Merrill Lynch, Pierce, Fenner & Smith Incorporated SUPPLEMENTAL FUND SERVICES AGREEMENT
Exhibit 23(m)(4)(b)
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
SUPPLEMENTAL FUND SERVICES AGREEMENT
This Supplemental Fund Services Agreement (this “Agreement”) is made and entered into as of November 22, 2006, by and between Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated (“Xxxxxxx Xxxxx”) and J.& X. Xxxxxxxx & Co. Incorporated (“JWS”), Xxxxxxxx Advisors, Inc (“Fund Provider”) and Xxxxxxxx Data Corp. (the “Fund Shareholder Agent”).
1. Purpose of the Agreement.
(a) Xxxxxxx Xxxxx and the Fund Provider (or their predecessors) have entered into a Selected Dealer Agreement dated September 22, 1997 (the “Service Agreement”) and a Financial Services Agreement dated on or about October, 2006. This Agreement is intended to supplement the Service Agreement and replace the existing Supplemental Fund Services Agreement dated February 1, 2003, as amended December 1, 2005; accordingly, except as otherwise specified herein, the Service Agreement, as in effect at the time in question, will continue to govern the conduct of business between Xxxxxxx Xxxxx and Fund Provider in regard to the matters set forth herein.
(b) Xxxxxxx Xxxxx provides recordkeeping and investment related services to certain employee benefit plans (collectively referred to as “Plans” and individually as a “Plan”) pursuant to the arrangements described in Section 2. The Plans wish to invest in certain open-end investment companies registered under the Investment Company Act of 1940, as amended (the “1940 Act”) identified in Attachment A hereto, for which the Fund Provider is the distribution coordinator (collectively referred to as the “Funds” and individually as the “Fund”). For the convenience of the Plans, Xxxxxxx Xxxxx is the record owner of the shares of the Fund(s) and maintains such ownership interests through an omnibus account (“Omnibus Account”) established for each Fund pursuant to the Service Agreement. This Omnibus Account represents the aggregate number of shares of the Funds held by the Plans and all other Xxxxxxx Xxxxx customers at any given time. Xxxxxxx Xxxxx or other recordkeepers (“TPAs”) track the beneficial ownership of such shares, distribute dividends and shareholder information, and perform other services pursuant to agreements with or for the benefit of the Plans as described in Section 3. The Funds and Fund Provider receive a direct benefit from the services performed by Xxxxxxx Xxxxx and the TPAs. The provisions of this Agreement are intended (i) to facilitate the investment of Plan assets in shares of the Fund(s) and (ii) to define the responsibilities of Xxxxxxx Xxxxx and Fund Provider relating to the services described in Section 3.
2. Designation of Servicing Arrangements.
(a) Xxxxxxx Xxxxx provides recordkeeping services for participant (“Participant”) interests in defined contribution Plans and performs such services directly through a proprietary recordkeeping system that is linked to a Xxxxxxx Xxxxx securities account (“ML Recordkeeping Arrangements”).
(b) Xxxxxxx Xxxxx has entered into arrangements with selected TPAs to: (i) offer co-branded defined contribution recordkeeping products that are linked to a Xxxxxxx Xxxxx securities account and sold by Xxxxxxx Xxxxx Financial Advisers (“ML Connect Arrangements”), and (ii) provide investment services to defined contribution plans as to which the TPA provides recordkeeping services and maintains a direct trading link with Xxxxxxx Xxxxx (“TPA Recordkeeping Arrangements”).
(c) Xxxxxxx Xxxxx provides investment services to certain Plans and Plan Participants, other than the Plans described in the preceding Sections 2(a) and 2(b), (“Investment Only Arrangements”).
3. Services to Plans.
(a) The servicing arrangements described in Section 2(a) (ML Recordkeeping Arrangements) and Section 2(b) (ML Connect Arrangements and TPA Recordkeeping Arrangements), provide that the following services will be performed for and on behalf of the Plans:
(i) Xxxxxxx Xxxxx will maintain separate records for each Plan which offers the Fund(s) as investment options to Participants under the Plan, and Plan records, sufficient to identify shares purchased and redeemed and share balances for each Participant, will be maintained by the recordkeeper.
(ii) Xxxxxxx Xxxxx will maintain an Omnibus Account with the transfer agent of each Fund and execute transactions on behalf of the Plans through such Omnibus Account.
(iii) Xxxxxxx Xxxxx will disburse or credit to the Plans all proceeds of redemptions of shares of the Fund(s) and all dividends and other distributions not reinvested in shares of the Fund(s), as applicable.
(iv) Xxxxxxx Xxxxx will prepare and transmit to the relevant employer or plan sponsor periodic statements showing the total number of shares owned by the Plan as of the statement closing date, purchases and redemptions of Fund shares by the Plan during the period covered by the statement and the dividends and other distributions paid to the Plan during the statement period (whether paid in cash or reinvested in Fund shares).
(v) Xxxxxxx Xxxxx will transmit to the Fund Shareholder Agent or other person as may be designated by the Fund Provider, purchase and redemption orders on behalf of the Plans in accordance with the procedures set forth in Section 4(b)(i) below.
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(b) The servicing arrangements described in Section 2(c) (Investment Only Arrangements), provide that the following services will be performed for and on behalf of the Plans:
(i) Xxxxxxx Xxxxx will maintain separate records for each Plan that offers the Fund(s), including records of shares purchased and redeemed and share balances for each Plan and each Participant who maintains a separate Xxxxxxx Xxxxx securities account.
(ii) Xxxxxxx Xxxxx will maintain an Omnibus Account with the transfer agent of each Fund and execute transactions on behalf of the Plans through such Omnibus Account.
(iii) Xxxxxxx Xxxxx will disburse or credit to the Plans or Participant accounts as appropriate all proceeds of redemptions of shares of the Fund(s) and all dividends and other distributions not reinvested in shares of the Fund(s), as applicable.
(iv) Xxxxxxx Xxxxx will prepare and transmit to the employer sponsor or account holder periodic statements showing the total number of shares owned as of the statement closing date, purchases and redemptions of Fund shares during the period covered by the statement and the dividends and other distributions paid during the statement period (whether paid in cash or reinvested in Fund shares).
(v) Xxxxxxx Xxxxx will transmit to the Fund Shareholder Agent or other person as may be designated by the Fund Provider, purchase and redemption orders on behalf of the Plans in accordance with the procedures set forth in Section 4(b)(ii) (specifically excluding for purposes of this Section 3(b), the provisions of Section 4(b)(i) herein).
4. Procedures for Purchases and Redemptions of Fund Shares.
(a) On each day the New York Stock Exchange is open for business (“Business Day”) Xxxxxxx Xxxxx or its agent may receive instructions from Participants for the purchase, redemption and exchange of shares of the Funds. Instructions received after the close of the New York Stock Exchange (“Close of Trading”) on any Business Day will be treated as if received on the next following Business Day.
(b) All Plan transactions in Fund shares shall be executed through the Omnibus Accounts and in accordance with the following provisions applicable to the arrangements described in Section 2.
(i) In respect of transactions executed pursuant to an arrangement described in Section 2(a) (ML Recordkeeping Arrangements) and Section 2(b) (ML Connect Arrangements and TPA Recordkeeping Arrangements), by 11:00 a.m. Eastern Time (“ET”) on the next Business Day following receipt of such instructions
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(the “Cut-off Time”), Xxxxxxx Xxxxx will provide to the Fund Shareholder Agent or other person designated by Fund Provider via the NSCC Defined Contribution Platform (which utilizes the “as of” record layout within Fund/SERV) one or more files detailing the instructions received with respect to each Plan prior to the Close of Trading on the prior Business Day for each of the Funds. If for any reason Xxxxxxx Xxxxx is unable to transmit the file(s) with respect to any Business Day, Xxxxxxx Xxxxx will notify the Fund Shareholder Agent or other person designated by the Fund Provider by the Cut-off Time on the next following Business Day.
