Exhibit (h)(1)
ADMINISTRATION AGREEMENT
AGREEMENT dated as of July 22, 2002, between each of the Massachusetts
business trusts listed on Appendix I hereto (as the same may from time to time
be amended to add one or more additional investment companies advised by an
affiliate of Columbia Management Group, Inc. ("CMG") or to delete one or more of
such trusts), each of such trusts acting severally on its own behalf and not
jointly with any of such other trusts (each of such trusts being hereinafter
referred to as the "Trust"), and Fleet Investment Advisors, Inc. (the
"Administrator"), a New York corporation. Each Trust may offer an unlimited
number of separate investment series ("Funds"), each of which may have multiple
classes of shares. "Fund" shall be substituted for "Trust" in the Agreement
except when not applicable in context.
In consideration of the mutual promises and covenants set forth herein,
the parties hereto agree as follows:
1. Subject to the general direction and control of the Board of Trustees
of the Trust, the Administrator shall perform such administrative services as
may from time to time be reasonably requested by the Trust, which shall include
without limitation:
(a) providing office space, equipment, including stationery and office
supplies, and clerical personnel necessary for maintaining the
organization of the Trust and for performing the administrative
functions herein set forth;
(b) arranging, if desired by the Trust, for Directors, officers and
employees of the Administrator to serve as Trustees, officers or
agents of the Trust or a Fund if duly elected or appointed to
such positions and subject to their individual consent and to any
limitations imposed by law;
(c) assistance in preparing and, if applicable, filing all documents
required for compliance by the Trust and the Funds with
applicable laws and regulations, including registration
statements, registration fee filings, and proxy statements;
(d) assistance in preparation of agendas and supporting documents for
meetings of Trustees, committees of Trustees and shareholders;
(e) preparation, filing and mailing of various reports for the
Funds, including semiannual and annual reports to shareholders,
semi-annual and annual reports on Form N-SAR, and notices
pursuant to Rule 24f--2;
(f) arrangement and preparation of materials for meetings of the Board
of Trustees and its committees relating to the services provided
by the Administrator or its affiliates;
(g) preparation and filing of the Trust's federal, state and local tax
returns;
(h) arrangement of all meetings of shareholders, and management and
supervision of all shareholder solicitations;
(i) coordinating and overseeing the activities of the Trust's other
third-party service providers;
(j) preparation and maintenance of the registration and qualification
of Fund shares for sale under the securities laws of each relevant
jurisdiction;
(k) response to all inquiries by regulatory agencies, media and the
general public concerning the business and affairs of the Trust,
including oversight of all
periodic and other inspections of operations of the Trust and its
agents by regulatory authorities;
(l) responses to subpoenas and tax levies relating to the Trust;
(m) handling and resolution of any complaints registered with the Trust
by shareholders, regulatory authorities, and the general public;
(n) monitoring legal, tax, regulatory and industry developments related
to the business affairs of the Trust and communicating such
developments to the officers and Board of Trustees of the Trust
as they may reasonably request or as the Administrator deems
appropriate;
(o) provision of internal legal, accounting, compliance, audit and risk
management services and periodic reporting to the Board of
Trustees with respect to such services;
(p) administration of the Trust's Code of Ethics and periodic reporting
to the Board of Trustees of Trustee and officer compliance
therewith; (q) administration of operating policies of the Trust
and recommendation to the officers and Board of Trustees of the
Trust of modifications to such policies to facilitate the
protection of shareholders or market competitiveness of the Trust
and to the extent necessary to comply with new legal or
regulatory requirements;
(r) performing custody liaison operations, including maintaining the
day-to-day operational contact with the Trust's custodian,
calculating daily cash availability, authorizing and monitoring
cash movements, processing corporate actions, supporting income
and security settlements processed by the custodian and recorded
by the Administrator;
(s) assisting the Trust's investment adviser ("Adviser"), at the
Adviser's request, in monitoring and developing compliance
procedures for the Trust which shall include, among other things,
procedures to assist the Adviser in monitoring compliance with
each Fund's investment objective, policies, restrictions, tax
matters and applicable laws and regulations;
(t) arranging and bearing the cost of processing purchase and
redemption orders with respect to each Fund's shares;
(u) monitoring the Trust's arrangements with respect to services
provided by certain institutional shareholders ("Service
Organizations") to their customers, who are beneficial owners of
any class of shares of the Trust's shares of beneficial interest
(including any series or sub-class thereof), pursuant to
agreements between the Trust and such Service Organizations
("Servicing Agreements"), including, among other things,
reviewing the qualifications of Service Organizations wishing to
enter into Servicing Agreements with the Trust, assisting in the
execution and delivery of the Servicing Agreements, reporting to
the Board of Trustees with respect to the amounts paid or payable
by the Trust from time to time under the Servicing Agreements and
the nature of the services provided by Service Organizations, and
maintaining appropriate records in connection with the foregoing
duties;
(v) reviewing all sales materials and advertising; and
(w) maintaining books and records of the Trust and the Funds (exclusive
of records required by Xxxxxxx 00 (x) xx xxx 0000 Xxx).
