Exhibit 9(a)
TRANSFER AGENCY AGREEMENT
Agreement made as of the 1st of April 1997 between the PBHG Insurance Series
Fund, Inc. ("Fund"), on behalf of itself and its series ("Portfolios"), a
Maryland corporation, and DST Systems, Inc. ("DST") a Delaware corporation
(hereinafter referred to as the "Transfer Agent").
WITNESSETH:
That for and in consideration of the mutual promises hereinafter set forth, the
parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases shall have the
following meanings:
1. "Approved Institution" shall mean an entity so named in a
Certificate. From time to time the Fund may amend a previously delivered
Certificate by delivering to the Transfer Agent a Certificate naming an
additional entity or deleting any entity named in a previously delivered
Certificate.
2. The "Board of Directors" shall mean the Board of Directors of the
Fund.
3. "Certificate" shall mean any notice, instruction, or other
instrument in writing, authorized or required by this Agreement to be given to
the Transfer Agent by the Fund which is signed by any Officer, as hereinafter
defined, and actually received by the Transfer Agent.
4. "Custodian(s)" shall mean the financial institution(s) appointed as
custodian(s) under the terms and conditions of the Custody Agreement(s) between
the financial institution(s) and the Fund, or its successor(s).
5. "Fund Business Day" shall be deemed to be each day on which the New
York Stock Exchange, Inc. is open for trading.
6. "Officer" shall be deemed to be the Fund's President, any Vice
President of the Fund, the Fund's Secretary, the Fund's Treasurer, the Fund's
Controller, any Assistant Controller of the Fund, any Assistant Treasurer of the
Fund and any Assistant Secretary of the Fund, and any other person duly
authorized by the Board of Directors of the Fund to execute any Certificate,
instruction, notice or other instrument on behalf of the Fund and named in the
Certificate annexed hereto as Appendix A, as such Certificate may be amended
from time to time, and any person reasonably believed by the Transfer Agent to
be such a person.
7. "Out-of-Pocket Expenses" means amounts reasonably necessary and
actually incurred by Transfer Agent in the provision of Transfer Agent services
or pursuant to this Agreement for the following purpose: postage (and first
class mail insurance in connection with mailing share certificates), envelopes,
check forms, continuous forms, forms for reports and statement, stationery, and
other similar items, telephone and telegraph charges incurred in answering
inquiries from dealers or shareholders, microfilm used to record transactions in
shareholder accounts and computer tapes used for permanent storage of records
and cost of insertion of materials in mailing envelopes by outside firms.
Transfer Agent may, at its option, arrange to have various service providers
submit invoices directly to the Fund for payment of
2
out-of-pocket expenses reimbursable hereunder; and such other expenses paid or
incurred by Transfer Agent at the request of the Fund. Any charges associated
with special or exception processing shall also be considered Out-of-Pocket
Expenses.
8. "Prospectus(es)" shall mean the last Fund prospectus(es) with
respect to a Portfolio and any supplements actually received by the Transfer
Agent from the Fund with respect to which the Fund has indicated a registration
statement under the Federal Securities Act of 1933 has become effective,
including the Statement(s) of Additional Information, incorporated by reference
therein.
9. "Shares" shall mean all or any part of each class or series of the
shares of common stock of the Fund or Portfolio listed in the Certificate as to
which the Transfer Agent acts as transfer agent hereunder, as may be amended
from time to time, which are authorized and/or issued by the Fund.
10. "Transfer Agent" shall mean DST, as transfer agent and dividend
disbursing agent under the terms and conditions of this Agreement, its
successor(s) or assign(s).
ARTICLE II
APPOINTMENT OF TRANSFER AGENT
1. The Fund hereby constitutes and appoints the Transfer Agent as
transfer agent of all the Shares of the Fund and as dividend disbursing agent
during the period of this Agreement.
2. The Transfer Agent hereby accepts appointment as transfer agent and
dividend disbursing agent and agrees to perform duties thereof as hereinafter
set forth.
3
3. In connection with such appointment, the Fund upon the request of
the Transfer Agent, shall deliver the following documents to the Transfer Agent:
(i) A copy of the Articles of Incorporation of the Fund and all
amendments thereto certified by the Secretary of the Fund;
(ii) A copy of the By-Laws of the Fund certified by the Secretary of
the Fund;
(iii) A copy of a resolution of the Board of Directors of the Fund
certified by the Secretary of the Fund appointing the Transfer Agent and
authorizing the execution of this Transfer Agency Agreement;
(iv) A Certificate signed by the Secretary of the Fund specifying:
The number of authorized Shares, if any, the number of such authorized Shares
issued, the number of such authorized Shares issued and currently outstanding;
the names and specimen signatures of the Officers of the Fund; and the name and
address of the legal counsel for the Fund;
(v) In the event the Fund issues shares, specimen share certificate
for each or series class of Shares in the form approved by the Board of
Directors of the Fund (and in a format compatible with the Transfer Agent's
system), together with a Certificate signed by the Secretary of the Fund as to
such approval;
(vi) Copies of the Fund's Registration Statement, as amended to
date, and the most recently filed Post-Effective Amendment thereto, filed by the
Fund with the Securities and Exchange Commission under the Securities Act of
1933, as amended, and under the Investment Company Act of 1940, as amended,
together with any applications fled in connection therewith; and
4
(vii) Opinion of counsel for the Fund with respect to the validity
of the authorized and outstanding Shares, whether such Shares are fully paid and
non-assessable and the status of such Shares under the Securities Act of 1933,
as amended, and any other applicable federal law or regulation (i.e., if subject
to registration, that they have been registered and that the Registration
Statement has become effective or, if exempt, the specific grounds therefor.)
