Exhibit (h)(1)
MASTER TRANSFER AGENCY AND SERVICE AGREEMENT FOR
XXXX XXXXXXX FUNDS II AND XXXX XXXXXXX FUNDS III
Master Transfer Agency and Service Agreement made as of the 2nd day of
September, 2005 by and between each investment company listed in Appendix A and
advised by Xxxx Xxxxxxx Investment Management Services, LLC, having its
principal office and place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, 00000, and Xxxx Xxxxxxx Signature Services, Inc., a Delaware
corporation having its principal office and place of business at The Schraffts
Center, Xxxxxxxxxxx, Xxxxxxxxxxxxx, 00000 ("JHSS").
WITNESSETH:
----------
WHEREAS, each investment company desires to appoint JHSS as its transfer agent,
dividend disbursing agent and agent in connection with certain other activities;
and
WHEREAS, JHSS desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the
parties hereto agree as follows:
Article 1 Definitions
-----------
Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean each investment company that has adopted this
agreement and is listed on Appendix A hereto. If the Fund is a
Massachusetts business trust (a "Trust") or Maryland corporation (a
"Corporation"), it may in the future establish and designate other separate
and distinct series of shares, each of which may be called a "series" or a
"portfolio"; in such case, the term "Fund" shall also refer to each such
separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
Article 2 Terms of Appointment; Duties of JHSS
------------------------------------
2.01 Subject to the terms and conditions set forth in this Agreement, the Fund
hereby employs and appoints JHSS to act, and JHSS agrees to act, as transfer
agent and dividend dispersing agent with respect to the authorized and issued
shares of beneficial interest ("Shares") of the Fund subject to this Agreement
and to provide to the shareholders of the Fund ("Shareholders") such services in
connection therewith as may be set out in the prospectus of the Fund from time
to time.
2.02 JHSS agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and JHSS, JHSS shall:
(i)Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation therefor to the
Fund's Custodian authorized pursuant to the Fund's Declaration of
Trust or Articles of Incorporation (the "Custodian");
1
(ii)Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder account;
(iii)Receive for acceptance, redemption requests and redemption
directions and deliver the appropriate documentation therefor to the
Custodian;
(iv)At the appropriate time as and when it receives monies paid to it
by the Custodian with respect to any redemption, pay over or cause to
be paid over in the appropriate manner such monies as instructed by
the redeeming Shareholders;
(v)Effect transfers of Shares by the registered owners thereof upon
receipt of appropriate instructions;
(vi)Prepare and transmit payments for dividends and distributions
declared by the Fund, processing the reinvestment of distributions on
the Fund at the net asset value per share for the Fund next computed
after the payment (in accordance with the Fund's then-current
prospectus);
(vii)Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and
(viii)Record the issuance of Shares of the Fund and maintain pursuant
to Rule 17Ad-10(e) of the rules and regulations of the Securities
Exchange Act of 1934 a record of the total number of Shares of the
Fund which are authorized, based upon data provided to it by the Fund,
and issued and outstanding. JHSS shall also provide the Fund, on a
regular basis, with the total number of Shares which are authorized
and issued and outstanding and shall have no obligation, when
recording the issuance of Shares, to monitor the issuance of these
Shares or to take cognizance of any laws relating to the issue or sale
of these Shares, which functions shall be the sole responsibility of
the Fund.
(b) In calculating the number of Shares to be issued on purchase or
reinvestment, or redeemed or repurchased, or the amount of the purchase
payment or redemption or repurchase payments owed, JHSS shall use the net
asset value per share (as described in the Fund's then-current prospectus)
computed by it or such other person as may be designated by the Fund's
Board. All issuances, redemptions or repurchases of the Funds' shares shall
be effected at the net asset values per share next computed after receipt
of the orders in good order and such orders shall become irrevocable as of
the time such values are next computed.
