Ex 99.B8(e)
MASTER ADMINISTRATIVE SERVICES AGREEMENT
AMENDED AND RESTATED
AUGUST 1, 2006
MASTER ADMINISTRATIVE SERVICES AGREEMENT
MASTER ADMINISTRATIVE SERVICES AGREEMENT initially dated the 1st day of March,
1997, and as amended and restated on this 1st day of August, 2006, by and among
Massachusetts Financial Services Company, a Delaware corporation (the
"Administrator"), and each of the funds (or trusts acting on behalf of their
series) identified from time to time on EXHIBIT A hereto (each a "Fund" and
collectively the "Funds").
WITNESSETH:
WHEREAS, the Funds have entered into Investment Advisory Agreements with the
Administrator (the "Advisory Agreements") pursuant to which the Administrator
provides investment advisory services to the Funds;
WHEREAS, the Funds desire to retain the Administrator to render the legal,
financial administration and other administrative services required by the Funds
in the manner and on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto and hereinafter set forth, the parties covenant and agree as
follows:
1. ADMINISTRATIVE SERVICES. The Administrator shall, at its expense (subject to
Sections 2 and 3 hereof), and subject always to the control of the trustees,
directors or other governing body of the Funds (referred to herein as
"Trustees"), manage, supervise and conduct all of the day-to-day and ordinary
course non-investment related affairs and business of the Funds and matters
incidental thereto not required to be provided by the Administrator under the
Advisory Agreements (together "Administrative Services"). EXHIBIT B hereto lists
various categories of Administrative Services to be provided by the
Administrator hereunder, it being understood that such list is not exhaustive
and that the Funds may require Administrative Services in addition to those
specified or referenced in EXHIBIT B. If there occurs a material change in the
laws, rules or regulations governing the Funds or related Fund policies that
materially increase or decrease the types or quantities of Administrative
Services required by the Funds, the Funds and the Administrator shall negotiate
in good faith an adjustment to the Administrative Fee payable under Section 5
hereof. In the performance of its duties, the Administrator will comply with the
provisions of the Declaration of Trust and Bylaws of each Fund and applicable
law, and shall comply with such compliance and other policies and procedures as
the Trustees may adopt, approve or determine from time to time.
2. RESPONSIBILITY FOR CHARGES AND EXPENSES. During the term of this Agreement,
the Administrator will pay all expenses incurred by it in connection with its
obligations under this Agreement, except such expenses as are assumed by the
Funds under this Agreement and any expenses that are paid by the Funds or by a
party other than the Funds on behalf of the Funds under the terms of any other
agreement to which the Funds are a party or a third-party beneficiary. The
Administrator further agrees to pay or cause its affiliates to pay all salaries,
fees,
2
and expenses of any officer or Trustee of the Funds who is an officer, director,
or employee of the Administrator or an affiliate of the Administrator. The
Administrator assumes and shall pay for maintaining its staff and personnel and
shall, at its own expense, provide the equipment, office space, and facilities
necessary to perform its obligations under this Agreement. The Administrator
shall not, under the terms of this Agreement, bear the categories of expenses
listed on EXHIBIT C hereto (although the Administrator or an affiliate may bear
certain of these expenses under one or more other agreements).
