EXHIBIT 99.D2
SUB-ADVISORY AGREEMENT
NATIONS LIFEGOAL FUNDS, INC.
THIS AGREEMENT is made as of this 15th day of October, 1996, by
and among NATIONSBANC ADVISORS, INC., a North Carolina corporation (the
"Adviser"), TRADESTREET INVESTMENT ASSOCIATES, INC., a Maryland corporation (the
"Sub-Adviser"), and NATIONS LIFEGOAL FUNDS, INC., a Maryland corporation (the
"Company"), on behalf of those portfolios of the Company now or hereafter
identified on Schedule I hereto (each a "Fund" and collectively, the "Funds").
RECITALS
WHEREAS, the Company is registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940,
as amended (the "1940 Act") as an open-end, series management investment
company; and
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of acting as an investment adviser; and
WHEREAS, the Sub-Adviser also is registered with the Commission
under the Advisers Act as an investment adviser; and
WHEREAS, the Adviser and the Company have entered into an
Investment Advisory Agreement of even date herewith (the "Investment Advisory
Agreement"), pursuant to which the Adviser shall act as investment adviser with
respect to the Funds; and
WHEREAS, pursuant 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 of which is
hereby acknowledged, the parties hereto agree as follows:
1. APPOINTMENT OF SUB-ADVISER. The Adviser hereby appoints, and
the Company hereby approves, the Sub-Adviser to render investment research and
advisory services to the Adviser and the Company with respect to the Funds,
under the supervision of the Adviser and subject to the policies and control of
the Company's Board of Directors, and the Sub-Adviser hereby accepts such
appointment, all subject to the terms and conditions contained herein.
2. INVESTMENT SERVICES. The specific duties of the Adviser
delegated to the Sub-Adviser shall be the following:
(a) obtaining and evaluating pertinent information
about significant developments and economic, statistical and
financial data, domestic, foreign or otherwise, whether affecting
the economy generally or the Funds specifically, and whether
concerning the individual issuers whose securities are included in
the Funds or the activities in which such issuers engage, or with
respect to securities which the Adviser or Sub-Adviser considers
desirable for inclusion in the Funds;
(b) investing and reinvesting, on an ongoing basis,
assets held in the Funds in strict accordance with the investment
policies of the Funds as set forth in the registration statement
of the Company with respect to the Funds, as the same may be
amended from time to time;
(c) in accordance with policies and procedures
established by the Board of Directors of the Company and the
Adviser, selecting brokers and dealers to execute portfolio
transactions for the Funds and selecting the markets on or in
which the transactions will be executed;
(d) voting, either in person or by general or
limited proxy, or refraining from voting, any securities held in
the Funds for any purposes; exercising or selling any subscription
or conversion rights; consenting to and joining in or opposing any
voting trusts, reorganizations, consolidations, mergers,
foreclosures and liquidations and in connection therewith,
depositing securities, and accepting other property received
therefor; and
(e) performing other acts necessary or appropriate
in connection with the proper management of the Funds, consistent
with its obligations hereunder, and as may be directed by the
Adviser and/or the Company's Board of Directors.
3. CONTROL BY BOARD OF DIRECTORS. As is the case with respect to
the Adviser under the Investment Advisory Agreement, any investment activities
undertaken by the Sub-Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser with respect to the Funds, shall at all
times be subject to any directives of the Board of Directors of the Company.
4. COMPLIANCE WITH APPLICABLE REQUIREMENTS. In carrying out its
obligations under this Agreement, the Sub-Adviser shall at all times conform to:
(a) all applicable provisions of the 1940 Act, the
Advisers Act and any rules and regulations adopted thereunder;
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(b) the provisions of the registration statement of
the Company applicable to the Funds, as the same may be amended
from time to time, under the Securities Act of 1933 and the 1940
Act;
(c) the provisions of the Articles of Incorporation
of the Company, as the same may be amended from time to time;
(d) the provisions of the By-Laws of the Company, as
the same may be amended from time to time;
(e) any other applicable provisions of state or
federal law.
