SHAREHOLDER SERVICING PLAN AND AGREEMENT
THIS SHAREHOLDER SERVICING PLAN AND AGREEMENT ("Agreement") is made as
of the 13th day of March, 1996 by and between THE PARNASSUS FUND, a
Massachusetts business trust (the "Fund"), and PARNASSUS INVESTMENTS, a
California corporation ("Parnassus").
WITNESSETH
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Fund wishes to retain Parnassus to appoint, oversee the
activities of and make payment to banks, 401 (k) administrators and any other
person or entity that have entered into agreements with Parnassus to provide
servicing to persons holding shares of the Fund, including personal services
and/or account maintenance for shareholders of the Fund and/or transfer agency
or sub-transfer agency services ("Service Providers"), and Parnassus is willing
to furnish such services.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby authorizes Parnassus to obtain for the
Fund the shareholder services specified in Section 2 of this Agreement for
clients of the Service Providers that hold shares of the Fund ("Clients").
Parnassus agrees to furnish through the Service Providers such shareholder
services for the compensation payable to Service Providers pursuant to Section 6
of this Agreement. Parnassus and not the Fund will be responsible for the
remittal of such compensation to the respective Service Providers.
2. Services and Responsibilities on a Continuing Basis The shareholder
services provided pursuant to this Agreement shall be provided on a regular
basis, which shall be daily, weekly or as otherwise appropriate, unless
otherwise specified by the Fund. These services are the following:
(a) For Service Providers whose Clients' shares of the Fund are
held on the books of the Fund in a single, aggregated account
maintained by the Service Provider ("Recordkeepers"), such
services relating to record maintenance, processing of
dividends and other distributions, shareholder communications
and/or tax information reporting as are comparable to
shareholder servicing and/or transfer agency services that are
or may be provided to persons whose Fund shares are not held
in an omnibus account; and
(b) For any Service Provider,
(i) responding to client inquiries;
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(ii) assisting Clients in changing dividend and/or
distribution options, account designations and
addresses;
(iii) providing assistance and information in connection
with proxy statements, annual reports, prospectuses
and other correspondence from the Fund to
shareholders (including, upon request, copies, but
not originals, of regular correspondence,
confirmations or regular statements of account) where
such clients hold shares of the Fund registered in
the name of Parnassus, a Service Provider, or their
nominees; and
(iv) providing such other information and assistance to
shareholders as may be reasonably requested by such
clients.
Parnassus and the Fund acknowledge that, to the extent any of the foregoing
services are provided by Parnassus, Parnassus is compensated for such services
under the Agreement for Transfer Agent Services and Accounting and Pricing
Services. No Payment shall be made pursuant to this Agreement for any services
that are primarily intended to result in the sale or distribution of shares of
the Fund.
3. Standard of Care. In the performance of the duties hereunder,
Parnassus and the Service Providers shall be obligated to exercise due care and
diligence and to act in good faith and to use their best efforts. Without
limiting the generality of the foregoing or of any other provision of this
Agreement, neither Parnassus nor any Service Provider shall be liable for delays
or errors or loss of data occurring by reason of circumstances beyond Parnassus'
or the Service Provider's control.
4. Confidentiality. Parnassus agrees, on behalf of itself and its
employees, to treat confidentially all records and other information relative to
the Fund, and all prior, present or potential shareholders of the Fund, except
after prior notification to, and approval of release of information in writing
by, the Fund, which approval shall not be unreasonably withheld, and may not be
withheld where Parnassus or a Service Provider 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
Fund.
5. Independent Contractor. Parnassus shall, for all purposes herein, be
deemed to be an independent contractor, and the Service Providers shall at all
times be deemed to be independent contractors retained by Parnassus and not the
Fund, and Parnassus and the Service Providers shall, unless otherwise expressly
provided and authorized to do so, have no authority to act for or represent the
Fund in any way, or in any way be deemed an agent for the Fund. It is expressly
understood and agreed that the services to be rendered by Parnassus under the
provisions of this Agreement are not to be deemed exclusive, and Parnassus shall
be free to render similar or different services to others so long as its ability
to render the services provided for in this
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Agreement shall not materially be impaired thereby.
6. Compensation. As compensation for the services rendered by, and
responsibilities assumed by, Parnassus during the term of this Agreement, the
Fund will pay to Parnassus for payment to Service Providers an aggregate service
fee at the rate of up to 0.25% (25 basis points) per annum of the average daily
net asset value of the Fund's shares; except, however, with respect to services
which are not provided by Recordkeepers, the Fund shall pay to Parnassus an
aggregate service fee which does not exceed the annual rate of 0.10% (10 basis
points) of the average daily net asset value of the Fund's shares.
7. Fund Information. No person is authorized to make any
representations concerning the Fund, shares of the Fund or shareholder services
except in accordance with the terms of this Agreement. Neither Parnassus or any
Service Provider, nor any of their respective agents will use or distribute, or
authorize the use or distribution of, any statements relating to the Fund other
than those contained in the Fund's current Prospectus or Statement of Additional
Information or in such supplemental literature as may be authorized by the Fund.
8. Reports to Fund. Parnassus shall provide to the Board of Trustees of
the Fund, and the Board shall review, at each meeting, a written report of the
amounts expended pursuant to this Agreement and the purposes for which such
expenditures were made.
9. Duration. This Agreement shall continue in full force and effect for
so long as such continuance is approved at least annually by vote or written
consent of a majority of the Trustees of the Fund, including a majority of the
Trustees of the Fund who are not "interested persons" of either party to this
Agreement and have no direct or indirect financial interest in the operation of
this Agreement.
10. Termination. This Agreement may be terminated without penalty by
either party upon at least 60 days' prior written notice to the other; provided,
that in the case of termination by the Fund, the Trustees, including a majority
of the Independent Trustees, shall have authorized such action.
11. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought. All amendments to this Agreement
must be approved by vote of the Board of Trustees of the Fund, including a
majority of the Independent Trustees.
12. Records. All records required to be maintained and preserved by the
Fund pursuant to the provisions of rules or regulations of the Securities and
Exchange Commission under Section 31(a) of the 1940 Act and maintained and
preserved by Parnassus on behalf of the Fund, including any such records
maintained by Parnassus in connection with the performance of its obligations
under this Agreement, are the property of the Fund and shall be provided by
Parnassus promptly on request by the Fund.
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13. Miscellaneous.
(a) This agreement embodies the entire agreement and understanding
between the parties hereto, and supersedes all prior
agreements and understandings, relating to the subject matter
hereof.
(b) The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
(c) This Agreement shall be governed by and construed in
accordance with the laws of the State of California as
applicable to contracts between California residents entered
into and to be performed entirely within California.
(d) 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.
(e) Parnassus acknowledges that it has received notice of and
accepts the limitations of the Fund's liability set forth in
the Fund's Agreement and the Declaration of Trust. Parnassus
agrees that the Fund's obligations under this Agreement shall
be limited to the Fund and to its assets, and that neither
Parnassus nor any Service Provider shall seek satisfaction of
any such obligation from the shareholders of the Fund or from
any Trustee, officer, employee or agent of the Fund.
(f) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
(g) This Agreement may not be assigned without the written consent
of the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written
THE PARNASSUS FUND
By:
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Xxxxxxx Xxxxxxxxx, Secretary
PARNASSUS INVESTMENTS
By:
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Xxxxxx X. Xxxxxx, President
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