FUND ACCOUNTING AND PRICING AGENT AGREEMENT
This Fund Accounting and Pricing Agent Agreement (the "Agreement") is made
as of January 13, 1998, by and between G.T. Global Variable Investment Series
(the "Company") and Chancellor LGT Asset Management, Inc. ("Chancellor LGT").
WHEREAS, the Company is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company;
WHEREAS, the Company currently operates five separate mutual funds, each
organized as a separate and distinct series consisting of shares of beneficial
interest (such existing funds and such funds as may hereafter be established
being referred to in this Agreement as the "Funds" and singly as a "Fund");
WHEREAS, the Company is part of a complex of investment companies that are
managed and/or administered by Chancellor LGT and with which Chancellor LGT has
entered into Fund Accounting and Pricing Agent Agreements (the "GT Global Group
of Funds");
WHEREAS, the Company desires to retain Chancellor LGT to act as its
accounting and pricing agent, and Chancellor LGT is willing to act in such
capacities.
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions hereinafter set forth, the Company and Chancellor LGT hereby agree as
follows:
SECTION 1. APPOINTMENT. The Company hereby appoints Chancellor LGT
to act as the accounting and pricing agent for each Fund for the period and on
the terms and conditions set forth in this Agreement. Chancellor LGT hereby
accepts such appointment and agrees to render the services set forth for the
compensation herein provided.
SECTION 2. DEFINITIONS. As used in this Agreement and in addition to
the terms defined elsewhere herein, the following terms shall have the meanings
assigned to them in this Section:
(a) "Authorized Person" means any officer of the Company and any
other person, whether or not any such person is an officer or employee of
the Company, duly authorized by the Board of Trustees (the "Board"), the
President or any Vice President of the Fund to give Oral and/or Written
Instructions on behalf of the Company or any Fund.
(b) "Commission" means the Securities and Exchange Commission.
(c) "Custodian" means the custodian or custodians employed by
the Company to maintain custody of the Fund's assets.
(d) "Governing Documents" means the Declaration of Trust,
By-Laws and other applicable charter documents of the Company, all as they
may be amended from time to time.
(e) "Oral Instruction" means oral instructions actually received
by Chancellor LGT from an Authorized Person or from a person reasonably
believed by Chancellor LGT to be an Authorized Person, provided that, any
Oral Instruction shall be promptly confirmed by Written Instructions.
(f) "Prospectus" means the current prospectus and statement of
additional information of a Fund, taken together.
(g) "Shares" means shares of beneficial interest of any of the
Funds.
(h) "Shareholder" means any owner of Shares.
(i) "Written Instructions" means written instructions delivered
by hand, mail, tested telegram or telex, cable or facsimile sending device
received by Chancellor LGT and signed by an Authorized Person.
SECTION 3. COMPLIANCE WITH LAWS, ETC. In performing its
responsibilities hereunder, Chancellor LGT shall comply with all terms and
provisions of the Governing Documents, the Prospectus and all applicable state
and federal laws including, without limitation, the 1940 Act and the rules and
regulations promulgated by the Commission thereunder.
SECTION 4. SERVICES. In consideration of the compensation payable
hereunder and subject to the supervision and control of the Company's Boards,
Chancellor LGT shall provide the following services to the Funds:
(a) PRICING AGENT. As pricing agent, Chancellor LGT shall:
(1) Obtain security market quotes from services approved by the
investment manager of the Funds or, if such quotes are unavailable,
then obtain such prices from the investment manager of the Funds or
from such sources as the investment manager may direct, and, in either
case, calculate the market value of the Funds' investments; and
(2) Value the assets of the Funds and compute the net asset
value per Share of the Funds at such dates and times and in the manner
specified in the then currently effective Prospectus and transmit to
the Funds' investment manager.
(b) ACCOUNTING AGENT. As fund accounting agent, Chancellor LGT
shall:
- 2 -
(1) Calculate the net income of each Fund;
(2) Calculate capital gains or losses for each Fund from the
sale or disposition of assets, if any;
(3) Maintain the general ledger and other accounts, books and
financial records of the Company, as required under Section 31(a) of
the 1940 Act and the rules promulgated by the Commission thereunder in
connection with the services provided by Chancellor LGT;
(4) Perform the following functions on a daily basis:
(A) journalize each Fund's investment, capital share
and income and expense activities;
(B) reconcile cash and investment balances of each Fund
with the Custodian and provide the Funds' investment manager with
the beginning cash balance available for investment purposes and
update the cash availability throughout the day as required by
the investment manager;
(C) verify investment buy/sell trade tickets received from
a Fund's investment manager and transmit trades to a Fund's
Custodian for proper settlement;
(D) maintain individual ledgers for investment securities;
(E) maintain historical tax lots for investment securities;
(F) calculate various contractual expenses (e.g., advisory
and custody fees);
(G) post to and prepare the Funds' statement of assets and
liabilities and statement of operations; and
(H) monitor expense accruals and notify an Authorized
Person of any proposed adjustments;
(5) Receive and act upon notices, Oral and Written Instructions,
certificates, instruments or other communications from a Fund's
shareholder servicing and transfer agent;
(6) Assist in the preparation of financial statements
semiannually
- 3 -
which will include the following items:
(A) schedule of investments;
(B) statement of assets and liabilities;
(C) statement of operations;
(D) changes in net assets;
(E) cash statement; and
(F) schedule of capital gains and losses;
(7) Prepare monthly security transaction listings;
(8) Prepare quarterly broker security transactions summaries;
and
(9) At the reasonable request of the Company, assist in the
preparation of various reports or other financial documents required
by federal, state and other appropriate laws and regulations.
