Exhibit (9)(a)
ADMINISTRATIVE AND CORPORATE SERVICES AGREEMENT
AGREEMENT, made and entered into as of April 15, 1997, by and between PENN
SERIES FUNDS, INC., a Maryland corporation ("Penn Series"), and THE PENN
MUTUAL LIFE INSURANCE COMPANY, a Pennsylvania mutual life insurance company
("Penn Mutual").
WITNESSETH:
WHEREAS, Penn Series is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), offering multiple series (or classes) of capital stock and each
series (or class) representing interests in a separate fund or portfolios of
investments ("Fund or Funds"); and
WHEREAS, Penn Mutual currently serves as Administrative and Corporate
Services Agent for Penn Series and in such capacity provides administrative and
corporate services to Penn Series; and
WHEREAS Penn Series and Penn Mutual desire Penn Mutual to continue
providing administrative services to its existing Funds and to provide
administrative services to the new Penn Series Emerging Growth Fund; and
WHEREAS, Penn Series and Penn Mutual desire to amend and restate their
existing Administrative and Corporate Services Agreement, dated as of May 1,
1989 and amended as of November 1, 1992 and March 1, 1995;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Penn Series hereby appoints Penn Mutual its Administrative and
Corporate Services Agent to administer its corporate affairs, subject to the
overall supervision of the Board of Directors of Penn Series, for the period and
on the terms set forth in this Agreement. Penn Mutual accepts such appointment
and agrees to furnish the services herein set forth in return for the
compensation as provided in Paragraph 7 of this Agreement.
2. Penn Mutual will administer all aspects of Penn Series' operations
other than those administered by Penn Series' Investment Advisers pursuant to
the Investment Advisory Agreements, Penn Series' Accounting Services Agent
pursuant to the Accounting Services Agreement, Penn Series' Custodian under the
Custodian Agreement and Penn Series' Transfer Agent under the Transfer Agency
Agreement. In performing its duties as Administrative and Corporate Services
Agent, Penn Mutual will act in conformity with the Articles of Incorporation,
By-Laws, and 1940 Act registration statement of Penn Series and with the
instructions and directions of the Board of Directors of Penn Series and will
conform to and comply with the requirements of the 1940 Act and all other
applicable Federal or state laws and regulations.
3. The services which Penn Mutual shall provide as Administrative and
Corporate Services Agent include but are not limited to:
(a) the maintenance of all books and records pertaining to Penn
Series' affairs, except those that are required to be maintained by Penn
Series' Investment Advisers, Accounting Services Agent, Custodian, or
Transfer Agent;
(b) the preparation of such annual, semi-annual or other reports or
proxy statements as Penn Series may be required to file with the Securities
and Exchange Commission or to distribute to its shareholders;
(c) the preparation of any registration statements or amendments to
registration statements which Penn Series may be required or may desire to
file with the Securities and Exchange Commission;
(d) the preparation of such filings as may be required for compliance
with the securities laws of any state or other jurisdiction;
(e) the preparation of such applications or requests as Penn Series
may desire to make to the Securities and Exchange Commission or its staff
for exemption from, or interpretation of any provision of the 1940 Act or
any other applicable Federal securities statute;
(f) the preparation of Penn Series' Federal and state tax returns and
any other filings required for tax purposes other than those required to be
made by Penn Series' Custodian, Transfer Agent, Accounting Services Agent,
or Investment Advisers;
(g) such services as Penn Series' Board of Directors may require in
connection with its oversight of Penn Series' Investment Advisers,
Accounting Services Agent, Custodian, or Transfer Agent, including the
periodic collection and presentation of data concerning the investment
performance of Penn Series' various investment portfolios;
(h) the organization of all meetings of Penn Series' Board of
Directors;
(i) the organization of all meetings of Penn Series' shareholders;
(j) the collection and presentation of any financial or other data
required by Penn Series' Board of Directors, accountants, or counsel;
(k) the preparation and negotiation of any amendments to, or
substitutes for, the present agreements with Penn Series' Investment
Advisers, Accounting Services Agent, Custodian, or Transfer Agent; and
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(l) such other services as the Penn Series' Board of Directors may
reasonably request.
