INVESTMENT ADVISORY AGREEMENT
NATIONS FUNDS TRUST
THIS AGREEMENT is made as of March 30, 2000, by and between NATIONS
FUNDS TRUST, a Delaware business trust (the "Trust"), and BANC OF AMERICA
ADVISORS, INC., a North Carolina corporation (the "Adviser"), on behalf of those
series of the Trust now or hereafter identified on Schedule I (each, a "Fund"
and collectively, the "Funds").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser is registered with the Commission as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act");
WHEREAS, the Trust desires that the Adviser manage the investment
operations of the Funds and the Adviser desires to manage said operations; and
WHEREAS, the Board of Trustees of the Trust (the "Board"), including a
majority of the Trustees who are not "interested persons" (as defined herein) of
any party to this Agreement, have approved this arrangement;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT OF ADVISER. The Trust hereby appoints the Adviser and
the Adviser hereby agrees to manage the investment operations of each Fund
subject to the terms of this Agreement and subject to the supervision of the
Board. The Trust and the Adviser contemplate that certain duties of the Adviser
under this Agreement may be delegated to one or more investment sub-adviser(s)
(the "Sub-Adviser(s)") pursuant to separate investment sub-advisory agreement(s)
(the "Sub-Advisory Agreement(s)"). The Adviser may, in its discretion, provide
services under this Agreement through its own employees or through one or more
affiliated companies that are qualified to act as investment advisers under
applicable law and are under common control of Bank of America Corporation.
2. SERVICES OF ADVISER. The Adviser shall perform, or arrange for the
performance of, the management services necessary for the investment operations
of each Fund, including but not limited to:
(a) Managing the investment and reinvestment of all assets, now or
hereafter acquired by each Fund, including determining what
securities and other investments are to be purchased or sold for
each Fund and executing transactions accordingly;
(b) Transmitting trades to each Fund's custodian for settlement in
accordance with each Fund's procedures and as may be directed by
the Trust;
-1-
(c) Assisting in the preparation of all shareholder communications,
including shareholder reports, and participating in shareholder
relations;
(d) Making recommendations as to the manner in which voting rights,
rights to consent to Fund action and any other rights pertaining
to each Fund's portfolio securities shall be exercised;
(e) Making recommendations to the Board with respect to Fund
investment policies and procedures, and carrying out such
investment policies and procedures as are adopted by the Board;
(f) Supplying reports, evaluations, analyses, statistical data and
information to the Board or to the Funds' officers and other
service providers as the Board may reasonably request from time
to time or as may be necessary or appropriate for the operation
of the Trust as an open-end investment company or as necessary to
comply with Section 3(a) of this Agreement;
(g) Maintaining all required books and records with respect to the
investment decisions and securities transactions for each Fund;
(h) Furnishing any and all other services, subject to review by the
Board, that the Adviser from time to time determines to be
necessary or useful to perform its obligations under this
Agreement or as the Board may reasonably request from time to
time.
3. RESPONSIBILITIES OF ADVISER. In carrying out its obligations under
this Agreement, the Adviser agrees that it will:
(a) Comply with all applicable law, including but not limited to the
1940 Act and the Advisers Act, the rules and regulations of the
Commission thereunder, and the conditions of any order affecting
the Trust or a Fund issued thereunder;
(b) Use the same skill and care in providing such services as it uses
in providing services to other fiduciary accounts for which it
has investment responsibilities;
(c) Not make loans to any person for the purpose of purchasing or
carrying Fund shares;
(d) Place, or arrange for the placement of, all orders pursuant to
its investment determinations for the Funds either directly with
the issuer or with any broker or dealer (including any affiliated
broker or dealer). In executing portfolio transactions and
selecting brokers or dealers, the Adviser will use its best
efforts to seek on behalf of each Fund the best overall terms
available. In assessing the best overall terms available for any
transaction, the Adviser shall consider all factors that it deems
relevant, including the
-2-
breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both
for the specific transaction and on a continuing basis. In
evaluating the best overall terms available, and in selecting the
broker or dealer to execute a particular transaction, the Adviser
may also consider whether such broker or dealer furnishes
research and other information or services to the Adviser;
(e) Adhere to the investment objective, strategies and policies and
procedures of the Trust adopted on behalf of each Fund; and
(f) Maintain a policy and practice of conducting its investment
advisory services hereunder independently of the commercial
banking operations of its affiliates. In making investment
recommendations for a Fund, the Adviser's investment advisory
personnel will not inquire or take into consideration whether the
issuers (or related supporting institutions) of securities
proposed for purchase or sale for the Fund's account are
customers of the commercial departments of its affiliates. In
dealing with commercial customers, such commercial departments
will not inquire or take into consideration whether securities of
those customers are held by the Fund.
