-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AW2ExZwlYeTzebBeviFh/+lOszfdKcoKvR0fjTT/V+c8cHcmccYSR/rXTzfV9PwC 13ZlsJ2xbzXBDSaHWT5pug== 0000950109-02-000366.txt : 20020414 0000950109-02-000366.hdr.sgml : 20020413 ACCESSION NUMBER: 0000950109-02-000366 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20020122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONS FUNDS TRUST CENTRAL INDEX KEY: 0001097519 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 333-89661 FILM NUMBER: 02514370 BUSINESS ADDRESS: STREET 1: ONE BANK OF AMERICA PLAZA CITY: CHARLOTTE STATE: NC ZIP: 28255 BUSINESS PHONE: 8003217854 MAIL ADDRESS: STREET 1: ONE BANKOF AMERICA PLAZA CITY: CHARLOTTE STATE: NC ZIP: 28255 497 1 d497.txt 497C - NATIONS FUNDS TRUST NATIONS FUND TRUST NATIONS FUND, INC. NATIONS RESERVES One Bank of America Plaza 101 South Tryon Street Charlotte, North Carolina 28255 Telephone: (800) 653-9427 January 14, 2002 Dear Shareholder: We are pleased to invite you to special meetings of shareholders of Nations Prime Fund, Nations Cash Reserves, Nations Treasury Fund, Nations Treasury Reserves, Nations Government Money Market Fund and Nations Government Reserves (collectively, the "Funds"). The meetings will be jointly held at 10:00 a.m., Eastern time, on March 27, 2002, at One Bank of America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina (the "Meetings"). At the Meetings, you will be asked to approve the proposed reorganization (the "Reorganization") of your Fund into an acquiring mutual fund (an "Acquiring Fund") in Nations Funds Trust, another registered investment company within the Nations Funds family. If you own shares of Nations Cash Reserves, Nations Treasury Reserves or Nations Government Reserves, the investment objective, principal investment strategies and investment risks of your Fund will be identical to those of the corresponding Acquiring Fund. If you own shares of Nations Prime Fund, Nations Treasury Fund or Nations Government Money Market Fund, the investment objective, principal investment strategies and investment risks of your Fund will be substantially similar to those of the corresponding Acquiring Fund. The Reorganization will not cause a change to the investment adviser and sub-adviser who currently manage your Fund. Nor will the Reorganization cause any change to your Fund's total operating expense ratios (after waivers and/or reimbursements). In addition, the features and services that are available to you today as a shareholder generally will continue to be available to you as an Acquiring Fund shareholder after the Reorganization. THE BOARDS OF TRUSTEES OF NATIONS FUND TRUST AND NATIONS RESERVES AND THE BOARD OF DIRECTORS OF NATIONS FUND, INC. UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR THE PROPOSED REORGANIZATION. The Reorganization offers several potential benefits. First, management and the Boards of Trustees and Directors believe that combining like Funds should lead to various benefits that come from greater asset size, including potential economies of scale by eliminating certain duplicative costs associated with maintaining those Funds as separate series and by spreading remaining costs over a larger, combined asset base. The Reorganization is part of a broader initiative to streamline the operations of the Nations Funds family, which currently consists of several registered investment companies. As part of the broader initiative, management expects to reduce the number of registered investment companies in the Nations Funds family without necessarily impacting investment alternatives. Streamlining the Nations Funds family in this fashion may lead to additional cost savings by reducing accounting, legal and securities registration costs. Also, the Acquiring Funds will be part of a Delaware business trust, which generally is viewed as having more flexibility in its operations than a Massachusetts business trust (like Nations Fund Trust or Nations Reserves) or a Maryland corporation (like Nations Fund, Inc.). Finally, each Acquiring Fund will have more flexibility in its investment policies than your current Fund, including policies that would permit it to adopt a "master-feeder" structure. A master-feeder structure, if adopted in the future, would allow an Acquiring Fund to access other distribution channels that might not otherwise be available, thereby potentially achieving additional economies of scale and other benefits that come from greater asset size. If shareholder approval is obtained and the other conditions to the Reorganization are satisfied, it is anticipated that each Fund will be reorganized into its corresponding Acquiring Fund on or about May 10, 2002, when Fund shares will be exchanged for shares of a designated class of shares of the corresponding Acquiring Fund of equal dollar value. The exchange of shares in the Reorganization is expected to be tax-free under federal income tax law. Shareholders are not expected to bear any of the customary expenses of the Reorganization because of existing expense arrangements. The formal Notice of Special Meetings, Combined Proxy Statement/Prospectus and Proxy Ballot(s) are enclosed. The Reorganization and the reasons for the unanimous recommendation of the Boards are discussed in more detail in the enclosed materials, which you should read carefully. If you have any questions, please do not hesitate to contact us at the toll-free number set forth above. We look forward to your attendance at the Meetings or to receiving your Proxy Ballot(s) so that your shares may be voted at the Meetings. Sincerely, A. MAX WALKER President and Chairman of the Boards of Nations Fund Trust, Nations Fund, Inc. and Nations Reserves YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN. PLEASE VOTE BY SUBMITTING YOUR PROXY BALLOT(S) TODAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. YOU MAY ALSO SUBMIT YOUR PROXY BY A TOLL-FREE PHONE CALL OR BY VOTING ON-LINE, AS INDICATED BELOW. Two Quick And Easy Ways To Submit Your Proxy As a valued Fund shareholder, your proxy vote is important to us. That's why we've made it faster and easier to submit your proxy at your convenience, 24 hours a day. After reviewing the enclosed Combined Proxy Statement/Prospectus ("Proxy/Prospectus") select one of the following quick and easy methods to submit your proxy--accurately and quickly. Vote On-Line Vote By Toll-Free Phone Call 1. Read the enclosed Proxy/Prospectus and have 1. Read the enclosed Proxy/Prospectus and have your Proxy Ballot(s)* at hand. your Proxy Ballot(s)* at hand. 2. Go to Web site www.proxyvote.com 2. Call the toll-free number on your Proxy Ballot(s) . 3. Enter the 12-digit Control Number found on your 3. Enter the 12-digit Control Number found on your Proxy Ballot(s). Proxy Ballot(s) . 4. Submit your proxy using the easy-to-follow 4. Submit your proxy using the easy-to-follow instructions. instructions.
* Do not mail the Proxy Ballot(s) if submitting your proxy by Internet or telephone. 2 NATIONS FUND TRUST NATIONS FUND, INC. NATIONS RESERVES One Bank of America Plaza 101 South Tryon Street Charlotte, North Carolina 28255 Telephone: (800) 653-9427 NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS To Be Held on March 27, 2002 Shareholders: PLEASE TAKE NOTE THAT special meetings of shareholders of Nations Prime Fund and Nations Treasury Fund of Nations Fund, Inc.; Nations Cash Reserves, Nations Treasury Reserves and Nations Government Reserves of Nations Reserves and Nations Government Money Market Fund of Nations Fund Trust (collectively, the "Funds") will be jointly held at 10:00 a.m., Eastern time, on March 27, 2002, at One Bank of America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina, for the purpose of considering and voting upon: Item 1. A proposed agreement and plan of reorganization dated as of January 1, 2002 that provides for the reorganization of your Fund into a corresponding acquiring fund. Item 2. Such other business as may properly come before the meetings or any adjournment(s). Item 1 is described in the attached Combined Proxy Statement/Prospectus. THE BOARDS OF TRUSTEES OF NATIONS FUND TRUST AND NATIONS RESERVES AND THE BOARD OF DIRECTORS OF NATIONS FUND, INC. UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF THE PROPOSAL. Shareholders of record as of the close of business on December 27, 2001 are entitled to notice of, and to vote at, the meetings or any adjournment(s) thereof. SHAREHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE THE ACCOMPANYING PROXY BALLOT(S), WHICH IS BEING SOLICITED BY THE BOARD OF TRUSTEES OF NATIONS FUND TRUST AND NATIONS RESERVES AND THE BOARD OF DIRECTORS OF NATIONS FUND, INC. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE MEETINGS. SHAREHOLDERS ALSO MAY SUBMIT THEIR PROXIES: 1) BY TELEPHONE AT THE TOLL-FREE NUMBER SHOWN ON THEIR PROXY BALLOT(S); OR 2) ON-LINE AT THE WEBSITE WWW.PROXYVOTE.COM. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO NATIONS FUNDS A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY DATED PROXY OR BY ATTENDING THE MEETINGS AND VOTING IN PERSON. By Order of the Boards of Directors and Trustees, RICHARD H. BLANK, JR. Secretary of Nations Fund Trust, Nations Fund, Inc. and Nations Reserves January 14, 2002 COMBINED PROXY STATEMENT/PROSPECTUS Dated January 14, 2002 NATIONS FUND TRUST NATIONS FUND, INC. NATIONS RESERVES One Bank of America Plaza 101 South Tryon Street Charlotte, North Carolina 28255 Telephone: (800) 653-9427 For ease of reading, certain terms or names that are used in this Proxy/Prospectus have been shortened or abbreviated. A list of these terms and their corresponding full names or definitions can be found at the end of this Proxy/Prospectus in Appendix A. A shareholder may find it helpful to review the terms and names in Appendix A before reading the Proxy/Prospectus. This Proxy/Prospectus, which should be retained for future reference, sets forth concisely the information about the proposed Reorganization of the Funds into corresponding Acquiring Funds, and the information about the Acquiring Funds that a shareholder should know before deciding how to vote. It is both a proxy statement for the Meetings and a prospectus offering shares in the Acquiring Funds. However, it is not a prospectus for shareholders of Cash Reserves, Treasury Reserves or Government Reserves because these Funds are proposed to be reorganized into Acquiring Funds that are "shell" funds--that is to say, they have identical investment objectives, principal investment strategies and risks as those Funds. Additional information about the Funds and Acquiring Funds is available in their prospectuses, statements of additional information (or SAIs) and annual and semi-annual reports to shareholders, all of which are incorporated herein by reference. For Prime Fund, Treasury Fund and Government Money Market Fund shareholders, a copy of each applicable Acquiring Fund prospectus also accompanies this Proxy/Prospectus in Appendix D. The Funds' prospectuses, annual reports to shareholders for the fiscal year ended March 31, 2001 and semi-annual reports to shareholders for the fiscal period ended September 30, 2001 previously have been mailed to shareholders. The SAI relating to this Proxy/Prospectus also is incorporated by reference and is dated January 14, 2002. Additional copies of any of these documents are available without charge by writing to the address given above or by calling (800) 653-9427. These documents also are available on the SEC website at www.sec.gov. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS PROXY/PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The Meetings have been called to consider Reorganization Agreements dated as of January 1, 2002 that provide for the reorganization of each Fund into a corresponding Acquiring Fund. It is expected that this Proxy/Prospectus will be mailed to shareholders on or about January 14, 2002. At the Meetings, shareholders will be asked to approve the reorganization of each Fund into an Acquiring Fund as set forth below.
Will Be Reorganized into these Acquiring Funds of These Funds Nations Funds Trust - ------------------------------------------------------------------------------------------------------------------ Prime Fund [GRAPHIC] Cash Reserves (acquiring) Thin Arrow Cash Reserves - ------------------------------------------------------------------------------------------------------------------ Treasury Fund [GRAPHIC] Treasury Reserves (acquiring) Thin Arrow Treasury Reserves - ------------------------------------------------------------------------------------------------------------------ Government Money Market Fund [GRAPHIC] Government Reserves (acquiring) Thin Arrow Government Reserves - ------------------------------------------------------------------------------------------------------------------
1 TABLE OF CONTENTS
Page No. -------- SUMMARY......................................................................................... 3 Fee Tables................................................................................... 3 Overview of the Reorganization Agreements.................................................... 4 Overview of Investment Objective and Principal Investment Strategies......................... 4 Overview of Service Providers................................................................ 4 Overview of Purchase, Redemption, Distribution, Exchange and Other Procedures................ 4 Federal Income Tax Consequences.............................................................. 5 Principal Risk Factors....................................................................... 5 THE REORGANIZATION.............................................................................. 6 Description of the Reorganization Agreements................................................. 6 Reasons for the Reorganization and Other Considerations...................................... 7 Board Consideration.......................................................................... 8 Comparison of Investment Management, Investment Objective and Principal Investment Strategies................................................................................. 9 Comparison of Investment Policies and Restrictions........................................... 11 Comparison of Forms of Business Organization................................................. 12 Comparison of Advisory and Other Service Arrangements and Fees............................... 13 Investment Advisory and Sub-Advisory Services and Fees....................................... 13 Comparison of Purchase, Redemption, Distribution and Exchange Policies and Other Shareholder Transactions and Services.................................................................. 14 Material Federal Income Tax Consequences..................................................... 18 Capitalization............................................................................... 19 VOTING MATTERS.................................................................................. 26 General Information.......................................................................... 26 Quorum....................................................................................... 26 Shareholder Approval......................................................................... 27 Principal Shareholders....................................................................... 27 Annual Meetings and Shareholder Meetings..................................................... 41 ADDITIONAL INFORMATION ABOUT THE TRUST, THE COMPANY, RESERVES AND NATIONS FUNDS TRUST........................................................................... 41 Financial Statements......................................................................... 41 Other Business............................................................................... 42 Shareholder Inquiries........................................................................ 42 APPENDICES A--GLOSSARY B--EXPENSE SUMMARIES OF THE FUNDS AND ACQUIRING FUNDS C--COMPARISON OF FUNDAMENTAL POLICIES AND LIMITATIONS OF THE FUNDS AND THE ACQUIRING FUNDS D--PROSPECTUS OF THE ACQUIRING FUNDS
2 SUMMARY The following is an overview of certain information relating to the proposed Reorganization. More complete information is contained throughout the Proxy/Prospectus and its Appendices. Fee Tables The table shows: (i) the current expense ratios of each of Prime Fund, Treasury Fund and Government Money Market Fund; and (ii) the pro forma expense ratios of their corresponding Acquiring Funds. The table shows that (after waivers and expense reimbursements) the pro forma expense ratios of the Acquiring Funds after the Reorganization will be the same as they were for the Funds. For certain classes of the Funds, the pro forma expense ratios (before waivers and expense reimbursements) will be higher. All expense ratios shown are annualized total operating expense ratios. Pro forma expense ratios are based upon the fee arrangements that will be in place upon consummation of the Reorganization and assume in each case that both Prime Fund and Cash Reserves, Treasury Fund and Treasury Reserves and Government Money Market Fund and Government Reserves shareholders approve the Reorganization. It is possible that one Fund's shareholders will approve the Reorganization while the shareholders of the other Fund involved in the Reorganization do not. These scenarios (if they result in any change to a shareholder's current expense ratios) are shown, along with other detailed pro forma expense information, in Appendix B. The table does not show current or pro forma expenses for Cash Reserves, Treasury Reserves or Government Reserves because those expenses (both before and after any waivers or expense reimbursements) will not change as a result of the Reorganization.
Pro Forma Total Total Operating Expense Operating Expense Ratios (before/after Ratios (before/after waivers and Combined Acquiring Fund/ waivers and Fund/Share Class reimbursements)* Class Post-Reorganization reimbursements)* - ---------------- ----------------------- ------------------------------- -------------------- Prime Fund (right arrow) Cash Reserves (acquiring) Daily 1.03%/0.80% Daily 0.87%/0.80% Investor A 0.68%/0.65% Investor A 0.72%/0.65% Investor B 0.68%/0.55% Investor 0.62%/0.55% Investor C 0.58%/0.55% Investor 0.62%/0.55% Marsico 0.58%/0.55% Marsico 0.62%/0.55% Primary A 0.33%/0.30% Trust Class 0.37%/0.30% Primary B 0.58%/0.55% Investor 0.62%/0.55% - ---------------------------------------------------------------------------------------------------------------- Treasury Fund (right arrow) Treasury Reserves (acquiring) Daily 1.03%/0.80% Daily 0.87%/0.80% Investor A 0.68%/0.65% Investor A 0.72%/0.65% Investor B 0.68%/0.55% Investor 0.62%/0.55% Investor C 0.58%/0.55% Investor 0.62%/0.55% Primary A 0.33%/0.30% Trust Class 0.37%/0.30% Primary B 0.58%/0.55% Investor 0.62%/0.55% - ---------------------------------------------------------------------------------------------------------------- Government Money Mkt Fund (right arrow) Government Reserves (acquiring) Daily 1.08%/0.80% Daily 0.88%/0.80% Investor A 0.73%/0.65% Investor A 0.73%/0.65% Investor B 0.73%/0.55% Investor 0.63%/0.55% Investor C 0.63%/0.55% Investor 0.63%/0.55% Primary A 0.38%/0.30% Trust Class 0.38%/0.30% Primary B 0.63%/0.55% Investor 0.63%/0.55%
- -------- * The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. 3 Overview of the Reorganization Agreements The documents that govern the Reorganization are the Reorganization Agreements. There are three Reorganization Agreements: one for the Trust and its Fund, one for the Company and its Funds and one for Reserves and its Funds. The Reorganization Agreements provide for: (i) the transfer of all of the assets and liabilities of each Fund to its corresponding Acquiring Fund in exchange for shares of equal value of designated classes of the Acquiring Fund; and (ii) the distribution of the Acquiring Fund shares to Fund shareholders in liquidation of that Fund. The Reorganization Agreements also contemplate that, assuming the Reorganization is approved by Fund shareholders, as well as by shareholders of all other funds of the Trust, the Company and Reserves that are being asked to approve separate reorganizations of their funds, officers of the Trust, the Company and Reserves will dissolve each investment company under state law and also de-register each of them under the 1940 Act. The Reorganization is subject to a number of conditions, including approval by Fund shareholders. As a result of the Reorganization, Fund shareholders will become shareholders of the corresponding Acquiring Fund and will hold, immediately after the Reorganization, Acquiring Fund shares having a total dollar value equal to the total dollar value of the shares of the Fund that the shareholder held immediately before the Reorganization. The Reorganization is expected to occur on or about May 10, 2002. The exchange of Fund shares for corresponding Acquiring Fund shares in the Reorganization is expected to be tax-free under federal income tax law and Fund shareholders will not pay any sales charge or sales load on the exchange. The Reorganization Agreements provide that the Funds will only bear the expenses of the Reorganization if those expenses do not exceed certain "caps" that have been put in place. Because of these caps, it is not expected that any of the Funds will bear the costs associated with the Reorganization. The Funds, however, ordinarily bear certain expenses such as brokerage commissions and other transaction charges, as well as interest on borrowed money, and will bear these expenses and extraordinary expenses that may be associated with the Reorganization. For more information about the Reorganization and the Reorganization Agreements, see "The Reorganization--Description of the Reorganization Agreements." Overview of Investment Objective and Principal Investment Strategies The investment objective and principal investment strategies of Prime Fund, Treasury Fund and Government Money Market Fund and their corresponding Acquiring Funds are substantially similar. The investment objective and principal investment strategies of Cash Reserves, Treasury Reserves and Government Reserves and their corresponding Acquiring Funds are substantially similar. For additional information about the similarities and differences between the investment objectives and principal investment strategies of the Funds and Acquiring Funds, see "The Reorganization--Comparison of Investment Management, Investment Objective and Principal Investment Strategies." Overview of Service Providers The Funds and Acquiring Funds have the same service providers, including BA Advisors as investment adviser and BACAP as investment sub-adviser. Please see the discussion under "The Reorganization--Comparison of Advisory and Other Service Arrangements and Fees." Overview of Purchase, Redemption, Distribution, Exchange and Other Procedures After the Reorganization, the purchase, redemption, distribution, exchange and other policies and procedures of each share class of the Acquiring Funds will be similar to those of the corresponding share class of the Funds prior to the Reorganization. However, there will be some differences for Daily, Investor A, Investor B, 4 Investor C, Marsico, Primary A, Primary B and Investor Class shareholders. For example, certain classes of Acquiring Fund shareholders will be able to take advantage of lower minimum initial investment and lower minimum additional investment requirements. In addition, certain Acquiring Fund classes will have distribution, shareholder servicing and/or shareholder administration plans where the corresponding Fund classes do not. These differences can be largely attributed to the different channels through which certain Fund shares and Acquiring Fund shares are offered for sale. While these changes may result in fees for certain classes of Fund shareholders, there will be no change to total operating expense ratios (after waivers and expense reimbursements) for any Fund shareholder after the Reorganization. For more information concerning these aspects of the Reorganization, see "The Reorganization--Comparison of Purchase, Redemption, Distribution and Exchange Policies and other Shareholder Transactions and Services." Federal Income Tax Consequences The Reorganization is not expected to result in the recognition of gain or loss, for federal income tax purposes, by the Funds, the Acquiring Funds or their respective shareholders. However, the sale of securities by any Fund prior to the Reorganization, whether in the ordinary course of business or in anticipation of the Reorganization, could result in taxable distributions to such Fund's shareholders. See "The Reorganization--Material Federal Income Tax Consequences" for additional information. Since their inception, each of the Funds and Acquiring Funds believes it has qualified as a "regulated investment company" under the Code. Accordingly, each Fund and Acquiring Fund believes it has been, and expects to continue to be, relieved of any federal income tax liability on its taxable income distributed to shareholders. Principal Risk Factors The following principal investment risks are relevant to an investment in the Acquiring Funds: Cash Reserves (acquiring) and Treasury Reserves (acquiring) . Investment strategy risk--Although the Fund tries to maintain a share price of $1.00, an investment in the Fund may lose money. An investment in this Fund is not a bank deposit and is not insured or guaranteed by Bank of America, the FDIC or any other government agency. . Income/principal payment risk--The Fund's ability to pay distributions depends on the creditworthiness of the issuers of the securities the Fund holds. The Fund may not be able to pay distributions, or could lose money, if the issuer of a security is unable to pay interest or repay principal when it's due. . Changing to a feeder fund--Unlike traditional mutual funds, which invest in individual securities, a "feeder fund" invests all of its net investable assets in another fund, called a "master portfolio." Other feeder funds generally also invest in a master portfolio. The master portfolio invests in individual securities and has the same investment objective, investment strategies and principal risks as the feeder funds. This structure can help reduce a feeder fund's expenses because its assets are combined with those of other feeder funds. If a master portfolio doesn't attract other feeder funds, however, a feeder fund's expenses could be higher than those of a traditional mutual fund. Each Acquiring Fund may become a feeder fund if the Board decides this would be in the best interests of shareholders. We don't require shareholder approval to make the change, but we'll notify you if it happens. If a Fund becomes a feeder fund, it will have the additional risks of investing in a master portfolio. Government Reserves (acquiring) . Investment strategy risk--Although the Fund tries to maintain a share price of $1.00, an investment in the Fund may lose money. An investment in this Fund is not a bank deposit and is not insured or guaranteed by Bank of America, the FDIC or any other government agency. 5 . Income/principal payment risk--The Fund's ability to pay distributions depends on the creditworthiness of the issuers of the securities the Fund holds. The Fund may not be able to pay distributions, or could lose money, if the issuer of a security is unable to pay interest or repay principal when it's due. . Tax considerations--Most of the distributions paid by the Fund come from interest on U.S. government and U.S. Treasury securities, which for most states is free from state income tax, but will be subject to federal tax. Any portion of a distribution that comes from income paid on other kinds of securities or from realized capital gains is generally subject to federal, state and local taxes. You should consult with your own tax adviser to determine the tax consequences to you of investing in the Fund. . Changing to a feeder fund--Unlike traditional mutual funds, which invest in individual securities, a "feeder fund" invests all of its net investable assets in another fund, called a "master portfolio." Other feeder funds generally also invest in a master portfolio. The master portfolio invests in individual securities and has the same investment objective, investment strategies and principal risks as the feeder funds. This structure can help reduce a feeder fund's expenses because its assets are combined with those of other feeder funds. If a master portfolio doesn't attract other feeder funds, however, a feeder fund's expenses could be higher than those of a traditional mutual fund. Each Acquiring Fund may become a feeder fund if the Board decides this would be in the best interests of shareholders. We don't require shareholder approval to make the change, but we'll notify you if it happens. If a Fund becomes a feeder fund, it will have the additional risks of investing in a master portfolio. Comparison to the Funds: The investment risks of the Prime Fund, Treasury Fund and Government Money Market Fund are substantially similar to the investment risks of their corresponding Acquiring Funds. In addition, the Funds do not have the ability to convert to a feeder fund in a master-feeder structure without shareholder approval. The Acquiring Funds will have that ability and accordingly, if the structure is adopted, an investment in an Acquiring Fund comes with the additional considerations relevant to an investment in a feeder fund. THE REORGANIZATION Description of the Reorganization Agreements As noted in the Summary, the Reorganization Agreements are the governing documents of the Reorganization. Among other things, each Reorganization Agreement provides for: (i) the transfer of all of the assets and liabilities of a Fund to its Acquiring Fund in exchange for shares of equal value of the designated classes of the Acquiring Fund; and (ii) the distribution of Acquiring Fund shares to Fund shareholders in liquidation of their Fund. Each Reorganization Agreement also sets forth representations and warranties of the parties, describes the mechanics of the transaction and includes a number of conditions to the completion of the Reorganization, such as the requirement that a good standing certificate be obtained by each party and that no stop-orders or similar regulatory barriers have been issued by the SEC. The completion of the Reorganization also is conditioned upon the Trust, the Company, Reserves and Nations Funds Trust, as applicable, receiving an opinion from Morrison & Foerster LLP that the exchange of shares contemplated under the Reorganization will be tax-free under federal income tax law. Each Reorganization Agreement provides that the Reorganization may be abandoned at any time before Closing by any party to a Reorganization Agreement if any condition is not satisfied or otherwise by mutual consent of the parties. At any time before or (to the extent permitted by law) after approval of a Reorganization Agreement by Fund shareholders: (i) the parties may, by written agreement authorized by the Board of the Trust, the Company, Reserves or Nations Funds Trust, as applicable, and with or without the approval of their shareholders, amend any of the provisions of the respective Reorganization Agreement; and (ii) either party may waive any default by the other party for the failure to satisfy any of the conditions to its obligations (the waiver to be in writing and authorized by the respective Board with or without the approval of shareholders). Additionally, 6 each Reorganization Agreement provides that the Reorganization of one Fund is not conditioned upon the Reorganization of any other Fund. Upon completion of the Reorganization, all outstanding shares of each Fund will be canceled. Exchange or redemption requests received thereafter will be deemed to be exchange or redemption requests for shares of the corresponding Acquiring Fund. Each Reorganization Agreement provides that the Funds will only bear customary expenses of the Reorganization to the extent that the Fund's total operating expenses have not exceeded certain total operating expense "caps" that have been put in place. Because of these total operating expense caps, it is not expected that any of the Funds will bear the customary expenses associated with the Reorganization, including proxy solicitation costs. The Funds, however, ordinarily bear certain expenses such as brokerage commissions and other transaction charges, as well as interest on borrowed money, and will continue to bear these expenses and extraordinary expenses that may be associated with the Reorganization. A copy of each Reorganization Agreement is available at no charge by calling (800) 653-9427 or writing Nations Funds at the address listed on the first page of the Proxy/Prospectus. Copies of the Reorganization Agreements are also available at the SEC's website (www.sec.gov). Reasons for the Reorganization and Other Considerations . The Nations Funds Family Reorganization. The Reorganization is the final phase of a broader initiative begun two years ago to streamline the operations of the Nations Funds Family. A primary goal of the initiative is to reduce the number of registered investment companies in the Nations Funds Family without necessarily impacting investment alternatives. This final phase would reorganize all of the remaining funds of the Trust, the Company and Reserves in the Nations Funds Family into series of Nations Funds Trust. Management and the Boards believe that operating fewer registered investment companies offers potential efficiencies and benefits to shareholders over the long-term. These efficiencies and benefits include potential cost savings from the reduction of accounting, legal, filing and securities registration costs. If shareholders of the Funds approve the Reorganization (and shareholders of all of the other funds of the Trust, the Company and Reserves approve similar reorganizations), management will de-register and dissolve the Trust, the Company and Reserves. The Acquiring Funds will be part of a Delaware business trust, which generally is viewed as having more flexibility in its operations than a Maryland corporation (like the Company) or Massachusetts business trusts (like the Trust and Reserves). Also, as part of Nations Funds Trust, the Acquiring Funds will be governed under a more flexible charter document which can be amended by Nations Funds Trust's Board without the necessity of soliciting shareholders, thereby saving costs relating to proxy solicitations on certain routine matters. Specifically, the Acquiring Funds will have greater flexibility in their investment policies, including policies that, for example, will permit them to: . adopt a "master-feeder" structure. A master-feeder structure will only be adopted if the Board approves the change as being in the best interests of an Acquiring Fund and its shareholders. In evaluating this change, the Board will consider both the potential benefits and disadvantages of this type of structure. One potential advantage is that feeder funds investing in the same master portfolio can reduce their expenses through sharing of the costs of managing and administering a larger combined pool of assets. Converting to a master portfolio can provide access to other distribution channels--such as private investment companies or offshore fund investors--that would not otherwise be available to stand-alone mutual funds. One potential disadvantage is that if there are other feeders in the master portfolio, an Acquiring Fund's voting impact on the master portfolio could be diminished. Additionally, if the Acquiring Fund were to withdraw its investment from the master portfolio, such withdrawal could result in a distribution in kind of portfolio securities (as opposed to a distribution of cash) by the master 7 portfolio to the Acquiring Fund. That distribution could result in a less diversified portfolio of investments and could adversely affect the liquidity of the Acquiring Fund's investment portfolio. In addition, if securities were distributed, the Acquiring Fund generally would incur brokerage commissions, capital gains or losses, and/or other charges if it converted the securities to cash. . participate in interfund lending among the Nations Funds Family. Management expects to file an exemptive application with the SEC that would permit funds in the Nations Funds Family to lend to and borrow money from each other for temporary purposes. At any particular time, the Funds may need to borrow money for temporary purposes to satisfy redemption requests, to cover unanticipated cash shortfalls such as a trade "fail" in which cash payment for a security sold by a Fund has been delayed, or for other temporary purposes. The Funds currently have a line of credit with their custodian, which is designed to cover these borrowing needs. The interfund lending arrangements are expected to reduce the Acquiring Funds' potential borrowing costs and provide the lending Acquiring Funds with the ability to earn interest on short-term lendings to other Nations Funds. The Funds' fundamental investment policies currently prohibit the Funds from participating in the proposed interfund lending arrangements. The Acquiring Funds, however, have adopted fundamental investment policies that will allow them to take advantage of these arrangements, assuming that the SEC issues an exemptive order. . Achieving economies of scale. In addition to the reasons cited above, an additional reason for combining the Prime Fund with Cash Reserves, the Treasury Fund with Treasury Reserves and the Government Money Market Fund with Government Reserves is that each Reorganization will result in a corresponding Acquiring Fund with a significantly larger asset size (assuming both Funds' shareholders approve the Reorganization). Because of the economies of scale that could result from larger asset size, management and the Boards may be able to offer Fund shareholders a substantially identical investment in an Acquiring Fund that will have the same total operating expense ratios (after waivers and expense reimbursements), with the potential for lower total operating expense ratios in the future. Board Consideration The Boards of the Trust, the Company and Reserves unanimously voted to approve the Reorganization Agreements at special meetings held on October 10, 2001. During deliberations, the Boards (with the advice and assistance of independent counsel) reviewed and considered, among other things: (1) the Reorganization as part of a broader initiative to streamline the operations of the Nations Funds Family; (2) the various aspects of the Reorganization and the Reorganization Agreement, including the fact that the Acquiring Funds will be part of a Delaware business trust that will allow the Acquiring Funds to be operated with greater flexibility; (3) the current asset levels of the Funds and the pro forma asset levels of the Acquiring Funds; (4) the investment advisory and other fees paid by the Funds, and the historical and projected expense ratios of the Funds, as compared with the expense ratios of their corresponding Acquiring Funds; (5) the historical performance record of the Funds; (6) the investment objectives and principal investment strategies of the Funds, and the fact that they are substantially identical to those of their corresponding Acquiring Funds; (7) the fact that Fund shareholders will experience beneficial and less restrictive changes in shareholder services; (8) the fact that the Acquiring Funds as part of Nations Funds Trust will have greater flexibility in their investment policies and will be governed under a more flexible charter document which could be amended by the Board of Nations Funds Trust without the necessity of soliciting shareholders, thereby potentially saving future costs relating to proxy solicitations on certain routine matters; (9) the anticipated tax-free nature of the exchange of shares in the Reorganization; (10) that shareholders would not bear the customary expenses of the Reorganization. The Boards also noted that the Funds, however, ordinarily bear brokerage commissions and other transaction charges, interest on borrowed money, and will bear those expenses and extraordinary expenses that may be associated with the Reorganization; and (11) potential benefits of the Reorganization, if any, to other persons, including BA Advisors and its affiliates (e.g., the benefit of consolidating resources within BA Advisors and its affiliates). 8 Based upon their evaluation of the information presented to them, and in light of the fiduciary duties under federal and state law, the Boards of the Trust, the Company and Reserves including all of the non-interested Directors/Trustees, determined that participation in the Reorganization, as contemplated by the respective Reorganization Agreements, was in the best interests of each Fund, and that the shares of each Fund will not be diluted as a result of the Reorganization. Similarly, the Board of Trustees of Nations Funds Trust, including all of the non-interested Trustees, also evaluated the Reorganization and based upon its evaluation of the information presented to it, and in light of its fiduciary duties under federal and state law, determined that participation in the Reorganization, as contemplated by each Reorganization Agreement, was in the best interests of the Acquiring Funds and that the shares of the Acquiring Funds will not be diluted as a result of the Reorganization. THE BOARDS OF THE TRUST, THE COMPANY AND RESERVES UNANIMOUSLY RECOMMEND THAT FUND SHAREHOLDERS VOTE TO APPROVE THEIR REORGANIZATION AGREEMENT. Comparison of Investment Management, Investment Objective and Principal Investment Strategies All of the Funds and their Acquiring Funds are advised by BA Advisors and sub-advised by BACAP. The investment objective and principal investment strategies of the Funds, although in some cases are worded somewhat differently, are either identical or substantially identical to those of their Acquiring Funds.
