Exhibit (h)(vi)
FORM OF
COMPLIANCE SERVICES AGREEMENT
AGREEMENT effective as of the 5thday of October, 2004, between FIFTH THIRD
FUNDS (the "Trust"), a Massachusetts business trust having its principal place
of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, FIFTH THIRD BANK (the
"Bank"), an Ohio state chartered bank, having its principal place of business at
00 Xxxxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx, Xxxx 00000, and BISYS FUND SERVICES
LIMITED PARTNERSHIP ("BISYS"), an Ohio limited partnership, which has its
principal place of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust is a registered investment company, and will as such
become subject to the requirements of Rule 38a-1 under the Investment Company
Act of 1940, as amended, (the "1940 Act"), which requires each registered
investment company to, among other things, adopt policies and procedures that
are reasonably designed to prevent it from violating the Securities Act of 1933,
the Securities Exchange Act of 1934, the Xxxxxxxx-Xxxxx Act of 2002, the
Investment Company Act, the Advisers Act, Title V of the Xxxxx-Xxxxx-Xxxxxx Act,
any rules adopted by the Commission under any of these statutes, the Bank
Secrecy Act as it applies to registered investment companies, and any rules
adopted thereunder by the Commission or the Department of the Treasury
(collectively, the "Federal Securities Laws"). These policies and procedures
include policies and procedures that provide for the oversight of compliance by
each investment adviser, principal underwriter, administrator, and transfer
agent of the Trust (collectively, the "Service Providers");
WHEREAS, BISYS performs certain management and administration services for
the Trust under an sub-administration agreement between BISYS (or an affiliate
of BISYS) and the Bank dated October 29, 2001e(the "Sub-Administration
Agreement");
WHEREAS, BISYS offers compliance services through its Compliance EDGE
program, which may be tailored to create a compliance program for the Trust;
WHEREAS, the Trust desires to retain the services of BISYS to create a
comprehensive compliance program for approval and adoption by the Trust in
accordance with Rule 38a-1 in part by tailoring BISYS' Compliance EDGE program;
WHEREAS, BISYS is willing to perform the services enumerated in this
Agreement on the terms and conditions set forth in this Agreement; and
WHEREAS, BISYS and the Trust wish to enter into this Agreement in order to
set forth the terms under which BISYS will perform the services enumerated
herein on behalf of the Trust, BISYS and the Bank wish to enter into this
Agreement in order to supplement certain provisions of the Sub-Administration
Agreement between the Bank and BISYS.
NOW, THEREFORE, in consideration of the covenants herein contained, the Trust
and BISYS hereby agree as follows:
1. Compliance Services.
(a) The parties mutually agree to coordinate and cooperate in connection with
the creation and implementation of written compliance polices and procedures
which shall be reasonably designed to prevent the Trust from violating the
provisions of the Federal Securities Laws applicable to the Trust, as required
under Rule 38a-1 under the 0000 Xxx.
(b) The Trust agrees to provide BISYS with copies of its current compliance
policies and procedures and furnish (and cause its Service Providers to furnish)
all such additional information as may reasonably relate to the design and
implementation of the Fund Compliance Program (as defined below). Such
additional information shall include compliance and related information
pertaining to the Service Providers other than BISYS. BISYS shall review and
evaluate all such existing information and create a written document or
documents designed to embody the overall fund compliance program which will
include the compliance programs of the Service Providers to the Trust. Drafts
shall be prepared by BISYS in consultation with the Trust and its counsel and
shall be submitted for review and comment. Upon approval by the Board of
Trustees of the Trust (the "Board"), such documents or
documents shall become effective as the fund compliance program required under
Rule 38a-1 (as amended from time to time upon the approval of the Board, the
"Fund Compliance Program").