4. CONFIDENTIALITY OF INFORMATION. Each party agrees that it will treat
confidentially all information provided by the other party regarding such other
party's business and operations, including without limitation the investment
activities or holdings of a Fund. All confidential information provided by a
party hereto shall not be disclosed to any unaffiliated third party without the
prior consent of the providing party. The foregoing shall not apply to any
information that is public when provided or thereafter becomes public or which
is required to be disclosed by any regulatory authority in the lawful and
appropriate exercise of its jurisdiction over a party, by any auditor of the
parties hereto, by judicial or administrative process or otherwise by applicable
law or regulation.
5. DELEGATION OF DUTIES. Subject to the approval of the Board and, if
required, the shareholders of the Funds, the Adviser may delegate to one or more
Sub-Adviser(s) any or all of its duties hereunder, provided that the Adviser
shall continue to supervise and monitor the performance of the duties delegated
to the Sub-Adviser(s) and any such delegation shall not relieve the Adviser of
its duties and obligations under this Agreement. The Adviser shall be solely
responsible for compensating the Sub-Adviser(s) for performing any of the duties
delegated to them. The Adviser may request that the Trust pay directly to the
Sub-Adviser(s) the portion of the Adviser's compensation that the Adviser is
obligated to pay to the Sub-Adviser(s). If the Trust agrees to such request, it
will pay such portion to the Sub-Adviser(s) on behalf of the Adviser, thereby
reducing the compensation paid to the Adviser by the amount paid directly to the
Sub-Adviser(s). However, such an arrangement will not relieve the Adviser of its
responsibility for compensating the Sub-Adviser(s). In the event that any
Sub-Adviser appointed hereunder is terminated, the Adviser may provide
investment advisory services pursuant to this Agreement through its own
employees or through one or more affiliated companies that are
-3-
qualified to act as investment advisers under applicable law and are under
common control of Bank of America Corporation or through other Sub-Adviser(s) as
approved by the Trust in accordance with applicable law.
6. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and the Adviser shall be free to
furnish similar services to others so long as its provision of services under
this Agreement is not impaired thereby. To the extent that the purchase or sale
of securities or other investments of the same issuer may be deemed by the
Adviser to be suitable for two or more accounts managed by the Adviser, the
available securities or investments may be allocated in a manner believed by the
Adviser to be equitable to each account. It is recognized that in some cases
this procedure may adversely affect the price paid or received by a Fund or the
size of the position obtainable for or disposed of by a Fund. Nothing in this
Agreement shall limit or restrict the right of any of the Adviser's partners,
officers or employees to engage in any other business or to devote his or her
time and attention in part to the management or other aspects of any business,
whether of a similar or dissimilar nature, nor limit or restrict the Adviser's
right to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
7. DELIVERY OF DOCUMENTS. The Trust has furnished the Adviser with
copies, properly certified or authenticated, of each of the following:
(a) the Trust's Certificate of Trust, as filed with the Secretary of
State of Delaware, and Declaration of Trust (such Declaration of
Trust, as presently in effect and as from time to time amended,
is herein called the "Declaration of Trust");
(b) the most recent prospectus(es) and statement(s) of additional
information relating to each Fund (such prospectus(es) together
with the related statement(s) of additional information, as
presently in effect and all amendments and supplements thereto,
are herein called the "Prospectus"); and
(c) any and all applicable policies and procedures approved by the
Board.
The Trust will promptly furnish the Adviser with copies of any and all
amendments of or additions or supplements to the foregoing.
8. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records that it maintains
for each Fund under this Agreement are the property of the Trust and further
agrees to surrender promptly to the Trust any of such records upon request. The
Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
9. EXPENSES OF THE FUNDS. Except to the extent expressly assumed by the
Adviser and except to any extent required by law to be paid or reimbursed by the
Adviser, the Adviser
-4-
shall have no duty to pay any ordinary operating expenses incurred in the
organization and operation of the Funds. Ordinary operating expenses include,
but are not limited to, brokerage commissions and other transaction charges,
taxes, legal, auditing, printing, or governmental fees, other service providers'
fees and expenses, expenses of issue, sale, redemption and repurchase of shares,
expenses of registering and qualifying shares for sale, expenses relating to
Board and shareholder meetings, the cost of preparing and distributing reports
and notices to shareholders and interest payments and other fees or charges
associated with any credit facilities established by or on behalf of the Funds.
