EXHIBIT 99.23(h)(4)
FORM OF SUB-ADMINISTRATION AGREEMENT
NATIONS FUNDS TRUST
This SUB-ADMINISTRATION AGREEMENT (the "Agreement") is made as of
[DATE] by and among THE BANK OF NEW YORK ("BNY"), BANC OF AMERICA ADVISORS, LLC
("BA Advisors") and NATIONS FUNDS TRUST (the "Trust").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, BA Advisors serves as the Co-Administrator for the investment
portfolios of the Trust pursuant to a separate Co-Administration Agreement; and
WHEREAS, BA Advisors desires to retain BNY to render certain
sub-administrative services to the Trust and to BA Advisors, as Co-Administrator
of the Trust, and BNY is willing to render such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. Appointment and Duties as Sub-Administrator.
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(a) BA Advisors hereby appoints BNY to act as Sub-Administrator of the
Trust and to render sub-administrative services for each portfolio of the Trust
listed on Schedule I (individually, a "Fund" and collectively, the "Funds") and
BNY hereby accepts such appointment and agrees to render the services and duties
set forth in Schedule II as it may be amended from time to time, for the
compensation and on the terms herein provided. Each new investment portfolio
established in the future by the Trust or BA Advisors will become a "Fund" for
all purposes hereunder when BNY receives a revised Schedule I from BA Advisors
or the Trust that includes such new portfolio.
(b) Subject to the other provisions of this Section 1, in performing
all services under this Agreement, BNY shall (i) act in conformity with the
Trust's Declaration of Trust, the 1940 Act and the rules thereunder, including
but not limited to Rules 31a-1 to 31a-3, and other applicable laws and
regulations, as the same may be amended from time to time, and the Trust's
Registration Statement (defined below) as such Registration Statement may be
amended from time to time; (ii) consult and coordinate with BA Advisors and the
Trust, as necessary and appropriate; and (iii) advise and report to BA Advisors
and the Trust, as necessary or appropriate, with respect to any compliance
matters that come to its attention. In performing all services under this
Agreement BNY shall meet the minimum quality of service standards set forth on
Schedule III.
(c) The Trust has furnished BNY and BA Advisors with copies properly
certified or authenticated of each of the following: (i) the Trust's Declaration
of Trust or other
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organizational document and all amendments thereto (the "Declaration"); (ii)
votes of the Trust's Board of Trustees or other governing body (the "Board")
authorizing the execution, delivery and performance of this Agreement by the
Trust; (iii) the Trust's Registration Statement on Form N-1A (the "Registration
Statement") under the Securities Act of 1933, as amended, and under the 1940 Act
(File Nos. 333-89661 and 881-09645), as filed with the Securities and Exchange
Commission (the "SEC") relating to the Funds' shares of beneficial interest (the
"Shares"); (iv) the Funds' current prospectus(es); (v) the Funds' current
statement(s) of additional information; and (v) the pricing procedures
applicable to the calculation of the Funds' net asset values as approved by the
Trust's Board (the "Pricing Procedures"). It is solely the Trust's
responsibility to furnish BNY from time to time with copies, properly certified
or authenticated, of all amendments of or supplements to the foregoing, and BNY
will not be held to have knowledge of any such amendments or supplements until
the same are actually received by BNY. Furthermore, the Trust will provide BNY
with any other documents that BNY and BA Advisors may reasonably request and
will notify BNY and BA Advisors as soon as possible of any matter materially
affecting either BNY's or BA Advisors' performance of its services under this
Agreement.
(d) Subject to the direction and approval of the Trust's Board and
appropriate officers and the provisions of this Agreement, BNY shall provide to
each Fund the administrative services set forth on Schedule II attached hereto.
In performing such services hereunder, BNY shall provide, at its expense, office
space, facilities, equipment and personnel. BNY shall not provide any services
relating to the management, investment advisory or sub-advisory functions of any
Fund, distribution of shares of any Fund, maintenance of any Fund's financial
records (except as otherwise agreed by the parties) or any services normally
performed by the Funds' counsel or independent accountants. Upon receipt of the
Trust's prior written consent, BNY may delegate any of its duties and
obligations hereunder to any delegee or agent whenever and on such terms and
conditions as it deems necessary or appropriate. Unless expressly agreed in
writing, BNY shall not be relieved of liability or responsibility for the
performance of any duties or obligations delegated to a delegee or agent,
provided that BNY shall have no liability for duties or obligations that are
delegated to a delegee or agent at the instruction of the Trust or BA Advisors.
The Trust and BA Advisors shall cause their respective officers, and shall use
reasonable efforts to cause the Trust's or BA Advisors' legal counsel,
independent accountants, and transfer agent to cooperate with BNY and to provide
BNY, upon BNY's reasonable written request, such information, documents and
advice relating to such Fund as is within the possession or knowledge of such
persons, in order to enable BNY to perform its duties hereunder. Such
cooperation or provision of information, documents or advice shall be at no cost
to BNY, provided BNY's request is reasonable and BA Advisors shall have been
notified of the request. In connection with its duties hereunder, BNY shall be
entitled to reasonably rely upon any documents relating to a Fund provided to
BNY by any of the aforementioned persons. BNY may apply to the Trust or BA
Advisors for written instructions with respect to any matter arising in
connection with BNY's performance hereunder. If, after a reasonable period of
time, BNY receives no response to any such application, BNY may then notify the
Trust or BA Advisors of reasonable action that BNY shall take if written
instructions are not received within a stated period of time after such notice,
and then BNY shall not be liable for taking such reasonable action as if written
instructions had been provided. BNY is entitled to reasonably rely
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and act in accordance with written instructions believed to have been given by
authorized persons and shall incur no costs for such reasonable reliance. BNY
shall have no duties or responsibilities whatsoever except such duties and
responsibilities as are specifically set forth in this Agreement and Schedule II
hereto, and no covenant or obligation shall be implied against BNY in connection
with this Agreement.
(e) The Trust and BA Advisors, for itself and not for the others,
hereby represents and warrants to BNY, which representations and warranties
shall be deemed to be continuing, that: (i) it is duly organized and existing
under the laws of the jurisdiction of its organization, with full power to carry
on its business as now conducted, to enter into this Agreement and to perform
its obligations hereunder; (ii) this Agreement has been duly authorized,
executed and delivered by it in accordance with all requisite action and
constitutes a valid and legally binding obligation, enforceable in accordance
with its terms; (iii) it is conducting its business substantially in compliance
with all applicable laws and regulations, both state and federal, and has
obtained all regulatory licenses, approvals and consents necessary to carry on
its business as now conducted; (iv) there is no statute, regulation, rule, order
or judgment binding on it and no provision of its Declaration, nor of any
mortgage, indenture, credit agreement or other contract binding on it or
affecting its property which would prohibit its execution or performance of this
Agreement; and (v) the Trust and BA Advisors will use reasonable efforts to
promptly notify BNY of any errors or omissions contained in any reports,
calculations, valuations and other items of information, provided that any
failure by the Trust or BA Advisors to detect any such errors or omissions shall
not relieve BNY of any resulting liability therefrom. To the extent that BA
Advisors has actual knowledge of any such error or omission and fails to use
reasonable efforts to promptly notify BNY, BNY shall be relieved of any
liability that BNY may have mitigated had BA Advisors provided notice of such
error or omission to BNY.
(f) BNY hereby represents and warrants to the Trust and BA Advisors,
which representations and warranties shall be deemed to be continuing, that: (i)
it is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted, to
enter into this Agreement and to perform its obligations hereunder; (ii) this
Agreement has been duly authorized, executed and delivered by it in accordance
with all requisite action and constitutes a valid and legally binding
obligation, enforceable in accordance with its terms; and (iii) it is conducting
its business substantially in compliance with all applicable laws and
regulations, both state and federal, and has obtained all regulatory licenses,
approvals and consents necessary to carry on its business as now conducted;
there is no statute, regulation, rule, order or judgment binding on it and no
provision of its Charter, nor of any mortgage, indenture, credit agreement or
other contract binding on it or affecting its property which would prohibit its
execution or performance of this Agreement.
2. Compensation. For the services to be rendered, the facilities to be
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furnished and the compensation and other expenses to be borne by BNY, as
provided for in this Agreement, BNY shall be entitled to receive a monthly fee
from BA Advisors and reimbursement for out-of-pocket expenses as set forth in
Schedule IV to this Agreement. It is understood that BA Advisors shall be
responsible for BNY's monthly fee for its services hereunder, and BNY agrees
that it shall have no claim against the Trust or the Funds with respect to
compensation under this Agreement.
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3. Recordkeeping. BNY shall, as agent for the Trust, and subject to the
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direction and approval of the Trust's Board and the provisions of this
Agreement, maintain and keep current the books, accounts and other documents, if
any, pursuant to the services and duties provided by BNY as set forth in
Schedule II of this Agreement, and preserve any such books, accounts and other
documents in accordance with the applicable provisions of Rule 31a-2 of the 1940
Act. Such books, accounts and other documents shall be made available upon
reasonable request for inspection by officers, employees and auditors of the
Trust and BA Advisors during BNY's normal business hours. All records maintained
and preserved by BNY pursuant to this Agreement which the Trust is required to
maintain and preserve in accordance with Rule 31a-2 of the 1940 Act shall be and
remain the property of the Trust and shall be surrendered to the Trust promptly
upon request in the form in which such records have been maintained and
preserved. Upon reasonable request of the Trust, BNY shall provide in data files
or hard copy, whichever the Trust shall reasonably elect, any records included
in any such delivery which are maintained by BNY on a computer disc, or are
similarly maintained, and the Trust shall reimburse BNY for its expenses of
providing such hard copy.
