SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
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Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PEACHTREE FUNDS: Peachtree Bond Fund, Peachtree Equity Fund, Peachtree
Georgia Tax-Free
Income Fund, Peachtree Government Money Market Fund, Peachtree Prime
Money Market Fund
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it
was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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PEACHTREE FUNDS
PEACHTREE BOND FUND
PEACHTREE EQUITY FUND
PEACHTREE GEORGIA TAX-FREE INCOME FUND
PEACHTREE GOVERNMENT MONEY MARKET FUND
PEACHTREE PRIME MONEY MARKET FUND
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NOTICE OF JOINT MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 8, 1996
A joint meeting (together with any adjournments or postponements, the
"Meeting") of the shareholders of each Fund listed above (each such Fund
individually referred to as a "Portfolio" or collectively as the "Portfolios")
of PEACHTREE FUNDS (the "Trust"), will be held on Monday, January 8, 1996. The
meeting will be held at the offices of the Trust, Federated Investors Tower,
19th Floor, 10001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779 at 1:00
P.M., January 8, 1996, for the purpose of considering and voting upon:
(1) A proposal, in connection with the pending merger (the
"Merger") of Bank South Corporation, the parent of Bank South, the Trust's
current advisor, into NationsBank Corporation ("NationsBank"), to approve a new
Investment Advisory Contract (the "New Advisory Contract") (which provides for
no increase in advisory fees) on behalf of each Portfolio between the Trust and
NationsBanc Advisors, Inc. ("NBAI"), a NationsBank affiliate, the terms of
which are substantially similar to the existing investment advisory contract
between the Trust and Bank South, subject to and effective upon the
consummation of the Merger;
(2) A proposal to approve a new Sub-Advisory Contract (the "New
Sub-Advisory Contract") on behalf of each Portfolio between NBAI and its
affiliate, TradeStreet Investment Associates, Inc. ("TSIA"), subject to the
approval of the New Advisory Contract, and subject to and effective upon the
consummation of the Merger; and
(3) Such other matters as may properly come before the Meeting.
The Trustees have fixed December 6, 1995 as the record date for
determination of shareholders of each Portfolio entitled to vote at the Meeting
on all matters relating to each such Portfolio. The related Proxy Statement
describes the Merger, the New Advisory Contract, the New Sub-Advisory Contract,
and NBAI and TSIA.
A Proxy solicited by the Trustees is enclosed herewith. Please mark,
sign, date, and return the Proxy promptly in the enclosed business reply
envelope. If you attend the Meeting, you may, if you wish, withdraw your Proxy
and vote in person.
By Order of the Board of Trustees
John W. McGonigle
Dated: December 22, 1995 Secretary
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL
OF THE NEW ADVISORY CONTRACT AND THE NEW SUB-ADVISORY CONTRACT.
IF YOU ARE UNABLE TO ATTEND THE MEETING, PLEASE MARK, SIGN, DATE AND RETURN THE
ENCLOSED PROXY SO THAT THE NECESSARY QUORUM MAY BE REPRESENTED AT THE MEETING.
THE ENCLOSED ENVELOPE REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
PEACHTREE FUNDS
PEACHTREE BOND FUND
PEACHTREE EQUITY FUND
PEACHTREE GEORGIA TAX-FREE INCOME FUND
PEACHTREE GOVERNMENT MONEY MARKET FUND
PEACHTREE PRIME MONEY MARKET FUND
FEDERATED INVESTORS TOWER, 19TH FLOOR
PITTSBURGH, PENNSYLVANIA 15222-3779
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PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of Proxies by the Board of Trustees of Peachtree Funds (the "Trust") for use at
the joint meeting of shareholders of the funds listed above (each fund
individually referred to as a "Portfolio" or collectively as the "Portfolios")
to be held at the offices of the Trust, Federated Investors Tower, 19th Floor,
10001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779 at 1:00 P.M., on
Monday, January 8, 1996, (together with any adjournments or postponements
thereof, the "Meeting"), for the purposes set forth in the accompanying Notice
of Meeting.
Bank South, 3350 Cumberland Circle, Atlanta, Georgia 30339, presently
serves as the Trust's investment adviser (the "Adviser" or "Bank South").
Federated Administrative Services, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779 (the "Administrator") provides administrative services
for the Trust, and Federated Services Company, P.O. Box 8600, Boston,
Massachusetts 02266-8600 (the "Transfer Agent") serves as the Trust's transfer
agent and dividend disbursing agent and provides portfolio accounting services.
The Trust's distributor and principal underwriter is Federated Securities
Corp., Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 (the
"Distributor"). The Administrator, Transfer Agent, and Distributor are
collectively referred to herein as the "Present Administration."
Bank South Corporation ("BSC"), the Adviser's parent corporation, has
agreed to merge (the "Merger") into NationsBank Corporation ("NationsBank"),
pursuant to which the Adviser will become a wholly-owned subsidiary of
NationsBank. It is presently expected that the Merger will be effective on or
about January 9, 1996 (the "Effective Time"). NationsBank, one of the largest
providers of financial services in the country, will conduct its various
investment advisory activities through its affiliates, NationsBanc Advisors,
Inc. ("NBAI") and TradeStreet Investment Associates, Inc. ("TSIA"). The
principal offices of NBAI and TSIA are located at 101 South Tryon Street,
NationsBank Plaza, Charlotte, North Carolina 28255. As of September 30, 1995,
NationsBank managed, through its Trust Investment Management Group and Mutual
Funds Group, substantially all of the assets and operations of which will be
transferred to NBAI and TSIA, approximately $30 billion of investment assets
(including approximately $17 billion in mutual funds for which NationsBank
affiliates serve as investment adviser). Such transfer is expected to occur on
or about January 1, 1996. Upon the approval of the proposed Investment
Advisory Contract between the Trust and NBAI (the "New Advisory Contract") and
the proposed Sub-Advisory Contract between NBAI and TSIA (the "New Sub-Advisory
Contract" and, together with the New Advisory Contract, the "New Contracts"),
respectively, NBAI will become the Trust's investment adviser, and TSIA will
become the Trust's sub-adviser. A proposal may be made in 1996 to merge (the
"Funds Merger") the Portfolios with and into comparable portfolios of Nations
Funds, NationsBank's proprietary family of 43 mutual funds, the portfolios of
which are presently advised by NationsBank, N.A., and, on or about January 1,
1996, will be advised by NBAI and, as to the domestic portfolios, sub-advised
by TSIA. Any proposed Funds Merger will be subject to approval of the Trustees
and will be subject to further approvals of the shareholders of the Portfolios,
which are not solicited hereby. It is presently expected that the Present
Administration will continue to provide services to the Trust prior to the
completion of any Funds Merger.
The vote required for the approval by each Portfolio of each of the
New Contracts is (i) 67% or more of the shares of the Portfolio present at the
Meeting, if holders of more than 50% of the shares of such Portfolio
outstanding on the record date are present, in person or by proxy, or (ii) more
than 50% of the outstanding shares of such Portfolio on the record date,
whichever is less. Consequently, with respect to each proposal, abstentions
and broker non-votes (i.e., proxies sent in by brokers and other nominees which
cannot be voted on a proposal because instructions have not been received from
the beneficial owners) will be counted as part of the base number of votes to
be used in determining if the proposal has received the requisite number of
votes for approval. Thus, an abstention or a broker non-vote will have the
same effect as a vote "against" such proposal. Bank South and its affiliates
presently own, and intend to vote, sufficient shares of each Portfolio, except
for the Peachtree Georgia Tax-Free Income Fund, to assure approval of the New
Contracts.
Each shareholder of each Portfolio is entitled to one vote on each
proposal per share held as of the record date (the "Shares"). In determining
whether a quorum for any Portfolio exists at the Meeting for purposes of all
matters to be voted on, votes "for" or "against," as well as all abstentions
(including votes to withhold authority to vote in certain cases) and broker
non-votes, with respect to the proposal receiving the most such votes
(including abstentions and broker non-votes) of such Portfolio, will be
counted. A majority of the outstanding Shares of each Portfolio, respectively,
represented in person or by proxy, is required to constitute a quorum for each
such Portfolio at the Meeting.
Any Proxy given pursuant to this solicitation may be revoked by any
shareholder who attends the Meeting and gives verbal notice of his or her
election to vote in person, without compliance with any other formalities. In
addition, any Proxy given pursuant to this solicitation may be revoked prior to
the Meeting by delivering an instrument revoking it or a duly executed Proxy
bearing a later date to the Secretary of the Trust. If the Proxy is properly
completed and returned by the shareholder and is not revoked, it will be voted
at the Meeting in the manner specified thereon. If the Proxy is properly
executed and returned, but no choice is specified thereon, it will be voted in
favor of the proposals described below.
The expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be paid by NationsBank and/or Bank South.
Copies of solicitation materials may be furnished to banks, brokerage houses
and other custodians, nominees and fiduciaries for forwarding to beneficial
owners of the Shares, and normal handling charges may be paid for such
forwarding services. In addition to solicitations by mail, certain officers or
employees of the Trust, Bank South, the Transfer Agent, and the Administrator
may solicit Proxies in person or by telephone, telegraph or other means. It is
anticipated that this Proxy Statement and the accompanying Proxy will first be
mailed to shareholders on or about December 22, 1995.
The Trust will provide, without charge and upon verbal or written
request, to each shareholder of a Trust Portfolio, a copy of the Portfolio's
annual report for the fiscal year ended September 30, 1995. Written or
telephone requests for such documents should be directed to the Peachtree Funds
Service Center, 3350 Cumberland Circle, Atlanta, Georgia 30339, telephone:
(770) 989-6200 or (800) 621-8969.
VOTING SECURITIES AND PRINCIPAL HOLDERS
The record of shareholders entitled to vote at the Meeting was taken
as of the close of business on December 6, 1995. On that date the Shares held
in the Portfolios of the Trust, with each Share entitled to one vote, were as
follows:
PORTFOLIO SHARES OUTSTANDING
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Peachtree Bond Fund 9,335,813.627
Peachtree Equity Fund 10,323,835.660
Peachtree Georgia Tax-Free Income Fund 268,921.164
Peachtree Government Money Market Fund 73,973,742.370
Peachtree Prime Money Market Fund 158,109,324.730
The following list sets forth certain information concerning the only
"persons" (as that term is defined by the Securities and Exchange Commission)
who are known by the Trust to be the beneficial owners of more than 5% of the
Shares of any Trust Portfolio as of December 6, 1995.
