(h)(73)
Agency Agreement dated as of November 8, 2002 between
The Vanguard Group, Inc., One Group Mutual Funds
and Banc One Investment Advisors Corporation.
AGENCY AGREEMENT
THIS AGREEMENT made as of this 8th day of November, 2002 by and between THE
VANGUARD GROUP, INC. ("Vanguard"), a Pennsylvania corporation, BANC ONE
INVESTMENT ADVISORS CORPORATION (the "Investment Advisor"), an Ohio corporation
and ONE GROUP MUTUAL FUNDS, a Massachusetts business trust (the "Fund").
W I T N E S S E T H:
WHEREAS, Vanguard provides participant accounting, record-keeping and
administrative services for certain employee benefit plans (referred to herein
individually as the "Plan" or collectively as the "Plans");
WHEREAS, the Fund, an open-end investment company registered under the
Investment Company Act of 1940, as amended (the "Act"), and each portfolio of
the Fund (referred to individually herein as the "Portfolio") listed on Exhibit
A hereto, each a series of the Fund, authorize investment by the Plan;
WHEREAS, the Fund desires that Vanguard serve as sub-transfer agent of the
Fund, for the purposes set forth herein;
WHEREAS, it is intended that the transfer agent of the Fund will establish
an account on its mutual fund shareholder accounting system to reflect the
aggregate ownership by the Plans of shares of the portfolio and all transactions
by the Plans involving such shares;
WHEREAS, Vanguard will establish individual accounts on its defined
contribution plan record-keeping system reflecting all transactions by or on
behalf of participants and beneficiaries under the Plan which result in
purchases or redemptions by the Plan of shares of the Portfolio;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto, intending to be legally bound, hereby agree and declare as
follows:
Section 1. Appointment as Agent. Vanguard is hereby appointed a
sub-transfer agent of the Fund solely for the purpose of receiving orders, in
accordance with the procedures outlined herein, for the purchases and
redemptions by the Plan of shares of the Portfolio. Such purchases and
redemptions shall be based on participant-level transactions made by or on
behalf of participants and beneficiaries under the Plan which are recorded on
Vanguard's defined contribution plan record-keeping system.
Vanguard shall maintain records for the Plan participants and beneficiaries
thereof reflecting all shares of the Portfolio purchased and redeemed by the
Plan based on participant-level transactions (including the date and price for
all transactions and share balances) and all
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re-investments by the Plan of dividends and capital gains distributions paid by
the Portfolio. Vanguard shall reconcile on each business day all transactions by
the Plan involving shares of the Portfolio (including purchases, redemptions and
re-investments of dividends and capital gains distributions) with the
corresponding participant-level transactions on Vanguard's defined contribution
plan record-keeping system. Notwithstanding Vanguard's appointment hereunder as
sub-transfer agent of the Fund to receive orders for the purchases and
redemptions by the Plan of shares of the Portfolio, Vanguard shall have no
authority under this Agreement or otherwise to act as sub-transfer agent of the
Fund in respect of or in connection with the distribution of shares of any
Portfolio.
Section 2. Operating Procedures. In accordance with the procedures set
forth below, Vanguard will act as the sub-transfer agent of the Fund to receive
orders by the Plans for purchases and redemptions of shares of the Portfolio. In
the case of any such purchase or redemption order received by Vanguard on any
business day prior to the time the net asset value of shares of the Portfolios
are determined (ordinarily the close of regular trading on the New York Stock
Exchange at 4:00 p.m. Eastern time), the order shall be accorded a trade date on
the Fund's accounting system that is the date of receipt of the order by
Vanguard. In the case of any such purchase or redemption order received by
Vanguard on any business day after the time the net asset value of shares of the
Portfolio are determined, the order shall be accorded a trade date on the Fund's
accounting system that is the next business day that the New York Stock Exchange
is open for trading.
(a) Transmission by the Fund of Portfolio Price. The Fund shall
transmit to the NSCC (National Securities Clearing Corporation) by 7:00
P.M. Eastern time on each business day the New York Stock Exchange is open
for trading a file identifying the net asset value per share (or "Share
Price") of each Portfolio as of the close of trading on that business day.
