Exhibit h(1)
ADMINISTRATIVE AND CORPORATE SERVICES AGREEMENT
AGREEMENT, made and entered into as of May 1, 2000, by and between PENN
SERIES FUNDS, INC., a Maryland corporation ("Penn Series"), and THE PENN MUTUAL
LIFE INSURANCE COMPANY, a Pennsylvania mutual life insurance company ("Penn
Mutual").
WITNESSETH:
WHEREAS, Penn Series is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), offering multiple classes of capital stock, and each
class of capital stock represents interests in a separate fund or portfolios of
investments ("Fund or Funds"); and
WHEREAS, Penn Mutual currently serves as Administrative and Corporate
Services Agent for Penn Series, and in such capacity provides administrative and
corporate services to Penn Series with respect to certain Penn Series Funds; and
WHEREAS Penn Series desires Penn Mutual to provide administrative and
corporate services with respect to additional Penn Series Funds identified in
Schedule A ("Additional Funds"), and Penn Mutual desires to provide such
services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Penn Series hereby appoints Penn Mutual its Administrative and
Corporate Services Agent to administer its corporate affairs, subject to the
overall supervision of the Board of Directors of Penn Series, with respect to
the Additional Funds, for the period and on the terms set forth in this
Agreement. Penn Mutual accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Paragraph 7 of this Agreement.
2. With respect to the Additional Funds, Penn Mutual will administer
all aspects of Penn Series' operations other than administrative services
provided by Penn Series' Investment Adviser, Accounting Services Agent,
Custodian and Transfer Agent. In performing its duties as Administrative and
Corporate Services Agent, Penn Mutual will act in conformity with the Articles
of Incorporation, By-Laws, and 1940 Act Registration Statement of Penn Series
and with the instructions and direction of the Board of Directors of Penn
Series. In performing its duties, Penn Mutual will conform to and comply with
the requirements of the 1940 Act and all other applicable Federal or state laws
and regulations.
3. The services which Penn Mutual shall provide as Administrative and
Corporate Services Agent include but are not limited to:
(a) the maintenance of all books and records pertaining to
Penn Series' affairs, except those that are required to be maintained
by Penn Series' Investment Adviser, Accounting Services Agent,
Custodian, or Transfer Agent;
(b) the preparation of such annual, semi-annual or other
reports or proxy statements as Penn Series may be required to file with
the Securities and Exchange Commission or to distribute to its
shareholders;
(c) the preparation of any registration statements or
amendments to registration statements which Penn Series may be required
or may desire to file with the Securities and Exchange Commission;
(d) the preparation of such filings as may be required for
compliance with the securities laws of any state or other jurisdiction;
(e) the preparation of such applications or requests as Penn
Series may desire to make to the Securities and Exchange Commission or
its staff for exemption from, or interpretation of any provision of the
1940 Act or any other applicable Federal securities statute;
(f) the preparation of Penn Series' Federal and state tax
returns and any other filings required for tax purposes other than
those required to be prepared by Penn Series' Investment Adviser,
Custodian, Transfer Agent or Accounting Services Agent;
(g) such services as Penn Series' Board of Directors may
require in connection with its oversight of Penn Series' Investment
Adviser, Accounting Services Agent, Custodian, or Transfer Agent,
including the periodic collection and presentation of data concerning
the investment performance of Penn Series' various investment
portfolios;
(h) the organization of all meetings of Penn Series' Board of
Directors;
(i) the organization of all meetings of Penn Series'
shareholders;
(j) the collection and presentation of any financial or other
data required by Penn Series' Board of Directors, accountants, or
counsel;
(k) the preparation and negotiation of any amendments to, or
substitutes for, the present agreements with Penn Series' Investment
Adviser, Accounting Services Agent, Custodian, or Transfer Agent; and
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(l) such other services as the Penn Series' Board of Directors
may reasonably request.
4. Penn Mutual shall permit any of its directors, officers, or
employees who may be elected as directors or officers of Penn Series to serve in
the capacities in which they are elected. Any of the services to be furnished by
Penn Series under this Agreement may be furnished through the medium of such
directors, officers, or employees of Penn Mutual.
