EXHIBIT (H)(23)
SHAREHOLDER SERVICES AGREEMENT
XXXXXXXX XXXXX FUNDS, INC.
This Shareholder Services Agreement (this "Agreement") is made as of
___________, 2002, between Xxxxxxxx Plumb Funds, Inc. ("Xxxxxxxx Xxxxx"), on its
own behalf and on behalf of each of its mutual fund series listed on Schedule I
hereto; Xxxxxxxx Plumb & Associates, Inc. (the "Fund Affiliate"); and Xxxxxxxx
Xxxxx Trust Company ("Service Provider"). Xxxxxxxx Plumb and the Fund Affiliate
are collectively referred to as "Fund Parties." The parties to this Agreement
are referred to as "Parties" or individually as a "Party".
WHEREAS the Fund Affiliate is the investment adviser for the Funds;
WHEREAS Xxxxxxxx Xxxxx is an open-end investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), with one
or more series of shares (each such series of shares identified on Schedule I
hereto, as amended from time to time, being referred to as a "Fund");
WHEREAS Fund Parties wish to obtain for the Funds certain shareholder
services such as record maintenance, fund communications, shareholder
communications, transactional services, information returns and reports, and
other such services;
WHEREAS Service Provider is willing to perform such shareholder
services on the terms and conditions set forth herein;
WHEREAS Fund Parties desire to compensate Service Provider for
providing such shareholder services;
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, Service Provider shall
perform the services set forth herein and on Exhibit A hereto, as such exhibit
may be amended from time to time by mutual consent of the parties (the
"Services").
2. Fees.
For the Services, Service Provider shall receive a fee (the
"Fee") which shall be calculated and paid in accordance with Exhibit B hereto.
Should Exhibit A be amended to revise the Services, the parties shall also amend
Exhibit B, if necessary, in order to reflect any changes in the Fee.
3. Operational Matters.
In processing purchase and redemption orders placed by Service
Provider on behalf of Service Provider's clients, and in order to facilitate
Service Provider's performance of the Services, Fund Parties agree to follow and
comply with, and to cause each Fund to follow and comply with, the procedures,
terms and conditions set forth in the Prospectus and Statement of Additional
Information of the relevant Fund. The terms "Prospectus" and "Statement of
Additional Information" are used herein to refer respectively to the then
current prospectus and statement of additional information relating to the
shares of each relevant Fund forming parts of the Registration Statement on Form
N-1A of a Fund under the Securities Act of 1933, as amended (the "1933 Act"),and
the 1940 Act.
4. Transaction Charges.
Service Provider shall not, during the term of this agreement, assess
against or collect from its clients or customers who have brokerage, custody or
investment accounts ("Clients") any transaction fee upon the purchase or
redemption of any Fund's shares that are considered in calculating the Fee.
Notwithstanding the foregoing, the parties acknowledge and agree that Service
Provider may collect such transaction fees from certain Clients for certain
special trading services and from other customers upon such other customers'
redemption of certain shares. The value of shares as to which such transaction
fees are charged will not be included in the calculation of the Fee.
5. Representations, Warranties and Covenants.
(a) Fund Parties represent and warrant to Service Provider that Fund
Parties and the persons executing this Agreement on their behalf, including on
behalf of any Fund, are duly authorized and empowered to execute and deliver
this Agreement on behalf of Fund Parties and, when executed and delivered, this
Agreement shall constitute the legal, valid and binding obligation of Fund
Parties, enforceable in accordance with its terms. Fund Parties further
represent and warrant to Service Provider that the payment to Service Provider
of any Fees pursuant hereto (i) has been duly authorized by the Board of
Directors of each Fund Party and any other person to the extent such
authorization is required to make such payment; (ii) is properly disclosed in
the relevant Fund Prospectus and/or Statement of Additional Information to the
extent such disclosure may be required; and (iii) is in conformity with all
federal, state and industry laws or regulations to which the Fund(s) or its
agents are subject.
(b) Each Fund is a "no-load" or "no sales charge" Fund as defined in
Rule 2830 of the NASD Conduct Rules.
