Exhibit (h)(9)
COMPLIANCE SERVICES AGREEMENT
AGREEMENT effective as of the 1st day of October, 2004, between STI CLASSIC
FUNDS and STI CLASSIC VARIABLE TRUST (each a "Trust" and collectively, the
"Trust;" references herein to the "Trust" shall be applicable separately to each
Trust executing this Agreement), each of which is a Massachusetts business
trust, c/o Trusco Capital Management, Inc., 00 Xxxx Xxxxx, Xxxxx 0000, Xxxxxxx,
XX 00000 and BISYS FUND SERVICES OHIO, INC. ("BISYS"), an Ohio corporation
having its principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx
00000.
WHEREAS, the Trust is a registered investment company, and is subject to
the requirements of Rule 38a-1 under the 1940 Act, which requires each
registered investment company to adopt policies and procedures that are
reasonably designed to prevent it from violating the federal securities laws;
WHEREAS, BISYS performs certain management and administration services for
the Trust under a Master Services Agreement between BISYS and the Trust dated
July 16, 2004 (the "Master Services Agreement");
WHEREAS, BISYS offers compliance services through its ComplianceEDGE
program, which may be tailored to create a compliance program for the Trust;
WHEREAS, the Trust desires that BISYS provide certain Compliance EDGE
program services in connection with the institution of a more comprehensive
compliance program for the Trust;
WHEREAS, BISYS is willing to perform the services enumerated in this
Agreement on the terms and conditions set forth in this Agreement;
WHEREAS, additional details of the compliance services anticipated by this
Agreement are set forth on Schedule A, and Schedule A will be revised as
mutually agreed upon; and
WHEREAS, BISYS and each Trust wish to enter into this Agreement in order to
set forth the terms under which BISYS will perform the services enumerated
herein on behalf of the Trust, and to supplement and clarify certain provisions
of the Master Services Agreement.
NOW, THEREFORE, in consideration of the covenants herein contained, the
Trust and BISYS hereby agree as follows:
1. Compliance Services.
(a) The parties mutually agree to coordinate and cooperate in connection
with the creation and implementation of written compliance polices and
procedures which, in the aggregate, shall be deemed by the Board of Trustees of
the Trust (the "Board") to be reasonably designed to prevent the Trust from
violating the provisions of the Federal
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securities laws applicable to the Trust (the "Applicable Securities Laws"), as
required under Rule 38a-1 under the 0000 Xxx.
(b) The Trust agrees to provide BISYS with copies of its current compliance
policies and procedures and furnish an initial copy of its related investment
adviser compliance policies and procedures. BISYS shall review and evaluate all
such existing information, initiate and coordinate the creation of a written
document or documents designed to embody the overall fund compliance program and
the oversight of the compliance programs of the service providers to the Trust
as provided in Rule 38a-1, and as amended, including but not limited to the
Investment Adviser, Distributor, Transfer Agent, Administrator and Accountant,
("Service Providers") as applicable. Drafts shall be prepared by BISYS in
consultation with the Trust and its counsel and shall be submitted for review
and comment. Upon approval by the Board, such documents or documents shall
become effective as the "Fund Compliance Program" required under Rule 38a-1 (as
amended from time to time upon the approval of the Board).
(c) BISYS will provide the following services in relation to the Fund
Compliance Program during the term of this Agreement: (i) provide support and
assistance to the Trust's Chief Compliance Officer in developing and
implementing the written policies and procedures comprising the Fund Compliance
Program, as contemplated above and as may be necessary in connection with
amendments from time to time; (ii) provide support and assistance to the Trust's
Chief Compliance Officer in preparing and evaluating the results of annual
reviews of the compliance policies and procedures of Service Providers; (iii)
provide other support services to the Chief Compliance Officer of the Trust,
including support for conducting an annual review of the Fund Compliance
Program; (iv) assist the Trust's Chief Compliance Officer in developing
standards for reports to the Board by BISYS and other Service Providers,
including reports relating to compliance exceptions, to the testing and
monitoring of the service provider procedures and to the processes by which the
Trust meets various tax and regulatory filing requirements and such other
reports as may be required to support the Fund Compliance Program; (v) assist
the Trust's Chief Compliance Officer in developing standards for reports to the
Board by the Chief Compliance Officer; and (vi) assist the Trust's Chief
Compliance Officer and otherwise provide support with regard to the
documentation to be submitted to the Board to enable it to make findings and
conduct reviews pertaining to the Fund Compliance Program and compliance
programs and related policies and procedures of Service Providers.
