FUND SERVICES AGREEMENT
AGREEMENT dated as of July __, 1996 by and between Xxxxxxx Xxxxx Xxxxxx,
Xxxxxx & Xxxxx Incorporated ("Xxxxxxx Xxxxx") and Lord, Xxxxxx & Co.
("Fund Provider").
WHEREAS, Xxxxxxx Xxxxx has been retained by certain sponsors
of qualified employee benefit plans (individually, a "Plan" and, collectively,
the "Plans") to provide recordkeeping and related administrative services,
including the processing of orders for investment and reinvestment of Plan
assets in the Plan's investment options, on behalf of such Plans; and
WHEREAS, the Fund Provider is the principal underwriter or
distributor for certain funds, each of which is an open-end investment company
registered under the Investment Company Act of 1940, as amended (individually,
the "Fund" and, collectively, the "Funds"), which the Plans wish to offer as
investment options; and
WHEREAS, the Fund Provider desires to retain Xxxxxxx Xxxxx to
perform certain administrative services on behalf of the Funds and Xxxxxxx Xxxxx
is willing and able to furnish such services on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, Xxxxxxx Xxxxx and the Fund Provider agree as
follows:
1. XXXXXXX XXXXX SERVICES. Xxxxxxx Xxxxx agrees to provide the
---------------------- administrative services specified in Attachment A
hereto (the "Services") for the benefit of the Plans who offer the Fund or
Funds as an investment option(s) to participants in the Plans (the
"Participants") and whose shares are included in the master account
referred to in paragraph 1 of Attachment X. Xxxxxxx Xxxxx agrees that it
will maintain and preserve all records as required by law to be maintained
and preserved in connection with providing the Services, and will otherwise
comply with all law, rules and regulations applicable to the Services. Upon
request of the Fund Provider acting in its capacity described herein,
Xxxxxxx Xxxxx shall provide copies of all the historical records relating
to transactions involving the Funds and the Plans, all written
communication regarding those Funds to and from such Plans and other
materials, in each case as may reasonably be requested to enable the Funds
or their respective representatives to monitor and review the Services, or
to comply with any request of the board of directors or trustees of the
Funds or of a governmental body, self-regulatory organization or a
shareholder Plan. Xxxxxxx Xxxxx agrees that it will permit the Fund
Provider or its representative to have reasonable access to its personnel
and records in order to facilitate the monitoring of the quality of the
Services.
2. TRANSACTIONS IN THE FUNDS. The Fund Provider will purchase, exchange and
redeem shares of each Fund for the Plans at such Fund's net asset
valuewith a waiver of the contingent deferred sales charge or redemption
fee, if any. Dividends and capital gains distributions will be
automatically reinvested in
full and fractional shares of the Fund at net asset value next determined
on the reinvestment date for such dividends and distributions. The Fund
Provider shall comply with all law, rules and regulations applicable to it
by virtue of entering into this Agreement and shall maintain and preserve
all records as required by any such laws, rules and regulations.
3. PROCEDURES AND TIMING OF TRANSACTIONS. On each day the New York Stock
Exchange is open for business ("Business Day"), Xxxxxxx Xxxxx will receive
instructions from Participants for the purchase, redemption and exchange of
shares of the Funds. Instructions received by Xxxxxxx Xxxxx after 4:00 p.m.
Eastern Standard Time (EST) on any Business Day will be treated as if
received on the next following Business Day.
a. The parties shall process the transactions relating to the
instructions received from Participants in accordance with the
procedures set forth in Attachment B hereto.
4. FUND INFORMATION. The Fund Provider will provide the information set
---------------- forth in Attachment C hereto for each of the Funds. The
Fund Provider hereby agrees that Xxxxxxx Xxxxx may use the information
provided by the Fund Provider pursuant to this Section 4 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 plan services.
5. PROSPECTUS AND PROXY DELIVERY. The Fund Provider shall provide Xxxxxxx
Xxxxx with a sufficient quantity of prospectuses for each Fund to be used
in conjunction with the transactions contemplated by this Agreement. Upon
request, the Fund Provider shall also provide to Xxxxxxx Xxxxx, in
sufficient quantity for each Participant invested in the Fund, proxy
materials, financial statements and reports and other material relating to
each Fund.
6. COMPENSATION AND EXPENSES. In consideration of the Services by Xxxxxxx
Xxxxx, the Fund Provider will pay Xxxxxxx Xxxxx during the term of this
agreement the fees set forth in Attachment D hereto. Xxxxxxx Xxxxx will
calculate the amount of the fees and payment will be due within 30 days of
receipt by the Fund provider of Xxxxxxx Xxxxx'x invoice for such fees.
