TRANSFER AGENT AGREEMENT
THIS
TRANSFER AGENT AGREEMENT is made and entered into as of the 16th day of
December, 2009, by and between PFM Funds, a Virginia business trust (the
"Trust") with respect to its Prime Series (“Prime Series”) and Government Series
(“Government Series”) and each of the classes of the Prime Series identified in
Schedule A of this Agreement (each, a "Fund" and collectively, the "Funds") and
PFM Asset Management LLC, a Delaware limited liability company (hereinafter
referred to as the "Agent").
W I T N E
S S E T H:
WHEREAS,
the Trust is an open-end, diversified, management investment company which is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS,
the Agent is not required to register under the Securities Exchange Act of 1934,
as amended (the "1934 Act"), as a transfer agent;
NOW,
THEREFORE, the Trust, on behalf of the Funds, and the Agent do mutually promise
and agree as follows:
1. Terms
of Appointment; Duties of the Agent
Subject
to the terms and conditions set forth in this Agreement, the Trust hereby
employs and appoints the Agent to act as transfer agent, dividend disbursing
agent, and shareholder servicing agent for the Funds.
With
respect to each of the Funds, the Agent shall perform all of the customary
services of a transfer agent, dividend disbursing agent and shareholder
servicing agent, and as relevant, agent in connection with accumulation, open
account or similar plans (including without limitation any periodic investment
plan or periodic withdrawal program), including but not limited to the following
and as more fully described in Exhibit A:
A. Receive
orders for the purchase of shares, with prompt delivery, where appropriate, of
payment and supporting documentation to the Funds' custodian;
B. Process
purchase orders and issue the appropriate number of uncertificated shares with
such uncertificated shares being held in the appropriate shareholder
account;
C. Process
redemption requests received in good order and, where relevant, deliver
appropriate documentation to the Funds' custodian;
D. Pay
moneys (upon receipt from the Funds' custodian, where relevant) in accordance
with the instructions of redeeming shareholders;
E. Process
transfers of shares in accordance with the shareowner's
instructions;
F. Process
exchanges between the Funds and any other funds within the same family of funds,
if applicable;
G. Prepare
and transmit payments for dividends and distributions declared by the
Funds;
H. Make
changes to shareholder records, including, but not limited to, address changes
in plans (i.e.,
systematic withdrawal, automatic investment, dividend reinvestment,
etc.);
I. Record
the issuance of shares of the Funds and maintain, pursuant to Rule 17Ad-10(e)
under the 1934 Act, a record of the total number of shares of the Funds which
are authorized, issued and outstanding and such other records as are required to
be maintained by a transfer agent for open-end registered investment companies
by the rules adopted under the 1934 Act;
J. Prepare
shareholder meeting lists and, if applicable, mail, receive and tabulate
proxies;
K. Mail
shareholder reports and prospectuses to current shareholders;
L. Prepare
and file U.S. Treasury Department forms 1099 and other appropriate information
returns required with respect to dividends and distributions for all
shareholders;
M. Provide
shareholder account information upon request and prepare and mail confirmations
and statements of account to shareholders for all purchases, redemptions and
other confirmable transactions as agreed upon with the Trust, or in the
alternative, to deliver monthly statements by means of electronic mail, or by
providing access to a password protected website, to those shareholders of the
trust who consent to delivery of monthly statements in such manner;
and
N. Provide
a Blue Sky System which will enable the Funds to monitor the total number of
shares sold in each state. In addition, the Trust, on behalf of the Funds, shall
identify to the Agent in writing those transactions and assets to be treated as
exempt from the Blue Sky reporting for each state. The responsibility
of the Agent for the Funds' Blue Sky state registration status is solely limited
to the initial compliance by the Fund and the reporting of such transactions to
the Fund.
