Exhibit (h)(5)
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT, made this 25th day of September,
2000, between Xxxxxxx Pathway Series (the "Trust"), a Massachusetts business
trust and Xxxxxxx Xxxxxx Investments, Inc. ("Xxxxxxx Xxxxxx"), a Delaware
corporation.
WHEREAS, the Trust is registered with the Securities and Exchange Commission
("SEC") as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial interest
("Shares") in separate portfolios with each such portfolio representing
interests in a separate portfolio of securities and other assets; and
WHEREAS, the Trust has established multiple portfolios, including Pathway
Balanced Portfolio, Pathway Conservative Portfolio, and Pathway Growth
Portfolio (each a "Portfolio");
WHEREAS, this Agreement shall become effective as of September 25, 2000; and
WHEREAS, the Trust wishes to retain Xxxxxxx Xxxxxx to provide administrative and
other services to the Trust with respect to the Portfolio in the manner and on
the terms hereinafter set forth; and
WHEREAS, Xxxxxxx Xxxxxx is willing to furnish such services in the manner and
on the terms hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties agree as follows:
I. APPOINTMENT. The Trust hereby appoints Xxxxxxx Xxxxxx as Administrator to
provide the administrative and other services with respect to the Portfolio for
the period and on the terms set forth in this Agreement. The Administrator
accepts such appointment and agrees during such period to render the services
herein set forth for the compensation herein provided. In the event the Trust
establishes and designates additional portfolios with respect to which it
desires to retain the Administrator to render administrative and other services
hereunder, it shall notify the Administrator in writing. If the Administrator is
willing to render those services, it shall notify the Trust in writing,
whereupon Schedule A hereto shall be amended to reflect the compensation payable
to the Administrator on behalf of that portfolios and that portfolios shall
become a Portfolio hereunder.
II. DUTIES. Subject to the general supervision of the Board of Trustees of the
Trust (the "Board"), the Administrator shall provide or procure all
organizational, administrative and other services reasonably necessary for the
operation of the Portfolio and certain other services, all as more particularly
described and except as provided below.
A. ADMINISTRATIVE SERVICES. Subject to the approval or consent of the Board, the
Administrator shall provide or procure, at the Administrator's expense, services
to include the following: (i) coordinating matters relating to the operation of
the Portfolio, including any necessary coordination among Xxxxxxx Xxxxxx or
other advisers to the Portfolio, the custodian(s), transfer agent(s),
shareholder servicing and dividend disbursing agent(s),
subaccounting and recordkeeping agent(s), fund accounting agent(s), pricing
agent(s), accountants, attorneys, and other parties performing services or
operational functions for the Portfolio; (ii) providing the Portfolio with the
services of a sufficient number of persons competent to perform such
administrative and clerical functions as are necessary to ensure compliance with
federal securities laws, as well as other applicable laws, and to provide
effective administration of the Portfolio; (iii) maintaining, or supervising the
maintenance by third parties, of such books and records of the Trust and the
Portfolio as may be required by applicable federal or state law other than the
records and ledgers maintained under the Investment Management Agreement; (iv)
preparing and arranging for the distribution of proxy materials and periodic
reports to shareholders of the Portfolio as required by applicable law; and (v)
taking such other action with respect to the Portfolio as may be required by
applicable law, including, without limitation, the rules and regulations of the
SEC and of state securities commissions and other regulatory agencies.
