1
EXHIBIT (9)(u)
FORM OF FUND ALLIANCE AGREEMENT BY AND BETWEEN THE ONE GROUP, THE
ONE GROUP SERVICES COMPANY, AND XXXXXX FIDUCIARY TRUST COMPANY
2
THE ONE GROUP FUND ALLIANCE AGREEMENT
FUND ALLIANCE AGREEMENT made as of the ___ day of ____________, 19__ by
and between The One Group, a Massachusetts business trust, (the "Fund Company")
and The One Group Services Company (the "TOGSC") with principal offices at 0000
Xxxxxxx Xxxx, Xxxxxxxx, XX 00000, and Putnam Fiduciary Trust Company, a
Massachusetts trust company with its principal office at Xxx Xxxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 ("Plan Agent").
WHEREAS TOGSC serves as administrator and distributor in connection
with certain other matters for each investment company listed on Schedule A
hereto, as such Schedule A may be amended from time to time with the mutual
consent of the parties hereto (each such investment company a "Fund" and,
collectively, the "Funds"), each of which is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the "
1940 Act"). With respect to any Fund, this Agreement shall become effective upon
the date such Fund is identified on Schedule A and this Agreement is approved by
the Fund or its Board of Trustees if such approval is required;
WHEREAS Plan Agent provides certain administrative and recordkeeping
services as agent for certain employee benefit plans, (each such plan a "Plan"
and, collectively, the "Plans"), and is a transfer agent registered under the
Securities Exchange Act of 1934, as amended (the "1934 Act"); and
WHEREAS TOGSC desires to appoint Plan Agent as agent for the Funds
solely with respect to the Plans, Plan Agent desires to accept such appointment;
and
WHEREAS, the Plans have authorized and requested the parties hereto to
carry out the obligations described herein;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. TERMS OF APPOINTMENT; DUTIES OF THE PARTIES.
1.01. TOGSC and Plan Agent agree to facilitate the purchase and
redemption OF SHARES of shares of the Funds on behalf of the
Plans and their Participants through one or more accounts per
Fund for each Plan (the "Accounts"). Accounts for a Plan will
be opened upon completion of the application form for the
appropriate Fund. Plan Agent represents and warrants that it
is authorized to act on behalf of each Plan effecting
transactions in the Accounts.
1.02. TOGSC agrees to waive any and all loads or fees associated
with purchase, exchange and redemption transactions. Any
trading restrictions, including those related to the size and
frequency of transactions, are also waived. TOGSC agrees to
cause the Accounts to be kept open on each Fund's books
regardless of a lack of activity or small position size except
to the extent Plan Agent takes specific action to close an
Account.
1.03. Subject to the terms and conditions set forth in this
Agreement, TOGSC hereby appoints Plan Agent to act as, and
Plan Agent agrees to act as, agent for the sole purpose of
accepting orders for the purchase, and requests for the
redemption, of the authorized and
3
issued shares of beneficial interest or common stock of any
Fund (the "Shares") purchased, held or redeemed by a Plan
(collectively referred to as "Instructions"). If a Fund offers
two or more series of Shares, at any time, each such series
shall be deemed at such time to be a Fund, unless otherwise
indicated herein.
1.04. Plan Agent shall perform the following services in accordance
with procedures established from time to time by agreement of
the parties hereto:
a) Receive from the Plans orders for the purchase of
Shares by the close of regular trading on the New
York Stock Exchange (the "Close of Trading") each
business day that the New York Stock Exchange is open
for business ("Business Day"), transmit such orders
to the Fund Company or its designee for acceptance on
such Business Day and promptly deliver or instruct
the Plans (or the Plans' Trustee(s) as the case may
be) to deliver payment and appropriate documentation
therefor to the Fund Company or its designee for
acceptance. On occasions when the New York Stock
Exchange closes earlier than its regular trading time
(4:00 p.m. Eastern Time), the earlier close time will
apply;
b) Receive from the Plans by the Close of Trading each
Business Day redemption requests and redemption
directions, transmit such requests and directions to
the Fund Company or its designee and deliver
appropriate documentation therefor to the Fund
Company or its designee, in each case for acceptance
on such Business Day; and
c) As instructed, maintain adequate records related to,
and advise the Fund Company or its designee as to,
the foregoing. To the extent required under the 1940
Act and rules thereunder, Plan Agent and the Fund
Company or its designee agree that such records
maintained by it will be preserved, maintained and
made available in accordance with the provisions of
the 1940 Act and rules thereunder, and copies or, if
required, originals, will be surrendered promptly to
the Fund Company or its designee on and in accordance
with its request. Records surrendered hereunder shall
be in machine readable or optical disk form. This
provision shall survive the termination of this
Agreement.