5. Penn Mutual shall bear all of the following expenses in connection
with the services to be rendered under this Agreement.
(a) all rent and other expense involved in the provision of
office space for Penn Series and for Penn Mutual in connection with its
performance of services under this Agreement;
(b) the salaries and expenses of all personnel of Penn Series
and Penn Mutual incurred in connection with the provision of
administrative services to Penn Series, except the fees and expenses of
directors of Penn Series who are not interested persons (as defined in
the 0000 Xxx) of Penn Series or affiliated persons (as defined in the
0000 Xxx) of Penn Mutual or of Penn Series' Investment Adviser; and
(c) all expenses incurred by Penn Mutual or Penn Series in
connection with administering the ordinary course of Penn Series'
business, other than those excluded pursuant to Paragraph 6 below.
6. Nothing in this Agreement shall require Penn Mutual to bear, or to
reimburse Penn Series for,
(a) the costs of printing and mailing the items referred to in
Paragraph 3(b) above, or any prospectuses included in registration
statements referred to in Paragraph 3(c) or required by law, regulation
or regulatory authorities;
(b) compensation of members of Penn Series' Board of Directors
who are not interested persons (as defined in the 0000 Xxx) of Penn
Series or affiliated persons (as defined in the 0000 Xxx) of Penn
Mutual or of Penn Series' Investment Adviser;
(c) registration, filing, or other fees imposed by the
Securities and Exchange Commission or other regulatory authorities;
(d) the charges and expenses of Penn Series' Investment
Adviser, Accounting Services Agent, Custodian, and Transfer Agent;
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(e) the fees and expenses of legal counsel and independent
accountants for Penn Series;
(f) brokers' commissions and any issue or transfer taxes
chargeable to Penn Series in connection with its securities
transactions;
(g) taxes and corporate fees payable by Penn Series to
Federal, state or other governmental entities;
(h) the fees of any trade association of which Penn Series may
be a member; and
(i) litigation and indemnification expenses and other
extraordinary expenses not incurred in the ordinary course of Penn
Series' business.
7. Penn Series shall pay Penn Mutual as full compensation for services
rendered and facilities furnished hereunder a fee computed at the annual rate of
0.15% of the average daily net assets of the Additional Funds. Such fee shall be
payable at such intervals not more frequently than monthly and not less
frequently than quarterly as the officers of Penn Series may from time to time
determine and specify in writing to Penn Mutual. Such fee shall be calculated on
the basis of the average of all valuations of the net assets of the Additional
Funds made as of the close of business on each valuation day during the period
for which such fee is paid and shall be prorated among the Additional Funds in
proportion to the average total net assets of each such Fund during the period.
8. With respect to each of the Additional Funds of Penn Series, to the
extent that the Fund's total expenses for a fiscal year (excluding interest,
taxes, brokerage, other expenses which are capitalized in accordance with
generally accepted accounting principles, and extraordinary expenses, but
including investment advisory and administrative and corporate services fees
before any adjustment pursuant to this provision) exceed the expense limitation
for the Fund, such excess amount shall be a liability of Penn Mutual to Penn
Series. The liability (if any) of Penn Mutual to pay Penn Series such excess
amounts shall be determined on a daily basis. With respect to each such Fund of
Penn Series, if, at the end of each fee payment period, there is any liability
of Penn Mutual to pay Penn Series any such excess amount, the administrative
services fee shall be reduced by such liability. If, at the end of each fee
payment period, there is no liability of Penn Mutual to pay Penn Series any such
excess amount, and if payments of the administrative services fee at the end of
prior fee payment periods during the fiscal year have been reduced in excess of
that required to maintain expenses within the expense limitation, such excess
reduction shall be recaptured by Penn Mutual and shall be payable by Penn Series
to Penn Mutual along with the administrative services fee payable to Penn Mutual
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for that period. If, at the end of the fiscal year, there is any remaining
liability of Penn Mutual to pay Penn Series any such excess amounts (which have
not been paid through reduction of the administrative services fee), Penn Mutual
shall remit to Penn Series an amount sufficient to pay such remaining liability.
The expense limitation of each Additional Fund, as a percentage of the Fund's
average daily net assets, is set forth in Schedule B.