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NUMBER OF SHARES PERCENT
BENEFICIAL OWNER BENEFICIALLY OWNED OF CLASS
- ---------------- ------------------ --------
Bank South, acting in various capacities for numerous accounts
3350 Cumberland Circle
Atlanta, Georgia 30339
Peachtree Bond Fund 9,027,371.127 96.70%
Peachtree Equity Fund 9,856,113.624 95.47%
Peachtree Georgia Tax-Free Income Fund 104,983.954 39.04%
Peachtree Government Money Market Fund 72,420,152.420 97.90%
Peachtree Prime Money Market Fund 106,962,946.930 67.65%
BHC Securities, Inc.,(1) acting in various capacities for numerous accounts
100 North 20th Street
4th Floor
Philadelphia, Pennsylvania 19103 163,921.596 60.96%
Peachtree Georgia Tax-Free Income Fund 50,213,593.580 31.76%
Peachtree Prime Money Market Fund
- ----------------------------
(1) BHC Securities, Inc. acts as the clearing and carrying broker for Bank
South Investment Services, Inc., a subsidiary of Bank South.
PROPOSAL 1
APPROVAL OF A NEW INVESTMENT ADVISORY CONTRACT
THE ACQUISITION OF BANK SOUTH BY NATIONSBANK
Bank South has served as Adviser to the Trust Portfolios pursuant to
an Investment Advisory Contract dated December 1, 1993 (the "Present
Contract"), a copy of which is attached to this Proxy Statement as Exhibit A.
Bank South is a wholly-owned subsidiary of BSC, a bank holding company
registered under the Bank Holding Company Act of 1956, as amended (the "BHC
Act"), with its main office located at 55 Marietta Street, N.W., Atlanta,
Georgia 30303. BSC conducts a wide range of commercial and personal banking
activities through Bank South and, through its non-banking subsidiaries,
provides insurance, mortgage leasing, certain securities underwriting and
brokerage services, and retail loan services.
On September 4, 1995, BSC and NationsBank entered into an Agreement
and Plan of Merger (the "Merger Agreement"). Consummation of the transactions
contemplated by the Merger Agreement, including the Merger, will cause the
Adviser to become an indirect wholly-owned subsidiary of NationsBank.
Additionally, it is expected that following the consummation of the Merger,
Bank South will be merged with and into NationsBank of Georgia, N.A.,
NationsBank's wholly-owned Georgia banking subsidiary. The change in ownership
of the Adviser would automatically terminate the Present Contract in accordance
with its terms as required by the Investment Company Act of 1940, as amended
(the "1940 Act"). Accordingly, the New Contracts are being proposed for
approval by the shareholders of each Portfolio in order to ensure continuity in
the provision of investment advisory services to the Trust. Both NBAI and TSIA
are wholly-owned subsidiaries of NationsBank, N.A., Charlotte, North Carolina.
There are various conditions precedent to the consummation of the
Merger, including approval of federal and state regulatory authorities. The
Merger Agreement may be terminated and the Merger abandoned at any time prior
to the Effective Time by the mutual consent of BSC and NationsBank or upon the
occurrence of other events specified in the Merger Agreement. BSC's
shareholders approved the Merger on December 14, 1995.
APPROVAL OF THE NEW ADVISORY CONTRACT
The Trustees are proposing that shareholders of each Portfolio approve
the New Advisory Contract with NBAI, to become effective as of the Effective
Time of the Merger. A description of the New Advisory Contract,
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NBAI, and the services to be provided by NBAI thereunder is set forth below.
The description of the New Advisory Contract is qualified in its entirety by
reference to the form of the New Advisory Contract attached to this Proxy
Statement as Exhibit B. See "Proposal 2 - Approval of the New Sub-Advisory
Contract" for further information regarding TSIA and the proposed New
Sub-Advisory Contract.
As more fully described below, the terms of the New Advisory Contract
are substantially similar in all material respects to the Present Contract,
except for (i) the change in investment adviser, and (ii) the effective date,
which, in the case of the New Advisory Contract, will be the date of the
Effective Time of the Merger of BSC into NationsBank. It is currently expected
that the Effective Time will occur on or before January 31, 1996. The New
Advisory Contract provides for no increase in advisory fees payable by any
Portfolio.
At a meeting held on November 15, 1995, the Trustees, including a
majority of the Trustees who are not interested persons, as that term is
defined in the 1940 Act, of the Trust and who will not be interested persons of
NBAI or TSIA (the "Non-Interested Trustees"), approved the New Contracts. By
approving the New Contracts, the Trustees have acted in what they believe to be
the best interest of the shareholders of the Trust. In connection with the
approval of the New Contracts, the Trustees considered the absence of material
changes in the overall form of the Present Contract, the investment advisory
fees, or any Portfolio's investment objectives or policies. The Trustees also
took into account the financial strength of NationsBank, the management,
personnel, experience and operations of NationsBank and its affiliates, the
commitment of NationsBank and its affiliates to the financial services
industry, and the fact that NBAI and TSIA are affiliates of NationsBank. The
Trustees based their determinations in this regard on discussions with
representatives of Bank South and NBAI at the meeting and a review of materials
presented by Bank South, NBAI, and TSIA in connection with the meeting. These
materials included NationsBank's annual and quarterly reports, prospectuses and
marketing brochures for Nations Funds, various documents outlining the history
and current operations of NationsBank, NBAI, TSIA, and Nations Funds, as well
as opportunities for the Portfolios within this structure and the experience of
the NationsBank organization, particularly the Trust Investment Management
Group and Mutual Funds Group, which managed approximately $30 billion of
investment assets (including approximately $17 billion in mutual funds for
which NationsBank affiliates serve as investment adviser), as of September 30,
1995. Finally, the Trustees considered the management, personnel, and
operations contemplated with respect to NBAI and TSIA following the Merger.
The Trustees were also advised by NBAI that NationsBank intends to examine all
mutual fund activities of the combined entities subsequent to consummation of
the Merger, and that management of the Trust would be involved in the
examinations of these activities. The Trustees have not yet considered a
possible Funds Merger, and no action will be taken on such Funds Merger at the
Meeting. The Trustees, including Non-Interested Trustees, concluded that NBAI
and TSIA are fully capable of performing the services contemplated by the New
Advisory Contract and the Sub-Advisory Contract, respectively, and recommended
that the New Contracts be approved by the shareholders of the Trust.
INFORMATION ABOUT THE PRESENT ADVISER AND THE NEW ADVISER
Bank South
Bank South is a Georgia-chartered state bank and trust company
headquartered in Atlanta, Georgia, that is a member of the Federal Reserve
System. It has been managing discretionary assets for its customers since
1931. As of December 6, 1995, Bank South managed approximately $1.4 billion in
discretionary assets. Bank South has served as Adviser to the Trust since its
inception in 1994, but was not previously an investment adviser to a mutual
fund.
Two employees of Bank South are principally responsible for the
day-to-day management of the Portfolios. Mr. W. Shelton Prince is primarily
responsible for the day-to-day management of the Peachtree Equity Fund. He
joined Bank South in March 1968 and was promoted to Vice President in November
1979, and to Senior Investment Manager in February 1993. Additionally, he is
responsible for the management of Bank South's Equity Common Trust Funds and
has overall responsibility for Bank South's Mutual Fund Management Group. He
also serves on Bank South's Investment Strategy Advisory Committee.
Mr. Jan A. Koenig assumed the responsibility for the day-to-day
management of the Fund Portfolios (other than the Peachtree Equity Fund) in
September 1995. He joined Bank South in July 1995 as a Senior
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Portfolio Adviser and head of the Investment Management Division of the Wealth
Management Group. Mr. Koenig previously served as a Senior Portfolio
Manager/Manager of the Investment Services Group at Texas Commerce Investment
Management Company, a subsidiary of Chemical Banking Corporation, in Houston,
Texas from 1987 to 1995.
It is presently anticipated that Messrs. Prince and Koenig will not be
involved in the day-to-day management of the Portfolios after consummation of
the Merger and execution of the New Contracts. For a description of the
individuals who will be responsible for the day-to-day management of the
Portfolios under the New Advisory Contract, see "Information About the Present
Adviser and the New Adviser - NBAI."
The principal executive officers and directors of Bank South are
listed in the table below. The business address of each such individual is
Bank South, 55 Marietta Street, N.W., Atlanta, Georgia 30303.
Other Substantial
Business, Profession,
Name Position with Bank South Vocation or Employment
- ---- ------------------------ ----------------------
Ray C. Anderson Director President and Chief Executive Officer of Interface,
Inc., a manufacturer of carpet, textiles and
chemicals.
Kenneth W. Cannestra Director Senior Adviser of Lockheed Martin Corporation.
John S. Carr Director President of John S. Carr & Associates, Inc., a real
estate development company, and John S. Carr &
Company, Inc., real estate brokerage firm.
Patrick L. Flinn Chairman, Chief Executive None
Officer, and Director
Ralph E. Hutchins, Jr. Chief Financial Officer None
Sidney E. Jennette, Jr. Director Management consultant; retired Vice President-
Corporate and External Affairs of Southern Bell
Telephone & Telegraph Co.
Lynn H. Johnston Director Retired Chairman of Life Insurance Company of
Georgia and of ING America Life Corporation.
William M. McClatchey Director Physician with Piedmont Medical Care Foundation.
John E. McKinley, III Principal Operating None
Officer, Credit Policy and
Corporate Banking, and
Director
Julia W. Morgan Director President and Chief Executive Officer of Ed Morgan &
Associates, Inc., an insurance company.
Barry Phillips Director Partner of Kilpatrick & Cody, attorneys.
Ben G. Porter Director An owner of Piedmont Communications Corporation,
operators of two radio stations in Macon, Georgia;
retired Senior Vice President of and active
consultant to Charter Medical Corporation.
John W. Robinson, Jr. Director President of Southern Waistbands, Inc., a
manufacturer of textile products.
- 5 -
Other Substantial
Business, Profession,
Name Position with Bank South Vocation or Employment
- ---- ------------------------ ----------------------
Lee M. Sessions, Jr. Principal Operating None
Officer, Retail, Trust and
Investment Management
Felker W. Ward, Jr. Director President of Ward & Associates, Inc., investment
bankers since 1988; director of the Atlanta Gas
Light Company and Abrams Industries, Inc.
Virgil R. Williams Director Chairman and Chief Executive Officer of Equipment
Technology, Inc., an environmental engineering
company; Chairman of Williams Service Group, Inc.,
an industrial engineering company, and President of
Williams Communications, Inc., a communications
company.
NBAI
NBAI is a wholly-owned, indirect subsidiary of NationsBank, N.A., a
wholly-owned banking subsidiary of NationsBank. NationsBank, a bank holding
company registered under the BHC Act, is a financial services company
headquartered in Charlotte, North Carolina. Through its related banking
subsidiaries and its various non-banking subsidiaries, NationsBank provides
banking and banking-related services, primarily throughout the Southeast and
Mid-Atlantic states and Texas. On September 30, 1995, NationsBank had total
assets of $182 billion.
