ADMINISTRATION AGREEMENT
AGREEMENT made as of this 1st day of October, 1999, between LSA VARIABLE
SERIES TRUST, a business trust organized and registered under the laws of the
state of Delaware (the "Trust"), and INVESTORS BANK & TRUST COMPANY, a
Massachusetts trust company (the "Bank").
WHEREAS, the Trust, a registered investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), consisting of the separate
funds listed on APPENDIX A hereto; and
WHEREAS, the Trust desires to retain the Bank to render certain
administrative services to the Trust and the Bank is willing to render such
services.
NOW, THEREFORE, in consideration of the mutual covenants herein set forth,
it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Trust hereby appoints the Bank to act as Administrator
of the Trust on the terms set forth in this Agreement. The Bank accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Bank with copies
properly certified or authenticated of each of the following:
(a) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Bank to provide certain administrative services to the Trust
and approving this Agreement;
(b) The Trust's Declaration of Trust and all amendments thereto (the
"Declaration");
(c) The Trust's By-laws and all amendments thereto (the "By-Laws");
(d) The Trust's agreements with all service providers which include
any investment advisory agreements, sub-investment advisory agreements, custody
agreements, distribution agreements and transfer agency agreements
(collectively, the "Agreements");
(e) The Trust's most recent Registration Statement on Form N-lA (the
"Registration Statement") under the Securities Act of 1933 and under the 1940
Act and all amendments thereto; and
(f) The Trust's most recent prospectus and statement of additional
information (the "Prospectus"); and
(g) Such other certificates, documents or opinions as may mutually be
deemed necessary or appropriate for the Bank in the proper performance of its
duties hereunder.
The Trust will immediately furnish the Bank with copies of all amendments
of or supplements to the foregoing. Furthermore, the Trust will notify the Bank
as soon as possible of any matter which may materially affect the performance by
the Bank of its services under this Agreement.
3. DUTIES OF ADMINISTRATOR. Subject to the supervision and direction of the
Board of Trustees of the Trust, the Bank, as Administrator, will assist in
conducting various aspects of the Trust's administrative operations and
undertakes to perform the services described in APPENDIX B hereto. The Bank may,
from time to time, perform additional duties and functions which shall be set
forth in an amendment to such APPENDIX B executed by both parties. At such time,
the fee schedule included in APPENDIX C hereto shall be appropriately amended.
In performing all services under this Agreement, the Bank shall act in
conformity with the Trust's Articles and By-Laws and the 1940 Act, as the same
may be amended from time to time, and the investment objectives, investment
policies and other practices and policies set forth in the Trust's Registration
Statement, as the same may be amended from time to time. Notwithstanding any
item discussed herein, the Bank has no discretion over the Trust's assets or
choice of investments and cannot be held liable for any problem relating to such
investments.
4. DUTIES OF THE TRUST.
(a) The Trust is solely responsible (through its transfer agent or
otherwise) for (i) providing timely and accurate reports ("Daily Sales Reports")
which will enable the Bank as Administrator to monitor the total number of
shares sold in each state on a daily basis and (ii) identifying any exempt
transactions ("Exempt Transactions") which are to be excluded from the Daily
Sales Reports.
(b) The Trust agrees to make its legal counsel available to the Bank
for instruction with respect to any matter of law arising in connection with the
Bank's duties hereunder, and the Trust further agrees that the Bank shall be
entitled to rely on such instruction without further investigation on the part
of the Bank. The Bank agrees that it will obtain the approval of the Trust
before consulting with the Trust=s legal counsel.
5. FEES AND EXPENSES.
(a) For the services to be rendered and the facilities to be furnished
by the Bank, as provided for in this Agreement, the Trust will compensate the
Bank in accordance with the fee schedule attached as APPENDIX C hereto. Such
fees do not include out-of-pocket disbursements (as delineated on the fee
schedule or other expenses with the prior approval of the Trust's management) of
the Bank for which the Bank shall be entitled to xxxx the Trust separately and
for which the Trust shall reimburse the Bank.
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(b) The Bank shall not be required to pay any expenses incurred by the
Trust.
