Exhibit (13)(a)
MANAGEMENT AND ADMINISTRATION AGREEMENT
AGREEMENT made this 1st day of December, 1995, between The One Group (the
"Trust"), a Massachusetts business trust having its principal place of business
at 000 Xxxx Xxxxxx Xxxxx, Xxxxxxxxxxx, Xxxx 00000, and The One Group Services
Company ("Administrator"), a Delaware corporation having its principal place of
business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust is an open-end management investment company, organized
as a Massachusetts business trust and registered with the Securities and
Exchange Commission (the "Commission") under the Investment Company Act of 1940
(the "1940 Act"); and
WHEREAS, the Trust desires to retain Administrator to furnish management
and administration services to certain investment portfolios of the Trust and
may retain Administrator to serve in such capacity with respect to additional
investment portfolios of the Trust, all as now or hereafter may be identified in
Schedule A hereto as such Schedule may be amended from time to time
(individually referred to herein as a "Fund" and collectively referred to herein
as the "Funds").
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. SERVICES AS MANAGER AND ADMINISTRATOR
Subject to the direction and control of the Board of Trustees of the Trust,
Administrator will assist in supervising all aspects of the operations of the
Funds except those performed by the investment adviser for the Funds under its
Investment Advisory Agreement, the custodian for the Funds under its Custodian
Agreement, the transfer agent for the Funds under its Transfer Agency Agreement
and the fund accountant for the Funds under its Fund Accounting Agreement.
Administrator will maintain office facilities (which may be in the offices
of Administrator or an affiliate but shall be in such location as the Trust
shall reasonably determine); furnish statistical and research data, clerical and
certain bookkeeping services and stationery and office supplies; prepare the
periodic reports to the Commission on Form N-SAR or any replacement forms
therefor; compile data for, assist the Trust or its designee in the preparation
of, and file, all the Funds' federal and state tax returns and required tax
filings other than those required to be made by the Funds' custodian and
transfer agent; prepare compliance filings pursuant to state securities laws
with the advice of the Trust's counsel; assist to the extent requested by the
Trust with the Trust's preparation of its Annual and Semi-Annual Reports to
Shareholders and its Registration Statements (on Form N-1A or any replacement
therefor); compile data for and prepare for filing Notices to the Commission
required pursuant to Rule 24f-2 under the 1940 Act; keep and maintain the
financial accounts and records of the Funds, including calculation of daily
expense accruals; in the case of money market funds, periodic review of the
amount of the deviation, if any, of the current net asset value per share
(calculated using available market quotations or an appropriate substitute that
reflects current market conditions) from each money market fund's amortized cost
price per share; and generally assist in all aspects of the operations
of the Funds. In compliance with the requirements of Rule 31a-3 under the 1940
Act, Administrator hereby agrees that all records which it maintains for the
Trust are the property of the Trust and further agrees to surrender promptly to
the Trust any of such records upon the Trust's request. Administrator further
agrees to preserve for the periods prescribed by Rule 31a-2 under the 1940 Act
the records required to be maintained by Rule 31a-1 under the 1940 Act.
Administrator may delegate some or all of its responsibilities under this
Agreement.
2. FEES; EXPENSES; EXPENSE REIMBURSEMENT
In consideration of services rendered and expenses assumed pursuant to this
Agreement, each of the Funds will pay Administrator on the first business day of
each month, or at such time(s) as Administrator shall request and the parties
hereto shall agree, a fee computed daily and paid as specified below calculated
at the applicable annual rate set forth on Schedule A hereto. The fee for the
period from the day of the month this Agreement is entered into until the end of
that month shall be prorated according to the proportion which such period bears
to the full monthly period. Upon any termination of this Agreement before the
end of any month, the fee for such part of a month shall be prorated according
to the proportion which such period bears to the full monthly period and shall
be payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to Administrator, the value of
the net assets of a particular Fund shall be computed in the manner described in
the Trust's Declaration of Trust or in the Prospectus or Statement of Additional
Information respecting that Fund as from time to time is in effect for the
computation of the value of such net assets in connection with the determination
of the liquidating value of the shares of such Fund.