ARTICLE III
AUTHORIZATION AND ISSUANCE OF SHARES
1. The Fund shall deliver to the Transfer Agent the following documents
on or before the effective date of any increase or decrease in the total number
of Shares authorized to be issued:
(a) A certified copy of the amendment to the Articles of
Incorporation giving effect to such increase or decrease;
(b) In the case of an increase, an opinion of counsel for the Fund
with respect to the validity of the Shares of the Fund and the status of such
Shares under the Securities Act of 1933, as amended, and any other applicable
federal law or regulation (i.e., if subject to registration, that they have been
registered and that the Registration Statement has become effective or, if
exempt, the specific grounds therefor); and
(c) In the case of an increase, if the appointment of the Transfer
Agent was theretofore expressly limited, a certified copy of a resolution of the
Board of Directors of the Fund increasing the authority of the Transfer Agent.
5
2. Prior to the issuance of any additional Shares of the Fund pursuant
to stock dividends or stock splits, etc., and prior to any reduction in the
number of shares outstanding, the Fund shall deliver the following documents to
the Transfer Agent:
(a) A certified copy of the resolution(s) adopted by the Board of
Directors and/or the shareholders of the Fund authorizing such issuance of
additional Shares of the Fund or such reduction, as the case may be, and
(b) An opinion of counsel for the Fund with respect to the validity
of the Shares of the Fund and the status of such Shares under the Securities Act
of 1933, as amended, and any other applicable federal law or regulation (i.e.,
if subject to registration, that they have been registered and that the
Registration Statement has become effective, or, if exempt, the specific grounds
therefor).
ARTICLE IV
RECAPITALIZATION OR CAPITAL ADJUSTMENT
1. In the case of any negative stock split, recapitalization or other
capital adjustment requiring a change in the form of Share certificates, the
Transfer Agent will issue Share certificates in the new form in exchange for, or
upon transfer of, outstanding Share certificates in the old form, upon
receiving:
(a) A Certificate authorizing the issuance of the Share certificates
in the new form;
(b) A certified copy of any amendment to the Articles of
Incorporation with respect to the change;
6
(c) Specimen Share certificates for each class of Shares in the new
form approved by the Board of Directors of the Fund, with a Certificate signed
by the Secretary of the Fund as to such approval; and
(d) An opinion of counsel for the Fund with respect to the validity
of the Shares in the new form and the status of such Shares under the Securities
Act of 1933, as amended, and any other applicable federal law or regulation
(i.e., if subject to registration, that the Shares have been registered and that
the Registration Statement has become effective or, if exempt, the specific
grounds therefor).
2. The Fund at its expense shall furnish the Transfer Agent with a
sufficient supply of blank Share certificates in the new form and from time to
time will replenish such supply upon the request of the Transfer Agent. Such
blank Share certificates shall be compatible with the Transfer Agent's system
and shall be properly signed by facsimile or otherwise by Officers of the Fund
authorized by law or by the By-Laws to sign Share certificates and, if required
shall bear the corporate Seal or facsimile thereof. The Fund agrees to indemnify
and exonerate, save and hold the Transfer Agent harmless, from and against any
and all claims or demands that may be asserted against the Transfer Agent with
respect to the genuineness of any Share certificate supplied to the Transfer
Agent pursuant to this section.
ARTICLE V
ISSUANCE, REDEMPTION AND TRANSFER OF SHARES
1. (a) The Transfer Agent acknowledges that it has received a copy of
the Fund's prospectus(es) and statement(s) of additional information, which
prospectus(es) and statement(s)
7
of additional information described how sales and redemption of shares of the
Fund shall be made, and the Transfer Agent agrees to accept purchase orders and
redemption requests with, respect to the Fund shares on each Fund Business Day
in accordance with such prospectus(es) and statement(s) of additional
information; provided, however, that the Transfer Agent shall only accept
purchase orders from states in which the shares of the Fund are registered. The
Fund shall provide the Transfer Agent with a listing of the states in which the
shares of the Fund are registered on a periodic basis. The Fund agrees to
provide the Transfer Agent with sufficient advance notice to enable the Transfer
Agent to effect any changes in the procedures set forth in the prospectus(es)
and statement(s) of additional information regarding such purchase and
redemption procedure; provided, however, that in no event will such advance
notice be less than 30 days.
(b) The Transfer Agent shall also accept with respect to each Fund
Business Day, at such times as are agreed upon from time to time by the Transfer
Agent and the Fund, a computer tape or electronic data transmission consistent
in all respects with the Transfer Agent's tape layout package, as amended from
time to time, which is believed by the Transfer Agent to be furnished by or on
behalf of any Approved Institution. The Transfer Agent shall not be liable for
any losses or damages to the Fund or its shareholders in the event that a
computer tape or electronic data transmission from an Approved Institution is
unable to be processed for any reason beyond the control of the Transfer Agent,
or if any of the information on such tape or transmission is found to be
incorrect.
8
2. On each Fund Business Day the Transfer Agent shall, as of the time
at which the Fund computes the net asset value of the Fund, issue to and redeem
from the accounts specified in a purchase order, redemption request, or computer
tape, which in accordance with the Prospectus(es) is effective on such Fund
Business Day, the appropriate number of full and fractional Shares based on the
net asset value per Share of such Fund specified in an advice received on such
Fund Business Day from the Fund. Notwithstanding the foregoing, if a redemption
specified in a computer tape is for a dollar value of Shares in excess of the
dollar value of uncertificated Shares in the specified account, the Transfer
Agent shall not effect such redemption in whole or in part and shall within
twenty-four hours orally advise the Approved Institution which supplied such
tape of the discrepancy.