6. LIMITATION OF LIABILITY.
(a) The Bank, its directors, officers, employees and agents shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust in connection with the performance of its obligations and duties
under this Agreement, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of such obligations and duties, or by
reason of its reckless disregard thereof. The Trust will indemnify the Bank, its
directors, officers, employees and agents against and hold it and them harmless
from any and all losses, claims, damages, liabilities or expenses (including
legal fees and expenses) resulting from any claim, demand, action or suit (i)
arising out of the actions or omissions of the Trust, including, but not limited
to, inaccurate Daily Sales Reports and misidentification of Exempt Transactions;
(ii) arising out of the offer or sale of any securities of the Trust in
violation of (x) any requirement under the federal securities laws or
regulations, (y) any requirement under the securities laws or regulations of any
state, or (z) any stop order or other determination or ruling by any federal or
state agency with respect to the offer or sale of such securities; or (iii) not
resulting from the willful misfeasance, bad faith or negligence of the Bank in
the performance of such obligations and duties or by reason of its reckless
disregard thereof.
(b) The Bank may apply to the Trust at any time for instructions and
may consult counsel for the Trust, or its own counsel (at the expense of the
Bank), and with accountants and other experts with respect to any matter arising
in connection with its duties hereunder, and the Bank shall not be liable or
accountable for any action taken or omitted by it in good faith in accordance
with such instruction, or with the opinion of such counsel, accountants, or
other experts. The Bank shall not be liable for any act or omission taken or not
taken in reliance upon any document, certificate or instrument which it
reasonably believes to be genuine and to be signed or presented by the proper
person or persons. The Bank shall not be held to have notice of any change of
authority of any officers, employees, or agents of the Trust until receipt of
written notice thereof has been received by the Bank from the Trust.
(c) In the event either party is unable to perform, or is delayed in
performing, its obligations under the terms of this Agreement because of acts of
God, strikes, legal constraint, government actions, war, emergency conditions,
interruption of electrical power or other utilities, equipment or transmission
failure or damage reasonably beyond its control or other causes reasonably
beyond its control, such party shall not be liable to the other for compensation
nor for any damages resulting from such failure to perform or otherwise from
such causes.
(d) Notwithstanding anything to the contrary in this Agreement, in no
event shall the Bank be liable for special, incidental or consequential damages,
even if advised of the possibility of such damages.
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7. TERMINATION OF AGREEMENT.
(a) The term of this Agreement shall be three years commencing upon
the date hereof (the "Initial Term"), unless earlier terminated as provided
herein. After the expiration of the Initial Term, the term of this Agreement
shall automatically renew for successive one-year terms (each a "Renewal Term")
unless notice of non-renewal is delivered by the non-renewing party to the other
party no later than ninety days prior to the expiration of the Initial Term or
any Renewal Term, as the case may be.
(i) Either party hereto may terminate this Agreement prior to the
expiration of the Initial Term in the event the other party violates any
material provision of this Agreement, provided that the violating party does not
cure such violation within forty-five (45) days of receipt of written notice
from the non-violating party of such violation.
(ii) If, during the Initial Term of this Agreement, a state or Federal
statutory or regulatory change shall occur such that the sale of variable
products by insurance companies generally is no longer feasible (and such change
is evidenced by changes in the sales practices for variable products across the
insurance industry) and as a result, the Board of Trustees of the Fund votes to
liquidate the Fund and terminate its registration with the Securities and
Exchange Commission, written notice (the "Liquidation Notice") of such
determination setting forth the reasons for such determination shall be provided
to the Bank. In order to be effective, any Liquidation Notice must be executed
by two officers of the Fund. The Bank shall, within seven days of receipt of
such a Liquidation Notice, reply to the Fund as to whether it agrees that the
terms of the Liquidation Notice meet the requirements of this paragraph, which
agreement shall not be unreasonably withheld. Upon such agreement, the Fund may
terminate this Agreement without additional action by the Fund's Board upon an
additional sixty (60) days written notice.
