00% 8.65% 0.00% 65.32%
Indonesia 0.06% 0.39% 6.10% 4.01% 11.61% 5.07%
Israel 0.00% 0.00% 0.48% 0.64% 0.00% 0.00%
India 0.00% 0.19% 0.11% 2.33% 0.00% 0.00%
Italy 2.44% 1.82% 0.00% 0.00% 0.00% 0.00%
Japan 12.01% 8.95% 0.00% 0.00% 0.00% 0.00%
Korea 0.90% 1.10% 0.93% 1.55% 11.09% 4.59%
Malaysia 2.25% 0.84% 20.78% 5.18% 35.89% 8.45%
Mexico 0.00% 4.81% 0.00% 8.74% 0.00% 0.00%
Netherlands 9.91% 7.29% 0.00% 0.00% 0.00% 0.00%
Norway 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Peru 0.00% 0.38% 0.00% 3.50% 0.00% 0.00%
Philippines 0.04% 0.03% 3.24% 0.97% 1.60% 0.44%
Portugal 0.48% 0.48% 5.91% 3.94% 0.00% 0.00%
Russia 0.00% 0.00% 0.00% 0.28% 0.00% 0.00%
Sweden 3.45% 2.57% 0.00% 0.00% 0.00% 0.00%
Singapore 3.84% 1.62% 0.00% 0.00% 16.17% 5.02%
Thailand 0.54% 0.61% 0.99% 0.74% 1.52% 1.03%
Taiwan 0.00% 0.00% 0.00% 1.11% 0.00% 0.00%
South Africa 0.00% 0.00% 9.61% 10.80% 0.00% 0.00%
100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
II-16
Instructions For Calculating Foreign Tax and Foreign Source Income by
Country:
1. To calculate your foreign tax by country, multiply the total
foreign taxes (Form 1099-DIV, Box 3) by the applicable Foreign Tax Factor
percentage (Column C) indicated in the chart to the left.
2. To calculate the total foreign source income, multiply the amount
in Box 1b on Form 1099-DIV by the appropriate factor in column B.
3. To calculate the total foreign source income by country, multiply
the total foreign source income determined in step 2 by the applicable Foreign
Income Factor percentage (Column D) presented in the chart to the left.
II-17
SCHEDULE III
SERVICE LEVEL PERFORMANCE STANDARDS
----------------------------------------------------------------------------------------------------------------------------
SERVICE STANDARD
----------------------------------------------------------------------------------------------------------------------------
1. Daily Cash Availability [_] 100% accuracy and delivery by 9:00 a.m. EST for Money
Market Funds and 9:30 a.m. EST for all others
[_] Compensation for uninvested cash at Nations Cash Reserves'
Mill rate
----------------------------------------------------------------------------------------------------------------------------
2. Calculation of daily NAVs [_] 100% accuracy by 5:00 p.m. EST including pricing, expense
accruals, cash activity, manual entries, S/H activity.
Delivery by 5:45 p.m. EST
----------------------------------------------------------------------------------------------------------------------------
3. Review of daily NAVs [_] 100% review by 5:30 p.m. EST
[_] Review of NAV components for reasonableness including
analysis of the change in the NAV and the change in
mill rates.
[_] Review of price variance report
[_] Review of manual proof
----------------------------------------------------------------------------------------------------------------------------
4. NASDAQ Reporting [_] 100% accuracy and communication by 5:45 p.m. EST
----------------------------------------------------------------------------------------------------------------------------
5. Daily Pricing and Rate Report (DPRR) [_] 100% accuracy in nightly transmission of DPRRs
[_] Money Market Funds-5:30 p.m. EST
[_] All other Funds-6:00 p.m. EST
----------------------------------------------------------------------------------------------------------------------------
6. FundStation Report (SubM) [_] 100% accuracy and nightly transmission by 7:00 p.m. EST
----------------------------------------------------------------------------------------------------------------------------
7. Processing of trade tickets [_] 100% accuracy and processed by T+1 if received by the
following cut-off times:
[_] All Funds (except International) - 10:00 am (T+1)
[_] International - 12:00 p.m. (T+1)
[_] Same day settlements - 1:30 p.m.
