Exhibit 13(e)
Form of Administrative Services Agreement
FORM OF ADMINISTRATIVE SERVICES AGREEMENT
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THIS AGREEMENT, made as of the 12th day of November, 2002, by
and among THE PHOENIX EDGE SERIES FUND, a Massachusetts business trust having a
principal place of business located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ (hereinafter referred to as the "Fund"), and PHOENIX LIFE
INSURANCE COMPANY, an insurance company domiciled in the State of New York and
having a place of business located at One American Row, Hartford, Connecticut
(hereinafter referred to as "PLIC"); PHL VARIABLE INSURANCE COMPANY, an
insurance company domiciled in the State of Connecticut and having a place of
business located at One American Row, Hartford, Connecticut; and PHOENIX LIFE
AND ANNUITY COMPANY, an insurance company domiciled in the State of Connecticut
and having a place of business located at One American Row, Hartford,
Connecticut (for the purposes hereof, the immediately preceding insurance
companies shall hereinafter be collectively referred to as the "Insurance
Company").
W I T N E S S E T H:
WHEREAS, Insurance Company issues variable annuity contracts and
variable life policies;
WHEREAS, the separate accounts of the Insurance Company that underlie
said variable annuity contracts and variable life policies invest in shares of
the Fund;
WHEREAS, the Insurance Company is presently providing certain transfer
agent and investor servicing functions for the Fund at no cost to the Fund but
has now determined that it will begin assessing fees for the transfer agent and
investor servicing functions that it currently provides to the Fund;
WHEREAS, the Board of Trustees of the Fund has reviewed comparable fees
charged by other providers of similar transfer agent and investor services and
has determined that the proposed fee to be charged by the Insurance Company is
reasonable and in line with standard industry practice;
WHEREAS, the Board of Trustees of the Fund has also considered that the
services described below will be provided at cost to the Fund by the Insurance
Company;
WHEREAS, the Board of Trustees of the Fund has determined that it is in
the best interest of the Fund, its shareholders and the variable annuity
contract and variable life policyholders to appoint the Variable Products
Operations unit of PLIC, on behalf of each Insurance Company, to provide the
services described below solely with respect to shares of the Fund that are
available to shareholders who own variable annuity contracts or variable life
policies now or hereafter issued by the Insurance Company; and,
WHEREAS, the parties wish to set forth herein their mutual
understandings and agreements.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency whereof being hereby acknowledged and affirmed, the parties hereto
agree as follows:
ARTICLE 1 TERMS OF APPOINTMENT; DUTIES OF INSURANCE COMPANY
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1.01 Subject to the terms and conditions set forth in this
Agreement, the Insurance Company agrees to provide the services described herein
with respect to the authorized and issued shares of beneficial interest of the
Fund (hereinafter collectively and singularly referred to as "Shares"), as owned
by one or more separate accounts now or hereafter established by the Insurance
Company for the benefit of purchasers of variable annuities and/or variable life
insurance contracts ("Shareholders") and as set out in the currently effective
registration statement of the Fund (the prospectus and statement of additional
information portions of such registration statement being referred to as the
"Prospectus").
1.02 Insurance Company agrees that it will perform the following
services pursuant to this Agreement:
(a) In accordance with procedures established from time to time by
agreement between the Fund and Insurance Company, Insurance Company shall:
i) Receive for acceptance, orders for the purchase or
transfer of Shares, and promptly deliver payment and
appropriate documentation therefor to the Custodian
appointed from time to time by the Trustees of the
Fund (which entity or entities, as the case may be,
shall be referred to as the "Custodian");
ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the each
appropriate Shareholder account;
iii) Receive for acceptance, redemption requests and
redemption directions and deliver the appropriate
documentation therefor to the Custodian;
iv) In respect to the transactions in items (i), (ii) and
(iii) above, the Insurance Company shall execute
transactions directly with broker-dealers authorized
by the Fund who shall thereby be deemed to be acting
on behalf of the Fund;
v) At the appropriate time as and when it receives
monies paid to it by any Custodian with respect to
any redemption, pay over or cause to be paid over in
the appropriate manner such monies as instructed by
the redeeming Shareholders;
vi) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
vii) Prepare and transmit payments for dividends and
distributions declared by the Fund, if any;
viii) Maintain records of account for and advise the Fund
and its respective Shareholders as to the foregoing;
and
ix) Record the issuance of Shares and maintain pursuant
to Rule 17Ad-10(e) under the Exchange Act of 1934, a
record of the total number of Shares which are
authorized, issued and outstanding based upon data
provided to it by the Fund. The Insurance Company
shall also provide on a regular basis to the Fund the
total number of Shares which are authorized, issued
and outstanding shall have no obligation, when
recording the issuance of Shares, to monitor the
issuance of such Shares or to take cognizance of any
laws relating to the issue or sale of such Shares,
which functions shall be the sole responsibility of
the Fund.
