Exhibit 99.23(h)(3)
SUB-ADMINISTRATION AGREEMENT
This SUB-ADMINISTRATION AGREEMENT (the "Agreement") is made as of May 21,
1999 by and among THE BANK OF NEW YORK ("BNY"), NATIONSBANC ADVISORS, INC.
("NBAI") and NATIONS MASTER INVESTMENT TRUST (the "Master Trust").
WHEREAS, the Master Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, NBAI serves as the Co-Administrator for the investment portfolios
of the Master Trust pursuant to a separate Co-Administration Agreement; and
WHEREAS, NBAI desires to retain BNY to render certain sub-administrative
and other services to the Master Trust and to NBAI, as Co-Administrator of the
Master Trust, and BNY is willing to render such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. Appointment and Duties as Sub-Administrator.
-------------------------------------------
(a) NBAI hereby appoints BNY to act as Sub-Administrator of the Master
Trust and to render sub-administrative services for each portfolio of the Master
Trust listed on Schedule I (individually, a "Fund" and collectively, the "Master
Portfolios") and BNY hereby accepts such appointment and agrees to render the
services and duties set forth in Schedule II as it may be amended from time to
time, for the compensation and on the terms herein provided. Each new investment
portfolio established in the future by the Master Trust or NBAI will become a
"Master Portfolio" for all purposes hereunder when BNY receives a revised
Schedule I from NBAI or the Master Trust that includes such new portfolio.
(b) Subject to the other provisions of this Section 1, in performing all
services under this Agreement, BNY shall (i) act in conformity with the Master
Trust's Declaration of Trust and Bylaws (the "Bylaws"), the 1940 Act and the
rules thereunder, including but not limited to Rules 31a-1 to 31a-3, and other
applicable laws and regulations, as the same may be amended from time to time,
and the Master Trust's Registration Statement, as such Registration Statement
may be amended from time to time; (ii) consult and coordinate with NBAI and the
Master Trust, as necessary and appropriate; and (iii) advise and report to NBAI
and the Master Trust, as necessary or appropriate, with respect to any
compliance matters that come to its attention. In performing all services under
this Agreement BNY shall meet the minimum quality of service standards set forth
on Schedule III.
(c) The Master Trust has furnished BNY and NBAI with copies properly
certified or authenticated of each of the following: (i) the Master Trust's
Declaration of Trust or other
1
organizational document and all amendments thereto (the "Declaration"); (ii) the
Master Trust's Bylaws; (iii) resolutions of the Master Trust's Board of Trustees
or other governing body (the "Board") authorizing the execution, delivery and
performance of this Agreement by the Master Trust; (iv) the Master Trust's most
recent Post-Effective Amendment to its Registration Statement on Form N-1A (the
"Registration Statement") under the 1940 Act (File No. 811-09347), as filed with
the Securities and Exchange Commission (the "SEC") relating to interests in the
Master Portfolios (the "Interests"); (iv) the Master Portfolios' current
Prospectus(es); (v) the Master Portfolios' current Statement(s) of Additional
Information; and (vi) the pricing procedures applicable to the calculation of
the Master Portfolios' net asset values as approved by the Master Trust's Board
(the "Pricing Procedures"). It is solely the Master Trust's responsibility to
furnish BNY from time to time with copies, properly certified or authenticated,
of all amendments of or supplements to the foregoing, and BNY will not be held
to have knowledge of any such amendments or supplements until the same are
actually received by BNY. Furthermore, the Master Trust will provide BNY with
any other documents that BNY and NBAI may reasonably request and will notify BNY
and NBAI as soon as possible of any matter materially affecting either BNY's or
NBAI's performance of its services under this Agreement.
(d)(i) BNY undertakes to report on a regular basis to NBAI and the Master
Trust regarding: (A) the readiness of its computer systems, or those used by it
in the performance of its duties hereunder, properly to record, store, process,
calculate or present calendar dates falling on and after, and time spans
including, September 9, 1999, January 1, 2000 or February 29, 2000 (the "Subject
Dates") as a result of the occurrence, or use of data containing any such
Subject Dates; (B) the readiness of its computer systems or those used by it in
the performance of its duties hereunder, to calculate any information dependent
on or relating to dates on or after the Subject Dates; and (C) its ability to
perform the administration and fund accounting services set forth in Schedule II
(the "Services") in accordance with any applicable performance standards set
forth in Schedule III (the "Standards") with respect to the maintenance of
records or processing of data containing dates falling on or after the Subject
Dates, provided that, with respect to computers used but not owned by BNY and
third-party computer systems other than InvestOne, BNY's responsibility shall be
limited to seeking similar reports from such owners or third parties and
promptly forwarding such reports to NBAI. Without limiting the foregoing, BNY
undertakes to notify NBAI and the Master Trust, in writing, of any concerns
believed by BNY to be material regarding the events described in this paragraph,
provided that, with respect to computers owned by others and third-party
computer systems other than InvestOne, BNY's responsibility shall be limited to
seeking similar notice from such owners or third parties and promptly forwarding
such notifications to NBAI.
(ii) NBAI or the Master Trust shall have the right to terminate this
Agreement if there is a "material failure" by BNY to perform any of the Services
in accordance with the Standards due to a failure by computers owned or used by
BNY in performing its duties hereunder to properly process the occurrence of the
Subject Dates or data containing the Subject Dates. As used in this Section
1(d), the term "material failure" shall be limited to a failure to provide any
of the Services in accordance with the Standards, provided that no such failure
shall be deemed a "material failure" if such failure occurs at or about the time
other major financial institutions similar to BNY providing similar services in
a similar volume to investment companies similar
2
to the Master Trust are experiencing similar failures, and, provided further,
that no failure by BNY shall be or be deemed a "material failure" if BNY
substantially provides the Services under a contingency plan, it being agreed
that, to the extent that the parties mutually agree, the time frames and
deadlines set forth in Schedule III of this Agreement and elsewhere shall not be
considered in determining whether BNY is substantially providing the Services in
accordance with the Standards. NBAI and the Master Trust agree to act reasonably
and in good faith in considering any request by BNY to extend time frames and
deadlines.
(iii) In the event there is a "material failure" by BNY to provide the
Services and such "material failure" is not cured by BNY within 10 days after
such material failure arises, NBAI or the Master Trust shall have the right to
terminate this Agreement upon the giving of 60 days written notice to BNY. BNY
shall, notwithstanding any other provision contained in this Agreement, have no
liability to the Master Trust or NBAI under this Agreement if such "material
failure" initially arose out of or was caused by a failure of a computer used
but not owned by BNY or owned by a third party (other than InvestOne) to
properly process the Subject Dates or data containing the Subject Dates, and BNY
shall be entitled to any compensation and reimbursement for out-of-pocket
expense as may then be due and payable, as well as agreed-upon out-of-pocket
expenses incurred in connection with such a termination. If such a termination
is the result of a "material failure" initially arising out of, or caused by a
failure of computers owned by BNY or a failure by InvestOne, then, first, BNY's
liability hereunder for such failure shall, notwithstanding any other provision
contained in this Agreement to the contrary, be limited to the lesser of (x) the
fees paid to a successor service provider during the six months next succeeding
the date of termination to the extent such fees exceed the fees that would have
been paid to BNY hereunder, and (y) $1,000,000; and second, BNY shall not be
entitled to out-of-pocket expenses incurred in connection with such a
termination.
(iv) In the event of conflict between this Section 1(d) and any other
provision contained in this Agreement, this Section 1(d) shall control.
(v) NBAI and the Master Trust each agree to hold all of the provisions of
this Section 1(d) in strict confidence and not to disclose, nor permit
disclosure of, such provisions.
(e) Subject to the direction and approval of the Master Trust's Board and
appropriate officers and the provisions of this Agreement, BNY shall provide to
each Master Portfolio the administrative services set forth on Schedule II
attached hereto. In performing such services hereunder, BNY shall provide, at
its expense, office space, facilities, equipment and personnel. BNY shall not
provide any services relating to the management, investment advisory or
sub-advisory functions of any Master Portfolio, distribution of Interests of any
Master Portfolio, maintenance of any Master Portfolio's financial records
(except as otherwise agreed by the parties) or any services normally performed
by the Master Portfolios' counsel or independent accountants. Upon receipt of
the Master Trust's prior written consent, BNY may delegate any of its duties and
obligations hereunder to any delegee or agent whenever and on such terms and
conditions as it deems necessary or appropriate. Unless expressly agreed in
writing, BNY shall not be relieved of liability or responsibility for the
performance of any duties or obligations delegated to a delegee or agent,
provided that BNY shall have no liability for duties or obligations that are
delegated to a delegee or agent at the instruction of the Master Trust or
3
NBAI. The Master Trust and NBAI shall cause their respective officers, and shall
use reasonable efforts to cause the Master Trust's or NBAI's legal counsel and
independent accountants to cooperate with BNY and to provide BNY, upon BNY's
reasonable written request, such information, documents and advice relating to
such Master Portfolio as is within the possession or knowledge of such persons,
in order to enable BNY to perform its duties hereunder. Such cooperation or
provision of information, documents or advice shall be at no cost to BNY,
provided BNY's request is reasonable and NBAI shall have been notified of the
request. In connection with its duties hereunder, BNY shall be entitled to
reasonably rely upon any documents relating to a Master Portfolio provided to
BNY by any of the aforementioned persons. BNY may apply to the Master Trust or
NBAI for written instructions with respect to any matter arising in connection
with BNY's performance hereunder. If, after a reasonable period of time, BNY
receives no response to any such application, BNY may then notify the Master
Trust or NBAI of reasonable action that BNY shall take if written instructions
are not received within a stated period of time after such notice, and then BNY
shall not be liable for taking such reasonable action as if written instructions
had been provided. BNY is entitled to reasonably rely and act in accordance with
written instructions believed to have been given by authorized persons and shall
incur no costs for such reasonable reliance. BNY shall have no duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement and Schedule II hereto, and no covenant
or obligation shall be implied against BNY in connection with this Agreement.
