1
EXHIBIT 23(h)(2)
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT (the "Agreement") is made by and between
Provident Mutual Life Insurance Company ("Provident Mutual"), a Pennsylvania
mutual life insurance company, and Market Street Fund (the "Fund"), a Delaware
business trust.
WITNESSETH:
WHEREAS, Provident Mutual offers and sells to the public variable life
insurance policies, with the Separate Accounts established for these policies
continuously investing in shares of the respective Portfolios of the Fund as the
investment vehicle for these Separate Accounts and the policies; and
WHEREAS, the Fund currently offers eleven (11) portfolios (and may
offer new portfolios in the future) (each, a "Portfolio") listed on the appendix
attached to this Agreement, which may be amended from time to time under this
Agreement (the "Appendix"), each of which Portfolio generally bears the
Portfolio's own costs and expenses, including those costs and expenses as
investment advisory fees, administrative fees, custodian costs, and legal,
accounting, and printing expenses, as well as a pro-rata portion of the costs
and expenses of the Fund as a whole, including, but not limited to, the fees and
expenses of the Fund's Trustees, costs of insurance and professional group
memberships; and
WHEREAS, Provident Mutual has undertaken voluntarily to bear a portion
of each Portfolio's costs and expenses to avoid any potential detriment to the
policyholders of these policies arising from the impact of these costs and
expenses on the Portfolio's assets;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. TERMINATION. All reimbursement agreements prior to this date are
hereby terminated.
2. EXPENSE CAPS FOR PORTFOLIO. For the Portfolios listed in the Appendix
hereto, if the total ordinary operating expenses of a Portfolio, excluding
advisory fees and extraordinary costs and expenses, such as attorneys' fees,
court judgments, decrees or awards, or any other litigation costs in legal
actions involving the Fund generally or the Portfolio specifically, or costs
relating to indemnification of directors, officers, or employees of the Fund
where these costs are not covered by the Fund's director and officer liability
insurance, for any year are in excess of the annual rate of the percentage of
the Portfolio's average daily net assets specified in the Appendix hereto,
Provident Mutual shall reimburse the Fund for any expenses of the applicable
Portfolio(s) in excess of this rate.
2
3. CALCULATION. The reimbursable amount, if any, shall be calculated daily
and credited to the Fund on a monthly basis.
4. EFFECTIVENESS. This Agreement shall be effective as of later of the
date on which this Agreement is approved by the Fund's Board of Trustees or the
close of business on the 26th day of January, 2001, which date shall be the day
on which Market Street Fund, Inc., a Maryland corporation, reorganizes and
redomesticates into Market Street Fund, a Delaware business trust.
5. DURATION. This Agreement shall continue until December 31, 2001, and,
thereafter, for successive annual periods ending December 31 of each year;
provided, that this continuance is specifically approved by the parties to the
Agreement.
IN WITNESS WHEREOF, the parties have caused this Reimbursement
Agreement to be signed by their respective officials, duly authorized, as of the
day and year first above written.
ATTEST: PROVIDENT MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------- ------------------------
Name: Xxxxx Xxxxxxxxx Name: Xxxxxx X. Xxxxx
Title: Assistant General Counsel Title: President
ATTEST: MARKET STREET FUND
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxxxx Xxxxx
-------------------------- ------------------------
Name: Xxxxx Xxxxxxxxx Name: Xxxxxxx Xxxxx
Title: Secretary Title: President
Compliance Officer
2
3
APPENDIX
PORTFOLIO ANNUAL EXPENSE CAP RATES
(AS A PERCENT OF THE AVERAGE DAILY NET ASSETS)
All Pro Broad Equity Portfolio 0.16%
All Pro Small Cap Value Portfolio 0.40%
All Pro Small Cap Growth Portfolio 0.40%
All Pro Large Cap Value Portfolio 0.40%
All Pro Large Cap Growth Portfolio 0.40%
Mid-Cap Growth Portfolio 0.20%
International Portfolio 0.75%
Equity 500 Index Portfolio 0.04%
Balanced Portfolio 0.40%
Bond Portfolio 0.28%
Money Market Portfolio 0.25%
3
