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EXHIBIT 99.B(15)(d)
SHAREHOLDER SERVICE AGREEMENT
This Shareholder Service Agreement (this "Agreement") is made and entered
into by and between First Trust Corporation ("FTC"), a Colorado corporation with
its principal office at 000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 and
Xxxxxxxx Research Corporation (the "Company"), an Ohio corporation, with its
principal office at 0000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000.
RECITALS
A. FTC is a duly licensed trust company providing trust, custodial and
other services to individual retirement accounts, qualified retirement plans and
taxable investment accounts (the "Plan(s)"). Some of the Plans contain
provisions that permit or require each participant to direct the investment of
that portion of a Plan's assets that is allocated to such participant's account.
Some of the Plans provide for the delegation of investment authority to
investment managers, co-trustees, or named fiduciaries other than FTC. In no
case does FTC have any investment discretion or authority with respect to any of
the Plans.
B. In its capacity as principal underwriter, the Company has entered into a
plan and agreement with each of the mutual fund companies identified on EXHIBIT
A for making payments to certain persons for shareholder servicing and
administration of shareholder accounts. The Company may enter into a similar
plan and agreement with other mutual fund companies in the future, and such
additional mutual fund companies may be added to this Agreement as provided
below. The mutual fund companies currently identified on Exhibit A and those
added to this Agreement in the future are referred to below individually as the
"Fund" and collectively as the "Funds."
C. FTC desires to make the Funds available to the Plans and to provide
shareholder servicing and recordkeeping functions required for purchases and
redemptions of, and dividends paid on account of, the shares of the Funds to be
held by FTC for the benefit of the Plans.
AGREEMENT
1. PROCEDURES FOR ACCOUNTS AND TRANSACTIONS. The Company will cause the
Funds' transfer agent (the "Transfer Agent") to maintain one or more accounts
(the "FTC Account(s)") on its books for each Fund for the Plans. The assets of
one or more Plans may be held in any FTC Account. The FTC Accounts will be
titled in the nominee name of "FTC & Co., Attn: DATAlynx #_____________," and
FTC, as trustee or custodian of the Plans, will be the shareholder of record
for the FTC Accounts. FTC will purchase or redeem shares of each Fund for
the benefit of the Plans, as applicable, as follows:
(a) The Company confirms that if FTC notifies the Company or the
Transfer Agent prior to the earlier of 4:00 P.M. or the close of trading on the
New York Stock Exchange on any business day (which is defined as each day that
the New York Stock Exchange is open for regular business) concerning the
purchase of a Fund's shares, the purchase will be effected on
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such business day, and that if FTC notifies the Company or the Transfer Agent at
or after such time on any business day concerning the purchase of a Fund's
shares, the purchase will be effected on the next business day. (All times
referred to in this Agreement will be Eastern time.) Purchases will be paid for
in cash or by Federal Funds at prices equal to net asset value. FTC will make
reasonable efforts to ensure that payment is received by the Transfer Agent
prior to 4:00 o'clock P.M. on the next business day following the effective date
of the purchase.
(b) The Company confirms that if FTC notifies the Company or the
Transfer Agent prior to the time set forth in Section l(a) on any business day
concerning the redemption of a Fund's shares, the redemption will be effected on
such business day, and that if FTC notifies the Company or the Transfer Agent at
or after such time on any business day concerning the redemption of a Fund's
shares, the redemption will be effected on the next business day. The Company
confirms that the Transfer Agent will wire redemption proceeds to FTC on the
next business day following the effective date of the redemption.
(c) The Company confirms that FTC may make orders for the purchase or
redemption of shares of a Fund by telephonic advice, subject to that Fund's
telephone order procedures as set forth in Exhibit C.
(d) FTC will maintain separate accounting and recordkeeping for each
of the Plans, and will allocate on its records the number of Fund shares
purchased, accrued as dividends and redeemed, and any cash dividends or
distributions paid on account of the shares of each Fund, for each of the Plans.
FTC will reconcile the amounts posted to each Plan with the amounts recorded on
the Transfer Agent's records for each Fund for each respective FTC Account.
(e) The Company will be responsible under this Agreement for the
servicing of the respective FTC Accounts and will have no responsibility for the
servicing of the Plans. FTC will provide recordkeeping services to the Plans.
The foregoing obligations of the parties are more particularly described on
Exhibit B. which is made a part of this Agreement.
2. FEES. For the services provided by FTC under this Agreement, the Company
will pay to FTC a quarterly service fee equal on an annual basis to .25%
(0.0625% per quarter) of the average daily net asset value of the shares of such
Fund which are owned beneficially by the Plans during such period. Such fees
will be paid no later than ten (10) days following the end of the calendar
quarter in which they accrue.