(f) The Master Trust and NBAI, for itself and not for the others, hereby
represents and warrants to BNY, which representations and warranties shall be
deemed to be continuing, that: (i) it is duly organized and existing under the
laws of the jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to perform its
obligations hereunder; (ii) this Agreement has been duly authorized, executed
and delivered by it in accordance with all requisite action and constitutes a
valid and legally binding obligation, enforceable in accordance with its terms;
(iii) it is conducting its business substantially in compliance with all
applicable laws and regulations, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted; (iv) there is no statute, regulation, rule, order or judgment
binding on it and no provision of its Declaration or Bylaws, nor of any
mortgage, indenture, credit agreement or other contract binding on it or
affecting its property which would prohibit its execution or performance of this
Agreement; and (v) the Master Trust and NBAI will use reasonable efforts to
promptly notify BNY of any errors or omissions contained in any reports,
calculations, valuations and other items of information, provided that any
failure by the Master Trust or NBAI to detect any such errors or omissions shall
not relieve BNY of any resulting liability therefrom. To the extent that NBAI
has actual knowledge of any such error or omission and fails to use reasonable
efforts to promptly notify BNY, BNY shall be relieved of any liability that BNY
may have mitigated had NBAI provided notice of such error or omission to BNY.
(g) BNY hereby represents and warrants to the Master Trust and NBAI, which
representations and warranties shall be deemed to be continuing, that: (i) it is
duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted, to
enter into this Agreement and to perform its obligations hereunder; (ii) this
Agreement has been duly authorized, executed and delivered by it in
4
accordance with all requisite action and constitutes a valid and legally binding
obligation, enforceable in accordance with its terms; and (iii) it is conducting
its business substantially in compliance with all applicable laws and
regulations, both state and federal, and has obtained all regulatory licenses,
approvals and consents necessary to carry on its business as now conducted;
there is no statute, regulation, rule, order or judgment binding on it and no
provision of its Declaration or Bylaws, nor of any mortgage, indenture, credit
agreement or other contract binding on it or affecting its property which would
prohibit its execution or performance of this Agreement.
2. Compensation. For the services to be rendered, the facilities to be
------------
furnished and the compensation and other expenses to be borne by BNY, as
provided for in this Agreement, BNY shall be entitled to receive a monthly fee
from NBAI and reimbursement for out-of-pocket expenses as set forth in Schedule
IV to this Agreement. It is understood that NBAI shall be responsible for BNY's
monthly fee for its services hereunder, and BNY agrees that it shall have no
claim against the Master Trust or the Master Portfolios with respect to
compensation under this Agreement.
3. Recordkeeping. BNY shall, as agent for the Master Trust, and subject to
-------------
the direction and approval of the Master Trust's Board and the provisions of
this Agreement, maintain and keep current the books, accounts and other
documents, if any, pursuant to the services and duties provided by BNY as set
forth in Schedule II of this Agreement, and preserve any such books, accounts
and other documents in accordance with the applicable provisions of Rule 31a-2
of the 1940 Act. Such books, accounts and other documents shall be made
available upon reasonable request for inspection by officers, employees and
auditors of the Master Trust and NBAI during BNY's normal business hours. All
records maintained and preserved by BNY pursuant to this Agreement which the
Master Trust is required to maintain and preserve in accordance with Rule 31a-2
of the 1940 Act shall be and remain the property of the Master Trust and shall
be surrendered to the Master Trust promptly upon request in the form in which
such records have been maintained and preserved. Upon reasonable request of the
Master Trust, BNY shall provide in data files or hard copy, whichever the Master
Trust shall reasonably elect, any records included in any such delivery which
are maintained by BNY on a computer disc, or are similarly maintained, and the
Master Trust shall reimburse BNY for its expenses of providing such hard copy.
4. Standard of Care; Indemnification.
---------------------------------
(a) BNY shall at all times act in good faith and agrees to use its best
efforts to fulfill its obligations under this Agreement, but assumes no
responsibility for loss or damage to the Master Trust unless such loss or damage
is caused by BNY's own negligence, bad faith or willful misconduct or that of
its directors, officers or employees. BNY shall be responsible hereunder for all
direct damages resulting from its own negligence, bad faith or willful
misconduct, provided however that it shall not be responsible for lost profits
or lost business arising under or in connection with this Agreement. It is
understood and agreed that for purposes of this Section 4(a), "direct damages"
shall include, but shall not be limited to, all legal costs, penalties,
reimbursement for excess distribution and redemption payments, repurchasing
costs for servicing
5
agents and reimbursement to the Master Portfolios for net asset value breaks (as
calculated under the Pricing Procedures).
(b) The Master Trust, on behalf of each Master Portfolio, will indemnify
BNY against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses of a
defense against any claim, demand, action or suit), relating to the particular
Master Portfolio and arising from any one or more of the following: (i) errors
in records or instructions, explanations, information, specifications or
documentation of any kind, as the case may be, supplied to BNY by any person
described in Section 1 hereof or by any third party described in Section 5; (ii)
action or inaction taken or omitted to be taken by BNY pursuant to written or
oral instructions described in this Agreement (or otherwise without bad faith,
negligence or willful misconduct); (iii) any action taken or omitted to be taken
by BNY in good faith in accordance with the advice or opinion of counsel for a
Master Portfolio, the Master Trust, NBAI (obtained in accordance with the
procedures set forth in this Agreement) or its own counsel; (iv) any improper
use by the Master Portfolio, the Master Trust, NBAI or their respective agents,
of any valuations or computations supplied by BNY pursuant to this Agreement;
(v) the method of valuation of the securities and the method of computing a
Master Portfolio's net asset value or any other amount computed by BNY
hereunder, provided BNY has followed the Pricing Procedures; and (vi) any
valuation of securities, net asset value or other amount provided by a Master
Portfolio or NBAI. BNY will not confess any claim or settle or make any
compromise in any instance in which the Master Trust will be asked to provide
indemnification, except with the Master Trust's prior written consent. Any
amounts payable by the Master Trust under this Section 4(b) shall be satisfied
only against the assets of the Master Portfolio involved in the claim, demand,
action or suit and not against the assets of any other investment portfolio of
the Master Trust.
5. Master Portfolio Accounting and Other Services.
----------------------------------------------
(a) BNY, in performing the services required of it under the terms of this
Agreement, shall be entitled to rely fully on the accuracy and validity of any
and all instructions, explanations, information, specifications and
documentation furnished to it by a Master Portfolio and shall have no duty or
obligation to review the accuracy, validity or propriety of such instructions,
explanations, information, specifications or documentation, including, without
limitation, evaluations of securities; the amounts or formula for calculating
the amounts and times of accrual of Master Portfolio's liabilities and expenses;
the amounts receivable and the amounts payable on the sale or purchase of
securities; and amounts receivable or amounts payable for the sale or redemption
of Master Portfolio Interests effected by or on behalf of the Master Portfolio.
In the event BNY's computations hereunder rely, in whole or in part, upon
information, including, without limitation, bid, offer or market values of
securities or other assets, or accruals of interest or earnings thereon, from a
pricing or similar service utilized, or subscribed to, by BNY which BNY in its
judgment deems reliable, or any other third party pricing source designated by
the Master Trust, BNY shall not be responsible for, under any duty to inquire
into, or deemed to make any assurances with respect to, the accuracy or
completeness of such information. BNY shall not be required to inquire into any
valuation of securities or other assets by the Master Portfolio or any third
party described in this Section, even though
6
BNY in performing services similar to the services provided pursuant to this
Agreement for others may receive different valuations of the same or different
securities of the same issuers.
(b) Subject to the provisions of this Agreement and the direction and
approval of the Master Trust's Board, BNY shall perform the computations
described in Schedule II at such times and dates and in the manner specified or
described in the then-current Prospectus(es) of a Master Portfolio. To the
extent valuation of securities or a computation specified or described in a
Master Portfolio's Pricing Procedures or then-current effective Prospectus is at
any time inconsistent with any applicable laws or regulations, the Master Trust
or NBAI shall immediately so notify BNY in writing and thereafter shall furnish
BNY at all appropriate times with the values of such securities and such Master
Portfolio's net asset value or other amounts otherwise to be calculated by BNY,
or, subject to the prior approval of BNY, instruct BNY in writing to value
securities and make such computations in a manner which the Master Trust or NBAI
then represents in writing to be consistent with all applicable laws and
regulations. The Master Trust or NBAI may also from time to time, subject to the
prior approval of BNY, instruct BNY in writing to make computations other than
as specified in this Section of this Agreement. By giving such instruction, the
Master Trust or NBAI shall be deemed to have represented that such instruction
is consistent with all applicable laws and regulations and the then-current
effective Prospectus of the particular Master Portfolio. The Master Trust or
NBAI shall have sole responsibility for determining the method of valuation of
securities and the method of computations, and all computations, valuation of
securities and the method of computing each Master Portfolio's net asset value
shall be subject to approval by the Master Trust and NBAI. BNY shall not be
liable for relying on any price provided by any pricing service believed by BNY
to be reliable, and the Master Trust or NBAI shall furnish values when the same
are not available from a pricing service utilized by BNY, with such furnishing
to constitute an instruction to BNY to rely on the provided values.
(c) BNY shall be responsible for determining and properly reflecting in the
computations made by it under this Agreement: (i) the taxable nature of any
distribution or amount received or deemed received by, or payable to, a Master
Portfolio; (ii) the taxable nature or effect on a Master Portfolio or its
shareholders of any corporate actions, class actions, tax reclaims, tax refunds,
or similar events; (iii) the taxable nature or taxable amount of any
distribution or dividend paid, payable or deemed paid, by a Master Portfolio to
its shareholders; (iv) the effect under any federal, state, or foreign income
tax laws of a Master Portfolio making or not making any distribution or dividend
payment, or any election with respect thereto; or (v) any tax accounting;
provided, however, that if BNY is not certain of the taxable nature, amount or
effect of any such item, it may seek instructions regarding the proper treatment
of such item from the Master Trust or NBAI in accordance with the procedures set
forth in Section 1(e), above, and shall have no liability for acting in reliance
on such instructions.
