ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") made as of the 25th day of
January, 2001 by and between PBHG Insurance Series Fund, a Delaware business
trust (the "Trust"), and PBHG Fund Services, a Pennsylvania business trust (the
"Administrator").
W I T N E S S E T H:
WHEREAS, the Trust is engaged in business as an open-end management
investment company and registered as such under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, the Trust desires to retain the Administrator to provide
administrative services to the Trust and each of its several series which are
identified in Schedule A hereto (the "Funds"), in the manner and on the terms
and conditions hereinafter set forth; and
WHEREAS, the Trust and the Administrator propose to engage a
sub-administrator (the "Sub-Administrator") to provide certain administrative
services to the Trust and the Funds, subject to the approval of the Trust's
Board of Trustees;
NOW THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the parties hereto, intending to be
legally bound, do hereby agree as follows:
1. DUTIES AND RESPONSIBILITIES OF THE ADMINISTRATOR.
The Administrator shall oversee the administration of the Trust's and each
Fund's business and affairs as set forth herein and shall provide certain
services required for effective administration of the Trust and the Funds. In
connection therewith, the Administrator shall:
1.1. OFFICE AND OTHER FACILITIES. Furnish, without cost to the
Trust, or provide and pay the cost of, such office facilities, furnishings, and
office equipment as are necessary for the performance of the Administrator's
duties to the Trust under this Agreement.
1.2. PERSONNEL. Provide, without additional remuneration from or
other cost to the Trust, the services of individuals competent to perform all of
the Administrator's obligations under this Agreement.
1.3. AGENTS. Assist the Trust in selecting, coordinating the
activities of, supervising and acting as liaison with any other person or agent
engaged by the Trust, including the Trust's depository agent or custodian,
consultants, transfer agent, sub-transfer agents, intermediaries with respect to
mutual fund alliance programs, dividend disbursing agent, Sub-Administrator,
independent accountants, and independent legal counsel. The Administrator shall
also monitor the functions of such persons and agents, including without
limitation the compliance of the Trust and the Trust's custodians with Rule
17f-5 under the 1940 Act, if appropriate.
1.4. TRUSTEES AND OFFICERS. Authorize and permit the Administrator's
directors, officers, and employees that may be elected or appointee as Trustees
or officers of the Trust to serve in such capacities, without remuneration from
or additional cost to the Trust.
1.5. BOOKS AND RECORDS. Maintain customary records, on behalf of the
Trust, in connection with the performance of the Administrator's duties under
this Agreement. The Administrator also will monitor and oversee the performance
of the agents specified in Section 1.3. above, to ensure that all financial,
accounting, corporate, and other records required to be maintained and preserved
by the Trust or on its behalf will be maintained in accordance with applicable
laws and regulations.
1.6. COST OVERSIGHT. Monitor and review activities and procedures of
the Trust and its agents identified in Section 1.3. above, in order to identify
and seek to obtain possible service improvements and cost reductions. In
connection therewith, the Administrator shall, on a quarterly basis, prepare and
submit to the Trust a pro forma budget or similar document concerning the
estimated costs of providing the services to the Trust and shall monitor and
periodically report to the Trust's Board of Trustees information and analysis
about the actual expenses incurred in providing such services.
1.7. ACCOUNTING AND COMPLIANCE POLICIES AND PROCEDURES. Assist in
developing, reviewing, maintaining, and monitoring the effectiveness of Trust
accounting and compliance policies and procedures, including portfolio valuation
procedures, expense allocation procedures, and personal trading procedures, and
the Trust's Code of Ethics. The Administrator also will assist and coordinate
participation by the Trust and its agents in any audit by its outside auditors
or any examination by federal or state regulatory authorities or any
self-regulatory organization. The Administrator also will oversee and coordinate
the activities of Trust accountants, outside counsel, and other experts in these
audits or examinations.
1.8. SYSTEMS. Assist in developing, implementing, and monitoring the
Trust's use of automated systems for the purchase, sale, redemption and transfer
of Trust shares and the payment of Rule 12b-1 service fees or other service fees
to broker-dealers and others that provide personal services, distribution
support services, and/or account maintenance services to shareholders, and for
recording and tracking such transactions and/or payments. The Administrator also
will assist in developing, implementing, and monitoring the Trust's use of
automated communications systems with brokers, dealers, custodians, and other
service providers, including without limitation trade clearance systems.
