SERVICE STANDARDS RELATED TO THE SECOND AMENDED AND RESTATED INVESTMENT COMPANY SERVICES AGREEMENT BETWEEN MATTHEWS ASIAN FUNDS AND PFPC
SERVICE
STANDARDS
RELATED
TO THE
SECOND
AMENDED AND RESTATED INVESTMENT COMPANY SERVICES AGREEMENT
BETWEEN
XXXXXXXX ASIAN FUNDS
AND
PFPC
In
connection with the Second Amended and Restated Investment Company Services
Agreement dated as of April 2, 2008 and effective retroactively from April
1,
2007 (the “Agreement”) between PFPC Inc. (“PFPC”) and Xxxxxxxx International
Funds d/b/a Xxxxxxxx Asian Funds (the “Trust”), PFPC has agreed to perform the
services described in the Agreement in accordance with the service standards
set
forth in this agreement (the “Service Level Agreement”). The parties agree that
the service standards set forth herein may be revised, from time to time,
by
mutual written agreement.
PFPC
will
use commercially reasonable efforts to perform the services set forth in
the
Agreement in accordance with the service standards set forth below (each,
a
“Standard”).
In
the event PFPC fails to meet a particular Standard in any particular month,
PFPC
agrees to take appropriate, commercially reasonable corrective measures within
the following month to seek to be in compliance with the appropriate Standard
at
the end of such month; provided, however, that the foregoing requirement
shall
not apply in those instances in which PFPC’s failure to meet a Standard was due
to circumstances beyond its control.
With
respect to each PFPC line of business (that is, (a) Transfer Agency &
Shareholder Services, and (b) Fund Accounting & Regulatory Administration),
in the event PFPC fails to meet the Standards for three or more different
items
(“Items”),
each
as identified below (except for any failure due to circumstances beyond its
control), in each of three consecutive months, the fee payable to PFPC under
the
Agreement attributable
to the corresponding line of business shall
be
reduced by one and one-quarter percent (1.25%) or such lower amount as the
parties shall agree upon for the third of those three months. With respect
to
each PFPC line of business, if PFPC fails to meet the Standards for any three
or
more different Items (except for any failure to do circumstances beyond its
control), in each of four or more consecutive months, the fee payable to
PFPC
under the Agreement attributable to the corresponding line of
business shall
be
reduced by two and one-half percent (2.50%) or such lower amount as the parties
shall agree upon for the fourth of those months and each successive month
until
PFPC no longer fails to meet the Standards for such three or more Items in
a
particular month. For the avoidance of doubt, the foregoing calculations
will be
calculated separately for each PFPC line of business.
Transfer
Agency & Shareholder Services
|
ITEM
|
STANDARD
|
|
|
New
Account External Quality
|
98%
accuracy rate
|
|
|
Financial
Transaction Quality
|
99%
accuracy rate
|
|
|
Incoming
Calls
|
85%
answered in twenty (20) seconds
|
|
|
Abandon
Rate
|
Under
2%
|
|
|
Non-Financial
Transaction Quality
|
98%
accuracy rate
|
|
|
Financial
Correspondence
Non-Financial
Correspondence
|
98%
responded to within three (3) business days
98%
responded to within five (5) business days
|
|
|
Confirmations
|
99%
mailed in three business (3) days
|
|
|
Statements
|
99%
mailed in five business (5) days
|
|
|
Form
1099-DIV Additional Year-End Tax Information
|
Prepared
and mailed notices to shareholders within 45 days of calendar
year-end.
|
|
|
Email
Inquiries
|
98%
resolved within 3 business days of
receipt.
|
Fund
Accounting & Regulatory Administration Services
|
ITEM
|
STANDARD
|
|
|
NAV
Operations
|
||
|
NAV
Calculation Accuracy
|
99.4%
or better
|
|
|
Cash
Availability
|
90%
delivered by 10:15 am (ET).
|
|
|
Daily
Bulletin
|
99%
or better delivered by 6:30 pm (ET).
|
|
|
Position
Reconciliation
|
Weekly,
for the prior week.
|
|
|
Compliance
|
||
|
Monthly
Sub-M
|
Results
provided by 5th
business day
|
|
Board
Meetings
|
||
|
Mailing
of Board Meeting Materials
|
7
business days prior to meeting date, provided the Administrator
has
received timely notice of such meeting and has timely received
information
from third parties.
|
|
|
Fund
Administration
|
||
|
N-SARs
|
Completed
and filed with the SEC by the 60th
day following the Fund’s fiscal year end, or mid-year end (with respect to
semi-annual dates), if these dates are business day, otherwise,
the next
business day.
