Exhibit (h)(17)
FundVest Institutional No-Load Transaction Fee Agreement dated as of March 20,
2002 between the Pershing Division of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, One Group Mutual Funds, and One Group Dealer Services, Inc.
FundVest Institutional- No Transaction Fee Agreement
This Agreement is made as of March 20, 2002, between Pershing Division of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("Pershing"), a Delaware
Corporation, and One Group Dealer Services, Inc. ("Fund Agent"), and One Group
Mutual Funds ("Fund").
WHEREAS it is understood that Pershing functions primarily as a clearing agent
for introducing broker-dealers/correspondents and in such capacity performs
traditional operational functions, including execution and clearance of trades
and holding customers funds and securities, and that certain of these
broker-dealers/correspondents have agreed to participate in Pershing's mutual
fund no transaction fee program ("FundVest") under the terms and conditions as
set forth in a separate agreement between Pershing and the
broker-dealer/correspondent ("Participating Correspondent(s)");
WHEREAS the terms and conditions set forth herein apply to mutual fund
transactions for funds participating in FundVest effected either on behalf of
customers of Participating Correspondents or customers of Pershing
("Client/Shareholder(s)");
WHEREAS the Fund wishes to have Pershing or a Participating Correspondent act as
a sub-transfer agent for the Fund with respect to shares of the Fund held under
the FundVest program.
WHEREAS the Fund Agent wishes to have Pershing or Participating Correspondents
provide, on its behalf, certain administrative services with respect to
Client/Shareholders of such Fund;
WHEREAS such services will be performed pursuant to the terms and conditions as
set forth herein and in the manner described in Schedule II attached hereto;
NOW THEREFORE, in consideration of the foregoing and the mutual promises set
forth below, the parties agree as follows:
1. Services
During the term of this Agreement, Pershing or Participating
Correspondents will perform sub-transfer agency and shareholder
services as set forth in Schedule III attached hereto (the "Services").
Such Schedule may be amended from time to time with mutual consent of
the parties.
2. Fees
a. For performance of Services, Pershing shall receive a fee (the
"Fee") which will be calculated and paid as provided in
Schedule IV attached hereto. Fees are solely for sub-transfer
agency, shareholder servicing and other administrative
services provided by Pershing or Participating Correspondents
and do not constitute payment in any manner for investment
advisory, distribution, trustee, or custodial services. Fees
shall be payable on all shares of the Fund being held by
Pershing for Client/Shareholders excluding: (i) shares held by
Pershing for such
Client/Shareholders prior to the effective date of Agreement with
Fund Agent; (ii) shares first placed into a Client/Shareholders
account after the termination of the Agreement with such Fund;
(iii) shares on which Pershing or Participating Correspondent has,
upon purchase, assessed any transaction fee.
The total number of shares of the funds upon which Fees are due
Pershing are referred to within this Agreement as program shares
("Program Shares"). This Fee is in addition to any service or
12b-1 fees due and payable by Fund Agent to Pershing or
Participating Correspondent pursuant to any existing 12b-1 or
service agreements between Fund Agent and Pershing or
Participating Correspondents.
b. Fund Agent's sole responsibility for Fee payment shall be to
Pershing.
c. In the event that Schedule III is revised, the parties agree, in
good faith, to negotiate a revision of fees set forth in Schedule
IV.
3. Transaction Charges
Pershing or any Participating Correspondent shall not, during the term
of this Agreement, assess against, or collect from,
Client/Shareholders, any transaction fee upon the purchase or
redemption of any Fund's shares that meet the minimum purchase criteria
set forth in this Agreement, except as noted in Section 4 below.
Client/Shareholder purchases not meeting the criteria as set forth
herein may be charged a transaction fee by the Participating
Correspondent or Pershing, as the case may be, and will not be included
in Fee invoices presented to Fund for payment.
4. Short Term Redemptions
It is hereby understood that Pershing or Participating Correspondents
may apply a redemption fee for any short-term redemption of shares
purchased within specified time frames.