1.9. REPORTS TO THE TRUST. Furnish to or place at the disposal of
the Trust such information, reports, evaluations, analysis, and opinions
relating to its administrative functions and the administrative functions
performed by the Sub-Administrator, as the Trust may, at any time or from time
to time, reasonably request or as the Administrator may deem helpful to the
Trust. The Administrator also will assist in the preparation of agendas and
other materials for meetings of the Trust's Board of Trustees and will attend
such meetings.
1.10. REPORTS AND FILINGS. Provide appropriate assistance in the
development and/or preparation of all reports and communications by the Trust to
Trust shareholders and all reports and filings necessary to maintain the
registrations and qualifications of the Trust's shares under federal securities
law.
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1.11. SHAREHOLDER INQUIRIES. Respond to all inquiries from Trust
shareholders or otherwise answer communications from Trust shareholders if such
inquiries or communications are directed to the Administrator. If any such
inquiry or communication would be more properly answered by one of the agents
listed in Section 1.3. above, the Administrator will coordinate, as needed, the
provision of their response.
2. ALLOCATION OF EXPENSES.
2.1. EXPENSES PAID BY THE ADMINISTRATOR.
2.1.1. IN GENERAL. The Administrator shall bear all of its own
expenses in connection with the performance of its duties under this Agreement.
2.1.2. SALARIES AND FEES OF DIRECTORS AND OFFICERS. The
Administrator shall pay all salaries, expenses, and fees, if any, of the
directors, officers, and employees of the Administrator who are directors,
officers, or employees of the Trust.
2.1.3. WAIVER OR ASSUMPTION AND REIMBURSEMENT OF TRUST EXPENSES BY
THE ADMINISTRATOR. The waiver or assumption and reimbursement by the
Administrator of any expense of the Trust that the Administrator is not required
by this Agreement to waive, or assume or reimburse, shall not obligate the
Administrator to waive, assume, or reimburse the same or any similar expense of
the Trust on any subsequent occasion, unless so required pursuant to a separate
agreement between the Trust and the Administrator.
2.2. EXPENSES PAID BY THE TRUST. The Trust shall bear all expenses
of its organization, operation, and business not specifically waived, assumed,
or agreed to be paid by the Administrator as provided in this Agreement or any
other agreement between the Trust and the Administrator, and as described in the
Trust's then-current Prospectuses and Statements of Additional Information.
3. FEES.
3.1. COMPENSATION RATE. As compensation for all services rendered,
facilities provided, and expenses paid and any expense waived or assumed and
reimbursed by the Administrator, the Trust shall pay the Administrator a fee per
Fund at the annual rate of .15% of the average daily net assets of each Fund.
3.2. METHOD OF COMPUTATION. The Administrator's fee shall accrue on
each calendar day and the sum of the daily fee accruals shall be paid monthly to
the Administrator by the fifth (5th) business day of the next calendar month.
The daily fee accruals shall be computed by multiplying the fraction of one (1)
over the number of calendar days in the year by the applicable annual rates
described in Section 3.1. above, and multiplying this product by the net assets
of the Funds, as determined in accordance with the current Prospectuses of the
Trust, as of the close of business on the last preceding business day on which
the Trust was open for business.
3.3. PRORATION OF FEE. If this Agreement becomes effective or
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terminates before the end of any month, the fee for the period from the
effective date to the end of such month or from the beginning of such month to
the date of termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full month in which such effectiveness
or termination occurs.
4. ADMINISTRATOR'S USE OF THE SERVICES OF OTHERS.
The Administrator may at its own cost employ, retain, or otherwise avail
itself of the services or facilities of other persons or organizations for the
purpose of providing the Administrator or the Trust with such information,
advice, or assistance as the Administrator may deem necessary, appropriate, or
convenient for the discharge of its obligations hereunder or otherwise helpful
to the Administrator, including consulting, monitoring, and evaluation services
concerning the Trust and the Funds.
