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EXHIBIT (H)(15)
FUNDVEST - NO TRANSACTION FEE AGREEMENT
This Agreement is made as of February 20, 2001, between Pershing Division of
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation ("Pershing"), a Delaware
Corporation, and Xxxxxxxx Xxxxx ("Company").
WHEREAS it is understood that Pershing functions primarily as a clearing agent
for introducing broker-dealers/correspondents, and in such capacity performs
traditional operational functions, including execution and clearance of trades
and custody of customer funds and securities;
WHEREAS certain of these broker-dealers/correspondents have agreed to
participate in Pershing's FundVest No Transaction Fee Program ("FundVest") under
the terms and conditions set forth in a separate agreement between Pershing and
the broker-dealers/correspondents (each a "Participating Correspondent");
WHEREAS the terms and conditions set forth herein apply to transactions effected
either on behalf of customers of Participating Correspondents or direct
customers of Pershing (collectively, ".Customers");
WHEREAS the Company wishes to have Pershing or Participating Correspondents
provide on its behalf certain administrative services for the funds set forth on
Schedule I attached hereto (each a "Fund"), which Pershing shall make available
to Customers through FundVest;
WHEREAS such services will be performed pursuant to the terms and conditions as
set forth herein and on the Schedules attached hereto;
NOW THEREFORE, in consideration of the foregoing and the mutual promises set
forth below, the parties agree as follows:
Services
During the term of this Agreement, Pershing or Participating
Correspondents will perform services as set forth in Schedule III attached
hereto (the "Services"). Such Schedule may be amended from time to time upon the
mutual written consent of the parties.
Fees
For performance of Services, Pershing shall receive a fee (the "Fee") which will
be calculated and paid as provided in 'Schedule IV attached hereto. Fees are
solely for shareholder servicing and other administrative services provided by
Pershing or Participating Correspondents and do not constitute payment in any
manner for investment advisory, distribution, trustee, or custodial services.
Fees shall be payable on all shares of a Fund being held by Pershing for
Customers of Participating Correspondents, excluding: (i) shares held by
Pershing for such Customers prior to
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the effective date of the Agreement as to such Fund, (ii) shares first placed
into a brokerage account with Pershing after the termination of the Agreement as
to the Fund issuing such shares, and (iii) shares on which Pershing or
Participating Correspondent has, upon purchase, assessed to-Customers any
transaction fee. The total number of shares of the Funds upon which Fees are due
Pershing are referred to within the Agreement as program shares ("Program
Shares").
The Company's sole responsibility for fee payment under this Agreement shall be
to Pershing. Pershing shall be solely responsible for payment of a portion of
such fee to Participating Correspondents pursuant to separate agreements with
such correspondents.
The Company represents that fees paid to Pershing will be paid out
of shareholder servicing or other fees presently being charged to
the Funds as set forth in the current prospectus of each of the
Funds.
In the event that Schedule III is revised, the parties agree, in good faith, to
negotiate a revision of fees set forth in Schedule IV.
Transaction Charges.
Neither Pershing nor any Participating Correspondent shall, during the
term of this Agreement, assess against or collect from Customers any transaction
fee upon the purchase or redemption of any Fund's shares that meet the minimum
purchase criteria set forth in this Agreement, except as noted in Section 4
below. Customer purchases not meeting the criteria as set forth herein may be
charged a transaction fee by the Participating Correspondent or Pershing, as the
case may be, and will not be included in service fee invoices presented to the
Company for payment.
Short Term Redemptions and Transfers
It is hereby understood that Pershing or Participating Correspondents may apply
a redemption fee for any short term redemption of shares purchased within
specified time frames.
Pershing or the Participating Correspondent, as the case may be, reserves the
right to apply a fee for the transfer of any Fund position purchased within
specified time frames.
