EX-99.B(h)(1)
ADMINISTRATION AGREEMENT
Xxxxx Fargo Variable Trust
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
THIS AGREEMENT is made as of this 1st day of March, 2001, by and
between Xxxxx Fargo Variable Trust, a Delaware business trust (the "Trust") and
Xxxxx Fargo Funds Management, LLC, a limited liability company organized under
the laws of the State of Delaware ("Funds Management").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain Funds Management to render certain
administrative services to the Trust's investment portfolios listed on Appendix
A (individually, a "Fund" and collectively, the "Funds"), and Funds Management
is willing to render such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties agree as follows:
1. Appointment. The Trust hereby appoints Funds Management to act as
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Administrator of the Funds, and Funds Management hereby accepts such appointment
and agrees to render such services and duties set forth in Paragraph 3, for the
compensation and on the terms herein provided. Each new investment portfolio
established in the future by the Trust shall automatically become a "Fund" for
all purposes hereunder as if it were listed on Appendix A, absent written
notification to the contrary by either the Trust or Funds Management.
2. Delivery of Documents. The Trust shall furnish to, or cause to be
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furnished to, Funds Management originals of, or copies of, all books, records,
and other documents and papers related in any way to the administration of the
Trust.
3. Duties as Administrator. Fuunds Management shall, at its expense,
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provide the following administrative services in connection with the operations
of the Trust and the Funds:
(a) receive and tabulate shareholder votes;
(b) furnish statistical and research data;
(c) coordinate (or assist in) the preparation and filing with the
U.S. Securities and Exchange Commission ("SEC") of
registration statements, notices, shareholder reports, and
other material required to be filed under applicable laws;
(d) prepare and file with the states registration statements,
notices, reports, and other material required to be filed
under applicable laws;
(e) prepare and file Form 24F-2s and N-SARs;
(f) review bills submitted to the Funds and, upon determining that
a xxxx is appropriate, allocating amounts to the appropriate
Funds and Classes thereof and instructing the Funds' custodian
to pay such bills;
(g) coordinate (or assist in) the preparation of reports and other
information materials regarding the Funds including proxies
and other shareholder communications, and review prospectuses;
(h) prepare expense table information for annual updates;
(i) provide legal and regulatory advice to the Funds in connection
with its other administrative functions, including assignment
of matters to outside legal counsel on behalf of the Trust and
supervising the work of such counsel;
(j) provide office facilities and clerical support for the Funds;
(k) develop and implement procedures for monitoring compliance
with regulatory requirements and compliance with the Funds'
investment objectives, policies and restrictions;
(l) serve as liaison between the Funds and their independent
auditors;
(m) prepare and file tax returns;
(n) review payments of Fund expenses;
(o) prepare expense budgeting and accruals;
(p) provide communication, coordination, and supervision services
with regard to the Funds' transfer agent, custodian, fund
accountant, any co-administrators, and other service
organizations that render recordkeeping or shareholder
communication services;
(q) provide information to the Funds' distributor concerning fund
performance and administration;
(r) assist the Trust in the development of additional investment
portfolios;
(s) provide reports to the Funds' board of directors regarding its
activities;
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(t) assist in the preparation and assembly of meeting materials,
including comparable fee information, as required, for the
Funds' board of directors; and
(u) provide any other administrative services reasonably necessary
for the operation of the Funds other than those services that
are to be provided by the Trust's transfer and dividend
disbursing agent, custodian, and fund accountant, provided
that nothing in this Agreement shall be deemed to require
Funds Management to provide any services that may not be
provided by it under applicable banking laws and regulations.
In performing all services under this Agreement, Funds Management
shall: (a) act in conformity with the Trust's Declaration of Trust (and By-Laws,
if any), the 1940 Act, and any other applicable laws as may be amended from time
to time, and with the Trust's registration statement under the Securities Act of
1933 and the 1940 Act, as may be amended from time to time; (b) consult and
coordinate with legal counsel to the Trust as necessary and appropriate; and (c)
advise and report to the Trust and its legal counsel, as necessary and
appropriate, with respect to any compliance or other matters that come to its
attention.
In connection with its duties under this Paragraph, Funds Management
may, at its own expense, enter into sub-administration agreements with other
service providers, provided that each such service provider agrees with Funds
Management to comply with this Agreement and all relevant provisions of the 1940
Act, the Investment Advisers Act of 1940, any other applicable laws as may be
amended from time to time, and all relevant rules thereunder. Funds Management
will provide the Trust with a copy of each sub-administration agreement it
executes relating to the Trust. Funds Management will be liable for acts or
omissions of any such sub-administrators under the standards of care described
herein under Paragraph 5.