In addition, any code of ethics adopted by the Sub-Adviser
pursuant to Rule 17j-1 under the 1940 Act shall include policies, prohibitions
and procedures which substantially conform to the recommendations regarding
personal investing approved by the Board of Governors of the Investment Company
Institute on June 30, 1994, as such recommendations may be amended from time to
time.
5. BROKER-DEALER RELATIONSHIPS. The Sub-Adviser is responsible for
the purchase and sale of securities for the Funds, broker-dealer selection, and
negotiation of brokerage commission rates. The Sub-Adviser's primary
consideration in effecting a security transaction will be to obtain the best
price and execution. In selecting a broker-dealer to execute each particular
transaction for a Fund, the Sub-Adviser will take the following into
consideration: the best net price available, the reliability, integrity and
financial condition of the broker-dealer; the size of and difficulty in
executing the order; and the value of the expected contribution of the
broker-dealer to the Fund on a continuing basis. Accordingly, the price to the
Fund in any transaction may be less favorable than that available from another
broker-dealer if the difference is reasonably justified by other aspects of the
portfolio execution services offered. Subject to such policies as the Adviser or
the Company's Board of Directors may from time to time determine, the
Sub-Adviser shall not be deemed to have acted unlawfully or to have breached any
duty created by this Agreement or otherwise solely by reason of having caused a
Fund to pay a broker or dealer that provides brokerage and research services to
the Sub-Adviser an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction, if the Sub-Adviser determines in
good faith that such amount of commission was reasonable in relation to the
value of the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the overall
responsibilities of the Sub-Adviser with respect to the Fund and to other
clients of the Sub-Adviser. The Sub-Adviser is further authorized to allocate
the orders placed by it on behalf of the Funds to brokers and dealers who also
provide research or statistical material, or other services to the Funds or to
the Sub-Adviser. Such allocation shall be in such amounts and proportions as the
Sub-Adviser shall determine, and the Sub-Adviser will report on said allocations
regularly to the Adviser and to the Board of Directors of the Company indicating
the brokers to whom such allocations have been made and the basis therefor.
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6. COMPENSATION. The Adviser shall pay the Sub-Adviser, as
compensation for services rendered hereunder, fees, payable monthly, at the
annual rate of 0.05% of the average daily net assets of each Fund. 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 Fund with respect to compensation under this
Agreement. The Sub-Adviser's fees shall be pro-rated for portions of months in
which sub-advisory services are provided.
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.
7. EXPENSES OF THE FUNDS. All of the ordinary business expenses
incurred by the Company in the operations of the Funds and the offering of their
shares shall be borne by the Funds unless specifically provided otherwise in
this Agreement or in the Investment Advisory Agreement.
8. NON-EXCLUSIVITY. The services of the Sub-Adviser to the Adviser
and the Company with respect to the Fund are not to be deemed to be exclusive,
and the Sub-Adviser shall be free to render investment advisory and
administrative or other services to others (including other investment
companies) and to engage in other activities. It is understood and agreed that
the officers and directors of the Sub-Adviser are not prohibited from engaging
in any other business activity or from rendering services to any other person,
or from serving as partners, officers, directors or trustees of any other firm
or trust, including other investment advisory companies.
9. RECORDS. The Sub-Adviser shall, with respect to the orders the
Sub-Adviser places for the purchases and sales of portfolio securities of the
Funds, maintain or arrange for the maintenance of the documents and records
required pursuant to Rule 31a-1 under the 1940 Act as well as such records as
the Funds' administrator reasonably requests to be maintained, including, but
not limited to, trade tickets and confirmations for portfolio trades. All such
records shall be maintained in a form acceptable to the Funds and in compliance
with the provisions of Rule 31a-1. All such records will be the property of the
Funds and will be available for inspection and use by the Adviser or the Funds
upon request. The Sub-Adviser will promptly notify the Adviser and the Fund's
administrator if it experiences any difficulty in maintaining the records in an
accurate and complete manner.
