1
Exhibit (h)
TRANSFER AGENCY AND SERVICE AGREEMENT
between
TARGET FUNDS
and
PRUDENTIAL MUTUAL FUND SERVICES LLC
2
TABLE OF CONTENTS
Article 1 Terms of Appointment; Duties of the Agent .......... 1
Article 2 Fees and Expenses................................... 5
Article 3 Representations and Warranties of PMFS.............. 5
Article 4 Representations of Warranties of the Fund........... 7
Article 5 Duty of Care and Indemnification.................... 7
Article 6 Documents and Covenants of the Fund and PMFS........ 10
Article 7 Termination of Agreement............................ 11
Article 8 Assignment.......................................... 12
Article 9 Affiliations........................................ 12
Article 10 Amendment........................................... 13
Article 11 Applicable Law...................................... 13
Article 12 Miscellaneous....................................... 13
Article 13 Merger of Agreement................................. 15
3
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 31st day of August, 1999 by and between TARGET
FUNDS (the Trust), a Delaware business trust having its principal office and
place of business at Gateway Center Three, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, and PRUDENTIAL MUTUAL FUND SERVICES LLC (the Agent or PMFS), a New
Jersey limited liability corporation, having its principal office and place of
business at ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, the Trust desires to appoint PMFS as its transfer agent,
dividend disbursing agent and shareholder servicing agent in connection with
certain other activities, and PMFS desires to accept such appointment;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
Article 1 Terms of Appointment; Duties of PMFS
1.01 Subject to the terms and conditions set forth in this
Agreement, the Trust hereby employs and appoints PMFS to act as, and PMFS agrees
to act as, the transfer agent for the authorized and issued shares of beneficial
interest of each series or Fund of the Trust, $.01 par value (Shares), dividend
disbursing agent and shareholder servicing agent in connection with any
accumulation, open-account or similar plans provided to the shareholders of the
Trust or any series or Fund thereof (Shareholders) and set out in the currently
effective prospectuses and statement of additional information (prospectus) of
the Trust, including without limitation any periodic investment plan or periodic
withdrawal program.
1.02 PMFS agrees that it will perform the following services:
3
4
(a) In accordance with procedures established from time to time by
agreement between the Trust and PMFS, PMFS shall:
(i) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation therefor to the custodian
(the Custodian) of the Trust authorized pursuant to the Agreement and
Declaration of Trust (Declaration of Trust) of the Trust;
(ii) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;
(iii) Receive for acceptance redemption requests and redemption
directions and deliver the appropriate documentation therefor to the Custodian;
(iv) At the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over or cause to be paid
over in the appropriate manner such monies as instructed by the redeeming
Shareholders;
(v) Effect transfers of Shares by the registered owners thereof
upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and distributions
declared by the Trust;
(vii) Calculate any sales charges payable by a Shareholder on
purchases and/or redemptions of Shares of the Trust as such charges may be
reflected in the prospectus;
(viii) Maintain records of account for and advise the Trust and its
Shareholders as to the foregoing; and
(ix) Record the issuance of Shares of the Trust and maintain
pursuant to
4
5
Rule 17Ad-10(e) under the Securities Exchange Act of 1934 (1934 Act) a record of
the total number of Shares of the Trust which are authorized, based upon data
provided to it by the Trust, and issued and outstanding. PMFS shall also provide
to the Trust on a regular basis the total number of Shares which are authorized,
issued and outstanding. When recording the issuance of Shares, PMFS shall have
no obligation to take cognizance of any Blue Sky laws relating to the issue or
sale of such Shares, which functions shall be the sole responsibility of the
Trust.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a), PMFS shall: (i) perform all of the customary services of a
transfer agent, dividend disbursing agent and, as relevant, shareholder
servicing agent in connection with accumulation, open-account or similar plans
(including without limitation any periodic investment plan or periodic
withdrawal program), including but not limited to, maintaining all Shareholder
accounts, preparing Shareholder meeting lists, mailing proxies, receiving and
tabulating proxies, mailing Shareholder reports and prospectuses to current
Shareholders, withholding taxes on non-resident alien accounts, preparing and
filing appropriate forms required with respect to dividends and distributions by
federal tax authorities for all Shareholders, preparing and mailing confirmation
forms and statements of account to Shareholders for all purchases and
redemptions of Shares and other confirmable transactions in Shareholder
accounts, preparing and mailing activity statements for Shareholders and
providing Shareholder account information and (ii) provide a system which will
enable the Trust to monitor the total number of Shares sold in each State or
other jurisdiction.