3. In connection with a reinvestment of a dividend or distribution of
shares of the Fund, the Transfer Agent shall as of each Fund Business Day, as
specified in a Certificate or resolution described in paragraph 1 of succeeding
Article VI, issue Shares of the Fund based on the net asset value per Share of
such Fund specified in an advice received form the Fund on such Fund Business
Day.
4. On each Fund Business Day the Transfer Agent shall supply the Fund
with a statement specifying with respect to the immediately preceding Fund
Business Day: the total number of Shares of the Fund (including fractional
Shares) issued and outstanding at the opening of business on such day; the total
number of Shares of the Fund sold on such day, pursuant to preceding paragraph 2
of this Article; the total number of Shares of the Fund redeemed from
Shareholders by the Transfer Agent on such day; the total number of Shares of
the Fund, if any,
9
sold on such day pursuant to preceding paragraph 3 of this Article, and the
total number of Shares of the Fund issued and outstanding.
5. In connection with each purchase and each redemption of Shares, the
Transfer Agent shall send such statements as are prescribed by the Federal
Securities laws applicable to transfer agents and Section 8-408 of the Uniform
Commercial Code as enacted in the Commonwealth of Massachusetts or as described
in the Prospectus(es). If the Prospectus(es) indicates that certificates for
Shares are available and if specifically requested in writing by any
shareholder, or if otherwise required hereunder, the Transfer Agent will
countersign, issue and mail to such shareholder at the address set forth in the
records of the Transfer Agent a Share certificate for any full Share requested.
6. As of each Fund Business Day the Transfer Agent shall furnish the
Fund with an advice setting forth the number of dollar amount of Shares to be
redeemed on such Fund Business Day in accordance with paragraph 2 of this
Article.
7. Upon receipt of a proper redemption request and moneys paid to it by
the Custodian(s) in connection with a redemption of Shares, the Transfer Agent
shall cancel the redeemed Shares and after making appropriate deduction for any
withholding of taxes required of it by applicable law (a) in the case of a
redemption of Shares pursuant to a redemption described in preceding paragraph
l(a) of this Article, make payment in accordance with the Fund's redemption and
payment procedures described in the Prospectus(es), and (b) in the case of a
redemption of Shares pursuant to a computer tape described in preceding
paragraph l(b) of
10
this Article, make payment by directing a federal funds wire order to the
account previously designated by the Approved Institution specified in said
computer tape.
8. The Transfer Agent shall not be required to issue any Shares after
it has received from an Officer of the Fund or from an appropriate federal or
state authority written notification that the sale of Shares has been suspended
or discontinued, and the Transfer Agent shall be entitled to rely upon such
written notification.
9. Upon the issuance of any Shares in accordance with this Agreement
the Transfer Agent shall not be responsible for the payment of any original
issue or other taxes required to be paid by the Fund in connection with such
issuance of any Shares.
10. The Transfer Agent shall accept a computer tape consistent with the
Transfer Agent's tape layout package, as amended from time to time, which is
reasonably believed by the Transfer Agent to be furnished by or on behalf of any
Approved Institution and is represented to be instructions with respect to the
transfer of Shares from one account of such Approved, Institution to another
such account, and shall effect the transfers specified in said computer tape.
The Transfer Agent shall not be liable for any losses to the Fund or its
shareholders in the event that a computer tape or electronic data transmission
from an Approved Institution is unable to be processed for any reason beyond the
control of the Transfer Agent, or if any of the information on such tape or
transmission is found to be incorrect.
11. (a) Except as otherwise proved in sub-paragraph (b) of this
paragraph and in paragraph 13 of this Article, Shares will be transferred or
redeemed upon presentation to the Transfer Agent of Share certificates or
instructions properly endorsed for transfer or redemption,
11
accompanied by such documents as the Transfer Agent deems necessary to evidence
the authority of the person making such transfer or redemption, and bearing
satisfactory evidence of the payment of stock transfer taxes. In the case of
small estates where no administration is contemplated, the Transfer Agent may,
when furnished with an appropriate surety bond, and without further approval of
the Fund, transfer or redeem Shares registered in the name of a decedent where
the current market value of the Shares being transferred does not exceed such
amount as may from time to time be prescribed by various states. The Transfer
Agent reserves the right to refuse to transfer or redeem Shares until it is
satisfied that the endorsement on the stock certificate or instructions is valid
and genuine, and for that purpose it will require, unless otherwise instructed
by an authorized officer of the Fund, a guarantee of signature by an "Eligible
Guarantor Institution" as that term is defined by SEC Rule 17Ad-15. The Transfer
Agent also reserves the right to refuse to transfer or redeem Shares until it is
satisfied that the requested transfer or redemption is legally authored, and its
shall incur no liability for the refusal, in good faith, to make transfers or
redemptions which the Transfer Agent, in its judgment, deems improper or
unauthorized, or until it is satisfied that there is no basis to any claims
adverse to such transfer or redemption. The Transfer Agent may, in effecting
transfers, and redemptions of Shares, rely upon those provisions of the Uniform
Act for the Simplification of Fiduciary Security Transfers or the Uniform
Commercial Code, as the same may be amended from time to time, applicable to the
transfer of securities, and the Fund shall indemnify the Transfer Agent for any
act done or omitted by it in good faith in reliance upon such laws. In
12
no event will the Fund indemnify the Transfer Agent for any act done by it as a
result of willful misfeasance, bad faith, gross negligence or reckless disregard
of its duties.
(b) Notwithstanding the foregoing or any other provision contained
in this Agreement to the contrary, the Transfer Agent shall be fully protected
by the Fund in not requiring any instruments, documents, assurances,
endorsements or guarantees, including, without limitation, any signature
guarantees, in connection with a redemption, or transfer, of Shares whenever the
Transfer Agent reasonably believes that requiring the same would be inconsistent
with the transfer and redemption procedures as described in the Prospectus(es).
