MANAGEMENT AND ADMINISTRATION AGREEMENT
AGREEMENT made this 1st day of March, 1999, 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 OHIO, INC. ("Administrator"), a corporation organized under the laws of
the State of Ohio and 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 promises 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 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
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; Indemnification
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. The Trust agrees to indemnify and
hold harmless Administrator, its employees, agents, directors, officers and
nominees from and against any and all claims, demands, actions and suits,
whether groundless or otherwise, and from and against any and all judgments,
liabilities, losses, damages, costs, charges, counsel fees and other expenses of
every nature and character arising out of or in any way relating to
Administrator's actions taken or nonactions with respect to the performance of
services under this Agreement or based, if applicable, upon reasonable reliance
on information, records, instructions or requests given or made to Administrator
by the Trust, the investment adviser and on any records provided by any fund
accountant or custodian thereof; provided that this indemnification shall not
apply to actions or omissions of Administrator in cases of its own bad faith,
willful misfeasance, negligence or from reckless disregard by it of its
obligations and duties; and further provided that prior to confessing any claim
against it which may be the subject of this indemnification, the Administrator
shall give the Trust written notice of and reasonable opportunity to defend
against said claim in its own name or in the name of Administrator. Any person,
even though also a officer, director, 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
The term of this Agreement shall commence 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 remain in effect through an initial three-year period from the date
first written above ("Initial Term"). Thereafter, unless otherwise terminated as
provided herein, this Agreement shall be renewed automatically for successive
three-year periods ("Rollover Periods"). This Agreement may be terminated
without penalty: (i) by provision of a notice of nonrenewal in the manner set
forth below; (ii) by mutual agreement of the parties; or (iii) for "cause," as
defined below, upon the provision of 60 days advance written notice by the party
alleging cause. Written notice of nonrenewal must be provided at least 60 days
prior to the end of the Initial Term or any Rollover Period, as the case may be.
For purposes of this Agreement, "cause" shall mean: (a) a material
breach of this Agreement that has not been remedied for thirty (30) days
following written notice of such breach from the non-breaching party; (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; or (c) financial difficulties on the
part of the party to be terminated which are 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.
Notwithstanding the foregoing, after such termination for so long as
the Administrator, with the written consent of the Trust, in fact continues to
perform any one or more of the services contemplated by this Agreement or any
schedule or exhibit hereto, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Compensation due the Administrator and unpaid by the Trust
upon such termination shall be immediately due and payable upon and
notwithstanding such termination. The Administrator shall be entitled to collect
from the Trust, in addition to the compensation described in Schedule A hereto,
the amount of all of the Administrator's cash disbursements for services in
connection with the Administrator's activities in effecting such termination,
including without limitation, the delivery to the Trust and/or its designees of
the Trust's property, records, instruments and documents.
If, for any reason other than nonrenewal, mutual agreement of the
parties or "cause," as defined above, the Administrator is replaced as
administrator, or if a third party is added to perform all or a part of the
services provided by the Administrator under this Agreement (excluding any
sub-administrator appointed by the Administrator as provided in Article 1
hereof), then the Trust shall make a one-time cash payment, in consideration of
the fee structure and services to be provided under this Agreement, and not as a
penalty, to the Administrator equal to the balance due the Administrator for the
remainder of the then-current term of this Agreement, assuming for purposes of
calculation of the payment that such balance shall be based upon the average
amount of the relevant Fund(s)'s assets for the twelve months prior to the date
the Administrator is replaced or a third party is added.
In the event the Trust or a Fund is merged into another legal entity in
part or in whole pursuant to any form of business reorganization or is
liquidated in part or in whole prior to the expiration of the then-current term
of this Agreement, the parties acknowledge and agree that the liquidated damages
provision set forth above shall be applicable in those instances in which the
Administrator is not retained to provide administration services consistent with
this Agreement. The one-time cash payment referenced above shall be due and
payable on the day prior to the first day in which the Administrator is replaced
or a third party is added.
The parties further acknowledge and agree that, in the event the
Administrator is replaced, or a third party is added, as set forth above, (i) a
determination of actual damages incurred by the Administrator would be extremely
difficult, and (ii) the liquidated damages provision contained herein is
intended to adequately compensate the Administrator for damages incurred and is
not intended to constitute any form of penalty.
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.
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 OHIO, INC.
By: _____________________________ By: _________________________
Title: __________________________ Title: ______________________
Dated: Xxxxx 0, 0000
Xxxxxxxx A
to the
Management and Administration Agreement
between Variable Insurance Funds and BISYS Fund Services Ohio, Inc.
NAME OF FUND COMPENSATION*
BB&T Growth and Income Fund Annual rate of twenty-one hundredths of one percent (.20%)
of each Fund's average daily net assets.
BB&T Capital Manager Fund Annual rate of seven on-hundredths of one percent (0.07%)
of each Fund's average daily net assets.
AmSouth Regional Equity Fund Annual rate of twenty one-hundredths of one percent (0.20%)
AmSouth Equity Income Fund of each Fund's average daily net assets.
AmSouth Select Equity Fund
----------------------------
*All fees are computed daily and paid periodically.
VARIABLE INSURANCE FUNDS
By:___________________________
Title:_________________________
BISYS FUND SERVICES OHIO, INC.
By:___________________________
Title:________________________
