EXHIBIT 99.B5(a)
INVESTMENT ADVISORY AGREEMENT
NATIONS ANNUITY TRUST
THIS AGREEMENT is made as of this ___day of February, 1998, by and
between NATIONS ANNUITY TRUST, a Delaware business trust (the "Trust"),
and NATIONSBANC ADVISORS, INC., a North Carolina corporation (the
"Adviser"), on behalf of those portfolios of the Trust now or hereafter
identified on Schedule I hereto (each a "Portfolio" and collectively,
the "Portfolios").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission ( the "Commission") as an open-end management investment
company under the Investment Company Act of 1940, as amended ( the "1940
Act");
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser;
WHEREAS, the Trust and the Adviser desire to enter into an
agreement to provide for investment advisory services to the Trust upon
the terms and conditions hereinafter set forth; and
WHEREAS, the Trust and the Adviser contemplate that certain duties
of the Adviser under this Agreement will be delegated to one or more
sub-investment adviser(s) (the "Sub-Adviser(s)") pursuant to separate
sub-advisory agreement(s) (the "Sub-Advisory Agreement(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Adviser to act as
investment adviser to each Portfolio for the period and on the terms set
forth in this Agreement. The Adviser accepts such appointment and agrees
to furnish the services herein set forth for the compensation herein
provided. In the event that the Trust establishes one or more portfolios
other than the Portfolios with respect to which it desires to retain the
Adviser to act as investment adviser hereunder, it shall notify the
Adviser in writing. If the Adviser is willing to render such services
under this Agreement it shall notify the Trust in writing whereupon such
portfolio shall become a Portfolio hereunder and shall be subject to the
provisions of this Agreement except to the extent that said provisions
(including those relating to the compensation payable by the Fund to the
Adviser) are modified with respect to such Portfolio in writing by the
Trust and the Adviser at the time.
2. Delegation of Responsibilities. Subject to the approval of the
Trust's Board of Trustees and, if required, the shareholders of the
Portfolios, the Adviser may, pursuant to the Sub-Advisory Agreement(s),
delegate to the Sub-Adviser(s) those of its duties hereunder identified
in the Sub-Advisory Agreement(s), provided that the Adviser shall
continue to supervise and monitor the performance of the duties
delegated to the Sub-Adviser(s) and any such delegation shall not
relieve the Adviser of its duties and obligations under this Agreement.
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The Adviser shall be solely responsible for compensating the
Sub-Adviser(s) for services rendered under the Sub-Advisory
Agreement(s).
3. Delivery of Documents. The Trust has furnished the Adviser with
copies, properly certified or authenticated, of each of the following:
(a) The Trust's Certificate of Trust as filed with the
Secretary of State of Delaware on November 24, 1997, and Declaration of
Trust and all amendments thereto (such Declaration of Trust, as
presently in effect and as it shall from time to time be amended, is
herein called the "Declaration of Trust");
(b) The Trust's By-Laws and amendments thereto (such
By-Laws, as presently in effect and as it shall from time to time be
amended, is herein called the "By-Laws");
(c) Votes of the Trust's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
(d) The Trust's Registration Statement, as amended, on
Form N-1A under the Securities Act of 1933, as amended (the "1933 Act")
(File No. 333-40265) and under the 1940 Act (File No. 811-08481); and
(e) The most recent prospectus of the Trust relating to
each Portfolio (such prospectus) together with the related statement of
additional information, as presently in effect and all amendments and
supplements thereto, are herein called the "Prospectus").
The Trust will furnish the Adviser from time to time with copies
of all amendments of or supplements to the foregoing, if any.