2. Additional
Services
With respect to the SNAP® Fund Class of
Prime Series, the Agent will:
A. Assist shareholders in compiling and
maintaining information on the draw-down of the proceeds of tax-exempt bond
issues invested in said classes;
B. Maintain information as
provided by the respective shareholders on any related tax-exempt bond issues,
the proceeds of which are invested in said classes;
C. Prepare periodic reports
for shareholders to enable them to track their spending as compared with the
spend-down standards contained in the Internal Revenue Code of 1986, as amended
(the “Code”) and applicable Regulations promulgated thereunder; and
D. Provided that a
shareholder has furnished information on the related bond issue, prepare
periodic interim estimates of the arbitrage rebate liabilities due under
provision of the Code and Regulations for tax-exempt bond proceeds invested in
said classes.
3. Compensation
and Expenses
As full
compensation for the services and facilities furnished to the Trust and the
expenses assumed by the Agent under this Agreement, the Trust shall pay to the
Agent a fee with respect to each Fund, as calculated in accordance with Schedule
B hereto. The Agent shall bear all of the costs of providing services
hereunder.
The Trust
agrees to pay all reimbursable expenses within thirty (30) days following
receipt of a notice for reimbursement of such expenses.
4. Representations
of Agent
The Agent
represents and warrants to the Trust that:
A. It
is a limited liability company duly organized, existing and in good standing
under the laws of the State of Delaware;
B. It
is duly qualified to carry on its business and is not required to be registered
as a transfer agent under the 1934 Act;
C. It
is empowered under applicable laws and by its charter and bylaws to enter into
and perform this Agreement;
D. All
requisite corporate proceedings have been taken to authorize it to enter and
perform this Agreement; and
E. It
has and will continue to have access to the necessary facilities, equipment and
personnel to perform its duties and obligations under this
Agreement.
5. Representations
of the Trust
The Trust
represents and warrants to the Agent that:
A. The
Trust is registered under the 1940 Act as an open-ended, diversified management
investment company;
B. The
Trust is a business trust organized, existing, and in good standing under the
laws of the Commonwealth of Virginia;
C. The
Trust is empowered under applicable laws and by its Declaration of Trust and
other governing documents to enter into and perform this Agreement;
D. All
necessary proceedings required to be taken by the Trust to authorize it to enter
into and perform this Agreement have been taken;
E. The
Trust will comply with all applicable requirements of the Securities Act of
1933, as amended (the “1933 Act”), and the 1940 Act, and all other laws, rules
and regulations of governmental authorities having jurisdiction;
and
F. A
registration statement under the 1933 Act covering shares of the Funds is
currently effective and will remain effective. Appropriate state
securities law filings have been made and will continue to be made, with respect
to all shares of the Funds being offered and sold.
6. Covenants
of the Trust and the Agent
The Trust
shall furnish the Agent a certified copy of the resolution of the Board of
Trustees of the Trust authorizing the appointment of the Agent and the execution
of this Agreement. The Trust shall provide to the Agent a copy of its
Declaration of Trust and all amendments.
The Agent
shall keep records relating to the services to be performed hereunder, in the
form and manner as it may deem advisable. To the extent required by Section 31
of the 1940 Act and the rules thereunder, the Agent agrees that all such records
prepared or maintained by the Agent relating to the services to be performed by
the Agent hereunder are the property of the Trust and will be preserved,
maintained and made available in accordance with such section and rules and will
be surrendered to the Trust on and in accordance with its request.
7. Liability;
Indemnification
The Agent
agrees to use reasonable care and to act in good faith in performing its duties
hereunder and shall not be liable for any error in judgment or mistake of law or
for any loss suffered by the Trust or any Fund in connection with the matters to
which this Agreement relates, provided that the Agent has acted in accordance
with such standard and with the terms of this Agreement.
Notwithstanding
the foregoing, the Agent shall not be liable or responsible for delays or errors
occurring by reason of circumstances beyond its control, including acts of civil
or military authority, national or state emergencies, fire, mechanical or
equipment failure, flood or catastrophe, acts of God, insurrection or
war. In the event of a mechanical breakdown beyond its control, the
Agent shall take all reasonable steps to minimize service interruptions for any
period that such interruption continues beyond the Agent's
control. The Agent will make every reasonable effort to restore any
lost or damaged data, and the correction of any errors resulting from such a
breakdown will be at the Agent's expense. The Agent agrees that it shall, at all
times, have reasonable contingency plans with appropriate parties, making
reasonable provision for emergency use of electrical data processing equipment
to the extent appropriate equipment is available.