(ii) In respect of transactions executed pursuant to an arrangement described in Section 2(c) (Investment Only Arrangements), Xxxxxxx Xxxxx will provide to the Fund Shareholder Agent via the NSCC Fund/SERV Platform one or more files detailing the instructions received by Xxxxxxx Xxxxx with respect to each Plan prior to the Close of Trading on the Business Day for each of the Funds; provided however, such instructions shall be received by the Fund Shareholder Agent or other person designated by the Fund Provider no later than the Cut-off Time on the next following Business Day.
(c) Except as otherwise provided in this Agreement, the purchase and redemption transactions contemplated hereunder shall be executed at prices and pursuant to procedures established in accordance with the provisions of the Service Agreement.
(d) Notwithstanding anything to the contrary in the Service Agreement, by 6:30 p.m. ET on each Business Day, the Fund Provider will provide or cause to be provided to Xxxxxxx Xxxxx by means of the NSCC Profile, (i) the Fund’s net asset value at the Close of Trading, (ii) in the case of income Funds, the daily accrual or interest rate factor (mil rate) and (iii) when applicable, the record date, ex-dividend date and payable date information for dividends and capital gains. In lieu of transmitting this information through the NSCC Profile, the Fund Provider may provide or cause to be provided such information through an alternative channel acceptable to Xxxxxxx Xxxxx.
(e) Notwithstanding any provision of the Service Agreement to the contrary, for purchase and redemption instructions with respect to any Fund, Xxxxxxx Xxxxx and the Fund Shareholder Agent or other person designated by Fund Provider will settle the purchase and redemption transactions referred to in Section 4(b) above, via the NSCC Fund/SERV settlement process on the next Business Day following the effective trade date. The Fund Shareholder Agent or other person designated by Fund Provider will provide to Xxxxxxx Xxxxx a daily transmission of positions and trading activity taking place in the Omnibus Accounts using the proprietary Inventory Control System (“ICS”).
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5. Transactions in the Funds.
(a) Fund Shares Notwithstanding anything to the contrary contained in the Service Agreement, the Fund Provider will make available to the Plans a class of shares that (i) are eligible for purchase at net asset value and (ii) are not subject to a contingent deferred sales charge, redemption fee or exchange fee. The form of payment of dividends and capital gains distributions for these shares will be determined in accordance with Xxxxxxx Xxxxx’x operational procedures in effect at the time of the payment of such dividend or distribution. All Plan transactions in the Fund shares shall be executed through the Omnibus Accounts.
(b) Xxxxxxx Xxxxx Recordkept Plans Xxxxxxx Xxxxx agrees to cooperate with Fund Provider’s efforts to identify plan participant (“Shareholder”) transaction activity that may violate Fund Provider’s policies established for the purpose of eliminating or reducing any dilution in the value of Fund shares (“Fund Policies”). To that end, Xxxxxxx Xxxxx agrees to promptly respond to inquiries from Fund Shareholder Agent or other person designated by Fund Provider regarding Shareholder transaction activity with respect to shares held through a plan arrangement described in Section 2(a) (ML Recordkept Arrangements). Xxxxxxx Xxxxx’x response to such inquiries will include the amount and dates of the Shareholder purchase, redemption, transfer, and exchange activity in a format consistent with its established procedures. In the normal course, Xxxxxxx Xxxxx’x response to such inquiries will not include confidential plan or participant information in order to minimize the risk of misuse or inadvertent disclosure to unauthorized persons. Upon written request of Fund Shareholder Agent or other person designated by Fund Provider, Xxxxxxx Xxxxx will promptly provide confidential plan and participant information, including the participant’s taxpayer identification numbers (“Confidential Customer Information”). Communications to and from Xxxxxxx Xxxxx that includes Confidential Customer Information, as well as procedures for maintaining custody of such information will meet the requirements set forth in Section 14(c). Any change in the requirements in Section 14(c) or Xxxxxxx Xxxxx’x procedures for responding to requests for information hereunder will become effective following reasonable notice to Fund Shareholder Agent and Fund Provider.
(c) Fund Transaction Restrictions Xxxxxxx Xxxxx agrees to execute promptly reasonable instructions from the Fund Shareholder Agent or other person designated by Fund Provider to restrict or prohibit further share purchases or exchanges in plan arrangements described in Section 2(a) (ML Recordkept Arrangements) for Shareholders or participants who violate Fund Policies. Such instructions shall be in a form and pursuant to procedures that are consistent with Xxxxxxx Xxxxx’x capabilities as described in Attachment E. Any change in these procedures or capabilities will become effective following reasonable notice to Fund Provider.
(d) Other Recordkeeping Arrangements In regard to plan arrangements described in Section 2(b) (ML Connect Arrangements and TPA Recordkeeping Arrangements) and Section 2(c) (Investment Only Arrangements), Fund Provider acknowledges that Xxxxxxx Xxxxx does not have direct access or control over Shareholder
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transaction information for such plans. Xxxxxxx Xxxxx will make reasonable efforts to facilitate Fund Shareholder Agent or other person designated by Fund Provider identifying and entering into contractual arrangements with the parties that maintain custody and control over such Shareholder or participant transaction records, including Client Confidential Information, to (i) provide promptly information with respect to Shareholder or participant transaction activity including Client Confidential Information and (ii) implement Shareholder or participant transaction restrictions where directed by Fund Shareholder Agent or other person designated by Fund Provider.
6. Redemption Fees and Participant Transaction Restrictions
(a) Xxxxxxx Xxxxx Recordkept Plans Xxxxxxx Xxxxx has a limited capability to assess, collect and remit redemption fees with respect to certain Shareholder transactions in plans described in Section 2(a) (ML Recordkeeping Arrangements) pursuant to the methodology described in Attachment D. Fund Provider may elect to utilize that capability with respect to some or all of the Funds subject to this Agreement, in lieu of the redemption fee requirements set forth in the applicable prospectus. Such election shall be made by formal notification pursuant to procedures adopted by Xxxxxxx Xxxxx.
(b) Other Recordkeeping Arrangements Xxxxxxx Xxxxx does not have timely access to confidential participant transaction data for plan arrangements described in Section 2(b) (ML Connect Arrangements and TPA Recordkeeping Arrangements) and Section 2(c) (Investment Only Arrangements). Accordingly, Xxxxxxx Xxxxx is unable to assess, collect and remit redemption fees with respect to participant transactions in those plan arrangements. Even though it lacks the capacity to implement redemption fees with respect to participant transactions in those plan arrangements, Xxxxxxx Xxxxx will, at the direction of the Fund Shareholder Agent or other person designated by Fund Provider, assess, collect and remit redemption fees on transactions at the plan account level for those plan arrangements. Fund Provider may elect to utilize this plan level redemption fee in lieu of any redemption fee requirement set forth in the applicable prospectus. Any such election shall be made by formal notification pursuant to procedures adopted by Xxxxxxx Xxxxx.
(c) Participant Transaction Restrictions Xxxxxxx Xxxxx has a limited capability to restrict the frequency of participant transactions in plans described in Section 2(a) (ML Recordkeeping Arrangements) by imposing time based limitations on purchase and redemption activity as described in Attachment E. Fund Provider or Fund Shareholder Agent may elect to utilize that capability with respect to some or all of the Funds subject to this Agreement. Such election shall be made by formal notification pursuant to procedures adopted by Xxxxxxx Xxxxx.
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7. Disclosures to Plans and Plan Participants.
To the extent required by law, including, without limitation, the Securities Exchange Act of 1934 (“Exchange Act”), the rules of the NASD, and related rules, each party agrees to provide applicable disclosures regarding the services provided pursuant to this Agreement. Without limiting the foregoing, Xxxxxxx Xxxxx agrees to provide such point of sale disclosure documents regarding this Agreement and the Fees as are consistent with then-current legal requirements.
