Exhibit (h)(4)
ADMINISTRATIVE AGREEMENT
This Agreement is made this 29/th/ day of December, 1998, by and between
Heartland Group, Inc. ("HGI"), a Maryland corporation registered under the
Investment Company Act of 1940 ("1940 Act") as an open-end diversified
management investment company, and Heartland Advisors, Inc. ("Administrator"), a
Wisconsin corporation registered under the Investment Advisers Act of 1940 as an
investment adviser.
1. Appointment. HGI hereby appoints Administrator to furnish certain
administrative services with respect to HGI and the series of HGI listed in
Schedule A hereto, as such schedule may be amended from time to time. Each such
series is hereinafter referred to as a "Fund." Administrator accepts such
appointment and agrees to perform the services described herein.
2. Administrative Services. Subject to the terms of this Agreement and the
supervision and control of HGI's Board of Directors, Administrator shall provide
the following services:
(a) Provide such assistance as HGI may request in the preparation and
maintenance of HGI's registration statement or statements with the
Securities and Exchange Commission ("SEC");
(b) Provide such assistance as HGI may request in the preparation and
periodic updating of the prospectus and statement of additional
information for each Fund (collectively, the "Prospectus");
(c) Provide such assistance as HGI may request in the preparation, filing
with appropriate regulatory authorities, and dissemination of various
reports for each Fund, including but not limited to reports to
shareholders under Section 30(d) of the 1940 Act, annual and
semiannual reports on Form N-SAR, and notices pursuant to Rule
24f-2;
(d) Provide such assistance as HGI may request in arrangements for all
meetings of shareholders required by law, including the collection of
all information required for preparation of proxy statements, the
preparation and filing with appropriate regulatory agencies of such
proxy statements, the supervision of solicitation of shareholders and
shareholder nominees in connection therewith, tabulation (or
supervision of the tabulation) of votes, response to all inquiries
regarding such meetings from shareholders, the public and the media,
and preparation and retention of all minutes and all other records
required to be kept in connection with such meetings;
(e) Maintenance and retention of all HGI charter documents and the filing
of all documents required to maintain HGI's status as a Maryland
corporation and as a registered open-end investment company;
(f) Arrangement and preparation and dissemination of all materials for
meetings of HGI's Board of Directors and committees thereof and
review and retention of all minutes and other records thereof;
(g) Preparation and filing of HGI's federal, state, and local income tax
returns and calculation of any tax required to be paid in connection
therewith;
(h) Calculation of all HGI and Fund expenses and arrangement for the
payment thereof;
(i) After consultation with the officers of HGI, preparation and
submission of such filings as shall be required by the jurisdictions
in which shares of each Fund ("Shares") may be sold, including, but
not limited to, preparation and maintenance of the registration,
qualification, or notice filings with respect to the Shares for sale
under the securities laws of each such jurisdiction;
(j) Provision of the services of persons who may be appointed as officers
of HGI by HGI's Board of Directors, it being agreed that some person
or persons may be officers of both HGI and the Administrator or of any
affiliate of either of them, and that the existence of any such dual
interest shall not affect the validity of this Agreement except as
otherwise provided by specific provision of applicable law;
(k) Preparation and, subject to approval of HGI's Chief Accounting
Officer, dissemination of HGI's and each Fund's quarterly financial
information to HGI's Board of Directors and preparation of such other
reports relating to the business and affairs of HGI and each Fund as
the officers and HGI's Board of Directors may from time to time
reasonably request;
(l) Administration of HGI's Code of Ethics and periodic reporting to HGI's
Board of Directors concerning compliance therewith by directors and
officers of HGI;
(m) Provision of internal legal, compliance, audit, and risk management
services and periodic reporting to HGI's Board of Directors with
respect to such services;
(n) Negotiation, administration, and oversight of third party services to
HGI including, but not limited to, custody, tax, accounting and
bookkeeping, transfer agency, audit, and legal services;
(o) Negotiation and arrangement for insurance desired or required of HGI
and administering all claims thereunder;
(p) Preparation of responses to all inquiries by regulatory agencies, the
press, and the general public concerning the business and affairs of
HGI, including the oversight of all
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periodic inspections of the operations of HGI and its agents by
regulatory authorities and responses to subpoenas and tax levies;
(q) Handling and resolution of any complaints registered with HGI by
shareholders, regulatory authorities, and the general public;
(r) Monitoring legal, tax, regulatory, and industry developments related
to the business affairs of HGI and communicating such developments to
HGI's officers and Board of Directors as they may reasonably request
or as the Administrator believes appropriate;
(s) Administration of operating policies of HGI and recommendation to
HGI's officers and Board of Directors of modifications to such
policies to facilitate the protection of the shareholders or market
competitiveness of HGI and each Fund and to the extent necessary to
comply with new legal or regulatory requirements;
(t) Responding to surveys conducted by third parties and reporting of each
Fund's performance and other portfolio information; and
(u) Filing of claims, class actions involving portfolio securities, and
handling administrative matters in connection with the litigation or
settlement of such claims with respect to each Fund.