1.05. Plan Agent shall maintain adequate offices, personnel and
computer and other equipment to perform the services
contemplated by this Agreement. Plan Agent shall notify TOGSC
and the Fund Company or its designee promptly in the event
that it becomes unable for any reason to perform the services
contemplated by, or any other of its obligations under, this
Agreement.
1.06. Plan Agent shall maintain insurance coverage at all times that
is reasonable and customary in light of its duties hereunder.
1.07. In accordance with procedures established from time to time by
agreement of the parties hereto, TOGSC and the Fund Company or
its designee shall furnish to Plan Agent, for each Fund, no
later than 6:30 p.m. Eastern Time on each Business Day as
appropriate:
2
4
a) Net asset value information as of the Close of Trading each
Business Day when such information is used for crediting
accounts;
b) Dividend and capital gains distribution information, as it
arises, when such information is used for crediting accounts;
c) Daily accrual for interest rate factor (mil rate) information
with respect to Funds which declare dividends daily, when such
information is used for crediting accounts; and
d) In addition, the TOGSC, the Fund Company or its designee will
transmit daily net asset value information and daily accrual
for interest rate factor (mil rate) information as of the
Close of Trading each Business Day to Plan Agent via the
NSCC's Mutual Fund Profile system ("MFPS") no later than 7:00
p.m. Eastern Time on each Business Day.
1.08. a) Orders derived from, and in amounts equal to, Instructions
received by Plan Agent prior to the Close of Trading on any
Business Day ("Day 1") shall be transmitted by Plan Agent via
the Fund/SERV system to the Fund Company or its designee no
later than 5:00 a.m. Eastern Time on the next Business Day
("Day 2"). Such trades will be effected at the net asset value
of each Fund's shares calculated as of the Close of Trading on
Day 1 subject to the terms of such Fund's prospectus. In the
event or an error or delay with respect to the transmittal of
such orders by Plan Agent, Plan Agent may resubmit such order
to the Fund Company or its designee via the Fund/SERV system
on the Business Day following Day 2 and the Fund Company or
its designee shall effect such trade as of the original trade
date.
b) To the extent that such orders are not transmitted to the Fund
Company or its designee via the Fund/SERV system, such orders
shall be transmitted via facsimile to the Fund Company or its
designee by 9:00 a.m. Eastern Time on the next Business Day.
Such trades will be effected at the net asset value of each
Fund's shares calculated as of the Close of Trading on Day 1
subject to the terms of such Fund's prospectus.
1.09. Plan Agent, TOGSC and the Fund Company or its designee agree that all
books, records, information and data pertaining to the business of the
other party which are exchanged or received pursuant to the negotiation
or the carrying out of this Agreement shall remain confidential and
shall not be voluntarily disclosed to any other person, except as may
be required by law.
1.10. Plan Agent and the Fund Company or its designee shall maintain or
provide for redundant facilities and shall maintain or provide for
backup files of its records maintained hereunder and shall store such
back-up files in a secure off-premises location, so that in the event
of a power failure or other interruption of whatever cause at the
location of its records such records are maintained intact and
transactions can be processed at another location.
3
5
1.11. Plan Agent, TOGSC and the Fund Company or its designee shall comply
with federal and state securities laws and regulations thereunder in
connection with its responsibilities under this Agreement.
