SUB-ADVISORY AGREEMENT
NATIONS INSTITUTIONAL RESERVES
THIS AGREEMENT is made as of this 21st day of May, 1999, by and between
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
CHICAGO EQUITY PARTNERS CORPORATION, a Delaware corporation (the "Sub-Adviser"),
and NATIONS INSTITUTIONAL RESERVES, a Massachusetts business trust (the
"Trust"), on behalf of those portfolios of the Trust now or hereafter identified
on Schedule I hereto (each a "Fund" and collectively, the "Funds").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission ("Commission") under the Investment Company Act of 1940, as amended
("1940 Act") as an open-end, management investment company;
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;
WHEREAS, the Sub-Adviser is also registered with the Commission under
the Advisers Act as an investment adviser and engages in the business of acting
as an investment adviser;
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement (the "Investment Advisory Agreement"), pursuant to which the
Adviser acts as investment adviser with respect to the Funds; and
WHEREAS, pursuant to 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, it is agreed between the parties hereto as follows:
1. APPOINTMENT OF SUB-ADVISER. The Adviser hereby appoints the Sub-Adviser
to act as investment sub-adviser or co-investment sub-adviser with respect to
the Funds, under the supervision of 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. SERVICES OF SUB-ADVISER. Subject to the oversight and supervision of
the Adviser and the Trust's Board of Trustees, the Sub-Adviser will provide a
continuous investment program for the Funds, including investment research and
management with respect to all equity securities and investments; provided,
however, that with respect to Nations Asset Allocation Fund, the Sub-Adviser
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will manage such Fund's equity investments, as a percentage of such Fund as may
be determined from time-to-time by TradeStreet Investment Associates, Inc.
Pursuant to the foregoing, the Sub-Adviser will determine from time to time what
securities and other investments will be purchased, retained or sold by the
Funds. The Sub-Adviser will provide the services rendered by it under this
Agreement in accordance with the investment criteria and policies established
from time to time for the Funds by the Adviser, the Funds' investment
objectives, strategies and restrictions as stated in the Funds' Prospectuses and
Statement of Additional Information, the operating policies and procedures of
the Funds, and resolutions of the Trust's Board of Trustees.
The Sub-Adviser further agrees that it will:
(a) Provide information to the Funds' accountant for the
purpose of updating the Funds' cash availability
throughout the day as required;
(b) Maintain historical tax lots for each portfolio
security held by the Funds;
(c) Transmit trades to the Trust's custodian for proper
settlement in accordance with the Trust's procedures
and as may be directed by the Trust or the Adviser;
(d) Maintain all books and records with respect to the
Funds that are required to be maintained under Rule
31a-l(f) under the 1940 Act;
(e) Supply the Adviser, the Trust and the Trust's Board of
Trustees with reports, statistical data and economic
information as requested; and
(f) Prepare a quarterly broker security transaction summary
and, if requested in advance, monthly security
transaction listing for the Funds.
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 Trust, shall at all
times be subject to any directives of the Board of Trustees of the Trust.
4. OTHER COVENANTS. In carrying out its obligations under this Agreement,
the Sub-Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations
of the Commission and will in addition conduct its
activities under this Agreement in accordance with
other applicable law, including but not limited to the
1940 Act and the Advisers Act;
(b) will use the same skill and care in providing such
services as it uses in providing services to fiduciary
accounts for which it has investment responsibilities;
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(c) will not make loans to any person to purchase or carry
Fund shares;
(d) will place orders pursuant to its investment
determinations for the Funds either directly with the
issuer or with any broker or dealer. Subject to the
other provisions of this paragraph, in executing
portfolio transactions and selecting brokers or
dealers, the Sub-Adviser will use its best efforts to
seek on behalf of each Fund 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/dealer to execute a particular
transaction, the Sub-Adviser may also consider any
brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act
of 1934, as amended) provided to the Fund and/or other
accounts over which the Sub-Adviser or an affiliate of
the Sub-Adviser exercises investment discretion. The
Sub-Adviser is authorized, subject to prior approval of
the Trust's Board of Trustees, to pay to a broker or
dealer who provides such brokerage and research
services a commission for executing a portfolio
transaction for any Fund which is in excess of the
amount of commission another broker or dealer would
have charged for effecting that transaction if, but
only if, the Sub-Adviser determines in good faith that
such commission was reasonable in relation to the value
of the brokerage and research services provided by such
broker or dealer -- viewed in terms of that particular
transaction or in terms of the overall responsibilities
of the Sub-Adviser to its clients, including the
particular Fund and to the Trust. In addition, the
Sub-Adviser is authorized to take into account the sale
of shares of the Trust in allocating purchase and sale
orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with
the Sub-Adviser or the Trust's principal underwriter),
provided that the Sub-Adviser believes that the quality
of the transaction and the commission are comparable to
what they would be with other qualified firms. In no
instance, however, will portfolio securities be
purchased from or sold to the Adviser, Sub-Adviser or
the Trust's principal underwriter for the Funds or an
affiliated person of either acting as principal or
broker, except as permitted by the Commission or
applicable law;
(e) will adhere to the policies and procedures of the Trust
adopted on behalf of the Funds;
(f) will 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 Fund, its
investment advisory personnel will not inquire or take
into consideration whether the issuer (or related
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supporting institution) of securities proposed for
purchase or sale for the Fund's account are customers
of the commercial departments of its affiliates;
(g) will use reasonable efforts to perform its duties and
obligations under this Agreement without: (a) any
failure of its computer systems, or those used by it in
the performance of its duties hereunder, properly to
record, store, process, calculate or present calendar
dates falling on and after, and time spans including,
September 9, 1999, January 1, 2000 or February 29, 2000
(the "Subject Dates") as a result of the occurrence, or
use of data containing any such Subject Dates; (b) any
failure of its computer systems, or those used by it in
the performance of its duties hereunder, to calculate
any information dependent on or relating to dates on or
after the Subject Dates; or (c) any loss of
functionality or performance with respect to the
maintenance of records or processing of data containing
dates falling on or after the Subject Dates ((a), (b),
and (c) above shall be referred to as "Y2K Failures").