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Notwithstanding the foregoing, the Administrator shall not be deemed to
have assumed or have any responsibility with respect to functions specifically
assumed by any transfer agent or custodian of the Trust.
2. The Administrator shall be free to render similar services to others
so long as its services hereunder are not impaired thereby.
3. In consideration of the services provided and expenses assumed
pursuant to this Agreement, the Trust on behalf of each of the Funds will pay
the Administrator the fees set forth in the Fee Schedule attached hereto as
Appendix II. In addition, the Trust on behalf of each of the Funds will pay to
the Administrator the domestic and global custody fees and expenses for each
Fund as set forth in Appendix II. The Administrator shall be responsible for
payment of all fees and expenses under the terms of the custody agreement
between the Trust and its custodian.
4. This Agreement shall become effective as of the date of its execution
and (a) shall continue in effect from year to year so long as approved annually
by vote of a majority of the Trustees including a majority of the Trustees who
are not affiliated with the Administrator; (b) may be terminated at any time
without penalty by the Board of Trustees of the Trust or by the Administrator,
in each case on sixty days' written notice to the other party; and (c) may be
terminated at any time for cause by either party if such cause remains
unremedied for a reasonable period not to exceed ninety days after receipt of
written specification of such cause. If the Trust designates a successor to any
of the Administrator's obligations, the Administrator shall, at the expense and
direction of the Trust, transfer to the successor all Fund records maintained by
the Administrator.
5. This Agreement may be amended only by a writing signed by both parties.
6. In the absence of willful misfeasance, bad faith or negligence on the
part of the Administrator, or reckless disregard of its obligations and duties
hereunder, the Administrator shall not be subject to any liability to the Trust
or any Fund, to any shareholder of the Trust or any Fund or to any other person,
firm or organization, for any act or omission in the course of, or connected
with, rendering services hereunder. The provisions of this paragraph 6 shall
survive any termination of the Agreement.
7. In connection with the services to be provided by the Administrator
under this Agreement, the Administrator may, to the extent it deems appropriate,
and subject to compliance with the requirements of applicable laws and
regulations and upon receipt of approval of the Trustees, make use of (i) its
affiliated companies and their directors, trustees, officers, and employees, and
(ii) subcontractors selected by the Administrator, provided that the
Administrator shall supervise and remain fully responsible for the services of
all such third parties in accordance with and to the extent provided in this
Agreement. All costs and expenses associated with services provided by any such
third parties shall be borne by the Administrator or such parties.
8. Except as otherwise expressly assumed by the Administrator or required
by law, the Trust shall pay all costs and expenses incidental to its
organization, operations and business. The
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Administrator shall furnish at its own expense all executive and other
personnel, office space, and office facilities required to render the services
set forth in this Agreement.
9. The Administrator agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information relative to the Trust and its prior, present or potential
shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and duties under this Agreement, 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.
10. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts.
11. A copy of the Declaration of Trust of the Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Trustees of the Trust as Trustees
and not individually and that the obligations of or arising out of the
instrument are not binding upon any of the Trustees or officers or shareholders
individually, but binding only upon the assets and property of the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
THE TRUSTS LISTED ON APPENDIX I
/s/ XXXX X. X'XXXXX
--------------------------------------------
By: Xxxx X. X'Xxxxx
Title: President
FLEET INVESTMENT ADVISORS, INC.
/s/ XXXXX X. XXXXX
--------------------------------------------
By: Xxxxx X. Xxxxx
Title: Chairman, CEO and President
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APPENDIX I
The Galaxy Fund
The Galaxy VIP Fund
Galaxy Fund II
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APPENDIX II
FEE SCHEDULE
For the services rendered, the facilities furnished and the payments
made by the Administrator as provided in this Agreement, the Trust on behalf of
each Fund will pay the Administrator on the final business day of each month a
fee for the previous month at the rates listed below. Upon any termination of
this Agreement before the end of any month, the fee for such part of a month
shall be prorated according to the proportion which such period bears to the
final monthly period and shall be payable on the date of termination of this
Agreement.
All asset-based fees shall be calculated daily and paid monthly. Net assets
shall be computed in accordance with the Funds' prospectuses and statements of
additional information and the resolutions of the Trust's Board of Trustees.
ADMINISTRATION FEES:
The Administrator shall be paid an annual administration fee at the annual rate
set forth below:
(1) With respect to The Galaxy Fund, .09% of the first $2.5 billion of
the Funds' combined average daily net assets, .085% of the next $2.5
billion of combined average daily net assets, .075% of the next $7
billion of combined average daily net assets, .065% of the next $3
billion of combined average daily net assets, .06% of the next $3
billion of combined average daily net assets, .0575% of the next $3
billion of combined average daily net assets, .0525% of the next $9
billion of combined average daily net assets and .05% of combined
daily net assets in excess of $30 billion.
