EXHIBIT (h)11
TRADING AND NSCC FUND/SERV NETWORKING AGREEMENT
THIS AGREEMENT is made and entered into this 7th day of August, 2003 by
and between BenefitsCorp Equities, Inc. ("BCE"), a Delaware corporation having
its principal office and place of business at 0000 Xxxx Xxxxxxx Xxxx, Xxxxxxxxx
Xxxxxxx, Xxxxxxxx, 00000, Northwestern Mutual Investment Services LLC ("NMIS"),
a Wisconsin limited liability company having its principal office and place of
business at Suite 300, 000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 and
Xxxxx Street Funds, Inc., a Maryland corporation having its principal office and
place of business at 000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000 (the
"Fund").
WHEREAS, NMIS, a registered broker/dealer, is the principal underwriter,
to the Fund, an open-end investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), and the separate series of the
Fund set forth on Exhibit A (the "Portfolios"); and
WHEREAS, through a separate agreement with American Funds Distributors,
Inc. ("AFD"), BCE, a registered broker/dealer and member of the National
Association of Securities Dealers ("NASD"), has contractually agreed to provide
recordkeeping and administrative services to qualified retirement plans ("Plans"
or "Account Holders") that participate in AFD's full service recordkeeping
program (the "Program") for such Plans;
WHEREAS, BCE, pursuant to a separate Administrative Services Agreement
with the Fund and NMIS, has agreed to provide the Fund certain administrative
and recordkeeping services with respect to Account Holders which have allocated
assets to one or more Portfolios (the "Services");
WHEREAS, it is understood that when BCE and the Fund, NMIS or other Fund
agent, are members of the National Securities Clearing Corporation ("NSCC") the
terms and conditions of NSCC membership shall be incorporated herein and the
parties hereto shall act according to their duties as NSCC members including but
not limited to the duties, procedures and obligations of Matrix Level 0
Networking as defined by NSCC on June 1, 1998 (Fund/SERV).
NOW THEREFORE, in consideration of the promises and mutual covenants
hereinafter contained, the parties agree as follows:
1. Non-NSCC Trades.
BCE, the Fund and NMIS have entered into this Agreement in order to
facilitate the transmission of information regarding Accounts (as defined below)
through Fund/SERV. In the event that the parties are unable to transmit
information regarding Accounts through Fund/SERV on any Business Day, procedures
for purchase, redemption and exchange orders for shares from Account Holders
shall be as set forth in this Section 1.
(a) BCE shall maintain one or more omnibus accounts (the "Accounts")
with each Portfolio or its designated transfer agent (the "Transfer
Agent"). The Accounts shall be held in the name of BCE, the
Plans or a nominee. BCE shall act as agent for the Fund, and
shall receive from the Account Holders for acceptance as of the
close of trading on the New York Stock Exchange (normally 4:00
p.m Eastern Time (ET)) ("Close of Trading") on each Business Day
(based upon the Account Holders' receipt of instructions from
Plan participants ("Participants") prior to the Close of Trading
on each such Business Day): (i) orders for the purchase of shares
of the Portfolios; (ii) redemption requests and redemption
directions with respect to shares of the Portfolios held by the
Plans; and (iii) orders for the exchange of shares from one
Portfolio to another Portfolio (such purchase orders, redemption
requests and exchange orders are collectively referred to in this
Agreement as "Instructions").
(b) The Fund, or its agent, shall furnish BCE, for each Portfolio, by
7:00 PM Eastern Time (ET) the following: (1) the final net asset
value information on each business day the New York Stock Exchange
is open for business (each a "Business Day"); and (2) in the case of
fixed income or money market funds, the daily accrual or the
interest rate factor. All such communications shall be made via
facsimile or an electronic medium acceptable to the parties.