5. Indemnification
x. Xxxxxxxx shall indemnify and hold harmless Fund Agent, the Fund,
their directors, officers, employees, and agents (hereinafter,
"Indemnified Parties") from and against any and all losses,
claims, liabilities and expenses (including, but not limited to,
reasonable attorney's fees) incurred by any of them and arising as
a result of: (i) Pershing's dissemination of information (oral or
written) regarding the Funds, that is materially incorrect and
that was not provided to Pershing, or approved by such Fund, any
of its affiliated persons (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) (affiliates) or agents;
or (ii) Pershing's willful misconduct or negligence in the
performance of, or failure to perform, its obligations under this
Agreement, except to the extent the losses are a result of the
negligence, willful misconduct, or breach of this Agreement by an
Indemnified Party or (iii) the failure of Pershing to comply with
any provision hereof or the breach of any representation or
warranty herein (including the Schedules hereto).
b. Fund Agent hereby agrees to indemnify Pershing and Participating
Correspondents their directors, officers, employees, and agents
(hereinafter, "Indemnified Parties") from and against any and all
losses, claims, damages, liabilities and expenses (including, but
not limited to, reasonable attorney's fees) to which Pershing or
Participating Correspondents may become subject as a result of (i)
Fund Agents violation of any law, rule or regulation, at common
law or otherwise, including any related to or in connection with
the offering for sale of Fund shares, (ii) dissemination of any
information, advertising or promotional material regarding Fund,
that is materially incorrect, inaccurate or misleading and which
was provided or generated by Fund Agent or any of its affiliated
persons (as defined in the Investment Company of 1940, as amended
(the "1940 Act")); or (iii) willful misconduct or negligence in
the performance of, or failure to perform, its obligations
pursuant to this Agreement, except to the extent the losses are a
result of the negligence or willful misconduct of an Indemnified
Party.
c. In any event, no party shall be liable for any special,
consequential or incidental damages.
d. In order that the indemnification provisions contained herein
shall apply, upon the assertion of a claim or loss for which any
party (the "Indenmitor") may be required to indemnify another
party (the "`Indemnitee"), the Indemnitee shall promptly notify
the Indemnitor of such assertion or loss, and shall keep the
Indenmitor advised with respect to all developments concerning any
such claim. The Indemnitor shall have the option to participate at
its expense with the Indemnitee in the defense of any such claim.
The Indemnitee shall in no case confess any claim or make any
compromise in any case in which the Indenmitor may be required to
indemnify it except with the Indemnitor's prior written consent.
e. This Section 5 shall survive termination of this Agreement.
6. Role of Parties
The parties acknowledge and agree that the Services under this
Agreement are sub-transfer agent, recordkeeping, shareholder
communication, and related services only and are not the services of an
underwriter or a principal underwriter within the meaning of the
Securities Act of 1933, as amended, or the Investment Company Act of
1940. This Agreement does not xxxxx Xxxxxxxx or Participating
Correspondents any right to purchase shares from any Fund (although it
does not preclude them from purchasing any such shares), nor does it
constitute Pershing or Participating Correspondent an agent of the Fund
Agent for purposes of selling shares of any Fund to any dealer or to
the public. To the extent Pershing or Participating Correspondent is
involved in the purchase of shares of Fund by Client/Shareholders, such
involvement will be as agent of such Client/Shareholders only.
7. Information to be provided
The Fund Agent shall provide to Pershing, prior to the effectiveness of
this Agreement, or as soon thereafter as possible, a copy of the
current prospectus and statement of additional information for each
Fund participating in the program described herein. The Fund Agent
shall provide Pershing with written copies of any amendments to, or
changes in such documents as soon as possible after such amendments or
changes become available.
8. Notices
All notices required under this Agreement must be in writing and
delivered either personally or via first class mail. Such notices will
be deemed to be received as of the date of actual receipt, or three (3)
days after deposit, first class postage prepaid, in the United States
mail, whichever is earlier.
All such notices shall be made:
if to Pershing, to: Pershing Division of Xxxxxxxxx, Xxxxxx
& Xxxxxxxx Securities Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
with a copy to: Attention: General Counsel (at the same address);
if to the Fund Agent, to the address as given below in the signature block, with
a copy to the General Counsel (at the same address).