Indemnification
Pershing shall indemnify and hold harmless the Company, its directors, officers,
employees, and agents (hereinafter, "Indemnified Parties") from and against any
and all losses, claims, liabilities and expenses (including, but not limited to,
reasonable attorney's fees) incurred by any of them and arising as a result of
(i) Pershing's dissemination of information (oral or written) regarding the
Company that is materially incorrect and that was not provided to Pershing by
the Company or approved by the Company or any of its affiliated persons (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")) or
agents; or (ii) Pershing's willful misconduct or negligence in the performance
of, or failure to perform, its obligations under this Agreement, except to the
extent the losses are a result of the negligence, willful misconduct, or breach
of this Agreement by an Indemnified Party.
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Pershing has obtained from each Participating Correspondent an agreement with
Pershing regarding the FundVest program which contains the following clause:
The Participating Correspondent shall indemnify and hold
harmless each of the Participating Funds, as identified on
Schedule A as may be amended from time to time, their directors,
officers, employees, and agents (hereinafter, "Indemnified
Parties") from and against any and all losses, claims, liabilities
and expenses (including, but not limited to, reasonable attorney's
fees) incurred by any of them and arising as a result of
Participating Correspondent's (i) violation of any law, rule or
regulation, including any related to or in connection with the
sale of Fund shares, (ii) dissemination of information regarding
any Fund, that is materially incorrect or misleading and which was
not provided in writing to Participating Correspondent by such
fund or approved in writing, or any of their affiliated persons
(as defined in the Investment company Act of 1940, as amended (the
"1940 Act")) or (iii) Participating Correspondent's willful
misconduct or negligence in the performance of, or failure to
perform, its obligations under this Agreement, except to the
extent the losses are a result of the negligence, willful
misconduct, or breach of the Agreement by an Indemnified Party.
The Company hereby agrees to indemnify Pershing and Participating Correspondents
and their directors, officers, employees, and agents (hereinafter, "Indemnified
Parties") from and against any and all losses, claims, damages, liabilities and
expenses (including, but not limited to, reasonable attorney's fees) (i) to
which Pershing or Participating Correspondent may become subject as a result of
any untrue or alleged untrue statement of a material fact contained in the
prospectus or statement of additional information of a Fund, as amended or
supplemented from time to time, or the omission of a material fact required to
be stated therein or necessary to make the statements therein not misleading;
(ii) arising out of or related to the Company's violation of any law, rule or
regulation, at common law or otherwise, including any related to or in
connection with the offering for sale of Fund shares; (iii) arising out of or
related to the dissemination of any information, advertising or promotional
material regarding any Fund, that is inaccurate or misleading and which was
provided or generated by the Company or the Fund or any of their affiliated
persons (as defined in the 1940 Act); or (iv) the Company's willful misconduct
or negligence in the performance of, or failure to perform, its obligations
pursuant to this Agreement, except to the extent the losses are a result of the
negligence or willful misconduct of an Indemnified Party.
In any event, no party shall be liable for any special, consequential or
incidental damages.
In order that the indemnification provisions contained herein shall apply, upon
the assertion of a claim or loss for which any party (the "Indemnitor") may be
required to indemnify another party (the "Indemnitee"), the Indemnitee shall
promptly notify the Indemnitor of such assertion or loss, and shall keep the
Indemnitor advised with respect to all developments concerning any such claim.
The Indemnitor shall have the option to participate at its expense with the
Indemnitee in the defense of any such claim. The Indemnitee shall in no case
confess any claim or make any compromise in any case in which the Indemnitor may
be required to indemnify it except with the Indemnitor's prior written consent.
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This section 5 shall survive termination of this Agreement.
Role of Parties
The parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication, and related services
only and are not the services of an underwriter or a principal underwriter
within the meaning of the Securities Act of 1933, as amended, or the 1940 Act.
