EX-99.B5(e)
SUB-ADVISORY AGREEMENT
NATIONS FUND, INC.
AGREEMENT made as of April 8, 1998 between NATIONSBANC ADVISORS, INC.,
a North Carolina corporation (herein called the "Adviser"), XXXXXXX INVESTMENT
PARTNERS, L.P., a California limited partnership (herein called the
"Sub-Adviser") and NATIONS FUND, INC. (the "Company"), on behalf of the
portfolios of the Company as now or hereafter may be identified on Schedule I
hereto (each a "Fund" and collectively, the "Funds").
RECITALS
WHEREAS, the Company is registered with the Securities and Exchange
Commission (the "Commission") under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end series management investment company;
and
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and engages in
the business of acting as an investment adviser; and
WHEREAS, the Sub-Adviser is also registered under the Advisers Act, as
an investment adviser and engages in the business of acting as an investment
adviser; and
WHEREAS, the Adviser and the Company have entered into an Investment
Advisory Agreement dated January 1, 1996, as amended (the "Investment Advisory
Agreement"), pursuant to which the Adviser shall act as investment adviser with
respect to the Funds; and
WHEREAS, pursuant to such Investment Advisory Agreement, the Adviser,
with the approval of the Company, wishes to retain the Sub-Adviser for purposes
of rendering advisory services to the Adviser and the Company in connection with
the Funds upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment.
The Adviser hereby appoints the Sub-Adviser to act as
investment sub-adviser to the Funds for the period and on the terms set forth in
this Agreement. The Sub-Adviser accepts such appointment and agrees to furnish
the services herein set forth for the compensation herein provided.
2. Services of Sub-Adviser.
Subject to the oversight and supervision of the Adviser and
the Company's Board of Directors, the Sub-Adviser will provide a continuous
investment program for the Funds, including investment research and management
with respect to all securities and investments, except for such cash balances of
the Funds as may, from time to time, be managed by the Adviser. Pursuant to the
foregoing, the Sub-Adviser will determine from time to time what securities and
other investments will be purchased, retained or sold by the Funds. The
Sub-Adviser will provide the services rendered by it under this Agreement in
accordance with the investment criteria and policies established from time to
time for the Funds by the Adviser, the Funds' investment objectives, policies
and restrictions as stated in the Funds' Prospectuses and Statement of
Additional Information for the Funds, and resolutions of the Funds' Board of
Directors.
The Sub-Adviser further agrees that it will:
(a) Provide information to the Funds' accountant for the
purpose of updating the Funds' cash availability throughout
the day as required;
(b) Maintain historical tax lots for each portfolio security
held by the Funds;
(c) Transmit trades to the Company's custodian for proper
settlement;
(d) Maintain all books and records with respect to the Funds
that are required to be maintained under Rule 31a-l(f) under
the 1940 Act;
(e) Supply the Adviser, the Company and the Company's Board
of Directors with reports, statistical data and economic
information as requested; and
(f) Prepare a quarterly broker security transaction summary
and, if requested in advance, monthly security transaction
listing for the Funds.
3. Other Covenants.
The Sub-Adviser agrees that it will:
(a) Comply with all applicable Rules and Regulations of the
Commission and will in addition conduct its activities under
this Agreement in accordance with other applicable law;
(b) Use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which
it has investment responsibilities;
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(c) Place orders pursuant to its investment determinations
for the Funds either directly with the issuer or with any
broker or dealer. In executing portfolio transactions and
selecting brokers or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of the Funds the best overall
terms available. In assessing the best overall terms available
for any transaction, the Sub-Adviser shall consider all
factors that it deems relevant, including the breadth of the
market in the security, the price of the security, the
financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting
the broker-dealer to execute a particular transaction, the
Sub-Adviser may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Funds or
other accounts over which the Sub-Adviser or an affiliate of
the Sub-Adviser exercises investment discretion. The
Sub-Adviser is authorized, subject to the prior approval of
the Adviser and the Company's Board of Directors, to pay to a
broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction
for the Funds which is in excess of the amount of commission
another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in
good faith that such commission was reasonable in relation to
the value of the brokerage and research services provided by
such broker or dealer -- viewed in terms of that particular
transaction or in terms of the overall responsibilities of the
Sub-Adviser to the Funds. In addition, the Sub-Adviser is
authorized to take into account the sale of shares of the
Company in allocating purchase and sale orders for portfolio
securities to brokers or dealers (including brokers and
dealers that are affiliated with the Adviser, Sub-Adviser or
the Company's principal underwriter), provided that the
Sub-Adviser believes that the quality of the transaction and
the commission are comparable to what they would be with other
qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Adviser,
Sub-Adviser, the Company's principal underwriter or any
affiliated person of either the Company, the Adviser,
Sub-Adviser, or the Company's principal underwriter, acting as
principal in the transaction, except to the extent permitted
by the Comission;
(d) Treat confidentially and as proprietary information of
the Company, all records and other information relative to the
Company maintained by the Sub-Adviser, and will not use such
records and information for any purpose other than performance
of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Company,
which approval shall not be unreasonably withheld and may not
be withheld where the Sub-Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted
authorities, or when so requested by the Company; and
(e) Maintain a policy and practice of conducting its
sub-investment advisory services hereunder independently of
its, and any of its
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affiliates', commercial banking operations. When the
Sub-Adviser makes investment recommendations for the Funds,
its investment advisory personnel will not inquire or take
into consideration whether the issuers of securities proposed
for purchase or sale for the Funds' accounts are customers of
its, or any of its affiliates', commercial department. In
dealing with commercial customers, the commercial department
of the Sub-Adviser, or any of its affiliates, will not
inquire or take into consideration whether securities of
those customers are held by the Funds.