4. Standard of Care; Indemnification.
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(a) BNY shall at all times act in good faith and agrees to use its best
efforts to fulfill its obligations under this Agreement, but assumes no
responsibility for loss or damage to the Trust unless such loss or damage is
caused by BNY's own negligence, bad faith or willful misconduct or that of its
directors, officers or employees. BNY shall be responsible hereunder for all
direct damages resulting from its own negligence, bad faith or willful
misconduct, provided however that it shall not be responsible for lost profits
or lost business arising under or in connection with this Agreement. It is
understood and agreed that for purposes of this Section 4(a), "direct damages"
shall include, but shall not be limited to, all legal costs, penalties,
reimbursement for excess distribution and redemption payments, repurchasing
costs for servicing agents and reimbursement to the Funds for net asset value
breaks (as calculated under the Pricing Procedures).
(b) The Trust, on behalf of each Fund, will indemnify BNY against and
hold it harmless from any and all losses, claims, damages, liabilities or
expenses (including reasonable counsel fees and expenses of a defense against
any claim, demand, action or suit), relating to the particular Fund and arising
from any one or more of the following: (i) errors in records or instructions,
explanations, information, specifications or documentation of any kind, as the
case may be, supplied to BNY by any person described in Section 1 hereof or by
any third party described in Section 5; (ii) action or inaction taken or omitted
to be taken by BNY pursuant to written or oral instructions described in this
Agreement (or otherwise without bad faith, negligence or willful misconduct);
(iii) any action taken or omitted to be taken by BNY in good faith in accordance
with the advice or opinion of counsel for a Fund, the Trust, BA Advisors
(obtained in accordance with the procedures set forth in this Agreement) or its
own counsel; (iv) any improper use by the Fund, the Trust, BA Advisors or their
respective agents, of any valuations or computations supplied by BNY pursuant to
this Agreement; (v) the method of valuation of the securities and the method of
computing a Fund's net asset value or any other amount computed by BNY
hereunder, provided BNY has followed the Pricing Procedures; and (vi) any
valuation of securities, net asset value or other amount provided by a Fund or
BA
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Advisors. BNY will not confess any claim or settle or make any compromise in any
instance in which the Trust will be asked to provide indemnification, except
with the Trust's prior written consent. Any amounts payable by the Trust under
this Section 4(b) shall be satisfied only against the assets of the Fund
involved in the claim, demand, action or suit and not against the assets of any
other investment portfolio of the Trust.
5. Fund Accounting Services.
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(a) BNY, in performing the services required of it under the terms of
this Agreement, shall be entitled to rely fully on the accuracy and validity of
any and all instructions, explanations, information, specifications and
documentation furnished to it by a Fund and shall have no duty or obligation to
review the accuracy, validity or propriety of such instructions, explanations,
information, specifications or documentation, including, without limitation,
evaluations of securities; the amounts or formula for calculating the amounts
and times of accrual of Fund's liabilities and expenses; the amounts receivable
and the amounts payable on the sale or purchase of securities; and amounts
receivable or amounts payable for the sale or redemption of Fund shares effected
by or on behalf of the Fund. In the event BNY's computations hereunder rely, in
whole or in part, upon information, including, without limitation, bid, offer or
market values of securities or other assets, or accruals of interest or earnings
thereon, from a pricing or similar service utilized, or subscribed to, by BNY
which BNY in its judgment deems reliable, or any other third party pricing
source designated by the Trust, BNY shall not be responsible for, under any duty
to inquire into, or deemed to make any assurances with respect to, the accuracy
or completeness of such information. BNY shall not be required to inquire into
any valuation of securities or other assets by the Fund or any third party
described in this Section, even though BNY in performing services similar to the
services provided pursuant to this Agreement for others may receive different
valuations of the same or different securities of the same issuers.
(b) Subject to the provisions of this Agreement and the direction and
approval of the Trust's Board, BNY shall perform the computations described in
Schedule II at such times and dates and in the manner specified or described in
the then-current prospectus(es) of a Fund. To the extent valuation of securities
or a computation specified or described in a Fund's Pricing Procedures or
then-current effective prospectus(es) is at any time inconsistent with any
applicable laws or regulations, the Trust or BA Advisors shall immediately so
notify BNY in writing and thereafter shall furnish BNY at all appropriate times
with the values of such securities and such Fund's net asset value or other
amounts otherwise to be calculated by BNY, or, subject to the prior approval of
BNY, instruct BNY in writing to value securities and make such computations in a
manner which the Trust or BA Advisors then represents in writing to be
consistent with all applicable laws and regulations. The Trust or BA Advisors
may also from time to time, subject to the prior approval of BNY, instruct BNY
in writing to make computations other than as specified in this Section of this
Agreement. By giving such instruction, the Trust or BA Advisors shall be deemed
to have represented that such instruction is consistent with all applicable laws
and regulations and the then-current effective prospectus(es) of the particular
Fund. The Trust or BA Advisors shall have sole responsibility for determining
the method of valuation of securities and the method of computations, and all
computations, valuation of securities and the method of computing each Fund's
net asset value shall be subject to approval by the Trust and BA Advisors. BNY
shall not be liable for relying on any price
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provided by any pricing service believed by BNY to be reliable, and the Trust or
BA Advisors shall furnish values when the same are not available from a pricing
service utilized by BNY, with such furnishing to constitute an instruction to
BNY to rely on the provided values.
(c) BNY shall be responsible for determining and properly reflecting in
the computations made by it under this Agreement: (i) the taxable nature of any
distribution or amount received or deemed received by, or payable to, a Fund;
(ii) the taxable nature or effect on a Fund or its shareholders of any corporate
actions, class actions, tax reclaims, tax refunds, or similar events; (iii) the
taxable nature or taxable amount of any distribution or dividend paid, payable
or deemed paid, by a Fund to its shareholders; (iv) the effect under any
federal, state, or foreign income tax laws of a Fund making or not making any
distribution or dividend payment, or any election with respect thereto; or (v)
any tax accounting; provided, however, that if BNY is not certain of the taxable
nature, amount or effect of any such item, it may seek instructions regarding
the proper treatment of such item from the Trust or BA Advisors in accordance
with the procedures set forth in Section 1(e), above, and shall have no
liability for acting in reliance on such instructions.
6. Termination of Agreement.
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(a) This Agreement shall become effective as of the date first set
forth above and shall remain in full force and effect unless terminated pursuant
to the provisions of Section 6(b).
(b) This Agreement may be terminated at any time without payment of any
penalty, upon 60 days' written notice to BNY, by BA Advisors or by vote of the
Board of the Trust, or upon 180 days' written notice to BA Advisors and the
Trust, by BNY. Upon any such termination, BNY will cooperate with and assist the
Trust, BA Advisors, their agents and any successor administrator(s) or
sub-administrator(s) in the substitution/conversion process. In connection with
any termination of this Agreement, unless BNY is in breach of this Agreement,
the Funds and BA Advisors agree to pay BNY any compensation and reimbursement
for out-of-pocket expenses as may then be due and payable, as well as
agreed-upon out-of-pocket expenses incurred in connection with a termination. If
BNY is in breach of this Agreement, the Funds and BA Advisors may offset any
compensation or reimbursement amounts owed to BNY by the amount of damages,
costs and expenses incurred as a result of BNY's breach, including costs,
expenses and reasonable incremental fees for a period not to exceed one year
incurred in connection with a conversion by the Trust and BA Advisors to a
successor service provider. In the event of a dispute as to the amount of such
damages, the Funds and BA Advisors agree to escrow the set-off amount.
(c) Sections 4 and 8 shall survive this Agreement's termination.
7. Amendments. Except as expressly provided in the first paragraph of
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Section 1, no provision of this Agreement may be amended or modified orally, but
only by an instrument in writing signed by the party against which enforcement
of the amendment or modification is sought.
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8. Confidentiality. All books, records, information and data pertaining
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to the business of the Trust, or its prior, present or potential shareholders
that are exchanged or received in connection with the performance of BNY's
duties under this Agreement shall remain confidential and shall not be disclosed
to any other person, except as specifically authorized by the Trust or as may be
required by law, and shall not be used for any purpose other than performance of
its responsibilities and duties hereunder, and except that BNY retains the right
to disclose matters subject to confidentiality to its examiners, regulators,
internal or external auditors, its accountants, its internal and external
counsel, and to any other entity whenever it is advised by its internal or
external counsel that it is reasonably likely that BNY would be liable for a
failure to do so. BNY will endeavor to provide written notice to the Trust and
BA Advisors at least five business days prior to any disclosures pursuant to
this Section 8, but, provided it shall have provided as much notice as is
reasonably practicable under the circumstances, BNY shall have no liability for
any failure to do so.