2. Use of Affiliated Companies and Subcontractors. In connection with the
services to be provided by Administrator under this Agreement,
Administrator may, to the extent it deems appropriate, and subject to
compliance with the requirements of applicable laws and regulations and
upon receipt of approval of HGI's Board of Directors, make use of (i) its
affiliated companies, if any, and their directors, officers, and employees
and (ii) subcontractors selected by Administrator, provided that
Administrator shall supervise and remain fully responsible for the services
of all such third parties in accordance with and to the extent provided by
this Agreement. All costs and expenses associated with services provided by
any such third parties shall be borne by Administrator or such parties.
3. Instructions, Opinions of Counsel, and Signatures. At any time
Administrator may request instructions regarding HGI from any duly
authorized agent of HGI, and may consult counsel for HGI or its own
counsel, in respect of any matter arising in connection with this
Agreement, and it shall not be liable for any action taken or omitted by it
in good faith in accordance with such instructions or with the advice or
opinion of such counsel. Administrator shall be protected in acting upon
any such instruction, advice, or opinion and upon any other paper or
document delivered by HGI or such counsel believed by Administrator to be
genuine and to have been signed by the proper person or persons, and shall
not be held to have notice of any change of authority of any officer or
agent of HGI, until receipt of written notice thereof from HGI, unless such
change was authorized by a duly authorized employee of Administrator or
Administrator shall have received written notice thereof from HGI.
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4. Expenses Borne by HGI. Except to the extent expressly assumed by
Administrator herein or under a separate agreement between HGI and
Administrator and except to the extent required by law to be paid by
Administrator, HGI shall pay all costs and expenses incidental to the
organization, operations, and business of HGI and each Fund. Without
limitation, such costs and expenses shall include, but not be limited to:
(a) All charges of depositories, custodians, and other agencies for the
safekeeping and servicing of its cash, securities, and other property;
(b) All charges for equipment or services used for obtaining price
quotations or for communication between Administrator or HGI and the
custodian, transfer agent, or any other agent selected by HGI;
(c) All charges for investment advisory, portfolio management, and
accounting services provided to HGI by the Administrator, or any other
provider of such services;
(d) All charges for services of HGI's independent auditors and for
services to HGI by legal counsel;
(e) All compensation of directors and officers, other than those employed
by Administrator or its affiliates, all expenses of HGI's officers and
directors incurred in connection with their services to HGI, and all
expenses of meetings of the directors or committees thereof;
(f) All expenses incidental to holding meetings of shareholders, including
expenses of printing and supplying to each record-date shareholder
notice and proxy solicitation material, and all other proxy
solicitation expenses;
(g) All expenses of printing of annual or more frequent revisions of HGI
prospectus(es) and of supplying each existing shareholder with a copy
of a revised prospectus; provided, however, that any such expense with
respect to copies for persons other than existing shareholders or
regulatory agencies shall be paid by HGI's distributor;
(h) All expenses related to preparing and transmitting certificates
representing Fund shares, if any;
(i) All expenses of bond and insurance coverage required by law or deemed
advisable by HGI's Board of Directors;
(j) All brokers' commissions and other normal charges incident to the
purchase, sale, or lending of Fund securities;
(k) All taxes and governmental fees payable to federal, state, or other
governmental agencies, domestic or foreign, including all stamp or
other transfer taxes;
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(l) All expenses of registering and maintaining the registration of HGI
under the 1940 Act and, to the extent no exemption is available,
expenses of registering HGI shares under the 1933 Act, of qualifying
and maintaining qualification of HGI and of HGI shares for sale under
the securities laws of various states or other jurisdictions and of
registration and qualification of HGI under all other laws applicable
to HGI or its business activities;
(m) All interest on indebtedness or commitment fees for letters of credit,
if any, incurred by HGI or a Fund; and
(n) All fees, dues, and other expenses incurred by HGI in connection with
membership of HGI in any trade association or other investment company
organization.