(c) In addition to and not in lieu of the services set forth in the above
paragraph (a), JHSS shall: (i) perform all of the customary services of a
transfer agent and dividend disbursing agent including but not limited to:
maintaining all Shareholder accounts, preparing Shareholder meeting lists,
mailing proxies, receiving and tabulating proxies, mailing Shareholder
reports and prospectuses to current Shareholders, withholding taxes on U.S.
resident and non-resident alien accounts, preparing and filing appropriate
forms required with respect to dividends and distributions by federal
authorities for all Shareholders, preparing and mailing confirmation forms
and statements of account to Shareholders for all purchases and redemptions
of Shares and other confirmable transactions in Shareholder accounts,
preparing and mailing activity statements for Shareholders, and providing
Shareholder account information and (ii) provide a system which will enable
the Fund to monitor the total number of the Fund's Shares sold in each
State.
(d) In addition, the Fund shall (i) identify to JHSS in writing those
transactions and assets to be treated as exempt from the blue sky reporting
for each State and (ii) verify the establishment of transactions for each
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State on the system prior to activation and thereafter monitor the daily
activity for each State. The responsibility of JHSS for the Fund's blue sky
State registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Fund and the reporting
of these transactions to the Fund as provided above.
(e) Additionally, JHSS shall:
(i) Utilize a system to identify all share transactions which involve
purchase and redemption orders that are processed at a time other than
the time of the computation of net asset value per share next computed
after receipt of such orders, and shall compute the net effect upon
the Fund of the transactions so identified on a daily and cumulative
basis.
(ii) If upon any day the cumulative net effect of such transactions
upon the Fund is negative and exceeds a dollar amount equivalent to
1/2 of 1 cent per share, JHSS shall promptly make a payment to the
Fund in cash, in such amount as may be necessary to reduce the
negative cumulative net effect to less than 1/2 of 1 cent per share.
(iii) At the end of a calendar year, any positive cumulative net
effect upon a Fund of such transactions shall be deemed to be a credit
to JHSS which shall first be applied to permit JHSS to recover any
prior cash payments made by it to the Fund under paragraph (ii) above
during the calendar year, in an amount equal to prior payments made by
JHSS during such calendar year, but not exceeding the sum of that
calendar year's credit. Any portion of a credit to JHSS not so used by
it by the end of a calendar year will not be allowed to be used as
payment against the amount of any future negative cumulative net
effects that would otherwise require a cash payment. The cumulative
net effect upon the Fund shall be reset to zero on the first business
day of the next calendar year.
(iv) JHSS shall supply to the Fund from time to time, as mutually
agreed upon, reports summarizing the transactions identified pursuant
to paragraph (i) above, and the daily and cumulative net effects of
such transactions, and shall advise the Fund at the end of each month
of the net cumulative effect at such time. JHSS shall promptly advise
the Fund if at any time the cumulative net effect exceeds a dollar
amount equivalent to 1/2 of 1 cent per share.
(v) In the event that this Agreement is terminated for whatever cause,
or this provision 2.02 (e) is terminated pursuant to paragraph (vi)
below, the Fund shall promptly pay to JHSS an amount in cash equal to
the amount by which the cumulative net effect upon the Fund is
positive or, if the cumulative net effect upon the Fund is negative,
JHSS shall promptly pay to the Fund an amount in cash equal to the
amount of such cumulative net effect.
(vi) This provision 2.02 (e) of the Agreement may be terminated by
JHSS at any time without cause, effective as of the close of business
on the date written notice (which may be by telex) is received by the
Fund.
(f) Procedures applicable to certain of these services described in this
paragraph 2.02(a) through (e) may be established from time to time by
agreement between the Fund and JHSS. JHSS may subcontract for the
performance hereof with any other entity registered as a transfer agent
under Section 17A(c)(1) of the Securities Exchange Act of 1934, as amended,
in order to comply with the terms and conditions of this Agreement;
provided, however, that (i) upon engagement of any such subcontractor, and
3
at least annually thereafter, JHSS discloses to the Board the financial
terms of such subcontract and a summary of the services provided to the
Fund pursuant to such subcontract, and (ii) JHSS shall be as fully
responsible to the Fund for any acts or omissions of any such subcontractor
as JHSS is for its own acts and omissions.