9. Service to Other Companies. The Trust and BA Advisors acknowledge
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that BNY now provides, will continue to provide and may in the future provide
administrative or other services to other investment companies or series of
investment companies, and the Trust and BA Advisors have no objection to BNY so
doing. The Trust and BA Advisors further acknowledge that the persons employed
by BNY to assist in the performance of BNY's duties under this Agreement may not
devote their full time to such service and nothing contained in this Agreement
shall be deemed to limit or restrict the right of BNY or any affiliate of BNY to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
10. Miscellaneous.
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(a) This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflict of laws principles thereof.
Each Fund, the Trust and BA Advisors hereby consent to the jurisdiction of a
state or federal court situated in New York City, New York in connection with
any dispute arising hereunder. To the extent that in any such jurisdiction any
of the aforementioned persons may now or hereafter be entitled to claim, for
itself or its assets, immunity from suit, execution, attachment (before or after
judgment) or other legal process, each irrevocably agrees not to claim, and it
hereby waives, such immunity.
(b) In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby, and if any provision is inapplicable to any
person or circumstances, it shall nevertheless remain applicable to all other
persons and circumstances.
(c) Each and every right granted to BNY, the Trust or BA Advisors
hereunder or under any other document delivered hereunder or in connection
herewith, or allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of BNY, the Trust or BA
Advisors to exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by BNY, the Trust or BA
Advisors of any right preclude any other or future exercise thereof or the
exercise of any other right.
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(d) BNY shall not be responsible for delays or errors that occur by
reason of circumstances beyond its reasonable control in the performance of its
duties under this Agreement, provided that reasonable back-up and disaster
recovery systems are in place, including, without limitation, labor
difficulties, mechanical breakdowns, computer breakdowns or malfunctions
(hardware or software), flood or catastrophe, acts of God, failures of
transportation, communication or power supply, or other similar circumstances.
Nor shall BNY be responsible for delays or failures to supply the information or
services specified in this Agreement where such delays or failures are caused by
the failure of any person(s) other than BNY to supply any instructions,
explanations, information, specifications or documentation deemed necessary by
BNY in the performance of its duties under this Agreement.
(e) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Trust, BNY and/or BA Advisors shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Trust:
Nations Funds Trust
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
To BA Advisors:
Banc of America Advisors, LLC
One Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
To BNY:
The Bank of New York
00 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Grunston
(f) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement may not be assigned by BNY, nor may BNY delegate
responsibility for the performance of any of its duties hereunder, without the
written consent of the other parties hereto.
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(g) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(h) The captions of 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.
(i) This Agreement constitutes the entire agreement between the parties
hereto with respect to the provision by BNY of sub-administrative services and
the receipt of fees therefor, and supersedes all prior arrangements or
understandings, written or oral, with respect to the provision by BNY of such
services and the receipt of fees therefor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
THE BANK OF NEW YORK
By:
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BANC OF AMERICA ADVISORS, LLC
By:
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Xxxxxx X. Xxxxxx
Senior Vice President and
Chief Operating Officer
NATIONS FUNDS TRUST
By:
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Xxxxxxx Xxxx
Assistant Secretary
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SCHEDULE I
1. Nations Value Fund
2. Nations Capital Growth Fund
3. Nations MidCap Growth Fund
4. Nations LargeCap Index Fund
5. Nations Managed Index Fund
6. Nations SmallCap Index Fund
7. Nations Strategic Growth Fund
8. Nations Short-Intermediate Government Fund
9. Nations Municipal Income Fund
10. Nations Short-Term Municipal Income Fund
11. Nations Intermediate Municipal Bond Fund
12. Nations Short-Term Income Fund
13. Nations Strategic Income Fund
14. Nations Bond Fund
15. Nations Florida Municipal Bond Fund
16. Nations Florida Intermediate Municipal Bond Fund
17. Nations Georgia Intermediate Municipal Bond Fund
18. Nations Maryland Intermediate Municipal Bond Fund
19. Nations North Carolina Intermediate Municipal Bond Fund
20. Nations South Carolina Intermediate Municipal Bond Fund
21. Nations Tennessee Intermediate Municipal Bond Fund
22. Nations Texas Intermediate Municipal Bond Fund
23. Nations Virginia Intermediate Municipal Bond Fund
24. Nations Small Company Fund
25. Nations Cash Reserves
26. Nations Treasury Reserves
27. Nations Municipal Reserves
28. Nations Government Reserves
29. Nations Tax-Exempt Reserves
30. Nations Money Market Reserves
31. Nations California Tax-Exempt Reserves
32. Nations Convertible Securities Fund
33. Nations California Municipal Bond Fund
34. Nations Emerging Markets Fund
35. Nations International Value Fund
36. Nations International Equity Fund
37. Nations Intermediate Bond Fund
38. Nations Research Fund
Approved: October 10, 2001
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SCHEDULE II
FUND ADMINISTRATION SERVICES
BNY shall perform the following sub-administrative services, in
addition to any other services agreed to from time to time:
o Monitor and document compliance by the Funds with their policies and
restrictions as delineated in their prospectuses and statements of
additional information, including any supplements or amendments thereto,
and with the rules and regulations under the 1940 Act utilizing Xxxxxxx
River Development's compliance monitoring system or by such other means as
the parties may agree. BAAI shall be responsible for communicating such
policies and restrictions, including any changes thereto, to BNY by such
means as the parties agree.
o Provide income attribution summary schedules necessary for year-end tax
reporting, including the attached examples. Provide a gross up for foreign
taxes on a per share basis and the redesignation of income and capital
gains on a per share basis.
o Prepare federal, state, excise and local income tax returns for the Funds
and file such returns upon the approval of the Funds' independent
accountants; monitor, report on and prepare periodic worksheet and tax
provision packages with respect to Sub-Chapter M qualifications; prepare
and file all Form 1099s with respect to the Funds' Trustees; monitor
compliance with Section 4982 of the Internal Revenue Code; calculate and
maintain records pertaining to original issue discount and premium
amortization as required; identify wash sales and all other book/tax
differences, and report results to the Funds' independent accountants and
Funds management; and such other duties relating to federal and/or state
tax compliance as the parties may agree. BNY shall be responsible for
providing all pertinent tax information to the Funds' independent
accountants.
o Prepare Return of Capital Statement of Position 93-2 adjustments.
o Support BAAI in its preparation of the schedules and provide BAAI unaudited
quarterly and semi-annual and audited annual financial statements and
schedules of Fund investments by providing, without limitation, each Funds'
schedule of investments and general ledger in electronic format and/or hard
copy, as required, and such other information as may be necessary to
complete such financial reports.
o Prepare statistical reports for outside information services (referenced in
Schedule V), and such other information services as the parties may agree,
including the ICI expense survey.
o Prepare calculations for capital gains pursuant to IRS rules in conjunction
with BAAI and the Funds' independent accountant.
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o Attend Fund shareholder and Board of Trustees meetings as requested by
BAAI, including making such presentations as are appropriate, and, with
respect to the Fund administration services described herein, provide such
periodic and special reports to the Trust and BAAI as the Trust and BAAI
shall reasonably request.
FUND ACCOUNTING SERVICES
BNY shall provide all accounting and recordkeeping services necessary
and appropriate for the business of the Funds, including but not limited to
those set forth below.
Required Records; Ledgers and Journals
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BNY shall keep current the following accounts and records relating to
the business of the Funds, in such form as is required by the 1940 Act and the
rules thereunder, and generally accepted accounting principles, to support all
filings under applicable federal and state tax laws and regulations and as may
be mutually agreed to among the Trust, BAAI and BNY, and shall make available to
BAAI and/or the Trust upon request:
1. Cash Receipts Journal
2. Cash Disbursements Journal
3. Dividends Paid and Payable Schedule (book vs. tax basis)
4. Purchase and Sales Journals - Portfolio Securities
5. Realized/Unrealized Gain (Loss) Reports
6. Subscription and Redemption Journals
7. Security Ledgers - Transaction Report and Tax Lot Holdings Report
8. Broker Ledger - Commission Report
9. Daily Expense Accruals
10. Daily Interest Accruals
11. Daily Trial Balance
12. Portfolio Interest Receivable and Income Journal
13. Portfolio Dividend Receivable and Income Register
14. Listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security
15. Aged Receivables (dividends, interest, tax reclaiming)
16. Portfolio Turnover Rate
17. Cash reconciliations
18. Position reconciliations
BNY will be responsible for maintaining, in accordance with Section 31
and the rules thereunder of the 1940 Act, all books and records so required and
generated in the course of performing their duties under this agreement.
Further, at a minimum, BNY shall maintain on-site the above referenced reports
as of each month end for the most recent fiscal year-ended and the current
fiscal year.