8. Representations of the Parties.
(a) Each party hereby severally, and not jointly, represents and covenants that:
(i) neither its execution of Agreement nor its performance of its obligations hereunder shall cause a material breach of, or be in material conflict with, any other agreement or obligation of the party or any law or regulation applicable to the party;
(ii) it will not directly or indirectly offer, solicit or knowingly accept compensation for promoting or selling Fund shares in the form of commission on brokerage transactions directed by Fund Provider or any related person;
(iii) it will not offer or knowingly accept compensation for promoting or selling Fund shares in the form of remuneration received by any other broker-dealer from Fund Provider or any related person that has executed portfolio securities transactions for that Fund, Fund Provider or a related person; and
(iv) it has not entered into any agreement with or on behalf of any Fund or the Fund Provider pursuant to which that Fund or any affiliate is expected to direct brokerage commissions to any party to compensate that party for promoting or selling Fund shares.
(b) Xxxxxxx Xxxxx represents and covenants that (i) all trading in Class I shares shall, unless otherwise agreed to by the Fund Shareholder Agent, be conducted using NSCC level 3 (with no more than one account per Plan); (ii) each Plan investing in Class I shares shall meet the eligibility requirements for investing in Class I shares as disclosed in the Fund’s current prospectus, which shall include for this purpose, Class I shares purchased by a Plan that meets the following criteria: the plan must have at least $50 million in assets; and (iii) Xxxxxxx Xxxxx shall provide prior written notice to Fund Provider of any change in Xxxxxxx Xxxxx’x eligibility requirements for Class I shares.
9. Fund Information.
(a) The Fund Provider will provide (or cause to be provided) to Xxxxxxx Xxxxx the information set forth in Attachment B hereto. In addition, notwithstanding anything contained in the Service Agreement to the contrary, the Fund Provider hereby agrees that
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Xxxxxxx Xxxxx may use such information in communications prepared for the Plans, including, but not limited to, Participant enrollment and other communications materials and voice response systems, as well as proposals prepared and submitted by Xxxxxxx Xxxxx to sponsors of employee benefit plans or their representatives who have expressed interest in Xxxxxxx Xxxxx’x employee benefit plan recordkeeping or other services. The Fund Provider will provide timely notification to Xxxxxxx Xxxxx of any change to the information described in part I of Attachment B, including without limitation any change to the CUSIP number or symbol designation of a Fund. Such notification shall be given to Xxxxxxx Xxxxx as soon as practicable prior to the effective date of the change; provided however that if such notification is not given at least ten (10) Business Days prior to the effective date of the change, the effect of the change with respect to transactions by the Plans in any affected Fund shall be delayed for a reasonable time following notification hereunder but not more than ten (10) Business Days.
(b) Notwithstanding anything to the contrary in the Service Agreement, upon request, the Fund Provider will provide Xxxxxxx Xxxxx with prospectuses, proxy materials, financial statements, reports and other materials relating to each Fund in sufficient quantity for each Participant invested in the Fund.
(c) With the exception of (i) listings of product offerings; (ii) materials in the public domain (e.g., magazine articles and trade publications); and (iii) materials used on an internal basis only, Xxxxxxx Xxxxx agrees not to furnish or cause to be furnished to any third parties or to display publicly or publish any information or materials relating to the Funds, except such materials and information as may be distributed to Xxxxxxx Xxxxx by Fund Provider or approved for distribution by Fund Provider upon Xxxxxxx Xxxxx’x request.
10. Compensation.
(a) Notwithstanding anything to the contrary in the Service Agreement, with respect to Fund shares purchased for each Plan pursuant to this Agreement, the Fund Provider will pay Xxxxxxx Xxxxx fees as set forth in Attachment C hereto, as may be amended from time to time pursuant to Section 18, except that the Fund Shareholder Agent and not the Fund Provider shall pay the fees stated in Section 1(Processing Fee) of Part II of Attachment C and provided that certain of the Funds have adopted or may, in the future, adopt a plan (the “12b-1 Plan”) pursuant to Rule 12b-1 under the 1940 Act. Xxxxxxx Xxxxx acknowledges that Fund Provider intends that the fees set forth in Section 3 (Distribution Fee) of Part II of Attachment C will be paid pursuant to the Rule 12b-1 Plan (the “12b-1 Fees”).
In addition, the payment of these Distribution Fees from the 12b-1 Plan shall (a) remain in effect, with respect to a Fund, only so long as such continuance is specially approved at least annually by a vote of the board of directors or trustees who are not “interested persons” (as defined in the 0000 Xxx) of the Fund (referred to herein as “Independent Directors”) and have no direct or indirect financial interest in the operation of the 12b-1 Plan adopted by such Fund or in any agreement related thereto cast in person at a meeting
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called for the purpose of voting on such approval; (b) be terminable, without penalty, at any time by such Fund by a vote of a majority of the Independent Directors or by vote of a majority of the voting securities (as such term is defined in the 0000 Xxx) of such Fund upon 60 days written notice to Xxxxxxx Xxxxx or (c) automatically terminate in the event of assignment of this Agreement. In the event that a Fund terminates a 12 b-1 Plan and ceases to pay the Distribution Fees, JWS shall pay Xxxxxxx Xxxxx out of its own resources such fees (calculated as provided in Attachment C) with respect to each Fund, provided that Xxxxxxx Xxxxx would have been entitled to such fees under the Agreement in the absence of such termination.
The fees payable under this Section 10 will be in lieu of any fees which might otherwise be payable under the Service Agreement or the Financial Services Agreement dated on or about October 2006. For the purpose of computing payments to Xxxxxxx Xxxxx under this Section 10 with respect to the Plans, the average daily amount invested by the Plans in a Fund for any calendar month will be computed by totaling the Plans’ aggregate investment (share net asset value multiplied by total number of shares of the Fund held by the Plans) on each Business Day during the month and dividing by the total number of Business Days during such month. Xxxxxxx Xxxxx will calculate the amount of any fee to be paid with respect to the Plans hereunder at the end of each calendar quarter and payment will be due within 30 days of receipt by the Fund Provider or Fund Shareholder Agent, as the case may be, of Xxxxxxx Xxxxx’x invoice for such fees.
(b) Notwithstanding any provision herein to the contrary, the Fund Provider shall not be obligated to make any payments under this Agreement that exceed the maximum amounts permitted under any applicable rule or regulation, including any rule promulgated by the NASD (the “Applicable Limitations”). Xxxxxxx Xxxxx agrees that any amount due under this Agreement that the Fund Provider determines to be in excess of the Applicable Limitations may be paid by another entity designated by Fund Provider (an “Alternative Payer”). Any decision to designate an Alternative Payer shall be within the sole discretion of Fund Provider, subject to the consent of Xxxxxxx Xxxxx, which consent will not be unreasonably withheld. Fund Provider agrees that: (i) Xxxxxxx Xxxxx may submit a single xxxx for monies owed under this Agreement, (ii) Fund Provider shall be solely responsible to ensure that any Applicable Limitations are not exceeded, and (iii) Fund Provider shall be responsible to ensure that any Alternative Payer discharges its obligations consistent with the provisions of this Agreement.
(c) The parties hereto agree that the payments to Xxxxxxx Xxxxx under this Section 10 do not constitute payment in any manner for investment advisory services.
11. Use of Names.
Except as otherwise expressly provided for in this Agreement, neither party will use the name or logo (or any variation thereof) or any tradename or service xxxx of the other party without such other party’s prior written consent, which consent may be unreasonably withheld.
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12. Termination.
