EXHIBIT (h)(8)
FORM OF COMPLIANCE SERVICES AGREEMENT
Exhibit (h)(8)
FORM OF
COMPLIANCE SERVICES AGREEMENT
AGREEMENT effective as of the ____ day of ___________, 2004, between
AMERICAN PERFORMANCE FUNDS (the "Trust"), a Massachusetts business trust having
its principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and
BISYS FUND SERVICES OHIO, INC. ("BISYS"), an Ohio corporation having its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust is a registered investment company, and will as such
become subject to the requirements of Rule 38a-1 under the Investment Company
Act of 1940, as amended, (the "1940 Act"), which requires each registered
investment company to, among other things, adopt policies and procedures that
are reasonably designed to prevent it from violating the Securities Act of 1933,
the Securities Exchange Act of 1934, the Xxxxxxxx-Xxxxx Act of 2002, the
Investment Company Act, the Advisers Act, Title V of the Xxxxx-Xxxxx-Xxxxxx Act,
any rules adopted by the Commission under any of these statutes, the Bank
Secrecy Act as it applies to registered investment companies, and any rules
adopted thereunder by the Commission or the Department of the Treasury
(collectively, the "Federal Securities Laws"). These policies and procedures
include policies and procedures that provide for the oversight of compliance by
each investment adviser, principal underwriter, administrator, and transfer
agent of the Trust (collectively, the "Service Providers");
WHEREAS, BISYS performs certain management and administration services for
the Trust under a sub-administration agreement between BISYS and BOk Investment
Advisers, Inc. (the "Administrator") (the "Sub-Administration Agreement");
WHEREAS, BISYS offers compliance services through its Compliance EDGE
program, which may be tailored to create a compliance program for the Trust;
WHEREAS, the Trust desires to retain the services of BISYS to create a
comprehensive compliance program for approval and adoption by the Trust in
accordance with Rule 38a-1 in part by tailoring BISYS' Compliance EDGE program;
WHEREAS, BISYS is willing to perform the services enumerated in this
Agreement on the terms and conditions set forth in this Agreement; and
WHEREAS, BISYS and the Trust wish to enter into this Agreement in order to
set forth the terms under which BISYS will perform the services enumerated
herein on behalf of the Trust, and to supplement certain provisions of the
Sub-Administration Agreement.
NOW, THEREFORE, in consideration of the covenants herein contained, the
Trust and BISYS hereby agree as follows:
1. Compliance Services.
(a) The parties mutually agree to coordinate and cooperate in connection
with the creation and implementation of written compliance polices and
procedures which shall be reasonably designed to prevent the Trust from
violating the provisions of the Federal Securities Laws applicable to the Trust,
as required under Rule 38a-1 under the 0000 Xxx.
(b) The Trust agrees to provide BISYS with copies of its current
compliance policies and procedures and furnish (and cause its Service Providers
to furnish) all such additional information as may reasonably relate to the
design and implementation of the Fund Compliance Program (as defined below).
Such additional information shall include compliance and related information
pertaining to the Service Providers other than BISYS. BISYS shall review and
evaluate all such existing information and create a written document or
documents designed to embody the overall fund compliance program which will
include the compliance programs of the Service Providers to the Trust. Drafts
shall be prepared by BISYS in consultation with the Trust and its counsel and
shall be submitted for review and comment. Upon approval by the Board of
Trustees of the Trust (the "Board"), such documents or documents shall become
effective as the fund compliance program required under Rule 38a-1 (as amended
from time to time upon the approval of the Board, the "Fund Compliance
Program").