3. MAIMER OF PAYMENT. Payments made pursuant to Section 2 of this Agreement
will be made by check, and will be accompanied by one report for each FTC
Account. Such report will show the calculation used to arrive at the amount
paid.
4. REPORTING OF TRANSACTIONS. The Company will furnish or cause to be
furnished to FTC, on a transaction-by-transaction basis, a statement that will
set forth for each FTC Account the number of shares purchased or redeemed, the
beginning and ending share balances, and the net asset value per share. The
Company will mail such statement to FTC no later than the business
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day next following the transaction being reported.
5. SHAREHOLDER COMMUNICATIONS. FTC will cause the mailing to the Plans of
all currently effective prospectuses of the Fund, proxy materials (including
notices, proxy statements and forms of proxies), reports and other
communications which must be furnished by law to shareholders, in accordance
with the procedures set forth on Exhibit B. Upon FTC's request, the Company will
provide FTC with sufficient copies of any requested communications to ensure FTC
is able to fulfill its obligations as described in this Section 5.
6. COORDINATION OF OPERATIONS. The Company will cause appropriate personnel
to be made available, as may be reasonably requested by FTC, to consult with FTC
in coordinating operations pursuant to this Agreement.
7. STATUS OF FTC. The parties acknowledge and agree that the services
provided by FTC are recordkeeping and related services only and are not the
services of an underwriter or a principal underwriter of the Funds within the
meaning of the Securities Act of 1933 or the Investment Company Act of 1940.
This Agreement does not grant FTC any right to purchase shares from the Funds,
nor does it constitute FTC an agent of the Funds or of the Company, for purposes
of selling shares of the Funds to any dealer or to the public, or for any other
purposes. To the extent FTC enters any purchase or redemption order for an FTC
Account, such purchase or redemption order will be made by FTC (a) as agent of
each of the Plans whose shares are the subject of such purchase or redemption
order, and (b) pursuant to instructions from the account owner, participant,
named fiduciary entity or any other person with investment discretion and
authority for the assets that are the subject of the transaction.
8. AMENDMENTS. Any amendment to this Agreement will be valid only if in
writing and signed by the parties. The parties agree that Funds may be deleted
from and additional Funds may be added to this Agreement (and thus would become
"Funds" for purposes of this Agreement), whenever the patties sign an addendum
that identifies such Funds, at which time this Agreement will be deemed to have
been so amended without further action by the parties.
9. TERMINATION WITHOUT CAUSE. FTC will have the right to terminate this
Agreement for any reason upon 60 days' written notice to the Company, without
any liability arising by reason of such termination. Company may terminate this
Agreement at any time, without payment of any penalty, by vote of a majority of
the Independent Trustees or by vote of a majority of the outstanding voting
securities of any Fund, upon 60 days written notice to FTC.
10. TERMINATION UPON BREACH. Upon any breach of this Agreement by FTC, the
Company may terminate this Agreement upon 10 days' written notice to FTC. Upon
any breach of this Agreement by the Company, FTC may terminate this Agreement at
any time upon 10 day's written notice to he Company.
11. RESOLUTION OF DISPUTES. All disputes arising out of or in connection
with this Agreement (except disputes concerning the Company's use of FTC
proprietary information described in Section 14) will be settled by arbitration,
to be conducted pursuant to the rules of the American
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Arbitration Association. All arbitration proceedings will take place only in
Denver, Colorado. To the extent not preempted by federal law, Colorado statutory
law (including without limitation the statutes governing the award of damages
and arbitration) and Colorado common law will control during arbitration. Both
parties waive any right either of them may have to institute or conduct
litigation or arbitration in any other forum or location, or before any other
body, except that FTC expressly reserves the rights granted to it in Section 14.
Arbitration is final and binding on the parties. An award rendered by the
arbitrator(s) may be entered in any court having jurisdiction over the pertinent
party. The prevailing party in any arbitration, or in any judicial proceeding
relating to the rights of FTC under Section 14, will be entitled to reasonable
attorneys' fees and costs.
12. INDEMNIFICATION OBLIGATIONS. FTC agrees to indemnify and hold harmless
the Company any loss, expense, cost, liability or damage (including reasonable
attorneys fees) which may be suffered by it as a result of any breach of this
Agreement by FTC or arising from any negligent act or omission of FTC in the
performance of its duties under this Agreement. The Company agrees to indemnify
and hold harmless FTC from any loss, expense, cost, liability or damage
(including reasonable attorneys fees) which may be suffered by it as a result of
any breach of this Agreement by the Company or arising from any negligent act or
omission of the Company in the performance of its duties under this Agreement.
