EX. 99.B5(a)
INVESTMENT ADVISORY AGREEMENT
NATIONS FUND PORTFOLIOS, INC.
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 (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") 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).
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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 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, under the
Securities Act of 1933 and the 1940 Act;
(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.
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 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.
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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 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.
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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 when approved in accordance with the requirements of the 1940
Act, and 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 the 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.
18. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement affecting a
Fund shall be effective until approved by vote of a majority of the outstanding
voting securities of such Fund. However, this shall not prevent the Adviser from
reducing, limiting or waiving its fee.
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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 and Chairman of the
Board of Directors
NATIONSBANC ADVISORS, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
-----------------------------
Xxxx X. Xxxxxxxxxx
President and Director
SCHEDULE I
The Company shall pay the Adviser as full compensation for services provided
and expenses assumed hereunder an advisory fee for each Fund, computed daily and
payable monthly at the annual rates listed below as a percentage of the average
daily net assets of the Fund:
Fund Rate of Compensation
---- --------------------
Nations Emerging Markets Fund 1.10%
Nations Global Government Fund 0.70%
Nations Pacific Growth Fund 0.90%