(c) BISYS will provide the following services in relation to the Fund
Compliance Program during the term of this Agreement:
(i) make an individual, acceptable to the Board, available to serve as
the Trust's chief compliance officer as provided in Rule 38a-1(a)(4) of the 1940
Act to administer the Fund Compliance Program (the "Chief Compliance Officer"),
to the extent provided in Section 2(a) below. The individual serving as Chief
Compliance Officer must be available, at the discretion of the Board and in any
event no less frequently than annually, to meet separately with the independent
members of the Board;
(ii) through the Chief Compliance Officer, develop, implement and
maintain (as required from time to time, including to reflect any amendments to
Rule 38a-1) the written policies and procedures comprising the Fund Compliance
Program, as contemplated above;
(iii) through the Chief Compliance Officer, conduct, as needed in
response to significant compliance events, changes in business arrangements and
regulatory developments and, in no event less than annually, a review of the
Fund Compliance Program which will include a review of the adequacy of the
policies and procedures and the effectiveness of their implementation;
(iv) through the Chief Compliance Officer, provide a written report to
the Board that, at a minimum, addresses:
(A) the Chief Compliance Officer's assessment of the operation of the
policies and procedures of the Trust and each Service Provider, any
material changes made to those policies and procedures since the date
of the last report, and any material changes to the policies and
procedures recommended as a result of the annual review conducted;
(B) each Material Compliance Matter (as defined under Rule 38a-1) that
occurred since the date of the last report; and
(C) the Chief Compliance Officer's assessment of the adequacy of the
policies and procedures and the effectiveness of their implementation;
(v) through the Chief Compliance Officer, provide the Board with any
additional information specifically requested or otherwise reasonably necessary
for the Board to review and evaluate the Fund Compliance Program;and
(vi) through the Chief Compliance Officer, provide the Board with
prompt notification of any serious compliance issues that have come to the
attention of BISYS or the Chief Compliance Officer.
In connection with the services set forth above in paragraphs (c)(ii),
(iii), (iv) and (v) of this Section 1, in the event that the Board retains a
Chief Compliance officer that is not provided by BISYS, the services shall
consist of providing the appropriate level of support to the Chief Compliance
Officer to reasonably enable him or her to fulfill the duties set forth therein.
2. Provision of Executive Officers.
(a) Provision of Chief Compliance Officer. At the election of the
Board, in connection with the compliance services to be rendered by BISYS
pursuant to Section 1 above, and subject to the provisions of this Section 2(a)
and Section 2(c) below, BISYS agrees to make available to the Trust and the
Board a person to serve as the Trust's Chief Compliance Officer responsible for
administering the Fund Compliance Program as provided in paragraph (a)(4) of
Rule 38a-1. BISYS' obligation in this regard shall be met by providing an
appropriately qualified employee or agent of BISYS (or its affiliates) who, in
the exercise of his or her duties to the Trust, shall act in good
faith and in a manner reasonably believed by him or her to be in the best
interests of the Trust. In the event that the employment relationship between
BISYS and any person made available by BISYS to serve as Chief Compliance
Officer terminates for any reason, BISYS shall have no further responsibility to
provide the services of that particular person, and shall have no responsibility
whatsoever for the services to the Trust or other activities of such person
provided or occurring after such termination in the event the Board retains such
person as Chief Compliance Officer. In the event such person is terminated as
Chief Compliance Officer by the Board, and upon the request of the Board, BISYS
will employ reasonable good faith efforts to promptly make another person
available to serve as the Chief Compliance Officer. In addition, the Board may,
in its sole discretion and for any reason, terminate the Chief Compliance
Officer provided for under this Agreement. Following a reasonable opportunity
for BISYS to provide a replacement, if the person(s) BISYS makes available is
not acceptable to the Board to serve as the replacement Chief Compliance
Officer, the Trust shall have the ability to terminate this Agreement upon
thirty (30) days notice to BISYS. In the event that the Trust appoints a Chief
Compliance Officer that is not provided by BISYS but this Agreement is not
terminated: (i) BISYS shall continue to render the other services enumerated in
Section 1(c), and continue to perform the other services enumerated in Section
1(c), in support of the replacement Chief Compliance Officer and (ii) BISYS and
the Trust will negotiate, in good faith, a lower rate for, the annual fee
payable under Schedule A, provided, however, that BISYS' annual fee under
Schedule A shall remain unchanged unless and until a mutually acceptable lower
fee is agreed upon in writing. .
In connection with BISYS' commitment to make an appropriately qualified
person available to serve as Chief Compliance Officer, BISYS shall pay a level
of total compensation to such person as is consistent with BISYS' compensation
of employees having similar duties, similar seniority, and working at the same
or similar geographical location. BISYS shall not be obligated to pay any
compensation to a Chief Compliance Officer which exceeds that set forth in the
previous sentence. BISYS agrees to provide the Board with information pertaining
to the compensation of the Chief Compliance Officer and acknowledges that the
Chief Compliance Officer's compensation must be acceptable to and approved by
the Board, including a majority of the independent members of the Board.
No employee of BISYS, or any person acting under the direction of BISYS may
directly or indirectly take any action to coerce, manipulate, mislead, or
fraudulently influence the Chief Compliance Officer in the performance of his or
her duties under this Agreement.
