EX-99.B5(a)
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made as of this 1st day of January, 1996, by
and between Nations Fund Portfolios, Inc., a Maryland corporation (the
"Company"), and NationsBanc Advisors, Inc., a North Carolina corporation
(the "Adviser"), on behalf of those portfolios of the Company now or
hereafter identified on Schedule I hereto (each a "Fund" and,
collectively, the "Funds").
RECITALS
WHEREAS, the Company is registered with the Securities and
Exchange Commission ("Commission") under the Investment Company Act of
1940, as amended (the "1940 Act") as an open-end, series management
investment company; and
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser; and
WHEREAS, the Company and the Adviser desire to enter into an
agreement to provide for investment advisory services to the Company
upon the terms and conditions hereinafter set forth; and
WHEREAS, the Company and the Adviser contemplate that certain
duties of the Adviser under this Agreement will be delegated to one or
more sub-investment adviser(s) (the "Sub-Adviser(s)") pursuant to
separate sub-advisory agreement(s) (the "Sub-Advisory Agreement(s)");
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
1. Advisory Services. The Adviser shall act as investment
adviser for the Funds and shall, in such capacity, manage and supervise
the investment and reinvestment of the cash, securities or other
properties comprising the Funds' assets, subject at all times to the
policies and control of the Company's Board of Directors. The Adviser
shall give the Funds the benefit of its best judgment, efforts and
facilities in rendering its services as investment adviser.
2. Investment Analysis and Implementation. In carrying out its
obligations under paragraph 1 hereof, the Adviser shall:
(a) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial
data, domestic, foreign or otherwise, whether affecting the
economy generally or the Funds specifically, and whether
concerning the individual issuers whose securities are included
in the Funds or
the activities in which such issuers engage, or with respect to
securities which the Adviser considers desirable for inclusion in
the Funds;
(b) invest and reinvest, on an ongoing basis, assets
held in the Funds in strict accordance with the investment
policies of the Funds as set forth in the registration statement
of the Company with respect to the Funds, as the same may be
amended from time to time;
(c) in accordance with policies and procedures
established by the Company's Board of Directors, select brokers
and dealers to execute portfolio transactions for the Funds and
select the markets on or in which the transactions will be
executed;
(d) vote, either in person or by general or limited
proxy, or refrain from voting, any securities held in the Funds
for any purposes; exercise or sell any subscription or conversion
rights; consent to and join in or oppose any voting trusts,
reorganizations, consolidations, mergers, foreclosures and
liquidations and in connection therewith, deposit securities, and
accept and hold other property received therefor;
(e) determine on an ongoing basis the overall
investment strategy with respect to the Funds, and ensure on an
ongoing basis adherence to such strategy;
(f) use the same skill and care in providing services
to the Funds as it uses in providing services to fiduciary
accounts for which it has investment responsibilities;
(g) furnish the Company's Board of Directors with such
periodic and special reports as the Board of Directors may
request; and
(h) take, on behalf of the Funds, all actions which
appear necessary to carry into effect such purchase and sale
programs and supervisory functions set forth in this Paragraph 2.
3. Delegation of Responsibilities. Subject to the
approval of the Company's Board of Directors and, if required, the
shareholders of the Funds, the Adviser may, pursuant to the Sub-Advisory
Agreement(s), delegate to the Sub-Adviser(s) those of its duties
hereunder identified in the Sub-Advisory Agreement(s), provided that the
Adviser shall continue to supervise and monitor the performance of the
duties delegated to the Sub-Adviser(s) and any such delegation shall not
relieve the Adviser of its duties and obligations under this Agreement.
The Adviser shall be solely responsible for compensating the
Sub-Adviser(s) for services rendered under the Sub-Advisory
Agreement(s).
4. Control by Board of Directors. Any investment activities
undertaken by the Adviser pursuant to this Agreement, as well as any
other activities undertaken by the Adviser on
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behalf of the Funds, shall at all times be subject to any directives of
the Company's Board of Directors.
5. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Adviser shall at all times conform
to:
(a) all applicable provisions of the 1940 Act, the
Advisers Act and any rules and regulations adopted thereunder;
(b) the provisions of the registration statement of the
Company, as the same may be amended from time to time;
(c) the provisions of the Articles of Incorporation of
the Company, as the same may be amended from time to time;
(d) the provisions of the By-laws of the Company, as
the same may be amended from time to time; and
(e) any other applicable provisions of state or federal
law.