----------------------------------------------------------------------------------------------------------------------------
III-1
----------------------------------------------------------------------------------------------------------------------------
SERVICE STANDARD
----------------------------------------------------------------------------------------------------------------------------
8. Problem Resolution (general) [_] NAV impact analysis within 1 day
[_] Clear and timely communication of 100% of issues
[_] Ongoing Tracking
----------------------------------------------------------------------------------------------------------------------------
9. Cash reconciliations [_] Performed daily and sent daily to BAAI (Money Market
Funds) and sent weekly to BAAI (all other funds)
[_] Issues communicated to BAAI same day
[_] Outstanding items addressed within 1 business day
----------------------------------------------------------------------------------------------------------------------------
10. Position Reconciliations [_] Performed daily and sent weekly to BAAI
[_] Issues communicated to BAAI same day
[_] Open issues addressed within 2 business days
----------------------------------------------------------------------------------------------------------------------------
11. Tax reporting
[_] Federal, state, tax returns [_] Tax provision package prepared within time parameters as
set by BAAI/Independent tax personnel (PWC)
[_] Tax provision packages including Sub-M and
excise tax amounts/distributions [_] Estimates of tax requirements prepared as required by BAAI
for proper tax planning
[_] Identification of all book/tax differences
[_] Capital gain estimate preparations
----------------------------------------------------------------------------------------------------------------------------
12. Statistical Reports [_] Filed within the time parameters as set forth by each
statistical service
----------------------------------------------------------------------------------------------------------------------------
13. Expense accruals/payments [_] Payments made on the business day written instructions
from an authorized signator received
[_] Expense accruals made with 100% accuracy based upon
written instructions from BAAI
----------------------------------------------------------------------------------------------------------------------------
14. Management Reports [_] Provided to BAAI within 10 business days of month end
----------------------------------------------------------------------------------------------------------------------------
III-2
---------------------------------------------------------------------------------------------------------
SERVICE STANDARD
---------------------------------------------------------------------------------------------------------
15. Year end tax reports [_] Provided to BAAI within the time frame agreed to
---------------------------------------------------------------------------------------------------------
16. Annual/Semi-Annual Reports [_] Provide Trial Balance within 5 business days after
annual/semi-annual period
[_] Provide additional financial statement support as
agreed to
---------------------------------------------------------------------------------------------------------
17. Daily Reports [_] To be provided on the following day
[_] Provide detailed portfolio valuation
[_] Trial Balance
---------------------------------------------------------------------------------------------------------
18. Daily Cash Sweep [_] 100% accuracy and communication by 2:00 p.m. EST
[_] AIM
[_] Nuveen
---------------------------------------------------------------------------------------------------------
19. Post Dividends / Corporate Actions [_] 100% accuracy and posted on effective date
---------------------------------------------------------------------------------------------------------
20. Monthly Reconciliations [_] Complete reconciliations within 10 business days
---------------------------------------------------------------------------------------------------------
21. Reporting to Sub-Advisors [_] Provide nightly and other periodic reporting to
Nations Funds Sub-Advisors
---------------------------------------------------------------------------------------------------------
22. Compliance [_] Provide compliance reports as requested by BAAI
---------------------------------------------------------------------------------------------------------
III-3
SCHEDULE IV
(Attached)
IV-1
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR NATIONSBANC MANAGED PORTFOLIOS
Effective 12/1/98
Money Market Funds
------------------
1 1/4 basis point per annum on the first $3 billion of each portfolio's
average net assets;
1 basis point on the next $3 billion;
1/2 of one basis point on the next $4 billion;
1/4 of one basis point on the excess.
Domestic Equity
---------------
6 basis points per annum on the first $1 billion of each portfolio's
average net assets;
4 basis points on the next $500 million;
2 basis points on the next $500 million;
1 basis point on the excess.
Domestic Fixed Income
---------------------
5 basis points per annum on the first $1 billion of each portfolio's
average net assets.
3 basis points on the next $500 million.
1 1/2 basis point on the next $500 million.
1/2 of one basis point on the excess.
International Funds
-------------------
7 basis points per annum on the first $1 billion of each portfolio's
average net assets;
5 basis points on the next $500 million;
3 basis points on the next $500 million;
1 basis point on the excess.
IV-2
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR NATIONSBANC MANAGED PORTFOLIOS
Effective 12/1/98
Multiple Class Charges
----------------------
$500 per month, per portfolio, for each additional class in excess of nine (9)
classes.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with the Bank or for
on-going usage of any Bank systems related to fund accounting or administration
services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by Nations obtained from
third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket expenses
traditionally include, but are not limited to, cost associated with attendance
at Board Presentations, printing of shareholders reports, express mail charges,
etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
NationsBanc Advisors, Inc. The Bank of New York
Approved by: Approved by: /s/ Xxx Xxxxxx
--------------
Name: Name: Xxx Xxxxxx
----------
Title: Title: Vice President
--------------
Date: Date: May 7, 1999
-----------
IV-2
NationsBanc Managed Portfolios
------------------------------
Fund Accounting and Sub Administration Fee Schedule
---------------------------------------------------
When Aggregate Assets Exceed $100 billion
-----------------------------------------
Fund Type Basis Points
--------- ------------
Money Market
------------
First $2 billion 0.000100
Next $1 billion 0.000075
On excess (>$3.0 billion) 0.000025
Domestic Equity
---------------
First $500 million 0.000550
Next $500 million 0.000450
Next $500 million 0.000250
Next $500 million 0.000150
On excess (>$2.0 billion) 0.000050
Domestic Fixed Income
---------------------
First $500 million 0.000450
Next $500 million 0.000350
Next $250 million 0.000225
Next $250 million 0.000100
On excess (>$1.5 billion) 0.000050
International
-------------
First $500 million 0.00060
Next $500 million 0.00050
Next $250 million 0.00040
Next $250 million 0.00030
On excess (>$1.5 billion) 0.00005
IV-4
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR
NATIONSBANC MANAGED PORTFOLIOS
(Multi Managers)
Multi-Managers
--------------
$22,000 per annum for each multi-manager going to a single feeder. These fees
will be in addition to the following fee schedule now in effect.