(b) Transmission by the Fund of Dividend and Capital Gains
Information. Upon the declaration of each dividend and each capital gain
distribution by the Fund with respect to shares of the Funds, the Fund or
its agent shall furnish, or cause to be furnished to, Vanguard information
setting forth the date of the declaration of such dividend or distribution,
the ex-dividend date, the date of payment thereof, the record date as of
which shareholders are entitled to payment, the amount payable per share to
the shareholders of record as of that date, and the total amount payable on
the payment date. The Fund shall provide this information to Vanguard by
7:00 p.m. ET on the ex date. This information shall be transmitted to
Vanguard via facsimile.
(c) Receipt by Vanguard of Participant-Level Transactions. All
participant-level transactions shall be received and processed by Vanguard
in accordance with its standard transaction processing procedures that
apply to all investment options offered under the Plans. Vanguard shall
maintain records sufficient to identify the date and time of receipt of all
participant-level transactions involving the Portfolios and shall make such
records available upon request for examination by the Fund, or its
designated representative, at the request of the transfer agent or by
appropriate governmental authorities. Under no circumstances shall Vanguard
change, alter or manipulate any participant-level transactions received by
it in good order.
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(d) Transmission by Vanguard of Net Purchase or Redemption Order.
Based on the aggregate participant-level transactions for each Plan
received by Vanguard on each business day that the New York Stock Exchange
is open for trading, Vanguard shall transmit to the Fund via the NSCC's
Fund/SERV system, for receipt by the Fund by 4:00 a.m. Eastern time on the
following business day, a file containing the net purchase or redemption
order by each account of shares of the Portfolios for the preceding
business day.
(e) Trade Settlement. In performing its settlement obligations
hereunder, Vanguard may settle all Fund/SERV purchases through Participant
#5972 in accordance with the procedures and timeframes established under
the rules of the NSCC. In performing its settlement obligations hereunder,
the Fund may settle all Fund/SERV redemptions through Participant #5599 in
accordance with the procedures and timeframes established under the rules
of the NSCC.
(f) Confirmation by the Fund of Net Purchases or Redemptions. The Fund
shall transmit to Vanguard via Fund/SERV by the established NSCC deadline
on each business day that the New York Stock Exchange is open for trading,
a confirmation of any purchases or redemptions by the Plans of shares of
the Portfolios with a trade date one business day prior.
(g) Bi-Monthly Position File by the Fund. The Fund shall provide to
Vanguard each 1/st/ and 3/rd/ Friday a Networking Position File, containing
activity summary and share balance of the Fund in the omnibus account for
the preceding two weeks.
(h) Processing Adjustments. In the event of any error or delay with
respect to the procedures outlined in this Section 2 which is caused by the
Fund, the Fund shall make any adjustments on the Fund's accounting system
necessary to correct such error or delay and shall reimburse the Plan and
Vanguard for any losses or reasonable costs incurred directly as a result
of the error or delay. In the event of any error or delay with respect to
the procedures outlined in this Section 2 which is caused by Vanguard, or
by any administrator or representative of the Plans, the Fund shall make
any adjustments on the Fund's accounting system necessary to correct such
error or delay provided that the Portfolio and the Fund shall be reimbursed
by Vanguard or the Plan for any losses or reasonable costs incurred
directly as a result of the error or delay. In the event of any such
adjustments on the Fund's accounting system, Vanguard shall make the
corresponding adjustments on its defined contribution plan record-keeping
system. Vanguard and the Fund, respectively, each agree to provide the
other prompt notice of any errors or delays of the type referred to in this
Section 2(h) and to use reasonable efforts to take such action as may be
appropriate to avoid or mitigate any such costs or losses.
Section 3. NETWORKING Agreement. Vanguard and the Fund agree to be bound by
the terms of the NSCC NETWORKING Agreement. Vanguard and the Fund hereto agree
that they will fulfill their obligation within respect to account maintenance
through NETWORKING Matrix Level ZERO (Trust Processing). The parties agree to
perform any and all duties, functions, procedures and responsibilities assigned
to it under this Agreement and as otherwise established by the NSCC. The
foregoing activities will be conducted in compliance
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with all applicable laws, rules and regulations, including the NSCC Rules and
Procedures; provided, however that in the event of a conflict between the
provisions of this Agreement and any NSCC Rule or Procedure, this Agreement will
control.