5. OWNERSHIP AND CONFIDENTIALITY OF RECORDS.
All records required to be maintained and preserved by the Trust, pursuant
to rules or regulations of the Securities and Exchange Commission under Section
31(a) of the 1940 Act, and maintained and preserved by the Administrator on
behalf of the Trust, are the property of the Trust and shall be surrendered by
the Administrator promptly on request by the Trust. The Administrator shall not
disclose or use any record or information obtained pursuant to this Agreement in
any manner whatsoever except as expressly authorized by this Agreement and
applicable law. The Administrator shall keep confidential any information
obtained in connection with its duties hereunder and shall disclose such
information only if the Trust has authorized such disclosure or if such
disclosure is expressly required by applicable law or federal or state
regulatory authorities.
6. REPORTS TO THE ADMINISTRATOR.
The Trust shall furnish or otherwise make available to the Administrator
such Prospectuses, Statements of Additional Information, financial statements,
proxy statements, reports, and other information relating to the business and
affairs of the Trust, as the Administrator may, at any time or from time to
time, reasonably require in order to discharge its obligations under this
Agreement.
7. SERVICES TO OTHER CLIENTS.
Nothing herein contained shall limit the freedom of the Administrator or
any affiliated person of the Administrator to render corporate administrative
services to other investment companies or to engage in other business
activities; however, so long as this Agreement or any extension, renewal, or
amendment hereof shall remain in effect or until the Administrator shall
otherwise consent, the Administrator shall be the only administrator to the
Trust .
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8. LIMITATION OF LIABILITY OF THE ADMINISTRATOR AND INDEMNIFICATION BY
THE TRUST.
8.1. LIMITATION OF LIABILITY.
8.1.1. Neither the Administrator nor any of its directors, officers,
employees or agents performing services for the Trust, at the direction or
request of the Administrator in connection with the Administrator's discharge of
its obligations undertaken or reasonably assumed with respect to this Agreement,
shall be liable for any act or omission in the course of or in connection with
the Administrator's services hereunder, including any error of judgment or
mistake of law or for any loss suffered by the Trust, in connection with the
matters to which this Agreement relates; provided, that nothing herein contained
shall be construed to protect the Administrator or any such person against any
liability to the Trust or its shareholders to which the Administrator or such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or negligence in the performance of its or their duties on behalf of the Trust.
8.1.2. The Administrator's directors, officers, employees and agents
performing services for the Trust shall be covered errors and omissions and
directors and officers liability insurance, as appropriate, under a policy
maintained by the Administrator or an affiliate of the Administrator.
8.1.3. The Administrator may apply to the Board of Trustees of the
Trust at any time for instructions and may consult counsel for the Trust or its
own counsel and with accountants and other experts with respect to any matter
arising in connection with the Administrator's duties, and the Administrator
shall not be liable or accountable for any act on taken or omitted by it in good
faith in accordance with such instruction or with the opinion of such counsel,
accountants, or other experts.
8.1.4. The Administrator shall at all times have the right to
mitigate or cure any and all losses, damages, costs, charges, fees,
disbursements, payments and liabilities to the Trust and its shareholders.
8.1.5. As provided in the governing instrument of the Trust and
pursuant to Delaware Law:
(a) no Shareholder or Trustee of the Trust shall be personally
liable for any debts, liabilities, obligations or expenses
incurred by, or contracted for under this Agreement; and
(b) (i) the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a
particular Portfolio of the Trust shall be enforceable against
the assets of such Portfolio only, and not against the assets
of the Trust generally or assets belonging to any other
Portfolio of the Trust; and (ii) none of the debts,
liabilities, obligations and expenses incurred, contracted for
or otherwise existing with respect to the Trust generally that
have not been allocated to a specified Portfolio of the Trust,
shall be enforceable against the assets of such specified
Portfolio.
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8.2. INDEMNIFICATION BY THE TRUST.
8.2.1 As long as the Administrator acts in good faith and with due
diligence and without negligence, the Trust shall indemnify the Administrator
and hold it harmless from and against any and all actions, suits, and claims,
whether groundless or otherwise, and from and against any and all losses,
damages (excluding consequential, punitive or other indirect damages), costs,
charges, reasonable counsel fees and disbursements, payments, expenses, and
liabilities (including reasonable investigation expenses) arising directly or
indirectly out of the administrative services or any other service rendered to
the Trust hereunder. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
8.2.2. The rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Trust may be asked to
indemnify or hold the Administrator harmless, the Board of Trustees of the Trust
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the Administrator will
use all reasonable care to identify and notify the Board of Trustees of the
Trust promptly concerning any situation which presents or appears likely to
present the probability of such a claim for indemnification against the Trust,
but failure to do so in good faith shall not affect the rights hereunder.
