ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") made as of the 25th day
of January, 2001 by and between PBHG Funds, a Delaware business trust (the
"Company"), and PBHG Fund Services, a Pennsylvania business trust (the
"Administrator").
W I T N E S S E T H:
WHEREAS, the Company is engaged in business as an open-end management
investment company and registered as such under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Company desires to retain the Administrator to provide
administrative services to the Company and each of its several series which are
identified in Schedule A hereto (the "Funds"), in the manner and on the terms
and conditions hereinafter set forth; and
WHEREAS, the Company and the Administrator propose to engage a
sub-administrator (the "Sub-Administrator") to provide certain administrative
services to the Company and the Funds, subject to the approval of the Company's
Board of Trustees;
NOW THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending to
be legally bound, do hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE ADMINISTRATOR.
The Administrator shall oversee the administration of the Company's and
each Fund's business and affairs as set forth herein and shall provide certain
services required for effective administration of the Company and the Funds. In
connection therewith, the Administrator shall:
1.1. OFFICE AND OTHER FACILITIES. Furnish, without cost to the
Company, or provide and pay the cost of, such office facilities, furnishings,
and office equipment as are necessary for the performance of the Administrator's
duties to the Company under this Agreement.
1.2. PERSONNEL. Provide, without additional remuneration from
or other cost to the Company, the services of individuals competent to perform
all of the Administrator's obligations under this Agreement.
1.3. AGENTS. Assist the Company in selecting, coordinating the
activities of, supervising and acting as liaison with any other person or agent
engaged by the Company, including the Company's depository agent or custodian,
consultants, transfer agent, sub-transfer agents, intermediaries with respect to
mutual fund alliance programs, dividend disbursing agent, Sub-Administrator,
independent accountants, and independent legal counsel. The Administrator shall
also monitor the functions of such persons and agents, including without
limitation the compliance of the Company and the Company's custodians with Rule
17f-5 under the 1940 Act, if appropriate.
1.4. DIRECTORS AND OFFICERS. Authorize and permit the
Administrator's directors, officers, and employees that may be elected or
appointee as directors or officers of the Company to serve in such capacities,
without remuneration from or additional cost to the Company.
1.5. BOOKS AND RECORDS. Maintain customary records, on behalf
of the Company, in connection with the performance of the Administrator's duties
under this Agreement. The Administrator also will monitor and oversee the
performance of the agents specified in Section 1.3. above, to ensure that all
financial, accounting, corporate, and other records required to be maintained
and preserved by the Company or on its behalf will be maintained in accordance
with applicable laws and regulations.
1.6. COST OVERSIGHT. Monitor and review activities and
procedures of the Company and its agents identified in Section 1.3. above, in
order to identify and seek to obtain possible service improvements and cost
reductions. In connection therewith, the Administrator shall, on a quarterly
basis, prepare and submit to the Company a pro forma budget or similar document
concerning the estimated costs of providing the services to the Company and
shall monitor and periodically report to the Company's Board of Trustees
information and analysis about the actual expenses incurred in providing such
services.
1.7. ACCOUNTING AND COMPLIANCE POLICIES AND PROCEDURES. Assist
in developing, reviewing, maintaining, and monitoring the effectiveness of
Company accounting and compliance policies and procedures, including portfolio
valuation procedures, expense allocation procedures, and personal trading
procedures, and the Company's Code of Ethics. The Administrator also will assist
and coordinate participation by the Company and its agents in any audit by its
outside auditors or any examination by federal or state regulatory authorities
or any self-regulatory organization. The Administrator also will oversee and
coordinate the activities of Company accountants, outside counsel, and other
experts in these audits or examinations.
1.8. SYSTEMS. Assist in developing, implementing, and
monitoring the Company's use of automated systems for the purchase, sale,
redemption and transfer of Company shares and the payment of Rule 12b-1 service
fees to broker-dealers and others that provide personal services, distribution
support services, and/or account maintenance services to shareholders, and for
recording and tracking such transactions and/or payments. The Administrator also
will assist in developing, implementing, and monitoring the Company's use of
automated communications systems with brokers, dealers, custodians, and other
service providers, including without limitation trade clearance systems.