(c) BISYS will provide the following services in relation to the Fund
Compliance Program during the term of this Agreement:
(i) make an individual, acceptable to the Board, available to serve as the
Trust's chief compliance officer as provided in Rule 38a-1(a)(4) of the 1940 Act
to administer the Fund Compliance Program (the "Chief Compliance Officer"), to
the extent provided in Section 2(a) below. The individual serving as Chief
Compliance Officer must be available, at the discretion of the Board and in any
event no less frequently than annually, to meet separately with the independent
members of the Board;
(ii) through the Chief Compliance Officer, develop, implement and maintain
(as required from time to time, including to reflect any amendments to Rule
38a-1) the written policies and procedures comprising the Fund Compliance
Program, as contemplated above;
(iii) through the Chief Compliance Officer, conduct, as needed in response
to significant compliance events, changes in business arrangements and
regulatory developments and, in no event less than annually, a review of the
Fund Compliance Program which will include a review of the adequacy of the
policies and procedures and the effectiveness of their implementation;
(iv) through the Chief Compliance Officer, provide a written report to the
Board that, at a minimum, addresses:
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(A) the Chief Compliance Officer's assessment of the operation of the
policies and procedures of the Trust and each Service Provider, any
material changes made to those policies and procedures since the date of
the last report, and any material changes to the policies and procedures
recommended as a result of the annual review conducted;
(B) each Material Compliance Matter (as defined under Rule 38a-1) that
occurred since the date of the last report; and
(C) the Chief Compliance Officer's assessment of the adequacy of the
policies and procedures and the effectiveness of their implementation; and
(v) through the Chief Compliance Officer, provide the Board with any
additional information specifically requested or otherwise reasonably necessary
for the Board to review and evaluate the Fund Compliance Program.
In connection with the services set forth above in paragraphs (c)(ii),
(iii), (iv) and (v) of this Section 1, in the event that the Board retains a
Chief Compliance officer that is not provided by BISYS, the services shall
consist of providing the appropriate level of support to the Chief Compliance
Officer to reasonably enable him or her to fulfill the duties set forth therein.
2. Chief Compliance Officer.
(a) Provision of Chief Compliance Officer. At the election of the Board,
in connection with the compliance services to be rendered by BISYS pursuant to
Section 1 above, and subject to the provisions of this Section 2(a) and Section
2(d) below, BISYS agrees to make available to the Trust and the Board a person
to serve as the Trust's Chief Compliance Officer responsible for administering
the Fund Compliance Program as provided in paragraph (a)(4) of Rule 38a-1.
BISYS' obligation in this regard shall be met by providing an appropriately
qualified employee or agent of BISYS (or its affiliates) who, in the exercise of
his or her duties to the Trust, shall act in good faith and in a manner
reasonably believed by him or her to be in the best interests of the Trust. In
the event that the employment relationship between BISYS and any person made
available by BISYS to serve as Chief Compliance Officer terminates for any
reason, BISYS shall have no further responsibility to provide the services of
that particular person, and shall have no responsibility whatsoever for the
services to the Trust or other activities of such person provided or occurring
after such termination in the event the Board retains such person as Chief
Compliance Officer. In the event such person is terminated as Chief Compliance
Officer by the Board, and upon the request of the Board, BISYS will employ
reasonable good faith efforts to promptly make another person available to serve
as the Chief Compliance Officer. In addition, the Board may, in its sole
discretion and for any reason, terminate the Chief Compliance Officer provided
by BISYS under this Agreement. Such removal will not impact the provision of
other services enumerated in Section 1(c), which shall continue in effect for
the remaining term of the contract, in support of the replacement Chief
Compliance Officer; however, compensation paid to
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BISYS will be at the reduced rate set forth on Schedule A if the replacement
Chief Compliance Officer is not provided by BISYS.
In connection with BISYS' commitment to make an appropriately qualified
person available to serve as Chief Compliance Officer, BISYS shall pay a level
of total compensation to such person as is consistent with BISYS' compensation
of employees having similar duties, similar seniority, and working at the same
or similar geographical location. BISYS shall not be obligated to pay any
compensation to a Chief Compliance Officer which exceeds that set forth in the
previous sentence. BISYS agrees to provide the Board with information pertaining
to the compensation of the Chief Compliance Officer and acknowledges that the
Chief Compliance Officer's compensation must be acceptable to and approved by
the Board, including a majority of the independent members of the Board.
