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EX-99.(H)(1)
TRANSFER AGENT CONTRACT
TRANSFER AGENT CONTRACT (this "Contract"), dated March __, 2000 by and
between WM Trust I, WM Trust II and WM Variable Trust (each a "Trust" and a
"Company"), each a Massachusetts business trust, WM Strategic Asset Management
Portfolios, LLC (the "LLC" and a "Company"), a Massachusetts limited liability
company, WM Shareholder Services, Inc. ("WMSS"), a Washington corporation, and
PFPC, Inc. a Massachusetts corporation ("PFPC").
W I T N E S S E T H
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WHEREAS, each Company is an investment management company registered
under the Investment Company Act of 1940 (the "1940 Act");
WHEREAS, each Company is authorized to issue shares in separate series
with each series listed on the signature page of the Contract representing a
separate portfolio of securities and other assets (each a "Fund");
WHEREAS, each Fund desires PFPC to perform the services set forth on
Schedule A hereto, and PFPC is willing to perform such services;
WHEREAS, each Fund desires WMSS to oversee the provision by PFPC of the
services set forth in Schedule A hereto, and to perform the services set forth
in Schedule B hereto (to the extent they are not provided by PFPC pursuant to
Section 1 hereof), and WMSS is willing to oversee and perform such services;
WHEREAS, WMSS and PFPC are parties to a certain Service Agreement dated
as of June 17, 1998, as amended October 26, 1999 (the "Services Agreement");
NOW THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, all the parties hereto agree as follows:
1. PFPC agrees to perform the services set forth in Schedule A
hereto.
2. WMSS agrees to oversee PFPC in its performance of the services
set forth in Schedule A hereto, and to perform the services set forth in
Schedule B hereto to the extent they are not performed by PFPC pursuant to
Section 1 hereof.
3. WMSS's monthly fees under this Contract will be calculated in
accordance Schedule C hereto (the "WMSS Monthly Fees"), subject to the
provisions of this Section 3.
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PFPC's monthly fees under this Contract will be calculated in accordance with
Schedule D hereto (the "PFPC Monthly Fees"), subject to the provisions of this
Section 3.
(a) The Funds agree to pay directly to PFPC the lesser of (i)
the WMSS Monthly Fees and (ii) the PFPC Monthly Fees.
(b) If, for a given month, WMSS Monthly Fees exceed PFPC
Monthly Fees, the Funds shall pay to WMSS an amount equal to the excess of
(i) the WMSS Monthly Fees over (ii) the PFPC Monthly Fees.
(c) If, for any given month, the PFPC Monthly Fees exceed the
WMSS Monthly Fees, WMSS shall pay to PFPC an amount equal to the excess of
(i) the PFPC Monthly Fees over (ii) the WMSS Monthly Fees.
(d) For the avoidance of doubt, WMSS acknowledges and agrees
that it shall not be entitled to any portion of the PFPC Monthly Fees.
4. PFPC hereby waives, with respect to any periods during which this
Contract is in effect, any right to receive from WMSS any fees under the
Services Agreement in respect of the services set forth on Schedule A hereto.
5. Each Company acknowledges and agrees that, for so long as PFPC
provides the services set forth on Schedule A hereto in accordance with the
performance standards set forth in Schedule 1 to Exhibit D hereto (the
"Performance Standards"), WM Advisors shall have met its obligation to provide
the services set forth on Schedule A hereto.
6. WMSS agrees to indemnify and hold the Funds harmless from and
against any and all claims, costs, expenses (including attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or kind which may be
asserted against the Funds or for which the Funds may be held liable (a "Claim")
arising out of or attributable to any actual or alleged failure of PFPC to
provide the services set forth on Schedule A hereto in accordance with the
Performance Standards.
7. WMSS agrees to indemnify and hold PFPC harmless from and against
any and all Claims arising out of or attributable to this Contract to the extent
that PFPC would not have been responsible for such Claims under the Services
Agreement.