4. Penn Mutual shall permit any of its directors, officers, or employees
who may be elected as directors or officers of Penn Series to serve in the
capacities in which they are elected. Any of the services to be furnished by
Penn Series under this Agreement may be furnished through the medium of such
directors, officers, or employees of Penn Mutual.
5. Penn Mutual shall bear all of the following expenses in connection
with the services to be rendered under this Agreement.
(a) all rent and other expense involved in the provision of office
space for Penn Series and for Penn Mutual in connection with its
performance of services under this Agreement;
(b) the salaries and expenses of all personnel of Penn Series and
Penn Mutual incurred in connection with the provision of administrative
services to Penn Series, except the fees and expenses of directors of Penn
Series who are not interested persons (as defined in the 0000 Xxx) of Penn
Series or affiliated persons (as defined in the 0000 Xxx) of Penn Mutual or
of Penn Series' Investment Advisers; and
(c) all expenses incurred by Penn Mutual or Penn Series in connection
with administering the ordinary course of Penn Series' business, other than
those excluded pursuant to Paragraph 6 below.
6. Nothing in this Agreement shall require Penn Mutual to bear, or to
reimburse Penn Series for,
(a) the costs of printing and mailing the items referred to in
Paragraph 3(b) above, or any prospectuses included in registration
statements referred to in Paragraph 3(c) or required by law, regulation or
regulatory authorities;
(b) compensation of member of Penn Series' Board of Directors who are
not interested persons (as defined in the 0000 Xxx) of Penn Series or
affiliated persons (as defined in the 0000 Xxx) of Penn Mutual or of Penn
Series' Investment Advisers;
(c) registration, filing, or other fees imposed by the Securities and
Exchange Commission or other regulatory authorities;
(d) the charges and expenses of Penn Series' Investment Advisers,
Accounting Services Agent, Custodian, and Transfer Agent;
(e) the fees and expenses of legal counsel and independent
accountants for
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Penn Series;
(f) brokers' commissions and any issue or transfer taxes chargeable
to Penn Series in connection with its securities transactions;
(g) taxes and corporate fees payable by Penn Series to Federal, state
or other governmental entities;
(h) the fees of any trade association of which Penn Series may be a
member; and
(i) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of Penn Series' business.
7. Penn Series shall pay Penn Mutual as full compensation to services
rendered and all facilities furnished hereunder a fee computed at the annual
rate of 0.15% of the average daily net assets of Penn Series. Such fee shall be
payable at such intervals not more frequently than monthly and not less
frequently than quarterly as the officers of Penn Series may from time to time
determine and specify in writing to Penn Mutual. Such fee shall be calculated on
the basis of the average of all valuations of the net assets of Penn Series made
as of the close of business on each valuation day during the period for which
such fee is paid and be prorated among the several investment portfolios (or
Funds) in proportion to the average total net assets of each such portfolio (or
Fund) during the period.
8. With respect to each of the Growth Equity, Value Equity, Small
Capitalization, International Equity, Quality Bond and Money Market Funds of
Penn Series, to the extent that the Fund's total expenses for a fiscal year
(excluding interest, taxes, brokerage, other expenses which are capitalized in
accordance with generally accepted accounting principles, and extraordinary
expenses, but including investment advisory and administrative and corporate
services fees before any adjustment pursuant to this provision) exceed the
expense limitation for the Fund by more than 0.10% of the average daily net
assets of the Fund, such excess amount shall be a liability of Penn Mutual to
Penn Series. The liability (if any) of Penn Mutual to pay Penn Series such
excess amounts shall be determined on a daily basis. With respect to each of the
Emerging Growth, Flexibly Managed and High Yield Bond Funds, to the extent that
the Fund's total expenses for a fiscal year exceed the expense limitation for
the Fund, one-half of such excess amount shall be a liability of Penn Mutual to
Penn Series. The liability (if any) of Penn Mutual to pay Penn Series one-half
of such excess amounts shall be determined on a daily basis. With respect to
each Fund of Penn Series, if, at the end of each fee payment period, there is
any liability of Penn Mutual to pay Penn Series any such excess amount, the
administrative services fee shall be reduced by such liability. If, at the end
of each fee payment period, there is no liability of Penn Mutual to pay Penn
Series any such excess amount, and if payments of the administrative services
fee at the end of prior fee payment periods during the fiscal year have been
reduced in excess of that required to maintain expenses within the expense
limitation, such excess reduction shall be recaptured by Penn Mutual and shall
be payable by Penn Series to Penn Mutual along with the
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administrative services fee payable to Penn Mutual for that period. If, at the
end of the fiscal year, there is any remaining liability of Penn Mutual to pay
Penn Series any such excess amounts (which have not been paid through reduction
of the administrative services fee), Penn Mutual shall remit to Penn Series an
amount sufficient to pay such remaining liability. The expense limitations of
the Penn Series Funds, as a percentage of the Fund's average daily net assets,
are as follows:
Fund Expense Limitation
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Growth Equity Fund 1.00%
Value Equity Income Fund 1.00%
Small Capitalization Fund 1.00%
Emerging Growth Fund 1.15%
Flexibly Managed Equity Fund 1.00%
International Equity Fund 1.50%
Quality Bond Fund 0.90%
High Yield Bond Fund 0.90%
Money Market Fund 0.80%
9. Penn Mutual assumes no responsibility under this Agreement other than
to render the services called for hereunder, and specifically assumes no
responsibilities for investment advice or the investment or reinvestment of Penn
Series' assets.