Fund Corresponding Acquiring Fund ---- ---------------------------- Investment Prime Fund--The Fund seeks the (right arrow) Cash Reserves (acquiring)--The Fund Objective maximization of current income to seeks to preserve principal value and the extent consistent with the maintain a high degree of liquidity preservation of capital and the while providing current income. maintenance of liquidity Principal The Fund pursues its objective by Identical Investment generally investing in a diversified Strategies portfolio of high quality money market instruments that, at the time of investment, are considered to have remaining maturities of 397 days or less. - --------------------------------------------------------------------------------------------------------- Investment Cash Reserves--The Fund seeks to (right arrow) Cash Reserves (acquiring)--identical Objective preserve principal value and maintain a high degree of liquidity while providing current income. Principal The Fund pursues its objective by Identical Investment generally investing in a diversified Strategies portfolio of high quality money market instruments that, at the time of investment, are considered to have remaining maturities of 397 days or less.
9
Fund Corresponding Acquiring Fund ---- ---------------------------- Investment Treasury Fund--The Fund's (right arrow) Treasury Reserves (acquiring)--The Objective investment objective is the Fund seeks to preserve principal value maximization of current income to and maintain a high degree of liquidity the extent consistent with the while providing current income. preservation of capital and the maintenance of liquidity. Principal The Fund pursues its objective by Identical Investment generally investing in a diversified Strategies portfolio of high quality money market instruments that, at the time of investment, are considered to have remaining maturities of 397 days or less. - ----------------------------------------------------------------------------------------------------------- Investment Treasury Reserves--The Fund seeks (right arrow) Treasury Reserves (acquiring)-- Objective to preserve principal value and Identical maintain a high degree of liquidity while providing current income. Principal The Fund pursues its objective by Identical Investment generally investing in a diversified Strategies portfolio of high quality money market instruments that, at the time of investment, are considered to have remaining maturities of 397 days or less. - ----------------------------------------------------------------------------------------------------------- Investment Government Money Market (right arrow) Government Reserves (acquiring)-- Objective Fund--The Fund seeks a high level The Fund seeks to preserve principal of current income as is consistent value and maintain a high degree of with liquidity and stability of liquidity while providing current principal. income. Principal The Fund pursues its objective by Identical Investment generally investing in a diversified Strategies portfolio of high quality money market instruments that, at the time of investment, are considered to have remaining maturities of 397 days or less. - ----------------------------------------------------------------------------------------------------------- Investment Government Reserves--The Fund (right arrow) Government Reserves (acquiring)-- Objective seeks to preserve principal value and Identical maintain a high degree of liquidity while providing current income. Principal The Fund pursues its objective by Identical Investment generally investing in a diversified Strategies portfolio of high quality money market instruments that, at the time of investment, are considered to have remaining maturities of 397 days or less.
10 If the Reorganization is approved, the resulting portfolios of each Acquiring Fund will combine the assets of each of its two corresponding Funds. The asset classes in which each Fund invests are substantially similar to those of the other Fund with which it will reorganize, as shown below: Comparison of Portfolio Holdings As of Fiscal Period Ended 9/30/2001
Prime Fund Cash Reserves - ---------------------------------------- --------------------------------------- Asset-backed securities: 2.3% Asset-backed securities: 3.3% Bank notes: 2.9% Bank notes: 2.1% Cert. of deposit (domestic): 4.3% Cert. of deposit (domestic): 3.0% Cert. of deposit (euro): 0.4% Cert. of deposit (euro): 2.0% Cert. of deposit (yankee): 14.8% Cert. of deposit (yankee): 16.0% Time deposits (euro): 0.0% Time deposits (euro): 2.0% Commercial paper: 40.4% Commercial paper: 37.6% Corporate bonds and notes: 25.3% Corporate bonds and notes: 18.5% Foreign bonds and notes: 0.0% Foreign bonds and notes: 1.2% Funding agreements: 2.2% Funding agreements: 0.8% Municipal bonds/notes: 1.1% Municipal bonds/notes: 0.3% Repurchase agreements: 0.5% Repurchase agreements: 5.9% U.S. gov't obligations: 5.5% U.S. gov't obligations: 7.4% Other assets and liabilities: 0.3% Other assets and liabilities: (0.1%) Treasury Fund Treasury Reserves - ---------------------------------------- --------------------------------------- U.S. Treasury bills: 27.7% U.S. Treasury bills: 30.1% U.S. Treasury notes: 16.7% U.S. Treasury notes: 18.2% Repurchase agreements: 55.3% Repurchase agreements: 51.5% Other assets and liabilities: 0.3% Other assets and liabilities: 0.2% Government Money Market Fund Government Reserves - ---------------------------------------- --------------------------------------- U.S. gov't and agency obligations: 99.9% U.S. gov't and agency obligations: 100% Other assets and liabilities: 0.1%
Comparison of Investment Policies and Restrictions The Acquiring Funds also will have a more streamlined set of fundamental investment policies than the Funds. Some of the Funds' current fundamental investment policies may limit their portfolio management team(s) from investing in a security or engaging in investment techniques even though consistent with a Fund's investment objective and believed to be a good investment. One reason for the Reorganization is to remove these restrictions that unnecessarily hamper the portfolio management team's investment discretion. Some of these restrictions were originally put in place by the Funds as a result of the directives of various state securities commissions. Changes to federal securities laws have superseded these directives and are, accordingly, no longer necessary. In addition, as discussed above, the Funds currently have fundamental investment policies that prohibit them from participating in interfund lending arrangements. The Acquiring Funds, however, have fundamental investment policies that will permit them to take part in these arrangements. Another reason for the Reorganization is management's desire to have uniform investment policies for all funds in the Nations Funds Family. Uniform policies should lead to efficiencies in administering the Funds' activities, including ensuring compliance with law and internal procedures. The Funds and Acquiring Funds have identical non-fundamental investment policies. 11 For a detailed comparison of the fundamental investment policies of the Funds and the Acquiring Funds, see Appendix C to this Proxy/Prospectus. Comparison of Forms of Business Organization Federal securities laws largely govern the way that mutual funds operate, but they do not cover every aspect of a fund's existence and operation. State law and a fund's governing documents fill in most of these gaps and typically create additional operational rules and restrictions that funds must follow. Cash Reserves, Treasury Reserves, Government Reserves and the Government Money Market Fund are series of Massachusetts business trusts. The Prime Fund and Treasury Fund are series of a Maryland corporation. The Acquiring Funds are series of a Delaware business trust. While the differences among these forms of organization are not extensive, one advantage of a Delaware business trust is its potential for greater flexibility. Generally, under Delaware business trust law, a mutual fund's governing instrument, called a declaration of trust, may establish the way it will operate with few state law requirements or prohibitions. Thus, mutual funds organized in Delaware generally have more flexibility in their operations and greater certainty about any operational restrictions than mutual funds organized elsewhere. The following discussion outlines some of the differences between the Trust and Reserves (which are Massachusetts business trusts), the Company (which is a Maryland corporation) and Nations Funds Trust (which is a Delaware business trust). . The Board of Trustees. The Board of Nations Funds Trust has eleven Trustees, ten of whom currently serve as Board members of the Trust, the Company and Reserves, with the eleventh currently serving in an advisory capacity to the Board of the Trust, the Company and Reserves. . Governing Law. Unlike Maryland corporate law and Massachusetts business trust law, the Delaware Business Trust Act has been specifically drafted to accommodate the unique governance needs of investment companies and provides that its policy is to give maximum freedom of contract to the trust instrument (discussed below) of a Delaware business trust. For example, Delaware law provides that, should a Delaware trust issue multiple series of shares, each series will not be liable for the debts of another series. Maryland law also allows the same. However, although remote, this is a potential risk in the case of a Massachusetts business trust, where state law does not clearly provide that one series is not liable for the debts of another series. In addition, Delaware has obtained a favorable national reputation for its business laws and business environment. The Delaware courts, which may be called upon to interpret the Delaware Business Trust Act, are among the nation's most highly respected and have particular expertise in corporate matters. Accordingly, there is a well-established body of precedent, which may be relevant in deciding issues pertaining to a Delaware business trust, which is not the case in Maryland or Massachusetts. . Governing Documents. Maryland corporations are typically governed by organizational documents called articles of incorporation and by-laws. Massachusetts business trusts and Delaware business trusts are governed by similar sets of documents, typically called declarations of trust and by-laws. These governing documents are generally similar, although there are some differences. For example, in order for the Company to dissolve under Maryland law, a majority of all outstanding shares of the Company generally must approve its dissolution. In contrast, the Declaration of Trust of Nations Funds Trust generally provides that Nations Funds Trust, or any series of Nations Funds Trust, may be dissolved at any time by the Board of Nations Funds Trust upon written notice to shareholders. In addition, Nations Funds Trust's Declaration of Trust, as permitted by Delaware law, provides that shareholders of series of Nations Funds Trust will be entitled to vote on mergers, acquisitions and consolidations involving such series, only to the extent required by federal securities law. By limiting mandatory shareholder votes to those matters expressly required under the federal securities laws, the Acquiring Funds may save costs by not having to schedule special shareholder meetings and solicit shareholder proxies. Although shareholders of an Acquiring Fund of Nations Funds Trust may no longer have certain voting rights, it is anticipated that the Acquiring Funds will benefit from a reduction in expenses associated with potential proxy solicitations on these matters. 12 In general, the attributes of a share of beneficial interest in the case of a Massachusetts business trust and a share of common stock in the case of a Maryland corporation are comparable to those of a share of beneficial interest of a Delaware business trust such as Nations Funds Trust, i.e., shares are entitled to one vote per share held and fractional votes for fractional shares held. . Shareholder Liability. Under Maryland law, shareholders are not personally liable for the debts of a Fund. Under Massachusetts law, shareholders may, in certain circumstances, be held personally liable for the debts and obligations of a Massachusetts business trust. Under Delaware law, shareholders of a Delaware business trust like Nations Funds Trust are not personally liable for the debts and obligations of such trust. Comparison of Advisory and Other Service Arrangements and Fees The Funds and the Acquiring Funds have the same service providers. Immediately after the Reorganization, these service providers are expected to continue to serve the Acquiring Funds in the capacities indicated below. Service Providers for the Funds and the Acquiring Funds ------------------------------------------------------- Investment Adviser..... BA Advisors Investment Sub-Adviser. BACAP Distributor............ Stephens Inc. Co-Administrator....... BA Advisors Co-Administrator....... Stephens Inc. Sub-Administrator...... The Bank of New York Custodian.............. The Bank of New York Transfer Agent......... PFPC Inc. Sub-Transfer Agent..... Bank of America (for Primary A shares only) Independent Accountants PricewaterhouseCoopers LLP
Investment Advisory and Sub-Advisory Services and Fees BA Advisors serves as the investment adviser for each Fund and each Acquiring Fund, which pay an advisory fee, computed daily and paid monthly, to BA Advisors based on average daily net assets. Currently the maximum advisory fee rate is 0.20% for each of Prime Fund, Treasury Fund and Government Money Market Fund; is 0.15% for each of Cash Reserves, Treasury Reserves and Government Reserves; and also is 0.15% for each of the Acquiring Funds.* - -------- * Currently, BA Advisors is under a contractual commitment to cap Fund level total operating expenses for the Prime Fund, Treasury Fund and Government Money Market Fund at 0.30% and for Cash Reserves, Treasury Reserves and Government Reserves at 0.20% until July 31, 2002. The waivers and/or reimbursements necessary to maintain those expense levels may come from BA Advisors's advisory fees, administration fees and/or other fees and expenses (excluding Rule 12b-1/shareholder servicing and shareholder administration fees), at BA Advisors's discretion. After July 31, 2002, there is no guarantee that these waivers and/or reimbursements will continue. BACAP serves as the sub-adviser for each Fund and Acquiring Fund. BA Advisors pays BACAP sub-advisory fees from the investment advisory fees it receives from the Funds. Currently, BA Advisors advises over 75 mutual funds in the Nations Funds Family. BACAP, currently managing more than $125 billion, acts as investment manager for individuals, corporations and financial institutions, and is sub-adviser to private investment companies and more than 60 mutual funds in the Nations Funds Family. BA Advisors and the Acquiring Funds are seeking an exemptive order from the SEC that would permit BA Advisors to engage a different or additional sub-adviser for an Acquiring Fund, to continue the engagement of a sub-adviser who has experienced a change in its ownership or corporate structure or under an agreement that has materially changed, with the approval of the Board of Nations Funds Trust, but without submitting the sub-advisory change to a vote of the Acquiring Fund's shareholders, under certain circumstances. If this exemptive 13 order is granted and the Reorganization is approved, BA Advisors or the Acquiring Funds will inform shareholders of any such sub-advisory change, which may include: (i) engaging new or additional sub-advisers, (ii) terminating or replacing one or more sub-advisers, or (iii) materially amending an existing sub-advisory agreement. Unless and until this exemptive order is granted and the proposed Reorganization is approved, consistent with applicable law, the Funds and Acquiring Funds will continue to submit any sub-advisory change to shareholders for approval. Comparison of Purchase, Redemption, Distribution and Exchange Policies and Other Shareholder Transactions and Services As noted earlier, after the Reorganization, the purchase, redemption, distribution, exchange and other policies and procedures of each share class of the Acquiring Funds will be similar to those of the corresponding share class of the Funds prior to the Reorganization. However, there will be some differences for these shareholders. For example, certain Fund shareholders will be able to take advantage of lower minimum initial investment and lower minimum additional investment requirements. In addition, certain Acquiring Fund classes will have distribution, shareholder servicing and/or shareholder administration plans where the corresponding Fund classes do not. These differences can be attributed to the different channels through which certain Fund shares and Acquiring Fund shares are offered for sale. While these changes may result in fees for certain Fund shareholders, there will be no change to total operating expense ratios (after waivers and expense reimbursements) for any Fund shareholder after the Reorganization. For details on these aspects of the various Fund and Acquiring Fund share classes, shareholders should consult their Fund prospectus or the Acquiring Fund prospectuses. How Shares Are Priced and How Orders Are Processed All transactions are based on the price of a Fund's shares--or its net asset value per share. Net asset value per share is calculated at the times indicated below. Orders to buy, sell and exchange shares are processed on business days, which generally are days that the Federal Reserve Bank of New York and the New York Stock Exchange are open. Orders received by Stephens Inc., PFPC Inc., or their agents by the time shown below on a business day (unless a Fund or Acquiring Fund closes early) will receive that day's net asset value per share. Orders received after these times will receive the next business day's net asset value per share. The Funds or Acquiring Funds may refuse any order to buy or exchange shares. If this happens, the Funds will return any money received.
Orders Received by this Time Will Shares Are Priced at this Time: Receive that Day's Net Asset Value: ------------------------------- ----------------------------------- Prime Fund 3:00 p.m., Eastern time 3:00 p.m., Eastern time Cash Reserves and Cash Reserves 5:00 p.m., Eastern time 5:00 p.m., Eastern time (3:00 p.m., (acquiring) Eastern time for orders placed on the last business day of the calendar year) - ---------------------------------------------------------------------------------------------------------------- Treasury Fund 3:00 p.m., Eastern time 3:00 p.m., Eastern time Treasury Reserves and Treasury Reserves 5:00 p.m., Eastern time 5:00 p.m., Eastern time (3:00 p.m., (acquiring) Eastern time for orders placed on the last business day of each calendar quarter and business days that precede the national holidays observed by this Fund and Acquiring Fund) - ---------------------------------------------------------------------------------------------------------------- Government Money Market Fund 12 Noon, Eastern time 12 Noon, Eastern time Government Reserves and Government 2:30 p.m., Eastern time 2:30 p.m., Eastern time Reserves (acquiring)
14 Purchase, Redemption, Distribution and Exchange Policies and Other Shareholder Transactions and Services Daily Shares of Prime Fund, Treasury Fund or Government Money Market Fund: The purchase, redemption, distribution and exchange policies of the Daily Shares are substantially similar to those of the corresponding Acquiring Funds' Daily Class Shares. The following differences are noted. . Distribution (12b-1), shareholder servicing and administration fees--Stephens Inc., the Funds' distributor, and selling and servicing agents are compensated for selling shares and providing services to investors under distribution, shareholders servicing and/or administration plans. For such services, these service providers may receive a maximum distribution (12b-1) fee from the Daily Shares of 0.45%; they may receive a maximum distribution (12b-1) fee from the Daily Class Shares of 0.35%. . Exchange Features of the Funds-- . Exchange Features of the Acquiring Funds-- Shareholders of Daily Shares of a Fund Shareholders of Daily Class Shares of an can exchange their Daily Shares for Acquiring Fund can exchange their Daily Class Investor C Shares of any other fund in Shares for Daily Class Shares of any other the Nations Funds Family, except Nations Reserves Money Market Fund. Nations Money Market Funds, or for Daily Shares of Nations Money Market Funds.
Investor A Shares of Prime Fund, Treasury Fund or Government Money Market Fund: The purchase, redemption, distribution and exchange policies of the Investor A Shares are substantially similar to those of the corresponding Acquiring Funds' Investor A Shares, with the following exceptions: . Distribution (12b-1), shareholder servicing and administration fees--BA Advisors, its affiliates and/or other financial institutions and intermediaries may receive a fee for providing certain shareholder administration services. For such services, these entities may receive a maximum shareholder administration fee from the Acquiring Funds' Investor A Shares of 0.10%. The Funds' Investor A Shares do not have a shareholder administration plan. Investor B Shares of Prime Fund, Treasury Fund or Government Money Market Fund: The purchase, redemption, distribution and exchange policies of the Investor B Shares are substantially similar to those of the corresponding Acquiring Funds' Investor Class Shares, with the following exceptions: . Exchange Features of the Funds-- . Exchange Features of the Acquiring Funds-- Shareholders of Investor B Shares of a Shareholders of Investor Class Shares of an Fund can exchange their Investor B Acquiring Fund can exchange their Investor Shares for Investor B Shares of any other Class Shares for Investor Class Shares of any Nations Money Market Fund. other Nations Reserves Money Market Fund.
15 Investor C Shares of Prime Fund, Treasury Fund or Government Money Market Fund: The purchase, redemption, distribution and exchange policies of the Investor C Shares are substantially similar to those of the corresponding Acquiring Funds' Investor Class Shares, with the following exceptions: . Distribution (12b-1), shareholder servicing and administration fees--Stephens Inc., the Funds' distributor, and selling and servicing agents are compensated for selling shares and providing services to investors under distribution, shareholders servicing and/or administration plans. For such services, these service providers may receive a maximum distribution (12b-1) fee from the Acquiring Funds' Investor Class Shares of 0.10%. The Funds' Investor C Shares do not have a distribution (12b-1) plan. . Exchange Features of the Funds-- . Exchange Features of the Acquiring Funds-- Shareholders of Investor C Shares of a Fund can Shareholders of Investor Class Shares of an exchange their Investor C Shares for Acquiring Fund can exchange their Investor Investor B Shares of any other fund Class Shares for Investor Class Shares of any in the Nations Funds Family, except other Nations Reserves Money Market Fund. Nations Money Market Funds, or for Investor C Shares of a Nations Money Market Fund. Shareholders must exchange at least $1,000 Shareholders must exchange at least $25,000 at a at a time. time.
Marsico Shares of Prime Fund: The purchase, redemption, distribution and exchange policies of the Marsico Shares are substantially similar to those of the corresponding Acquiring Fund's Marsico Shares, with the following exceptions: . Distribution (12b-1), shareholder servicing and administration fees--BA Advisors, its affiliates and/or other financial institutions and intermediaries may receive a fee for providing certain shareholder administration services. For such services, these entities may receive a maximum shareholder administration fee from the Acquiring Funds' Marsico Shares of 0.10%. The Fund's Marsico Shares do not have a shareholder administration plan. Primary A Shares of Prime Fund, Treasury Fund or Government Money Market Fund: The purchase, redemption, distribution and exchange policies of the Investor A Shares are substantially similar to those of the corresponding Acquiring Funds' Trust Class Shares, with the following exceptions: . Distribution (12b-1), shareholder servicing and administration fees--BA Advisors, its affiliates and/or other financial institutions and intermediaries may receive a fee for providing certain shareholder administration services. For such services, these entities may receive a maximum shareholder administration fee from the Acquiring Funds' Trust Class Shares of 0.10%. The Funds' Primary A Shares do not have a shareholder administration plan. Primary B Shares of Prime Fund, Treasury Fund or Government Money Market Fund: The purchase, redemption, distribution and exchange policies of the Primary B Shares are substantially similar to those of the corresponding Acquiring Funds' Investor Class Shares, with the following exceptions: . Distribution (12b-1), shareholder servicing and administration fees--BA Advisors, its affiliates and/or other financial institutions and intermediaries may receive a fee for providing certain shareholder 16 administration services. For such services, these entities may receive a maximum shareholder administration fee from the Acquiring Funds' Investor Class Shares of 0.10%. The Funds' Primary B Shares do not have a shareholder administration plan.
. Exchange Features of the Funds-- . Exchange Features of the Acquiring Funds-- Shareholders of Primary B Shares of a Fund can Shareholders of Investor Class Shares of an exchange their Primary B Shares for Primary B Acquiring Fund can exchange their Investor Shares of any other fund in the Nations Funds Class Shares for Investor Class Shares of any Family. other Nations Reserves Money Market Fund. Shareholders must exchange at least $1,000 at a Shareholders must exchange at least $25,000 at a time. time.
. Other compensation--Selling and servicing agents also may receive in connection with the Acquiring Funds' Investor Class Shares: a bonus, incentive or other compensation relating to the sale, promotion and marketing of the Investor Class Shares. The Funds' Primary B Shares do not pay this type of compensation. Daily Class Shares of Cash Reserves, Treasury Reserves and Government Reserves: The purchase, redemption, distribution and exchange policies of the Funds' Daily Class Shares are substantially similar to those of the corresponding Acquiring Funds' Daily Class Shares, with the following exceptions: . Minimum initial and additional investment amounts--The minimum initial investment for the Funds' Daily Class Shares is $1,000, unless using the systematic investment plan in which case the minimum initial investment is $100. There is no minimum for any additional investments, unless using the systematic investment plan in which case the minimum additional investment is $100. The minimum initial amount for the Acquiring Funds' Daily Class Shares is $1,000 for regular accounts; $500 for traditional Roth and IRA accounts; $250 for accounts set up with some fee-based investment advisers or financial planners, including wrap fee accounts and other managed accounts; $100 using the Systematic Investment Plan and there is no minimum for 401(k) plans, simplified employee pension plans, salary reduction-simplified employee pension plans, Savings Incentives Match Plans for Employees, salary reduction-IRAs or other similar kinds of accounts, however, if the value of the account falls below $1,000 for 401(k) plans or $500 for the other plans within one year after the account is opened, your shares may be sold after you are given 60 days notice in writing. There is no minimum for any additional investments for the Acquiring Funds' Daily Class Shares, unless using the systematic investment plan in which case the minimum additional investment is $100. Investor Class Shares of Cash Reserves, Treasury Reserves and Government Reserves: The purchase, redemption, distribution and exchange policies of the Funds' Investor Class Shares are substantially similar to those of the corresponding Acquiring Funds' Investor Class Shares, with the following exceptions: . Minimum initial and additional investment amounts--The minimum initial investment for the Funds' Investor Class Shares is $25,000, unless using the systematic investment plan in which case the minimum initial investment is $10,000. There is no minimum for any additional investments, unless using the systematic investment plan in which case the minimum additional investment is $1,000. The minimum initial amount for the Acquiring Funds' Investor Class Shares is $1,000 for regular accounts; $500 for traditional Roth and IRA accounts; $250 for accounts set up with some fee-based 17 investment advisers or financial planners, including wrap fee accounts and other managed accounts; $100 using the Systematic Investment Plan and there is no minimum for 401(k) plans, simplified employee pension plans, salary reduction-simplified employee pension plans, Savings Incentives Match Plans for Employees, salary reduction-IRAs or other similar kinds of accounts, however, if the value of the account falls below $1,000 for 401(k) plans or $500 for the other plans within one year after the account is opened, your shares may be sold after you are given 60 days notice in writing. There is no minimum for any additional investments for the Acquiring Funds' Investor Class Shares, unless using the systematic investment plan in which case the minimum additional investment is $1,000. Adviser Class Shares, Capital Class Shares, Institutional Class Shares, Investor B Shares, Investor C Shares, Liquidity Class Shares, Market Class Shares, Service Class Shares and Trust Class Shares of Cash Reserves, Treasury Reserves and Government Reserves: The purchase, redemption, distribution and exchange policies of the Funds' share classes are substantially identical to those of the corresponding Acquiring Funds' share classes. Material Federal Income Tax Consequences As noted, the exchange of shares in the Reorganization is expected to be tax-free under federal income tax law. The following discussion summarizes the material federal income tax consequences of the Reorganization that are applicable to Fund shareholders. It is based on the Code, applicable Treasury Regulations, judicial authority, and administrative rulings and practice, all as of the date of this Proxy/Prospectus and all of which are subject to change, including changes with retroactive effect. The discussion below does not address any state, local or foreign tax consequences of the Reorganization. A Fund shareholder's tax treatment may vary depending upon his or her particular situation. A Fund shareholder also may be subject to special rules not discussed below if they are a certain kind of shareholder, including: an insurance company; a tax-exempt organization; a financial institution or broker-dealer; a person who is neither a citizen nor a resident of the United States or is an entity that is not organized under the laws of the United States or political subdivision thereof; a holder of Fund shares as part of a hedge, straddle or conversion transaction; or a person that does not hold Fund shares as a capital asset at the time of the Reorganization. Neither the Trust, the Company, Reserves nor Nations Funds Trust has requested or will request an advance ruling from the Internal Revenue Service as to the federal income tax consequences of the Reorganization or any related transaction. The Internal Revenue Service may adopt positions contrary to that discussed below and such positions could be sustained. A Fund shareholder is urged to consult with his or her own tax advisors and financial planners as to the particular tax consequences of the Reorganization to the Fund shareholder, including the applicability and effect of any state, local or foreign laws, and the effect of possible changes in applicable tax laws. The Reorganization, with respect to each Fund and its corresponding Acquiring Fund, is intended to qualify as a "reorganization" for federal income tax purposes. In this regard, the obligation of the Funds and the Acquiring Funds to consummate the Reorganization is conditioned upon the receipt by the Trust, the Company, Reserves and Nations Funds Trust of an opinion of Morrison & Foerster LLP reasonably acceptable to the Trust, the Company, Reserves and Nations Funds Trust substantially to the effect that the Reorganization, with respect to each Fund and its corresponding Acquiring Fund, will be treated for federal income tax purposes as a tax-free reorganization under Section 368(a) of the Code and, in such connection, that the Fund and its corresponding Acquiring Fund will each be a party to a reorganization within the meaning of Section 368(b) of the Code. Provided that the Reorganization so qualifies, the opinion will state that: . Neither the Funds, the Acquiring Funds nor their respective shareholders will recognize any gain or loss pursuant to the Reorganization. 18 . A Fund shareholder's aggregate tax basis for the Acquiring Fund shares received pursuant to the Reorganization will equal such shareholder's aggregate tax basis in Fund shares held immediately before the Reorganization. . A Fund shareholder's holding period for the Acquiring Fund shares received pursuant to the Reorganization will include the period during which the Fund shares are held. The tax opinion of Morrison & Foerster LLP described above will be based upon facts, representations and assumptions to be set forth or referred to in the opinion and the continued accuracy and completeness of representations made by the Trust, the Company, Reserves, on behalf of their respective Funds, and Nations Funds Trust, on behalf of the Acquiring Funds, which if incorrect in any material respect would jeopardize the conclusions reached by Morrison & Foerster LLP in the opinion. In addition, in the event that the Trust, the Company, Reserves and/or Nations Funds Trust are unable to obtain the tax opinion, they are permitted under the Reorganization Agreements to waive the receipt of such tax opinion as a condition to their obligation to consummate the Reorganization. Regardless of whether the acquisition of the assets and liabilities of each Fund by the corresponding Acquiring Fund qualifies as a tax-free reorganization as described above, the sale of securities by the Fund prior to the Reorganization, whether in the ordinary course of business or in anticipation of the Reorganization, could result in a taxable distribution to Fund shareholders. Since its formation, each Fund and Acquiring Fund believes it has qualified as a separate "regulated investment company" under the Code. Accordingly, each Fund and Acquiring Fund believes it has been, and expects to continue to be, relieved of federal income tax liability on its taxable income distributions to its shareholders. Capitalization The following tables show the total net assets, number of shares outstanding and net asset value per share of each Fund and Acquiring Fund. This information is generally referred to as the "capitalization." The term "pro forma capitalization" means the expected capitalization of each Acquiring Fund after it has combined with its corresponding Fund, i.e., as if the Reorganization had already occurred. The tables show several combination scenarios of the Funds. They show the possibility of one Fund approving the Reorganization but not the other (e.g., Fund A + Fund C or Fund B + Fund C). They also show the possibility of both Funds approving the Reorganization (e.g., Fund A + Fund B + Fund C). These capitalization tables are based on figures as of August 31, 2001. The ongoing investment performance and daily share purchase and redemption activity of the Funds and Acquiring Funds affects capitalization. Therefore, the capitalization on the Closing date may vary from the capitalization shown in the following tables.