5. Allocation of Expenses Borne by HGI. Any expenses borne by HGI that are
attributable solely to the organization, operation, or business of a Fund
shall be paid solely out of Fund assets. Any expense borne by HGI which is
not solely attributable to a Fund, nor solely to any other series of shares
of HGI, shall be apportioned in such manner as Administrator determines is
fair and appropriate, or as otherwise specified by HGI's Board of
Directors.
6. Expenses Borne by Administrator.
(a) Administrator at its own expense shall furnish all executive and other
personnel, office space, and office facilities required to render the
services set forth in this Agreement. However, Administrator shall not
be required to pay or provide any credit for services provided by
HGI's custodian, transfer agent, or other agents without additional
cost to HGI.
(g) In the event that Administrator pays or assumes any expenses of HGI or
a Fund not required to be paid or assumed by Administrator under this
Agreement, Administrator shall not be obligated hereby to pay or
assume the same or similar expense in the future.
7. Administration Fee. For the services rendered, facilities provided, and
charges assumed and paid by Administrator hereunder, HGI shall pay to
Administrator out of the assets of each Fund fees at the annual rate for such
Fund as set forth in Schedule B to this Agreement. For each Fund, the
administrative fee shall accrue on each calendar day, and shall be payable
monthly on the first business day of the next succeeding calendar month. The
daily fee accrual shall be computed by multiplying the fraction of one divided
by the number of days in the calendar year by the applicable annual rate of fee,
and multiplying this product by the net assets of HGI, determined in the manner
established by the Board of Directors, as of the close of
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business on the last preceding business day on which the Fund's net asset value
was determined.
8. Reduction of Compensation and Reimbursement of Expenses. Administrator may
voluntarily reduce any portion of the compensation or reimbursement of
expenses due to it pursuant to this Agreement and may agree to make
payments to limit the expenses which are the responsibility of a Fund under
this Agreement. Any such reduction or payment shall be applicable only to
such specific reduction or payment and shall not constitute an agreement to
reduce any future compensation due to Administrator or make any future
payment to limit expenses of a Fund hereunder. Any such reduction or
payment will be agreed upon prior to accrual of the related expense or fee
and will be estimated daily. Any fee withheld shall be voluntarily reduced,
and any Fund expense paid by Administrator voluntarily or pursuant to an
agreed expense limitation shall be reimbursed by the appropriate Fund to
Administrator in the first, second or third (or any combination thereof)
fiscal year next succeeding the fiscal year of the withholding, reduction,
or payment to the extent permitted by applicable law. No such reimbursement
shall be permitted which would cause aggregate expenses for the year of
reimbursement to exceed any expense limitation then in effect; provided,
however, that reimbursements may be paid prior to the Fund's payment of
current expenses if so requested by Administrator even if such payment
should require Administrator to waive or reduce its fees hereunder or to
pay current Fund expenses for the year of reimbursement in order not to
cause any expense limitation then in effect to be exceeded. Administrator
may also agree not to require payment of any portion of its fees or
reimbursement of expenses hereunder.
9. Nonexclusivity. The services of Administrator to HGI hereunder are not to
be deemed exclusive, and Administrator shall be free to render similar
services to others.