4. Management. Subject to the supervision of the Trust's Board of
Trustees, the Adviser will provide a continuous investment program for
each Portfolio, including investment research and management with
respect to all securities, investments, cash and cash equivalents in
each Portfolio. The Adviser will determine from time to time what
securities and other investments will be purchased, retained or sold by
the Portfolios and will place the daily orders for the purchase or sale
of securities. The Adviser will provide the services rendered by it
under this Agreement in accordance with each Portfolio's investment
objective, policies and restrictions as stated in the Prospectus and
votes of the Trust's Board of Trustees. The Adviser further agrees that
it will:
(a) update each Portfolio's cash availability
throughout the day as required;
(b) maintain historical tax lots for each portfolio
security held by each Portfolio;
(c) transmit trades to the Trust's custodian for proper
settlement;
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(d) maintain all books and records with respect to each
Portfolio's securities and transactions;
(e) supply the Trust and its Board of Trustees with
reports and statistical data as requested; and
(f) prepare a quarterly broker security transaction
summary and monthly security transaction listing for each Portfolio.
5. Other Covenants. The Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations
of the Commission and will in addition conduct its activities under this
Agreement in accordance with other applicable law, including but not
limited to the 1940 Act and the Advisers Act;
(b) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for
which it has investment responsibilities;
(c) will not make loans to any person to purchase or
carry Portfolio shares;
(d) will place orders pursuant to its investment
determinations for the Portfolios either directly with the issuer or
with any broker or dealer. Subject to the other provisions of this
paragraph, in executing portfolio transactions and selecting brokers or
dealers, the Adviser will use its best efforts to seek on behalf of each
Portfolio the best overall terms available. In assessing the best
overall terms available for any transaction, the 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
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, as amended) provided to the Portfolio and/or other accounts over
which the Adviser or an affiliate of the Adviser exercises investment
discretion. The Adviser is authorized, subject to the prior approval of
the Trust's Board of Trustees, to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a
portfolio transaction for any Portfolio 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 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 Adviser to the particular Portfolio and to the
Trust. In addition, the Adviser is authorized to take into account the
sale of shares of the Trust in allocating purchase and sale orders for
portfolio securities to brokers or dealers (including brokers and
dealers that are affiliated with the Adviser or the Trust's principal
underwriter), provided that the 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
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or the Trust's principal underwriter for the Portfolios or an affiliated
person of either acting as principal or broker, except as permitted by
the Commission or applicable law;
(e) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial
banking operations of its affiliates. In making investment
recommendations for a Portfolio, its investment advisory personnel will
not inquire or take into consideration whether the issuer (or related
supporting institution) of securities proposed for purchase or sale for
the Portfolio's account are customers of the commercial departments of
its affiliates. In dealing with commercial customers, such commercial
departments will not inquire or take into consideration whether
securities of those customers are held by the Portfolio; and
(f) will treat confidentially and as proprietary
information of the Trust all records and other information relative to
the Trust and prior, present or potential shareholders, and will not use
such records and information for any purpose other than performance of
its responsibilities and duties hereunder (except after prior
notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld and will be
deemed granted where the Adviser may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested
by the Trust).
6. Services Not Exclusive. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and the 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 Adviser to be suitable for two or more accounts managed by the
Adviser, the available securities or investments may be allocated in a
manner believed by the Adviser to be equitable to each account. It is
recognized that in some cases this procedure may adversely affect the
price paid or received by a Portfolio or the size of the position
obtainable for or disposed of by a Portfolio.
7. Books and Records. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Adviser hereby agrees that all records
which it maintains for each Portfolio are the property of the Trust and
further agrees to surrender promptly to the Trust any of such records
upon the Trust's request. The Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required
to be maintained by Rule 31a-1 under the 1940 Act.
8. Expenses. During the term of this Agreement, the Adviser will
pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities, commodities and other
investments (including brokerage commissions and other transaction
charges, if any) purchased or sold for the Portfolios. In addition, if
the aggregate expenses borne by any Portfolio in any fiscal year exceed
the applicable expense limitations imposed by the securities regulations
of any state in which its shares are registered or qualified for sale to
the public, the Adviser together with the Portfolio's administrator(s)
shall reimburse such Portfolio for such excess in proportion to the fees
otherwise payable to them for such year.
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The obligation of the Adviser to reimburse the Trust hereunder is
limited in any fiscal year to the amount of its fee hereunder for such
fiscal year, provided, however, that notwithstanding the foregoing, the
Adviser shall reimburse the Trust for the full amount of its share of
any such excess expenses regardless of the fees paid to it during such
fiscal year to the extent that the securities regulations of any state
having jurisdiction over the Trust so require. Such expense
reimbursement, if any, will be estimated, reconciled and paid on a
monthly basis.
