INTERIM SUB-ADVISORY AGREEMENT
NATIONS FUNDS TRUST
THIS AGREEMENT is made as of January 1, 2002, by and between BANC OF
AMERICA ADVISORS, LLC, a North Carolina limited liability company (the
"Adviser"), BANC OF AMERICA CAPITAL MANAGEMENT, LLC, a North Carolina limited
liability company (the "Sub-Adviser"), and NATIONS FUNDS TRUST, a Delaware
business trust (the "Trust"), on behalf of those series of the Trust now or
hereafter identified on Schedule I (each a "Fund" and collectively, the
"Funds").
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 as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act");
WHEREAS, the Sub-Adviser is also registered with the Commission as an
investment adviser under the Advisers Act;
WHEREAS, the Adviser and the Trust have entered into an investment
advisory agreement (the "Investment Advisory Agreement"), pursuant to which the
Adviser manages the investment operations of each Fund and may delegate certain
duties of the Adviser to one or more investment sub-adviser(s); and
WHEREAS, the Adviser, with the approval of the Board of Trustees of the
Trust (the "Board"), including a majority of the Trustees who are not
"interested persons" (defined herein) of any party to this Agreement, desires to
delegate to the Sub-Adviser the duty to manage the portfolio investments of the
Funds;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment of Sub-Adviser.
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The Adviser hereby appoints the Sub-Adviser and the Sub-Adviser hereby agrees to
manage the portfolio investments of each Fund subject to the terms of this
Agreement and subject to the supervision of the Adviser and the Board.
2. Services of Sub-Adviser.
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The Sub-Adviser shall perform all services necessary for the management of the
portfolio investments of each Fund, including but not limited to:
(a) Managing the investment and reinvestment of all
assets, now or hereafter acquired by each Fund,
including determining what securities and other
investments are to be purchased or sold for each Fund
and executing transactions accordingly;
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(b) Transmitting trades to each Fund's custodian for
settlement in accordance with each Fund's procedures
and as may be directed by the Trust;
(c) Assisting in the preparation of all shareholder
communications, including shareholder reports, and
participating in shareholder relations;
(d) Making recommendations as to the manner in which
voting rights, rights to consent to Fund action and
any other rights pertaining to each Fund's portfolio
securities shall be exercised;
(e) Making recommendations to the Adviser and the Board
with respect to Fund investment policies and
procedures, and carrying out such investment policies
and procedures as are approved by the Board or by the
Adviser under authority delegated by the Board to the
Adviser;
(f) Supplying reports, evaluations, analyses, statistical
data and information to the Adviser, the Board or to
the Funds' officers and other service providers as
the Adviser or the Board may reasonably request from
time to time or as may be necessary or appropriate
for the operation of the Trust as an open-end
investment company or as necessary to comply with
Section 3(a) of this Agreement;
(g) Maintaining all required books and records with
respect to the investment decisions and securities
transactions for each Fund;
(h) Furnishing any and all other services, subject to
review by the Board, that the Adviser from time to
time determines to be necessary or useful to perform
its obligations under the Investment Advisory
Agreement or as the Board may reasonably request from
time to time.
