Exhibit 9(b)
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT ("Agreement") made as of the 1st day of
April, 1997 by and between PBHG Insurance Series Fund, Inc., a Maryland
corporation (the "Fund"), and PBHG Fund Services, a Pennsylvania business trust
(the "Administrator").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as an open-end management
investment company of the series type and registered as such under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund desires to retain the Administrator to provide
administrative services to the Fund and each of its several series (the
"Portfolios"), which are identified in Schedule A hereto, in the manner and on
the terms and conditions hereinafter set forth; and
WHEREAS, the Fund and the Administrator propose to engage a
sub-administrator (the "Sub-Administrator") to provide certain administrative
services to the Fund and the Portfolios, subject to the approval of the Fund's
Board of Directors;
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 Fund's and each
Portfolio's business and affairs as set forth herein and shall provide certain
services required for effective administration of the Fund and the Portfolios.
In connection therewith, the Administrator shall:
1.1. Office and Other Facilities. Furnish, without cost to the Fund, 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 Fund under this Agreement.
1.2. Personnel. Provide, without additional remuneration from or other cost
to the Fund, the services of individuals competent to perform all of the
Administrator's obligations under this Agreement.
1.3. Agents. Assist the Fund in selecting, coordinating the activities of,
supervising and acting as liaison with any other person or agent engaged by the
Fund, including the Fund'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 Fund and the Fund's custodians with Rule 17f-5 under the 1940
Act, if appropriate.
1.4. Directors and Officers. Authorize and permit the Administrator's
directors, officers, and employees that may be elected or appointed as directors
or officers of the Fund to serve in such capacities, without remuneration from
or additional cost to the Fund.
1.5. Books and Records. Maintain customary records, on behalf of the Fund,
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 Fund 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
Fund 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 Fund a pro forma budget or similar document concerning the estimated costs
of providing the services to the Fund and shall monitor and periodically report
to the Fund's Board of Directors information and analysis about the actual
expenses incurred in providing such services.
1.7. Fund Accounting and Compliance Policies and Procedures. Assist in
developing, reviewing, maintaining, and monitoring the effectiveness of Fund
accounting and compliance policies and procedures, including portfolio valuation
procedures, expense allocation procedures, and personal trading procedures, and
the Fund's Code of Ethics. The Administrator also will assist and coordinate
participation by the Fund 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 Fund accountants, outside counsel, and other experts in these
audits or examinations.
1.8. Fund Systems. Assist in developing, implementing, and monitoring the
Fund's use of automated systems for the purchase, sale, redemption and transfer
of Fund shares and the payment of Rule 12b-1 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 Fund's use of automated
communications systems with brokers, dealers, custodians, and other service
providers, including without limitation trade clearance systems.
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1.9. Reports to the Fund. Furnish to or place at the disposal of the Fund
such information, reports, evaluations, analyses, and opinions relating to its
administrative functions and the administrative functions performed by the
Sub-Administrator, as the Fund may, at any time or from time to time, reasonably
request or as the Administrator may deem helpful to the Fund. The Administrator
also will assist in the preparation of agendas and other materials for meetings
of the Fund's Board of Directors 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 Fund to
Fund shareholders and all reports and filings necessary to maintain the
registrations and qualifications of the Fund's shares under federal securities
law.
1.11. Shareholder Inquiries. Respond to all inquiries from Fund
shareholders or otherwise answer communications from Fund 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 Fund.
2.1.3. Waiver or Assumption and Reimbursement of Fund Expenses by the
Administrator. The waiver or assumption and reimbursement by the
Administrator of any expense of the Fund 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 Fund on any subsequent occasion, unless so required
pursuant to a separate agreement between the Fund and the Administrator.
2.2. Expenses Paid by the Fund. The Fund 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 Fund and the Administrator, and as described in the
Fund's then-current Prospectuses and Statements of Additional Information.
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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 Fund shall pay the Administrator a fee per
Portfolio at the annual rate of .15% of the average daily net assets of each
Portfolio.