B. EXPENSES. During the term of this Agreement, the Administrator will pay all
expenses incurred by it in connection with its obligations under this Agreement,
except such expenses as are those of the Portfolio under this Agreement. The
Administrator shall pay for maintaining its staff and personnel and shall, at
its own expense provide the equipment, office space, and facilities necessary to
perform its obligations under this Agreement. In addition, the Administrator
shall, at its expense, furnish to the Trust, or procure and pay for: (a) usual
and customary auditing services of each Portfolios' independent public
accountants; (b) services of each Portfolios' transfer agent(s), shareholder
servicing and dividend disbursing agent(s), and shareholder recordkeeping
agent(s); (c) services of each Portfolios' custodian, including any
recordkeeping services provided by the custodian; (d) services of each
Portfolios' accounting agent(s), (e) services of obtaining quotations for
calculating the value of each Portfolios' net assets; (f) services of
maintaining the Portfolios' tax records; (g) services, including procurement of
legal services, incident to meetings of the Trust's shareholders, the
preparation and filing of registration statements under the Securities Act of
1933, as amended, and the 1940 Act and any amendments thereto, and reports of
the Trust to its shareholders, the preparation and filing of reports to
regulatory bodies, the maintenance of the Trust's existence and qualification to
do business, and the registration of shares with federal and state securities
authorities (except as described in subsection (gg) below); (h) procurement of
ordinary legal services, including the services that arise in the ordinary
course of business for a Massachusetts business trust registered as an open-end
management investment company; (i) the Trust's pro rata portion of the fidelity
bond required by Section 17(g) of the 1940 Act, or other insurance premiums; (j)
association membership dues; (k) services to organize and offer shares of the
Trust and the Portfolio; and (l) printing and postage expenses related to the
mailing of periodic reports, prospectuses, statements of additional information
and other shareholder mailings, excluding proxy solicitations; (m) expenses that
are the obligation of a Portfolio pursuant to a special servicing agreement with
a registered investment company that is a holder of shares of the Portfolio and
that may be deemed to be an affiliated person, or an affiliated person of such a
person, as defined in the 1940 Act; and (n) expenses in the nature of avoided
transfer agency costs payable to a person that is a shareholder of record for an
omnibus account on the transfer agency records of the Portfolio. The Trust shall
bear the following expenses: (aa) salaries and other compensation of any of the
Trust's executive officers and employees, if any, who are not officers,
directors, stockholders, or employees of the Administrator or its subsidiaries
or affiliates; (bb) taxes, if any, levied against the Trust or any of its
Portfolio; (cc) brokerage fees and commissions in connection with the purchase
and sale of portfolio securities for any of the Portfolios; (dd) costs,
2
including the interest expenses, of borrowing money; (ee) fees and expenses of
Board members who are not officers, employees, or stockholders of the
Administrator or its subsidiaries or affiliates, and the fees and expenses of
any counsel, accountants, or any other persons engaged by such Board members in
connection with the duties of their office with the Trust; (ff) extraordinary
expenses, including extraordinary legal expenses to the extent authorized by the
Board, as may arise, including expenses incurred in connection with litigation,
proceedings, other claims and the legal obligations of the Trust to indemnify
its Board members, officers, employees, shareholders, distributors, and agents
with respect thereto; (gg) organizational and offering expenses of the Trust and
the Portfolio to the extent authorized by the Board, and any other expenses
which are capitalized in accordance with generally accepted accounting
principles; and (hh) any expenses allocated to a specific Portfolio pursuant to
an administrative services or distribution plan.
C. ORGANIZATIONAL SERVICES. The Administrator shall provide the Trust and the
Portfolio, at the Administrator's expense, with the services necessary to
organize any Portfolio that commence operations on or after the date of this
Agreement so that such Portfolio can conduct business as described in the
Trust's Registration Statement.
D. The Administrator shall also make its officers and employees available to the
Board and officers of the Trust for consultation and discussions regarding the
administration of the Portfolio and services provided to the Portfolio under
this agreement.
E. In performing these services, the Administrator: (i) shall conform with the
1940 Act and all rules and regulations thereunder, all other applicable federal
and state laws and regulations, with any applicable procedures adopted by the
Board, and with the provisions of the Trust's Registration Statement filed on
Form N-1A as supplemented or amended from time to time, (ii) will make available
to the Trust, promptly upon request, any of the Portfolios' books and records as
are maintained under this Agreement, and will furnish to regulatory authorities
having the requisite authority any such books and records and any information or
reports in connection with the Administrator's services under this Agreement
that may be requested in order to ascertain whether the operations of the Trust
are being conducted in a manner consistent with applicable laws and regulations,
and (iii) will regularly report to the Board on the services provided under this
Agreement and will furnish the Board with respect to the Portfolio such periodic
and special reports as the Board may reasonably request.
F. The services provided by the Administrator under this Agreement are in
addition to those required to be provided by it under the Investment Management
Agreement entered into between the Administrator and the Trust on behalf of each
Portfolio. Notwithstanding any other provision of the Agreement, all other
services provided by the Administrator under the Investment Management Agreement
will continue to be provided by the Administrator and paid for by the Trust
pursuant to that agreement.
III. INDEPENDENT CONTRACTOR. The Administrator shall for all purposes herein be
deemed to be an independent contractor and shall, unless otherwise expressly
provided herein or authorized by the Board from time to time, have no authority
to act for or represent the Trust in any way or otherwise be deemed its agent.
3
IV. COMPENSATION. The Trust shall pay on behalf of each Portfolio compensation
to the Administrator for the services rendered under this Agreement as set forth
in Schedule A hereto. The amount of any credit received from the Portfolios'
custodian for cash balances maintained at the custodian shall be subtracted from
any amount required to be paid by Trust under this Agreement.
V. NON-EXCLUSIVITY. It is understood that the services of the Administrator
hereunder are not exclusive, and the Administrator shall be free to render
similar services to other investment companies and other clients.