Should this Agreement be terminated in accordance with the terms of
this paragraph, the Fund shall pay to the Bank, in lieu of the fees for which
the Fund would otherwise be liable to the Bank hereunder through the end of the
Initial Term, the following amounts:
A. If during the first year of the Initial Term the Fund shall pay to the
Bank an amount equal to the fees that would otherwise be due under
this Agreement through the last day of the eighteenth month of the
Initial Term, WITHOUT giving effect to the discount provided on the
first years' fees set forth in Appendix C;
B. If during the second year of the Initial Term the Fund shall pay to
the Bank an amount equal to the fees that would otherwise be due under
this Agreement through the last day of the second year of the Initial
Term;
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C. If during the third year of the Initial Term the Fund shall pay to the
Bank an amount equal to the fees that would otherwise be due under
this Agreement through the end of the Initial Term.
(iii) Either party may terminate this Agreement during any Renewal
Term upon ninety days written notice to the other party. Any termination
pursuant to this paragraph 7(a)(ii) shall be effective upon expiration of such
ninety days, provided, however, that the effective date of such termination may
be postponed, at the request of the Trust, to a date not more than one hundred
twenty days after delivery of the written notice in order to give the Trust an
opportunity to make suitable arrangements for a successor administrator.
(b) The Bank, as Administrator, and the Trust agree that all books,
records, information and data pertaining to the business of the other party
which are exchanged or received pursuant to the negotiation or the carrying out
of this Agreement shall remain confidential, and shall not be voluntarily
disclosed to any other person, except as may be required by law.
In the event of the termination of this Agreement, it is the
obligation of the Bank to promptly deliver to the Trust the books and records
with respect to transactions for which the Bank is responsible pursuant to the
terms and conditions of this Agreement.
8. MISCELLANEOUS.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Trust or the Bank shall be sufficiently
given if addressed to that party and received by it at its office set forth
below or at such other place as it may from time to time designate in writing.
To the Trust:
LSA Variable Series Trust
Allstate Life Insurance Company
0000 Xxxxxxx Xxxx, Xxxxx X0X
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx, Vice President, Chief Operations
Officer
With a copy to: Xxxxxxx X. Xxxxxxx, Secretary and Chief
Compliance Officer
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To the Bank:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx, Director, Client Management
With a copy to: Xxxx X. Xxxxx, General Counsel
(b) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable without the written consent of the
other party.
(c) This Agreement shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, without regard to its conflict of laws
provisions.
(d) This Agreement may be executed in any number of counterparts each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
9. CONFIDENTIAL. All books, records, information and data pertaining to the
business of the other party which are exchanged or received pursuant to the
negotiation or the carrying out of this Agreement shall remain confidential, and
shall not be voluntarily disclosed to any other person, except as may be
required in the performance of duties hereunder or as otherwise required by law.
10. USE OF BANK NAME. The Trust shall not use the name of the Bank or any
of its affiliates in any prospectus, sales literature or other material relating
to the Trust in a manner not approved by the Bank prior thereto in writing;
provided however, that the approval of the Bank shall not be required for any
use of its name which merely refers in accurate and factual terms to its
appointment hereunder or which is required by the Securities and Exchange
Commission or any state securities or insurance authority or any other
appropriate regulatory, governmental or judicial authority; PROVIDED FURTHER,
that in no event shall such approval be unreasonably withheld or delayed.
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11. Use of Trust Name. The Bank shall not use the name of the Trust or any
of its affiliates in any advertisement, sales literature or other material
relating to the Bank in a manner not approved by the Trust prior thereto in
writing; provided however, that the approval of the Trust shall not be required
for any use of its name which merely refers in accurate and factual terms to its
relationship with the Trust hereunder or which is required by the Securities and
Exchange Commission or any state securities or insurance authority or any other
appropriate regulatory, governmental or judicial authority; PROVIDED FURTHER,
that in no event shall such approval be unreasonably withheld or delayed.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed and delivered by their duly authorized officers as of the date
first written above.
LSA VARIABLE SERIES TRUST
By: /s/ Xxxx X. Xxxxxx
------------------
Name: Xxxx X. Xxxxxx
Title: President
INVESTORS BANK & TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
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APPENDIX A
LSA Variable Series Trust
Fund List
IBT
Account Fund Adviser
------- ---- -------
255 Focused Equity Xxxxxx Xxxxxxx Asset Management
260 Growth Equity Xxxxxxx Sachs Asset Management
265 Disciplined Equity XX Xxxxxx Investment Management Inc.
270 Value Equity Salomon Brothees Asset Management Inc.
275 Balanced OpCap Advisors
280 Emerging Growth Domestic
Equity RS Investment Management, L.P.