3. ADMINISTRATIVE SERVICES PROVIDED BY THIRD PARTIES. It is acknowledged and
agreed that the Funds will require and bear the costs of administrative services
to be provided by third parties in addition to Administrative Services which the
Administrator is required to provide or procure at its own expense under this
Agreement, such as legal services to be provided by legal counsel to the Funds
and the Trustees who are not "interested persons" (as defined in the Investment
Company Act of 1940) of the Funds ("Independent Trustees"), and services to be
provided to the Funds by independent accountants or other auditors or
consultants which would otherwise constitute Administrative Services ("Separate
Third Party Services"). It is further acknowledged and agreed that, from time to
time, due to resource constraints or otherwise, the Administrator may cause or
arrange for third parties to provide Administrative Services that the
Administrator is required to provide or procure at its own expense under this
Agreement (E.G., the use of outside legal counsel to draft routine Fund proxy
statements or prospectuses) ("Outsourced Third Party Services"). Subject to any
policies or procedures that are adopted by the Funds, the Administrator shall
pay for the costs of any Outsourced Third Party Service unless it obtains the
approval of the Trustees (or a committee or other delegate of the Trustees) for
the Funds to bear some or all of such costs prior to causing or arranging for
the Outsourced Third Party Service to be provided to the Funds. The parties
recognize that there may be circumstances in which it is unclear as to whether a
particular administrative service provided by a third party constitutes a
Separate Third Party Service or an Outsourced Third Party Service. Subject to
any policies or procedures that are adopted by the Funds, the Administrator
shall use its best efforts to identify and bring such circumstances to the
attention of the Trustees, in which case the Trustees shall, in good faith,
determine whether the particular service constitutes a Separate Third Party
Service or an Outsourced Third Party Service for purposes of this Agreement.(1)
4. MAINTENANCE OF BOOKS AND RECORDS. With respect to the provision of
Administrative Services, the Administrator will preserve for each Fund that is
registered as an investment company with the Securities and Exchange Commission
(the "SEC") all records required to be maintained as prescribed by the rules and
regulations of the SEC in the manner and for the time periods prescribed by such
rules. The Administrator agrees that all such records shall be the property and
under the control of each Fund for which they are maintained and shall be made
----------
1) The Funds/Trustees and the Administrator may from time to time develop
written policies designed to delineate various administrative services and
responsibilities to be provided by third party service providers to the
Funds or the Independent Trustees (for which the Funds bear the associated
expenses), on the one hand, and those to be provided by the Administrator
at is own expense, on the other, as well as procedures to be followed by
the Administrator in utilizing third party service providers on behalf of
the Funds. In this regard, reference is made to the document entitled "Role
of Ropes & Xxxx LLP as Counsel to the MFS Funds and the Independent
Trustees," as it may be amended from time to time.
3
available, within five business days of any request therefore, to the Fund's
Trustees or independent accountants during regular business hours at the
Administrator's offices. In the event of termination of this Agreement for any
reason, all such records shall be returned, without charge, promptly to the
appropriate Fund, free from any claim or retention of rights by the
Administrator, except that the Administrator may retain copies of such records.
5. ADMINISTRATIVE FEE. Each Fund shall pay the Administrator a fee as agreed to
from time to time and as set forth in Exhibit D hereto (the "Administrative
Fee"). The Administrative Fee shall be accrued for each calendar day and the sum
of the daily fee accruals shall be paid monthly to the Administrator on the
second to last business day of each calendar month. If this Agreement becomes
effective or terminates before the end of any calendar month, the Administrative
Fee for the period from the effective date to the end of such calendar month or
from the beginning of such calendar month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
6. NON-EXCLUSIVITY. The services of the Administrator to the Funds hereunder are
not to be deemed exclusive and the Administrator shall be free to render similar
services to others.
7. STANDARD OF CARE. Neither the Administrator, nor any of its directors,
officers, stockholders, agents or employees, shall be liable or responsible to
any Fund or its shareholders for any error of judgment, mistake of law or any
loss arising out of any act or omission in the performance by the Administrator
of its duties under this Agreement, except for liability resulting from (a)
willful misfeasance, (b) bad faith, (c) gross negligence, or (d) reckless
disregard by the Administrator of its obligations and duties under this
Agreement.
8. TERM, TERMINATION, AMENDMENT AND ASSIGNMENT. This Agreement shall begin on
the date first written above and shall continue indefinitely with respect to
each Fund until terminated as follows:
(i) the Agreement may be terminated at any time, without payment of any
penalty, by the Trustees of the Fund upon sixty (60) days' written notice to the
Administrator;
(ii) the Agreement may be terminated by the Administrator with respect to
any Fund at any time upon sixty (60) days' written notice to the Fund; and
(iii) if the Trustees of the Fund, including a majority of the Independent
Trustees, do not specifically approve at least annually the continuance of this
Agreement, then this Agreement shall automatically terminate at the close of
business on the anniversary of its execution, or upon the expiration of one year
from the effective date of the last such continuance, whichever is later.
This Agreement may be amended at any time by a written agreement executed
by each party hereto and may be assigned with respect to any Fund only with the
written consent of the Fund and the Administrator.
4
9. MISCELLANEOUS.
A. CAPTIONS. The captions in this Agreement are included for convenience
of reference only and in no way define or delineate any of the
provisions hereof or otherwise affect their construction or effect.