SECTION 5. COMPENSATION. As compensation for the services rendered
by Chancellor LGT hereunder during the term of the Agreement, each Fund shall
pay to Chancellor LGT monthly such fees as shall be agreed to from time to time
by the Company and Chancellor LGT, in writing and attached hereto as Schedule A.
In addition, as may be agreed to from time to time in writing by the Company and
Chancellor LGT, each Fund shall reimburse Chancellor LGT for certain expenses
that it incurs in rendering services with respect to that Fund under this
Agreement.
SECTION 6. RELIANCE BY CHANCELLOR LGT ON INSTRUCTIONS. Unless
otherwise provided in this Agreement, Chancellor LGT shall act only upon Oral or
Written Instructions. Chancellor LGT shall be entitled to rely upon any such
Instructions actually received by it under this Agreement. The Company agrees
that Chancellor LGT shall incur no liability to the Company or any of the Funds
in acting upon Oral or Written Instructions given to Chancellor LGT hereunder,
provided that, such Instructions reasonably appear to have been received from an
Authorized Person.
SECTION 7. COOPERATION WITH AGENTS OF THE COMPANY. Chancellor LGT
shall cooperate with the Company's agents and employees, including, without
limitation, their independent accountants, and shall take all reasonable action
in the performance of its obligations under this Agreement to assure that all
necessary information is made available to such agents to the extent necessary
in the performance of their duties to the Company.
- 4 -
SECTION 8. CONFIDENTIALITY. Chancellor LGT, on behalf of itself and
its employees, agrees to treat confidentially all records and other information
relating to the Company and the Funds except when requested to divulge such
information by duly constituted authorities provided that notification and prior
approval is obtained from the Company, which approval shall not be unreasonably
withheld and may not be withheld if Chancellor LGT, in its judgment, may be
subject to civil or criminal contempt proceedings for failure to comply.
SECTION 9. STANDARD OF CARE. In the performance of its
responsibilities hereunder, Chancellor LGT shall exercise care and diligence in
the performance of its duties and act in good faith and use its best efforts to
ensure the accuracy and completeness of all services under this Agreement. In
performing services hereunder, Chancellor LGT:
(a) shall be under no duty to take any action on behalf of the
Company or the Funds except as specifically set forth herein or as may be
specifically agreed to by Chancellor LGT in writing, and in computing the
net asset value per Share of a Fund, Chancellor LGT may rely upon any
information furnished to it including, without limitation, information (1)
as to the accrual of liabilities of a Fund and as to liabilities of a Fund
not appearing on the books of account kept by Chancellor LGT, (2) as to the
existence, status and proper treatment of reserves, if any, authorized by a
Fund, (3) as to the sources of quotations to be used in computing net asset
value, (4) as to the fair value to be assigned to any securities or other
property for which price quotations are not readily available and (5) as to
the sources of information with respect to "corporate actions" affecting
portfolio securities of a Fund (information as to "corporate actions" shall
include information as to dividends, distributions, interest payments,
prepayments, stock splits, stock dividends, rights offerings, conversions,
exchanges, recapitalizations, mergers, redemptions, calls, maturity dates
and similar actions, including ex-dividend and record dates and the amounts
and terms thereof);
(b) shall be responsible and liable for all losses, damages and
costs (including reasonable attorneys' fees) incurred by the Company or any
Fund which is due to or caused by Chancellor LGT's negligence in the
performance of its duties under this Agreement or for Chancellor LGT's
negligent failure to perform such duties as are specifically assumed by
Chancellor LGT in this Agreement, provided that, to the extend that duties,
obligations and responsibilities are not expressly set forth in this
Agreement, Chancellor LGT shall not be liable for any act or omission that
does not constitute willful misfeasance, bad faith or negligence on the
part of Chancellor LGT or reckless disregard by Chancellor LGT of such
duties, obligations and responsibilities; and
(c) without limiting the generality of the foregoing,
Chancellor LGT shall not, in connection with Chancellor LGT's duties under
this Agreement, be under any duty or obligation to inquire into and shall
not be liable for or in respect of:
(1) the validity or invalidity or authority or lack of
authority of any Oral or Written Instruction, notice or other
instrument which conforms
- 5 -
to the applicable requirements of this Agreement, if any and that
Chancellor LGT reasonably believes to be genuine; and
(2) delays or errors or loss of data occurring by reason of
circumstances beyond Chancellor LGT's control including, without
limitation, acts of civil or military authorities, national
emergencies, labor difficulties, fire, mechanical breakdown,
denial of access, earthquake, flood or catastrophe, acts of God,
insurrection, war, riots, or failure of the mails,
transportation, communication or power supply.