9. Penn Mutual assumes no responsibility under this Agreement other
than to render the services called for hereunder, and specifically assumes no
responsibilities for investment advice or the investment or reinvestment of Penn
Series' assets.
10. Neither Penn Mutual nor any of its trustees, officers or employees,
nor any persons performing executive, administrative or other functions shall be
liable for any error of judgment or mistake of law or for any loss suffered by
Penn Series in connection with the matters to which this Agreement relates,
except for loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of its or his or her duties on behalf of Penn
Mutual or from reckless disregard by Penn Mutual or any such person of Penn
Mutual's duties under this Agreement.
11. This Agreement shall continue in effect with respect to a given
Fund for a period more than two years from the date of its execution only so
long as such continuation is specifically approved at least annually by either
the Board of Directors of Penn Series or by vote of a majority of the
outstanding voting securities (as defined in the 1940 Act) representing
interests in that Fund, provided that in either event such continuation shall
also be approved by the vote of a majority of the directors who are not
interested persons of Penn Series, as defined in the 1940 Act, cast by them in
person at a meeting called for the purpose of voting on such approval; provided,
however, that:
(a) this Agreement may at any time be terminated by Penn
Series with respect to any Fund, without the payment of any penalty, on
60 days' notice to Penn Mutual either by vote of the Board of Directors
of Penn Series or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) representing interests in that
Fund;
(b) this Agreement may be terminated by Penn Mutual at any
time, without the payment of any penalty, on 90 days' written notice to
Penn Series; and
(c) this Agreement shall immediately terminate in event of its
assignment as defined in the 1940 Act.
12. The services of Penn Mutual to Penn Series called for under this
Agreement are not to be deemed to be exclusive and Penn Mutual shall be free to
provide similar services to others. Nothing in this Agreement shall limit or
restrict the right of any trustee, officer or employee of Penn Mutual who may
also be a director, officer or employee of Penn Series to engage in any other
business or to devote his or her other time and attention in part to the
management or other aspects of any business, whether of a similar or a
dissimilar nature.
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13. It is understood that directors, officers, agents and stockholders
of Penn Series are or may be interested in Penn Mutual as trustees, officers, or
otherwise; that trustees, officers, agents and policyholders of Penn Mutual are
or may be interested in Penn Series as directors, officers, stockholders or
otherwise; and that Penn Mutual may be interested in Penn Series as a
shareholder or otherwise. The existence of any such dual interest shall not
affect the validity hereof or of and transactions hereunder.
14. This Agreement may be amended by mutual written consent.
15. Any notice or other communication required to be given pursuant to
this Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage prepaid: (a) to Penn Mutual at 000 Xxxxxxx Xxxx, Xxxxxxx XX 00000,
Attention: President; or (b) to Penn Series at 000 Xxxxxxx Xxxx, Xxxxxxx, XX
00000, Attention: President.
16. This Agreement contains the entire agreement between the parties
hereto with respect to the Additional Funds.
17. This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
PENN SERIES FUNDS, INC.
By:
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Xxxxx X. Xxxxxxx
President
THE PENN MUTUAL LIFE INSURANCE COMPANY
By:
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Xxx X. Xxxxxxxxx
Vice President and Controller
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SCHEDULE A
to
ADMINISTRATIVE AND CORPORATE SERVICES AGREEMENT
Between
PENN SERIES FUNDS, INC.
and
THE PENN MUTUAL LIFE INSURANCE COMPANY
Additional Funds
----------------
Limited Maturity Bond Fund
Growth and Income Fund
Index 500 Fund
Mid Cap Growth Fund
Mid Cap Value Fund
A-1
SCHEDULE B
to
ADMINISTRATIVE AND CORPORATE SERVICES AGREEMENT
Between
PENN SERIES FUNDS, INC.
and
THE PENN MUTUAL LIFE INSURANCE COMPANY
Expense Limitations
-------------------
Fund Expense Limitation
---- ------------------
Limited Maturity Bond Fund 0.90%
Growth and Income Fund 1.00%
Index 500 Fund 0.40%
Mid Cap Growth Fund 1.00%
Mid Cap Value Fund 1.00%
B-1