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 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
Portfolios, as determined in accordance with the current Prospectuses of the
Fund, as of the close of business on the last preceding business day on which
the Fund was open for business.
3.3. Proration of Fee. If this Agreement becomes effective or 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 Fund 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 Fund and the Portfolios.
5. Ownership and Confidentiality of Records.
All records required to be maintained and preserved by the Fund, 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 Fund, are the property of the Fund and shall be surrendered by the
Administrator promptly on request by the Fund. The Administrator shall not
disclose or use any record or information obtained pursuant to this
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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 Fund 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 Fund 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 Fund, 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
Fund.
8. Limitation of Liability of the Administrator and Indemnification by the Fund.
8.1. Limitation of Liability.
8.1.1. Neither the Administrator nor any of its directors, officers,
employees or agents performing services for the Fund, 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 Fund,
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 Fund 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 Fund.
8.1.2. The Administrator's directors, officers, employees and agents
performing services for the Fund shall be covered by errors and omissions
and directors and officers liability insurance, as appropriate, under a
policy maintained by the Administrator or an affiliate of the
Administrator.
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8.1.3. The Administrator may apply to the Board of Directors of the
Fund at any time for instructions and may consult counsel for the Fund 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 action 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 Fund and its shareholders.
8.2. Indemnification by the Fund.
8.2.1. As long as the Administrator acts in good faith and with due
diligence and without negligence, the Fund 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 Fund
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 Fund may be
asked to indemnify or hold the Administrator harmless, the Board of
Directors of the Fund 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 Directors of the Fund promptly concerning any situation which
presents or appears likely to present the probability of such a claim for
indemnification against the Fund, 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.
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9. Indemnification by the Administrator.
9.1. The Administrator shall indemnify the Fund, its officers and directors
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 Fund 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 Fund. 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 Fund, its officers, and directors 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 Fund 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 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 or other 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 Fund for any and all
losses, damages, costs, charges, counsel fees, payments and expenses incurred by
the Fund 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.
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11. Retention of Sub-Administrator.
The Administrator may retain a Sub-Administrator to perform corporate
administrative services to the Fund. 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 Fund.
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, 1998. 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 Fund, 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 respected 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 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 Fund such action shall have been
authorized by resolution of the Board of Directors of the Fund or by a vote
of a majority of the outstanding voting securities of the Fund or, in the
case of termination with respect to a particular Portfolio, by a resolution
of the Board of Directors of the Fund or by a vote of a majority of the
outstanding voting securities of such Portfolio. In the case of termination
by the Administrator, such termination shall not be effective until the
Fund and the Administrator shall have contracted with one or more persons
to serve as successor Administrator(s) for the Fund and such person(s)
shall have assumed such position.
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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 Directors of the Fund or by a majority
of the outstanding voting securities of the Fund or, in the case of an amendment
to this Agreement with respect to a particular Portfolio, by a resolution of the
Board of Directors of the Fund or a vote of a majority of the outstanding voting
securities of such Portfolio.
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
Pilgrim Xxxxxx Fund Services, 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxx, XX 00000,
Attention: Xxxxx Xxxxxxxx, and (ii) if to the Fund, to The PBHG Funds, Inc.,
0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxx, XX 00000, Attention: Xxxxxxx Xxxxxxxxxx.
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 Fund to take any action contrary to its Articles of Incorporation 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 Directors
of its responsibility for and control of the conduct of the affairs of the Fund.
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, rule, regulation, or 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, INC.
/s/ Xxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
----------------------------- -------------------------------
Title: Vice President Title: Vice President
ATTEST: PBHG FUND SERVICES
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxx X. Xxxxxxxx
----------------------------- -------------------------------
Title: President Title: Treasurer
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SCHEDULE A
PBHG INSURANCE SERIES FUND, INC.
The PBHG Insurance Series Fund, Inc. consists of the following Portfolios:
PBHG Growth II Portfolio
PBHG Select 20 Portfolio
PBHG Large Cap Growth Portfolio
PBHG Technology & Communications Portfolio
PBHG Large Cap Value Portfolio
PBHG Small Cap Value Portfolio
Date: April 1, 1997