(c) Instructions will be deemed received by the Fund if received in good
order by BCE prior to the Close of Trading on the Business Day of
the original communication from the Plan to BCE ("First Business
Day"). BCE shall cooperate to enable the Fund and its Transfer
Agent and NMIS (by facsimile or such other means upon which the
parties may mutually agree) to receive Instructions and deliver
confirmations on the Business Day following the First Business
Day ("Second Business Day"). BCE shall communicate confirmation
of the transactions effectuated as a result of the receipt of
Instructions to the applicable Plan representative. BCE shall
communicate (by facsimile or such other means upon which the
parties may mutually agree) Instructions based on orders received
by BCE from Account Holders or Participants by the Close of
Trading on the First Business Day to the Transfer Agent no later
than 10:00 a.m. ET on the Second Business Day (prenotification
shall not be required); the Fund shall cause the Transfer Agent
to communicate (by facsimile or such other means upon which the
parties may mutually agree) confirmations by the Close of Trading
on the Second Business Day. BCE shall, as agent for the Fund,
process all oral or written instructions from Plan
representatives or Participants to purchase, redeem or exchange
shares of the Portfolios in accordance with the procedures set
forth in each Portfolio's then current Prospectus and Statement
of Additional Information ("SAI"). BCE shall maintain internal
safekeeping procedures to safeguard and protect the
confidentiality of the data so transmitted. In no event shall
BCE accept Instructions on any Business Day with respect to
requests by Participants that have not been received by BCE prior
to the Close of Trading on the Business Day on which such
Instructions are to be prepared. Instructions received in proper
form by BCE after the Close of Trading on any Business Day shall
be treated as if received on the next following Business Day.
(d) Upon receipt of the monies paid to BCE by the Transfer Agent for the
redemption of shares of a Portfolio, BCE shall pay, or shall direct
the Plan representative to pay, such monies to the applicable Plan
or Participant. BCE shall not process or effect any redemption with
respect to shares of a Portfolio after receipt by BCE of
notification of the suspension of the determination of the net asset
value of such Portfolio.
(e) BCE represents that all orders transmitted to the Fund shall be
based on Instructions communicated in proper form by the Plan
representative, Participants and/or authorized committee. In no
event shall Instructions for processing on the First Business Day be
accepted by BCE later than the Close of Trading on such First
Business Day.
(f) The settlement date for all trades (including redemptions) is the
Business Day following the trade date (settlement date = trade
date + 1). BCE will send all wires for net purchases and the
Fund, subject to the limitations set forth in the Portfolios'
Prospectuses and SAI, will send wires for net redemptions by the
close of the Federal Reserve Wire Transfer System (normally 5:30
p.m. ET) on settlement date. Settlements shall be in U.S.
dollars.
On any Business Day when the Federal Reserve Wire Transfer System is
closed, all communication and processing rules will be suspended for the
settlement of trades. Trades will be settled on the next Business Day that the
Federal Reserve Wire Transfer System is open. The original trade date will
apply.
2. Procedures for Order and Settlement via Fund/SERV.
BCE, the Fund and NMIS have entered into this Agreement to facilitate the
transmission of information regarding Accounts through Fund/SERV. When the
parties are actively trading via Fund/SERV, procedures for purchase and
redemption orders for shares from Account Holders shall be as set forth in this
Section 2.
(a) NMIS, or its agent, shall furnish BCE, for each Portfolio, by 7:00
p.m. ET the following: (1) the final net asset value information as
calculated at the close of trading on the New York Stock Exchange
(normally 4:00 p.m. ET) on each Business Day; (2) dividend and
capital gains information as it arises, but in any event, on or
prior to the record date of the Portfolio; and (3) in the case of
fixed income or money market funds, the daily accrual or the
interest rate factor. All such notifications will be
communicated via Fund/SERV. Should such services be unavailable
for any reason the communication will be made via facsimile or an
electronic medium acceptable to the parties.
(b) As agent for the Fund, BCE shall: (a) receive Instructions from the
Plans for acceptances as of the Close of Trading on each Business
Day (based upon the Plans' receipt of Instructions from Account
Holders prior to the Close of Trading on each such Business
Day). Upon receipt of Instructions from the Account Holders for
acceptance as of the Close of Trading, BCE shall calculate the
net purchase and/or redemption order for each Portfolio for each
Account. Orders for net purchases and/or net redemptions
received by BCE, or its agent, prior to the Close of Trading on
any given Business Day shall be transmitted to the NSCC by 10:00
a.m. ET on the next Business Day (prenotification shall not be
required). Subject to BCE's compliance with the foregoing, the
Business Day on which Instructions are received by BCE, or its
agent, in proper form prior to the Close of Trading shall be the
date as of which shares of the Funds are deemed purchased or
redeemed pursuant to such Instructions. Instructions received in
proper form by BCE after the Close of Trading on any given
Business Day will be treated as if received on the next following
Business Day. Dividends and capital gains distributions shall be
automatically reinvested at net asset value in accordance with
the Portfolios' then current prospectuses.