Article 3 Fees and Expenses
-----------------
3.01 For performance by JHSS pursuant to this Agreement, the Fund agrees to pay
JHSS a fee as set out in Appendix A attached hereto. Such fees and out-of-pocket
expenses and advances identified under Section 3.02 below may be changed from
time to time subject to mutual written agreement between the Fund and JHSS.
3.02 In addition to the fee paid under Section 3.01 above, the Fund agrees to
reimburse JHSS for out-of-pocket expenses or advances incurred by JHSS for the
items set out in the fee schedule in Appendix B attached hereto. In addition,
any other expenses incurred by JHSS at the request or with the consent of the
Fund, will be reimbursed by the Fund.
3.03 The Fund agrees to pay all fees and reimbursable expenses promptly
following the mailing of the respective billing notice.
3.04 Using Lipper as a guideline, JHSS will from time to time waive asset based
charges when Transfer Agent expenses exceed industry averages by 5 basis points.
Article 4 Representations and Warranties of JHSS
--------------------------------------
JHSS represents and warrants to the Fund that:
4.01 It is a corporation duly organized and existing and in good standing under
the laws of the State of Delaware, and is duly qualified and in good standing as
a foreign corporation under the Laws of The Commonwealth of Massachusetts.
4.02 It has corporate power and authority to enter into and perform its
obligations under this Agreement.
4.03 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
4.04 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
Article 5 Representations and Warranties of the Fund
------------------------------------------
The Fund represents and warrants to JHSS that:
5.01 It is a business trust duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts or, in the case of a
Maryland corporation, duly organized and existing and in good standing under the
laws of the State of Maryland.
5.02 It has the power and authority to enter into and perform this Agreement.
5.03 All proceedings required by the Fund's Declaration of Trust or Articles of
Incorporation and By-Laws have been taken to authorize it to enter into and
perform this Agreement.
4
5.04 It is an open-end investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
5.05 A registration statement under the Securities Act of 1933, as amended, with
respect to the shares of the Fund subject to this Agreement has become
effective, and appropriate state securities law filings have been made and will
continue to be made.
Article 6 Indemnification
---------------
6.01 JHSS shall not be responsible for, and the Fund shall indemnify and hold
JHSS harmless from and against, any and all losses, damages, costs, charges,
counsel fees, payments, expenses and liabilities arising out of or attributable
to:
(a) All actions of JHSS or its agents or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misfeasance.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's bad faith, gross negligence or
willful misfeasance or which arise out of the reckless disregard of any
representation or warranty of the Fund hereunder.
(c) The reliance on or use by JHSS or its agents or subcontractors of
information, records and documents which (i) are received by JHSS or its
agents or subcontractors and furnished to it by or on behalf of the Fund,
and (ii) have been prepared and/or maintained by the Fund or any other
person or firm on behalf of the Fund.
(d) The reliance on, or the carrying out by JHSS or its agents or
subcontractors of, any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or
regulations of any state that Fund Shares be registered in that state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of Shares in that
state.
(f) It is understood and agreed that the assets of the Fund may be used to
satisfy the indemnity under this Article 6 only to the extent that the
loss, damage, cost, charge, counsel fee, payment, expense and liability
arises out of or is attributable to services hereunder with respect to the
Shares of such Fund.
6.02 JHSS shall indemnify and hold harmless the Fund from and against any and
all losses, damages, costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributed to any action or failure or omission to
act by JHSS as a result of JHSS's lack of good faith, negligence or willful
misfeasance.