13. INDEMNIFICATION PROCEDURES. If a person receives notice of the
commencement of any action, suit, or proceeding (an "Action") or notice that any
Action may be commenced, and if the person receiving the notice (the
"indemnified person") desires to be indemnified by a party under this Agreement
(the "indemnifying party"), the indemnified person will give notice to the
indemnifying party of the commencement of the Action or of the possibility that
an Action will be commenced. Any omission to notify an indemnifying party will
not relieve the indemnifying party from any liability which it may have under
this Agreement, except to the extent the failure to notify the indemnifying
party prejudices the rights of the indemnifying party. The indemnified person
will be entitled, at the sole expense and liability of the indemnifying party,
to exercise full control of the defense, compromise or settlement of any such
Action unless the indemnifying party, within a reasonable time after the giving
of such notice by the indemnified person, (1) admits in writing to the
indemnified person the indemnifying party's duty to indemnify the indemnified
person for such Action under the terms of this Section, (2) notifies the
indemnified person in writing of the indemnifying party's intention to assume
such defense, (3) provides evidence reasonably satisfactory to the indemnified
person as to the indemnifying party's ability to pay the amount, if any, for
which the indemnified person may be liable as a result of such Action, and (4)
retains legal counsel reasonably satisfactory to the indemnified person to
conduct the defense of such Action. The other person will cooperate with the
person assuming the defense, compromise or settlement of any Action in
accordance with this Agreement in any manner that such person reasonably may
request. If the indemnifying party so assumes the defense of any such Action,
the indemnified person will have the right to employ a separate counsel and to
participate in (but not control) the defense, compromise or settlement of the
Action, but the fees and expenses of such counsel will be at the expense of the
indemnified person unless (a) the indemnifying party has agreed to pay such fees
and expenses, (b) any relief other than the payment of money damages is sought
against the indemnified person, or (c) the
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indemnified person has been advised by its counsel that there may be one or more
defenses available to it which are different from or additional to those
available to the indemnifying party and that a conflict of interest therefore
exists, and in any such case that portion of the fees and expenses of such
separate counsel that are reasonably related to matters covered by the indemnity
provided in this Section will be paid by the indemnifying party. No indemnified
person will settle or compromise any such Action for which it is entitled to
indemnification under this Agreement without the prior written consent of the
indemnifying party, which consent cannot be unreasonably withheld, unless the
indemnifying party has failed, after reasonable notice, to undertake control of
such Action in the manner provided in this Section. No indemnifying party will
settle or co Promise any such Action in which any relief other than the payment
of money damages is sought against any indemnified person without the consent of
the indemnified person, such consent not to be unreasonably withheld.
14. CONFIDENTIALITY OF INFORMATION. The Company recognizes that the
information provided to it or to be provided to it under this Agreement relating
to the Plans (including the names and addresses of the participants, the account
numbers of the Plans, and any similar information) is the proprietary
information of FTC and agrees to keep such information confidential and to
prevent the use of such information by others, except to the extent it is
required by law to disclose such information or necessary it to perform its own
actions under this agreement. Prior to disclosing any such information to any
person in accordance with a requirement of law, the Company will redact such
information to the greatest extent permissible under law and will provide FTC
with a reasonable opportunity to appear in any judicial, administrative or
arbitration proceeding or investigation to contest the disclosure of such
information. The Company also agrees not to use such information for its benefit
or the benefit of any affiliate of the Company, directly or indirectly. The
obligations of the Company under this Section 14 will aptly during the term of
this Agreement and for a period of five (5) years after the date this Agreement
is terminated, for whatever reason. Because a violation of the duties of the
Company under this Section 14 could cause irrevocable injury to FTC and could
cause injury to FTC which may not be measurable in money damages, the Company
agrees that FTC will be entitled to obtain injunctive relief against the Company
for any violation of such duties, without prejudicing FTC's right to obtain
money damages.
15. INTEREST ON AMOUNTS DUE. Any amount due under this Agreement from one
party to another party will bear interest, from the date such amount is due
until such payment is made, at a rate equal to the "prime rate," as published
from time to time by The Wall Street Journal.
16. PRIOR AGREEMENTS. This Agreement supersedes all proposals, prior
communications, advertising, representations, warranties and promises, whether
oral or written, relating to :he subject matter of this Agreement.
17. ASSIGNMENT. This Agreement shall terminate automatically in the event
of its assignment.
18. SEPARABILITY. If any provision of this Agreement is deemed to be in
violation of law or is unenforceable, the remainder of this Agreement with such
provision omitted will remain in full
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force and effect.
19. COMPLIANCE WITH LAWS. Each party agrees to abide by all applicable
federal and sta e laws and regulations in connection with the performance of its
obligations under this Agreement.