10. Standard of Care. Neither Administrator, nor any of its directors,
officers, shareholders, agents or employees shall be liable to HGI, any
Fund, or shareholders of either for any action taken or thing done by it,
or its subcontractors or agents, on behalf of HGI or the Fund in carrying
out the terms and provisions of this Agreement if done in good faith and
without negligence or misconduct on the part of Administrator, its
subcontractors, or agents. Nothing in this Agreement shall be construed to
protect any officer of Administrator from liability for violation of
Section 17(h) or (i) of the 1940 Act.
11. Liability and Indemnification.
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(a) HGI shall indemnify and hold Administrator and its controlling
persons, if any, harmless from any and all claims, actions, suits,
losses, costs, damages, and expenses, including reasonable expenses
for counsel, incurred by it in connection with its acceptance of this
Agreement, in connection with any action or omission by it or its
employees, agents, or subcontractors in the performance of its duties
hereunder to HGI, or as a result of acting upon any instruction
believed by it to have been executed by a duly authorized agent of HGI
or as a result of acting upon information provided by HGI in form and
under policies agreed to by Administrator and HGI; provided, however,
that (i) to the extent such claims, actions, suits, losses, costs,
damages, or expenses relate solely to one or more Funds, such
indemnification shall be only out of the assets of that Fund or group
of Funds; (ii) this indemnification shall not apply to actions or
omissions constituting negligence or misconduct on the part of
Administrator or its employees, agents, or subcontractors, including,
but not limited to, willful misfeasance, bad faith, or negligence in
the performance of their duties, or reckless disregard of their
obligations and duties under this Agreement; and (iii) Administrator
shall give HGI prompt notice and reasonable opportunity to defend
against any such claim or action in its own name or in the name of
Administrator. In any event, HGI shall not be responsible for any
claim settled or compromised, or for any confession of judgment,
without its prior written consent, which consent shall not be
unreasonably withheld.
(b) Administrator shall indemnify and hold harmless HGI from and against
any and all claims, demands, expenses, and liabilities which HGI may
sustain or incur arising out of, or incurred because of, the
negligence or misconduct of Administrator, or its agents or
contractors, or the breach by Administrator of its obligations under
this Agreement, provided, however, that (i) this indemnification shall
not apply to actions or omissions constituting negligence or
misconduct on the part of HGI, or its other agents or contractors, and
(ii) HGI shall give Administrator prompt notice and reasonable
opportunity to defend against any such claim or action in its own name
or in the name of HGI. In any event, Administrator shall not be
responsible for any claim settled or compromised, or for any
confession of judgment, without its prior written consent, which
consent shall not be unreasonably withheld.
12. Effective Date, Amendment, and Termination.
(a) This Agreement shall become effective as to any Fund as of the
effective date for that Fund specified in Schedule A hereto and,
unless terminated as hereinafter provided, shall remain in effect with
respect to such Fund thereafter from year to year so long as such
continuance is specifically approved with respect to that Fund at
least annually by a majority of the directors who are not interested
persons of HGI or Administrator.
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(b) As to HGI or any Fund, this Agreement may be modified or amended from
time to time by mutual agreement between Administrator and HGI, and
may be terminated by Administrator or HGI on at least sixty (60) days'
written notice given by the terminating party to the other party.
Upon termination as to any Fund, HGI shall pay to Administrator such
compensation as may be due under this Agreement as of the date of such
termination and shall reimburse Administrator for its costs, expenses,
and disbursements payable under this Agreement to such date. In the
event that, in connection with a termination, a successor to any of
the duties or responsibilities of Administrator hereunder is
designated by HGI by written notice to Administrator, upon such
termination Administrator shall promptly, and at the expense of HGI or
the Fund with respect to which this Agreement is terminated, transfer
to such successor all relevant books, records, and data established or
maintained by Administrator under this Agreement and shall cooperate
in the transfer of such duties and responsibilities, including
provision, at the expense of such Fund, for assistance from personnel
of Administrator in the establishment of books, records, and other
data by such successor.
