1
Exhibit 99(g)(1)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of this 1st day of June, 2000, by and between
BB&T Funds, a Massachusetts business trust (the "Company"), having its principal
place of business at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and BISYS Fund
Services Limited Partnership d/b/a BISYS Fund Services (the "Administrator"), an
Ohio limited partnership having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares of beneficial interest or common
stock ("Shares"); and
WHEREAS, the Company desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
each series of the Company, all as now or hereafter may be established from time
to time ("Portfolios"), on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company and the Administrator hereby agree as
follows:
ARTICLE 1. RETENTION OF THE ADMINISTRATOR. The Company hereby retains
the Administrator to act as the administrator of the Portfolios and to furnish
the Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Company in any way and shall
not be deemed an agent of the Company.
ARTICLE 2. ADMINISTRATIVE SERVICES. The Administrator shall perform or
supervise the performance by others of other administrative services in
connection with the operations of the Portfolios, and, on behalf of the Company,
will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Portfolios' operations. The
Administrator shall provide the Trustees of the Company with such reports
regarding investment performance as they may reasonably request but shall have
no responsibility for supervising the performance by any investment adviser or
sub-adviser of its responsibilities.
The Administrator shall provide the Company with regulatory reporting,
all necessary office space, equipment, personnel, compensation and facilities
(including Facilities for Shareholders' and Trustees') for handling the affairs
of the Portfolios and such other services as the Administrator shall, from time
to time, determine to be necessary to perform its obligations
2
under this Agreement. In addition, at the request of the Trustees, the
Administrator shall make reports to the Company's Trustees concerning the
performance of its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate contractual Company expenses and control all
disbursements for the Company, and as appropriate, compute the
Company's yields, total return, expense ratios, portfolio turnover rate
and, if required, portfolio average dollarweighted maturity;
(b) assist Company counsel with the preparation of prospectuses,
statements of additional information, registration statements and proxy
materials;
(c) prepare such reports, notice filing forms and other documents
(including reports regarding the sale and redemption of Shares as may
be required in order to comply with Federal and state securities law)
as may be necessary or desirable to make notice filings relating to the
Company's Shares with state securities authorities, monitor the sale of
Company Shares for compliance with state securities laws, and file with
the appropriate state securities authorities the registration
statements and reports for the Company and the Company's Shares and all
amendments thereto, as may be necessary or convenient to qualify and
keep effective the Company and the Company's Shares with state
securities authorities to enable the Company to make a continuous
offering of its Shares;
(d) develop and prepare, with the assistance of the Company's
investment adviser and independent auditors, communications to
Shareholders, including the semi-annual and annual reports to
Shareholders;
(e) supervise the Company's transfer agent with respect to the payment
of dividends and other distributions to Shareholders;
(f) calculate performance data of the Portfolios for dissemination to
information services covering the investment company industry;
(g) coordinate and supervise the preparation and filing of the
Company's tax returns;
(h) examine and review the operations and performance of the various
organizations providing services to the Company or any Portfolio of the
Company, including, without Stations the Company's investment adviser,
distributor, custodian, fund accountant, transfer agent, outside legal
counsel and independent public accountants, and at the request of the
Trustees, report to the Board on the performance of organizations;
(i) assist with the design, development, and operation of the
Portfolios including new classes, investment objectives, policies and
structure;
-2-
3
(j) provide individuals reasonably acceptable to the Company's Trustees
to serve as officers of the Company, who will be responsible for the
management of certain of the Company's affairs as determined by the
Company's Trustees;
(k) advise the Company and its Trustees on matters concerning the
Company and its affairs;
(1) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the Company in
accordance with the requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act as such bonds and policies are approved by the Company's
Trustees;
(m) monitor and advise the Company and its Portfolios on their
registered investment company status under the Internal Revenue Code of
1986, as amended;
(n) perform all administrative services and functions of the Company
and each Portfolio to the extent administrative services and functions
are not provided to the Company or such Portfolio pursuant to the
Company's or such Portfolio's investment advisory agreement,
distribution agreement, custodian agreement, transfer agent agreement
and fund accounting agreement;
(o) furnish advice and recommendations with respect to other aspects of
the business and affairs of the Portfolios as the Company and the
Administrator shall determine desirable; and
(p) prepare and file with the SEC the semi-annual report for the
Company on Form N-SAR and all required notices pursuant to Rule 24f-2.