Either party may terminate this Agreement upon 90 days’ prior written notice to the other parties; provided that the Fund Provider reserves the right to suspend sales or to withdraw the offering of shares of the Funds, as more fully set forth in the Service Agreement. Notwithstanding the foregoing, this Agreement will be terminated immediately upon a material breach by a party, which is not cured within 30 days after notice from the non-breaching party. In the event this Agreement is terminated, the parties will be obligated to fulfill their responsibilities (including under Sections 3, 4, 5, 6, 7, 8 and 10) under the Agreement with respect to any shares of the Funds held under Plans for which Xxxxxxx Xxxxx provides recordkeeping services as of the date of such termination, until and including the earlier of the date that Xxxxxxx Xxxxx ceases to provide recordkeeping services for such Plan or two years after termination of the Agreement.
13. Non-Exclusivity.
Each of the parties acknowledges and agrees that this Agreement and the arrangement described herein are intended to be non-exclusive and that each of the parties is free to enter into similar agreements and arrangements with other entities.
14. Confidentiality.
(a) Each party will treat confidentially, by not disclosing to unaffiliated persons, all information and documentation provided by the other party relating to any Plan (including the identity of the Plan and information regarding the Participants) except (i) to the Trustee of the Plan, any administrator of the Plan or any person as may be necessary in connection with the proper operation of this Agreement, (ii) in connection with an audit or regulatory examination, or (iii) as may otherwise be legally required.
(b) Each party will use information and data back-up procedures and information security so as to reasonably insure that the other party’s confidential and/or proprietary information and data is not lost, modified, altered, or disclosed to any other party nor accessed by any third party without the other party’s prior written approval, except as provided by the terms and conditions of this Agreement. Each party shall monitor, evaluate and adjust its information security systems and procedures in response to relevant changes in technology, and internal and external threats to information security and will maintain its information security program to conform with the applicable regulations promulgated pursuant to The Xxxxx-Xxxxx-Xxxxxx Act (15 U.S.C. 6801 and 6805).
(c) Without limiting the generality of the foregoing, Fund Provider and Fund Shareholder Agent shall, in the case of Confidential Customer Information, transmit and maintain custody and control of Confidential Customer Information in accordance with the following requirements:
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(i) Transmit all Confidential Customer Information specific information via some mechanism other than a Web browser, using a Xxxxxxx Xxxxx approved encryption algorithm.
(ii) Maintain all workstations, servers, and network equipment with access to Confidential Customer Information in secure facilities owned, operated, or contracted for by Fund Provider or Fund Shareholder Agent, as the case may be.
(iii) Limit access to these secure facilities to authorized staff members and agents with job-related needs.
(iv) Monitor access to these secure facilities through the use of security guards, surveillance cameras, authorized entry systems, or similar methods capable of recording entry and exit information.
(v) Maintain all backup and archival media containing Confidential Customer Information in secure, environmentally-controlled storage areas owned, operated, or contracted for by Fund Provider or Fund Shareholder Agent, as the case may be.
(vi) Limit access to Confidential Customer Information held in backup and archival media storage areas and contents to authorized staff members and agents with job-related needs.
15. Indemnification
(a) The Fund Provider will defend (subject to subsection (b) below), indemnify and hold harmless Xxxxxxx Xxxxx and its affiliates, and their officers, directors and employees (each a “Xxxxxxx Xxxxx Indemnitee”) against any losses, claims, damages (excluding consequential damages), liabilities and expenses (including reasonable costs of investigation and attorney’s fees (collectively, “Losses”)), to which a Xxxxxxx Xxxxx Indemnitee may become subject to the extent that such Losses (or actions with respect thereto) arise out of or are based on the negligence of the Fund Provider, except and solely to the extent that any such Losses are caused, or contributed to by, a Xxxxxxx Xxxxx Indemnitee’s negligence or willful misconduct.
(b) In the event that Xxxxxxx Xxxxx seeks indemnification under this Section 15, Xxxxxxx Xxxxx will, promptly after receipt of notice of the commencement of any action, suit or proceeding against it, give written notice of the commencement of such action, suit or proceeding to the Fund Provider, but an omission so to notify the Fund Provider will not relieve the Fund Provider from any indemnification obligation it may otherwise have. In case such notice of any such action is so given, the Fund Provider will be entitled to participate at its own expense in the defense, or if it so elects, to assume the defense of such action, in which event such defense will be conducted by counsel (satisfactory to Xxxxxxx Xxxxx) chosen by the Fund Provider; provided, however, that the Fund Provider will not have the right to assume the defense of any action in which the
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named parties (including any implied parties) include both the Fund Provider and Xxxxxxx Xxxxx and in which counsel to either the Fund Provider or Xxxxxxx Xxxxx has advised that there may be legal defense available to Xxxxxxx Xxxxx which are different from or in addition to those available to the Fund Provider. If the Fund Provider does not elect to assume the defense of such action and in cases where separate counsel is retained because of the availability of different defenses, the Fund Provider will reimburse Xxxxxxx Xxxxx for the reasonable fees and expenses of any counsel retained by Xxxxxxx Xxxxx. Payment (other than the reimbursement of Xxxxxxx Xxxxx’x legal and other related fees and expense, which will be payable to Xxxxxxx Xxxxx upon the Fund Provider’s receipt of Xxxxxxx Xxxxx’x xxxx related thereto) will be made upon any final determination of liability resulting from such claim or misstatement or omission by a court, panel of arbitrators, administrative agency or self-regulatory organization, or upon any settlement of any dispute, the subject of which involves such claim. In any action in which the Fund Provider has elected to assume the defense, Xxxxxxx Xxxxx will bear the fees and expense of any additional counsel it retains, unless the Fund Provider or Merrill Lunch has retained separate counsel because those are legal defense available to one of them which are different from or in addition to those available to the other, in which case the Fund Provider will bear the fees and expenses of Xxxxxxx Xxxxx’x counsel as well.
(c) Xxxxxxx Xxxxx will defend (subject to subsection (d) below), indemnify and hold harmless the Fund Provider, the Fund Shareholder Agent and their affiliates and their respective officers, directors and employees (each a “Fund Provider Indemnitee”) against any losses, claims, damages (excluding any consequential damages), liabilities and expenses (including reasonable attorney’s fees) arising out of Xxxxxxx Xxxxx’x negligence, except and solely to the extent that any such losses are caused, or contributed to by, a Fund Provider Indemnitee’s negligence or willful misconduct.
(d) In the event that either the Fund Provider or Fund Shareholder Agent seeks indemnification under this Section 15, the provisions of Section 15(b) above shall apply, but substituting the term “Fund Provider” for “Xxxxxxx Xxxxx” and the term “Xxxxxxx Xxxxx” for “Fund Provider” or “Fund Shareholder Agent”, as the case may be, whenever those terms appear in that Section.
16. Arbitration
If a dispute arises between the parties hereto with respect to this Agreement which the parties are unable to resolve themselves, it will be settled by arbitration in accordance with the then existing NASD Code of Arbitration Procedure (the “NASD Code”). The parties agree that, to the extent permitted by the NASD Code, the arbitrator(s) will be selected from the securities industry.
17. Entire Agreement.
Except as otherwise provided in Section 1 herein, this Agreement, including the Attachments hereto, constitutes the entire agreement between the parties with respect to transactions in the Funds by Plans, subject to the arrangements described in Section 2 herein, and this Agreement supercedes all previous agreements, written or oral, with respect to such matters.
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18. Amendment.
Notwithstanding the Service Agreement to the contrary, this Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.
19. Notices.
Notwithstanding any provision of the Service Agreement to the contrary, for purposes of this Agreement all communications to be sent to Xxxxxxx Xxxxx will be sent to: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 1400 Xxxxxxx Xxxxx Drive, Mail Stop 0404, Xxxxxxxxxx, Xxx Xxxxxx 00000; Attention: Investment Alliances Group, Xxxxxxx Xxxxx Retirement Group. Notwithstanding any provision of the Service Agreement to the contrary, for purposes of this Agreement, all communications to be sent to Fund Provider or Fund Shareholder Agent shall be sent to the address indicated below.
