Exhibit (12)(b)
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT, made this 28th day of August, 2000,
between Value Equity Trust (the "Fund"), a Massachusetts business trust and
Xxxxxxx Xxxxxx Investments, Inc. ("Xxxxxxx Xxxxxx"), a Delaware corporation.
WHEREAS, the Fund is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund is authorized to issue shares of beneficial interest
("Shares") in separate series, with each such series representing interests in a
separate portfolio of securities and other assets; and
WHEREAS, the Fund has established multiple series, including Xxxxxxx Large
Company Value Fund, Xxxxxxx Select 500 Fund, and Xxxxxxx Select 1000 Growth Fund
(each a "Series");
WHEREAS, this Agreement shall become effective as to each Series as of the date
listed next to such Series on Schedule A hereto; and
WHEREAS, the Fund wishes to retain Xxxxxxx Xxxxxx to provide administrative and
other services to the Fund with respect to the Series in the manner and on the
terms hereinafter set forth; and
WHEREAS, Xxxxxxx Xxxxxx is willing to furnish such services in the manner and on
the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties agree as follows:
I. APPOINTMENT. The Fund hereby appoints Xxxxxxx Xxxxxx as Administrator to
provide the administrative and other services with respect to the Series for the
period and on the terms set forth in this Agreement. The Administrator accepts
such appointment and agrees, during such period, to render the services herein
set forth for the compensation herein provided. In the event the Fund
establishes and designates additional series with respect to which it desires to
retain the Administrator to render administrative and other services hereunder,
it shall notify the Administrator in writing. If the Administrator is willing to
render those services, it shall notify the Fund in writing, whereupon Schedule A
hereto shall be amended to reflect the compensation payable to the Administrator
on behalf of that series and that series shall become a Series hereunder.
II. DUTIES. Subject to the general supervision of the Board members of the Fund
(the "Board"), the Administrator shall provide or procure all organizational,
administrative and other services reasonably necessary for the operation of the
Series and certain other services, all as more particularly described and except
as provided below.
A. ADMINISTRATIVE SERVICES. Subject to the approval or consent of the
Board, the Administrator shall provide or procure, at the Administrator's
expense, services to
include the following: (i) coordinating matters relating to the operation of the
Series, including any necessary coordination among Xxxxxxx Xxxxxx or other
advisers to the Series, the custodian(s), transfer agent(s), shareholder
servicing and dividend disbursing agent(s), subaccounting and recordkeeping
agent(s), fund accounting agent(s), pricing agent(s), accountants, attorneys,
and other parties performing services or operational functions for the Series;
(ii) providing the Series with the services of a sufficient number of persons
competent to perform such administrative and clerical functions as are necessary
to ensure compliance with federal securities laws, as well as other applicable
laws, and to provide effective administration of the Series; (iii) maintaining,
or supervising the maintenance by third parties, of such books and records of
the Fund and the Series as may be required by applicable federal or state law
other than the records and ledgers maintained under the Investment Management
Agreement; (iv) preparing and arranging for the distribution of proxy materials
and periodic reports to shareholders of the Series as required by applicable
law; and (v) taking such other action with respect to the Series as may be
required by applicable law, including, without limitation, the rules and
regulations of the SEC and of state securities commissions and other regulatory
agencies.
B. EXPENSES. During the term of this Agreement, the Administrator will
pay all expenses incurred by it in connection with its obligations under this
Agreement, except such expenses as are those of the Series under this Agreement.