The Trust
will indemnify and hold the Agent harmless against any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses) ("Losses") resulting from any claim, demand, action or suit and
arising out of or in connection with the Agent's duties on behalf of the Trust
hereunder, except insofar as such Losses result from the willful misfeasance,
bad faith or gross negligence of the Agent in the performance of its duties
hereunder or from its reckless disregard of such duties.
In
performing services hereunder, the Agent shall be entitled to rely and to act
upon: (i) telephone instructions relating to the exchange or redemption of
shares received by the Agent and reasonably believed by the Agent to have
originated from the record owner of the subject shares; (ii) any instructions
executed or orally communicated by a duly authorized officer or employee of the
Trust, according to such lists of authorized officers and employees furnished to
the Agent and as amended from time to time in writing by a resolution of the
Board of Trustees of the Trust; and (iii) any genuine instrument signed,
countersigned or executed by any person or persons authorized to sign,
countersign or execute the same.
8. Virginia
Law to Apply
This
Agreement shall be deemed to have been executed in Virginia and shall be
construed and the provisions thereof interpreted under and in accordance with
the substantive laws of the Commonwealth of Virginia, without regard to the
conflicts of laws provisions of such state.
9. Term,
Amendment, Assignment, Termination and Notice
A. This
Agreement shall become effective as of the date set forth above for an initial
term of two years and shall continue in effect from year to year thereafter
provided that each such continuance is approved annually by the Board of
Trustees of the Trust, including the vote of a majority of the Trustees who are
not "interested persons" of the Trust, as defined by the 1940 Act and the rules
thereunder.
B. This
Agreement, including the Schedules and Exhibit hereto, may be amended by the
mutual written consent of the parties.
C. This
Agreement may be terminated upon ninety (90) days’ written notice given by one
party to the other.
D. This
Agreement and any right or obligation hereunder may not be assigned by either
party without the signed, written consent of the other party; provided, however,
that the Agent may assign this Agreement without such consent in a transaction
which does not constitute an "assignment" as defined by the 1940 Act and the
rules thereunder.
E. Any
notice required to be given by the parties to each other under the terms of this
Agreement shall be in writing, addressed and delivered, or mailed to the
principal place of business of the other party.
F. In
the event that the Trust gives to the Agent written notice of its intention to
terminate this Agreement and appoint a successor transfer agent, the Agent
agrees to cooperate in the transfer of its duties and responsibilities to the
successor, including the transfer of any and all relevant books, records and
other data established or maintained by the Agent under this
Agreement.
G. Should
the Trust exercise its right to terminate, all out-of-pocket expenses associated
with the movement of records and material will be paid by the
Trust.
10. Nature
of the Trust
A. Article
VII of the Declaration of Trust contains provisions limiting the liability of
the Trustees, officers, employees and agents of the Trust. The
obligations of the Trust created hereunder are not personally binding upon, nor
shall resort be had to the property of, any of the Trustees, officers, employees
or agents of the Trust or of the shareholders of the Funds, and only that
portion of a Fund's property necessary to satisfy the obligations of that Fund
arising hereunder shall be bound or affected by the operation of this
Agreement.
B. Third
Parties. When dealing with third parties on behalf of the Trust or
any Fund, the Agent shall include such recitals in written documents as may be
reasonably requested by the Trust regarding the limitation of liability of the
Board of Trustees, the Trust's shareholders, and the Trust's officers, employees
and agents to third parties.
C. Separate
Series. It is agreed that the Agent's responsibilities and
obligations to each Fund are separate from its responsibilities and obligations
to each other Fund, and that each Fund's responsibilities and obligations to the
Agent are separate from the responsibilities and obligations of each other
Fund.