9. Nonexclusivity
Each Party acknowledges that the other may enter into agreements,
similar to this one, with other parties, for the performance of
services similar to those to be provided under this Agreement, unless
otherwise agreed to in writing by the parties.
10. Assignability
This Agreement is not assignable by any party without the other party's
prior written consent. Any attempted assignment in contravention hereof
shall be null and void; provided, however, that Pershing or the Fund
may assign its rights and obligations under this Agreement to any
Affiliate.
11. Schedules
All Schedules attached to this Agreement (as they may be amended from
time to time) are, by this reference, incorporated into, and made a
part of, this Agreement.
12. Entire Agreement-Amendment
This Agreement (including the Schedules attached hereto), constitutes
the entire agreement between the parties with regard to the subject
matter herein. Additionally, these materials supersede any and all
agreements, representations and warranties, whether written or oral,
made prior to the execution of this Agreement. This Agreement and the
Schedules attached hereto may be amended only by a writing executed by
each party to be bound by the amendment.
13. Governing Law
This Agreement will be governed by, and interpreted under, the laws of
the State of New York as applied to contracts entered into and to be
performed entirely within that state.
14. Counterparts
This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall
constitute one instrument.
15. Effectiveness of Agreement-Termination
a. This Agreement will become effective as to a Fund as of. (i) the
date set forth on Schedule I opposite the name of the Fund; or
(ii) such later date as Pershing may, in its discretion,
designate.
b. This Agreement shall have an initial term of one (1) year after
which it may be terminated, as to one or more Funds (as reflected
in Schedule I), by either party (i) upon sixty (60) days written
notice to the other parties; or (ii) upon such shorter notice as
is required by law, order, or instruction from a court of
competent jurisdiction, regulatory body, or self-regulatory
organization with jurisdiction over the terminating party; or
(iii) automatically, effective on the day following termination of
any plan of distribution ("Rule 12b-1 Plan") adopted and
maintained pursuant to Rule 12b-1 under the 1940 Act by any fund
that has a Rule 12b-1 Plan in effect as of the effective date of
this Agreement, provided that a portion of the Fee is paid
pursuant to the Rule 12b-1 Plan to; (iv) Fund Agent's
non-performance of responsibilities including, but not limited to,
non-payment of Fees.
c. Upon termination as to a Fund, Fund Agent will not be obligated to
pay the Fee with respect to any shares of the Fund that become
part of a Client/Shareholders account after the date of such
termination. However, notwithstanding any such termination, the
Fund will remain obligated to pay Pershing the Fee as to each
share of such Fund that was considered when calculating the Fee as
of the date of termination (a "Pre-Termination Share"), for so
long as such Pre-Termination Share is held in any
Client/Shareholders account and Pershing or Participating
Correspondent continues to perform the Services as to such shares.
16. Confidentiality
Each party acknowledges and understands that any and all technical,
trade secret, or business information, including, without limitation,
financial information, business or marketing strategies or plans,
product development or customer information, which is disclosed to the
other or is otherwise obtained by the other, its affiliates, agents or
representatives during the term of this Agreement (the "Proprietary
Information") is confidential and proprietary, constitutes trade
secrets of the owner, and is of great value and importance to the
success of the owner's business. Each party agrees to use its best
efforts (the same being not less than that employed to protect his own
proprietary information) to safeguard the Proprietary Information and
to prevent the unauthorized,
negligent or inadvertent use or disclosure thereof. Neither party
shall, without the prior written approval of any officer of the other,
directly or indirectly, disclose the Proprietary Information to any
person or business entity except for a limited number of employees,
attorneys, accountants and other advisors of the other on a
need-to-know basis or as may be required by law or regulation. Each
party shall promptly notify the other in writing of any unauthorized,
negligent or inadvertent use or disclosure of Proprietary information.
Each party shall be liable under this Agreement to the other for any
use or disclosure in violation of this Agreement by its employees,
attorneys, accountants, or other advisors or agents. This section shall
continue in full force and effect, notwithstanding the termination of
this Agreement.
17. Custody
Fund acknowledges that Fund shares maintained by the Fund for
Client/Shareholders hereunder are held in custody for the exclusive
benefit of Client/Shareholders and shall be held free of any right,
charge, security interest, lien or claim against Pershing or
Participating Correspondents in favor of the Fund or its agents acting
on behalf of the Fund.
