SHAREHOLDER SERVICES AGREEMENT
BETWEEN
DREYFUS FOUNDERS FUNDS, INC. AND
DREYFUS SERVICE CORPORATION
AGREEMENT (this "Agreement") made as of the 1st day of May, 2003, by and
between Dreyfus Founders Funds, Inc., a Maryland corporation (the "Fund"), and
Dreyfus Service Corporation, a New York corporation ("DSC").
WHEREAS, the Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "Act"); and
WHEREAS, DSC is registered as a broker-dealer under the Securities
Exchange Act of 1934, and engages in the business of acting as a distributor of
shares of mutual funds, including the Fund, and providing certain services to
mutual fund shareholders; and
WHEREAS, the Fund desires to retain DSC to perform certain services for
the Fund and for the holders of the Fund's Class F shares, and DSC desires to
perform such services on the terms and conditions hereinafter set forth; and
WHEREAS, the Fund has entered into an Amended and Restated Transfer Agency
Agreement (the "TA Agreement") with Dreyfus Transfer, Inc. ("DTI"), pursuant to
which DTI provides transfer agent services to the Fund and the holders of the
Fund's Class F shares; and
WHEREAS, DSC has entered into arrangements with third parties which
provide sub-transfer agency, recordkeeping, investor services, and/or other
administrative services (the "Third Party Services") to participants in 401(k)
and other tax-qualified retirement programs and to participants in other
arrangements (the "Participants"), pursuant to which the third party establishes
one or more omnibus accounts with the Fund, into which investments of the
Participants are pooled in the Fund's Class F shares; and
WHEREAS, in establishing such omnibus accounts and providing the Third
Party Services, the third parties effectively reduce or eliminate the need for
Services to be provided on behalf of the Participants by DSC or DTI; and
WHEREAS, a third party may charge a basis point fee method or other fee
method to DSC or the Fund to compensate it for providing the Third Party
Services to Participants (the "Third Party Fee");
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and DSC agree as follows:
1. SERVICES. The Fund hereby retains DSC to provide the services outlined
on Exhibit A hereto (the "Services") with respect to the Fund's Class F shares,
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which exhibit is incorporated herein by this reference. DSC shall at all times
use reasonable care, due diligence, and act in good faith in performing its
duties under this Agreement.
2. STAFF MAINTENANCE. DSC shall, at its own expense, maintain such staff
and employ or retain such personnel as it shall from time to time determine to
be necessary or useful to the performance of its obligations under this
Agreement. Without limiting the generality of the foregoing, such staff and
personnel may include officers of DSC and persons employed or otherwise retained
by DSC to provide or assist in providing services to mutual funds other than
those Services to be provided to the Fund pursuant to this Agreement.
3. FACILITIES. DSC shall, at its own expense, provide such office space,
facilities, equipment, and other property or resources as shall be necessary to
provide the Services to the Fund.
4. FUND INFORMATION. The Fund will, from time to time, furnish or
otherwise make available to DSC such information relating to the business and
affairs of the Fund as DSC may reasonably require in order to discharge its
duties and obligations hereunder.
5. FEES. The Fund shall pay to DSC a prorated monthly fee equal on an
annual basis to $24.00 for each shareholder account in the Class F shares of the
Fund considered to be an open account at any time during the month. This fee
shall provide for the payment of the following:
a. The services rendered and facilities furnished by DSC under this
Agreement; and
b. The services rendered and facilities furnished by DTI with
respect to the holders of the Fund's Class F shares pursuant to the TA
Agreement.
In addition to the $24.00 per account fee, DSC will also be entitled to
reimbursement from the Fund for all reasonable out-of-pocket expenses incurred
by DSC in connection with the performance of Services under this Agreement, and
DTI will also be entitled to reimbursement from the Fund for all reasonable
out-of-pocket expenses to the extent provided in the TA Agreement.
Out-of-pocket expenses with respect to this Agreement shall include, but
are not limited to, expenditures for postage, envelopes, banking fees, courier
fees, overnight mail fees, computer hardware and software licensing fees,
checks, continuous forms, reports and statements, telephone line charges,
telegraph, stationery, supplies, costs of outside mailing firms, record storage
costs and media for storage of records (e.g., microfilm and computer tapes).
Any other expenses incurred by DSC at the request or with the consent of
the Fund will be reimbursed promptly by the Fund.