Notwithstanding the above, the Sub-Adviser shall not be
liable for any Y2K Failures caused by Y2K Failures in a
third party system with which the Sub-Adviser
interfaces or from which the Sub-Adviser receives data
in connection with the performance of its duties
hereunder; and
(h) will treat confidentially and as proprietary
information of the Trust all records and other
information relative to the Trust and prior, present or
potential shareholders, and will not use such records
and information for any purpose other than performance
of its responsibilities and duties hereunder (except
after prior notification to and approval in writing by
the Trust, which approval shall not be unreasonably
withheld and may not be withheld and will be deemed
granted where the Sub-Adviser may be exposed to civil
or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly
constituted authorities, or when so requested by the
Trust).
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 services under this Agreement
are 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 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 may adversely affect the price paid or received by a Fund or the
size of the position obtainable for or disposed of by a Fund.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for each Fund are the property of the Trust and further agrees to
surrender promptly to the Adviser or the Trust 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 Rule 31a-1
under the 1940 Act.
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7. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased or sold for the Funds.
8. COMPENSATION. For the services provided to each Fund 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 for that Fund
determined in accordance with Schedule I attached hereto. The Adviser and the
Sub-Adviser may, from time to time, agree to reduce, limit or waive the amounts
payable hereunder with respect to one or more Funds for such period or periods
they deem advisable. 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.
9. 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 Company in connection with the performance of 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 Sub-Adviser in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
10. DURATION AND TERMINATION. This Agreement shall become effective when
approved, and shall continue in effect until the second anniversary of its
effective date. Thereafter, if not terminated, this Agreement shall continue in
effect for successive annual periods ending on January 1, 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.
Notwithstanding the foregoing, this Agreement may be terminated as to any Fund
at any time, without the payment of any penalty, by the Trust (by vote of the
Trust's Board of Trustees or by vote of a majority of the outstanding voting
securities of the particular Fund), or by the Sub-Adviser or Adviser on sixty
(60) days' written notice to the other parties to this Agreement. The notice
provided for herein may be waived by the party entitled to receipt thereof. This
Agreement will immediately terminate in the event of its assignment. As used in
this Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as such terms
have in the 1940 Act.
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11. 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 Sub-Adviser
from reducing, limiting or waiving its fee.
12. RELEASE. The names "Nations Institutional Reserves" and "Trustees of
Nations Institutional Reserves" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated January 22, 1990, which is hereby
referred to and a copy of which is on file at the office of the Secretary of The
Commonwealth of Massachusetts and the principal office of the Trust. The
obligations of "Nations Institutional Reserves" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust property, and all persons dealing with any class of shares of the
Trust must look solely to the property belonging to such class for the
enforcement of any claims against the Trust.
13. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective successors and shall be
governed by Delaware law.
14. 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 INSTITUTIONAL RESERVES
on behalf of the Funds
By: /s/ A. Xxx Xxxxxx
--------------------------
A. Xxx Xxxxxx
President and Chairman of
the Board of Trustees
NATIONSBANC ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------
Xxxxxx X. Xxxxxx
President
CHICAGO EQUITY PARTNERS
CORPORATION
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Xxxxx X. Xxxxxx
Executive Vice President
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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 Fund,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Fund under the Sub-Adviser's
management:
Fund Rate of Compensation
---- --------------------
Nations Asset Allocation Fund 0.25%
(equity portion)
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