This Agreement does not xxxxx Xxxxxxxx or Participating Correspondents any right
to purchase shares from any Fund (although it does not preclude them from
purchasing any such shares), nor does it constitute Pershing or any
Participating Correspondent an agent of a Fund for purposes of selling shares of
any Fund to any dealer or to the public. To the extent Pershing or a
Participating Correspondent is involved in the purchase of shares of any Fund by
Customers, such involvement will be as agent of such Customers only.
Information to be provided
The Company shall provide to Pershing, prior to the effectiveness of
this Agreement, or as soon thereafter as possible, a copy of the current
prospectus and statement of additional information for each Fund participating
in the program described herein. The Company shall provide Pershing with written
copies of any amendments to or changes in such documents as soon as possible
after such amendments or changes become available.
Notices
All notices required under this Agreement (not including the Operating
Agreement, if any) must be in writing and delivered either personally or via
first class mail. Such notices will be deemed to be received as of the date of
actual receipt, or three (3) days after deposit, first class postage prepaid, in
the United States mail, whichever is earlier.
All such notices shall be made:
if to Pershing, to: Pershing Division of Xxxxxxxxx, Xxxxxx
& Xxxxxxxx Securities Corporation
Xxx Xxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Mutual Funds Department
with a copy to: Attention: General Counsel (at the same address);
if to the Company, to the address as given below in the signature
block.
Nonexclusivity
Each Party acknowledges that the other may enter into agreements,
similar to this one, with other parties, for the performance of services similar
to those to be provided under this Agreement, unless otherwise agreed to in
writing by the parties.
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Assignability
This Agreement is not assignable by any party without the other party's
prior written consent, such consent not to be unreasonably withheld. Any
attempted assignment in contravention hereof shall be null and void; provided,
however, that Pershing or the Company may assign its rights and obligations
under this Agreement to any affiliate.
Schedules
All Schedules attached to this Agreement (as they may be amended from
time to time) are, by this reference, incorporated into, and made a part of,
this Agreement.
Entire Agreement-Amendment
This Agreement (including the Schedules attached hereto), together with
the Operating Agreement, if any, constitute the entire agreement between the
parties with regard to the subject matter herein. Additionally, these materials
supersede any and all agreements, representations and warranties, whether
written or oral, made prior to the execution of this Agreement. This Agreement
and the Schedules attached hereto may be amended only by a writing executed by
each party.
Governing Law
This Agreement will be governed by, and interpreted under, the laws of
the State of New York as applied to contracts entered into and to be performed
entirely within that state.
Counterparts
This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one
instrument.
Effectiveness of Agreement--Termination.
This Agreement will become effective as to a Fund as of (i) the date set forth
on Schedule I opposite the name of the Fund; or (ii) such later date as Pershing
may, in its discretion, designate.
This Agreement shall have an initial term of one (1) year - after which it may
be terminated, as to one or more Funds, by either party (i) upon one hundred
twenty (120) days' written notice to the other party; or (ii) upon such shorter
notice as is required by law, order, or instruction from a court of competent
jurisdiction, regulatory body, or self-regulatory organization with jurisdiction
over the terminating party; or (iii) automatically, effective on the day
following termination of any plan of distribution ("Rule l2b-1 Plan") adopted
and maintained pursuant to Rule 12b-1 under the 1940 Act by any Fund that has a
Rule 12b-1 Plan in effect as of the effective date of this Agreement, provided
that a portion of the Fee is paid pursuant to the Rule l2b-1 Plan.
Upon termination as to a Fund, the Company will not be obligated to pay the fee
with respect to any shares of such Fund that becomes part of a Customer's
account after the date of such termination. However, notwithstanding any such
termination, the Company will remain
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obligated to pay Pershing the fee as to each share of such Fund that was
considered when calculating the fee as of the date of termination (a
"Pre-Termination Share"), for so long as such Pre-Termination Share is held in
any Pershing brokerage account and Pershing or Participating Correspondent
continues to perform the Services as to such shares. The Company shall reimburse
Pershing promptly for any reasonable expenses Pershing incurs in effecting any
termination of this Agreement, including, but not limited to, delivery to the
Company or a Fund of any records, instruments, or documents reasonably requested
by the Company or a Fund.