20. Survival.
The provisions of Sections 8, 11, 14, 15 and 16 will survive termination of this Agreement.
IN WITNESS WHEREOF, the Fund Provider and Xxxxxxx Xxxxx have each caused this Agreement to be executed in its corporate name by its duly authorized officer, as of the date set forth above.
| XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED | XXXXXXXX ADVISORS, INC | |||||
| By: |
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By: |
| |||
| Print Name: |
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Print Name: | Xxxxxxx X. Xxxxxx | |||
| Title: |
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Title: | President | |||
| Address for Notice: | ||||||
| 000 Xxxx Xxx | ||||||
| Xxx Xxxx, XX 00000 | ||||||
| Contact Person: Head of Retirement Planning | ||||||
| Phone: 000-000-0000 | ||||||
| FAX: 000-000-0000 | ||||||
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| XXXXXXXX DATA CORP | ||
| By: |
| |
| Print Name: | Xxxxxx Xxxxxxx | |
| Title: | Vice President | |
| Address for Notice (if applicable): | ||
| 000 Xxxx Xxx | ||
| Xxx Xxxx, XX 00000 | ||
| Contact Person: President | ||
| Phone: 000-000-0000 | ||
| FAX: 000-000-0000 | ||
| J.&W. XXXXXXXX & CO. INCORPORATED | ||
| By: |
| |
| Print Name: | Xxxxxxx X. Xxxxxx | |
| Title: | Managing Director | |
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ATTACHMENT A
List of Funds
| Class A | Fund Name | Symbol | CUSIP | |||
| Xxxxxxxx Capital Fund. | SCFIX | 816326102 | ||||
| Xxxxxxxx Common Stock Fund | SCSFX | 816332308 | ||||
| Xxxxxxxx Growth Fund | SGRFX | 816335103 | ||||
| Xxxxxxxx Frontier Fund | SLFRX | 816334106 | ||||
| Xxxxxxxx Income & Growth Fund | SINFX | 816338107 | ||||
| Xxxxxxxx Large-Cap Value Fund | SLVAX | 816356109 | ||||
| Xxxxxxxx Smaller-Cap Value Fund | SSCVX | 816356406 | ||||
| Xxxxxxxx Cash Management Fund | SCMXX | 816329106 | ||||
| Xxxxxxxx LaSalle Monthly Div Real Estate Fund | SREAX | 00000X000 | ||||
| Xxxxxxxx Communications & Info Fund | SLMCX | 816333108 | ||||
| Xxxxxxxx Global Smaller Co. Fund | SHGAX | 00000X000 | ||||
| Xxxxxxxx International Growth Fund | SHIFX | 00000X000 | ||||
| Xxxxxxxx Global Technology Fund | SHGTX | 00000X000 | ||||
| Xxxxxxxx Global Growth Fund | SHGOX | 00000X000 | ||||
| Xxxxxxxx Emerging Markets Fund | SHEMX | 00000X000 | ||||
| Xxxxxxxx Core Fixed Income Fund | SIVAX | 00000X000 | ||||
| U.S. Government Securities Fund | SUSGX | 816336101 | ||||
| High-Yield Bond Fund | SHYBX | 816336309 | ||||
| Time Horizon 00 Xxxx | XXXXX | 816352108 | ||||
| Time Horizon 20 Fund | SATWX | 816352504 | ||||
| Time Horizon 10 Fund | SANAX | 816352819 | ||||
| Harvester Fund | SATVX | 816352850 | ||||
| TargETFund Core | SHVAX | 00000X000 | ||||
| TargETFund 2015 | STJAX | 00000X000 | ||||
| TargETFund 2025 | STKAX | 00000X000 | ||||
| TargETFund 2035 | XXXXX | 00000X000 | ||||
| XxxxXXXxxx 2045 | STQAX | 00000X000 | ||||
| Class B | Fund Name | Symbol | CUSIP | |||
| Xxxxxxxx Capital Fund | SLCBX | 816326300 | ||||
| Xxxxxxxx Common Stock Fund | SBCSX | 816332308 | ||||
| Xxxxxxxx Growth Fund | SGBTX | 816335301 | ||||
| Xxxxxxxx Frontier Fund | SLFBX | 816334304 | ||||
| Xxxxxxxx Income & Growth Fund | SIBBX | 816338305 | ||||
| Xxxxxxxx Large-Cap Value Fund | SLVBX | 816356208 | ||||
| Xxxxxxxx Smaller-Cap Value Fund | SSCBX | 816356505 | ||||
| Xxxxxxxx Cash Management Fund | SCBXX | 816329403 | ||||
| Xxxxxxxx LaSalle Monthly Div Real Estate Fund | SREBX | 00000X000 | ||||
| Xxxxxxxx Communications & Info Fund | SLMBX | 816333306 | ||||
| Xxxxxxxx Global Smaller Co. Fund | SHGBX | 00000X000 | ||||
| Xxxxxxxx International Growth Fund | SHBIX | 00000X000 | ||||
| Xxxxxxxx Global Technology Fund | SHTBX | 00000X000 | ||||
| Xxxxxxxx Global Growth Fund | SHOBX | 00000X000 | ||||
| Xxxxxxxx Emerging Markets Fund | SHEBX | 00000X000 | ||||
| Xxxxxxxx Core Fixed Income Fund | SIVBX | 00000X000 | ||||
| U.S. Government Securities Fund | SXGMX | 816336705 | ||||
| High-Yield Bond Fund | SBBHX | 816336606 | ||||
| Time Horizon 30 Fund | SBTHX | 816352207 | ||||
| Time Horizon 20 Fund | STWBX | 816352603 | ||||
| Time Horizon 10 Fund | SANBX | 816352827 | ||||
| Harvester Fund | STVBX | 816352868 | ||||
| Class C | Fund Name | Symbol | CUSIP | |||
| Xxxxxxxx Capital Fund | SCLCX | 816326409 | ||||
| Xxxxxxxx Common Stock Fund | SCKCX | 816332407 | ||||
| Xxxxxxxx Growth Fund | SGRCX | 816335400 | ||||
| Xxxxxxxx Frontier Fund | SLFCX | 816334403 | ||||
| Xxxxxxxx Income & Growth Fund | SIMCX | 816338404 | ||||
| Xxxxxxxx Large-Cap Value Fund | SVLCX | 816356703 | ||||
| Xxxxxxxx Smaller-Cap Value Fund | SVMCX | 816356802 | ||||
| Xxxxxxxx Cash Management Fund | SMCXX | 816329502 | ||||
| LaSalle Monthly Div Real Estate Fund | SRECX | 00000X000 | ||||
| Xxxxxxxx Communications & Info Fund | SCICX | 816333405 | ||||
| Xxxxxxxx Global Smaller Co. Fund | SHGCX | 00000X000 | ||||
| Xxxxxxxx International Growth Fund | SITCX | 00000X000 | ||||
| Xxxxxxxx Global Technology Fund | SHTCX | 00000X000 | ||||
| Xxxxxxxx Global Growth Fund | SHOCX | 00000X000 | ||||
| Xxxxxxxx Emerging Markets Fund | SHECX | 00000X000 | ||||
| Xxxxxxxx Core Fixed Income Fund | SIVCX | 00000X000 | ||||
| U.S. Government Securities Fund | SGVCX | 816336887 | ||||
| High-Yield Bond Fund | SHCCX | 816336804 | ||||
| Time Horizon 30 Fund | STHCX | 816352306 | ||||
| Time Horizon 20 Fund | STWCX | 816352702 | ||||
| Time Horizon 10 Fund | STNCX | 816352835 | ||||
| Harvester Fund | STVCX | 816352876 | ||||
| TargETFund Core | SHVCX | 00000X000 | ||||
| TargETFund 2015 | STJCX | 00000X000 | ||||
| TargETFund 2025 | STKCX | 00000X000 | ||||
| TargETFund 2035 | STZCX | 00000X000 | ||||
| TargETFund 2045 | STQCX | 00000X000 | ||||
| Class D | Fund Name | Symbol | CUSIP | |||
| Xxxxxxxx Capital Fund | SLCDX | 816326201 | ||||
| Xxxxxxxx Common Stock Fund | SCSDX | 816332209 | ||||