6.03 At any time JHSS may apply to any officer of the Fund for instructions, and
may consult with legal counsel with respect to any matter arising in connection
with the services to be performed by JHSS under this Agreement, and JHSS and its
agents or subcontractors shall not be liable and shall be indemnified by the
Fund for any action taken or omitted by it in reliance upon such instructions or
upon the opinion of such counsel. JHSS, its agents and subcontractors shall be
protected and indemnified in acting upon any paper or document furnished by or
on behalf of the Fund, reasonably believed to be genuine and to have been signed
by the proper person or persons, or upon any instruction, information, data,
records or documents provided JHSS or its agents or subcontractors by machine
readable input, telex, CRT data entry or other similar means authorized by the
Fund, and shall not be held to have notice of any change of authority of any
5
person, until receipt of written notice thereof from the Fund. JHSS, its agents
and subcontractors shall also be protected and indemnified in recognizing share
certificates which are reasonably believed to bear the proper manual or
facsimile signatures of the officer of the Fund, and the proper countersignature
of any former transfer agent or registrar, or of a co-transfer agent or
co-registrar.
6.04 In the event either party is unable to perform its obligations under the
terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
6.05 Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any act or
failure to act hereunder.
6.06 In order that the indemnification provisions contained in this Article 6
shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
6
Article 7 Covenants of the Fund and JHSS
------------------------------
7.01 The Fund shall promptly furnish to JHSS the following:
(a) A certified copy of the resolution(s) of the Trustees of the Trust or
the Directors of the Corporation authorizing the appointment of JHSS and
the execution and delivery of this Agreement.
(b) A copy of the Fund's Declaration of Trust or Articles of Incorporation
and By-Laws and all amendments thereto.
7.02 JHSS hereby agrees to establish and maintain facilities and procedures
reasonably acceptable to the Fund for safekeeping of share certificates and
facsimile signature imprinting devices, if any; and for the preparation or use,
and for keeping account of, such certificates and devices.
7.03 JHSS shall keep records relating to the services to be performed hereunder,
in the form and manner as it may deem advisable. To the extent required by
Section 31 of the Investment Company Act of 1940 and the rules and regulations
of the Securities and Exchange Commission thereunder, JHSS agrees that all such
records prepared or maintained by JHSS relating to the services to be performed
by JHSS hereunder are the property of the Fund and will be preserved, maintained
and made available in accordance with such Act and rules, and will be
surrendered to the Fund promptly on and in accordance with the Fund's request.
7.04 JHSS and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person without
the consent of the other party to this Agreement, except as may be required by
law.
7.05 JHSS agrees that, from time to time or at any time requested by the Fund,
JHSS will make reports to the Fund, as requested, of JHSS's performance of the
foregoing services.
7.06 JHSS will cooperate generally with the Fund to provide information
necessary for the preparation of registration statements and periodic reports to
be filed with the Securities and Exchange Commission, including registration
statements on Form N-1A, semi-annual reports on Form N-SAR, periodic statements,
shareholder communications and proxy materials furnished to holders of shares of
the Fund, filings with state "blue sky" authorities and with United States and
foreign agencies responsible for tax matters, and other reports and filings of
like nature.
7.07 In case of any requests or demands for the inspection of the Shareholder
records of the Fund, JHSS will endeavor to notify the Fund and to secure
instructions from an authorized officer of the Fund as to such inspection. JHSS
reserves the right, however, to exhibit the Shareholder records to any person
whenever it is advised by its counsel that it may be held liable for the failure
to exhibit the Shareholder records to such person.
7
Article 8 No Partnership or Joint Venture
-------------------------------
8.01 The Fund and JHSS are not currently partners of or joint venturers with
each other and nothing in this Agreement shall be construed so as to make them
partners or joint venturers or impose any liability as such on them.
Article 9 Termination of Agreement
------------------------
9.01 This Agreement may be terminated by either party upon one hundred twenty
(120) days' written notice to the other party.
9.02 Should the Fund exercise its right to terminate, all out-of-pocket expenses
associated with the movement of records and material will be borne by the Fund.