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INVESTORS BANK & TRUST
SUMMARY OF ADMINISTRATION FUNCTIONS
LSA VARIABLE SERIES TRUST ("LSA VST")
Suggested Fund
Function Investors Bank & Trust LSA VST Sub-Advisor Auditor or Counsel
----------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT REPORTING
& TREASURY
ADMINISTRATION
--------------------
Monitor portfolio Perform tests of certain Monitor testing Continuously monitor A/C - Provide
compliance in specific portfolio activity results and approve portfolio activity and consultation as
accordance with based on provisions of the resolution of Fund operations in needed on
the current Fund's Prospectus and SAI. compliance issues. conjunction with 1940 Act, compliance issues.
Prospectus and SAI. Communicate with LSA VST and Prospectus, SAI and any
follow-up on potential other applicable laws and
violations. Issue daily regulations. Monitor
report of compliance testing results and approve
findings to LSA VST. resolution of compliance
issues.
FREQUENCY: DAILY
Provide compliance Provide a report of Review report. A/C - Provide
summary package. compliance testing results. consultation as
needed.
FREQUENCY: MONTHLY
Perform asset Perform asset diversification Review test results Continuously monitor A - Provide
diversification tests at each tax quarter end. and take any necessary portfolio activity in consultation as
testing to Provide results to LSA LLC and action. Approve tax conjunction with IRS needed in
establish to subadvisors by the 12th positions taken. requirements and alert LSA establishing
qualification as business day after quarter-end. Approve resolution of as necessary. Review test positions to be
a RIC and to meet Follow-up on issues. compliance issues. results and take any taken in tax
requirements of necessary action. treatment of
Section 817(h) of IRC. particular issues.
Review quarter end
tests on a current
basis.
FREQUENCY: QUARTERLY
1
Suggested Fund
Function Investors Bank & Trust LSA VST Sub-Advisor Auditor or Counsel
----------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT REPORTING
& TREASURY
ADMINISTRATION
(CONT.)
--------------------
Perform qualifying Perform qualifying income Review test results Continuously monitor A- Consult as
income testing to testing (on book basis income, and take any necessary portfolio activity in needed on tax
establish unless material differences action. Approve tax conjunction with IRS accounting
qualification as are anticipated) on quarterly positions taken. requirements. Review positions to be
a RIC. basis and as may otherwise Approve resolution of test results and take taken. Review in
be necessary. Follow-up compliance issues. any necessary action. conjunction with
on issues. year-end audit.
FREQUENCY: QUARTERLY
Prepare the Fund's Prepare preliminary expense Provide asset level
annual expense budget. budget. Notify fund accounting projections. Approve
Establish daily of new accrual rates. expense budget.
accruals.
FREQUENCY: ANNUALLY
Monitor the Fund's Monitor actual expenses Provide asset level
expense budget. updating budgets/ expense projections quarterly.
accruals. Notify Fund Provide vendor
Accounting of any changes. information as
necessary. Review
expense analysis and
approve budget revisions.
FREQUENCY: QUARTERLY
Receive and coordinate Propose allocations of Approve invoices and
payment of fund invoices among Funds and allocations of payments.
expenses. obtain authorized approval Send invoices to IBT in
to process payment. a timely manner.
FREQUENCY: AS OFTEN
AS NECESSARY
2
Suggested Fund
Function Investors Bank & Trust LSA VST Sub-Advisor Auditor or Counsel
----------------------------------------------------------------------------------------------------------------------------------
MANAGEMENT REPORTING
& TREASURY
ADMINISTRATION
(CONT.)
--------------------
Calculate total Provide total return Review total return
return information calculations. information.
on Funds as defined
in the current
Prospectus and SAI.
FREQUENCY: MONTHLY
Prepare responses to Subject to prior approval by Identify the services to
major industry LSA, prepare, coordinate as which the Funds report.
questionnaires. necessary, and submit Provide information as
responses to the appropriate requested.
agency. Provide copy of all
responses to LSA.