7. REPRESENTATIONS. Xxxxxxx Xxxxx represents that it has full power and
authority to enter into and perform this Agreement. Xxxxxxx Xxxxx also
hereby represents that it will promptly notify the Fund Provider in the
event that Xxxxxxx Xxxxx is for any reason unable to perform any of its
obligations under this Agreement.
a. The Fund Provider represents that it has full power and
authority to enter into and perform this Agreement. The Fund
Provider also hereby represents that it will promptly notify
Xxxxxxx Xxxxx in the event that the Fund Provider is for any
reason unable to perform and of its obligations under this
Agreement.
8. USE OF NAMES. Except as otherwise expressly provid ed for in this
Agreement, neither the Fund Provider nor the Funds shall use the name or
logo of Xxxxxxx Xxxxx or any variation of such name or logo or any
tradename or service xxxx of Xxxxxxx Xxxxx without Xxxxxxx Xxxxx'x prior
written consent, which may be unreasonably withheld. Except as otherwise
expressly provided for in this Agreement, Xxxxxxx Xxxxx shall not use the
name or logo of the Fund Provider, or any variation of such name or logo or
any tradename or service xxxx of the Fund Provider without the Fund
Provider's prior written consent, which may not be unreasonably withheld.
9. INDEMNITY. The Fund Provider shall indemnify and hold harmless Xxxxxxx
Xxxxx and its directors, officers, employees and agents, from and
against all claims, liabilities, losses, damages or expenses, including
reasonable attorneys' fees, imposed on Xxxxxxx Xxxxx or incurred by Xxxxxxx
Xxxxx to the extent arising out of any act of commission or omission by the
Fund Provider relating to this Agreement or the services rendered
hereunder, including, but not limited to, any loss incurred by Xxxxxxx
Xxxxx due to errors in the Fund information provided to Xxxxxxx Xxxxx
pursuant to Section 4 hereunder or any loss related to discrepancies
between the participant balances maintained by Xxxxxxx Xxxxx and the Fund
balances maintained by the Fund Provider due to errors caused by the Fund
Provider.
x. Xxxxxxx Xxxxx shall indemnify and hold harmless the Fund Provider
and its directors, officers, employees and agents, from and
against all claims, liabilities, losses, damages or expenses,
including reasonable attorneys' fees, imposed on, or incurred by,
the Fund Provider to the extent arising out of any act of
commission or omission by Xxxxxxx Xxxxx relating to this
Agreement or the services rendered hereunder, including, but not
limited to, any loss related to discrepancies between the
participant balances maintained by Xxxxxxx Xxxxx and the Fund
balances maintained by the Fund Provider due to errors caused by
Xxxxxxx Xxxxx.
10. CONFIDENTIALITY. Each party will treat confidentially, by not
disclosing to unaffiliated persons, all information and documentation
provided by the other party or relating to the Plans (including the
identity of the Plans and information regarding the Participants)
except (I) to the Trustee of the Plans, any administrator of the Plans
or any person as may be necessary in connections with the proper
operation of this Agreement and the Plans, (II) in connection with an
audit or regulatory examination, or (III) as may otherwise be legally
required.
11. TERMINATION; WITHDRAWAL OF OFFERING. Either party may terminate this
Agreement upon
ten (10) days written notice to the other party; provided, however,
that the Fund Provider reserves the right, without notice, to suspend
sales or to withdraw the offering of shares of any Fund, in whole or in
part, or to make a limited offering of shares of the Fund in the event
that (A) any regulatory body commences formal proceedings against the
Fund Provider or the Fund which proceeding the Fund Provider or the
Fund believes will have a material adverse impact on the Fund
Provider's ability to perform its obligations under this Agreement or
(B) in the judgment of the Fund's management, the Fund's declining to
accept any additional instructions for the purchase or sale of shares
of the Funds is warranted by market, economic or political conditions,
or (C) the Fund is unable to offer its shares without violating a
____________. Notwithstanding the foregoing, this Agreement shall be
terminated immediately upon either (I) a material breach by either
party which is not cured within 30 days after notice from the other
party, or (II) upon termination of services by either party to the
Plans. Termination of this Agreement, however, shall not affect the
obligations of the parties to make payments under Attachment B for
instructions involving shares of the Funds received by Xxxxxxx Xxxxx
prior to such termination.
12. 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.
13. SURVIVAL. The provisions of Sections 8, 9, and 10 of this Agreement shall
survive termination of this Agreement.
14. AMENDMENT. This Agreement may not be modified or amended except by an
instrument in writing signed by Xxxxxxx Xxxxx and the Fund Provider.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSIDERED AS EXECUTED AND DELIVERED
IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THAT STATE.
16. ENTIRE AGREEMENT. This Agreement, including the Attachments hereto,
constitutes the entire agreement between the parties with respect to the
matters dealt with herein, and supersedes all previous agreements, written
or oral, with respect to such matters.
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.