The Trust will provide copies of the Fund Compliance Program, related
policies and procedures, and all other books and records of the Trust as the
Chief Compliance Officer deems necessary or desirable in order to carry out his
or her duties hereunder on behalf of the Trust. The Trust shall cooperate with
the Chief Compliance Officer and ensure the cooperation of the Service Providers
to the Trust, as well as Trust counsel, independent Trustee counsel and the
Trust's independent accountants (collectively, the "Other Providers"), and
assist the Chief Compliance Officer and BISYS in preparing, implementing and
carrying out the duties of the Chief Compliance Officer under the Fund
Compliance Program and Rule 38a-1. In addition, the Trust shall provide the
Chief Compliance Officer with appropriate access to the executive officers and
Board of the Trust, and to representatives of and to any records, files and
other documentation prepared by, Service Providers and Other Providers, which
are or may be related to the Fund Compliance Program.
Each party agrees to provide promptly to the other party (and to the Chief
Compliance Officer), upon request, copies of other records and documentation
relating to the compliance by such party with Federal Securities Laws (as
related to the Fund Compliance Program), and each party also agrees otherwise to
assist the other party (and the Chief Compliance Officer) in complying with the
requirements of the Fund Compliance Program and Federal Securities Laws.
BISYS agrees to provide the services set forth in Section 1 pertaining to the
Fund Compliance Program, whether or not the person serving as Chief Compliance
Officer is an employee or agent of BISYS.
(b) AML Compliance Officer. It is understood that the Trust is a
financial institution subject to the law entitled Uniting and Strengthening
America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism ("U.S.A. Patriot") Act of 2001 and the Bank Secrecy Act (collectively,
the "AML Acts"), and is required to comply with the AML Acts and applicable
regulations thereunder (collectively, the "Applicable AML Laws").
Subject to the provisions of this Section 2(b) and Section 2(c) below, BISYS
agrees to make available to the Trust a person to serve as the Trust's
anti-money laundering compliance officer ("AML Compliance Officer"). BISYS'
obligation in this regard shall be met by providing an appropriately qualified
employee or agent of BISYS (or its
affiliates) who, in the exercise of his or her duties to the Trust, shall act in
good faith and in a manner reasonably believed by him or her to be in the best
interests of the Trust. Subject to the relevant terms of the transfer agency or
other services agreement under which BISYS provides certain anti-money
laundering services to the Trust, the AML Compliance Officer will assist the
Trust in operating the written anti-money laundering program adopted by the
Board of the Trust and provided to BISYS (the "AML Program"), and shall perform
the duties assigned to the AML Compliance Officer which are set forth in the AML
Program.
The Trust shall provide copies of its anti-money laundering compliance
reports and such other books and records of the Trust as the AML Compliance
Officer deems necessary or desirable in order to carry out his or her duties
hereunder on behalf of the Trust. Each party also agrees to provide promptly to
the other party (and to the AML Compliance Officer), upon request, copies of
other records and documentation relating to the compliance by such party with
Applicable AML Laws (in relation to the Trust), and each party also agrees
otherwise to assist the other party (and the AML Compliance Officer) in
complying with the requirements of the AML Program and Applicable AML Laws. Each
party agrees to retain a copy of all documents and records prepared, maintained
or obtained by it relating to shareholders and transactions for a period of at
least five (5) years from the termination of the relationship with each such
shareholder or the date of execution of each such transaction. The foregoing is
not intended to limit any obligation to retain any specified records for any
other period that may be specified in the AML Program or under Applicable AML
Laws.
(c) Additional Provisions Concerning Executive Officers. It is
mutually agreed and acknowledged by the parties that the Chief Compliance
Officer and the AML Compliance Officer contemplated under the provisions of this
Section 2 of this Agreement will be executive officers of the Trust ("Executive
Officers"). The provisions of Sections 2(a) - (b) are subject to the internal
policies of BISYS concerning the activities of its employees and their service
as officers of funds (the "BISYS Policies"), a copy of which shall be provided
to the Trust upon request. The Trust's governing documents (including its
Agreement and Declaration of Trust and By-Laws) and/or resolutions of its Board
shall contain mandatory indemnification provisions that are applicable to each
Executive Officer, that are designed and intended to have the effect of fully
indemnifying him or her and holding him or her harmless with respect to any
claims, liabilities and costs arising out of or relating to his or her service
in good faith in a manner reasonably believed to be in the best interests of the
Trust, except to the extent he or she would otherwise be liable to the Trust by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office.
The Trust shall provide coverage to each Executive Officer under its
directors' and officers' liability policy that is appropriate to the Executive
Officer's role and title, and consistent with coverage applicable to the other
officers holding positions of executive management.