FREQUENCY: AS OFTEN
AS NECESSARY
Prepare disinterested Summarize amounts paid to Provide social security
director/trustee directors/trustees during the numbers and current
Form 1099-Misc. calendar year. Prepare Form mailing addresses for
1099-Misc and send to LSA VST trustees. Review and .
for mailing to Trustees. approve information
provided for Form
1099-Misc
FREQUENCY: ANNUALLY
FINANCIAL REPORTING
3
Prepare financial Prepare selected portfolio Review financial
information for data (i.e., top X holdings), information.
presentation to financial information (i.e.,
Fund Management financial highlight data),
and Board of and other supporting
Trustees. information (i.e., broker
commissions, compliance
summary, capital stock
activity and 144A schedules)
for quarterly board meetings.
FREQUENCY: QUARTERLY
4
Suggested Fund
Function Investors Bank & Trust LSA Sub-Advisor Auditor or Counsel
----------------------------------------------------------------------------------------------------------------------------------
FINANCIAL REPORTING (CONT)
--------------------------
Coordinate the annual Coordinate the creation of Provide past financial Prepare and coordinate A - Perform audit
audit and semi-annual templates reflecting client- statements and other production of Management and issue opinion
preparation and selected standardized information required to Discussion and Analysis. on annual
printing of financial appearance and text of create templates, Review and approve financial
statements and notes financial statements and including report style portfolio presentation. statements.
with management, fund footnotes. Draft and and graphics. Approve
accounting and the manage production cycle. format and text as A/C - Review
fund auditors. Coordinate with IBT fund standard. Approve reports.
accounting the electronic production cycle and
receipt of portfolio and assist in managing the
general ledger information. cycle. Review and
Assist in resolution of approve entire report.
accounting issues. Using Make appropriate
templates, draft financial representations in
statements, coordinate conjunction with audit.
auditor and management review,
and clear comments. Coordinate
review and approval by portfolio
managers of portfolio listings to
be included in financial statements.
Coordinate, as requested by LSA,
printing of reports and XXXXX
conversion with outside printer
and filing with the SEC via XXXXX.
FREQUENCY: SEMI-ANNUALLY
LEGAL
5
Prepare agenda and Maintain annual calendar of Review and approve C - Review agenda,
board materials for required quarterly and annual board materials. board material and
quarterly board approvals. Prepare agenda, board and committee
meetings. resolutions and other board meeting minutes.
materials for quarterly board Ensure BOD material
meetings. Prepare supporting contains all
information and materials when required
necessary. Assemble, check, information that
and distribute books in advance the BOD must review
of meeting. Attend board and and/or approve to
committee meetings and perform their
prepare minutes. duties as
directors.
FREQUENCY: QUARTERLY
6
Suggested Fund
Function Investors Bank & Trust LSA Sub-Advisor Auditor or Counsel
----------------------------------------------------------------------------------------------------------------------------------
LEGAL (CONT)
------------
Prepare and file Prepare form for filing. Provide appropriate C - Review initial
Form N-SAR. Obtain any necessary responses. Review and filing.
supporting documents. authorize filing. A - Provide annual
File with SEC via XXXXX. audit internal
control letter to
accompany the annual
filing.
FREQUENCY: SEMI-ANNUALLY
Prepare amendments Coordinate the preparation Review and approve. C - Review and
to Registration and filing of post-effective approve filings.
Statement. amendments. Coordinate with A/C - Provide
outside printers the Xxxxx consents as
conversion, filing with the appropriate.
SEC and printing of prospectus.
FREQUENCY: ANNUAL
UPDATE (INCLUDES UPDATING
FINANCIAL HIGHLIGHTS,
EXPENSE TABLES, RATIOS)
PLUS ONE ADDITIONAL
FILING PER FISCAL YEAR
Prepare Prospectus/ Coordinate, at LSA's request, Review and approve. C - Review and
SAI supplements. the preparation and printing approve filings.
of Prospectus and SAI A/C - Provide
supplements. Coordinate consents as
filing with the SEC via Xxxxx. appropriate.
FREQUENCY: AS
OFTEN AS REQUIRED
7
Proxy Material/ Prepare scripts. Attend Review and approve C- Review and
Shareholder Meetings meeting and prepare minutes. proxy. approve proxy.