1.9. REPORTS TO THE COMPANY. Furnish to or place at the
disposal of the Company such information, reports, evaluations, analysis, and
opinions relating to its administrative functions and the administrative
functions performed by the Sub-Administrator, as the Company may, at any time or
from time to time, reasonably request or as the Administrator may deem helpful
to the Company. The Administrator also will assist in the preparation of agendas
and other materials for meetings of the Company's Board of Trustees and will
attend such meetings.
1.10. REPORTS AND FILINGS. Provide appropriate assistance in
the development and/or preparation of all reports and communications by the
Company to Company shareholders and all reports and filings necessary to
maintain the registrations and qualifications of the Company's shares under
federal securities law.
1.11. SHAREHOLDER INQUIRIES. Respond to all inquiries from
Company shareholders or otherwise answer communications from Company
shareholders if such inquiries or communications are directed to the
Administrator. If any such inquiry or communication would be more properly
answered by one of the agents listed in Section 1.3. above, the Administrator
will coordinate, as needed, the provision of their response.
2. ALLOCATION OF EXPENSES.
2.1. EXPENSES PAID BY THE ADMINISTRATOR.
2.1.1. IN GENERAL. The Administrator shall bear all of its own
expenses in connection with the performance of its duties under this Agreement.
2.1.2. SALARIES AND FEES OF DIRECTORS AND OFFICERS. The
Administrator shall pay all salaries, expenses, and fees, if any, of the
directors, officers, and employees of the Administrator who are trustees,
officers, or employees of the Company.
2.1.3. WAIVER OR ASSUMPTION AND REIMBURSEMENT OF COMPANY
EXPENSES BY THE ADMINISTRATOR. The waiver or assumption and reimbursement by the
Administrator of any expense of the Company that the Administrator is not
required by this Agreement to waive, or assume or reimburse, shall not obligate
the Administrator to waive, assume, or reimburse the same or any similar expense
of the Company on any subsequent occasion, unless so required pursuant to a
separate agreement between the Company and the Administrator.
2.2. EXPENSES PAID BY THE COMPANY. The Company shall bear all
expenses of its organization, operation, and business not specifically waived,
assumed, or agreed to be paid by the Administrator as provided in this Agreement
or any other agreement between the Company and the Administrator, and as
described in the Company's then-current Prospectuses and Statements of
Additional Information.
3. FEES.
3.1. COMPENSATION RATE. As compensation for all services
rendered, facilities provided, and expenses paid and any expense waived or
assumed and reimbursed by the Administrator, the Company shall pay the
Administrator a fee per Fund at the annual rate of .15% of the average daily net
assets of each Fund.
3.2. METHOD OF COMPUTATION. The Administrator's fee shall
accrue on each calendar day and the sum of the daily fee accruals shall be paid
monthly to the Administrator by the fifth (5th) business day of the next
calendar month. The daily fee accruals shall be computed by multiplying the
fraction of one (1) over the number of calendar days in the year by the
applicable annual rates described in Section 3.1. above, and multiplying this
product by the net assets of the Funds, as determined in accordance with the
current Prospectuses of the Company, as of the close of business on the last
preceding business day on which the Company was open for business.
3.3. PRORATION OF FEE. If this Agreement becomes effective or
terminates before the end of any month, the fee for the period from the
effective date to the end of such month or from the beginning of such month to
the date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full month in which such effectiveness
or termination occurs.
4. ADMINISTRATOR'S USE OF THE SERVICES OF OTHERS.
The Administrator may at its own cost employ, retain, or otherwise
avail itself of the services or facilities of other persons or organizations for
the purpose of providing the Administrator or the Company with such information,
advice, or assistance as the Administrator may deem necessary, appropriate, or
convenient for the discharge of its obligations hereunder or otherwise helpful
to the Administrator, including consulting, monitoring, and evaluation services
concerning the Company and the Funds.
5. OWNERSHIP AND CONFIDENTIALITY OF RECORDS.
All records required to be maintained and preserved by the Company,
pursuant to rules or regulations of the Securities and Exchange Commission under
Section 31(a) of the 1940 Act, and maintained and preserved by the Administrator
on behalf of the Company, are the property of the Company and shall be
surrendered by the Administrator promptly on request by the Company. The
Administrator shall not disclose or use any record or information obtained
pursuant to this Agreement in any manner whatsoever except as expressly
authorized by this Agreement and applicable law. The Administrator shall keep
confidential any information obtained in connection with its duties hereunder
and shall disclose such information only if the Company has authorized such
disclosure or if such disclosure is expressly required by applicable law or
federal or state regulatory authorities.