10. TERM AND APPROVAL. This Agreement shall become effective with
respect to each Fund when approved in accordance with the requirements of the
1940 Act, and shall thereafter continue in force and effect for one year, and
may be continued from year to year with respect to each Fund thereafter,
provided that the continuation of the Agreement is specifically approved at
least annually:
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(a) (i) by the Company's Board of Directors or (ii) by the
vote of "a majority of the outstanding voting securities" of the
Fund (as defined in Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the Directors
of the Company who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of a party to
this Agreement (other than as Directors of the Company), by votes
cast in person at a meeting specifically called for such purpose.
11. TERMINATION. This Agreement may be terminated at any time with
respect to a Fund, without the payment of any penalty, by vote of the Company's
Board of Directors or by vote of a majority of the Fund's outstanding voting
securities, or by the Adviser or by the Sub-Adviser, on sixty (60) days' written
notice to the other parties to this Agreement. Any party entitled to notice may
waive the notice provided for herein. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for purposes of
this paragraph having the meaning defined in Section 2(a)(4) of the 1940 Act.
12. LIABILITY OF SUB-ADVISER. In the absence of willful
misfeasance, bad faith, negligence or reckless disregard of obligations or
duties hereunder on the part of the Sub-Adviser or any of its officers,
directors, employees or agents, the Sub-Adviser shall not be subject to
liability to the Adviser or to the Company for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security.
13. INDEMNIFICATION. In the absence of willful misfeasance, bad
faith, negligence or reckless disregard of duties hereunder on the part of the
Sub-Adviser, or any officers, directors, employees or agents thereof, the
Company hereby agrees to indemnify and hold harmless the Sub-Adviser against all
claims, actions, suits or proceedings at law or in equity whether brought by a
private party or a governmental department, commission, board, bureau, agency or
instrumentality of any kind, arising from the advertising, solicitation, sale,
purchase or pledge of securities, whether of the Funds or other securities,
undertaken by the Funds, their officers, directors, employees, agents or
affiliates, resulting from any violations of the securities laws, rules,
regulations, statutes and codes, whether federal or of any state, by the Funds,
their officers, directors, employees or affiliates. Federal and state securities
laws impose liabilities under certain circumstances on persons who act in good
faith, and nothing herein shall constitute a waiver or limitation of any rights
which a Fund may have and which may not be waived under any applicable federal
and state securities laws.
14. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to such address as may be
designated for the receipt of such notice, with a copy to the Company. Until
further notice, it is agreed that the address of the Company shall be 000 Xxxxxx
Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000; that of the Sub-Adviser shall be Xxx
XxxxxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000; and that of the Adviser
shall be Xxx XxxxxxxXxxx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000.
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15. QUESTIONS OF INTERPRETATION. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act or the Advisers Act shall be
resolved by reference to such term or provision of the 1940 Act or the Advisers
Act and to interpretations thereof, if any, by the United States courts or in
the absence of any controlling decision of any such court, by rules, regulations
or orders of the Commission issued pursuant to the 1940 Act or the Advisers Act.
In addition, where the effect of a requirement of the 1940 Act or the Advisers
Act reflected in any provision of this Agreement is revised by rule, regulation
or order of the Commission, such provision shall be deemed to incorporate the
effect of such rule, regulation or order.
16. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. No amendment of this
Agreement affecting a Fund shall be effective until approved by vote of a
majority of the outstanding voting securities of such Fund. However, this shall
not prevent the Sub-Adviser from reducing, limiting or waiving its fee.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in triplicate by their respective officers on the day and year
first written above.
NATIONS LIFEGOAL FUNDS, INC.,
on behalf of the Funds
By: /s/ A. Xxx Xxxxxx
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A. Xxx Xxxxxx
President and Chairman of the
Board of Directors
NATIONSBANC ADVISORS, INC.
By: /s/ Xxxx X. Xxxxxxxxxx
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Xxxx X. Xxxxxxxxxx
President and Director
TRADESTREET INVESTMENT
ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President and Director
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SCHEDULE I
LifeGoal Growth Portfolio
LifeGoal Balanced Growth Portfolio
LifeGoal Income and Growth Portfolio
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