The Trust will provide copies of the Fund Compliance Program, related
policies and procedures, and all other books and records of the Trust as the
Chief Compliance Officer deems necessary or desirable in order to carry out his
or her duties hereunder on behalf of the Trust. The Trust shall cooperate with
the Chief Compliance Officer and ensure the cooperation of the Service Providers
to the Trust, as well as Trust counsel, independent Trustee counsel and the
Trust's independent accountants (collectively, the "Other Providers"), and
assist the Chief Compliance Officer and BISYS in preparing, implementing and
carrying out the duties of the Chief Compliance Officer under the Fund
Compliance Program and Rule 38a-1. In addition, the Trust shall provide the
Chief Compliance Officer with appropriate access to the executive officers and
Board of the Trust, and to representatives of and to any records, files and
other documentation prepared by, Service Providers and Other Providers, which
are or may be related to the Fund Compliance Program.
Each party agrees to provide promptly to the other party (and to the Chief
Compliance Officer), upon request, copies of other records and documentation
relating to the compliance by such party with Federal Securities Laws (as
related to the Fund Compliance Program), and each party also agrees otherwise to
assist the other party (and the Chief Compliance Officer) in complying with the
requirements of the Fund Compliance Program and Federal Securities Laws.
(b) Additional Provisions Concerning Executive Officers. It is mutually
agreed and acknowledged by the parties that the Chief Compliance Officer
contemplated under the provisions of this Section 2 of this Agreement will be an
executive officer of the Trust ("Executive Officer"). The provisions of Section
2(a) are subject to the internal policies of BISYS concerning the activities of
its employees and their service as officers of funds (the "BISYS Policies"), a
copy of which shall be provided to the Trust upon request. The Trust's governing
documents (including its Agreement and Declaration of Trust and By-Laws) and/or
resolutions of its Board shall contain mandatory indemnification provisions that
are applicable to each Executive Officer, that are designed and intended to have
the effect of fully indemnifying him or her and holding him or her harmless with
respect to any claims, liabilities and costs arising out of or relating to his
or her service in good faith in a manner reasonably believed to be in the best
interests of the Trust, except to the
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extent he or she would otherwise be liable to the Trust by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
The Trust shall provide coverage to the Executive Officer under its
directors' and officers' liability policy that is appropriate to the Executive
Officer's role and title, and consistent with coverage applicable to the other
officers holding positions of executive management.
In appropriate circumstances, the Executive Officer shall have the
discretion to resign from his or her position, in the event that he or she
reasonably determines that there has been or is likely to be (a) a material
deviation from the BISYS Policies, (b) an ongoing pattern of conduct involving
the continuous or repeated violation of Applicable Federal Securities Laws, or
(c) a material deviation by the Trust from the terms of this Agreement governing
the services of the Executive Officer that is not caused by the Executive
Officer or BISYS. In addition, the Executive Officer shall have reasonable
discretion to resign from his or her position in the event that he or she
determines that he or she has not received sufficient cooperation from the Trust
or its Other Providers to make an informed determination regarding any of the
matters listed above.
The Executive Officer may, and the Trust shall, promptly notify BISYS of
any issue, matter or event that would be reasonably likely to result in any
claim by the Trust, one or more Trust shareholder(s) or any third party which
involves an allegation that the Executive Officer failed to exercise his or her
obligations to the Trust in a manner consistent with applicable laws (including
but not limited to any claim that a Report failed to meet the standards of
Xxxxxxxx-Xxxxx and other applicable laws).
