AMENDMENT
To
Transfer Agency and Service Agreement
Dated: June 30, 2000
1. General Background.
1.1 In accordance with the Amendment provision in Article 11 of the
Transfer Agency and Service Agreement between The Victory Portfolios
(the "Company"), on behalf of the individual Funds listed on Schedule
A, individually and not jointly (collectively the "Funds"), and State
Street Bank and Trust Company (the "Bank") dated July 26, 1996 (the
"Agreement"), the Company on behalf of the Funds desires to amend the
Agreement to include SIMPLE XXX recordkeeping services.
1.2 The Company on behalf of the Funds intends to make available to
certain of their customers SIMPLE XXX plans ("SIMPLE IRAs") pursuant
to which the customers ("Employers") may adopt the SIMPLE IRAs for the
benefit of individual employees ("Participants").
1.3 Participants may appoint the Bank as Custodian ("Custodian") of SIMPLE
IRAs, the prototype of which is maintained by the Bank using IRS Form
5305 SIMPLE and/or IRS Form 5304 SIMPLE, as applicable (the "Bank
Prototype").
1.4 The Company on behalf of the Funds desires to appoint the Bank as its
recordkeeper for the SIMPLE IRAs, and the Bank desires to accept such
appointment.
1.5 All defined terms and definitions in the Agreement shall be the same
in this amendment (the "2000 Amendment") except as specifically
revised by the 2000 Amendment.
1.6 The Bank shall provide ministerial data processing or recordkeeping
services under this Amendment.
2. Availability of Shares.
2.1 The Funds or its affiliate distribute or make available to SIMPLE IRAs
Shares of the open-end, diversified investment companies listed in
Schedule A of the Agreement that are registered under the 0000 Xxx.
2.2 The Funds will give the Bank and each Employer one hundred and fifty
(150) days' prior written notice of the Funds' ceasing to offer Shares
to SIMPLE IRAs.
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3. Duties of the Bank and Record Keeper of SIMPLE IRAs.
3.1 Plan Set-Up. The Bank shall:
(a) Establish the SIMPLE IRAs on the DST Systems, Inc. TRAC-2000
System (hereinafter referred to as the "TRAC-2000 System")
based on the information submitted by the Employer on the
plan application.
(b) Provide each Employer with PLANLINK software for the
Employer to transmit payroll information for individual
Participants.
3.2 Participant Set-Up. The Bank shall:
(a) Establish Participant accounts with Participant selected
allocations submitted by the Participant on the Adoption
Agreement provided by the Funds.
(b) Maintain individual Participant accounts on the TRAC-2000
System in the name of the Custodian for the benefit of the
individual Participants.
3.3 Payroll Processing.
(a) Using the PLANLINK software, the Employer will provide the
Bank with the payroll information for each individual
Participant, including amount of deferral, amount of match
contribution and amount of discretionary contribution, as
applicable for each payroll period (hereinafter collectively
referred to as "Contributions"). The Employer will also
provide the Bank with the total dollar amount of
Contributions for all Participants in the SIMPLE IRAs. The
Employer will simultaneously provide the Bank with the
monies to effectuate the Contributions requested.
(b) The Bank will set up and reconcile automated payrolls on the
TRAC-2000 System.
3.4 Processing Transactions. The Bank shall perform the following
processing transactions:
(a) Receive for acceptance and execute/process such instructions
from Participants for the contribution and distribution to
and from Participants' accounts for the purchase and sale of
Shares, as appropriate.
(b) Receive for acceptance and execute/process such instructions
from the Employer for the contribution to Participants'
accounts. When the Bank receives such instructions in good
order (including receipt of the appropriate monies), the
Bank will credit such Shares to the appropriate Participant
account.
(c) Pursuant to purchase orders from Participants, hold the
appropriate number of Shares, as appropriate in the
appropriate Participant account. When the Bank receives such
purchase orders in good order (including receipt of the
appropriate monies), the Bank will credit such Shares to the
appropriate Participant account.
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(d) At the appropriate time as and when the Bank receives monies
paid with respect to any sale, credit such monies to the
appropriate Participant account.
(e) Effect exchanges of Shares, as appropriate, by the
Participants upon receipt of appropriate instructions in
good order.
(f) Receive payments and information for dividends and
distributions declared by the issuers of the Shares in the
form of an earnings roster and process/execute such.