(b) In addition to, and not in lieu of, the services set forth in
the above paragraph (a), Insurance Company shall: (i) maintain all Shareholder
accounts, prepare Shareholder meeting lists, mail Shareholder reports and
Prospectuses to current Shareholders, compute withholding taxes on U.S. resident
and non-resident alien accounts, prepare and file U.S. Treasury Department Forms
1099 and other appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders, prepare and mail
confirmation forms and statements of account to Shareholders for all purchases,
transfers and redemptions of Shares and other confirmable transactions in
Shareholder accounts, prepare and mail activity statements for Shareholders, and
provide Shareholder account information; and (ii) provide a system which will
enable the Fund to monitor the total number of Shares sold in each State.
(c) Procedures as to whom shall provide certain of the services in
Article 1 may be established from time to time by agreement between the Fund and
Insurance Company pursuant to the attached service responsibility schedule, if
any. The Insurance Company may at times perform only a portion of these services
and the Fund or its agent may perform these services on behalf of the Fund.
ARTICLE 2 FEES AND EXPENSES
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2.01 In consideration of the services provided by the Insurance
Company pursuant to this Agreement, the Fund agrees to pay Insurance Company an
annual maintenance fee for each Shareholder account as set forth in Schedule A
attached hereto and made a part hereof. Annual Maintenance Fees and
out-of-pocket expenses and advances identified under Section 2.02 below may be
changed from time to time subject to mutual written agreement between the Fund
and Insurance Company. Nothing herein shall preclude the assignment of all or
any portion of the foregoing fees and expense reimbursements to any sub-agent
contracted by Insurance Company.
2.02 In addition to the fee paid under Section 2.01 above, the Fund
agrees to reimburse Insurance Company for out-of-pocket expenses or advances
incurred by Insurance Company for the items set out in Schedule A attached
hereto. In addition, any other expenses incurred by
Insurance Company at the request or with the consent of the Fund, will be
reimbursed by the Fund requesting the same.
2.03 The Fund agrees to pay all fees and reimbursable expenses
within five days following the mailing of the respective billing notice. The
above fees will be charged against each Fund's custodian checking account five
(5) days after the invoice is transmitted to the Fund. Postage for mailing of
dividends, proxies, Fund reports and other mailings to all Shareholder accounts
shall be advanced to Insurance Company at least seven (7) days prior to the
mailing date of such materials.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF INSURANCE COMPANY
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The Insurance Company collectively represents and warrants to the Fund
that:
3.01 Each entity is an insurance company organized and existing and in
good standing under the laws of their respective states of domicile.
3.02 It is empowered under applicable laws and by its charter and
by-laws to enter into and perform this Agreement.
3.03 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
3.04 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
3.05 It is exempt from registration as a transfer agent pursuant to
Section 3(a)(25) of the Securities Exchange Act of 1934.
3.06 To the best of the Insurance Company's knowledge and belief, the
Insurance Company has provided pertinent information relating to the cost of the
services provided hereunder and has concluded, based on such information, that
the fees and expenses hereunder are not in excess of the actual costs incurred
by the Insurance Company in providing such services as of the date hereof and in
any event are not disproportionate or excessive in terms of the fees and
expenses that the Fund would otherwise be obligated to pay to third parties for
such services.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF FUND
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The Fund represents and warrants to Insurance Company that:
4.01 All trust proceedings required to enter into and perform this
Agreement have been undertaken and are in full force and effect.
4.02 The Fund is an open-end, diversified management investment
company registered under the Investment Company Act of 1940.
4.03 A registration statement under the Securities Act of 1933 is
currently effective for the Fund that is offering its securities for sale and
such registration statement will remain effective, and appropriate state
securities law filings have been made and will continue to be made, with respect
to all Shares being offered for sale.