Net Asset Value Fund Net Assets Shares Outstanding Per Share ---- ----------------- ------------------ --------------- Prime Fund (Fund A) $995,131,086.19 995,503,380.67 $1.00 (Daily) (Daily) (Primary A) $581,986,101.95 582,074,802.20 $1.00 (Investor A) (Investor A) (Investor A) $752,849,415.93 752,940,256.95 $1.00 (Investor B) (Investor B) (Investor B) $4,185,719.44 4,187,574.59 $1.00 (Investor C) (Investor C) (Investor C) $35,744,502.57 35,743,736.82 $1.00 (Marsico) (Marsico) (Marsico) $3,387,570,264.93 3,387,951,088.76 $1.00 (Primary A) (Primary A) (Primary A) $8,873,762.86 8,877,267.75 $1.00 (Primary B) (Primary B) (Primary B)
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Net Asset Value Fund Net Assets Shares Outstanding Per Share - ---- ------------------ ------------------ --------------- Cash Reserves (Fund B) $7,015,604,298.20 7,106,073,216.49 $1.00 (Adviser) (Adviser) (Adviser) $21,032,311,433.89 21,032,541,048.42 $1.00 (Capital) (Capital) (Capital) $14,415,521,142.97 14,415,478,091.92 $1.00 (Daily) (Daily) (Daily) $970,586,371.19 970,548,631.31 $1.00 (Institutional) (Institutional) (Institutional) $5,587,922,505.02 5,588,493,690.21 $1.00 (Investor) (Investor) (Investor) $32,425,984.13 32,424,877.19 $1.00 (Investor B) (Investor B) (Investor B) $2,019,338.62 2,019,288.45 $1.00 (Investor C) (Investor C) (Investor C) $1,706,295,409.06 1,706,226,735.11 $1.00 (Liquidity) (Liquidity) (Liquidity) $3,606,277,022.11 3,606,141,507.46 $1.00 (Market) (Market) (Market) $1,006,941,830.65 1,006,939,697.06 $1.00 (Service) (Service) (Service) $1,847,525,385.43 1,847,439,401.37 $1.00 (Trust) (Trust) (Trust) Cash Reserves (acquiring) (Fund C) $0 0 $0 (Adviser) (Adviser) (Adviser) $0 0 $0 (Capital) (Capital) (Capital) $0 0 $0 (Daily) (Daily) (Daily) $0 0 $0 (Institutional) (Institutional) (Institutional) $0 0 $0 (Investor) (Investor) (Investor) $0 0 $0 (Investor A) (Investor A) (Investor A) $0 0 $0 (Investor B) (Investor B) (Investor B) $0 0 $0 (Investor C) (Investor C) (Investor C) $0 0 $0 (Liquidity) (Liquidity) (Liquidity) $0 0 $0 (Market) (Market) (Market) $0 0 $0 (Marsico) (Marsico) (Marsico) $0 0 $0 (Service) (Service) (Service) $0 0 $0 (Trust) (Trust) (Trust) Pro Forma Combined Fund $995,131,086.19 995,503,380.67 $1.00 (Fund A + Fund C) (Daily) (Daily) (Primary A) $581,986,101.95 582,074,802.20 $1.00 (Investor A) (Investor A) (Investor A) $752,849,415.93 752,940,256.95 $1.00 (Investor B) (Investor B) (Investor B) $4,185,719.44 4,187,574.59 $1.00 (Investor C) (Investor C) (Investor C) $35,744,502.57 35,743,736.82 $1.00 (Marsico) (Marsico) (Marsico) $3,387,570,264.93 3,387,951,088.76 $1.00 (Primary A) (Primary A) (Primary A) $8,873,762.86 8,877,267.75 $1.00 (Primary B) (Primary B) (Primary B)
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Net Asset Value Fund Net Assets Shares Outstanding Per Share - ---- ------------------ ------------------ --------------- Pro Forma Combined Fund $7,015,604,298.20 7,106,073,216.49 $1.00 (Fund B + Fund C) (Adviser) (Adviser) (Adviser) $21,032,311,433.89 21,032,541,048.42 $1.00 (Capital) (Capital) (Capital) $14,415,521,142.97 14,415,478,091.92 $1.00 (Daily) (Daily) (Daily) $970,586,371.19 970,548,631.31 $1.00 (Institutional) (Institutional) (Institutional) $5,587,922,505.02 5,588,493,690.21 $1.00 (Investor) (Investor) (Investor) $32,425,984.13 32,424,877.19 $1.00 (Investor B) (Investor B) (Investor B) $2,019,338.62 2,019,288.45 $1.00 (Investor C) (Investor C) (Investor C) $1,706,295,409.06 1,706,226,735.11 $1.00 (Liquidity) (Liquidity) (Liquidity) $3,606,277,022.11 3,606,141,507.46 $1.00 (Market) (Market) (Market) $1,006,941,830.65 1,006,939,697.06 $1.00 (Service) (Service) (Service) $1,847,525,385.43 1,847,439,401.37 $1.00 (Trust) (Trust) (Trust) Pro Forma Combined Fund $7,015,604,298.20 7,016,073,216.49 $1.00 (Fund A + Fund B + Fund C) (Adviser) (Adviser) (Adviser) $21,032,311,433.89 21,032,541,048.42 $1.00 (Capital) (Capital) (Capital) $15,410,652,229.16 15,410,981,472.59 $1.00 (Daily) (Daily) (Daily) $970,586,371.19 970,548,631.31 $1.00 (Institutional) (Institutional) (Institutional) $6,353,831,403.25 6,354,498,789.50 $1.00 (Investor) (Investor) (Investor) $581,986,101.95 582,074,802.20 $1.00 (Investor A) (Investor A) (Investor A) $32,425,984.13 32,424,877.19 $1.00 (Investor B) (Investor B) (Investor B) $2,019,338.62 2,019,288.45 $1.00 (Investor C) (Investor C) (Investor C) $1,706,295,409.06 1,706,226,735.11 $1.00 (Liquidity) (Liquidity) (Liquidity) $3,606,277,022.11 3,606,141,507.46 $1.00 (Market) (Market) (Market) $35,744,502.57 35,743,736.82 $1.00 (Marsico) (Marsico) (Marsico) $1,006,941,830.65 1,006,939,697.06 $1.00 (Service) (Service) (Service) $5,235,095,650.36 5,235,390,490.13 $1.00 (Trust) (Trust) (Trust)
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Net Asset Value Fund Net Assets Shares Outstanding Per Share - ---- ----------------- ------------------ --------------- Treasury Fund $51,001,354.40 51,093,138.86 $1.00 (Fund A) (Daily) (Daily) (Primary A) $1,044,451,157.12 1,045,019,196.99 $1.00 (Investor A) (Investor A) (Investor A) $176,870,280.07 176,981,382.07 $1.00 (Investor B) (Investor B) (Investor B) $217,359.37 217,411.90 $1.00 (Investor C) (Investor C) (Investor C) $587,596,243.36 587,885,999.10 $1.00 (Primary A) (Primary A) (Primary A) $8,230,940.59 8,237,409.40 $1.00 (Primary B) (Primary B) (Primary B) Treasury Reserves $2,460,670,711.43 2,461,170,372.65 $1.00 (Fund B) (Adviser) (Adviser) (Adviser) $1,431,478,858.05 1,431,697,287.63 $1.00 (Capital) (Capital) (Capital) $1,153,895,228.94 1,153,989,907.51 $1.00 (Daily) (Daily) (Daily) $47,393,187.11 47,393,189.68 $1.00 (Institutional) (Institutional) (Institutional) $745,696,888.00 745,892,859.99 $1.00 (Investor) (Investor) (Investor) $73,723.28 73,720.00 $1.00 (Investor B) (Investor B) (Investor B) $10.00 10.00 $1.00 (Investor C) (Investor C) (Investor C) $371,049,597.20 371,063,936.26 $1.00 (Liquidity) (Liquidity) (Liquidity) $1,347,448,493.79 1,347,500,010.32 $1.00 (Market) (Market) (Market) $374,145,901.00 374,164,274.49 $1.00 (Service) (Service) (Service) $562,243,639.84 562,237,930.00 $1.00 (Trust) (Trust) (Trust) Treasury Reserves (acquiring) $0 0 $0 (Fund C) (Adviser) (Adviser) (Adviser) $0 0 $0 (Capital) (Capital) (Capital) $0 0 $0 (Daily) (Daily) (Daily) $0 0 $0 (Institutional) (Institutional) (Institutional) $0 0 $0 (Investor) (Investor) (Investor) $0 0 $0 (Investor A) (Investor A) (Investor A) $0 0 $0 (Investor B) (Investor B) (Investor B) $0 0 $0 (Investor C) (Investor C) (Investor C) $0 0 $0 (Liquidity) (Liquidity) (Liquidity) $0 0 $0 (Market) (Market) (Market) $0 0 $0 (Marsico) (Marsico) (Marsico) $0 0 $0 (Service) (Service) (Service) $0 0 $0 (Trust) (Trust) (Trust)
22
Net Asset Value Fund Net Assets Shares Outstanding Per Share - ---- ----------------- ------------------ --------------- Pro Forma Combined Fund $51,001,354.40 51,093,138.86 $1.00 (Fund A + Fund C) (Daily) (Daily) (Primary A) $1,044,451,157.12 1,045,019,196.99 $1.00 (Investor A) (Investor A) (Investor A) $176,870,280.07 176,981,382.07 $1.00 (Investor B) (Investor B) (Investor B) $217,359.37 217,411.90 $1.00 (Investor C) (Investor C) (Investor C) $587,596,243.36 587,885,999.10 $1.00 (Primary A) (Primary A) (Primary A) $8,230,940.59 8,237,409.40 $1.00 (Primary B) (Primary B) (Primary B) Pro Forma Combined Fund $2,460,670,711.43 2,461,170,372.65 $1.00 (Fund B + Fund C) (Adviser) (Adviser) (Adviser) $1,431,478,858.05 1,431,697,287.63 $1.00 (Capital) (Capital) (Capital) $1,153,895,228.94 1,153,989,907.51 $1.00 (Daily) (Daily) (Daily) $47,393,187.11 47,393,189.68 $1.00 (Institutional) (Institutional) (Institutional) $745,696,888.00 745,892,859.99 $1.00 (Investor) (Investor) (Investor) $73,723.28 73,720.00 $1.00 (Investor B) (Investor B) (Investor B) $10.00 10.00 $1.00 (Investor C) (Investor C) (Investor C) $371,049,597.20 371,063,936.26 $1.00 (Liquidity) (Liquidity) (Liquidity) $1,347,448,493.79 1,347,500,010.32 $1.00 (Market) (Market) (Market) $374,145,901.00 374,164,274.49 $1.00 (Service) (Service) (Service) $562,243,639.84 562,237,930.00 $1.00 (Trust) (Trust) (Trust) Pro Forma Combined Fund $2,460,670,711.43 2,461,170,372.65 $1.00 (Fund A + Fund B + Fund C) (Adviser) (Adviser) (Adviser) $1,431,478,858.05 1,431,697,287.63 $1.00 (Capital) (Capital) (Capital) $1,204,896,583.34 1,205,083,046.37 $1.00 (Daily) (Daily) (Daily) $47,393,187.11 47,393,189.68 $1.00 (Institutional) (Institutional) (Institutional) $931,015,468.03 931,329,063.36 $1.00 (Investor) (Investor) (Investor) $1,044,451,157.12 1,045,019,196.99 $1.00 (Investor A) (Investor A) (Investor A) $73,723.28 73,720.00 $1.00 (Investor B) (Investor B) (Investor B) $10.00 10.00 $1.00 (Investor C) (Investor C) (Investor C) $371,049,597.20 371,063,936.26 $1.00 (Liquidity) (Liquidity) (Liquidity) $1,347,448,493.79 1,347,500,010.32 $1.00 (Market) (Market) (Market) $374,145,901.00 374,164,274.49 $1.00 (Service) (Service) (Service) $1,149,839,883.20 1,150,123,929.10 $1.00 (Trust) (Trust) (Trust)
23
Net Asset Value Fund Net Assets Shares Outstanding Per Share - ---- ----------------- ------------------ --------------- Government Money Market Fund $20,213,281.81 20,213,022.09 $1.00 (Fund A) (Daily) (Daily) (Primary A) $18,804,392.78 18,802,731.82 $1.00 (Investor A) (Investor A) (Investor A) $61,693,882.41 61,694,131.77 $1.00 (Investor B) (Investor B) (Investor B) $488,285.81 488,227.97 $1.00 (Investor C) (Investor C) (Investor C) $284,309,930.33 284,301,180.39 $1.00 (Primary A) (Primary A) (Primary A) $272,247.67 272,545.65 $1.00 (Primary B) (Primary B) (Primary B) Government Reserves $961,450,066.79 961,695,744.08 $1.00 (Fund B) (Adviser) (Adviser) (Adviser) $1,254,845,160.65 1,254,909,574.87 $1.00 (Capital) (Capital) (Capital) $265,857,132.27 265,826,051.19 $1.00 (Daily) (Daily) (Daily) $110,588,543.28 110,581,710.81 $1.00 (Institutional) (Institutional) (Institutional) $356,119,097.63 356,456,568.65 $1.00 (Investor) (Investor) (Investor) $1,477,012.21 1,476,938.81 $1.00 (Investor B) (Investor B) (Investor B) $12,103.48 12,099.25 $1.00 (Investor C) (Investor C) (Investor C) $99,605,635.43 99,571,715.65 $1.00 (Liquidity) (Liquidity) (Liquidity) $537,909,104.91 537,870,149.10 $1.00 (Market) (Market) (Market) $35,002,200.29 35,000,010.10 $1.00 (Service) (Service) (Service) $396,493,946.69 396,471,030.66 $1.00 (Trust) (Trust) (Trust) Government Reserves (acquiring) $0 0 $0 (Fund C) (Adviser) (Adviser) (Adviser) $0 0 $0 (Capital) (Capital) (Capital) $0 0 $0 (Daily) (Daily) (Daily) $0 0 $0 (Institutional) (Institutional) (Institutional) $0 0 $0 (Investor) (Investor) (Investor) $0 0 $0 (Investor A) (Investor A) (Investor A) $0 0 $0 (Investor B) (Investor B) (Investor B) $0 0 $0 (Investor C) (Investor C) (Investor C) $0 0 $0 (Liquidity) (Liquidity) (Liquidity) $0 0 $0 (Market) (Market) (Market) $0 0 $0 (Marsico) (Marsico) (Marsico) $0 0 $0 (Service) (Service) (Service) $0 0 $0 (Trust) (Trust) (Trust)
24
Net Asset Value Fund Net Assets Shares Outstanding Per Share - ---- ----------------- ------------------ --------------- Pro Forma Combined Fund $20,213,281.81 20,213,022.09 $1.00 (Fund A + Fund C) (Daily) (Daily) (Primary A) $18,804,392.78 18,802,731.82 $1.00 (Investor A) (Investor A) (Investor A) $61,693,882.41 61,694,131.77 $1.00 (Investor B) (Investor B) (Investor B) $488,285.81 488,227.97 $1.00 (Investor C) (Investor C) (Investor C) $284,309,930.33 284,301,180.39 $1.00 (Primary A) (Primary A) (Primary A) $272,247.67 272,545.65 $1.00 (Primary B) (Primary B) (Primary B) Pro Forma Combined Fund $961,450,066.79 961,695,744.08 $1.00 (Fund B + Fund C) (Adviser) (Adviser) (Adviser) $1,254,845,160.65 1,254,909,574.87 $1.00 (Capital) (Capital) (Capital) $265,857,132.27 265,826,051.19 $1.00 (Daily) (Daily) (Daily) $110,588,543.28 110,581,710.81 $1.00 (Institutional) (Institutional) (Institutional) $356,119,097.63 356,456,568.65 $1.00 (Investor) (Investor) (Investor) $1,477,012.21 1,476,938.81 $1.00 (Investor B) (Investor B) (Investor B) $12,103.48 12,099.25 $1.00 (Investor C) (Investor C) (Investor C) $99,605,635.43 99,571,715.65 $1.00 (Liquidity) (Liquidity) (Liquidity) $537,909,104.91 537,870,149.10 $1.00 (Market) (Market) (Market) $35,002,200.29 35,000,010.10 $1.00 (Service) (Service) (Service) $396,493,946.69 396,471,030.66 $1.00 (Trust) (Trust) (Trust) Pro Forma Combined Fund $961,450,066.79 961,695,744.08 $1.00 (Fund A + Fund B + Fund C) (Adviser) (Adviser) (Adviser) $1,254,845,160.65 1,254,909,574.87 $1.00 (Capital) (Capital) (Capital) $286,070,414.08 286,039,073.28 $1.00 (Daily) (Daily) (Daily) $110,588,543.28 110,581,710.81 $1.00 (Institutional) (Institutional) (Institutional) $418,573,513.52 418,861,474.04 $1.00 (Investor) (Investor) (Investor) $18,804,392.78 18,802,731.82 $1.00 (Investor A) (Investor A) (Investor A) $1,477,012.21 1,476,938.81 $1.00 (Investor B) (Investor B) (Investor B) $12,103.48 12,099.25 $1.00 (Investor C) (Investor C) (Investor C) $99,605,635.43 99,571,715.65 $1.00 (Liquidity) (Liquidity) (Liquidity) $537,909,104.91 537,870,149.10 $1.00 (Market) (Market) (Market) $35,002,200.29 35,000,010.10 $1.00 (Service) (Service) (Service) $680,803,877.02 680,772,211.05 $1.00 (Trust) (Trust) (Trust)
25 VOTING MATTERS General Information This Proxy/Prospectus is being furnished in connection with the solicitation of proxies for the Meetings by the Boards. It is expected that the solicitation of proxies will be primarily by mail. Officers and service contractors of the Trust, the Company and Reserves also may solicit proxies by telephone or otherwise. Shareholders may submit their proxy: (1) by mail, by marking, signing, dating and returning the enclosed proxy ballot(s) in the enclosed postage-paid envelope; (2) by phone at the toll-free number on the proxy ballot(s); or (3) by on-line voting at www.proxyvote.com. Any shareholder submitting a proxy may revoke it at any time before it is exercised at the Meetings by submitting a written notice of revocation addressed to Nations Funds at the address shown on the cover page of this Proxy/Prospectus, or a subsequently executed proxy or by attending the Meetings and voting in person. It is anticipated that PFPC Inc. and ADP Investor Communication Services, will provide solicitation services to certain of the Funds at an estimated cost of $225,000 for Cash Reserves, $7,000 for Treasury Reserves, $4,400 for Treasury Fund and $9,000 for Government Reserves. Only shareholders of record at the close of business on December 27, 2001 will be entitled to vote at the Meetings. On that date the following were the number shares outstanding and entitled to vote for each Fund. Each whole and fractional share of a Fund is entitled to a whole or fractional vote. Prime Fund................................................. 5,398,528,697.284 shares Cash Reserves.............................................. 75,282,812,179.810 shares Treasury Fund.............................................. 1,657,729,131.720 shares Treasury Reserves.......................................... 9,264,705,549.380 shares Government Money Market Fund............................... 1,377,536,345.110 shares Government Reserves........................................ 8,585,417,864.800 shares
If the accompanying proxy ballot(s) is executed and returned in time for the Meetings, the shares covered thereby will be voted in accordance with the proxy on all matters that may properly come before the Meetings. Quorum A quorum is constituted with respect to a Fund by the presence in person or by proxy of the holders of more than one-half of the outstanding shares of the Fund entitled to vote at the Meetings. For purposes of determining the presence of a quorum for transacting business at the Meetings, abstentions will be treated as shares that are present at the Meetings but which have not been voted. Accordingly, abstentions will have the effect of a "no" vote for purposes of obtaining the requisite approvals of the Reorganization Agreements. Broker "non-votes" (that is, proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owners or other persons entitled to vote shares on a particular matter with respect to which the brokers or nominees do not have discretionary power) will be treated the same as abstentions. In certain circumstances, brokers or nominees that are members of the New York Stock Exchange may vote the shares of beneficial owners who do not otherwise submit voting instructions to their broker or nominee. In the event that a quorum is not present at the Meetings, or in the event that a quorum is present at the Meetings but sufficient votes to approve a Reorganization Agreement are not received by a Fund, one or more adjournment(s) may be proposed to permit further solicitation of proxies in order to obtain a requisite vote. All Meetings may be adjourned for a reasonable period of time, except the Meeting of Prime Fund and Treasury Fund, which may be adjourned to no more than 120 days from the record date of December 27, 2001. Any such adjournment(s) will require the affirmative vote of a majority of those shares affected by the adjournment(s) that are represented at the Meetings in person or by proxy. If a quorum is present, the persons named as proxies will vote those proxies which they are entitled to vote FOR the particular proposal for which a quorum exists in favor of such adjournment(s), and will vote those proxies required to be voted AGAINST such proposal against any adjournment(s). 26 Shareholder Approval For Government Money Market Fund, its Reorganization Agreement must be approved by the affirmative vote of at least a majority of its outstanding shares. For Cash Reserves, Treasury Reserves and Government Reserves, their Reorganization Agreement must be approved by the affirmative vote of at least a majority of the shares of a Fund present in person or by proxy. For the Prime Fund and Treasury Fund, their Reorganization Agreement must be approved by the affirmative vote of at least a majority of the shares of the Fund present in person or by proxy, and to dissolve the Company the affirmative vote of at least a majority of all the outstanding shares of the Company voting in the aggregate. The Reorganization of any Fund is not conditioned upon the Reorganization of any other Fund. Accordingly, it is possible that one or more Fund(s)' shareholders will not approve the Reorganization and such Fund(s) will not be reorganized. In this event, the Board(s) will consider what further action is appropriate. A vote of the shareholders of the Acquiring Funds is not being solicited, since their approval or consent is not necessary for the Reorganization. Principal Shareholders The table below shows the name, address and share ownership of each person known to the Trust to have ownership with respect to 5% or more of a class of a Fund as of December 4, 2001. Each shareholder is known to own as of record the shares indicated below. Any shareholder known to the Trust to own such shares beneficially is designated by an asterisk.
Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing Cash Reserves BANK OF AMERICA 973,839,600 12.59% 1.32% 1.23% c/o NATIONS FUNDS Advisor ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 2,008,664,860.75 25.97% 4.66% 4.32% AGENT FBO Advisor GLOBAL FINANCE SWEEP CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA SWP 398,000,000 5.14% 6.84% 6.34% DISBURSEMENT NC Advisor BANK OF AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 1,017,763,269.98 13.16% 10.32% 11.33% EXCLUSIVE BENEFIT OF OUR Advisor CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
27
Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing THE BANK OF NEW YORK 2,229,500,000 6.56% 3.03% 2.81% AS AGENT FOR ITS SECURITIES Capital LENDING CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 2,431,165,869.19 7.15% 5.95% 9.89% c/o NATIONS FUNDS Capital ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL 6,028,116,543.59 42.85% 8.20% 7.61% SERVICES CORP Daily FBO OF OUR EXCULSIVE CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 1,420,000,000 10.09% 4.66% 4.32% AGENT FBO Daily GLOBAL FINANCE SWEEP CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 5,504,048,978.15 39.12% 10.32% 11.33% EXCLUSIVE BENEFIT OF OUR Daily CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 KOCH GLOBAL INVESTMENTS INC 375,000,000 13.35% 0.51% 0.47% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 146,575,997.50 5.22% 5.95% 9.89% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA-SHORT TERM 507,947,000 18.09% 0.69% 0.64% ASSET MANAGEMENT Instl c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 HORSESHOE GAMING HOLDING CORP 151,131,350.26 5.38% 0.21% 0.19% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing BANC OF AMERICA SECURITIES LLC 706,372,120.12 12.21% 0.96% 0.89% c/o NATIONS FUNDS Investor ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 HARE & CO, BANK OF NEW YORK 317,751,315.25 5.49% 0.84% 0.78% c/o NATIONS FUNDS Investor ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 1,074,814,001.83 18.58% 10.32% 11.33% EXCLUSIVE BENEFIT OF OUR Investor CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 SILICON VALLEY BANK 3,517,939,689.83 60.83% 4.78% 4.44% c/o NATIONS FUNDS Investor ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 RITCHEY M MARBURY III TTEE 82,628.08 5.49% 0.00% 0.00% MARBURY ENGINEERING CO Investor C PROFIT SHARING PLAN c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W16-023051 94,120.26 6.25% 0.00% 0.00% JERRY W CUMMINGS Investor C SYLVIA A CUMMINGS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W52-048305 201,712.54 13.40% 0.00% 0.00% CATHERINE R BECK Investor C RICHARD BECK c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 LENNAR CORPORATION 458,416,543.23 20.30% 0.62% 0.58% c/o NATIONS FUNDS Liquidity ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing BANK OF AMERICA SWP 3,609,000,000 98.86% 6.84% 6.34% DISBURSEMENT NC Market BANK OF AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA SWP 1,022,000,000 89.43% 6.84% 6.34% DISBURSEMENT NC Service BANK OF AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 1,792,346,654.38 84.22% 5.95% 9.89% ATTN TONY FARRER Trust c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 HARE & CO, BANK OF NEW YORK 299,800,367.27 14.08% 0.84% 0.78% c/o NATIONS FUNDS Trust ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 Government NATIONAL FINANCIAL FOR THE 17,438,712.72 99.90% 7.46% 24.47% Money Market EXCLUSIVE BENEFIT OF OUR Daily Fund CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 13,394,846.24 89.91% 7.46% 24.47% EXCLUSIVE BENEFIT OF OUR Investor A CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 AUSTIN W TUPLER TTEE 3,188,692.50 11.40% 0.77% 0.05% AUSTIN W TUPLER TRUST Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 KATE BELKNAP HUSTER AND 1,480,201.82 5.29% 0.36% 0.02% R A BELKNAP JTWROS Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing LAURA F BELKNAP AND 1,452,816.24 5.19% 0.35% 0.77% R A BELKNAP JTWROS Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 HARE & CO, BANK OF NEW YORK 2,339,396.65 8.36% 0.57% 0.04% c/o NATIONS FUNDS Investor B ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 YMCA OF METROPOLITAN DALLAS 1,962,891.73 7.01% 0.47% 0.03% c/o NATIONS FUNDS Investor B ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 CORBIN J ROBERTSON JR TTEE 2,076,292.02 7.42% 0.50% 0.03% WILLIAM K ROBERTSON 1993 MGMT TR Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 CORBIN J ROBERTSON JR TTEE 2,305,335.90 8.24% 0.56% 0.03% FRANCES C ROBERTSON 1992 MTG TR Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 ELI S JACOBS 2,739,860.20 9.79% 0.66% 0.04% c/o NATIONS FUNDS Investor B ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W69-008842 474,587.92 96.59% 0.11% 0.01% NFSC/FMTC IRA ROLLOVER Investor C FBO THOMAS S SPADARO c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 343,749,482.87 99.11% 83.18% 5.18% c/o NATIONS FUNDS Primary A ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 458,525.50 100.00% 0.11% 0.01% c/o NATIONS FUNDS Primary B ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing Government BANC OF AMERICA SECURITIES LLC 184,299,858.60 17.20% 8.94% 8.38% Reserves c/o NATIONS FUNDS Advisor ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 508,909,394.15 47.51% 25.60% 24.47% EXCLUSIVE BENEFIT OF OUR Advisor CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 ARKANSAS STATE TREASURY 201,341,459.59 8.29% 3.23% 3.03% c/o NATIONS FUNDS Capital ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 ALLEGIS GROUP INC 136,538,050.35 5.62% 2.19% 2.06% c/o NATIONS FUNDS Capital ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NINTENDO OF AMERICA 663,124,552.72 27.31% 10.65% 9.99% c/o NATIONS FUNDS Capital ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 HARTFORD LIFE INSURANCE CO 128,962,490.16 5.31% 2.07% 1.94% SERIES II WAMCO FIXED INCOME Capital MORTGAGE BACKED DIVISION c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 277,970,477.41 99.36% 25.60% 24.47% EXCLUSIVE BENEFIT OF OUR Daily CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 VARIETY WHOLESALERS 15,000,000 6.97% 0.24% 0.23% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA-SHORT TERM 19,933,000 9.26% 0.32% 0.30% ASSET MANAGEMENT Instl c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing NEW VALLEY CORPORATION 50,450,347.24 23.44% 0.81% 0.76% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 HOSPITAL AUTH OF VALDOSTA & 18,180,881.77 8.45% 0.29% 0.27% LOWNDES Instl CO GA DBA S GA MEDICAL CENTER c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 MERANT INC 45,225,286.75 21.01% 0.73% 0.68% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF HAMPTON ROADS 21,000,000 9.76% 0.34% 0.32% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 FARMERS RICE COOPERATIVE 28,162,000 13.08% 0.45% 0.42% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANC OF AMERICA SECURITIES LLC 372,143,982.70 31.07% 8.94% 8.38% c/o NATIONS FUNDS Investor ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 807,367,188.72 67.42% 25.60% 24.47% EXCLUSIVE BENEFIT OF OUR Investor CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W67-626333 384,339.68 19.46% 0.01% 0.01% CARLOS EXPOSITO Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 DEAN WITTER FOR THE BENEFIT OF 264,319.31 13.38% 0.00% 0.00% GEORGE K BERNSTEIN TRUST Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing DEAN WITTER FOR THE BENEFIT OF 356,640.98 18.05% 0.01% 0.01% CARYL S BERNSTEIN Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W19-040584 12,164.50 99.91% 0.00% 0.00% DON L CLYMER CUST Investor C BRITTANY LYNN CLYMER UTMA FL c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA SWP 54,000,000 30.14% 9.77% 9.15% DISBURSEMENT NC Liquidity BANK OF AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 ZAPATA CORPORATION 14,478,212.99 8.08% 0.23% 0.22% c/o NATIONS FUNDS Liquidity ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NORBERT DICKMAN & 10,487,333.60 5.85% 0.17% 0.16% ROBERT DICKSON TRUSTEES Liquidity BARBARA FASKEN 1995 TRUST c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 FASKEN LTD 17,629,406.75 9.84% 0.28% 0.27% c/o NATIONS FUNDS Liquidity ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 QUINTANA MINERALS CORP 11,639,041.11 6.49% 0.19% 0.18% c/o NATIONS FUNDS Liquidity ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA SWP 520,000,000 99.99% 9.77% 9.15% DISBURSEMENT NC BANK OF Market AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing BANK OF AMERICA SWP 34,000,000 99.99% 9.77% 9.15% DISBURSEMENT NC BANK OF Service AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 300,949,258.07 99.99% 4.83% 4.53% c/o NATIONS FUNDS Trust ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 Prime Fund NATIONAL FINANCIAL FOR THE 949,576,400.14 97.86% 16.64% 11.33% EXCLUSIVE BENEFIT OF OUR Daily CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 433,952,921.57 86.84% 7.60% 11.33% EXCLUSIVE BENEFIT OF OUR Investor A CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W19-668443 297,678.23 8.07% 0.01% 0.00% JOHN JONES Investor C BECKY L JONES c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W26-003808 263,496.84 7.14% 0.00% 0.00% HERBERT MAXEY JR Investor C NANCY A MAXEY c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 DEAN WITTER REYNOLDS CUST FOR 297,189.19 8.05% 0.01% 0.00% CARROLL D SHANKS Investor C c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 SUNSTONE FINANCIAL GROUP INC AS 30,815,704.36 99.99% 0.54% 0.04% AGT Marsico FOR MARISCO FUNDS INC 803 W MICHIGAN ST SUITE A MILWAUKEE WI 53233-2301
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing BANK OF AMERICA NA 3,470,971,561.96 98.85% 60.81% 9.89% c/o NATIONS FUNDS Primary A ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 9,622,078.32 100.00% 0.17% 0.01% c/o NATIONS FUNDS Primary B ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 Treasury Fund NATIONAL FINANCIAL FOR THE 55,589,129.96 99.18% 3.07% 3.56% EXCLUSIVE BENEFIT OF OUR Daily CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 HARE & CO, BANK OF NEW YORK 899,015,489.34 86.27% 52.94% 14.08% c/o NATIONS FUNDS Investor A ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANC OF AMERICA SECURITIES LLC 120,544,368.92 11.56% 6.66% 1.05% c/o NATIONS FUNDS Investor A ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 HARE & CO, BANK OF NEW YORK 58,557,765.46 57.80% 52.94% 14.08% c/o NATIONS FUNDS Investor B ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 ROBERT G ACKERLEY 8,560,447.47 8.44% 0.47% 0.07% c/o NATIONS FUNDS Investor B ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W13-643629 13,447.47 6.14% 0.00% 0.00% NFSC/FMTC IRA Investor C FBO MAUREEN D MATRICARDI c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W13-643637 13,447.47 6.14% 0.00% 0.00% NFSC/FMTC IRA FBO Investor C EDMUND A MATRICARDI JR c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing NFSC FEBO # W52-725021 53,669.86 24.54% 0.00% 0.00% NFSC/FMTC IRA Investor C FBO RETHA C WHITEHEAD c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W32-608246 19,685.60 9.00% 0.00% 0.00% NFSC/FMTC IRA Investor C FBO DONALD E PAUL c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # RS6-607207 11,680.76 5.34% 0.00% 0.00% NFSC/FMTC IRA ROLLOVER Investor C FBO JAMES A COX c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W75-129410 102,127.40 46.70% 0.01% 0.00% RAKHMAN YEVDAYEV Investor C GENRIETA YEVDAYEVA c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 598,726,907.04 99.86% 33.10% 8.36% c/o NATIONS FUNDS Primary A ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 7,448,830.28 100.00% 0.41% 0.06% c/o NATIONS FUNDS Primary B ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 Treasury Reserves BANK OF AMERICA NA 628,032,011.64 21.42% 10.95% 9.23% AGENT FBO Advisor GLOBAL FINANCE SWEEP CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA SWP 562,000,000 19.17% 26.69% 22.51% DISBURSEMENT NC Advisor BANK OF AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing HARE & CO, BANK OF NEW YORK 566,572,039.20 19.32% 6.83% 14.08% c/o NATIONS FUNDS Advisor ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 KPMG PEAT MARWICK LL 194,000,000 8.18% 2.00% 1.68% c/o NATIONS FUNDS Capital ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANC OF AMERICA SECURITIES LLC 367,223,427.89 15.48% 3.78% 3.19% c/o NATIONS FUNDS Capital ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 PHELPS DODGE CORPORATION 285,967,666.96 12.06% 2.94% 2.48% c/o NATIONS FUNDS Capital ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 AMERICAN NATIONAL RED CROSS 131,306,290.12 5.53% 1.35% 1.14% c/o NATIONS FUNDS Capital ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 AT&T CORP 400,000,000 16.86% 4.12% 3.47% c/o NATIONS FUNDS Capital ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 436,000,000 33.82% 10.95% 9.23% AGENT FBO Daily GLOBAL FINANCE SWEEP CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA SWP 373,525,416.29 28.97% 26.69% 22.51% DISBURSEMENT NC Daily BANK OF AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 304,118,379.23 23.59% 3.65% 3.56% EXCLUSIVE BENEFIT OF OUR Daily CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing PILLOWTEX CORPORATION 5,206,660.33 9.81% 0.05% 0.05% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 TIGUA INDIAN RESERVATION 17,350,264.48 32.69% 0.18% 0.15% YSLETA DEL SUR PUEBLO Instl MINOR ACCOUNT c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 CLARK COUNTY PUBLIC GUARDIAN 8,000,000 15.07% 0.08% 0.07% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 CLARK COUNTY PUBLIC 8,500,000 16.01% 0.09% 0.07% ADMINISTRATOR Instl JARED E SHAFER PUBLIC ADMINISTRATOR c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 PROFIT RECOVERY GROUP USA INC 8,000,000 15.07% 0.08% 0.07% c/o NATIONS FUNDS Instl ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 HARE & CO, BANK OF NEW YORK 97,479,879.67 13.63% 6.83% 14.08% c/o NATIONS FUNDS Investor ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NATIONAL FINANCIAL FOR THE 50,860,073.68 7.11% 3.65% 3.56% EXCLUSIVE BENEFIT OF OUR Investor CUSTOMERS c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 SILICON VALLEY BANK 537,697,116.35 75.20% 5.53% 4.66% c/o NATIONS FUNDS Investor ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W32-105767 9,199.13 9.01% 0.00% 0.00% TU NGUYEN Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
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Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing NFSC FEBO # W14-618039 53,384.77 52.31% 0.00% 0.00% SUSIE BEARD Investor B ELLA P BEARD c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W25-025950 18,676.05 18.30% 0.00% 0.00% NFSC/FMTC IRA ROLLOVER Investor B FBO HOWARD E SOLOMON c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 NFSC FEBO # W38-050156 20,154.23 19.75% 0.00% 0.00% ROBERT L COLEMAN Investor B c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 STEPHENS INC 10 100.00% 0.00% 0.00% c/o NATIONS FUNDS Investor C ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA SWP 26,000,000 8.46% 26.69% 22.51% DISBURSEMENT NC Liquidity BANK OF AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 FRONTIER GENERAL TRUSTEE FOR 23,493,000 7.64% 0.24% 0.20% OCCUPATIONAL ACCIDENT & REINS Liquidity POOL YEAR 4 c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 SWINERTON & WALBERG CO 44,329,083.10 14.43% 0.46% 0.38% MR JAMES R GILLETTE EXEC VP Liquidity c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 PALMETTO BRIDGE CONSTRUCTORS 30,750,562.73 10.01% 0.32% 0.27% c/o NATIONS FUNDS Liquidity ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
40
Percentage of Percentage of Total Shares/ Percentage Fund (All Fund Post Fund Name and Address Class of Class Classes) Closing BANK OF AMERICA SWP 1,322,000,000 99.99% 26.69% 22.51% DISBURSEMENT NC Market BANK OF AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA SWP 310,500,000 87.46% 26.69% 22.51% DISBURSEMENT NC Service BANK OF AMERICA SWEEP/AUTOBORROW c/o NATIONS FUNDS ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255 BANK OF AMERICA NA 365,915,155.01 97.80% 3.77% 8.36% c/o NATIONS FUNDS Trust ONE BANK OF AMERICA PLAZA 33RD FLOOR CHARLOTTE, NC 28255
For purposes of the 1940 Act, any person who owns directly or through one or more controlled companies more than 25% of the voting securities of a company is presumed to "control" such company. Accordingly, to the extent that a shareholder identified in the foregoing table is identified as the beneficial holder of more than 25% of a class, or is identified as the holder of record of more than 25% of a class and has voting and/or investment power, it may be presumed to control such class. As of December 27, 2001, Bank of America had voting control of 54.82% of the outstanding shares of Prime Fund; and 71.72% of the outstanding shares of Government Money Market Fund. Accordingly, Bank of America may be considered to "control" these Funds. The address of Bank of America is: 411 N. Akard Street, TX1-945-0818, Dallas, TX 75201. Bank of America's control is likely to increase the chance that the Funds' shareholders will approve the proposed items. As of December 27, 2001, the officers and Trustees of the Trust as a group did not own more than 1% of any class of any Fund. Annual Meetings and Shareholder Meetings Neither the Trust, the Company, Reserves nor Nations Funds Trust presently holds annual meetings of shareholders for the election of Trustees and other business unless otherwise required by the 1940 Act. ADDITIONAL INFORMATION ABOUT THE TRUST, THE COMPANY, RESERVES AND NATIONS FUNDS TRUST Financial Statements The audited financial statements and financial highlights for shares of the Funds for the annual period ended March 31, 2001, and unaudited financial statements for shares of the Funds for the semi-annual period ended September 30, 2001, are incorporated by reference in their prospectuses or statements of additional information, or in the SAI related to this Proxy/Prospectus. 41 The annual financial statements and financial highlights of the Funds for the year ended March 31, 2001 have been audited by PricewaterhouseCoopers LLP, independent accountants, to the extent indicated in their reports thereon, and have been incorporated by reference in the SAI to this Proxy/Prospectus, in reliance upon such reports given upon the authority of such firm as an expert in accounting and auditing. Other Business The Boards know of no other business to be brought before the Meetings. However, if any other matters properly come before the Meetings, it is the intention that proxies which do not contain specific restrictions to the contrary will be voted on such matters in accordance with the judgment of the persons named in the enclosed form of proxy. Shareholder Inquiries Shareholders may find more information about the Funds and Acquiring Funds in the following documents: . Annual and semi-annual reports The annual and semi-annual reports contain information about Fund investments and performance, the financial statements and the independent accountants' reports. The annual report also includes a discussion about the market conditions and investment strategies that had a significant effect on each Fund's performance during the period. Because the Acquiring Funds are new portfolios, they have not yet completed a fiscal year and, accordingly, do not yet have an annual or semi-annual report. . Statement of Additional Information The SAI for the Funds and Acquiring Funds contains additional information about the Funds and Acquiring Funds and their policies. The SAI is legally part of their prospectuses (it is incorporated by reference). Copies have been filed with the SEC. Shareholders may obtain free copies of these documents, request other information about the Funds or Acquiring Funds and make shareholder inquiries by contacting Nations Funds: By telephone: (800) 653-9427 By mail: Nations Funds c/o Stephens Inc. One Bank of America Plaza 33rd Floor Charlotte, NC 28255 On the Internet: www.nations-funds.com Information about the Funds and Acquiring Funds can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 942-8090. The reports and other information about the Funds are available on the EDGAR Database on the SEC's Internet site at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. 42 APPENDIX A Glossary
Term Used in Proxy/Prospectus Definition - ----------------------------- ---------- 1933 Act............................. Securities Act of 1933, as amended 1934 Act............................. Securities Exchange Act of 1934, as amended 1940 Act............................. Investment Company Act of 1940, as amended Acquiring Fund(s).................... Cash Reserves (acquiring), Treasury Reserves (acquiring) and Government Reserves (acquiring) (each a Fund of Nations Funds Trust) Adviser.............................. BA Advisors and/or BACAP, as the context may require BA Advisors.......................... Banc of America Advisors, LLC BACAP................................ Banc of America Capital Management, LLC Bank of America...................... Bank of America, N.A. Board................................ Any one Board of Trustees/Directors of the Trust, the Company Reserves or Nations Funds Trust Boards............................... More than one of the Boards of Trustees/Directors of the Trust, the Company Reserves or Nations Funds Trust Cash Reserves........................ Nations Cash Reserves Cash Reserves (acquiring)............ The Acquiring Fund of Nations Funds Trust that will acquire the assets and liabilities of the Prime Fund and Cash Reserves Closing.............................. Closing of the Reorganization, expected to occur on or about May 10, 2002 Code................................. Internal Revenue Code of 1986, as amended Company.............................. Nations Fund, Inc. Fund(s).............................. Nations Prime Fund, Nations Treasury Fund, Nations Government Money Market Fund, Nations Cash Reserves, Nations Treasury Reserves and Nations Government Reserves Government Money Market Fund......... Nations Government Money Market Fund Government Reserves.................. Nations Government Reserves Government Reserves (acquiring)...... The Acquiring Fund of Nations Funds Trust that will acquire the assets and liabilities of the Government Money Market Fund and Government Reserves Meeting(s)........................... The shareholder meetings of the Funds that will be jointly held at 10:00 a.m., Eastern time, on March 27, 2002, at One Bank of America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina Nations Funds or Nations Funds Family The fund complex that is comprised of the Companies Nations Money Market Funds........... The money market funds of the Trust and the Company. Nations Reserves Money Market Funds.. The money market funds of Nations Funds Trust. Prime Fund........................... Nations Prime Fund Proxy/Prospectus..................... This combined proxy statement/prospectus Reorganization....................... The reorganization of the Fund(s) into the Acquiring Fund(s)
A-1
Term Used in Proxy/Prospectus Definition - ----------------------------- ---------- Reorganization Agreement(s). One or more of the: Agreement and Plan of Reorganization dated January 1, 2002 by and between Nations Fund Trust, on behalf of its Funds, and Nations Funds Trust, on behalf of the Acquiring Funds; Agreement and Plan of Reorganization dated January 1, 2002 by and between Nations Fund, Inc., on behalf of its Funds, and Nations Funds Trust, on behalf of the Acquiring Funds; and Agreement and Plan of Reorganization dated January 1, 2002 by and between Nations Reserves, on behalf of its Funds, and Nations Funds Trust, on behalf of the Acquiring Funds Reserves.................... The Capitol Mutual Funds d/b/a Nations Reserves SAI......................... Statement of Additional Information
SEC.......................... United States Securities and Exchange Commission Treasury Fund................ Nations Treasury Fund Treasury Reserves............ Nations Treasury Reserves Treasury Reserves (acquiring) The Acquiring Fund of Nations Funds Trust that will acquire the assets and liabilities of the Treasury Fund and Treasury Reserves Trust........................ Nations Fund Trust
A-2 APPENDIX B Expense Summaries of the Funds and Acquiring Funds The following tables describe the fees and expenses associated with holding Fund and Acquiring Fund shares. In particular, the tables (a) compare the fees and expenses as of August 31, 2001, for each class of each Fund and the corresponding class of the Acquiring Fund, and (b) show the estimated fees and expenses for each combined Acquiring Fund on a pro forma basis after giving effect to the Reorganization. The pro forma expense presentations also are shown where Prime Fund approves the Reorganization but Cash Reserves does not; where Treasury Fund approves the Reorganization but Treasury Reserves does not; and where Government Money Market Fund approves the Reorganization but Government Reserves does not. However, the pro forma expense presentations are not shown in the case where Cash Reserves, Treasury Reserves or Government Reserves approves the Reorganization but Prime Fund, Treasury Fund or Government Money Market Fund, respectively, do not, because in each such case fees and expenses for the Acquiring Fund would remain exactly the same as that of the Fund prior to the Reorganization. The fund operating expense levels shown in this Proxy/Prospectus assume net asset levels as of August 31, 2001; pro forma expense levels shown should not be considered an actual representation of future expenses or performance. Such pro forma expense levels project anticipated levels but may be greater or less than those shown. B-1 IF ONLY PRIME FUND IS REORGANIZED: Primary A Shares/Trust Class
Pro Forma Cash Reserves Prime Fund (acquiring) ---------- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Shareholder administration fees.................................................. 0.00% 0.10% . Other expenses................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses............................................. 0.33% 0.38% . Fee waivers and/or reimbursements................................................ (0.03)% (0.08)% ----- ----- . Total net expenses/1/............................................................ 0.30% 0.30% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary A Shares or Trust Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund......................... $31 $103 $182 $415 Pro Forma Cash Reserves (acquiring) $31 $114 $205 $473
B-2 IF BOTH PRIME FUND AND CASH RESERVES ARE REORGANIZED: Primary A Shares/Trust Class
Pro Forma Cash Reserves Prime Fund Cash Reserves (acquiring) ---------- ------------- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................. none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees................................................ 0.20% 0.15% 0.15% . Shareholder administration fees................................ 0.00% 0.10% 0.10% . Other expenses................................................. 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses........................... 0.33% 0.37% 0.37% . Fee waivers and/or reimbursements.............................. (0.03)% (0.07)% (0.07)% ----- ----- ----- . Total net expenses/1/.......................................... 0.30% 0.30% 0.30% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary A Shares or Trust Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund......................... $31 $103 $182 $415 Cash Reserves...................... $31 $112 $201 $461 Pro Forma Cash Reserves (acquiring) $31 $112 $201 $461
B-3 IF ONLY PRIME FUND IS REORGANIZED: Primary B Shares/Investor Class
Pro Forma Cash Reserves Prime Fund (acquiring) ---------- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.25% 0.35% . Other expenses................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses............................................. 0.58% 0.63% . Fee waivers and/or reimbursements................................................ (0.03)% (0.08)% ----- ----- . Total net expenses/1/............................................................ 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years ---- ------ ------- ------- -------- Prime Fund......................... $56 $183 $321 $723 Pro Forma Cash Reserves (acquiring) $56 $194 $343 $779
B-4 IF BOTH PRIME FUND AND CASH RESERVES ARE REORGANIZED: Primary B Shares/Investor Class
Pro Forma Cash Reserves Prime Fund Cash Reserves (acquiring) ---------- ------------- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................. none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees................................................ 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees......... 0.25% 0.35% 0.35% . Other expenses................................................. 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses........................... 0.58% 0.62% 0.62% . Fee waivers and/or reimbursements.............................. (0.03)% (0.07)% (0.07)% ----- ----- ----- . Total net expenses/1/.......................................... 0.55% 0.55% 0.55% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund......................... $56 $183 $321 $723 Cash Reserves...................... $56 $191 $339 $768 Pro Forma Cash Reserves (acquiring) $56 $191 $339 $768
B-5 IF ONLY PRIME FUND IS REORGANIZED: Investor A Shares
Pro Forma Cash Reserves Prime Fund (acquiring) ---------- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Shareholder administration fees.................................................. 0.00% 0.10% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.35% 0.35% . Other expenses................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses............................................. 0.68% 0.73% . Fee waivers and/or reimbursements................................................ (0.03%) (0.08%) ----- ----- . Total net expenses/1/............................................................ 0.65% 0.65% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor A Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund......................... $66 $215 $376 $844 Pro Forma Cash Reserves (acquiring) $66 $225 $398 $899
B-6 IF ONLY PRIME FUND IS REORGANIZED: Investor B Shares/Investor Class
Pro Forma Cash Reserves Prime Fund (acquiring) ---------- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.35% 0.35% . Other expenses................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses............................................. 0.68% 0.63% . Fee waivers and/or reimbursements................................................ (0.13)% (0.08)% ----- ----- . Total net expenses/1/............................................................ 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund......................... $56 $204 $366 $834 Pro Forma Cash Reserves (acquiring) $56 $194 $343 $779
B-7 IF BOTH PRIME FUND AND CASH RESERVES ARE REORGANIZED: Investor B Shares/Investor Class
Pro Forma Cash Reserves Prime Fund Cash Reserves (acquiring) ---------- ------------- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................. none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees................................................ 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees......... 0.35% 0.35% 0.35% . Other expenses................................................. 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses........................... 0.68% 0.62% 0.62% . Fee waivers and/or reimbursements.............................. (0.13)% (0.07)% (0.07)% ----- ----- ----- . Total net expenses/1/.......................................... 0.55% 0.55% 0.55% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years ---- ------ ------- ------- -------- Prime Fund......................... $56 $204 $366 $834 Cash Reserves...................... $56 $191 $339 $768 Pro Forma Cash Reserves (acquiring) $56 $191 $339 $768
B-8 IF ONLY PRIME FUND IS REORGANIZED: Investor C Shares/Investor Class
Pro Forma Cash Prime Reserves Fund (acquiring) ----- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees 0.25% 0.35% . Other expenses................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses............................................. 0.58% 0.63% . Fee waivers and/or reimbursements................................................ (0.03)% (0.08)% ----- ----- . Total net expenses/1/............................................................ 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor C Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund......................... $56 $183 $321 $723 Pro Forma Cash Reserves (acquiring) $56 $194 $343 $779
B-9 IF BOTH PRIME FUND AND CASH RESERVES ARE REORGANIZED: Investor C Shares/Investor Class
Pro Forma Cash Reserves Prime Fund Cash Reserves (acquiring) ---------- ------------- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................. none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees................................................ 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees......... 0.25% 0.35% 0.35% . Other expenses................................................. 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses........................... 0.58% 0.62% 0.62% . Fee waivers and/or reimbursements.............................. (0.03)% (0.07)% (0.07)% ----- ----- ----- . Total net expenses/1/.......................................... 0.55% 0.55% 0.55% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor C Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund......................... $56 $183 $321 $723 Cash Reserves...................... $56 $191 $339 $768 Pro Forma Cash Reserves (acquiring) $56 $191 $339 $768
B-10 IF ONLY PRIME FUND IS REORGANIZED: Daily Shares/Daily Class
Pro Forma Cash Reserves Prime Fund (acquiring) ---------- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.70% 0.60% . Other expenses................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses............................................. 1.03% 0.88% . Fee waivers and/or reimbursements................................................ (0.23)% (0.08)% ----- ----- . Total net expenses/1/............................................................ 0.80% 0.80% ===== =====
- -------- /1 /The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Daily Shares or Daily Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund..................................... $82 $305 $546 $1,239 Pro Forma Cash Reserves (acquiring)............ $82 $273 $480 $1,077
B-11 IF BOTH PRIME FUND AND CASH RESERVES ARE REORGANIZED: Daily Shares/Daily Class
Pro Forma Cash Reserves Prime Fund Cash Reserves (acquiring) ---------- ------------- -------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....................................... none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value....... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees......................................... 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees.. 0.70% 0.60% 0.60% . Other expenses.......................................... 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses.................... 1.03% 0.87% 0.87% . Fee waivers and/or reimbursements....................... (0.23)% (0.07)% (0.07)% ----- ----- ----- Total net expenses/1/..................................... 0.80% 0.80% 0.80% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Daily Shares or Daily Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund......................... $82 $305 $546 $1,239 Cash Reserves...................... $82 $271 $475 $1,066 Pro Forma Cash Reserves (acquiring) $82 $271 $475 $1,066
B-12 IF ONLY PRIME FUND IS REORGANIZED: Marsico Shares
Pro Forma Prime Cash Reserves Fund (acquiring) ----- ------------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price............. none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees........................................................................ 0.20% 0.15% . Shareholder administration fees........................................................ 0.00% 0.10% . Shareholder servicing fees............................................................. 0.25% 0.25% . Other expenses......................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses................................................... 0.58% 0.63% . Fee waivers and/or reimbursements...................................................... (0.03)% (0.08)% ----- ----- . Total net expenses/1/.................................................................. 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Marsico Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Prime Fund......................... $56 $183 $321 $723 Pro Forma Cash Reserves (acquiring) $56 $194 $343 $779
B-13 IF ONLY TREASURY FUND IS REORGANIZED: Primary A Shares/Trust Class
Pro Forma Treasury Treasury Reserves Fund (acquiring) -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price............. none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees........................................................................ 0.20% 0.15% . Shareholder administration fees........................................................ 0.00% 0.10% . Other expenses......................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses................................................... 0.33% 0.38% . Fee waivers and/or reimbursements...................................................... (0.03)% (0.08)% ----- ----- . Total net expenses/1/.................................................................. 0.30% 0.30% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary A Shares or Trust Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Treasury Fund.......................... $31 $103 $182 $415 Pro Forma Treasury Reserves (acquiring) $31 $114 $205 $473
B-14 IF BOTH TREASURY FUND AND TREASURY RESERVES ARE REORGANIZED: Primary A Shares/Trust Class