| Xxxxxxxx Growth Fund | SGRDX | 816335202 | ||||
| Xxxxxxxx Frontier Fund | SLFDX | 816334205 | ||||
| Xxxxxxxx Income & Growth Fund | SINDX | 816338206 | ||||
| Xxxxxxxx Large-Cap Value Fund | SLVDX | 816356307 | ||||
| Xxxxxxxx Smaller-Cap Value Fund | SSVDX | 816356604 | ||||
| Xxxxxxxx Cash Management Fund | SCDXX | 816329304 | ||||
| LaSalle Monthly Div Real Estate Fund | SREDX | 00000X000 | ||||
| Xxxxxxxx Communications & Info Fund | SLMDX | 816333207 | ||||
| Xxxxxxxx Global Smaller Co. Fund | SHGDX | 00000X000 | ||||
| Xxxxxxxx International Growth Fund | SHIDX | 00000X000 | ||||
| Xxxxxxxx Global Technology Fund | SHTDX | 00000X000 | ||||
| Xxxxxxxx Global Growth Fund | SHODX | 00000X000 | ||||
| Xxxxxxxx Emerging Markets Fund | SHEDX | 00000X000 | ||||
| Xxxxxxxx Core Fixed Income Fund | SIVDX | 00000X000 | ||||
| U.S. Government Securities Fund | SUSDX | 816336507 | ||||
| High-Yield Bond Fund | SHYDX | 816336408 | ||||
| Time Horizon 30 Fund | STHDX | 816352405 | ||||
| Time Horizon 20 Fund | STWDX | 816352801 | ||||
| Time Horizon 10 Fund | STNDX | 816352843 | ||||
| Harvester Fund | STVDX | 816352884 | ||||
| TargETFund Core | SHVDX | 00000X000 | ||||
| TargETFund 2015 | XXXXX | 00000X000 | ||||
| XxxxXXXxxx 2025 | STKDX | 00000X000 | ||||
| TargETFund 2035 | STZDX | 00000X000 | ||||
| TargETFund 2045 | STQDX | 00000X000 | ||||
| Class R | Fund Name | Symbol | CUSIP | |||
| Xxxxxxxx Capital Fund | SCFRX | 816326607 | ||||
| Xxxxxxxx Common Stock Fund | SCSRX | 816332605 | ||||
| Xxxxxxxx Growth Fund | SGFRX | 816335608 | ||||
| Xxxxxxxx Frontier Fund | SFFRX | 816334601 | ||||
| Xxxxxxxx Income & Growth Fund | SIFRX | 816338503 | ||||
| Xxxxxxxx Large-Cap Value Fund | SLVRX | 816356851 | ||||
| Xxxxxxxx Smaller-Cap Value Fund | SSVRX | 816356844 | ||||
| Xxxxxxxx Cash Management Fund | SMRXX | 816329700 | ||||
| LaSalle Monthly Div Real Estate Fund | SRERX | 00000X000 | ||||
| Xxxxxxxx Communications & Info Fund | SCIRX | 816333603 | ||||
| Xxxxxxxx Global Smaller Co. Fund | SGSRX | 00000X000 | ||||
| Xxxxxxxx International Growth Fund | SIGRX | 00000X000 | ||||
| Xxxxxxxx Global Technology Fund | SGTRX | 00000X000 | ||||
| Xxxxxxxx Global Growth Fund | SGGRX | 00000X000 | ||||
| Xxxxxxxx Emerging Markets Fund | SERRX | 00000X000 | ||||
| Xxxxxxxx Core Fixed Income Fund | SIVRX | 00000X000 | ||||
| U.S. Government Securities Fund | SGVRX | 816336853 | ||||
| High-Yield Bond Fund | SHYRX | 816336861 | ||||
| TargETFund Core | SHVRX | 00000X000 | ||||
| TargETFund 2015 | XXXXX | 00000X000 | ||||
| XxxxXXXxxx 2025 | XXXXX | 00000X000 | ||||
| XxxxXXXxxx 2035 | STZRX | 00000X000 | ||||
| TargETFund 2045 | STQRX | 00000X000 | ||||
| Class I | Fund Name | Symbol | CUSIP | |||
| Xxxxxxxx Capital Fund | SCLIX | 816326508 | ||||
| Xxxxxxxx Common Stock Fund | SCSIX | 816332506 | ||||
| Xxxxxxxx Growth Fund | SGFIX | 816335509 | ||||
| Xxxxxxxx Frontier Fund | SFFIX | 816334502 | ||||
| Xxxxxxxx Income & Growth Fund | SINIX | 816338602 | ||||
| Xxxxxxxx Large-Cap Value Fund | SLVIX | 816356877 | ||||
| Xxxxxxxx Smaller-Cap Value Fund | SSVIX | 816356869 | ||||
| Xxxxxxxx Cash Management Fund | SMIXX | 816329601 | ||||
| LaSalle Monthly Div Real Estate Fund | SREIX | 00000X000 | ||||
| Xxxxxxxx Communications & Info Fund | SCMIX | 816333504 | ||||
| Xxxxxxxx Global Smaller Co. Fund | SGSIX | 00000X000 | ||||
| Xxxxxxxx International Growth Fund | SIGIX | 00000X000 | ||||
| Xxxxxxxx Global Growth Fund | SGLIX | 00000X000 | ||||
| Xxxxxxxx Emerging Markets Fund | SERIX | 00000X000 | ||||
| Xxxxxxxx Core Fixed Income Fund | SIVIX | 00000X000 | ||||
| High-Yield Bond Fund | SHIIX | 816336879 | ||||
| TargETFund Core | SHVIX | 00000X000 | ||||
| TargETFund 2015 | STJIX | 00000X000 | ||||
| TargETFund 2025 | STKIX | 00000X000 | ||||
| TargETFund 2035 | STZIX | 00000X000 | ||||
| TargETFund 2045 | STQIX | 00000X000 |
ATTACHMENT B
Part I. Fund Description for the Voice Response System
| • | The Fund Provider will provide to Xxxxxxx Xxxxx, or a common service provider designated by Xxxxxxx Xxxxx within ten (10) days of the end of each month, the Fund’s average annual return for the 1, 5, and 10 year periods ending the current month on a Net Asset Value basis. |
| • | The Fund Provider will provide to Xxxxxxx Xxxxx a description of the Fund and a statement of objective in a mutually acceptable format suitable for use in Xxxxxxx Xxxxx’x Voice Response System. |
Part II. Proposal Information and Materials
The Fund Provider will provide to Xxxxxxx Xxxxx the following information and materials on an as needed basis, as requested by Xxxxxxx Xxxxx:
| • | A supply of materials relating to the Funds (prospectuses, quarterly reports and other brochures) to include with proposal requests from prospects. |
| • | Specific investment performance information that may be requested in a “Request For Proposal” that cannot be obtained from the prospectus. This would include specific calculations on various performance parameters and will require an aggressive turnaround time (usually 5 business days). |
| • | A supply of one (1) page fund profiles (fact sheets) with current fund performance information, that the Fund Provider has had approved by the NASD for participant communications. This supply will be made available in sufficient quantities to a fulfillment center of Xxxxxxx Xxxxx’x choosing, by the last business day of the month following every calendar quarter-end (March, June, September, and December). |
ATTACHMENT C
FEE SCHEDULE
Part I. Section Intentionally Blank
Part II. The Fund Provider or the Fund Shareholder Agent (as noted below) shall pay to Xxxxxxx Xxxxx for each Fund the fees as provided under Part III of this Attachment C based on the following fee elements:
1. Processing Fee (Payable by the Fund Shareholder Agent)
(i) Class “A” and “R” Class shares (excluding Funds of SeligmanHorizon ETF Portfolios, Inc.)