(c) Service Provider represents and warrants that: (i) it and the
persons executing this Agreement on its behalf are duly authorized and empowered
to enter into this Agreement and, when executed and delivered, this Agreement
shall constitute the legal, valid and binding obligation of Service Provider,
enforceable in accordance with its terms; (ii) the activities of Service
Provider contemplated by this Agreement comply with all provisions of federal
and state securities laws and the NASD Conduct Rules applicable
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to such activities; (iii) Service Provider has obtained and shall maintain such
registrations and qualifications as are necessary to permit it to perform its
obligations hereunder; and (iv) the arrangements provided for in this Agreement
will be disclosed to the Clients, to the extent required by law.
(d) Service Provider represents and warrants that it will comply with
all provisions of federal and state laws, rules and regulations, including the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
applicable to its respective activities under this Agreement. The receipt of
compensation under this Agreement by Service Provider will not violate any
federal or state laws, rules or regulations, including ERISA.
(e) Service Provider represents and warrants that it has adopted a
privacy policy in accordance with Regulation S-P and will comply with such
privacy policy with regard to Clients who purchase, own and sell shares of any
Fund. Service Provider further represents and warrants that it has adopted an
anti-money laundering program that satisfies the requirements of the USA PATRIOT
Act and applicable rules and regulations relating thereto and will comply with
such program with regard to Clients who purchase, own and sell shares of any
Fund.
(f) Service Provider acknowledges and agrees that certain Clients may
engage in activities that may be disruptive to a Fund, including market timing
and frequent purchases, redemptions or exchanges. Service Provider agrees to use
its best efforts to comply with policies and requests of any Fund that are
designed to reduce or eliminate such disruptive activities and to assist a Fund
or a Fund Party in identifying Clients who are engaging in such disruptive
activities.
6. Compliance Responsibilities; Uncontrollable Events; Indemnification.
(a) Fund Parties acknowledge and agree that Service Provider is not
responsible for: (i) any information contained in any prospectus, registration
statement, annual report, proxy statement, or item of advertising or marketing
material (including profile information) of or relating to any Fund or Fund
Party (except for advertising or marketing materials prepared by Service
Provider to the extent any information therein is not furnished to Service
Provider by Fund Party, any Fund or any "affiliated person" (as that term is
defined under Section 2(a)(3) of the 0000 Xxx) of any of them (each an
"Affiliate") or accurately derived from information published or provided by any
of them); (ii) the registration or qualification of any shares of any Fund under
any federal or applicable state laws; or (iii) the compliance or failure to
comply by any Fund or Fund Party, or any Affiliate, with any applicable federal
or state law, rule or regulation (including the 1940 Act, the Investment
Advisers Act of 1940, as amended (the "Advisers Act"), and the rules and
regulations thereunder) or the rules and regulations of any self-regulatory
organization with jurisdiction over a Fund Party or such Fund or Affiliate,
except to the extent the failure to so comply by a Fund Party or any Fund or
Affiliate is caused by Service Provider's failure to comply with any of the
applicable foregoing laws, rules, or regulations or its breach of this
Agreement. The matters listed in this Section 6(a)(i)-(iii) include, but are not
limited to,
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information published, distributed or made available, and activities conducted
through, the Internet and any other electronic medium.
(b) Service Provider acknowledges and agrees that neither Fund Parties
nor any Fund or Affiliate is responsible for Service Provider's compliance or
failure to comply with any applicable law, rule, or regulation governing Service
Provider's performance of the Services, except to the extent that Service
Provider's failure to comply with any such law, rule, or regulation is caused by
the failure of a Fund Party, any Fund or any Affiliate to comply with any
applicable law, rule, or regulation or a Fund Party's breach of this Agreement.
(c) In providing the Services, a Service Provider is entitled to rely
on any written records or instructions provided to it by a Fund Party or any
Fund or by Clients. Except as otherwise set forth in this Agreement, any
communication, instruction or notice made pursuant to this Agreement may be made
orally, provided that such oral communication is promptly confirmed in writing
by facsimile transmission or overnight mail.