6. Termination of Agreement.
------------------------
(a) This Agreement shall become effective as of the date first set forth
above and shall remain in full force and effect unless terminated pursuant to
the provisions of Section 6(b).
7
(b) This Agreement may be terminated at any time without payment of any
penalty, upon 60 days' written notice to BNY by NBAI or by vote of the Board of
the Master Trust; or upon 180 days' written notice to NBAI and the Master Trust
by BNY. Upon any such termination, BNY will cooperate with and assist the Master
Trust, NBAI, their agents and any successor administrator(s) or
sub-administrator(s) in the substitution/conversion process. In connection with
any termination of this Agreement, unless BNY is in breach of this Agreement,
the Master Portfolios and NBAI agree to pay BNY any compensation and
reimbursement for out-of-pocket expenses as may then be due and payable, as well
as agreed-upon out-of-pocket expenses incurred in connection with a termination.
If BNY is in breach of this Agreement, the Master Portfolios and NBAI may offset
any compensation or reimbursement amounts owed to BNY by the amount of damages,
costs and expenses incurred as a result of BNY's breach, including costs,
expenses and reasonable incremental fees for a period not to exceed one year
incurred in connection with a conversion by the Master Trust and NBAI to a
successor service provider. In the event of a dispute as to the amount of such
damages, the Master Portfolios and NBAI agree to escrow the set-off amount.
(c) Sections 4 and 8 shall survive this Agreement's termination.
7. Amendments. Except as expressly provided in the first paragraph of
----------
Section 1, no provision of this Agreement may be amended or modified orally, but
only by an instrument in writing signed by the party against which enforcement
of the amendment or modification is sought.
8. Confidentiality. All books, records, information and data pertaining to
---------------
the business of the Master Trust, or its prior, present or potential
shareholders that are exchanged or received in connection with the performance
of BNY's duties under this Agreement shall remain confidential and shall not be
disclosed to any other person, except as specifically authorized by the Master
Trust or as may be required by law, and shall not be used for any purpose other
than performance of its responsibilities and duties hereunder, and except that
BNY retains the right to disclose matters subject to confidentiality to its
examiners, regulators, internal or external auditors, its accountants, its
internal and external counsel, and to any other entity whenever it is advised by
its internal or external counsel that it is reasonably likely that BNY would be
liable for a failure to do so. BNY will endeavor to provide written notice to
the Master Trust and NBAI at least five business days prior to any disclosures
pursuant to this Section 8, but, provided it shall have provided as much notice
as is reasonably practicable under the circumstances, BNY shall have no
liability for any failure to do so.
9. Service to Other Companies. The Master Trust and NBAI acknowledge that
--------------------------
BNY now provides, will continue to provide and may in the future provide
administrative or other services to other investment companies or series of
investment companies, and the Master Trust and NBAI have no objection to BNY so
doing. The Master Trust and NBAI further acknowledge that the persons employed
by BNY to assist in the performance of BNY's duties under this Agreement may not
devote their full time to such service and nothing contained in this Agreement
shall be deemed to limit or restrict the right of BNY or any affiliate of BNY to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
8
10. Miscellaneous.
-------------
(a) This Agreement shall be construed in accordance with the laws of the
State of New York, without regard to conflict of laws principles thereof. Each
Master Portfolio, the Master Trust and NBAI hereby consent to the jurisdiction
of a state or federal court situated in New York City, New York in connection
with any dispute arising hereunder. To the extent that in any such jurisdiction
any of the aforementioned persons may now or hereafter be entitled to claim, for
itself or its assets, immunity from suit, execution, attachment (before or after
judgment) or other legal process, each irrevocably agrees not to claim, and it
hereby waives, such immunity.
(b) In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby, and if any provision is inapplicable to any
person or circumstances, it shall nevertheless remain applicable to all other
persons and circumstances.
(c) Each and every right granted to BNY, the Master Trust or NBAI hereunder
or under any other document delivered hereunder or in connection herewith, or
allowed it by law or equity, shall be cumulative and may be exercised from time
to time. No failure on the part of BNY, the Master Trust or NBAI to exercise,
and no delay in exercising, any right will operate as a waiver thereof, nor will
any single or partial exercise by BNY, the Master Trust or NBAI of any right
preclude any other or future exercise thereof or the exercise of any other
right.
(d) BNY shall not be responsible for delays or errors that occur by reason
of circumstances beyond its reasonable control in the performance of its duties
under this Agreement, provided that reasonable back-up and disaster recovery
systems are in place, including, without limitation, labor difficulties,
mechanical breakdowns, computer breakdowns or malfunctions (hardware or
software), flood or catastrophe, acts of God, failures of transportation,
communication or power supply, or other similar circumstances. Nor shall BNY be
responsible for delays or failures to supply the information or services
specified in this Agreement where such delays or failures are caused by the
failure of any person(s) other than BNY to supply any instructions,
explanations, information, specifications or documentation deemed necessary by
BNY in the performance of its duties under this Agreement.
(e) Any notice or other instrument authorized or required by this Agreement
to be given in writing to the Master Trust, BNY and/or NBAI shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Master Trust:
Nations Master Investment Trust
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
9
To NBAI:
NationsBanc Advisors, Inc.
One Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
To BNY:
The Bank of New York
00 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Grunston
(f) This Agreement shall extend to and shall be binding upon the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement may not be assigned by BNY, nor may BNY delegate responsibility for
the performance of any of its duties hereunder, without the written consent of
the other parties hereto.
(g) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and which collectively shall be deemed
to constitute only one instrument.
(h) The captions of 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.
(i) This Agreement constitutes the entire agreement between the parties
hereto with respect to the provision by BNY of sub-administrative services and
the receipt of fees therefor, and supersedes all prior arrangements or
understandings, written or oral, with respect to the provision by BNY of such
services and the receipt of fees therefor.
10
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
THE BANK OF NEW YORK
By:/s/ Xxxxxxx X. Grunston
---------------------------------
Xxxxxxx X. Grunston
Vice President
NATIONSBANC ADVISORS, INC.
By:/s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President and
Chief Operating Officer
NATIONS MASTER INVESTMENT TRUST
By:/s/ Xxxxx X. Xxxxx, Xx.
---------------------------------
Xxxxx X. Xxxxx, Xx.
Assistant Secretary
11
SCHEDULE I
1. Nations Intermediate Bond Master Portfolio
2. Nations Blue Chip Master Portfolio
3. Nations International Equity Master Portfolio
4. Nations Xxxxxxx Focused Equities Master Portfolio
5. Nations Xxxxxxx Growth & Income Master Portfolio
6. Nations International Value Master Portfolio
7. Nations High Yield Bond Master Portfolio
8. Nations Xxxxxxx 21st Century Master Portfolio
9. Nations Xxxxxxx International Opportunities Master Portfolio
10. Nations SmallCap Value Master Portfolio
11. Nations Strategic Growth Master Portfolio
Adopted: December 2, 1998
Last Amended: April 30, 2002
IN WITNESS WHEREOF, the parties hereto have caused this amended
Schedule I to be executed by their officers designated below as of the 30th day
of April, 2002.
THE BANK OF NEW YORK
By:/s/ Xxxxxxx x. Grunston
--------------------------------------
Xxxxxxx X. Grunston
Vice President
BANC OF AMERICA ADVISORS, LLC
(Formerly, NationsBanc Advisors, Inc.)
By:/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President and
Chief Operating Officer
NATIONS MASTER INVESTMENT TRUST
By:/s/ Xxxxxxx X. Xxxxx, Xx.
--------------------------------------
Xxxxxxx X. Xxxxx, Xx.
Secretary
I-1
SCHEDULE II
MASTER PORTFOLIO ADMINISTRATION SERVICES
BNY shall perform the following sub-administrative services, in addition to
any other services agreed to from time to time:
.. Monitor and document compliance by the Master Portfolios with their
policies and restrictions as delineated in their Prospectuses and
Statements of Additional Information, including any supplements or
amendments thereto, and with the rules and regulations under the 1940 Act
utilizing Xxxxxxx River Development's compliance monitoring system or by
such other means as the parties may agree. NBAI shall be responsible for
communicating such policies and restrictions, including any changes
thereto, to BNY by such means as the parties agree.
.. Provide income attribution summary schedules necessary for year-end tax
reporting, including the attached examples. Provide a gross up for foreign
taxes on a per share basis and the redesignation of income and capital
gains on a per share basis.
.. Prepare federal, state, excise and local income tax returns for the Master
Portfolios and file such returns upon the approval of the Master
Portfolios' independent accountants; monitor, report on and prepare
periodic worksheet and tax provision packages with respect to Sub-Chapter M
qualifications; prepare and file all Form 1099s with respect to the Master
Portfolios' Trustees; monitor compliance with Section 4982 of the Internal
Revenue Code; calculate and maintain records pertaining to original issue
discount and premium amortization as required; identify wash sales and all
other book/tax differences, and report results to the Master Portfolios'
independent accountants and Master Portfolios management; and such other
duties relating to federal and/or state tax compliance as the parties may
agree. BNY shall be responsible for providing all pertinent tax information
to the Master Portfolios' independent accountants.
.. Prepare Return of Capital Statement of Position 93-2 adjustments.
.. Support NBAI in its preparation of the schedules and provide NBAI unaudited
quarterly and semi-annual and audited annual financial statements and
schedules of Master Portfolio investments by providing, without limitation,
each Master Portfolios' schedule of investments and general ledger in
electronic format and/or hard copy, as required, and such other information
as may be necessary to complete such financial reports.
.. Prepare statistical reports for outside information services (referenced in
Schedule V), and such other information services as the parties may agree,
including the ICI expense survey.
