99.B(5)(e)
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made as of this 1st day of January, 1996, by and
among NationsBanc Advisors, Inc., a North Carolina corporation (the "Adviser"),
TradeStreet Investment Associates, Inc., a Maryland corporation (the
"Sub-Adviser"), and Nations Institutional Reserves, formerly known as The
Capitol Mutual Funds, a Massachusetts business trust, (the "Trust"), consisting
of Nations Cash Reserves, Nations Treasury Reserves, Nations Government Reserves
and Nations Municipal Reserves, on behalf of those portfolios of the Trust now
or hereafter identified on Schedule I hereto (each a "Fund" and collectively,
the "Funds").
RECITALS
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "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") and engages in
the business of acting as an investment adviser; and
WHEREAS, the Sub-Adviser also is registered with the Commission
under the Advisers Act as an investment adviser; and
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement of even date herewith (the "Investment Advisory Agreement"),
pursuant to which the Adviser shall act as investment adviser with respect to
the Funds; and
WHEREAS, pursuant such Investment Advisory Agreement, the Adviser,
with the approval of the Trust, wishes to retain the Sub-Adviser for purposes of
rendering advisory services to the Adviser and the Trust in connection with the
Funds upon the terms and conditions hereinafter set forth;
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. Appointment of Sub-Adviser. The Adviser hereby appoints, and
the Trust hereby approves, the Sub-Adviser to render investment research and
advisory services to the Adviser and the Trust with respect to the Funds, under
the supervision of
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the Adviser and subject to the policies and control of the Trust's Board of
Trustees, and the Sub-Adviser hereby accepts such appointment, all subject to
the terms and conditions contained herein.
2. Investment Services. The specific duties of the Adviser
delegated to the Sub-Adviser shall be the following:
(a) obtaining and evaluating 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 or Sub-Adviser considers
desirable for inclusion in the Funds;
(b) investing and reinvesting, 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 Trust 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 Board of Trustees of the Trust and the Adviser,
selecting brokers and dealers to execute portfolio transactions
for the Funds and selecting the markets on or in which the
transactions will be executed;
(d) voting, either in person or by general or
limited proxy, or refraining from voting, any securities held in
the Funds for any purposes; exercising or selling any subscription
or conversion rights; consenting to and joining in or opposing any
voting trusts, reorganizations, consolidations, mergers,
foreclosures and liquidations and in connection therewith,
depositing securities, and accepting other property received
therefor; and
(e) performing other acts necessary or appropriate
in connection with the proper management of the Funds, consistent
with its obligations hereunder, and as may be directed by the
Adviser and/or the Trust's Board of Trustees.
3. Control by Board of Trustees. As is the case with respect to
the Adviser under the Investment Advisory Agreement, any investment activities
undertaken by the Sub-Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser with respect to the Funds, shall at all
times be subject to any directives of the Board of Trustees of the Trust.
4. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Sub-Adviser shall at all times conform to:
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(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 Trust applicable to the Funds, as the same may be amended from
time to time, under the Securities Act of 1933 and the 1940 Act;
(c) the provisions of the Declaration of Trust of
the Trust, as the same may be amended from time to time;
(d) the provisions of the By-Laws of the Trust, as
the same may be amended from time to time;
(e) any other applicable provisions of state or
federal law.
In addition, any code of ethics adopted by the Sub-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.
5. Broker-Dealer Relationships. The Sub-Adviser is responsible for
the purchase and sale of securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates. The Sub-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 Sub-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 Adviser or
the Trust's Board of Trustees may from time to time determine, the Sub-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
Sub-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 Sub-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 Sub-Adviser with respect to the Fund and to other
clients of the Sub-Adviser. The Sub-Adviser is further authorized to allocate
the orders placed by it on behalf of the Funds to brokers and dealers who also
provide research or statistical
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material, or other services to the Funds or to the Sub-Adviser. Such allocation
shall be in such amounts and proportions as the Sub-Adviser shall determine and
the Sub-Adviser will report on said allocations regularly to the Adviser and to
the Board of Trustees of the Trust indicating the brokers to whom such
allocations have been made and the basis therefor.