B. GOVERNING LAW. The provisions of this Agreement shall be construed and
interpreted in accordance with the domestic substantive laws of The
Commonwealth of Massachusetts, without giving effect to any conflicts
or choice of laws rule or provision that would result in the
application of the domestic substantive laws of any other
jurisdiction.
C. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
D. JOINDER OF FUNDS. In the event that additional funds are created from
time to time which desire to retain the Administrator to provide them
with Administrative Services pursuant to this Agreement, the
Administrator and the additional fund may jointly amend SCHEDULE A
hereto to add the additional fund, and the additional fund shall
thereafter be deemed a "Fund" for all purposes of this Agreement. The
consent of the other parties to this Agreement shall not be required
to amend SCHEDULE A hereto.
E. SCOPE OF FUND'S OBLIGATIONS. A copy of the Declaration of Trust of
each Fund (or trust of which the Fund is a series) organized as a
Massachusetts business trust (each a "Trust"), is on file with the
Secretary of State of The Commonwealth of Massachusetts. The
Administrator acknowledges that the obligations of or arising out of
this Agreement are not binding upon any of a Trust's Trustees,
officers, employees, agents or shareholders individually, but are
binding solely upon the assets and property of the Trust in accordance
with its proportionate interest thereunder and hereunder. If this
Agreement is executed by a Trust on behalf of one or more series of
the Trust, the Administrator further acknowledges that the assets and
liabilities of each series of the Trust are separate and distinct and
that the obligations of or arising out of this Agreement are binding
solely upon the assets or property of the series on whose behalf the
Trust has executed this Agreement. The Administrator also agrees that
the obligations of each Fund hereunder shall be several and not joint
nor joint and several, in accordance with its proportionate interest
hereunder, and agrees not to proceed (by way of claim, set-off or
otherwise) against any Fund for the obligations of another Fund.
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affiliated, as of the date first written above.
On behalf of the MFS Family of Funds,
MFS Closed-End Funds and MFS
Institutional Funds listed on Exhibit A
hereto
By: /s/ X. XXXXXX XXXX
------------------------------------
X. Xxxxxx Ives
Chair of the Trustees
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: /s/ XXXXXX X. XXXXX
------------------------------------
Xxxxxx X. Xxxxx
Chairman
6
As of __________, 2006
MASTER ADMINISTRATIVE SERVICES AGREEMENT - EXHIBIT A
FUNDS
I. MFS FAMILY OF FUNDS
MFS SERIES TRUST I:
MFS Cash Reserve Fund
MFS Core Equity Fund
MFS Core Growth Fund
MFS New Discovery Fund
MFS Research International Fund
MFS Strategic Growth Fund
MFS Technology Fund
MFS Value Fund
MFS SERIES TRUST II:
MFS Emerging Growth Fund
MFS SERIES TRUST III:
MFS High Income Fund
MFS High Yield Opportunities Fund
MFS MunicipalHigh Income Fund
MFS SERIES TRUST IV:
MFS Government Money Market Fund
MFS Mid Cap Growth Fund
MFS Money Market Fund
MFS Municipal Bond Fund
MFS SERIES TRUST V:
MFS International New Discovery Fund
MFS Research Fund
MFS Total Return Fund
MFS SERIES TRUST VI:
MFS Global Equity Fund
MFS Global Total Return Fund
MFS Utilities Fund
MFS SERIES TRUST VII:
MFS Capital Opportunities Fund
MFS SERIES TRUST VIII:
MFS Global Growth Fund
MFS Strategic Income Fund
7
MFS SERIES TRUST IX:
MFS Bond Fund
MFS Inflation-Adjusted Bond Fund
MFS Intermediate Investment Grade Bond Fund
MFS Limited Maturity Fund
MFS Municipal Limited Maturity Fund
MFS Research Bond Fund
MFS Research Bond Fund J
MFS SERIES TRUST X:
MFS Aggressive Growth Allocation Fund
MFS Conservative Allocation Fund
MFS Emerging Markets Debt Fund
MFS Emerging Markets Equity Fund
MFS Floating Rate High Income Fund
MFS Growth Allocation Fund
MFS International Diversification Fund
MFS International Growth Fund
MFS International Value Fund
MFS Moderate Allocation Fund
MFS New Endeavor Fund