Additionally, JHSS reserves the right to charge for any other reasonable
expenses associated with such termination (including any expenses, fees and/or
penalties associated with JHSS's termination of a subcontract previously entered
into pursuant to the authority granted under this Agreement, which subcontract
would be terminated due to termination of the Agreement by the Fund; provided,
however, that any such expenses, fees and/or penalties arising from such
termination by JHSS of the subcontract were commercially reasonable).
Article 10 Assignment
----------
10.01 Except as provided in Section 10.03 below, neither this Agreement nor any
rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
10.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
Article 11 Amendment
---------
11.01 This Agreement may be amended or modified by a written agreement executed
by both parties and authorized or approved by a resolution of the Trustees of
the Trust or Directors of the Corporation, as the case may be.
Article 12 Massachusetts Law to Apply
--------------------------
12.01 This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the internal substantive laws of The Commonwealth
of Massachusetts.
Article 13 Merger of Agreement
-------------------
13.01 This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof whether
oral or written.
Article 14 Limitation on Liability
-----------------------
14.01 If the Fund is a Massachusetts business trust, JHSS expressly acknowledges
the provision in the Fund's Declaration of Trust limiting the personal liability
of the trustees and shareholders of the Fund; and JHSS agrees that it shall have
8
recourse only to the assets of the Fund for the payment of claims or obligations
as between JHSS and the Fund arising out of this Agreement, and JHSS shall not
seek satisfaction of any such claim or obligation from the trustees or
shareholders of the Fund. In any case, each Fund, and each series or portfolio
of each Fund, shall be liable only for its own obligations to JHSS under this
Agreement and shall not be jointly or severally liable for the obligations of
any other Fund, series or portfolio hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in their names and on their behalf under their seals by and through their duly
authorized officers, as of the day and year first above written.
XXXX XXXXXXX FUNDS II, and each Fund listed in
Appendix A
By: /s/ Xxxxxx Xxxxx
-----------------------------------------
Xxxxxx Xxxxx
Treasurer
XXXX XXXXXXX FUNDS III, and each Fund listed in
Appendix A
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------------
Xxxxx X. Xxxxxxxxx
President
XXXX XXXXXXX SIGNATURE SERVICES, INC.
By: /s/ Xxxx Xxxxx
-----------------------------------------
Xxxx Xxxxx
President and Chief Executive Officer
9
APPENDIX A
TRANSFER AGENT FEE SCHEDULE, EFFECTIVE September 2, 2005
--------------------------------------------------------
Effective September 2, 2005, the transfer agent fees payable monthly under
the transfer agent agreement between each fund and Xxxx Xxxxxxx Signature
Services, Inc. shall be the following rates plus certain out-of-pocket expenses
as described to the Board:
A-1
ANNUAL RATE PER ACCOUNT
--------------------------------------------------------------------------------------------------- --------------------------------
XXXX XXXXXXX FUNDS II CLASS A CLASS B CLASS C CLASS R3 CLASS R4 CLASS R5 ASSET BASED FEE
(% OF DAILY NET
ASSETS)
--------------------------------------------------------------------------------------------------- --------------------------------
Lifestyle Aggressive $15.00 $17.50 $16.50 $15.00 $15.00 $15.00 0.05%
--------------------------------------------------------------------------------------------------- ------------------------------
Lifestyle Growth $15.00 $17.50 $16.50 $15.00 $15.00 $15.00 0.05%
--------------------------------------------------------------------------------------------------- ------------------------------
Lifestyle Balanced $15.00 $17.50 $16.50 $15.00 $15.00 $15.00 0.05%
--------------------------------------------------------------------------------------------------- ------------------------------
Lifestyle Moderate $15.00 $17.50 $16.50 $15.00 $15.00 $15.00 0.05%
--------------------------------------------------------------------------------------------------- ------------------------------
Lifestyle Conservative $15.00 $17.50 $16.50 $15.00 $15.00 $15.00 0.05%
--------------------------------------------------------------------------------------------------- --------------------------------
These fees are agreed to by the undersigned as of September 2, 2005.