(q) assist in monitoring and developing compliance procedures for each
Portfolio which will include, among other matters, procedures to
monitor compliance with each Portfolio's investment objective,
policies, restrictions, tax matters and applicable laws and
regulations;
(r) provide legal support to the Company with respect to regulatory
matters including: monitoring regulatory and legislative developments
which may affect the Company and assisting in the strategic response to
such developments, assisting the Company in routine regulatory
examinations or investigations of the Company, and working closely with
outside counsel to the Company in response to any litigation or
non-routine regulatory matters; and
(s) assist the Company in preparing for Board meetings by (i)
coordinating board book production and distribution, (ii) assisting in
the preparation of Board agendas, (iii) attending Board meetings, (iv)
preparing the BISYS section of Board materials,
-3-
4
(v) preparing Board meeting materials, including but not limited to,
materials relating to annual contract approvals and 12b-1 plan
approvals, as agreed upon by the parties,
The Administrator shall perform such other services for the Company
that are mutually agreed upon by the parties from time to time for such
additional fees, if any, that are agreed upon by the parties.
ARTICLE 3. ALLOCATION OF CHARGES AND EXPENSES.
(A) THE ADMINISTRATOR. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Company as well as all Trustees of the
Company who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Company retained by the Trustees of the
Company to perform services on behalf of the Company.
(B) THE COMPANY. The Company assumes and shall pay or cause to be paid
all other expenses of the Company not otherwise allocated herein, including,
without Stations organization costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the Shares under
Federal and state securities laws, fees and out-of-pocket expenses of Trustees
who are not affiliated persons of the Administrator or the Investment Adviser to
the Company or any affiliated corporation of the Administrator or the Investment
Adviser, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Company.
ARTICLE 4. COMPENSATION OF THE ADMINISTRATOR.
(A) ADMINISTRATION FEE. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Company shall pay to the Administrator compensation at an annual
rate specified in the Omnibus Fee Agreement by and among the Company, BISYS Fund
Services Ohio, Inc. and the Administrator dated as of June 1, 2000, (the "Fee
Agreement"). in addition to paying BISYS the fees set forth in the Fee
Agreement, the Company shall also reimburse the Administrator for its reasonable
out-of-pocket expenses, including but not limited to the travel and lodging
expenses incurred by officers and employees of the Administrator in connection
with attendance at Board meetings.
-4-
5
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
(B) SURVIVAL OF COMPENSATION RIGHTS. All rights of compensation under
this Agreement for services performed as of the termination date shall survive
the termination of this Agreement.
ARTICLE 5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable law which cannot be waived or modified
hereby. (As used in this Article 5, the term "Administrator" shall include
partners, officers, employees and other agents of the Administrator as well as
the Administrator itself.)
So long as the Administrator acts in good faith and with due diligence
and without negligence, the Company assumes full responsibility and shall
indemnify the Administrator and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of the
Administrator's actions taken or nonactions with respect to the performance of
services hereunder. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Company may be asked to indemnify or hold the
Administrator harmless, the Company shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator Will use all reasonable care to identify and
notify the Company promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Company, but failure to do so in good faith shall not affect the rights
hereunder.
The Company shall be entitled to participate at its own expense or, if
it so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision.
-5-
6
If the Company elects to assume the defense of any such claim, the defense shall
be conducted by counsel chosen by the Company and satisfactory to the
Administrator, whose approval shall not be unreasonably withheld. In the event
that the Company elects to assume the defense of any suit and retain counsel,
the Administrator shall bear the fees and expenses of any additional counsel
retained by it. If the Company does not elect to assume the defense of a suit,
it will reimburse the Administrator for the reasonable fees and expenses of any
counsel retained by the Administrator.
The Administrator may apply to the Company at any time for instructions
and may consult counsel for the Company or its own counsel and with accountants
and other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons. The Administrator will not be held to have
notice of any change of authority of any officers, employees or agents of the
Company until receipt of written notice thereof from the Company.
ARTICLE 6. ACTIVITIES OF THE ADMINISTRATOR. The services of the
Administrator rendered to the Company are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that directors, officers, employees
and Shareholders of the Company are or may be or become interested in the
Administrator, as officers, employees or otherwise and that partners, officers
and employees of the Administrator and its counsel are or may be or become
similarly interested in the Company, and that the Administrator may be or become
interested in the Company as a Shareholder or otherwise.