MFS Strategic Value Fund
MFS SERIES TRUST XI:
MFS Mid Cap Value Fund
MFS Union Standard Equity Fund
MFS SERIES TRUST XII:
MFS Lifetime Retirement Income Fund
MFS Lifetime 2010 Fund
MFS Lifetime 2020 Fund
MFS Lifetime 2030 Fund
MFS Lifetime 2040 Fund
MFS Sector Rotational Fund
MFS SERIES TRUST XIII:
MFS Diversified Income Fund
MFS Government Securities Fund
MFS MUNICIPAL SERIES TRUST:
MFS Alabama Municipal Bond Fund
MFS Arkansas Municipal Bond Fund
MFS California Municipal Bond Fund
MFS Florida Municipal Bond Fund
MFS Georgia Municipal Bond Fund
MFS Maryland Municipal Bond Fund
MFS Massachusetts Municipal Bond Fund
MFS Mississippi Municipal Bond Fund
MFS New York Municipal Bond Fund
MFS North Carolina Municipal Bond Fund
MFS Pennsylvania Municipal Bond Fund
MFS South Carolina Municipal Bond Fund
MFS Tennessee Municipal Bond Fund
MFS Virginia Municipal Bond Fund
MFS West Virginia Municipal Bond Fund
8
MFS Municipal Income Fund
MFS Growth Opportunities Fund
Massachusetts Investors Growth Stock Fund
MFS Government Limited Maturity Fund
Massachusetts Investors Trust
II. MFS CLOSED-END FUNDS
MFS Charter Income Trust
MFS Government Markets Income Trust
MFS Intermediate Income Trust
MFS Multimarket Income Trust
MFS Municipal Income Trust
MFS Special Value Trust
III. MFS INSTITUTIONAL FUNDS
MFS INSTITUTIONAL TRUST:
MFS Institutional International Equity Fund
MFS Institutional International Research Equity Fund
MFS Institutional Large Cap Growth Fund
MFS Institutional Large Cap Value Fund
MFS VARIABLE INSURANCE TRUST:
MFS Capital Opportunities Series
MFS Emerging Growth Series
MFS Global Equity Series
MFS High Income Series
MFS Investors Growth Stock Series
MFS Investors Trust Series
MFS Mid Cap Growth Series
MFS Money Market Series
MFS New Discovery Series
MFS Research Bond Series
MFS Research International Series
MFS Research Series
MFS Strategic Income Series
MFS Total Return Series
MFS Utilities Series
MFS Value Series
9
EXHIBIT B
ADMINISTRATION SERVICES
I. FINANCIAL ADMINISTRATIVE SERVICES.
A. GENERAL SERVICES.
1. Prepare such financial information of the Fund as is reasonably
necessary for reports to shareholders of the Fund, reports to the
Fund's Trustees and officers, and reports to appropriate regulatory
authorities including, without limitation, prospectuses, shareholder
reports, shareholder notices, proxy statements and other periodic
reports and render statements or copies of records as from time to
time are reasonably requested by the Fund.
2. Facilitate audits of accounts by the Fund's independent public
accountants or by any of the auditors employed or engaged by the Fund
or by any regulatory body with jurisdiction over the Fund. Coordinate
with, and monitor the performance of, the custodian banks retained by
the Fund to perform the necessary custodial services for the Fund
including, without limitation, the safekeeping of the funds and
securities.
3. Negotiate contracts for computing the Fund's net asset value per
share, and, if applicable, its public offering price and/or its daily
dividend rates and money market yields and other investment
performance quotations, in accordance with sub-paragraph C below, and
oversee the notification to the Fund and such other persons as the
Fund may reasonably request of the net asset value per share, the
public offering price and/or its daily dividend rates and money market
yields and other investment performance quotations (with the expenses
under such contracts to be paid separately by the Funds).
B. VALUATION OF SECURITIES. The Administrator shall ensure that the value
of the Fund's securities is computed in accordance with governing law,
rules and regulations, the Fund's governing instruments and subject to the
oversight and direction of the Fund's Trustees. The Administrator shall
oversee the use of one or more external pricing services (at the separate
expense of the Funds) to provide the value of a Fund's securities,
including broker/dealers, provided that the Fund's Trustees or a committee
or an individual designated by the Fund's Trustees has approved the use of
such pricing services.
