INVESTMENT ADVISORY AGREEMENT
NATIONS ANNUITY TRUST
THIS AGREEMENT is made as of July 3, 2000, by and between NATIONS
ANNUITY TRUST, a Delaware business trust (the "Trust"), and BANC OF AMERICA
ADVISORS, INC., a North Carolina corporation (the "Adviser"), on behalf of those
series of the Trust now or hereafter identified on Schedule I (each, a
"Portfolio" and collectively, the "Portfolios").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser is registered with the Commission as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act");
WHEREAS, the Trust desires that the Adviser manage the investment
operations of the Portfolios and the Adviser desires to manage said operations;
and
WHEREAS, the Board of Trustees of the Trust (the "Board"), including a
majority of the Trustees who are not "interested persons" (as defined herein) of
any party to this Agreement, have approved this arrangement;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment of Adviser. The Trust hereby appoints the Adviser and the Adviser
hereby agrees to manage the investment operations of each Portfolio subject to
the terms of this Agreement and subject to the supervision of the Board. The
Trust and the Adviser contemplate that certain duties of the Adviser under this
Agreement may be delegated to one or more investment sub-adviser(s) (the
"Sub-Adviser(s)") pursuant to separate investment sub-advisory agreement(s) (the
"Sub-Advisory Agreement(s)"). The Adviser may, in its discretion, provide
services under this Agreement through its own employees or through one or more
affiliated companies that are qualified to act as investment advisers under
applicable law and are under common control of Bank of America Corporation.
2. Services of Adviser. The Adviser shall perform, or arrange for the
performance of, the management services necessary for the investment operations
of each Portfolio, including but not limited to:
(a) Managing the investment and reinvestment of all assets, now or
hereafter acquired by each Portfolio, including determining what
securities and other investments are to be purchased or sold for each
Portfolio and executing transactions accordingly;
(b) Transmitting trades to each Portfolio's custodian for settlement in
accordance with each Portfolio's procedures and as may be directed by
the Trust;
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(c) Assisting in the preparation of all shareholder communications,
including shareholder reports, and participating in shareholder
relations;
(d) Making recommendations as to the manner in which voting rights, rights
to consent to Portfolio action and any other rights pertaining to each
Portfolio's portfolio securities shall be exercised;
(e) Making recommendations to the Board with respect to Portfolio
investment policies and procedures, and carrying out such investment
policies and procedures as are adopted by the Board;
(f) Supplying reports, evaluations, analyses, statistical data and
information to the Board or to the Portfolios' officers and other
service providers as the Board may reasonably request from time to time
or as may be necessary or appropriate for the operation of the Trust as
an open-end investment company or as necessary to comply with Section
3(a) of this Agreement;
(g) Maintaining all required books and records with respect to the
investment decisions and securities transactions for each Portfolio;
(h) Furnishing any and all other services, subject to review by the Board,
that the Adviser from time to time determines to be necessary or useful
to perform its obligations under this Agreement or as the Board may
reasonably request from time to time.
3. Responsibilities of Adviser. In carrying out its obligations under this
Agreement, the Adviser agrees that it will:
(a) Comply with all applicable law, including but not limited to the 1940
Act and the Advisers Act, the rules and regulations of the Commission
thereunder, and the conditions of any order affecting the Trust or a
Portfolio issued thereunder;
(b) Use the same skill and care in providing such services as it uses in
providing services to other fiduciary accounts for which it has
investment responsibilities;
(c) Not make loans to any person for the purpose of purchasing or carrying
Portfolio shares;
(d) Place, or arrange for the placement of, all orders pursuant to its
investment determinations for the Portfolios either directly with the
issuer or with any broker or dealer (including any affiliated broker or
dealer). In executing portfolio transactions and selecting brokers or
dealers, the Adviser will use its best efforts to seek on behalf of
each Portfolio the best overall terms available. In assessing the best
overall terms available for any transaction, the Adviser shall consider
all factors that it deems relevant, including the breadth of the market
in the security, the price of the security, the financial
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condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall
terms available, and in selecting the broker or dealer to execute a
particular transaction, the Adviser may also consider whether such
broker or dealer furnishes research and other information or services
to the Adviser;
(e) Adhere to the investment objective, strategies and policies and
procedures of the Trust adopted on behalf of each Portfolio; and
(f) Maintain a policy and practice of conducting its investment advisory
services hereunder independently of the commercial banking operations
of its affiliates. In making investment recommendations for a
Portfolio, the Adviser's investment advisory personnel will not inquire
or take into consideration whether the issuers (or related supporting
institutions) of securities proposed for purchase or sale for the
Portfolio's account are customers of the commercial departments of its
affiliates. In dealing with commercial customers, such commercial
departments will not inquire or take into consideration whether
securities of those customers are held by the Portfolio.