(c) In addition, the Trust shall (i) identify to PMFS in writing
those
5
6
transactions and assets to be treated as exempt from Blue Sky notice for each
State and (ii) verify the establishment of transactions for each State on the
system prior to activation and thereafter monitor the daily activity for each
State. The responsibility of PMFS for the Trust's registration status under the
Blue Sky or securities laws of any State or other jurisdiction is solely limited
to the initial establishment of transactions subject to Blue Sky compliance by
the Trust and the reporting of such transactions to the Trust as provided above
and as agreed from time to time by the Trust and PMFS.
PMFS may also provide such additional services and functions not
specifically described herein as may be mutually agreed between PMFS and the
Trust and set forth in Schedule B hereto.
Procedures applicable to certain of these services may be
established from time to time by agreement between the Trust and PMFS.
Article 2 Fees and Expenses
2.01 For performance by PMFS pursuant to this Agreement, the
Trust agrees to pay PMFS an annual maintenance fee for each Shareholder account
and certain transactional fees as set out in the fee schedule attached hereto as
Schedule A. Such fees and out-of-pocket expenses and advances identified under
Section 2.02 below may be changed from time to time subject to mutual written
agreement between the Trust and PMFS.
2.02 In addition to the fees paid under Section 2.01 above,
the Trust agrees to reimburse PMFS for out-of-pocket expenses or advances
incurred by PMFS for the items set out in Schedule A attached hereto. In
addition, any other expenses incurred by PMFS at the request or with the consent
of the Trust will be reimbursed by
6
7
the Trust.
2.03 The Trust agrees to pay all fees and reimbursable
expenses within a reasonable period of time following the mailing of the
respective billing notice. Postage for mailing of dividends, proxies, Trust
reports and other mailings to all Shareholder accounts shall be advanced to PMFS
by the Trust upon request prior to the mailing date of such materials.
Article 3 Representations and Warranties of PMFS
PMFS represents and warrants to the Trust that:
3.01 It is a corporation duly organized and existing and in
good standing under the laws of the State of New Jersey and it is duly qualified
to carry on its business in New Jersey.
3.02 It is and will remain registered with the U.S.
Securities and Exchange Commission (SEC) as a Transfer Agent pursuant to the
requirements of Section 17A of the ▇▇▇▇ ▇▇▇.
3.03 It is empowered under applicable laws and by its
charter and By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement.
3.05 It has and will continue to have access to the
necessary facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
Article 4 Representations and Warranties of the Trust
The Trust represents and warrants to PMFS that:
4.01 It is a business trust duly organized and existing and
in good
7
8
standing under the laws of Delaware.
4.02 It is empowered under applicable laws and by its
Declaration of Trust and By-Laws to enter into and perform this Agreement.
4.03 All proceedings required by said Declaration of Trust
and By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is an investment company registered or to be
registered with the SEC under the Investment Company Act of 1940, as amended
(the 1940 Act).
4.05 A registration statement under the Securities Act of
▇▇▇▇ (▇▇▇ ▇▇▇▇ ▇▇▇) is currently effective or is anticipated to become
effective, and will remain effective, and appropriate state securities law
notice filings have been made and will continue to be made, with respect to all
Shares of the Trust being offered for sale.
Article 5 Duty of Care and Indemnification
5.01 PMFS shall not be responsible for, and the Trust shall
indemnify and hold PMFS harmless from and against, any and all losses, damages,
costs, charges, counsel fees, payments, expenses and liability arising out of or
attributable to:
(a) All actions of PMFS or its agents or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.
(b) The Trust's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Trust's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Trust hereunder.
(c) The reliance on or use by PMFS or its agents or subcontractors
of information, records and documents which (i) are received by PMFS or its
agents or
8
9
subcontractors and furnished to it by or on behalf of the Trust, and (ii) have
been prepared and/or maintained by the Trust or any other person or firm on
behalf of the Trust.
(d) The reliance on, or the carrying out by PMFS or its agents or
subcontractors of, any instructions or requests of the Trust.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities or Blue Sky
laws of any State or other jurisdiction that notice of such Shares be filed in
such State or other jurisdiction or in violation of any stop order or other
determination or ruling by any federal agency or any State or other jurisdiction
with respect to the offer or sale of such Shares in such State or other
jurisdiction.
5.02 PMFS shall indemnify and hold the Trust harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liability arising out of or attributable to any action or failure
or omission to act by PMFS as a result of PMFS' lack of good faith, negligence
or willful misconduct.