Pursuant to the New Advisory Contract, NBAI will succeed Bank South as
the investment adviser for the Trust Portfolios. NBAI is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and effective on or about January 1, 1996, will act as
investment adviser to Nations Funds, NationsBank's proprietary family of 43
mutual funds. On September 30, 1995, NationsBank's Trust Investment Management
Group and Mutual Funds Group, substantially all of the assets and operations of
which will be transferred to NBAI and TSIA, held approximately $30 billion of
investment assets under management (including approximately $17 billion in
mutual funds for which NationsBank affiliates serve as investment adviser).
In the event the shareholders approve the New Advisory Contract, five
new individuals would be principally responsible for the day-to-day management
of the Portfolios. Under the New Advisory Contract, the Peachtree Prime Money
Market Fund would be managed by Martha L. Sherman, Vice President of
NationsBank. Ms. Sherman is Portfolio Manager in NationsBank's Money Market
Department and is presently responsible for the Nations Prime and Capitol Cash
Reserve Funds. She joined NationsBank in 1987 and managed the hedge positions
for NationsBank's Portfolio Insurance product line. Prior to employment with
NationsBank, Ms. Sherman's work experience included short-term cash management
and management of futures and options positions for a private money management
firm. Ms. Sherman graduated Summa Cum Laude from the University of Texas at
Dallas with a B.S. in Business and Public Administration with a concentration
in Finance and Investments.
Under the New Advisory Contract, the Peachtree Government Money Market
Fund would be managed by Sandra L. Duck, who is presently Vice President -
Portfolio Manager for the Nations Treasury and Government Funds, Capitol
Treasury and Government Funds, and trader for NationsBank's Money Market
Department. A NationsBank employee since 1989, Ms. Duck previously worked as
an Over-The-Counter Equity Trader and Municipal Bond Trader.
Philip J. Sanders, a member of NationsBank's Value Equity Group, would
be responsible for the day-to-day management of the Peachtree Equity Fund under
the New Advisory Contract. Mr. Sanders has been the principal portfolio
manager for the Nations Capital Growth Fund since May 1995. He is also the
Vice President
- 6 -
and Fund Manager of the Nations Balanced Target Maturity Fund. Mr. Sanders
joined NationsBank in 1988, and prior to joining NationsBank he was employed at
Duke Power Company for six years, where he supervised and performed various
types of detailed financial analysis. Mr. Sanders holds a B.A. in Economics
from the University of North Carolina in Charlotte. He is a Chartered
Financial Analyst and a member of the Association for Investment Management and
Research.
Under the New Advisory Contract, the Peachtree Bond Fund would be
managed by Gregory H. Cobb, Vice President and Fixed Income Portfolio Manager
at NationsBank. Mr. Cobb has been principal portfolio manager for Nations
Short-Term Income Fund since 1993. A member of the Fixed Income Group, Mr.
Cobb joined NationsBank in 1993 and has over 7 years of portfolio management
experience. Mr. Cobb received a B.A. from the University of North
Carolina-Chapel Hill.
Michele M. Poirier would be responsible for the Peachtree Georgia
Tax-Free Income Fund under the New Advisory Contract. Ms. Poirier is presently
responsible for the management of Nations Municipal Income Fund, Nations
Florida Intermediate Municipal Bond Fund, Nations Florida Municipal Bond Fund,
Nations Georgia Intermediate Municipal Bond Fund, Nations Georgia Municipal
Bond Fund, Nations South Carolina Intermediate Municipal Bond Fund and Nations
South Carolina Municipal Bond Fund. Ms. Poirier, a Vice President and Fixed
Income Portfolio Manager of NationsBank, is presently responsible for over $1
billion in tax-free assets. She joined NationsBank in 1990 and is the
principal portfolio manager for 9 municipal bond mutual funds and 6 municipal
bond common trust funds. Ms. Poirier has over 20 years of investment
experience from positions previously held in management, sales and trading at
Financial Service Corporation, Bankers Trust Company and The Robinson-Humphrey
Company, respectively. She earned a B.B.A. in marketing from Georgia State
University.
The principal executive officers and directors of NBAI are listed in
the table below. The business address of each such individual is 101 South
Tryon Street, NationsBank Plaza, Charlotte, North Carolina 28255.
Other Substantial
Business, Profession,
Name Position with NBAI Vocation or Employment
- ---- ------------------ ----------------------
Mark Hurst Williamson President and Director None
Theodore Orto Johnson Secretary/Treasurer None
Robert Harry Gordon Senior Vice President None
Martha Ellen Fox CCO/Asst. Sec. None
John Warner Munce Director Executive Vice President, NationsBank, N.A.
James Bainbridge Sommers Director President, NationsBank, N.A. Trust
The following schedule lists the net assets of each of the Nations
Funds portfolios and the contractual advisory fees, current waivers, and actual
advisory fees for such portfolios, as of October 31, 1995.
- 7 -
ASSETS AND ADVISORY FEES PAID UNDER NATIONS FUNDS PORTFOLIOS
AND NATIONS INSTITUTIONAL RESERVES
TYPE AND NET ASSETS AS OF CONTRACTUAL CURRENT FEE ACTUAL ADVISORY
NAME OF FUND OCTOBER 31, 1995 ADVISORY FEE WAIVERS(1) FEE
- ------------ ---------------- ------------ ------- ---------------
EQUITY FUNDS
Equity Income $ 406,561,488 0.70% 0.02% 0.68%
Capital Growth 902,230,396 0.75% 0.00% 0.75%
Emerging Growth 294,740,255 0.75% 0.00% 0.75%
Value 1,062,643,066 0.75% 0.00% 0.75%
Equity Index Fund 138,298,635 0.50% 0.45% 0.05%
International Equity 684,947,177 0.90% 0.00% 0.90%
Disciplined Equity 177,002,734 0.75% 0.00% 0.75%
Balanced Assets 225,358,556 0.75% 0.00% 0.75%
Emerging Markets 17,037,448 1.10% 0.00% 1.10%
Pacific Growth 35,620,823 0.90% 0.00% 0.90%
---------------
$ 3,884,440,581
===============
FIXED INCOME
Global Gov't Income 21,663,969 0.70% 0.00% 0.70%
Short Term Income 186,100,665 0.80% 0.30% 0.30%
Short/Intermediate Gov't 517,594,034 0.80% 0.20% 0.40%
Government Securities 108,272,773 0.64% 0.14% 0.50%
Mortgage-Backed Sec. 44,682,895 0.60% 0.10% 0.50%
Strategic Fixed Income 806,999,707 0.60% 0.10% 0.50%
Diversified Income 141,099,526 0.60% 0.10% 0.50%
---------------
$ 1,826,413,569
===============
TAX-EXEMPT FUNDS
Short Term Municipal 67,911,033 0.50% 0.42% 0.08%
Intermediate Municipal 75,876,861 0.50% 0.32% 0.18%
Municipal Income 114,120,618 0.60% 0.26% 0.34%
Florida Int. Municipal 50,493,012 0.50% 0.27% 0.23%
Florida Municipal 37,356,098 0.60% 0.28% 0.32%
Georgia Int. Municipal 60,230,131 0.50% 0.27% 0.23%
Georgia Municipal 15,026,107 0.60% 0.38% 0.22%
Maryland Int. Municipal 90,563,737 0.50% 0.25% 0.25%
Maryland Municipal 12,317,476 0.60% 0.42% 0.18%
North Carolina Int. Muni. 38,333,041 0.50% 0.29% 0.21%
North Carolina Muni. 31,047,300 0.60% 0.29% 0.31%
South Carolina Int. Muni. 70,934,280 0.50% 0.25% 0.25%
South Carolina Muni. 15,126,309 0.60% 0.37% 0.23%
Tennessee Int. Municipal 17,741,769 0.50% 0.38% 0.12%
Tennessee Municipal 7,406,278 0.60% 0.53% 0.07%
Texas Int. Municipal 30,644,052 0.50% 0.34% 0.16%
Texas Municipal 17,419,278 0.80% 0.35% 0.25%
Virginia Int. Municipal 249,613,912 0.50% 0.22% 0.28%
Virginia Municipal 19,868,825 0.80% 0.33% 0.27%
---------------
$ 1,022,030,112
===============
MONEY MARKET
Prime 3,951,532,950 0.20% 0.05% 0.15%
Treasury 3,165,689,843 0.20% 0.05% 0.15%
Government Money Mkt. 413,265,288 0.40% 0.26% 0.14%
Tax-Exempt Money Mkt. 1,168,146,185 0.40% 0.26% 0.14%
---------------
$ 8,698,628,246
===============
TOTAL NATIONS
FUNDS $15,431,518,508
===============
(Table continued on next page)
- 8 -
TYPE AND NET ASSETS AS OF CONTRACTUAL CURRENT FEE ACTUAL ADVISORY
NAME OF FUND OCTOBER 31, 1995 ADVISORY FEE WAIVERS(1) FEE
------------ ---------------- ------------ ------- ---------------
INSTITUTIONAL RESERVES
Cash Reserves $ 665,408,813 0.30% 0.22% 0.08%
Treasury Reserves 503,895,940 0.30% 0.24% 0.06%
Government Reserves 154,290,635 0.30% 0.25% 0.05%
Municipal Reserves 103,241,007 0.30% 0.30% 0.00%
---------------
TOTAL NATIONS
INSTITUTIONAL RESERVES $ 1,426,836,395
===============
- -------------------
(1) Each current fee waiver represents a percentage of daily net assets of
each Fund calculated at an annualized rate.
The annual advisory fees which NBAI will be entitled to receive for
its services to the Portfolios, and which will be payable to NBAI following the
Merger, provided the New Advisory Contract is approved by the shareholders of
the Portfolios, are set forth below in the section entitled "Information About
the New Advisory Contract."
INFORMATION ABOUT THE NEW ADVISORY CONTRACT
The form of the New Advisory Contract is attached to this Proxy
Statement as Exhibit B. Under the New Advisory Contract, NBAI will manage the
Portfolios' investments, provide various administrative services, investment
research, advice, management, and supervision of the investments of the Trust,
and conduct a continuous program of investment evaluation and appropriate sale
or other disposition and reinvestment of the Trust's assets, subject to the
supervision of the Trustees and in conformity with the stated investment
objectives and policies of each Portfolio.