The Administrator shall administer the Valuation Policies approved by the
Trustees for the Fund, including the implementation and application of fair
valuation methods and security valuation factors for applicable securities
and other assets, including those provided by third-party service providers
at the expense of the Funds, and provide such
10
reports to the Fund's Trustees or a committee thereof as is required by
such Policies or otherwise requested.
C. COMPUTATION OF NET ASSET VALUE, PUBLIC OFFERING PRICE, DAILY DIVIDEND
RATES AND PERFORMANCE QUOTATIONS. The Administrator shall assure that the
Fund's net asset value, net income, public offering price, dividend rates
and money market yields, if applicable, and other investment performance
quotations are calculated in a manner and at such time or times as the Fund
shall direct and in accordance with governing law, rules and regulations
and the Fund's governing instruments and subject to the oversight and
direction of the Fund's Trustees. The Administrator will oversee the
computation of the net asset value and public offering price as calculated
by service providers of the Funds.
D. OTHER FINANCIAL ADMINISTRATION SERVICES.
1. Provide Treasurers or Assistant Treasurers to serve as officers of the
Fund;
2. Coordinate the meetings of the Audit Committees of the Fund, assure
that meetings are scheduled and that agendas are prepared; participate
in meetings of the Audit Committee;
3. Review contracts and negotiate fees for the Fund for services such as
independent audit fees, custodian fees, bank lines of credit, transfer
agent fees and the fees of other service providers to the Fund;
4. Oversee the preparation of accounting records by service providers of
the Fund required to be maintained by the Fund. Assure that any audit
of Fund records is coordinated and completed timely;
5. Direct the preparation of Fund Financial Statements and Footnotes
included in shareholder and other regulatory reports. Assure that all
statements and disclosures are in accordance with generally accepted
accounting principles and that disclosures meet current regulatory or
accounting requirements. Establish and maintain disclosure controls
and internal controls over financial reporting to assist in the Funds'
officers certification under the Xxxxxxxx-Xxxxx Act of 2002;
6. Calculate and/or oversee the calculation of income and capital gain
distributions for applicable funds. Assure that all distributions of
the Fund meet the distribution and excise tax requirements to assure
qualification and to minimize taxes paid by the Fund;
7. Establish the tax policies and procedures for the Fund; maintain
procedures and policies with respect to tax matters; maintain or
oversee the maintenance of certain tax accounting records of the Fund;
complete or review tax returns and excise tax forms for the Fund;
assist in preparing the 1099-DIV information delivered to
shareholders;
11
8. Prepare materials for the Trustees of the Fund and committees thereof,
including materials for board meetings and in connection with the
renewal of investment advisory and distribution contracts;
9. Direct the accrual of Fund expenses; review and approve all invoices
submitted to the Fund;
10. Calculate total return and other performance information for each Fund
and its respective classes;
11. Prepare and file or oversee preparation and review the Funds' annual
and semi-annual N-CSR and other periodic reports; and
12. Administer the Funds' securities lending program.
II. LEGAL ADMINISTRATIVE SERVICES.
A. ORGANIZATIONAL MATTERS AND INITIAL REGISTRATION.
1. Draft, negotiate as appropriate, and file with appropriate regulatory
authorities the Fund's charter documents, service contracts, and
registration statement or other similar registration documentation
(the "Registration Statement"), except that the out-of-pocket expenses
incurred in connection therewith shall be paid by the Funds;
2. Otherwise arrange for and oversee registration and qualification of
the Fund's shares, except that the out-of-pocket expenses incurred in
connection therewith shall be paid by the Funds.
B. ONGOING REGULATORY FILINGS, REPORTS AND MEETINGS.
1. Prepare and file with appropriate regulatory authorities amendments to
the Fund's Registration Statement, and supplements to the Fund's
prospectus and statement of additional information;
2. Design and draft documents or materials required to be prepared by or
on behalf of the Fund for distribution to shareholders of the Fund,
the Fund's Trustees and officers and any governmental officers or
commissions as required of the Fund including, without limitation,
prospectuses, shareholder reports, shareholder notices and proxy
statements;
3. Prepare and file or oversee preparation and review and provide legal
guidance on the Fund's annual, semi-annual and other periodic reports
and tax filings and reports;
12
4. Establish and maintain a disclosure controls and procedures program to
assist in the Funds' officers certification under the Xxxxxxxx-Xxxxx
Act of 2002;
5. Develop or assist in developing guidelines and procedures to improve
overall compliance by the Funds;
6. Provide consultation and advice for resolving compliance questions
together with the Funds' outside legal counsel;
7. Prepare and file with appropriate regulatory authorities various
reports in order to maintain the Fund's status in good standing;
8. Arrange for and attend shareholders' meetings;
9. Prepare the Fund's representatives who will attend shareholder
meetings and all necessary materials in connection with such meetings
including, without limitation, a written script for such meetings,
minutes and any follow-up documents.
C. SECURITIES TRADING AND INVESTMENT PRACTICES.
1. Review and negotiate private placement and municipal securities
offering documentation and provide legal guidance on transfer
restrictions;
2. Provide guidance on legal considerations relating to the types and
levels of ownership of securities, including foreign securities;
3. Draft and negotiate documentation necessary to permit the Fund to
engage in a variety of derivative and securities trading practices and
provide legal guidance with respect to these practices.
D. REGULATED ACTIVITIES. Applicable securities laws regulate numerous
aspects of the Fund's business, including such matters as the Fund's:
prospectus disclosure; investment activities; affiliated transactions;
investment in senior securities; sales, redemptions and exchanges;
distribution of income and capital gains; distribution of Fund shares;
board composition; code of ethics; fidelity bond; custodial services; and
investment advisory and distribution contracts. The Administrator will
provide the Fund with legal guidance with respect to these matters and to
the general application of securities laws to the Fund's business.
E. TAX CONSIDERATIONS. Procure legal guidance with respect to the
application of tax rules to the Fund and analysis from a tax perspective
new types of securities, investment practices and investment products or
practices as may be appropriate for the Fund (it being understood that such
legal guidance and analysis provided by third-parties will be at the
expense of the Fund).
13
F. BOARD MATTERS.
1. Coordinate and prepare agendas and materials for and attend board and
committee meetings, draft and keep records of minutes of such
meetings, and coordinate any follow up issues; and
2. Provide advice and guidance and prepare materials on legal issues
relevant to the Fund's business, including composition of the
governing board.
G. MISCELLANEOUS/EXTRAORDINARY EVENTS.
1. Supervise outside legal counsel retained at the expense of the Fund
with respect to litigation brought by the Fund and against the Fund
and negotiate litigation settlements and pre-litigation settlements
and work-out arrangements;
2. Obtain the required documentation to be filed in connection with any
lawsuits against the Fund and provide information or expertise on
administrative matters affecting such litigation;
3. Provide legal guidance on alternative distribution structures for the
Fund's shares (such as the adoption of a multiple class structure);
4. Review all contracts concerning the acquisition of other investment
companies or the liquidation of the Fund, draft, negotiate and file
various documentation required in connection therewith, provide
guidance on the manner such transactions should be structured to
comply with applicable law and obtain at the Fund's expense legal
opinions and regulatory authority rulings necessary for such
transactions to comply with applicable law;
5. Seek formal guidance from regulatory authorities concerning the
application of various regulations to the Fund and seek exemptive
relief where appropriate; and
6. Provide or arrange for all other legal services that constitute
Administrative Services required by the Fund and not otherwise
provided for under this Agreement (it being understood that various
legal services will be provided to the Fund and the Independent
Trustees at the expense of the Funds, as described in Section 3 of the
Agreement).
14
III. OTHER ADMINISTRATIVE SERVICES.
1. Arrange for persons or other entities to serve as transfer agent,
registrar or dividend disbursing agent as required by the Fund, and
provide legal guidance on applicable laws regulating such agents;
2. Arrange for consideration by the Board of appropriate or necessary
insurance coverage for the Fund;
3. Develop and implement procedures to monitor each Fund's compliance
with:
- Regulatory requirements as required by Rule 38a-1 of the
Investment Company Act of 1940, as amended;
- Each Fund's investment policies and restrictions as set forth in
each Fund's currently effective Prospectus and Statement of
Additional Information filed under the Securities Act of 1933, as
amended;
- Establishing and maintaining an anti-money laundering program to
assist in the Funds' compliance with the USA Patriot Act and the
Bank Secrecy Act;
- Performing IRS sub-Chapter M testing;
- Reviewing and filing with the NASD semi-annual and annual
reports;
- Assisting in training of certain MFS personnel including
Portfolio Managers and other investment staff;
- Monitoring "Access Persons" transactions and their adherence
under the terms of the Funds' Code of Ethics Policy;
- Providing assistance and resources to the Funds' Independent
Chief Compliance Officer ("ICCO") as requested by the ICCO.
4. Prepare, and arrange for the printing and mailing of, any necessary
investment communications;
5. Arrange for the printing and mailing of any documents or written
materials required to be prepared by or on behalf of the Fund
including, without limitation, stock certificates, prospectuses,
shareholder reports, shareholder notices, proxy statements and reports
to governmental officers and commissions;
6. Arrange for any other printing, production and delivery services
required of the Fund and not otherwise specifically provided for under
this Agreement;
7. Provide a system of internal controls adequate to carry-out the
business of the Fund and arrange for the annual report on internal
controls of the Fund and its agents;
8. Review the Fund's disclosure documents to ensure that disclosures and
policies conform to the Fund's actual operation;
15
9. Provide for the calculation and timely disbursement of appropriate
regulatory authority registration fees; and
10. Oversee and assist in the coordination of, and as the Trustees may
reasonably request or deem appropriate, make reports and
recommendations to the Trustees on, the performance of administrative
and professional services rendered to the Fund by others, including
the custodian, accountants, attorneys, underwriters, brokers and
dealers, insurers, banks, transfer agents and dividend disbursing
agents and such other persons in any such other capacity deemed
necessary or desirable by the Trustees.
16
EXHIBIT C
CATEGORIES OF NON-ADMINISTRATOR EXPENSES
a. The fees and expenses described in Article 2(b) or Section 2.2(b) of the
MFS Family of Funds' Advisory Agreements and Article 5 of the MFS/Sun Life
Series Trust and Compass Product's Advisory Agreements.
b. Investment advisory fees and other expenses associated with the investment
management of the Funds' portfolios.
c. Costs of brokerage fees, commissions, ticket charges and transfer taxes in
connection with the purchase and sale of portfolio securities and other
assets for the Funds.
d. Distribution and marketing expenses of the Funds, including Rule 12b-1
fees.
e. Expenses of the Funds for transfer agent(s), registrar(s) and dividend
disbursing agent(s).
f. Expenses of the Funds for custodian(s) and related custodial services.
g. Except as described in Section 3 of the Agreement, costs of Fund accounting
services provided by third parties to the Funds, including the fund
accounting services of the type currently provided by State Street Bank to
the MFS Funds.
h. Except as described in Section 3 of the Agreement, costs of services
provided by independent accountants and outside legal and tax counsel to
the Funds and the Independent Trustees.
i. Taxes, if any, levied against the Funds.
j. Costs, including interest expenses, commitment fees, facilities fees and
unused line fees of any borrowings made by the Funds.
k. The Funds' allocable portion of the fidelity bond required by Section 17(g)
of the Investment Company Act of 1940, and directors' and officers'
liability and other insurance premiums.
l. Proxy filing fees and the costs of printing and mailing of any proxy
materials for meetings of shareholders' of the Funds.
m. All applicable registration and filing fees required to be paid by the
Funds under federal and state securities laws.
n. The Funds' allocable portion of expenses of obtaining quotations and other
pricing information for calculating the value of the Fund's net assets,
including the costs of independent pricing services.
o. Fees, expenses and other compensation of or payable by the Funds to
Independent Trustees, including expenses to maintain the Independent
Trustees' retirement plan, including actuarial services provided by Xxxxxx
Xxxxx Wordwide.
p. Printing, mailing and filing costs associated with the preparation and
distribution of registration statements, prospectuses and reports of the
Fund to its shareholders, the filing of reports with regulatory bodies, the
maintenance of the Trust's existence and qualification to do business, and
the registration of shares with federal and state securities authorities.
q. Extraordinary expenses as may arise, including judgments and expenses
incurred in connection with litigation, bankruptcies, workouts and
restructurings, proceedings and other claims against the Funds, and the
legal obligations of the
17
Funds to indemnify its trustees, officers, employees, shareholders,
distributors, and agents with respect thereto.
r. The Funds' allocable portion of dues for membership in various industry
organizations, including the Investment Company Institute, the Independent
Directors' Forum and the Mutual Funds Directors Forum.
s. The costs of third-party software used for the Funds' financial reporting,
N-SAR reporting, tax preparation and registration statement preparation as
appropriately allocated to the Funds.
t. Costs of third-party tax notification services used for the Funds (E.G.,
Ernst & Young's PFIC list).
u. The costs of third-party legal advice regarding state tax law issues for
the municipal Funds.
v. The allocable costs of third-party legal services to review loan
documentation for the MFS Floating Rate High Income Fund and other Funds
that purchase bank loans.
w. The costs of third-party legal, accounting or other expert advice incurred
in connection with an examination, investigation, enforcement proceeding,
litigation or other regulatory proceeding of or against the Funds.
18
EXHIBIT D
ADMINISTRATIVE FEE
In return for the Administrative Services provided by the Administrator
under this Agreement, each Fund shall pay the Administrator fees as described
below:
(i) FIXED FEE: Regardless of asset size, each Fund shall pay an annual fee
to the Administrator in the amount of $17,500.
(ii) ASSET-BASED FEE: In addition to the Fixed Fee, each Fund, other than
Funds that invest substantially all of their assets in other Funds ("Asset
Allocation Funds")(2), shall pay a fee at the following annual rates, stated as
a percentage of the average daily net assets of the Fund:
0.0000% on average daily net assets from $0 to $50 million;
0.0175% on average daily net assets in excess of $50 million and less than
or equal to $750 million;
0.0170% on average daily net assets in excess of $750 million and less than
or equal to $1.5 billion;
0.0165% on average daily net assets in excess of $1.5 billion and less than
or equal to $2.5 billion;
0.0120% on average daily net assets in excess of $2.5 billion and less than
or equal to $4.0 billion; and
0.0000% on average daily net assets in excess of $4.0 billion.
(iii) ADJUSTMENT BASED ON AGGREGATE NET ASSETS.
For purposes of this paragraph (iii), the term "Base Annual Asset-Based
Fees" shall mean the total amount of Asset-Based Fees payable to the
Administrator hereunder for a one year period assuming that the aggregate net
assets of all Funds that pay Asset-Based Fees remain at the same level
throughout the entire annual period as they were on the June 30 immediately
preceding the commencement of such one year period. Further, the term "Maximum
Annual Asset-Based Fees" for any one year period shall be equal to the product
of the Base Annual Asset-Based Fees for all Funds for such period and 1.30; and
the term "Minimum Annual Asset-Based Fees" for any one year period shall be
equal to the product of the Base Annual Asset-Based Fees for all Funds for such
period and 0.70.
Notwithstanding paragraph (ii) above, with respect to the one year period
commencing on the date of execution of this Agreement (August 1, 2006) and each
one year period thereafter (each a "Contract Year"), the total Asset-Based Fees
received by the Administrator shall not exceed the Maximum Annual Asset-Based
Fees for such Contract Year nor be less than the Minimum Asset-Based Fees for
such Contract Year. If this Agreement remains in effect for less
----------
(2) The Asset Allocation Funds will only be charged the fixed fee of $17,500.
The Asset Allocation Funds already incur administrative services fees
indirectly through their holdings in the underlying Funds.
19
than a full Contract Year, the Maximum and Minimum Annual Asset-Based Fees
for purposes of applying this provision shall be reduced pro rata based on the
portion of the Contract Year that the Agreement is in effect.
In the event that the Administrator is paid an amount equal to the Maximum
Annual Asset-Based Fees for any Contract Year, the Funds shall cease to pay any
Asset-Based Fees hereunder for the remainder of such Contract Year. The
Administrator and the Trustees shall discuss and agree on an appropriate method
to accrue the Administrative Fee on the books of the Funds in such circumstance.
If, after completion of a Contract Year, less than the Minimum Annual
Asset-Based Fees has been paid or is payable to the Administrator for such
Contract Year, the Funds shall pay an additional amount of Asset Based Fees (a
"Catch Up Payment") to the Administrator to bring the total up to the level of
the Minimum Annual Asset-Based Fees for such Contract Year, such Catch Up
Payment to be allocated pro rata among the Funds that pay Asset Based Fees based
on their relative net assets at the end of such Contract Year.
20