IN
WITNESS WHEREOF, the authorized representatives of the parties hereto have
executed this Agreement as of the date first written above.
|
PFM
Asset Management LLC
|
|
|
By:__________________________________
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By:__________________________________
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|
Attest:________________________________
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Attest:_______________________________
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SCHEDULE
A
The
Agreement shall apply to the following Funds, and as full compensation for the
services and facilities furnished to the Trust and the expenses assumed by the
Agent under this Agreement, each Fund shall pay to the Agent monthly
compensation calculated daily at the following annual rates:
|
Fund
|
Applicable
Rate
|
|
Prime
Series – SNAP® Fund Class
|
.02
of 1% of average daily net assets
|
|
Prime
Series – Institutional Class
|
.09
of 1% of average daily net assets
|
|
Prime
Series – Independent Schools and
|
|
|
Colleges
Class
|
.17
of 1% of the first $100 million of average daily net
assets
|
|
.16
of 1% of the next $100 million of average daily net
assets
|
|
|
.15
of 1% of the next $100 million of average daily net
assets
|
|
|
.14
of 1% of the next $100 million of average daily net
assets
|
|
|
.13
of 1% of the next $100 million of average daily net
assets
|
|
|
.12
of 1% of the next $100 million of average daily net
assets
|
|
|
.11
of 1% of the next $100 million of average daily net
assets
|
|
|
.10
of 1% of the next $100 million of average daily net
assets
|
|
|
.09
of 1% of the next $100 million of average daily net
assets
|
|
|
.08
of 1% of the next $100 million of average daily net
assets
|
|
|
.07
of 1% of the net assets over $1 billion
|
|
|
Government
Series
|
.09
of 1% of average daily net
assets
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EXHIBIT
A
Duties of
the Agent
1. Shareholder
Information
The Agent
shall maintain a record of the number of shares held by each holder of record
which shall include their addresses and taxpayer identification
numbers.
2. Shareholder
Services
The Agent
will investigate all shareholder inquiries relating to shareholder accounts, and
will answer all correspondence from shareholders and others relating to its
duties hereunder and such other correspondence as may from time to time be
mutually agreed upon between the Agent and the Trust. The Agent shall
keep records of shareholder correspondence and replies thereto, and of the lapse
of time between the receipt of such correspondence and the mailing of such
replies.
3. State
Registration Reports
The Agent
shall furnish the Trust on a state-by-state basis, sales reports, such periodic
and special reports as the Trust may reasonably request, and such other
information, including shareholder lists and statistical information concerning
accounts, as may be agreed upon from time to time between the Trust and the
Agent.
4. Uncertificated
Shares
With
respect to shares held in open accounts or uncertificated form (i.e., no certificate being
issued with respect thereto), the Agent shall maintain comparable records of the
recordholders thereof, including their names, addresses, and taxpayer
identification numbers.
5. Mailing
Communications to Shareholders: Proxy Materials
At the
expense of the Trust, the Agent will address and mail to shareholders of the
Funds, all reports to shareholders, dividend and distribution notices, and proxy
material for meetings of shareholders. In connection with the meetings of
shareholders, the Agent 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).
6. Sales
of Shares
(a) Processing
of Investment Checks or Other Investments
Upon
receipt of any check or other instrument drawn or endorsed to it as agent for,
or identified as being for the account of a Fund, or drawn or endorsed to the
Distributor of the Funds' shares for the purchase of shares, the Agent shall
stamp the check with the date of receipt, shall forthwith transmit the same to
the Fund's custodian for collection and, shall record the number of shares sold,
the trade date and price per share, and the amount of money to be delivered to
the custodian of the Funds for the sale of such shares.
(b) Issuance
of Shares
Upon
receipt of notification that the Funds' custodian has received the amount of
money specified in the immediately preceding paragraph, the Agent shall issue to
and hold in the account of the purchaser/shareholder, or if no account is
specified therein, in a new account established in the name of the purchaser,
the number of shares such purchaser is entitled to receive, as determined in
accordance with applicable Federal law and regulations.
(c) Confirmations
The Agent
shall send to purchasers of shares confirmations of their purchases and periodic
statements which will show the new share balance, the shares held under a
particular plan, if any, for withdrawing investments, the amount invested, and
the price paid for the newly purchased shares, or will be in such other form as
the Trust and the Agent may agree from time to time. Such
confirmations and statements will be sent at such times as may be required by
applicable laws and regulations or as may otherwise be agreed to by the Trust
and the Agent in compliance with such laws and regulations.