18. Additional Terms applicable to One Group
The names "One Group(R)Mutual Funds" and "Trustees of One(R)Group
Mutual Funds" refer respectively to the Trust created and the Trustees,
as trustees but not individually or personally, acting from time to
time under a Declaration of Trust dated May 23, 1985 to which reference
is hereby made and a copy of which is on file at the office of the
Secretary of the Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of One Group(R) Mutual Funds entered
into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, Shareholders
or representatives of the Trust personally, but bind only the assets of
the Trust and all persons dealing with any series of Shares of the
Trust must look solely to the assets of the Trust belonging to such
series for the enforcement of any claims against the Trust.
IN WITNESS WHEREOF, duly authorized representatives of the parties hereto have
executed this Agreement.
Fund Agent: One Group Dealer Services, Inc. Pershing Division of Xxxxxxxxx,
Lufkin & Xxxxxxxx Securities
Corporation
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxx
------------------------------------ ----------------------------
Print Name: Xxxx X. Xxxxxx Print Name: Xxxxxxxx X. Xxxx
----------------------------- --------------------
Title: President Title: Vice President
--------------------------------- -------------------------
Address: 0000 Xxxxxxx Xxxxxxx
-------------------------------
Xxxxxxxx, XX 00000-0000
One Group Mutual Funds
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Print Name: Xxxxxx X. Xxxxx
-----------------------------
Title: VP & Treasurer
---------------------------------
Address: 0000 Xxxxxxx Xxxxxxx
-------------------------------
Xxxxxxxx, XX 00000-0000
----------------------------------------
Schedule I
Fund Date
One Group High Yield Bond Fund Class A 5/l/99
One Group Bond Fund Class A 5/l/99
One Group Balanced Fund Class A 5/l/99
One Group Large Cap Growth Fund Class A 5/l/99
One Group Large Cap Value Fund Class A 5/l/99
One Group Mid Cap Growth Fund Class A 5/l/99
One Group International Equity Index Fund Class A 5/l/99
One Group Mid Cap Value Fund Class A 5/l/99
One Group Equity Income Fund Class A 5/l/99
One Group Diversified Equity Fund Class A 5/l/99
One Group Small Cap Growth Fund Class A 5/l/99
One Group Investor Balanced Fund Class A 5/l/99
One Group Investor Conservative Growth Fund Class A 5/l/99
One Group Investor Growth Fund Class A 5/1/99
One Group Investor Growth & Income Fund Class A 5/l/99
One Group Small Cap Value Fund Class A 5/l/99
One Group Diversified Mid Cap Fund Class A 5/l/99
Schedule II
Operational Procedures Relevant to the Agreement
Unless processed using the NSCC FundServ and/or Networking interfaces in the
customary manner as prescribed by the NSCC, or as amended by mutual agreement
whether verbally or in writing, operational responsibilities will be executed as
outlined below in paragraphs (1), (2), and (3).
(1) Non FundServ Purchase and Redemption Orders
Pershing will aggregate and calculate purchase and redemption orders for shares
of a Fund that it has accepted as placed by Client/Shareholders prior to the
close of trading on the New York Stock Exchange, and will communicate to Fund
Agent such orders for each Fund for each business day. Fund Agent agrees that
such orders will receive the applicable Fund's closing net asset value for that
business day, provided they have been received by Pershing by 4:00 p.m. (Eastern
time) and are communicated to Fund by 8:00 p.m. Eastern Time.
(2) Settlement of Non FundServ Trades
Both Pershing and Fund will use their best efforts to cause to be transmitted by
wire on the Business Day immediately following trade date (settlement date) to
an account as directed by the counterpart, the proceeds of all redemption orders
and the purchase price of all purchase orders.
(3) Account Activity and Distribution Information (Omnibus or House Accounts)
(a) Fund shall cause to be provided to Pershing confirmations of Fund activity
in the form of statements detailing activity no less frequently than monthly, as
well as other information as may reasonably be requested by Pershing.
(b) Fund shall cause to be provided to Pershing all distribution announcement
information (ex dates, record dates, payable dates, distribution rate per share,
record date share balances, etc.) as soon as it is announced by each Fund.