20. SURVIVAL OF OBLIGATIONS. The representations and warranties of the
parties and all obligations and responsibilities of the parties under this
Agreement, including all payment obligations, as to periods through the date
this Agreement is terminated, will survive the termination of this Agreement.
Without limiting the foregoing, the provisions of Sections 11, 12, 13, 14, and
15 will continue to apply aft' r termination of this Agreement.
21. NOTICES. Except as otherwise provided in this Agreement, all notices
given under this Agreement will be given only by delivery in person, by deposit
in the United States mails, using certified mail, by commercial overnight
delivery service, or by facsimile transmission (with machine confirmation) or
electronic mail. All notices will be in writing and addressed to the party at
the address set forth in the first paragraph of this Agreement (unless a party
specifies by a written notice to the other party that a different address should
be used). Notices will be deemed delivered when delivered in person or, if
mailed by certified mail, on the third business day after the date of deposit
into the United States mails, and upon receipt, if by commercial overnight
delivery service. Facsimile transmission and electronic mail will be deemed
received the same day as sent.
22. EFFECTIVE DATE. This Agreement will be effective on the date it is
accepted and executed by FTC.
23. GOVERNING LAW. This Agreement will be construed by and governed in
accordance with the laws of the State of Colorado.
XXXXXXXX RESEARCH CORPORATION (Company)
By /s/ Xxxxx X. Xxxxxxxx
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Its: President
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Date: December 11, 1996
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Accepted by:
FIRST TRUST CORPORATION (FTC)
By:
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Its: Senior Vice President/Compliance
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Date: December 12, 1996
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EXHIBIT A
to Shareholder Service Agreement
Mutual Fund Companies
Fund Name Cusip Ticker Symbol Trading Cutoff Time
--------- ----- ------------- -------------------
1. Fairport Midwest Growth* 305562308 FPMGX 4:00 p.m. EST
2. Fairport Growth and Income* 305562100 FPGIX 4:00 p.m. EST
3. Fairport Government
Securities Fund* 305562209 FPGSX 4:00 p.m. EST
* These Funds have adopted a Rule 12b-1 Plan.
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EXHIBIT B
TO SHAREHOLDER SEANCE AGREEMENT
REGISTRAR, TRANSFER AGENT AND RECORDKEEPING SERVICES
A. Registrar and Transfer Agency Functions Provided or Caused to be Provided
by the Company
1. Process purchases, redemptions and exchanges of Fund shares in
accordance with instructions received from FTC.
2. Provide to FTC one Fund statement for each FTC Account as described in
Section 4 of the Agreement.
3. Provide daily pricing, dividend reinvestment and capital gain
information for each FTC Account.
4. Assist FTC in resolving any account discrepancies between FTC and the
Fund.
B. Recordkeeping and Shareholder Servicing Functions Provided by FTC
1. Provide sub-accounting services in accordance with Section 1(d) of the
Agreement.
2. Timely cause the mailing of Fund prospectuses, proxies and related
information to those Plans and individual participants identified by
FTC and in accordance with Section 5 of the Agreement.
3. Assist in processing purchase and redemption transactions; changing
dividend options, account designations and addresses; and
establishment and maintenance of Plan accounts and records.
4. Provide additional services to the Plans as required in the separate
XXX account, custodial account or service agreement between FTC and
each taxable investment account owner or plan employer, as they may be
amended from time to time.
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EXHIBIT C
TO SHAREHOLDER SERVICE AGREEMENT
The Funds currently permit the transaction of purchase and redemption orders by
telephone. Shareholders may purchase or redeem shares by telephone by calling
the Company or the Transfer Agent. Orders received by the Company or the
Transfer Agent prior to the Valuation Time (as defined in the Funds' Prospectus)
on any Business Day will be effective that day, and the price of shares will be
the net asset value per share of that Fund next determined after the order, in
proper order, is received by the Company or the Transfer Agent.
Neither Fairport Funds, the Funds nor the Funds' transfer agent will be
responsible for the authenticity of the instructions received by telephone if it
reasonably believes those instructions to be genuine. Fairport Funds and the
Funds' transfer agent will each employ reasonable procedures to confirm that
telephone instructions are genuine, and may be liable for losses resulting from
unauthorized or fraudulent telephone transactions if it does not employ those
procedures. Such procedures may include taping of telephone conversations and
requesting a shareholder to state correctly his or her Fund account number, the
name in which his or her account is registered, his or her social security
number, banking institution bank account number and the name in which his or her
bank account is registered.
In addition, any transaction requests, whether by telephone or otherwise, are
subject to the Funds' transaction procedures as described in their then current
prospectus.