.. Prepare calculations for capital gains pursuant to IRS rules in conjunction
with NBAI and the Master Portfolios' independent accountants.
II-1
.. Attend Master Portfolio shareholder and Board of Trustees meetings as
requested by NBAI, including making such presentations as are appropriate,
and, with respect to the Master Portfolio administration services described
herein, provide such periodic and special reports to the Master Trust and
NBAI as the Master Trust and NBAI shall reasonably request.
MASTER PORTFOLIO ACCOUNTING AND OTHER SERVICES
BNY shall provide all accounting and recordkeeping services necessary and
appropriate for the business of the Master Portfolios, including but not limited
to those set forth below.
Required Records; Ledgers and Journals
--------------------------------------
BNY shall keep current the following accounts and records relating to the
business of the Master Portfolios, in such form as is required by the 1940 Act
and the rules thereunder, and generally accepted accounting principles, to
support all filings under applicable federal and state tax laws and regulations
and as may be mutually agreed to among the Master Trust, NBAI and BNY, and shall
make available to NBAI and/or the Master Trust upon request:
1. Cash Receipts Journal
2. Cash Disbursements Journal
3. Dividends Paid and Payable Schedule (book vs. tax basis)
4. Purchase and Sales Journals - Portfolio Securities
5. Realized/Unrealized Gain (Loss) Reports
6. Subscription and Redemption Journals
7. Security Ledgers - Transaction Report and Tax Lot Holdings Report
8. Broker Ledger - Commission Report
9. Daily Expense Accruals
10. Daily Interest Accruals
11. Daily Trial Balance
12. Portfolio Interest Receivable and Income Journal
13. Portfolio Dividend Receivable and Income Register
14. Listing of Portfolio Holdings - showing cost, market value and percentage
of portfolio comprised of each security
15. Aged Receivables (dividends, interest, tax reclaiming)
16. Portfolio Turnover Rate
17. Cash reconciliations
18. Position reconciliations
BNY will be responsible for maintaining, in accordance with Section 31 and
the rules thereunder of the 1940 Act, all books and records so required and
generated in the course of performing their duties under this agreement.
Further, at a minimum, BNY shall maintain on-site the above referenced reports
as of each month end for the most recent fiscal year-ended and the current
fiscal year.
II-2
BNY shall maintain a listing of all feeders of each Master Portfolio,
including the number and the value of the Interests held by each feeder, based
upon daily or periodic allocations of Master Portfolio assets.
Daily Accounting Services
-------------------------
BNY shall perform the following services on each Business Day:
1. Calculate Net Asset Value (NAV), and Public Offering Price (POP) Per Share
--------------------------------------------------------------------------
Pursuant to SEC formulas:
------------------------
. Update the valuation of security positions held by each Master
Portfolio's portfolio in accordance with the Master Portfolio's
Pricing Procedures and any other appropriate procedures established by
the Board and NBAI as NBAI shall provide BNY in writing
. When instructed by NBAI, enter manual prices supplied by broker and
link to pricing procedures
. Calculate each Master Portfolio's NAV/POP in accordance with the
applicable Pricing Procedures approved by the Master Trust's Board of
Trustees and prepare NAV proof sheet. Review components of change in
NAV for reasonableness based on the tolerance levels as NBAI shall
direct BNY in writing
. Review variance reporting for price changes in individual securities
using variance levels established by Master Portfolio and report to
Master Portfolio portfolio managers and to NBAI
. Review for ex-dividend items indicated by pricing sources; trace to
general ledger for agreement
. Communicate required pricing and yield information (NAV/POP), as
appropriate, to NBAI and, electronically, to NASDAQ and to such other
third parties as designated by the Master Portfolios with respect to
its various distribution channels. In addition, provide Master
Portfolio share activity to NBAI.
2. Dividend Rates/Yields/Dollar Weighted Average Maturity:
------------------------------------------------------
. Calculate, subject to the approval of NBAI, net investment income
available for distribution daily as appropriate
. Calculate daily dividend rate, and 1, 7, 30-day yields/SEC yields
. Calculate dollar weighted average maturity
3. Determine and Report Cash Availability:
--------------------------------------
. Receive daily cash and transaction statements from the Master
Portfolios' Custodian
. Complete daily bank cash reconciliations (including documentation of
any reconciling items) and notify the Master Portfolios' Custodian
. Report investable cash to NBAI and Master Portfolio sub-advisers
II-3
4. Daily Expense Accruals:
----------------------
. Accrue individual expenses on a daily basis based on Instructions
provided by NBAI, except for those instances where such an adjustment
would cause a full xxxxx break in NAV, in which case such adjustment
will be included in the calculation of NAV on the day received
. If applicable, accrue daily amortization of organization expense as
instructed by NBAI
. If applicable, accrue daily Rule 12b-1 Plan expenses
. Adjust expense accruals as instructed by NBAI and provide reports as
requested by NBAI
5. Verify and Record All Daily Income Accruals for Debt Issues:
-----------------------------------------------------------
. Track income and provide year end tax schedules
. Review and verify all interest and amortization reports
. Periodic tie-out of receivables
. Ensure security masters denote proper interest and amortization
methods as per the fund set up sheets as instructed by NBAI
6. Monitor Securities:
------------------
. Review each Master Portfolios portfolio holding and current days
security trades for dividend activity
. Interface with Master Portfolios' Custodian for timely collection and
postings of corporate actions, dividends and interest pre-payments
7. Enter All Security Trades:
-------------------------
. Review verification of trade and interest calculations
. Verify settlement through custodian statements
. Maintain security ledger transaction reporting
. Maintain tax lot holdings
. Determine realized gains or losses on security trades
. Provide broker commission information
8. Enter All Master Portfolio Share Transactions:
---------------------------------------------
. Periodically reconcile dividend payable amounts
. Process activity identified on reports
. Verify settlement through custodian statements
. Reconcile to report balances
. Process and track capital stock gain/loss activity
II-4
9. Prepare Daily Trial Balance:
---------------------------
. Post manual entries to general ledger
. Post custodian bank activity
. Require automated settled transactions between custody and activity
records (prepare, clear and post)
. Post shareholder and security transactions
. Post and verify income and expense accruals and resolve differences
. Prepare general ledger
. Post corporate action activity
10. Review and Reconcile Custodian Statements:
-----------------------------------------
. Verify all posted interest, dividends, expenses, and shareholder and
security payments/receipts, etc. when requested
. Post all cash settlement activity to trial balance
. Reconcile to ending cash balance accounts
. Report to NBAI the status of past due items and failed trades with the
custodian
. Reconcile cash exception Income items, tax reclaims and past due
income items with custody area
11. Preparation of Accounting Reports:
---------------------------------
. Price Variance Report
. Trial Balance
. Portfolio Valuation
. NAV Calculation Report
. Cash Availability
. Change in NAV
. Non-standard entries
. Stale Price Report
. Other such reports as may be reasonably be requested by NBAI
Monthly/Quarterly Services
--------------------------
BNY shall provide the following services on a monthly or quarterly basis,
within such timeframe as may be mutually agreed upon by BNY, the Master Trust
and NBAI:
1. Submission of Monthly Accounting Reports as mutually agreed upon
----------------------------------------------------------------
2. Reconcile Asset Listing to Custodian Asset Listing
--------------------------------------------------
3. Provide Monthly Analysis and Reconciliation of Trial Balance Accounts
---------------------------------------------------------------------
4. Prepare Documentation Supporting the Preparation of:
---------------------------------------------------
II-5
. SEC yield reporting
. Income by state reporting
. Standard Industry Code Valuation Report (please provide NBAI's
industry code classifications/is there a standard for all funds)
. Alternative Minimum Tax Income segregation schedule
5. Provide Upon Request Broker Commission and Net Trade Reports
------------------------------------------------------------
Annual (and Semi-Annual) Accounting Services
--------------------------------------------
BNY shall provide the following services on an annual and semi-annual
basis:
1. Supply auditors InvestOne reports supporting securities and shareholder
transactions, income and expense accruals, etc. during the year in
accordance with standard audit assistance requirements
2. Provide NBAI with information to assist NBAI in the preparation of NSAR
-----------------------------------------------------------------------
filings
-------
Other Core Services
-------------------
BNY shall provide the following services:
. Accrete discounts and amortize premiums to put and call events as
directed by NBAI and in a manner acceptable under generally accepted
accounting principles
. Process principal repayments on mortgage backed securities
. Update variable securities with current rates
. Process corporate action events through a primary vender feed, and
monitor results via Reuters, Bloomberg, or other available sources as
the parties may agree
. Perform automated portfolio pricing with a second vendor as requested
by NBAI
. Produce documents and respond to inquiries during account and SEC
examinations
Money Market Master Portfolios: Prepare daily xxxx to market reports
------------------------------
and analysis in compliance with Rule 2a-7 including:
. Calculating the daily portfolio weighted average maturity
. Report portfolio diversification based on trade/security information
provided by NBAI by:
Country, State, Tier, Liquidity, Asset Backed Securities,
Industry, Letter of Credit
II-6
. Listing percentage of portfolio maturing in specified intervals (i.e.,
number of days)
. Providing issuer and guarantor diversification exception reporting
International Master Portfolios: BNY shall provide the following
-------------------------------
services:
. Report in base and local currency
. Processing of tax liability on foreign income subject to approval of
NBAI
. Daily variance analysis performed on FX rates for security position
held
. Produce automated bifurcation reporting in compliance with IRC Section
988
. Xxxx to market security receivables and payables on a daily basis
. Determine portfolio exposure by country and currency
In addition to the above, BNY will provide additional support as
agreed upon from time to time (i.e., financial statement production).
II-7
Federal Obligation Percentage
The following is federal obligation information on the Nations Funds
portfolio earnings credited to your account in 1997. This information is
provided to enable you to calculate your state tax liability if you live in a
state which does not tax income from U.S. government obligations. We recommend
that you consult your tax adviser if you have questions regarding the
requirements for reporting this information as the requirements vary from state
to state.