6. REPORTS TO THE ADMINISTRATOR.
The Company shall furnish or otherwise make available to the
Administrator such Prospectuses, Statements of Additional Information, financial
statements, proxy statements, reports, and other information relating to the
business and affairs of the Company, as the Administrator may, at any time or
from time to time, reasonably require in order to discharge its obligations
under this Agreement.
7. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Administrator
or any affiliated person of the Administrator to render corporate administrative
services to other investment companies or to engage in other business
activities; however, so long as this Agreement or any extension, renewal, or
amendment hereof shall remain in effect or until the Administrator shall
otherwise consent, the Administrator shall be the only administrator to the
Company.
8. LIMITATION OF LIABILITY OF THE ADMINISTRATOR AND
INDEMNIFICATION BY THE COMPANY.
8.1. LIMITATION OF LIABILITY.
8.1.1. Neither the Administrator nor any of its directors,
officers, employees or agents performing services for the Company, at the
direction or request of the Administrator in connection with the Administrator's
discharge of its obligations undertaken or reasonably assumed with respect to
this Agreement, shall be liable for any act or omission in the course of or in
connection with the Administrator's services hereunder, including any error of
judgment or mistake of law or for any loss suffered by the Company, in
connection with the matters to which this Agreement relates; provided, that
nothing herein contained shall be construed to protect the Administrator or any
such person against any liability to the Company or its shareholders to which
the Administrator or such person would otherwise be subject by reason of willful
misfeasance, bad faith, or negligence in the performance of its or their duties
on behalf of the Company.
8.1.2. The Administrator's directors, officers, employees and
agents performing services for the Company shall be covered errors and omissions
and directors and officers liability insurance, as appropriate, under a policy
maintained by the Administrator or an affiliate of the Administrator.
8.1.3. The Administrator may apply to the Board of Trustees of
the Company at any time for instructions and may consult counsel for the Company
or its own counsel and with accountants and other experts with respect to any
matter arising in connection with the Administrator's duties, and the
Administrator shall not be liable or accountable for any act on taken or omitted
by it in good faith in accordance with such instruction or with the opinion of
such counsel, accountants, or other experts.
8.1.4. The Administrator shall at all times have the right to
mitigate or cure any and all losses, damages, costs, charges, fees,
disbursements, payments and liabilities to the Company and its shareholders.
8.1.5. As provided in the governing instrument of the Trust
and pursuant to Delaware Law:
(a) no Shareholder or Trustee of the Trust shall be personally
liable for any debts, liabilities, obligations or expenses
incurred by, or contracted for under this Agreement; and
(b) (i) the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with
respect to a particular Portfolio of the Trust shall be
enforceable against the assets of such Portfolio only, and
not against the assets of the Trust generally or assets
belonging to any other Portfolio of the Trust; and (ii)
none of the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with
respect to the Trust generally that have not been
allocated to a specified Portfolio of the Trust, shall be
enforceable against the assets of such specified
Portfolio.
8.2. INDEMNIFICATION BY THE COMPANY.
8.2.1 As long as the Administrator acts in good faith and with
due diligence and without negligence, the Company shall indemnify the
Administrator and hold it harmless from and against any and all actions, suits,
and claims, whether groundless or otherwise, and from and against any and all
losses, damages (excluding consequential, punitive or other indirect damages),
costs, charges, reasonable counsel fees and disbursements, payments, expenses,
and liabilities (including reasonable investigation expenses) arising directly
or indirectly out of the administrative services or any other service rendered
to the Company hereunder. The indemnity and defense provisions set forth herein
shall indefinitely survive the termination of this Agreement.
