Exhibit (h)(3)
MEMORIAL FUNDS
SHAREHOLDER SERVICE AGREEMENT
INSTITUTIONAL CLASS
AGREEMENT made this 29th day of June, 1999, between Memorial Funds (the
"Trust"), a Delaware business trust registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end management investment company,
which may issue its shares of beneficial interest in separate series, and
Memorial Group, Inc. (the "Institution"), a corporation organized under the laws
of the State of Delaware with its principal place of business at 0000 Xxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
WHEREAS, the Trust has adopted a Shareholder Service Plan with respect
to the Institutional Class of shares of each series of the Trust (the "Service
Plan") under which the Trust pays fees to qualified financial institutions for
maintaining and providing services to shareholder accounts of each series of the
Trust; and
WHEREAS, the Trust desires that Institution perform certain service
activities with respect to the Institutional Class of shares of each series of
the Trust listed in Schedule A to this Agreement (each a "Fund" and
collectively, the "Funds") and Institution is willing to perform those services
on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, for and in consideration of the representations,
covenants and agreements contained herein and other valuable consideration, the
undersigned parties do hereby agree as follows:
SECTION 1. SERVICE ACTIVITIES
In connection with providing services and maintaining shareholder
accounts of each Fund and Class with respect to its various customers,
Institution may provide services including: (a) establishing and maintaining
accounts and records relating to clients of Institution; (b) answering
shareholder inquiries regarding the manner in which purchases, exchanges and
redemptions of shares of the Trust may be effected and other matters pertaining
to the Trust's services; (c) providing necessary personnel and facilities to
establish and maintain shareholder accounts and records; (d) assisting
shareholders in arranging or processing purchase, exchange and redemption
transactions; (e) arranging for the wiring of funds; (f) integrating periodic
statements with other shareholder transactions; and (g) providing such other
related services as the shareholder may request. Institution shall not be
obligated to perform any specific service for its clients. Institution's
appointment shall be nonexclusive and the Trust may enter into similar
agreements with other persons.
SECTION 2. COMPENSATION
(a) As compensation for Institution's service activities with respect
to each Fund, the Trust shall pay Institution fees in the amounts listed on
Schedule B to this Agreement (the "Payments").
(b) The Payments shall be accrued daily and paid monthly or at such
other interval as the Trust and Institution shall agree.
(c) On behalf of each Fund, Institution may spend such amounts and
incur such expenses as it deems appropriate or necessary on any service
activities. Such expenses may include compensation to employees and expenses,
including overhead and telephone and other communication expenses, of
Institution. Institution shall be solely liable for any expenses it incurs.
SECTION 3. REPRESENTATIONS OF INSTITUTION
Institution represents that:
(a) the compensation payable to it under this Agreement in connection
with the investment in any Fund of the assets of its customers (I) will be
disclosed by Institution to its customers, (ii) will be authorized by its
customers, and (iii) will not result in an excessive fee to Institution;
(b) if it is a member of the National Association of Securities Dealers
,Inc. ("NASD"), it shall abide by the Rules of Fair Practice of the NASD;
(c) it will, in connection with sales and offers to sell shares,
furnish to or otherwise insure that each person to whom any such sale or offer
is made receives a copy of the appropriate Fund's or Funds' then current
prospectus, as applicable;
(d) the performance of all its obligations hereunder will comply with
all applicable laws and regulations, including any applicable Federal securities
laws and any requirements to deliver confirmations to its customers, the
provisions of its charter documents and bylaws and all material contractual
obligations binding upon Institution; and
(e) it will promptly inform the Trust of any change in applicable laws
or regulations (or interpretations thereof) or in its charter or bylaws or
material contracts which would prevent or impair full performance of any of its
obligations hereunder.
SECTION 4. TRUST LITERATURE
Institution is not authorized to make any representations concerning
shares of any Fund except those contained in the appropriate then current
prospectus and statement of additional information ("SAI") and printed
information issued by the Trust as information supplemental to the prospectus.
The Trust will supply Institution upon its request with prospectuses, SAIs,
reasonable quantities of supplemental sales literature and additional
information. Institution agrees not to use other advertising or sales material
relating to any Fund unless approved in writing by the Trust in advance of such
use.
SECTION 5. INDEMNIFICATION
Institution agrees to indemnify and hold harmless the Trust from any
claims, expenses, or liabilities incurred by the Trust as a result of any act or
omission of Institution in connection with its services under this Agreement.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective on the date hereof and, upon
its effectiveness, shall supersede all previous agreements between the parties
covering the subject matter hereof.
(b) This Agreement may be terminated as follows:
(i) automatically in the event of the termination of the
Service Plan;
(ii) automatically in the event of the assignment of this
Agreement as defined in the Act; and
(iii) by either party to the Agreement without cause by
giving the other party at least sixty (60) days' written notice of its
intention to terminate.
SECTION 7. NOTICES
Any notice under this Agreement shall be in writing and shall be
addressed and delivered, or mailed postage prepaid, to the other party's
principal place of business, or to such other place as shall have been
previously specified by written notice given to the other party.
SECTION 8. AMENDMENTS
Subject to approval of material amendments to the form of this
Agreement by the Trust's Board of Trustees, this Agreement may be amended by the
parties at any time.
SECTION 9. USE OF THE TRUST'S NAME
Institution shall not use the name of the Trust on any checks, bank
drafts, bank statements or forms for other than internal use in a manner not
approved by the Trust prior thereto in writing; provided however, that the
approval of the Trust shall not be required for the use of the Trust's name
which merely refers in accurate and factual terms to the Trust in connection
with Institution's role hereunder or which is required by any appropriate
regulatory, governmental or judicial authority; and further provided that in no
event shall such approval be unreasonably withheld or delayed.
SECTION 10. MISCELLANEOUS
(a) This Agreement shall be construed in accordance with the laws of
the State of New York.
(b) If any provision of this Agreement shall be held invalid by a court
decision, statute, rule or otherwise, the remainder of the Agreement shall not
be affected thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
MEMORIAL FUNDS
By:/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Vice President
MEMORIAL GROUP, INC.
By:/s/ Xxxxxxxxxxx X. Xxxx
Xxxxxxxxxxx X. Xxxx
President
MEMORIAL FUNDS
SHAREHOLDER SERVICE AGREEMENT
INSTITUTIONAL CLASS
SCHEDULE A
SERIES OF MEMORIAL FUNDS
Government Bond Fund
Corporate Bond Fund
Value Equity Fund
Growth Equity Fund
International Equity Fund
Money Market Fund
Equity Income Fund
MEMORIAL FUNDS
SHAREHOLDER SERVICE AGREEMENT
INSTITUTIONAL CLASS
SCHEDULE B
PAYMENTS PURSUANT TO THE SERVICE PLAN
0.25% of the average annual daily net assets of the Institutional Class
of Government Bond Fund, Corporate Bond Fund, Value Equity Fund, Growth
Equity Fund, International Equity Fund, Money Market Fund and Equity
Income Fund represented by shares owned by investors for which
Institution provides services pursuant to this Agreement.