Specifically, NBAI will furnish reports, statistical and research
services and make investment decisions with respect to each Portfolio. Each
Portfolio will pay the cost of all of its expenses and liabilities, including
expenses and liabilities incurred in connection with maintaining its
registration under the Securities Act of 1933, as amended, the 1940 Act, and
the securities laws of the states in which its shares are registered or
qualified for sale, printing prospectuses as they are updated, share
certificates, mailings, brokerage charges, issue and transfer taxes on the sale
of Portfolio securities, custodian and stock transfer charges, printing, legal
and auditing expenses, and expenses of any shareholder meetings and reports to
shareholders. Notwithstanding the foregoing, it is presently anticipated that
the Present Administration will continue to provide services to the Trust prior
to the completion of any Funds Merger. The Trust's expenses will continue to
include expenses of administrative personnel and services provided to the Trust
by the Administrator at an annual rate as described in the prospectuses for the
various Portfolios.
The New Advisory Contract provides that the advisory fees payable to
NBAI by the Portfolios will be the same as those charged by Bank South under
the Present Contract. The advisory fees payable under the New Advisory
Contract by the Portfolios are equal to a fixed percentage of daily net assets
of each Portfolio calculated at an annualized rate, payable on a monthly basis.
From time to time, NBAI, consistent with Bank South's current practice, may
waive its fee or reimburse a Portfolio for certain of its expenses in order to
reduce the Portfolio's expense ratio. As a result, the Portfolio's return and
yield would be higher than it would be if the fees and such expenses had been
paid by the Portfolio.
The following table sets forth the annual advisory fees with respect
to each Portfolio under the Present and New Advisory Contracts. In addition,
the table indicates the aggregate amount of advisory fees paid by each
Portfolio under the Present Contract, net of any advisory fee waiver, during
its most recent fiscal year.
- 9 -
ADVISORY FEES AND EXPENSE LIMITATIONS UNDER THE
NEW AND PRESENT ADVISORY CONTRACTS
NET ASSETS ON CONTRACTUAL CURRENT FEE ACTUAL
PORTFOLIO SEPTEMBER 30, 1995 ADVISORY FEE WAIVER(1) ADVISORY FEE
- --------- ------------------ ------------ ------ ------------
Peachtree Bond Fund $ 93,524,323 0.75% 0.00% 0.75%
Peachtree Equity Fund 125,031,481 0.75% 0.00% 0.75%
Peachtree Georgia Tax-Free
Income Fund 3,202,988 0.75% 0.75% 0.00%
Peachtree Government
Money Market Fund 59,013,066 0.50% 0.30% 0.20%
Peachtree Prime
Money Market Fund 150,427,875 0.50% 0.31% 0.19%
- --------------------------
(1) The current voluntary fee waivers and reimbursement may be modified or
terminated by the Adviser at any time in its sole discretion. Similarly, under
the New Advisory Contract, NBAI would be able to modify or terminate the
voluntary fee waivers and reimbursement in its sole discretion.
For the fiscal year ended September 30, 1995, the Trust paid Bank
South the following investment advisory fees:
PORTFOLIO ADVISORY FEES
--------- -------------
Peachtree Bond Fund $635,619, none of which was waived
Peachtree Equity Fund $814,121, none of which was waived
Peachtree Georgia Tax-Free Income Fund $ 14,375, all of which was waived
Peachtree Government Money Market Fund $356,814, of which $217,475 was waived
Peachtree Prime Money Market Fund $515,302, of which $321,304 was waived
The terms of the New Advisory Contract are substantially similar to
the Present Contract with Bank South. However, the New Advisory Contract
differs from the Present Contract in (i) the identity and ultimate ownership of
the investment adviser, and (ii) the effective date, which, in the case of the
New Advisory Contract, will be the date of the Effective Time of the Merger.
As indicated above, it is currently expected that the Effective Time will occur
on or about January 9, 1996.
Similar to the Present Contract, the New Advisory Contract provides
that in the absence of willful misfeasance, bad faith, gross negligence, or
reckless disregard of the obligations or duties of NBAI under the New Advisory
Contract, NBAI and its affiliates shall not be liable to the Trust or to any
shareholder for any act or omission in the course of, or connected in any way
with, rendering services or for any losses that may be sustained in the
purchase, holding, or sale of any security.
If approved by shareholders at this Meeting, the New Advisory Contract
will continue for two years after it takes effect, unless terminated, and may
be continued from year to year thereafter by the Board of Trustees. The
continuation of the New Advisory Contract must be approved by a majority vote
of the Trustees, including a majority of the Non-Interested Trustees, cast in
person at a meeting called for that purpose. NBAI will have the right, in any
year, to notify the Trust in writing at least 60 days before the New Advisory
Contract anniversary date that it does not desire a renewal of the New Advisory
Contract. The Trustees, or a majority of the outstanding voting shares of the
Trust, may terminate the New Advisory Contract at any time without penalty by
giving NBAI 60 days' written notice. The New Advisory Contract may not be
assigned by NBAI and will terminate automatically in the event of an
assignment. The New Advisory Contract provides that it may be amended by a
vote of both a majority of the Trustees, including a majority of the
Non-Interested Trustees, and on behalf of a Portfolio by the holders of a
majority of the outstanding voting shares of such Portfolio. If the New
Advisory
- 10 -
Contract is approved by shareholders of one or more Portfolios and the Merger
is consummated, the New Advisory Contract will be executed and become effective
with respect to such Portfolio(s) on the Effective Date.
SECTION 15(f) OF THE 1940 ACT
Section 15(f) of the 1940 Act provides that in connection with the
sale of any interest in an investment adviser (such as Bank South) which
results in the "assignment" of an investment advisory contract, an investment
adviser (such as NBAI) of a registered investment company (such as the Trust),
or an affiliated person of such investment adviser (such as TSIA), may receive
any amount or benefit if (i) for a period of three years after the sale, at
least 75% of the members of the Board of Trustees of the investment company are
not interested persons of the investment adviser or the predecessor adviser,
and (ii) there is no "unfair burden" imposed on the investment company as a
result of such sale or any express or implied terms, conditions or
understanding applicable thereto. For this purpose, "unfair burden" is defined
to include any arrangement during the two-year period after the transaction,
whereby the investment adviser or its predecessor or successor investment
advisers, or any interested persons of any such adviser, receives or is
entitled to receive any compensation directly or indirectly (i) from any person
in connection with the purchase or sale of securities or other property to,
from or on behalf of the investment company other than bona fide ordinary
compensation as principal underwriter for such company, or (ii) from the
investment company or its security holders for other than bona fide investment
advisory or other services. This provision of the 1940 Act was enacted by
Congress in 1975 to make it clear that an investment adviser (or an affiliated
person of the adviser) can realize a profit on the sale of the adviser's
business subject to the two safeguards described above. The Board of Trustees
of the Trust has requested and received assurances from the Adviser that no
"unfair burden" will be imposed on the Trust as a result of the proposed
transactions.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Under the New Advisory Contract, decisions regarding each Portfolio
will be made by NBAI subject to the supervision and control of the Trustees.
All Portfolio transactions are undertaken on the basis of their desirability
from an investment standpoint. Subject to review by the Board of Trustees, the
adviser makes decisions on and selects brokers or dealers for portfolio
transactions. In selecting firms to effect securities transactions, the
primary consideration of the Trust is prompt execution at the most favorable
price. The Trust will also consider such factors as the price of the
securities and the size and difficulty of execution of the order. If these
objectives may be met with more than one firm, the Trust will also consider the
availability of statistical and investment data and economic facts and opinions
helpful to the Trust.
Under the New Advisory Contract, NBAI may select brokers and dealers
who, in addition to meeting the above requirements, also furnish brokerage and
research services. These services may include advice as to the advisability of
investing in securities, security analyses and reports, economic studies,
industry studies, receipt of quotations for portfolio valuations and similar
services. These services may be furnished either directly to the Trust, to
NBAI, to advisers who are affiliates of NBAI (such as TSIA) or to accounts
advised by those companies. The brokers and dealers who execute portfolio
transactions selected for the above reasons may also sell shares of the Trust
and certain other affiliated funds. The fact that a broker or dealer may sell
shares of the Trust or any other fund is not a criterion that NBAI will use in
selecting a broker or dealer to execute portfolio transactions on behalf of the
Trust.
NBAI, in selecting brokers or dealers to execute portfolio
transactions, will exercise reasonable business judgment and determine in good
faith that commissions charged by such persons are reasonable in relationship
to the value of the brokerage and research services provided by such persons,
viewed in terms of the overall responsibilities of the adviser and its
affiliated companies with respect to the Trust itself and the other accounts to
which they render investment advice. As a practical matter, the benefits
inuring to these companies or accounts are not divisible. To the extent that
the receipt of the above-described services may supplant services for which
NBAI might otherwise have paid, it would, of course, tend to reduce its
expenses. The same is true of services furnished to the Trust and in turn made
available by the Trust to NBAI or TSIA, or their affiliates. NBAI generally
will not lower its fee, however, as a consequence of receiving such services.
- 11 -
The Trust will not effect brokerage transactions with any broker or
dealer affiliated directly or indirectly with NBAI or TSIA, unless such
transactions are fair and reasonable, under the circumstances, to the relevant
Portfolio's shareholders and comply with the requirements of the 1940 Act.
Circumstances that may indicate that such transactions are fair and reasonable
include the frequency of such transactions, the selection process, and the
commissions payable in connection with such transactions.
With respect to the portion of any Portfolio invested in municipal
securities or United States Government securities, it is anticipated that most
purchase and sale transactions will be with the issuer or an underwriter or
with major dealers in debt instruments acting as principals. Such transactions
are normally on a net basis and generally do not involve payment of brokerage
commissions. However, the cost of securities purchased from an underwriter
usually includes a commission paid by the issuer to the underwriter. Purchases
or sales from dealers will normally reflect the spread between bid and ask
prices.
With respect to any Portfolio investing in domestic and/or foreign
equity securities, it is anticipated that most transactions in such securities
will occur on domestic and/or foreign stock exchanges. Transactions on stock
exchanges involve the payment of brokerage commissions. In transactions on
stock exchanges in the United States, these commissions are negotiated, whereas
on many foreign stock exchanges these commissions are fixed. In the case of
securities traded in the foreign and domestic over-the-counter markets, there
is generally no stated commission, but the price usually includes an
undisclosed commission or markup. Over-the-counter transactions will generally
be placed directly with a principal market maker, although the Trust may place
an over-the-counter order with a broker-dealer if a better price (including
commission) and execution are available.
With respect to any Portfolio investing in money market instruments,
it is anticipated that most transactions in such securities will be made with
recognized dealers in such instruments except when a better price (including
commission) and execution are available elsewhere.
RECOMMENDATION OF THE BOARD OF TRUSTEES
Based upon the considerations set forth under "Approval of the New
Advisory Contract" above, the Trustees have determined that the New Advisory
Contract is in the best interest of each Portfolio and its shareholders. In
addition, NBAI expects that there will be no diminution in the scope and
quality of services provided to the Trust as a result of these transactions.