4. Confidentiality of Information. Each party agrees that it will treat
confidentially all information provided by the other party regarding such other
party's business and operations, including without limitation the investment
activities or holdings of a Portfolio. All confidential information provided by
a party hereto shall not be disclosed to any unaffiliated third party without
the prior consent of the providing party. The foregoing shall not apply to any
information that is public when provided or thereafter becomes public or which
is required to be disclosed by any regulatory authority in the lawful and
appropriate exercise of its jurisdiction over a party, by any auditor of the
parties hereto, by judicial or administrative process or otherwise by applicable
law or regulation.
5. Delegation of Duties. Subject to the approval of the Board and, if required,
the shareholders of the Portfolios, the Adviser may delegate to one or more
Sub-Adviser(s) any or all of its duties hereunder, 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 performing any of the duties
delegated to them. The Adviser may request that the Trust pay directly to the
Sub-Adviser(s) the portion of the Adviser's compensation that the Adviser is
obligated to pay to the Sub-Adviser(s). If the Trust agrees to such request, it
will pay such portion to the Sub-Adviser(s) on behalf of the Adviser, thereby
reducing the compensation paid to the Adviser by the amount paid directly to the
Sub-Adviser(s). However, such an arrangement will not relieve the Adviser of its
responsibility for compensating the Sub-Adviser(s). In the event that any
Sub-Adviser appointed hereunder is terminated, the Adviser may provide
investment advisory services pursuant to this Agreement through its own
employees or through one or more affiliated companies that are qualified to act
as investment advisers under applicable law and are under common control of
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Bank of America Corporation or through other Sub-Adviser(s) as approved by the
Trust in accordance with applicable law.
6. Services Not Exclusive. The services furnished by the Adviser hereunder are
deemed not to be exclusive, and the Adviser shall be free to furnish similar
services to others so long as its provision of services under this Agreement is
not impaired thereby. To the extent that the purchase or sale of securities or
other investments of the same issuer may be deemed by the Adviser to be suitable
for two or more accounts managed by the Adviser, the available securities or
investments may be allocated in a manner believed by the Adviser to be equitable
to each account. It is recognized that in some cases this procedure may
adversely affect the price paid or received by a Portfolio or the size of the
position obtainable for or disposed of by a Portfolio. Nothing in this Agreement
shall limit or restrict the right of any of the Adviser's partners, officers or
employees to engage in any other business or to devote his or her time and
attention in part to the management or other aspects of any business, whether of
a similar or dissimilar nature, nor limit or restrict the Adviser's right to
engage in any other business or to render services of any kind to any other
corporation, firm, individual or association.
7. Delivery of Documents. The Trust has furnished the Adviser with copies,
properly certified or authenticated, of each of the following:
(a) the Trust's Certificate of Trust, as filed with the Secretary of State
of Delaware, and Declaration of Trust (such Declaration of Trust, as
presently in effect and as from time to time amended, is herein called
the "Declaration of Trust");
(b) the Trust's Bylaws, if any;
(c) the most recent prospectus(es) and statement(s) of additional
information relating to each Portfolio (such prospectus(es) together
with the related statement(s) of additional information, as presently
in effect and all amendments and supplements thereto, are herein called
the "Prospectus"); and
(d) any and all applicable policies and procedures approved by the Board.
The Trust will promptly furnish the Adviser with copies of any and all
amendments of or additions or supplements to the foregoing.
8. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Adviser hereby agrees that all records that it maintains for
each Portfolio under this Agreement are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon request. The
Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
9. Expenses of the Portfolios. Except to the extent expressly assumed by the
Adviser and except to any extent required by law to be paid or reimbursed by the
Adviser, the Adviser shall have no duty to pay any ordinary operating expenses
incurred in the organization
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and operation of the Portfolios. Ordinary operating expenses include, but are
not limited to, brokerage commissions and other transaction charges, taxes,
legal, auditing, printing, or governmental fees, other service providers' fees
and expenses, expenses of issue, sale, redemption and repurchase of shares,
expenses of registering and qualifying shares for sale, expenses relating to
Board and shareholder meetings, the cost of preparing and distributing reports
and notices to shareholders and interest payments and other fees or charges
associated with any credit facilities established by or on behalf of the
Portfolios.
10. Compensation. Except as otherwise provided herein, for the services provided
to each Portfolio and the expenses assumed pursuant to this Agreement, the Trust
will pay the Adviser and the Adviser will accept as full compensation therefor a
fee determined in accordance with Schedule I attached hereto; provided, however,
that the compensation paid to the Adviser shall be reduced by any amount paid by
the Trust directly to the Sub-Advisor(s) pursuant to Section 5 of this
Agreement. In addition, BAAI or its affiliated persons may receive compensation
or reimbursement of recordkeeping, bookkeeping, accounting, administrative and
transactional fees or charges incurred in connection with any credit facilities
established by or on behalf of the Portfolios. The fees or charges attributable
to each Portfolio shall be a separate charge to such Portfolio and shall be the
several (and not joint or joint and several) obligation of each such Portfolio.
The Trust and the Adviser may, from time to time, agree to reduce, limit or
waive the amounts payable hereunder with respect to one or more Portfolios for
such period or periods they deem advisable.
