1
EXHIBIT 9 (b)
ADMINISTRATION AGREEMENT
NON-MONEY MARKET FUNDS
This Administration Agreement is made as of this 1st day of
November, 1996 between PACIFIC HORIZON FUNDS, INC., a Maryland corporation
(herein called the "Company"), and The BISYS GROUP, INC.
WHEREAS, the Company is a Maryland corporation which is an
open-end management investment company and is so registered under the Investment
Company Act of 1940 (the "1940 Act"); and
WHEREAS, the Company will offer and maintain the following
investment portfolios: Utilities Fund, Growth and Income Fund, International
Bond Fund, Blue Chip Fund, Intermediate Bond Fund and Asset Allocation Fund
(collectively, the "Feeder Funds") and Aggressive Growth Fund, Capital Income
Fund, U.S. Government Securities Fund, California Tax-Exempt Bond Fund, National
Municipal Bond Fund, Short-Term Government Fund, International Equity Fund and
Corporate Bond Fund (collectively, the "Managed Funds" and collectively with the
Feeder Funds, the "Funds"); and
WHEREAS, pursuant to an Amended and Restated Distribution
Agreement dated September 1, 1995 (the "Distribution Agreement") between the
Company and Concord Financial Group, Inc. ("Concord Financial"), the Company has
retained Concord Financial as its Distributor to provide for the sale and
distribution of shares of common stock of each Fund, each such share having a
par value of $.001 (herein collectively called "Shares"); and
WHEREAS, the Company desires to retain The BISYS Group, Inc.
as its Administrator to provide it with administrative services for the Funds
and The BISYS Group, Inc. is willing to provide such services for the Funds;
NOW, THEREFORE, in consideration of the premises and mutual
covenants set forth herein, the parties hereto agree as follows:
I. ADMINISTRATION
1. APPOINTMENT OF ADMINISTRATOR. The Company hereby appoints
The BISYS Group, Inc. as Administrator of each Fund on the terms and for the
period set forth in this Agreement, and The BISYS Group, Inc. hereby accepts
such appointment and agrees to
-1-
2
have the services and duties set forth in this Section I performed for the
compensation provided in this Section. The Company understands that the services
and duties set forth in this Section I will be performed by BISYS Fund Services,
L.P., a wholly-owned subsidiary of The BISYS Group, Inc. (hereafter, BISYS Fund
Services, L.P. and The BISYS Group, Inc., collectively "BISYS"). Notwithstanding
anything herein to the contrary, The BISYS Group, Inc. shall be as fully
responsible to the Company for the acts or omissions of BISYS Fund Services,
L.P. and any other affiliate of The BISYS Group, Inc. as The BISYS Group, Inc.
is for its own acts or omissions. The Company further understands that BISYS now
acts and will continue to act as administrator of various investment companies
and fiduciary of other managed accounts, and the Company has no objection to
BISYS' so acting. In addition, it is understood that the persons employed by
BISYS to assist in the performance of its duties hereunder will not devote their
full time to such services and nothing herein contained shall be deemed to limit
or restrict the right of BISYS or any affiliate of BISYS to engage in and devote
time and attention to other businesses or to render services of whatever kind or
nature.
2. SERVICES AND DUTIES.
(A) Subject to the supervision and control of the Company's
Board of Directors, BISYS will provide facilities, equipment, statistical and
research data, clerical, accounting and bookkeeping services, internal auditing
and legal services, and personnel to carry out all administrative services
required for operation of the business and affairs of the Funds, other than
those investment advisory functions which are to be performed by the Company's
Investment Adviser, the services of Concord Financial as Distributor pursuant to
the Distribution Agreement, those services to be performed by The Bank of New
York and PNC Bank, National Association pursuant to the Company's Custody
Agreements, those services to be performed by BISYS Fund Services, Inc. (the
"Transfer Agent") pursuant to the Company's Transfer Agency Agreement and those
services normally performed by the Company's counsel and auditors. The
responsibilities of BISYS include without limitation the following services:
(1) Providing a facility to receive purchase
and redemption orders for Shares via toll-free IN-WATS
telephone lines;
(2) Providing for the preparing, supervising
and mailing of confirmations for all purchase and redemption
orders for Shares;
(3) Providing and supervising the operation
of an automated data processing system to process purchase and
redemption orders for Shares received by
-2-
3
BISYS (BISYS assumes responsibility for the accuracy of
the data transmitted for processing or storage);
(4) Overseeing the performance of The Bank
of New York, PNC Bank, National Association and Transfer Agent
under the Custody Agreements and Transfer Agency Agreement
with respect to the Funds;
(5) Making available information concerning
each Fund to its shareholders; distributing written
communications to each Fund's shareholders such as periodic
listings of each Fund's securities, annual and semi-annual
reports, and prospectuses and supplements thereto; and
handling shareholder problems and calls relating to
administrative matters; and
(6) Providing and supervising the services
of employees ("relationship coordinators") whose principal
responsibility and function shall be to preserve and
strengthen each Fund's relationships with its shareholders.