8. Each Fund agrees to reimburse each of WMSS and PFPC, as
applicable, for the out-of-pocket expenses set forth on Schedule E hereto.
9. Each Fund agrees that all computer programs and procedures
developed and/or used by WMSS and PFPC to perform services required under this
Contract are the property of WMSS and PFPC, respectively, and WMSS and PFPC
agree that all records and other data of
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the Funds maintained by WMSS and PFPC, except computer programs and procedures,
are the property of the Fund. Each of WMSS and PFPC agrees that it will furnish
all such records and other data as may be requested to a Fund immediately upon
termination of this Contract for any reason whatsoever.
10. Each of WMSS and PFPC agrees to treat all records and other
information relative to a Fund with utmost confidence and further agrees that
all records maintained by it for the Fund shall be open to inspection and audit
at reasonable times by the officers, agents or auditors employed by the Fund and
that such records shall be preserved and retained by it so long as this Contract
shall remain in effect.
11. Neither PFPC nor WMSS shall be liable for any damage, loss of
data, delay or any other loss caused by any such power failure or machine
breakdown, except that each shall be liable for actual out-of-pocket costs
caused by any such power failure or machine breakdown, and each shall make all
reasonable efforts to recover the data in process that is assumed lost during
any power failure or machine breakdown.
12. WMSS will maintain in force through the duration of this Contract
a fidelity bond in a face amount not less than $1,000,000 written by a reputable
insurance company, covering theft, embezzlement, forgery and other acts of
malfeasance by WMSS, its employees, or agents in connection with services
performed for a Fund.
13. This Contract may be terminated without the payment of any
penalty by any party upon one hundred eighty (180) days written notice thereof
given by a any party hereto to the other parties hereto. For the avoidance of
doubt, termination of this Contract will not terminate the Services Agreement.
Upon such termination, PFPC's right to receive fees from WMSS under the Services
Agreement shall automatically be reinstated. Termination of this Agreement shall
in no way be interpreted or construed as termination of the Services Agreement
which shall remain in effect until terminated in accordance with its terms.
14. Any notice shall be officially given to a Fund when sent by
registered or certified mail by a party to the appropriate address listed in the
Fund's current registration statement, provided that each party may notify the
others by regular mail of any changed address to which such notices should be
sent.
15. This Contract constitutes the entire agreement between the Funds
and each of WMSS and PFPC, and shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts and shall inure to the
benefit of the parties hereto and their respective successors.
16. (a) A copy of the Declaration of Trust of each Trust is on file
with the Secretary of the Commonwealth of Massachusetts, and notice is hereby
given that this Contract is executed by an officer of each Trust on behalf of
each Fund, and that the obligations of this Contract shall
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be binding upon the assets and properties of the Fund only and shall not be
binding upon the assets and properties of any other series of any Trust or upon
any of the trustees, officers, employees, agents or shareholders of the Fund or
the Trust individually.
(b) A copy of the LLC Certificate of Formation of the LLC is on
file with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is executed by an officer of the LLC on behalf
of its trustees, as trustees and not individually, on further behalf of each
Fund, and that the obligations of this Contract as they relate to each Fund
shall be binding upon the assets and properties of that Fund only and shall not
be binding upon the assets and properties of any other Fund or series of the LLC
or upon any of the trustees, officers, employees, agents or shareholders of a
Fund or the LLC individually.
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IN WITNESS WHEREOF, the parties hereto cause this Contract to be
executed by their officers designated below as of the date first above-written.