/s/ Xxxxxx Xxxxx
------------------------------
XXXX XXXXXXX FUNDS II
By: Xxxxxx Xxxxx
Treasurer
/s/ Xxxx Xxxxx
------------------------------
XXXX XXXXXXX SIGNATURE
SERVICES, INC.
By: Xxxx Xxxxx
President and Chief Executive Officer
A-2
ANNUAL RATE PER ACCOUNT
--------------------------------------------------------------------------------------------------- --------------------------------
XXXX XXXXXXX FUNDS III CLASS A CLASS B CLASS C CLASS I CLASS R ASSET BASED FEE
(% OF DAILY NET
ASSETS)
--------------------------------------------------------------------------------------------------- --------------------------------
U.S. Core Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
-------------------------------------------------------------------------------------------------- ---------------------------------
U.S. Quality Equity Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
-------------------------------------------------------------------------------------------------- ---------------------------------
Active Value Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
-------------------------------------------------------------------------------------------------- ---------------------------------
Intrinsic Value Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
-------------------------------------------------------------------------------------------------- ---------------------------------
Growth Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
-------------------------------------------------------------------------------------------------- ---------------------------------
International Core Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
-------------------------------------------------------------------------------------------------- ---------------------------------
International Growth Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
-------------------------------------------------------------------------------------------------- ---------------------------------
Global Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
-------------------------------------------------------------------------------------------------- ---------------------------------
Value Opportunities Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
-------------------------------------------------------------------------------------------------- ---------------------------------
Growth Opportunities Fund $15.00 $17.50 $16.50 N/A $15.00 0.05%
--------------------------------------------------------------------------------------------------- --------------------------------
These fees are agreed to by the undersigned as of September 2, 2005.
/s/ Xxxxx X. Xxxxxxxxx
------------------------------
XXXX XXXXXXX FUNDS III
By: Xxxxx X. Xxxxxxxxx
President
/s/ Xxxx Xxxxx
------------------------------
XXXX XXXXXXX SIGNATURE
SERVICES, INC.
By: Xxxx Xxxxx
President and Chief Executive Officer
A-3
APPENDIX B
TRANSFER AGENT BASE AND OUT-OF-POCKET FEES (OOP)
------------------------------------------------
BASE FEES
---------
ACCT. TITLE GENERAL DESCRIPTION FUNDS ALLOCATION METHODOLOGY
--------------------------------------------------------------------------------------------------- --------------------------------
DST Base Fee DST complex base charge for Retail, Retirement & Allocated by fund by number of open billable
utilization of TA2000 system Institutional accounts.
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DST Closed Represents DST expense associated with Retail, Retirement & Allocated by fund by number of CLOSED accounts.
Accounts maintaining closed accounts on Institutional
recordkeeping system.
--------------------------------------------------------------------------------------------------- --------------------------------
DST CDSC Represents DST expense, in addition to Retail Class B & C Allocated by fund by number of OPEN billable
Charges open account fee, for tracking and
reporting associated with Class B and
C accounts (i.e. Sharelot facility).
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OUT-OF-POCKET EXPENSES (OOP)
----------------------------
ACCT. TITLE GENERAL DESCRIPTION FUNDS ALLOCATION METHODOLOGY
------------------------------------------------------------------------------------------------------------------------------------
Confirms and Category represents the production and Retail & Institutional In general, customer output expenses are
Statements mailing of JHF customer output allocated by fund number of open billable
including base stock, postage, accounts. If fund specific, the total expense
printing and mailing of confirms, will be allocated to the applicable fund (s)
statements including daily redemption only.
and replacement checks.
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Tax Forms Category represents the production Retail & Institutional In general, customer output expenses are
and mailing of original (Xxxxx/ allocated by fund number of open billable
DST Output) and duplicate DST Output)) accounts. If fund is specific, the total
(DST Output)) tax forms including base expense will be allocated to the applicable
stock, print costs and will be allocated fund only.
to the applicable fund only. postage.