VI. LIABILITY. The Administrator shall give the Trust the benefit of the
Administrator's best efforts in rendering services under this Agreement. The
Administrator may rely on information reasonably believed by it to be accurate
and reliable. As an inducement for the Administrator's undertaking to render
services under this Agreement, the Trust agrees that neither the Administrator
nor the stockholders, officers, directors, or employees of the Administrator
shall be subject to any liability for, or any damages, expenses or losses
incurred in connection with, any act, omission or mistake in judgment connected
with or arising out of any services rendered under this Agreement, except by
reason of willful misfeasance, bad faith, or negligence in the performance of
the Administrator's duties, or by reason of reckless disregard of the
Administrator's obligations and duties under this Agreement. This provision
shall govern only the liability to the Trust of the Administrator and that of
the stockholders, officers, directors, and employees of the Administrator, and
shall in no way govern the liability to the Trust or the Administrator of any
other person or provide a defense for such other person, including persons that
provide services for the Portfolio as described in Section II.B or C of this
Agreement.
VII. TERM AND CONTINUATION. This Agreement shall take effect as of the date
hereof, and shall remain in effect, unless sooner terminated as provided herein,
until three (3) years from the date of this Agreement, and shall continue
thereafter on an annual basis with respect to each Portfolio, provided that such
continuance is specifically approved at least annually (a) by the vote of a
majority of the Board, or (b) by vote of a majority of the outstanding voting
securities of the Portfolio, and provided continuance is also approved by the
vote of a majority of the Board who are not parties to this Agreement or
"interested persons" (as defined in the 0000 Xxx) of the Trust, cast in person
at a meeting called for the purpose of voting on such approval. This Agreement
may be terminated without the payment of any penalty with respect to the entire
Trust or only with respect to one or more Portfolio thereof: (a) by the Trust at
any time with respect to the services provided by the Administrator by vote of
(1) a majority of the Board members who are not "interested persons" (as such
term is defined in the 0000 Xxx) of the Trust, or (2) a majority of the
outstanding voting shares of the Trust or, with respect to a particular
Portfolio, by vote of a majority of the outstanding voting shares of such
Portfolio, on 60 days' written notice to the Administrator; and (b) by the
Administrator on or after the third anniversary of the date hereof, without the
payment of any penalty, upon 60 days' written notice to the Trust.
VIII. NOTICES. Notices of any kind to be given to the Administrator by the Trust
shall be in writing and shall be duly given if mailed or delivered to the
Administrator at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or to such other
address or to such individual as shall be specified by the Administrator.
Notices of any kind to be given to the Trust by the Administrator shall be in
writing and shall be duly given if mailed or delivered to Two International
Place, Boston, Massachusetts, or to such other address or to such individual as
shall be specified by the Trust.
4
IX. TRUST OBLIGATION. A copy of the Trust's Agreement and Declaration of Trust,
as amended, is on file with the Secretary of the Commonwealth of Massachusetts,
and notice is hereby given that this Agreement has been executed on behalf of
the Trust by a Board member in his or her capacity as Board member and not
individually. The obligations of this Agreement to pay the Administrator for
services provided to or procured for a Portfolio shall be binding only upon the
assets and property of that Portfolio and shall not be binding upon any Board
member, officer, or shareholder of the Trust individually.
X. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original.
XI. MISCELLANEOUS. This Agreement shall be governed by the laws of
Massachusetts, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or order of the SEC thereunder. If
any provision of this Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby and, to this extent, the provisions of this Agreement shall
be deemed to be severable. To the extent that any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or otherwise
with regard to any party hereunder, such provisions with respect to other
parties hereto shall not be affected thereby. The captions in this Agreement are
included for convenience only and in no way define any of the provisions hereof
or otherwise affect their construction or effect. This Agreement may not be
assigned by the Trust or the Administrator without the consent of the other
party.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below on the day and year first above
written.
XXXXXXX PATHWAY SERIES, on behalf
of the Portfolio
By:
-------------------------------------
Xxxx Xxxxxxxx
Vice President
XXXXXXX XXXXXX INVESTMENTS, INC.
By:
-------------------------------------
Xxxxxxx X. Xxxxx
5
SCHEDULE A
XXXXXXX XXXXXX INVESTMENTS, INC.
FEE INFORMATION FOR SERVICES PROVIDED UNDER
ADMINISTRATIVE SERVICES AGREEMENT
The Administrative Fee, which shall be calculated based on each
Portfolios' average daily net assets, shall be payable [quarterly] in an amount
based on the following annual rates.
Annual Administrative Fee Rates
-------------------------------
Xxxxxxx Pathway Series 0.0000%
__________________, 2000
6