Fund Provider
By:
Print Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
Print Name:
Title:
ATTACHMENT A
Xxxxxxx Xxxxx Services
Pursuant to the Agreement by and between the parties hereto, Xxxxxxx Xxxxx shall
perform the following Services:
1. Maintain separate records for each Plan which offers the Funds as an
investment option(s) to Participants, which records shall reflect the shares
purchased and redeemed and share balances. Xxxxxxx Xxxxx will maintain a single
master account with the transfer agent of each Fund on behalf of the Plans for
which Xxxxxxx Xxxxx Trust Company or one of its affiliates is acting as trustee
and such account shall be in the name of "Xxxxxxx Xxxxx Trust Company, Trustee"
or its nominee as the record owner of the shares owned by such Plans. In the
case of a Plan for which Xxxxxxx Xxxxx Trust Company or one of its affiliates is
not acting as trustee, a separate account will be established in the name of the
trustee of such Plan.
2. Disburse or credit to the Plans all proceeds of redemptions of
shares of the Fund and all dividends and other distributions not reinvested in
shares of the Fund.
3. Prepare and transmit to the Plans periodic statements showing the
total number of shares owned by the Plans as of the statement closing date,
purchases and redemptions of Fund shares by the Plans during the period covered
by the statement and the dividends and other distributions paid to the Plans
during the statement period (whether paid in cash or reinvested in Fund shares).
4. Transmit to the Fund's transfer agent purchase and redemption orders
on behalf of the Plans in accordance with the procedures set forth in Attachment
B to the Agreement.
ATTACHMENT B
Procedures and Timing of Transactions Relating to
Purchases and Redemptions of Shares of the
funds Pursuant to Section 3 of the Agreement
(1) By 10:00 a.m. EST on the next Business Day following receipt of
such instructions, Xxxxxxx Xxxxx will provide to the fund Provider via facsimile
a report detailing the instructions received from Participants the prior
Business Day for each of the Funds. For purchases, the report will reflect the
dollar amount to be invested in each Fund (net purchases and exchanges), the
price per share of each Fund and the full and fractional number of shares to be
purchased in each Fund. For redemptions, the report will reflect the dollar
amount to be redeemed from each Fund (net redemptions and exchanges), the price
per share of each Fund and the full and fractional number of shares to be
redeemed from each Fund. The report will also reflect the opening and ending
share balances for each Fund. Xxxxxxx Xxxxx will provide via facsimile this
report to the Fund Provider each Business Day, regardless of whether there are
any transactions involving the funds. If for any reason Xxxxxxx Xxxxx is unable
to provide this report, Xxxxxxx Xxxxx will notify the Fund Provider by 10:00
a.m. EST each Business Day.
(2) The fund Provider will notify Xxxxxxx Xxxxx by 10:30 a.m. EST each
Business Day if the report has not yet been received. Upon receipt of the report
from Xxxxxxx Xxxxx, the Fund Provider will execute the purchase and redemption
transactions on a daily basis at the net asset value computed at the close of
trading on the New York Stock Exchange ("Close of Trading") on the prior
Business Day ("Effective Trade Date"). The Fund Provider agrees that such
purchase and redemption transactions will settle on the Business Day following
the Effective Trade Date.
(3) By 3 p.m. EST, the Fund Provider will provide to Xxxxxxx Xxxxx via
facsimile a report reflecting Participant transactions occurring in each Fund.
For purchases, the report will reflect dollar amount invested in each Fund, the
price per share and the number of full and fractional shares purchased in each
Fund. For redemptions, the report will reflect the dollar amount redeemed from
each Fund, the price per share and the number of full and fractional shares
redeemed from each Fund. For dividend and capital gains distributions, the
report will also reflect the dollar amount of the dividend and capital gains
distributions reinvested in each Fund, the price per share and the number of
full and fractional shares purchased in each Fund. Additionally, the report will
reflect the opening and closing share balances for each of the Funds.
(4) By 6:00 p.m. EST on each Business Day, the Fund Provider will
provide to Xxxxxxx Xxxxx (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, record date, ex-dividend date and payable date
information for dividends and capital gains distributions. By 4:00 p.m. EST on
each Business Day, Xxxxxxx Xxxxx will provide to the Fund Provider via facsimile
an estimate of the dollar amount to be redeemed from each Fund (net redemptions
and exchanges) based upon instruction received by Xxxxxxx Xxxxx from
Participants on that Business Day.
(5) For purchase instructions, Xxxxxxx Xxxxx will initiate by 12 p.m.
EST a federal funds wire payment to a custodian account designated in writing by
the Fund Provider on the next Business Day following the Effective Trade Date.
For redemption instructions, the Fund
Provider will initiate by 12 p.m. EST a federal funds wire payment to a
custodian account designated by Xxxxxxx Xxxxx on the next Business Day following
the Effective Trade Date.