In fact, except as described above, the New Advisory Contract is the same in
all material respects as the Present Contract under which the Trust is
currently operating and which have been approved previously by the initial
shareholders of each respective Portfolio. The Board of Trustees believes that
the Portfolios will receive investment management services under the New
Advisory Contract at least equivalent to those that they receive under the
Present Contract, and at the same fee and expense levels.
In the event the Merger is not consummated, the Present Contract will
continue in accordance with its terms. If the Merger is consummated and if the
New Advisory Contract is not approved by the shareholders of any Portfolio, the
Present Contract will terminate and the Board of Trustees will consider what
actions should be taken, including but not limited to requesting that NBAI
perform investment advisory services at cost until a new investment advisory
contract is approved by the shareholders of that Portfolio.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR" THE APPROVAL
OF THE NEW ADVISORY CONTRACT.
- 12 -
PROPOSAL 2
APPROVAL OF THE NEW SUB-ADVISORY CONTRACT
APPROVAL OF THE NEW SUB-ADVISORY CONTRACT
As described below, the Trustees are proposing that shareholders of
each Portfolio approve the New Sub-Advisory Contract between NBAI and TSIA, to
become effective as of the Effective Time of the Merger. A description of the
New Sub-Advisory Contract, TSIA, and the services to be provided by TSIA
thereunder is set forth below. The descriptions of the New Sub-Advisory
Contract is qualified in its entirety by reference to the form of the New
Sub-Advisory Contract attached to this Proxy Statement as Exhibit C.
As more fully described below, execution of the New Sub-Advisory
Contract will allow TSIA's research department and staff to furnish NBAI with
factual information and investment recommendations and advice, and to be
available for consultation generally with respect to each Portfolio. There
will be no additional charge to the Trust for the services provided by TSIA.
The effective date of the New Sub-Advisory Contract, if approved by the
shareholders, will be the date of the Effective Time of the Merger. It is
currently expected that the Effective Time will occur on or about January 9,
1996.
At a meeting held on November 15, 1995, the Trustees, including a
majority of the Non-Interested Trustees, approved the New Sub-Advisory
Contract. For a discussion of the information reviewed and issues considered
by the Trustees in approving the New Sub-Advisory Contract, see "Proposal 1 -
Approval of the New Advisory Contract." The Trustees, including Non-Interested
Trustees, concluded that TSIA is fully capable of performing the services
contemplated by the New Sub-Advisory Contract and recommended that the New
Sub-Advisory Contract be approved by the shareholders of the Trust.
INFORMATION ABOUT THE SUB-ADVISER
TSIA is a wholly-owned subsidiary of NationsBank, N.A., a wholly-owned
banking subsidiary of NationsBank. TSIA, which will become the sub-adviser for
the domestic Nations Fund portfolios effective on or about January 1, 1996, is
comprised of more than 30 investment professionals having significant
investment industry experience. Pursuant to the New Sub-Advisory Contract,
TSIA will provide certain sub-advisory services for NBAI and will act as
sub-adviser of the Trust Portfolios.
The principal executive officers and directors of TSIA are listed in
the table below. The business address of each such individual is 101 South
Tryon Street, NationsBank Plaza, Charlotte, North Carolina 28255.
OTHER SUBSTANTIAL
BUSINESS, PROFESSION,
NAME POSITION WITH TSIA VOCATION OR EMPLOYMENT
- ---- ------------------ ----------------------
Andrew Michael Silton President/Director None
Rich Gershen Chief Operating Officer None
Louis E. Jerome Treasurer Senior Vice President, NationsBank, N.A. Trust
Mary Della Primm Officer None
David Milton Hetherington Officer None
Holly Day Deem Officer None
James Bainbridge Sommers Director President, NationsBank, N.A. Trust
John Warner Munce Director Executive Vice President, NationsBank, N.A.
Stuart Alvin Sachs Director President, Sovran Capital Management
Laura Dagenhart Fennell Officer Counsel, NationsBank
Pursuant to the New Sub-Advisory Contract, TSIA will be reimbursed
by NBAI in connection with the rendering of services on the basis of the direct
and indirect costs of performing such sub-advisory services. The annual sub-
advisory fees which TSIA will be entitled to receive for its services to NBAI,
and which will be payable
- 13 -
to TSIA by NBAI following the Merger, provided the New Contracts are approved
by the shareholders of the Portfolios, are set forth below in the section
entitled "Information About the New Sub-Advisory Contract." TSIA's fees under
the New Sub-Advisory Contract will be paid by NBAI from the fees received by
NBAI from the Portfolios.
INFORMATION ABOUT THE NEW SUB-ADVISORY CONTRACT
The form of the New Sub-Advisory Contract is attached to this Proxy
Statement as Exhibit C. Under the New Sub- Advisory Contract, TSIA's research
department and staff will furnish NBAI with factual information and investment
recommendations and advice, and will be available for consultation generally
with respect to each Portfolio. In connection with the rendering of such
services, TSIA will receive an annual sub-advisory fee from NBAI equal to a
fixed percentage of daily net assets of each Portfolio calculated at an
annualized rate. In the event that NBAI's advisory fee from the Trust is
reduced in order to meet the expense limitations imposed on a Portfolio by
state securities laws or regulations, the sub-advisory fee will be reduced by
one-half of the reduction in the fee due from the Trust to NBAI on behalf of
the Portfolio. From time to time, TSIA may waive its fee or reimburse a
Portfolio for certain of its expenses in order to reduce the Portfolio's
expense ratio. Because TSIA's fee is payable by NBAI out of NBAI's advisory
fees, there will be no additional charge to the Trust for the services provided
by TSIA.
The New Sub-Advisory Contract provides that in the absence of willful
misfeasance, bad faith, gross negligence, or reckless disregard of the
obligations or duties of TSIA under the New Sub-Advisory Contract, TSIA and its
affiliates shall not be liable to the NBAI, the Trust, or to any shareholder
for any act or omission in the course of, or connected in any way with,
rendering services or for any losses that may be sustained in the purchase,
holding, or sale of any security.
The following table sets forth the proposed annual sub-advisory fee
and expense limitation applicable with respect to each Portfolio under the New
Sub-Advisory Contract.
SUB-ADVISORY FEE
NAME OF FUND (TO BE PAID BY NBAI) (1)
- ------------ --------------------
Peachtree Bond Fund .15%
Peachtree Equity Fund .25%
Peachtree Georgia Tax-Free Income Fund .07%
Peachtree Government Money Market Fund .055%
Peachtree Prime Money Market Fund .055%
- -------------------
(1) In the event NBAI waives all of its advisory fees with respect to a
Portfolio or Portfolios under the New Advisory Contract, it is expected that
TSIA will waive its sub-advisory fees with respect to such Portfolio or
Portfolios under the New Sub-Advisory Contract.
If approved by shareholders at this Meeting, the New Sub-Advisory
Contract will continue for two years after it takes effect, unless terminated,
and may be continued from year to year thereafter by the Board of Trustees.
The continuation of the New Sub-Advisory Contract must be approved by a
majority vote of the Trustees, including a majority of the Non-Interested
Trustees, cast in person at a meeting called for that purpose. NBAI will have
the right, in any year, to notify the Trust in writing at least 60 days before
the New Sub-Advisory Contract anniversary date that it does not desire a
renewal of the New Sub-Advisory Contract. The Trustees, or a majority of the
outstanding voting shares of the Trust, may terminate the New Sub-Advisory
Contract at any time without penalty by giving NBAI and TSIA 60 days' written
notice. The New Sub-Advisory Contract may not be assigned by NBAI and will
terminate automatically in the event of an assignment. The New Sub-Advisory
Contract provides that it may be amended by a vote of both a majority of the
Trustees, including a majority of the Non-Interested Trustees, and on behalf of
a Portfolio by the holders of a majority of the outstanding voting shares of
such Portfolio.
- 14 -
SECTION 15(f) OF THE 1940 ACT
The Board of Trustees of the Trust has requested and received
assurances from the Adviser that no "unfair burden" will be imposed on the
Trust as a result of the proposed transactions. See "Proposal 1 - Section
15(f) of the 1940 Act."
RECOMMENDATION OF THE BOARD OF TRUSTEES
Based upon the considerations set forth under "Approval of the New
Sub-Advisory Contract" above, the Trustees have determined that the New
Sub-Advisory Contract is in the best interest of each Portfolio and its
shareholders. The Board of Trustees believes that the Portfolios will receive
investment management services under the New Advisory Contract and the New
Sub-Advisory Contract equal or better to those that they receive under the
Present Contract, and at the same fee and expense levels.
In the event the Merger is not consummated, the Present Contract will
continue in accordance with its terms and the New Sub-Advisory Contract will
not be executed. To the extent that the New Advisory Contract is not approved
by the shareholders of any Portfolio, the New Sub-Advisory Contract will not be
executed with respect to such Portfolio. If the Merger is consummated and the
New Advisory Contract is approved, but the New Sub-Advisory Contract is not
approved by the shareholders of any Portfolio, the New Advisory Contract will
be executed, and NBAI and the Board of Trustees will consider what actions
should be taken, including but not limited to seeking approval for the
retention of another sub-adviser.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR"
THE APPROVAL OF THE NEW SUB-ADVISORY CONTRACT.
OTHER MATTERS AND DISCRETION OF ATTORNEYS NAMED IN THE PROXY
While the Meeting is called to act upon any other business that may
properly come before it, at the date of this Proxy Statement the only business
which the management intends to present or knows that others will present is
the business mentioned in the Notice of Meeting. If any other matters lawfully
come before the Meeting, and in all procedural matters at said Meeting, it is
the intention that the enclosed Proxy shall be voted in accordance with the
best judgment of the attorneys named therein, or their substitutes, present and
acting at the Meeting.
If at the time any session of the Meeting is called to order, a quorum
is not present in person or by proxy, the persons named as proxies may vote
those Proxies which have been received to adjourn the Meeting to a later date.
In the event that a quorum is present but sufficient votes in favor of one or
more of the proposals have not been received, the persons named as proxies may
propose one or more adjournments of the Meeting to permit further solicitation
of Proxies with respect to any such proposal. All such adjournments will
require the affirmative vote of a majority of the Shares present in person or
by proxy at the session of the Meeting to be adjourned. The persons named as
proxies will vote those Proxies which they are entitled to vote in favor of the
proposal, in favor of such an adjournment, and will vote those Proxies required
to be voted against the proposal, against any such adjournment. A vote may be
taken on one or more of the proposals in this Proxy Statement prior to any such
adjournment if sufficient votes for its approval have been received and it is
otherwise appropriate.