-----------------------------------------------------------------------------------
Direct and Non-
FUND Government Qualifying Total
Agency Income/2/
Obligations/1/
Nations Balanced Assets Fund 3.30% 96.70% 100.00%
Nations Capital Growth Fund 0.00% 100.00% 100.00%
Nations Cash Reserves 1.26% 98.74% 100.00%
Nations Disciplined Equity Fund 0.00% 100.00% 100.00%
Nations Diversified Income Fund 28.86% 71.14% 100.00%
Nations Emerging Growth Fund 0.00% 100.00% 100.00%
Nations Equity Income Fund 2.36% 97.64% 100.00%
Nations Equity Index Fund 0.09% 99.91% 100.00%
Nations Global Government Income Fund 9.21% 90.79% 100.00%
Nations Government Money Market Fund 99.78% 0.22% 100.00%
Nations Government Reserves 31.19% 68.81% 100.00%
Nations Government Securities Fund 35.09% 64.91% 100.00%
Nations International Growth Fund 0.00% 100.00% 100.00%
Nations LifeGoal Balanced Growth Portfolio 12.65% 87.35% 100.00%
Nations LifeGoal Growth Portfolio 0.10% 99.90% 100.00%
Nations LifeGoal Income and Growth Portfolio 16.36% 83.64% 100.00%
Nations Managed Index Fund 0.33% 99.67% 100.00%
Nations Managed SmallCap Index Fund 0.00% 100.00% 100.00%
Nations Managed SmallCap Value Index Fund 0.00% 100.00% 100.00%
Nations Managed Value Index Fund 0.00% 100.00% 100.00%
Nations Pacific Growth Fund 1.73% 98.27% 100.00%
Nations Prime Fund 5.52% 94.48% 100.00%
Nations Short-Intermediate Government Fund 66.12% 33.88% 100.00%
Nations Short-Term Income Fund 10.64% 89.36% 100.00%
Nations Small Company Growth Fund 0.16% 99.84% 100.00%
Nations Strategic Fixed Income Fund 20.21% 79.79% 100.00%
Nations Treasury Fund 21.25% 78.75% 100.00%
Nations Treasury Reserves 17.46% 82.45% 100.00%
Nations U.S. Government Bond Fund 90.51% 9.49% 100.00%
Nations Value Fund 0.00% 100.00% 100.00%
-----------------------------------------------------------------------------------
/1/ "Direct Obligations" include U.S. Treasury bills, notes, and bonds.
"Government Agency" covers those non-mortgage related obligations issued by
federal agencies including but not limited to, the Student Loan Marketing
Association (SLMA), the Federal Farm Credit Bank, the Federal Deposit Insurance
Corporation (FDIC), and the Federal Financing Bank. These obligations are backed
by the full faith and credit of the U.S. government.
II-8
/2/ "Non-Qualifying Income" includes earnings derived from repurchase
agreements, money market instruments such as agency-issued commercial paper,
other regulated investment companies, corporate obligations, and obligations
issued by the Government National Mortgage Association (GNMA), the Federal
National Mortgage Association (FNMA), and the Federal Home Loan Mortgage Corp.
(FHLMC).
Capital Gains Information For Residents Of South Carolina
For each of the Funds, the amount of capital gains distribution which is
from assets held two or more years can be determined by multiplying each capital
gain distribution from your year-end statement by the appropriate percentages:
-------------------------------------------------------------------------------------------------
FUND May 30, 1997 Distribution November 7, 1997 Distribution
------------------------- -----------------------------
-------------------------------------------------------------------------------------------------
Nations Balanced Assets Fund 5.80% 17.51%
-------------------------------------------------------------------------------------------------
Nations Capital Growth Fund 46.05% 40.53%
-------------------------------------------------------------------------------------------------
Nations Disciplined Equity Fund 0.00% 22.75%
-------------------------------------------------------------------------------------------------
Nations Emerging Growth Fund 33.38% 21.24%
-------------------------------------------------------------------------------------------------
Nations Equity Income Fund 37.09% 51.39%
-------------------------------------------------------------------------------------------------
Nations Equity Index Fund 8.97% 13.84%
-------------------------------------------------------------------------------------------------
Nations Georgia Intermediate -- 99.04%
Municipal Bond Fund
-------------------------------------------------------------------------------------------------
Nations Global Government Income Fund 0.00% --
-------------------------------------------------------------------------------------------------
Nations Intermediate Municipal -- 100.00%
Bond Fund
-------------------------------------------------------------------------------------------------
Nations International Equity Fund -- 100.00%
-------------------------------------------------------------------------------------------------
Nations International Growth Fund -- 100.00%
-------------------------------------------------------------------------------------------------
Nations Managed Index Fund 0.00% --
-------------------------------------------------------------------------------------------------
Nations Municipal Income Fund -- 98.42%
-------------------------------------------------------------------------------------------------
Nations Small Company Growth -- 6.12%
Fund
-------------------------------------------------------------------------------------------------
Nations South Carolina Intermediate -- 79.38%
Municipal Bond Fund
-------------------------------------------------------------------------------------------------
Nations South Carolina Municipal 93.25% --
Bond Fund
-------------------------------------------------------------------------------------------------
Nations U.S. Government Bond -- 46.40%
Fund
-------------------------------------------------------------------------------------------------
Nations Value Fund 61.85% 66.01%
-------------------------------------------------------------------------------------------------
II-9
Percentage Of Municipal Income By State and Territory
Many states do not tax income derived from investments in their own state
obligations or in investments subject to agreements between their state and
other states. The following chart shows the percentage of income excluding
capital gains in the various Nations Funds portfolios derived from investments
in municipal obligations. This percentage indicates the amount that may be
tax-exempt in your state.
Nations Nations Short-Term Nations Nations
Tax-Exempt Municipal Income Nations Intermediate Municipal Municipal
STATE Fund Fund Municipal Bond Fund Income Fund Reserves
-------------------------------------------------------------------------------------------------------
Alabama 2.50% 0.00% 1.00% 2.93% 3.73%
-------------------------------------------------------------------------------------------------------
Alaska 1.18% 4.04% 2.17% 3.38% 0.45%
-------------------------------------------------------------------------------------------------------
Arizona 5.09% 3.42% 3.11% 1.74% 1.22%
-------------------------------------------------------------------------------------------------------
Arkansas 0.17% 0.00% 0.65% 0.99% 0.23%
-------------------------------------------------------------------------------------------------------
California 2.07% 0.00% 0.70% 2.63% 4.83%
-------------------------------------------------------------------------------------------------------
Colorado 3.59% 0.00% 2.11% 1.15% 3.70%
-------------------------------------------------------------------------------------------------------
Connecticut 0.03% 0.00% 1.24% 1.30% 0.00%
-------------------------------------------------------------------------------------------------------
Delaware 2.61% 0.00% 0.02% 0.00% 1.46%
-------------------------------------------------------------------------------------------------------
District of Columbia 1.04% 1.64% 0.89% 1.34% 1.69%
-------------------------------------------------------------------------------------------------------
Florida 7.25% 1.08% 6.75% 7.84% 4.89%
-------------------------------------------------------------------------------------------------------
Georgia 6.06% 2.74% 4.02% 7.64% 8.30%
-------------------------------------------------------------------------------------------------------
Guam 0.00% 3.70% 0.33% 0.52% 0.00%
-------------------------------------------------------------------------------------------------------
Hawaii 0.42% 0.81% 2.17% 1.50% 0.00%
-------------------------------------------------------------------------------------------------------
Idaho 0.25% 0.00% 0.00% 0.00% 0.00%
-------------------------------------------------------------------------------------------------------
Illinois 14.19% 5.49% 8.18% 5.01% 9.66%
-------------------------------------------------------------------------------------------------------
Indiana 2.84% 1.69% 0.94% 3.44% 1.54%
-------------------------------------------------------------------------------------------------------
Iowa 0.25% 0.88% 0.70% 0.00% 0.00%
-------------------------------------------------------------------------------------------------------
Kansas 2.42% 0.42% 0.65% 1.53% 0.00%
-------------------------------------------------------------------------------------------------------
Kentucky 3.80% 0.00% 0.04% 0.22% 2.53%
-------------------------------------------------------------------------------------------------------
Louisiana 2.33% 0.41% 0.07% 0.00% 2.39%
-------------------------------------------------------------------------------------------------------
Maine 0.37% 0.00% 0.61% 0.08% 0.00%
-------------------------------------------------------------------------------------------------------
Maryland 0.80% 1.76% 3.10% 0.00% 0.55%
-------------------------------------------------------------------------------------------------------
Massachusetts 0.12% 2.40% 3.02% 3.85% 0.00%
-------------------------------------------------------------------------------------------------------
Michigan 2.34% 7.12% 1.82% 1.99% 2.99%
-------------------------------------------------------------------------------------------------------
Minnesota 0.86% 0.43% 1.11% 0.14% 0.31%
-------------------------------------------------------------------------------------------------------
Mississippi 0.80% 0.00% 2.11% 1.05% 0.32%
-------------------------------------------------------------------------------------------------------
Missouri 7.88% 0.49% 2.60% 2.02% 1.69%