For each new multi-manager account with assets less than $20 million, we will
waive our fees for the first three months.
Money Market Funds
------------------
1 1/4 basis point per annum on the first $3 billion of each portfolio's
average net assets;
1 basis point on the next $3 billion;
1/2 of one basis point on the next $4 billion;
1/4 of one basis point on the excess.
Domestic Equity
---------------
6 basis points per annum on the first $1 billion of each portfolio's
average net assets;
4 basis points on the next $500 million;
2 basis points on the next $500 million;
1 basis point on the excess.
Domestic Fixed Income
---------------------
5 basis points per annum on the first $1 billion of each portfolio's
average net assets.
3 basis points on the next $500 million.
1 1/2 basis point on the next $500 million.
1/2 of one basis point on the excess.
International Funds
-------------------
7 basis points per annum on the first $1 billion of each portfolio's
average net assets;
5 basis points on the next $500 million;
3 basis points on the next $500 million;
1 basis point on the excess.
IV-5
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR
NATIONSBANC MANAGED PORTFOLIOS
(Multi Managers)
Multiple Class Charges
----------------------
$500 per month, per portfolio, for each additional class in excess of nine (9)
classes.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with the Bank or for
on-going usage of any Bank systems related to fund accounting or administration
services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by Nations obtained from
third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket expenses
traditionally include, but are not limited to, cost associated with attendance
at Board Presentations, printing shareholders reports, express mail charges,
etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
NationsBanc Advisors, Inc. The Bank of New York
Approved by: Approved by: /s/ Xxx Xxxxxx
--------------
Name: Name: Xxx Xxxxxx
----------
Title: Title: Vice President
--------------
Date: Date: May 7, 1999
-----------
IV-6
PORTFOLIO PRICING, FUND ACCOUNTING
AND FUND ADMINISTRATION FEE SCHEDULE
FOR
BANC OF AMERICA ADVISORS, INC.
Nations Financial Services Fund
Domestic Equity Funds
---------------------
5 1/2 basis points per annum on the first $500 million of the portfolio's
average net assets;
4 1/2 basis points on the next $500 million;
2 1/2 basis points on the next $500 million;
1 1/2 basis points on the next $500 million;
1/2 of one basis point on the excess.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with us or for
on-going usage of any Bank systems related to fund accounting or administration
services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by the each fund
obtained from third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket
expenses traditionally include, but are not limited to, cost associated with
attendance at Board Presentations, printing shareholders reports, express mail
charges, etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
IV-7
PORTFOLIO PRICING, FUND ACCOUNTING
AND FUND ADMINISTRATION FEE SCHEDULE
FOR
BANC OF AMERICA ADVISORS, INC.
Nations Global Value Fund
International Funds
-------------------
6 basis points per annum on the first $500 million of the portfolio's
average net assets;
5 basis points on the next $500 million;
4 basis points on the next $250 million;
3 basis points on the next $250 million;
1/2 of one basis point on the excess.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with us or for
on-going usage of any Bank systems related to fund accounting or administration
services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by the each fund
obtained from third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket
expenses traditionally include, but are not limited to, cost associated with
attendance at Board Presentations, printing shareholders reports, express mail
charges, etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
IV-8
PORTFOLIO PRICING, FUND ACCOUNTING
AND FUND ADMINISTRATION FEE SCHEDULE
FOR
BANC OF AMERICA ADVISORS, INC.
Nations Classic Value Fund
Domestic Equity
---------------
5 1/2 basis points per annum on the first $500 million of the portfolio's
average net assets;
4 1/2 basis points on the next $500 million;
2 1/2 basis points on the next $500 million;
1 1/2 basis points on the next $500 million
1/2 of one basis point on the excess.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with us or for
on-going usage of any Bank systems related to fund accounting or administration
services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by the each fund
obtained from third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket
expenses traditionally include, but are not limited to, cost associated with
attendance at Board Presentations, printing shareholders reports, express mail
charges, etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
IV-9
SCHEDULE V
All Database Companies Quarterly List
---------------------- --------------
AMG Data Services Lipper
Xxxxxx'x Morningstar
Bloomberg CDA Wiesenberger
CDA Wiesenberger Investment Company Institute
Commerce Clearing House (CCH) S&P Micropal
Forbes Institute for Economic Research
Institute for Economic Research Value Line
Interactive Data Services Media General Financial Services
Investment Company Institute LCG Associates
LCG Associates Closed End Fund Digest (Closed End Only)
Lipper Lipper - International (Closed End Only)
Media General
Xxxxx'x Investors Service
Morningstar
S&P Micropal
Strategic Insights
Value Line
V-1