12. Notwithstanding any provision contained in this Agreement to the
contrary, the Transfer Agent shall not be required or expected to require, as a
condition to any transfer of any Shares pursuant to paragraph 11 of this Article
or any redemption of any Shares pursuant to a computer tape described in this
Agreement, any documents, including, without limitation, any documents of the
kind described in sub-paragraph (a) of paragraph 12 of this Article, to evidence
the authority of the person requesting the transfer or redemption and/or the
payment of any stock transfer taxes, and shall be fully protected in acting in
accordance with the applicable provisions of this Article.
13. (a) As used in this Agreement, the terms "computer tape" and
"computer tape believed by the Transfer Agent to be furnished by an Approved
Institution," shall include any tapes generated by the Transfer Agent to reflect
information believed by the Transfer Agent to have been inputted by an Approved
Institution, via a remote terminal or other similar link, into a data
processing, storage, or collection system, or similar system (the "System"),
located on
13
the Transfer Agent's premises. For purposes of paragraph 1 of this Article, such
a computer tape shall be deemed to have been furnished at such times as are
agreed upon from time to time by the Transfer Agent and Fund only if the
information reflected thereon was inputted into the System at such times as are
agreed upon form time to time by the Transfer Agent and the Fund.
(b) Nothing contained in this Agreement shall constitute any
agreement or representation by the Transfer Agent to permit, or to agree to
permit, any Approved Institution to input information into a System.
(c) The Transfer Agent reserves the right to approve, in advance,
any Approved Institution, such approval not to be unreasonably withheld. The
Transfer Agent also reserves the right to terminate any and all automated data
communications, at its discretion, upon a reasonable attempt to notify the Fund
when in the opinion of the Transfer Agent continuation of such communications
would jeopardize the accuracy and/or integrity of the Fund's records on the
System.
ARTICLE VI
DIVIDENDS AND DISTRIBUTIONS
1. The Fund shall furnish to the Transfer Agent a copy of a resolution
of its Board of Directors, certified by the Secretary or any Assistant
Secretary, either (i) setting forth the date of the declaration of a dividend or
distribution, the date of accrual or payment, as the case may be, thereof, the
record date as of which Shareholders entitle to payment, or accrual, as the case
may be, shall be determined, the amount per Share of such dividend or
distribution, the payment date on which all previously accrued and unpaid
dividends are to be paid, and the total amount,
14
if any, payable to the Transfer Agent on such payment date, or (ii) authorizing
the declaration of dividends and distributions on a daily or other periodic
basis and authorizing the Transfer Agent to rely on a Certificate setting forth
the information described in subsection (i) of this paragraph.
2. Upon the mail date specified in such Certificate or resolution, as
the case may be, the Fund shall, in the case of a cash dividend or distribution,
cause the Custodian(s) to deposit in an account in the name of the Transfer
Agent on behalf of the Fund an amount of cash, if any sufficient for the
Transfer Agent to make the payment, as of the mail date, specified in such
Certificate or resolution, as the case may be, to the shareholders who were of
record on the record date. The Transfer Agent will, upon receipt of any such
cash, make payment of such cash dividends or distributions to the shareholders
of record as of the record date by: (i) mailing a check, payable to the
registered shareholder, to the address of record or dividend mailing address, or
(ii) wiring such amounts to the accounts previously designated by an Approved
Institution, as the case may be. The Transfer Agent shall not be liable for any
improper payments made in good faith and without negligence, in accordance with
a Certificate or resolution described in the preceding paragraph. If the
Transfer Agent shall not receive from the Custodian(s) sufficient cash to make
payments of any cash dividend or distribution to all shareholders of the Fund as
of the record date, the Transfer Agent shall, upon notifying the Fund, withhold
payment to all shareholders of record as of the record date until sufficient
cash is provided to the Transfer Agent.
15
3. It is understood that the Transfer Agent shall in no way be
responsible for the determination of the rate or form of dividends or capital
gain distributions due to the shareholders. It is expressly agreed and
understood that the Transfer Agent is not liable for any loss as a result of
processing a distribution based on information provided in the Certificate that
is incorrect. The Fund agrees to pay the Transfer Agent for any and all costs,
both direct and out-of-pocket expenses, incurred in such corrective work as
necessary to remedy such error.
4. It is understood that the Transfer Agent shall file such appropriate
information returns concerning the payment of dividend and capital gain
distributions with the proper federal, state and local authorities as are
required by law to be filed by the Fund but shall in no way be responsible for
the collection or withholding of taxes due on such dividends or distributions
due to shareholders, except and only to the extent, required by applicable law.
ARTICLE VII
CONCERNING THE FUND
1. The Fund represents to the Transfer Agent that:
(a) It is a corporation duly organized and existing under the laws
of the State of Maryland.
(b) It is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement.
(c) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
16
(d) It is an investment company registered under the Investment
Company Act of 1940, as amended.
(e) A registration statement under the Securities Act of 1933, as
amended, with respect to the Shares is effective. The Fund shall notify the
Transfer Agent if such registration statement or any state securities
registrations have been terminated or a stop order has been entered with respect
to the Shares.
2. Each copy of the Articles of Incorporation of the Fund and copies of
all amendments thereto shall be certified by the Secretary of State (or other
appropriate official) of the state of organization, and if such Articles of
Incorporation and/or amendments are required by law also to be fled with a
county or other officer or official body, a certificate of such filing shall be
fled with a certified copy submitted to the Transfer Agent. Each copy of the
By-Laws and copies of all amendments thereto, and copies of resolutions of the
Board of Directors of the Fund, shall be certified by the Secretary of the Fund
under seal.