ARTICLE 5 DATA ACCESS AND PROPRIETARY INFORMATION
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5.01 The Fund acknowledges that the data bases, computer programs,
screen formats, report formats, interactive design techniques, and documentation
manuals furnished to the Fund by the Insurance Company as part of the Fund's
ability to access certain Fund-related data ("Customer Data") maintained by the
Insurance Company on data bases under the control and ownership of the Insurance
Company or other third party ("Data Access Services") constitute copyrighted,
trade secret, or other proprietary information (collectively, "Proprietary
Information") of substantial value to the Insurance Company or other third
party. In no event shall Proprietary Information be deemed Customer Data. The
Fund agrees to treat all Proprietary Information as proprietary to the Insurance
Company and further agrees that it shall not divulge any Proprietary Information
to any person or organization except as may be provided hereunder. Without
limiting the foregoing, the Fund agrees for itself and its employees and agents:
(a) to access Customer Data solely from location as may be
designated in writing by the Insurance Company and solely in
accordance with the Insurance Company's applicable user
documentation;
(b) to refrain from copying or duplicating in any way the
Proprietary Information;
(c) to refrain from obtaining unauthorized access to any portion
of the Proprietary Information, and if such access is
inadvertently obtained, to inform in a timely manner of such
fact and dispose of such information in accordance with the
Insurance Company's instructions;
(d) to refrain from causing or allowing third-party data acquired
hereunder from being retransmitted to any other computer
facility or other location, except with the prior written
consent of the Insurance Company;
(e) that the Fund shall have access only to those authorized
transactions agreed upon by the parties; and
(f) to honor all reasonable written requests made by the Insurance
Company to protect at the Insurance Company's expense the
rights of the Insurance Company in Proprietary Information at
common law, under federal copyright law and under other
federal or state law.
Each party shall take reasonable efforts to advise its employees of
their obligations pursuant to this Article 5. The obligations of this Article
shall survive any earlier termination of this Agreement.
5.02 If the Fund notified the Insurance Company that any of the Data
Access Services do not operate in material compliance with the most recently
issued user documentation for such services, the Insurance Company shall
endeavor in a timely manner to correct such failure. Organizations from which
the Insurance Company may obtain certain data included in the Data Access
Services are solely responsible for the contents of such data and the Fund
agrees to make no claim against the Insurance Company arising out of the
contents of such third-party data, including, but not limited to, the accuracy
thereof. DATA ACCESS SERVICES AND ALL COMPUTER PROGRAMS AND SOFTWARE
SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS
AVAILABLE BASIS. THE INSURANCE COMPANY EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT
THOSE EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
5.03 If the transactions available to the Fund include the ability to
originate electronic instructions to the Insurance Company in order to (i)
effect the transfer or movement of cash or Shares or (ii) transmit Shareholder
information or other information (such transactions constituting a "COEFI"),
then in such event the Insurance Company shall be entitled to rely on the
validity and authenticity of such instruction without undertaking any further
inquiry as long as such instruction is undertaken in conformity with security
procedures established by the Insurance Company from time to time.
ARTICLE 6 INDEMNIFICATION
6.01 The Insurance Company shall not be responsible for, and the
Fund shall indemnify and hold Insurance Company harmless from and against, any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to:
(a) All Actions of Insurance Company or its agent or
subcontractors required to be taken pursuant to this Agreement, provided that
such actions are taken in good faith and without negligence or willful
misconduct.
(b) The lack of good faith, negligence or willful misconduct by
the Fund which arise out of the breach of any representation or warranty of the
Fund hereunder.
(c) The reliance on or use by the Insurance Company or its agents
or subcontractors of information, records and documents which (i) are received
by Insurance Company or its agents or subcontractors, and (ii) have been
prepared, maintained or performed by the Fund or any other person or firm on
behalf of the Fund including but not limited to any previous Insurance Company
or registrar.
(d) The reliance on, or the carrying out by Insurance Company or
its agents or subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determinations or rulings by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
6.02 Insurance Company shall indemnify and hold the Fund harmless
from and against any and all losses, damages, costs, charges, counsel fees,
payments, expenses and liability arising out of or attributable to any action or
failure or omission to act by Insurance Company, or any sub-agent, as a result
of Insurance Company's, or such sub-agent's, lack of good faith, negligence or
willful misconduct.