Notwithstanding any provision of the Sub-Administration Agreement or any
other agreement or instrument that expressly or by implication provides to the
contrary, (a) it is expressly agreed and acknowledged that BISYS cannot ensure
that the Trust complies with Applicable Federal Securities Laws, and (b)
whenever an employee or agent of BISYS serves as an Executive Officer of the
Trust, as long as the Executive Officer acts in good faith and in a manner
reasonably believed to be in the best interests of the Trust, the Trust shall
indemnify the Executive Officer and BISYS and hold the Executive Officer and
BISYS harmless from any loss, liability, expenses (including reasonable
attorneys fees) and damages incurred by them arising out of or related to the
service of such employee or agent of BISYS as an Executive Officer of the Trust,
except to the extent such indemnification would be illegal, impermissible or
improper under the Federal Securities Laws, as interpreted by the SEC.
3. Fees and Expenses.
(a) BISYS shall be entitled to receive from the Trust the amounts set
forth on Schedule A hereto, reflecting the amounts charged by BISYS for the
performance of services under this Agreement. The fees hereunder shall be in
addition to all fees and expenses charged by BISYS under the Sub-Administration
Agreement.
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(b) In addition to paying BISYS the fees set forth in Schedule A, the
Trust agrees to reimburse BISYS for all of its reasonable out-of-pocket expenses
incurred in providing services under this Agreement, including but not limited
to the following:
(i) The out-of-pocket expenses incurred in connection with BISYS'
provision of the Chief Compliance Officer to the Trust and in
connection with compliance services, including travel costs for
attending Board meetings, conducting due diligence of Service
Providers, and attending training conferences and seminars (plus the
costs of training);
and
(ii) Any other expenses approved by the Board.
(c) All rights of compensation under this Agreement for services
performed and for expense reimbursement shall survive the termination of this
Agreement.
4. Information to be Furnished by the Trust.
(a) The Trust has furnished or shall promptly furnish to BISYS copies of
the various policies and procedures of the Trust that have been adopted through
the date hereof which pertain to compliance matters that are required to be
covered by the Fund Compliance Program, including the compliance programs of
Service Providers other than BISYS, as necessary under Rule 38a-1 for inclusion
in the Fund Compliance Program
(b) The Trust shall furnish BISYS written copies of any amendments to, or
changes in, any of the items referred to in Section 4(a) hereof, forthwith upon
such amendments or changes becoming effective. In addition, the Trust agrees
that no amendments will be made to the Fund Compliance Program which will have
the effect of changing the procedures employed by BISYS in providing the
services agreed to hereunder or which amendment will affect the duties of BISYS
hereunder unless the Trust first notifies BISYS of such amendments or changes.
(c) BISYS may rely on all documents furnished to it by the Trust and its
agents in connection with the services to be provided under this Agreement,
including any amendments to or changes in any of the items to be provided by the
Trust pursuant to Section 4(a), and shall be entitled to indemnification in
accordance with Section 5 below with regard to such reliance.
5. Term and Termination.
(a) The compliance services to be rendered by BISYS under this Agreement
shall commence upon the date of this Agreement and shall continue in effect for
one (1) year from that date, unless earlier terminated pursuant to the terms of
this Agreement. During such one year term (i) the Agreement may be terminated
upon thirty (30) days notice in the event there is "cause," as defined in the
Sub-Administration Agreement, and (ii) the Chief Compliance Officer may be
terminated at any time by the Board, in its sole discretion, without cause and
such termination will be effective immediately. Following
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the one year anniversary of the date of this Agreement, the Agreement may be
terminated by either party for "cause," as provided above, or by providing the
other party with ninety (90) days written notice of termination.
(b) Notwithstanding anything in this Agreement to the contrary, including
but not limited to the provisions of Section 5(a), all of the obligations of
BISYS and the American Performance Funds hereunder shall terminate automatically
upon any termination of the Sub-Administration Agreement.
6. Notice.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Trust, to ________________; Attn:
____________, at _____________; and if to BISYS, at 0000 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000; Attn: President, or at such other address as such party may from
time to time specify in writing to the other party pursuant to this Section.