II-3
Daily Accounting Services
-------------------------
BNY shall perform the following services on each Business Day:
1. Calculate Net Asset Value (NAV), and Public Offering Price (POP) Per
Share Pursuant to SEC formulas:
--------------------------------------------------------------------
o Update the valuation of security positions held by each Fund's
portfolio in accordance with the Fund's Pricing Procedures and
any other appropriate procedures established by the Board and
BAAI as BAAI shall provide BNY in writing
o When instructed by BAAI, enter manual prices supplied by
broker and link to pricing procedures
o Calculate each Fund's NAV/POP in accordance with the
applicable Pricing Procedures approved by the Trust's Board of
Trustees and prepare NAV proof sheet. Review components of
change in NAV for reasonableness based on the tolerance levels
as BAAI shall direct BNY in writing
o Review variance reporting for price changes in individual
securities using variance levels established by Fund and
report to Fund portfolio managers and to BAAI
o Review for ex-dividend items indicated by pricing sources;
trace to general ledger for agreement
o Communicate required pricing and yield information (NAV/POP),
as appropriate, to BAAI, the Funds' transfer agent and
sub-transfer agent and, electronically, to NASDAQ and to such
other third parties as designated by the Funds with respect to
its various distribution channels. In addition, provide Fund
share activity to BAAI.
2. Dividend Rates/Yields/Dollar Weighted Average Maturity:
------------------------------------------------------
o Calculate, subject to the approval of BAAI, net investment
income available for distribution daily as appropriate
o Calculate daily dividend rate, and 1, 7, 30-day yields/SEC
yields
o Calculate dollar weighted average maturity
3. Determine and Report Cash Availability:
--------------------------------------
o Receive daily cash and transaction statements from the Funds'
custodian
o Complete daily bank cash reconciliations (including
documentation of any reconciling items) and notify the Funds'
custodian
o Report investable cash to BAAI and Fund sub-advisers
4. Daily Expense Accruals:
----------------------
o Accrue individual expenses on a daily basis based on
Instructions provided by BAAI, except for those instances
where such an adjustment would cause a full xxxxx break in
NAV, in which case such adjustment will be included in the
calculation of NAV on the day received
o If applicable, accrue daily amortization of organization
expense as instructed by BAAI
II-4
II-4
o If applicable, accrue daily Rule 12b-1 Plan expenses
o Adjust expense accruals as instructed by BAAI and provide
reports as requested by XXXX
0. Verify and Record All Daily Income Accruals for Debt Issues:
-----------------------------------------------------------
o Track income and provide year end tax schedules
o Review and verify all interest and amortization reports
o Periodic tie-out of receivables
o Ensure security masters denote proper interest and
amortization methods as per the fund set up sheets as
instructed by BAAI
6. Monitor Securities:
------------------
o Review each Fund's portfolio holdings and current day's
security trades for dividend activity
o Interface with Funds' custodian for timely collection and
postings of corporate actions, dividends and interest
pre-payments
7. Enter All Security Trades:
-------------------------
o Review verification of trade and interest calculations
o Verify settlement through custodian statements
o Maintain security ledger transaction reporting
o Maintain tax lot holdings
o Determine realized gains or losses on security trades
o Provide broker commission information
8. Enter All Fund Share Transactions:
---------------------------------
o Periodically reconcile dividend payable amounts with the
Funds' transfer agent
o Process activity identified on transfer agent reports
o Verify settlement through custodian statements
o Reconcile to transfer agency report balances
o Process and track capital stock gain/loss activity
9. Prepare Daily Trial Balance:
---------------------------
o Post manual entries to general ledger
o Post custodian bank activity
o Require automated settled transactions between custody and
activity records (prepare, clear and post)
o Post shareholder and security transactions
o Post and verify income and expense accruals and resolve
differences
o Prepare general ledger
o Post corporate action activity
II-5
10. Review and Reconcile Custodian Statements:
-----------------------------------------
o Verify all posted interest, dividends, expenses, and
shareholder and security payments/receipts, etc. when
requested
o Post all cash settlement activity to trial balance
o Reconcile to ending cash balance accounts
o Report to BAAI the status of past due items and failed trades
with the custodian
o Reconcile cash exception Income items, tax reclaims and past
due income items with custody area
11. Preparation of Accounting Reports:
---------------------------------
o Price Variance Report
o Trial Balance
o Portfolio Valuation
o NAV Calculation Report
o Cash Availability
o Change in NAV
o Non-standard entries
o Stale Price Report
o Other such reports as may be reasonably requested by BAAI
Monthly/Quarterly Services
--------------------------
BNY shall provide the following services on a monthly or quarterly basis, within
such timeframe as may be mutually agreed upon by BNY, the Trust and BAAI:
1. Submission of Monthly Accounting Reports as mutually agreed upon
----------------------------------------------------------------
2. Reconcile Asset Listing to Custodian Asset Listing
--------------------------------------------------
3. Provide Monthly Analysis and Reconciliation of Trial Balance Accounts
---------------------------------------------------------------------
4. Prepare Documentation Supporting the Preparation of:
---------------------------------------------------
o SEC yield reporting
o Income by state reporting
o Standard Industry Code Valuation Report (please provide BAAI's
industry code classifications/is there a standard for all
Funds)
o Alternative Minimum Tax Income segregation schedule
II-6
5. Provide Upon Request Broker Commission and Net Trade Reports
------------------------------------------------------------
Annual (and Semi-Annual) Accounting Services
--------------------------------------------
BNY shall provide the following services on an annual and semi-annual
basis:
1. Supply auditors InvestOne reports supporting securities and shareholder
transactions, income and expense accruals, etc. during the year in
accordance with standard audit assistance requirements
2. Provide BAAI with information to assist BAAI in the preparation of
NSAR filings
------------------------------------------------------------------
Other Core Services
-------------------
BNY shall provide the following services:
o Accrete discounts and amortize premiums to put and call events
as directed by BAAI and in a manner acceptable under generally
accepted accounting principles
o Process principal repayments on mortgage backed securities
o Update variable securities with current rates
o Process corporate action events through a primary vender feed,
and monitor results via Reuters, Bloomberg, or other available
sources as the parties may agree
o Perform automated portfolio pricing with a second vendor as
requested by BAAI
o Produce documents and respond to inquiries during account and
SEC examinations
Money Market Funds: Prepare daily xxxx to market reports and analysis
------------------
in compliance with Rule 2a-7 including:
o Calculating the daily portfolio weighted average maturity
o Report portfolio diversification based on trade/security
information provided by BAAI by: Country, State, Tier,
Liquidity, Asset Backed Securities, Industry, Letter of Credit
o Listing percentage of portfolio maturing in specified
intervals (i.e., number of days)
o Providing issuer and guarantor diversification exception
reporting
International Funds: BNY shall provide the following services:
-------------------
o Report in base and local currency
II-7
o Processing of tax liability on foreign income subject to
approval of BAAI
o Daily variance analysis performed on FX rates for security
position held
o Produce automated bifurcation reporting in compliance with IRC
Section 988
o Xxxx to market security receivables and payables on a daily
basis
o Determine portfolio exposure by country and currency
In addition to the above, BNY will provide additional support as agreed
upon from time to time (i.e., financial statement production).
II-8
Federal Obligation Percentage
The following is federal obligation information on the Nations Funds
portfolio earnings credited to your account in 1997. This information is
provided to enable you to calculate your state tax liability if you live in a
state which does not tax income from U.S. government obligations. We recommend
that you consult your tax adviser if you have questions regarding the
requirements for reporting this information as the requirements vary from state
to state.
------------------------------------------------------------- ------------------------ ------------------ ------------
Direct and Government Non-Qualifying
FUND Agency Obligations(1) Income(2) Total
Nations Balanced Assets Fund 3.30% 96.70% 100.00%
Nations Capital Growth Fund 0.00% 100.00% 100.00%
Nations Cash Reserves 1.26% 98.74% 100.00%
Nations Disciplined Equity Fund 0.00% 100.00% 100.00%
Nations Diversified Income Fund 28.86% 71.14% 100.00%
Nations Emerging Growth Fund 0.00% 100.00% 100.00%
Nations Equity Income Fund 2.36% 97.64% 100.00%
Nations Equity Index Fund 0.09% 99.91% 100.00%
Nations Global Government Income Fund 9.21% 90.79% 100.00%
Nations Government Money Market Fund 99.78% 0.22% 100.00%
Nations Government Reserves 31.19% 68.81% 100.00%
Nations Government Securities Fund 35.09% 64.91% 100.00%
Nations International Growth Fund 0.00% 100.00% 100.00%
Nations LifeGoal Balanced Growth Portfolio 12.65% 87.35% 100.00%
Nations LifeGoal Growth Portfolio 0.10% 99.90% 100.00%
Nations LifeGoal Income and Growth Portfolio 16.36% 83.64% 100.00%
Nations Managed Index Fund 0.33% 99.67% 100.00%
Nations Managed SmallCap Index Fund 0.00% 100.00% 100.00%
Nations Managed SmallCap Value Index Fund 0.00% 100.00% 100.00%
Nations Managed Value Index Fund 0.00% 100.00% 100.00%
Nations Pacific Growth Fund 1.73% 98.27% 100.00%
Nations Prime Fund 5.52% 94.48% 100.00%
Nations Short-Intermediate Government Fund 66.12% 33.88% 100.00%
Nations Short-Term Income Fund 10.64% 89.36% 100.00%
Nations Small Company Growth Fund 0.16% 99.84% 100.00%
Nations Strategic Fixed Income Fund 20.21% 79.79% 100.00%
Nations Treasury Fund 21.25% 78.75% 100.00%
Nations Treasury Reserves 17.46% 82.45% 100.00%
Nations U.S. Government Bond Fund 90.51% 9.49% 100.00%
Nations Value Fund 0.00% 100.00% 100.00%
------------------------------------------------------------- ------------------------ ------------------ ------------
(1) "Direct Obligations" include U.S. Treasury bills, notes, and bonds.