In addition, any code of ethics adopted by the Adviser
pursuant to Rule 17j-1 under the 1940 Act shall include policies,
prohibitions and procedures which substantially conform to the
recommendations regarding personal investing approved by the Board of
Governors of the Investment Company Institute on June 30, 1994, as such
recommendations may be amended from time to time.
6. Broker-Dealer Relationships. The Adviser is responsible for
the purchase and sale of securities for the Funds, broker-dealer
selection, and negotiation of brokerage commission rates. The Adviser's
primary consideration in effecting a security transaction will be to
obtain the best price and execution. In selecting a broker-dealer to
execute each particular transaction for a Fund, the Adviser will take
the following into consideration: the best net price available, the
reliability, integrity and financial condition of the broker-dealer; the
size of and difficulty in executing the order; and the value of the
expected contribution of the broker-dealer to the Fund on a continuing
basis. Accordingly, the price to the Fund in any transaction may be
less favorable than that available from another broker-dealer if the
difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies as the Company's
Board of Directors may from time to time determine, the Adviser shall
not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of having caused
a Fund to pay a broker or dealer that provides brokerage and research
services to the Adviser an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction, if the Adviser determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of
either that particular transaction or the overall responsibilities of
the Adviser with respect to the Fund and to other clients of the
Adviser. The Adviser is further
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authorized to allocate the orders placed by it on behalf of the Funds to
brokers and dealers who also provide research or statistical material,
or other services to the Funds or to the Adviser. Such allocation shall
be in such amounts and proportions as the Adviser shall determine and
the Adviser will report on said allocations regularly to the Board of
Directors of the Company indicating the brokers to whom such allocations
have been made and the basis therefor.
7. Compensation. The Company shall pay the Adviser as
compensation for services rendered hereunder fees, payable monthly, at
the annual rates indicated on Schedule I hereto, as such Schedule may be
amended or supplemented from time to time.
The average daily net asset value of the Funds shall be
determined in the manner set forth in the Company's Articles of
Incorporation and registration statement, as amended from time to time.
8. Expenses of the Funds. All of the ordinary business expenses
incurred in the operations of the Funds and the offering of their shares
shall be borne by the Funds unless specifically provided otherwise in
this Agreement. These expenses borne by the Funds include, but are not
limited to, brokerage commissions, taxes, legal, auditing, or
governmental fees, the cost of preparing share certificates, custodian,
transfer agent and shareholder service agent costs, expenses of issue,
sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, expenses relating to directors and
shareholder meetings, the cost of preparing and distributing reports and
notices to shareholders, the fees and other expenses incurred by the
Funds in connection with membership in investment company organizations
and the cost of printing copies of prospectuses and statements of
additional information distributed to the Funds' shareholders.
9. Expense Limitation. If, for any fiscal year, the total of
all ordinary business expenses of a Fund, including all investment
advisory fees, but excluding brokerage commissions, fees, taxes,
interest and extraordinary expenses, such as litigation costs, would
exceed the applicable expense limitations imposed by state securities
regulations in any state in which the Funds' shares are qualified for
sale, as such limitations may be raised or lowered from time to time,
the aggregate of all such investment advisory fees shall be reduced by
the amount of such excess. The amount of any such reduction to be borne
by the Adviser shall be deducted from the monthly investment advisory
fee otherwise payable to the Adviser during such fiscal year. If
required pursuant to such state securities regulations, the Adviser
will, not later than the last day of the first month of the next
succeeding fiscal year, reimburse the Fund for any such annual operating
expenses (after reduction of all investment advisory fees in excess of
such limitation). For the purposes of this paragraph, the term "fiscal
year" shall exclude the portion of the current fiscal year which shall
have elapsed prior to the date hereof and shall include the portion of
the current fiscal year which shall have elapsed at the date of
termination of this Agreement.
10. Non-Exclusivity. The services of the Adviser to the Funds
are not to be deemed to be exclusive, and the Adviser shall be free to
render investment advisory and administrative or other services to
others (including other investment companies) and to engage in other
activities. It is understood and agreed that officers or directors of
the Adviser may serve as
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officers and directors of the Company, and that officers or directors of
the Company may serve as officers or directors of the Adviser, to the
extent that such services may be permitted by law, and that the officers
and directors of the Adviser are not prohibited from engaging in any
other business activity or from rendering services to any other person,
or from serving as partners, officers, directors or trustees of any
other firm or trust, including other investment advisory companies.
