THE LIPPER FUNDS, INC.
GROUP RETIREMENT SERVICING PLAN
1. The Lipper Funds, Inc. (the "Company") is hereby authorized to
enter into written agreements in substantially the form attached hereto as
Exhibit I or in any other form duly approved by the Board of Directors (the
"Shareholder Servicing Agreement") with institutional shareholders of record or
other financial institutions ("Shareholder Servicing Agents"). A Shareholder
Servicing Agreement shall require the Shareholder Servicing Agent to provide
support services on behalf of the Company as set forth therein to its customers
(the "Customers") who beneficially own shares (the "Shares") in any of the
company's investment portfolios (the "Funds"). For such services, the
Shareholder Servicing Agent shall receive a fee, computed daily and paid
monthly from the assets of each Fund in the manner set forth in the Shareholder
Servicing Agreement, at an annual rate of up to [ ] of 1% of the average
daily net asset value of Shares in such Fund with respect to which the
Shareholder Servicing Agent provides services for its Customers.
2. Each Shareholder Servicing Agreement which varies substantially
from the form attached hereto as Exhibit I or which is proposed to be entered
into with a Shareholder Servicing Agent which is the investment adviser or
principal underwriter of the Company, or an "affiliate," as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), of the Company,
its investment adviser or its principal underwriter, shall be approved by the
Board of Directors and by a vote of a majority of the Directors who are not
"interested persons" of the Company, as defined in the 1940 Act, and who have
no financial interest, direct or indirect, in such Shareholder Servicing
Agreement. Each Shareholder Servicing Agreement which does not vary
substantially from the form attached hereto as Exhibit I and which is not
proposed to be entered into with the investment adviser or principal
underwriter of the Company, or any "affiliate," as defined in the 1940 Act, of
the Company, its investment adviser or its principal underwriter, may be
entered into, executed and delivered in the name and on behalf of the Company,
by the President or any Vice President of the Company, at a fee determined in
accordance with paragraph 1 above by the officer executing such Agreement.
3. This plan (the "Plan"), shall become effective upon the approval
of the Plan (and the form of Shareholder Servicing Agreement attached hereto)
by the Board of Directors and by the vote of the majority of the Directors who
are not "interested persons" of the Company, as defined in the 1940 Act, and
who have no financial interest, direct or indirect, in the Plan or in any
Shareholder Servicing Agreement or other agreement relating to the Plan (the
"Disinterested Directors").
4. The Plan may be amended at any time by the Board of Directors
including the vote of a majority of the Disinterested Directors, without the
consent of any Shareholder Servicing Agent; provided, however, that any such
amendment shall not, without the consent of the affected Shareholder Servicing
Agent, modify the terms of any Shareholder Servicing Agent, modify the terms of
any Shareholder Servicing Agreement to which the company is a party.
5. The Plan may be terminated at any time, without the payment of
any penalty, by a vote of a majority of the Company's entire Board of Directors
on sixty (60) days' written notice to any Shareholder Servicing Agents which ar
parties to any Shareholder Servicing Agreements with the Company. Any notice
of termination of the Plan shall be deemed to also constitute a notice of
termination of the Plan shall be deemed to also constitute a notice of
termination of the Shareholder Servicing Agreement between the Company and any
Shareholder Servicing Agent to which such notice of termination is delivered.
SHAREHOLDER SERVICING AGREEMENT
SHAREHOLDER SERVICING AGREEMENT, dated as of December __, 1995, by
and between The Lipper Funds, Inc. (the "Company"), a Maryland corporation, and
[ ] (the "Financial Institution"), as a shareholder servicing agent
hereunder (the "Agent") relating to transactions in shares of capital stock,
$.001 par value (the "Shares"), of any of the three existing investment
portfolios offered by the Company (the "Funds"). In the event that the Company
establishes one or more portfolios other than the Funds with respect to which
it decides to retain the Financial Institution hereunder, the Company shall
promptly notify the Financial Institution in writing. If the Financial
Institution is willing to render such services, it shall notify the Company in
writing whereupon such portfolio shall become a Fund hereunder.
The Company and the Financial Institution hereby agree as follows:
1. Appointment. The Financial Institution, as Agent, hereby agrees
to perform certain services for its customers (the "Customers") as hereinafter
set forth. The Agent's appointment hereunder is non-exclusive, and the parties
recognize and agree that, from time to time, the Company may enter into other
shareholder servicing agreements, in writing, with other financial
institutions.