- 15 -
NEXT MEETING OF SHAREHOLDERS
No Portfolio is required to, and none intend to hold annual or other
periodic meetings of shareholders, except as required by the 1940 Act. The
next meeting of the shareholders of each Portfolio will be held at such time as
the Board of Trustees may determine or at such time as may be legally required.
Any shareholder proposal intended to be presented at such meeting must be
received by the Trust at its office a reasonable time prior to the meeting, as
determined by the Board of Trustees, to be included in the Portfolio's proxy
statement and form of proxy relating to such meeting, and must satisfy all
other legal requirements. Upon consummation of the Merger and execution of the
New Advisory Contract, the principal offices of the Trust will continue to be
located at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779.
PLEASE COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY CARD AND RETURN SUCH CARD
PROMPTLY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE.
By Order of the Trustees
John W. McGonigle
Secretary
December 22, 1995
- 16 -
EXHIBIT A
("PRESENT CONTRACT")
PEACHTREE FUNDS
INVESTMENT ADVISORY CONTRACT
WITH BANK SOUTH
PEACHTREE FUNDS
INVESTMENT ADVISORY CONTRACT
This Contract is made this 1st day of December 1993, between Bank
South, N.A., a national banking association having its principal place of
business in Atlanta, Georgia (the "Adviser"), and Peachtree Funds, a
Massachusetts business trust having its principal place of business in
Pittsburgh, Pennsylvania (the "Trust").
WHEREAS the Trust is an open-end management investment company as that
term is defined in the Investment Company Act of 1940 and is
registered as such with the Securities and Exchange Commission; and
WHEREAS Adviser is engaged in the business of rendering investment
advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Trust hereby appoints Adviser as Investment Adviser for
each of the portfolios ("Funds") of the Trust which executes an exhibit to this
Contract, and Adviser accepts the appointments. Subject to the direction of
the Trustees of the Trust, Adviser shall provide investment research and
supervision of the investments of the Funds and conduct a continuous program of
investment evaluation and of appropriate sale or other disposition and
reinvestment of each Fund's assets.
2. Adviser, in its supervision of the investments of each of the
Funds will be guided by each of the Fund's investment objective and policies
and the provisions and restrictions contained in the Declaration of Trust and
By-Laws of the Trust and as set forth in the Registration Statements and
exhibits as may be on file with the Securities and Exchange Commission.
Adviser will place or cause to be placed orders for the purchase and sale of
such investments and instruments on behalf of each Fund and give corresponding
instructions to the Fund's custodian.
3. Each Fund shall pay or cause to be paid all of its own
expenses and its allocable share of Trust expenses, including, without
limitation, the expenses of organizing the Trust and continuing its existence;
fees and expenses of Trustees and officers of the Trust; fees for investment
advisory services and administrative personnel and services; fees and expenses
of preparing and printing its Registration Statements under the Securities Act
of 1933 and the Investment Company Act of 1940 and any amendments thereto;
expenses of registering and qualifying the Trust, the Funds, and shares
("Shares") of the Funds under federal and state laws and regulations; expenses
of preparing, printing, and distributing prospectuses (and any amendments
thereto) to shareholders; interest expense, taxes, fees, and commissions of
every kind; expenses of issue (including cost of Share certificates), purchase,
repurchase, and redemption of Shares, including expenses attributable to a
program of periodic issue; charges and expenses of custodians, transfer agents,
dividend disbursing agents, shareholder servicing agents, and registrars;
printing and mailing costs, auditing, accounting, and legal expenses; reports
to shareholders and governmental officers and commissions; expenses of meetings
of Trustees and shareholders and proxy solicitations therefor; insurance
expenses; association membership dues and such nonrecurring items as may arise,
including all losses and liabilities incurred in administering the Trust and
the Funds. Each Fund will also pay its allocable share of such extraordinary
expenses as may arise including expenses incurred in connection with
litigation, proceedings, and claims and the legal obligations of the Trust to
indemnify its officers and Trustees and agents with respect thereto.
4. Each of the Funds shall pay to Adviser, for all services
rendered to each Fund by Adviser hereunder, the fees set forth in the exhibits
attached hereto.
5. The net asset value of each Fund's Shares as used herein will
be calculated to the nearest 1/10th of one cent.
6. The Adviser may from time to time and for such periods as it
deems appropriate reduce its compensation (and, if appropriate, assume expenses
of one or more of the Funds) to the extent that any Fund's expenses exceed such
lower expense limitation as the Adviser may, by notice to the Fund, voluntarily
declare to be effective.
7. This Contract shall begin for each Fund as of the date of
execution of the applicable exhibit and shall continue in effect with respect
to each Fund presently set forth on an exhibit (and any subsequent Funds added
pursuant to an exhibit during the initial term of this Contract) for two years
from the date of this Contract set forth above and thereafter for successive
periods of one year, subject to the provisions for termination and all of the
other terms and conditions hereof if: (a) such continuation shall be
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust, including a majority of the Trustees who are not parties
to this Contract or interested persons of any such party (other than as
Trustees of the Trust), cast in person at a meeting called for that purpose;
and (b) Adviser shall not have notified a Fund in writing at least sixty (60)
days prior to the anniversary date of this Contract in any year thereafter that
it does not desire such continuation with respect to that Fund. If a Fund is
added after the first approval by the Trustees as described above, this
Contract will be effective as to that Fund upon execution of the applicable
exhibit and will continue in effect until the next annual approval of this
Contract by the Trustees and thereafter for successive periods of one year,
subject to approval as described above.
8. Notwithstanding any provision in this Contract, it may be
terminated at any time with respect to any Fund, without the payment of any
penalty, by the Trustees of the Trust or by a vote of the shareholders of that
Fund on sixty (60) days' written notice to Adviser.
9. This Contract may not be assigned by Adviser and shall
automatically terminate in the event of any assignment. Adviser may employ or
contract with such other person, persons, corporation, or corporations at its
own cost and expense as it shall determine in order to assist it in carrying
out this Contract.
10. In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties under this
Contract on the part of Adviser, Adviser shall not be liable to the Trust or to
any of the Funds or to any shareholder for any act or omission in the course of
or connected in any way with rendering services or for any losses that may be
sustained in the purchase, holding, or sale of any security.
11. This Contract may be amended at any time by agreement of the
parties provided that the amendment shall be approved both by the vote of a
majority of the Trustees of the Trust, including a majority of the Trustees who
are not parties to this Contract or interested persons of any such party to
this Contract (other than as Trustees of the Trust) cast in person at a meeting
called for that purpose, and on behalf of a Fund by a majority of the
outstanding voting securities of such Fund.
12. The Adviser acknowledges that all sales literature for
investment companies (such as the Trust) are subject to strict regulatory
oversight. The Adviser agrees to submit any proposed sales literature for the
Trust (or any Fund) or for itself or its affiliates which mentions the Trust
(or any Fund) to the Trust's distributor for review and filing with the
appropriate regulatory authorities prior to the public release of any such
sales literature, provided, however, that nothing herein shall be construed so
as to create any obligation or duty on the part of the Adviser to produce sales
literature for the Trust (or any Fund). The Trust agrees to cause its
distributor or promptly review all such sales literature to ensure compliance
with relevant requirements, to promptly advise Adviser of any deficiencies
contained in such sales literature, to promptly file complying sales literature
with the relevant authorities, and to cause such sales literature to be
distributed to prospective investors in the Trust.
13. Adviser is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and agrees
that the obligations pursuant to this Contract of a particular Fund and of the
Trust with respect to that particular Fund be limited solely to the assets of
that particular Fund, and Adviser shall not seek satisfaction of any such
obligation from any other Fund, the shareholders of any Fund, the Trustees,
officers, employees or agents of the Trust, or any of them.
-2-
14. This Contract shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
15. This Contract will become binding on the parties hereto upon
their execution of the attached exhibits to this Contract.
16. The parties hereto acknowledge that Bank South, N.A. has
reserved the right to grant the non-exclusive use of the name "Peachtree Funds"
or any derivative thereof to any other investment company, investment company
portfolio, investment adviser, distributor or other business enterprise, and to
withdraw from the Trust and one or more of the Funds the use of the name
"Peachtree Funds." The name "Peachtree Funds" will continue to be used by the
Trust and each Fund so long as such use is mutually agreeable to Bank South,
N.A. and the Trust.
-3-
EXHIBIT A
to the
Investment Advisory Contract
Peachtree Government Money Market Fund
Peachtree Prime Money Market Fund
For all services rendered by Adviser hereunder, the above-named Funds
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to .50 of 1% of the average daily net assets of the Funds.
The portion of the fee based upon the average daily net assets of the
Funds shall be accrued daily at the rate of 1/365th of .50 of 1% applied to the
daily net assets of the Funds.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of December, 1993.
Attest: Bank South, N.A.
By:
- ------------------------------- ----------------------------------
Secretary Vice President
Attest: Peachtree Funds
By:
- ------------------------------- -------------------------------
Assistant Secretary Vice President
-4-
EXHIBIT B
to the
Investment Advisory Contract
Peachtree Equity Fund
Peachtree Bond Fund
Peachtree Georgia Tax-Free Income Fund
For all services rendered by Adviser hereunder, the above-named Funds
of the Trust shall pay to Adviser and Adviser agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to .75 of 1% of the average daily net assets of the Funds.
The portion of the fee based upon the average daily net assets of the
Funds shall be accrued daily at the rate of 1/365th of .75 of 1% applied to the
daily net assets of the Funds.
The advisory fee so accrued shall be paid to Adviser daily.
Witness the due execution hereof this 1st day of December, 1993.
Attest: Bank South, N.A.
By:
- ------------------------------- --------------------------------
Secretary Vice President
Attest: Peachtree Funds
By:
- ------------------------------- -------------------------------
Assistant Secretary Vice President
-5-
EXHIBIT B
("NEW ADVISORY CONTRACT")
PEACHTREE FUNDS
INVESTMENT ADVISORY CONTRACT
WITH NATIONSBANC ADVISORS, INC.
PEACHTREE FUNDS
INVESTMENT ADVISORY CONTRACT
This Contract is made this day of January 1996, between
---
NationsBanc Advisors, Inc., a North Carolina corporation having its principal
place of business in Charlotte, North Carolina (the "Advisor"), and Peachtree
Funds, a Massachusetts business trust having its principal place of business in
Pittsburgh, Pennsylvania (the "Trust").