3. The Fund shall promptly deliver to the Transfer Agent written notice
of any change in the officers authorized to sign Share certificates,
notifications or requests, together with a specimen signature of each new
officer. In the event any officer who shall have signed manually or whose
facsimile signature shall have been affixed to blank Share certificates shall
die, resign or be removed prior to issuance of such Share certificates, the
Transfer Agent may issue such Share certificates of the Fund notwithstanding
such death, resignation or removal, and the Fund shall promptly deliver to the
Transfer Agent such approval, adoption or ratification as may be required by
law.
17
4. It shall be the sole responsibility of the Fund to deliver to the
Transfer Agent the Fund's currently effective Prospectus(es) and, for purposes
of this Agreement, the Transfer Agent shall not be deemed to have notice of any
information contained in such Prospectus(es) until a reasonable time after it is
actually received by the Transfer Agent.
ARTICLE VIII
CONCERNING THE TRANSFER AGENT
1. The Transfer Agent represents and warrants to the Fund that:
(a) It is a corporation duly organized and existing under the laws
of the State of Delaware.
(b) It is empowered under applicable law and by its Charter and
By-laws to enter into and perform this Agreement.
(c) All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement.
(d) It is duly registered as a transfer agent under Section 17A of
the Securities Exchange Act of 1934, as amended.
2. The Transfer Agent shall not be liable and shall be indemnified in
acting upon any computer tape, writing or document reasonably believed by it to
be genuine and to have been signed or made by an Officer of the Fund or person
designated by the Fund and shall not be held to have any notice of any change of
authority of any person until receipt of written notice thereof from the Fund or
such person. It shall also be protected in processing Share certificates which
18
bear the proper countersignature of the Transfer Agent and which it reasonably
believes to bear the proper manual or facsimile signature of the Officers of the
Fund.
3. The Transfer Agent upon notice to the Fund may establish such
additional procedures, rules and regulations governing the transfer or
registration of Share certificates as it may deem advisable and consistent with
such rules and regulations generally adopted by mutual fund transfer agents.
4. The Transfer Agent shall keep such records as are specified in
Schedule II hereto in the form and manner, and for such period, as it may been
advisable and is agreeable to the Fund but not inconsistent with the rules and
regulations of appropriate government authorities, in particular Rules 31a-2 and
31a-3 under the Investment Company Act of 1940, as amended. The Transfer Agent
acknowledges that such records are the property of the Fund. The Transfer Agent
may deliver to the Fund from time to time at its discretion, for safekeeping or
disposition by the Fund in accordance with law, such records, papers, documents
accumulated in the execution of its duties as such Transfer Agent, as the
Transfer Agent may deem expedient, other than those which the Transfer Agent is
itself required to maintain pursuant to applicable laws and regulations. The
Fund shall assume all responsibility for any failure thereafter to produce any
record, paper, canceled Share certificate, or other document so returned, if and
when required. The records specified in Schedule II hereto maintained by the
Transfer Agent pursuant to this paragraph 4, which have not been previously
delivered to the Fund pursuant to the foregoing provisions of this paragraph 4,
shall be considered to be the property of the Fund, shall be made available upon
request for inspection by the officers, employees, and auditors of
19
the Fund, and records shall be delivered to the Fund upon request and in any
event upon the date of termination of this Agreement, as specified in Article IX
of this Agreement, in the form and manner kept by the Transfer Agent on such
date of termination or such earlier date as may be requested by the Fund.
5. The Transfer Agent shall not be liable for any loss or damage,
including counsel fees, resulting from its actions or omissions to act or
otherwise, except for any loss or damage arising out of its bad faith,
negligence, willful misfeasance, gross negligence or reckless disregard of its
duties under this agreement.
6. (a) The Fund shall indemnify and exonerate, save and hold harmless
the Transfer Agent from and against any and all claims (whether with or without
basis in fact or law), demands, expenses (including reasonable attorney's fees)
and liabilities of any and every nature which the Transfer Agent may sustain or
incur or which may be asserted against the Transfer Agent by any person by
reason of or as a result of any action taken or omitted to be taken by any prior
transfer agent of the Fund or as a result of any action taken or omitted to be
taken by the Transfer Agent in good faith and without negligence or willful
misconduct or in reliance upon (i) any provision of this Agreement; (ii) the
Prospectus(es); (iii) any instruction or order including, without limitation,
any computer tape reasonably believed by the Transfer Agent to have been
received from an Approved Institution; (iv) any instrument, order or Share
certificate reasonably believed by it to be genuine and to be signed,
countersigned or executed by any duly authorized Officer of the Fund; (v) any
Certificate or other instructions of an Officer; or (vi) any opinion of legal
counsel for the Fund or the Transfer Agent. The Fund shall
20
indemnify and exonerate, save and hold the Transfer Agent harmless from and
against any and all claims (whether with or without basis in fact or law),
demands, expenses (including reasonable attorney's fees) and liabilities of any
and every nature which the Transfer Agent may sustain or incur or which may be
asserted against the Transfer Agent by any person by reason of or as a result of
any action taken or omitted to be taken by the Transfer Agent in good faith in
connection with its appointment or in reliance upon any law, act, regulation or
any interpretation of the same even though such law, act or regulation may
thereafter have been altered, changed, amended or repealed.