10. COMPENSATION. Except as otherwise provided herein, for the services
provided to each Fund and the expenses assumed pursuant to this Agreement, the
Trust will pay the Adviser and the Adviser will accept as full compensation
therefor a fee determined in accordance with Schedule I attached hereto;
provided, however, that the compensation paid to the Adviser shall be reduced by
any amount paid by the Trust directly to the Sub-Advisor(s) pursuant to Section
5 of this Agreement. In addition, BAAI or its affiliated persons may receive
compensation or reimbursement of recordkeeping, bookkeeping, accounting,
administrative and transactional fees or charges incurred in connection with any
credit facilities established by or on behalf of the Funds. The fees or charges
attributable to each Fund shall be a separate charge to such Fund and shall be
the several (and not joint or joint and several) obligation of each such Fund.
The Trust and the Adviser may, from time to time, agree to reduce, limit or
waive the amounts payable hereunder with respect to one or more Funds for such
period or periods they deem advisable.
11. LIABILITY OF ADVISER. The Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of its duties under this Agreement, except a
loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services, or a loss resulting from willful misfeasance, bad
faith or negligence on the part of the Adviser or any of its officers,
directors, employees or agents, in the performance of their duties under this
Agreement, or from reckless disregard by it or obligations and duties under this
Agreement.
12. TERM AND APPROVAL. This Agreement will become effective as of the
date set forth herein above, and shall continue in effect until the second
anniversary of its effective date. This Agreement will become effective with
respect to each additional Fund as of the date set forth on Schedule I when each
such Fund is added thereto. The Agreement shall continue in effect for a Fund
after the second anniversary of the effective date for successive annual periods
ending on each anniversary of such date, provided that the continuation of the
Agreement is specifically approved for the Fund at least annually:
(a)(i) by the Board or (ii) by the vote of "a majority of the
outstanding voting securities" of the Fund (as defined in
Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the Trustees of the
Trust who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of a party to this
Agreement (other than as Trustees of the
-5-
Trust), by votes cast in person at a meeting specifically called
for such purpose.
13. TERMINATION. This Agreement may be terminated without payment of
any penalty at any time by:
(a) the Trust with respect to a Fund, by vote of the Board or by
vote of a majority of a Fund's outstanding voting securities,
upon sixty (60) days' written notice to the Adviser; or
(b) the Adviser with respect to a Fund, upon sixty (60) days'
written notice to the Trust.
Any party entitled to notice may waive the notice provided for herein.
This Agreement shall automatically terminate in the event of its assignment,
unless an order is issued by the Commission conditionally or unconditionally
exempting such assignment from the provisions of Section 15(a) of the 1940 Act,
in which event this Agreement shall remain in full force and effect subject to
the terms of such order. For the purposes of this paragraph, the definitions
contained in Section 2(a) of the 1940 Act and the applicable rules under the
1940 Act shall apply.
14. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, except by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
15. NOTICES. Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to such address as may be
designated for the receipt of such notice. Until further notice, it is agreed
that the address of the Trust shall be c/o Stephens Inc., 000 Xxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: Secretary, and that of the Adviser shall
be Xxx Xxxx xx Xxxxxxx Xxxxx, 00xx Xxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000, Attention: President.
16. RELEASE. The names "Nations Funds Trust" and "Trustees of Nations
Funds Trust" refer respectively to the Trust created by the Declaration of Trust
and the Trustees as Trustees but not individually or personally. All parties
hereto acknowledge and agree that any and all liabilities of the Trust arising,
directly or indirectly, under this Agreement will be satisfied solely out of the
assets of the Trust and that no Trustee, officer or shareholder shall be
personally liable for any such liabilities. All persons dealing with any Fund of
the Trust must look solely to the property belonging to such Fund for the
enforcement of any claims against the Trust.
17. MISCELLANEOUS. This Agreement contains the entire understanding of
the parties hereto. Each provision of this Agreement is intended to be
severable. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby.
-6-
18. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, Delaware law and the federal securities laws, including the
1940 Act and the Advisers Act.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
-7-
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
NATIONS FUNDS TRUST
on behalf of the Funds
By: /s/ A. Xxx Xxxxxx
-----------------------
A. Xxx Xxxxxx
President and Chairman of the
Board of Trustees
BANC OF AMERICA ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
------------------------
Xxxxxx X. Xxxxxx
President
-8-
SCHEDULE I
The Trust shall pay the Adviser, as full compensation for services
provided and expenses assumed hereunder, an advisory fee for each Fund, computed
daily and payable monthly at the annual rates listed below as a percentage of
the average daily net assets of the Fund:
RATE OF
FUND COMPENSATION EFFECTIVE DATE
---- ------------ --------------
Nations MidCap Index Fund 0.40% 3/30/00
Approved: December 9, 1999
Last Amended: March 30, 2000
-9-