In appropriate circumstances, each Executive Officer shall have the
discretion to resign from his or her position, in the event that he or she
reasonably determines that there has been or is likely to be (a) a material
deviation from the BISYS Policies, (b) an ongoing pattern of conduct involving
the continuous or repeated violation of Applicable AML Laws or Federal
Securities Laws, or (c) a material deviation by the Trust from the terms of this
Agreement governing the services of such Executive Officer that is not caused by
such Executive Officer or BISYS. In addition, each Executive Officer shall have
reasonable discretion to resign from his or her position in the event that he or
she determines that he or she has not received sufficient cooperation from the
Trust or its Other Providers to make an informed determination regarding any of
the matters listed above.
Each Executive Officer may, and the Trust shall, promptly notify BISYS of any
issue, matter or event that would be reasonably likely to result in any claim by
the Trust, one or more Trust shareholder(s) or any third party which involves an
allegation that any Executive Officer failed to exercise his or her obligations
to the Trust in a manner consistent with applicable laws (including but not
limited to any claim that a Report failed to meet the standards of
Xxxxxxxx-Xxxxx and other applicable laws).
Notwithstanding any provision of the Administration Agreement or any other
agreement or instrument that expressly or by implication provides to the
contrary, (a) it is expressly agreed and acknowledged that BISYS cannot ensure
that the Trust complies with Applicable AML Laws or the Federal Securities Laws,
and (b) whenever an employee or agent of BISYS serves as an Executive Officer of
the Trust, as long as such Executive Officer acts in good faith and in a manner
reasonably believed to be in the best interests of the Trust, the Trust shall
indemnify the Executive Officer and BISYS and hold the Executive Officer and
BISYS harmless from any loss, liability, expenses (including reasonable
attorneys fees) and damages incurred by them arising out of or related to the
service of such
employee or agent of BISYS as an Executive Officer of the Trust, except to the
extent such indemnification would be illegal, impermissible or improper under
the Federal Securities Laws, as interpreted by the SEC.
3. Fees and Expenses.
(a) BISYS shall be entitled to receive from the Trust the amounts set forth
on Schedule A hereto, reflecting the amounts charged by BISYS for the
performance of services under this Agreement. The fees hereunder shall be in
addition to all fees and expenses charged by BISYS under the Administration
Agreement.
(b) In addition to paying BISYS the fees set forth in Schedule A, the Trust
agrees to reimburse BISYS for all of its reasonable out-of-pocket expenses
incurred in providing services under this Agreement, including but not limited
to the following:
(i) The out-of-pocket expenses incurred in connection with
BISYS' provision of Executive Officers to the Trust and in
connection with compliance services, including travel costs
for attending Board meetings, conducting due diligence of
Service Providers, and attending training conferences and
seminars (plus the costs of training);
and
(ii) Any other expenses approved by the Board.
(c) All rights of compensation under this Agreement for services performed
and for expense reimbursement shall survive the termination of this Agreement.
4. Information to be Furnished by the Trust.
(a) The Trust has furnished or shall promptly furnish to BISYS copies
of the following, as amended and current as of the date of this Agreement:
(i) The various policies and procedures of the Trust that have been
adopted through the date hereof which pertain to compliance matters
that are required to be covered by the Fund Compliance Program,
including the compliance programs of Service Providers other than
BISYS, as necessary under Rule 38a-1 for inclusion in the Fund
Compliance Program; and
(ii) The Trust's Anti-Money Laundering Policy.
(b) The Trust shall furnish BISYS written copies of any amendments to, or
changes in, any of the items referred to in Section 4(a) hereof, forthwith upon
such amendments or changes becoming effective. In addition, the Trust agrees
that no amendments will be made to the AML Program or the Fund Compliance
Program which will have the effect of changing the procedures employed by BISYS
in providing the services agreed to hereunder or which amendment will affect the
duties of BISYS hereunder unless the Trust first notifies BISYS of such
amendments or changes.
(c) BISYS may rely on all documents furnished to it by the Trust and its agents
in connection with the services to be provided under this Agreement, including
any amendments to or changes in any of the items to be provided by the Trust
pursuant to Section 4(a), and shall be entitled to indemnification in accordance
with Section 5 below with regard to such reliance.
5. Term and Termination.
(a) The compliance services to be rendered by BISYS under this Agreement
shall commence upon the date of this Agreement and shall continue in effect for
one (1) year from that date, unless earlier terminated pursuant to the terms of
this Agreement. During such one year term (i) the Agreement may be terminated
upon thirty (30) days notice in the event there is "cause," as defined in the
Administration Agreement and (ii) the Chief Compliance Officer may be terminated
at any time by the Board, in its sole discretion, without cause and such
termination will be effective immediately. Following the one year anniversary of
the date of this Agreement, the Agreement may be terminated by either party for
"cause," as provided above, or by providing the other party with ninety (90)
days written notice of termination.