Confidentiality
Each party acknowledges and understands that any and all technical,
trade secret, or business information, including, without limitation,
financial information, business or marketing strategies or plans,
product development or customer information, which is disclosed to the
other or is otherwise obtained by the other, its affiliates, agent or
representatives during the term of this Agreement (the Proprietary
Information") is confidential and proprietary, constitutes trade
secrets of the owner, and is of great value and importance to the
success of the owner's business. Each party agrees to use its best
efforts (the same being not less than that employed to protect his own
proprietary information) to safeguard the Proprietary Information and
to prevent the unauthorized, negligent or inadvertent use or disclosure
thereof. Neither party shall, without the prior written approval of any
officer of the other, directly or indirectly, disclose the Proprietary
Information to any person or business entity except for a limited
number of employees, attorneys, accountants and other advisors of the
other on a need-to-know basis or as may be required by law or
regulation. Each party shall promptly notify the other in writing of
any unauthorized, negligent or inadvertent use or disclosure of
Proprietary information. Each party shall be liable under this
Agreement to the other for any use or disclosure in violation of this
Agreement by its employees, attorneys, accountants, or other advisors
or agents. This section shall continue in full force and effect
notwithstanding the termination of this Agreement.
Custody
The Company acknowledges that Fund shares maintained by the Fund for
Customers hereunder are held in custody for the exclusive benefit of
Customers of Pershing or Participating Correspondents and shall be held
free of any right, charge, security interest, lien or claim against
Pershing or - Participating Correspondents in favor of the Fund or its
agents acting on behalf of the Fund.
IN WITNESS WHEREOF, duly authorized representatives of the parties
hereto have executed this Agreement.
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XXXXXXXX XXXXX XXXXXXXX DIVISION OF XXXXXXXXX,
LUFKIN & XXXXXXXX SECURITIES
CORPORATION
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxxx X.
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Xxxxxx X. Xxxxx
Principal
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SCHEDULE I
FUND NAME CUSIP SYMBOL
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Xxxxxxxx Xxxxx Growth Fund 0000000000 THPGX
Xxxxxxxx Plumb Balanced Fund 884891102 THPBX
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SCHEDULE II
OPERATIONAL PROCEDURES RELEVANT TO THE AGREEMENT
Unless processed using the NSCC FundServ and/or Networking interfaces in the
customary manner as prescribed by the NSCC, or as amended by mutual agreement
whether verbally or in writing, operational responsibilities will be executed as
outlined below in paragraphs (1), (2), and (3).
(1) PURCHASE AND REDEMPTION ORDERS
Pershing will aggregate and calculate purchase and redemption orders for shares
of a Fund that it has accepted as placed by Customers prior to the close of
trading on the New York Stock Exchange, and will communicate to Fund such orders
for each Fund for each business day. Such orders will receive the applicable
Fund's closing net asset value for that business day, provided they are
communicated to Fund by 5:00 p.m. Eastern Time.
(2) SETTLEMENT OF TRADES
Both Pershing and Fund will use their best efforts to cause to be transmitted by
wire on the Business Day immediately following trade date (settlement date) to
an account as directed by the counterpart, the proceeds of all redemption orders
and the purchase price of all purchase orders.
(3) ACCOUNT ACTIVITY AND DISTRIBUTION INFORMATION
(a) Fund shall cause to be provided to Pershing confirmations of Fund activity
in the form of statements detailing activity no less frequently than monthly, as
well as other information as may reasonably be requested by Pershing.
(b) Fund shall cause to be provided to Pershing all distribution announcement
information (ex dates, record dates, payable dates, distribution rate per share,
record date share balances, etc.) as soon as it is announced by each Fund.
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SCHEDULE III
Schedule of services to be performed by Pershing or Participating
Correspondent(s) pursuant to this Agreement.