13. Assignment. Any interest of Administrator under this Agreement shall not
be assigned either voluntarily or involuntarily, by operation of law or
otherwise, without the prior written consent of HGI.
14. Books and Records.
(a) Administrator shall maintain, or oversee the maintenance by such other
persons as may from time to time be approved by the Board of Directors
to maintain, the books, documents, records, and data required to be
kept by HGI under the 1940 Act, the laws of the State of Maryland, or
such other authorities having jurisdiction over HGI, or as may
otherwise be required for the proper operation of the business and
affairs of HGI.
(b) Administrator will periodically send to HGI all books, documents,
records, and data of HGI and each of its Funds listed in Schedule A
that are no longer needed for current purposes or required to be
retained as set forth herein. Administrator shall have no liability
for loss or destruction of such books, documents, records, or data
after they are returned to HGI.
(c) Except as the parties otherwise agree, Administrator agrees that all
such books, documents, records, and data which it maintains shall be
maintained in accordance with Rule 31a-3 of the 1940 Act and that any
such items maintained by it shall be the property of HGI.
Administrator further agrees to surrender promptly to HGI any such
items it maintains upon request; provided, however, that Administrator
shall be permitted to retain a copy of all such items. Administrator
agrees to preserve all such items maintained under Rule 31a-1 for the
period prescribed under Rule 31a-2 of the 1940 Act.
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(d) HGI shall furnish or otherwise make available to Administrator such
copies of the financial statements, proxy statements, reports, and
other information relating to the business and affairs of each Fund or
of HGI as Administrator may, at any time or from time to time,
reasonably require in order to discharge its obligations under this
agreement.
15. Use of Administrator's Name. Unless otherwise prohibited by Administrator,
HGI may use its name and the names of its Funds listed in Schedule A or any
other name derived from the name "Heartland," or any servicemark or
trademark owned by Administrator, only for so long as this Agreement or any
extension, renewal, or amendment hereof remains in effect, including any
similar agreement with any organization which shall have succeeded to the
business of Administrator as it relates to the services it has agreed to
furnish under this Agreement. At such time as this Agreement or any
extension, renewal, or amendment hereof, or such other similar agreement
shall no longer be in effect, HGI will cease to use any name derived from
the name "Heartland" or otherwise connected with Administrator, or with any
organization which shall have succeeded to Administrator's business herein
described, and any servicemark or trademark owned by Administrator.
16. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or sent by certified mail, postage prepaid, to the other party at
such address as such other party may designate for the receipt of such
notices. Until further notice, it is agreed that the address of both HGI
and Administrator is 000 Xxxxx Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx
00000, Attention: Secretary. With respect to any notice given hereunder to
HGI, a copy shall be delivered to Xxxxxxx & Xxxxx LLP, 000 Xxxx Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxxx, Esq.,
and with respect to any notice given hereunder to Administrator, a copy
shall be delivered to Heartland Advisors, Inc., 000 Xxxxx Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000, Attention: General Counsel.
17. Headings. Headings are placed herein for convenience of reference only and
shall not be taken as part hereof or control or affect the meaning,
construction, or effect of this Agreement.
18. Governing Law. This Agreement shall be governed by the laws of the State
of Wisconsin.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.
HEARTLAND GROUP, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
HEARTLAND ADVISORS, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
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ADMINISTRATIVE AGREEMENT
SCHEDULE A
The Funds of Heartland Group, Inc. currently subject to this Agreement are:
Effective Date
--------------
Heartland Taxable Short Duration Municipal Fund 12/29/98
Dated: December 29, 1998
HEARTLAND GROUP, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
HEARTLAND ADVISORS, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
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ADMINISTRATIVE AGREEMENT
SCHEDULE B
Compensation pursuant to Section 7 of this Agreement shall be 0.15 of 1% of the
average daily net assets of the Heartland Taxable Short Duration Municipal Fund.
Dated: December 29, 1998
HEARTLAND GROUP, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
HEARTLAND ADVISORS, INC.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
President
Attest:
__________________________________
Xxxx X. Xxxxxxxxxxxx
Secretary
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