9. Compensation. For the services provided to each Portfolio and
the expenses assumed pursuant to this Agreement, the Trust will pay the
Adviser and the Adviser will accept as full compensation therefor a fee
for that Portfolio determined in accordance with Schedule I attached
hereto. The fee attributable to each Portfolio shall be a separate
charge to such Portfolio and shall be the several (and not joint or
joint and several) obligation of each such Portfolio. The Trust and the
Adviser may, from time to time, agree to reduce, limit or waive the
amounts payable hereunder with respect to one or more Portfolios for
such period or periods they deem advisable.
10. Limitation of Liability. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Trust in connection with the performance of this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of the Adviser or
any of its officers, directors, employees or agents, in the performance
of its duties or from reckless disregard by it of its obligations and
duties under this Agreement.
11. Duration and Termination. This Agreement shall become
effective with respect to a Portfolio when approved in accordance with
the requirements of the 1940 Act, and shall continue in effect for a
period of two years from the date first written above. This Agreement
shall thereafter continue from year to year, provided that the
continuation of the Agreement is specifically approved at least
annually:
(a) (i) by the Trust's Board of Trustees or (ii) by
the vote of "a majority of the outstanding voting
securities" of the Portfolio (as defined in Section
2(a)(42) of the 1940 Act), and
(b) by the affirmative vote of a majority of the
Trust's Trustees who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of a
party to this Agreement (other than as Trustees of the
Trust), by votes cast in person at a meeting specifically
called for such purpose.
Notwithstanding the foregoing, this Agreement may be terminated as to
any Portfolio at any time, without the payment of any penalty, by the
Trust (by vote of the Trust's Board of Trustees or by vote of a majority
of the outstanding voting securities of the particular Portfolio), or by
the Adviser on sixty (60) days' written notice. The notice provided for
herein may be waived by the party entitled to receipt thereof. This
Agreement will immediately terminate in the event of its assignment. As
used in this Agreement, the terms "majority of the outstanding voting
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securities," "interested persons" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.
12. 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 Portfolio shall be effective until approved
by vote of a majority of the outstanding voting securities of such
Portfolio. However, this shall not prevent the Adviser from reducing,
limiting or waiving its fee.
13. Release. The names "Nations Annuity Trust" and "Trustees of
Nations Annuity Trust" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from
time to time under a Declaration of Trust and the Certificate of Trust
dated November 24, 1997, which is hereby referred to and a copy of which
is on file at the office of the Secretary of State of Delaware and the
principal office of the Trust. The obligations of "Nations Annuity
Trust" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees,
shareholders, or representatives of the Trust personally, but bind only
the Trust Property, and all persons dealing with any class of shares of
the Trust must look solely to the Trust Property belonging to such class
for the enforcement of any claims against the Trust.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and shall be governed by Delaware law.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
NATIONS ANNUITY TRUST
on behalf of the Portfolios
By:
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A. Xxx Xxxxxx
President and Chairman of the
Board of Trustees
NATIONSBANC ADVISORS, INC.
By:
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Xxxx X. Xxxxxxxxxx
President and Director
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SCHEDULE I
The Trust shall pay the Adviser as full compensation for
services provided and expenses assumed hereunder an advisory fee for
each Portfolio, computed daily and payable monthly at the annual rates
listed below as a percentage of the average daily net assets of the
Portfolio:
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Rate of
Fund Compensation
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Nations Balanced Assets Portfolio 0.75%
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Nations Disciplined Equity Portfolio 0.75%
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Nations International Growth Portfolio 0.90%
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Nations Managed Index Portfolio 0.50%
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Nations Managed SmallCap Index Portfolio 0.50%
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Nations Xxxxxxx Focused Equities Portfolio 0.85%
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Nations Xxxxxxx Growth & Income Portfolio 0.85%
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Nations Value Portfolio 0.75%
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Approved: December 9, 1997
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