1.12. In accordance with the procedures established from time to time by
agreement of the parties hereto, the Fund Company or its designee shall
promptly furnish to the Plan Agent in the frequency requested, for each
Fund:
a) copies of prospectuses, financial statements, reports or other
materials relating to each Fund, and updates of such
materials, in the quantity requested by Plan Agent, as such
updates become available and as required by law; and
b) performance data for each Fund, including without limitation,
standardized performance information, total return and current
yield information computed in accordance with SEC rules and
other performance information as the Plan Agent may reasonably
request;
c) Such copies and performance data as described in subsections
1.12. (a) and (b) above (collectively "Fund Information") may
be received by the Plan Agent through electronic means or in
disk format. Plan Agent is authorized to distribute such
Information to the Plan and plan participants via Internet,
other electronic means or hard copy;
d) With respect to the Fund Information received electronically
or in disk format, Plan Agent represents, warrants and
covenants that it shall not alter in any way such Fund
Information provided by the Fund Company or its designee and
shall promptly make available updated Fund Information after
Plan Agent receives such Fund Information from the Fund
Company or its designee in the format specified in subsection
(c) above. The Fund Company or its designee represents,
warrants and covenants that Fund Information shall be promptly
delivered electronically or in disk format to the Plan Agent.
1.13. Purchases and sales of the Funds are subject to the terms of the Funds'
prospectuses.
1.14. TOGSC and the Fund Company hereby authorizes Plan Agent, for purposes
of Section 1.12 (b) and (c), concerning the transmission of performance
data, to utilize Lipper Analytical Services ("Lipper") in reporting the
performance of the Fund(s). TOGSC and the Fund Company shall not be
responsible for such information obtained from Lipper except to the
extent TOGSC and/or the Fund Company provides erroneous information to
Lipper.
1.15. On each Business Day for which Plan Agent has transmitted orders for
purchases, exchanges or redemptions for a Plan, the Fund Company or its
designee shall send to Plan Agent via the Fund/SERV system,
verification of such purchases, exchanges or redemptions or
notification of the rejection of such orders("Confirmations"). Such
Confirmations shall include the total number of Shares of each Fund
held by a Plan following such purchases, exchanges or redemptions.
4
6
The Fund Company or its designee shall submit, in a timely
manner, such Confirmations to the Fund/SERV system in order
for Plan Agent to receive no later than 11:00 a.m. Eastern
Time the next Business Day.
1.16. a) In the event there are purchase and redemption orders
received by the transfer agent of a Fund within the
time limits set forth above on any Business Day for
any Fund, settlement shall occur consistent with the
requirements of the Fund/SERV system.
b) For those purchase orders not transmitted via the
Fund/SERV system, Plan Agent shall initiate payment
to the Fund Company or its designated agent in
federal funds no later than 1:00 p.m. on the Business
Day following the day on which the Instructions are
treated as having been received by the Fund Company
or its designee pursuant to this Agreement.
c) For those redemption orders not transmitted via the
Fund/SERV system, the Fund Company or its designee
shall initiate payment in federal funds no later than
1:00 p.m. on the Business Day following the day on
which the Instructions are treated as having been
received by the Fund Company or its designee pursuant
to this Agreement.
1.17. The Fund Company or its designee will transmit to Plan Agent
by dedicated facsimile and via the NETWORKING system those
Networking activity files reflecting all account activity
including but not limited to closing account balance,
purchases, redemptions, capital gains, dividends, price and
share adjustments. Such files must be received by Plan Agent
on the Business Day following Day 2. Information transmitted
by dedicated facsimile shall be sent to Plan Agent no later
than 11:00 a.m. on the next Business Day.
2. COMPENSATION. For the services which Plan Agent will render to TOGSC
and the Fund Company under this Agreement, TOGSC and the Fund Company
will pay to Plan Agent an annual fee calculated on a quarterly basis,
at the rate or rates as set forth in Schedule B.