(c) Upon receipt of the monies paid to BCE by the Transfer Agent for the
redemption of shares of a Portfolio, BCE shall pay, or shall direct
the Plan representative to pay, such monies to the applicable Plan
or Participant. BCE shall not process or effect any redemption with
respect to shares of a Portfolio after receipt by BCE of
notification of the suspension of the determination of the net asset
value of such Portfolio.
(d) BCE represents that all orders transmitted to the Fund shall be
based on Instructions communicated in proper form by the Plan
representative, Participants and/or authorized committee. In no
event shall Instructions for processing on the First Business Day be
accepted by BCE later than the Close of Trading on such First
Business Day.
(e) The Parties shall settle all trades (including redemptions) on the
Business Day following the trade date (settlement date = trade
date + 1). BCE will send all wires for net purchases and the
Fund, subject to the limitations set forth in the Portfolios'
Prospectuses and SAI, will send wires for net redemptions by the
close of the Federal Reserve Wire Transfer System (normally 5:30
p.m. ET) on settlement date and in accordance with NSCC rules and
procedures. Settlements shall be in U.S. dollars.
On any Business Day when the Federal Reserve Wire Transfer System is
closed, all communication and processing rules will be suspended for the
settlement of trades. Trades will be settled on the next Business Day that the
Federal Reserve Wire Transfer System is open. The original trade date will
apply.
3. Position Files. Daily, NMIS shall furnish, or cause to be furnished to,
BCE information setting forth the position of each Account as of a date
determined by BCE. All such notifications will be communicated via
Fund/SERV. Should such services be unavailable for any reason, or should
either party not be currently transmitting or receiving such information
via Fund/SERV, the communication will be made via first class mail,
facsimile or an electronic medium acceptable to the parties.
4. Dividends and Distributions. Upon the declaration of each dividend and
each capital gain distribution by the Directors of the Fund with
respect to shares of the Portfolios, NMIS shall furnish, or cause to be
furnished to, BCE information setting forth the date of the declaration
of such dividend or distribution, the ex-dividend date, the date of
payment thereof, the record date as of which shareholders are entitled
to payment, the amount payable per share to the shareholders of record
as of that date, and the total amount payable on the payment date.
This information should be provided to BCE no later than 7:00 p.m. ET
on the ex-dividend date. On or before the payment date specified in
such resolution of the Directors, NMIS, or its agent, will pay to the
Accounts sufficient cash to make payment for Fund shares as of such
payment date. With respect to the reinvestment of dividends and
capital gains, the number of shares reinvested shall be furnished to
BCE by the following Business Day. All such notifications will be
communicated via Fund/SERV. Should such services be unavailable for
any reason, or should either party not be currently transmitting or
receiving such information via Fund/SERV, the communication shall be
made via first class mail, facsimile or an electronic medium acceptable
to the parties.
5. Verification. Each party hereto shall, as soon as practicable after
its receipt of a report, notification or information transmitted by the
other party hereto, verify to such other party by facsimile or an
electronic medium acceptable to the parties its receipt of such
transmission, and in the absence of such verification, a party to whom
a transmission is sent shall not be liable for any failure to act in
accordance with such transmission unless the sending party can prove
that such transmission was actually received by the other.
6. Trade Corrections. In the event that a Portfolio is removed from the
Program or is closed to new investors and, prior to such event, BCE
makes an error in the process of a trade request on behalf of an
Account Holder but has not yet communicated such error to NMIS or the
Fund, NMIS and the Fund shall honor the correction of such trade for a
period of 3 days after settlement date of the erroneous trade. The
indemnifications set forth in Section 11 of this Agreement shall apply
to any such error. All such corrective transactions will be
communicated by BCE via Fund/SERV. Should such services be unavailable
for any reason the communication will be made via overnight mail,
facsimile or an electronic medium acceptable to the parties.
7. Pricing Errors. In the event of an error in the computation of a
portfolio of the Fund's net asset value per share ("NAV") or any
dividend or capital gain distribution (each, a "pricing error"), NMIS
or the Fund shall immediately notify BCE as soon as possible after
discovery of the error. Such notification may be verbal, but shall be
confirmed promptly in writing. A pricing error shall be corrected in
accordance with the then applicable guidance from the Securities and
Exchange Commission ("SEC") or its staff regarding pricing error
correction or in accordance with the Fund's pricing error correction
policy, if any, to the extent such policy requires pricing error
corrections at least as often as the applicable SEC guidance. If an
adjustment is necessary to correct a material error caused by NMIS or
the Fund which has caused an Account to receive less than the amount of
shares to which it is entitled, the number of shares of the appropriate
Portfolios attributable to such Account will be adjusted and the amount
of any underpayments shall be credited by the Fund to BCE for crediting
of such amounts to the applicable Account Holders. Upon notification
by NMIS or the Fund of any overpayment due to an error, BCE shall
promptly remit to NMIS or the Fund any overpayment that has not been
paid to Account Holders; however, NMIS and the Fund acknowledge that
BCE does not intend to seek additional payments from any Account Holder
who, because of a pricing error, may have underpaid for units of
interest or shares credited to his/her account. In no event shall BCE
be liable to Account Holders for any such adjustments or underpayment
amounts.