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The monthly fee described in this Section 5 and any out-of-pocket
reimbursements due to DSC pursuant to this Section shall be payable to DSC on
the first business day of the calendar month next succeeding the month in which
the services are rendered, or as soon thereafter as such reimbursements can be
determined.
In instances in which third parties establish omnibus accounts with the
Class F shares of one or more of the Series which represent pooled accounts of
Participants whose Third Party Services are being provided by the third party or
its agent and not by DSC and/or DTI, Class F of the Series will pay the third
party, or reimburse DSC or its agents for paying the third party, a Third Party
Fee in an amount which shall not be in excess of the $24.00 account fee for each
Participant account.
Any fees paid by the Fund to a third party, or to DSC or its agents as
reimbursement for payment by DSC or its agents to a third party, in
consideration of its providing Third Party Services shall be calculated monthly
at the rate of 1/12th of an annual fee not to exceed $24.00 per Participant
account, and shall be paid no more frequently than monthly. Such payments shall
be made for a Participant account in the month that it opens or closes, as well
as in each month in which the Participant account remains open, regardless of
its account balance.
6. ACCESS TO DSC'S RECORDS. DSC will permit representatives of the
Fund, including the Fund's independent auditors, to have reasonable access to
the personnel and records of DSC in order to enable such representatives to
monitor the quality of services being provided and the level of fees and
reimbursements due DSC pursuant to this Agreement. In addition, DSC shall
promptly deliver to the Board of Directors of the Fund such information as may
reasonably be requested from time to time to permit the Board of Directors to
make an informed determination regarding the rendering of the Services, the
continuation of this Agreement, and the payments contemplated to be made
hereunder.
7. LIABILITY AND INDEMNIFICATION. So long as DSC shall act in good faith,
without negligence and without willful misconduct in performing its duties under
this Agreement, DSC shall not be responsible for, and the Fund shall indemnify
and hold DSC harmless from and against, any and all losses, liabilities, claims,
demands, suits, costs, and expenses (including reasonable attorneys' fees) which
may be asserted against DSC or for which DSC may be held to be liable, which
arise out of, or are attributable to, DSC's discharge of its responsibilities
and obligations imposed by this Agreement.
The Fund shall not be responsible for, and DSC shall indemnify and hold
the Fund harmless from and against, any and all losses, liabilities, claims,
demands, suits, costs, and expenses (including reasonable attorneys' fees) which
may be asserted against the Fund or for which the Fund may be held to be liable,
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which arise out of, or are attributable to, any negligence, willful misconduct,
or lack of good faith of DSC in discharging the responsibilities and obligations
imposed upon DSC by this Agreement.
DSC and the Fund agree that each shall promptly notify the other in
writing of any situation which represents or appears to involve a claim which
may be the subject of indemnification hereunder, although the failure to provide
such notification shall not relieve the indemnifying party of its liability
pursuant to this Section 7. The indemnifying party shall have the option to
defend against any such claim. In the event the indemnifying party so elects, it
will notify the indemnified party and shall assume the defense of such claim,
and the indemnified party shall cooperate fully with the indemnifying party, at
the indemnifying party's expense, in the defense of such claim. Notwithstanding
the foregoing, the indemnified party shall be entitled to participate in the
defense of such claim at its own expense through counsel of its own choosing.
The indemnified party shall not enter into any settlement of such matter without
the written consent of the indemnifying party, which consent shall not
unreasonably be withheld. The indemnifying party shall not be obligated to
indemnify the indemnified party for any settlement entered into without the
written consent of the indemnifying party. If the consent of the indemnified
party is required to effectuate any settlement and the indemnified party refuses
to consent to any settlement negotiated by the indemnifying party, the liability
of the indemnifying party for losses arising out of or due to such matter shall
be limited to the amount of the rejected proposed settlement, provided that the
rejected proposed settlement does not require the indemnified party to perform
any action (other than executing the settlement agreement) or incur any
liability not otherwise required by this Agreement.
The obligations of DSC and the Fund pursuant to this Section 7 shall
survive the termination of this Agreement.
8. EFFECT OF AGREEMENT. Nothing herein contained shall be deemed to
require the Fund to take any action contrary to its Articles of Incorporation or
its By-Laws or any applicable law, regulation or order to which it is subject or
by which it is bound, or to relieve or deprive the directors of the Fund of
their overall responsibility for and control of the conduct of the business and
affairs of the Fund.