2. Fees and Expenses
(a) BISYS shall be entitled to receive from the Trust the amounts set forth
on Schedule B hereto, reflecting the amounts charged by BISYS for the
performance of services under this Agreement. The fees hereunder shall be in
addition to all fees and expenses charged by BISYS under the Master Services
Agreement.
(b) In addition to paying BISYS the fees set forth in Schedule B, the Trust
agrees to reimburse BISYS for all of its actual out-of-pocket expenses
reasonably incurred in providing services under this Agreement, including but
not limited to the following:
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(i) All reasonable out of pocket costs incurred in connection with travel
costs for attending Board meetings and conducting due diligence of Service
Providers; and
(ii) the reasonable costs incurred by BISYS with respect to Service
Providers, in providing assistance and support for reports rendered by the
Trust's Chief Compliance Officer under the Fund Compliance Program.
(c) All rights of compensation and expense reimbursement under this
Agreement for services performed shall survive the termination of this
Agreement.
3. Information to be Furnished by the Trust
(a) The Trust has furnished or shall promptly furnish to BISYS copies, as
amended and current as of the date of this Agreement, of the Fund Compliance
Program or the various policies and procedures of the Trust that have been
adopted through the date hereof which pertain to compliance matters.
(b) The Trust shall furnish BISYS written copies of any amendments to, or
changes in, any of the items referred to in Section 3(a) hereof, forthwith upon
such amendments or changes becoming effective. In addition the Trust agrees that
with respect to any amendments to the written Fund Compliance Program, which
might have the effect of changing the procedures employed by BISYS in providing
the services agreed to hereunder or which amendment might affect the duties of
BISYS hereunder, the Trust will provide such amendment to BISYS and obtain
BISYS' approval of such amendments or changes, which approval shall not be
withheld unreasonably.
(c) BISYS may reasonably rely on all documents furnished to it by the Trust
and its agents in connection with the services to be provided under this
Agreement, including any amendments to or changes in any of the items to be
provided by the Trust pursuant to Section 3(a), and shall be entitled to
indemnification in accordance with the Master Services Agreement with regard to
such reasonable reliance.
4. Term and Termination
(a) The compliance services to be rendered by BISYS under this Agreement
(the "Compliance Services") shall commence upon the date of this Agreement and
shall continue in effect for one (1) year, until September 30, 2005, unless
earlier terminated pursuant to the terms of this Agreement. During such one year
term, the Compliance Services may be terminated upon thirty (30) days notice in
the event there is "cause," as defined in the Master Services Agreement.
Following the one year anniversary of the date of this Agreement, the Compliance
Services may be terminated by either party for "cause," as provided above, or by
providing the other party with ninety (90) days written notice of termination.
(b) Notwithstanding anything in this Agreement to the contrary, including
but not limited to the provisions of Section 4(a), all of the obligations of
BISYS hereunder shall terminate automatically upon any termination of the Master
Services Agreement.
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5. Notice
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Trust, to c/o Trusco Capital Management,
Inc., 00 Xxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000 Attn: Xxxxxxx Xxxx; and if to
BISYS, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000; Attn: President, or at such
other address as such party may from time to time specify in writing to the
other party pursuant to this Section.
6. Governing Law and Matters Relating to the Trust as a Massachusetts
Business Trust
This Agreement shall be construed in accordance with the laws of the State
of Ohio and the applicable provisions of the 1940 Act. To the extent that the
applicable laws of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the Investment Company Act of 1940, as
amended, the latter shall control. 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 them personally, but shall bind only the trust
property of the Trust as provided in the Trust's Declaration of Trust.
7. Representations and Warranties
Each party represents and warrants to the other that this Agreement has
been duly authorized and, when executed and delivered by it, will constitute a
legal, valid and binding obligation of it, enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and remedies of
creditors and secured parties.
8. Miscellaneous
(a) Except as expressly provided in this Agreement, the terms of the Master
Services Agreement shall apply to the services rendered under this Agreement and
the general provisions thereof shall be used on a residual basis to construe any
issues arising under this Agreement that are not addressed by the express terms
of this Agreement. Except as provided in this Agreement, the provisions of the
Master Services Agreement remain in full force and effect (including, without
limitation, the term of the Agreement).
(b) The provisions set forth in this Agreement supersede all prior
negotiations, understandings and agreements bearing upon the subject matter
covered herein, including any conflicting provisions of the Master Services
Agreement.