Pro Forma Treasury Treasury Treasury Reserves Fund Reserves (acquiring) -------- -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees........................................................... 0.20% 0.15% 0.15% . Shareholder administration fees........................................... 0.00% 0.10% 0.10% . Other expenses............................................................ 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses...................................... 0.33% 0.37% 0.37% . Fee waivers and/or reimbursements......................................... (0.03)% (0.07)% (0.07)% ----- ----- ----- . Total net expenses/1/..................................................... 0.30% 0.30% 0.30% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary A Shares or Trust Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Treasury Fund.......................... $31 $103 $182 $415 Treasury Reserves...................... $31 $112 $201 $461 Pro Forma Treasury Reserves (acquiring) $31 $112 $201 $461
B-15 IF ONLY TREASURY FUND IS REORGANIZED: Primary B Shares/Investor Class
Pro Forma Treasury Treasury Reserves Fund (acquiring) -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price............. none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees........................................................................ 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees................................. 0.25% 0.35% . Other expenses......................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses................................................... 0.58% 0.63% . Fee waivers and/or reimbursements...................................................... (0.03)% (0.08)% ----- ----- . Total net expenses/1/.................................................................. 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Treasury Fund.......................... $56 $183 $321 $723 Pro Forma Treasury Reserves (acquiring) $56 $194 $343 $779
B-16 IF BOTH TREASURY FUND AND TREASURY RESERVES ARE REORGANIZED: Primary B Shares/Investor Class
Pro Forma Treasury Treasury Treasury Reserves Fund Reserves (acquiring) -------- -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees........................................................... 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees.................... 0.25% 0.35% 0.35% . Other expenses............................................................ 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses...................................... 0.58% 0.62% 0.62% . Fee waivers and/or reimbursements......................................... (0.03)% (0.07)% (0.07)% ----- ----- ----- . Total net expenses/1/..................................................... 0.55% 0.55% 0.55% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Treasury Fund.......................... $56 $183 $321 $723 Treasury Reserves...................... $56 $191 $339 $768 Pro Forma Treasury Reserves (acquiring) $56 $191 $339 $768
B-17 IF ONLY TREASURY FUND IS REORGANIZED: Investor A Shares
Pro Forma Treasury Treasury Reserves Fund (acquiring) -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price............. none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees........................................................................ 0.20% 0.15% . Shareholder administration fees........................................................ 0.00% 0.10% . Distribution (12b-1) and/or shareholder servicing fees................................. 0.35% 0.35% . Other expenses......................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses................................................... 0.68% 0.73% . Fee waivers and/or reimbursements...................................................... (0.03)% (0.08)% ----- ----- . Total net expenses/1/.................................................................. 0.65% 0.65% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor A Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Treasury Fund.......................... $66 $215 $376 $844 Pro Forma Treasury Reserves (acquiring) $66 $225 $398 $899
B-18 IF ONLY TREASURY FUND IS REORGANIZED: Investor B Shares/Investor Class
Pro Forma Treasury Treasury Reserves Fund (acquiring) -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.35% 0.35% . Other expenses................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses............................................. 0.68% 0.63% . Fee waivers and/or reimbursements................................................ (0.13)% (0.08)% ----- ----- . Total net expenses/1/............................................................ 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Treasury Fund.................................. $56 $204 $366 $834 Pro Forma Treasury Reserves (acquiring)........ $56 $194 $343 $779
B-19 IF BOTH TREASURY FUND AND TREASURY RESERVES ARE REORGANIZED: Investor B Shares/Investor Class
Pro Forma Treasury Treasury Treasury Reserves Fund Reserves (acquiring) -------- -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees........................................................... 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees.................... 0.35% 0.35% 0.35% . Other expenses............................................................ 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses...................................... 0.68% 0.62% 0.62% . Fee waivers and/or reimbursements......................................... (0.13)% (0.07)% (0.07)% ----- ----- ----- . Total net expenses/1/..................................................... 0.55% 0.55% 0.55% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Treasury Fund.................................. $56 $204 $366 $834 Treasury Reserves.............................. $56 $191 $339 $768 Pro Forma Treasury Reserves (acquiring)........ $56 $191 $339 $768
B-20 IF ONLY TREASURY FUND IS REORGANIZED: Investor C Shares/Investor Class
Pro Forma Treasury Treasury Reserves Fund (acquiring) -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.25% 0.35% . Other expenses................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses............................................. 0.58% 0.63% . Fee waivers and/or reimbursements................................................ (0.03)% (0.08)% ----- ----- . Total net expenses/1/............................................................ 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor C Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years ---- ------ ------- ------- -------- Treasury Fund.......................... $56 $183 $321 $723 Pro Forma Treasury Reserves (acquiring) $56 $194 $343 $779
B-21 IF BOTH TREASURY FUND AND TREASURY RESERVES ARE REORGANIZED: Investor C Shares/Investor Class
Pro Forma Treasury Treasury Treasury Reserves Fund Reserves (acquiring) -------- -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees........................................................... 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees.................... 0.25% 0.35% 0.35% . Other expenses............................................................ 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses...................................... 0.58% 0.62% 0.62% . Fee waivers and/or reimbursements......................................... (0.03)% (0.07)% (0.07)% ----- ----- ----- . Total net expenses/1/..................................................... 0.55% 0.55% 0.55% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor C Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years ---- ------ ------- ------- -------- Treasury Fund.......................... $56 $183 $321 $723 Treasury Reserves...................... $56 $191 $339 $768 Pro Forma Treasury Reserves (acquiring) $56 $191 $339 $768
B-22 IF ONLY TREASURY FUND IS REORGANIZED: Daily Shares/Daily Class
Pro Forma Treasury Treasury Reserves Fund (acquiring) -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price............. none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees........................................................................ 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees................................. 0.70% 0.60% . Other expenses......................................................................... 0.13% 0.13% ----- ----- . Total annual Fund operating expenses................................................... 1.03% 0.88% . Fee waivers and/or reimbursements...................................................... (0.23)% (0.08)% ----- ----- . Total net expenses/1/.................................................................. 0.80% 0.80% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Daily Shares or Daily Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Treasury Fund.................................. $82 $305 $546 $1,239 Pro Forma Treasury Reserves (acquiring)........ $82 $273 $480 $1,077
B-23 IF BOTH TREASURY FUND AND TREASURY RESERVES ARE REORGANIZED: Daily Shares/Daily Class
Pro Forma Treasury Treasury Treasury Reserves Fund Reserves (acquiring) -------- -------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................................... none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value....................................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees......................................................... 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees.................. 0.70% 0.60% 0.60% . Other expenses.......................................................... 0.13% 0.12% 0.12% ----- ----- ----- . Total annual Fund operating expenses.................................... 1.03% 0.87% 0.87% . Fee waivers and/or reimbursements....................................... (0.23)% (0.07)% (0.07)% ----- ----- ----- . Total net expenses/1/................................................... 0.80% 0.80% 0.80% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Daily Shares or Daily Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Treasury Fund.......................... $82 $305 $546 $1,239 Treasury Reserves...................... $82 $271 $475 $1,066 Pro Forma Treasury Reserves (acquiring) $82 $271 $475 $1,066
B-24 IF ONLY GOVERNMENT MONEY MARKET FUND IS REORGANIZED: Primary A Shares/Trust Class
Government Pro Forma Money Government Market Reserves Fund (acquiring) ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Shareholder administration fees.................................................. 0.00% 0.10% . Other expenses................................................................... 0.18% 0.18% ----- ----- . Total annual Fund operating expenses............................................. 0.38% 0.43% . Fee waivers and/or reimbursements................................................ (0.08)% (0.13)% ----- ----- . Total net expenses/1/............................................................ 0.30% 0.30% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary A Shares or Trust Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $31 $114 $205 $473 Pro Forma Government Reserves (acquiring) $31 $125 $228 $530
B-25 IF BOTH GOVERNMENT MONEY MARKET FUND AND GOVERNMENT RESERVES ARE REORGANIZED: Primary A Shares/Trust Class
Government Pro Forma Money Government Market Government Reserves Fund Reserves (acquiring) ---------- ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................. none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees................................................ 0.20% 0.15% 0.15% . Shareholder administration fees................................ 0.00% 0.10% 0.10% . Other expenses................................................. 0.18% 0.13% 0.13% ----- ----- ----- . Total annual Fund operating expenses........................... 0.38% 0.38% 0.38% . Fee waivers and/or reimbursements.............................. (0.08)% (0.08)% (0.08)% ----- ----- ----- . Total net expenses/1/.......................................... 0.30% 0.30% 0.30% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary A Shares or Trust Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $31 $114 $205 $473 Government Reserves...................... $31 $114 $205 $473 Pro Forma Government Reserves (acquiring) $31 $114 $205 $473
B-26 IF ONLY GOVERNMENT MONEY MARKET FUND IS REORGANIZED: Primary B Shares/Investor Class
Government Pro Forma Money Government Market Reserves Fund (acquiring) ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.25% 0.35% . Other expenses................................................................... 0.18% 0.18% ----- ----- . Total annual Fund operating expenses............................................. 0.63% 0.68% . Fee waivers and/or reimbursements................................................ (0.08)% (0.13)% ----- ----- . Total net expenses/1/............................................................ 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $56 $194 $343 $779 Pro Forma Government Reserves (acquiring) $56 $204 $366 $834
B-27 IF BOTH GOVERNMENT MONEY MARKET FUND AND GOVERNMENT RESERVES ARE REORGANIZED: Primary B Shares/Investor Class
Pro Forma Government Government Money Government Reserves Market Fund Reserves (acquiring) ----------- ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................. none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees................................................ 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees......... 0.25% 0.35% 0.35% . Other expenses................................................. 0.18% 0.13% 0.13% ----- ----- ----- . Total annual Fund operating expenses........................... 0.63% 0.63% 0.63% . Fee waivers and/or reimbursements.............................. (0.08)% (0.08)% (0.08)% ----- ----- ----- . Total net expenses/1/.......................................... 0.55% 0.55% 0.55% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Primary B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $56 $194 $343 $779 Government Reserves...................... $56 $194 $343 $779 Pro Forma Government Reserves (acquiring) $56 $194 $343 $779
B-28 IF ONLY GOVERNMENT MONEY MARKET FUND IS REORGANIZED: Investor A Shares
Government Pro Forma Money Government Market Reserves Fund (acquiring) ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Shareholder administration fees.................................................. 0.00% 0.10% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.35% 0.35% . Other expenses................................................................... 0.18% 0.18% ----- ----- . Total annual Fund operating expenses............................................. 0.73% 0.78% . Fee waivers and/or reimbursements................................................ (0.08)% (0.13)% ----- ----- . Total net expenses/1/............................................................ 0.65% 0.65% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor A Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $66 $225 $398 $899 Pro Forma Government Reserves (acquiring) $66 $236 $420 $954
B-29 IF ONLY GOVERNMENT MONEY MARKET FUND IS REORGANIZED: Investor B Shares/Investor Class
Government Pro Forma Money Government Market Reserves Fund (acquiring) ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.35% 0.35% . Other expenses................................................................... 0.18% 0.18% ----- ----- . Total annual Fund operating expenses............................................. 0.73% 0.68% . Fee waivers and/or reimbursements................................................ (0.18)% (0.13)% ----- ----- . Total net expenses/1/............................................................ 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund................ $56 $215 $388 $890 Pro Forma Government Reserves (acquiring)... $56 $204 $366 $834
B-30 IF BOTH GOVERNMENT MONEY MARKET FUND AND GOVERNMENT RESERVES ARE REORGANIZED: Investor B Shares/Investor Class
Government Pro Forma Money Government Market Government Reserves Fund Reserves (acquiring) ---------- ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................. none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees................................................ 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees......... 0.35% 0.35% 0.35% . Other expenses................................................. 0.18% 0.13% 0.13% ----- ----- ----- . Total annual Fund operating expenses........................... 0.73% 0.63% 0.63% . Fee waivers and/or reimbursements.............................. (0.18)% (0.08)% (0.08)% ----- ----- ----- . Total net expenses/1/.......................................... 0.55% 0.55% 0.55% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor B Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $56 $215 $388 $890 Government Reserves...................... $56 $194 $343 $779 Pro Forma Government Reserves (acquiring) $56 $194 $343 $779
B-31 IF ONLY GOVERNMENT MONEY MARKET FUND IS REORGANIZED: Investor C Shares/Investor Class
Government Pro Forma Money Government Market Reserves Fund (acquiring) ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.25% 0.35% . Other expenses................................................................... 0.18% 0.18% ----- ----- . Total annual Fund operating expenses............................................. 0.63% 0.68% . Fee waivers and/or reimbursements................................................ (0.08)% (0.13)% ----- ----- . Total net expenses/1/............................................................ 0.55% 0.55% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor C Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $56 $194 $343 $779 Pro Forma Government Reserves (acquiring) $56 $204 $366 $834
B-32 IF BOTH GOVERNMENT MONEY MARKET FUND AND GOVERNMENT RESERVES ARE REORGANIZED: Investor C Shares/Investor Class
Government Pro Forma Money Government Market Government Reserves Fund Reserves (acquiring) ---------- ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................. none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees................................................ 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees......... 0.25% 0.35% 0.35% . Other expenses................................................. 0.18% 0.13% 0.13% ----- ----- ----- . Total annual Fund operating expenses........................... 0.63% 0.63% 0.63% . Fee waivers and/or reimbursements.............................. (0.08)% (0.08)% (0.08)% ----- ----- ----- . Total net expenses/1/.......................................... 0.55% 0.55% 0.55% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Investor C Shares or Investor Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $56 $194 $343 $779 Government Reserves...................... $56 $194 $343 $779 Pro Forma Government Reserves (acquiring) $56 $194 $343 $779
B-33 IF ONLY GOVERNMENT MONEY MARKET FUND IS REORGANIZED: Daily Shares/Daily Class
Government Pro Forma Money Government Market Reserves Fund (acquiring) ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price....... none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value......................................................... none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees.................................................................. 0.20% 0.15% . Distribution (12b-1) and/or shareholder servicing fees........................... 0.70% 0.60% . Other expenses................................................................... 0.18% 0.18% ----- ----- . Total annual Fund operating expenses............................................. 1.08% 0.93% . Fee waivers and/or reimbursements................................................ (0.28)% (0.13)% ----- ----- Total net expenses/1/.............................................................. 0.80% 0.80% ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Daily Shares or Daily Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $82 $316 $568 $1,292 Pro Forma Government Reserves (acquiring) $82 $283 $502 $1,131
B-34 IF BOTH GOVERNMENT MONEY MARKET FUND AND GOVERNMENT RESERVES ARE REORGANIZED: Daily Shares/Daily Class
Government Pro Forma Money Government Market Government Reserves Fund Reserves (acquiring) ---------- ---------- ----------- Shareholder Fees (fees paid directly from your investment) . Maximum sales charge (load) imposed on purchases, as a % of offering price................................................. none none none . Maximum deferred sales charge (load) as a % of the lower of the original purchase price or net asset value..................... none none none Annual Fund Operating Expenses (Expenses that are deducted from the Fund's assets) . Management fees................................................ 0.20% 0.15% 0.15% . Distribution (12b-1) and/or shareholder servicing fees......... 0.70% 0.60% 0.60% . Other expenses................................................. 0.18% 0.13% 0.13% ----- ----- ----- . Total annual Fund operating expenses........................... 1.08% 0.88% 0.88% . Fee waivers and/or reimbursements.............................. (0.28)% (0.08)% (0.08)% ----- ----- ----- . Total net expenses/1/.......................................... 0.80% 0.80% 0.80% ===== ===== =====
- -------- /1/ The Funds' investment adviser and/or some of its other service providers have agreed to waive fees and/or reimburse expenses until July 31, 2002. The figures shown here are after waivers and/or reimbursements. There is no guarantee that these waivers and/or reimbursements will continue after this date. Example This example is intended to help you compare the cost of investing in this Fund with the cost of investing in other mutual funds. This example assumes: you invest $10,000 in Daily Shares or Daily Class Shares of the fund for the time periods indicated and then sell all of your shares at the end of those periods; you reinvest all dividends and distributions in the fund; your investment has a 5% return each year; the fund's operating expenses remain the same as shown in the table above; and the waivers and/or reimbursements shown above expire July 31, 2002 and are not reflected in the 3, 5 and 10 year examples. Although your actual costs may be higher or lower, based on these assumptions your costs would be:
Fund 1 year 3 years 5 years 10 years - ---- ------ ------- ------- -------- Government Money Market Fund............. $82 $316 $568 $1,292 Government Reserves...................... $82 $273 $480 $1,077 Pro Forma Government Reserves (acquiring) $82 $273 $480 $1,077
B-35 APPENDIX C Comparison of Fundamental Policies and Limitations of the Funds and the Acquiring Funds Fundamental Investment Policies and Limitations
Cash Reserves, Treasury Reserves and Government Reserves may not: The Acquiring Funds may not: - ------------------------------------ ---------------------------- 1. Act as an underwriter of securities of other issuers 1. Underwrite any issue of securities within the except as it may be deemed an underwriter in meaning of the 1933 Act except when it might selling a Fund security. technically be deemed to be an underwriter either (a) in connection with the disposition of a portfolio security, or (b) in connection with the purchase of securities directly from the issuer thereof in accordance with its investment objective. This restriction shall not limit the Fund's ability to invest in securities issued by other registered investment companies. 2. Purchase or sell real estate, real estate limited 2. Purchase or sell real estate, except a Fund may partnership interests, commodities or commodities purchase securities of issuers which deal or contracts. invest in real estate and may purchase securities which are secured by real estate or interests in real estate. 3. See No. 2 above 3. Purchase or sell commodities, except that a Fund may to the extent consistent with its investment objective, invest in securities of companies that purchase or sell commodities or which invest in such programs, and purchase and sell options, forward contracts, futures contracts, and options on futures contracts. This limitation does not apply to foreign currency transactions including without limitation forward currency contracts. 4. Make loans, except that (a) a Fund may purchase 4. Make loans, except to the extent permitted by the or hold debt instruments in accordance with its 1940 Act, the rules and regulations thereunder investment objective and policies; (b) may enter and any exemptive relief obtained by the Funds. into repurchase agreement and non-negotiable time deposits, provided that repurchase agreements and non-negotiable time deposits maturing in more than seven days, illiquid restricted securities and other securities which are not readily marketable are not to exceed, in the aggregate, 10% of the Fund's total assets and (c) the Funds may engage in securities lending as described in each prospectus and in this SAI.
C-1
Cash Reserves, Treasury Reserves and Government Reserves may not: The Acquiring Funds may not: - ------------------------------------ ---------------------------- 5. Borrow money except for temporary or 5. Borrow money or issue senior securities except emergency purposes and then only in an amount to the extent permitted by the 1940 Act, the rules not exceeding one-third of the value of total and regulations thereunder and any exemptive assets. Any borrowing will be done from a bank relief obtained by the Funds. and to the extent that such borrowing exceeds 5% of the value of the Fund's assets, asset coverage of at least 300% is required. In the event that such asset coverage shall at any time fall below 300%, the Fund shall, within three days thereafter or such longer period as the SEC may prescribe by rules and regulations, reduce the amount of its borrowings to such an extent that the asset coverage of such borrowings shall be at least 300%. This borrowing provision is included solely to facilitate the orderly sale of portfolio securities to accommodate heavy redemption requests if they should occur and is not for investment purposes. All borrowings will be repaid before making additional investments and any interest paid on such borrowings will reduce income. 6. Acquire more than 10% of the voting securities of 6. Purchase any securities which would cause 25% any one issuer. or more of the value of its total assets at the time of purchase to be invested in the securities of one or more issuers conducting their principal business activities in the same industry, provided that: (a) there is no limitation with respect to obligations issued or guaranteed by the U.S. Government, any state or territory of the United States, or any of their agencies, instrumentalities or political subdivisions, and (b) notwithstanding this limitation or any other fundamental investment limitation, assets may be invested in the securities of one or more management investment copies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
C-2
Cash Reserves, Treasury Reserves and Government Reserves may not: The Acquiring Funds may not: - ------------------------------------ ---------------------------- 7. Purchase securities of other investment companies 7. Purchase securities (except securities issued or except as permitted by the 1940 Act and the rules guaranteed by the U.S. Government, its agencies and regulations thereunder and may only purchase or instrumentalities) of any one issuer if, as a securities of other money market funds. Under result, more than 5% of its total assets will be these rules and regulations, the Funds are invested in the securities of such issuer or it prohibited from acquiring the securities of other would own more than 10% of the voting investment companies if, as a result of such securities of such issuer, except that (a) up to acquisition, the Funds own more than 3% of the 25% of its total assets may be invested without total voting stock of the company; securities regard to these limitations and (b) a Fund's issued by any one investment company represent assets may be invested in the securities of one or more than 5% of the Fund's total assets; or more management investment companies to the securities (other than treasury stock) issued by all extent permitted by the 1940 Act, the rules and investment companies represent more than 10% regulations thereunder and any exemptive relief of the total assets of the Fund. These investment obtained by the Funds. companies typically incur fees that are separate from those fees incurred directly by the Fund. A Fund's purchase of such investment company securities results in the layering of expenses, such that Shareholders would indirectly bear a proportionate share of the operating expenses of such investment companies, including advisory fees. It is the position of the SEC's staff that certain nongovernmental issues of CMOs and REMICS constitute investment companies pursuant to the 1940 Act and either (a) investments in such instruments are subject to the limitations set forth above or (b) the issuers of such instruments have received orders from the SEC exempting such instruments from the definition of investment company. 8. Invest in companies for the purpose of exercising 8. No corresponding fundamental investment control. policy 9. Invest in warrants valued at lower of cost or 9. No corresponding fundamental investment market exceeding 5% of the Fund's net assets. policy Included in that amount but not to exceed 2% of the Fund's net assets, may be warrants not listed on the NYSE or AMEX. 10. Write or purchase puts, calls or combinations 10. No corresponding fundamental investment thereof. policy 11. Invest in interest in oil, gas or other mineral 11. No corresponding fundamental investment exploration or development programs and oil, gas policy or mineral leases.
C-3
Cash Reserves, Treasury Reserves and Government Reserves may not: The Acquiring Funds may not: - ------------------------------------ ---------------------------- 12. Purchase or retain securities of an issuer if, to the 12. No corresponding fundamental investment knowledge of the NR, an officer, trustee, or policy partner of NR or adviser of NR owns beneficially more than 1/2 of 1% of the shares or securities of such issuer and all such officers, trustees and partners owning more than 1/2 of 1% of such shares or securities together own more than 5% of such shares or securities. 13. Issue senior securities (as defined in the 1940 Act) 13. See No. 5 above. except in connection with permitted borrowings as described above or as permitted by rule, regulation or order of the SEC. 14. Make short sales of securities, maintain a short 14. No corresponding fundamental investment position or purchase securities on margin, except policy that the Trust may obtain short-term credits as necessary for the clearance of security transactions. 15. Pledge, mortgage or hypothecate assets except to 15. No corresponding fundamental investment secure temporary borrowings permitted by (3) policy above in aggregate amounts not to exceed 10% of total assets taken at current value at the time of the incurrence of such loan, except as permitted with respect to securities lending.
C-4
Prime Fund, Treasury Fund and Government Money Market Fund may not: The Acquiring Funds may not: - ------------------------------------- ---------------------------- 1. Underwrite securities issued by any other person, 1. Underwrite any issue of securities within the except to the extent that the purchase of securities meaning of the 1933 Act except when it might and the later disposition of such securities in technically be deemed to be an underwriter either accordance with the Fund's investment program (a) in connection with the disposition of a portfolio may be deemed an underwriting. This restriction security, or (b) in connection with the purchase of shall not limit a Fund's ability to invest in securities securities directly from the issuer thereof in issued by other registered investment companies. accordance with its investment objective. This restriction shall not limit the Fund's ability to invest in securities issued by other registered investment companies. 2. Invest in real estate or real estate limited partnership 2. Purchase or sell real estate, except a Fund may interests. (A Fund may, however, purchase and sell purchase securities of issuers which deal or invest securities secured by real estate or interests therein in real estate and may purchase securities which are or issued by issuers which invest in real estate or secured by real estate or interests in real estate. interests therein.) This restriction does not apply to real estate limited partnerships listed on a national stock exchange (e.g., the NYSE). 3. Purchase or sell commodity contracts except that 3. Purchase or sell commodities, except that a Fund each Fund may, to the extent appropriate under its may to the extent consistent with its investment investment policies, purchase publicly traded objective, invest in securities of companies that securities of companies engaging in whole or in part purchase or sell commodities or which invest in in such activities, may enter into futures contracts such programs, and purchase and sell options, and related options, may engage in transactions on a forward contracts, futures contracts, and options on when-issued or forward commitment basis, and may futures contracts. This limitation does not apply to enter into forward currency contracts in accordance foreign currency transactions including without with its investment policies. limitation forward currency contracts. 4. Make loans, except that a Fund may purchase and 4. Make loans, except to the extent permitted by the hold debt instruments (whether such instruments are 1940 Act, the rules and regulations thereunder and part of a public offering or privately placed), may any exemptive relief obtained by the Funds. enter into repurchase agreements and may lend portfolio securities in accordance with its investment policies.
C-5
Prime Fund, Treasury Fund and Government Money Market Fund may not: The Acquiring Funds may not: - ------------------------------------- ---------------------------- 5. Borrow money or issue senior securities as defined 5. Borrow money or issue senior securities except to in the 1940 Act except that (a) a Fund may borrow the extent permitted by the 1940 Act, the rules and money from banks for temporary purposes in regulations thereunder and any exemptive relief amounts up to one-third of the value of such Fund's obtained by the Funds. total assets at the time of borrowing, provided that borrowings in excess of 5% of the value of such Fund's total assets will be repaid prior to the purchase of additional portfolio securities by such Fund, (b) a Fund may enter into commitments to purchase securities in accordance with the Fund's investment program, including delayed delivery and when-issued securities, which commitments may be considered the issuance of senior securities, and (c) a Fund may issue multiple classes of shares in accordance with SEC regulations or exemptions under the 1940 Act. The purchase or sale of futures contracts and related options shall not be considered to involve the borrowing of money or issuance of senior securities. Each Fund may enter into reverse repurchase agreements or dollar roll transactions. The purchase or sale of futures contracts and related options shall not be considered to involve the borrowing of money or issuance of senior securities. 6. Purchase any securities which would cause 25% or 6. Purchase any securities which would cause 25% or more of the value of the Fund's total assets at the more of the value of its total assets at the time of time of such purchase to be invested in the securities purchase to be invested in the securities of one or of one or more issuers conducting their principal more issuers conducting their principal business activities in the same industry, provided that this activities in the same industry, provided that: (a) limitation does not apply to investments in there is no limitation with respect to obligations obligations issued or guaranteed by the U.S. issued or guaranteed by the U.S. Government, any Government, any state or territory of the United state or territory of the United States, or any of States, or any of their agencies, instrumentalities or their agencies, instrumentalities or political political subdivisions. In addition, this limitation subdivisions, and (b) notwithstanding this does not apply to investments by "money market limitation or any other fundamental investment funds" as that term is used under the 1940 Act, in limitation, assets may be invested in the securities obligations of domestic banks. of one or more management investment copies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
C-6
Prime Fund, Treasury Fund and Government Money Market Fund may not: The Acquiring Funds may not: - ------------------------------------- ---------------------------- 7. Purchase securities of any one issuer (other than 7. Purchase securities (except securities issued or U.S. Government Obligations) if, immediately after guaranteed by the U.S. Government, its agencies or such purchase, more than 5% of the value of such instrumentalities) of any one issuer if, as a result, Fund's total assets would be invested in the more than 5% of its total assets will be invested in securities of such issuer, except that up to 25% of the securities of such issuer or it would own more the value of the Fund's total assets may be invested than 10% of the voting securities of such issuer, without regard to these limitations and with respect except that (a) up to 25% of its total assets may be to 75% of such Fund's assets, such Fund will not invested without regard to these limitations and (b) hold more than 10% of the voting securities of any a Fund's assets may be invested in the securities of issuer. one or more management investment companies to the extent permitted by the 1940 Act, the rules and regulations thereunder and any exemptive relief obtained by the Funds.