9. TERM AND TERMINATION. This Agreement shall remain in effect until no
later than August 31, 2004, and shall remain in effect from year to year
thereafter provided such continuance is approved at least annually by the vote
of a majority of the directors of the Fund who are not parties to this Agreement
or "interested persons" (as defined in the Act) of any such party, which vote
must be cast in person at a meeting called for the purpose of voting on such
approval; provided, however, that (a) the Fund may, at any time and without the
payment of any penalty, terminate this Agreement upon 90 days' written notice to
DSC; (b) the Agreement shall immediately terminate in the event of its
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assignment (within the meaning of the Act and the Rules thereunder) unless the
Board of Directors of the Fund approves such assignment; and (c) DSC may
terminate this Agreement without payment of penalty on 180 days' written notice
to the Fund. Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party at the principal
office of such party.
10. APPLICATION OF LAW. This Agreement shall be construed in accordance
with the laws of the State of Colorado and the applicable provisions of the Act.
To the extent the applicable law of the State of Colorado or any of the
provisions herein conflict with the applicable provision of the Act and other
applicable laws, the latter shall control.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the day and year first above written.
DREYFUS FOUNDERS FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Xxxxxxx X. Xxxx, President
DREYFUS SERVICE CORPORATION
By: /s/ J. Xxxxx Xxxxxxx
-------------------------------------
J. Xxxxx Xxxxxxx, President
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EXHIBIT A
TO
SHAREHOLDER SERVICES AGREEMENT
BETWEEN
DREYFUS FOUNDERS FUNDS, INC. AND
DREYFUS SERVICE CORPORATION
The following Services will be provided by DSC to the holders of the Fund's
Class F shares:
1. TELEPHONE SERVICES
DSC's personnel will receive and process all telephone requests received
by DSC to: add or delete services for an account, explain Fund or market
conditions and/or performance, perform research into account problems and
correct such problems, and other matters related to account servicing;
change an account address or distribution option; or correct a
registration or account error.
2. RETIREMENT SERVICES
a. PROTOTYPE RETIREMENT PLANS. DSC's personnel will ensure that employers
have all the necessary forms to administer their plans on prototype
non-TRAC2000 retirement plan documents (TRAC2000 retirement plans are
serviced on behalf of the Fund by a third party, pursuant to separate
contract).
b. REVIEW OF RETIREMENT ACCOUNTS. DSC's personnel will periodically review
retirement account information and advise investors before reaching age
70-1/2 that a distribution may be required.
3. QUALITY CONTROL
DSC's personnel will periodically conduct a quality control audit on
telephone purchase, redemption and exchange requests, and account changes
received by DTI. DSC will provide quality control with respect to other
aspects of the transfer agent's operations, such as the transfer agent's
resolution of shareholder inquiries. DSC will perform quality control for
all telephone transactions for retirement plans.
4. TRAINING
DSC will continually provide training to DSC or DTI personnel, as
applicable, with regard to processing exchanges and redemptions,
maintaining accounts, liquidating accounts, transferring accounts,
answering questions concerning "B" notices, and servicing mutual fund
accounts.
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5. CORRESPONDENCE
a. SHAREHOLDER INQUIRIES. DSC's personnel will respond to shareholder
inquiries received by DSC by telephone, mail, or e-mail through
xxxxxxxx@xxxxxxxx.xxx, and to the extent feasible will resolve such
inquiries.
b. GERMAN SHAREHOLDERS. DSC's personnel will provide specialized service
to German shareholders as may be necessary and appropriate.
c. DUE DILIGENCE. DSC will request the mailing of W-8 and W-9 forms to
shareholders to ensure that the Fund is complying with IRS regulations.
d. REQUESTS FOR INFORMATION. DSC will respond to requests it receives from
shareholders for additional prospectuses.
6. SHORT-TERM TRADERS
. DSC will monitor shareholder accounts to uncover abuses of the telephone
exchange privilege described in the prospectus.
7. LARGE MONEY MANAGERS
DSC will assign one or more contact persons to communicate with large
money managers and to ensure that their transactions are timely and
properly conducted and their accounts are set up correctly and continually
updated.
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