INVESTMENT SUB-ADVISORY AGREEMENT
NATIONS ANNUITY TRUST
THIS AGREEMENT is made as of July 3, 2000, by and between BANC OF
AMERICA ADVISORS, INC., a North Carolina corporation (the "Adviser"), XXXXXXX
INVESTMENT PARTNERS, L.P., a California limited partnership (the "Sub-Adviser"),
and NATIONS ANNUITY TRUST, a Delaware business trust (the "Trust"), 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 Sub-Adviser is also registered with the Commission as an
investment adviser under the Advisers Act;
WHEREAS, the Adviser and the Trust have entered into an investment
advisory agreement (the "Investment Advisory Agreement"), pursuant to which the
Adviser manages the investment operations of each Portfolio and may delegate
certain duties of the Adviser to one or more investment sub-adviser(s); and
WHEREAS, the Adviser, with the approval of the Board of Trustees of the
Trust (the "Board"), including a majority of the Trustees who are not
"interested persons" (defined herein) of any party to this Agreement, desires to
delegate to the Sub-Adviser the duty to manage the portfolio investments of the
Portfolios;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints the
Sub-Adviser and the Sub-Adviser hereby agrees to manage the portfolio
investments of each Portfolio subject to the terms of this Agreement and subject
to the supervision of the Adviser and the Board.
2. Services of Sub-Adviser. The Sub-Adviser shall perform all services
necessary for the management of the portfolio investments of each Portfolio,
including but not limited to:
(a) Managing, in its discretion, 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;
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(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;
(c) Assisting in the preparation of all shareholder
communications, including shareholder reports, and
participating in shareholder relations;
(d) Making determinations as to the manner in which voting rights
and/or any other rights pertaining to each Portfolio's
securities holdings shall be exercised; provided, however,
that any such determinations shall be subject to any policies,
procedures or directives approved by the Board and provided to
the Sub-Adviser;
(e) Attending and participating in discussions and meetings with
the Adviser with respect to Portfolio investment policies and
procedures, and carrying out such investment policies and
procedures as are approved by the Board or by the Adviser
under authority delegated by the Board to the Adviser and
provided to the Sub-Adviser;
(f) Supplying reports, evaluations, analyses, statistical data and
information to the Adviser, the Board or to the Portfolios'
officers and other service providers as the Adviser or 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 the
Investment Advisory Agreement or as the Board may reasonably
request from time to time.
3. Responsibilities of Sub-Adviser. In carrying out its obligations
under this Agreement, the Sub-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;
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(c) 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 broker or dealer affiliated with the Trust, the
Adviser or any of their affiliates; with listings of such
affiliated brokers and dealers to be provided to the
Sub-Adviser by the Adviser on an annual basis, and more
frequently as changes occur). In executing portfolio
transactions and selecting brokers or dealers, the Sub-Adviser
will use its best efforts to seek on behalf of each Portfolio
the best overall terms available. In assessing the best
overall terms available for any transaction, the Sub-Adviser
shall consider all factors that it deems relevant, including
the breadth of the market in the security, the price of the
security, the financial condition and execution capability of
the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a
continuing basis. In evaluating the best overall terms
available, and in selecting the broker or dealer to execute a
particular transaction, the Sub-Adviser may also consider
whether such broker or dealer furnishes research and other
information or services to the Sub-Adviser; and
(d) Adhere to the investment objective, strategies and policies
and procedures of the Trust adopted on behalf of each
Portfolio including, but not limited to, those stated in each
of their prospectuses and statements of additional
information.
4. Confidentiality of Information. Each party agrees that it will treat
confidentially all information provided by another party regarding such other
party's business and operations which is not generally known by third parties
nor otherwise generally disclosed publicly by such other party, including
without limitation the investment activities or holdings of a Portfolio, except
as is otherwise mutually agreed upon by the parties. Each party agrees that it
will not unreasonably withhold its agreement to disclosure of investment
activities or holdings. 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 through disclosure by the
party about whom the information relates or becomes public without any wrongful
act of the party providing such information 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 by applicable law or regulation.
5. Services Not Exclusive. The services furnished by the Sub-Adviser
hereunder are deemed not to be exclusive, and the Sub-Adviser shall be free to
furnish similar services to others so long as its 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
Sub-Adviser to be suitable for two or more accounts managed by the Sub-Adviser,
the available securities or investments may be allocated in a manner believed by
the Sub-Adviser to be equitable to each account. It is recognized that in some
cases this procedure
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may adversely affect the price paid or received by a Portfolio or the size of
the position obtainable for or disposed of by a Portfolio.
6. Delivery of Documents. The Trust will provide the Sub-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 Sub-Adviser with copies of any and
all amendments of or additions or supplements to the foregoing.
7. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-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 or the Adviser any of such
records upon request. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by it under this Agreement.