"Government Agency" covers those non-mortgage related obligations issued by
federal agencies including but not limited to, the Student Loan Marketing
Association (SLMA), the Federal Farm Credit Bank, the Federal Deposit Insurance
Corporation (FDIC), and the Federal Financing Bank. These obligations are backed
by the full faith and credit of the U.S. government.
(2) "Non-Qualifying Income" includes earnings derived from repurchase
agreements, money market instruments such as agency-issued commercial paper,
other regulated investment companies, corporate obligations, and obligations
issued by the
II-9
Government National Mortgage Association (GNMA), the Federal National Mortgage
Association (FNMA), and the Federal Home Loan Mortgage Corp. (FHLMC).
Capital Gains Information For Residents Of South Carolina
For each of the Funds, the amount of capital gains distribution which
is from assets held two or more years can be determined by multiplying each
capital gain distribution from your year-end statement by the appropriate
percentages:
--------------------------------------------- --------------------------------- --------------------------------------
FUND May 30, 1997 Distribution November 7, 1997 Distribution
------------------------- -----------------------------
--------------------------------------------- --------------------------------- --------------------------------------
Nations Balanced Assets Fund 5.80% 17.51%
--------------------------------------------- --------------------------------- --------------------------------------
Nations Capital Growth Fund 46.05% 40.53%
--------------------------------------------- --------------------------------- --------------------------------------
Nations Disciplined Equity Fund 0.00% 22.75%
--------------------------------------------- --------------------------------- --------------------------------------
Nations Emerging Growth Fund 33.38% 21.24%
--------------------------------------------- --------------------------------- --------------------------------------
Nations Equity Income Fund 37.09% 51.39%
--------------------------------------------- --------------------------------- --------------------------------------
Nations Equity Index Fund 8.97% 13.84%
--------------------------------------------- --------------------------------- --------------------------------------
Nations Georgia Intermediate Municipal Bond - 99.04%
Fund
--------------------------------------------- --------------------------------- --------------------------------------
Nations Global Government Income Fund 0.00% -
--------------------------------------------- --------------------------------- --------------------------------------
Nations Intermediate Municipal Bond Fund - 100.00%
--------------------------------------------- --------------------------------- --------------------------------------
Nations International Equity Fund - 100.00%
--------------------------------------------- --------------------------------- --------------------------------------
Nations International Growth Fund - 100.00%
--------------------------------------------- --------------------------------- --------------------------------------
Nations Managed Index Fund 0.00% -
--------------------------------------------- --------------------------------- --------------------------------------
Nations Municipal Income Fund - 98.42%
--------------------------------------------- --------------------------------- --------------------------------------
Nations Small Company Growth Fund - 6.12%
--------------------------------------------- --------------------------------- --------------------------------------
Nations South Carolina Intermediate - 79.38%
Municipal Bond Fund
--------------------------------------------- --------------------------------- --------------------------------------
Nations South Carolina Municipal Bond Fund 93.25% -
--------------------------------------------- --------------------------------- --------------------------------------
Nations U.S. Government Bond Fund - 46.40%
--------------------------------------------- --------------------------------- --------------------------------------
Nations Value Fund 61.85% 66.01%
--------------------------------------------- --------------------------------- --------------------------------------
II-10
Percentage Of Municipal Income By State and Territory
Many states do not tax income derived from investments in their own
state obligations or in investments subject to agreements between their state
and other states. The following chart shows the percentage of income excluding
capital gains in the various Nations Funds portfolios derived from investments
in municipal obligations. This percentage indicates the amount that may be
tax-exempt in your state.
Nations Nations Short-Term Nations Intermediate Nations Nations
Tax-Exempt Municipal Income Municipal Bond Municipal Municipal
STATE Fund Fund Fund Income Fund Reserves
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Alabama 2.50% 0.00% 1.00% 2.93% 3.73%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Alaska 1.18% 4.04% 2.17% 3.38% 0.45%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Arizona 5.09% 3.42% 3.11% 1.74% 1.22%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Arkansas 0.17% 0.00% 0.65% 0.99% 0.23%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
California 2.07% 0.00% 0.70% 2.63% 4.83%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Colorado 3.59% 0.00% 2.11% 1.15% 3.70%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Connecticut 0.03% 0.00% 1.24% 1.30% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Delaware 2.61% 0.00% 0.02% 0.00% 1.46%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
District of Columbia 1.04% 1.64% 0.89% 1.34% 1.69%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Florida 7.25% 1.08% 6.75% 7.84% 4.89%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Georgia 6.06% 2.74% 4.02% 7.64% 8.30%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Guam 0.00% 3.70% 0.33% 0.52% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Hawaii 0.42% 0.81% 2.17% 1.50% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Idaho 0.25% 0.00% 0.00% 0.00% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Illinois 14.19% 5.49% 8.18% 5.01% 9.66%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Indiana 2.84% 1.69% 0.94% 3.44% 1.54%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Iowa 0.25% 0.88% 0.70% 0.00% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Kansas 2.42% 0.42% 0.65% 1.53% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Kentucky 3.80% 0.00% 0.04% 0.22% 2.53%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Louisiana 2.33% 0.41% 0.07% 0.00% 2.39%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Maine 0.37% 0.00% 0.61% 0.08% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Maryland 0.80% 1.76% 3.10% 0.00% 0.55%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Massachusetts 0.12% 2.40% 3.02% 3.85% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Michigan 2.34% 7.12% 1.82% 1.99% 2.99%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Minnesota 0.86% 0.43% 1.11% 0.14% 0.31%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Mississippi 0.80% 0.00% 2.11% 1.05% 0.32%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Missouri 7.88% 0.49% 2.60% 2.02% 1.69%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Montana 0.56% 0.00% 0.00% 0.00% 0.64%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Nebraska 0.22% 0.00% 0.22% 0.10% 0.21%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Nevada 0.00% 3.39% 2.61% 1.74% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
New Hampshire 0.00% 0.00% 0.00% 0.00% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
New Jersey 0.32% 1.18% 2.76% 0.82% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
New Mexico 0.55% 3.04% 0.92% 0.38% 1.82%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
New York 0.22% 3.45% 2.59% 4.28% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
II-11
Nations Nations Short-Term Nations Intermediate Nations Nations
Tax-Exempt Municipal Income Municipal Bond Municipal Municipal
STATE Fund Fund Fund Income Fund Reserves
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
North Carolina 2.48% 1.16% 2.47% 1.58% 0.42%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
North Dakota 0.00% 0.25% 0.00% 0.00% 0.26%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Ohio 1.40% 0.15% 0.63% 1.54% 5.85%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Oklahoma 0.38% 0.42% 0.66% 0.00% 0.11%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Oregon 1.31% 0.00% 0.80% 1.18% 0.72%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Pennsylvania 3.17% 4.66% 2.81% 4.39% 2.43%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Puerto Rico 0.00% 1.07% 0.27% 0.09% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Rhode Island 0.21% 0.00% 0.39% 0.59% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
South Carolina 1.94% 2.13% 1.82% 2.79% 4.19%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
South Dakota 0.00% 0.77% 0.00% 0.00% 0.46%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Tennessee 1.40% 4.86% 1.55% 2.77% 6.35%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Texas 5.07% 15.58% 11.44% 10.38% 9.72%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Utah 1.63% 0.00% 0.13% 2.01% 1.70%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Vermont 0.00% 0.00% 0.00% 0.00% 0.00%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Virginia 1.22% 2.51% 6.51% 1.48% 4.04%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Washington 2.17% 11.60% 7.18% 9.47% 1.15%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
West Virginia 1.86% 0.00% 0.22% 0.57% 1.46%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Wisconsin 2.11% 2.67% 2.24% 0.41% 3.07%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
Wyoming 0.01% 0.00% 0.00% 0.47% 0.85%
----------------------- --------------- -------------------- ------------------------- ----------------- --------------
State Specific Tax-Exempt Funds
For residents of the following states, a portion of income (excluding
capital gains) derived from Nations Funds state-specific municipal bond funds
for the year ended December 31, 1997 is exempt from regular federal and state
income taxes. For certain investors, a portion of income may be subject to the
federal Alternative Minimum Tax.