FREQUENCY: AS NEEDED
8
Suggested Fund
Function Investors Bank & Trust LSA Sub-Advisor Auditor or Counsel
----------------------------------------------------------------------------------------------------------------------------------
LEGAL (CONT)
------------
Assist in updating Make annual filing of Obtain required
of fidelity bond fidelity bond insurance. fidelity bond insurance
insurance coverage. material with the SEC coverage. Monitor
level of fidelity bond
insurance maintained
in accordance with
required coverage.
FREQUENCY: ANNUALLY
Respond to Assist LSA VST (as requested) Compile and provide C - Provide
regulatory in resolution of examination documentation pursuant consultation
examinations. inquiries. Provide, with prior to exam requests. as needed.
consent of LSA, documentation Coordinate with
as needed to respond to regulatory auditors to
auditors. provide requested
documentation and
resolutions to
inquiries.
FREQUENCY: AS NEEDED
TAX
----
Prepare income Calculate investment company Provide transaction Provide transaction A - Provide
tax provisions. taxable income, net capital information as information as requested. consultation as
gain and spillback dividend requested. Assist with Identify Passive Foreign needed in
requirements. Identify book- the sub- advisors' Investment Companies establishing
tax accounting differences. identification of (PFIC's) to IBT positions to be
Track required information Passive Foreign taken in tax
relating to accounting / Investment Companies . treatment of
tax differences. Coordinate (PFICs) to IBT. Approve particular issues.
review by external auditors. tax accounting Perform review in
positions to be taken. conjunction with
Approve provisions. the year-end audit.
FREQUENCY: ANNUALLY
9
Suggested Fund
Function Investors Bank & Trust LSA Sub-Advisor Auditor or Counsel
----------------------------------------------------------------------------------------------------------------------------------
TAX (CONT)
------------
Calculate excise Calculate required Provide transaction Provide transaction A - Provide
tax distributions distributions to avoid information as information as requested. consultation as
imposition of excise tax. requested. Assist with Identify PFIC's to IBT. needed in
- Calculate capital sub advisors' establishing
gain net income and identification of positions to be
foreign currency gain/ Passive Foreign taken in tax
loss through October 31. Investment Companies treatment of
- Calculate ordinary income (PFICs) to IBT. Approve particular issues.
and distributions through tax accounting Review and concur
a specified cut off date. positions to be taken. with proposed
- Project ordinary income Review and approve all distributions per
from cut off date to income and distribution share.
December 31. calculations,
- Ascertain dividend shares. including projected
Identify book-tax accounting income and dividend
differences. Track required shares. Approve
information relating to distribution rates per
accounting differences. share and aggregate
Coordinate review by amounts. Obtain Board
management and fund auditors. approval when required.
Notify custody and transfer
agent of authorized dividend
rates in accordance with
Board approved policy.
Report dividends to Board
as required.
FREQUENCY: ANNUALLY
Prepare tax returns Prepare RIC income tax Review and sign tax A - Review and sign
returns (federal) and return as entity, not tax return as
Excise (if necessary). preparer. preparer.
FREQUENCY: ANNUALLY
10
Prepare shareholder Obtain yearly Review and approve
character distribution information. information provided.
distribution Calculate dividend
information, if character reclasses.
required.
FREQUENCY: ANNUALLY
11
Function Investors Bank & Trust LSA Sub-Advisor Auditor or Counsel
----------------------------------------------------------------------------------------------------------------------------------
TAX (CONT)
------------
Prepare other Obtain yearly income Review and approve A - Provide
year-end tax- distribution information provided. consultation as
related disclosures information. Calculate required.
disclosures (i.e., foreign
tax credits; dividends
deceived deduction; and
interest received from the
US Government and its Agencies)
and communicate such information
to LSA within 60 days of year end.
FREQUENCY: ANNUALLY
12
Review and Approval
The attached Summary of Administration Functions has been reviewed and
represents the services currently being provided.