3. Responsibilities of Sub-Adviser.
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In carrying out its obligations under this Agreement, the Sub-Adviser agrees
that it will:
(a) Comply with all applicable law, including but not
limited to the 1940 Act and the Advisers Act, the
rules and regulations of the Commission thereunder,
and the conditions of any order affecting the Trust
or a Fund issued thereunder;
(b) Use the same skill and care in providing such
services as it uses in providing services to other
fiduciary accounts for which it has investment
responsibilities;
(c) Not make loans to any person for the purpose of
purchasing or carrying Fund shares;
(d) Place, or arrange for the placement of, all orders
pursuant to its investment determinations for the
Funds either directly with the issuer or with any
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broker or dealer (including any affiliated 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 each Fund
the best overall terms available. In assessing the
best overall terms available for any transaction, the
Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the
security, the price of the security, the financial
condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if
any, both for the specific transaction and on a
continuing basis. In evaluating the best overall
terms available, and in selecting the broker or
dealer to execute a particular transaction, the
Sub-Adviser may also consider whether such broker or
dealer furnishes research and other information or
services to the Sub-Adviser;
(e) Adhere to the investment objective, strategies and
policies and procedures of the Trust adopted on
behalf of each Fund;
(f) Maintain a policy and practice of conducting its
investment advisory services hereunder independently
of the commercial banking operations of its
affiliates. In making investment recommendations for
a Fund, the Sub-Adviser's investment advisory
personnel will not inquire or take into consideration
whether the issuers (or related supporting
institutions) of securities proposed for purchase or
sale for a Fund'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 Fund.
4. Confidentiality of Information.
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Each party agrees that it will treat confidentially all information provided by
another party regarding such other party's business and operations, including
without limitation the investment activities or holdings of a Fund. All
confidential information provided by a party hereto shall not be disclosed to
any unaffiliated third party without the prior consent of the providing party.
The foregoing shall not apply to any information that is public when provided or
thereafter becomes public or which is required to be disclosed by any regulatory
authority in the lawful and appropriate exercise of its jurisdiction over a
party, by any auditor of the parties hereto, by judicial or administrative
process or otherwise by applicable law or regulation.
5. Services Not Exclusive.
----------------------
The services furnished by the Sub-Adviser hereunder are deemed not to be
exclusive, and the Sub-Adviser shall be free to furnish similar services to
others so long as its provision of services under this Agreement is 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 a Fund or the size of the
position obtainable
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for or disposed of by a Fund. Nothing in this Agreement shall limit or restrict
the right of any of the Sub-Adviser's partners, officers or employees to engage
in any other business or to devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or dissimilar
nature, nor limit or restrict the Sub-Adviser's right to engage in any other
business or to render services of any kind to any other corporation, firm,
individual or association.
6. Delivery of Documents.
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The Trust will provide the Sub-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, and Declaration of
Trust (such Declaration of Trust, as presently in
effect and as from time to time amended, is herein
called the "Declaration of Trust");
(b) the most recent prospectus(es) and statement(s) of
additional information relating to each Fund (such
prospectus(es) together with the related statement(s)
of additional information, as presently in effect and
all amendments and supplements thereto, are herein
called the "Prospectus"); and
(c) any and all applicable policies and procedures
approved by the Board.
The Trust will promptly furnish the Sub-Adviser with copies of any and
all amendments of or additions or supplements to the foregoing.
7. Books and Records.
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In compliance with the requirements of Rule 31a-3 under the 1940 Act, the
Sub-Adviser hereby agrees that all records that it maintains for each Fund under
this Agreement are the property of the Trust and further agrees to surrender
promptly to the Trust or the Adviser any of such records upon request. The
Sub-Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
8. Expenses of the Funds.
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Except to the extent expressly assumed by the Sub-Adviser and except to any
extent required by law to be paid or reimbursed by the Sub-Adviser, the
Sub-Adviser shall have no duty to pay any ordinary operating expenses incurred
in the organization and operation of the Funds. Ordinary operating expenses
include, but are not limited to, brokerage commissions and other transaction
charges, taxes, legal, auditing, printing, or governmental fees, other Fund
service providers' fees and expenses, expenses of issue, sale, redemption and
repurchase of shares, expenses of registering and qualifying shares for sale,
expenses relating to Board and shareholder meetings, and the cost of preparing
and distributing reports and notices to shareholders.