Administrator will from time to time employ or associate with itself such
person or persons as Administrator may believe to be particularly fitted to
assist it in the performance of this Agreement. Such person or persons may be
partners, officers, or employees who are employed by both Administrator and the
Trust. The compensation of such person or persons shall be paid by
Administrator and no obligation may be incurred on behalf of the Funds in such
respect. Other expenses to be incurred in the operation of the Funds including
taxes, interest, brokerage fees and commissions, if any, fees of Trustees who
are not partners, officers, directors, shareholders or employees of
Administrator or the investment adviser or distributor for the Funds, Commission
fees and state Blue Sky qualification and renewal fees and expenses, investment
advisory fees, custodian fees, transfer and dividend disbursing agents' fees,
fund accounting fees including pricing of portfolio securities, service
organization fees, certain insurance premiums, outside and, to the extent
authorized by the Trust, inside auditing and legal fees and expenses, costs of
maintenance of corporate existence, typesetting and printing prospectuses for
regulatory purposes and for distribution to current shareholders of the Funds,
costs of shareholders' and Trustees' reports and meetings and any extraordinary
expenses will be borne by the Funds; provided, however, that the Funds will not
bear, directly or indirectly, the cost of any activity which is primarily
intended to result in the distribution of shares of the Funds.
If in any fiscal year the aggregate expenses of a particular Fund (as
defined under the securities regulations of any state having jurisdiction over
the Trust) exceed the expense limitations of any such state, Administrator will
reimburse such Fund for a portion of such excess expenses equal to such excess
times the ratio of the fees respecting such Fund otherwise payable
to Administrator hereunder to the aggregate fees respecting such Fund otherwise
payable to Administrator hereunder and to Banc One Investment Advisors
Corporation under the Investment Advisory Agreements between Banc One Investment
Advisors Corporation and the Trust. The expense reimbursement obligation of
Administrator is limited to the amount of its fees hereunder for such fiscal
year, provided, however, that notwithstanding the foregoing, Administrator shall
reimburse a particular Fund for such proportion of such excess expenses
regardless of the amount of fees paid to it during such fiscal year to the
extent that the securities regulations of any state having jurisdiction over the
Trust so require. Such expense reimbursement, if any, will be estimated daily
and reconciled and paid on a monthly basis.
3. PROPRIETARY AND CONFIDENTIAL INFORMATION
Administrator agrees on behalf of itself and its partners and employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Trust and prior, present, or potential
shareholders, and not to use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Trust, which approval shall
not be unreasonably withheld and may not be withheld where Administrator may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Trust.
4. LIMITATION OF LIABILITY; RELIANCE ON RECORDS AND INSTRUCTIONS;
INDEMNIFICATION
Administrator shall use its best efforts to ensure the accuracy of all
services performed under this Agreement but shall not be liable for any loss
suffered by the Funds in connection with the matters to which this Agreement
relates, except for a loss resulting from willful misfeasance, bad faith or
negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. Any person,
even though also, an employee, or agent of Administrator, who may be or become
an officer, Trustee, employee or agent of the Trust or the Funds shall be
deemed, when rendering services to the Trust or the Funds, or acting on any
business of that party, to be rendering such services to or acting solely for
that party and not as a partner, employee, or agent or one under the control or
direction of Administrator even though paid by it.
The Trust agrees to indemnify and hold harmless Administrator, its
employees, agents, directors, officers and nominees from and against any and all
liabilities or expenses, including but not limited to attorney fees, in
connection with any claims or regulatory actions based upon reasonable reliance
on written information or records with respect to a Fund given to Administrator
by a duly authorized representative of the Sub-Administrator, Fund Accountant,
or Distributor; provided, that this indemnification shall not apply to actions
or omissions of Administrator in cases of its own bad faith, willful
misfeasance, negligence or from reckless disregard by it of its obligations and
duties, and further provided that prior to confessing any claims against it
which may be the subject of this indemnification, Administrator shall give the
Trust written notice of and reasonable opportunity to defend against said claim
in its own name or in the name of Administrator.