WM TRUST I, on behalf of its series: WM STRATEGIC ASSET MANAGEMENT
Money Market Fund PORTFOLIOS, LLC, on behalf of its series:
Tax-Exempt Money Market Fund Strategic Growth Portfolio
U.S. Government Securities Fund Conservative Growth Portfolio
Income Fund Balanced Portfolio
High Yield Fund Flexible Income Portfolio
Tax-Exempt Bond Fund Income Portfolio
Bond & Stock Fund
Growth & Income Fund
Growth Fund of the Northwest WM VARIABLE TRUST,
Mid Cap Stock Fund on behalf of its series:
Money Market Fund
WM TRUST II, on behalf of its series: Short Term Income Fund
California Money Fund U.S. Government Securities Fund
Short Term Income Fund Income Fund
California Municipal Fund Bond & Stock Fund
California Insured Intermediate Growth & Income Fund
Municipal Fund Growth Fund of the Northwest
Florida Insured Municipal Fund Mid Cap Stock Fund
Growth Fund Growth Fund
Small Cap Stock Fund Small Cap Stock Fund
International Growth Fund International Growth Fund
Strategic Growth Portfolio
Conservative Growth Portfolio
Balanced Portfolio
Flexible Income Portfolio
Income Portfolio
Each by:
Xxxxxxx X. Xxxxxx
President
PFPC, INC. WM SHAREHOLDER SERVICES, INC.
By: ______________________________ ____________________________
Its: _____________________________ Xxxxx X. Xxxxxx
First Vice President
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SCHEDULE A
SERVICES PROVIDED BY PFPC AND OVERSEEN BY WMSS*
1. Shareholder Information. PFPC shall maintain a record of the
number of Shares held by each Shareholder of record which shall include name,
address, taxpayer identification and which shall indicate whether such Shares
are held in certificates or uncertificated form.
2. Shareholder Services. PFPC shall respond as appropriate to all
inquiries and communications from Shareholders relating to Shareholder accounts
with respect to its duties hereunder and as may be from time to time mutually
agreed upon between PFPC and WMSS.
3. Mailing Communications to Shareholders; Proxy Materials. PFPC
will address and mail to Shareholders of the Funds, all reports to Shareholders,
dividend and distribution notices and proxy material for the Funds' meetings of
Shareholders. In connection with meetings of Shareholders, PFPC will prepare
Shareholder lists, mail and certify as to the mailing of proxy materials,
process and tabulate returned proxy cards, report on proxies voted prior to
meetings, act as inspector of election at meetings and certify Shares voted at
meetings.
4. Sales of Shares.
PFPC shall not be required to record as sold any Shares of a Fund
where it has received a Written Instruction from WMSS or official notice from
any appropriate authority that the sale of the Shares of such Fund has been
suspended or discontinued. The existence of such Written Instructions or such
official notice shall be conclusive evidence of the right of PFPC to rely on
such Written Instructions or official notice.
In the event that any check or other order for the payment of
money is returned unpaid for any reason, PFPC will endeavor to: (i) give prompt
notice of such return to WMSS or its designee; (ii) place a stop transfer order
against all Shares recorded as sold in reliance on such check or order; and
(iii) take such other actions as PFPC may from time to time deem appropriate.
5. Transfer and Repurchase.
(a) PFPC shall process all requests to transfer or redeem Shares
in accordance with the transfer or repurchase procedures set forth in the Funds'
Prospectus.
(b) PFPC will transfer or repurchase Shares upon receipt of Oral
or Written Instructions or otherwise pursuant to the Prospectus and Share
certificates, if any, properly
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* Note: Capitalized terms used in this Schedule A without definition have the
meanings given them in the Services Agreement.
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endorsed for transfer or redemption, accompanied by such documents as PFPC
reasonably may deem necessary.
PFPC reserves the right to refuse to transfer or repurchase
Shares until it is satisfied that the endorsement on the instructions is valid
and genuine. PFPC also reserves the right to refuse to transfer or repurchase
Shares until it is satisfied that the requested transfer or repurchase is
legally authorized, and it shall incur no liability for the refusal, in good
faith, to make transfers or repurchases which PFPC, in its good judgment, deems
improper or unauthorized, or until it is reasonably satisfied that there is no
basis to any claims adverse to such transfer or repurchase.
When Shares are redeemed, PFPC shall, upon receipt of the
instructions and documents in proper form, deliver to the Custodian and the
respective Fund or its designee a notification setting forth the number of
Shares to be repurchased. Such repurchased shares shall be reflected on
appropriate accounts maintained by PFPC reflecting outstanding Shares of such
Fund and Shares attributed to individual accounts.
PFPC shall, upon receipt of the monies provided to it by the
Custodian for the repurchase of Shares, pay such monies as are received from the
Custodian, all in accordance with the procedures described in the written
instruction received by PFPC from WMSS
PFPC shall not process or effect any repurchase with respect to
Shares of any Fund after receipt by PFPC or its agent of notification of the
suspension of the determination of the net asset value of such Fund.
6. Dividends.
(a) Upon the declaration of each dividend and each capital gains
distribution by the Board of Directors of the Funds with respect to Shares of
such Fund, WMSS shall furnish or cause to be furnished to PFPC Written
Instructions 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 entitled to payment shall be determined, the amount
payable per Share to the Shareholders of record as of that date, the total
amount payable on the payment date and whether such dividend or distribution is
to be paid in Shares at net asset value.
On or before the payment date specified in such resolution of
the Board of Directors, the Fund will provide PFPC with sufficient cash to make
payment to the Shareholders of record as of such payment date.
If PFPC does not receive sufficient cash from the Fund to make
total dividend and/or distribution payments to all Shareholders of the Fund as
of the record date, PFPC will, upon notifying WMSS, withhold payment to all
Shareholders of record as of the record date until sufficient cash is provided
to PFPC.
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7. In addition to and neither in lieu nor in contravention of the
services set forth above, PFPC shall perform all the customary services of a
transfer agent, registrar, dividend disbursing agent and agent of the dividend
reinvestment and cash purchase plan as described herein consistent with those
requirements in effect as at the date of the Services Agreement. The detailed
definition, frequency, limitations and associated costs (if any) set out in
Schedule D to the Contract, include but are not limited to: maintaining all
Shareholder accounts, preparing Shareholder meeting lists, mailing proxies,
tabulating proxies, mailing Shareholder reports to current Shareholders,
withholding taxes on U.S. resident and non-resident alien accounts where
applicable, preparing and filing U.S. Treasury Department Forms 1099 and other
appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders.
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SCHEDULE B
SERVICES PROVIDED BY WMSS
I. Shareholder Services
A. Maintain all Shareholder records on electronic data processing
equipment, including:
1. Share balances
2. Account transaction history
3. Names and addresses
4. Distribution records
5. Transfer records
6. Over-all control records
B. New Accounts
1. Deposit all monies received into a Fund custody account
maintained by the Fund's custodian.
2. Set up account according to Shareholders' instructions
3. Issue and mail shareholder confirmations
C. Additional Purchases
1. Deposit monies received into a Fund custody account maintained
by the Fund's custodian.
2. Issue Shareholder confirmations
D. Redemptions
Liquidate shares upon Shareholder request
1. Make payments of redemption proceeds in accordance with the
Fund's then current prospectus.
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2. Issue and mail Shareholder confirmation
E. Transfer shares as requested, including obtaining necessary papers
and documents to satisfy transfer requirements. On irregular
transfers requiring special legal opinions, such special legal
fees, if any, are to be paid for by the Fund.
F. Process changes, corrections of addresses and registrations
G. Maintain service with Shareholders as follows:
1. Activity required to receive, process and reply to
Shareholders' correspondence regarding account matters
2. Refer correspondence regarding investment matters to the Fund
with sufficient account data to answer
3. Contact Shareholders directly to settle problems and answer
questions
H. Compute distributions, dividends and capital gains
1. Make payment or reinvest in additional shares as directed by
shareholders according to provisions of the Fund's then
current prospectus
2. Advise each Shareholder of the amount of dividends received
and tax status annually
I. Produce transcripts of shareholder account history as required
J. Maintain the controls associated with the computer programs and
manual systems to arrive at the Fund's total shares outstanding
K. Receive mail and perform other administrative functions relating to
transfer agent work
II. Other Services
A. Mailing services to shareholders
B. Services in connection with any stock splits
C. Develop special reports for Fund officers regarding statistical and
accounting data pertaining to the Fund. Fund shall pay for
out-of-pocket expenses charged by vendors to develop such reports
or portions thereof
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X. Xxxxx xxxxxxxx xxxx
X. XXXX support
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XXXXXXXX X
XXXX MONTHLY FEES
September __, 1999
Fee Per Account Per Month*
Open Closed
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Money Market
Money Market Fund $1.65 $0.21
Tax-Exempt Money Market Fund
California Money Fund
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All Other Funds
$1.35 $0.21
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Fees Include:
- Shareholder and Broker Servicing
- Transaction Processing, Correspondence, and Research
- Settlement and Reconciliation
- Corporate Actions
- Tax Reporting and Compliance
- NSCC Support
- Management Company and Broker/Dealer Support
- Asset Allocation Processing for all distribution channels
Additional charges will be made for out-of-pocket expenses according to
Schedule C.
* No fee is paid by WM Variable Trust.
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SCHEDULE D
PFPC MONTHLY FEES*
1) Per Account Fees:
Open Accounts $15.00 per Account
Closed Accounts $2.00 per Account
NSCC Level III Accounts $8.00 per Account
Each year, effective on the anniversary date of the Services Agreement, the per
account fee will increase by a percentage equal to an amount one percent greater
than the Consumer Price Index as reported monthly by Bloomberg Financial Markets
and Commodity News in the month preceding the effective date of the increase.
This provides PFPC with an opportunity to manage uncontrollable expenses due to
inflationary increases.
2) Variable Annuity Fees:
$1,000 per month per Portfolio for the first six variable annuity
Portfolios; $500 per month per Portfolio for each additional
variable annuity Portfolio.
3) Dedicated Systems Development Team:
WMSS shall pay $275,000.00 annually for a dedicated systems
development team consisting of 1.5 programmers, .5 system manager
and .5 BSA. In the event that WMSS desires to discontinue this
service, WMSS shall provide PFPC 60 days written notice. In the
event of such termination, WMSS shall be responsible for the pro
rata share of the stated annual dedicated System Development Team
fee.
Incremental systems resources will be billed at a rate of $135.00
per hour.
The number of hours worked, projects and status will be reported
monthly.
TRANSFER AGENCY FEES INCLUDE:
- Shareholder and Broker Servicing
- Transaction Processing, Correspondence, and Research
- Settlement and Reconciliation
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* Note: Capitalized terms used in this Schedule D without definition have the
meanings given them in the Services Agreement.
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- Corporate Actions
- Tax Reporting and Compliance
- NSCC Support
- Management Company and Broker/Dealer Support
- Asset Allocation Processing for all distribution channels
ADDITIONAL TRANSFER AGENCY FEES:
- NSCC charges
- Banking fees
- Standard out-of-pocket expenses
VALUE ADDED TRANSFER AGENCY SERVICES:
1. DAZL Pricing:
Set Up Fee: $5,000.00
Monthly Usage Fee: $1,000.00
Transmission Charge: $.03 per record (Price record transmission cost is
$.015 per record.)
2. Voice Response Unit (VRU)
$25,000 set up fee
$.29 per minute maintenance charge
In the event that PFPC has failed to meet a specific Performance
Standard category, as set forth on Exhibit 1 of this Schedule D, in two months
of any rolling four month period for print/mail services or in two months of any
five month period for all other categories, the fees due to PFPC under this
Contract for such service (i.e., fund accounting, transfer agency or print/mail
services), excluding out-of-pocket expenses, will be reduced by an amount equal
to five percent (5%) of the fees for such service for the month in which the
second failure occurs. In the event PFPC fails to meet the specific Performance
Standard category which caused the fee reduction referenced in the preceding
sentence for a third time in the twelve month period commencing with the month
in which the first failure occurred, then the fees due to PFPC under this
Contract for such service (i.e., fund accounting, transfer agency of print/mail
service), excluding out-of-pocket expenses, for such third month shall be
reduced by an amount equal to ten percent (10%) of such fees.