11. Liability of Adviser. The Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the performance of its duties under this Agreement, except a loss resulting
from a breach of fiduciary duty with respect to the receipt of compensation for
services, or a loss resulting from willful misfeasance, bad faith or negligence
on the part of the Adviser or any of its officers, directors, employees or
agents, in the performance of their duties under this Agreement, or from
reckless disregard by it or obligations and duties under this Agreement.
12. Term and Approval. This Agreement will become effective as of the date set
forth herein above, and shall continue in effect until the second anniversary of
its effective date. This Agreement will become effective with respect to each
additional Portfolio as of the date set forth on Schedule I when each such
Portfolio is added thereto. The Agreement shall continue in effect for a
Portfolio after the second anniversary of the effective date for successive
annual periods ending on each anniversary of such date, provided that the
continuation of the Agreement is specifically approved for the Portfolio at
least annually:
(a)(i) by the Board or (ii) by the vote of "a majority of the outstanding
voting securities" of the Portfolio (as defined in Section 2(a)(42) of
the 0000 Xxx); and
(b) by the affirmative vote of a majority of the Trustees of the Trust who
are not parties to this Agreement or "interested persons" (as defined
in the 0000 Xxx) of a party to this Agreement (other than as Trustees
of the Trust), by votes cast in person at a meeting specifically called
for such purpose.
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13. Termination. This Agreement may be terminated without payment of any penalty
at any time by:
(a) the Trust with respect to a Portfolio, by vote of the Board or by vote
of a majority of a Portfolio's outstanding voting securities, upon
sixty (60) days' written notice to the Adviser; or
(b) the Adviser with respect to a Portfolio, upon sixty (60) days' written
notice to the Trust.
Any party entitled to notice may waive the notice provided for herein.
This Agreement shall automatically terminate in the event of its assignment,
unless an order is issued by the Commission conditionally or unconditionally
exempting such assignment from the provisions of Section 15(a) of the 1940 Act,
in which event this Agreement shall remain in full force and effect subject to
the terms of such order. For the purposes of this paragraph, the definitions
contained in Section 2(a) of the 1940 Act and the applicable rules under the
1940 Act shall apply.
14. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, except by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought.
15. Notices. Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to such address as may be designated for the
receipt of such notice. Until further notice, it is agreed that the address of
the Trust shall be c/o Stephens Inc., 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000, Attention: Secretary, and that of the Adviser shall be Xxx Xxxx xx
Xxxxxxx Xxxxx, 00xx Xxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx
00000, Attention: President.
16. Release. The names "Nations Annuity Trust" and "Trustees of Nations Annuity
Trust" refer respectively to the Trust created by the Declaration of Trust and
the Trustees as Trustees but not individually or personally. All parties hereto
acknowledge and agree that any and all liabilities of the Trust arising,
directly or indirectly, under this Agreement will be satisfied solely out of the
assets of the Trust and that no Trustee, officer or shareholder shall be
personally liable for any such liabilities. All persons dealing with any
Portfolio of the Trust must look solely to the property belonging to such
Portfolio for the enforcement of any claims against the Trust.
17. Miscellaneous. This Agreement contains the entire understanding of the
parties hereto. Each provision of this Agreement is intended to be severable. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby.
18. Governing Law. This Agreement shall be governed by, and construed in
accordance with, Delaware law and the federal securities laws, including the
1940 Act and the Advisers Act.
19. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
NATIONS ANNUITY TRUST
on behalf of the Portfolios
By: /s/ A. Xxx Xxxxxx
-----------------
A. Xxx Xxxxxx
President and Chairman of the
Board of Trustees
BANC OF AMERICA ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
President
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SCHEDULE I
The Trust shall pay the Adviser, as full compensation for services
provided and expenses assumed hereunder, an advisory fee for each Portfolio,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Portfolio:
Rate of Effective
Portfolio Compensation Date
--------- ------------ ----
Nations High Yield Bond Portfolio 0.55% 7/3/00
Nations International Value Portfolio 0.90% 7/3/00
Nations MidCap Growth Portfolio 0.65% 5/1/01
Nations Small Company Portfolio 0.90% 5/1/01
Nations Xxxxxxx International Opportunities Portfolio 0.80% 5/1/01
Nations Capital Growth Portfolio 0.65% 5/1/01
Nations Xxxxxxx 21st Century Portfolio 0.75% 5/1/01
Nations Asset Allocation Portfolio 0.65% 5/1/01
Approved: December 9, 1999
Last Amended: May 1, 2001
IN WITNESS WHEREOF, the parties hereto have caused this amended
Schedule I to be executed by their officers designated below as of the 1st day
of May, 2001.
NATIONS SEPARATE ACCOUNT TRUST
(formerly Nations Annuity Trust)
on behalf of the Portfolios
By: /s/ A. Xxx Xxxxxx
-----------------
A. Xxx Xxxxxx
President and Chairman of the
Board of Trustees
BANC OF AMERICA ADVISORS,
LLC (formerly Banc of
America Advisors, Inc.)
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
President
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