|
|
|
Excise
Tax Distributions
|
Calculated
and declared income and capital gain distributions prior to December
31.
|
|
|
Monthly
Performance Calculations
|
Complete
and distribute within 3 business days following calendar
month-end.
|
|
|
Expense
Budgeting and Analysis
|
Analyze
and adjust expense accruals, as needed, on a monthly basis.
|
|
|
Annual
and Semi-Annual Reports and N-CSR Filings
|
Complete
annual and semi-annual reports by the 60th
day following the Fund’s fiscal year end, or mid-fiscal year end (with
respect to semi-annual dates). File N-CSR with SEC 10 days after
initial
mail date to shareholders, if is a business day, otherwise, the
next
business day
|
|
|
24f-2
Share Registration Date
|
Prepare
financial data for inclusion in the Form 24f-2 filing within 90
days of
fiscal year-end.
|
|
|
Form
1099-MIS Additional Year-End Tax Information
|
Prepare
and mail notices to Trustees and vendors within 45 days of calendar
year-end.
|
|
|
Forms
1120-RIC and 8613
|
Prepare
and file on a Fund-by-Fund basis with the U.S. Internal Revenue
Service by
the relevant due date, inclusive of extensions where
allowable.
|
|
|
Payment
of Invoices
|
Pay
on behalf of the Trust all invoices accurately within 2 weeks of
initial
receipt of invoice by PFPC. For avoidance of doubt, the Trust will
promptly reimburse PFPC for all such payments.
|
|
|
Payment
of Asset-Based Fees
|
Recalculate
and prepare payment authorizations for advisory fees monthly. To
be
completed within 1 business day of the end of the calculation period.
|
NAV
Standard.
With
respect to the NAV Standard, NAV calculations are measured by total number
of
NAVs calculated monthly. On each day where PFPC receives less than 50% of
the
nightly security information prior to 5:00pm ET, that entire day’s NAV
calculation will be excluded from the Standard performance calculation.
An
inaccurate NAV (an error greater than 1 cent per share of the asset value)
calculation may persist beyond one day. If an error lasts more than one business
day, it shall be treated as one error and excluded from both the numerator
and
denominator after the first day for that month’s calculation unless the source
of the inaccuracy changes during the relevant period.
It
is
anticipated that the Funds would not wish to deliver an NAV to NASDAQ if
the
accuracy of the NAV is in question at the time it is necessary to transmit
the
NAV to NASDAQ. If PFPC has reason to believe that an NAV is or may be incorrect,
PFPC may either “withhold” the NAV from NASDAQ or “withdraw” an NAV previously
submitted, in consultation with an appropriate representative of the Funds.
In
such event, PFPC shall not be deemed to have failed to report to NASDAQ by
the
applicable cut-off time.
General.
Standards
measured in percentages associated with an Item will be measured by dividing
the
total number of times that Item was correctly performed during the month
by the
total number of times that Item occurred during the month.
For
purposes of the foregoing, a failure to meet a particular Standard includes
only
those failures for which PFPC, in its capacity under the Agreement, would
not be
excused and for which PFPC would be responsible under the Agreement (including,
without limitation, under Section 13, Responsibility of PFPC).
Miscellaneous.
(a)
Capitalized terms not defined in this Service Level Agreement have their
respective meanings as defined in the Agreement.
(b)
As
hereby supplemented, the Agreement shall remain in full force and effect.
In the
event of a conflict between the terms hereof and the Agreement, this Service
Level Agreement shall control.
(c) The
Agreement, as supplemented hereby, together with its Exhibits and Schedules,
constitutes the complete understanding and agreement of the parties with
respect
to the subject matter hereof and supersedes all prior communications with
respect thereto.
(d)
This
Service Level Agreement may be executed in two or more counterparts, each
of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The facsimile signature of any party to this
Service Level Agreement shall constitute the valid and binding execution
hereof
by such party.
(e)
This
Service Level Agreement shall be governed by the laws of the State of Delaware,
without regard to its principles of conflicts of laws.
IN
WITNESS WHEREOF,
the
parties hereto have caused this Service Level Agreement to be executed by
their
duly authorized officers designated below on the date and year first above
written.
XXXXXXXX
INTERNATIONAL FUNDS
|
By:
|
/s/ Xxxxxxx X. Xxxxxxxxx |
|
Name:
|
Xxxxxxx X. Xxxxxxxxx |
|
Title:
|
President |
PFPC
INC.