(d) Suspension
of Sale of Shares
The Agent
shall not be required to issue any shares of the Funds where it has received a
written instruction from the Trust or written notice from any appropriate
Federal or state authority that the sale of the shares of that Fund has been
suspended or discontinued, and the Agent shall be entitled to rely upon such
written instructions or written notification.
(e) Taxes
in Connection with Issuance of Shares
Upon the
issuance of any shares in accordance with the foregoing provisions of this
Section, the Agent shall not be responsible for the payment of any original
issue or other taxes required to be paid in connection with such
issuance.
(f) Returned
Checks
In the
event the Agent receives advice from the Fund's custodian that any check or
other order for the payment of money is returned unpaid for any reason, the
Agent will: (i) give prompt notice of such return to the Trust or its designee;
(ii) place a stop transfer order against all shares issued as a result of such
check or order; and (iii) take such actions as the Agent may from time to time
deem appropriate.
7. Redemptions
(a) Requirements
for Transfer or Redemption of Shares
The Agent
shall process all requests from shareholders to transfer or redeem shares of
each Fund in accordance with the procedures set forth in the Prospectus for the
Fund, including, but not limited to, all requests from shareholders to redeem
shares and all determinations of the number of shares required to be redeemed to
fund designated monthly payments, automatic payments, or any other such
distribution or withdrawal plan.
The Agent
will transfer or redeem shares upon receipt of written instructions, accompanied
by such documents as the Agent reasonably may deem necessary to evidence the
authority of the person making such transfer or redemption, and bearing
satisfactory evidence of the payment of stock transfer taxes, if
any.
The Agent
reserves the right to refuse to transfer or redeem shares until it is satisfied
that the endorsement on the instructions is valid and genuine, and for that
purpose it may require a guarantee of signature by a member firm of a national
securities exchange, by any national bank or trust company, by any member bank
of the Federal Reserve system or by other eligible guarantor
institution. The Agent also reserves the right to refuse to transfer
or redeem shares until it is satisfied that the requested transfer or redemption
is legally authorized, and it shall incur no liability for the refusal, in good
faith, to make transfers or redemptions which the Agent, in its judgment, deems
improper or unauthorized, or until it is reasonably satisfied that there is no
basis to any claims adverse to such transfer or redemption.
The Agent
may, in effecting transactions, rely upon the provisions of the Uniform Act for
the Simplification of Fiduciary Security Transfers or the provisions of Article
8 of the Uniform Commercial Code, as the same may be amended from time to time
in the Commonwealth of Virginia, which, in the opinion of legal counsel for the
Trust or of its own legal counsel protect it in not requiring certain documents
in connection with the transfer or redemption of shares. The Trust may authorize
the Agent to waive the signature guarantee in certain cases by written
instructions.
For the
purposes of the redemption of shares of the Funds which have been purchased
within 15 days of a redemption request, the Trust shall provide the Agent with
written instructions concerning the time within which such requests may be
honored.
(b) Notice
to Custodian and Funds
When
shares are redeemed, the Agent shall, upon receipt of the instructions and
documents in proper form, deliver to the Funds' custodian and the Trust a
notification setting forth the number of shares to be redeemed. Such
redemptions shall be reflected on appropriate accounts maintained by the Agent
reflecting outstanding shares of the Funds and shares attributed to individual
accounts and, if applicable, any individual withdrawal or distribution
plan.
(c) Payment
of Redemption Proceeds
The Agent
shall, upon receipt of requests for the redemption of shares, instruct the
Fund's custodian to pay to the shareholder, or his authorized agent or legal
representative, such moneys as are due to the shareholders, all in accordance
with the redemption procedures described in the applicable Prospectus; provided,
however, that the Agent shall instruct the Fund's custodian to pay the proceeds
of any redemption of shares purchased within a period of time agreed upon in
writing by the Agent and the Trust, only in accordance with procedures agreed to
in writing by the Agent and the Trust, for determining that good funds have been
collected for the purchase of such shares. The Trust shall indemnify
the Agent in respect of any instructions given by the Agent for any payment of
redemption proceeds or refusal to make such payment, if the payment or refusal
to pay is in accordance with said written procedures.