8.2.2. The rights hereunder shall include the right to
reasonable advances of defense expenses in the event of any pending or
threatened litigation with respect to which indemnification hereunder may
ultimately be merited. In order that the indemnification provision contained
herein shall apply, however, it is understood that if in any case the Company
may be asked to indemnify or hold the Administrator harmless, the Board of
Trustees of the Company shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further understood that
the Administrator will use all reasonable care to identify and notify the Board
of Trustees of the Company promptly concerning any situation which presents or
appears likely to present the probability of such a claim for indemnification
against the Company, but failure to do so in good faith shall not affect the
rights hereunder.
8.2.3. The Administrator shall secure and maintain a fidelity
bond, or be covered by an affiliate's blanket fidelity bond, in at least the
amount required by Rule 17g-1 under the 1940 Act for joint insurance bonds of
investment companies.
9. INDEMNIFICATION BY THE ADMINISTRATOR.
9.1. The Administrator shall indemnify the Company, its
officers and trustees and hold them harmless from and against any and all
actions, suits, and claims, whether groundless or otherwise, and from and
against any and all losses, damages (excluding consequential, punitive or other
indirect damages), costs, charges, reasonable counsel fees and disbursements,
payments, expenses, and liabilities (including reasonable investigation
expenses) arising directly or indirectly out of the administrative services or
any other service rendered to the Company hereunder and arising or based upon
the willful misfeasance, bad faith, or negligence of the Administrator, its
directors, officers, employees, and agents in the performance of its or their
duties on behalf of the Company. The indemnity and defense provisions set forth
herein shall indefinitely survive the termination of this Agreement.
9.2. The rights hereunder shall include the right to
reasonable advances of defense expenses in the event of any pending or
threatened litigation with respect to which indemnification hereunder may
ultimately be merited. In order that the indemnification provision contained
herein shall apply, however, it is understood that if in any case the
Administrator may be asked to indemnify or hold the Company, its officers, and
trustees harmless, the Administrator shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Company will use all reasonable care to identify and notify
the Administrator promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Administrator, but failure to do so in good faith shall not affect the
rights hereunder.
10. FORCE MAJEURE.
In the event the Administrator is unable to perform its obligations or
duties under the terms of this Agreement because of any act of God, strike,
riot, act of war, equipment failure, power failure or damage of the causes
reasonably beyond its control, the Administrator shall not be liable for any and
all losses, damages, costs, charges, counsel fees, payments, expenses or
liability to any other party (whether or not a party to this Agreement)
resulting from such failure to perform its obligations or duties under this
Agreement or otherwise from such causes. This provision, however, shall in no
way excuse the Administrator from being liable to the Company for any and all
losses, damages, costs, charges, counsel fees, payments and expenses incurred by
the Company due to the non-performance or delay in performance by the
Administrator of its duties and obligation under this Agreement if such
non-performance or delay in performance could have been reasonably been
prevented by the Administrator through back-up systems and other procedures
commonly employed by other administrators in the mutual fund industry, provided
that the Administrator shall have the right, at all times, to mitigate or cure
any losses, including by making adjustments or corrections to any current or
former shareholder accounts.
11. RETENTION OF SUB-ADMINISTRATOR.
The Administrator may retain a Sub-Administrator to perform corporate
administrative services to the Company. The retention of a Sub-Administrator
shall be at the cost and expense of the Administrator. The Administrator shall
pay and shall be solely responsible for the payment of the fees of the
Sub-Administrator for the performance of its services for the Company.
12. TERM OF AGREEMENT.
The term of this Agreement shall begin on the day and year first
written above, and unless sooner terminated as hereinafter provided, shall
continue in effect for an initial period that will expire on December 31, 2002.
Thereafter, this Agreement shall continue in effect from year to year, subject
to the termination provisions and all other terms and conditions hereof. The
Administrator shall furnish to the Company, promptly upon its request, such
information as may be reasonably necessary to evaluate the terms of this
Agreement or any extension, renewal, or amendment thereof.
The assignment (as that term is defined in Section (2)(a)(4) of the
1940 Act and rules thereunder) of this Agreement or any rights or obligations
thereunder shall be prohibited by either party without the written consent of
the other party. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
13. TERMINATION OF AGREEMENT.
This Agreement may be terminated by any of the parties hereto, without
the payment of any penalty:
(a) for a material breach of this Agreement, upon thirty (30)
days prior written notice to the other parties; provided, that this Agreement
shall not terminate if such material breach is cured within such thirty (30) day
period.