Notwithstanding any other provisions of this Agreement, the following provisions
shall apply with respect to Chancellor LGT's computation of a Fund's net asset
value: Chancellor LGT shall be held to the exercise of reasonable care in
computing and determining net asset value as provided in Section 4(a), above,
but shall not be held accountable or liable for any losses, damages or expenses
of a Fund or any Shareholder or former Shareholder may incur arising from or
based upon errors or delays in the determination of such net asset value unless
such error or delay was due to Chancellor LGT's negligence or willful
misfeasance in the computation and determination of such net asset value. The
parties hereto acknowledge, however, that Chancellor LGT causing an error or
delay in the determination of net asset value may, but does not in an of itself,
constitute negligence or willful misfeasance. In no event shall Chancellor LGT
be liable or responsible to the Company or a Fund or any other party for any
error or delay which continued or was undetected after the date of an audit of
the Company or any Fund performed by the certified public accountants employed
by the Company if, in the exercise of reasonable care in accordance with
generally accepted accounting principles, such accountants should have become
aware of such error or delay in the course of performing such audit. Chancellor
LGT's liability for any such negligence or willful misfeasance which results in
an error in determination of such net asset value be limited to the direct
out-of-pocket loss a Fund and/or any Shareholder or former Shareholder shall
actually incur.
Without limiting the generality of the foregoing, Chancellor LGT shall
not be held accountable or liable to a Fund a Shareholder or former Shareholder
or any other person for any delays or losses, damages or expenses any of them
may suffer or incur resulting from (1) Chancellor LGT's failure to receive
timely and suitable notification concerning quotations, corporate actions or
similar matters relating to or affecting portfolio securities of a Fund or (2)
any errors in the computation of a net asset value based upon or arising out of
quotations or information as to corporate actions if received by Chancellor LGT
from a source that Chancellor LGT was authorized to rely upon. Nevertheless,
Chancellor LGT will use its best judgment in determining whether to verify
through other sources any information that it has received as to quotations or
corporate actions if Chancellor LGT has reason to believe that any such
information is incorrect.
SECTION 10. RECEIPT OF ADVICE. If Chancellor LGT is in doubt as to
any action to be taken or omitted by it, Chancellor LGT may request, and shall
be entitled to rely upon, directions and advice from the Company, including Oral
or Written Instructions where
- 6 -
appropriate, or from counsel of its own choosing (who may also be counsel for
the Company or any Fund), with respect to any question of law. In case of
conflict between directions, advice or Oral and Written Instructions received by
Chancellor LGT pursuant to this Section, Chancellor LGT shall be entitled to
rely on and follow the advice received from counsel as described above.
Chancellor LGT shall be protected in any action or in action that it takes in
reliance on any directions, advice or Oral or Written Instructions received
pursuant to this Section that Chancellor LGT, after the receipt of the same, in
good faith believes to be consistent with such directions, advice or Oral or
Written Instructions, as the case may be. Notwithstanding the foregoing,
nothing in this Section shall be construed as imposing on Chancellor LGT any
obligation to seek such directions, advice or Oral or Written Instruction, or to
act in accordance with them when received, unless the same is a condition to
Chancellor LGT's properly taking or omitting to take such action under the terms
of this Agreement.
SECTION 11. INDEMNIFICATION OF CHANCELLOR LGT. The Company agrees to
indemnify and hold harmless Chancellor LGT and its officers, directors,
employees, nominees and subcontractors, if any, from all taxes, charges,
expenses, assessments, claims and liabilities, including, without limitation,
liabilities arising under the 1940 Act, the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, the Commodities Exchange Act
and any state or foreign securities or blue sky laws, and expenses, including,
without limitation, reasonable attorneys' fees and disbursements, arising
directly or indirectly from any action or thing that Chancellor LGT takes or
omits to take or do:
(a) at the request or on the direction of or in reliance upon
the advice of the Company;
(b) upon Oral or Written Instructions; or
(c) in the performance by Chancellor LGT of its responsibilities
under this Agreement;
provided that, Chancellor LGT shall not be indemnified against any liability to
the Company or the Funds, or any expenses incident thereto, arising out of
Chancellor LGT's own willful misfeasance, bad faith or negligence or reckless
disregard of its duties in connection with the performance of its duties and
obligations specifically described in this Agreement.