1. Pershing/Participating Correspondent represents and warrants that it
has and will continue at all times to have the necessary facilities,
equipment and personnel to perform the services hereunder in a
businesslike and competent manner and its system complies with any
applicable laws, rules and regulations related to the services to be
provided under this Agreement, including the maintenance and
preservation of all records and registrations required by any
applicable laws, rules and regulations.
2. Customers are aware that they are transacting business with
Pershing/Participating Correspondent and not the Company or the Fund,
and will look to Pershing/Participating Correspondent and not the
Company or the Fund for resolution of problems or discrepancies in
their accounts.
3. Pershing/Participating Correspondent agrees that it will perform
various services for the Customers in those accounts, including where
applicable:
- Establishing and maintaining records of Customers'
accounts;
- Processing purchase and redemption transactions;
- Confirming Customer transactions;
- Answering routine client inquires regarding a Fund;
- Assisting Customers in changing dividend options,
account designations and addresses; withholding taxes
on non-resident alien accounts;
- Disbursing income dividends and capital gains
distributions;
- Reinvesting dividends and distributions;
- Preparing and delivering to Customers and state and
federal authorities, including the United States
Internal Revenue Service, such information respecting
dividends and distributions paid by the Funds as may
be required by law, rule or regulation;
- Withholding on dividends and distributions as may be
required by state or Federal authorities from time to
time;
- And such other services as the Company or a Fund may
reasonably request.
Pershing/Participating Correspondent shall maintain all historical
Customer records, consistent with requirements of all applicable laws,
rules and regulations. (a) Upon the request of a Fund, Pershing shall
provide copies of all the historical records relating to transactions
between the Fund and the Customers, written communications regarding
the Fund to or from the Customers and other materials, in each case (1)
as are maintained by Pershing in the ordinary course of its business,
and (2) as may reasonably be requested to enable the Fund including
without limitation its auditors or legal counsel to (A) monitor and
review the Services, (B) comply with any request of a governmental or
self regulatory organization, (C) verify compliance by Pershing with
the terms of this agreement, (D) make required regulatory reports, or
(E) perform general customer supervision. Pershing agrees that it will
permit the Fund to have reasonable access to its personnel and records
in order to facilitate the monitoring of the services. (b) Upon the
request of Pershing, a Fund shall provide copies of all the historical
records relating to transactions between the Fund and Pershing, written
communications regarding the Fund to or from Pershing and other
materials, in each case (1) as are maintained by the Fund in the
ordinary course of its business and in compliance with applicable law,
and (2) as may be requested to enable Pershing to (A) comply with the
request of any governmental body or self regulatory organization, (B)
verify
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compliance by the Fund with the terms of this Agreement, (C) make
required regulatory reports, or (D) perform general customer
supervision.
4. Pershing/Participating Correspondent shall make available to the
Company or a Fund (if requested) records or communications necessary to
determine the number of Customers in each Pershing/Participating
Correspondent omnibus account, if applicable.
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NETWORKING REIMBURSEMENT SCHEDULE
In consideration of the services provided by Pershing Division of Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation, you agree to pay a fee equal to $6 per
year per each position held in the Xxxxxxxx Plumb Funds, assessed as of the last
day of each quarter. Pershing Division of Xxxxxxxxx, Xxxxxx & Xxxxxxxx will
issue an invoice following the close of each quarter detailing the number of
positions being invoiced and the total amount due at the quarterly rate of
$1.50.
Accepted & Agreed:
Firm: PERSHING DIVISION OF XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORP.
By: /s/ Xxxxx Xxxxxxxxxxx
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Print Name: Xxxxx Xxxxxxxxxxx
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Title: Vice President
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Date: 03-16-2001
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For: XXXXXXXX, PLUMB & ASSOCIATES, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Print Name: Xxxx X. Xxxxxxxx
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Title: Chairman
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Date: 03-15-2001
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