(g) Maintain records of accounts for and advise the Participants
quarterly, and the Funds monthly as to the foregoing.
(h) For exchanges and allocation changes of Shares or monies,
provide daily confirmations to Participants and maintain
records thereof.
(i) Provide an 800 telephone number for Participant inquiries
and transactions when it is made available by DST Systems,
Inc.
(j) Upon receipt of data from the Company, Funds or the Employer
with respect to termination of Participants' employment with
Employers and the death of Participants, the Bank will
process such transactions and maintain such records for the
data received.
3.5 Reporting. The Bank shall:
(a) Process Federal withholding as requested by a Participant
upon distribution of assets from a Participant's account.
(b) Transmit to the IRS the dollar amounts withheld according to
IRS prescribed formats or requirements.
(c) Produce and mail annually Form 1099R to Participants
reflecting distributed amounts and federal withholding.
(d) Produce and mail annually Form 5498 to each Participant
reflecting total contributions deposited to each
Participant's account.
(e) Forward copies of all required forms to the IRS.
(f) Produce and mail to Participant's home address (as reflected
on the TRAC-2000 System) a quarterly statement reflecting
the financial activity of Participant's account.
(g) Produce and mail to the Employer's address and to the
registered representative, if any, (as reflected on the
TRAC-2000 System) a quarterly Trust Report reflecting the
financial activity of the SIMPLE XXX.
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4. Bank Prototype
4.1 The Bank consents to the use of the Bank Prototype by the Funds in
connection with the offer or sale of Shares to current or prospective
clients of the Funds. Such consent is subject to the terms and
conditions of this Amendment and to the fulfillment of the Funds's
obligations hereunder.
4.2 The Bank will furnish the Funds with a copy of the Bank Prototype
(which, if agreed to by the Bank, will be in an electronic or
machine-readable format). The Funds will be responsible for
reproducing copies of the Bank Prototype for use in the Funds'
business. The Company and the Funds acknowledge that modification to
the Bank Prototype, except as provided in Section 4.3 herein, may
adversely affect the tax effect of the Bank Prototype. If the Company
or the Funds make any modifications to the Bank Prototype, the Company
and the Funds shall be responsible for the modified Bank Prototype.
The Bank will have no responsibility or liability for the modified
Bank Prototype including, but not limited to, the maintenance and
updating of the modified Bank Prototype. The Funds agree to indemnify
and hold harmless the Bank from and against any and all losses,
damages, costs, charges, counsel fees, payments, expenses including
reasonable fees for counsel, taxes, penalties and liability arising
out of or attributable to any modifications to the Bank Prototype by
the Company or the Funds, their agents, employees, representatives or
any other person acting on behalf of the Company or the Funds.
4.3 The Bank agrees that the Funds may modify the following items in the
Bank Prototype: (i) logos; (ii) address of the Funds; (iii) fees; and
(iv) title/name of the documents.
4.4 As long as the Funds continue as the Bank's transfer agency client,
the Bank will be responsible for establishing, maintaining and
updating the Bank Prototype in compliance with the Internal Revenue
Code of 1986 and all other applicable Federal or state laws or
regulations, when changes in the law require such updating. The Bank
will provide the Funds, on a timely basis, with any updated Bank
Prototype or any revisions, amendments or other changes to the Bank
Prototype made by the Bank.
4.5 Termination.
(a) If the Funds choose to discontinue performing any of its
duties and obligations described in or contemplated by this
Amendment, either of a general nature or in respect to any
or all SIMPLE IRAs it will give the Bank at least one
hundred twenty (120) days' written notice prior to such
discontinuance. The Bank may thereupon resign as Custodian
in respect to any or all SIMPLE IRAs by providing written
notice to the Funds.
(b) If the Company on behalf of the Funds chooses to terminate
the Agreement, it will give the Bank written notice prior to
such termination in accordance with Article 9 therein. The
Bank may thereupon resign as Custodian in respect to any or
all SIMPLE IRAs by providing written notice to the Funds
(c) If the Bank chooses to resign as Custodian of any or all
SIMPLE IRAs, the Bank shall provide thirty (30) days prior
written notice to the Funds.
