ADMINISTRATION AGREEMENT
This Agreement, dated as of the 1st day of August, 1995, made by and
between IAA Trust Asset Allocation Fund, Inc. (the "Asset Allocation Fund"), a
corporation duly organized and existing under the laws of the state of Maryland,
operating as a registered investment company under the Investment Company Act of
1940, as amended (the "Act"), and Fund/Plan Services, Inc. ("Fund/Plan"), a
corporation duly organized and existing under the laws of the State of Delaware
(collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Parties desire to enter into an agreement whereby Fund/Plan
will provide certain administration services to the Asset Allocation Fund on the
terms and conditions set forth in this Agreement; and
WHEREAS, Fund/Plan is willing to serve in such capacity and perform such
administrative services under the terms and conditions set forth below; and
WHEREAS, the Asset Allocation Fund will provide all necessary information
to Fund/Plan concerning the Fund so that Fund/Plan may appropriately execute its
responsibilities hereunder;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
Section 1. Appointment The Asset Allocation Fund hereby appoints Fund/Plan
as administrator and Fund/Plan hereby accepts such appointment.
Section 2. Duties and Obligations of Fund/Plan
(a) Subject to the succeeding provisions of this section and subject
to the direction and control of the Board of Directors of the Asset Allocation
Fund, Fund/Plan shall provide to the Fund all administrative services as set
forth in Schedule "A" attached hereto and incorporated by reference in its
entirety into this Agreement. In addition to the obligations set forth in
Schedule "A", Fund/Plan shall (i) provide its own office space, facilities,
equipment and personnel for the performance of its duties under this Agreement;
and (ii) take all actions it deems necessary to properly execute the
administrative responsibilities of the Asset Allocation Fund.
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Page 1 of 7 pages.
(b) So that Fund/Plan may perform its duties under the terms of this
Agreement, the Board of Directors of the Asset Allocation Fund shall direct the
officers, investment advisor, distributor, legal counsel, independent
accountants and custodian of the Asset Allocation Fund to cooperate fully with
Fund/Plan and to provide such information, documents and advice relating to the
Asset Allocation Fund as is within the possession or knowledge of such persons
provided that no such person need provide any information to Fund/Plan if to do
so would result in the loss of any privilege or confidential treatment with
respect to such information. In connection with its duties, Fund/Plan shall be
entitled to rely, and shall be held harmless by the Asset Allocation Fund when
acting in reasonable reliance upon the instruction, advice or any documents as
provided by the Asset Allocation Fund to Fund/Plan by any of the aforementioned
persons. All fees charged by any such persons shall be deemed an expense of the
Asset Allocation Fund.
(c) Any activities performed by Fund/Plan under this Agreement shall
conform to the requirements of:
(1) the provisions of the Investment Company Act of 1940, as amended
(the "Act") and the Securities Act of 1933, as amended, and of any rules or
regulations in force thereunder;
(2) any other applicable provision of state and federal law;
(3) the provisions of the Articles of Incorporation and By-Laws of
the Asset Allocation Fund as amended from time to time;
(4) any policies and determinations of the Board of Directors of the
Asset Allocation Fund; and
(5) the fundamental policies of the Asset Allocation Fund as
reflected in the registration statement under the Act.
Fund/Plan acknowledges that all records that it maintains for the Asset
Allocation Fund are the property of the Asset Allocation Fund and will be
surrendered promptly to the Asset Allocation Fund upon written request.
Fund/Plan will preserve, for the periods prescribed under Rule 31a-2 under the
Act, all such records required to be maintained under Rule 31a-1 of the Act.
(d) Nothing in this Agreement shall prevent Fund/Plan or any officer
thereof from acting as administrator for or with any other person, firm or
corporation. While the
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Page 2 of 7 pages.
administrative services supplied to the Asset Allocation Fund may be different
than those supplied to other persons, firms or corporations, Fund/Plan shall
provide the Asset Allocation Fund equitable treatment in supplying services. The
Asset Allocation Fund recognizes that it will not receive preferential treatment
from Fund/Plan as compared with the treatment provided to other Fund/Plan
clients. Fund/Plan agrees to maintain the records and all other information of
the Asset Allocation Fund in a confidential manner and shall not use such
information for any purpose other than the performance of Fund/Plan's duties
under this Agreement.
Section 3. Allocation of Expenses All costs and expenses of the Asset
Allocation Fund shall be paid by the Asset Allocation Fund including, but not
limited to:
(a) fees paid to an investment adviser (the "Adviser");
(b) interest and taxes;
(c) brokerage fees and commissions;
(d) insurance premiums;
(e) compensation and expenses of its Directors who are not
affiliated persons of the Adviser;
(f) legal, accounting and audit expenses;
(g) custodian and transfer agent, or shareholder servicing agent,
fees and expenses;
(h) fees and expenses incident to the registration of the shares
of the Asset Allocation Fund under Federal or state securities
laws;
(i) expenses related to preparing, setting in type, printing and
mailing prospectuses, statements of additional information,
reports and notices and proxy material to shareholders of the
Asset Allocation Fund;
(j) all expenses incidental to holding meetings of shareholders
and Directors of the Asset Allocation Fund;
(k) such extraordinary expenses as may arise, including
litigation, affecting the Asset Allocation Fund and the legal
obligations which the Asset Allocation Fund may have regarding
indemnification of its officers and directors; and
(l) fees and out-of-pocket expenses paid on behalf of the Asset
Allocation Fund by Fund/Plan.
Section 4. Compensation of Fund/Plan. The Asset Allocation Fund agrees to
pay Fund/Plan compensation for its services and to reimburse it for expenses
incurred and paid by Fund/Plan on behalf of the Asset Allocation Fund, at the
rates and amounts as set forth in Schedule "B" attached hereto, and as shall be
set forth in any amendments to such Schedule "B" approved by the Asset
Allocation Fund and Fund/Plan. The Asset Allocation Fund agrees and understands
that Fund/Plan's compensation be comprised of two components, payable on a
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Page 3 of 7 pages.
monthly basis, as follows:
(i) A combined asset-based fee subject to a minimum amount will be billed
monthly to the Asset Allocation Fund. These fees are to be paid by the Asset
Allocation Fund within ten calendar days after receipt of an invoice from
Fund/Plan.
(ii) reimbursement of any out-of-pocket expenses paid by Fund/Plan on
behalf of the Asset Allocation Fund, which out-of-pocket expenses will be billed
to the Asset Allocation Fund within the first ten calendar days of the month
following the month in which such out-of-pocket expenses were incurred. The
Asset Allocation Fund agrees to reimburse Fund/Plan for such expenses within ten
calendar days of receipt of such xxxx.
For the purpose of determining fees payable to Fund/Plan, the value of the
Asset Allocation Fund's net assets shall be computed at the times and in the
manner specified in the Asset Allocation Fund's Prospectus and Statement of
Additional Information then in effect.
During the term of this Agreement, should the Asset Allocation Fund seek
services or functions in addition to those outlined above or in Schedule "A"
attached, a written amendment to this Agreement specifying the additional
services and corresponding compensation shall be executed by both Fund/Plan and
the Asset Allocation Fund.
Section 5. Duration.
(a) The term of this Agreement shall be for a period of three (3) years,
commencing on the date hereinabove first written ("Effective Date") and shall
continue thereafter on a year to year term subject to termination by either
Party set forth in (c) below.
(b) The fee schedule set forth in Schedule "B" attached shall be fixed for
three (3) years commencing on the Effective Date of this Agreement.
(c) After the initial term of this Agreement, the Asset Allocation Fund or
Fund/Plan may give written notice to the other of the termination of this
Agreement, such termination to take effect at the time specified in the notice,
which date shall not be less than one hundred twenty (120) days after the date
of receipt of such notice. Upon the effective termination date, the Asset
Allocation Fund shall pay to Fund/Plan such compensation as may be due as of the
date of termination and shall likewise reimburse Fund/Plan for any out-of-pocket
expenses and disbursements reasonably incurred by Fund/Plan to such date.
(d) If a successor to any of Fund/Plan's duties or responsibilities under
this Agreement is designated by the Asset Allocation Fund by written notice to
Fund/Plan in
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Page 4 of 7 pages.
connection with the termination of this Agreement, Fund/Plan shall promptly upon
such termination and at the expense of the Asset Allocation Fund, transfer all
required records and shall cooperate in the transfer of such duties and
responsibilities.
Section 6. Amendment No provision of this Agreement may be amended or
modified, in any manner except by a written agreement properly authorized and
executed by Fund/Plan and the Asset Allocation Fund.
Section 7. Applicable Law This Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania and the venue of any action arising under this
Agreement shall be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
Section 8. Limitation of Liability.
(a) The execution and delivery of this Agreement has been duly authorized
by the Board of Directors of the Asset Allocation Fund and executed on behalf of
the Asset Allocation Fund by the undersigned officer, in that officer's capacity
as an officer of the Asset Allocation Fund. The obligations under this Agreement
shall be binding upon the assets and property of the Asset Allocation Fund and
shall not be binding upon any director, officer or shareholder of the Fund
individually.
(b) Fund/Plan, its directors, officers, employees, shareholders and agents
shall only be liable for any error of judgment or mistake of law or for any loss
suffered by the Asset Allocation Fund in connection with the performance of this
Agreement that result from willful misfeasance, bad faith or negligence on the
part of Fund/Plan in the performance of its obligations and duties under this
Agreement.
(c) Any person, even though a director, officer, employee, shareholder or
agent of Fund/Plan, who may be or become an officer, director, employee or agent
of the Asset Allocation Fund, shall be deemed when rendering services to such
entity or acting on any business of such entity (other than services or business
in connection with Fund/Plan's duties under the Agreement), to be rendering such
services to or acting solely for the Asset Allocation Fund and not as a
director, officer, employee, shareholder or agent of, or under the control or
direction of Fund/Plan even though such person may receive compensation from
Fund/Plan.
(d) Notwithstanding any other provision of this Agreement, the Asset
Allocation Fund shall indemnify and hold harmless Fund/Plan, its directors,
officers, employees,
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Page 5 of 7 pages.
shareholders and agents from and against any and all claims, demands, expenses
and liabilities (whether with or without basis in fact or law) of any and every
nature which Fund/Plan may sustain or incur or which may be asserted against
Fund/Plan by any person by reason of, or as a result of (i) any action taken or
omitted to be taken by Fund/Plan in good faith, (ii) any action taken or omitted
to be taken by Fund/Plan in good faith in reliance upon any certificate,
instrument, order or stock certificate or other document reasonably believed by
Fund/Plan to be genuine and to be signed, countersigned or executed by any duly
authorized person, upon the oral instructions or written instruction of an
authorized person of the Asset Allocation Fund or upon the opinion of legal
counsel for the Asset Allocation Fund; or (iii) any action taken in good faith
or omitted to be taken by Fund/Plan in connection with its appointment in
reliance upon any law, act, regulation or interpretation of the same even though
the same may thereafter have been altered, changed, amended or repealed.
Indemnification under this subparagraph shall not apply, however, to actions or
omissions of Fund/Plan or its directors, officers, employees, shareholders or
agents in cases of its or their willful misfeasance, bad faith, negligence or
reckless disregard of its or their duties hereunder.
(e) Fund/Plan shall give written notice to the Asset Allocation Fund
within ten (10) business days of receipt by Fund/Plan of a written assertion or
claim of any threatened or pending legal proceeding which may be subject to this
indemnification. The failure to notify the Asset Allocation Fund of such written
assertion or claim shall not, however, operate in any manner whatsoever to
relieve the Asset Allocation Fund of any liability arising under this Section or
otherwise, unless such failure prejudices the Asset Allocation Fund.
(f) For any legal proceeding giving rise to this indemnification, the
Asset Allocation Fund shall be entitled to defend or prosecute any claim in the
name of Fund/Plan at its own expense and through counsel of its own choosing if
it gives written notice to Fund/Plan within ten (10) business days of receiving
notice of such claim. Notwithstanding the foregoing, Fund/Plan may participate
in the litigation at its own expense through counsel of its own choosing. If the
Asset Allocation Fund does choose to defend or prosecute such claim, then the
parties shall cooperate in the defense or prosecution thereof and shall furnish
such records and other information as are reasonably necessary.
(g) The terms of this Section 8 shall survive the termination of this
Agreement.
Section 9. Notices. Except as otherwise provided in this Agreement, any
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Page 6 of 7 pages.
notice or other communication required by or permitted to be given in connection
with this Agreement shall be in writing, and shall be delivered in person or
sent by first class mail, postage prepaid to the respective parties as follows:
If to IAA Trust Asset Allocation Fund, Inc.: If to Fund/Plan:
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IAA Trust Asset Allocation Fund, Inc. Fund/Plan Services, Inc.
000 XXX Xxxxx 0 Xxxx Xxx Xxxxxx
Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx Attention: Xxxxxxx X. Xxxxx,
Vice President President
Section 10. Severability. If any part, term or provision of this Agreement
is held by any court to be illegal, in conflict with any law or otherwise
invalid, the remaining portion or portions shall be considered severable and not
affected, and the rights and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
Section 11. Section Headings. Section and Paragraph headings are for
convenience only and shall not be construed as part of this Agreement.
Section 12. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting of seven typewritten pages, together with Schedules "A" and "B" to be
signed by their duly authorized officers as of the day and year first above
written.
IAA Trust Asset Allocation Fund, Inc. Fund/Plan Services, Inc.
____________________________________ ___________________________________
By: Xxxx X. Xxxx, Vice President By: Xxxxxxx X. Xxxxx, President
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Page 7 of 7 pages.
SCHEDULE "A"
FUND ADMINISTRATION SERVICES
FOR
IAA TRUST ASSET ALLOCATION FUND, INC.
I. Regulatory Compliance
A. Compliance - Federal Investment Company Act of 1940
1. Review, report and renew
a. Investment advisory contracts
b. Fidelity bond (if requested)
c. Underwriting contracts
d. Distribution (12b-1) plans
e. Administration contracts
f. Accounting contracts
g. Custody contracts
h. Transfer agent and shareholder services contract
2. Filings
a. N-SAR (semi-annual report)
b. N-1A (prospectus), post effective amendments and
supplements ("stickers")
c. 24f-2 indefinite registration of shares
d. Filing shareholder reports under 30b2-1
e. Notify frequency capital gains under 19b-1
f. Coordination of XXXXX filings
3. Annual up-dates of biographical information and questionnaires
for Directors and Officers (if requested)
4. Monitor money market funds under Rule 2A-7
B. Compliance - State "Blue Sky"
Blue Sky (state registration)
a. Registration shares (initial/renewal)
b. Monitor sale shares over/under
c. Report shares sold
d. Filing of federal prospectus and contracts
e. Filing annual and semi-annual reports with states
C. Compliance - Prospectus
1. Analyze and review portfolio reports from advisor regarding:
a. compliance with investment objectives
b. maximum investment by company/industry size
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Schedule "A": Page 1
D. Compliance - Other
1. Applicable state tax laws
II. Corporate Business and Shareholder/Public Information
A. Directors/Management
1. Preparation of meetings
a. Agendas - all necessary items of compliance
b. Preparation of Board packages
c. Assist with arranging and conducting meetings
d. Prepare minutes (if requested)
e. Keep attendance records (if requested)
f. Maintain certain board records as requested
2. Preparation and distribution of periodic operation reports to
management
B. Coordinate Proposals for Service Agents
1. Suppliers
2. Printers
3. Fulfillment of literature requests
4. Underwriters
C. Maintain Corporate Calendars
1. General
2. Blue sky
D. Shareholder Meeting - maximum one per year
1. Preparation of Proxy
2. Conduct Meeting
3. Record ballot results
E. Maintain certain Corporate Files as requested
F. Release Corporate Information
1. To shareholders
2. To financial and general press
3. To industry publications
a. distributions (dividends and capital gains)
b. tax information
c. changes to prospectus
d. letters from management
e. funds' performance
4. Respond to:
a. financial press
b. miscellaneous shareholder inquiries
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Schedule "A": Page 2
c. industry questionnaires
5. Prepare, maintain and update monthly information manual
F. Communications to Shareholders
1. Coordinate printing and distribution of annual and semi-annual
reports and prospectus
III. Financial and Management Reporting
A. Income and Expenses
1. Expense figures calculated and accrual levels set
2. Monitoring of expenses, accruals monthly
3. Approve and coordinate payment of expenses
4. Projection of income and expenses (with regards to B(2)) -
ex-date will determine if projection will apply
5. Calculation of advisory fee, 12b-1 fee
6. Calculation of average net assets
B. Distributions to Shareholders
1. Calculations of dividends and capital gain distributions (in
conjunction with the Fund and their auditors)
a. compliance with income tax provisions
b. compliance with excise tax provisions
c. compliance with Investment Company Act of 1940
C. Financial Reporting
1. Liaison between Fund management, independent auditors and
printers for shareholder reports
2. Preparation of semi-annual and annual reports to shareholders
3. 60-day delivery to SEC and shareholders
4. Preparation of semi-annual and annual NSAR's (financial data)
D. Subchapter M Compliance (monthly)
1. Asset diversification test
2. Short/short test
3. Income Qualification Test
E. Other Financial Analyses
1. Upon request from fund management, other budgeting and
analyses can be constructed to meet a fund's specific needs
(additional fees may apply)
2. Sales information, portfolio turnover (monthly)
3. Work closely with independent auditors on return of capital
presentation, excise tax calculation
4. Performance (total return) calculation (monthly)
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Schedule "A": Page 3
5. Analysis of interest derived from various Government
obligations (annual) (if interest income was distributed in a
calendar year) for reporting to Shareholders
F. Review and Monitoring Functions (monthly)
1. Review expense and reclassification entries to ensure proper
update
2. Perform various reviews to ensure accuracy of
subscription/liquidation schedules, accounting (the monthly
expense analysis)
3. Review all accruals and expenditures where applicable
G. Preparation and distribution of monthly operational reports to
management by 10th Business Day
1. Management Statistics (Recap)
- portfolio
- book gains/losses/per share
- net income, book income per share
- capital stock activity
- distributions
2. Performance Analysis
- total return
- monthly, year to date, average annual (1, 5, 10 yrs), 5 yr
cumulative, since inception cumulative
3. Expense Analysis
- schedule
- expenses paid
- accrual monitoring
- advisory fee
4. Short-Short Analysis
- short-short income
- gross income (components)
5. Portfolio Turnover
- cost of purchases
- net proceeds of sales
- average market value
6. Asset Diversification Test
- gross assets
- non-qualifying assets
7. Activity Summary
- shares sold, redeemed and reinvested
- change in investment
8. Summary of Dividends paid for each Fund.
H. Provide rating agencies statistical data as requested
(monthly/quarterly)
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Schedule "A": Page 4
I. Standard schedules for Board Package (quarterly)
1. Activity Summary (III-G-7 from above)
2. Other schedules can be provided (additional fees may apply)
3. Statistical Report
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Schedule "A": Page 5
SCHEDULE "B"
ADMINISTRATION SERVICES FEE SCHEDULE
FOR
IAA TRUST ASSET ALLOCATION FUND, INC.
This Fee Schedule is fixed for a period of three (3) years from the
Effective Date as that term is defined in the Agreement.
I. Administration Expense
.0015 On the First $ 50 Million of Average Net Assets
.0010 On the Next $ 50 Million of Average Net Assets
.0005 Over $100 Million of Average Net Assets
The above fee schedule is applicable to total net assets of all four
portfolios within the IAA Trust family of Funds. A minimum annual fee of
$50,000 will be charged to the Growth Fund and a minimum annual fee of
$80,000 applies in total to the group of four IAA Trust Funds. New
portfolios added shall bear an annual minimum fee of $10,000.
II. Out-of-Pocket Expenses
The Fund(s) will reimburse Fund/Plan Services monthly for all reasonable
out-of-pocket expenses, including telephone, postage, telecommunications,
special reports, all currently required tax return preparation ($3500 per
year, total all Funds), record retention, script fees, stamp duty, special
transportation costs as incurred, and copying and sending materials to
auditors.
III. Additional Services
Activities of a non-recurring nature including but not limited to fund
consolidations, mergers, acquisitions, reorganizations, the addition or
deletion of a fund, and shareholder meetings/proxies, are not included
herein, and will be quoted separately. To the extent the Asset Allocation
Fund should decide to issue multiple/separate classes of shares,
additional fees will apply. Any additional/enhanced services or reports
will be quoted upon request.
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Administration Agreement between IAA Trust Asset Allocation Fund, Inc.
and Fund/Plan Services, Inc.
Schedule "B"