The Administrator shall pay for maintaining its staff and personnel and shall,
at its own expense provide the equipment, office space, and facilities necessary
to perform its obligations under this Agreement. In addition, the Administrator
shall, at its expense, furnish to the Fund, or procure and pay for: (a) usual
and customary auditing services of each Series' independent public accountants;
(b) services of each Series' transfer agent(s), shareholder servicing and
dividend disbursing agent(s), and shareholder recordkeeping agent(s); (c)
services of each Series' custodian, including any recordkeeping services
provided by the custodian; (d) services of each Series' accounting agent(s), (e)
services of obtaining quotations for calculating the value of each Series' net
assets; (f) services of maintaining the Series' tax records; (g) services,
including procurement of legal services, incident to meetings of the Fund's
shareholders, the preparation and filing of registration statements under the
Securities Act of 1933, as amended, and the 1940 Act and any amendments thereto,
and reports of the Fund to its shareholders, the preparation and filing of
reports to regulatory bodies, the maintenance of the Fund's existence and
qualification to do business, and the registration of shares with federal and
state securities authorities (except as described in subsection (gg) below); (h)
procurement of ordinary legal services, including the services that arise in the
ordinary course of business for a Massachusetts business trust registered as an
open-end management investment company; (i) the Fund's pro rata portion of the
fidelity bond required by Section 17(g) of the 1940 Act, or other insurance
premiums; (j) association membership dues; (k) services to organize and offer
shares of the Fund and the Series; and (l) printing and postage expenses related
to the mailing of periodic reports, prospectuses, statements of additional
information and other shareholder mailings, excluding proxy solicitations; (m)
expenses that are the obligation of a Series pursuant to a special servicing
agreement with a registered investment company that is a holder of shares of the
Series and that may be deemed to be an affiliated person, or an affiliated
person of such a person, as defined in the 1940 Act; and (n) expenses in the
nature of avoided transfer agency costs payable to a person that is a
shareholder of record for an omnibus account on the transfer agency records of
the Series. The Fund shall bear the following expenses: (aa) salaries and other
compensation of any
2
of the Fund's executive officers and employees, if any, who are not officers,
Board members, stockholders, or employees of the Administrator or its
subsidiaries or affiliates; (bb) taxes, if any, levied against the Fund or any
of its Series; (cc) brokerage fees and commissions in connection with the
purchase and sale of portfolio securities for any of the Series; (dd) costs,
including the interest expenses, of borrowing money; (ee) fees and expenses of
Board members who are not officers, employees, or stockholders of the
Administrator or its subsidiaries or affiliates, and the fees and expenses of
any counsel, accountants, or any other persons engaged by such Board members in
connection with the duties of their office with the Fund; (ff) extraordinary
expenses, including extraordinary legal expenses to the extent authorized by the
Board, as may arise, including expenses incurred in connection with litigation,
proceedings, other claims and the legal obligations of the Fund to indemnify its
Board members, officers, employees, shareholders, distributors, and agents with
respect thereto; (gg) organizational and offering expenses of the Fund and the
Series to the extent authorized by the Board, and any other expenses which are
capitalized in accordance with generally accepted accounting principles; and
(hh) any expenses allocated to a specific Series pursuant to an administrative
services or distribution plan.
C. ORGANIZATIONAL SERVICES. The Administrator shall provide the Fund
and the Series, at the Administrator's expense, with the services necessary to
organize any Series that commence operations on or after the date of this
Agreement so that such Series can conduct business as described in the Fund's
Registration Statement.
D. The Administrator shall also make its officers and employees
available to the Board and officers of the Fund for consultation and discussions
regarding the administration of the Series and services provided to the Series
under this agreement.
E. In performing these services, the Administrator: (i) shall conform
with the 1940 Act and all rules and regulations thereunder, all other applicable
federal and state laws and regulations, with any applicable procedures adopted
by the Board, and with the provisions of the Fund's Registration Statement filed
on Form N-1A as supplemented or amended from time to time, (ii) will make
available to the Fund, promptly upon request, any of the Series' books and
records as are maintained under this Agreement, and will furnish to regulatory
authorities having the requisite authority any such books and records and any
information or reports in connection with the Administrator's services under
this Agreement that may be requested in order to ascertain whether the
operations of the Fund are being conducted in a manner consistent with
applicable laws and regulations, and (iii) will regularly report to the Board on
the services provided under this Agreement and will furnish the Board with
respect to the Series such periodic and special reports as the Board may
reasonably request.
F. The services provided by the Administrator under this Agreement are
in addition to those required to be provided by it under the Investment
Management Agreement entered into between the Administrator and the Fund on
behalf of each Series. Notwithstanding any other provision of the Agreement, all
other services provided by the Administrator under the Investment Management
Agreement will continue to be provided by the Administrator and paid for by the
Fund pursuant to that agreement.