11. Records. The Adviser shall, with respect to orders the
Adviser places for the purchase and sale of portfolio securities of the
Funds, maintain or arrange for the maintenance of the documents and
records required pursuant to Rule 31a-1 under the 1940 Act as well as
such records as the Funds' administrator reasonably requests to be
maintained, including, but not limited to, trade tickets and
confirmations for portfolio trades. All such records shall be
maintained in a form acceptable to the Funds and in compliance with the
provisions of Rule 31a-1. All such records will be the property of the
Funds and will be available for inspection and use by the Funds. The
Adviser will promptly notify the Funds' administrator if it experiences
any difficulty in maintaining the records in an accurate and complete
manner.
12. Term and Approval. This Agreement shall become effective
with respect to a Fund if and when approved by the Directors of the
Company, and if so approved, this Agreement shall thereafter continue
from year to year, provided that the continuation of the Agreement is
specifically approved at least annually;
(a) (i) by the Company's Board of Directors or (ii) by the
vote of "a majority of the outstanding voting securities" of a
Fund (as defined in Section 2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the Company's
Directors who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of a party to this
Agreement (other than as Directors of the Company), by votes cast
in person at a meeting specifically called for such purpose.
13. Termination. This Agreement may be terminated with
respect to a Fund at any time, without the payment of any penalty, by
vote of the Company's Board of Directors or by vote of a majority of a
Fund's outstanding voting securities, or by the Adviser, on sixty (60)
days' written notice to the other party. The notice provided for herein
may be waived by the party entitled to receipt thereof. This Agreement
shall automatically terminate in the event of its assignment, the term
"assignment" for purposes of this paragraph having the meaning defined
in Section 2(a)(4) of the 1940 Act.
14. Liability of Adviser. In the absence of willful misfeasance,
bad faith, negligence or reckless disregard of obligations or duties
hereunder on the part of the Adviser or any of its officers, directors,
employees or agents, the Adviser shall not be subject to liability to
the Company or to any shareholder of the Company for any act or omission
in the course of, or connected with, rendering services hereunder or for
any losses that may be sustained in the purchase, holding or sale of any
security.
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15. Indemnification. In the absence of willful misfeasance, bad
faith, negligence or reckless disregard of duties hereunder on the part
of the Adviser or any of its officers, directors, employees or agents,
the Company hereby agrees to indemnify and hold harmless the Adviser
against all claims, actions, suits or proceedings at law or in equity
whether brought by a private party or a governmental department,
commission, board, bureau, agency or instrumentality of any kind,
arising from the advertising, solicitation, sale, purchase or pledge of
securities, whether of the Funds or other securities, undertaken by the
Funds, their officers, directors, employees or affiliates, resulting
from any violations of the securities laws, rules, regulations, statutes
and codes, whether federal or of any state, by the Funds, their
officers, directors, employees or affiliates. Federal and state
securities laws impose liabilities under certain circumstances on
persons who act in good faith, and nothing herein shall constitute a
waiver or limitation of any rights which a Fund may have and which may
not be waived under any applicable federal and state securities laws.
16. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other
party at such address as such other party may designate for the receipt
of such notice. Until further notice to the other party, it is agreed
that the address of the Company shall be c/o Stephens Inc., 000 Xxxxxx
Xxxxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxx 00000 and that of the Adviser
shall be Xxx XxxxxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000.
17. Questions of Interpretation. Any question of interpretation
of any term or provision of this Agreement having a counterpart in or
otherwise derived from a term or provision of the 1940 Act or the
Advisers Act shall be resolved by reference to such terms or provision
of the 1940 Act or the Advisers Act and to interpretations thereof, if
any, by the United States Courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of the
Commission issued pursuant to the 1940 Act or the Advisers Act. In
addition, where the effect of a requirement of the 1940 Act or the
Advisers Act reflected in any provision of this Agreement is revised by
rule, regulation or order of the Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
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IN WITNESS WHEREOF, the parties hereto have cause this Agreement to
be executed in duplicate by their respective officers on the day and
year first written above.
NATIONS FUND PORTFOLIOS. INC.
on behalf of the Funds
By: /S/ A. Xxx Xxxxxx
----------------------------
A. Xxx Xxxxxx
President
NATIONSBANC ADVISORS, INC.
By: /S/ Xxxx X. Xxxxxxxxxx
-----------------------------
Xxxx X. Xxxxxxxxxx
President and Director
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SCHEDULE I
Fund Rate of Compensation
Nations Emerging Markets Fund 1.10%
Nations Global Government Fund 0.70%
Nations Pacific Growth Fund 0.90%