8.2.3. The Administrator shall secure and maintain a fidelity bond,
or be covered by an affiliate's blanket fidelity bond, in at least the amount
required by Rule 17g-1 under the 1940 Act for joint insurance bonds of
investment companies.
9. INDEMNIFICATION BY THE ADMINISTRATOR.
9.1. The Administrator shall indemnify the Trust, its officers and
Trustees and hold them harmless from and against any and all actions, suits, and
claims, whether groundless or otherwise, and from and against any and all
losses, damages (excluding consequential, punitive or other indirect damages),
costs, charges, reasonable counsel fees and disbursements, payments, expenses,
and liabilities (including reasonable investigation expenses) arising directly
or indirectly out of the administrative services or any other service rendered
to the Trust hereunder and arising or based upon the willful misfeasance, bad
faith, or negligence of the Administrator, its directors, officers, employees,
and agents in the performance of its or their duties on behalf of the Trust. The
indemnity and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.
9.2. The rights hereunder shall include the right to reasonable
advances of defense expenses in the event of any pending or threatened
litigation with respect to which indemnification hereunder may ultimately be
merited. In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Administrator may be
asked to indemnify or hold the Trust, its officers, and Trustees harmless, the
Administrator shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that the
Trust will use all reasonable care to identify and notify the Administrator
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the
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Administrator, but failure to do so in good faith shall not affect the rights
hereunder.
10. FORCE MAJEURE.
In the event the Administrator is unable to perform its obligations or
duties under the terms of this Agreement because of any act of God, strike,
riot, act of war, equipment failure, power failure or damage of the causes
reasonably beyond its control, the Administrator shall not be liable for any and
all losses, damages, costs, charges, counsel fees, payments, expenses or
liability to any other party (whether or not a party to this Agreement)
resulting from such failure to perform its obligations or duties under this
Agreement or otherwise from such causes. This provision, however, shall in no
way excuse the Administrator from being liable to the Trust for any and all
losses, damages, costs, charges, counsel fees, payments and expenses incurred by
the Trust due to the non-performance or delay in performance by the
Administrator of its duties and obligation under this Agreement if such
non-performance or delay in performance could have been reasonably been
prevented by the Administrator through back-up systems and other procedures
commonly employed by other administrators in the mutual fund industry, provided
that the Administrator shall have the right, at all times, to mitigate or cure
any losses, including by making adjustments or corrections to any current or
former shareholder accounts.
11. RETENTION OF SUB-ADMINISTRATOR.
The Administrator may retain a Sub-Administrator to perform corporate
administrative services to the Trust. The retention of a Sub-Administrator shall
be at the cost and expense of the Administrator. The Administrator shall pay and
shall be solely responsible for the payment of the fees of the Sub-Administrator
for the performance of its services for the Trust.
12. TERM OF AGREEMENT.
The term of this Agreement shall begin on the day and year first written
above, and unless sooner terminated as hereinafter provided, shall continue in
effect for an initial period that will expire on December 31, 2002. Thereafter,
this Agreement shall continue in effect from year to year, subject to the
termination provisions and all other terms and conditions hereof. The
Administrator shall furnish to the Trust, promptly upon its request, such
information as may be reasonably necessary to evaluate the terms of this
Agreement or any extension, renewal, or amendment thereof.
The assignment (as that term is defined in Section (2)(a)(4) of the 1940
Act and rules thereunder) of this Agreement or any rights or obligations
thereunder shall be prohibited by either party without the written consent of
the other party. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and assigns.
13. TERMINATION OF AGREEMENT.
This Agreement may be terminated by any of the parties hereto, without the
payment of any penalty:
(a) for a material breach of this Agreement, upon thirty (30) days
prior written notice to the other parties; provided, that this Agreement shall
not terminate if such material
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breach is cured within such thirty (30) day period.