/s/ Xxxxx XxXxxxx September 24, 1999
Signature of Account Manager Date
______________________________________________________________________
Signature of Authorized Client Representative Date
Title: President
Print Name: Xxxx X. Xxxxxx
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APPENDIX C
LSA VARIABLE SERIES TRUST
PROPOSED FEE SCHEDULE*
FOR 6 MUTUAL FUNDS
DOMESTIC CUSTODY, FUND ACCOUNTING,
CALCULATION OF N.A.V.,
ADMINISTRATION AND TRANSFER AGENCY
A. DOMESTIC CUSTODY, FUND ACCOUNTING, CALCULATION OF N.A.V., ADMINISTRATION AND
TRANSFER AGENCY
The following fees will apply to all assets for which Investors Bank
provides Custody, Fund Accounting, calculation of N.A.V., Administration and
Transfer Agency services.
Annual Fee
----------
FIRST $500 MILLION OF NET ASSETS 11.0 Basis Points
NEXT $500 MILLION OF NET ASSETS 9.0 Basis Points
NEXT $500 MILLION OF NET ASSETS 6.0 Basis Points
Assets in excess of $1.5 Billion 4.0 Basis Points
There will be an annual minimum fee of $140,000 per fund. However, to
accommodate the start-up period, first year minimums will be as follows: 1st
Quarter 50%, 2nd Quarter 75%, 3rd Quarter 85%, 4th Quarter and beyond 100%.
B. DOMESTIC TRANSACTIONS
DTC/Fed Book Entry $10**
Physical Securities 35
Options and Futures 18
GNMA Securities 30
Principal Paydown 5
Foreign Currency 18***
Outgoing Wires 7
Incoming Wires 5
1
**This assumes that the trade information will be sent to Investors Bank in the
ISITC/SWIFT format. Manual trades will be billed at $12.00 per trade. There are
no transaction charges for use of the Investors Bank Repo.
***There are no transaction charges for F/X contracts executed by Investors
Bank.
C. FOREIGN SUBCUSTODIAN FEES
o Incremental basis point and transaction fees will be charged for
all foreign assets for which we are custodian. The asset based
fees and transaction fees vary by country, based upon the
attached global custody fee schedule. Local duties, script fees,
registration, reclaims, exchange fees, and other market charges
are additional out-of-pocket fees.
o Investors Bank will require the fund to hold all international
assets at the subcustodian of our choice.
MISCELLANEOUS
A. OUT-OF-POCKET
o These charges consist of:
-Legal Expenses -InvestView
-Printing, Delivery & Postage -Forms and Supplies
-Third Party Review -Micro Rental
-Extraordinary Travel Expenses
-Customized Systems Development/Reporting
-International Verification Services($3/security/month)
-Pricing and Verification Services
-Telecommunications
-Support Equipment Rental
-Data Transmissions
-Non Standard Extract
B. DOMESTIC BALANCE CREDIT
o We allow use of balance credit against fees (excluding
out-of-pocket charges) for fund balances arising out of the
custody relationship. The credit is based on collected balances
reduced by balances required to support the activity charges of
the accounts. The monthly earnings allowance is equal to 75% of
the 90-day T-xxxx rate.
2
C. SECURITIES LENDING, FOREIGN EXCHANGE & CASH MANAGEMENT
o The assumption was made that Investors Bank would perform
securities lending, if applicable, foreign exchange and cash
management for the portfolios. Securities Lending revenue is
split with the funds and Investors Bank on a 60/40% basis: 60%
going to the funds.
D. PAYMENT
o The above fees will be charged against the fund's custodian
checking account five business days after the invoice is mailed.
E. SYSTEMS
o The details of any systems work will be determined after a
thorough business analysis. System's work will be billed on a
time and material basis. Investors Bank provides an allowance of
10 system hours for data extract set up and reporting extract set
up. Additional systems hours will be billed on a time and
material basis.
* A LETTER OF INTENT ACCOMPANIED BY A $25,000 DEPOSIT TO BE CREDITED AGAINST
FUTURE FEES IS REQUIRED TO BEGIN THIS IMPLEMENTATION. THIS FEE SCHEDULE IS VALID
FOR 60 DAYS FROM DATE OF ISSUE AND ASSUMES THE EXECUTION OF OUR STANDARD
CONTRACTUAL AGREEMENTS FOR A MINIMUM OF THREE YEARS.
* THIS FEE SCHEDULE IS CONFIDENTIAL INFORMATION OF THE PARTIES AND SHALL NOT BE
DISCLOSED TO ANY THIRD PARTY WITHOUT PRIOR WRITTEN CONSENT OF BOTH PARTIES.
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