Exhibit (h)(9)
VARIABLE INSURANCE FUNDS
EXPENSE LIMITATION AGREEMENT
THIS AGREEMENT, dated as of May 1, 2005, and amended and restated
effective January 1, 2006, is made and entered into by and between Variable
Insurance Funds (the "Trust"), on behalf of certain investment portfolios of the
Trust set forth in Schedule A (each a "Fund" and collectively the "Funds"), and
Fifth Third Asset Management Inc. (the "Advisor").
WHEREAS, the Advisor has been appointed the investment adviser to the
Funds pursuant to an Investment Advisory Agreement dated October 1, 2001,
between the Trust, on behalf of the Funds, and the Advisor (the "Advisory
Agreement"); and
WHEREAS, the Trust and the Advisor desire to enter into the arrangements
described herein relating to certain expenses for certain of the Funds;
NOW, THEREFORE, the Trust and the Advisor hereby agree as follows:
1. The Advisor hereby agrees, subject to Section 2 hereof, to reduce the
fees payable to it under the Advisory Agreement (but not below zero) and make
any additional payments to the extent necessary to limit the operating expenses
(exclusive of brokerage costs, interest, taxes, dividends, litigation,
indemnification, and extraordinary expenses (as determined under generally
accepted accounting principles)) ("Operating Expenses") of each Fund to an
annual rate (as a percentage of the Fund's average daily net assets) as set
forth on Schedule A ("Expense Limit") for a three-year period ("Expense
Limitation Term").
2. The Trust agrees to pay the Advisor the amount of advisory fees that,
but for Section 1 hereof, would have been payable by each Fund to the Advisor
pursuant to the Advisory Agreement, and reimburse any additional payments
remitted by the Advisor (the "Deferred Expenses"), subject to the limitations
provided in this Section. Such repayment shall be made monthly, but only if the
Operating Expenses of that Fund, without regard to such repayment, are at an
annual rate (as a percentage of the average daily net assets of the Fund) less
than the Expense Limit for payments made through the Expense Limitation Term.
Furthermore, the amount of Deferred Expenses paid by a Fund in any subsequent
month shall be limited so that the sum of (a) the amount of such payment and (b)
the other Operating Expenses of the Fund do not exceed the Expense Limit for
payments made through the Expense Limitation Term, or such rate as may be agreed
upon from time to time for payments made after such date. Deferred Expenses
shall not be payable by a Fund to the extent that the amounts payable by it
pursuant to the immediately preceding two sentences during the period ending
three years after the expiry of the Expense Limitation Term (the "Recoupment
Period") are not sufficient to pay such Deferred Expenses. In no event will a
Fund be obligated to pay any fees waived or deferred by the Advisor with respect
to any other series of the Trust.
3. This Agreement shall automatically renew effective May 1 of every year,
until such time as the Advisor provides written notice of nonrenewal to the
Trust. Such annual renewal will have the effect of extending the then-existing
Expense Limitation Term and Recoupment Period for an additional one-year period.
Any notice of nonrenewal of this Agreement shall be prospective only, and shall
not affect the Advisor's or the Trust's existing obligations under this
Agreement.
4. The parties agree that this Agreement shall supersede any prior expense
limitation agreement between the Trust and the Advisor
5. A copy of the Declaration of Trust establishing the Trust is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this Agreement is hereby executed by the Trust on behalf of the Funds
by an officer of the Trust as an officer and not individually, and that the
obligations of or arising out of this Agreement are not binding upon any of the
Trustees, officers or shareholders individually, but are binding only upon the
assets and property belonging to the Fund to which such obligation relates.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
VARIABLE INSURANCE FUNDS FIFTH THIRD ASSET MANAGEMENT INC.
By: ________________________________ By: _______________________________
Name: ______________________________ Name: _____________________________
Title: _____________________________ Title: ____________________________
SCHEDULE A
DATED JANUARY 1, 2006
FUND NAME EXPENSE LIMIT
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Fifth Third Quality Growth VIP Fund 1.00%
Fifth Third Balanced VIP Fund 0.95%
Fifth Third Mid Cap VIP Fund 1.00%
Fifth Third Disciplined Value VIP Fund 1.00%