4. Services Not Exclusive.
The services furnished by the Sub-Adviser hereunder are deemed
not to be exclusive, and the Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby. To the extent that the purchase or sale of securities or other
investments of the same issuer may be deemed by the Sub-Adviser to be suitable
for two or more accounts managed by the Sub-Adviser, the available securities or
investments may be allocated in a manner believed by the Sub-Adviser to be
equitable to each account. It is recognized that in some cases this procedure
may adversely affect the price paid or received by the Funds or the size of the
position obtainable for or disposed of by the Funds.
5. Books and Records.
In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Sub-Adviser hereby agrees that all records which it maintains for
the Funds are the property of the Company and further agrees to surrender
promptly to the Company any of such records upon the Company's request. The
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act, the records required to be maintained by it under this
Agreement.
6. Expenses.
During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions, custodial charges and other transaction costs,
if any) purchased or sold for the Funds.
7. Compensation.
The Adviser shall pay the Sub-Adviser, as compensation for
services rendered hereunder, fees, payable monthly, at the annual rates
indicated on Schedule I hereto, as such Schedule may be supplemented and amended
from time to time. It is understood that the Adviser shall be responsible for
the Sub-Adviser's fee for its services hereunder, and the Sub-Adviser agrees
that it shall have no claim against the Company or the Funds with respect to
compensation under this Agreement.
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The average daily net asset value of the Funds shall be
determined in the manner set forth in the Articles of Incorporation and
registration statement of the Company, as amended from time to time.
8. Limitation of Liability.
The Sub-Adviser shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Company in connection with the
performance of this Agreement, except that the Sub-Adviser shall be liable to
the Company for any loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services or any loss resulting from willful
misfeasance, bad faith or negligence on the part of the Sub-Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
9. Duration and Termination.
This Agreement will become effective as of the date first
written above. Unless sooner terminated as provided herein, this Agreement shall
continue in effect until April _, 2000 and, if approved by the shareholders of
the Funds on or before such date, shall continue in effect for an additional
period ending on January 1, 2001. Thereafter, if not terminated, this Agreement
shall automatically continue in effect for successive annual periods ending on
January 1, provided such continuance is specifically approved at least annually
(a) by the vote of a majority of those members of the Company's Board of
Directors who are not interested persons of any party to this Agreement, cast in
person at a meeting called for the purpose of voting such approval, and (b) by
the Company's Board of Directors or by vote of a majority of the outstanding
voting securities of the Funds. Notwithstanding the foregoing, this Agreement
may be terminated as to the Funds at any time, without the payment of any
penalty, by the Adviser or by the Company (by vote of the Company's Board of
Directors or by vote of a majority of the outstanding voting securities of the
Funds), on sixty days' written notice to the Sub-Adviser, or by the Sub-Adviser,
on sixty days' written notice to the Company, provided that in each such case,
notice shall be given simultaneously to the Adviser. In addition,
notwithstanding anything herein to the contrary, in the event of the termination
of the Investment Advisory Agreement with respect to the Funds for any reason
(whether by the Company, by the Adviser or by operation of law) this Agreement
shall terminate upon the effective date of such termination of the Investment
Advisory Agreement. This Agreement will also immediately terminate in the event
of its assignment. (As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meaning as such terms have in the 1940 Act.)
10. Amendment of This Agreement.
No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought. To the extent required by the 1940 Act, no amendment of
this Agreement shall be effective until approved by vote of a majority of the
outstanding voting securities of the Funds.
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11. Miscellaneous.
The captions in this Agreement are included for convenience of
reference only, and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by Maryland law.
12. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers of the day and year first
written above.
NATIONS FUND, INC.,
on behalf of the Funds
By: /s/ A. Xxx Xxxxxx
-----------------------
A. Xxx Xxxxxx
President and Chairman of the
Board of Directors
NATIONSBANC ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
Senior Vice President
XXXXXXX INVESTMENT
PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Xxxxxxx X. Xxxxx
Managing Partner
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SCHEDULE I
The Adviser shall pay the Sub-Adviser as full compensation for services
provided and expenses assumed hereunder, a sub-advisory fee for each Fund,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Fund:
FUND RATE OF COMPENSATION
---- ---------------------
Nations International Value Fund .50% of average daily net assets
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