$16.00 annually per each position of each Fund in a Plan, which is comprised of front loaded share (class A or class R Shares).
(ii) Class “B”, Class “C” and “D” Class shares (excluding Funds of SeligmanHorizon ETF Portfolios, Inc.)
The processing fee will be $19.00 annually per each position of each Fund which is comprised of other than front loaded shares (class B or class D shares). Payment shall be made monthly based upon the number of participants of a Fund who hold shares of such Fund in a Plan for any part of the subject month.
(iii) TargETFunds of SeligmanHorizon ETF Portfolios, Inc.: Class “A”, Class “C”, Class “D” and Class “R” shares
The processing fee will be an amount equal to the product of twenty-five basis points (0.25%) and the average daily amount invested by the Plans in each Fund. Payment shall be made monthly, calculated in accordance Section 10 of this Supplemental Fund Services Agreement.
2. Service Fee (Payable by the Fund Provider)
(i) Class “A”, Class “B”, Class “C” and Class “D” Shares (including Funds of SeligmanHorizon ETF Portfolios, Inc.)
An amount equal to the product of twenty basis points (0.20%) and the average daily amount invested by the Plans in each Fund. Payment shall be made monthly, calculated in accordance with Section 10 of this Supplemental Fund Services Agreement.
(ii) ) Class “R” Shares (including Funds of SeligmanHorizon ETF Portfolios, Inc.)
An amount equal to the product of ten basis points (0.10%) and the average daily amount invested by the Plans in each Fund. Payment shall be made monthly, calculated in accordance with Section 10 of this Supplemental Fund Services Agreement
(iii) Class “I” Shares
An amount equal to the product of twenty basis points (0.20%) and the average daily amount invested by the Plans in each Fund. Payment shall be made monthly, calculated in accordance with Section 10 of this Supplemental Fund Services Agreement
3. Distribution Fee
An amount equal to the product of the appropriate Basis Point Factor set forth in the following table and the average daily amount invested by Plans that are eligible to purchase that class of shares in each Fund.
| Share Class |
Basis Point Factor | |
| “D” shares | One-hundred basis points (1.00%) | |
| “C” shares | One-hundred basis points (1.00%) | |
| “B” shares | One-hundred basis points (1.00%) | |
| “R” shares | Fifty basis points (0.50%) | |
| “A” shares | Twenty-five basis points (0.25%) | |
| “Institutional” shares | Zero (0.00%) | |
The Distribution Fee for shares acquired by a Plan shall be an amount equal to the product of the Basis Point Factor applicable to the Share Class purchased by the Plan (Share Class eligibility for each Plan is determined in accordance with Xxxxxxx Xxxxx’x established policies and procedures) and the average daily amount invested by such Plan in the Fund. Payment shall be made monthly, calculated in accordance with Section 10 of this Supplemental Fund Services Agreement.
Part III. The Fund Provider or Fund Shareholder Agent (as noted above) will pay to Xxxxxxx Xxxxx a monthly (prorated where appropriate) fee as follows:
1. With respect to transactions and fund positions entered into on behalf of or held by Plans subject to the arrangements described in Section 2 (a) (ML Recordkeeping Arrangements) and Section 2(b) of this Supplemental Fund Services Agreement (ML Connect Arrangements and TPA Recordkeeping Arrangements), a prorata portion of the annual Processing Fee described in Part II (1) of this Attachment C and a prorata portion of the annual Service Fee described in Part II (2) of this Attachment C, and a prorata portion of the annual Distribution Fee described in Part II(3) of this Attachment C.
2. With respect to transactions and fund positions entered into on behalf of or held by Plans subject to the arrangements described in Section 2 (c) of this Supplemental Fund Services Agreement (Investment Only Arrangements), a prorata portion of the annual Processing Fee described in Part II (1) for a single position and a prorata portion of the annual Service Fee described in Part II (2) of this Attachment C, and a prorata portion of the annual Distribution Fee described in Part II(3) of this Attachment C..
Part IV. Subject to the terms of this Agreement, the Fund Provider acknowledges that Xxxxxxx Xxxxx intends to implement the following policies and procedures relating to the Funds:
| 1. | Initial Sales Charge shall be waived. |
| 2. | Contingent Deferred Sales Charge shall be waived. |
| 3. | Prospectus based Redemption Fees shall be waived. |
| 4. | Exchange Fees shall be waived. |
| 5. | Share class eligibility and truncation shall be determined on a “plan level” basis, in accordance with Xxxxxxx Xxxxx’x established policies and procedures, except that purchase of Class I shares shall comply with Section 8(b). |
ATTACHMENT D
Redemption Fee Methodology for Certain Defined Contribution Employee Benefit Plans
This redemption fee methodology is resident on the Xxxxxxx Xxxxx proprietary plan/participant recordkeeping system (plans subject to a ML Recordkept Arrangement described in Section 2(a) of the Agreement). The methodology is only available under circumstances where a defined contribution plan maintains its assets in a Xxxxxxx Xxxxx securities account and the records of participant directed transactions are maintained on the Xxxxxxx Xxxxx proprietary recordkeeping system. This methodology is not available where a plan’s assets are maintained with another financial services provider or where the underlying participant transactions are not maintained on the Xxxxxxx Xxxxx proprietary recordkeeping system.
At the direction of a Fund Provider, Xxxxxxx Xxxxx will assign a redemption fee indicator on its recordkeeping system for a designated mutual fund, with the effect that redemption fees will be assessed, collected and remitted for certain participant directed transactions in that fund Such redemption fees will be assessed on the transactions and in accordance with the methodology set forth herein. Once in place, the redemption fee will apply to participant transactions for all plans supported on the Xxxxxxx Xxxxx proprietary recordkeeping system, without exception.
The notification from the Fund Provider directing implementation of the redemption methodology will contain the following information and otherwise comply with procedures adopted by Xxxxxxx Xxxxx:
| 1. | Funds assessing fees |
| 2. | Minimum holding periods (expressed in calendar days) |
| 3. | Percentage amount of fee |
The fee will be assessed as a percentage amount of the gross proceeds on shares tracked on the Xxxxxxx Xxxxx recordkeeping system that are redeemed prior to the specified minimum holding period. The holding period will be a number of calendar days and mutual fund shares shall be “aged” for purposes of determining whether they are subject to the redemption fee shall be made utilizing utilizing a “First In First Out” accounting method.
Transactions Subject to Redemption Fees
The Xxxxxxx Xxxxx recordkeeping system has the capability to assess redemption fees only with respect to certain participant directed mutual fund share transfers, subject to the limitations and exclusions set forth below. The Xxxxxxx Xxxxx recordkeeping system identifies certain purchases of mutual fund shares as potentially subject to a redemption fee. Shares purchased in one of those transactions are “tracked” and a record of the purchase date is maintained. When those shares are redeemed in a transaction that may be subject to the redemption fee, the system logic compares the historical record to the criteria provided by the Fund Provider to determine whether a redemption fee will be assessed.