(B) BISYS shall assure that persons are available to
transmit redemption requests for Shares to the Company's transfer agent as
promptly as practicable.
(C) BISYS shall assure that persons are available to
transmit orders accepted for the purchase of Shares to the transfer agent of the
Company as promptly as practicable.
(D) BISYS shall participate in the periodic updating
of the Funds' prospectuses and statements of additional information and shall
accumulate information for and, subject to approval by the Company's Treasurer
and legal counsel, coordinate the preparation, filing, printing and
dissemination of reports to the Funds' shareholders and the Commission,
including but not limited to annual reports and semi-annual reports on Form
N-SAR, notices pursuant to Rule 24f-2 and proxy materials pertaining to the
Funds.
(E) BISYS shall compute each Fund's net asset value
per share on each business day.
(F) BISYS shall calculate dividends and capital gain
distributions to be paid to each Fund's shareholders in conformity with
subchapter M of the Internal Revenue Code.
(G) BISYS shall pay all costs and expenses of
maintaining the offices of the Company, wherever located, and shall arrange for
payment by the Company of all expenses payable by the Company.
-3-
4
(H) BISYS, after consultation with legal counsel for
the Company, shall determine the jurisdictions in which the Shares shall be
registered or qualified for sale and, in connection therewith, shall be
responsible for the maintenance of the registration or qualification of the
Shares for sale under the securities laws of any state. Payment of Share
registration fees and any fees for qualifying or continuing the qualification of
the Company shall be made by the Company.
(I) BISYS shall provide the services of certain
persons who may be appointed as officers of the Company by the Company's Board
of Directors.
(J) BISYS shall oversee the maintenance by The Bank
of New York, PNC Bank, National Association and Transfer Agent of the books and
records pertaining to the Funds required under the 1940 Act in connection with
the performance of the Custody Agreements and Transfer Agency Agreement, and
shall maintain such other books and records with respect to the Funds (other
than those required to be maintained by the Company's Investment Adviser) as may
be required by law or may be required for the proper operation of the business
and affairs of the Funds. Without limiting the foregoing, BISYS shall obtain
from the Company's prior administrator all books and records pertaining to the
Funds that are required to be maintained under the 1940 Act and that are in the
prior administrator's possession, and shall be responsible for the proper
maintenance of such records throughout the term of this Agreement. In compliance
with the requirements of Rule 31a-3 under the 1940 Act, BISYS agrees that all
such books and records which it maintains, or is responsible for maintaining,
for the Company and the Funds are the property of the Company and further agrees
to surrender promptly to the Company any of such books and records upon the
Company's request. BISYS further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act said books and records required to be
maintained by Rule 31a-1 under said Act.
(K) BISYS shall prepare the Funds' federal, state and
local income tax returns.
(L) BISYS shall prepare and, subject to approval of
the Company's Treasurer, disseminate to the Company's directors each Fund's
quarterly financial statements and schedules of investments, and shall prepare
such other reports relating to the business and affairs of the Funds (not
otherwise appropriately prepared by the Company's Investment Adviser, counsel or
auditors) as the officers and directors of the Company may from time to time
reasonably request in connection with performance of their duties.
-4-
5
(M) BISYS shall assist The Bank of New York, PNC
Bank, National Association and Transfer Agent and the Company's Investment
Adviser, counsel and auditors as required to carry out the business and
operations of the Funds.
(N) In performing its duties as Administrator for the
Funds, BISYS will act in conformity with the Company's Charter, By-laws,
prospectuses and statements of additional information, and the instructions and
directions of the Board of Directors of the Company. In addition, BISYS will
conform to and comply with the requirements of the 1940 Act and all other
applicable federal or state laws and regulations.
3. SUBCONTRACTORS. It is understood that BISYS may from time
to time employ or associate with itself such person or persons as BISYS may
believe to be particularly fitted to assist in the performance of this
Agreement; provided, however, that the compensation of such person or persons
shall be paid by BISYS and that notwithstanding anything herein to the contrary
The BISYS Group, Inc. shall be as fully responsible to the Company for the acts
and omissions of any subcontractor as The BISYS Group, Inc. is for its own acts
and omissions. Without limiting the generality of the foregoing, it is
understood that BISYS, an affiliate of BISYS or a subcontractor has entered into
an agreement with PFPC, Inc. under which said institution will provide certain
accounting, bookkeeping, pricing and dividend and distribution calculation
services with respect to the Funds at the expense of the Funds.