6. (b) The Transfer Agent shall not settle any claim, demand, expense
or liability to which it may seek indemnity pursuant to paragraph 6(a) above
(each, an "Indemnifiable Claim") without the express written consent of an
Officer of the Fund. The Transfer Agent shall notify the Fund within 15 days of
receipt of notification of an Indemnifiable Claim, provided that the failure by
the Transfer Agent to furnish such notification shall not impair its right to
seek indemnification from the Fund unless the Fund is unable to adequately
defend the Indemnifiable Claim as a result of such failure, and further
provided, that if as a result of the Transfer Agent's failure to provide the
Fund with timely notice of the institution of litigation a judgment by default
is entered, prior to seeking indemnification from the Fund the Transfer Agent,
at its own cost and expense, shall open such judgment. The Fund shall have the
right to defend any Indemnifiable Claim at its own expense, provided that such
defense shall be conducted by counsel selected by the Fund and reasonably
acceptable to the Transfer Agent. The Transfer Agent may join in such defense at
its own expense, but to the extent that it shall so desire the
21
Fund shall direct such defense. The Fund shall not settle any Indemnifiable
Claim without the express written consent of the Transfer Agent if the Transfer
Agent determined that such settlement would have an adverse effect on the
Transfer Agent beyond the scope of this Agreement. In such event, each of the
Fund and the Transfer Agent shall be responsible for their own defense at their
own cost and expense, and such claim shall not be deemed an Indemnifiable Claim
hereunder. If the Fund shall fail or refuse to defend an Indemnifiable Claim,
the Transfer Agent may provide its own defense at the cost and expense of the
Fund. Anything in this Agreement to the contrary notwithstanding, the Fund shall
not indemnify the Transfer Agent against any liability or expense arising out of
the Transfer Agent's willful misfeasance, bad faith, gross negligence or
reckless disregard of its duties and obligations under this Agreement. The
Transfer Agent shall indemnify and hold the Fund harmless from and against any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liability arising out of or attributable to any action or failure or omission to
act by the Transfer Agent as a result of the Transfer Agent's lack of good
faith, negligence or willful misconduct.
7. The Transfer Agent shall not be liable to the fund with respect to
any redemption draft on which the signature of the drawer is forged and which
the fund's Custodian(s) or Cash Management bank has advised the Transfer Agent
to honor the redemption; nor shall Transfer Agent be liable for any material
alteration or absence or forgery of any endorsement, it being understood that
the Transfer Agent's sole responsibility with respect to inspecting redemption
drafts is to use reasonable care to verify the drawer's signature against
signatures on file.
22
8. There shall be excluded from the consideration of whether the
Transfer Agent has been negligent or has breached this Agreement, any period of
time, and only such period of time, during which the Transfer Agent's
performance is materially affected, by reason of circumstances beyond its
control (collectively, "Causes"), including, without limitation (except as
provided below), (a) mechanical breakdowns of equipment (including any
alternative power supply and operating systems software), flood or catastrophe,
acts of God, failures of transportation, communication or power supply, strikes,
lockouts, work stoppages or other similar circumstances.
9. At any time the Transfer Agent may apply to an Officer of the Fund
for written instructions with respect to any matter arising in connection with
the Transfer Agent's duties and obligations under this Agreement, and the
Transfer Agent shall not be liable for any action taken or permitted by it in
good faith in accordance with such written instructions. Such application by the
Transfer Agent for written instructions from an Officer of the Fund may set
forth in writing any action proposed to be taken or omitted by the Transfer
Agent with respect to its duties or obligations under this Agreement and the
date on and/or after which such action shall be taken. The Transfer Agent shall
not be liable for any action taken or omitted in accordance with a proposal
included in any such application on or after the date specified therein unless,
prior to taking or omitting any such action, the Transfer Agent has received
written instructions in response to such application specifying the action to be
taken or omitted. The Transfer Agent may consult counsel of the Fund, or upon
notice to the Fund, its own counsel, at the expense
23
of the Fund and shall be fully protected with respect to anything done or
omitted by it in good faith in accordance with the advice or opinion of counsel
to the fund or its own counsel.
10. The Transfer Agent may issue new Share certificates in place of
certificates represented to have been lost, stolen, or destroyed upon receiving
written instructions from the shareholder accompanied by proof of an indemnity
or surety bond issued by a recognized insurance institution specified by the
Fund or the Transfer Agent. If the Transfer Agent receives written notification
from the shareholder or broker dealer that the certificate issued was never
received, and such notification is made within 30 days of the date of issuance,
the Transfer Agent may reissue the certificate without requiring a surety bond.
The Transfer Agent may also reissue certificates which are represented as lost,
stolen, or destroyed without requiring a surety bond provided that the
notification is in writing and accompanied by an indemnification signed on
behalf of a member firm of the New York Stock Exchange and signed by an officer
of said firm with the signature guaranteed. Notwithstanding the foregoing, the
Transfer Agent will reissue a certificate upon written authorization from an
Officer of the Fund.
11. In case of any requests or demands for the inspection of the
shareholder records of the Fund, the Transfer Agent will endeavor to notify the
Fund promptly and to secure instructions from an Officer as to such inspection.
The Transfer Agent reserves the right, however, to exhibit the shareholder
records to any person whenever it receives an opinion from its counsel that
there is a reasonable likelihood that the Transfer Agent will be held liable for
the failure to exhibit the shareholder records to such person; provided,
however, that in
24
connection with any such disclosure the Transfer Agent shall promptly notify the
Fund that such disclosure has been made or is to be made.
12. At the request of an Officer of the Fund the Transfer Agent will
address and mail such appropriate notices to shareholders as the Fund may
direct.
13. Notwithstanding any of the foregoing provisions of this Agreement,
the Transfer Agent shall be under no duty or obligation to inquire into, and
shall not be liable for:
(a) The legality of the issue or sale of any Shares, the sufficiency
of the amount to be received therefor, or the authority of the Approved
Institution or of the Fund, as the case may be, to request such sale or
issuance;
(b) The legality of a transfer of Shares, or of a redemption of any
Shares, the property of the amount to be paid therefor, or the authority of the
Approved Institution or of the Fund, as the case may be, to request such
transfer or redemption;
(c) The legality of the declaration of any dividend by the Fund, or
the legality of the issue of any Shares in payment of any stock dividend; or
(d) The legality of any recapitalization or readjustment of Shares.