10. Neither Penn Mutual nor any of its trustees, officers or employees,
nor any persons performing executive, administrative or other functions shall be
liable for any error of judgment or mistake of law or for any loss suffered by
Penn Series in connection with the matters to which this Agreement relates,
except for loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of its or his or her duties on behalf of Penn
Mutual or from reckless disregard by Penn Mutual or any such person of Penn
Mutual's duties under this Agreement.
11. This Agreement shall continue in effect with respect to a given Fund
for a period more than two years from the date of its execution only so long as
such continuation is specifically approved at least annually by either the Board
of Directors of Penn Series or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) representing interests in that Fund,
provided that in either event such continuation shall also be approved by the
vote of a majority of the directors who are not interested persons of Penn
Series, as defined in the 1940 Act, cast by them in person at a meeting called
for the purpose of voting on such approval; provided, however, that:
(a) this Agreement may at any time be terminated by Penn Series with
respect to any Fund, without the payment of any penalty, on 60 days' notice
to Penn Mutual either by vote of the Board of Directors of Penn Series or
by vote of a majority of the outstanding voting securities (as defined in
the 1940 Act) representing interests in that Fund;
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(b) this Agreement may be terminated by Penn Mutual at any time,
without the payment of any penalty, on 90 days' written notice to Penn
Series; and
(c) this Agreement shall immediately terminate in event of its
assignment as defined in the 1940 Act.
12. The services of Penn Mutual to Penn Series provided under this
Agreement are not to be deemed to be exclusive and Penn Mutual shall be free to
provide similar services to others. Nothing in this Agreement shall limit or
restrict the right of any trustee, officer or employee of Penn Mutual who may
also be a director, officer or employee of Penn Series to engage in any other
business or to devote his or her other time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature.
13. It is understood that directors, officers, agents and stockholders of
Penn Series are or may be interested in Penn Mutual as trustees, officers, or
otherwise; that trustees, officers, agents and policyholders of Penn Mutual are
or may be interested in Penn Series as directors, officers, stockholders or
otherwise; and that Penn Mutual may be interested in Penn Series as a
shareholder or otherwise. The existence of any such dual interest shall not
affect the validity hereof or of and transactions hereunder.
14. This Agreement may be amended by mutual written consent.
15. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage prepaid: (a) to Penn Mutual at 000 Xxxxxxx Xxxx, Xxxxxxx XX 00000,
Attention: President; or (b) to Penn Series at 000 Xxxxxxx Xxxx, Xxxxxxx, XX
00000, Attention: President.
16. This Agreement contains the entire agreement between the parties
hereto and supersedes all prior agreements, understandings and arrangements with
respect to the subject matter hereof.
17. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
PENN SERIES FUNDS, INC.
By: /s/ Xxxxx X. XxXxxxxx
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Xxxxx X. XxXxxxxx
Executive Vice President
THE PENN MUTUAL LIFE INSURANCE COMPANY
By: /s/ X. Xxxxxxxx Xxxxxxx
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X. Xxxxxxxx Illoway
Senior Vice President,
Marketing and Field Sales Support
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