5. TERM
This Agreement shall become effective as of the date first written above
(or, if a particular Fund is not in existence on the date, on the date an
amendment to Schedule A to this Agreement relating to that Fund is executed) and
shall continue until November 30, 1996, and unless sooner terminated as provided
herein, thereafter shall be renewed automatically for successive one-year terms,
unless written notice not to renew is given by the non-renewing party to the
other party at least 60 days prior to the expiration of the then-current term;
provided that such continuance is specifically reviewed and approved at least
annually (a) by the vote of a majority of the Trust's Board of Trustees or by
the vote of a majority of the outstanding voting securities of such Fund and (b)
by the majority of the Trust's Trustees who are not parties to the Agreement or
interested persons (as defined in the 0000 Xxx) of any party to this Agreement,
by vote cast in person at a meeting called for the purpose of voting on such
approval. The scope of such review shall be whether there is any "cause" (as
defined below) that would justify terminating the Agreement. This Agreement is
terminable with respect to a particular Fund through a failure to renew at the
end of a five-year term; upon mutual agreement of the parties hereto; or for
"cause" by the party alleging "cause," in any case on not less than 60 days
written notice by the Trust's Board of Trustees or by Administrator. Written
notice not to renew may be given for any reason, with or without "cause" (as
defined below).
For purposes of this Agreement, "cause" shall mean (a) willful misfeasance,
bad faith, gross negligence or reckless disregard on the part of the party to be
terminated with respect to its obligations and duties set forth herein; (b) a
final, unappealable judicial, regulatory or administrative ruling or order in
which the party to be terminated has been found guilty of criminal or unethical
behavior in the conduct of its business; (c) financial difficulties on the part
of the party to be terminated which is evidenced by the authorization or
commencement of, or involvement by way of pleading, answer, consent, or
acquiescence in, a voluntary or involuntary case under Title 11 of the United
States Code, as from time to time is in effect, or any applicable law, other
than said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the rights of
creditors; or (d) any circumstance which substantially impairs the performance
of the obligations and duties of the party to be terminated, or the ability to
perform those obligations and duties, as contemplated herein. Notwithstanding
the foregoing, the absence of either or both an annual review or ratification of
this Agreement by the Board of Trustees shall not, in and of itself, constitute
"cause" as used herein.
If, for any reason other than "cause" as defined above, Administrator is
replaced as fund manager and administrator, or if a third party is added to
perform all or a part of the services provided by Administrator under this
Agreement (excluding any sub-administrator appointed by Administrator as
provided in Section 1 hereof), then the Trust shall make a one-time cash
payment, as liquidated damages, to Administrator equal to the balance due
Administrator for the remainder of the term of this Agreement, assuming for
purposes of calculation of the payment that the asset level of the Trust on the
date Administrator is replaced, or a third party is added, will remain constant
for the balance of the contract term.
6. USE OF SUB-ADMINISTRATOR
Administrator shall retain Banc One Investment Advisors Corporation
("BOIA") to provide sub-administration services pursuant to a sub-administration
agreement among Administrator, BOIA and the Trust dated as of the date first
written above. Such sub-administration agreement shall not be terminated during
the term of this Agreement without the specific written approval of the Trust.
Administrator shall not bear any responsibility or liability whatsoever to the
Trust for duties to be performed by BOIA under such sub-administration
agreement.
7. GOVERNING LAW AND MATTERS RELATING TO THE TRUST AS A MASSACHUSETTS
BUSINESS TRUST
This Agreement shall be governed by the law of the Commonwealth of
Massachusetts. It is expressly agreed that the obligations of the Trust
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents or employees of the Trust personally, but shall bind only the
trust property of 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 any of them personally, but shall bind only the trust
property of the Trust as provided in the Trust's Agreement and Declaration of
Trust.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
written above.