6. Compensation. The Adviser shall pay the Sub-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. It is understood that the Adviser shall be
responsible for the Sub-Adviser's fee for its services hereunder, and the
Sub-Adviser agrees that it shall have no claim against the Trust or the Fund
with respect to compensation under this Agreement.
The average daily net asset value of the Funds shall be determined
in the manner set forth in the Declaration of Trust and registration statement
of the Trust, as amended from time to time.
7. Expenses of the Funds. All of the ordinary business expenses
incurred by the Trust 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,
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.
8. Expense Limitation. If, for any fiscal year of a Fund, the
amount of the aggregate advisory fee which the Trust would otherwise be
obligated to pay with respect to the Fund is reduced pursuant to expense
limitation provisions of the Investment Advisory Agreement, the fee which the
Sub-Adviser would otherwise receive pursuant to this Agreement shall be reduced
proportionately.
9. Non-Exclusivity. The services of the Sub-Adviser to the Adviser
and the Trust with respect to the Fund are not to be deemed to be exclusive, and
the Sub-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 the officers and directors
of the Sub-Adviser are not prohibited from engaging in any other business
activity or from rendering services to any the person, or from serving as
partners, officers, directors or trustees of any other firm or trust, including
other investment advisory companies.
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10. Records. The Sub-Adviser shall provide to the Adviser, with
respect to the orders the Sub-Adviser places for the purchases and sales of
portfolio securities of the Funds, 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 Sub-Adviser will
promptly notify the Adviser and the Fund's administrator if it experiences any
difficulty in providing the records in an accurate and complete manner.
11. Term and Approval. This Agreement shall become effective with
respect to each Fund as of the date first set forth above and shall thereafter
continue in force and effect for one year, and may be continued from year to
year with respect to each Fund thereafter, provided that the continuation of the
Agreement is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees or (ii) by the
vote of "a majority of the outstanding voting securities" of the
Fund (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 at any time with
respect to a Fund, without the payment of any penalty, by vote of the Trust's
Board of Trustees or by vote of a majority of the Fund's outstanding voting
securities, or by the Adviser, or by the Sub-Adviser on 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, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
13. Liability of Sub-Adviser. In the absence of willful
misfeasance, bad faith, negligence or reckless disregard of obligations or
duties hereunder on the part of the Sub-Adviser or any of its officers,
directors, employees or agents, the Sub-Adviser shall not be subject to
liability to the Adviser or to the Trust 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.
14. Indemnification. In the absence of willful misfeasance, bad
faith, negligence or reckless disregard of duties hereunder on the part of the
Sub-Adviser, or
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any officers, directors, employees or agents thereof, the Trust hereby agrees to
indemnify and hold harmless the Sub-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, agents 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.
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, with a copy to the Trust. Until
further notice, it is agreed that the address of the Trust shall be 000 Xxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000; that of the Sub-Adviser shall be Xxx
XxxxxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000; and that of the Adviser
shall be Xxx XxxxxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000.
16. 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 term 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 caused this Agreement
to be executed in triplicate by their respective officers on the day and year
first written above.
NATIONS INSTITUTIONAL RESERVES,
on behalf of the Funds
Attest:
By: A. Xxx Xxxxxx
Name:
A. Xxx Xxxxxx
President
NATIONSBANC ADVISORS, INC.
Attest: /s/ Xxxx X. Xxxxxxxxxx
By: Xxxx X. Xxxxxxxxxx
Name:
Xxxx X. Xxxxxxxxxx
President and Director
TRADESTREET INVESTMENT ASSOCIATES, INC.
Attest:
By: /s/Xxxxxx X.Xxxxxx
Name:
Xxxxxx Xxxxxxx Xxxxxx
President and Director
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SCHEDULE I
Fund Rate of Compensation
Nations Cash Reserves 0.033%
Nations Treasury Reserves 0.033%
Nations Government Reserves 0.033%
Nations Municipal Reserves 0.033%
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