SOUND SHORE FUND, INC.
PFO/TREASURER SERVICES AGREEMENT
AGREEMENT made as of January 31, 2008 by and between Sound Shore Fund,
Inc., a Maryland corporation, with its principal office and place of business at
______________________ (the "Fund"), and Foreside Management Services, LLC, a
Delaware limited liability company with its principal office and place of
business at Two Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000 ("Foreside").
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end management investment company; and
WHEREAS, the Fund desires that Foreside perform certain services and
Foreside is willing to provide those services on the terms and conditions set
forth in this Agreement;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the Fund and Foreside hereby agree as follows:
SECTION 1. APPOINTMENT; DELIVERY OF DOCUMENTS
(a) Subject to the approval of the Board of Directors of the Fund, Foreside
hereby agrees to provide Xxxxx X. Xxxxxxx, the individual identified in Appendix
A or any other individual as specified in Section 2(a), to serve as the Fund's
Principal Financial Officer ("PFO") and Treasurer, to the Fund for the period
and on the terms and conditions set forth in this Agreement.
(b) In connection therewith, the Fund has delivered to Foreside copies of:
(i) the Fund's Articles of Incorporation and Bylaws (collectively, as amended
from time to time, "Organizational Documents"); (ii) the Fund's current
Registration Statement, as amended or supplemented, filed with the U.S.
Securities and Exchange Commission ("SEC") pursuant to the Securities Act of
1933, as amended (the "Securities Act"), or the 1940 Act (the "Registration
Statement"); (iii) the Fund's current Prospectus and Statement of Additional
Information (collectively, as currently in effect and as amended or
supplemented, the "Prospectus" or "SAI", as the case may be, or the "Disclosure
Documents"); (iv) each plan of distribution or similar document that may be
adopted by the Fund under Rule 12b-1 under the 1940 Act ("Plan") and each
current shareholder service plan or similar document adopted by the Fund
("Service Plan"); (v) all policies, programs and procedures adopted by the Fund
with respect to the Funds, and shall promptly furnish Foreside with all
amendments of or supplements to the foregoing. The Fund shall deliver to
Foreside a certified copy of the resolution of the Board of Directors of the
Fund (the "Board") appointing Foreside hereunder and authorizing the execution
and delivery of this Agreement. In addition, the Fund shall deliver, or cause to
deliver, to Foreside upon Foreside's reasonable request any other documents that
would enable Foreside to perform the services described in this Agreement.
SECTION 2. DUTIES OF FORESIDE
(a) Subject to the approval of the Board, Foreside shall make available as
PFO and Treasurer only candidates who are competent and knowledgeable regarding
the management and internal controls of the Fund to serve as the Fund's PFO and
Treasurer, who will have the authority normally incident to such office,
including the authority to execute documents required to be executed by the
Fund's "Principal Financial Officer" and "Treasurer" and who will act in good
faith in a manner reasonably believed by him or her to be in the best interests
of the Fund.
(b) Foreside shall provide such other services and assistance relating to
the affairs of the Fund as the Fund may, from time to time, reasonably request
pursuant to mutually acceptable compensation and implementation agreements.
(c) Foreside shall maintain records relating to its services, such as
policies and procedures, relevant Board presentations, and other records, as are
required to be maintained under the relevant securities laws. Such reports shall
be maintained in the manner and for the periods as are required under the
applicable rule or regulation. The books and records pertaining to the Fund that
are in the possession of Foreside shall be the property of the Fund. The Fund,
or the Fund's authorized representatives, shall have access to such books and
records at all times during Foreside's normal business hours. Upon the
reasonable request of the Fund, copies of any such books and records shall be
provided promptly by Foreside to the Fund or the Fund's authorized
representatives at the Fund's expense.
(d) Nothing contained herein shall be construed to require Foreside to
perform any service that could cause Foreside to be deemed an investment adviser
for purposes of the 1940 Act or the Investment Advisers Act of 1940, as amended,
or that could cause the Fund to act in contravention of the Fund's Prospectus or
any provision of the 1940 Act. Except with respect to Foreside's duties as set
forth in this Section 2 and except as otherwise specifically provided herein,
the Fund assumes all responsibility for ensuring that the Fund complies with all
applicable requirements of the Securities Act, the Exchange Act, the 1940 Act
and any laws, rules and regulations of governmental authorities with
jurisdiction over the Fund. All references to any law in this Agreement shall be
deemed to include reference to the applicable rules and regulations promulgated
under authority of the law and all official interpretations of such law or rules
or regulations.
