SUB-ADVISORY AGREEMENT
NATIONS ANNUITY TRUST
THIS AGREEMENT is made as of this 25th day of February, 1998, by and
among NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
TRADESTREET INVESTMENT ASSOCIATES, INC., a Maryland corporation (the
"Sub-Adviser"), and NATIONS ANNUITY TRUST, a Delaware business trust (the
"Trust"), 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 Sub-Adviser also is registered with the Commission under
the Advisers Act as an investment adviser;
WHEREAS, the Adviser and the Trust 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 Portfolios; and
WHEREAS, pursuant to such Investment Advisory Agreement, the Adviser,
with the approval of the Trust, wishes to retain the Sub-Adviser for purposes of
rendering advisory services to the Adviser and the Trust in connection with the
Portfolios upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints, and the
Trust hereby approves, the Sub-Adviser to render investment research and
advisory services to the Adviser and the Trust with respect to the Portfolios,
under the supervision of the Adviser and subject to the policies and control of
the Trust's Board of Trustees, and the Sub-Adviser hereby accepts such
appointment, all subject to the terms and conditions contained herein.
2. Investment Services. Subject to the supervision of the Adviser
and the Trust's Board of Trustees, the Sub-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 Sub-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 Sub-Adviser
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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 Sub-Adviser shall
provide such additional services related to the continuous investment program,
including recordkeeping services, as may reasonably be requested from time to
time by the Trust or the Adviser.
3. Control by Board of Trustees. 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 Trust, shall at all
times be subject to any directives of the Board of Trustees of the Trust.
4. Other Covenants. In carrying out its obligations under this
Agreement, the Sub-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 Sub-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 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, as amended) provided to
the Portfolio(s) and/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 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 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 particular Portfolio and to the Trust. In addition,
the Sub-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
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(including brokers and dealers that are affiliated with the Sub-Adviser or the
Trust'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 Sub-Adviser 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 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
Trust).
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 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 a Portfolio or
the size of the position obtainable for or disposed of by a Portfolio.
6. 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 each Portfolio are the property of the Trust and further agrees
to surrender promptly to the Adviser or the Trust 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.
7. 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 and other transaction charges, if any)
purchased or sold for the Portfolios. In addition, the Sub-Adviser
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acknowledges that the Adviser has agreed, pursuant to the Investment Advisory
Agreement, that, 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. If, for any fiscal year of a Portfolio,
the amount of the aggregate advisory fee which the Trust would otherwise be
obligated to pay is reduced pursuant to expense limitation provisions of the
Investment Advisory Agreement, the fee which the Sub-Adviser would otherwise
receive pursuant to this Agreement shall be reduced proportionately.
8. Compensation. For the services provided to each Portfolio 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
for that Portfolio determined in accordance with Schedule I attached hereto. 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 Portfolios for
such period or periods they deem advisable. 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 Trust or the
Portfolio with respect to compensation under this Agreement.
9. 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 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 Sub-Adviser in the performance of
its duties, or from reckless disregard by it of its obligations and duties under
this Agreement.
10. Duration and Termination. This Agreement shall become effective
with respect to a Portfolio when approved by the Trustees of the Trust, 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 a
Portfolio (as defined in Section 2(a)(42) of the 0000 Xxx); 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 Sub-Adviser or Adviser
on sixty (60) days' written notice to the other parties to this Agreement.
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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 securities," "interested persons" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.
11. 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 Sub-Adviser from reducing, limiting or waiving its fee.
12. 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 (as defined in the Declaration of Trust) and all persons
dealing with any class of shares of the Trust must look solely to the property
belonging to such class for the enforcement of any claims against the Trust.
13. 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.
14. Counterparts. This Agreement may be executed in any manner 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 ANNUITY TRUST
on behalf of the Portfolios
By: /s/ A. Xxx Xxxxxx
--------------------------------------
A. Xxx Xxxxxx
President and Chairman of the
Board of Trustees
NATIONSBANC ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President and Chief
Operating Officer
TRADESTREET INVESTMENT ASSOCIATES, INC.
By: /s/ Xxxxx Xxxx
-------------------------------------
Xxxxx Xxxx
President
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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 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
Portfolio Compensation
--------------------------------------------------------------------------------
Nations Value Portfolio 0.25%
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Last Amended: May 1, 2001
IN WITNESS WHEREOF, the parties hereto have caused this amended
Schedule I to be executed by their officers designated below as of the 1st day
of May, 2001.
NATIONS SEPARATE ACCOUNT
TRUST (formerly Nations Annuity Trust) on
behalf of the Portfolios
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------
Xxxxxxx X. Xxxxx, Xx.
Secretary
BANC OF AMERICA CAPITAL
MANAGEMENT, LLC (formerly TradeStreet
Investment Associates, Inc.)
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------
Xxxxxxx Xxxxxxxxx
President
BANC OF AMERICA ADVISORS, LLC
(formerly NationsBanc Advisors, Inc.)
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
President
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The name, address and percentage of ownership of each person who is
known by the Trust to have owned of record or beneficially five percent or more
of any of the Funds as of April 25, 2001 is:
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Fund Beneficial and Record Owner Shares Owned % of Portfolio
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Xxxxxxx 21st Century Portfolio Hartford Life Insurance Company 573,827.660 99.26%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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Xxxxxxx International Opportunities Hartford Life Insurance Company 1,133,904.125 99.91%
Portfolio XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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International Value Portfolio Hartford Life Insurance Company 420,416.004 97.82%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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High Yield Bond Portfolio Hartford Life Insurance Company 1,175,138.957 99.53%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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MidCap Growth Portfolio Hartford Life Insurance Company 1 100%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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Value Portfolio Hartford Life Insurance Company 985,663.191 99.23%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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Capital Growth Portfolio Hartford Life Insurance Company 1,951,984.551 99.84%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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Small Company Portfolio Hartford Life Insurance Company 1,028,073.575 99.78%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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Asset Allocation Portfolio Hartford Life Insurance Company 808,261.972 99.87%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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Xxxxxxx Focused Equities Portfolio Hartford Life Insurance Company 8,925,650.175 99.88%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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Xxxxxxx Growth & Income Portfolio Hartford Life Insurance Company 5,482,551.196 99.87%
XX Xxx 0000
Xxxxxxxx, XX 00000-0000
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