14. The Transfer Agent shall be entitled to receive and the Fund hereby
agrees to pay to the Transfer Agent for its performance hereunder, including its
performance of the duties and functions set forth in Schedule I hereto, (i) its
reasonable out-of-pocket expenses (including reasonable legal expenses and
attorney's fees) incurred in connection with its performance hereunder and (ii)
such compensation as may be agreed upon in writing from time to time by the
Transfer Agent and the Fund.
25
15. The Transfer Agent shall have not duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against the Transfer Agent.
16. Purchase and Prices of Services.
(a) The fund will compensate the Transfer Agent for, and Transfer Agent
will provide, beginning on the execution date of this Agreement and continuing
until the termination of this Agreement as provided hereinafter, the Services
set forth in Schedule I.
(b) The current unit prices for the Services are set forth in Schedule
m (the "Schedule m Fee Schedule"). Once in each calendar year, the Transfer
Agent may elect to raise the Schedule m Fees upon ninety (90) days prior notice
to the Fund. Notwithstanding the annual right to raise the Schedule m Fees, the
Transfer Agent may increase prices due to changes in legal or regulatory
requirements. Any increases in prices or one-time charges due to changes in the
legal or regulatory requirements will be subject to the approval of the Fund,
which approval shall not be unreasonably withheld.
17. Billing and Payment.
(a) The Transfer Agent shall xxxx the Fund as follows: (i) monthly in
arrears for Accounts maintained and in arrears for any Out-of-Pocket Expenses
incurred by the Transfer Agent, provided, however, that with respect to
Out-of-Pocket Expenses the Transfer Agent shall provide the Fund monthly with an
amount to be advanced to the Transfer Agent for estimated postage expenses for
the following month. Documentation to support reconciliation of actual
26
postal charges will be provided to the Fund monthly. The Transfer Agent may from
time to time request the Fund to make additional advances when appropriate.
(b) The Fund shall pay the Transfer Agent in immediately available
funds at United Missouri Bank in Kansas City, Missouri within thirty (30) days
of the date of the xxxx.
ARTICLE IX
TERMINATION
Either of the parties hereto may terminate this Agreement by giving to
the other party a notice in writing specifying the date of such termination,
which shall be not less than 60 days after the date of receipt of such notice.
In the event such notice is given by the Fund, it shall be accomplished by a
copy of a resolution of the Board of Directors of the Fund, certified by the
Secretary or any Assistant Secretary, electing to terminate this Agreement and
designating the successor transfer agent or transfer agents. In the event such
notice is given by the Transfer Agent, the Fund shall on or before the
termination date, deliver to the Transfer Agent a copy of a resolution of its
Board of Directors certified by the Secretary or any Assistant Secretary
designating a successor transfer agent or transfer agents. In the absence of
such designation by the Fund, the Fund shall upon the date specified in the
notice of termination of this Agreement and delivery of the records maintained
hereunder, be deemed to be its own transfer agent and the Transfer Agent shall
thereby be relieved of all duties and responsibilities pursuant to this
Agreement.
In the event this Agreement is terminated as provided herein, the
Transfer Agent, upon the written request of the Fund, shall deliver the records
of the Fund on
27
electromagnetic media to the Fund or its successor transfer agent. The Fund
shall be responsible to the Transfer Agent for the reasonable costs and expenses
associated with the preparation and delivery of such media.
ARTICLE X
MISCELLANEOUS
1. The Fund agrees that prior to effecting any change in the
Prospectus(es) which would increase or alter the duties and obligations of the
Transfer Agent hereunder, it shall advise the Transfer Agent of such proposed
change at least 30 days prior to the intended date of the same, and shall
proceed with such change only if it shall have received the written consent of
the Transfer Agent thereto, which shall not be unreasonably withheld.
2. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Fund shall be sufficiently given if addressed
to the Fund and mailed or delivered to it at its office at the address first
above written, or at such other place as the Fund may from time to time
designate in writing.
3. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Transfer Agent shall be sufficiently given if
addressed to the Transfer Agent and mailed or delivered to the Senior Vice
President at 0000 Xxxxxxxx, 0xx Xxxxx, Xxxxxx Xxxx, XX 00000, or at such other
place as the Transfer Agent may from time to time designate in writing.
4. This Agreement may not be amended or modified in any manner except
by a written agreement executed by both parties with the formality of this
Agreement.
28
5. This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns. This Agreement shall not be
assignable by either party without the written consent of the other party,
except that the Transfer Agent may assign this Agreement to a corporate
affiliate with advance written notice to the Fund.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois.
7. This Agreement may be executed in any number of counterparts each of
which shall be deemed to be an original; but such counterparts shall, together,
constitute only one instrument.
8. The provisions of this Agreement are intended to benefit only the
Transfer Agent and the Fund, and no rights shall be granted to any other person
by virtue of this Agreement.
9. (a) The Transfer Agent will endeavor to assist in resolving
shareholder inquiries and errors relating to the period during which prior
transfer agents acted as such for the Fund. Any such inquiries or errors which
cannot be expediently resolved by the Transfer Agent will be referred to the
Fund.
(b) The Transfer Agent shall only be responsible for the safekeeping
and maintenance of transfer agency records, canceled certificates and
correspondence of the fund created or produced prior to the time of conversion
which are under its control and acknowledged in a writing to the fund to be in
its possession. Any expenses or liabilities incurred by the Transfer Agent as a
result of shareholder inquiries, regulatory compliance or
29
audits related to such records and not caused as a result of Transfer Agent's
bad faith, willful malfeasance or negligence shall be the responsibility of the
Fund as provided in Article VIII herein.