3. REPRESENTATIONS AND WARRANTIES.
3.01. Each party represents and warrants to the other party that:
a) It is duly organized, validly existing and in good
standing under the laws of its state of organization
or incorporation:
b) It has legal power and authority to carry on its
business, and is registered or licensed as required,
in each jurisdiction where it conducts its business.
c) It is empowered by its charter and bylaws and under
applicable law to enter into and to perform this
Agreement.
d) All requisite actions have been taken to authorize it
to enter into and to perform this Agreement.
5
7
e) TOGSC is duly registered as a registered broker
dealer, the Fund Company is duly registered as a
registered investment company under the 1940 Act and
Plan Agent is duly registered as registered transfer
agent under section 17A of the 1934 Act;
f) It maintains and knows of no reason why it cannot or
will not during the term hereof maintain adequate
offices, personnel and computer and other equipment
to perform the services contemplated by this
Agreement; and
g) Each party hereby represents that all of its core
systems directly affecting client operations will be
fully tested and operational prior to December 31,
1999 to ensure that they will function without
material disruption of each party's ability to
provide services as provided herein in the Year 2000
and beyond.
4. INDEMNIFICATION.
4.01. Each party (an "Indemnitor") shall indemnify and hold harmless
the other party, each of such other party's affiliated
companies, and all of the divisions, subsidiaries, directors,
officers, agents, employees and assigns of each of the
foregoing (collectively, "Indemnified Parties"), against and
from any and all demands, damages, liabilities, and losses, or
any pending or completed actions, claims, suits, complaints,
proceedings, or investigations (including all expenses of
litigation or arbitration, judgments, fines or amounts paid in
any settlement consented to by the Indenmitor) to which any of
them may be or become subject as a result or arising out of
(a) any negligent act or omission by the Indemnitor or its
agents relating to the performance of its obligations under
this Agreement; (b) any breach of the Indemnitor's
representations or warranties contained in this Agreement; (c)
the Indemnitor's failure to comply with any of the terms of
this Agreement; or (d) the acceptance by any Indemnified Party
of any transaction or account maintenance information from the
Indemnitor with respect to the Plans or their assets. Each
party represents and warrants that at all times it has
sufficient financial resources, whether through a fidelity
bond or otherwise, to meet all of its indemnification
obligations arising under this Agreement.
4.02. In order that the indemnification provisions contained herein
shall apply, upon the assertion of a claim or loss for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party
of such assertion or loss, and shall keep the other advised
with respect to all developments concerning such claim. The
party who may be required to indemnify shall have the option
to participate at its expense with the party seeking
indemnification in the defense of such claim. The party
seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may
be required to indemnify it except with the other party's
prior written consent. The obligations of the parties hereto
under this Section 4 shall survive the termination of the
Agreement.
6
8
5. ACKNOWLEDGMENTS. Plan Agent acknowledges that each Fund, as a
registered investment company under the 1940 Act, is subject
to the provisions of the 1940 Act and regulations thereunder,
and that the offer and sale of its shares are subject to the
provisions of federal and state laws and regulations
applicable to the offer and sale of securities. The Fund
Company and TOGSC acknowledges that Plan Agent is not
responsible for such Fund's compliance with such laws and
regulations.
6. STATEMENTS REGARDING THE FUNDS. It is understood by the
parties that the Plan Agent's representatives will discuss
with Participants the investment objectives and policies of
the Funds: provided, however, that Plan Agent is not
authorized to make any representations concerning the
Distributor, any Fund, or a Fund's Shares except those
representations contained in the Fund's then-current
Prospectus and the Company's Statement of Additional
Information and in such printed information as the Distributor
or the Company may subsequently prepare.
[;solely as set forth in the Fund's current Prospectus and
other written materials prepared by the Fund Company or its
affiliates, and the recent investment performance of the Funds
as provided by the Fund Company, TOGSC or a third party
distributor of performance data.]