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Dividend/ Represents the production and Retail & Institutional These expenses are allocated by fund number of
SWP Checks mailing of dividend, capital gain and accounts coded for cash distributions or SWPs.
SWP checks.
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DST Internet Category represents all DST Internet Retail & Institutional >> FAN is allocated by fund by number of
Products including: open billable accounts (Retail and
>> FAN: Shareholder access to Institutional)
DST via Internet for account >> Vision is allocated by fund by number
history, portfolio value and of open billable accounts (Retail and
transaction processing. Institutional)
>> Vision: Broker/Representative >> TRAC Internet is allocated by fund
access to DST via Internet by number of open billable PPA
for account history, portfolio (participant) accounts (Retail Only)
value and transaction processing. >> E-delivery is allocated by number of
>> TRAC Internet: Participant open accounts with e-delivery option
access to DST via Internet for (Retail Only)
account history, portfolio value
and transaction processing.
>> E-delivery: Delivery of
quarterly statements
electronically.
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Bank Processing Fees assessed by banks for processing Retail, Retirement & Allocated by fund by number of open billable
and reconciliation of transfer agent Institutional accounts
DDAs. Includes BONY, FSB&T.
------------------------------------------------------------------------------------------------------------------------------------
Check Writing Represents expenses associated with Retail Class A only Allocated by fund (only funds that offer check
the productions nd mailing, including writing privilege) by # of open billable
base stock and postage, of check accounts coded for check writing. As of
writing checkbooks by Xxxx Xxxxxxx as 1/5/2004, the following funds offer check
well as First Signature Bank writing:
reconciliation charges.
FUND # FUND NAME
------ ---------
43 US Government Cash Reserve
44 Money Market
55 Intermediate Government Income Fund
56 Government Income Fund
91 Strategic Income Fund
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National Represents Fund/SERV and networking Retail, Retirement & Allocated by fund by number of open billable
Securities fees charged by National Securities Institutional accounts that are NSCC eligible
Clearing Clearing Corporation (NSCC).
Corporation
(NSCC) Non-
DST
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B-1
(NSCC) Non-
DST
------------------------------------------------------------------------------------------------------------------------------------
Miscellaneous Includes one time fees/credits which Retail & Institutional Allocated asexpense dictates
are not applicable to an existing OOP
category. If the fee is recurring, a
separate category may be established.
------------------------------------------------------------------------------------------------------------------------------------
B-2
TRANSFER AGENT BASE AND OUT-OF-POCKET FEES (OOP)
ACCT. TITLE GENERAL DESCRIPTION FUNDS ALLOCATION METHODOLOGY
------------------------------------------------------------------------------------------------------------------------------------
800 Line Represents telephone usage and Retail & Institutional Allocated by 800 by product/fund by number of
Charges related expenses assessed by AT&T and open billable accounts
DST including automated voice
response.
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TRAC 2000 Expenses associated with utilizing Retail & Institutional Allocated by fund by number of open billable
Audio DST's automated voice response PPA (participant) accounts
Response product for retirement plans
(participants).
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TRAC 2000 Represents programming expenses Retail & Institutional Allocated by fund by number of open billable
Dedicated associated with DST TRAC development PPA (participant) accounts
Programmer initiatives.
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Programming/ Represents programming expenses Retail & Institutional Allocated by fund and number of open billable
Development assessed by non-DST 3rd party accounts (unless expense is specific to fund).
business partners. DST Output,
Informa programming falls into this
category.
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DST Represents charges associated with Retail, Retirement & Allocated by fund by number of open billable
PowerSelect using PowerSelect which is a PC-based Institutional accounts
ad hoc reporting tool that provides
the ability to run queries on
shareholder account and transaction
data to generate reports, labels, and
other output, including magnetic
media.
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TRAC 2000 Includes the following DST charges: Retail & Institutional Allocated by fund by number of closed PPA
Participant Fees Participant Fees, Outside Investment (participant) accounts. Non-funded SIMPLES and
Vehicles, Participant without Money 403bs should be allocated as fund billable
Fees for SIMPLE, 403b and 401k funded expenses.
and non-funded participant positions
maintained on TRAC20000.