(b) The obligations of BISYS set forth in Section 2(b) above shall terminate
automatically upon any termination of the transfer agency agreement under which
BISYS provides transfer agency services to the Trust.
(c) Notwithstanding anything in this Agreement to the contrary, including but
not limited to the provisions of Section 5(a), all of the obligations of BISYS
and the Fifth Third Funds hereunder shall terminate automatically upon any
termination of the Administration Agreement.
6. Notice.
Any notice provided hereunder shall be sufficiently given when sent by
registered or certified mail to the party required to be served with such notice
at the following address: if to the Trust, to ________________; Attn:
____________, at _____________; and if to BISYS, at 0000 Xxxxxxx Xxxx, Xxxxxxxx,
Xxxx 00000; Attn: President, or at such other address as such party may from
time to time specify in writing to the other party pursuant to this Section.
7. Governing Law and Matters Relating to the Trust as a Massachusetts
Business Trust.
This Agreement shall be construed in accordance with the laws of the
State of Ohio and the applicable provisions of the 1940 Act. To the extent that
the applicable laws of the State of Ohio, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act of 1940,
as amended, the latter shall control. The names "Fifth Third Funds" and
"Trustees of Fifth Third Funds" refer respectively to the Trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under an Agreement and Declaration of Trust dated as of September 15, 1988
to which reference is hereby made and a copy of which is on file at the office
of the Secretary of State of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "Fifth Third Funds" entered into in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders or representatives of the Trust personally, but bind only
the assets of the Trust, and all persons dealing with any series of shares of
the Trust must look solely to the assets of the Company belonging to such series
for the enforcement of any claims against the Trust. The execution and delivery
of this Agreement have been authorized by the Trustees, and this Agreement has
been signed and delivered by an authorized officer of the Trust, acting as such,
and neither such authorization by the Trustees nor such execution and delivery
by such officer shall be deemed to have been made by any of them individually or
to impose any liability on them personally, but shall bind only the trust
property of the Trust as provided in the Trust's Declaration of Trust.
8. Representations and Warranties.
Each party represents and warrants to the other that this Agreement has
been duly authorized and, when executed and delivered by it, will constitute a
legal, valid and binding obligation of it, enforceable against it in accordance
with its terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting the rights and remedies of
creditors and secured parties.
9. Miscellaneous.
(a) Except as expressly provided in this Agreement, the terms of the
Administration Agreement shall apply to the services rendered under this
Agreement and the general provisions thereof shall be used on a residual basis
to construe any issues arising under this Agreement that are not addressed by
the express terms of this Agreement. Except as provided in this Agreement, the
provisions of the Administration Agreement remain in full force and effect
(including, without limitation, the term of the Agreement).
(b) The provisions set forth in this Agreement supersede all prior
negotiations, understandings and agreements bearing upon the subject matter
covered herein, including any conflicting provisions of the Administration
Agreement.
(c) No amendment or modification to this Agreement shall be valid
unless made in writing and executed by both parties hereto.
(d) Paragraph headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(e) This Agreement may be executed in counterparts, each of which shall
be an original but all of which, taken together, shall constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed all as of the day and year first above written.
FIFTH THIRD FUNDS
By:
Name:
Title:
FIFTH THIRD BANK
By:
Name:
Title:
BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS FUND SERVICES, INC.,
its General Partner
By:
Name:
Title:
FORM OF SCHEDULE A
TO COMPLIANCE SERVICES AGREEMENT
Dated October 5, 2004
Compliance Services Fees
Compliance Services provided under this Agreement:
$200,000 annual fee**
** In the event that the Trust appoints a Chief Compliance Officer that
is not provided by BISYS but this Agreement is not terminated, the annual fee
will be subject to renegotiation at a lower rate in accordance with Section
2(a)..
All recurring fees set forth above shall be subject to adjustment annually
commencing on the one-year anniversary of the date of this Agreement by the
percentage increase in consumer prices for services as measured by the United
States Consumer Price Index entitled "All Services Less Rent of Shelter" or a
similar index should such index no longer be published.
Out of Pocket Expenses
Out of pocket expenses are not included in the above fees and shall also be paid
to BISYS in accordance with the provisions of this Agreement.
FIFTH THIRD FUNDS
By:
Name:
Title:
BISYS FUND SERVICES LIMITED PARTNERSHIP
By: BISYS FUND SERVICES, INC.,
its General Partner
By:
Name:
Title:
