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EXHIBIT (h)(3)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 20th day of December 1999, by and
between Huntington VA Funds, a Massachusetts business trust (the "Trust"), and
The Huntington National Bank (the "Administrator"), a national banking
association.
WHEREAS, the Trust is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares of beneficial interest; and
WHEREAS, the Trust desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such portfolios of the Trust as the Trust and the Administrator may agree on
("Funds") and as listed on the schedules attached hereto ("Schedules") and made
a part of this Agreement, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trust and the Administrator hereby agree as follows:
ARTICLE 1. Retention of the Administrator. The Trust hereby retains the
Administrator to act as the administrator of the Funds and to furnish the Funds
with the management and administrative services as set forth in Article 2 below.
The Administrator hereby accepts such employment to perform the duties set forth
below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Trust in any way and shall
not be deemed an agent of the Trust.
ARTICLE 2. Administrative and Accounting Services. The Administrator
shall perform or supervise the performance by others of other administrative
services in connection with the operations of the Funds, and, on behalf of the
Trust, will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Funds' operations. The
Administrator shall provide the Trustees of the Trust with such reports
regarding investment performance and compliance with investment policies and
applicable laws, rules and regulations as they may reasonably request but shall
have no responsibility for supervising the performance by any investment adviser
or sub-adviser of its responsibilities. The Administrator may appoint a
sub-administrator to perform certain of the services to be performed by the
Administrator hereunder, provided, however, that the Administrator is not
relieved of its obligations to the Trust as set forth hereunder.
The Administrator shall provide the Trust with administrative services,
regulatory reporting, fund accounting and related portfolio accounting services,
all necessary office space, equipment, personnel, compensation and facilities
(including facilities for shareholders' meetings but not
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Trustees' meetings that are not held at offices of the Administrator) for
handling the affairs of the Funds and such other services as the Trustees may,
from time to time, reasonably request and the Administrator shall, from time to
time, reasonably determine to be necessary to perform its obligations under this
Agreement. In addition, at the request of the Trust's Board of Trustees (the
"Trustees"), the Administrator shall make reports to the Trustees concerning the
performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) assist with the preparation of prospectuses, statements of
additional information, registration statements, and proxy
materials;
(b) coordinate the preparation and negotiation of, and administer,
contracts on behalf of the Trust with, among others, the
Trust's investment adviser, distributor, custodian, and
transfer agent;
(c) provide consultation services with respect to the Trust's fund
accounting issues;
(d) assist as necessary in the preparation of the Trust's budget
and accruals, analysis and payment of the expenses and
accruals;
(e) review the Trust's financial statements;
(f) provide (directly or through a sub-administrator) individuals
acceptable to the Trustees for nomination, appointment, or
election as officers of the Trust, who will be responsible for
the management of certain of the Trust's affairs as determined
by the Trustees;
(g) examine and review the operations and performance of the
various organizations providing services to the Trust or any
Fund of the Trust, including, without limitation, the Trust's
investment adviser, distributor, custodian, transfer agent,
Trust counsel and independent public accountants, and at the
request of the Trustees, report to the Trustees on the
performance of these organizations;
(h) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and
printing of the Trust's semi-annual and annual reports to
shareholders;
(i) assist with the design, development, and operation of the
Trust, including new portfolio and class investment
objectives, policies and structure;
(j) advise the Trust and its Trustees on matters concerning the
Trust and its affairs;
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(k) obtain (directly or through a sub-administrator) and keep in
effect fidelity bonds and directors and officers/errors and
omissions insurance policies for the Trust in accordance with
the requirements of Rules 17g-1 and 17d-1(7) under the 1940
Act as such bonds and policies are approved by the Trust's
Board of Trustees;
(l) monitor and advise the Trust and its Funds on their registered
investment company status under the Internal Revenue Code of
1986, as amended;
(m) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Funds as the Trust
and the Administrator shall determine desirable;
(n) monitor each Fund's compliance with the 1940 Act and the
applicable investment policies set forth in the Trust's
prospectuses and SAI;
(o) keep the books of account of each Fund;
(p) compute the net asset value per share of the outstanding
shares of each Fund;
(q) calculate daily the net income of each Fund as described in
each Fund's currently effective prospectus and Statement of
Additional Information;
(r) advise the Trust and the Trust's transfer agent daily of the
amounts of net income of each Fund and advise the transfer
agent periodically as to the division of such net income among
its various components;
(s) assist in the training and oversight of third parties used to
perform any of the services described herein;
(t) perform all administrative services and functions of the Trust
and each Fund to the extent administrative services and
functions are not provided to the Trust or such Fund pursuant
to the Trust's or such Fund's investment advisory agreement,
distribution agreement, custodian agreement or transfer agent
agreement; and
(u) provide other administrative services as requested by the
Trust from time to time.
The Administrator will perform other services for the Trust as agreed
from time to time, including, but not limited to: mailing the annual reports of
the Funds; preparing an annual list of shareholders; and mailing notices of
shareholders' meetings, proxies and proxy statements, for all of which the Trust
will pay the Administrator's out-of-pocket expenses.
In the performance of its duties hereunder, the Administrator will
comply with the provisions of the Declaration of Trust and the Bylaws of the
Trust, will safeguard and promote the welfare of the Trust, and will comply with
the policies that the Trustees may from time to time reasonably
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determine; provided that such policies are not in conflict with this Agreement,
the Trust's governing documents, or any applicable statutes or regulations.
ARTICLE 3. Allocation of Charges and Expenses.
(A) The Administrator. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Trust as well as all Trustees of the
Trust who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Trust retained by the Trustees of the Trust
to perform services on behalf of the Trust.
(B) The Trust. The Trust assumes and shall pay or cause to be paid all
other expenses of the Trust not otherwise allocated herein, including, without
limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing shareholders, all expenses
incurred in connection with issuing and redeeming shares, the costs of custodial
services, the cost of initial and ongoing registration of the shares under
federal and state securities laws, fees and out-of-pocket expenses of Trustees
who are not affiliated persons of the Administrator or the investment adviser to
the Trust or any affiliated corporation of the Administrator or the investment
adviser, the costs of Trustees' meetings, insurance, interest, brokerage costs,
litigation and other extraordinary or nonrecurring expenses, and all fees and
charges of investment advisers to the Trust.
ARTICLE 4. Compensation of the Administrator.
(A) Administration and Accounting Fees. For the services to be
rendered, the facilities furnished and the expenses assumed by the Administrator
pursuant to this Agreement, the Trust shall pay to the Administrator
compensation at annual rates specified in the Schedules for administrative
services and for accounting services. Such compensation shall be calculated and
accrued daily, and paid to the Administrator monthly.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
(B) Compensation from Transactions. The Trust hereby authorizes any
entity or person associated with the Administrator which is a member of a
national securities exchange to effect any transaction on the exchange for the
account of the Trust which is permitted by Section 11 (a) of the
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Securities Exchange Act of 1934, as amended (the "1934 Act") and Rule 11a2-2(T)
thereunder, and the Trust hereby consents to the retention of compensation for
such transactions in accordance with Rule 11a2-2(T)(a)(2)(iv).
(C) Survival of Compensation Rates. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. Standard of Care of the Administrator; Indemnification. The
duties of the Administrator shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against the
Administrator hereunder. The Administrator shall not be liable for any error of
judgment or mistake of law or for any loss arising out of any investment or for
any act or omission in carrying out its duties hereunder, except a loss
resulting from willful misfeasance, bad faith or negligence in the performance
of its duties, or by reason of reckless disregard of its obligations and duties
hereunder, except as may otherwise be provided under provisions of applicable
law which cannot be waived or modified hereby. (As used in this Article 7, the
term "Administrator" shall include directors, officers, employees and other
agents of the Administrator as well as the entity itself.)
So long as the Administrator or its agents act in good faith and with
due diligence and without negligence, the Trust assumes full responsibility and
shall indemnify the Administrator and hold it harmless from and against any and
all actions, suits and claims, whether groundless or otherwise, and from and
against any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of said
administration, transfer agency, and dividend disbursing relationships to the
Trust or any other service rendered to the Trust hereunder. The indemnity and
defense provisions set forth herein shall indefinitely survive the termination
of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Trust may be asked to indemnify or hold the
Administrator harmless, the Trust shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Trust promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Trust, but good faith failure to do so shall not affect the rights
hereunder.
The Trust shall be entitled to participate at its own expense or, if it
so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the Trust elects to assume the defense
of any such claim, the defense shall be conducted by counsel chosen by the Trust
and satisfactory to the Administrator, whose approval shall not be unreasonably
withheld. In the event that the Trust elects to assume the defense of any suit
and retain counsel, the Administrator shall bear the fees and expenses of any
additional counsel retained by it. If the Trust
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does not elect to assume the defense of a suit, it will reimburse the
Administrator for the reasonable fees and expenses of any counsel retained by
the Administrator.
The Administrator may apply to the Trust at any time for instructions
and may consult counsel or the independent accountants for the Trust with
respect to any matter arising in connection with the Administrator's duties, and
the Administrator 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 or accountants.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. Nor shall the Administrator be held to have
notice of any change of authority of any officers, employee or agent of the
Trust until receipt of written notice thereof from the Trust.
ARTICLE 6. Activities of the Administrator. The services of the
Administrator rendered to the Trust are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Trustees, officers, employees
and shareholders of the Trust are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or otherwise
and that directors, officers, employees and shareholders of the Administrator
and its counsel are or may be or become similarly interested in the Trust, and
that the Administrator may be or become interested in the Trust as a shareholder
or otherwise.
ARTICLE 7. Confidentiality. The Administrator agrees on behalf of
itself and its employees to treat confidentially all records and other
information relative to the Trust and its prior, present or potential
shareholders and relative to the investment adviser and its prior, present or
potential customers, 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 the 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.
ARTICLE 8. Equipment Failures. In the event of equipment failures
beyond the Administrator's control, the Administrator shall, at no additional
expense to the Trust, take reasonable steps to minimize service interruptions
but shall have no liability with respect to such service interruptions if such
reasonable steps are taken. The Administrator shall develop and maintain a plan
for recovery from equipment failures which may include contractual arrangements
with appropriate parties making reasonable provision for emergency use of
electronic data processing equipment to the extent appropriate equipment is
available.
ARTICLE 9. Compliance With Governmental Rules and Regulations. The
Administrator undertakes to comply with all applicable requirements of the
Securities Act of 1933, as amended, the 1934 Act, the 1940 Act and any laws,
rules and regulations of governmental authorities having jurisdiction with
respect to the duties to be performed by the Administrator hereunder.
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ARTICLE 10. Compliance With Year 2000. The Administrator warrants that
all software code owned by or under the Administrator's control, used in the
performance of the Administrator's obligations under this contract, will be Year
2000 compliant. For purposes of this Article, "Year 2000 Compliant" means that
the software will continue to operate beyond December 31, 1999 without creating
any logical or mathematical inconsistencies concerning any date after December
31, 1999 and without decreasing the functionality of the system applicable to
dates prior to January 1, 2000 including, but not limited to, making changes to
[a] date and data century recognition; [b] calculations which accommodate same-
and multi-century formulas and date values; and [c] input/output of date values
which reflect century dates. All changes described in this Article will be made
at no additional cost to the Trust.
ARTICLE 11. Duration of this Agreement. The Term of this Agreement
shall be as specified in the Schedules.
This Agreement shall not be assignable by either party without the
written consent of the other party. As used in this paragraph, the term
"assignment" shall be construed by reference to the term as defined and
interpreted under the 1940 Act.
The Administrator shall be entitled to collect from the Trust, in
addition to any other compensation owing to the Administrator, the amount of all
the Administrator's cash disbursements for services in connection with the
Administrator's activities in effecting termination as discussed in the Schedule
to this Agreement, including without limitation, the delivery to the Trust
and/or its designees of the Trust's property, records, instruments and
documents, or any copies thereof. Subsequent to such termination for a
reasonable fee to be paid by the Trust, the Administrator will provide the Trust
with reasonable access to any Trust documents or records remaining in its
possession.
ARTICLE 12. Amendments. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by the party against
which enforcement of such change or waiver is sought.
ARTICLE 13. Certain Records. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Trust shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Trust and will be made available
to or surrendered promptly to the Trust on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Trust and follow the Trust's
instructions as to permitting or refusing such inspection.
ARTICLE 14. Definitions of Certain Terms. The terms "interested person"
and "affiliated
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person," when used in this Agreement, shall have the respective meanings
specified in the 1940 Act and the rules and regulations thereunder, subject to
such exemptions as may be granted by the Securities and Exchange Commission.
ARTICLE 15. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Trust, at c/o Xxxxxxx Xxxxxxxx, Senior Vice President, The
Huntington National Bank, 00 X. Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxx 00000;
and if to the Administrator at c/o Xxxxxxx Xxxxxxxx, Senior Vice President, The
Huntington National Bank, 00 X. Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxx 00000.
ARTICLE 16. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the 1940 Act. To the extent that the applicable laws of the
Commonwealth of Massachusetts, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control.
ARTICLE 17. Multiple Originals. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 18. Limitation of Liability. The Administrator is hereby
expressly put on notice of the limitation of liability as set forth in Article
IV of the Trust's Declaration of Trust and agrees that the obligations pursuant
to this Agreement of a particular Fund and of the Trust with respect to that
Fund shall be limited solely to the assets of that Fund, and the Administrator
shall not seek satisfaction of any such obligation from any other Fund, the
shareholders of any Fund, the Trustees, officers, employees or agents of the
Trust, or any of them.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
HUNTINGTON VA FUNDS
BY: /s/ XXXX X. XXXXX
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NAME: XXXX X. XXXXX
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TITLE: PRESIDENT
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THE HUNTINGTON NATIONAL BANK
BY: /s/ XXXXXXX X. XXXXXXXX
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NAME: XXXXXXX X. XXXXXXXX
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TITLE: SENIOR VICE PRESIDENT
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SCHEDULE
TO THE ADMINISTRATION AGREEMENT
DATED AS OF DECEMBER 20, 0000
XXXXXXX
XXXXXXXXXX XX FUNDS
AND
THE HUNTINGTON NATIONAL BANK
Funds: This Agreement shall apply to all Funds of the Trust, either
now in the future created. The following is a listing of the
current portfolios of the Trust: VA Growth Fund and VA Income
Equity Fund (collectively, the "Funds").
Fees: Pursuant to Article 4, Section A, the Trust shall pay the
Administrator compensation for services rendered to the Funds
at an annual rate, which is calculated daily and paid monthly,
at a maximum administrative fee equal to 0.11% of each Fund's
average daily net assets plus a maximum accounting fee equal
to 0.03% of each Fund's average daily net assets.
Term: Pursuant to Article 10, the term of this Agreement shall
commence on December 20, 1999 and shall remain in effect
through December 20, 2004 ("Initial Term"). This Agreement
shall continue in effect for successive periods of one year
after the Initial Term, unless terminated by either party,
with or without cause, on not less than 60 days prior written
notice to the other party. In the event of a material breach
of this Agreement by either party, the non-breaching party
shall notify the breaching party in writing of such breach and
upon receipt of such notice, the breaching party shall have 45
days to remedy the breach or the non-breaching party may
immediately terminate this Agreement.
In addition, the Trust may terminate this Agreement immediately upon:
(i) the issuance of a final judgment by a court of competent
jurisdiction or of a final order by the Securities and
Exchange Commission, which judgment or order holds that the
Administrator has committed a felony or a misdemeanor
involving the purchase or sale of any security, or arising out
of its conduct as an administrator, a distributor, or an
affiliate of an investment company;
(ii) the dissolution or liquidation of the Administrator or other
cessation of its business other than a reorganization or
recapitalization of the Administrator as an ongoing business;
or
(iii) [a] the authorization of commencement of a voluntary case
regarding the Administrator under Title 11 of the United
States Code, as from time to time amended, or any other
applicable law of any jurisdiction relating to the liquidation
or reorganization of debtors or to the modification or
alteration of
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the rights of creditors; [b] consent to or acquiescence in any
involuntary case under such Title 11 or other such law; or [c]
the commencement of any involuntary case under such Title 11
or other such law, which case is not dismissed within 30 days
after the filing thereof.
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