-------------------------------------------------------------------------------------------------------
Montana 0.56% 0.00% 0.00% 0.00% 0.64%
-------------------------------------------------------------------------------------------------------
Nebraska 0.22% 0.00% 0.22% 0.10% 0.21%
-------------------------------------------------------------------------------------------------------
Nevada 0.00% 3.39% 2.61% 1.74% 0.00%
-------------------------------------------------------------------------------------------------------
New Hampshire 0.00% 0.00% 0.00% 0.00% 0.00%
-------------------------------------------------------------------------------------------------------
New Jersey 0.32% 1.18% 2.76% 0.82% 0.00%
-------------------------------------------------------------------------------------------------------
New Mexico 0.55% 3.04% 0.92% 0.38% 1.82%
-------------------------------------------------------------------------------------------------------
New York 0.22% 3.45% 2.59% 4.28% 0.00%
-------------------------------------------------------------------------------------------------------
II-10
Nations Nations Short-Term Nations Nations
Tax-Exempt Municipal Income Nations Intermediate Municipal Municipal
STATE Fund Fund Municipal Bond Fund Income Fund Reserves
-------------------------------------------------------------------------------------------------------
North Carolina 2.48% 1.16% 2.47% 1.58% 0.42%
-------------------------------------------------------------------------------------------------------
North Dakota 0.00% 0.25% 0.00% 0.00% 0.26%
-------------------------------------------------------------------------------------------------------
Ohio 1.40% 0.15% 0.63% 1.54% 5.85%
-------------------------------------------------------------------------------------------------------
Oklahoma 0.38% 0.42% 0.66% 0.00% 0.11%
-------------------------------------------------------------------------------------------------------
Oregon 1.31% 0.00% 0.80% 1.18% 0.72%
-------------------------------------------------------------------------------------------------------
Pennsylvania 3.17% 4.66% 2.81% 4.39% 2.43%
-------------------------------------------------------------------------------------------------------
Puerto Rico 0.00% 1.07% 0.27% 0.09% 0.00%
-------------------------------------------------------------------------------------------------------
Rhode Island 0.21% 0.00% 0.39% 0.59% 0.00%
-------------------------------------------------------------------------------------------------------
South Carolina 1.94% 2.13% 1.82% 2.79% 4.19%
-------------------------------------------------------------------------------------------------------
South Dakota 0.00% 0.77% 0.00% 0.00% 0.46%
-------------------------------------------------------------------------------------------------------
Tennessee 1.40% 4.86% 1.55% 2.77% 6.35%
-------------------------------------------------------------------------------------------------------
Texas 5.07% 15.58% 11.44% 10.38% 9.72%
-------------------------------------------------------------------------------------------------------
Utah 1.63% 0.00% 0.13% 2.01% 1.70%
-------------------------------------------------------------------------------------------------------
Vermont 0.00% 0.00% 0.00% 0.00% 0.00%
-------------------------------------------------------------------------------------------------------
Virginia 1.22% 2.51% 6.51% 1.48% 4.04%
-------------------------------------------------------------------------------------------------------
Washington 2.17% 11.60% 7.18% 9.47% 1.15%
-------------------------------------------------------------------------------------------------------
West Virginia 1.86% 0.00% 0.22% 0.57% 1.46%
-------------------------------------------------------------------------------------------------------
Wisconsin 2.11% 2.67% 2.24% 0.41% 3.07%
-------------------------------------------------------------------------------------------------------
Wyoming 0.01% 0.00% 0.00% 0.47% 0.85%
-------------------------------------------------------------------------------------------------------
State Specific Tax-Exempt Funds
For residents of the following states, a portion of income (excluding
capital gains) derived from Nations Funds state-specific municipal bond funds
for the year ended December 31, 1997 is exempt from regular federal and state
income taxes. For certain investors, a portion of income may be subject to the
federal Alternative Minimum Tax.
State Exempt Federal Exempt
FUND Percentage Percentage
---------------------------------------------------------------------------------------
Nations Florida Intermediate Municipal Bond Fund 98.26% 100.00%
---------------------------------------------------------------------------------------
Nations Florida Municipal Bond Fund 97.24% 99.71%
---------------------------------------------------------------------------------------
Nations Georgia Intermediate Municipal Bond Fund 98.93% 99.79%
---------------------------------------------------------------------------------------
Nations Georgia Municipal Bond Fund 97.35% 99.13%
---------------------------------------------------------------------------------------
Nations Maryland Intermediate Municipal Bond Fund 95.80% 100.00%
---------------------------------------------------------------------------------------
Nations Maryland Municipal Bond Fund 93.44% 99.48%
---------------------------------------------------------------------------------------
Nations North Carolina Intermediate Municipal Bond Fund 95.53% 99.87%
---------------------------------------------------------------------------------------
Nations North Carolina Municipal Bond Fund 97.69% 99.53%
---------------------------------------------------------------------------------------
Nations South Carolina Intermediate Municipal Bond Fund 98.72% 99.95%
---------------------------------------------------------------------------------------
Nations South Carolina Municipal Bond Fund 93.76% 99.44%
---------------------------------------------------------------------------------------
II-11
---------------------------------------------------------------------------------------
Nations Tennessee Intermediate Municipal Bond Fund 97.91% 99.89%
---------------------------------------------------------------------------------------
Nations Tennessee Municipal Bond Fund 97.47% 100.00%
---------------------------------------------------------------------------------------
Nations Texas Intermediate Municipal Bond Fund 81.38% 99.99%
---------------------------------------------------------------------------------------
Nations Texas Municipal Bond Fund 83.51% 99.39%
---------------------------------------------------------------------------------------
Nations Virginia Intermediate Municipal Bond Fund 97.87% 99.94%
---------------------------------------------------------------------------------------
Nations Virginia Municipal Bond Fund 95.42% 99.73%
---------------------------------------------------------------------------------------
Alternative Minimum Tax
This information is to be used to calculate your federal Alternative
Minimum Tax liability, if applicable. Multiply the percentage below by the Fund
distribution (excluding capital gains) to give you the distributions to be added
to your Alternative Minimum Taxable income.
FUND Percentage
--------------------------------------------------------------------------------
Nations Florida Intermediate Municipal Bond Fund 5.94%
--------------------------------------------------------------------------------
Nations Florida Municipal Bond Fund 17.79%
--------------------------------------------------------------------------------
Nations Georgia Intermediate Municipal Bond Fund 6.50%
--------------------------------------------------------------------------------
Nations Georgia Municipal Bond Fund 19.17%
--------------------------------------------------------------------------------
Nations Intermediate Municipal Bond Fund 6.28%
--------------------------------------------------------------------------------
Nations Maryland Intermediate Municipal Bond Fund 4.17%
--------------------------------------------------------------------------------
Nations Maryland Municipal Bond Fund 10.55%
--------------------------------------------------------------------------------
Nations Municipal Income Fund 12.44%
--------------------------------------------------------------------------------
Nations Municipal Reserves 9.79%
--------------------------------------------------------------------------------
Nations North Carolina Intermediate Municipal Bond Fund 4.23%
--------------------------------------------------------------------------------
Nations North Carolina Municipal Bond Fund 14.86%
--------------------------------------------------------------------------------
Nations Short-Term Municipal Income Fund 9.96%
--------------------------------------------------------------------------------
Nations South Carolina Intermediate Municipal Bond Fund 6.22%
--------------------------------------------------------------------------------
Nations South Carolina Municipal Bond Fund 15.57%
--------------------------------------------------------------------------------
Nations Tax-Exempt Fund 16.64%
--------------------------------------------------------------------------------
Nations Tennessee Intermediate Municipal Bond Fund 9.53%
--------------------------------------------------------------------------------
Nations Tennessee Municipal Bond Fund 16.04%
--------------------------------------------------------------------------------
Nations Texas Intermediate Municipal Bond Fund 4.09%
--------------------------------------------------------------------------------
Nations Texas Municipal Bond Fund 16.83%
--------------------------------------------------------------------------------
Nations Virginia Intermediate Municipal Bond Fund 6.83%
--------------------------------------------------------------------------------
Nations Virginia Municipal Bond Fund 14.66%
--------------------------------------------------------------------------------
II-12
Corporate Qualifying Dividends
The following information is provided to enable shareholders to calculate
the amount of dividends paid by the Fund which qualify for the corporate
dividend received deduction.