7. REVIEW OF PARTICIPANT COMMUNICATIONS MATERIALS. It is
understood by the parties that, based on the Fund's current
Prospectus and the information supplied by the Fund Company or
its designee under Section 1.12. above, the Plan Agent may
prepare communications or disclosure materials for the Plans
and their Participants which describe the Funds. Except for
those materials described above, the Plan Agent shall supply
the Fund, or its designated representative, with copies of all
other materials concerning the Funds within a reasonable time
period in advance of their intended distribution to the Plans
or their Participants. The Plan Agent and the Fund Company
shall establish a mutually agreeable time frame in which such
materials shall be reviewed and approved for use by the Fund
Company , or its designated representative. The Plan Agent
agrees not to use any such materials without the prior
approval of the Fund Company or its designated representative.
The Fund Company shall provide to Plan Agent updated
prospectuses and sales literature. The Fund Company represents
and warrants that such sales literature has been filed with
the NASD and reflects resolution of any NASD comments thereon.
Plan Agent agrees its use of such materials in literature
prepared by Plan Agent will conform to applicable law and NASD
Conduct Rules, including any filing requirements with respect
to such literature.
8. OTHER FUND INFORMATION. The Fund Company agrees to supply the
Plan Agent with any information which it may have that could
have an adverse impact on the performance of the Funds in the
same manner and time frame in which such information is made
available to the Fund's shareholders.
9. REASONABLE ACCESS. The Fund Company will provide Plan Agent or
its designated affiliate with reasonable access to its
offices, representatives, sales support personnel and Fund
investment management professionals for meetings and
day-to-day investment questions. The Fund Company or its
designee will provide to the Plan Agent written quarterly
performance reports with respect to the Funds, including but
not limited to (i) a comparison of performance against one or
more appropriate benchmarks or indices; (ii) quarterly,
year-to-date and annualized one, three and five year
performance date (or data for such lesser period of the Fund's
existence), and (iii) the Fund earnings on a net-of-fees
basis.
7
Language indicated as being shown by strike out in the typeset document is
enclosed in brackets '[' and ']' in the electronic format.
9
In addition, the Fund Company or its designee shall provide
such materials as reasonably requested by the Plan Agent,
including but not limited to, fund fact sheets, descriptions
of current Fund structure and attribution rates related to
fund strategy.
10. NOTIFICATION OF MATERIAL CHANGES. TOGSC shall promptly notify
the Plan Agent in the event of any material change in the
management, ownership or control of the Fund. In addition,
TOGSC shall notify the Plan Agent of any change in the
"fundamental policies" or other policy limitations described
in the Prospectus or Statement of Additional Information.
11. TERMINATION OF AGREEMENT.
11.01. This Agreement may be terminated by either party (i)
upon sixty (60) days written notice to the other
party or (ii) immediately upon written notice to the
other party in the event that:
a) Plan Agent becomes unable for any reason to
perform the services contemplated by this
Agreement,
b) TOGSC ceases to be the distributor for the
Funds, or
c) the Funds cease to be investment
alternatives under the Plans.
11.02. Upon termination of this Agreement, each party shall
return to the other party all copies of confidential
or proprietary materials or information received from
such other party hereunder other than materials or
information required to be retained by such party
under applicable laws or regulations. The obligations
of the parties under this subsection 11.02. and the
provisions of Sections 1, 2, 4, and 6 through 10;
provided, however, that, in the event TOGSC is
terminated as distributor for the Fund or otherwise
ceases to act as distributor for the Fund, such
payment obligation shall immediately cease. In such
event, Plan Agent may seek to receive such payments
from the Fund or any successor distributor that is
appointed by the Fund.
12. ASSIGNMENT.
12.01. Neither this Agreement nor any rights or obligations hereunder
may be assigned or delegated by either party without the
written consent of the other party.
12.02. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and
assigns.
13. NOTICES. Notices hereunder shall be in writing, shall be delivered
personally, sent by certified mail, return receipt requested, or sent by
facsimile machine in accordance with procedures established by agreement of the
parties hereto, and shall be addressed to a party either at his address below or
at a changed address specified by it in a notice to the other party hereto:
8
10
The Fund Company:
The One Group
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
ATTN: Xxxx X. Xxxxxx
TOGSC:
The One Group Services Company
0000 Xxxxxxx Xxxx
Xxxxxxxx, XX 00000
ATTN: Xxxx X. Xxxxxx
Plan Agent:
DCPA
Xxxxx 0
Xxxxxxxx 00
X.X. Xxx 0000
Xxxxxxxxxx, XX 02940-9740
ATTN: Xxxxxxx Xxxxxxxx, Managing Director
14. AMENDMENT. This Agreement may be amended or modified only by a written
agreement executed by both parties.