8. Sales Charges. With respect to Plans that invest in the Portfolios through
the Program, NMIS and the Fund agree to waive all sales loads (front-end
and back-end loads).
9. Blue Sky Matters. To the extent feasible, BCE will cooperate with NMIS
with respect to any requests pertaining to the state of residence as well
as the state of domicile of the Plans.
10. Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York, without
giving effect to conflicts of law principles thereof which might refer
such interpretations to the laws of a different state or jurisdiction.
11. Indemnification. BCE agrees to indemnify and hold harmless NMIS, the
Fund, their affiliates and their Directors, officers, employees, agents
and each person, if any, who controls NMIS or the Fund within the
meaning of the Securities Act of 1933, as amended (the "Securities
Act") against any losses, claims, damages or liabilities to which any
such indemnitee may become subject insofar as those losses, claims,
damages or liabilities (or actions in respect thereof) arise out of any
actions or failure or omission to act by BCE or its affiliates under
this Agreement, or occur in connection with or are based upon their
representations, warranties, and obligations under this Agreement and
BCE will reimburse the indemnitees for any legal or other expenses
incurred by them in connection with investigating or defending such
claim or action; provided, however, that BCE will not be liable for
indemnification hereunder to the extent that any such loss, claim,
damage or liability results from the negligence or willful misconduct
of the Fund, NMIS, or their Directors, officers, employees, agents, or
successors or assigns, as permitted hereunder.
NMIS agrees to indemnify and hold harmless BCE and its affiliates and
their directors, officers, employees, agents and each person, if any, who
controls BCE within the meaning of the Securities Act, against any losses,
claims, damages or liabilities to which any such indemnitee may become
subject insofar as those losses, claims, damages or liabilities (or
actions in respect thereof) arise out of any actions or failure or
omission to act by the Fund or NMIS, or their affiliates, under this
Agreement, or occur in connection with or are based upon their
representations, warranties, and obligations under this Agreement and NMIS
will reimburse the indemnitees for any legal or other expenses incurred by
them in connection with investigating or defending such claim or action;
provided, however, that NMIS will not be liable for indemnification
hereunder to the extent that any such loss, claim, damage or liability
results from the negligence or willful misconduct of BCE, its directors,
officers, employees, agents, or successors or assigns, as permitted
hereunder.
Promptly after receipt by an indemnitee under this Section 11 of notice of
the commencement of a claim or action that may be covered hereunder
("Claim"), the indemnitee shall notify the indemnitor of the commencement
thereof; provided, however, that the failure to provide such prompt notice
to the indemnitor shall not relieve the indemnitor of any liability it may
have to an indemnitee unless such failure has prejudiced the defense of
such claim. As a condition to indemnification hereunder, the indemnitee
shall provide the indemnitor with complete details, documents and
pleadings concerning any Claim. The indemnitor will be entitled to
participate in any Claim and may assume the defense thereof with counsel
reasonably satisfactory to the indemnitee. However, if the indemnitee
reasonably determines that defenses may be available to it which are not
available to the indemnitor, and which may be inconsistent with the
interests of the indemnitor, then the indemnitee shall have the right to
assume its own defense, with counsel reasonably satisfactory to the
indemnitor. Should this situation arise, the indemnitee will promptly
notify the indemnitor in writing of its decision and the reasons therefor.
The indemnitor shall remain responsible for the cost of reasonable legal
or other expenses incurred as they pertain to the additional or
inconsistent defenses of indemnitee. After notice from the indemnitor to
the indemnitee of the indemnitor's election to assume the defense of any
Claim, the indemnitor will not be liable to any indemnitee under this
Section 11 for any legal or other expenses subsequently incurred by the
indemnitee in connection with the defense of such Claim, except as stated
herein. No party shall unilaterally agree to a compromise or settlement of
any such claim without the written consent of the other party. Such
consent shall not be unreasonably withheld.