Excluded Purchase Transactions
Shares purchased pursuant to certain transactions are not tracked on the Xxxxxxx Xxxxx recordkeeping system and a redemption fee will not be assessed on any subsequent redemption of those shares. The following purchase transactions are not tracked on the Xxxxxxx Xxxxx recordkeeping system; (i) purchases incidental to a plan merger, (ii) purchases arising out of the transfer of a participant account balance by reason of a roll-over contribution from another plan, (iii) purchases arising out of a standing investment direction applied to recurring participant and sponsor contributions, (iv) purchases arising out of a standing investment direction applied to a loan repayment, (v) purchases incidental to a rebalancing program initiated by someone other than the participant under a branded service (i.e., Goal Manager and Advice Access), , and (vi) purchases arising out of the implementation of branded service strategy initiated by someone other than the participant (i.e., Goal Manager and Advice Access). A redemption fee will not be assessed on the subsequent sale of mutual fund shares purchased through any of these transactions.
Excluded Redemption Transactions
Shares redeemed pursuant to certain transactions are not tracked on the Xxxxxxx Xxxxx recordkeeping system and a redemption fee will not be assessed on those transactions, without regard to the timing or circumstances of the earlier purchase of those shares. The following redemption transactions are not tracked on the Xxxxxxx Xxxxx recordkeeping system; (i) redemptions incidental to a plan divestiture, (ii) redemptions arising out of the transfer of a participant account balance by reason of a withdrawal from the plan or a partition of the account, (iii) redemptions incidental to funding a plan loan, and (iv) redemptions incidental to rebalancing program under a branded service where the redemption is initiated by someone other than the participant (i.e., the Goal Manager service and Advice Access).
Payment
Xxxxxxx Xxxxx will assess and collect redemption fees daily on behalf of the Fund and will remit the fees to the Fund Provider on a monthly basis. Redemption fees will be remitted to the Fund Provider or its designee on behalf of Xxxxxxx Xxxxx by its affiliate, Financial Data Services Inc.
Special Note
The Xxxxxxx Xxxxx recordkeeping system redemption fee methodology does not recognize differences between participant directed transactions based on either the size of the transaction or the personal circumstances of the participant. Accordingly, redemption fees will be assessed, collected and remitted to Fund Providers without regard to any deminimus exclusions or exemptions for “hardship” circumstances that might otherwise apply to participant transactions.
Example
The following is an example of the operation of the Xxxxxxx Xxxxx recordkeeping system redemption fee capability:
The Fund Provider directs Xxxxxxx Xxxxx to implement a redemption fee on XYZ International Fund. The minimum holding period is 10 days and the fee amount is 2%. A participant directs the purchase of 100 shares of XYZ International Fund on Day 1. A contribution is used to purchase 50 shares on Day 5. The participant directs the purchase of 150 more shares on Day 9. The total share holding in the fund is now 300 shares. The participant then directs that 200 shares be redeemed on Day 12. The participant will be assessed a 2% fee of the gross proceeds on 50 of the shares redeemed.
Changes
Notwithstanding any provision of this Attachment or the Agreement to the contrary, Xxxxxxx Xxxxx reserves the right, in its sole discretion, to modify and enhance the system capability described in this Attachment. Any such modification or enhancement will become effective following reasonable notice of the change to Fund Provider.
ATTACHMENT E
Transaction Limitation Methodology for Certain Defined Contribution Employee Benefit Plans
The methodology for limiting participant transaction frequency described herein is resident on the Xxxxxxx Xxxxx proprietary plan/participant recordkeeping system. This methodology is only available under circumstances where a defined contribution plan maintains its assets in a Xxxxxxx Xxxxx securities account and the records of participant directed transactions are maintained on the Xxxxxxx Xxxxx proprietary recordkeeping system. This methodology is not available where a plan’s assets are maintained with another financial services provider or where the underlying participant transactions are not maintained on the Xxxxxxx Xxxxx proprietary recordkeeping system.
At the direction of a Fund Provider, Xxxxxxx Xxxxx will assign an indicator on its recordkeeping system for a designated mutual fund that will be effective for transactions in shares of that fund for a single plan supported on the Xxxxxxx Xxxxx recordkeeping system, for all such plans or for a selected participant or participants in one or more of those plans. The effect of this action will be to limit (i) purchases following redemptions or (ii) purchases following redemptions and redemptions following purchases for the designated plan, plans, participant or participants, within time limitations determined by the Fund Provider.
The notification from the Fund Provider directing implementation of the transaction limitation methodology will contain the following information and otherwise comply with procedures adopted by Xxxxxxx Xxxxx:
| 1. | Funds requiring transaction limitations |
| 2. | Transaction restriction period expressed in either calendar or business days (note detail below) |
| 3. | Transactions subject to the restriction period |
| 4. | Identification of plans and participants subject to the restriction |
Trade Limitation Methodology
There are two trade limitation options available to Fund Providers.
Minimum Purchase and Redemption Restriction Period Trading Limitations
| • | This restricted period limitation applies to both purchases and redemptions and is limited to transactions for all participants in a plan. |
| • | The restricted period limitation is measured in business days or calendar days. |
Purchase Side Restriction Period Trading Limitations
| • | Purchases are restricted for a minimum period following redemption of fund shares. |
| • | This restriction may be applied to all transactions for a plan or selected participants |
| • | The restricted period limitation is measured in business or calendar days. |
Minimum Transaction Limitation Period
The transaction limitation methodology resident on the Xxxxxxx Xxxxx recordkeeping system will “age” fund share holdings for purposes of trade limitations measured form the date of purchase but does not “age” shares for purposes of trade limitations measured from the date of redemption. Accordingly, where a fund has elected to prevent purchases within a restricted period following a redemption, the restriction will operate to prevent any purchase of those shares within the restricted period. Conversely, where the restriction is applied in the context of a purchase of shares, those shares (and only those shares) must be held for the minimum holding period.
Example #1:
A participant holds 1,000 shares of XYZ International Fund on day 1 and has held such shares for over three months. The Fund Provider implements a plan level Purchase Side Restriction Period Trading Limitation restriction of fourteen calendar days. Participant elects to sell 500 hundred shares of XYZ fund on calendar day 2. If the participant elects to purchase any shares of this fund on day 5 the restriction would be enforced to prevent a purchase until calendar day 15.
Example #2:
A participant holds 1,000 shares of XYZ International Fund on day 1 and has held such shares for over three months. The Fund Provider has implemented a plan level Minimum Purchase and Redemption Restriction Period Trading Limitations restriction of fourteen business days. Participant elects to sell 500 hundred shares of XYZ fund on business day 5. If the participant elects to purchase any shares of this fund on business day 5 the restriction would be enforced to prevent a purchase until business day 19.
Example #3:
A participant elects to buy 1,000 XYZ International Fund shares on business day 1. The Fund Provider has implemented a plan level Minimum Purchase and Redemption Restriction Period Trading Limitations restriction of fourteen business days. Upon buying the shares, an update is made to the Xxxxxxx Xxxxx recordkeeping system indicating the number of restricted shares. If the participant elects to sell 500 shares of this fund on business day 2 the restriction would be enforced as to the shares purchased on business day 1. If the participant held XYZ International Fund shares in excess of the 1,000 shares purchased on business day 1 (and held such shares in excess of the fourteen business day holding period), the redemption transaction would be processed to the extent of such prior share holdings.
Individual Participant Restrictions
The transaction limitation methodology resident on the Xxxxxxx Xxxxx recordkeeping system will permit the application of transaction restriction limits on individual participants, including preventing the participant from entering a purchase order for the fund shares while a participant in the plan for an indefinite period of time.
Special Note:
The capability described in this Attachment may, at the direction of a plan sponsor, be incorporated in a plan and participant transactions investment directions restricted accordingly. Under those circumstances, the restrictions are part of the governance structure of the plan and are not subject to control by the Fund Provider.
Changes
Notwithstanding any provision of this Attachment or the Agreement to the contrary, Xxxxxxx Xxxxx reserves the right, in its sole discretion, to modify and enhance the system capability described in this Attachment. Any such modification or enhancement will become effective following reasonable notice of the change to Fund Provider.
