EXHIBIT (h)(2)
FORM OF SUPPORT SERVICES AGREEMENT
----------------------------------
THIS AGREEMENT is made as of May 21, 2001 by and between Pacific Life
Insurance Company ("Pacific Life"), a California corporation, and Pacific Funds
(the "Fund"), a Delaware business trust (referred to herein as this
"Agreement").
WITNESSETH:
WHEREAS, the Fund is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended;
WHEREAS, Pacific Life has entered into an Advisory Agreement dated May
21, 2001 with the Fund pursuant to which Pacific Life is authorized to provide
advisory services for the Fund and each of its series (the "Advisory
Agreement");
WHEREAS, Pacific Life has entered into an Administration Agreement
dated May 21, 2001 with the Fund pursuant to which Pacific Life is authorized to
provide or procure certain administrative and shareholder services for the Fund
and each of its series (the "Administration Agreement");
WHEREAS, the Advisory Agreement and Administration Agreement
specifically provide that the Fund shall bear all or a portion of the expenses
associated with the following activities (hereinafter, "Covered Activities"):
(i) Expenses of registering and qualifying the Fund with the Securities
and Exchange Commission ("SEC") and with any state regulators;
(ii) Expenses of providing accounting and legal services to the Fund;
(iii) Expenses of overseeing the Fund's regulatory compliance program;
(iv) Expenses of maintaining the Fund's legal existence;
(v) Expenses of holding shareholders' meetings;
(vi) Expenses of preparing, printing and distributing reports to
shareholders, proxies and prospectuses, to existing shareholders.
WHEREAS, the Fund desires that Pacific Life provide support services
in connection with Covered Activities; and
WHEREAS, Pacific Life is willing to provide such support services as
the Fund requires.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is hereby agreed as follows:
1. Effective May 21, 2001, Pacific Life shall provide such support
services in connection with the Covered Activities as the Fund may require and
that Pacific Life reasonably believes it and its personnel may render in a cost
effective manner. Support services shall not include any services for which
Pacific Life is responsible pursuant to the Advisory Agreement or the
Administration Agreement. Support services may include, but are not limited to,
providing support and coordination in connection with the provision of services
to the Fund by the Fund's outside counsel and accountants, and services provided
by any employee of Pacific Life, including any officer or trustee of the Fund
who is also an officer or director of Pacific Life, with respect to any matter
which is a Covered Activity.
The accounting services contemplated by this Agreement that may be
provided by Pacific Life include supervision and assistance in connection with
the preparation of reports to shareholders, the Board of Trustees, or regulators
regarding the Fund's financial results or standing (including performance
reporting). The legal services contemplated by this Agreement that may be
provided by Pacific Life attorneys include the preparation, drafting and/or
review of Fund documents (including registration statements, reports,
procedures, and board materials), monitoring relevant regulatory developments,
preparation for, and attendance at, board meetings, and providing legal counsel
to the Fund. The expenses of registering and qualifying the Fund with the SEC
and state regulators that may be provided by Pacific Life includes supervision
of the preparation and filing of: the Fund's Registration Statement (Form N-1A);
annual and semi-annual SEC Form N-SAR filings; annual and semi-annual financial
reports; 24f-2 filings; and any amendments or supplements to any of the
foregoing; and filing fees and time spent on preparation of filings of any of
the aforementioned. The expenses of overseeing the Fund's regulatory compliance
program include supervision of the compliance monitoring program of the Fund and
the reporting of regulatory compliance to the Board of Trustees. The expenses
of maintaining the Fund's legal existence include preparation and filing of any
amendments to the Fund's Declaration of Trust, annual and periodic reports or
filings required by the State of Delaware in connection with the maintenance of
the Trust as a legal entity in Delaware. The expenses of preparing shareholder
reports, proxies and prospectuses, include filing fees and time spent in
preparation of filing of such documents with state and federal regulators. The
support services set forth in this paragraph are provided for illustrative
purposes only and do not constitute an exclusive listing or description of the
types of support services that Pacific Life may provide to the Fund under this
Agreement.
2. Pacific Life has no intention of profiting by provision of support
services to the Fund. However, Pacific Life shall be compensated for its costs
in providing the services of its employees, including any trustee or officer of
the Fund, pursuant to this Agreement. As compensation for services provided
pursuant to Paragraph 1, Pacific Life shall xxxx the Fund, and the Fund shall
pay Pacific Life, based upon the following procedure:
2
(A) A billable rate shall be established for each Pacific Life
employee who provides services in connection with a Covered Activity. Such rate
shall be determined based upon the employee's total estimated annual
compensation, including benefits, and departmental overhead. If a number of
people are working in the same capacity, Pacific Life may utilize an average
billable hourly rate for such services (e.g., if there are three accountants
working on Covered Activities, the salaries, benefits and other compensation,
along with overhead for all three people, may be added together to determine an
average billable rate). Alternatively, if Pacific Life has established a
standard billable hourly rate for an employee which it uses internally to xxxx
its business units, such rates may be used to xxxx the Fund.
(B) Billable rates shall be established for photocopying, printing,
automatic mail compilations, and other mechanical services provided in
connection with Covered Activities. Such rates may take into account the cost of
the machinery (including repair costs), or if Pacific Life has established an
internal billing rate for such items, such rate may be used to xxxx the Fund;
provided, however, that such cost shall not exceed the cost of providing such
services using outside sources of comparable quality.
(C) The following procedures shall be observed in submitting bills to
the Fund for services provided by Pacific Life and its employees:
(i) Each employee working on Fund matters for which
reimbursement is sought shall retain a record describing
precisely the Covered Activity which was worked on and the
amount of time spent on such matter. Time shall be billed
in increments of fifteen minutes.
(ii) Time records shall be submitted as back up for each xxxx
directed to the Fund.
(iii) Bills shall be submitted to the Fund for payment on a
monthly basis.
3. The Fund agrees to pay Pacific Life promptly for its provision of
services relating to Covered Activities.
4. The Fund has the right, through its officers, directors or agents, to
inspect, audit and copy all records pertaining to performance of services under
this Agreement.
5. Either party to this Agreement may terminate this Agreement at any
time without penalty upon thirty days' written notice to the other party.
Notices shall be addressed (a) if to Pacific Life, at 000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxxxx Xxxxx, XX 00000, Attention: _________or (b) if to the Fund, at 000
Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, XX 00000, Attention: __________.
6. This Agreement shall be governed by the laws of the State of Delaware.
3
7. The parties shall construe this Agreement consistent with the terms of
the Advisory Agreement and the Administration Agreement and each party's
obligations thereunder.
8. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected hereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
9. The obligations of this Agreement shall be binding upon the assets and
property of the Fund and shall not be binding upon any Trustee, officer, or
shareholder of the Fund individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
PACIFIC FUNDS PACIFIC LIFE INSURANCE COMPANY
By: By:
______________________________ ____________________________
[ ], [Title] [ ], [Title]
Attest: Attest:
__________________________ ________________________
[ ], [Title] [ ], [Secretary]
By:
____________________________
[ ], [Title]
Attest:
________________________
[ ], [Secretary]
4