C-7 APPENDIX D Prospectuses for the Acquiring Funds The information contained in this Appendix D should not, by itself, be considered a separate prospectus for, nor an offering of, Acquiring Fund shares. The information is designed only to accompany the information contained in the Proxy/Prospectus. D-1 [THIS PAGE INTENTIONALLY LEFT BLANK] D-2 [Graphic] MONEY MARKET FUNDS DAILY CLASS SHARES INVESTOR A SHARES INVESTOR CLASS SHARES MARSICO SHARES TRUST CLASS SHARES Prospectus January 14, 2002 Nations Cash Reserves Nations Treasury Reserves Nations Government Reserves The Securities and Exchange Commission (SEC) has not approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE [LOGO] NATIONS FUNDS D-3 An overview of the Funds - -------------------------------------------------------------------------------- [Graphic] Terms used in this prospectus In this prospectus, we, us and our refer to the Nations Funds family (Nations Funds or Nations Funds Family). Some other important terms we've used may be new to you. These are printed in italics where they first appear in a section and are described in Terms used in this prospectus. [Graphic] You'll find Terms used in this prospectus on page D-29. Your investment in these Funds is not a bank deposit and is not insured or guaranteed by Bank of America, N.A. (Bank of America), the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Your investment may lose money. Affiliates of Bank of America are paid for the services they provide to the Funds. This booklet, which is called a prospectus, tells you about some Nations Money Market Funds. Please read it carefully, because it contains information that's designed to help you make informed investment decisions. This prospectus offers Daily Class, Investor A, Investor Class, Marsico and Trust Class Shares of the Funds. The Investor Class and Trust Class Shares are designed primarily for financial institutions and intermediaries for their own accounts, and for certain of their client accounts. Daily Class and Investor A Shares are designed to be purchased through a selling agent or directly through Nations Funds. The Marsico Shares are designed for investors in the Marsico Focus Fund, the Marsico Growth & Income Fund, the Marsico 21st Century Fund and the Marsico International Opportunities Fund. Please turn to Buying, selling and exchanging shares for more information about who is eligible to buy these classes of shares. About the Funds The Money Market Funds seek to provide income while protecting the principal of your original investment by investing in money market instruments. Money market instruments include short-term debt securities that are U.S. government issued or guaranteed or have relatively low risk. Your original investment and your return aren't guaranteed, however, and returns will vary as short-term interest rates change. Over time, the return on money market funds may be lower than the return on other kinds of mutual funds or investments. Are these Funds right for you? Not every Fund is right for every investor. When you're choosing a Fund to invest in, you should consider things like your investment goals, how much risk you can accept and how long you're planning to hold your investment. The Money Market Funds may be suitable for you if: .you're looking for a relatively low risk investment with stability of principal .you have short-term income needs They may not be suitable for you if: .you're looking for higher returns .you're more comfortable with bank deposits that are FDIC-insured You'll find a discussion of each Fund's principal investments, strategies and risks in the Fund descriptions that start on page D-6. For more information If you have any questions about the Funds, please call us at 1.800.321.7854 for Daily Class, Investor A, Investor Class and Trust Class Shares or 1.888.860.8686 for Marsico Shares. You can also contact your investment professional. You'll find more information about the Funds in the Statement of Additional Information (SAI). The SAI includes more detailed information about each Fund's investments, policies, performance and management, among other things. Please turn to the back cover to find out how you can get a copy. D-4 What's inside - -------------------------------------------------------------------------------- [Graphic] Banc of America Advisors, LLC Banc of America Advisors, LLC (BA Advisors) is the investment adviser to each of the Funds. BA Advisors is responsible for the overall management and supervision of the investment management of each Fund. BA Advisors and Nations Funds have engaged a sub-adviser -- Banc of America Capital Management, LLC (BACAP), which is responsible for the day-to-day investment decisions for each of the Funds. [Graphic] You'll find more about BA Advisors and BACAP starting on page D-14. [Graphic] About the Funds Nations Cash Reserves D-6 Sub-adviser: BACAP --------------------------------- Nations Treasury Reserves D-8 Sub-adviser: BACAP --------------------------------- Nations Government Reserves D-10 Sub-adviser: BACAP --------------------------------- Other important information D-12 --------------------------------- How the Funds are managed D-14
[Graphic] About your investment Information for investors Buying, selling and exchanging shares D-16 How orders are processed D-18 How selling and servicing agents are paid D-25 Distributions and taxes D-27 ------------------------------------------------- Terms used in this prospectus D-29 ------------------------------------------------- Where to find more information D-32
D-5 [Graphic] About the sub-adviser BACAP is this Fund's sub-adviser. BACAP's Taxable Money Market Management Team makes the day-to-day investment decisions for the Fund. [Graphic] You'll find more about BACAP on page D-15. This Fund, like all money market funds, is subject to certain investment limitations. These are described in Other important information. The Fund is listed on the National Association of Insurance Commissioners' Approved List of Money Market Mutual Funds. [Graphic] First-tier securities A first-tier security is a short-term debt security that's an eligible investment for money market funds. It's "first-tier" because it's been given the highest credit rating by a nationally recognized statistical rating organization (NRSRO) or is considered to be of comparable quality. Nations Cash Reserves [Graphic] Investment objective The Fund seeks to preserve principal value and maintain a high degree of liquidity while providing current income. [Graphic] Principal investment strategies The Fund pursues its objective by generally investing in a diversified portfolio of high quality money market instruments that, at the time of investment, are considered to have remaining maturities of 397 days or less. The Fund will only buy first-tier securities. These securities include primarily: .commercial paper .bank obligations .short-term debt securities, including instruments issued by certain trusts, partnerships or other special purpose issuers, like pass-through certificates representing participations in, or instruments backed by, the securities and other assets owned by these issuers .short-term taxable municipal securities .repurchase agreements secured by first-tier securities or U.S. government obligations The Fund may also invest in other money market funds, consistent with its investment objective and strategies. When the team believes market conditions warrant, the Fund may invest more than 25% of its assets in U.S. dollar denominated bank obligations, including obligations of U.S. banks, foreign branches of U.S. banks and U.S. branches of foreign banks. The team tries to maintain a constant net asset value of $1.00 per share for the Fund. The team uses extensive research, including economic, technical and security analysis to select individual investments. .Economic analysis includes evaluating national and global economic conditions, as well as interest rate movements. .Technical analysis includes identifying categories of money market instruments that offer the highest yields and assessing the market for potential investments. .Security analysis includes evaluating the credit quality of an instrument. Securities are normally held to maturity, but the team may sell a security before it matures to meet cash flow needs, to manage the portfolio's maturity, if the team determines that the security is no longer a suitable investment, and for other reasons. D-6 [Graphic] You'll find more about other risks of investing in this Fund in Other important information and in the SAI. [Graphic] Risks and other things to consider Nations Cash Reserves has the following risks: .Investment strategy risk - Although the Fund tries to maintain a share price of $1.00, an investment in the Fund may lose money. An investment in this Fund is not a bank deposit and is not insured or guaranteed by Bank of America, the FDIC or any other government agency. .Income/principal payment risk - The Fund's ability to pay distributions depends on the creditworthiness of the issuers of the securities the Fund holds. The Fund may not be able to pay distributions, or could lose money, if the issuer of a security is unable to pay interest or repay principal when it's due. [Graphic] A look at the Fund's performance Because the Fund has not been in operation for a full calendar year, no performance information is included in the prospectus. D-7 [Graphic] About the sub-adviser BACAP is this Fund's sub-adviser. BACAP's Taxable Money Market Management Team makes the day-to-day investment decisions for the Fund. [Graphic] You'll find more about BACAP on page D-15. This Fund, like all money market funds, is subject to certain investment limitations. These are described in Other important information. The Fund is listed on the National Association of Insurance Commissioners' Approved List of Money Market Mutual Funds. [Graphic] First-tier securities A first-tier security is a short-term debt security that's an eligible investment for money market funds. It's "first-tier" because it's been given the highest credit rating by an NRSRO or is considered to be of comparable quality. Nations Treasury Reserves [Graphic] Investment objective The Fund seeks to preserve principal value and maintain a high degree of liquidity while providing current income. [Graphic] Principal investment strategies The Fund pursues its objective by generally investing in a diversified portfolio of high quality money market instruments that, at the time of investment, are considered to have remaining maturities of 397 days or less. The Fund will only buy first-tier securities. These securities include primarily: .U.S. Treasury obligations .repurchase agreements and reverse repurchase agreements secured by U.S. Treasury obligations .obligations whose principal and interest are backed by the U.S. government The Fund may invest in other money market funds that invest in these instruments, consistent with its investment objective and strategies. The Fund normally invests at least 65% of its assets in U.S. Treasury obligations, and repurchase agreements secured by U.S. Treasury obligations. The team tries to maintain a constant net asset value of $1.00 per share for the Fund. The team uses extensive research, including economic, technical and security analysis to select individual investments. .Economic analysis includes evaluating national and global economic conditions, as well as interest rate movements. .Technical analysis includes identifying categories of money market instruments that offer the highest yields and assessing the market for potential investments. .Security analysis includes evaluating the credit quality of an instrument. Securities are normally held to maturity, but the team may sell a security before it matures to meet cash flow needs, to manage the portfolio's maturity, if the team determines that the security is no longer a suitable investment, and for other reasons. D-8 [Graphic] You'll find more about other risks of investing in this Fund in Other important information and in the SAI. [Graphic] Risks and other things to consider Nations Treasury Reserves has the following risks: .Investment strategy risk - Although the Fund tries to maintain a share price of $1.00, an investment in the Fund may lose money. An investment in this Fund is not a bank deposit and is not insured or guaranteed by Bank of America, the FDIC or any other government agency. .Income/principal payment risk - The Fund's ability to pay distributions depends on the creditworthiness of the issuers of the securities the Fund holds. The Fund may not be able to pay distributions, or could lose money, if the issuer of a security is unable to pay interest or repay principal when it's due. [Graphic] A look at the Fund's performance Because the Fund has not been in operation for a full calendar year, no performance information is included in the prospectus. D-9 [Graphic] About the sub-adviser BACAP is this Fund's sub-adviser. BACAP's Taxable Money Market Management Team makes the day-to-day investment decisions for the Fund. [Graphic] You'll find more about BACAP on page D-15. This Fund, like all money market funds, is subject to certain investment limitations. These are described in Other important information. [Graphic] First-tier securities A first-tier security is a short-term debt security that's an eligible investment for money market funds. It's "first-tier" because it's been given the highest credit rating by an NRSRO or is considered to be of comparable quality. Nations Government Reserves [Graphic] Investment objective The Fund seeks to preserve principal value and maintain a high degree of liquidity while providing current income. [Graphic] Principal investment strategies The Fund pursues its objective by generally investing in a diversified portfolio of high quality money market instruments that, at the time of investment, are considered to have remaining maturities of 397 days or less. The Fund will only buy first-tier securities. These securities include primarily U.S. government obligations and U.S. Treasury obligations, the interest on which is generally free from state income tax. The team tries to maintain a constant net asset value of $1.00 per share for the Fund. The team uses extensive research, including economic, technical and security analysis to select individual investments. .Economic analysis includes evaluating national and global economic conditions, as well as interest rate movements. .Technical analysis includes identifying categories of money market instruments that offer the highest yields and assessing the market for potential investments. .Security analysis includes evaluating the credit quality of an instrument. Securities are normally held to maturity, but the team may sell a security before it matures to meet cash flow needs, to manage the portfolio's maturity, if the team determines that the security is no longer a suitable investment, and for other reasons. D-10 [Graphic] You'll find more about other risks of investing in this Fund in Other important information and in the SAI. [Graphic] Risks and other things to consider Nations Government Reserves has the following risks: .Investment strategy risk - Although the Fund tries to maintain a share price of $1.00, an investment in the Fund may lose money. An investment in this Fund is not a bank deposit and is not insured or guaranteed by Bank of America, the FDIC or any other government agency. .Income/principal payment risk - The Fund's ability to pay distributions depends on the creditworthiness of the issuers of the securities the Fund holds. The Fund may not be able to pay distributions, or could lose money, if the issuer of a security is unable to pay interest or repay principal when it's due. .Tax considerations - Most of the distributions paid by the Fund come from interest on U.S. government and U.S. Treasury securities, which for most states is free from state income tax, but will be subject to federal tax. Any portion of a distribution that comes from income paid on other kinds of securities or from realized capital gains is generally subject to federal, state and local taxes. You should consult with your own tax adviser to determine the tax consequences to you of investing in the Fund. [Graphic] A look at the Fund's performance Because the Fund has not been in operation for a full calendar year, no performance information is included in the prospectus. D-11 [Graphic] Other important information You'll find specific information about each Fund's principal investments, strategies and risks in the descriptions starting on page D-6. The following are some other risks and information you should consider before you invest: .Special rules for money market funds - Money market funds must comply with Rule 2a-7 under the Investment Company Act of 1940 (1940 Act). Rule 2a-7 sets out certain limits on investments, which are designed to help protect investors from risk of loss. These limits apply at the time an investment is made. The Funds, like all money market funds: .may only invest in securities with a remaining maturity of 397 days or less, or that have maturities longer than 397 days but have demand, interest rate reset features or guarantees that are 397 days or less .must maintain an average dollar-weighted maturity of 90 days or less .may normally invest no more than 5% of their assets in a single security, other than U.S. government securities; however, they may invest up to 25% of their assets in a first-tier security for up to three business days .may generally only invest in U.S. dollar denominated instruments that are determined to have minimal credit risk and are first-tier securities, except for Nations California Tax-Exempt Reserves, which also may invest in second-tier securities. .Changing investment objectives and policies - The investment objective and certain investment policies of any Fund can be changed without shareholder approval. Other investment policies may be changed only with shareholder approval. .Changing to a feeder fund - Unlike traditional mutual funds, which invest in individual securities, a "feeder fund" invests all of its assets in another fund called a "master portfolio". Other feeder funds generally also invest in a master portfolio. The master portfolio invests in individual securities and has the same investment objective, investment strategies and principal risks as the feeder funds. This structure can help reduce a feeder fund's expenses because its assets are combined with those of other feeder funds. If a master portfolio doesn't attract other feeder funds, however, a feeder fund's expenses could be higher than those of a traditional mutual fund. Each Fund may become a feeder fund if the Board decides this would be in the best interests of shareholders. We don't require shareholder approval to make the change, but we'll notify you if it happens. If a Fund becomes a feeder fund, it will have the additional risks of investing in a master portfolio. D-12 .Investing defensively - A Fund may temporarily hold investments that are not part of its investment objective or its principal investment strategies to try to protect it during a market or economic downturn or because of political or other conditions. A Fund may not achieve its investment objective while it is investing defensively. Any cash a Fund holds for defensive or other reasons does not earn income. .Bank of America and its affiliates - Bank of America and its affiliates currently provide services to some or all of the Funds, including investment advisory, investment sub-advisory, co-administration and brokerage services, and are paid for providing these services. Bank of America and its affiliates also may, at times, provide other services and be compensated for them, including transfer agency, interfund lending and securities lending services, or make loans to the Funds. Finally, Bank of America or its affiliates may serve as counterparties in transactions with Nations Funds where permitted by law or regulation, and may receive compensation in that capacity. D-13 [Graphic] Banc of America Advisors, LLC One Bank of America Plaza Charlotte, North Carolina 28255 [Graphic] How the Funds are managed Investment adviser BA Advisors is the investment adviser to over 75 mutual fund portfolios in the Nations Funds Family, including the Money Market Funds described in this prospectus. BA Advisors is a registered investment adviser. It's a wholly-owned subsidiary of Bank of America, which is owned by Bank of America Corporation. Nations Funds pays BA Advisors an annual fee for its investment advisory services. The fee is calculated as a percentage of the average daily net assets of each Fund and is paid monthly. BA Advisors uses part of this money to pay investment sub-advisers for the services they provide to each Fund. The following chart shows the maximum advisory fees BA Advisors can receive. Annual investment advisory fee, as a % of average daily net assets
Maximum advisory fee Nations Cash Reserves 0.15% Nations Treasury Reserves 0.15% Nations Government Reserves 0.15%
Investment sub-adviser Nations Funds and BA Advisors engage one or more investment sub-advisers for each Fund to make day-to-day investment decisions for the Fund. BA Advisors retains ultimate responsibility (subject to Board oversight) for overseeing the sub-advisers and evaluates the Funds' needs and available sub-advisers' skills and abilities on an ongoing basis. Based on its evaluations, BA Advisors may at times recommend to a Fund's Board that the Fund: .change, add or terminate one or more sub-advisers; .continue to retain a sub-adviser even though the sub-adviser's ownership or corporate structure has changed; or .materially change a sub-advisory agreement with a sub-adviser. Applicable law requires a Fund to obtain shareholder approval in order to act on most of these types of recommendations, even if the Fund's Board has approved the proposed action and believes that the action is in shareholders' best interests. BA Advisors and the Funds have applied for relief from the SEC to permit the Funds to act on many of BA Advisors' recommendations with approval only by the Funds' Board and not by Fund shareholders. BA Advisors or a Fund would inform the Fund's shareholders of any actions taken in reliance on this relief. Until BA Advisors and the Funds obtain the relief, each Fund will continue to submit these matters to shareholders for their approval to the extent required by applicable law. D-14 [Graphic] Banc of America Capital Management, LLC One Bank of America Plaza Charlotte, North Carolina 28255 [Graphic] Stephens Inc. 111 Center Street Little Rock, Arkansas 72201 [Graphic] PFPC Inc. 400 Bellevue Parkway Wilmington, Delaware 19809 Banc of America Capital Management, LLC BACAP is a registered investment adviser and a wholly-owned subsidiary of Bank of America. Its management expertise covers all major domestic asset classes, including equity and fixed income securities, and money market instruments. Currently managing more than $125 billion, BACAP acts as investment manager for individuals, corporations and financial institutions, and is the sub-adviser to private investment companies and more than 60 funds in the Nations Funds Family. BACAP takes a team approach to investment management. Each team has access to the latest technology and analytical resources. BACAP is the investment sub-adviser to the Funds shown in the table below. The table also tells you which internal BACAP asset management team is responsible for making the day-to-day investment decisions for each Fund.
Fund BACAP Team Nations Cash Reserves Taxable Money Market Management Team Nations Treasury Reserves Taxable Money Market Management Team Nations Government Reserves Taxable Money Market Management Team
Other service providers The Funds are distributed and co-administered by Stephens Inc. (Stephens), a registered broker/dealer. Stephens may pay distribution (12b-1) and shareholder servicing fees and/or other compensation to companies for selling shares and providing services to investors. BA Advisors is also co-administrator of the Funds, and assists in overseeing the administrative operations of the Funds. The Funds pay BA Advisors and Stephens a combined fee of 0.10% for their services, plus certain out-of-pocket expenses. The fee is calculated as an annual percentage of the average daily net assets of the Funds, and is paid monthly. PFPC Inc. (PFPC) is the transfer agent for the Funds' shares. Its responsibilities include processing purchases, sales and exchanges, calculating and paying distributions, keeping shareholder records, preparing account statements and providing customer service. D-15 [Graphic] We've used the term, investment professional, to refer to the person who has assisted you with buying Nations Funds. Selling agent or servicing agent (sometimes referred to as a selling agent) means the company that employs your investment professional. Selling and servicing agents include banks, brokerage firms, mutual fund dealers and other financial institutions, including affiliates of Bank of America. When you sell shares of a mutual fund, the fund is effectively "buying" them back from you. This is called a redemption. [Graphic] Buying, selling and exchanging shares This prospectus offers Daily Class, Investor A, Investor Class, Marsico and Trust Class Shares of the Funds. Here are some general rules about these classes of shares: .You can invest in Daily Class and Investor A Shares of the Funds through your selling agent or directly from Nations Funds. We encourage you to consult with an investment professional who can open an account for you with a selling agent and help you with your investment decisions. Once you have an account, you can buy, sell and exchange shares by contacting your investment professional or selling agent. They will look after any paperwork that's needed to complete a transaction and send your order to us. Daily Class Shares are available to financial institutions and intermediaries for their own accounts, and for certain client accounts for which they may provide automated cash management or other services. These include: .Bank of America and certain affiliates .certain other financial institutions and intermediaries. .Investor Class Shares are available on a direct basis or through certain financial institutions and intermediaries for their own accounts, and for certain client accounts for which they may provide automated cash management or other services. These include: .Bank of America and certain of its affiliates .certain other financial institutions and intermediaries. .Marsico Shares are available only to investors in the Marsico Focus Fund, the Marsico Growth & Income Fund, the Marsico 21st Century Fund, and the Marsico International Opportunities Fund (Marsico Funds). You don't pay any sales charges when you buy or sell Marsico Shares of the Fund. You can invest in the Fund only through the Fund's servicing agent, Sunstone Financial Group, Inc. Please call the servicing agent at 1.888.860.8686 for information about its procedures and account requirements, which may be different from those described here. We encourage you to consult with an investment professional who can open an account for you through the servicing agent and help you with your investment decisions. Once you have an account, you can buy and sell shares by contacting your investment professional or the servicing agent. They will look after any paperwork that's needed to complete a transaction and send your order to us. .Trust Class Shares are available to certain financial institutions and intermediaries for their own accounts, and for certain client accounts for which they act as a fiduciary, agent or custodian. These include: .Bank of America and certain of its affiliates .certain other financial institutions and intermediaries, including financial planners and investment advisers D-16 .institutional investors .charitable foundations .endowments .other funds in the Nations Funds Family. .The minimum initial investment for each class of shares is as follows: .Daily Class and Investor A Shares - $1,000 for regular accounts; $500 for traditional and Roth IRA accounts; $250 for accounts set up with some fee-based investment advisers or financial planners, including wrap fee accounts and other managed accounts; $100 using the Systematic Investment Plan and there is no minimum for 401(k) plans, simplified employee pension plans, salary reduction-simplified employee pension plans, Savings Incentives Match Plans for Employees, salary reduction-IRAs or other similar kinds of accounts, however, if the value of the account falls below $1,000 for 401(k) plans or $500 for the other plans within one year after the account is opened, your shares may be sold after you are given 60 days notice in writing. . InvestorClass Shares - $25,000 or $10,000 using the Systematic Investment Plan. Financial institutions or intermediaries can total the investments they make on behalf of their clients to come up with the minimum initial investment. Client accounts for which the financial institution or intermediary no longer acts as fiduciary, agent or custodian may no longer be eligible to purchase or hold Investor Class Shares. .Marsico Shares - $2,500 for regular accounts; $1,000 for traditional and Roth IRA accounts; $500 for spousal IRA accounts; $500 for SEP IRA accounts; $500 for transfers to minor accounts or $1,000 using the Automatic Investment Plan. .Trust Class Shares - $250,000. Financial institutions or intermediaries can total the investments they make on behalf of their clients to meet the minimum initial investment. Client accounts for which the financial institution or intermediary no longer acts as fiduciary, agent or custodian may no longer be eligible to purchase or hold Trust Class Shares. .The minimum for additional investments for each class of shares is as follows: .Daily Class Shares - No minimum except the minimum is $100 using the Systematic Investment Plan. .Investor A Shares - $100 for all accounts or $50 using the Systematic Investment Plan. .Investor Class Shares - No minimum except the minimum is $1,000 using the Systematic Investment Plan. .Marsico Shares - $100 for all accounts or $50 using the Automatic Investment Plan. .Trust Class Shares - No minimum. D-17 [Graphic] A business day is any day that the Federal Reserve Bank of New York and the New York Stock Exchange (NYSE) are open. The Money Market Funds reserve the right to close early on business days preceding national holidays, if the primary government securities dealers have closed early and/or if the Bond Market Association recommends that the securities markets close early. Either the Federal Reserve Bank of New York or the NYSE is closed on weekends and on the following national holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. There are no sales charges for buying, selling or exchanging these classes of shares. You'll find more information about buying, selling and exchanging these classes of shares on the pages that follow. You should also ask your financial institution, intermediary or selling agent about its limits, fees and policies for buying, selling and exchanging shares, which may be different from those described here, and about its related services and programs. The Funds also offer other classes of shares, with different features and expense levels, which you may be eligible to buy. If you have questions about buying, selling or exchanging, or you need help placing an order, please call us at 1.800.321.7854 for Daily Class, Investor A, Investor Class and Trust Class Shares or 1.888.860.8686 for Marsico Shares. You can also contact your investment professional. How shares are priced All transactions are based on the price of a Fund's shares -- or its net asset value per share. We calculate net asset value per share at the following times (unless the Fund closes early): .5:00 p.m. Eastern time each business day for each share class of Nations Cash Reserves and Nations Treasury Reserves .2:30 p.m. Eastern time each business day for each share class of Nations Government Reserves First, we calculate the net asset value for each class of a Fund by determining the value of the Fund's assets in the class and then subtracting its liabilities. Next, we divide this amount by the number of shares that investors are holding in the class. Although we try to maintain a net asset value per share of $1.00 for the Funds, we can't guarantee that we will be able to do so. Valuing securities in a Fund The value of a Fund's assets is based on the total market value of all of the securities it holds. We use the amortized cost method, which approximates market value, to value the assets in the Money Market Funds. How orders are processed Orders to buy, sell or exchange shares are processed on business days. Orders received by Stephens, PFPC or their agents by the following times on a business day (unless the Fund closes early) will receive that day's net asset value per share: .5:00 p.m. Eastern time for Nations Cash Reserves and Nations Treasury Reserves, except: .Orders must be received for Nations Treasury Reserves by 3:00 p.m. Eastern time on the last business day of each calendar quarter and business days that precede the national holidays observed by the Fund .Orders must be received for Nations Cash Reserves by 3:00 p.m. Eastern time on the last business day of the calendar year .2:30 p.m. Eastern time for Nations Government Reserves Investors are encouraged to place orders to sell as early in the day as possible. Orders received after these times will receive the next business day's net asset value per share. The business day that applies to an order is also called the trade date. We may refuse any order to buy or exchange shares. If this happens, we'll return any money we've received. D-18 [Graphic] The net asset value per share is the price of a share calculated by a Fund every business day. Telephone orders You can place orders to buy, sell or exchange Daily Class, Investor A, Investor Class and Marsico Shares by telephone if you complete the telephone authorization section of our account application and send it to us. Here's how telephone orders work: .If you sign up for telephone orders after you open your account, you must have your signature guaranteed. .Telephone orders may not be as secure as written orders. You may be responsible for any loss resulting from a telephone order. .We'll take reasonable steps to confirm that telephone instructions are genuine. For example, we require proof of your identification before we will act on instructions received by telephone and may record telephone conversations. If we and our service providers don't take these steps, we may be liable for any losses from unauthorized or fraudulent instructions. .Telephone orders may be difficult to complete during periods of significant economic or market change. [Graphic] Buying shares Here are some general rules for buying shares: .You buy shares of each class at net asset value per share. .We must receive payment by the following times on the business day Stephens, PFPC or their agents receive the order (unless the Fund closes early): .5:30 p.m. Eastern time for Nations Cash Reserves and Nations Treasury Reserves, except: .Payment must be received for Nations Treasury Reserves by 4:00 p.m. Eastern time on the last business day of each calendar quarter and business days that precede the national holidays observed by this Fund .Payment must be received for Nations Cash Reserves by 4:00 p.m. Eastern time on the last business day of the calendar year .4:00 p.m. Eastern time for Nations Government Reserves If we receive payment after these times, we'll refuse the order. We'll return any payment received for orders that we refuse. We can change these times under certain circumstances, for example, when there's more wiring activity than normal. .Financial institutions, intermediaries and selling agents are responsible for sending orders to us and for ensuring that we receive your money on time. Telephone orders may be difficult to complete during periods of significant economic or market change. .Shares purchased are recorded on the books of the Fund. We generally don't issue certificates. .Financial institutions and intermediaries are responsible for recording the beneficial ownership of the shares of their clients, and for reporting this ownership on account statements they send to their clients. D-19 Systematic Investment Plan You can make regular purchases of $100 or more of Daily Class Shares, $50 or more of Investor A Shares or $1000 or more of Investor Class Shares using automatic transfers from your bank account to the Funds you choose. You can contact your financial adviser, investment professional or us to set up the plan. Here's how the plan works: .You can buy shares twice a month, monthly or quarterly. .You can choose to have us transfer your money on or about the 15th or the last day of the month. .Some exceptions may apply to employees of Bank of America and its affiliates and plans set up before August 1, 1997. For details, please contact your financial adviser or investment professional. Automatic Investment Plan You can make regular purchases of $50 or more of Marsico Shares using automatic transfers from your bank account to the Fund. You can contact your investment professional or the servicing agent to set up the plan. Here's how the plan works: .You can buy shares twice a month, monthly or quarterly. .You can choose to have your money transferred on or about the 15th or the last day of the month. [Graphic] Selling shares Here are some general rules for selling shares: .We normally send the sale proceeds of Trust Class Shares by Fedwire on the same business day that Stephens, PFPC or their agents receive your order. .If you're selling your Daily Class, Investor A, Investor Class or Marsico Shares through a selling agent, financial institution or intermediary we'll normally send the sale proceeds by Fedwire on the same business day that Stephens, PFPC or their agents receive your order. Your selling agent is responsible for depositing the sale proceeds to your account on time. .If you're selling your Daily Class, Investor A, Investor Class or Marsico Shares directly through us, we'll normally send the sale proceeds by mail or electronic transfer them to your bank account on the same business day that the Fund receives your order. .You can sell up to $50,000 of Daily Class, Investor A, Investor Class or Marsico Shares by telephone if you qualify for telephone orders. D-20 [Graphic] For more information about telephone orders, see How orders are processed. .Financial institutions and intermediaries are responsible for sending orders for Daily Class, Investor Class and Trust Class Shares to us and for depositing the sale proceeds to your account on time. .If you paid for your shares with a check that wasn't certified, we'll hold the sale proceeds when you sell those shares for at least 15 days after the trade date of the purchase, or until the check has cleared, whichever is later. .If you hold any Daily Class, Investor A or Investor Class Shares in certificate form, you must sign the certificates (or send a signed stock power with them) and send them to PFPC. Your signature must be guaranteed unless you've made other arrangements with us. We may ask for any other information we need to prove that the order is properly authorized. .Under certain circumstances allowed under the 1940 Act, we can pay you in securities or other property when you sell your shares. .We can delay payment of the sale proceeds of Nations Cash Reserves, Nations Treasury Reserves or Nations Government Reserves for one day, or longer than one day if there is a non-routine closure of the Fedwire or the Federal Reserve Banks or under the extraordinary circumstances described in Section 22(e) of the 1940 Act. Generally, those extraordinary circumstances are when: (i) the NYSE is closed or trading is restricted, (ii) an emergency exists which makes the disposal of securities owned by a Fund or the fair determination of the value of the Fund's net assets not reasonably practicable, or (iii) the SEC by order permits the suspension of the right of redemption for the protection of investors. .Other restrictions may apply to retirement accounts. For more information about these restrictions please contact your retirement plan administrator. We may sell your shares: .if the value of your account falls below $500. We'll give you 60 days notice in writing if we're going to do this .if your financial institution, intermediary or selling agent tells us to sell your shares under arrangements made between the financial institution, intermediary, selling agent and you .under certain other circumstances allowed under the 1940 Act Checkwriting service You can withdraw money from the Funds using our free checkwriting service if you own Daily Class, Investor A or Investor Class Shares. You can contact your financial adviser, investment professional or us to set up the service. Here's how the service works: .Each check you write must be for $250 or more. .You can only use checks to make partial withdrawals. You can't use a check to make a full withdrawal of the shares you hold in a Fund. .Shares you sell by writing a check are eligible to receive distributions up to the day our custodian receives the check for payment. .We can change or cancel the service by giving you 30 days notice in writing. D-21 Automatic Withdrawal Plan The Automatic Withdrawal Plan lets you withdraw $25 or more twice a month, monthly, quarterly, bi-annually or annually if you own Daily Class, Investor A or Investor Class Shares. You can contact your financial adviser, investment professional or us to set up the plan. Here's how the plan works: .Your account balance must be at least $10,000 to set up the plan. .If you set up the plan after you've opened your account, your signature must be guaranteed. .You can choose to have us transfer your money on or about the 10th or the 25th of the month. .We'll send you a check or deposit the money directly to your bank account. .You can cancel the plan by giving your selling agent or us 30 days notice in writing. It's important to remember that if you withdraw more than your investment in the Fund is earning, you'll eventually use up your original investment. Systematic Withdrawal Plan The Systematic Withdrawal Plan lets you withdraw $25 or more twice a month, monthly, quarterly or annually if you own Marsico Shares. You can contact your investment professional or the servicing agent to set up the plan. Here's how the plan works: .Your account balance must be at least $10,000 to set up the plan. .If you set up the plan after you've opened your account, your signature must be guaranteed. .You can choose to have us transfer your money on or about the 15th or the 25th of the month. .We'll send you a check or deposit the money directly to your bank account. .You can cancel the plan by