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(d) If the Bank resigns as Custodian of any or all SIMPLE IRAs
pursuant to Sections 4.5(a), (b) or (c), the Company or the
Funds will promptly distribute the notice of the Bank's
resignation to such persons and in such manner as are called
for under the applicable provisions of the Bank Prototype
and in form and content satisfactory to and signed by the
Bank. In such an event, the Funds shall be responsible to
obtain a successor Custodian for all SIMPLE IRAs.
(e) If within thirty (30) days (or such longer time as the Bank
may agree to in writing) after resignation by the Bank as
the Custodian pursuant to Sections 4.5(a), (b) or (c), the
Funds have not appointed a successor custodian who has
accepted such appointment, termination of the Bank's
responsibilities as Custodian shall be effected by:
(i) The Bank transferring all assets of each Plan in-kind to
a successor custodian which has been appointed by the Bank
and has accepted such appointment in writing; or
(ii) If it is not practicable to make such transfer pursuant
to subsection (i) above, the Bank distributing all assets of
the custodial accounts under the SIMPLE IRAs in a single
payment in cash or in kind to each Participant, subject to
the Bank's right as Custodian to reserve monies as it may
deem advisable for payment of all its fees, compensation,
costs and expenses or for payment of any other liabilities
constituting a charge on or against the assets of custodial
accounts or on or against the Bank as the Custodian. Any
balance of such reserve remaining after the payment of all
such items shall be paid over to the successor custodian or
distributed to the Participants.
Such transfer or distribution shall be made as of the
effective date of the Bank's resignation pursuant to
Sections 4.5(a), (b) or (c), as the case may be, or if such
date has already passed, as soon as practicable. The Bank
shall provide the Funds with written notice prior to such
transfer or distribution.
5. Representations, Warranties and Covenants of the Funds and the Bank.
5.1 In addition to the other representations, warranties and covenants
contained in the Agreement, the Bank and the Company on behalf of the
Funds agree that:
(a) The Bank shall have no investment responsibility for the
selection of investments made for a SIMPLE XXX or liability
for any investments made for a SIMPLE XXX. The Company on
behalf of the Funds agrees that, in any communications from
the Company or the Funds to any Employer, SIMPLE XXX or
Participant, it will not state or represent that the Bank
has any investment discretion or other power concerning
investments of any SIMPLE XXX or that the Bank will serve as
plan administrator or have any administrative or other
responsibility for the administration or operation of any
SIMPLE XXX.
(b) The Bank shall not serve as "Plan Administrator" (as defined
in the Employee Retirement Income Security Act of 1974, as
amended), Trustee of any SIMPLE XXX, or in any other
administrative capacity or service in any other capacity
except as provided hereunder. The Funds and/or the Employer
are responsible for serving as Plan Administrator or
appointing a third party as Plan Administrator.
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(c) The Company, the Funds, the Employer or another fiduciary of
the SIMPLE IRAs shall deliver directions to the Bank
regarding the investment of the SIMPLE IRAs' assets for
which no Participant directions are received or where
implementing Participant directions is administratively
infeasible. The Funds shall indemnify and hold the Bank, its
employees, agents and subcontractors, harmless from and
against any and all losses, damages, costs, liability and
expenses (including reasonable attorneys' fees) arising out
of or attributable to the failure of the Company, the Funds,
the Employer or other fiduciary of a SIMPLE IRAs to provide
the above directions.
(d) The Bank shall not be responsible for, and the Funds shall
indemnify and hold the Bank, its employees, agents and
subcontractors, harmless from and against any and all
losses, damages, costs, liability and expenses (including
reasonable attorneys' fees) arising out of or attributable
to the negotiation and processing of any checks including
without limitation for deposit into the Funds' demand
deposit account maintained by the Bank. The parties further
agree that any encoding or payment processing errors shall
be governed by the standard of care in Article 7 of the
Agreement and Section 4-209 of the Uniform Commercial Code
is superseded thereby.
6. Fees and Expenses.
6.1 Fee Schedule. For the performance by the Bank pursuant to this
Amendment, the Funds agree to pay the Bank as set forth in the
attached fee schedule ("Schedule 6.1"), which may be amended from time
to time subject to mutual written agreement of the Funds and the Bank.
The Funds acknowledge and agree that the Bank is entitled to certain
fees and expenses from the Participants and Employers and that the
Bank shall collect such fees directly from the Participant accounts
and the Employers.