III. INDEPENDENT CONTRACTOR. The Administrator shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or
3
authorized by the Board from time to time, have no authority to act for or
represent the Fund in any way or otherwise be deemed its agent.
IV. COMPENSATION. The Fund shall pay on behalf of each Series compensation to
the Administrator for the services rendered under this Agreement as set forth in
Schedule A hereto. The amount of any credit received from the Series' custodian
for cash balances maintained at the custodian shall be subtracted from any
amount required to be paid by Fund under this Agreement.
V. NON-EXCLUSIVITY. It is understood that the services of the Administrator
hereunder are not exclusive, and the Administrator shall be free to render
similar services to other investment companies and other clients.
VI. LIABILITY. The Administrator shall give the Fund the benefit of the
Administrator's best efforts in rendering services under this Agreement. The
Administrator may rely on information reasonably believed by it to be accurate
and reliable. As an inducement for the Administrator's undertaking to render
services under this Agreement, the Fund agrees that neither the Administrator
nor the stockholders, officers, Board members, or employees of the Administrator
shall be subject to any liability for, or any damages, expenses or losses
incurred in connection with, any act, omission or mistake in judgment connected
with or arising out of any services rendered under this Agreement, except by
reason of willful misfeasance, bad faith, or negligence in the performance of
the Administrator's duties, or by reason of reckless disregard of the
Administrator's obligations and duties under this Agreement. This provision
shall govern only the liability to the Fund of the Administrator and that of the
stockholders, officers, Board members, and employees of the Administrator, and
shall in no way govern the liability to the Fund or the Administrator of any
other person or provide a defense for such other person, including persons that
provide services for the Series as described in Section II.B or C of this
Agreement.
VII. TERM AND CONTINUATION. This Agreement shall take effect as of the date
hereof, and shall remain in effect, unless sooner terminated as provided herein,
until three (3) years from the date of this Agreement, and shall continue
thereafter on an annual basis with respect to each Series, provided that such
continuance is specifically approved at least annually (a) by the vote of a
majority of the Board, or (b) by vote of a majority of the outstanding voting
securities of the Series, and provided continuance is also approved by the vote
of a majority of the Board who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of the Fund, cast in person at a meeting
called for the purpose of voting on such approval. This Agreement may be
terminated without the payment of any penalty with respect to the entire Fund or
only with respect to one or more Series thereof: (a) by the Fund at any time
with respect to the services provided by the Administrator by vote of (1) a
majority of the Board members who are not "interested persons" (as such term is
defined in the 1940 Act) of the Fund, or (2) a majority of the outstanding
voting shares of the Fund or, with respect to a particular Series, by vote of a
majority of the outstanding voting shares of such Series, on 60 days' written
notice to the Administrator; and (b) by the Administrator on or after the third
anniversary of the date hereof, without the payment of any penalty, upon 60
days' written notice to the Fund.
4
VIII. NOTICES. Notices of any kind to be given to the Administrator by the Fund
shall be in writing and shall be duly given if mailed or delivered to the
Administrator at 000 Xxxx Xxxxxx, Xxx Xxxx Xxx Xxxx 00000, or to such other
address or to such individual as shall be specified by the Administrator.
Notices of any kind to be given to the Fund by the Administrator shall be in
writing and shall be duly given if mailed or delivered to Xxx Xxxxxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or to such other address or to such
individual as shall be specified by the Fund.
IX. FUND OBLIGATION. A copy of the Fund's Agreement and Declaration of Trust, as
amended, is on file with the Secretary of the Commonwealth of Massachusetts, and
notice is hereby given that if this Agreement has been executed on behalf of the
Fund by a Board member, it is so executed in his or her capacity as a Board
member and not individually. The obligations of this Agreement to pay the
Administrator for services provided to or procured for a Series shall be binding
only upon the assets and property of that Series and shall not be binding upon
any Board member, officer, or shareholder of the Fund individually.
X. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original.
XI. MISCELLANEOUS. This Agreement shall be governed by the laws of
Massachusetts, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or order of the SEC thereunder. 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 and, to this extent, the provisions of this Agreement shall
be deemed to be severable. To the extent that any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or otherwise
with regard to any party hereunder, such provisions with respect to other
parties hereto shall not be affected thereby. The captions in this Agreement are
included for convenience only and in no way define any of the provisions hereof
or otherwise affect their construction or effect. This Agreement may not be
assigned by the Fund or the Administrator without the consent of the other
party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below on the day and year first above
written.