Section 4. Contingency Procedures - Share Price Transmission. Vanguard and
the Fund shall enact the following contingency procedures to protect Vanguard,
the Fund and the participants and beneficiaries of the Plans from any
significant investment loss or market exposure attributable to transmission
failure between the parties.
(a) The Fund shall contact Vanguard by 7:00 P.M. Eastern time either
via the Outside Funds Hotline (800.662.0106 x32550) or Vanguard's On-Call
service (800.662.0106 x 11559) concerning any systematic or human pricing
issues that will or have the potential to delay or prevent the successful
transmission of an accurate Share Price to Vanguard via the NSCC. If the
Fund is unable to contact a Vanguard representative directly, a message
should be left on the Outside Funds Hotline describing the issue, the
estimated time for correction, the Share Price for the corresponding trade
date and a contact name and number. In addition, the Fund shall transmit
the Share Price to Vanguard via facsimile and/or email to
XXXX_Xxxxxxx_Xxxxx@Xxxxxxxx.xxx.
Section 5. Fund Communications. The Fund shall supply Vanguard with the
following materials and information with respect to the Portfolio, which
Vanguard shall furnish or make available where appropriate or required by
applicable law to fiduciaries, participants and beneficiaries under the Plan:
(a) Portfolio Prospectuses, Annual Reports and Proxy Materials. The
Fund or, as appropriate, the transfer agent of the Fund, shall supply to
Vanguard upon request reasonably sufficient supplies of current
prospectuses, shareholder reports, and proxy statements and related
materials for the Portfolio. Vanguard shall be responsible for the timely
delivery of all prospectuses, shareholder reports, and proxy statements and
related materials to participants and beneficiaries under the Plan to the
extent necessary to satisfy the U.S. Department of Labor's final regulation
under section 404(c) of the Employee Retirement Income Security Act of 1974
(29 CFR (S)2550.404c-1) or other applicable law, or as specifically
required under the Plan or requested by the fiduciaries for the Plan.
(b) Advance Information. From time to time, the Fund may implement
policy changes that affect Vanguard's performance of recordkeeping for the
Plan. In order to allow Vanguard a reasonable amount of time to make any
necessary adjustments to its recordkeeping systems, the Fund shall
communicate such policy changes to Vanguard three months prior to the
effective date of the change ("Advance Information"). Vanguard shall treat
all Advance Information as confidential pursuant to Section 8 of this
agreement and shall use such information solely for systems adjustment
purposes. Vanguard shall communicate advance information to its own
directors, officers and employees on a need to know basis, only. Under no
circumstances shall Vanguard communicate Advance Information to any Plan,
its sponsor, or participants without the Funds prior written notice.
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(c) Fund Toll-Free Number. It is understood by the parties that
Vanguard licensed representatives will discuss with participants and
beneficiaries under the Plan the investment objectives and policies of the
Portfolio, solely as set forth in the current Portfolio prospectus, and the
recent investment performance of the Portfolio based solely on the
information supplied by the Fund. To the extent that participants or
beneficiaries under the Plan request additional information with respect to
the Portfolio, the Fund shall supply a toll-free telephone number which the
Plan participants and beneficiaries may use to request such additional
information from an appropriate representative of the Fund.
(d) Fund Review of Participant Communications Materials. It is
understood by the parties that, based on the current prospectus for the
Portfolio and the information supplied by the Fund, Vanguard may prepare
communications or disclosure materials for participants and beneficiaries
under the Plan which describe the Portfolio in the same format as that used
for the other investment options offered under the Plan.
(e) Other Portfolio Information. The Fund agrees to supply Vanguard
with any information which may have or explain a significant impact on the
performance of the Portfolio in the same manner and time frame in which
such information is made available to shareholders of that Portfolio.