ATTACHMENT C
Information to be Provided for each Fund Pursuant to Section 4 of the
Agreement
Pare I. FUND REPORTING AND PERFORMANCE INFORMATION
A. The fund Provider will provide the following information with respect to
each Fund:
o Name of the Fund
o Objective of the Fund
o Investor Profile (What type of investor is this Fund designed for?)
o Portfolio concept (What types of investments make up the Fund's portfolio?)
o Name of Fund manager
o Biography, including tenure with the Fund, of the fund manager
o Inception date of the fund
o Historical performance data for the Fund - Annual total return since
inception - Quarterly total return since inception
o All relevant changes to the Fund's method of doing business.
B. The fund Provider will provide the following information to Xxxxxxx Xxxxx
within five (5) Business Days of the end of each calendar quarter:
EQUITY FUNDS
o A four to five sentence, one to two paragraph, portfolio manager commentary
on how the fund performed for the quarter, why did it perform so well (or
poorly), what does the manager feel will be happening in the market, and
how is the manager planning for projected changes in the market, etc.
o Fund Asset Size.
o Asset Mix (Name and Percentage of Portfolio).
o Top Five Major Sector Weightings (name and percentage of portfolio).
o Top Ten Holdings.
o Average Equity Capitalization.
o Number of Equity Holdings.
o Management fees and expenses (broken down into management fees, 12b-1 fees,
other expenses, and total operating expenses of the Fund).
o One, three, five and ten year annualized rates of return for the current
period.
o Total return for the current quarter, year to date, and since inception of
the fund from/for the current period.
FIXED INCOME FUNDS
o A four to five sentence, one to two paragraph, portfolio manager commentary
on
how the fund performed for the quarter, why did it perform so well (or so
poorly), what does the manager feel will be happening in the market, and
how is the manager planning for projected changes in the market, etc.
o Fund Asset Size.
o Asset Mix (Name and Percentage of Portfolio).
o 30-Day Yield.
o Average Maturity.
o Average Duration.
o Average Coupon.
o Management fees and expenses (broken down into management fees, 12b-1 Fees,
other expenses, and total fund operating expenses).
o One, three, five and ten year annualized rates of return for the current
period.
o Total return for the current quarter, year to date, and since inception of
the fund form/for the current period.
o Yield for current quarter, year-to-date, preceding 30 days, and preceding
12 months.
Part II. FUND DESCRIPTION FOR THE VOICE RESPONSE SYSTEM
o The Fund Provider will provide to 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.
o The Fund Provider will provide to Xxxxxxx Xxxxx a description
of the Fund which will be used on Xxxxxxx Xxxxx'x Voice
Response System in the following VRS format:
ABC FUND
The Net Asset Value per share for ABC Fund as of MM/DD/YY was $XXX.XX.
The average annual total return for the Fund for the one year period
ended MM/DD/YY was XXX.XX%, for the five year period ended MM/DD/YY was
XXX.XX%. These total return figures assume reinvestment of all dividend
and capital gains distributions at Net Asset Value. Total investment
return is the combination of net income and gain or loss in market
value.
The ABC Fund seeks the highest total investment return consistent with
prudent risk. The portfolio may be invested in equity securities,
corporate bonds or money market securities. Historically, the Fund's
equity portfolio has been invested in the common stocks of larger,
quality companies.
Please be advised that past performance is no indication of future
performance. Investment return and principal value of an investment
will fluctuate so that shares, when redeemed, may be worth more or less
than their original cost. You should request and read the Fund
prospectus prior to investing.
Part III. PROPOSAL INFORMATION AND MATERIALS
The Fund Provider will provide to Xxxxxxx Xxxxx the following
information and materials on an as needed basis:
o A supply of materials relating to the Funds
(prospectuses, quarterly reports and other brochures)
to include with proposal requests from prospects.
o 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).
ATTACHMENT D
Fee Schedule
A. The Fund Provider shall pay to Xxxxxxx Xxxxx a non-refundable, one time
account set-up fee of $50,000. Payment shall be made with the return of the
signed "Fund Service Agreement."
B. The Fund Provider shall pay to Xxxxxxx Xxxxx FOR EACH FUND the following
fees:
1. SUB-ACCOUNTING FEE
$16.00 annually per each participant holding shares of the
Fund. 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.
2. SERVICE FEE
.20% of annual average daily value of the Fund's net assets held
in the Plans. Payment shall be made quarterly.
3. TRAIL COMMISSION
Payment shall be made quarterly.
4. SALES COMMISSION (Finders Fee)
Not applicable.
B. The Fund Provider agrees to waive certain fees including, but not limited
to, the following:
1. Initial Sales Charges
2. Contingent Deferred Sales Charges
3. Redemption Fees
4. Exchange Fees
5. Federal Funds Wire Payment Fees