THE ONE GROUP THE ONE GROUP SERVICES COMPANY
By: Xxxx Xxxxxx By: Xxxxx Xxxxxx
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Title: President Title: Executive Vice President
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Date: December 13, 1995 Date: December 13, 1995
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SCHEDULE A
TO THE MANAGEMENT AND ADMINISTRATION AGREEMENT
BETWEEN
THE ONE GROUP-Registered Trademark-
AND
THE ONE GROUP SERVICES COMPANY
NAME OF THE MULTIPLE CLASS FUND
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The U. S. Treasury Securities Money Market Fund
The Prime Money Market Fund
The Municipal Money Market Fund (formerly The Tax-Free Money Market Portfolio)
The Ohio Municipal Money Market Fund
The Income Equity Fund
The Disciplined Value Fund
The Small Company Growth Fund (formerly the Growth Equity Portfolio)
The International Equity Index Fund
The Large Company Value Fund (formerly The Quantitative Equity Portfolio)
The Equity Index Fund
The Income Bond Fund (formerly The Income Portfolio)
The Limited Volatility Bond Fund
The Intermediate Tax-Free Bond Fund
The Ohio Municipal Bond Fund
The Government Bond Fund
The Government ARM Fund
The Asset Allocation Fund (formerly The Flexible Balanced Portfolio)
The Tax-Free Bond Fund
The Texas Tax-Free Bond Fund
The West Virginia Tax-Free Fund
The Kentucky Municipal Bond Fund
The Intermediate Bond Fund
The Arizona Tax-Free Bond Fund
The Large Company Growth Fund
COMPENSATION REGARDING MULTIPLE CLASS FUNDS
Compensation for each of the above Funds (the "Multiple Class Funds") shall
be at annual rates of the Fund's average daily net assets as follows: twenty
one-hundredths of one percent (.20%) of amounts included in that portion of the
aggregate daily net assets of all Multiple Class Funds subject to this Agreement
equal to or less than $1,500,000,000; eighteen one-hundredths of one percent
(.18%) of amounts included in that portion of the aggregate daily net assets of
all Multiple Class Funds subject to this Agreement between $1,500,000,000 and
$2,000,000,000; and sixteen one-hundredths of one percent (.16%) of amounts
included in that portion of the aggregate daily net assets of all Multiple Class
Funds subject to this Agreement in excess of $2,000,000,000. The fees
pertaining to each Multiple Class Fund shall be computed daily in amounts
strictly proportionate to the amount of the Fund's average daily net assets as a
percentage of the aggregate daily net assets of all Multiple Class Funds subject
to this Agreement, and shall be paid periodically.A-1
A-1
NAME OF SINGLE CLASS FUND
-------------------------
The One Group Treasury Money Market Fund
The One Group Treasury Only Money Market Fund
The One Group Government Money Market Fund
The One Group Tax Exempt Money Market Fund
The One Group Institutional Prime Money Market Fund
COMPENSATION REGARDING SINGLE CLASS FUNDS
Compensation for each of the Funds listed immediately above (the "Single
Class Funds") shall be at the following annual rates: With respect to The One
Group Treasury Money Market, The One Group Treasury Only Money Market, The One
Group Government Money Market, and The One Group Tax Exempt Money Market Funds:
five one-hundredths of one percent (.05%) of the Fund's average daily net
assets; and with respect to The One Group Institutional Prime Money Market Fund:
four one-hundredths of one percent (.04%) of the Fund's average daily net
assets. The fees pertaining to each Single Class Fund shall be computed daily
and paid periodically.
COMPENSATION TO BE REDUCED BY FUND ACCOUNTING FEES
The compensation under this Agreement due to The One Group Services Company
with respect to each Multiple Class Fund and each Single Class Fund shall be
reduced in each month by the amount of compensation paid to The One Group
Service Company under its Fund Accounting Agreement with The One Group with
respect to such Fund.
THE ONE GROUP-Registered Trademark-
By: Xxxx Xxxxxx
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Title: President
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Date: December 1, 1995
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THE ONE GROUP SERVICES COMPANY
By: Xxxxx Xxxxxx
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Title: Executive Vice President
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Date: December 1, 1995
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A-2