giving the servicing agent 30 days notice in writing. It's important to remember that if you withdraw more than your investment in the Fund is earning, you'll eventually use up your original investment. D-22 [Graphic] You should make sure you understand the investment objective and policies of the Fund you're exchanging into. Please read its prospectus carefully. [Graphic] Exchanging shares You can sell shares of a Fund to buy shares of another Nations Fund. This is called an exchange. You might want to do this if your investment goals or tolerance for risk changes. Here's how exchanges work: .You can exchange Daily Class Shares of a Fund for Daily Class Shares of any other Nations Reserves Money Market Fund. You must exchange at least $1,000 at a time, or $25 if you use our Automatic Exchange Feature. If you received Daily Class Shares of a Fund from an exchange of Investor A Shares of an Index Fund, you can exchange these shares for Investor A Shares of an Index Fund. .You can exchange Investor A Shares of a Money Market Fund for Investor A Shares of any other Nations Fund, except Index Funds. If you bought Investor A Shares of a Money Market Fund through a Nations Funds IRA, you can exchange these shares for Investor B Shares of any other Nations Fund, except Money Market Funds. If you received your Investor B Shares before January 1, 1996 or after July 31, 1997, a contingent deferred sales charge (CDSC) may apply when you sell your Investor B Shares. The CDSC will be based on the period from when you received the Investor B Shares until you sold them. You must exchange at least $1,000, or $25 if you use our Automatic Exchange Feature. .You can exchange Investor Class Shares of a Fund for Investor Class Shares of any other Nations Reserves Money Market Fund. You must exchange at least $25,000 at a time. .You can exchange Marsico Shares of the Fund for shares of Marsico Funds. You must exchange at least $2,500, or $50 using our Automatic Exchange Feature. .You can exchange Trust Class Shares of a Fund for Primary A shares of all other Nations Funds or Trust Class Shares of Nations Reserves Money Market Funds. You must exchange at least $250,000 at a time. .The rules for buying shares of a Fund, including any minimum investment requirements, apply to exchanges into that Fund. .You may only make exchanges into a Fund that is legally sold in your state of residence. .You generally may only make an exchange into a Fund that is accepting investments. .We in the case of Daily Class, Investor A, Investor Class and Trust Class Shares or Marsico Funds in the case of Marsico Shares, may limit the number of exchanges you can make within a specified period of time. .We may change or cancel your right to make an exchange by giving the amount of notice required by regulatory authorities (generally 60 days for a material change or cancellation). .You cannot exchange any Daily Class, Investor A, Investor Class or Marsico Shares you own in certificate form until PFPC has received the certificate and deposited the shares to your account. D-23 Automatic Exchange Feature The Automatic Exchange Feature lets you exchange $25 or more of Daily Class, Investor A or Investor Class Shares every month or every quarter. You can contact your investment professional or us to set up the plan. Here's how automatic exchanges work: .Send your request to PFPC in writing or call 1.800.321.7854. .If you set up your plan to exchange more than $50,000 you must have your signature guaranteed. .You must already have an investment in the Funds you want to exchange into. .You can choose to have us transfer your money on or about the 1st or the 15th of the month. .The rules for making exchanges apply to automatic exchanges. Marsico Shares Automatic Exchange Feature The Automatic Exchange Feature lets you exchange $50 or more of Marsico Shares for shares of Marsico Funds every month or every quarter. You can contact your investment professional or the servicing agent to set up the plan. Here's how automatic exchanges work: .Send your request to the servicing agent in writing or call 1.888.860.8686. .If you set up your plan to exchange more than $50,000 you must have your signature guaranteed. .You must already have an investment in the Funds you want to exchange. .You can choose to have us transfer your money on or about the 1st or the 15th day of the month. .The rules for making exchanges apply to automatic exchanges. D-24 [Graphic] The financial institution or intermediary that buys shares for you is also sometimes referred to as a selling agent. The distribution fee is often referred to as a "12b-1" fee because it's paid through a plan approved under Rule 12b-1 of the 1940 Act. The selling agent may charge other fees for services provided to your account. [Graphic] How selling and servicing agents are paid Selling and servicing agents usually receive compensation based on your investment in the Funds. The kind and amount of the compensation depends on the share class in which you invest. Selling agents typically pay a portion of the compensation they receive to their investment professionals. Distribution (12b-1) and shareholder servicing and administration fees Stephens and selling and servicing agents are compensated for selling shares and providing services to investors under distribution, shareholder servicing and administration plans. Stephens may be reimbursed for distribution-related expenses up to an annual maximum of: .0.35% of the average daily net assets of Daily Class Shares of the Funds, some or all of which may be paid to selling agents .0.10% of the average daily net assets of Investor A Shares of the Funds, some or all of which may be paid to selling agents .0.10% of the average daily net assets of Investor Class Shares of the Funds, some or all of which may be paid to selling agents Servicing agents may receive a maximum annual shareholder servicing fee of 0.25% of the average daily net assets of Daily Class, Investor A, Investor Class and Marsico Shares of the Funds. BA Advisors, its affiliates and/or other financial institutions and intermediaries may receive a maximum annual shareholder administration fee of up to 0.10% of the average daily net assets of the Investor A and Trust Class Shares of the Funds. Administration agents may receive a maximum annual shareholder administration fee of 0.10% of the average daily net assets of Marsico Shares. Fees are calculated daily and paid monthly. Because these fees are paid out of the Fund's assets on an ongoing basis, over time they will increase the cost of your investment, and may cost you more than any sales charges you may pay. The Funds pay these fees for Daily Class, Investor A, Investor Class and Trust Class Shares to Stephens and/or to eligible selling and servicing agents, financial institutions and intermediaries, including BA Advisors or its affiliates, for as long as the plans continue. We may reduce or discontinue payments at any time. Nations Cash Reserves pays these fees for Marsico Shares to the servicing agent or administration agents for as long as the plan continues. We may reduce or discontinue payments at any time. D-25 Other compensation Selling and servicing agents may also receive in connection with Daily Class, Investor A and Investor Class and Trust Class Shares: .a bonus, incentive or other compensation relating to the sale, promotion and marketing of the Daily Class, Investor A and Investor Class Shares of the Funds .additional amounts of up to: .0.50% of the net asset value per share on all sales of Daily Class Shares to retirement plans .1.00% of the net asset value per share on all sales of Investor A Shares .non-cash compensation like trips to sales seminars, tickets to sporting events, theater or other entertainment, opportunities to participate in golf or other outings and gift certificates for meals or merchandise This compensation, which is not paid by the Funds, is discretionary and may be available only to selected selling and servicing agents. For example, Stephens sometimes sponsors promotions involving Banc of America Investment Services, Inc., an affiliate of BA Advisors, and certain other selling or servicing agents. Selected selling and servicing agents may also receive compensation for opening a minimum number of accounts. Stephens may cancel any compensation program at any time. BA Advisors and Stephens may pay amounts from their own assets to selling or servicing agents of the Funds for services they provide on behalf of all the share classes. D-26 [Graphic] The power of compounding Reinvesting your distributions buys you more shares of a Fund -- which lets you take advantage of the potential for compound growth. Putting the money you earn back into your investment means it, in turn, may earn even more money. Over time, the power of compounding has the potential to significantly increase the value of your investment. There is no assurance, however, that you'll earn more money if you reinvest your distributions. [Graphic] Distributions and taxes About distributions A mutual fund can make money two ways: .It can earn income. Examples are interest paid on bonds and dividends paid on common stocks. .A fund can also have capital gain if the value of its investments increases. If a fund sells an investment at a gain, the gain is realized. If a fund continues to hold the investment, any gain is unrealized. A mutual fund is not subject to federal income tax as long as it distributes its net investment income and realized capital gain to its shareholders. The Funds intend to pay out a sufficient amount of their income and capital gain to their shareholders so the Funds won't have to pay any federal income tax. When a Fund makes this kind of a payment, it's split among all shares, and is called a distribution. Although the Funds do not expect to realize any capital gain, any capital gain realized by a Fund will be distributed at least once a year. The Funds declare distributions of net investment income each business day, and pay them on the first business day of each month. Any distribution you receive is paid based on the number of shares you hold on the record date, which is usually the day the distribution is declared (daily dividend Funds) or the day before the distribution is declared (all other Funds). Shares are eligible to receive net investment income distributions from the settlement date (daily dividend Funds), trade date (all other Funds) or realized capital gain from the trade date of the purchase up to and including the day before the shares are sold. Different share classes of a Fund usually pay different net investment income distribution amounts, because each class has different expenses. We'll automatically reinvest distributions in additional shares of the same Fund unless you tell us you want to receive your distributions in cash. You can do this by writing to us at the address on the back cover, or by calling us at 1.800.321.7854 for Daily Class, Investor A, Investor Class and Trust Class Shares or 1.888.860.8686 for Marsico Shares. We generally pay cash distributions within five business days after the end of the month, quarter or year in which the distribution was made. If you sell all of your shares, we'll pay any distribution that applies to those shares in cash within five business days after the sale was made. D-27 [Graphic] This information is a summary of how federal income taxes may affect your investment in the Funds. It is not intended as a substitute for careful tax planning. You should consult with your own tax adviser about your situation, including any foreign, state and local taxes that may apply. [Graphic] For more information about taxes, please see the SAI. How taxes affect your investment Distributions of net investment income, any net short-term capital gain and certain other items generally are taxable to you as ordinary income. Although the Funds do not expect to realize any capital gain, any distributions of net long-term capital gain generally are taxable to you as long-term capital gain. In general, corporate shareholders will not be able to deduct any Fund distributions when determining their taxable income. In general, all distributions are taxable to you when paid, whether they are paid in cash or automatically reinvested in additional shares of the Fund. However, any distributions declared to shareholders of record in October, November or December of one year and distributed in January of the following year will be taxable as if they had been paid to you on December 31 of the first year. We'll send you a notice every year that tells you how much you've received in distributions during the year and their federal tax status. Foreign, state and local taxes may also apply to these distributions. U.S. government obligations If you invest in U.S. government obligations directly, interest on those obligations is free from state and local and individual income taxes. Distributions you receive that come from interest the Fund earns from U.S. government obligations may not be exempt from these taxes. Please consult with your tax adviser. Withholding tax We're required by federal law to withhold tax on any distributions and redemption proceeds paid to you (including amounts to be paid for in securities or other property and exchanges) if: .you haven't given us a correct Taxpayer Identification Number (TIN) and haven't certified that the TIN is correct and withholding doesn't apply .the Internal Revenue Service (IRS) has notified us that the TIN listed on your account is incorrect according to its records .the IRS informs us that you're otherwise subject to backup withholding The IRS may also impose penalties against you if you don't give us a correct TIN. Amounts we withhold are applied to your federal income tax liability. You may receive a refund from the IRS if the withholding tax results in an overpayment of taxes. We're also normally required by federal law to withhold tax on distributions (other than capital gain distributions) paid to foreign shareholders. Taxation of redemptions and exchanges As long as a Fund continually maintains a $1.00 net asset value per share, you ordinarily will not recognize a taxable gain or loss on the redemption or exchange of your shares of the Fund. D-28 [Graphic] This glossary includes explanations of the important terms that may be used in this prospectus. Some of the terms explained may apply to Nations Funds not included in this prospectus. [Graphic] Terms used in this prospectus Amortized cost method - under Rule 2a-7 of the 1940 Act, the method of calculating an investment company's net asset value whereby portfolio securities are valued at the Fund's acquisition cost as adjusted for amortization of premium or accretion of discount rather than at their value based on current market factors. Average dollar-weighted maturity - the average length of time until the debt securities held by a Fund reach maturity. In general, the longer the average dollar-weighted maturity, the more a Fund's share price will fluctuate in response to changes in interest rates. Bank obligation - a money market instrument issued by a bank, including certificates of deposit, time deposits and bankers' acceptances. Capital gain or loss - the difference between the purchase price of a security and its selling price. You realize a capital gain when you sell a security for more than you paid for it. You realize a capital loss when you sell a security for less than you paid for it. Commercial paper - a money market instrument issued by a large company. Common stock - a security that represents part equity ownership in a company. Common stock typically allows you to vote at shareholder meetings and to share in the company's profits by receiving dividends. Debt security - when you invest in a debt security, you are typically lending your money to a governmental body or company (the issuer) to help fund their operations or major projects. The issuer pays interest at a specified rate on a specified date or dates, and repays the principal when the security matures. Short-term debt securities include money market instruments such as treasury bills. Long-term debt securities include fixed income securities such as government and corporate bonds, and mortgage-backed and asset-backed securities. Equity security - an investment that gives you an equity ownership right in a company. Equity securities (or "equities") include common and preferred stock, rights and warrants. First-tier security - under Rule 2a-7 of the 1940 Act, a debt security that is an eligible investment for money market funds and has the highest short-term rating from a nationally recognized statistical rating organization (NRSRO) or if unrated, is determined by the Fund's portfolio management team to be of comparable quality, or is a money market fund issued by a registered investment company, or is a government security. Fixed income security - an intermediate to long-term debt security that matures in more than one year. Guaranteed investment contract - an investment instrument issued by a rated insurance company in return for a payment by an investor. High quality - includes municipal securities that are rated in the top two highest short-term debt categories according to NRSROs such as Standard & Poor's Corporation and Moody's Investor Services, Inc. The portfolio management team may consider an unrated municipal security if it is determined to be of comparable quality, based upon guidelines approved by the Fund's Board. Please see the SAI for more information about credit ratings. D-29 Liquidity - a measurement of how easily a security can be bought or sold at a price that is close to its market value. Money market instrument - a short-term debt security that is considered to mature in 13 months or less. Money market instruments include U.S. Treasury obligations, U.S. government obligations, certificates of deposit, bankers' acceptances, commercial paper, repurchase agreements and certain municipal securities. Municipal security (obligation) - a debt security issued by state or local governments or governmental authorities to pay for public projects and services. "General obligations" are typically backed by the issuer's full taxing and revenue-raising powers. "Revenue securities" depend on the income earned by a specific project or authority, like road or bridge tolls, user fees for water or revenues from a utility. Interest income from these securities is exempt from federal income taxes and is generally exempt from state taxes if you live in the state that issued the security. If you live in the municipality that issued the security, interest income may also be exempt from local taxes. Non-diversified - a fund that holds securities of fewer issuers or kinds of issuers than other kinds of funds. Non-diversified funds tend to have greater price swings than more diversified funds because events affecting one or more of its securities may have a disproportionately large effect on the fund. Participation - a pass-through certificate representing a share in a pool of debt obligations or other instruments. Pass-through certificate - securitized mortgages or other debt securities with interest and principal paid by a servicing intermediary shortly after interest payments are received from borrowers. Private activity bond - a municipal security that is used to finance private projects or other projects that aren't qualified for tax purposes. Interest on private activity bonds is generally taxable, unless it is specifically exempted, or may be treated as a tax preference item for federal alternative minimum tax purposes. Repurchase agreement - a short-term (often overnight) investment arrangement. The investor agrees to buy certain securities from the borrower and the borrower promises to buy them back at a specified date and price. The difference between the purchase price paid by the investor and the repurchase price paid by the borrower represents the investor's return. Repurchase agreements are popular because they provide very low-risk return and can virtually eliminate credit difficulties. Reverse repurchase agreement - a repurchase agreement in which an investor sells a security to another party, like a bank or dealer, in return for cash, and agrees to buy the security back at a specified date and price. Second-tier security - under Rule 2a-7 under the 1940 Act, a debt security that is an eligible investment for money market funds, but is not a first-tier security. Settlement Date - the date on which an order is settled either by payment or delivery of securities. Special purpose issuer - an entity organized solely to issue asset-backed securities on a pool of assets it owns. D-30 Trade date - the effective date of a purchase, sale or exchange transaction, or other instructions sent to us. The trade date is determined by the day and time we receive the order or instructions in a form that's acceptable to us. U.S. government obligations - a wide range of debt securities issued or guaranteed by the U.S. government or its agencies, authorities or instrumentalities. U.S. Treasury obligation - a debt security issued by the U.S. Treasury. D-31 [Graphic] Where to find more information You'll find more information about Nations Money Market Funds in the following documents: Annual and semi-annual reports The annual and semi-annual reports contain information about Fund investments and performance, the financial statements and the independent accountants' reports. The annual report also includes a discussion about the market conditions and investment strategies that had a significant effect on each Fund's performance during the period covered. [Graphic] Statement of Additional Information The SAI contains additional information about the Funds and their policies. The SAI is legally part of this prospectus (it's incorporated by reference). A copy has been filed with the SEC. You can obtain a free copy of these documents, request other information about the Funds and make shareholder inquiries by contacting Nations Funds: For information on Marsico Shares: By telephone: 1.888.860.8686 By mail: Nations Cash Reserves-Marsico Shares c/o Sunstone Financial Group Inc. P.O. Box 3210 Milwaukee, WI 53201-3210 For information on all other classes of shares: By telephone: 1.800.321.7854 By mail: Nations Funds c/o Stephens Inc. One Bank of America Plaza 33rd Floor Charlotte, NC 28255 On the Internet: www.nations-funds.com Information about the Funds can be reviewed and copied at the SEC's Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-942-8090. The reports and other information about the Funds are available on the EDGAR Database on the SEC's Internet site at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following E-mail address: publicinfo@sec.gov, or by writing the SEC's Public Reference Section, Washington, D.C. 20549-0102. [LOGO] Nations Funds D-32 PRX-3 Statement of Additional Information Dated January 14, 2002 NATIONS FUND TRUST NATIONS FUND, INC. NATIONS RESERVES NATIONS FUNDS TRUST One Bank of America Plaza 101 South Tryon Street, 33rd Floor Charlotte, North Carolina 28255 1-800-321-7854 March 28, 2002 Special Meeting of Shareholders of Nations Government Reserves, Nations Government Money Market Fund, Nations Cash Reserves, Nations Prime Fund, Nations Treasury Reserves and Nations Treasury Fund This SAI is not a prospectus but should be read in conjunction with the Proxy/Prospectus dated the date hereof, for the Special Meetings of Shareholders of the Funds to be held on March 28, 2002. Copies of the Proxy/Prospectus may be obtained at no charge by writing or calling Nations Fund Trust, Nations Fund, Inc. and Nations Reserves at the address or telephone number set forth above. Unless otherwise indicated, capitalized terms used herein and not otherwise defined have the same meanings as are given to them in the Proxy/Prospectus. Incorporation of Documents by Reference in Statement of Additional Information Further information about the Primary A Shares, Primary B Shares, Investor A Shares, Investor B Shares, Investor C Shares, Capital Class, Liquidity Class, Adviser Class, Market Class, Daily Class, Service Class, Investor Class, Trust Class and Institutional Class of the Funds, as applicable, is contained in (and incorporated herein by reference) the SAI for the Funds dated August 1, 2001, as supplemented. The Annual Reports for the Funds, including their audited financial statements and related Report of Independent Accountants for the year ended March 31, 2001 for the Funds are incorporated herein by reference. The Semi-Annual Reports for the Funds, including their unaudited financial statements for the period September 30, 2001 are incorporated herein by reference. 1 Table of Contents General Information .......................................................... 3 Introductory Note to Pro Forma Financial Information ......................... 4 2 General Information The Reorganization contemplates the transfer of the assets and liabilities of the Funds to the Acquiring Funds in exchange for shares of designated classes of the corresponding Acquiring Funds of equal value. The shares issued by an Acquiring Fund will have an aggregate dollar value equal to the aggregate dollar value of the shares of each corresponding Fund that are outstanding immediately before the closing of the Reorganization. Immediately after the Closing, each Fund will distribute the shares of its corresponding Acquiring Fund received in the Reorganization to its shareholders in liquidation of such Fund. Each shareholder owning shares of a Fund at the Closing will receive shares of the designated class of the corresponding Acquiring Fund, and will receive any unpaid dividends or distributions that were declared before the Closing on the Funds' shares. Nations Funds Trust will establish an account for each former shareholder of the Funds reflecting the number of Acquiring Fund shares distributed to that shareholder. If the Reorganization Agreement is approved and consummated, the Funds will transfer all of their assets and liabilities, as of the Closing, and all outstanding shares of the Funds will be redeemed and canceled in exchange for shares of the corresponding Acquiring Fund. If shareholders of all other funds of Nations Fund Trust, Nations Fund, Inc. and Nations Reserves approve the reorganization of their fund, Nations Fund Trust, Nations Fund, Inc. and Nations Reserves will be de-registered under the 1940 Act and dissolved under state law. For further information about the transaction, see the Proxy/Prospectus. 3 Introductory Note to Pro Forma Financial Information The following unaudited pro forma information gives effect to the proposed transfer of the assets and liabilities of the Funds to the Acquiring Funds accounted for as if the transfer had occurred as of September 30, 2001. In addition, the pro forma combined statement of operations has been prepared as if the transfer had occurred at the beginning of the fiscal year ended September 30, 2001 and is based upon the proposed fee and expense structure of the Acquiring Funds. The pro forma financial information should be read in conjunction with the historical financial statements and notes thereto of the Funds and the Acquiring Funds included or incorporated herein by reference in this Statement of Additional Information. The combination of the above Funds and the Acquiring Funds will be accounted for as a tax-free reorganization. Pro forma information giving effect to the proposed transfer of assets and liabilities of Nations Prime Fund and Nations Cash Reserves to Nations Cash Reserves (acquiring) and Nations Government Money Market Fund and Nations Government Reserves to Nations Government Reserves (acquiring), is not presented in this SAI because, as of November 1, 2001, the aggregate net asset value of Nations Prime Fund was less than 10% of the aggregate net asset value of Nations Cash Reserves and the aggregate net asset value of Nations Government Money Market Fund was less than 10% of the aggregate net asset value of Nations Government Reserves. Pro forma information giving effect to the proposed transfer of assets and liabilities of Nations Treasury Reserves to Nations Treasury Reserves (acquiring) is not presented in this SAI because this transaction would result in a "shell" transaction with no change to the Schedule of Investments and Statement of Assets and Liabilities or Statement of Operations of Nations Treasury Reserves. 4 Nations Treasury Fund/Nations Treasury Reserves (acquiring) Pro Forma Combining Schedule of Investments (unaudited) September 30, 2001
Nations Treasury Nations Nations Reserves Treasury Treasury Combined Pro Nations Nations (acquiring) Fund Reserves Forma Treasury Treasury Combined Pro Principal Principal Principal Fund Reserves Forma amount amount amount Value Value Value (000) (000) (000) Description (000) (000) (000) - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Treasury obligations - 44.4% U.S. Treasury bills - 27.8% $ 140,000 $ - $ 140,000 Discount note 10/18/01 $ 139,821 $ - $ 139,821 140,000 140,000 Discount note 10/25/01 139,740 - 139,740 70,000 70,000 Discount note 11/08/01 69,747 - 69,747 38,000 38,000 Discount note 11/29/01 37,856 - 37,856 140,000 140,000 Discount note 12/20/01 139,247 - 139,247 60,000 60,000 Discount note 02/14/02 59,267 - 59,267 40,000 40,000 Discount note 02/21/02 39,477 - 39,477 -------------------------------------- 625,155 - 625,155 -------------------------------------- U.S. Treasury notes - 16.6% 25,000 25,000 6.250% 10/31/01 25,038 - 25,038 14,000 14,000 7.500% 11/15/01 14,053 - 14,053 40,000 40,000 6.375% 01/31/02 40,388 - 40,388 40,000 40,000 6.625% 03/31/02 40,579 - 40,579 40,000 40,000 6.375% 04/30/02 40,612 - 40,612 60,000 60,000 6.625% 04/30/02 61,048 - 61,048 30,000 30,000 7.500% 05/15/02 30,696 - 30,696 40,000 40,000 6.500% 05/31/02 40,693 - 40,693 60,000 60,000 6.625% 05/31/02 61,025 - 61,025 20,000 20,000 6.250% 07/31/02 20,455 - 20,455 -------------------------------------- 374,587 - 374,587 -------------------------------------- Total U.S. Treasury obligations (Cost $999,742 and $0, respectively) 999,742 - 999,742 -------------------------------------- Repurchase agreements - 55.3% 50,000 50,000 Agreement with ABN AMRO Inc., 3.150% dated 09/28/01 to be repurchased at $ 51,013 on 10/01/01 collateralized by: $50,000 U.S. Treasury Notes, 7.250% due 05/15/2004 50,000 - 50,000 80,000 80,000 Agreement with Barclays Capital Inc., 3.250% dated 09/28/01 to be repurchased at $80,022 on 10/01/01 collateralized by: $80,001 U.S. Treasury Bills, due 12/27/01 80,000 - 80,000 70,000 70,000 Agreement with Bear, Stearns and Company, Inc., 3.375% dated 09/28/01 to be repurchased at $70,020 on 10/01/01 collateralized by: $58,645 GNMA, 5.500% - 9.500% due 05/15/13 - 09/15/31; $12,756 GNMA II, 4.500% - 8.000% due 11/20/23 - 07/20/31 70,000 - 70,000 70,000 70,000 Agreement with First Union Securities, Inc., 3.350% dated 09/28/01 to be repurchased at $70,020 on 10/01/01 collateralized by: $66,658 GNMA, 5.500% - 9.500% due 09/15/16 - 09/15/31, $3,342 GNMA II, 6.250% - 8.000% due 02/20/26 - 09/20/31 70,000 - 70,000 80,000 80,000 Agreement with Greenwich Capital Markets Inc., 3.250% dated 09/28/01 to be repurchased at $80,022 on 10/01/01 collateralized by: $81,604 Treasury Notes, 5.625% - 6.750% due 11/30/02 - 05/15/05 80,000 - 80,000
Nations Treasury Fund/Nations Treasury Reserves (acquiring) Pro Forma Combining Schedule of Investments (unaudited) (continued) September 30, 2001
Nations Treasury Nations Nations Reserves Treasury Treasury Combined Pro Nations Nations (acquiring) Fund Reserves Forma Treasury Treasury Combined Pro Principal Principal Principal Fund Reserves Forma amount amount amount Value Value Value (000) (000) (000) Description (000) (000) (000) - ------------------------------------------------------------------------------------------------------------------------------------ Repurchase agreements - (continued) $ 100,000 $ - $ 100,000 Agreement with J.P. Morgan Securities Inc., 3.350% dated 09/28/01 to be repurchased at $100,029 on 10/01/01 collateralized by: $102,001 GNMA, 5.000% - 8.000% due 08/15/14 - 09/15/31 $ 100,000 $ - $ 100,000 80,000 80,000 Agreement with Lehman Brothers Inc., 3.200% dated 09/28/01 to be repurchased at $80,021 on 10/01/01 collateralized by: $58,587 U.S. Treasury Notes, 5.625% - 6.250% due 02/28/02 - 05/15/08; $23,000 U.S. Treasury Strips, TIGR, Interest Receipt, due 08/15/20 80,000 - 80,000 80,000 80,000 Agreement with Morgan Stanley Dean Witter and Company, 3.150% dated 09/28/01 to be repurchased at $80,021 on 10/01/01 collateralized by: $80,354 U.S. Treasury Strips, TIGR, Interest Receipt, due 02/15/12 80,000 - 80,000 200,000 200,000 Agreement with Salomon Smith Barney Inc., 3.250% dated 09/28/01 to be repurchased at $200,054 on 10/01/01 collateralized by: $131,148 U.S. Treasury Notes, 5.375% - 6.875% due 04/30/03 - 10/15/06; $21,058 U.S. Treasury Bonds, 12.000% due 08/15/03; $48,607 U.S. Treasury Bills, due 02/07/02 200,000 - 200,000 250,000 250,000 Agreement with Salomon Smith Barney Inc., 3.375% dated 09/28/01 to be repurchased at $250,070 on 10/01/01 collateralized by: $193,206 GNMA, 6.500% - 9.000% due 11/15/17 - 12/15/30; $56,794 GNMA II, 7.000% - 8.500% due 05/20/29 - 06/20/31 250,000 - 250,000 84,193 84,193 Agreement with UBS Warburg, 3.250% dated 09/28/01 to be repurchased at $84,216 on 10/01/01 collateralized by: $85,880 U.S. Treasury Bill, due 11/23/01 84,193 - 84,193 100,000 100,000 Agreement with Westdeutsche Landesbank, Girozentrale, 3.350% dated 09/28/01 to be repurchased at $100,028 on 10/01/01 collateralized by: $100,000 GNMA II, 6.500% due 07/20/31 100,000 - 100,000 ------------------------------------------ Total repurchase agreements (Cost $1,244,193 and $0, respectively) 1,244,193 - 1,244,193 ------------------------------------------ Total investments - 99.7% (Cost $2,243,935 and $0, respectively) $ 2,243,935 $ - $ 2,243,935 ------------------------------------------
Nations Treasury Fund / Nations Treasury Reserves (acquiring) Pro Forma Combining Statement of Net Assets (unaudited) September 30, 2001
Nations Treasury Reserves (acquiring) Nations Nations Adjustments to Proforma Treasury Fund Treasury Reserves Pro Forma Combined (in 000's) (in 000's) (in 000's) (in 000's) -------------------------------------------------------------------------- Total Investments $ 2,243,935 $ - $ - $ 2,243,935 Other Assets and Liabilities: Cash 2 - 2 Receivable for investment securities sold 1,352,542 - 1,352,542 Receivable for Fund shares sold 1,992 - 1,992 Interest receivable 9,293 - 9,293 Receivable from investment advisor - - 235 (a) 235 Payable for Fund shares redeemed (8,840) - (8,840) Investment advisory fee payable (283) - (283) Administration fee payable (167) - (167) Shareholder servicing and distribution fees payable (412) - (412) Distributions payable (3,971) - (3,971) Payable for investment securities purchased (1,344,061) - (1,344,061) Accrued Trustees' fees and expenses (172) - (172) Accrued expenses and other liabilities (193) - (235)(a) (235) -------------------------------------------------------------------------- Total Other Assets and Liabilities 5,730 - - 5,730 -------------------------------------------------------------------------- Net Assets $ 2,249,665 $ - $ - $ 2,249,665 ========================================================================== Net Assets by Class: Capital Class $ - $ - $ - $ - Institutional Class - - - - Trust Class/Primary A Shares of Treasury Fund 549,245,115 - - 549,245,115 Liquidity Class - - - - Adviser Class - - - - Investor Class/Primary B Shares of Treasury Fund 10,161,882 - - 10,161,882 Investor Class/Investor B Shares of Treasury Fund 172,263,793 - - 172,263,793 Investor Class/Investor C Shares of Treasury Fund 217,817 - - 217,817 Market Class - - - Daily Class/Daily Shares of Treasury Fund 52,665,576 - - 52,665,576 Service Class - - - - Investor A Class/Investor A Shares of Treasury Fund 1,465,110,845 - - 1,465,110,845 Investor B Class - - - - -------------------------------------------------------------------------- $ 2,249,665,028 $ - $ - $ 2,249,665,028 -------------------------------------------------------------------------- Shares Outstanding by Class: Capital Class - - - - Institutional Class - - - - Trust Class/Primary A Shares of Treasury Fund 549,530,797 - - 549,530,797 Liquidity Class - - - - Adviser Class - - - - Investor Class/Primary B Shares of Treasury Fund 10,168,275 - - 10,168,275 Investor Class/Investor B Shares of Treasury Fund 172,373,618 - - 172,373,618 Investor Class/Investor C Shares of Treasury Fund 217,868 - - 217,868 Market Class - - - - Daily Class/Daily Shares of Treasury Fund 52,756,970 - - 52,756,970 Service Class - - - - Investor A Class/Investor A Shares of Treasury Fund 1,465,668,017 - 1,465,668,017 Investor B Class - - - - -------------------------------------------------------------------------- 2,250,715,545 - - 2,250,715,545 -------------------------------------------------------------------------- Net Asset Value per Share by Class: Capital Class $ - $ - $ - $ - Institutional Class $ - $ - $ - $ - Trust Class/Primary A Shares of Treasury Fund $ 1.00 $ - $ - $ 1.00 Liquidity Class $ - $ - $ - $ - Adviser Class $ - $ - $ - $ - Investor Class/Primary B Shares of Treasury Fund $ 1.00 $ - $ - $ 1.00 Investor Class/Investor B Shares of Treasury Fund $ 1.00 $ - $ - $ 1.00 Investor Class/Investor C Shares of Treasury Fund $ 1.00 $ - $ - $ 1.00 Market Class $ - $ - $ - $ - Daily Class/Daily Shares of Treasury Fund $ 1.00 $ - $ - $ 1.00 Service Class $ - $ - $ - $ - Investor A Class/Investor A Shares of Treasury Fund $ 1.00 $ - $ - $ 1.00 Investor B Class $ - $ - $ - $ -
(a) Adjustment reflects estimated costs of Reorganization. See Notes to Pro Forma Financial Statements Nations Treasury Fund / Nations Treasury Reserves (acquiring) Pro Forma Combining Statement of Operations (unaudited) Twelve Month Period Ending September 30, 2001
Nations Treasury Reserves (acquiring) Nations Nations Adjustments to Proforma Treasury Fund Treasury Reserves Pro Forma Combined (in 000's) (in 000's) (in 000's) (in 000's) -------------------------------------------------------- ------------------- Investment Income: Interest $92,717 $ - $ - $92,717 -------------------------------------------------------- ------------------- Expenses: Investment advisory fee 3,680 - (940)(a) 2,740 Administration fee 1,826 - - 1,826 Transfer agent fee 158 - - 158 Custodian fees 55 - - 55 Legal and audit fees 78 - - 78 Registration and filing fees 61 - - 61 Trustees' fees and expenses 24 - - 24 Printing expense 91 - - 91 Other (45) - 235 (b) 190 -------------------------------------------------------- ------------------- Subtotal 5,928 - (705) 5,223 -------------------------------------------------------- ------------------- Shareholder servicing and distribution fees: Institutional Class - - - - Trust Class/Primary A Shares of Treasury Fund - - - - Liquidity Class - - - - Adviser Class - - - - Investor Class/Primary B Shares of Treasury Fund 29 - - 29 Investor Class/Investor B Shares of Treasury Fund 671 - - 671 Investor Class/Investor C Shares of Treasury Fund - - - - Market Class - - - - Daily Class/Daily Shares of Treasury Fund 510 - (73)(a) 437 Service Class - - - - Investor A Class/Investor A Shares of Treasury Fund 3,399 - 972 (a) 4,371 Investor B Class - - - - -------------------------------------------------------- ------------------- Total expenses 10,537 - 194 10,731 -------------------------------------------------------- ------------------- Fees waived by investment advisor, administrator and/or distributor (778) - (1,173)(b), (c) (1,951) Fees reduced by credits allowed by the custodian (8) - - (8) -------------------------------------------------------- ------------------- Net Expenses 9,751 - (979) 8,772 -------------------------------------------------------- ------------------- Net Investment Income 82,966 - 979 83,945 -------------------------------------------------------- ------------------- Net realized gain/(loss) on investments 39 - 39 -------------------------------------------------------- ------------------- Net Increase/(Decrease) in Net Assets Resulting From Operations $83,005 $ - $ 979 $ 83,984 ======================================================== ===================
Legend: - ------- (a) Reflects adjustment to the acquiring fund's contractual fee obligation. (b) Adjustment reflects estimated costs of Reorganization. (c) Adjustment reflects reduction in fund level expenses as a result of the lower fund level expense cap. See Notes to Pro Forma Financial Statements Nations Treasury Fund Nations Treasury Reserves (acquiring) Notes to Pro Forma Combining Financial Statements (unaudited) 1. Basis of Combination The unaudited Pro Forma Combining Statement of Net Assets assumes the exchange described in the next paragraph occurred as of September 30, 2001 and the unaudited Pro Forma Combining Statement of Operations for the year ended September 30, 2001 assumes the exchange occurred as of October 1, 2000. These statements have been derived from books and records utilized in calculating daily net asset value of each fund at September 30, 2001 and for the twelve month period then ended. The proforma statements give effect to the proposed reorganization ("Reorganization") of Nations Treasury Fund (the "Fund") and Nations Treasury Reserves (acquiring) (the "Acquiring Fund"). The Reorganization provides for the transfer of the assets and liabilities of the Fund to the Acquiring Fund, in exchange for shares of equal value of designated classes of the Acquiring Fund. The Reorganization is expected to be done on a tax-free basis whereby the Acquiring Fund will assume the market value and cost basis of the portfolio positions in the Fund and the results of operations of the Fund for pre-combination periods will not be restated. It is not expected that the investment adviser or sub-adviser will sell any securities of the Fund, in anticipation of or as a result of the Reorganization, other than in the normal course of business. These financial statements present the Reorganization of the Fund into the Acquiring Fund. It is possible that both Nations Treasury Fund and Nations Treasury Reserves approve the Reorganization - that scenario is shown after these notes. The Funds will only bear the expenses of the Reorganization if those expenses do not exceed certain expense "caps" that have been put in place by the investment adviser. Because of these caps, it is not expected that the Funds will bear the costs associated with the Reorganization, including solicitation costs. The unaudited Pro Forma Combining Financial Statements should be read in conjunction with the historical financial statements of the funds incorporated by reference in the Statement of Additional Information. 2. Pro Forma Operations Pro forma operating expenses include the actual expenses of the Fund and the Acquiring Fund with certain expenses adjusted to reflect the expected expenses of the Acquiring Fund.
