MANAGEMENT AND ADMINISTRATION AGREEMENT
AGREEMENT made this _____ day of ____, 1997, between VARIABLE INSURANCE
FUNDS (the "Trust"), a Massachusetts business trust having its principal place
of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000-0000, and BISYS Fund
Services ("Administrator"), having its principal place of business at 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000-0000.
WHEREAS, the Trust is an open-end management investment company, organized
as a Massachusetts business trust and registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940
(the "1940 Act"); and
WHEREAS, the Trust desires to retain Administrator to furnish management
and administration services to certain investment portfolios of the Trust and
may retain Administrator to serve in such capacity with respect to additional
investment portfolios of the Trust, all as now or hereafter may be identified in
Schedule A hereto as such Schedule may be amended from time to time
(individually referred to herein as a "Fund" and collectively referred to herein
as the "Funds").
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Manager and Administrator
Subject to the direction and control of the Board of Trustees of the Trust,
Administrator will assist in supervising all aspects of the operations of the
Funds except those performed by any investment adviser for the Funds under its
Investment Advisory Agreement, any custodian for the Funds under its Custodian
Agreement, any transfer agent for the Funds under its Transfer Agency Agreement
and any fund accountant for the Funds under its Fund Accounting Agreement.
Administrator will maintain office facilities (which may be in the offices
of Administrator or an affiliate but shall be in such location as the Trust
shall reasonably determine); furnish statistical and research data, clerical and
certain bookkeeping services and stationery and office supplies; prepare the
periodic reports to the Commission on Form N-SAR or any replacement forms
therefor; compile data for, assist the Trust or its designee in the preparation
of, and file, all the Funds' federal and state tax returns and required tax
filings other than those required to be made by the Funds' custodian and
transfer agent; prepare compliance filings pursuant to state securities laws
with the advice of the Trust's counsel; assist to the extent requested by the
Trust with the Trust's preparation of its Annual and Semi-Annual Reports to
Shareholders and its Registration Statements (on Form N-1A or any replacement
therefor); compile data for and prepare for filing Notices to the Commission
required pursuant to Rule 24f-2 under the 1940 Act; keep and maintain the
financial accounts and records of the Funds, including calculation of daily
expense accruals; in the case of money market funds, periodic review of the
amount of the deviation, if any, of the current net asset value per share
(calculated using available market quotations or an appropriate substitute that
reflects current market conditions) from each money market fund's amortized cost
price per share; and generally assist in all aspects of the operations of the
Funds. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Administrator hereby agrees that all records which it maintains for the Trust
are the property of the Trust and further agrees to surrender promptly to the
Trust any of such records upon the Trust's request. Administrator further agrees
to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by Rule 31a-1 under the 1940 Act.
Administrator may delegate some or all of its responsibilities under this
Agreement.
Administrator may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder; provided,
however, that Administrator shall not be relieved of any of its obligations
under this Agreement by the appointment of such subcontractor and provided
further, that Administrator shall be responsible, to the extent provided in
Section 4 hereof, for all acts of such subcontractor as if such acts were its
own.
2. Fees; Expenses; Expense Reimbursement
In consideration of services rendered and expenses assumed pursuant to this
Agreement, each of the Funds will pay Administrator on the first business day of
each month, or at such time(s) as Administrator shall request and the parties
hereto shall agree, a fee computed daily and paid as specified below calculated
at the applicable annual rate set forth on Schedule A hereto. The fee for the
period from the day of the month this Agreement is entered into until the end of
that month shall be prorated according to the proportion which such period bears
to the full monthly period. Upon any termination of this Agreement before the
end of any month, the fee for such part of a month shall be prorated according
to the proportion which such period bears to the full monthly period and shall
be payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to Administrator, the value of
the net assets of a particular Fund shall be computed in the manner described in
the Trust's Amended and Restated Declaration of Trust ("Declaration of Trust")
or in the Prospectus or Statement of Additional Information respecting that Fund
as from time to time is in effect for the computation of the value of such net
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assets in connection with the determination of the liquidating value of the
shares of such Fund.
Administrator will from time to time employ or associate with itself such
person or persons as Administrator may believe to be particularly fitted to
assist it in the performance of this Agreement. Such person or persons may be
partners, officers, or employees who are employed by both Administrator and the
Trust. The compensation of such person or persons shall be paid by Administrator
and no obligation may be incurred on behalf of the Funds in such respect. Other
expenses to be incurred in the operation of the Funds including taxes, interest,
brokerage fees and commissions, if any, fees of Trustees who are not partners,
officers, directors, shareholders or employees of the Administrator or
distributor for the Funds, Commission fees and state Blue Sky qualification and
renewal fees and expenses, investment advisory fees, custodian fees, transfer
and dividend disbursing agents' fees, fund accounting fees including pricing of
portfolio securities, service organization fees, certain insurance premiums,
outside and, to the extent authorized by the Trust, inside auditing and legal
fees and expenses, costs of maintenance of corporate existence, typesetting and
printing prospectuses for regulatory purposes and for distribution to current
shareholders of the Funds, costs of shareholders' and Trustees' reports and
meetings and any extraordinary expenses will be borne by the Funds.