5.03 At any time PMFS may apply to any officer of the Trust for
instructions, and may consult with legal counsel, with respect to any matter
arising in connection with the services to be performed by PMFS under this
Agreement, and PMFS and its agents or subcontractors shall not be liable and
shall be indemnified by the Trust for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. PMFS, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Trust, reasonably believed to
be genuine and to have been signed by the proper
9
10
person or persons, or upon any instruction, information, data, records or
documents provided to PMFS or its agents or subcontractors by machine readable
input, telex, CRT data entry or other similar means authorized by the Trust, and
shall not be held to have notice of any change of authority of any person, until
receipt of written notice thereof from the Trust. PMFS, its agents and
subcontractors shall also be protected and indemnified in recognizing stock
certificates which are reasonably believed to bear the proper manual or
facsimile signature of the officers of the Trust, and the proper
countersignature of any former transfer agent or registrar, or of a co-transfer
agent or co-registrar.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the
10
11
defense of such claim. The party seeking indemnification shall in no case
confess any claim or make any compromise in any case in which the other party
may be required to indemnify it except with the other party's prior written
consent.
Article 6 Documents and Covenants of the Trust and PMFS
6.01 The Trust shall promptly furnish to PMFS the following:
(a) A certified copy of the resolution of the Board of Trustees of
the Trust authorizing the appointment of PMFS and the execution and delivery of
this Agreement;
(b) A certified copy of the Declaration of Trust and By-Laws of the
Trust and all amendments thereto;
(c) The current registration statements and any amendments and
supplements thereto filed with the SEC pursuant to the requirements of the 1933
Act and the 1940 Act;
(d) A specimen of the certificates for Shares of the Trust in the
forms approved by the Board of Trustees, with a certificate of the Secretary of
the Trust as to such approval;
(e) All account application forms or other documents relating to
Shareholder accounts and/or relating to any plan program or service offered or
to be offered by the Trust; and
(f) Such other certificates, documents or opinions as the Agent
deems to be appropriate or necessary for the proper performance of its duties.
6.02 PMFS hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Trust for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and
11
12
for keeping account of, such certificates, forms and devices.
6.03 PMFS shall prepare and keep records relating to the services
to be performed hereunder, in the form and manner as it may deem advisable. To
the extent required by Section 31 of the 1940 Act, and the Rules and Regulations
thereunder, PMFS agrees that all such records prepared or maintained by PMFS
relating to the services to be performed by PMFS hereunder are the property of
the Trust and will be preserved, maintained and made available in accordance
with such Section 31 of the 1940 Act, and the Rules and Regulations thereunder,
and will be surrendered promptly to the Trust on and in accordance with its
request.
6.04 PMFS and the Trust agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential and shall not be voluntarily disclosed to any other person
except as may be required by law or with the prior consent of PMFS and the
Trust.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Trust, PMFS will endeavor to notify the Trust and to
secure instructions from an authorized officer of the Trust as to such
inspection. PMFS reserves the right, however, to exhibit the Shareholder records
to any person whenever it is advised by its counsel that it may be held liable
for the failure to exhibit the Shareholder records to such person.
Article 7 Termination of Agreement
7.01 This Agreement may be terminated by either party upon one
hundred twenty (120) days written notice to the other.
12
13
7.02 Should the Trust exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and other
materials will be borne by the Trust. Additionally, PMFS reserves the right to
charge for any other reasonable fees and expenses associated with such
termination.
Article 8 Assignment
8.01 Except as provided in Section 8.03 below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
8.02 This Agreement shall inure to the benefit of and be
binding upon the parties and their respective permitted successors and assigns.
8.03 PMFS may, in its sole discretion and without further
consent by the Trust, subcontract, in whole or in part, for the performance of
its obligations and duties hereunder with any person or entity including but not
limited to: (i) Prudential Securities Incorporated (Prudential Securities), a
registered broker-dealer, (ii) The Prudential Insurance Company of America
(Prudential), (iii) Pruco Securities Corporation, a registered broker-dealer,
(iv) any Prudential Securities or Prudential subsidiary or affiliate duly
registered as a broker-dealer and/or a transfer agent pursuant to the 1934 Act
or (v) any other Prudential Securities or Prudential affiliate or subsidiary;
provided, however, that PMFS shall be as fully responsible to the Trust for the
acts and omissions of any agent or subcontractor as it is for its own acts and
omissions.
8.04 PMFS may enter into agreements with Prudential or any
subsidiary or affiliate of Prudential whereby PMFS will maintain an omnibus
account and the Trust will reimburse PMFS for amounts paid by PMFS to
Prudential, or such subsidiary or affiliate, in an amount not in excess of the
annual maintenance fee for each active beneficial shareholder account as if
each beneficial shareholder account were maintained by PMFS on the Trust's
records, subject to the fee schedule attached hereto as Schedule A. Prudential,
its subsidiary or affiliate, as the case may be, shall maintain records
relating to each beneficial shareholder account that underlies the omnibus
account maintained by PMFS.