WHEREAS the Trust is an open-end management investment company as that
term is defined in the Investment Company Act of 1940, as amended (the
"1940 Act") and is registered as such with the Securities and Exchange
Commission; and
WHEREAS, Advisor is engaged in the business of rendering investment
advisory and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:
1. The Trust hereby appoints Advisor as Investment Advisor for
each of the portfolios ("Funds") of the Trust which executes an exhibit to this
Contract, and Advisor accepts the appointments. Subject to the direction of
the Trustees of the Trust, Advisor shall provide investment research and
supervision of the investments of the Funds and conduct a continuous program of
investment evaluation and of appropriate sale or other disposition and
reinvestment of each Fund's assets.
2. Advisor, in its supervision of the investments of each of the
Funds will be guided by each of the Fund's investment objective and policies
and the provisions and restrictions contained in the Declaration of Trust and
By-Laws of the Trust and as set forth in the Registration Statements and
exhibits as may be on file with the Securities and Exchange Commission.
Advisor will place or cause to be placed orders for the purchase and sale of
such investments and instruments on behalf of each Fund and give corresponding
instructions to the Fund's custodian.
3. Each Fund shall pay or cause to be paid all of its own
expenses and its allocable share of Trust expenses, including, without
limitation, the expenses of organizing the Trust and continuing its existence;
fees and expenses of Trustees and officers of the Trust; fees for investment
advisory services and administrative personnel and services; fees and expenses
of preparing and printing its Registration Statements under the Securities Act
of 1933, as amended, and the 1940 Act; expenses of registering and qualifying
the Trust, the Funds, and shares ("Shares") of the Funds under federal and
state laws and regulations; expenses of preparing, printing, and distributing
prospectuses (and any amendments thereto) to shareholders; interest expense,
taxes, fees, and commissions of every kind; expenses of issue (including cost
of Share certificates), purchase, repurchase, and redemption of Shares,
including expenses attributable to a program of periodic issue; charges and
expenses of custodians, transfer agents, dividend disbursing agents,
shareholder servicing agents, and registrars; printing and mailing costs,
auditing, accounting, and legal expenses; reports to shareholders and
governmental officers and commissions; expenses of meetings of Trustees and
shareholders and proxy solicitations therefor; insurance expenses; association
membership dues and such nonrecurring items as may arise, including all losses
and liabilities incurred in administering the Trust and the Funds. Each Fund
will also pay its allocable share of such extraordinary expenses as may arise
including expenses incurred in connection with litigation, proceedings, and
claims and the legal obligations of the Trust to indemnify its officers and
Trustees and agents with respect thereto.
4. Each of the Funds shall pay to Advisor, for all services
rendered to each Fund by Advisor hereunder, the fees set forth in the exhibits
attached hereto.
5. The net asset value of each Fund's Shares as used herein will
be calculated to the nearest 1/10th of one cent.
6. The Advisor may from time to time and for such periods as it
deems appropriate reduce its compensation (and, if appropriate, assume expenses
of one or more of the Funds) to the extent that any Fund's expenses exceed such
lower expense limitation as the Advisor may, by notice to the Fund, voluntarily
declare to be effective.
7. This Contract shall begin for each Fund as of the date of
execution of the applicable exhibit and shall continue in effect with respect
to each Fund presently set forth on an exhibit (and any subsequent Funds added
pursuant to an exhibit during the initial term of this Contract) for two years
from the date of this Contract set forth above and thereafter for successive
periods of one year, subject to the provisions for termination and all of the
other terms and conditions hereof if: (a) such continuation shall be
specifically approved at least annually by the vote of a majority of the
parties to this Contract or interested persons of any such party (other than as
Trustees of the Trust), cast in person at a meeting called for that purpose;
and (b) Advisor shall not have notified a Fund in writing at least sixty (60)
days prior to the anniversary date of this Contract in any year that it does
not desire such continuation with respect to that Fund. If a Fund is added
after the first approval by the Trustees as described above, this Contract will
be effective as to that Fund upon execution of the applicable exhibit and will
continue in effect until the next annual approval of this Contract by the
Trustees and thereafter for successive periods of one year, subject to approval
as described above.
8. Notwithstanding any provision in this Contract, it may be
terminated at any time with respect to any Fund, without the payment of any
penalty, by the Trustees of the Trust or by a vote of the shareholders of that
Fund on sixty (60) days' written notice to Advisor.
9. This Contract may not be assigned by Advisor and shall
automatically terminate in the event of any "assignment," as defined in the
1940 Act. Advisor may employ or contract with such other person, persons,
corporation, or corporations at its own cost and expense as it shall determine
in order to assist it in carrying out its duties under this Contract.
10. In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties under this
Contract on the part of Advisor, Advisor and its affiliates shall not be liable
to the Trust or to any of the Funds or to any shareholder for any act or
omission in the course of or connected in any way with rendering services or
for any losses that may be sustained in the purchase, holding, or sale of any
security.
11. This Contract may be amended at any time by agreement of the
parties provided that the amendment shall be approved both by the vote of a
majority of the Trustees of the Trust, including a majority of the Trustees who
are not parties to this Contract or interested persons of any such party to
this Contract (other than as Trustees of the Trust) cast in person at a meeting
called for that purpose, and on behalf of a Fund by a majority of the
outstanding voting securities of such Fund.
12. The Advisor acknowledges that all sales literature for
investment companies (such as the Trust) are subject to strict regulatory
oversight. The Advisor agrees to submit any proposed sales literature for the
Trust (or any Fund) or for itself or its affiliates which mentions the Trust
(or any Fund) to the Trust's distributor for review and filing with the
appropriate regulatory authorities prior to the public release of any such
sales literature, provided, however, that nothing herein shall be construed so
as to create any obligation or duty on the part of the Advisor to produce sales
literature for the Trust (or any Fund). The Trust agrees to cause its
distributor to promptly review all such sales literature to ensure compliance
with relevant requirements, to promptly advise Advisor of any deficiencies
contained in such sales literature, to promptly file complying sales literature
with the relevant authorities, and to cause such sales literature to be
distributed to prospective investors in the Trust.
13. Advisor is hereby expressly put on notice of the limitation of
liability as set forth in Article XI of the Declaration of Trust and agrees
that the obligations pursuant to this Contract of a particular Fund and of the
Trust with respect to that particular Fund be limited solely to the assets of
that particular Fund, and Advisor shall not seek satisfaction of any such
obligation from any other Fund, the shareholders of any Fund, the Trustees,
officers, employees or agents of the Trust, or any of them.
-2-
14. This Contract shall be construed in accordance with and
governed by the laws of the Commonwealth of Pennsylvania.
15. This Contract will become binding on the parties hereto upon
their execution of the attached exhibits to this Contract.
16. The parties hereto acknowledge that NationsBanc Advisors, Inc.
has reserved the right to grant the non- exclusive use of the name "Peachtree
Funds" or any derivative thereof to any other investment company, investment
company portfolio, investment Advisor, distributor or other business
enterprise, and to withdraw from the Trust and one or more of the Funds the use
of the name "Peachtree Funds." The name "Peachtree Funds" will continue to be
used by the Trust and each Fund so long as such use is mutually agreeable to
NationsBanc Advisors, Inc. and the Trust.
-3-
EXHIBIT A
to the
Investment Advisory Contract
Peachtree Government Money Market Fund
Peachtree Prime Money Market Fund
For all services rendered by Advisor hereunder, the above-named Funds
of the Trust shall pay to Advisor and Advisor agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to .50 of 1% of the average daily net assets of the Funds.
The portion of the fee based upon the average daily net assets of the
Funds shall be accrued daily at the rate of 1/365th of .50 of 1% applied to the
daily net assets of the Funds.
The advisory fee so accrued shall be paid to Advisor daily.
Witness the due execution hereof this day of January, 1996.
---
Attest: NationsBanc Advisors, Inc.
By:
- ---------------------------------- ---------------------------
Secretary Vice President
[Corporate Seal]
Attest: Peachtree Funds
By:
- ---------------------------------- ---------------------------
Secretary Vice President
[Corporate Seal]
-4-
EXHIBIT B
to the
Investment Advisory Contract
Peachtree Equity Fund
Peachtree Bond Fund
Peachtree Georgia Tax-Free Income Fund
For all services rendered by Advisor hereunder, the above-named Funds
of the Trust shall pay to Advisor and Advisor agrees to accept as full
compensation for all services rendered hereunder, an annual investment advisory
fee equal to .75 of 1% of the average daily net assets of the Funds.
The portion of the fee based upon the average daily net assets of the
Funds shall be accrued daily at the rate of 1/365th of .75 of 1% applied to the
daily net assets of the Funds.
The advisory fee so accrued shall be paid to Advisor daily.
Witness the due execution hereof this day of January, 1996.
---
Attest: NationsBanc Advisors, Inc.
By:
- ------------------------------- ---------------------------------
Secretary Vice President
[Corporate Seal]
Attest: Peachtree Funds
By:
- ------------------------------- ---------------------------------
Secretary Vice President
[Corporate Seal]
-5-
EXHIBIT C
("NEW SUB-ADVISORY CONTRACT")
SUB-ADVISORY CONTRACT
BETWEEN
NATIONSBANC ADVISORS, INC.
AND
TRADESTREET INVESTMENT ASSOCIATED, INC.
NATIONSBANC ADVISORS, INC.
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made between NationsBanc Advisors, Inc., a North
Carolina corporation located in Charlotte, North Carolina (hereinafter referred
to as "Adviser"), and TradeStreet Investment Associates, Inc., a Delaware
corporation located in Charlotte, North Carolina (hereinafter referred to as
the "Sub-Adviser").
W I T N E S S E T H :
That the parties hereto, intending to be legally bound hereby, agree
as follows:
1. Sub-Adviser hereby agrees to furnish to Adviser in its
capacity as investment adviser to each portfolio ("Fund") of the Peachtree
Funds ("Trust") for which the parties hereto execute an exhibit to this
Agreement relating to such Fund, such investment advice, statistical and other
factual information, as may from time to time be reasonably requested by
Adviser for the Fund which may be offered in one or more classes of shares
("Classes").
2. For its services under this Agreement, Sub-Adviser shall
receive from Adviser an annual fee (the "Sub- Advisory Fee"), as set forth in
the exhibits hereto. In the event that the fee due from the Trust to the
Adviser on behalf of the Fund is reduced in order to meet expense limitations
imposed on the Fund by state securities laws or regulations, the Sub-Advisory
Fee shall be reduced by one-half of said reduction in the fee due from the
Trust to the Adviser on behalf of the Fund.
Notwithstanding any other provision of this Agreement, the Sub-Adviser
may from time to time and for such periods as it deems appropriate, reduce its
compensation (and, if appropriate, assume expenses of the Fund or Class of the
Fund) to the extent that the Fund's expenses exceed such lower expense
limitation as the Sub-Adviser may, by notice to the Trust on behalf of the
Fund, voluntarily declare to be effective.