The Agent
shall not effect any redemptions of shares of a Fund pursuant to a plan of
distribution or redemption, or in accordance with any other shareholder request
upon the receipt by the Agent of notification of the suspension of the
determination of that Fund's net asset value.
8. Dividends
(a) Notice
to Agent and Custodian
Upon the
declaration of each dividend and each capital gains distribution by the Board of
Trustees of the Trust with respect to shares, the Trust shall furnish to the
Agent a copy of a resolution of its Board of Trustees, certified by the
Secretary of the Trust, 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 to the Agent on the payment date, and whether such dividend
or distribution is to be paid in shares of such class at net asset
value.
On or
before the payment date specified in such resolution of the Board of Trustees,
the Agent will instruct the custodian of the Funds to make payment to the
shareholders of record as of such payment date.
(b) Payment
of Dividends by the Agent
The Agent
will, on the designated payment date, automatically reinvest all dividends
required to be reinvested in additional shares at the net asset value of the
applicable Fund (determined on such date), and mail to shareholders statements
at such times as may be required by applicable law or agreed to by the Trust and
the Agent showing the number of full and fractional shares (rounded to three
decimal places) then currently owned by the shareholders and the net asset value
of the shares so credited to the shareholders' accounts.
(c) Information
Returns
It is
understood that the Agent shall file such appropriate information returns
concerning the payment of dividends, return of capital, and capital gain
distributions with the proper Federal, state, and local authorities as are
required by law to be filed and shall be responsible for the withholding of
taxes, if any, due on such dividends or distributions to shareholders when
required to withhold taxes under applicable law.
9. Anti-Money
Laundering
(a) Background
It is
understood that the Trust is required by Section 352 of the USA Patriot Act (the
"Act") and the Interim Final Rule (Section 103.130) adopted by the Department of
the Treasury's Financial Crimes Enforcement Network (the "Rule") to develop and
implement an anti-money laundering program and monitor the operation of the
program and assess the effectiveness thereof.
(b) Procedures
The
Agent will provide the Trust with written procedures describing various tools
designed to promote the detection and reporting of potential money laundering
activity by monitoring certain aspects of shareholder activity as well as
written procedures for verifying a customer's identity (the "Procedures"), and
the Trust will delegate to the Agent the day-to-day operation of the Procedures
on behalf of the Trust. It is contemplated that these Procedures will
be amended from time to time by the parties as additional regulations are
adopted and/or regulatory guidance is provided relating to the Trust's
anti-money laundering responsibilities.
(c) Reports
The Agent
agrees to provide to the Trust (a) prompt written notification of any
transaction or combination of transactions that the Agent believes, based on the
Procedures, evidence money laundering activity in connection with the Trust or
any shareholder of the Trust, (b) prompt written notification of any customer(s)
that the Agent reasonably believes, based upon the Procedures, to be engaged in
money laundering activity, provided that the Trust agrees not to communicate
this information to the customer, (c) any reports received by
the Agent from any government agency or applicable industry
self-regulatory organization pertaining to the Agent's anti-money laundering
monitoring on behalf of the Trust as provided in this Addendum, (d) prompt
written notification of any action taken in response to anti-money laundering
violations as described in (a), (b) or (c), and (e) an annual report of its
monitoring and customer identification activities on behalf of the Trust. The
Agent shall provide such other reports on the monitoring and customer
identification activities conducted at the direction of the Trust as may be
agreed to from time to time by the Agent and the Trust.
(d) Inspection
The Trust
directs, and the Agent acknowledges, that the Agent shall (a) permit federal
regulators access to such information and records maintained by the Agent and
relating to the Agent's implementation of the Procedures on behalf of the Trust,
as they may request, and (b) permit such federal regulators to inspect the
Agent's implementation of the Procedures on behalf of the Trust.