Domestic Domestic & Foreign
FUND Corporations Corporations
--------------------------------------------------------------------------------
Nations Balanced Assets Fund 6.48% 6.82%
--------------------------------------------------------------------------------
Nations Capital Growth Fund 32.82% 34.22%
--------------------------------------------------------------------------------
Nations Disciplined Equity Fund 18.88% 19.50%
--------------------------------------------------------------------------------
Nations Emerging Growth Fund 19.87% 19.95%
--------------------------------------------------------------------------------
Nations Emerging Markets Fund 0.00% 100.00%
--------------------------------------------------------------------------------
Nations Equity Income Fund 30.13% 30.70%
--------------------------------------------------------------------------------
Nations Equity Index Fund 50.88% 52.15%
--------------------------------------------------------------------------------
Nations International Equity Fund 0.00% 100.00%
--------------------------------------------------------------------------------
Nations International Growth Fund 0.00% 100.00%
--------------------------------------------------------------------------------
Nations Managed Index Fund 84.38% 85.49%
--------------------------------------------------------------------------------
Nations Managed SmallCap Index Fund 22.43% 22.46%
--------------------------------------------------------------------------------
Nations Managed SmallCap Value Index Fund 75.88% 75.88%
--------------------------------------------------------------------------------
Nations Managed Value Index Fund 75.78% 75.78%
--------------------------------------------------------------------------------
Nations Pacific Growth Fund 0.00% 100.00%
--------------------------------------------------------------------------------
Nations Value Fund 44.32% 45.23%
--------------------------------------------------------------------------------
Florida Intangibles Tax Percentage/3/
Exempt
FUND Percentage
Equity
Nations Balanced Assets Fund 19.37%
--------------------------------------------------------------------------------
Nations Capital Growth Fund 0.00%
--------------------------------------------------------------------------------
Nations Disciplined Equity Fund 0.00%
--------------------------------------------------------------------------------
Nations Emerging Growth Fund 0.00%
--------------------------------------------------------------------------------
Nations Emerging Markets Fund 0.00%
--------------------------------------------------------------------------------
Nations Equity Income Fund 0.00%
--------------------------------------------------------------------------------
Nations Equity Index Fund 0.11%
--------------------------------------------------------------------------------
Nations International Equity Fund 0.00%
--------------------------------------------------------------------------------
Nations International Growth Fund 0.00%
--------------------------------------------------------------------------------
Nations LifeGoal Growth Portfolio 0.00%
--------------------------------------------------------------------------------
Nations LifeGoal Balanced Growth Portfolio 0.00%
--------------------------------------------------------------------------------
Nations LifeGoal Income and Growth Portfolio 0.00%
--------------------------------------------------------------------------------
Nations Managed Index Fund 0.13%
--------------------------------------------------------------------------------
II-13
Exempt
FUND Percentage
--------------------------------------------------------------------------------
Nations Managed SmallCap Index Fund 0.00%
--------------------------------------------------------------------------------
Nations Managed SmallCap Value Index Fund 0.00%
--------------------------------------------------------------------------------
Nations Managed Value Index Fund 0.00%
--------------------------------------------------------------------------------
Nations Pacific Growth Fund 0.00%
--------------------------------------------------------------------------------
Nations Value Fund 0.00%
--------------------------------------------------------------------------------
Fixed Income
Nations Diversified Income Fund 39.79%
--------------------------------------------------------------------------------
Nations Global Government Income Fund 0.00%
--------------------------------------------------------------------------------
Nations Government Securities Fund 0.00%
--------------------------------------------------------------------------------
Nations Short-Intermediate Government Fund 63.44%
--------------------------------------------------------------------------------
Nations Short-Term Income Fund 8.01%
--------------------------------------------------------------------------------
Nations Strategic Fixed Income Fund 8.28%
--------------------------------------------------------------------------------
Nations U.S. Government Bond Fund 0.00%
--------------------------------------------------------------------------------
Money Market
Nations Cash Reserves 0.46%
--------------------------------------------------------------------------------
Nations Government Money Market Fund 100.00%
--------------------------------------------------------------------------------
Nations Government Reserves 24.61%
--------------------------------------------------------------------------------
Nations Prime Fund 0.00%
--------------------------------------------------------------------------------
Nations Treasury Fund 0.00%
--------------------------------------------------------------------------------
Nations Treasury Reserves 12.56%
--------------------------------------------------------------------------------
Municipal
Nations Florida Intermediate Municipal Bond Fund 100.00%
--------------------------------------------------------------------------------
Nations Florida Municipal Bond Fund 100.00%
--------------------------------------------------------------------------------
Nations Georgia Intermediate Municipal Bond Fund 0.72%
--------------------------------------------------------------------------------
Nations Georgia Municipal Bond Fund 0.00%
--------------------------------------------------------------------------------
Nations Intermediate Municipal Bond Fund 0.18%
--------------------------------------------------------------------------------
Nations Maryland Intermediate Municipal Bond Fund 1.30%
--------------------------------------------------------------------------------
Nations Maryland Municipal Bond Fund 9.92%
--------------------------------------------------------------------------------
Nations Municipal Income Fund 0.00%
--------------------------------------------------------------------------------
Nations North Carolina Intermediate Municipal Bond Fund 0.93%
--------------------------------------------------------------------------------
Nations North Carolina Municipal Bond Fund 2.06%
--------------------------------------------------------------------------------
Nations Short-Term Municipal Income Fund 2.44%
--------------------------------------------------------------------------------
Nations South Carolina Intermediate Municipal Bond Fund 0.00%
--------------------------------------------------------------------------------
Nations South Carolina Municipal Bond Fund 5.29%
--------------------------------------------------------------------------------
Nations Tax-Exempt Fund 0.00%
--------------------------------------------------------------------------------
Nations Municipal Reserves 0.00%
--------------------------------------------------------------------------------
II-14
Exempt
FUND Percentage
--------------------------------------------------------------------------------
Nations Tennessee Intermediate Municipal Bond Fund 4.25%
--------------------------------------------------------------------------------
Nations Tennessee Municipal Bond Fund 7.81%
--------------------------------------------------------------------------------
Nations Texas Intermediate Municipal Bond Fund 0.26%
--------------------------------------------------------------------------------
Nations Texas Municipal Bond Fund 3.06%
--------------------------------------------------------------------------------
Nations Virginia Intermediate Municipal Bond Fund 0.00%
--------------------------------------------------------------------------------
Nations Virginia Municipal Bond Fund 0.00%
--------------------------------------------------------------------------------
/3/ If any portion of a fund's shares is subject to the Florida Intangibles
Tax, then only U.S. government obligations will retain their tax-exempt status.
Obligations issued by Florida would lose their exempt status and be subject to
the intangibles tax.
Additional Information:
As a shareholder of Nations International Equity Fund, Nations Emerging
Markets Fund, Nations Pacific Growth Fund and or Nations Global Government
Income Fund who received dividends, you are entitled to receive your choice of
either a foreign tax credit or an itemized deduction for foreign taxes paid by
the Fund. Your portion of the foreign taxes paid by the Fund in 1997 is reported
in Box 3 of your Form 1099-DIV.
To take an itemized deduction for your share of the foreign taxes paid by
the Fund, include the amount in Box 3 of Form 1099-DIV on Schedule A, Line 8 of
your Form 1040.
The TaxPayer Relief Act of 1997 has modified the flow-through status of
Foreign Tax Credits ("FTCs"). As a result, a percentage of FTC might not be
eligible for credit. In order to assist you in determining the amount of Foreign
Tax Paid which is not eligible for a credit, multiply the percentage listed in
Column A below, by the Foreign Tax Paid ("FTP") amount reported on Form
1099-DIV, box 3. For each fund, deduct this amount from the FTP (box 3) and
report the total resulting amounts in Form 1040, Line 43.
To compute the allowable credit, individual shareholders must complete IRS
Form 1116 and attach it to their Form 1040. Corporate shareholders should
complete Form 1118. The chart below should be used to prepare either of these
Forms.
Although it will generally be more advantageous to claim a credit for the
foreign taxes paid, the ability to claim a credit depends on your individual tax
situation. We suggest that you consult your tax adviser to determine your best
course of action.
II-15
(A) Amount Not (B) Foreign Source
Fund Eligible For Foreign Income Factor
Tax Credit
Nations Emerging Markets Fund 0.00% .38792129
Nations International Equity Fund 0.00% .51953104
Nations Pacific Growth Fund 0.00% .48509903
Foreign Tax Factor (C) and Foreign Income Factor (D)
--------------------------------------------------------------------------------
Nations Nations Emerging Nations Pacific
International Equity Markets Fund Growth Fund
Country Fund
C D C D C D
Argentina 0.00% 0.42% 0.00% 5.08% 0.00% 0.00%
Australia 2.83% 5.71% 0.00% 0.00% 22.12% 10.08%
Belgium 2.22% 1.65% 0.00% 0.00% 0.00% 0.00%
Brazil 1.05% 3.15% 21.05% 28.62% 0.00% 0.00%
Egypt 0.00% 0.00% 0.00% 1.40% 0.00% 0.00%
Switzerland 4.80% 4.68% 0.00% 0.00% 0.00% 0.00%
Chile 1.68% 1.38% 15.27% 7.20% 0.00% 0.00%
Germany 4.00% 4.46% 0.00% 0.00% 0.00% 0.00%
Spain 3.46% 2.60% 0.00% 0.00% 0.00% 0.00%
France 10.81% 8.22% 0.00% 0.00% 0.00% 0.00%
Great Britain 33.23% 26.80% 2.78% 1.05% 0.00% 0.00%
Greece 0.00% 0.00% 12.75% 3.69% 0.00% 0.00%
Hungary 0.00% 0.00% 0.00% 0.52% 0.00% 0.00%
Hong Kong 0.00% 9.85% 0.00% 8.65% 0.00% 65.32%
Indonesia 0.06% 0.39% 6.10% 4.01% 11.61% 5.07%
Israel 0.00% 0.00% 0.48% 0.64% 0.00% 0.00%
India 0.00% 0.19% 0.11% 2.33% 0.00% 0.00%
Italy 2.44% 1.82% 0.00% 0.00% 0.00% 0.00%
Japan 12.01% 8.95% 0.00% 0.00% 0.00% 0.00%
Korea 0.90% 1.10% 0.93% 1.55% 11.09% 4.59%
Malaysia 2.25% 0.84% 20.78% 5.18% 35.89% 8.45%
Mexico 0.00% 4.81% 0.00% 8.74% 0.00% 0.00%
Netherlands 9.91% 7.29% 0.00% 0.00% 0.00% 0.00%
Norway 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Peru 0.00% 0.38% 0.00% 3.50% 0.00% 0.00%
Philippines 0.04% 0.03% 3.24% 0.97% 1.60% 0.44%
Portugal 0.48% 0.48% 5.91% 3.94% 0.00% 0.00%
Russia 0.00% 0.00% 0.00% 0.28% 0.00% 0.00%
Sweden 3.45% 2.57% 0.00% 0.00% 0.00% 0.00%
Singapore 3.84% 1.62% 0.00% 0.00% 16.17% 5.02%
Thailand 0.54% 0.61% 0.99% 0.74% 1.52% 1.03%
Taiwan 0.00% 0.00% 0.00% 1.11% 0.00% 0.00%
South Africa 0.00% 0.00% 9.61% 10.80% 0.00% 0.00%
100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
II-16
Instructions For Calculating Foreign Tax and Foreign Source Income by
Country:
1. To calculate your foreign tax by country, multiply the total
foreign taxes (Form 1099-DIV, Box 3) by the applicable Foreign Tax Factor
percentage (Column C) indicated in the chart to the left.
2. To calculate the total foreign source income, multiply the amount
in Box 1b on Form 1099-DIV by the appropriate factor in column B.
3. To calculate the total foreign source income by country, multiply
the total foreign source income determined in step 2 by the applicable
Foreign Income Factor percentage (Column D) presented in the chart to the
left.