SECTION 12. INDEMNIFICATION OF THE COMPANY. Chancellor LGT agrees to
indemnify and hold harmless the Company and its officers, trustees, directors
and employees, from all taxes, charges, expenses, assessments, claims and
liabilities, including, without limitation, liabilities arising under the 1940
Act, the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the Commodities Exchange Act and any state or foreign
securities or blue sky laws, and expenses, including, without limitation,
reasonable attorneys' fees and disbursements, arising directly or indirectly
from any action or omission of Chancellor LGT that does not meet the standard of
care to which Chancellor LGT is subject under Section 9, above.
- 7 -
SECTION 13. LIMITATION OF LIABILITY OF SHAREHOLDERS AND TRUSTEES OF
THE COMPANY. It is expressly agreed that the obligations of the Company
hereunder shall not be binding upon any of the shareholders, trustees,
directors, officers, nominees, agents or employees of the Company personally,
but shall only bind the assets and property of the applicable Funds, as provided
in the Governing Documents. The execution and delivery of this Agreement has
been authorized by the Board of the Company, and this Agreement has been
executed and delivered by an authorized officer of the Company acting as such,
and neither such authorization by the Board nor such execution and delivery by
such officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the assets
and property of the applicable Fund as provided in the Governing Documents.
SECTION 14. DURATION AND TERMINATION. This Agreement shall continue
with respect to the Company and each Fund until termination with respect to the
Company, or with respect to one or more Funds, is effected by the Company or
Chancellor LGT upon sixty days' prior written notice to the other. In the event
of the "assignment" of this Agreement within the meaning of the 1940 Act, this
Agreement shall terminate automatically.
SECTION 15. NOTICES. All notices and other communications hereunder,
including Written Instructions, shall be in writing or by confirming telegram,
cable, telex or facsimile sending device. Notices with respect to a party shall
be directed to such address as may from time to time be designated by that party
to the other.
SECTION 16. FURTHER ACTIONS. The Company and Chancellor LGT agree to
perform such further acts and to execute such further documents as may be
necessary or appropriate to effect the purposes of this Agreement.
SECTION 17. AMENDMENTS. This Agreement, or any part thereof, may be
amended only by an instrument in writing signed by the Company and Chancellor
LGT.
SECTION 18. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
SECTION 19. MISCELLANEOUS. This Agreement embodies the entire
agreement and understanding between the Company and Chancellor LGT and
supersedes all prior agreements and understandings relating to the subject
matter hereof, provided that the Company and Chancellor LGT may embody in one or
more separate documents their agreement or agreements with respect to such
matters that this Agreement provides may be later agreed to by and between the
Company and Chancellor LGT from time to time. The captions in this Agreement
are included for convenience of reference only and in no way define or delimit
any of the provisions hereof or otherwise affect their construction or effect.
This Agreement shall be governed by and construed in accordance with California
law. If any provision of this
- 8 -
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the Company
and Chancellor LGT and their respective successors.
IN WITNESS WHEREOF, the Company and Chancellor LGT have caused this
Agreement to be executed by their officers designated below as of this day,
month and year first above written.
G.T. GLOBAL VARIABLE INVESTMENT SERIES
By:
------------------------------
Attest:
--------------------------
CHANCELLOR LGT ASSET MANAGEMENT, INC.
By:
------------------------------
Attest:
--------------------------
- 9 -
SCHEDULE A
FUND ACCOUNTING AND PRICING AGENT FEES
The Fund shall pay a Fee to Chancellor LGT determined as a percentage of
the Fund's net assets. The annualized rate at which the fee is paid (the Fee
Rate) and the Fee shall be calculated as set forth below:
- An ASSET MULTIPLIER is determined by multiplying .0003 times the first $5
billion in average net assets of the GT Global Funds plus .0002 times the
net assets over $5 billion.
- The FEE RATE is determined by dividing the Asset Multiplier by the net
assets of the GT Global Funds.
- The MONTHLY FEE is determined then by multiplying the average daily Fee
Rate by the number of days in the month and by the Fund's average daily net
assets then dividing by 365/or 366
Example: For Fund X having $100 million in average net assets during December
1997, in which the GT Global Funds have average net assets of $8 billion:
Asset Multiplier = (.0003) ($5 billion) + (.0002) ($3 billion) = $2.1
million
Fee Rate = $2.1 million = .0002625
------------
$8 billion
Monthly Fee = ( 31 ) (.0002625) ($100 million) = $2,229.45
-------
( 365 )
- 10 -