6.03 At any time the Insurance Company may apply to any officer of
the Fund for instructions, and may consult with legal counsel with respect to
any matter arising in connection with the services to be performed by Insurance
Company under this Agreement, and Insurance Company and its agents or
subcontractors shall not be liable and shall be indemnified by the Fund for any
action taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel. The Insurance Company, its agents and subcontractors
shall be protected and indemnified in acting upon any paper or document
furnished by or on behalf of the Fund, reasonably believed to be genuine and to
have been signed by the proper person or persons, or upon any instruction,
information, data, records or documents provided Insurance Company or its agents
or subcontractors by machine readable input, telex, CRT data entry or other
similar means authorized by the Fund, and shall not be held to have notice of
any change of authority of any person, until receipt of written notice thereof
from the Fund. Insurance Company, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the officers of
the Fund, and the proper countersignature of any former Insurance Company or
registrar, or of a co-Insurance Company or co-registrar.
6.04 In order that the indemnification provisions contained in this
Article 6 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in the
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6.05 Insurance Company hereby expressly acknowledges that recourse
against the Fund, if any, shall be subject to those limitations provided by
governing law and the Declaration of Trust of the Fund, as applicable, and
agrees that obligations assumed by the Fund hereunder shall be limited in all
cases to the Fund and its respective assets. Insurance Company shall not seek
satisfaction of any such obligation from the shareholders or any shareholder of
the Fund, nor shall the Insurance Company seek satisfaction of any obligations
from the Trustees/Directors or any individual Trustee/Director of the Fund.
ARTICLE 7 STANDARD OF CARE
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7.01 The Insurance Company shall at the times act in good faith and
agrees to use its best efforts within reasonable limits to insure the accuracy
of all services performed under this Agreement, but assumes no responsibility
and shall not be liable for loss or damage due to errors
unless said errors are caused by its negligence, bad faith, or willful
misconduct of that of its employees.
ARTICLE 8 COVENANTS
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8.01 The Fund shall promptly furnish to Insurance Company the
following:
(a) A certified copy of the resolution of its Trustees authorizing
the appointment of Insurance Company and the execution and delivery of this
Agreement.
(b) A copy of the Declaration of Trust and all amendments thereto
of the Fund.
8.02 The Insurance Company hereby agrees to establish and maintain
facilities and procedures reasonably acceptable to the Fund for safekeeping of
stock certificates, check forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping account of, such
certificates, forms and devices.
8.03 The Insurance Company shall keep records relating to the
services to be performed hereunder, in the form and manner as it may deem
advisable. To the extent required by Section 31 of the Investment Company Act of
1940, as amended, and the Rules thereunder, Insurance Company agrees that all
such records prepared or maintained by Insurance Company relating to the
services to be performed by Insurance Company hereunder are the property of the
Fund and will be preserved, maintained and made available in accordance with
such Section and Rules, and will be surrendered promptly to the Fund on and in
accordance with its request.
8.04 The parties agree that all books, records, information and
data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
8.05 In case of any requests or demands for the inspection of the
Shareholder records, Insurance Company will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
inspection. Insurance Company reserves the right, however, to exhibit the
Shareholder records to any person whenever it is advised by its counsel that it
may be held liable for the failure to exhibit the Shareholder records to such
person.
8.06 The Fund shall have the right, with reasonable notice to the
Insurance Company, during normal business hours, at its sole cost, to audit on a
confidential basis, any relevant books and records of the Insurance Company or
its sub-licensees in order to ensure that the type and amount of fees calculated
or stated to be payable by the Fund are complete and accurate.
ARTICLE 9 TERMINATION
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9.01 This Agreement shall become effective on the date set
forth on the first page of this Agreement. Unless terminated as hereinafter
provided, this Agreement shall remain in full force and effect until November
30, 2003, and thereafter only so long as its continuance has been specifically
approved at least annually by the Trustees of the Fund in accordance with
Section
15(a) of the Investment Company Act of 1940, and by the majority vote of the
disinterested Trustees in accordance with the requirements of Section 15(c)
thereof.
9.02 Notwithstanding the foregoing, this Agreement shall terminate
upon the earlier of the date one hundred twenty (120) days after written notice
is sent from one party to the other requesting termination of this Agreement or
the date upon which any law, regulation or interpretation thereof is rendered
that would have the effect of interpreting this Agreement as a joint enterprise,
joint arrangement or profit-sharing plan under governing law or otherwise
requiring the Insurance Company to obtain any approvals or registrations not
otherwise contemplated hereunder.
9.03 Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and material will
be borne by the Fund.