State Exempt Federal Exempt
FUND Percentage Percentage
--------------------------------------------------------------------- ----------------- ---------------------
Nations Florida Intermediate Municipal Bond Fund 98.26% 100.00%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Florida Municipal Bond Fund 97.24% 99.71%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Georgia Intermediate Municipal Bond Fund 98.93% 99.79%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Georgia Municipal Bond Fund 97.35% 99.13%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Maryland Intermediate Municipal Bond Fund 95.80% 100.00%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Maryland Municipal Bond Fund 93.44% 99.48%
--------------------------------------------------------------------- ----------------- ---------------------
Nations North Carolina Intermediate Municipal Bond Fund 95.53% 99.87%
--------------------------------------------------------------------- ----------------- ---------------------
II-12
--------------------------------------------------------------------- ----------------- ---------------------
Nations North Carolina Municipal Bond Fund 97.69% 99.53%
--------------------------------------------------------------------- ----------------- ---------------------
Nations South Carolina Intermediate Municipal Bond Fund 98.72% 99.95%
--------------------------------------------------------------------- ----------------- ---------------------
Nations South Carolina Municipal Bond Fund 93.76% 99.44%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Tennessee Intermediate Municipal Bond Fund 97.91% 99.89%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Tennessee Municipal Bond Fund 97.47% 100.00%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Texas Intermediate Municipal Bond Fund 81.38% 99.99%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Texas Municipal Bond Fund 83.51% 99.39%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Virginia Intermediate Municipal Bond Fund 97.87% 99.94%
--------------------------------------------------------------------- ----------------- ---------------------
Nations Virginia Municipal Bond Fund 95.42% 99.73%
--------------------------------------------------------------------- ----------------- ---------------------
Alternative Minimum Tax
This information is to be used to calculate your federal Alternative
Minimum Tax liability, if applicable. Multiply the percentage below by the Fund
distribution (excluding capital gains) to give you the distributions to be added
to your Alternative Minimum Taxable income.
FUND Percentage
--------------------------------------------------------------------------------------------- ---------------
Nations Florida Intermediate Municipal Bond Fund 5.94%
--------------------------------------------------------------------------------------------- ---------------
Nations Florida Municipal Bond Fund 17.79%
--------------------------------------------------------------------------------------------- ---------------
Nations Georgia Intermediate Municipal Bond Fund 6.50%
--------------------------------------------------------------------------------------------- ---------------
Nations Georgia Municipal Bond Fund 19.17%
--------------------------------------------------------------------------------------------- ---------------
Nations Intermediate Municipal Bond Fund 6.28%
--------------------------------------------------------------------------------------------- ---------------
Nations Maryland Intermediate Municipal Bond Fund 4.17%
--------------------------------------------------------------------------------------------- ---------------
Nations Maryland Municipal Bond Fund 10.55%
--------------------------------------------------------------------------------------------- ---------------
Nations Municipal Income Fund 12.44%
--------------------------------------------------------------------------------------------- ---------------
Nations Municipal Reserves 9.79%
--------------------------------------------------------------------------------------------- ---------------
Nations North Carolina Intermediate Municipal Bond Fund 4.23%
--------------------------------------------------------------------------------------------- ---------------
Nations North Carolina Municipal Bond Fund 14.86%
--------------------------------------------------------------------------------------------- ---------------
Nations Short-Term Municipal Income Fund 9.96%
--------------------------------------------------------------------------------------------- ---------------
Nations South Carolina Intermediate Municipal Bond Fund 6.22%
--------------------------------------------------------------------------------------------- ---------------
Nations South Carolina Municipal Bond Fund 15.57%
--------------------------------------------------------------------------------------------- ---------------
Nations Tax-Exempt Fund 16.64%
--------------------------------------------------------------------------------------------- ---------------
Nations Tennessee Intermediate Municipal Bond Fund 9.53%
--------------------------------------------------------------------------------------------- ---------------
Nations Tennessee Municipal Bond Fund 16.04%
--------------------------------------------------------------------------------------------- ---------------
Nations Texas Intermediate Municipal Bond Fund 4.09%
--------------------------------------------------------------------------------------------- ---------------
Nations Texas Municipal Bond Fund 16.83%
--------------------------------------------------------------------------------------------- ---------------
Nations Virginia Intermediate Municipal Bond Fund 6.83%
--------------------------------------------------------------------------------------------- ---------------
Nations Virginia Municipal Bond Fund 14.66%
--------------------------------------------------------------------------------------------- ---------------
II-13
Corporate Qualifying Dividends
The following information is provided to enable shareholders to
calculate the amount of dividends paid by the Fund which qualify for the
corporate dividend received deduction.
Domestic Domestic & Foreign
FUND Corporations Corporations
-------------------------------------------------------------- ------------------- --------------------------
Nations Balanced Assets Fund 6.48% 6.82%
-------------------------------------------------------------- ------------------- --------------------------
Nations Capital Growth Fund 32.82% 34.22%
-------------------------------------------------------------- ------------------- --------------------------
Nations Disciplined Equity Fund 18.88% 19.50%
-------------------------------------------------------------- ------------------- --------------------------
Nations Emerging Growth Fund 19.87% 19.95%
-------------------------------------------------------------- ------------------- --------------------------
Nations Emerging Markets Fund 0.00% 100.00%
-------------------------------------------------------------- ------------------- --------------------------
Nations Equity Income Fund 30.13% 30.70%
-------------------------------------------------------------- ------------------- --------------------------
Nations Equity Index Fund 50.88% 52.15%
-------------------------------------------------------------- ------------------- --------------------------
Nations International Equity Fund 0.00% 100.00%
-------------------------------------------------------------- ------------------- --------------------------
Nations International Growth Fund 0.00% 100.00%
-------------------------------------------------------------- ------------------- --------------------------
Nations Managed Index Fund 84.38% 85.49%
-------------------------------------------------------------- ------------------- --------------------------
Nations Managed SmallCap Index Fund 22.43% 22.46%
--------------------------------------------------------------------------------------------- ---------------
Nations Managed SmallCap Value Index Fund 75.88% 75.88%
--------------------------------------------------------------------------------------------- ---------------
Nations Managed Value Index Fund 75.78% 75.78%
--------------------------------------------------------------------------------------------- ---------------
Nations Pacific Growth Fund 0.00% 100.00%
-------------------------------------------------------------- ------------------- --------------------------
Nations Value Fund 44.32% 45.23%
-------------------------------------------------------------- ------------------- --------------------------
Florida Intangibles Tax Percentage(3)
Exempt
FUND Percentage
Equity
Nations Balanced Assets Fund 19.37%
--------------------------------------------------------------------------------------------- ---------------
Nations Capital Growth Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Disciplined Equity Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Emerging Growth Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Emerging Markets Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Equity Income Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Equity Index Fund 0.11%
--------------------------------------------------------------------------------------------- ---------------
Nations International Equity Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations International Growth Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations LifeGoal Growth Portfolio 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations LifeGoal Balanced Growth Portfolio 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations LifeGoal Income and Growth Portfolio 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Managed Index Fund 0.13%
--------------------------------------------------------------------------------------------- ---------------
II-14
Exempt
FUND Percentage
--------------------------------------------------------------------------------------------- ---------------
Nations Managed SmallCap Index Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Managed SmallCap Value Index Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Managed Value Index Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Pacific Growth Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Value Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Fixed Income
Nations Diversified Income Fund 39.79%
--------------------------------------------------------------------------------------------- ---------------
Nations Global Government Income Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Government Securities Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Short-Intermediate Government Fund 63.44%
--------------------------------------------------------------------------------------------- ---------------
Nations Short-Term Income Fund 8.01%
--------------------------------------------------------------------------------------------- ---------------
Nations Strategic Fixed Income Fund 8.28%
--------------------------------------------------------------------------------------------- ---------------
Nations U.S. Government Bond Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Money Market
Nations Cash Reserves 0.46%
--------------------------------------------------------------------------------------------- ---------------
Nations Government Money Market Fund 100.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Government Reserves 24.61%
--------------------------------------------------------------------------------------------- ---------------
Nations Prime Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Treasury Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Treasury Reserves 12.56%
--------------------------------------------------------------------------------------------- ---------------
Municipal
Nations Florida Intermediate Municipal Bond Fund 100.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Florida Municipal Bond Fund 100.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Georgia Intermediate Municipal Bond Fund 0.72%
--------------------------------------------------------------------------------------------- ---------------
Nations Georgia Municipal Bond Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Intermediate Municipal Bond Fund 0.18%
--------------------------------------------------------------------------------------------- ---------------
Nations Maryland Intermediate Municipal Bond Fund 1.30%
--------------------------------------------------------------------------------------------- ---------------
Nations Maryland Municipal Bond Fund 9.92%
--------------------------------------------------------------------------------------------- ---------------
Nations Municipal Income Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations North Carolina Intermediate Municipal Bond Fund 0.93%
--------------------------------------------------------------------------------------------- ---------------
Nations North Carolina Municipal Bond Fund 2.06%
--------------------------------------------------------------------------------------------- ---------------
Nations Short-Term Municipal Income Fund 2.44%
--------------------------------------------------------------------------------------------- ---------------
Nations South Carolina Intermediate Municipal Bond Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations South Carolina Municipal Bond Fund 5.29%
--------------------------------------------------------------------------------------------- ---------------
Nations Tax-Exempt Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Municipal Reserves 0.00%
--------------------------------------------------------------------------------------------- ---------------
II-15
Exempt
FUND Percentage
--------------------------------------------------------------------------------------------- ---------------
Nations Tennessee Intermediate Municipal Bond Fund 4.25%
--------------------------------------------------------------------------------------------- ---------------
Nations Tennessee Municipal Bond Fund 7.81%
--------------------------------------------------------------------------------------------- ---------------
Nations Texas Intermediate Municipal Bond Fund 0.26%
--------------------------------------------------------------------------------------------- ---------------
Nations Texas Municipal Bond Fund 3.06%
--------------------------------------------------------------------------------------------- ---------------
Nations Virginia Intermediate Municipal Bond Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
Nations Virginia Municipal Bond Fund 0.00%
--------------------------------------------------------------------------------------------- ---------------
(3) If any portion of a fund's shares is subject to the Florida
Intangibles Tax, then only U.S. government obligations will retain their
tax-exempt status. Obligations issued by Florida would lose their exempt status
and be subject to the intangibles tax.