7. Governing Law and Matters Relating to the Trust as a Massachusetts
Business Trust.
This Agreement shall be construed in accordance with the laws of the State
of Ohio and the applicable provisions of the 1940 Act. To the extent that the
applicable laws of the State of Ohio, or any of the provisions herein, conflict
with the applicable provisions of the Investment Company Act of 1940, as
amended, the latter shall control. The names "American Performance Funds" and
"Trustees of American Performance Funds" refer respectively to the Trust created
and the Trustees, as trustees but not individually or personally, acting from
time to time under an Agreement and Declaration of Trust dated 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 "American Performance Funds" entered into in the name
or on behalf thereof by and 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 Trust personally, but bind only
the assets of the Trust, and all persons dealing with any series of shares of
the Trust must look solely to the assets of the Trust belonging to such series
for the enforcement of any claims against the Trust. The execution and delivery
of this Agreement have been authorized by the Trustees, and this Agreement has
been signed and delivered by an authorized officer of the Trust, acting as such,
and neither such authorization by the Trustees 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 them personally, but shall bind only the trust
property of the Trust as provided in the Trust's Declaration of Trust.
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8. Representations and Warranties.
Each party represents and warrants to the other that this Agreement has
been duly authorized and, when executed and delivered by it, will constitute a
legal, valid and binding obligation of it, enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and remedies of
creditors and secured parties.
9. Miscellaneous.
(a) Except as expressly provided in this Agreement, the terms of the
Sub-Administration Agreement shall apply to the services rendered under this
Agreement and the general provisions thereof shall be used on a residual basis
to construe any issues arising under this Agreement that are not addressed by
the express terms of this Agreement. Except as provided in this Agreement, the
provisions of the Sub-Administration Agreement remain in full force and effect
(including, without limitation, the term of the Sub-Administration Agreement).
(b) The provisions set forth in this Agreement supersede all prior
negotiations, understandings and agreements bearing upon the subject matter
covered herein, including any conflicting provisions of the Sub-Administration
Agreement.
(c) No amendment or modification to this Agreement shall be valid unless
made in writing and executed by both parties hereto.
(d) Paragraph headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(e) This Agreement may be executed in counterparts, each of which shall be
an original but all of which, taken together, shall constitute one and the same
agreement.
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* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
AMERICAN PERFORMANCE FUNDS
By:
Name:
Title:
BISYS FUND SERVICES OHIO, INC.
By:
Name:
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SCHEDULE A
TO COMPLIANCE SERVICES AGREEMENT
Dated ____________ __, 2004
Compliance Services Fees
Compliance Services provided under this Agreement:
$75,000 one-time implementation fee*
and $150,000 annual fee**
* One half of the implementation fee is due upon the execution of this
Agreement. The balance shall be paid upon the approval by the Board of Trustees
of the Trust of the Fund Compliance Program prepared by BISYS, as contemplated
in Section 1(b) above.
** The annual fee will be reduced to $100,000 if, pursuant to section 2(a), the
Board of Trustees of the Trust appoints a Chief Compliance Officer that is not
employed by BISYS. Such reduction shall occur on a pro rata basis from the
beginning of the month following the date of the appointment. All annual fees
set forth above shall be payable in equally monthly installments.
All recurring fees set forth above shall be subject to adjustment annually
commencing on the one-year anniversary of the date of this Agreement by the
percentage increase in consumer prices for services as measured by the United
States Consumer Price Index entitled "All Services Less Rent of Shelter" or a
similar index should such index no longer be published.
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Out of Pocket Expenses
Out of pocket expenses are not included in the above fees and shall also be paid
to BISYS in accordance with the provisions of this Agreement.
AMERICAN PERFORMANCE FUNDS
___________________________________
By:
Name:
Title:
BISYS FUND SERVICES OHIO, INC.
___________________________________
By:
Name:
Title:
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