Exhibit (h)(1)
ADMINISTRATION AGREEMENT
AGREEMENT dated as of July 1, 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 semi-annual 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 Section 31(a) of the 1940 Act).
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.
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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 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.
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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.
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
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By: ▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: President
FLEET INVESTMENT ADVISORS, INC.
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By:
Title:
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APPENDIX I
The Galaxy Fund
The Galaxy VIP Fund
Galaxy Fund II
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 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 sub-adviser 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.
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/Commerical 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
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
Philipines 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.