(d) At a Fund Party's request, Service Provider shall promptly provide
information regarding the number of Clients who are invested in any Fund and who
have purchased or redeemed shares of any Fund during the applicable period, and
the names and addresses of Clients who beneficially own 5% or more of the
outstanding shares of any Fund.
(e) Fund Parties have full authority to take such action as they may
deem advisable in respect of all matters pertaining to the continuous offering
of Fund shares. Fund Parties reserve the right in their sole discretion to
suspend sales or withdraw the offering of shares of any Fund at any time after
Service Provider has received reasonable notice that such shares will no longer
be available to the public; provided, however, that in the event that Fund
Parties are required by law or regulation to suspend sales or withdraw the
offering of shares of any Fund, Fund Parties may immediately suspend sales or
withdraw the offering of such shares and will use their best efforts to notify
Service Provider prior to such suspension or withdrawal.
(f) Except to the extent specifically set forth in this Agreement,
neither Party assumes any responsibility hereunder, and will not be liable to
the other (and Service Provider will not be liable to any Fund or any Affiliate)
for any damage, loss of data, delay or any other loss whatsoever caused by
events beyond its reasonable control.
(g) Fund Parties shall indemnify, defend and protect Service Provider
and each director, officer, employee, shareholder, agent and Affiliate of
Service Provider and hold Service Provider and each such director, officer,
employee, shareholder, agent and Affiliate harmless from and against any and all
claims, demands, actions, losses, damages, liabilities, costs, charges,
reasonable counsel fees and expenses of any nature ("Losses") it or they incur
arising out of: (i) any material inaccuracy or material omission in any
Prospectus, Statement of Additional Information, registration statement, annual
report, proxy statement or other publicly disseminated material of any Fund, or
any advertising or
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promotional material generated by any Fund or a Fund Party or based on
information published or generated by a Fund Party or any Fund or Affiliate of
the Fund; (ii) any material breach by a Fund Party of any representation,
warranty, covenant or agreement contained in this Agreement (except to the
extent such Losses result from Service Provider's material breach of this
Agreement, willful misconduct or negligence); or (iii) any action taken or
omitted to be taken by Fund or Fund Party pursuant to this Agreement (except to
the extent such Losses result from Service Provider's material breach of this
Agreement, willful misconduct or negligence).
(h) Service Provider shall indemnify, defend and protect each Fund
Party, each Fund, and each of their respective directors, controlling persons,
officers, employees, and agents, and hold each Fund, Fund Party, and each such
director, controlling person, officer, employee and agent harmless from and
against any and all Losses it or they incur arising out of: (i) any material
inaccuracy or material omission in any advertising or promotional material
generated by Service Provider that is not accurately derived from (a) the
Prospectus, Statement of Additional Information, registration statement, annual
report, proxy statement or other publicly disseminated material of any Fund
provided to Service Provider, or (b) any advertising or promotional material
generated by any Fund or Fund Party and provided to Service Provider, or (c)
information published or generated by Fund Party or any Fund or Affiliate of the
Fund and provided to Service Provider; (ii) any material breach by Service
Provider of any representation, warranty, covenant or agreement contained in
this Agreement (except to the extent such Losses result from Fund's or Fund
Party's material breach of this Agreement, willful misconduct, or gross
negligence); or (iii) any action taken or omitted to be taken by Service
Provider pursuant to this Agreement (except to the extent such Losses result
from Fund's or Fund Party's material breach of this Agreement, willful
misconduct or negligence).
(i) Neither Party shall be liable for any special, consequential, lost
profits, incidental or punitive damages.
7. Role and Relationship of Service Provider.
The Parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication and related services only
and are not the services of a distributor or a principal underwriter of any Fund
within the meaning of the 1993 Act or the 1940 Act or otherwise primarily
intended to result in the sale of any Fund shares. This Agreement does not grant
Service Provider any right to purchase shares from any Fund (although it does
not preclude Service Provider from purchasing any such shares), nor does it
constitute Service Provider an agent of Fund Parties or any Fund for purposes of
selling shares of any Fund to any dealer or the public. To the extent Service
Provider is involved in the purchase of shares of any Fund by Service Provider's
customers, such involvement will be as agent of such customer only.