Article 9 Affiliations
9.01 PMFS may now or hereafter, without the consent of or
notice to
13
14
the Trust, function as Transfer Agent and/or Shareholder Servicing Agent for any
other investment company registered with the SEC under the 1940 Act, including
without limitation any investment company whose adviser, administrator, sponsor
or principal underwriter is or may become affiliated with Prudential Securities
and/or Prudential or any of its or their direct or indirect subsidiaries or
affiliates.
9.02 It is understood and agreed that the trustees,
officers, employees, agents and Shareholders of the Trust, and the trustees,
officers, employees, agents and shareholders of the Trust's investment adviser
and/or distributor, are or may be interested in the Agent as trustees, officers,
employees, agents, shareholders or otherwise, and that the trustees, officers,
employees, agents or shareholders of the Agent may be interested in the Trust as
trustees, officers, employees, agents, Shareholders or otherwise, or in the
investment adviser and/or distributor as officers, trustees, employees, agents,
shareholders or otherwise.
Article 10 Amendment
10.01 This Agreement may be amended or modified by a written
agreement executed by both parties and authorized or approved by a resolution of
the Board of Trustees of the Trust.
Article 11 Applicable Law
11.01 This Agreement shall be construed and the provisions
thereof interpreted under and in accordance with the laws of the State of New
Jersey.
Article 12 Miscellaneous
12.01 In the event of an alleged loss or destruction of any
Share
14
15
certificate, no new certificate shall be issued in lieu thereof, unless there
shall first be furnished to PMFS an affidavit of loss or non-receipt by the
holder of Shares with respect to which a certificate has been lost or destroyed,
supported by an appropriate bond satisfactory to PMFS and the Trust issued by a
surety company satisfactory to PMFS, except that PMFS may accept an affidavit of
loss and indemnity agreement executed by the registered holder (or legal
representative) without surety in such form as PMFS deems appropriate
indemnifying PMFS and the Trust for the issuance of a replacement certificate,
in cases where the alleged loss is in the amount of $1,000 or less.
12.02 In the event that any check or other order for payment
of money on the account of any Shareholder or new investor is returned unpaid
for any reason, PMFS will (a) give prompt notification to the Trust's
distributor (Distributor) of such non-payment; and (b) take such other action,
including imposition of a reasonable processing or handling fee, as PMFS may, in
its sole discretion, deem appropriate or as the Trust and the Distributor may
instruct PMFS.
12.03 Any notice or other instrument authorized or required
by this Agreement to be given in writing to the Trust or to PMFS shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Trust:
Target Funds
Gateway Center Three
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
15
16
To PMFS:
Prudential Mutual Fund Services LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Article 13 Merger of Agreement
13.01 This Agreement constitutes the entire agreement
between the parties hereto and supersedes any prior agreement with respect to
the subject matter hereof whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in their names and on their behalf under their seals by
and through their duly authorized officers, as of the day and year first above
written.
TARGET FUNDS
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
______________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
President
PRUDENTIAL MUTUAL FUND SERVICES LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
______________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President
16
17
Schedule A
Prudential Mutual Fund Services LLC
Fee Schedule
Fee Information for Services as
Transfer Agent, Dividend Disbursing Agent
and Shareholder Servicing Agent
General - Fees are based on an annual per shareholder account charge for account
maintenance plus out-of-pocket expenses. In addition, there is a one time set-up
charge per account for manually established accounts and a monthly charge for
inactive zero balance accounts. The effective period of this fee schedule is
September 22, 1999 through September 21, 2000 and shall continue thereafter from
year to year, unless otherwise amended.
Annual Maintenance Charges - The annual maintenance charge includes the
processing of all transactions and correspondence. The fee is billable on a
monthly basis at the rate of 1/12 of the annual fee. A charge is made for an
account in the month that an account opens or closes.
Annual Maintenance Per Account Fee $9.00 (annual dividend portfolios)
$9.50 (semi-annual dividend portfolios)
$10.00 (quarterly dividend portfolios)
Other Charges
New Account Set-up Fee for Manually $2.00
Established Accounts
Monthly Inactive Zero Balance Account Fee $ .20
Out-of-Pocket Expenses - out-of-pocket expenses include but are not limited to:
postage, stationery and printing, allocable communication costs, microfilm,
microfiche, and expenses incurred at the specific direction of the Trust.
Payment - An invoice will be presented to the Trust on a monthly basis assessing
the Trust the appropriate fee and out-of-pocket expenses.
TARGET FUNDS PRUDENTIAL MUTUAL FUND
SERVICES LLC
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
____________________________ ____________________________
TITLE: President TITLE: President
_________________________ _________________________
DATE: August 31, 1999 DATE: August 31, 1999
__________________________ __________________________
17