Nations Treasury Fund/Nations Treasury Reserves/Nations Treasury Reserves (acquiring) Pro Forma Combining Schedule of Investments (unaudited) September 30, 2001 Nations Treasury Nations Nations Reserves Treasury Treasury Combined Pro Nations Nations (acquiring) Fund Reserves Forma Treasury Treasury Combined Pro Principal Principal Principal Fund Reserves Forma amount amount amount Value Value Value (000) (000) (000) Description (000) (000) (000) - ------------------------------------------------------------------------------------------------------------------------------------ U.S. Treasury obligations - 47.5% U.S. Treasury bills - 29.6% $140,000 $805,807 $945,807 Discount note 10/18/01 $139,821 $804,800 $944,621 140,000 135,000 275,000 Discount note 10/25/01 139,740 134,686 274,426 70,000 280,000 350,000 Discount note 11/08/01 69,747 278,988 348,735 38,000 294,000 332,000 Discount note 11/29/01 37,856 292,874 330,730 140,000 760,000 900,000 Discount note 12/20/01 139,247 755,842 895,089 60,000 240,000 300,000 Discount note 02/14/02 59,267 237,067 296,334 40,000 160,000 200,000 Discount note 02/21/02 39,477 157,909 197,386 ------------------------------------- 625,155 2,662,166 3,287,321 ------------------------------------- U.S. Treasury notes - 17.9% 25,000 100,000 125,000 6.250% 10/31/01 25,038 100,153 125,191 14,000 54,800 68,800 7.500% 11/15/01 14,053 55,006 69,059 40,000 160,000 200,000 6.375% 01/31/02 40,388 161,551 201,939 40,000 160,000 200,000 6.625% 03/31/02 40,579 162,318 202,897 40,000 160,000 200,000 6.375% 04/30/02 40,612 162,449 203,061 60,000 240,000 300,000 6.625% 04/30/02 61,048 244,190 305,238 30,000 120,000 150,000 7.500% 05/15/02 30,696 122,784 153,480 40,000 260,000 300,000 6.500% 05/31/02 40,693 264,570 305,263 60,000 240,000 300,000 6.625% 05/31/02 61,025 244,102 305,127 20,000 86,000 106,000 6.250% 07/31/02 20,455 87,958 108,413 ------------------------------------- 374,587 1,605,081 1,979,668 ------------------------------------- Total U.S. Treasury obligations (Cost $999,742 and $4,267,247, respectively) 999,742 4,267,247 5,266,989 ------------------------------------- Repurchase agreements - 52.3% 200,000 200,000 Agreement with ABN AMRO Inc., 3.150% dated 09/28/01 to be repurchased at $200,053 on 10/01/01 collateralized by: $127,914 U.S. Treasury Notes, 3.625% - 7.250% due 09/30/01 - 08/15/11; $5,591 U.S. Treasury Bonds, 5.250% - 8.875% due 11/15/16 - 02/15/31; $66,496 U.S. Treasury Bills due 02/21/02 - 03/28/02 200,000 200,000 50,000 50,000 Agreement with ABN AMRO Inc., 3.150% dated 09/28/01 to be repurchased at $ 51,013 on 10/01/01 collateralized by: $50,000 U.S. Treasury Notes, 7.250% due 05/15/2004 50,000 50,000 220,000 220,000 Agreement with Barclays Capital Inc., 3.250% dated 09/28/01 to be repurchased at $220,060 on 10/01/01 collateralized by: $220,001 U.S. Treasury Inflation Linked Note, 3.625% due 04/15/28 220,000 220,000 80,000 80,000 Agreement with Barclays Capital Inc., 3.250% dated 09/28/01 to be repurchased at $80,022 on 10/01/01 collateralized by: $80,001 U.S. Treasury Bills, due 12/27/01 80,000 80,000 330,000 330,000 Agreement with Bear, Stearns and Company, Inc., 3.375% dated 09/28/01 to be repurchased at $330,928 on 10/01/01 collateralized by:$306,870 GNMA, 5.500%- 12.500% due 3/15/02 - 09/15/31; $29,733 GNMA II, 5.000% - 13.000% due 11/20/13- 09/20/31 330,000 330,000
Nations Treasury Fund/Nations Treasury Reserves/Nations Treasury Reserves (acquiring) Pro Forma Combining Schedule of Investments (unaudited) (continued) September 30, 2001 Nations Treasury Nations Nations Reserves Treasury Treasury Combined Pro Nations Nations (acquiring) Fund Reserves Forma Treasury Treasury Combined Pro Principal Principal Principal Fund Reserves Forma amount amount amount Value Value Value (000) (000) (000) Description (000) (000) (000) - ------------------------------------------------------------------------------------------------------------------------------------ Repurchase agreements - (continued) $70,000 $ - $ 70,000 Agreement with Bear, Stearns and Company, Inc., 3.375% dated 09/28/01 to be repurchased at $70,020 on 10/01/01 collateralized by:$58,645 GNMA, 5.500%- 9.500% due 05/15/13 - 09/15/31; $12,756 GNMA II, 4.500% - 8.000% due 11/20/23- 07/20/31 $ 70,000 $ - $ 70,000 200,000 200,000 Agreement with Deutsche Bank Securities Inc., 3.200% dated 09/28/01 to be repurchased at $200,053 on 10/01/01 collateralized by: $28,504 U.S. Treasury Strips, Interest Only, due 11/15/16; $66,682 U.S. Treasury Strips, Principal Only, due 05/15/02- 08/15/19; $38,865 U.S.Treasury Notes, 3.8750% due 07/31/03; $65,949 U.S. Treasury Bonds, 8.120% due 05/15/21 200,000 200,000 7,612 7,612 Agreement with Dresdner Kleinwort Benson North America LLC,2.800% dated 09/28/01 to be repurchased at $7,614 on 10/01/01 collateralized by:$7,768 U.S. Treasury Notes, 5.750%-6.500% due 11/15/04-11/15/05 7,612 7,612 285,000 285,000 Agreement with First Union Securities, Inc., 3.350% dated 09/28/01 to be repurchased at $285,080 on 10/01/01 collateralized by: $264,327 GNMA, 6.000% - 9.500% due 09/15/13 - 09/15/31; $20,673 GNMA II, 6.000% - 7.750% due 07/20/24 - 09/20/37 285,000 285,000 70,000 70,000 Agreement with First Union Securities, Inc., 3.350% dated 09/28/01 to be repurchased at $70,020 on 10/01/01 collateralized by: $66,658 GNMA, 5.500% - 9.500% due 09/15/16 - 09/15/31, $3,342 GNMA II, 6.250% - 8.000% due 02/20/26 - 09/20/31 70,000 70,000 5,631 5,631 Agreement with Goldman Sachs and Company, 3.000% dated 09/28/01 to be repurchased at $5,632 on 10/01/01 collateralized by: $5,631 U.S. Treasury Strips, Interest Only, due 02/15/12 5,631 5,631 220,000 220,000 Agreement with Greenwich Capital Markets Inc., 3.250% dated 09/28/01 to be repurchased at $220,060 on 10/01/01 collateralized by: $224,401 U.S. Treasury Notes, 4.750% - 5.625% due 11/30/02 - 11/15/08 220,000 220,000 80,000 80,000 Agreement with Greenwich Capital Markets Inc., 3.250% dated 09/28/01 to be repurchased at $80,022 on 10/01/01 collateralized by: $81,604 Treasury Notes, 5.625% - 6.750% due 11/30/02 - 05/15/05 80,000 80,000 400,000 400,000 Agreement with J.P. Morgan Securities Inc., 3.350% dated 09/28/01 to be repurchased at $400,112 on 10/01/01 collateralized by: $408,002 GNMA, 5.500% - 9.000% due 03/15/14 - 09/15/31 400,000 400,000
Nations Treasury Fund/Nations Treasury Reserves/Nations Treasury Reserves (acquiring) Pro Forma Combining Schedule of Investments (unaudited) (continued) September 30, 2001 Nations Treasury Nations Nations Reserves Treasury Treasury Combined Pro Nations Nations (acquiring) Fund Reserves Forma Treasury Treasury Combined Pro Principal Principal Principal Fund Reserves Forma amount amount amount Value Value Value (000) (000) (000) Description (000) (000) (000) - ------------------------------------------------------------------------------------------------------------------------------------ Repurchase agreements - (continued) $100,000 $ - $100,000 Agreement with J.P. Morgan Securities Inc., 3.350% dated 09/28/01 to be repurchased at $100,029 on 10/01/01 collateralized by: $102,001 GNMA, 5.000% - 8.000% due 08/15/14 - 09/15/31 $100,000 $ - $ 100,000 97,571 97,571 Agreement with Lehman Brothers Inc., 3.200% dated 09/28/01 to be repurchased at $97,597 on 10/01/01 collateralized by: $99,498 U.S. Treasury Notes, 5.500% - 6.250% due 01/31/02 - 05/15/08 97,571 97,571 80,000 80,000 Agreement with Lehman Brothers Inc., 3.200% dated 09/28/01 to be repurchased at $80,021 on 10/01/01 collateralized by: $58,587 U.S. Treasury Notes, 5.625% - 6.250% due 02/28/02 - 05/15/08; $23,000 U.S. Treasury Strips, TIGR, Interest Receipt, due 08/15/20 80,000 80,000 120,000 120,000 Agreement with Morgan Stanley Dean Witter and Company, 3.150% dated 09/28/01 to be repurchased at $120,032 on 10/01/01 collateralized by:$120,900 U.S. Treasury Strips, Interest Only, due 05/15/13 120,000 120,000 80,000 80,000 Agreement with Morgan Stanley Dean Witter and Company, 3.150% dated 09/28/01 to be repurchased at $80,021 on 10/01/01 collateralized by: $80,354 U.S. Treasury Strips, TIGR, Interest Receipt, due 02/15/12 80,000 80,000 700,000 700,000 Agreement with Salomon Smith Barney Inc., 3.250% dated 09/28/01 to be repurchased at $700,190 on 10/01/01 collateralized by: $695,855 U.S. Treasury Bonds, 8.750% - 10.750% due 05/15/03 - 08/15/20; $4,376 U.S. Treasury Notes, 5.375% due 06/30/03 700,000 700,000 1,150,000 1,150,000 Agreement with Salomon Smith Barney Inc., 3.375% dated 09/28/01 to be repurchased at $1,150,323 on 10/01/01 collateralized by: $1,150,000 GNMA II, 6.500% - 8.000% due 08/20/30 - 07/20/31 1,150,000 1,150,000 200,000 200,000 Agreement with Salomon Smith Barney Inc., 3.250% dated 09/28/01 to be repurchased at $200,054 on 10/01/01 collateralized by: $131,148 U.S. Treasury Notes, 5.375% - 6.875% due 04/30/03 - 10/15/06; $21,058 U.S. Treasury Bonds, 12.000% due 08/15/03; $48,607 U.S. Treasury Bills, due 02/07/02 200,000 200,000 250,000 250,000 Agreement with Salomon Smith Barney Inc., 3.375% dated 09/28/01 to be repurchased at $250,070 on 10/01/01 collateralized by: $193,206 GNMA, 6.500% - 9.000% due 11/15/17 - 12/15/30; $56,794 GNMA II, 7.000% - 8.500% due 05/20/29 - 06/20/31 250,000 250,000 215,807 215,807 Agreement with UBS Warburg, 3.250% dated 09/28/01 to be repurchased at $215,865 on 10/01/01 collateralized by: $220,126 U.S. Treasury Bills, due 11/23/01- 12/13/2001 215,807 215,807
Nations Treasury Fund/Nations Treasury Reserves/Nations Treasury Reserves (acquiring) Pro Forma Combining Schedule of Investments (unaudited) (continued) September 30, 2001 Nations Treasury Nations Nations Reserves Treasury Treasury Combined Pro Nations Nations (acquiring) Fund Reserves Forma Treasury Treasury Combined Pro Principal Principal Principal Fund Reserves Forma amount amount amount Value Value Value (000) (000) (000) Description (000) (000) (000) - ------------------------------------------------------------------------------------------------------------------------------------ Repurchase agreements - (continued) $ 84,193 $ - $ 84,193 Agreement with UBS Warburg, 3.250% dated 09/28/01 to be repurchased at $84,216 on 10/01/01 collateralized by: $85,880 U.S. Treasury Bill, due 11/23/01 $84,193 $ - $ 84,193 400,000 400,000 Agreement with Westdeutsche Landesbank, Girozentrale, 3.350% dated 09/28/01 to be repurchased at $400,112 on 10/01/01 collateralized by: $400,000 GNMA II, 6.500% due 07/20/31 400,000 400,000 100,000 100,000 Agreement with Westdeutsche Landesbank, Girozentrale, 3.350% dated 09/28/01 to be repurchased at $100,028 on 10/01/01 collateralized by: $100,000 GNMA II, 6.500% due 07/20/31 100,000 100,000 -------------------------------------------- Total repurchase agreements (Cost $1,244,193 and $4,551,621, respectively) 1,244,193 4,551,621 5,795,814 -------------------------------------------- Total investments - 99.8% (Cost $2,243,935 and $8,818,868, respectively) $2,243,935 $ 8,818,868 $ 11,062,803 --------------------------------------------
Nations Treasury Fund / Nations Treasury Reserves / Nations Treasury Reserves (acquiring) Pro Forma Combining Statement of Net Assets (unaudited) September 30, 2001 Nations Treasury Reserves (acquiring) Nations Nations Adjustments to Proforma Treasury Fund Treasury Reserves Pro Forma Combined (in 000's) (in 000's) (in 000's) (in 000's) ---------------------------------------------------------- --------------- Total Investments $ 2,243,935 $ 8,818,868 $ - $ 11,062,803 Other Assets and Liabilities: Cash 2 361 363 Receivable for investment securities sold 1,352,542 4,559,030 5,911,572 Receivable for Fund shares sold 1,992 328,677 330,669 Interest receivable 9,293 39,128 48,421 Receivable from investment advisor - - 816 (a) 816 Payable for Fund shares redeemed (8,840) (336,440) (345,280) Investment advisory fee payable (283) (1,078) (1,361) Administration fee payable (167) (203) (370) Shareholder servicing and distribution fees payable (412) (2,237) (2,649) Distributions payable (3,971) (19,774) (23,745) Payable for investment securities purchased (1,344,061) (4,551,621) (5,895,682) Accrued Trustees' fees and expenses (172) (92) (264) Accrued expenses and other liabilities (193) (365) (816)(a) (1,374) ---------------------------------------------------------- --------------- Total Other Assets and Liabilities 5,730 15,386 - 21,116 ---------------------------------------------------------- --------------- Net Assets $ 2,249,665 $ 8,834,254 $ - $ 11,083,919 ======================================================== =============== Net Assets by Class: Capital Class $ - $1,431,917,570 $ - $ 1,431,917,570 Institutional Class - 45,698,517 - 45,698,517 Trust Class/Primary A Shares of Treasury Fund 549,245,115 1,337,456,073 - 1,886,701,188 Liquidity Class - 372,083,894 - 372,083,894 Adviser Class - 2,069,812,889 - 2,069,812,889 Investor Class/Primary B, Investor B and Investor C Shares of Treasury Fund 182,643,492 759,840,559 - 942,484,051 Market Class - 1,313,011,362 - 1,313,011,362 Daily Class/Daily Shares of Treasury Fund 52,665,576 1,143,232,026 - 1,195,897,602 Service Class - 361,099,288 - 361,099,288 Investor A Class/Investor A Shares of Treasury Fund 1,465,110,845 - - 1,465,110,845 Investor B Class - 101,679 - 101,679 ---------------------------------------------------------- --------------- $2,249,665,028 $ 8,834,253,857 $ - $ 11,083,918,885 ---------------------------------------------------------- --------------- Shares Outstanding by Class: Capital Class - 1,432,066,769 - 1,432,066,769 Institutional Class - 45,694,569 - 45,694,569 Trust Class/Primary A Shares of Treasury Fund 549,530,797 1,337,388,851 - 1,886,919,648 Liquidity Class - 372,079,864 - 372,079,864 Adviser Class - 2,070,208,387 - 2,070,208,387 Investor Class/Primary B, Investor B and Investor C Shares of Treasury Fund 182,759,761 760,001,999 - 942,761,760 Market Class - 1,313,000,010 - 1,313,000,010 Daily Class/Daily Shares of Treasury Fund 52,756,970 1,143,271,778 - 1,196,028,748 Service Class - 361,101,691 - 361,101,691 Investor A Class/Investor A Shares of Treasury Fund 1,465,668,017 - - 1,465,668,017 Investor B Class - 101,671 - 101,671 ---------------------------------------------------------- --------------- 2,250,715,545 8,834,915,589 - 11,085,631,134 ---------------------------------------------------------- --------------- Net Asset Value per Share by Class: Capital Class $ - $ 1.00 $ - $ 1.00 Institutional Class $ - $ 1.00 $ - $ 1.00 Trust Class/Primary A Shares of Treasury Fund $ 1.00 $ 1.00 $ - $ 1.00 Liquidity Class $ - $ 1.00 $ - $ 1.00 Adviser Class $ - $ 1.00 $ - $ 1.00 Investor Class/Primary B, Investor B and Investor C Shares of Treasury Fund $ 1.00 $ 1.00 $ - $ 1.00 Market Class $ - $ 1.00 $ - $ 1.00 Daily Class/Daily Shares of Treasury Fund $ 1.00 $ 1.00 $ - $ 1.00 Service Class $ - $ 1.00 $ - $ 1.00 Investor A Class/Investor A Shares of Treasury Fund $ - $ - $ - $ 1.00 Investor B Class $ - $ 1.00 $ - $ 1.00
See Notes to Pro Forma Financial Statements
Nations Treasury Fund / Nations Treasury Reserves/Nations Treasury Reserves (acquiring) Pro Forma Combining Statement of Operations (unaudited) Twelve Month Period Ending September 30, 2001 Nations Treasury Reserves (acquiring) Nations Nations Adjustments to Proforma Treasury Fund Treasury Reserves Pro Forma Combined (in 000's) (in 000's) (in 000's) (in 000's) ---------------------------------------------------------- ---------------- Investment Income: Interest $92,717 $414,300 $ - $507,017 ---------------------------------------------------------- ---------------- Expenses: Investment advisory fee 3,680 12,212 (997)(a) 14,895 Administration fee 1,826 8,140 - 9,966 Transfer agent fee 158 240 - 398 Custodian fees 55 477 - 532 Legal and audit fees 78 74 (78)(b) 74 Registration and filing fees 61 664 (61)(b) 664 Trustees' fees and expenses 24 26 (24)(b) 26 Printing expense 91 135 (84)(b) 142 Other (45) 62 861 (b),(c) 878 ---------------------------------------------------------- ---------------- Subtotal 5,928 22,030 (383) 27,575 ---------------------------------------------------------- ---------------- Shareholder servicing and distribution fees: Institutional Class - 18 - 18 Trust Class/Primary A Shares of Treasury Fund - 487 - 487 Liquidity Class - 3,596 - 3,596 Adviser Class - 4,820 - 4,820 Investor Class/Primary B, Investor B and Investor C Shares of Treasury Fund 700 2,949 - 3,649 Market Class - 6,333 - 6,333 Daily Class/Daily Shares of Treasury Fund 510 6,181 (110)(a) 6,581 Service Class - 3,240 - 3,240 Investor A Class/Investor A Shares of Treasury Fund 3,399 - 972 (a) 4,371 Investor B Class - 2 - 2 ---------------------------------------------------------- ---------------- Total expenses 10,537 49,656 479 60,672 ---------------------------------------------------------- ---------------- Fees waived by investment advisor, administrator and/or distributor (778) (8,740) (1,240)(c),(d) (10,758) Fees reduced by credits allowed by the custodian (8) (6) - (14) ---------------------------------------------------------- ---------------- Net Expenses 9,751 40,910 (761) 49,900 ---------------------------------------------------------- ---------------- Net Investment Income 82,966 373,390 761 457,117 ---------------------------------------------------------- ---------------- Net realized gain/(loss) on investments 39 521 560 ---------------------------------------------------------- ---------------- Net Increase/(Decrease) in Net Assets Resulting From Operations $83,005 $373,911 $ 761 $ 457,677 ========================================================== ================
Legend: - ------- (a) Reflects adjustment to the acquiring fund's contractual fee obligation. (b) Adjustment reflects expected savings when the two funds become one. (c) Adjustment reflects estimated costs of Reorganization. (d) Adjustment reflects reduction in fund level expenses as a result of the lower fund level expense cap and share class waivers. See Notes to Pro Forma Financial Statements Nations Treasury Fund Nations Treasury Reserves Nations Treasury Reserves (acquiring) Notes to Pro Forma Combining Financial Statements (unaudited) 1. Basis of Combination The unaudited Pro Forma Combining Statement of Net Assets assumes the exchange described in the next paragraph occurred as of September 30, 2001 and the unaudited Pro Forma Combining Statement of Operations for the year ended September 30, 2001 assumes the exchange occurred as of October 1, 2000. These statements have been derived from books and records utilized in calculating daily net asset value of each fund at September 30, 2001 and for the twelve month period then ended. The pro forma statements give effect to the proposed reorganization (the "Reorganization") of Nations Treasury Fund ("Treasury Fund") and Nations Treasury Reserves ("Treasury Reserves") into Nations Treasury Reserves (acquiring)(the "Acquiring Fund"). The Reorganization provides for the transfer of the assets and liabilities of Treasury Fund and Treasury Reserves to the Acquiring Fund, in exchange for shares of equal value of designated classes of the Acquiring Fund. The Reorganization is expected to be done on a tax-free basis whereby the Acquiring Fund will assume the market value and cost basis of the portfolio positions in the Treasury Fund and Treasury Reserves and the results of operations of Treasury Fund and Treasury Reserves for pre-combination periods will not be restated. It is not expected that the investment adviser or sub-adviser will sell any securities of either acquired fund, in anticipation of or as a result of the Reorganization, other than in the normal course of business. The Funds will only bear the expenses of the Reorganization if those expenses do not exceed certain expense "caps" that have been put in place by the investment adviser. Because of these caps, it is not expected that the Funds will bear the costs associated with the Reorganization, including solicitation costs. The unaudited Pro Forma Combining Financial Statements should be read in conjunction with the historical financial statements of the funds incorporated by reference in the Statement of Additional Information. 2. Pro Forma Operations Pro forma operating expenses include the actual expenses of each fund and the Acquiring Fund, with certain expenses adjusted to reflect the expected expenses of the Acquiring Fund. EXHIBIT INDEX ------------- Nations Funds Trust File No. 333-74298 Exhibit Number Description - -------------- ----------- EX.-99.17(a) Form of Proxy Ballot EX-99.17A 3 dex9917a.txt FORM OF PROXY BALLOT FORM OF PROXY BALLOT Nations Funds [Insert Fund Name Here] 101 South Tryon Street 33rd Floor Special Meeting of Shareholders One Bank of America Plaza to be held on March 27, 2002 Charlotte, North Carolina 28255 The undersigned hereby appoints Richard H. Blank, Jr., Michael Simons and Carolyn Wyse (the "Proxies"), and each of them, attorneys and proxies of the undersigned, each with power of substitution and resubstitution, to attend, vote and act for the undersigned at the Special Meeting of Shareholders of the fund to be held at One Bank of America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina 28255, at 10:00 a.m. (Eastern time) on March 27, 2002, and at any adjournment(s) thereof. The Proxies shall cast votes according to the number of shares of the fund which the undersigned may be entitled to vote with respect to the proposal set forth below, in accordance with the specification indicated, if any, and shall have all the powers which the undersigned would possess if personally present. The undersigned hereby revokes any prior proxy to vote at such meeting, and hereby ratifies and confirms all that said Proxies, or any of them, may lawfully do by virtue hereof or thereof. THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF THE FUND AND THE COMBINED PROXY STATEMENT/PROSPECTUS, DATED JANUARY 14, 2002. THIS PROXY IS SOLICITED ON BEHALF OF THE FUND'S BOARD. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, EITHER BY THE ENCLOSED POSTAGE PAID ENVELOPE, OR BY TELEPHONE OR BY INTERNET. To vote by Telephone: 1) Read the Combined Proxy Statement/Prospectus and have the Proxy Ballot below at hand. 2) Call toll-free 1-800-690-6903. 3) Enter the 12-digit control number set forth on the Proxy Ballot and follow the simple instructions. To vote by Internet: 1) Read the Combined Proxy Statement/Prospectus and have the Proxy Ballot below at hand. 2) Go to the website www.proxyvote.com. 3) Enter the 12-digit control number set forth on the Proxy Ballot and follow the simple instructions. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED - -------------------------------------------------------------------------------- [Insert Fund Name Here] THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE TAKEN ON THE PROPOSAL BELOW. IN THE ABSENCE OF ANY SPECIFICATION, THIS PROXY WILL BE VOTED IN FAVOR OF THE PROPOSAL. -------- Vote on Proposal 1. A proposed agreement and plan of reorganization dated as of January 1, 2002 that provides for the reorganization of your fund into a corresponding acquiring fund. FOR AGAINST ABSTAIN [_] [_] [_] In their discretion, the Proxies, and each of them, are authorized to vote upon any other business that may properly come before the meeting, or any adjournment(s) thereof, including any adjournment(s) necessary to obtain requisite quorums and/or approvals. Please sign below exactly as your name(s) appear(s) hereon. Corporate proxies should be signed in full corporate name by an authorized officer. Each joint owner should sign personally. Fiduciaries should give full titles as such. ----------------------- -------- Signature Date ----------------------- -------- Signature (Joint Owners) Date - -------------------------------------------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----