8. Proprietary Information.
Service Provider, on the one hand, and Fund Parties, on the other hand,
acknowledge that the identities of the other Party's customers (other than such
information as
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may be independently developed or compiled by a Party from information supplied
to it by the other Party's customers who also maintain accounts directly with it
outside the Programs or from information which is otherwise publicly available),
as well as information maintained by such other Party regarding those customers,
and all computer programs, technical, trade secret or business information,
including, without limitation, financial information, business or marketing
strategies or plans, product development and procedures developed by such other
Party or such other Party's agents in connection with this arrangement which is
disclosed to the other Party hereto or otherwise obtained by the other party,
its Affiliates, agents or representatives during the term of this Agreement,
constitute the valuable property of such other Party ("Proprietary
Information"). Service Provider and Fund Parties agree that should either of
them be furnished any Proprietary Information, the Party who acquired such
Proprietary Information shall use its best efforts to hold such information or
property in confidence and refrain from using, disclosing, or distributing any
of such information or other property except (i) with the other Party's prior
written consent, or (ii) as required by law or judicial process. Service
Provider and Fund Parties acknowledge that any breach of the foregoing
agreements as to the other Party would result in immediate and irreparable harm
to such other Party for which there would be no adequate remedy at law and agree
that in the event of a breach such other Party will be entitled to seek
equitable relief, as well as such other relief as any court of competent
jurisdiction deems appropriate. Service Provider and Fund Parties shall promptly
notify the other in writing of any unauthorized, negligent or inadvertent use or
disclosure of Proprietary Information. Service Provider and Fund Parties shall
be liable under this Agreement for any use or disclosure in violation of this
Agreement by its employees, attorneys, accountants, or other advisors or agents.
This Section 8 shall continue in full force and effect notwithstanding the
termination of this Agreement.
9. Information to be Provided.
Fund Parties shall provide to Service Provider prior to the
effectiveness of this Agreement or as soon thereafter as practicable, the
following information and documents:
(a) Resolutions of the board of directors of each Fund Party
authorizing the Fund Party to enter into this Agreement and indicating the
officers authorized to execute this Agreement on behalf of the Fund Party; and
(b) The then-current Prospectus and Statement of Additional Information
of each Fund. Fund Parties shall provide Service Provider with written copies of
any amendments to or changes in each Fund's Prospectus or Statement of
Additional Information as soon as practicable after such amendments or changes
become available.
10. Notices.
All notices required by this Agreement shall be in writing and
delivered personally or sent by first class mail, overnight courier or by
facsimile that is promptly followed in writing. Such notices and other
communications concerning this Agreement will be deemed to have been received as
of the earlier of actual physical receipt or three (3)
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days after deposit, first class postage prepaid, in the United States mail. All
such notices and other communication shall be made:
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if to a Fund Party, to: Xxxxxxxx Xxxxx & Associates, Inc.
1200 Xxxx X. Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxxxxxxx
if to Service Provider, to: Xxxxxxxx Plumb Trust Company
1200 Xxxx X. Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxxxx
11. Nonexclusivity.
Each Party acknowledges that the other may enter into agreements
similar to this Agreement 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.
12. Assignability.
This Agreement is not assignable by any Party without the other
Parties' prior written consents and any attempted assignment in contravention
hereof shall be null and void.
13. Exhibits and Schedules.
All Exhibits and 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.
14. Entire Agreement; Amendment.
This Agreement, including the Exhibits and Schedules hereto,
constitutes the entire agreement between the parties as to the subject matter
hereof and supersede any and all agreements, representations and warranties,
written or oral, regarding such subject matter made prior to the time at which
this Agreement has been executed and delivered by Service Provider and Fund
Parties. This Agreement and the Exhibits and Schedules hereto may be amended
only by a writing executed by each party hereto that is to be bound by such
amendment.
