EXHIBIT (h)(1)
AMENDED AND RESTATED
ADMINISTRATIVE AND CORPORATE SERVICES AGREEMENT
AGREEMENT, made and entered into as of February 23, 2006, 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 series (or classes) of capital stock and each
series (or class) representing interests in a separate fund or portfolios of
investments ("Fund" or "Funds") (each such Fund being identified on Schedule A
to this Agreement); 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; and
WHEREAS, Penn Series and Penn Mutual desire Penn Mutual to continue
providing administrative services to the Funds; and
WHEREAS, Penn Series and Penn Mutual desire to amend and restate their
existing Administrative and Corporate Services Agreements, dated as of May 1,
1997 and May 1, 2000, as amended as of May 1, 2002;
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, 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. Penn Mutual will administer all aspects of Penn Series' operations other
than those administered by Penn Series' Investment Adviser, Accounting Services
Agent, and Custodian. 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 directions of the Board of Directors of Penn Series
and 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, or Custodian;
(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 made
by Penn Series' Custodian, Accounting Services Agent, or Investment Adviser;
(g) such services as Penn Series' Board of Directors may require in
connection with its oversight of Penn Series' Investment Adviser, Accounting
Services Agent, or Custodian, 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, or Custodian; and
(l) such other services as the Penn Series' Board of Directors may
reasonably request.
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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 member 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, and Custodian;
(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;
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(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 all facilities furnished hereunder a fee based on the average daily
net assets of each Fund at the annual rate set forth in Schedule B to this
Agreement. Such fee shall be accrued daily and 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.
8. Penn Mutual agrees to limit the total annual operating expenses of the
Funds as described in Schedule C to this Agreement.
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 indefinitely with respect to a
given Fund 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.
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12. The services of Penn Mutual to Penn Series provided 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.
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
and supersedes all prior agreements, understandings and arrangements with
respect to the subject matter hereof.
17. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania.
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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: /s/ Xxxx Xxxxxx
------------------------------------
Xxxx Xxxxxx
Controller, Penn Series Funds Inc.
THE PENN MUTUAL LIFE INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxx
------------------------------------
Xxxxx X. Xxxx
Executive Vice President and Chief
Financial Officer
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SCHEDULE A TO
AMENDED AND RESTATED ADMINISTRATIVE AND CORPORATE SERVICES AGREEMENT
BY AND BETWEEN
THE PENN MUTUAL LIFE INSURANCE COMPANY
AND
PENN SERIES FUNDS, INC.
(DATED FEBRUARY 23, 2006)
FUNDS
Money Market Fund
Limited Maturity Bond Fund
Quality Bond Fund
High Yield Bond Fund
Flexibly Managed Fund
Growth Stock Fund
Large Cap Value Fund
Large Cap Growth Fund
Index 500 Fund
Mid Cap Growth Fund
Mid Cap Value Fund
Strategic Value Fund
Small Cap Growth Fund
Small Cap Value Fund
International Equity Fund
REIT Fund
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SCHEDULE B TO
AMENDED AND RESTATED ADMINISTRATIVE AND CORPORATE SERVICES AGREEMENT
BY AND BETWEEN
THE PENN MUTUAL LIFE INSURANCE COMPANY
AND
PENN SERIES FUNDS, INC.
(DATED FEBRUARY 23, 2006)
FEES
Pursuant to Section 7 of the Agreement, each Fund shall pay Penn Mutual a fee
computed at the annual rate of the average daily net assets of the Fund as
specified below:
FUND RATE
---- -----
Money Market Fund 0.15%
Limited Maturity Bond Fund 0.15%
Quality Bond Fund 0.15%
High Yield Bond Fund 0.15%
Flexibly Managed Fund 0.15%
Growth Stock Fund 0.15%
Large Cap Value Fund 0.15%
Large Cap Growth Fund 0.15%
Index 500 Fund 0.15%
Mid Cap Growth Fund 0.15%
Mid Cap Value Fund 0.15%
Strategic Value Fund 0.15%
Small Cap Growth Fund 0.15%
Small Cap Value Fund 0.15%
International Equity Fund 0.15%
REIT Fund 0.15%
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SCHEDULE C TO
AMENDED AND RESTATED ADMINISTRATIVE AND CORPORATE SERVICES AGREEMENT
BY AND BETWEEN
THE PENN MUTUAL LIFE INSURANCE COMPANY
AND
PENN SERIES FUNDS, INC.
(DATED FEBRUARY 23, 2006)
Schedule C dated February 23, 2006, as amended and restated on May 18, 2006
EXPENSE LIMITATIONS
Pursuant to Section 8 of the Agreement, Penn Mutual agrees to limit the total
annual operating expenses of the Funds as follows:
1. With respect to each of the Growth Stock, Large Cap Value, Small Cap Value,
International Equity, Quality Bond and Money Market Funds, to the extent that
the Fund's total annual operating 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, as shown in paragraph 5 below, by more than 0.10% of the average
daily net assets of 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.
2. With respect to each of the Flexibly Managed and High Yield Bond Funds, to
the extent that the Fund's total annual operating 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, as shown in paragraph 5 below, one-half of such
excess amount shall be a liability of Penn Mutual to Penn Series. The liability
(if any) of Penn Mutual to pay Penn Series one-half of such excess amounts shall
be determined on a daily basis.
3. With respect to the Small Cap Growth, Limited Maturity, Index 000, Xxx Xxx
Xxxxxx, Xxx Xxx Value, Large Cap Growth, Strategic Value and REIT Funds, to the
extent that the Fund's total annual operating 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, as shown in paragraph 5 below, 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.
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4. With respect to each Fund of Penn Series:
a. Fee Waiver. If, at the end of each fee payment period, there is any
liability of Penn Mutual to pay Penn Series any excess amount described in
paragraph 1, 2 or 3 above, the administrative services fee shall be reduced by
such liability.
b. Reimbursement. If, at the end of the fiscal year, there is any remaining
liability of Penn Mutual to pay Penn Series any excess amounts described in
paragraph 1, 2 or 3 above that have not been paid through reduction of the
administrative services fee (as described in paragraph 4.a.), Penn Mutual shall
remit to Penn Series an amount sufficient to pay such remaining liability.
c. Recapture of Waived Fees and Reimbursements. If, at the end of a fee
payment period, there is no liability of Penn Mutual to pay Penn Series any
excess amount described in paragraph 1, 2 or 3 above and, during the preceding
three fiscal years, any payment of the administrative services fee has been
reduced pursuant to paragraph 4.a. or any reimbursement has been made pursuant
to paragraph 4.b. in order to maintain expenses within the expense limitation,
the amount of such reduction and reimbursement 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 for that period, provided
that Penn Mutual shall not be entitled to recapture any amount that would cause
a Fund to exceed its expense limitation for that fee payment period.
5. For purposes of this Schedule C, the expense limitations of Penn Series, as a
percentage of the Fund's average daily net assets, are as follows:
FUND EXPENSE LIMITATION
---- ------------------
Money Market Fund 0.80%
Limited Maturity Bond Fund 0.90%
Quality Bond Fund 0.90%
High Yield Bond Fund 0.90%
Flexibly Managed Fund 1.00%
Growth Stock Fund 1.00%
Large Cap Value Fund 1.00%
Large Cap Growth Fund 1.00%
Index 500 Fund 0.40%
Mid Cap Growth Fund 1.00%
Mid Cap Value Fund 1.00%
Strategic Value Fund 1.25%
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Small Cap Growth Fund 1.15%
Small Cap Value Fund 1.15%
International Equity Fund 1.50%
REIT Fund 1.25%
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