For purposes of the fee reduction set forth above, PFPC's obligation to
meet the Performance Standards shall be measured in the aggregate with respect
to all of the Funds and Portfolios.
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Exhibit 1 of Schedule D
Performance Standards
Revised as of October 25, 1999
PFPC's obligation to meet the following Performance Standards shall be measured
in the aggregate with respect to all Funds.
PFPC will report to WMSS on a monthly basis the percent of items completed
within standard as well as a quality rating. Reporting will be detailed to the
transaction type level. A pass/fail determination for contractual penalties will
however be based on the categories listed below. For example, the accuracy of
purchases, redemptions, exchanges and adjustments will be reported to WMSS on an
individual basis and as a collective group. PFPC will receive a "fail" for the
month if the collective score for all financials falls below the contractual
level. PFPC agrees to promptly notify WMSSS of any issues which may result in
the failure of PFPC to meet a Performance Standard.
TRANSFER AGENCY SERVICES
CATEGORY COMPONENTS (TO BE REPORTED INDIVIDUALLY)
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Financials Purchases, Redemptions, Exchanges, Adjustments (both
financial and non-financial adjustments)
Minimum Acceptable Quality Score: 99%
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Non-Financials Maintenance (including address changes, option changes,
ROA/LOI), Legal Transfers, New Accounts
Minimum Acceptable Quality Score: 98%
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Print Mail Statements, Confirms, Checks
Minimum Acceptable Quality Score: 98%
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Shareholder Service Telephone, Correspondence
Minimum Acceptable Quality Score: 98%
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COMPLETION STANDARDS
TRANSACTION PROCESSING
A. Complete on day of receipt:
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- Purchases, redemptions, exchanges, financial adjustments, new accounts
B. Complete within three days of receipt:
- Non-financial adjustments, legal transfers
C. Complete within 5 days of receipt
- Maintenance
D. 100% Same Day Quality Control of Financial Items
E. Timely and accurate dividend and capital gain payout
PRINT MAIL *
A. Mailed on day of receipt:
- Shareholder checks
B. Mailed within one day of receipt:
- Confirms
C. Mailed within five business days following the end of the reporting period
- Statements, Commission Checks
D. Statements will be available to WMSS on CD ROM 15 business days after each
quarter end
E. All IRS tax forms to be mailed within the regulatory requirements
- Note that Print Mail performance standards will be in effect
only for those mailings where services are provided by PFPC.
SHAREHOLDER SERVICES
A. Telephone calls abandoned no greater than 2% of calls received (excluding
calls that abandon in less than 20 seconds
B. Financial Correspondence mailed within two days of receipt
C. Non-financial Correspondence mailed within four days of receipt
D. Average Speed of Answer less than 20 seconds
E. PFPC meet an industry quality service ranking of better than average, as
measured by NQR. In connection therewith, WMSS and PFPC shall review the
criteria and ranking on an annual basis.
F. Problem Resolution. PFPC will track and report resolution time for each
problem type, as well as, track and report quality assurance scores for the
Management Company Support Group. Reports will be included with QSR Reports.
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SCHEDULE E
OUT-OF-POCKET EXPENSES
The Funds shall reimburse WMSS monthly for applicable out-of-pocket
expenses, including, but not limited to the following items:
- NSCC charges
- Banking fees
- Voice response unit
- Microfiche/Microfilm/Image production
- Magnetic media tapes and freight
- Printing costs, including certificates, envelopes, checks and stationery
- Postage (bulk, pre-sort, ZIP+4, bar-coding, first class) direct pass through
to the Funds
- Due diligence mailings
- Telephone and telecommunication costs, including all lease, maintenance and
line costs
- Ad hoc reports
- Shareholder transcripts
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
- Duplicating services
- Courier services
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- Overtime, as approved by the Funds
- Temporary staff, as approved by the Funds
- Travel and entertainment, as approved by the Funds
- Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party record keeping vendors
- Third party audit reviews
- Ad hoc programming time
- Insurance
- Such other miscellaneous expenses reasonably incurred by WMSS in performing
its duties and responsibilities under this Agreement
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