15. Maintenance of Records. Service Provider will maintain all
records required by law, including records detailing the services it provides in
return for the fees to which it is entitled under this Agreement. Such records
shall be preserved, maintained and made available to the extent required and in
accordance with the 1940 Act and the rules thereunder. Upon the request of a
Fund Party, Service Provider shall make copies or originals (if required) of
such of these records available to the Fund Party. Service Provider agrees that
it will permit a Fund Party to have reasonable access to its personnel and
records in order to facilitate the monitoring of the quality of the services
provided under this
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Agreement. Service Provider also agrees to notify promptly the Fund or Fund
Party if Service Provider experiences any difficulty in maintaining the records
described in this Section in an accurate and complete manner. This provision
shall survive the termination of this Agreement.
16. Governing Law.
This Agreement will be governed by and interpreted under the laws of
the State of Wisconsin as applied to contracts entered into and to be performed
entirely within that state, without reference to conflict of laws provisions
thereof.
17. 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
and the same instrument.
18. Effectiveness of Agreement; Termination.
(a) This Agreement will become effective as to a Fund as of the date
set forth on Schedule I opposite the name of the Fund.
(b) This Agreement may be terminated as to a Fund by any Party (i) upon
60 days' written notice to the other Parties or (ii) upon such shorter notice as
is required by law, order, or instruction by a court of competent jurisdiction
or a regulatory body or self-regulatory organization with jurisdiction over the
terminating Party.
(c) After the date of termination as to any Fund, Fund Parties will not
be obligated to pay the Fee with respect to any shares of the Fund that are
first held by Clients after the date of such termination. However,
notwithstanding any such termination, Fund Affiliate will remain obligated to
pay Service Provider the Fee as to each share of the Fund that was considered in
the calculation of the Fee as of the date of termination (a "Pre-Termination
Share"), for so long as such Pre-Termination Share is held in any Service
Provider brokerage account and Service Provider continues to perform
substantially all of the Services as to such Pre-Termination Share. Further, for
so long as Service Provider continues to perform the Services as to any
Pre-Termination Shares, this Agreement will otherwise remain in full force and
effect as to such Pre-Termination Shares.
(d) Fund Affiliate will reimburse Service Provider for reasonable
expenses actually incurred by Service Provider in effecting any termination of
this Agreement, if such termination is by Fund Parties.
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IN WITNESS WHEREOF, the Parties have executed this Agreement by a duly
authorized representative of the parties hereto.
XXXXXXXX XXXXX TRUST COMPANY XXXXXXXX PLUMB FUNDS, INC.
on its own behalf and on behalf
of each Fund listed on Schedule I
hereto
By: By:
----------------------------- -----------------------------
Title: Title:
------------------------- --------------------------
XXXXXXXX XXXXX & ASSOCIATES, INC.
By:
-----------------------------
Title:
--------------------------
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EXHIBIT A
SERVICES
Capitalized terms in this Exhibit have the meanings given them in the
Agreement.
1. RECORD MAINTENANCE
Service Provider shall establish and maintain an omnibus account for
all of its Clients' holdings in each Fund. Service Provider shall maintain the
following records with respect to a Fund for each Client who holds Fund shares:
(a) Number of shares;
(b) Date, price and amount of purchases and redemptions (including
dividend reinvestments) and dates and amounts of dividends paid for at least the
current year to date available thereafter in accordance with the record
retention requirements of the 1934 Act and the 1940 Act;
(c) Name and address of the customer, including zip codes and social
security numbers or taxpayers identification numbers;
(d) Records of distributions and dividend payments;
(e) Any transfers of shares; and
(f) Overall control records.
2. SHAREHOLDER COMMUNICATIONS
Service Provider shall:
(a) Provide to a shareholder mailing agent employed by each Fund for
the purpose of mailing certain Fund-related materials the names, addresses and
share holdings of all Clients who hold shares of such Fund. Such shareholder
mailing agent shall be a person or entity engaged by such Fund and the
Fund-related materials to be sent by such agent shall consist of updated
prospectuses and any supplements and amendments thereto, annual and other
periodic reports, proxy information statements and other appropriate shareholder
communications.