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DST Represents programming expenses Retail, Retirement & Allocated by fund by number of open billable
Programming associated with DST development Institutional accounts
initiatives.
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DST Data Technology costs associated with Retail, Retirement & Allocated by fund by number of open billable
Communication maintaining remote access to DST Institutional accounts
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DST Additional cost assessed by DST for Retail, Retirement & Allocated by fund by number of open billable
Comp/Recon the use of the Comp/Recon subsystem. Institutional accounts
JHSS Control Department uses this
system for automated reconciliation.
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DST National Per fund/cusip fee assessed by DST Retail, Retirement & Allocated by fund
Securities for processing through the NSCC. Institutional As of 10/24/03 per X. Xxxxxxxxx/Xxxx Xxxxx:
Clearing Allocate All Class R (except Fund 211-R) to
Corporation cost center 5306-4403000 not as an OOP.
(NSCC)
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DST Audio Expenses associated with utilizing Retail & Institutional Allocated by fund by number of open billable
Response DST's automated voice response accounts
products
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DST Computer Production and mailing of tapes (i.e. Retail, Retirement & Allocated by fund by number of open billable
Tapes tapes/cartridges for tax reporting, Institutional accounts
labels, admark, forms, proxies, etc.)
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DST Express Mail Charges associated with air delivery Retail, Retirement & Allocated by fund by number of open billable
of tapes, cartridges, etc. Institutional accounts
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DST Microfiche Represents the production and Retail, Retirement & Allocated by fund by number of open billable
delivery, including base stock Institutional accounts
of microfilm/fiche reports and
statements by non-DST 3rd parties.
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DST Disaster Represents fee associated with Retail, Retirement & Allocated by fund by number of open billable
Recovery subscribing to DST disaster recovery Institutional accounts
program
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DST Compliance Represents fees associated with the Retail, Retirement & Lost Shareholder Search/Tracking and Identity
Products following DST products: Institutional Check: Allocated by fund by number of open
>> Lost Shareholder Search billable accounts
>> Lost Shareholder Tracking
>> Identity Check (11/24/03 Short Term Trader: Allocated by specific fund
Formerly - Early Warning New
Account)
>> Short Term Trader
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B-3
TRANSFER AGENT BASE AND OUT-OF-POCKET FEES (OOP)
------------------------------------------------
ACCT. TITLE GENERAL DESCRIPTION FUNDS ALLOCATION METHODOLOGY
------------------------------------------------------------------------------------------------------------------------------------
Other- Monthly credit representing interest Retail, Retirement & Allocated by fund by number of open billable
Reimbursement earned in DDAs for JHF Institutional accounts
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** THE INSTITUTIONAL PORTION OF THE TA BASE AND OOP FEES ARE WAIVED AND
ALLOCATED TO THE TRANSFER AGENT.
NON JHSS TRANSFER AGENT OOP FEES
ACCT. TITLE GENERAL DESCRIPTION FUNDS ALLOCATION METHODOLOGY
------------------------------------------------------------------------------------------------------------------------------------
Omnibus Represents participant servicing fees Retail Allocated to specific funds by number of
Fees assessed by various Dealers for participants participating in omnibus positions.
sub-accounts within the omnibus
positions.
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Participant Represents participant servicing fees Retail Allocated to specific funds participating in IIO
Servicing assessed for participation in various arrangements.
Fees retirement platforms.
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National Represents Xxxxxxx Xxxxxx mutual fund Retail Allocated to specific funds participating in
Accounts service fees Xxxxxxx Xxxxxx platform. Specific allocation
to be provided by National Accounts.
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** THE INSTITUTIONAL PORTION OF THE NON-JHSS TRANSFER AGENT OOP FEES ARE WAIVED
AND ALLOCATED TO JHF.
B-4