4. Compensation. In consideration of the administration services to
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be rendered by Funds Management under this Agreement, the Trust shall pay Funds
Management a monthly fee, as shown on Appendix A, of the average daily value (as
determined on each business day at the time set forth in the Prospectus for
determining net asset value per share) of the Funds' net assets during the
preceding month. If the fee payable to Funds Management pursuant to this
Paragraph begins to accrue before the end of any month or if this Agreement
terminates before the end of any month, the fee for the period from the
effective date to the end of that month or from the beginning of that month to
the termination date, respectively, shall be prorated according to the
proportion that the period bears to the full month in which the effectiveness or
termination occurs. For purposes of calculating each such monthly fee, the value
of each Fund's net assets shall be computed in the manner specified in that
Fund's registration statement as then on file with the SEC for the computation
of the value of the Fund's net assets in connection with the determination of
the net asset value of Fund shares. For purposes of this Agreement, a "business
day" is any day that the Trust is open for trading.
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5. Limitation of Liability; Indemnification.
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(a) Funds Management shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Trust in connection
with the performance of its obligations and duties under this Agreement, except
a loss resulting from Funds Management's willful misfeasance, bad faith, or
negligence in the performance of its obligations and duties or that of its
agents or sub-administrators, or by reason of its or their reckless disregard
thereof. Any person, even though also an officer, director, employee or agent of
Funds Management, shall be deemed, when rendering services to the Trust or
acting on any business of the Trust (other than services or business in
connection with Funds Management's duties as Administrator hereunder), to be
acting solely for the Trust and not as an officer, director, employee, or agent
or one under the control or discretion of Funds Management even though paid by
it.
(b) The Trust, on behalf of each Fund, will indemnify Funds
Management against and hold it harmless from any and all losses, claims,
damages, liabilities, or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action, or suit relating to the
particular Fund and not resulting from willful misfeasance, bad faith, or
negligence of Funds Management or its agents or sub-administrators in the
performance of their obligations and duties, or by reason of its or their
reckless disregard thereof. Funds Management will not confess any claim or
settle or make any compromise in any instance in which the Trust will be asked
to provide indemnification, except with the Trust's prior written consent. Any
amounts payable by the Trust under this Subparagraph shall be satisfied only
against the assets of the Fund involved in the claim, demand, action, or suit
and not against the assets of any other Fund.
(c) Funds Management will indemnify the Trust against and hold
it harmless from any and all losses, claims, damages, liabilities, or expenses
(including reasonable counsel fees and expenses) resulting from any claim,
demand, action, or suit against the Trust or any Fund that resulted from a
failure of Funds Management or its agents to act in accordance with the standard
of care set forth in Subparagraph (a) above; provided that such loss, claim,
damage, liability or expense did not result primarily from willful misfeasance,
bad faith, or negligence of the Trust or its agents (other than Funds Management
or agents of Funds Management) in the performance of their obligations and
duties, or by reason of its or their reckless disregard thereof. The Trust will
not confess any claim or settle or make any compromise in any instance in which
Funds Management will be asked to provide indemnification, except with Funds
Management's prior written consent.
6. Allocation of Expenses. Funds Management assumes and shall pay
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for maintaining the staff and personnel necessary to perform its obligations
under this Agreement and shall, at its own expense, provide its own office
space, facilities and equipment. In addition to the fees described in Section 4
of this Agreement, the Trust (or its other service providers, as may be provided
pursuant to their respective agreements and contracts with the Trust) shall pay
all of its expenses which are not expressly assumed by Funds Management
hereunder. The expenses of legal counsel and accounting experts retained by
Funds Management, after consulting with the Trust's legal counsel and
independent auditors, as may be reasonably
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necessary or appropriate for the performance by Funds Management of its duties
under this Agreement shall be deemed to be expenses of, and shall be paid for
by, the Trust.
7. Amendments. This Agreement supersedes the administration agreement
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between Xxxxx Fargo Bank, N.A. and Xxxxx Fargo Variable Trust dated September
20, 1999, as approved by the Board of Trustees on March 26, 1999. This Agreement
may be amended at any time by mutual agreement in writing of the Trust and Funds
Management, provided that the Board of Trustees of the Trust, including a
majority of the trustees who are not interested persons of the Trust or any
party to this Agreement, as defined by the 1940 Act, approves any such amendment
in advance.