9. Compensation.
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Except as otherwise provided herein, for the services provided to each Fund and
the expenses assumed pursuant to this Agreement, the Adviser will pay the
Sub-Adviser and the Sub-Adviser will accept as full compensation therefor a fee
determined in
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accordance with Schedule I attached hereto. It is understood that the Adviser
shall be solely responsible for compensating the Sub-Adviser for performing any
of the duties delegated to the Sub-Adviser and the Sub-Adviser agrees that it
shall have no claim against the Trust or any Fund with respect to compensation
under this Agreement. The Adviser and the Sub-Adviser may, from time to time,
agree to reduce, limit or waive the amounts payable hereunder with respect to
one or more Funds for such period or periods they deem appropriate.
10. Liability of Sub-Adviser.
------------------------
The Sub-Adviser shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Adviser or the Trust in connection with the
performance of its duties under this Agreement, except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services, or a loss resulting from willful misfeasance, bad faith or negligence
on the part of the Sub-Adviser or any of its officers, directors, employees or
agents, in the performance of their duties under this Agreement, or from
reckless disregard by it of obligations and duties under this Agreement.
11. Term and Approval.
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This Agreement will become effective as of the date set forth above and shall
continue in effect until the earlier of: (a) such time as a new investment
sub-advisory agreement is approved by a majority of the outstanding voting
securities of the Fund; or (b) the 150th day, or such other time that is granted
by the Commission, following the termination of the prior agreement among the
Adviser, Chicago Equity Partners, LLC and the Trust dated June 8, 2001.
12. Termination.
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This Agreement may be terminated without payment of any penalty at any time by:
(a) the Trust with respect to a Fund, by vote of the Board
or by vote of a majority of a Fund's outstanding
voting securities, upon sixty (60) days' written
notice to the other parties to this Agreement; or
(b) the Adviser or the Sub-Adviser with respect to a Fund,
upon 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,
unless an order is issued by the Commission conditionally or unconditionally
exempting such assignment from the provisions of Section 15(a) of the 1940 Act,
in which event this Agreement shall remain in full force and effect subject to
the terms of such order. For the purposes of this paragraph, the definitions
contained in Section 2(a) of the 1940 Act and the applicable rules under the
1940 Act shall apply.
14. Amendment of this Agreement.
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No provision of this Agreement may be changed, waived, discharged or terminated
orally, except by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.
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15. Notices.
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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. Until further notice, it is agreed that the address of the Trust shall
be c/o Stephens Inc., 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, Attention:
Secretary, that of the Adviser shall be Xxx Xxxx xx Xxxxxxx Xxxxx, 00xx Xxxxx,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: President
and that of the Sub-Adviser shall be Xxx Xxxx xx Xxxxxxx Xxxxx, 00xx Xxxxx, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: President.
16. Release.
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The names "Nations Funds Trust" and "Trustees of Nations
Funds Trust" refer respectively to the Trust created by the Declaration of Trust
and the Trustees as Trustees but not individually or personally. All parties
hereto acknowledge and agree that any and all liabilities of the Trust arising,
directly or indirectly, under this Agreement will be satisfied solely out of the
assets of the Trust and that no Trustee, officer or shareholder shall be
personally liable for any such liabilities. All persons dealing with any Fund of
the Trust must look solely to the property belonging to such Fund for the
enforcement of any claims against the Trust.
17. Miscellaneous.
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This Agreement contains the entire understanding of the parties hereto. Each
provision of this Agreement is intended to be severable. 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.
18. Governing Law.
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This Agreement shall be governed by, and construed in accordance with, Delaware
law and the federal securities laws, including the 1940 Act and the Advisers
Act.
19. Counterparts.
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This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
NATIONS FUNDS TRUST
on behalf of the Funds
By: /s/ A. Xxx Xxxxxx
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A. Xxx Xxxxxx
President and Chairman of
the Board of Trustees
BANC OF AMERICA ADVISORS, LLC
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President
BANC OF AMERICA CAPITAL
MANAGEMENT, LLC
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Managing Director
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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:
Rate of Effective
Fund Compensation Date
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Nations Asset Allocation Fund 0.25% 01/01/02
(equity portion)
Approved: October 10, 2001
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