II-17
SCHEDULE III
SERVICE LEVEL PERFORMANCE STANDARDS
-------------------------------------------------------------------------------------------------
Service Standard
-------------------------------------------------------------------------------------------------
1. Daily Cash Availability . 100% accuracy and delivery by 9:00 a.m.
EST for Money Market Master Portfolios
and 9:30 a.m. EST for all others
. Compensation for uninvested cash at
Nations Cash Reserves' mill rate
-------------------------------------------------------------------------------------------------
2. Calculation of daily NAVs . 100% accuracy by 5:00 p.m. EST
including pricing, expense accruals, cash
activity, manual entries, S/H activity.
Delivery by 5:45 p.m. EST
-------------------------------------------------------------------------------------------------
3. Review of daily NAVs . 100% review by 5:30 p.m. EST
. Review of NAV components for
reasonableness including analysis of
the change in the NAV and the
change in mill rates.
. Review of price variance report
. Review of manual proof
-------------------------------------------------------------------------------------------------
4. NASDAQ Reporting . 100% accuracy and communication by
5:45 p.m. EST
-------------------------------------------------------------------------------------------------
5. Daily Pricing and Rate Report (DPRR) . 100% accuracy in nightly transmission of
DPRRs
. Money Market Master Portfolios-5:30
p.m. EST
. All other Master Portfolios- 6:00
p.m. EST
-------------------------------------------------------------------------------------------------
6. FundStation Report (SubM) . 100% accuracy and nightly transmission
by 7:00 p.m. EST
-------------------------------------------------------------------------------------------------
7. Processing of trade tickets . 100% accuracy and processed by T+1
if received by the following cut-off times:
. All Master Portfolios (except
International)- 10:00 am (T+1)
. International - 12:00 pm (T+1)
-------------------------------------------------------------------------------------------------
III-1
-----------------------------------------------------------------------------------------------
Service Standard
-----------------------------------------------------------------------------------------------
. Same day settlements- 1:30 pm
-----------------------------------------------------------------------------------------------
8. Problem Resolution (general) . NAV impact analysis within 1 day
. Clear and timely communication of 100%
of issues
. Ongoing Tracking
-----------------------------------------------------------------------------------------------
9. Cash reconciliations . Performed daily and sent daily to NBAI
(Money Market Master Portfolios) and
sent weekly to NBAI (all other Master
Portfolios)
. Issues communicated to NBAI same day
. Outstanding items addressed within 1
business day
-----------------------------------------------------------------------------------------------
10. Position Reconciliations . Performed daily and sent weekly to NBAI
. Issues communicated to NBAI same day
. Open issues addressed within 2 business
days
-----------------------------------------------------------------------------------------------
11. Tax reporting
. Federal, state, tax returns . Tax provision package prepared within
time parameters as set by
. Tax provision packages NBAI/Independent tax personnel (PWC)
including Sub-M and excise tax
amounts/distributions . Estimates of tax requirements prepared as
required by NBAI for proper tax planning
. Identification of all book/tax
differences
. Capital gain estimate
preparations
-----------------------------------------------------------------------------------------------
12. Statistical Reports . Filed within the time parameters as set
forth by each statistical service
-----------------------------------------------------------------------------------------------
13. Expense accruals/payments . Payments made on the business day
written instructions from an authorized
signator received
. Expense accruals made with 100%
accuracy based upon written instructions
from NBAI
-----------------------------------------------------------------------------------------------
III-2
-----------------------------------------------------------------------------------------------
Service Standard
-----------------------------------------------------------------------------------------------
14. Management Reports . Provided to NBAI within 10 business
days of month end
-----------------------------------------------------------------------------------------------
15. Year end tax reports . Provided to NBAI within the time frame
agreed to
-----------------------------------------------------------------------------------------------
16. Annual/Semi-Annual Reports . Provide Trial Balance within 5 business
days after annual/semi-annual period
. Provide additional financial statement
support as agreed to
-----------------------------------------------------------------------------------------------
17. Daily Reports . To be provided on the following day
. Provide detailed portfolio valuation
. Trial Balance
-----------------------------------------------------------------------------------------------
18. Daily Cash Sweep . 100% accuracy and communication by
2:00 p.m. EST
. Nations Cash Reserves
. AIM
. Nuveen
-----------------------------------------------------------------------------------------------
19. Post Dividends / Corporate Actions . 100% accuracy and posted on effective
date
-----------------------------------------------------------------------------------------------
20. Monthly Reconciliations . Complete reconciliations within 10
business days
-----------------------------------------------------------------------------------------------
21. Reporting to Sub-Advisors . Provide nightly and other periodic
reporting to Nations Funds Sub-Advisors
-----------------------------------------------------------------------------------------------
22. Compliance . Provide compliance reports as requested
by NBAI
-----------------------------------------------------------------------------------------------
III-3
SCHEDULE IV
(Attached)
IV-1
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR NATIONSBANC MANAGED PORTFOLIOS
Effective 12/1/98
Money Market Funds
------------------
1 1/4 basis point per annum on the first $3 billion of each portfolio's
average net assets;
1 basis point on the next $3 billion;
1/2 of one basis point on the next $4 billion;
1/4 of one basis point on the excess.
Domestic Equity
---------------
6 basis points per annum on the first $1 billion of each portfolio's
average net assets;
4 basis points on the next $500 million;
2 basis points on the next $500 million;
1 basis point on the excess.
Domestic Fixed Income
---------------------
5 basis points per annum on the first $1 billion of each portfolio's
average net assets.
3 basis points on the next $500 million.
1 1/2 basis point on the next $500 million.
1/2 of one basis point on the excess.
International Funds
-------------------
7 basis points per annum on the first $1 billion of each portfolio's
average net assets;
5 basis points on the next $500 million;
3 basis points on the next $500 million;
1 basis point on the excess.
IV-2
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR NATIONSBANC MANAGED PORTFOLIOS
Effective 12/1/98
Multiple Class Charges
----------------------
$500 per month, per portfolio, for each additional class in excess of nine (9)
classes.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with the Bank or for
on-going usage of any Bank systems related to fund accounting or administration
services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by Nations obtained from
third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket expenses
traditionally include, but are not limited to, cost associated with attendance
at Board Presentations, printing of shareholders reports, express mail charges,
etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
NationsBanc Advisors, Inc. The Bank of New York
Approved by: Approved by: /s/ Xxx Xxxxxx
----------------------
Name: Name: Xxx Xxxxxx
Title: Title: Vice President
Date: Date: May 7, 1999
IV-3
NationsBanc Managed Portfolios
------------------------------
Fund Accounting and Sub Administration Fee Schedule
---------------------------------------------------
When Aggregate Assets Exceed $100 billion
-----------------------------------------
Fund Type Basis Points
--------- ------------
Money Market
------------
First $2 billion 0.000100
Next $1 billion 0.000075
On excess (>$3.0 billion) 0.000025
Domestic Equity
---------------
First $500 million 0.000550
Next $500 million 0.000450
Next $500 million 0.000250
Next $500 million 0.000150
On excess (>$2.0 billion) 0.000050
Domestic Fixed Income
---------------------
First $500 million 0.000450
Next $500 million 0.000350
Next $250 million 0.000225
Next $250 million 0.000100
On excess (>$1.5 billion) 0.000050
International
-------------
First $500 million 0.00060
Next $500 million 0.00050
Next $250 million 0.00040
Next $250 million 0.00030
On excess (>$1.5 billion) 0.00005
IV-4
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR
NATIONSBANC MANAGED PORTFOLIOS
(Multi Managers)
Multi-Managers
--------------
$22,000 per annum for each multi-manager going to a single feeder. These fees
will be in addition to the following fee schedule now in effect.
For each new multi-manager account with assets less than $20 million, we will
waive our fees for the first three months.
Money Market Funds
------------------
1 1/4 basis point per annum on the first $3 billion of each portfolio's
average net assets;
1 basis point on the next $3 billion;
1/2 of one basis point on the next $4 billion;
1/4 of one basis point on the excess.
Domestic Equity
---------------
6 basis points per annum on the first $1 billion of each portfolio's
average net assets;
4 basis points on the next $500 million;
2 basis points on the next $500 million;
1 basis point on the excess.
Domestic Fixed Income
---------------------
5 basis points per annum on the first $1 billion of each portfolio's
average net assets.
3 basis points on the next $500 million.
1 1/2 basis point on the next $500 million.
1/2 of one basis point on the excess.
International Funds
-------------------
7 basis points per annum on the first $1 billion of each portfolio's
average net assets;
5 basis points on the next $500 million;
3 basis points on the next $500 million;
1 basis point on the excess.
IV-5
PORTFOLIO PRICING, FUND ACCOUNTING
AND SUB-FUND ADMINISTRATION FEE SCHEDULE
FOR
NATIONSBANC MANAGED PORTFOLIOS
(Multi Managers)
Multiple Class Charges
----------------------
$500 per month, per portfolio, for each additional class in excess of nine (9)
classes.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with the Bank or for
on-going usage of any Bank systems related to fund accounting or administration
services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by Nations obtained from
third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket expenses
traditionally include, but are not limited to, cost associated with attendance
at Board Presentations, printing shareholders reports, express mail charges,
etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
NationsBanc Advisors, Inc. The Bank of New York
Approved by: Approved by: /s/ Xxx Xxxxxx
----------------------
Name: Name: Xxx Xxxxxx
Title: Title: Vice President
Date: Date: May 7, 1999
IV-6
SCHEDULE V
All Database Companies Quarterly List
---------------------- ---------------
AMG Data Services Lipper
Xxxxxx'x Morningstar
Bloomberg CDA Wiesenberger
CDA Wiesenberger Investment Company Institute
Commerce Clearing House (CCH) S&P Micropal
Forbes Institute for Economic Research
Institute for Economic Research Value Line
Interactive Data Services Media General Financial Services
Investment Company Institute LCG Associates
LCG Associates Closed End Fund Digest (Closed End Only)
Lipper Lipper - International (Closed End Only)
Media General
Xxxxx'x Investors Service
Morningstar
S&P Micropal
Strategic Insights
Value Line
V-1