Section 6. Vanguard Fees. In consideration of the accounting, recordkeeping
and administrative services to be provided by Vanguard under this Agreement, the
Fund shall pay Vanguard a quarterly fee of .0625% of the Plan assets invested in
each Portfolio, up to $18 annually per participant position. The Investment
Advisor will pay Vanguard any amount owed in excess of the $18 annual cap amount
payable by the Fund. Vanguard's fees shall be paid quarterly and shall be
calculated separately for each Portfolio under each Plan by determining the
product of 0.000625 multiplied by the average daily balance of all assets
invested in the Fund during the applicable calendar quarter. Vanguard shall
notify the Fund in writing of the amount due and payable hereunder, and shall
provide such documentation supporting its calculation as may be reasonably
requested by the Fund. Unless the Fund objects in writing, the Fund shall pay
such fee to Vanguard within 30 days after receiving notice from Vanguard of the
amount due and payable. The parties hereto acknowledge that any fees paid by the
Fund and/or the Investment Advisor under this Agreement are for accounting,
recordkeeping and administrative services only and do not constitute payment in
any manner for investment advisory or distribution related services.
Section 7. Cross-Indemnification of Parties. The Fund shall not be held
responsible and Vanguard shall indemnify and hold the Fund and its officers,
directors, employees, agents, and persons, if any, who control them within the
meaning of the Securities Act of 1933, as amended, harmless from and against any
and all reasonable losses, damages, costs, charges, counsel fees, payments,
expenses, and liability arising out of or attributable to: (i) Vanguard's lack
of good faith, negligence, or willful misconduct in carrying out its duties and
responsibilities under this Agreement; (ii) any breach by Vanguard of any
material provision of this Agreement; or (iii) any breach by Vanguard of any
representation, warranty, or covenant made in this Agreement. Neither Vanguard
nor its affiliates shall be held responsible and the Fund shall indemnify and
hold Vanguard and its affiliates and their officers, directors, employees, and
agents harmless from and against any and all reasonable losses, damages, costs,
charges, counsel fees, payments, expenses, and liability arising out of or
attributable to: (i) the Fund's lack of good faith,
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negligence, or willful misconduct in carrying out its duties and
responsibilities under this Agreement; (ii) any breach by the Fund of any
material provision of this Agreement; or (iii) any breach by the Fund of any
representation, warranty, or covenant made in this Agreement.
Section 8. Confidentiality. All information, books, records, and data
supplied by one party to the other in connection with the negotiation or
carrying out of the Agreement are and shall remain the property of the party
supplying such information, books, records, or data and shall be kept
confidential by the other party except as may be required by law.
Section 9. Amendment or Termination of Agreement. Vanguard and the Fund
may agree in writing to amend this Agreement at any time in whole or in part.
Either Vanguard or the Fund may terminate this Agreement upon thirty (30) days
written notice to the other party (which notice may be waived by the other
party). This Agreement shall automatically terminate upon written notice to
Vanguard or the Fund of the termination of Vanguard as a service provider to the
Plan; the discontinuance of the Portfolio as an investment option offered under
the Plan; if, at any time, the authorizations, licenses, qualifications or
registrations required to be maintained by Vanguard or the Fund in connection
with the performance of their duties hereunder shall lapse or cease to remain in
full force and effect; or if, due to changes in the laws or for other reasons,
any action to be taken or service to be provided hereunder should become
unlawful.
Section 10. Representations and Warranties. Vanguard and the Fund,
respectively, each represent that it has obtained and shall maintain all
authorizations, licenses, qualifications or registrations of any governmental
body required of it in connection with this Agreement and the registrations are
and will remain in full force and effect during the term of this Agreement.
Section 11. Massachusetts Business Trust. The names "One Group Mutual
Funds" and "Trustees of the One Group Mutual Funds" refer respectively to the
Trust created and the Declaration of Trust dated May 23, 1985, as amended and
restated February 18, 1999, to which reference is hereby made and a copy of
which is on file at the office of the Secretary 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 "One Group Mutual 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
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.
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In witness whereof, the parties hereto have caused this Agreement to be
executed on their behalf by their duly authorized officers as of the day and
year first above written.
Attest: THE VANGUARD GROUP, INC.
Xxxx X. Xxxx By: /s/ J-----
--------------------------- --------------------------------
Principal
Attest: ONE GROUP MUTUAL FUNDS
Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxx
--------------------------- --------------------------------
Title: Treasurer
-----------------------------
Attest: BANC ONE INVESTMENT ADVISORS
CORPORATION
Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
--------------------------- ---------------------------------
Title: Senior Managing Director
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Exhibit A
FUND NAME TICKER CUSIP
--------- ------ -----
One Group Bond Fund WOBDX 6823IN743
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