Schedule III
Schedule of services to be performed by Pershing or Participating
Correspondent(s) pursuant to this Agreement.
1. Pershing/Participating Correspondent represents and warrants that it has
and will continue at all times to have the necessary facilities, equipment
and personnel to perform the services hereunder in a businesslike and
competent manner and its system complies with any applicable laws, rules
and regulations related to the services to be provided under this
Agreement, including the maintenance and preservation of all records and
registrations required by any applicable laws, rules and regulations.
2. Client/Shareholders are aware that they are transacting business with
Pershing/Participating Correspondent and not the Fund Agent, and will look
to Pershing/Participating Correspondent and not the Fund Agent for
resolution of problems or discrepancies in their accounts.
3. Pershing/Participating Correspondent agrees that it will perform various
services for the Client/Shareholders in those accounts, including where
applicable:
. Establishing and maintaining records of Client/Shareholders'
accounts;
. Processing purchase and redemption transactions;
. Confirming Client/Shareholder transactions;
. Answering routine client inquires regarding the Fund;
. Assisting clients in changing dividend options, accounts
designations and addresses; withholding taxes on non-resident alien
accounts;
. Disbursing income dividends and capital gains distributions;
. Reinvesting dividends and distributions;
. Preparing and delivering to Client/Shareholders and state and
federal authorities, including the United States Internal Revenue
Service, such information respecting dividends and distributions
paid by the Funds as may be required by law, rule or regulation;
. Withholding on dividends and distributions as may be required by
state or Federal authorities from time to time;
. And such other services as Fund may reasonably request.
Pershing/Participating Correspondent shall maintain all historical
Client/Shareholder records, consistent with requirements of all applicable
laws, rules and regulations. Upon the request of the Fund or Fund Agent,
Pershing shall provide copies of all the historical records relating to
transactions between the Funds and the Client/Shareholders, written
communications regarding the Funds to or from the Client/Shareholders and
other materials, in each case (1) as are maintained by Pershing in the
ordinary course of its business, and (2) as may reasonably be requested to
enable the Fund including without limitation, its auditors or legal counsel
to (A) monitor and review the Services, (B) comply with any request of a
governmental or self regulatory organization, (C) verify compliance by
Pershing with the terms of this agreement,
(D) make required regulatory reports, or (E) perform general customer
supervision. Pershing agrees that it will permit the Fund Agent to have
reasonable access to its personnel and records in order to facilitate the
monitoring of the services. Upon the request of Pershing, Fund Agent shall
provide copies of all the historical records relating to transactions
between the Funds and Pershing, written communications regarding the Funds
to or from Pershing and other materials, in each case (1) as are maintained
by the Fund Agent in the ordinary course of its business and in compliance
with applicable law, and (2) as may be requested to enable Pershing to (A)
comply with the request of any governmental body or self regulatory
organization, (B) verify compliance by the Fund Agent with the terms of
this Agreement, (C) make required regulatory reports, or (D) perform
general customer supervision.
4. Pershing/Participating Correspondent shall make available to Fund Agent (if
requested) records or communications necessary to determine the number of
Client/Shareholders in each Pershing/Participating Correspondent omnibus
account, if applicable.
Schedule IV
For performance of Services as outlined in Schedule II (attached hereto),
Pershing shall receive a service fee calculated as follows:
An annual service fee rate of 15 basis points of the average daily market value
of Program Shares, to be paid monthly upon receipt of invoice by the Fund Agent
from Pershing. Total market value of Program Shares will be calculated daily and
averaged throughout the exact number of days in the month to arrive at the
average daily market value.
The fee shall be paid by both the Fund and Fund Agent. The Fund shall pay no
more than that portion of the fee equivalent to $16 per account for each account
holding Program Shares, and the Fund Agent shall pay the remainder of the fee.
Payment shall be made by Fund and Fund Agent to Pershing within 30 days after
Fund's receipt of such invoice. Unless otherwise agreed to by Pershing, Fund,
and Fund Agent, such payment shall be by wire transfer and shall be separate
from other wire transfer payments from the Fund and Fund Agent to Pershing.