ARTICLE 10 ASSIGNMENT
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10.01 Except as provided in Section 10.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
10.03 The Insurance Company may, without further consent on the part
of the Fund, subcontract for the performance hereof with one or more sub-agents;
provided, however, that Insurance Company shall be as fully responsible to the
Fund for the acts and omissions of any subcontractor as it is for its own acts
and omissions.
ARTICLE 11 AMENDMENT
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11.01 This Agreement may be amended or modified by a written agreement
executed by the parties and authorized or approved by a resolution of the
Trustees of the Fund.
ARTICLE 12 CONNECTICUT LAW TO APPLY
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12.01 This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of Connecticut.
ARTICLE 13 FORCE MAJEURE
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13.01 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
ARTICLE 14 CONSEQUENTIAL DAMAGES
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14.01 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
act or failure to act hereunder.
ARTICLE 15 MERGER OF AGREEMENT
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15.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
15.02 This Agreement shall not be merged with or construed in
conjunction with any other current or future agreement between the Fund and
Phoenix Equity Planning Corporation, each and all of which agreements shall at
all times remain separate and distinct.
ARTICLE 16 LIMITATIONS OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS
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16.01 Notice is hereby given that the Agreement and Declaration of
Trust is on file with the Secretary of the Commonwealth of Massachusetts and was
executed on behalf of the Trustees of the Trust as Trustees and not individually
and that the obligations of this instrument are not binding upon any of the
Trustees or Shareholders individually but are binding only upon the assets and
property of the Fund.
ARTICLE 17 COUNTERPARTS
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17.01 This Agreement may be executed by the parties hereto on any
number of counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
ARTICLE 18 MISCELLANEOUS
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18.01 This Agreement shall not be binding upon a party unless
executed by an authorized officer of that party. This Agreement and the
obligations hereunder are subject to the following conditions precedent: (a)
approval by the Fund board of trustees at a meeting duly called and convened for
such purpose; and (b) approval by, or filing with, as appropriate, all requisite
regulatory authorities, including, without limitation, the Connecticut and New
York insurance departments.
18.02 Except with respect to the parties, nothing herein contained
shall be deemed to establish any rights in favor of any third parties.
18.03 No amendment to this Agreement shall be effective unless in
writing and signed by the party against whom enforcement therefor is sought.
18.04 No waiver of any provision of this Agreement shall be
effective unless contained in a writing executed by the party against whom
enforcement thereof is sought. A waiver of any specific term hereof shall not be
deemed to constitute a waiver of any other term hereof, nor shall
a waiver on any one or more occasions be deemed to imply or constitute a waiver
of the same or any other term on any other occasion.
18.05 If any part of this Agreement shall be held to be void or
otherwise unenforceable, such part shall be treated as severable, leaving valid
the remainder of this Agreement in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
THE PHOENIX EDGE SERIES FUND
By:
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: President
ATTEST:
By:
---------------------------------
Name:
Title:
PHOENIX LIFE INSURANCE COMPANY
ON BEHALF OF THE VARIABLE PRODUCTS
DIVISION THEREOF
By:
---------------------------------
Name:
Title:
ATTEST:
By:
---------------------------------
Name:
Title:
PHL VARIABLE INSURANCE COMPANY
By:
--------------------------------
Name:
Title:
ATTEST:
By:
---------------------------------
Name:
Title:
PHOENIX LIFE AND ANNUITY COMPANY
By:
---------------------------------
Name:
Title:
ATTEST:
By:
---------------------------------
Name:
Title:
SCHEDULE A
FEE SCHEDULE (1/1/03 - 12/31/03)
Annual Maintenance Fees shall be payable monthly in arrears and shall be based
on the following formula:
AMFSeries = AUM x ICF
where, AMFSeries refers to the Annual Maintenance Fee levied with
respect to each respective Series,
AUM refers to the average assets under management for each
Series as of the first day of each month during the term
hereof.
ICF refers to the internal costs factor determined from year
to year based upon such factors as proportionate investor
inquiry support; shareholder trading, subsequent deposit,
transfer and surrender support; confirmation activities;
quarterly statement processing; and, internet support. The ICF
for the 2003 fiscal year shall be 0.077%.
Out-of-Pocket Expenses
----------------------
Out-of-pocket expenses include, but are not limited to: printing, postage and
handling of Fund prospectuses, statements of additional information and annual
reports. The estimated out of pocket expenses for the 2002 fiscal year was $1.2
million.