15. NON-SOLICITATION. The Fund Company and TOGSC hereby agree that, so long
as this Agreement is in effect and for a period of two years from the
date of its termination, it will not solicit defined contribution plan
business from any sponsor of any plan for which Plan Agent provides
defined contribution plan services (including without limitation
trustee or recordkeeping services) or any affiliate of such a sponsor.
16. RELATIONSHIP OF THE PARTIES; NO JOINT VENTURE. Except for the limited
purpose provided for in Section 1, it is understood and agreed that all
services performed under this Agreement by Plan Agent shall not be as an
employee or agent of the Fund Company, TOGSC or Funds and none of the
parties shall hold itself out as an agent of any other party with the
authority to bind such party. Neither the execution nor performance of
this Agreement shall be deemed to create a partnership or joint venture
by and among any of the parties.
17. USE OF NAMES. Except as expressly agreed to in writing by the parties,
neither the Fund Company nor TOGSC shall use, nor shall it allow its
employees or agents to use, the name or logo of Plan Agent or any of
its affiliates, or any of the products or services sponsored, by the
Plan Agent or any of its affiliates for advertising, trade or other
commercial or non-commercial purposes.
18. GOVERNING LAW. This Agreement shall be constructed and the provisions
thereof interpreted under and in accordance with the laws of The
Commonwealth of Massachusetts.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with
respect to the subject matter hereof whether oral or written. This
Agreement is intended to set forth the rights, duties and
responsibilities between the Fund Company, TOGSC and Plan Agent with
respect to the matters covered herein.
9
11
Nothing contained in the Agreement is intended to convey rights to any
third parties such as Plans, Plan participants, the Fund Company or
TOGSC.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly authorized
officers, as of the day and year first above written.
XXXXXX FIDUCIARY TRUST COMPANY THE ONE GROUP SERVICES COMPANY
By:________________________________ By:________________________________
Name: _____________________________ Name: _____________________________
Title: ____________________________ Title:_____________________________
THE ONE GROUP
By: ______________________________
Name:_____________________________
Title: ___________________________
01/25/99
10
12
SCHEDULE A
The following funds shall be offered as part of the Fund Alliance Program:
FUNDS
-----
The One Group Growth Opportunities Fund - Class A Shares
The One Group Bond Fund - Class A Shares
11
13
SCHEDULE B - FUNDS AND FEES
The Fund Company and TOGSC shall automatically pay to Plan Agent a fee with
respect to each Fund, calculated and paid quarterly in arrears, equal to the
product of: (i) (a) the number of calendar days in the applicable quarter
divided by the number of calendar days in that year and (b) the percentage
specified below and (ii) the average daily net asset value of the investments
held in such Fund pursuant to this Agreement computed by totaling the aggregate
investment (share net asset value multiplied by the total number of shares held)
on each day during the calendar quarter and dividing by the total number of days
during such quarter. Fee will be paid by wire transfer or by check, at the Plan
Agent's election.
The Fund Company and TOGSC shall keep adequate and accurate records with respect
to the calculation and payment of these fees. Such records shall be provided to
Plan Agent upon request for purposes of auditing and reconciliation of payment
amounts.
The fees for the funds as listed in Part I of Revised Schedule A - List of Funds
shall be as follows:
Fund Annual Fee
The One Group Growth Opportunities Fund 0.35% (35 basis points)
(Class A Shares)
The One Group Bond Fund (Class A Shares) 0.25% (25 basis points)
The above stated fees shall continue throughout the duration of this Agreement.
The foregoing, notwithstanding, if either the Fund Company or TOGSC extends a
higher rate of fees to any other plan service provider, the Fund Company and
TOGSC shall offer such higher rate of fees to the Plan Agent.
12