8. Expenses of the Portfolios. Except to the extent expressly assumed
by the Sub-Adviser and except to any extent required by law to be paid or
reimbursed by the Sub-Adviser, the Sub-Adviser shall have no duty to pay any
ordinary operating expenses incurred in the organization 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 Portfolio service providers' fees and
expenses, expenses relating to the issue, sale (including any sales loads),
redemption and repurchase of shares, expenses of registering and qualifying
shares for sale, expenses relating to Board and shareholder meetings, and the
cost of preparing and distributing reports and notices to shareholders. The
Sub-Adviser shall pay all other expenses incurred by it in connection with its
services under this Agreement.
9. Compensation. Except as otherwise provided herein, for the services
provided to each Portfolio and the expenses assumed pursuant to this Agreement,
the Adviser will pay the Sub-Adviser and the Sub-Adviser will accept as full
compensation therefor a fee determined in accordance with Schedule I attached
hereto. It is understood that the Adviser shall be solely
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responsible for compensating the Sub-Adviser for performing any of the duties
delegated to the Sub-Adviser and the Sub-Adviser agrees that it shall have no
claim against the Trust or any Portfolio with respect to compensation under this
Agreement.
10. Liability of Sub-Adviser. The Sub-Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Adviser
or the Trust in connection with the performance of this Agreement, except that
the Sub-Adviser shall be liable to the Adviser or the Trust for any loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or any loss resulting from willful misfeasance, bad
faith or negligence on the part of the Sub-Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
11. 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.
12. 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 other
parties to this Agreement; or
(b) the Adviser or the Sub-Adviser with respect to a Portfolio,
upon sixty (60) days' written notice to the other parties to
this Agreement.
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.
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13. Code of Ethics. The Sub-Adviser represents that it has adopted a
written code of ethics complying with the requirements of Rule 17j-1 under the
1940 Act and will provide the Adviser or the Trust with a copy of such code, any
amendments or supplements thereto and its policies and/or procedures implemented
to ensure compliance therewith.
14. Insurance. The Sub-Adviser shall maintain for the term of this
Agreement and provide evidence thereof to the Trust or the Adviser a blanket
bond and professional liability (error and omissions) insurance in an amount
reasonably acceptable to Adviser.
15. Representations and Warranties. Each party to this Agreement
represents and warrants that the execution, delivery and performance of its
obligations under this Agreement are within its powers, have been duly
authorized by all necessary actions and that this Agreement constitutes a legal,
valid and binding obligation enforceable against it in accordance with its
terms. The Sub-Adviser further represents and warrants that it is duly
registered as an investment adviser under the Advisers Act.
16. 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.
17. 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, that of the Adviser shall be
Xxx Xxxx xx Xxxxxxx Xxxxx, 00xx Xxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: President, and that of the Sub-Adviser shall be
Xxxxxxx Investment Partners, L.P., 00000 Xxxx Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000, Attention: General Counsel. The Sub-Adviser agrees to promptly notify the
Adviser and the Trust, and the Adviser and the Trust agree to notify the
Sub-Adviser, in writing of the occurrence of any event which could have a
material impact on the performance of another party's duties under this
Agreement, including but not limited to (i) the occurrence of any event which
could disqualify the Adviser or the Sub-Adviser from serving as an investment
adviser pursuant to Section 9 of the 1940 Act; (ii) any material change in the
notifying party's business activities; (iii) any event that would constitute a
change in control of the notifying party; (iv) any change in the portfolio
manager or portfolio management team of a Portfolio; (v) the existence of any
pending or threatened audit, investigation, examination, complaint or other
inquiry (other than routine audits or regulatory examinations or inspections)
relating to any Portfolio; and (vi) any material violation of the notifying
party's code of ethics.
18. 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
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solely to the property belonging to such Portfolio for the enforcement of any
claims against the Trust. Nothing in this Section 18 shall be deemed to limit
the liabilities to which a Trustee, officer or shareholder of the Trust may be
subject under applicable law arising from such person's own wrongful conduct.
19. 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.
20. 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.
21. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
22. Use of the Name "Nations Funds". The Sub-Adviser agrees that it
will not use the name "Nations Funds", any derivative thereof, or the name of
the Adviser, the Trust or any Master Portfolio except in accordance with such
policies and procedures as may be mutually agreed to in writing.
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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
XXXXXXX INVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
Managing Partner
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SCHEDULE I
The Adviser shall pay the Sub-Adviser, as full compensation for
services provided and expenses assumed hereunder, a sub-advisory fee for each
Portfolio, computed daily and payable monthly at the annual rates listed below
as a percentage of the average daily net assets of the Portfolio:
Rate of
Portfolio Compensation Effective Date
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Nations International Value Portfolio 0.50% 7/3/00
Approved: December 9, 1999
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