If in any fiscal year the aggregate expenses of a particular Fund exceed
any applicable expense limitation, Administrator will reimburse such Fund for a
portion of such excess expenses equal to such excess times the ratio of the fees
respecting such Fund otherwise payable to Administrator hereunder to the
aggregate fees respecting such Fund otherwise payable to Administrator hereunder
and to any investment adviser under its Investment Advisory Agreement with the
Trust. The expense reimbursement obligation of Administrator is limited to the
amount of its fees hereunder for such fiscal year; provided, however, that
notwithstanding the foregoing, Administrator shall reimburse a particular Fund
for such proportion of such excess expenses regardless of the amount of fees
paid to it during such fiscal year to the extent required by any applicable
regulation. Such expense reimbursement, if any, will be estimated daily and
reconciled and paid on a monthly basis.
3. Proprietary and Confidential Information
Administrator agrees on behalf of itself and its partners and employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Trust and prior, present, or potential
shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Trust, which approval shall
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not be unreasonably withheld and may not be withheld where Administrator may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Trust.
4. Limitation of Liability
Administrator shall not be liable for any loss suffered by the Funds in
connection with the matters to which this Agreement relates, except for a loss
resulting from willful misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even though also a
partner, employee, or agent of Administrator, who may be or become an officer,
Trustee, employee, or agent of the Trust or the Funds shall be deemed, when
rendering services to the Trust or the Funds, or acting on any business of that
party, to be rendering such services to or acting solely for that party and not
as a partner, employee, or agent or one under the control or direction of
Administrator even though paid by it.
5. Term
This Agreement shall become effective as of the date first written above
(or, if a particular Fund is not in existence on such date, on the date an
amendment to Schedule A to this Agreement relating to that Fund is executed) and
shall continue until ___________, and unless sooner terminated as provided
herein, thereafter shall be renewed automatically for successive two-year terms,
unless written notice not to renew is given by the non-renewing party to the
other party at least 60 days prior to the expiration of the then-current term.
This Agreement will terminate automatically 90 days after: (1) the effective
date of the repeal or modification of the Xxxxx-Xxxxxxxx Act permitting banks or
bank affiliates to underwrite or distribute shares of mutual funds; or (2) a
change of control of, or assignment of this Agreement (within the meaning of
section 2(a)(4) of the 0000 Xxx) by, the Administrator; provided, however, that
the Fund may, at its sole option, elect to waive said automatic termination or
to specify a termination date which is later than 90 days but not to exceed the
expiration of the then-current contract term. This Agreement is terminable with
respect to a particular Fund through delivery of written notice of nonrenewal in
the manner described above prior to the end of the initial or a subsequent
two-year term; upon mutual agreement of the parties hereto; or for "cause" by
the party alleging "cause," in any case on not less than 60 days notice by the
Trust's Board of Trustees or by Administrator. Written notice not to renew may
be given for any reason, with or without "cause" (as defined below).
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For purposes of this Agreement, "cause" shall mean (a) willful misfeasance,
bad faith, gross negligence or reckless disregard on the part of the party to be
terminated with respect to its obligations and duties set forth herein; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; (c) financial difficulties on the part
of the party to be terminated which is evidenced by the authorization or
commencement of, or involvement by way of pleading, answer, consent, or
acquiescence in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors; or (d) any circumstance which substantially impairs the performance
of the obligations and duties of the party to be terminated, or the ability to
perform those obligations and duties, as contemplated herein. Notwithstanding
the foregoing, the absence of either or both an annual review or ratification of
this Agreement by the Board of Trustees shall not, in and of itself, constitute
"cause" as used herein.
If, for any reason other than "cause" as defined above, Administrator is
replaced as fund manager and administrator, or if a third party is added to
perform all or a part of the services provided by Administrator under this
Agreement (excluding any sub-administrator appointed by Administrator as
provided in Section 1 hereof), then the Trust shall make a one-time cash
payment, as liquidated damages, to Administrator equal to the balance due
Administrator for the remainder of the term of this Agreement, assuming for
purposes of calculation of the payment that the asset level of the Trust on the
date Administrator is replaced, or a third party is added, will remain constant
for the balance of the contract term.
6. Governing Law and Matters Relating to the Trust as a Massachusetts
Business Trust
This Agreement shall be governed by the law of the Commonwealth of
Massachusetts. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust personally, but shall bind only the
trust property of the Trust. The execution and delivery of this Agreement have
been authorized by the Trustees, and this Agreement has been signed and
delivered by an authorized officer of the Trust, acting as such, and neither
such authorization by the Trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the trust
property of the Trust as provided in the Trust's Agreement and Declaration of
Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first written
above.
VARIABLE INSURANCE FUNDS BISYS FUND SERVICES
By: BISYS Fund Services, Inc.,
General Partner
By: __________________________ By:____________________________
Title:________________________ Title:_________________________
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Dated: ______, 1997
Schedule A
to the
Management and Administration Agreement
between Variable Insurance Funds and
BISYS Fund Services
NAME OF FUND COMPENSATION*
Variable Insurance Money Market Fund Annual rate of
thirteen one-
hundredths of one
percent (.13%) of each
Fund's average
daily net assets.
BB&T Growth and Income Fund Annual rate of twenty
one-hundredths of one
percent (.20%) of each
Fund's average
daily net assets.
Variable Insurance Allocated Annual rate of seven
Conservative Fund one-hundredths of one
Variable Insurance Allocated Balanced percent (0.07%) of
Fund each Fund's average
Variable Insurance Allocated Growth daily net assets.
Fund
Variable Insurance Allocated
Aggressive Fund
BB&T Capital Manager Fund
-----------------------------
*All fees are computed daily and paid periodically.
VARIABLE INSURANCE FUNDS
By:________________________________
Title:_____________________________
BISYS FUND SERVICES
By:________________________________
Title:_____________________________