The Administrator shall waive all administration and custody fees for a
period of three months from the commencement of operations of any new
Fund which is established, provided that no fee shall be waived for any
"shell" Fund created pursuant to a merger or acquisition.
(2) With respect to The Galaxy VIP Fund, .085% of the first $1.0
billion of the Funds' combined average daily net assets, .078% of the
next $1.5 billion of combined average daily net assets, .073% of
combined average daily net assets in excess of $2.5 billion and a
percentage rate to be negotiated by the parties of combined average
daily net assets in excess of $5 billion. The minimum annual aggregate
fees for the Funds will be $100,000.
The Administrator shall waive all administration and custody fees for a
period of three months from the commencement of operations of any new
Fund which is established, provided that no fee shall be waived for any
"shell" Fund created pursuant to a merger or acquisition.
(3) With respect to Galaxy Fund II, .30% of the average daily net
assets. of each of the Large Company Index Fund, Small Company Index
Fund, Utility Index Fund and U.S. Treasury Index Fund, and .35% of the
average daily net assets of the Municipal Bond
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Fund. The Administrator will bear all expenses in connection with its
provision of services under this Agreement and all expenses incurred
in connection with the operation of Galaxy Fund II with the following
exceptions ("Excepted Expenses"): brokerage fees and commissions, fees
and expenses of Trustees who are not officers, directors or employees
of the Administrator or Galaxy Fund II's principal underwriter or of
any subadviser to Galaxy Fund II; taxes; interest; and any
extraordinary non-recurring expenses that may arise, including but not
limited to expenses of litigation to which Galaxy Fund II may be a
party. Galaxy Fund II will bear all Excepted Expenses.
DOMESTIC AND/OR GLOBAL CUSTODY FEES:
Domestic and/or global custody fees for each Fund are comprised of an
annual account fee, annual holding fees, and transaction fees (domestic custody)
and/or an annual account maintenance fee and asset and transaction fees per
country (global custody) as more particularly set forth in Exhibit I to this
Appendix II, plus out-of-pocket charges including, but not limited to,
insurance, telephone and script fees.
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EXHIBIT 1 TO APPENDIX II
CUSTODY
DOMESTIC CUSTODY
The fees for Domestic Custody are comprised of three separate charges
as follows:
ANNUAL ACCOUNT FEE
Assets less than $100 million $ 5,000
Assets $100 - 500 million $ 7,500
Assets greater than $500 million $ 15,000
ANNUAL HOLDING FEE
Book Entry (DTC, FBE, etc.) $ 24.00
Physical $ 60.00
PTC $ 72.00
Euroclear/Cedel 3 basis points
TRANSACTION FEE
DTC $ 8.00
Fed Book Entry $ 8.00
Physical/Commercial Paper $ 22.00
Interfund Trades $ 5.00
Options $ 25.00
Futures $ 25.00
Repurchase Agreements $ 15.00
Note: Euroclear/Cedel holdings is based upon dollar value of holdings (i.e.,
asset based charge).
GLOBAL CUSTODY
The fees for Global Custody are comprised of three separate charges as
follows:
ANNUAL ACCOUNT MAINTENANCE FEE
Fees are based on average net assets per Fund and include
management of custodian network, collection and settlement of
principal and income items and monitoring the quality of
services provided. Fees are billable on a monthly basis at the
rate of 1/12 of the annual fee.
FUND NET ASSETS ANNUAL FEE
Up to $100 million $25,000
$100 to $250 million $35,000
$250 to $500 million $45,000
Over $500 million Negotiable
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ASSET AND TRANSACTION FEES PER COUNTRY
BASIS POINT TRANSACTION
COUNTRY CHARGE CHARGE
------- ------ ------
Argentina 22 $75
Australia 7 $30
Austria 12 $60
Belgium 7 $30
Canada 7 $30
Chile 20 $100
China 40 $100
Denmark 16 $60
Finland 16 $60
France 7 $30
Germany 7 $30
Greece 26 $120
Hong Kong 12 $60
India 40 $100
Indonesia 26 $120
Ireland 7 $30
Italy 7 $30
Japan (debt) 12 $60
Japan (equity) 7 $30
Malaysia 22 $120
Mexico 16 $60
Netherlands 7 $30
New Zealand 12 $60
Norway 12 $60
Philippines 22 $120
Singapore 22 $120
South Korea 20 $100
Spain 26 $120
Sweden 7 $30
Switzerland 7 $30
Taiwan 32.75 $120
Thailand 22 $120
Turkey 26 $120
United Kingdom 7 $30
Venezuela 22 $120
Out-of-pocket charges including, but not limited to, taxes, insurance,
telephone, script fees, will be invoiced at cost.
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