(e) In order for Foreside to perform the services required by this Section
2, the Fund (i) shall take reasonable steps to encourage all Service Providers
to furnish any and all information to Foreside as reasonably requested; and (ii)
shall take reasonable steps to obtain the result that Foreside has access to all
records and documents maintained by the Fund or any service provider to the
Fund.
(f) The PFO and Treasurer provided by Foreside to the Fund as contemplated
by this Agreement shall provide the services as set forth on Appendix A.
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SECTION 3. STANDARD OF CARE; LIMITATION OF LIABILITY; INDEMNIFICATION
(a) Whenever an employee or agent of Foreside serves as PFO and Treasurer
of the Fund, as long as such PFO and Treasurer acts in good faith and in a
manner reasonably believed by him or her to be in the best interests of the Fund
(and would not otherwise be liable to the Fund 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 Fund shall indemnify the PFO and Treasurer
and Foreside, and all other of its employees, agents, directors, officers and
managers and any person who controls Foreside within the meaning of Section 15
of the Securities Act of 1933 or Section 20 of the Securities Exchange Act of
1934 (the "Foreside Indemnitees") and hold the the PFO, the Treasurer and the
Foreside Indemnitees 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 Foreside as PFO and
Treasurer of the Fund.
(b) FCS agrees to indemnify and hold harmless the Fund, its employees,
agents, directors, officers and managers (other than the PFO and Treasurer)
("Fund Indemnitees"), from any loss, liability, expenses (including reasonable
attorneys fees) and damages incurred by them arising out of or related to (i)
PFO or Treasurer actions taken or failures to act with respect to the Fund that
are by reason of his or her willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office;
(ii) any breach of this Agreement by FCS; or (iii) any breach of FCS'
representations set forth in Section 4.
(c) Foreside shall not be liable for the errors of other service providers
to the Fund or their systems.
SECTION 4. REPRESENTATIONS AND WARRANTIES
(a) Foreside represents and warrants to the Fund that:
(i) It is a limited liability company duly organized and existing and
in good standing under the laws of the State of Delaware;
(ii) It is duly qualified to carry on its business in the State of
Maine;
(iii) It is empowered under applicable laws and by its Operating
Agreement to enter into this Agreement and perform its duties under
this Agreement;
(iv) All requisite corporate proceedings have been taken to authorize
it to enter into this Agreement and perform its duties under this
Agreement;
(v) It has access to the necessary facilities, equipment, and
personnel to assist the PFO/Treasurer in the performance of his or her
duties and obligations under this Agreement;
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(vi) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of Foreside, enforceable against
Foreside 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;
(vii) It shall report to the Board promptly if Foreside learns about
PFO/Treasurer malfeasance or in the event the PFO/Treasurer is
terminated as an officer by another Fund or terminated by Foreside;
(viii) It shall comply with all applicable laws; and
(ix) It shall maintain policies of insurance reasonable and customary
for its business.
(b) The Fund represents and warrants to Foreside that:
(i) It is a corporation duly existing and in good standing under the
laws of the State of Maryland;
(ii) It is empowered under applicable laws and by its Fund Documents
to enter into this Agreement and perform its duties under this
Agreement;
(iii) All requisite corporate proceedings have been taken to authorize
it to enter into this Agreement and perform its duties under this
Agreement;
(iv) It is an open-end management investment company registered under
the 1940 Act;
(v) This Agreement, when executed and delivered, will constitute a
legal, valid and binding obligation of the Fund, enforceable against
the Fund 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;
(vi) A registration statement under the Securities Act and the
Exchange Act is effective and will remain effective and appropriate
State securities law filings will be or have been made and will
continue to be made with respect the Fund; and
(vii) The PFO/Treasurer shall be covered by the Fund's Directors &
Officers/Errors & Omissions Policy (the "Policy"), and the Fund shall
use reasonable efforts to ensure that such coverage be (a) reinstated
should the Policy be cancelled; (b) continued after such officers
ceases to serve as the Fund on substantially the same terms as such
coverage is provided for the Fund officers
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after such persons are no longer officers of the Fund; or (c)
continued in the event the Fund merges or terminates, on substantially
the same terms as such coverage is provided for the Fund officers (but
for a period no less than six years). The Fund shall provide Foreside
with proof of current coverage, including a copy of the Policy, and
shall notify Foreside immediately should the Policy be cancelled or
terminated.
(viii) The PFO/Treasurer is a named officer in the Fund's corporate
resolutions and subject to the provisions of the Fund's Organizational
Documents regarding indemnification of its officers.
SECTION 5. COMPENSATION AND EXPENSES
(a) In consideration of the services provided by Foreside pursuant to this
Agreement, the Fund shall pay Foreside the fees set forth in Appendix A hereto.
All fees payable hereunder shall be accrued daily by the Fund. The fees
payable for the services listed in Appendix A hereto shall be payable monthly in
arrears on the first business day of each calendar month for services performed
during the prior calendar month. Any out-of-pocket charges incurred by Foreside
as set forth in Appendix A shall be paid as incurred. If fees begin to accrue in
the middle of a month or if this Agreement terminates before the end of any
month, all fees for the period from that date to the end of that month or from
the beginning of that month to the date of termination, as the case may be,
shall be prorated according to the proportion that the period bears to the full
month in which the effectiveness or termination occurs. Upon the termination of
this Agreement, the Fund shall pay to Foreside such compensation, as shall be
payable prior to the effective date of termination.
(b) Foreside may, with respect to questions of law relating to its services
hereunder, apply to and obtain the advice and opinion of Fund counsel, subject
to coordination and pre-approval and consent by appropriate representatives of
the Fund's investment adviser, which consent shall not be reasonably withheld.
The costs of any such advice or opinion shall be borne by the Fund.
(c) Foreside shall not be responsible for and will not assume the
obligation for payment of the expenses of the Fund, including, without
limitation: (i) the fee payable under this Agreement; (ii) the fees payable to
the investment adviser under an agreement between the investment adviser and the
Fund; (iii) expenses of issue, repurchase and redemption of Fund Shares; (iv)
interest charges, taxes and brokerage fees and commissions and short sale fees;
(v) premiums of insurance for the Fund, the directors and officers and fidelity
bond premiums; (vi) fees, interest charges and expenses of third parties,
including Fund counsel, counsel to the Fund's independent directors, independent
public accountants, compliance audit firms, custodians, transfer agents,
dividend disbursing agents and Fund accountants; (vii) fees of pricing,
interest, dividend, credit and other reporting services; (viii) costs of
membership in trade associations; (ix) telecommunications expenses; (x)
transmission expenses; (xi) costs of maintaining the Fund's existence; (xii)
costs of preparing, filing and printing the Fund's Prospectus, subscription
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application forms and stockholder reports and other communications and
delivering them to existing stockholders, whether of record or beneficial;
(xiii) expenses of meetings of stockholders and proxy solicitations therefore;
(xiv) costs of maintaining books of original entry for portfolio and Fund
accounting and other required books and accounts and of calculating the net
asset value of Shares; (xv) costs of stationery, supplies and postage; (xvi)
fees and expenses of the Fund's directors and officers (except those incurred by
officers affiliated with Foreside); (xvii) costs of other personnel performing
services for the Fund; (xviii) costs of Board, Board committee, and other
corporate meetings; (xix) SEC registration fees and related expenses; and (xx)
state, territory or foreign securities laws registration fees and related
expenses.
SECTION 6. EFFECTIVENESS, DURATION, TERMINATION AND ASSIGNMENT
(a) This Agreement shall become effective on the date indicated above or
such time Foreside commences providing services under this Agreement, whichever
is later. Upon effectiveness of this Agreement, this Agreement shall constitute
the entire agreement between the parties and shall supersede all previous
agreements between the parties, whether oral or written relating to the Fund.
(b) This Agreement shall continue in effect until terminated.
(c) This Agreement may be terminated at any time, without the payment of
any penalty (i) by the Board on fifteen (15) days' written notice to Foreside or
(ii) by Foreside on thirty (30) days' written notice to the Fund; provided that
the provisions of this Agreement related to services pursuant to Section 2, may
be terminated at any time by the Board, effective upon written notice to
Foreside, without the payment of any penalty; the remaining portions of this
Agreement shall be considered severable and not affected.
(d) The provisions of Sections 2(e), 3, 6(d), 6(e), 7, 10, 11, and 12 shall
survive any termination of this Agreement.
(e) This Agreement and the rights and duties under this Agreement otherwise
shall not be assignable by either Foreside or the Fund except by the specific
written consent of the other party. All terms and provisions of this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto.
SECTION 7. CONFIDENTIALITY
Each Party shall comply with the laws and regulations applicable to it in
connection with its use of Confidential Information, including, without
limitation, Regulation S-P (if applicable). Foreside agrees to treat all records
and other information related to the Fund as proprietary information of the Fund
and, on behalf of itself and its employees, to keep confidential all such
information, except that Foreside may
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(a) Release such other information (i) as approved in writing by the Fund,
which approval shall not be unreasonably withheld and may not be withheld where
Foreside is advised by counsel that it may be exposed to civil or criminal
contempt proceedings for failure to release the information (provided, however,
that Foreside shall seek the approval of the Fund as promptly as possible so as
to enable the Fund to pursue such legal or other action as it may desire to
prevent the release of such information) or (ii) when so requested by the Fund.
SECTION 8. FORCE MAJEURE
Foreside shall not be responsible or liable for any failure or delay in
performance of its obligations under this Agreement arising out of or caused,
directly or indirectly, by circumstances beyond its reasonable control
including, without limitation, acts of civil or military authority, national
emergencies, fire, mechanical breakdowns, flood or catastrophe, acts of God,
insurrection, war, riots or failure of the mails, transportation, communication
system or power supply. In addition, to the extent Foreside's obligations
hereunder are to oversee or monitor the activities of third parties, Foreside
shall not be liable for any failure or delay in the performance of Foreside's
duties caused, directly or indirectly, by the failure or delay of such third
parties in performing their respective duties or cooperating reasonably and in a
timely manner with Foreside.
SECTION 9. ACTIVITIES OF FORESIDE
(a) Except to the extent necessary to perform Foreside's obligations under
this Agreement, nothing herein shall be deemed to limit or restrict Foreside's
right, or the right of any of Foreside's managers, officers or employees who
also may be a director, trustee, officer or employee of the Fund (including,
without limitation, the PFO/Treasurer), or who are otherwise affiliated persons
of the Fund, to engage in any other business or to devote time and attention to
the management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
(b) Upon prior approval by the Fund, Foreside may subcontract any or all of
its functions or responsibilities pursuant to this Agreement to one or more
persons, which may be affiliated persons of Foreside who agree to comply with
the terms of this Agreement; provided, that any such subcontracting shall not
relieve Foreside of its responsibilities hereunder. Foreside may pay those
persons for their services, but no such payment will increase Foreside's
compensation or reimbursement of expenses from the Fund.
SECTION 10. COOPERATION WITH INDEPENDENT PUBLIC ACCOUNTANTS
Foreside shall cooperate with the Fund's independent public accountants and
shall take reasonable action to make all necessary information available to the
accountants for the performance of the accountants' duties.
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SECTION 11. LIMITATION OF STOCKHOLDER AND TRUSTEE LIABILITY
The directors of the Fund and the stockholders of the Fund shall not be
liable for any obligations of the Fund under this Agreement, and Foreside agrees
that, in asserting any rights or claims under this Agreement, it shall look only
to the assets and property of the Fund.
SECTION 12. MISCELLANEOUS
(a) Neither party to this Agreement shall be liable to the other party for
consequential, special or indirect damages under any provision of this
Agreement.
(b) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware.
(c) This Agreement may be executed by the parties hereto in any number of
counterparts, and all of the counterparts taken together shall be deemed to
constitute one and the same instrument.
(d) If any part, term or provision of this Agreement is held to be illegal,
in conflict with any law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did not contain the particular part, term or provision held to be illegal or
invalid.
(e) Section headings in this Agreement are included for convenience only
and are not to be used to construe or interpret this Agreement.
(f) Notices, requests, instructions and communications received by the
parties at their respective principal places of business, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(g) Nothing contained in this Agreement is intended to or shall require
Foreside, in any capacity hereunder, to perform any functions or duties on any
day other than a Fund business day. Functions or duties normally scheduled to be
performed on any day which is not a Fund business day shall be performed on, and
as of, the next Fund business day, unless otherwise required by law.
(h) The term "affiliate" and all forms thereof used herein shall have the
meanings ascribed thereto in the 1940 Act.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
SOUND SHORE FUND, INC.
By:
------------------------------------
Name:
Title:
FORESIDE MANAGEMENT SERVICES, LLC
By:
------------------------------------
Name:
Title:
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SOUND SHORE FUND, INC.
PFO/TREASURER SERVICES AGREEMENT
APPENDIX A
JANUARY 31, 2008
(1) NAMED PFO\TREASURER
Xxxxx X. Xxxxxxx
(2) FEE
$25,000/year
(3) OUT-OF-POCKET AND RELATED EXPENSES
The Trust shall reimburse Foreside for the following out-of-pocket and ancillary
expenses:
(i) communications
(ii) postage and delivery services
(iii) record storage and retention (imaging, microfilm and shareholder record
storage)
(iv) reproduction
(v) reasonable travel expenses for the PEO incurred in connection with the
responsibilities set out in this service agreement
(vi) reasonable travel expenses incurred in connection with travel requested by
the Board
(vii) other expenses incurred in connection with providing the services
described in this Agreement if approved by the Board
(4) SUMMARY OF EXPERIENCE OF PROPOSED PFO\TREASURER
Month/year Birth Officer Principal Occupation over the last 5 years
--------------------------------------------------------------------------------
10/61 Xxxxx X. Xxxxxxx President, Foreside Financial Group, LLC
since 2005; President, Foreside Services,
Inc. (a staffing services firm) since
January 2007; Chief Operating Officer and
Managing Director, Global Fund Services,
Citigroup Fund Services, LLC from
2003-2005; Chief Operating Officer and
Managing Director, Global Securities
Services for Investors, Citibank N.A from
1999-2003.
(5) SERVICES
. Attend and represent the funds at periodic board meetings as
necessary;
. Make all necessary representations and certifications including
obtaining sub-certifications from various providers (i.e.,
Xxxxxxxx-Xxxxx certifications, conformity with GAAP principles, fraud
certifications, SEC filings, management representation letters to fund
auditors, etc.);
. Review and sign as PFO/Treasurer on all shareholder communications and
all SEC filings such as N-CSR/proxies/NP-X/N-Q/Registration
statements;
. Execute as signatory in the Trust's disclosure control committees;
. Undertake periodic risk-based reviews of the funds' service provider
operations to ensure compliance with fund policies and accounting
statement requirements;
. Design and authorize disclosure controls and procedures for financial
statements including sign-off on design to ensure that all relevant
fund financial information is properly disclosed to the executive
officers and the board;
. Ensure the fund administrator is in compliance with board policies,
procedures, by-laws and resolutions as they pertain to expense
management;
. Undertake periodic risk-based reviews of the funds' service provider
operations to ensure compliance with fund policies and accounting
statement requirements;
. Oversee the budgeting process and authorize the procedures and
authorities under which the fund administrator will make expense
payments on behalf of the funds;
. Review performance of investment adviser, independent accountant and
other service providers as per certification requirements and
coordinate contract renewal process regarding the same;
. Approve the funds' accounting policies; create and review policies
with investment adviser, funds' auditors and accountant and propose
any required amendments for approval by the funds' board;
. Coordinate timing of financial statement preparation and filings;
review as per certification requirements;
. Support the Principal Executive Officer of the trust and President of
the investment adviser to ensure that the goals of the trust are
aligned with the investment adviser's objectives;
. Assist with the negotiation of contracts related to audit fees and
fees for services with service providers and independent accountants;
. Represent the funds as PFO/Treasurer at SEC examinations as required;
. Present materials to the funds' board, audit committees and senior
management, as required or requested;
. Periodic review of performance of each service provider against the
funds' policies, procedures and contracts in cooperation with the
funds' CCO and President. Review performance against industry peer
benchmarks; and
. Other attendant duties of PFO/Treasurer as required.
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