(b) following the initial term of this Agreement, for any reason
upon ninety (90) days' prior written notice to the other parties; provided, that
in the case of termination by the Trust such action shall have been authorized
by resolution of the Board of Trustees of the Trust or by a vote of a majority
of the outstanding voting securities of the Trust or, in the case of termination
with respect to a particular Fund, by a resolution of the Board of Trustees of
the Trust or by a vote of a majority of the outstanding voting securities of
such Fund. In the case of termination by the Administrator, such termination
shall not be effective until the Trust and the Administrator shall have
contracted with one or more persons to serve as successor Administrator(s) for
the Trust and such person(s) shall have assumed such position.
14. AMENDMENT AND ASSIGNMENT OF AGREEMENT.
Any amendment to this Agreement shall be in writing and signed by the
parties hereto provided, that no material amendment shall be effective unless
authorized by resolution of the Board of Trustees of the Trust or by a majority
of the outstanding voting securities of the Trust or, in the case of an
amendment to this Agreement with respect to a particular Fund, by a resolution
of the Board of Trustees of the Trust or a vote of majority of the outstanding
voting securities of such Fund.
15. MISCELLANEOUS.
15.1. NOTICES. Any notice under this Agreement shall be given in
writing, addressed and delivered, or mailed postpaid, (i) if to the
Administrator, to PBHG Fund Services, 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx, XX 00000,
Attention: Xxx X. Xxxxxxxx, and (ii) if to the Trust, to PBHG Insurance Series
Fund, 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx, XX 00000, Attention: Xxxx X. Xxxx.
15.2. CAPTIONS. The captions contained in this Agreement are
included for convenience of reference only and in no way define or delineate any
of the provisions hereof or otherwise affect their construction or effect.
15.3. INTERPRETATION. Nothing herein contained shall be deemed to
require the Trust to take any action contrary to its Declaration of Trust or
By-Laws, or any applicable statutory or regulatory requirement to which it is
subject or by which it is bound, or to relieve or deprive the Board of Trustees
of its responsibility for and control of the conduct of the affairs of the
Trust.
15.4. DEFINITIONS. Any question of interpretation of any term or
provision of this Agreement having a counterpart in or otherwise derived from a
term or provision of the 1940 Act shall be resolved by reference to such term or
provision of the 1940 Act and to interpretations thereof, if any, by the United
States courts or, in the absence of any controlling decision of any such court
by rules, regulations, or orders of the Securities and Exchange Commission
validly issued pursuant to the 1940 Act. In addition, where the effect of a
requirement of the 1940 Act reflected in any provision of this Agreement is
relaxed by a rule, regulation, or
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order of the Securities and Exchange Commission, whether of special or of
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation, or order.
15.5. SEVERABILITY. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule, or otherwise, the remainder
of this Agreement shall not be affected thereby.
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15.6. GOVERNING LAW. Except insofar as the 1940 Act or other federal
laws and regulations may be controlling, this Agreement shall be governed by,
and construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their respective officers thereunto duly authorized and their respective
corporate seals to be hereunto affixed, as of the day and year first above
written.
ATTEST: PBHG INSURANCE SERIES FUND
/s/ Xxxxxxx X. Xxxxxxxxx By: /s/Xxx X. Xxxxxxxx
-------------------------- -------------------------------
Xxxxxxx X. Xxxxxxxxx Xxx X. Xxxxxxxx
Title: Assistant Secretary Title: Chief Financial Officer
ATTEST: PBHG FUND SERVICES
/s/ Xxxxxx X. Xxxxx By: /s/ Xxxx X. Xxxxxxxxx
-------------------------- -------------------------------
Xxxxxx X. Xxxxx Xxxx X. Xxxxxxxxx
Title: Assistant Secretary Title: Chief Financial Officer
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SCHEDULE A
PBHG INSURANCE SERIES FUND
PBHG Insurance Series Fund consists of the following Funds, each of which
is subject to this Agreement:
PBHG Growth II Portfolio
PBHG Large Cap Growth Portfolio
PBHG Select 20 Portfolio
PBHG Select Value Portfolio
PBHG Mid-Cap Value Portfolio
PBHG Small Cap Value Portfolio
PBHG Technology & Communications Portfolio
Dated: January 25, 2001
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