4. EXPENSES ASSUMED AS ADMINISTRATOR. Except as otherwise
stated in this subsection 4, BISYS shall pay all expenses incurred by it in
performing its services and duties hereunder as Administrator including the cost
of any independent pricing service used in connection with the Funds. Other
expenses to be incurred in the operation of the Funds (other than those borne by
the Company's Investment Adviser) including taxes, interest, brokerage fees and
commissions, if any, fees of directors who are not officers, directors,
partners, employees or holders of 5 percent or more of the outstanding voting
securities of the Company's Investment Adviser or BISYS or any of their
affiliates, Securities and Exchange Commission fees and state blue sky
registration and qualification fees, advisory fees, charges of custodians,
transfer and dividend disbursing agents' fees, certain insurance premiums,
outside auditing and legal expenses, costs of maintaining corporate existence,
costs attributable to shareholder services, including without limitation
telephone and personnel expenses, costs of preparing and printing prospectuses
or any supplement or amendment thereto, necessary for the continued effective
registration of the Shares under federal or state securities laws, costs of
printing and distributing any prospectus, supplement or amendment thereto for
existing shareholders of the Fund described therein, costs of
-5-
6
shareholders' reports and corporate meetings and any extraordinary expenses will
be borne by the Funds. It is understood that certain advertising, marketing,
shareholder servicing, administration and/or distribution expenses to be
incurred in connection with the Shares may be paid by the Company as provided in
any Plan which may in the sole discretion of the Company be adopted in
accordance with Rule 12b-1 under the 1940 Act, and that such expenses will be
paid apart from any fees paid under this Agreement.
5. COMPENSATION. For the services provided and the expenses
assumed as Administrator pursuant to Section I of this Agreement, the Company
will pay The BISYS Group, Inc. a fee, computed daily and payable monthly, at the
annual rate of: .15 percent of the average net assets of the Blue Chip Fund,
Intermediate Bond Fund, Asset Allocation Fund, Utilities Fund, Growth and Income
Fund and International Bond Fund; .20 percent of the average net assets of the
National Municipal Bond Fund, U.S. Government Securities Fund, Capital Income
Fund, Short-Term Government Fund, Corporate Bond Fund and International Equity
Fund; and .30 percent of the average net assets of the Aggressive Growth and
California Tax-Exempt Bond Funds. Such fee as is attributable to each Fund shall
be a separate (and not joint or joint and several) obligation of each such Fund.
The parties understand that each Feeder Fund will seek to
achieve its investment objective by investing all of its assets in an open-end
management investment company (a "Portfolio") having the same investment
objective as that of the Fund, and that The BISYS Group, Inc. will receive
administration fees from the Portfolios. If in any fiscal year the aggregate of
the (i) pro rata share of the total expenses of a Portfolio that are borne by a
Feeder Fund (as such expenses are defined under the securities regulations of
any state having jurisdiction over such Fund), plus (ii) the expenses borne by
such Fund in connection with such Fund's own operations as a registered
investment company (as defined under such regulations), exceed the expense
limitations of any such state, The BISYS Group, Inc. will reimburse the Feeder
Fund for a portion of such excess expenses equal to such excess times the ratio
of (a) the sum of the administration fees otherwise payable with respect to such
Fund and Portfolio to The BISYS Group, Inc. hereunder and under the
administration agreement between The BISYS Group, Inc. and the Portfolio (the
"Portfolio Administration Agreement"), to (b) the aggregate of such
administration fees otherwise payable with respect to such Fund and Portfolio to
The BISYS Group, Inc. plus the advisory fees otherwise payable by the Portfolio
under its investment advisory agreement with Bank of America N.T.S.A. The
obligation of The BISYS Group, Inc. to reimburse any Feeder Fund hereunder is
limited in any fiscal year to the amount of its fees hereunder and under the
Portfolio Administration Agreement for such fiscal year with respect to such
Fund and the Portfolio in
-6-
7
which the Feeder Fund's assets are invested; provided, however, that
notwithstanding the foregoing, The BISYS Group, Inc. will reimburse any Feeder
Fund for such proportion of such excess expenses regardless of the amount of
fees paid to it during such fiscal year to the extent that the securities
regulations of any state having jurisdiction over the Feeder Fund so require.
Such expense reimbursement, if any, will be estimated and accrued daily and paid
on a monthly basis.
Notwithstanding anything to the contrary herein, if in any
fiscal year the aggregate expenses of any Managed Fund (as defined under the
securities regulations of any state having jurisdiction over such Fund) exceed
the expense limitations of any such state, the Company may deduct from the fees
to be paid hereunder, or The BISYS Group, Inc. will bear, to the extent required
by state law, that portion of such excess which bears the same relation to the
total of such excess as The BISYS Group Inc.'s fee hereunder with respect to
such Fund bears to the total fees otherwise payable for the fiscal year with
respect to such Fund pursuant to this Agreement and the investment advisory
agreement then in effect for such Fund. The BISYS Group, Inc.'s obligation is
not limited to the amount of its fees hereunder. Such deduction or payment, if
any, will be estimated and accrued daily and paid on a monthly basis.