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(c) No amendment or modification to this Agreement shall be valid unless
made in writing and executed by both parties hereto.
(d) Paragraph headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement may be executed in counterparts, each of which shall be
an original but all of which, taken together, shall constitute one and the same
agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
STI CLASSIC FUNDS
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: CCO, EVP
STI CLASSIC VARIABLE TRUST
By: /s/ Xxxxxxx Xxxx
------------------------------------
Name: Xxxxxxx Xxxx
Title: CCO, EVP
BISYS FUND SERVICES OHIO, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------------
Name: Xxxx Xxxxxxx,
Title: President BISYS Fund Services
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SCHEDULE A
TO COMPLIANCE SERVICES AGREEMENT
DATED OCTOBER 1, 2004
ADDITIONAL DETAILS OF THE COMPLIANCE SERVICES
The following types of activity are included in the services under this
Agreement:
1. EXCEPTION REPORTING. Compliance exceptions relating to the Funds are
reported from the operating areas of BISYS and, with respect to
portfolio compliance exceptions from Fund Administration. These
exceptions are recorded in an exception log. This activity is intended
to do three things:
- to enable timely and appropriate resolution of compliance
exceptions,
- to provide Board reporting of compliance exceptions, and
- to identify problems - either at the Funds level or at the
service provider level - that might need to be addressed by
additions to or modifications of policies or procedures.
2. BISYS TESTING & MONITORING. BISYS has implemented a regime of testing
and monitoring of internal processes across its operating areas,
including Distributor, Transfer Agent and Administrator. While this
testing includes processing relating to the Funds, the object of the
testing is to demonstrate the integrity of BISYS' procedures as they
are implemented across the funds that it services. BISYS will further
implement similar testing and monitoring processes and reporting for
the Investment Adviser(s). Other service providers may be included as
required under Rule 38a-1, as amended, and/or as mutually agreed upon
between the Trust and BISYS. BISYS receives monthly reports of this
testing from which various quarterly Board reports will be developed.
In addition, this is designed to help to identify areas that may
require more intensive testing, or that may require changes in
procedures.
3. TAX & REGULATORY ACTIVITY. BISYS maintains a compliance calendar for
the Funds which details tax and regulatory filings and other
compliance activities of the Funds. The compliance calendar enables
BISYS to bring oversight to the processes by which tax and regulatory
filings are prepared and to verify the timely filing of the required
documents. The calendar also provides a mechanism by which
verification of the required filings may be provided to the Board.
BISYS will include such compliance oversight functions in its testing
and monitoring processes.
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4. POLICY & PROCEDURE UPDATES. BISYS tracks regulatory developments and
provides suggested updates to the Funds' policies and procedures.
BISYS will continually incorporate and update the Compliance Manual
and related policies and procedures for all regulatory requirements,
and other changes as provided by or required of all applicable service
providers as defined under Rule 38a-1,as amended.
5. PROGRAM ADMINISTRATION. In addition to maintaining the Policies and
Procedures of the Fund, BISYS also supports the Funds' CCO by
reviewing the portfolio compliance activities of the Fund, monitoring
escalations raised through Compliance Services and the internal
operational units, conducting independent testing of various
procedures of the Service Providers, producing quarterly reports to
assist in the preparation of the CCO report to the Board, and
performing other special reviews and analysis as needed.
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SCHEDULE B
TO COMPLIANCE SERVICES AGREEMENT
DATED OCTOBER 1, 2004
COMPLIANCE SERVICES FEES (PAYABLE BY THE TRUSTS IN THE AGGREGATE):
Compliance Services provided under this Agreement:
$100,000 one-time implementation fee*
and $150,000 annual fee per year
* One half of the implementation fee is due upon the execution of this
Agreement and represents a non-refundable payment for access to BISYS'
developed policies and procedures regarding general fund compliance program
information. The balance shall be paid upon the initial approval by the
Board of the Fund Compliance Program prepared by BISYS, as contemplated in
Section 1(b) above.
All annual fees set forth above shall be payable in equal monthly installments.
All recurring fees set forth above shall be subject to adjustment annually
commencing on the one-year anniversary of the date of this Agreement by the
percentage increase in consumer prices for services as measured by the United
States Consumer Price Index entitled "All Services Less Rent of Shelter" or a
similar index should such index no longer be published.
OUT OF POCKET EXPENSES
Out of pocket expenses are not included in the above fees and shall also be paid
to BISYS in accordance with the provisions of this Agreement.
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