30
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officer, hereunto duly authorized and
their respective corporate seals to be hereunto affixed, as the day and year
first above written.
DST Systems, Inc. PBHG Insurance Series, Fund, Inc.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxxx
------------------------------ ------------------------------
(Signature) (Signature)
Xxxxxxx X. Xxxxx Xxxxx X. Xxxxxxxx
------------------------------ ------------------------------
(Name) (Name)
Vice President and
Chief Financial Officer Vice President
------------------------------ ------------------------------
(Title) (Title)
4/15/97 4/14/97
------------------------------ ------------------------------
(Date Signed) (Date Signed)
31
SCHEDULE I
DESCRIPTION OF SERVICES
In consideration of the fees to be paid in such manner and at such
times as Fund and Transfer Agent will provide the services set forth below:
Examine and Process New Accounts, Subsequent Payments, Liquidations,
Exchanges, Telephone Transactions, Check Redemptions, Automatic Withdrawals,
Certificate Issuance, Wire Order Trades, Dividends, Dividend Statement, Dealer
Statement.
DAILY ACTIVITY
Maintain the following shareholder information in such a manner as the
Transfer Agent shall determine:
Name and Address, including zip Code
Balance of Uncertificated Shares
Balance of Certificated Shares
Certificate number, number of shares, issuance date of each certificate
outstanding and cancellation date for each certificate date for each
certificate no longer outstanding, if issued
Balance of dollar available for redemption
Dividend code (daily accrual, monthly reinvest, monthly cash or
quarterly cash)
Type of account code
Establishment date indicating the date an account was opened, carrying
forward preconversion data as available
Original establishment date for accounts opened by exchange
W-9 withholding status and periodic reporting
32
State of residence code
Social Security or taxpayer identification number, and indication of
certification
Historical transactions on the account for the most recent 18 months,
or other period as mutually agreed to from time-to-time
Indication as to whether phone transactions can be accepted for this
account. Beneficial owner code, i.e., male, female, joint tenant, etc.
An alternate or "secondary" account number issued by a dealer (or bank,
etc.) to a customer for use, inquiry and transaction input by "remote
accessors"
FUNCTIONS
Answer investor and dealer telephone and/or written inquiries, except
those concerning Fund policy, or requests for investment advice which
will be referred to the Fund, or those which the Fund chooses to answer
Deposit Fund share certificates into accounts upon receipt of
instructions from the investor or other authorized person, if issued
Examine and process transfers of shares insuring that all transfer
requirements and legal documents have been supplied
Process and confirm address changes
Process standard account record changes as required, i.e., Dividend
Codes, etc.
Microfilm source documents for transactions, such as account
applications and correspondence
Perform backup withholding for those accounts which federal government
regulations indicate is necessary
Perform withholdings on liquidations, if applicable, for employee
benefit plans. Prepare and mail 5498s and 1099R's
Solicit missing taxpayer identification numbers
Provide remote access inquiry to Fund records via Fund supplied
hardware (Fund responsible for connection line and monthly fee)
33
REPORTS PROVIDED
Daily Journals Reflecting all shares and dollar activity for the
previous day
Blue Sky Report Supply information monthly for Fund's
preparation of Blue Sky Reporting
N-SAR Report Supply monthly correspondence, redemption and
liquidation information for use in fund's N-SAR
Report
Additionally, monthly average daily balance reports will be provided at the
Fund's request to the Fund at no charge
Prepare and mail copies of summary statements to dealers and investment advisers
Generate and mail confirmation statements for financial transactions
DIVIDEND ACTIVITY
Reinvest or pay in cash including reinvesting in other funds within the
fund group serviced by the Transfer Agent as described in each Fund
prospectus(es)
Distribute capital gains simultaneously with income dividends
DEALER SERVICES
Prepare and mail confirmation statements to dealers daily
Prepare and mail copies of statements to dealers, same frequency as
investor statements
ANNUAL MEETINGS
Assist Fund in obtaining a qualified service to: address and mail
proxies and related material, tabulate returned proxies and supply
daily reports when sufficient proxies have been received
Prepare certified list of stockholders, hard copy or microform
34
PERIODIC ACTIVITIES
Mail transaction confirmation statements daily to investors
Address and mail four (4) periodic financial reports (material must be
adaptable to Transfer Agent's mechanical equipment as reasonably
specified by the Transfer Agent)
Mail periodic statements to investors
Compute, prepare and furnish all necessary reports to Governmental
authorities: Forms 1099R, 1099DIV, 1099B, 1042 and 1042S
Enclose various marketing material as designated by the Fund in
statement mailings, i.e., monthly and quarterly statements (material
must be adaptable to mechanical equipment as reasonably specified by
the Transfer Agent)
35
SCHEDULE II
RECORDS MAINTAINED BY TRANSFER AGENT
- Account applications
- Canceled certificates plus stock powers and supporting documents
- Checks including check registers, reconciliation records, any adjustment
records and tax withholding documentation
- Indemnity bonds for replacement of lost or missing stock certificates and
checks
- Liquidation, redemption, withdrawal and transfer requests including stock
powers, signature guarantees and any supporting documentation
36
SCHEDULE III
FEE SCHEDULE
PBHG Insurance Series Fund, Inc.
Period* Annual Fee**
------ ----------
0-3 months $20,000
4-6 months $22,500
7-12 months $25,000
* Commencing upon the effectiveness of this agreement.
** The Fee is based upon there being 100 or fewer trades per day. If the
number of trades exceed 100 on a day, the Fund will renegotiate in good
faith these fees.
37