In providing the indemnifications set forth in the immediately preceding
paragraphs, each party hereto agrees to maintain such insurance coverage
as shall be reasonably necessary under the circumstances.
12. Force Majeure. None of the parties hereto shall be liable to the other
for any and all losses, damages, costs, charges, counsel fees,
payments, expenses or liability due to any failure, delay or
interruption in performing its obligations hereunder due to causes or
conditions beyond its control including, without limitation, labor
disputes, strikes (whether legal or illegal), lock outs (whether legal
or illegal), civil commotion, riots, war and war-like operations
including acts of terrorism, invasion, rebellion, hostilities, military
power, sabotage, governmental regulations or controls, failure of
power, fire or other casualty, accidents, national or local
emergencies, boycotts, picketing, slow-downs, work stoppages, inability
to obtain materials or services, natural disasters, acts of God, or
disruptions in orderly trading on any relevant exchange or market.
13. Termination of Agreement.
(a) This Agreement shall become effective on the date first set forth
above and shall continue in effect until terminated as set forth
below.
(b) This Agreement may be terminated in its entirety or with respect to
an individual Portfolio at any time by any party upon sixty (60)
days' written notice to the other parties. Notwithstanding the
foregoing, this Agreement shall be terminated immediately (i)
upon a material breach by any party not cured within thirty (30)
days after notice from any other party, (ii) upon termination of
services from any party to the Account Holders, or (iii) with
respect to a particular Portfolio, upon the provision of notice
to BCE that the Fund has terminated NMIS' authority to serve as
principal underwriter for such Portfolio, such notice to be
provided to BCE promptly after the Fund terminates NMIS'
underwriting agreement.
(c) The provisions of Section 11 shall continue in full force and effect
after termination of this Agreement. In addition, the parties rights
and obligations under this Agreement shall continue in full force
and effect after termination of this Agreement with respect to
Account Holders with assets allocated to the Portfolio(s) at the
time of termination.
14. Notice. Unless otherwise specified, all notices and other communications
required hereunder shall be in writing and shall be hand delivered, sent
by express delivery or mailed by certified mail to the other party at the
following address or such other address as each party may give notice to
the other:
If to BenefitsCorp Equities, Inc.
0000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, President
cc: Xxxxxxx X. Xxxxx, Secretary and Compliance Officer
If to NMIS:
Northwestern Mutual Investment Services, LLC
Suite 300
000 X. Xxxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxxxxxx
If to Fund:
Mason Street Funds, Inc.
000 X. Xxxxxxxxx Xxx.
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
15. Assignment. Neither this Agreement nor any rights or obligations hereunder
may be assigned by any party without the prior written consent of the
other parties, provided however, that the Fund may add Portfolios without
written consent.
16. Amendment. This Agreement may be amended, modified, superseded, canceled,
renewed or extended, and the terms or covenants hereof may be waived only
by a written instrument executed by all of the parties hereto, or in the
case of a waiver, by the party waiving compliance.
17. Other Matters. This Agreement may be executed in several counterparts,
each of which shall be an original but all of which together shall
constitute one and the same instrument. The paragraph headings
contained herein are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement. This
Agreement and any Exhibits attached hereto and the Administrative
Services Agreement set forth the entire agreement and understanding of
the parties relating to the subject matter hereof, and supersede all
differing terms of prior agreements, arrangements and understandings,
written or oral, among the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers and such agreement shall become
effective as of the date first listed above.
BENEFITSCORP EQUITIES, INC.
By: /s/XXXXXXX X. XXXXXX Date: 8-18-03
--------------------
Name: Xxxxxxx X. Xxxxxx
Title: President
NORTHWESTERN MUTUAL INVESTMENT SERVICES, LLC
By: /s/XXXXXXX X. XXXXXXXXX Date: August 7, 2003
-----------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior Vice President -
Variable Annuities
XXXXX STREET FUNDS, INC.
By: /s/XXXX X. XXXX Date: August 7, 2003
---------------
Name: Xxxx X. Xxxx
Title: President
EXHIBIT A
PORTFOLIOS
NAME OF PORTFOLIO SHARE CLASS OFFERED
----------------- -------------------
Xxxxx Street Aggressive Growth Stock Fund A
Xxxxx Street Growth Stock Fund A
Xxxxx Street Small Cap Growth Stock Fund A
Xxxxx Street Asset Allocation Fund A
Xxxxx Street High Yield Bond Fund A
Xxxxx Street Select Bond Fund A