6.2 Out-of-Pocket Expenses. In addition to the fees paid under Section 6.1
above, the Funds agree to reimburse the Bank for out-of-pocket
expenses, including but not limited to, confirmation, production,
postage, forms, telephone, microfilm, microfiche, mailing and
tabulating proxies, records storage, or advances incurred by the Bank
for the items set out in Schedule 6.1 attached hereto. In addition,
any other expenses incurred by the Bank at the request or with the
consent of the Funds will be reimbursed by the Funds.
6.3 The Funds agree to pay all fees and out-of-pocket expenses in
accordance with the provisions of Section 2.03 of the Agreement.
7. Miscellaneous
7.1 Survival. All provisions regarding indemnification, warranty,
liability, and limits thereon, and confidentiality and/or protections
of proprietary rights and trade secrets shall survive the termination
of this Amendment or the Agreement.
7.2 Severability. If any provision or provisions of this Amendment or the
Agreement shall be held invalid, unlawful, or unenforceable, the
validity, legality, and enforceability of the remaining provisions
shall not in any way be affected or impaired.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
in their names on their behalf and through their duly authorized officers, as of
this 30th day of June, 0000.
XXXXX XXXXXX BANK AND THE VICTORY PORTFOLIOS, on behalf
TRUST COMPANY of each of the Funds listed on Schedule A
of the Agreement,individually and not
jointly
By:/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx Xxxxxxxx
-------------------------- ------------------------------------
Title: Vice Chairman Title: Secretary
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Schedule A
The Victory Portfolios
Class G Shares
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Value Fund
Growth Fund
Small Company Opportunity Fund
Special Value Fund
Diversified Stock Fund
Stock Index Fund
Established Value Fund
Balanced Fund
Real Estate Investment Fund
International Growth Fund
Intermediate Income Fund
Fund for Income
Investment Quality Bond Fund
LifeChoice Conservative Investor Fund
LifeChoice Moderate Investor Fund
LifeChoice Growth Investor Fund
Class A Shares of Prime Obligations Fund
Select Shares of U.S. Government Obligations Fund
SCHEDULE 6.1
FEE SCHEDULE
Dated: June 30, 2000
Institutional Fees:
Set Up Fee $30,000 Invoiced one time
TRAC-2000 Account Fees The higher of (a) or (b) Invoiced Monthly
(a) Rate A = $1.42 per account per month
Rate B = $.20 per account per month
(b) Months After Set Up Fee Per Month
------------------ -------------
0-6 $1,000
7-12 $2,000
13-18 $3,000
19-24 $5,000
25+ $8,000
Set up date is 6/30/00
Participant Internet:
If using generic screen flow $3,000.00 Invoiced one time
If customizing $15,000.00 Invoiced one time
Per Access $.50 Invoiced monthly
Monthly Minimums $3,000 through 9/1/00
$4,000 beginning 9/2/00
NOTE: MONTHLY MINIMUMS ARE DIVIDED AMONG ALL CLIENTS USING PARTICIPANT INTERNET.
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Plan Sponsor/Broker-Dealer Internet:
If currently using Participant Internet $150.00 per hour Invoiced As
Initial Set Up Fee Incurred
Per Session $.50 per access Invoiced Monthly
Monthly Minimum $2,000
NOTE: MONTHLY MINIMUMS ARE DIVIDED AMONG ALL CLIENTS USING PLAN SPONSOR
INTERNET.
Out-of-Pockets: Actual Costs Invoiced Monthly
NOTE: Includes, but is not limited to, statements, postage, paper, teleservice
and storage costs. Internet @ $.50 per access; VRU @ $50.00 per fund plus usage.
Programming: $150.00 per hour Invoiced as
incurred
Participant/Custodial Fees:
Annual Per Account Fee $25.00* Deducted per Quarter from
Participant Account @ $6.25*
a Quarter
*Prorated across investments
Distributions $30.00 closeout
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Employer Fees:
For payrolls in excess of
26 payrolls $20.00 per payroll
NOTE: FEES MAY BE ASSESSED TO PLAN SPONSOR AND/OR FINANCIAL INSTITUTION FOR
PAYROLLS THAT ARE NOT ELECTRONIC.
STATE STREET BANK AND THE VICTORY PORTFOLIOS, on behalf
TRUST COMPANY of each of the Funds listed on
Schedule A of the Agreement,
individually and not jointly
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx Xxxxxxxx
--------------------------------- -------------------------------
Title: Vice Chairman Title: Secretary
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