8. Administrator's Other Businesses. Except to the extent necessary to
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perform Xxxxx Fargo's obligations under this Agreement, nothing herein shall be
deemed to limit or restrict the right of Funds Management, or any affiliate or
employee of Funds Management, to engage in any other business or to devote time
and attention to the management or other aspects of any other business, whether
of a similar or dissimilar nature, or to render services of any kind to any
other corporation, firm, individual or association.
9. Duration. This Agreement shall become effective on its execution
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date and shall remain in full force and effect for one year or until terminated
pursuant to the provisions in Paragraph 10, and it may be reapproved at least
annually by the Board of Trustees, including a majority of the directors who are
not interested persons of the Trust or any party to this Agreement, as defined
by the 1940 Act.
10. Termination of Agreement. This Agreement may be terminated at any
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time, without the payment of any penalty, by a vote of a majority of the members
of the Trust's Board of Trustees, on 60 days' written notice to Funds
Management; or by Funds Management on 60 days' written notice to the Trust.
11. Expense Waivers. If in any fiscal year the total expenses of a Fund
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incurred by, or allocated to, the Fund, excluding taxes, interest, brokerage
commissions and other portfolio transaction expenses, other expenditures that
are capitalized in accordance with generally accepted accounting principles,
extraordinary expenses and amounts accrued or paid under a Rule 12b-1 Plan of
the Fund and including only the fees provided for in Paragraph 4 and those
provided for pursuant to the Fund's advisory agreement ("includible expenses"),
exceed the applicable voluntary expense waivers, if any, set forth in the
Prospectus, Funds Management shall waive or reimburse that portion of the excess
derived by multiplying the excess by a fraction, the numerator of which shall be
the percentage at which the fee payable pursuant to this Agreement is calculated
under Paragraph 4, and the denominator of which shall be the sum of such
percentage plus the percentage at which the fee payable pursuant to the Fund's
advisory agreement is calculated (the "Applicable Ratio"), but only to the
extent of the fee hereunder for the fiscal year. If the fees payable under this
Agreement and/or the Fund's advisory agreement contributing to such excess
portion are calculated at more than one percentage rate, the Applicable Ratio
shall be calculated separately for and applied separately to the portions of
excess attributable to, the period to which a particular percentage rate
applied. At the end of each month of the Trust's fiscal year, the Trust shall
review the includible expenses accrued during
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that fiscal year to the end of that period and shall estimate the includible
expenses for the balance of that fiscal year. If as a result of that review and
estimation it appears likely that the includible expenses will exceed the
limitations referred to in this Paragraph for a fiscal year with respect to the
Fund, the monthly fee set forth in Paragraph 4 payable to Funds Management for
such month shall be reduced, subject to a later adjustment, by an amount equal
to the Applicable Ratio times the estimated excess pro rated over the remaining
months of the fiscal year (including the month just ended). For purposes of
computing the excess, if any, the value of the Fund's net assets shall be
computed in the manner specified in Paragraph 4, and any reimbursements required
to be made by Funds Management shall be made once a year promptly after the end
of the Trust's fiscal year.
12. Trust not bound to violate its Articles. Nothing in this Agreement
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shall require the Trust to take any action contrary to any provision of its
Declaration of Trust or to any applicable statute or regulation.
13. Miscellaneous.
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(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Trust or Funds Management shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Trust:
Xxxxx Fargo Variable Trust
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
To Funds Management:
Xxxxx Fargo Funds Management, LLC
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
(b) This Agreement shall extend to and be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be subject to assignment (as that term is defined
under the 0000 Xxx) without the written consent of the other party.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
(d) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and which collectively shall be
deemed to constitute only one agreement.
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(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(f) If any provision of this Agreement is declared to be
prohibited or unenforceable, the remaining provisions of this Agreement shall
continue to be valid and fully enforceable.
In witness whereof, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.
XXXXX FARGO VARIABLE TRUST
By: /s/ C. Xxxxx Xxxxxxx
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C. Xxxxx Xxxxxxx
Secretary
XXXXX FARGO FUNDS MANAGEMENT, LLC
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
Chief Administrative Officer and
Chief Financial Officer
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Appendix A
Funds of Xxxxx Fargo Variable Trust Covered by This Agreement
Fee of 0.15% of average daily
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net assets on an annual basis:
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1. Asset Allocation Fund
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2. Corporate Bond Fund
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3. Equity Income Fund
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4. Equity Value Fund
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5. Growth Fund
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6. International Equity Fund
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7. Large Company Growth Fund
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8. Money Market Fund
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9. Small Cap Growth Fund
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Approved by Board of Trustees: October 24, 2000.
Most Recent Approval Date: August 7, 2001.
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