Additional Information:
As a shareholder of Nations International Equity Fund, Nations Emerging
Markets Fund, Nations Pacific Growth Fund and or Nations Global Government
Income Fund who received dividends, you are entitled to receive your choice of
either a foreign tax credit or an itemized deduction for foreign taxes paid by
the Fund. Your portion of the foreign taxes paid by the Fund in 1997 is reported
in Box 3 of your Form 1099-DIV.
To take an itemized deduction for your share of the foreign taxes paid
by the Fund, include the amount in Box 3 of Form 1099-DIV on Schedule A, Line 8
of your Form 1040.
The TaxPayer Relief Act of 1997 has modified the flow-through status of
Foreign Tax Credits ("FTCs"). As a result, a percentage of FTC might not be
eligible for credit. In order to assist you in determining the amount of Foreign
Tax Paid which is not eligible for a credit, multiply the percentage listed in
Column A below, by the Foreign Tax Paid ("FTP") amount reported on Form
1099-DIV, box 3. For each fund, deduct this amount from the FTP (box 3) and
report the total resulting amounts in Form 1040, Line 43.
To compute the allowable credit, individual shareholders must complete
IRS Form 1116 and attach it to their Form 1040. Corporate shareholders should
complete Form 1118. The chart below should be used to prepare either of these
Forms.
Although it will generally be more advantageous to claim a credit for
the foreign taxes paid, the ability to claim a credit depends on your individual
tax situation. We suggest that you consult your tax adviser to determine your
best course of action.
II-16
(A) Amount Not Eligible For (B) Foreign Source
Fund Foreign Tax Credit Income Factor
Nations Emerging Markets Fund 0.00% .38792129
Nations International Equity Fund 0.00% .51953104
Nations Pacific Growth Fund 0.00% .48509903
Foreign Tax Factor (C) and Foreign Income Factor (D)
--------------------- ---------------------------- ------------------------------ ---------------------------
Nations International Nations Emerging Markets Fund Nations Pacific Growth
Equity Fund Fund
Country
C D C D C D
Argentina 0.00% 0.42% 0.00% 5.08% 0.00% 0.00%
Australia 2.83% 5.71% 0.00% 0.00% 22.12% 10.08%
Belgium 2.22% 1.65% 0.00% 0.00% 0.00% 0.00%
Brazil 1.05% 3.15% 21.05% 28.62% 0.00% 0.00%
Egypt 0.00% 0.00% 0.00% 1.40% 0.00% 0.00%
Switzerland 4.80% 4.68% 0.00% 0.00% 0.00% 0.00%
Chile 1.68% 1.38% 15.27% 7.20% 0.00% 0.00%
Germany 4.00% 4.46% 0.00% 0.00% 0.00% 0.00%
Spain 3.46% 2.60% 0.00% 0.00% 0.00% 0.00%
France 10.81% 8.22% 0.00% 0.00% 0.00% 0.00%
Great Britain 33.23% 26.80% 2.78% 1.05% 0.00% 0.00%
Greece 0.00% 0.00% 12.75% 3.69% 0.00% 0.00%
Hungary 0.00% 0.00% 0.00% 0.52% 0.00% 0.00%
Hong Kong 0.00% 9.85% 0.00% 8.65% 0.00% 65.32%
Indonesia 0.06% 0.39% 6.10% 4.01% 11.61% 5.07%
Israel 0.00% 0.00% 0.48% 0.64% 0.00% 0.00%
India 0.00% 0.19% 0.11% 2.33% 0.00% 0.00%
Italy 2.44% 1.82% 0.00% 0.00% 0.00% 0.00%
Japan 12.01% 8.95% 0.00% 0.00% 0.00% 0.00%
Korea 0.90% 1.10% 0.93% 1.55% 11.09% 4.59%
Malaysia 2.25% 0.84% 20.78% 5.18% 35.89% 8.45%
Mexico 0.00% 4.81% 0.00% 8.74% 0.00% 0.00%
Netherlands 9.91% 7.29% 0.00% 0.00% 0.00% 0.00%
Norway 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Peru 0.00% 0.38% 0.00% 3.50% 0.00% 0.00%
Philippines 0.04% 0.03% 3.24% 0.97% 1.60% 0.44%
Portugal 0.48% 0.48% 5.91% 3.94% 0.00% 0.00%
Russia 0.00% 0.00% 0.00% 0.28% 0.00% 0.00%
Sweden 3.45% 2.57% 0.00% 0.00% 0.00% 0.00%
Singapore 3.84% 1.62% 0.00% 0.00% 16.17% 5.02%
Thailand 0.54% 0.61% 0.99% 0.74% 1.52% 1.03%
Taiwan 0.00% 0.00% 0.00% 1.11% 0.00% 0.00%
South Africa 0.00% 0.00% 9.61% 10.80% 0.00% 0.00%
100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
II-17
Instructions For Calculating Foreign Tax and Foreign Source Income by
Country:
1. To calculate your foreign tax by country, multiply the total foreign
taxes (Form 1099-DIV, Box 3) by the applicable Foreign Tax Factor percentage
(Column C) indicated in the chart to the left.
2. To calculate the total foreign source income, multiply the amount in
Box 1b on Form 1099-DIV by the appropriate factor in column B.
3. To calculate the total foreign source income by country, multiply
the total foreign source income determined in step 2 by the applicable Foreign
Income Factor percentage (Column D) presented in the chart to the left.
II-18
SCHEDULE III
SERVICE LEVEL PERFORMANCE STANDARDS
------------------------------------------------------------ ---------------------------------------------------------------
SERVICE STANDARD
------------------------------------------------------------ ---------------------------------------------------------------
1. Daily Cash Availability |_| 100% accuracy and delivery by 9:00 a.m. EST for
Money Market Funds and 9:30 a.m. EST for all
others
|_| Compensation for univested cash at Nations Cash
Reserves' Mill rate
------------------------------------------------------------ ---------------------------------------------------------------
2. Calculation of daily NAVs |_| 100% accuracy by 5:00 p.m. EST including pricing,
expense accruals, cash activity, manual entries,
S/H activity. Delivery by 5:45 p.m. EST
------------------------------------------------------------ ---------------------------------------------------------------
3. Review of daily NAVs |_| 100% review by 5:30 p.m. EST
|_| Review of NAV components for
reasonableness including analysis of the
change in the NAV and the change in mill
rates.
|_| Review of price variance report
|_| Review of manual proof
------------------------------------------------------------ ---------------------------------------------------------------
4. NASDAQ Reporting |_| 100% accuracy and communication by 5:45 p.m. EST
------------------------------------------------------------ ---------------------------------------------------------------
5. Daily Pricing and Rate Report (DPRR) |_| 100% accuracy in nightly transmission of DPRRs
|_| Money Market Funds-5:30 p.m. EST
|_| All other Funds- 6:00 p.m. EST
------------------------------------------------------------ ---------------------------------------------------------------
6. FundStation Report (SubM) |_| 100% accuracy and nightly transmission by 7:00 p.m.
EST
------------------------------------------------------------ ---------------------------------------------------------------
7. Processing of trade tickets |_| 100% accuracy and processed by T+1 if received by
the following cut-off times:
|_| All Funds (except International) - 10:00 am (T+1)
|_| International - 12:00 p.m. (T+1)
|_| Same day settlements - 1:30 p.m.