ARTICLE 7. DURATION OF THIS AGREEMENT. The Term of this Agreement shall
be as specified in Schedule A hereto.
ARTICLE 8. ASSIGNMENT. This Agreement shall not be assignable by either
party without the written consent of the other party; provided, however, that
the Administrator may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder. The
Administrator shall not, however, be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that the Administrator shall be responsible, to the extent provided in Article 5
hereof, for all acts of such subcontractor as if such acts were its own. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
-6-
7
ARTICLE 9. AMENDMENTS. This Agreement, or any term thereof, may be
modified only by a written amendment, signed by the party against whom
enforcement of such modification is sought.
ARTICLE 10. CERTAIN RECORDS. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Company shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Company and will be made
available to or surrendered promptly to the Company on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Company and follow the
Company's instructions as to permitting or refusing such inspection; provided
that the Administrator may exhibit such records to any person in any case where
it is advised by its counsel that it may be held liable for failure to do so,
unless (in cases involving potential exposure only to civil liability) the
Company has agreed to indemnify the Administrator against such liability.
ARTICLE 11. DEFINITIONS OF CERTAIN TERMS. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 12. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified 'mail, postage prepaid, addressed by the party giving notice to the
other party at the following address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
or at such other address as such party may from time to time specify in writing
to the other party pursuant to this Section.
ARTICLE 13. GOVERNING LAW AND MATTERS RELATING TO THE COMPANY AS A
MASSACHUSETTS BUSINESS TRUST. This Agreement shall be governed by the laws of
The Commonwealth of Massachusetts. The names "BB&T Funds" and "Trustees of BB &
T Funds" refer respectively to the Company created and the Trustees, as trustees
but not individually or personally, acting from time to time under an Agreement
and Declaration of Trust dated as of October 1, 1987 to which reference is
hereby made and a copy of which is on file at the office of the Secretary of
State of The Commonwealth of Massachusetts and elsewhere as required by law, and
to any and all amendments thereto so filed or hereafter filed. The obligations
of "BB&T Funds" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, shareholders or
representatives of the Company personally, but bind only the assets of the
Company, and all persons dealing with any series of shares of the Company must
look solely to the assets of the Company belonging to such series for the
enforcement of any claims against the Company.
ARTICLE 14. MULTIPLE ORIGINALS. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
-7-
8
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
BB&T FUNDS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: President
-----------------------
BISYS FUND SERVICES
LIMITED PARTNERSHIP
By: BISYS Fund Services, Inc. General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Title: Executive Vice-President
-----------------------
-8-
9
SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF JUNE 1, 2000
BETWEEN
BB&T FUNDS
AND
BISYS FUND SERVICES LIMITED PARTNERSHIP
Portfolios: This Agreement shall apply to all Portfolios of the Company, either
now or hereafter created. The current Portfolios of the Company are
set forth below:
BB&T U.S. Treasury Money Market Fund
BB&T Short Intermediate U. S. Government Income Fund
BB&T Intermediate U. S. Government Bond Fund
BB&T Growth and Income Stock Fund
BB&T North Carolina Intermediate Tax-Free Fund
BB&T Balanced Fund
BB&T Small Company Growth Fund
BB&T International Equity Fund
BB&T Capital Manager Conservative Growth Fund
BB&T Capital Manager Moderate Growth Fund
BB&T Capital Manager Growth Fund
BB&T Prime Money Market Fund
BB&T Large Company Growth Fund
BB&T South Carolina Intermediate Tax-Free Fund
BB&T Virginia Intermediate Tax-Free Fund
BB&T Equity Index Fund
BB&T Intermediate Corporate Bond Fund
BB&T Tax-Free Money Market Fund
Term: Pursuant to Article 7, the term of this Agreement shall commence on
June 1, 2000 and shall remain in effect through May 31, 2005 ("Initial
Term"). Thereafter, unless otherwise terminated as provided herein,
this Agreement shall be renewed automatically for successive one-year
periods ("Rollover Periods"). This Agreement may be terminated without
penalty (i) by provision of a notice of nonrenewal in the manner set
forth below, (ii) by mutual agreement of the parties or (iii) for
"cause," as defined below, upon the provision of sixty (60) days
advance written notice by the party alleging cause. Written notice of
nonrenewal must be provided at least sixty (60) days prior to the end
of the Initial Term or any Rollover Period, as the case may be.
-9-