(b) Mail current Fund prospectuses and statements of additional
information and annual and other periodic reports upon Client request and, as
applicable, with confirmation statements;
(c) Mail statements to Clients on a monthly basis (or, as to accounts
in which there has been no activity in a particular month, no less frequently
than quarterly) showing, among other things, the number of shares of each Fund
owned by such Client and the net asset value of such Fund as of a recent date;
(d) Produce and mail to Clients confirmation statements reflecting
purchases and redemptions of shares of each Fund;
(e) Respond to Client inquiries regarding, among other things, share
prices, account balances, dividend amounts and dividend payment date; and
(f) Distribute sales literature, answer routine customer inquiries
regarding the Funds, assist Clients in changing dividend options, account
designations and addresses, and in enrolling into any of several special
investment plans offered in connection with the purchase of the Funds' shares,
assist in the establishment and maintenance of customer accounts and records and
in the processing of purchase and redemption transactions, and provide such
other services as the Funds or the Client may reasonably request.
(g) With respect to Fund shares purchased by Clients after the
effective date of this Agreement, provide average cost basis reporting to the
customers to assist them in preparation of income tax returns.
3. TRANSACTIONAL SERVICES
Service Provider shall communicate, as to shares of each Fund,
purchase, redemption and exchange orders reflecting the orders it receives from
its Clients. Service Provider shall also communicate, as to shares of each Fund,
mergers, splits and other reorganization activities.
4. TAX INFORMATION RETURNS AND REPORTS
Service Provider shall prepare and file with the appropriate
governmental agencies, such information, returns and reports as are required to
be so filed for reporting (i) dividends and other distributions made, (ii)
amounts withheld on dividends and other distributions and payments under
applicable federal and state laws, rules and regulations, and (iii) gross
proceeds of sales transactions as required.
5. FUND COMMUNICATIONS
Service Provider shall provide each Fund with a monthly report of
average asset value for each Client on which the Fee is to be paid pursuant to
the Agreement, the number of Clients invested in each Fund, and the number of
share purchases and redemptions of each Fund made by Clients during the month.
Such summaries shall be expressed in both shares and dollar amounts.
SCHEDULE I
Xxxxxxxx Xxxxx hereby agrees to become a party to this Agreement, on
its own behalf and on behalf of each Fund listed on Schedule I hereto, as
amended from time to time.
Funds Effective Date
----- --------------
Xxxxxxxx Plumb Select Fund 8/1/02
Xxxxxxxx Xxxxx Blue Chip Fund 8/1/02
Xxxxxxxx Plumb Growth Fund 8/1/02
Xxxxxxxx Xxxxx Balanced Fund 8/1/02
Xxxxxxxx Plumb Bond Fund 8/1/02
EXHIBIT B
CALCULATION OF FEE
Capitalized terms used in this Exhibit have the meanings given them in
the Agreement.
1. The Fee shall be calculated by multiplying (a) the Average Daily
Value of Qualifying Shares (defined below) by (b) the appropriate Fee Rate
(indicated below). The Fee shall be computed and paid monthly in arrears.
2. The Average Daily Value of Qualifying Shares is the aggregate
average daily value of all shares of a Fund held by the Clients of Service
Provider for the month, subject to the following exclusions ("Qualifying
Shares"). There shall be excluded from the Qualifying Shares (i) shares as to
which a Client paid Service Provider a transaction fee upon the purchase of such
shares, and (ii) shares first held by a Client of Service Provider after the
termination of this Agreement as to the Fund.
3. The Fee Rate shall be 0.30% per annum per Fund.
4. For purposes of this Exhibit, the daily value of the shares of each
Fund will be the net asset value reported by such Fund on that day. No
adjustments will be made to the net asset values to correct errors in the net
asset values so reported for any day unless such error is corrected and the
corrected net asset value per share is reported to Service Provider before 5:00
p.m., Central time, on the first business day after the day to which the error
relates.
5. At the request of Fund Parties, Service Provider shall provide, on
each business day, a statement detailing the calculation for each Fund, the
aggregate value of the Qualifying Shares of each Fund.
6. Fund Affiliate shall pay Service Provider the Fee within 30 days
after the end of the month. Such payment shall be by wire transfer, unless the
amount thereof is less than $2,000. Such wire transfers shall be separate from
wire transfers of redemption proceeds or distributions under any other
agreement. Amounts less than $2,000 may, at Fund Affiliate's discretion, be paid
by check.