------------------------------------------------------------ ---------------------------------------------------------------
III-1
------------------------------------------------------------ ---------------------------------------------------------------
SERVICE STANDARD
------------------------------------------------------------ ---------------------------------------------------------------
8. Problem Resolution (general) |_| NAV impact analysis within 1 day
|_| Clear and timely communication of 100% of issues
|_| Ongoing Tracking
------------------------------------------------------------ ---------------------------------------------------------------
9. Cash reconciliations |_| Performed daily and sent daily to BAAI (Money Market
Funds) and sent weekly to BAAI (all other funds)
|_| Issues communicated to BAAI same day
|_| Outstanding items addressed within 1 business day
------------------------------------------------------------ ---------------------------------------------------------------
10. Position Reconciliations |_| Performed daily and sent weekly to BAAI
|_| Issues communicated to BAAI same day
|_| Open issues addressed within 2 business days
------------------------------------------------------------ ---------------------------------------------------------------
11. Tax reporting
|_| Federal, state, tax returns |_| Tax provision package prepared within time
parameters as set by BAAI/Independent tax
|_| Tax provision packages including Sub-M and excise personnel (PWC)
tax amounts/ distributions
|_| Estimates of tax requirements prepared as required
|_| Identification of all book/tax differences by BAAI for proper tax planning
|_| Capital gain estimate preparations
------------------------------------------------------------ ---------------------------------------------------------------
12. Statistical Reports |_| Filed within the time parameters as set forth by
each statistical service
------------------------------------------------------------ ---------------------------------------------------------------
13. Expense accruals/payments |_| Payments made on the business day written
instructions from an authorized signator received
|_| Expense accruals made with 100% accuracy based upon
written instructions from BAAI
------------------------------------------------------------ ---------------------------------------------------------------
14. Management Reports |_| Provided to BAAI within 10 business days of month end
------------------------------------------------------------ ---------------------------------------------------------------
III-2
------------------------------------------------------------ ---------------------------------------------------------------
SERVICE STANDARD
------------------------------------------------------------ ---------------------------------------------------------------
15. Year end tax reports |_| Provided to BAAI within the time frame agreed to
------------------------------------------------------------ ---------------------------------------------------------------
16. Annual/Semi-Annual Reports |_| Provide Trial Balance within 5 business days after
annual/semi-annual period
|_| Provide additional financial statement support as
agreed to
------------------------------------------------------------ ---------------------------------------------------------------
17. Daily Reports |_| To be provided on the following day
|_| Provide detailed portfolio valuation
|_| Trial Balance
------------------------------------------------------------ ---------------------------------------------------------------
18. Daily Cash Sweep |_| 100% accuracy and communication by 2:00 p.m. EST
|_| AIM
|_| Nuveen
------------------------------------------------------------ ---------------------------------------------------------------
19. Post Dividends / Corporate Actions |_| 100% accuracy and posted on effective date
------------------------------------------------------------ ---------------------------------------------------------------
20. Monthly Reconciliations |_| Complete reconciliations within 10 business days
------------------------------------------------------------ ---------------------------------------------------------------
21. Reporting to Sub-Advisors |_| Provide nightly and other periodic reporting to
Nations Funds Sub-Advisors
------------------------------------------------------------ ---------------------------------------------------------------
22. Compliance |_| Provide compliance reports as requested by BAAI
------------------------------------------------------------ ---------------------------------------------------------------
III-3
SCHEDULE IV
(Attached)
IV-1
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR NATIONSBANC MANAGED PORTFOLIOS
Effective 12/1/98
Money Market Funds
------------------
1 1/4 basis point per annum on the first $3 billion of each
portfolio's average net assets;
1 basis point on the next $3 billion;
1/2 of one basis point on the next $4 billion;
1/4 of one basis point on the excess.
Domestic Equity
---------------
6 basis points per annum on the first $1 billion of each
portfolio's average net assets;
4 basis points on the next $500 million;
2 basis points on the next $500 million;
1 basis point on the excess.
Domestic Fixed Income
---------------------
5 basis points per annum on the first $1 billion of each
portfolio's average net assets.
3 basis points on the next $500 million.
1 1/2 basis point on the next $500 million.
1/2 of one basis point on the excess.
International Funds
-------------------
7 basis points per annum on the first $1 billion of
each portfolio's average net assets;
5 basis points on the next $500 million;
3 basis points on the next $500 million;
1 basis point on the excess.
IV-2
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR NATIONSBANC MANAGED PORTFOLIOS
Effective 12/1/98
Multiple Class Charges
----------------------
$500 per month, per portfolio, for each additional class in excess of nine (9)
classes.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with the Bank or for
on-going usage of any Bank systems related to fund accounting or administration
services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by Nations obtained from
third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket expenses
traditionally include, but are not limited to, cost associated with attendance
at Board Presentations, printing of shareholders reports, express mail charges,
etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
NationsBanc Advisors, Inc. The Bank of New York
Approved by: Approved by: /s/ Xxx Xxxxxx
---------------
Name: Name: Xxx Xxxxxx
----------
Title: Title: Vice President
Date: Date: May 7, 1999
-----------
IV-3
NationsBanc Managed Portfolios
------------------------------
Fund Accounting and Sub Administration Fee Schedule
---------------------------------------------------
When Aggregate Assets Exceed $100 billion
-----------------------------------------
Fund Type Basis Points
--------- ------------
Money Market
------------
First $2 billion 0.000100
Next $1 billion 0.000075
On excess (>$3.0 billion) 0.000025
Domestic Equity
---------------
First $500 million 0.000550
Next $500 million 0.000450
Next $500 million 0.000250
Next $500 million 0.000150
On excess (>$2.0 billion) 0.000050
Domestic Fixed Income
---------------------
First $500 million 0.000450
Next $500 million 0.000350
Next $250 million 0.000225
Next $250 million 0.000100
On excess (>$1.5 billion) 0.000050
International
-------------
First $500 million 0.00060
Next $500 million 0.00050
Next $250 million 0.00040
Next $250 million 0.00030
On excess (>$1.5 billion) 0.00005
IV-4
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR
NATIONSBANC MANAGED PORTFOLIOS
(Multi Managers)
Multi-Managers
--------------
$22,000 per annum for each multi-manager going to a single feeder. These fees
will be in addition to the following fee schedule now in effect.
For each new multi-manager account with assets less than $20 million, we will
waive our fees for the first three months.
Money Market Funds
------------------
1 1/4 basis point per annum on the first $3 billion of each
portfolio's average net assets;
1 basis point on the next $3 billion;
1/2 of one basis point on the next $4 billion;
1/4 of one basis point on the excess.
Domestic Equity
---------------
6 basis points per annum on the first $1 billion of each
portfolio's average net assets;
4 basis points on the next $500 million;
2 basis points on the next $500 million;
1 basis point on the excess.
Domestic Fixed Income
---------------------
5 basis points per annum on the first $1 billion of each
portfolio's average net assets.
3 basis points on the next $500 million.
1 1/2 basis point on the next $500 million.
1/2 of one basis point on the excess.
International Funds
-------------------
7 basis points per annum on the first $1 billion of each
portfolio's average net assets;
5 basis points on the next $500 million;
3 basis points on the next $500 million;
1 basis point on the excess.
IV-5
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR
NATIONSBANC MANAGED PORTFOLIOS
(Multi Managers)
Multiple Class Charges
----------------------
$500 per month, per portfolio, for each additional class in excess of nine (9)
classes.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with the Bank or for
on-going usage of any Bank systems related to fund accounting or administration
services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by Nations obtained from
third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket expenses
traditionally include, but are not limited to, cost associated with attendance
at Board Presentations, printing shareholders reports, express mail charges,
etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
NationsBanc Advisors, Inc. The Bank of New York
Approved by: Approved by: /s/ Xxx Xxxxxx
---------------
Name: Name: Xxx Xxxxxx
----------
Title: Title: Vice President
Date: Date: May 7, 1999
-----------
IV-6
PORTFOLIO PRICING, FUND ACCOUNTING
AND FUND ADMINISTRATION FEE SCHEDULE
FOR
BANC OF AMERICA ADVISORS, INC.
Nations Financial Services Fund
Domestic Equity Funds
---------------------
5 1/2 basis points per annum on the first $500 million of the
portfolio's average net assets;
4 1/2 basis points on the next $500 million;
2 1/2 basis points on the next $500 million;
1 1/2 basis points on the next $500 million;
1/2 of one basis point on the excess.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with us or
for on-going usage of any Bank systems related to fund accounting or
administration services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by the each fund
obtained from third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket
expenses traditionally include, but are not limited to, cost associated with
attendance at Board Presentations, printing shareholders reports, express mail
charges, etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
IV-7
PORTFOLIO PRICING, FUND ACCOUNTING
AND FUND ADMINISTRATION FEE SCHEDULE
FOR
BANC OF AMERICA ADVISORS, INC.
Nations Global Value Fund
International Funds
-------------------
6 basis points per annum on the first $500 million of the portfolio's
average net assets;
5 basis points on the next $500 million;
4 basis points on the next $250 million;
3 basis points on the next $250 million;
1/2 of one basis point on the excess.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with us or
for on-going usage of any Bank systems related to fund accounting or
administration services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by the each fund
obtained from third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket
expenses traditionally include, but are not limited to, cost associated with
attendance at Board Presentations, printing shareholders reports, express mail
charges, etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
IV-8
PORTFOLIO PRICING, FUND ACCOUNTING
AND FUND ADMINISTRATION FEE SCHEDULE
FOR
BANC OF AMERICA ADVISORS, INC.
Nations Classic Value Fund
Domestic Equity
---------------
5 1/2 basis points per annum on the first $500 million of the
portfolio's average net assets;
4 1/2 basis points on the next $500 million;
2 1/2 basis points on the next $500 million;
1 1/2 basis points on the next $500 million
1/2 of one basis point on the excess.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with us or
for on-going usage of any Bank systems related to fund accounting or
administration services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by the each fund
obtained from third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket
expenses traditionally include, but are not limited to, cost associated with
attendance at Board Presentations, printing shareholders reports, express mail
charges, etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
IV-9
SCHEDULE V
All Database Companies Quarterly List
---------------------- --------------
AMG Data Services Lipper
Xxxxxx'x Morningstar
Bloomberg CDA Wiesenberger
CDA Wiesenberger Investment Company Institute
Commerce Clearing House (CCH) S&P Micropal
Forbes Institute for Economic Research
Institute for Economic Research Value Line
Interactive Data Services Media General Financial Services
Investment Company Institute LCG Associates
LCG Associates Closed End Fund Digest (Closed End Only)
Lipper Lipper - International (Closed End Only)
Media General
Xxxxx'x Investors Service
Morningstar
S&P Micropal
Strategic Insights
Value Line
V-1