(b) following the initial term of this Agreement, for any
reason upon ninety (90) days' prior written notice to the other parties;
provided, that in the case of termination by the Company such action shall have
been authorized by resolution of the Board of Directors of the Company or by a
vote of a majority of the outstanding voting securities of the Company or, in
the case of termination with respect to a particular Fund, by a resolution of
the Board of Directors of the Company or by a vote of a majority of the
outstanding voting securities of such Fund. In the case of termination by the
Administrator, such termination shall not be effective until the Company and the
Administrator shall have contracted with one or more persons to serve as
successor Administrator(s) for the Company and such person(s) shall have assumed
such position.
14. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto provided, that no material amendment shall be effective unless
authorized by resolution of the Board of Directors of the Company or by a
majority of the outstanding voting securities of the Company or, in the case of
an amendment to this Agreement with respect to a particular Fund, by a
resolution of the Board of Directors of the Company or a vote of majority of the
outstanding voting securities of such Fund.
15. MISCELLANEOUS.
15.1. NOTICES. Any notice under this Agreement shall be given
in writing, addressed and delivered, or mailed postpaid, (i) if to the
Administrator, to PBHG Fund Services, 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx, XX 00000,
Attention: Xxx X. Xxxxxxxx, and (ii) if to the Company, to PBHG Funds, 0000
Xxxxxxx Xxxxx Xxxxx, Xxxxx, XX 00000, Attention: Xxxx X. Xxxx.
15.2. CAPTIONS. The captions contained in this Agreement are
included for convenience of reference only and in no way define or delineate any
of the provisions hereof or otherwise affect their construction or effect.
15.3. INTERPRETATION. Nothing herein contained shall be deemed
to require the Company to take any action contrary to its Articles of
Incorporation or By-Laws, or any applicable statutory or regulatory requirement
to which it is subject or by which it is bound, or to relieve or deprive the
Board of Trustees of its responsibility for and control of the conduct of the
affairs of the Company.
15.4. DEFINITIONS. Any question of interpretation of any term
or provision of this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act shall be resolved by reference to such term
or provision of the 1940 Act and to interpretations thereof, if any, by the
United States courts or, in the absence of any controlling decision of any such
court by rules, regulations, or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
relaxed by a rule, regulation, or order of the Securities and Exchange
Commission, whether of special or of general application, such provision shall
be deemed to incorporate the effect of such rule, regulation, or order.
15.5. SEVERABILITY. 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.
15.6. GOVERNING LAW. Except insofar as the 1940 Act or other
federal laws and regulations may be controlling, this Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed
by their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PBHG FUNDS
/s/ Xxxxxx X. Xxxxx /s/Xxx X. Xxxxxxxx
______________________________ By:___________________________
Xxxxxx X. Xxxxx Xxx X. Xxxxxxxx
Assistant Secretary Chief Financial Officer
Title:________________________ Title:________________________
ATTEST: PBHG FUND SERVICES
/s/ Xxxxxx X. Xxxxx /s/Xxx X. Xxxxxxxx
______________________________ By:___________________________
Xxxxxx X. Xxxxx Xxx X. Xxxxxxxx
Vice President President
Title:________________________ Title:________________________
SCHEDULE A
PBHG FUNDS
PBHG Funds consists of the following Funds, each of which is subject to
this Agreement:
PBHG Growth Fund
PBHG Emerging Growth Fund
PBHG Large Cap Growth Fund
PBHG Select Equity Fund
PBHG Core Growth Fund
PBHG Limited Fund
PBHG Large Cap 20 Fund
PBHG New Opportunities Fund
PBHG Large Cap Value Fund
PBHG Mid-Cap Value Fund
PBHG Small Cap Value Fund
PBHG Focused Value Fund
PBHG International Fund
PBHG Cash Reserves Fund
PBHG Technology & Communications Fund
PBHG Strategic Small Company Fund
PBHG Global Technology & Communications Fund
PBHG Wireless & Telecom Fund
PBHG Clipper Focus Fund
PBHG XXX Capital Preservation Fund
PBHG Disciplined Equity Fund
PBHG New Perspective Fund
PBHG REIT Fund
PBHG Concentrated International Fund
Dated: October 29, 2001