3. This Agreement shall begin for the Fund on the date that the
parties execute an exhibit to this Agreement relating to such Fund and shall
continue in effect for the Fund for two years form the date of its execution
and from year to year thereafter, subject to the provisions for termination and
all of the other terms and conditions hereof if: (a) such continuation shall
be specifically approved at least annually by the vote of a majority of the
Trustees of the Trust, including a majority of the Trustees who are not parties
to this Agreement or interested persons of any such party (other than as
Trustees of the Trust) cast in person at a meeting called for that purpose; and
(b) Adviser shall not have notified the Trust in writing at least sixty (60)
days prior to the anniversary date of this Agreement in any year that it does
not desire such continuation with respect to the Fund.
4. Notwithstanding any provision in this Agreement, it may be
terminated at any time without the payment of any penalty: (a) by the Trustees
of the Trust or by a vote of a majority of the outstanding voting securities
(as defined in Section 2(a)(42) of the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Fund on sixty (60) days' written notice to
Adviser and Sub-Adviser; or (b) by Sub-Adviser or Adviser upon 60 days' written
notice to the other party to the Agreement.
5. This Agreement shall automatically terminate:
(a) in the event of its assignment (as defined in the
1940 Act); or
(b) in the event of termination of the Investment
Advisory Contract for any reason whatsoever.
6. So long as both Adviser and Sub-Adviser shall be legally
qualified to act as an investment adviser to the Fund, neither Adviser nor
Sub-Adviser shall act as an investment adviser (as such term is defined in the
1940 Act) to the Fund except as provided herein and in the Investment Advisory
Contract or in such other manner as may be expressly agreed between Adviser and
Sub-Adviser.
Provided, however, that if the Adviser or Sub-Adviser shall resign
prior to the end of any term of this Agreement or for any reason be unable or
unwilling to serve for a successive term which has been approved by the
Trustees of the Trust pursuant to the provisions of Paragraph 3 of this
Agreement or Paragraph 6 of the Investment Advisory Contract, the remaining
party, Sub-Adviser or Adviser as the case may be, shall not be prohibited from
serving as an investment adviser to such Fund by reason of the provisions of
this Paragraph 6.
7. In the absence of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the obligations or duties under this
Contract on the part of Sub-Advisor, Sub-Advisor and its affiliates shall not
be liable to the Adviser, the Trust, or to any of the Funds or to any
shareholder for any act or omission in the course of or connected in any way
with rendering services or for any losses that may be sustained in the
purchase, holding, or sale of any security.
8. This Agreement may be amended from time to time by agreement
of the parties hereto provided that such amendment shall be approved both by
the vote of a majority of Trustees of the Trust, including a majority of
Trustees who are not parties to this Agreement or interested persons, as
defined in Section 2(a)(19) of the 1940 Act, of any such party at a meeting
called for that purpose, and, where required by Section 15(a)(2) of the 1940
Act, by the holders of a majority of the outstanding voting securities (as
defined in Section 2(a)(42) of the 1940 Act) of the Fund.
-2-
EXHIBIT A
to the
Sub-Advisory Agreement
PEACHTREE FUNDS
Peachtree Georgia Tax-Free Income Fund
Peachtree Government Money Market Fund
For all services rendered by Sub-Adviser hereunder, Adviser shall pay
Sub-Adviser a Sub-Advisory Fee equal to .055 of 1% of the average daily net
assets of each of the above-mentioned portfolios. The Sub-Advisory Fee shall
be accrued daily, and paid daily as set forth in the Investment Advisory
Contract dated January , 1996.
--
This Exhibit duly incorporates by reference the Sub-Advisory Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf by their duly authorized officers, and their
corporate seals to be affixed hereto this day of January, 1996.
--
ATTEST: NationsBanc Advisors, Inc.
By:
- ------------------------------ -------------------------------------
Secretary Vice President
[Corporate Seal]
TradeStreet Investment Associates, Inc.
By:
- ------------------------------ --------------------------------------
Secretary Vice President
[Corporate Seal]
EXHIBIT B
to the
Sub-Advisory Agreement
PEACHTREE FUNDS
Peachtree Bond Fund
For all services rendered by Sub-Adviser hereunder, Adviser shall pay
Sub-Adviser a Sub-Advisory Fee equal to .15 of 1% of the average daily net
assets of the above-mentioned portfolio. The Sub-Advisory Fee shall be accrued
daily, and paid daily as set forth in the Investment Advisory Contract dated
January , 1996.
--
This Exhibit duly incorporates by reference the Sub-Advisory Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf by their duly authorized officers, and their
corporate seals to be affixed hereto this day of January, 1996.
--
ATTEST: NationsBanc Advisors, Inc.
By:
- ----------------------------- ------------------------------------
Secretary Vice President
[Corporate Seal]
TradeStreet Investment Associates, Inc.
By:
- ----------------------------- ------------------------------------
Secretary Vice President
[Corporate Seal]
EXHIBIT C
to the
Sub-Advisory Agreement
PEACHTREE FUNDS
Peachtree Equity Fund
For all services rendered by Sub-Adviser hereunder, Adviser shall pay
Sub-Adviser a Sub-Advisory Fee equal to .25 of 1% of the average daily net
assets of the above-mentioned portfolio. The Sub-Advisory Fee shall be accrued
daily, and paid daily as set forth in the Investment Advisory Contract dated
January , 1996. This Exhibit duly incorporates by reference the Sub-Advisory
--
Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed on their behalf by their duly authorized officers, and their
corporate seals to be affixed hereto this day of January, 1996.
--
ATTEST: NationsBanc Advisors, Inc.
By:
- ---------------------------- -------------------------------------
Secretary Vice President
[Corporate Seal]
TradeStreet Investment Associates, Inc.
By:
- ---------------------------- -------------------------------------
Secretary Vice President
[Corporate Seal]
EXHIBIT D
to the
Sub-Advisory Agreement
PEACHTREE FUNDS
Peachtree Georgia Tax-Free Income Fund
For all services rendered by Sub-Adviser hereunder, Adviser shall pay
Sub-Adviser a Sub-Advisory Fee equal to .07 of 1% of the average daily net
assets of the above-mentioned portfolio. The Sub-Advisory Fee shall be accrued
daily, and paid daily as set forth in the Investment Advisory Contract dated
January , 1996.
--
This Exhibit duly incorporates by reference the Sub-Advisory Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on their behalf by their duly authorized officers, and their
corporate seals to be affixed hereto this day of January, 1996.
--
ATTEST: NationsBanc Advisors, Inc.
By:
- ------------------------------ -------------------------------------
Secretary Vice President
[Corporate Seal]
TradeStreet Investment Associates, Inc.
By:
- ------------------------------ -------------------------------------
Secretary Vice President
[Corporate Seal]
APPENDIX A
PEACHTREE FUNDS
THE PEACHTREE FUNDS [NAME OF PORTFOLIO]
Proxy Services
Post Office Box 9153 THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
Farmingdale, NY 11735- OF PEACHTREE FUNDS FOR USE AT THE SPECIAL MEETING OF SHAREHOLDERS TO BE HELD AT
9812 FEDERATED INVESTORS TOWER, 19TH FLOOR, 10001 LIBERTY AVENUE, PITTSBURGH,
PENNSYLVANIA 15222-3779, ON MONDAY, JANUARY 8, 1996, AT 1:00 P.M., E.S.T.
THE UNDERSIGNED HEREBY APPOINTS C. GRANT ANDERSON, STEPHEN R. NEWCAMP, JENNIFER
R. CONNER, AND MARJORIE B. SELLERS, AND EACH OF THEM, WITH FULL POWER OF
SUBSTITUTION, AS PROXIES OF THE UNDERSIGNED TO VOTE AT THE ABOVE-STATED SPECIAL
MEETING, AND AT ALL ADJOURNMENTS OR POSTPONEMENTS THEREOF, ALL SHARES OF
BENEFICIAL INTEREST EVIDENCING INTERESTS IN
[NAME OF PORTFOLIO]
HELD OF RECORD BY THE UNDERSIGNED ON DECEMBER 6, 1995, THE RECORD DATE FOR THE
SPECIAL MEETING, UPON THE FOLLOWING MATTERS AND UPON ANY OTHER MATTER THAT MAY
COME BEFORE THE SPECIAL MEETING, IN THEIR DISCRETION.
EVERY PROPERLY SIGNED PROXY WILL BE VOTED IN THE MANNER SPECIFIED HEREON, AND IN
THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING AUTHORITY TO VOTE
"FOR" PROPOSALS 1 AND 2.
PLEASE MARK, SIGN, DATE, AND RETURN THE PROXY CARD USING THE ENCLOSED ENVELOPE
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS [x] KEEP THIS PORTION FOR YOUR RECORDS
- ----------------------------------------------------------------------------------------------------------------------------------
[NAME OF PORTFOLIO] DETACH AND RETURN THIS PORTION ONLY
VOTE ON PROPOSALS
FOR AGAINST ABSTAIN 1. PROPOSAL TO APPROVE A NEW INVESTMENT ADVISORY CONTRACT (THE "NEW ADVISORY
CONTRACT") ON BEHALF OF EACH PORTFOLIO BETWEEN THE TRUST AND NATIONSBANC
ADVISORS, INC. ("NBAI"), THE TERMS OF WHICH ARE SUBSTANTIALLY SIMILAR TO THE
EXISTING INVESTMENT ADVISORY CONTRACT BETWEEN THE TRUST AND BANK SOUTH,
SUBJECT TO AND EFFECTIVE UPON THE CONSUMMATION OF THE ACQUISITION OF BANK
SOUTH BY NATIONSBANK CORPORATION.
FOR AGAINST ABSTAIN 2. PROPOSAL TO APPROVE A NEW SUB-ADVISORY CONTRACT ON BEHALF OF EACH PORTFOLIO
BETWEEN NBAI AND ITS AFFILIATE, TRADESTREET INVESTMENT ASSOCIATES, INC.,
SUBJECT TO THE APPROVAL OF THE NEW ADVISORY CONTRACT, AND SUBJECT TO AND
EFFECTIVE UPON THE CONSUMMATION OF THE ACQUISITION OF BANK SOUTH BY
NATIONSBANK CORPORATION.
3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENTS OR
POSTPONEMENTS THEREOF.
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Signature Date Signature (Joint Owners) Date
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN. WHEN
SIGNING AS ATTORNEY OR EXECUTOR, ADMINISTRATOR, TRUSTEE, OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A
CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN
IN PARTNERSHIP NAME BY AUTHORIZED PERSON.
THIS PROXY MAY BE REVOKED BY THE SHAREHOLDER PRIOR TO ITS EXERCISE