II. CONFIDENTIALITY
BISYS will treat confidentially and as proprietary information
of the Company all records and other information relative to the Company and the
Funds and prior or present shareholders or those persons or entities who respond
to Concord Financial's inquiries concerning investment in the Company, and will
not use such records and information for any purpose other than performance of
its responsibilities and duties hereunder or under any other agreement with the
Company, except after prior notification to and approval in writing by the
Company, which approval shall not be unreasonably withheld and may not be
withheld where BISYS may be exposed to civil or criminal contempt proceedings
for failure to comply, when BISYS is requested to divulge such information by
duly constituted authorities, or when BISYS is so requested by the Company.
III. LIMITATIONS OF LIABILITY
Neither The BISYS Group, Inc. nor BISYS Fund Services, L.P.
shall be liable for any error of judgment or mistake of law or for any loss
suffered by the Company or by any Fund in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith or negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement. Any
person, even though also an officer, director,
-7-
8
partner, employee or agent of BISYS, who may be or become an officer, director,
employee or agent of the Company, shall be deemed, when rendering services to
the Company or to any Fund, or acting on any business of the Company or of any
Fund (other than services or business in connection with BISYS's duties as
Administrator hereunder or under any other agreement with the Company) to be
rendering such services to or acting solely for the Company or Fund and not as
an officer, director, partner, employee or agent or one under the control or
direction of BISYS even though paid by BISYS.
IV. DURATION AND TERMINATION
This Agreement shall become effective November 1, 1996, unless
sooner terminated as provided herein, shall continue until October 31, 1997.
Thereafter, if not terminated, this Agreement shall continue automatically as to
a particular Fund for successive terms of one year, provided that such
continuance is specifically approved at least annually (a) by a vote of a
majority of those members of the Board of Directors of the Company who are not
parties to this Agreement or "interested persons" of any such party, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the Board of Directors of the Company or by vote of a "majority of the
outstanding voting securities" of such Fund; provided, however, that this
Agreement may be terminated by the Company at any time with respect to any Fund,
without cause and without the payment of any penalty, by vote of a majority of
the entire Board of Directors of the Company or by a vote of a "majority of the
outstanding voting securities" of such Fund on 60 days' written notice to The
BISYS Group, Inc., or by The BISYS Group, Inc. at any time, without payment of
any penalty, on 90 days' written notice to the Company. This Agreement will
automatically and immediately terminate in the event of its "assignment." (As
used in this Agreement, the terms "majority of the outstanding voting
securities," "interested person" and "assignment" shall have the same meaning as
such terms have in the 1940 Act.)
V. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought.
VI. NOTICES
Notices of any kind to be given to the Company hereunder by
BISYS shall be in writing and shall be duly given if mailed or delivered to the
Company at Association of American Universities, Xxx Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, X.X. 00000, Attention: Xx. Xxxxxxxxx J. Pings, President, or at such
-8-
9
other address or to such individual as shall be so specified by the Company to
BISYS. Notices of any kind to be given to BISYS hereunder by the Company shall
be in writing and shall be duly given if mailed or delivered to BISYS at 000
Xxxxx Xxxx, Xxxxxx Xxxxx, Xxx Xxxxxx 00000, Attention: Xxxxx X. Dell, General
Counsel, or at such other address or to such individual as shall be so specified
by BISYS to the Company.
VII. MISCELLANEOUS
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be signed in
one or more counterparts, each of which shall be an original and all of which
together shall be deemed one and the same document. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Section IV hereof, this Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and shall be governed by New York law; provided, however, that
nothing herein shall be construed in a manner inconsistent with the 1940 Act or
any rule or regulation of the Commission thereunder.
-9-
10
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their officers designated below as of the day and
year first above written.
PACIFIC HORIZON FUNDS, INC.
By: /s/ Xxxxxxxxx X. Pings
-----------------------------
Xxxxxxxxx X. Pings
President
Attest: /s/ W. Xxxxx XxXxxxxx, III
--------------------------------
W. Xxxxx XxXxxxxx, III
Secretary
THE BISYS GROUP, INC.
By: /s/ Xxxxxx X. XxXxxxxx
-----------------------------
Name: Xxxxxx X. XxXxxxxx
Title: Executive Vice
President and Chief
Financial Officer
Attest: /s/ Xxxxx X. Dell
--------------------------------
Name: Xxxxx X. Dell
Title: Vice President,
General Counsel and
Secretary
-10-