VALUE EQUITY TRUST,
on behalf of each of the Series listed on Schedule A
By: /s/Xxxx Xxxxxxxx
----------------------------------
Xxxx Xxxxxxxx
Vice President
5
XXXXXXX XXXXXX INVESTMENTS, INC.
By: /s/Xxxxx X. Xxxxxxxx
-------------------------------
Xxxxx X. Xxxxxxxx
Managing Director
6
SCHEDULE A
XXXXXXX XXXXXX INVESTMENTS, INC.
FEE INFORMATION FOR SERVICES PROVIDED UNDER
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Fee, which shall be calculated based on each Series'
average daily net assets, shall be payable quarterly in an amount based on the
following annual rates.
Annual Administrative Fee Rates
-------------------------------
Emerging Markets Funds 0.6500%
Index Funds 0.2500%
International Funds 0.3750%
Money Market Funds 0.4000%
Sector Funds 0.3500%
Tax Free Funds 0.1500%
U.S. Income Funds 0.3000%
U.S. Large Cap Equity Funds 0.3000%
U.S. Small Cap Equity Funds 0.4500%
Emerging Markets Funds
----------------------
Xxxxxxx Emerging Markets Growth Fund October 2, 2000
Xxxxxxx Emerging Markets Income Fund October 2, 2000
Xxxxxxx Gold Fund October 2, 2000
Xxxxxxx Latin America Fund October 2, 2000
Xxxxxxx Pacific Opportunities Fund October 2, 2000
Index Funds
-----------
Xxxxxxx S&P 500 Index Fund September 11, 2000
Xxxxxxx Select 500 Fund August 28, 2000
Xxxxxxx Select 1000 Growth Fund October 2, 2000
International Funds
-------------------
Xxxxxxx Global Bond Fund October 2, 2000
Xxxxxxx Global Fund September 11, 2000
Xxxxxxx Greater Europe Growth Fund October 2, 2000
Xxxxxxx International Fund August 28, 2000
7
Money Market Funds
------------------
Xxxxxxx Cash Investment Trust September 11, 2000
Xxxxxxx Money Market Series: Prime Reserve Shares and Xxxxxx 00, 0000
XXXX Prime Reserve Class
Xxxxxxx U.S. Treasury Money Fund October 2, 2000
Sector Funds
------------
Xxxxxxx Health Care Fund October 2, 2000
Xxxxxxx Technology Fund October 2, 2000
Tax Free Funds
--------------
Xxxxxxx California Tax Free Fund October 2, 2000
Xxxxxxx High Yield Tax Free Fund December 1, 2000
Xxxxxxx Managed Municipal Bonds July 31, 2000
Xxxxxxx Massachusetts Tax Free Fund October 2, 2000
Xxxxxxx Medium Term Tax Free Fund October 2, 2000
Xxxxxxx New York Tax Free Fund October 2, 2000
Xxxxxxx Tax Free Money Fund October 2, 2000
U.S. Income Funds
-----------------
Xxxxxxx GNMA FundJuly 17, 2000
Xxxxxxx High Yield Bond FundOctober 2, 2000
Xxxxxxx Income FundJuly 31, 2000
Xxxxxxx Short Term Bond FundAugust 14, 2000
U.S. Large Cap Equity Funds
---------------------------
Xxxxxxx Balanced Fund August 28. 2000
Xxxxxxx Capital Growth Fund July 17, 2000
Xxxxxxx Dividend & Growth Fund October 2, 2000
Xxxxxxx Growth and Income Fund August 14, 2000
Xxxxxxx Large Company Growth Fund October 2, 2000
Xxxxxxx Large Company Value Fund October 2, 2000
U.S. Small Cap Equity Funds
---------------------------
Xxxxxxx Development Fund October 2, 2000
Xxxxxxx Small Company Stock Fund July 17, 2000
Xxxxxxx Small Company Value Fund October 2, 2000
Xxxxxxx 21st Century Growth Fund December 1, 2000
8