2. Services to be Performed. The Agent, as agent for its Customers,
shall be responsible for performing shareholder administrative support
services, which will include the following: (i) answering customer inquiries
regarding account status and history, the manner in which purchases, exchanges
and redemptions of shares of the Funds may be effected and certain other
matters pertaining to the Funds; (ii) assisting shareholders in designating and
changing dividend options, account designations and addresses; (iii) providing
necessary personnel and facilities to establish and maintain shareholder
accounts and records; (iv) assisting in aggregating and processing purchase,
exchange and redemption transactions; (v) placing net purchase and redemption
orders with the Company's distributor; (vi) arranging for wiring of funds;
(vii) transmitting and receiving funds in connection with customer orders to
purchase or redeem shares; (viii) processing dividend payments; (ix) verifying
and guaranteeing shareholder signatures in connection with redemption orders
and transfers and changes in shareholder-designated accounts, as necessary; (x)
providing periodic statements showing a customer's account balance and, to the
extent practicable, integrating such information with other customer
transactions otherwise effected through or with the Shareholder Servicing
Agent; (xi) furnishing (either separately or on an integrated basis with other
reports sent to a shareholder by a Shareholder Servicing Agent) monthly and
year-end statement and confirmations of purchases, exchanges and redemptions;
(xii) transmitting on behalf of the Company, proxy statements, annual reports,
updating prospectuses and other communications from the Company to the
shareholders of the Funds; (xiii) receiving, tabulating and transmitting to the
Company proxies executed by shareholders with respect to meetings of
shareholders of the Funds; and (xiv) providing such other related services as
the Company as the Company or a shareholder may request.
The Agent shall provide all personnel and facilities necessary in
order for it to perform the functions described in this paragraph with respect
to its Customers.
3. Fees.
3.1. Fees from the Company. In consideration for the services
described in Section 2 hereof and the incurring of expenses in connection
therewith, the Agent shall receive a fee, computed daily and payable monthly,
at the annual rate of ___ of 1% of the average daily net asset value of Shares
of each Fund for which the Agent from time to time performs services under this
Agreement on behalf of Customers. Fees with respect to Customers' Shares in
any one Fund will be paid exclusively from the assets of that Fund in which
such Customer's assets are invested. For purposes of determining the fees
payable to the Agent hereunder, the value of the Company's net assets shall be
computed in the manner specified in the Company's then-current prospectus and
statement of additional information (the "Prospectus") for computation of the
net asset value of the Company's Shares.
3.2. Fees from Customers. It is agreed that the Financial
Institution may impose certain conditions on Customers, in addition to or
different from those imposed by the Company, such as requiring a minimum
initial investment or imposing limitations on the amounts of transactions. It
is also understood that the Financial Institution may directly credit or charge
fees to Customers in connection with an investment in the Funds. The Financial
Institution shall credit or bill Customers directly for such credits or fees.
In the event the Financial Institution charges Customers such fees, it shall
make appropriate prior written disclosure (such disclosure to be in accordance
with all applicable laws) to Customers both of any direct fees charged to the
Customer and of the fees received or to be received by it from the Company
pursuant to Section 3.1 of this Agreement. It is understood however, that in
no event shall the Financial Institution have recourse or access as Agent or
otherwise to the account of any shareholder of the Company except to the extent
expressly authorized by law or by such shareholder, or to any assets of the
Company, for payment of any direct fees referred to in this Section 3.2.
4. Approval of Materials to be Circulated. Advance copies or proofs
of all materials which are to be generally circulated or disseminated by the
Agent to Customers or prospective Customers which identify or describe the
Company shall be provided to the Company at least 10 days prior to such
circulation or dissemination (unless the Company consents in writing to a
shorter period), and such materials shall not be circulated or disseminated or
further circulated or disseminated at any time after the Company shall have
given written notice to the Agent of any objection thereto.
Nothing in this Section 4 shall be construed to make the Company
liable for the use of any information about the Company which is disseminated
by the Agent.
5. Compliance with Laws, etc. The Agent shall comply with all
applicable federal and state laws and regulations in the performance of its
duties under this Agreement, including securities laws.
6. Limitation of Agent's Liability. In consideration of the Agent's
undertaking to render the services described in this Agreement, the Company
agrees that the Agent shall not be liable under this Agreement for any error of
judgment or mistake of law or for any loss suffered by the Company in
connection with the performance of this Agreement, provided that nothing in
this Agreement shall be deemed to protect or purport to protect the Agent
against any liability to the Company or its stockholders to which the Agent
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the Agent's duties under this Agreement or by
reason of the Agent's reckless disregard of its obligations and duties
hereunder.
7. Indemnification. The Company agrees to indemnify and hold
harmless the Agent from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, liabilities arising under the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the Investment Company Act of 1940, as amended, and any state and
foreign securities and blue sky laws, all as or to be amended from time to
time) and expenses, including attorneys' fees and disbursements arising
directly or indirectly from (i) any misstatements or omissions in the Company's
Prospectus, or (ii) any action or thing which the Agent takes or does or omits
to take or do reasonably believed by the Agent to be at the request or
direction or in reliance on the advice or instructions, whether oral or
written, of the Company provided, that the Agent shall not be indemnified
against any liability to the Company or to its shareholders (or any expenses
incident to such liability) arising out of the Agent's own willful misfeasance,
bad faith or gross negligence in the performance of its duties hereunder or by
reason of its reckless disregard of its obligations and duties hereunder. In
order that the indemnification provision contained
in this paragraph shall apply, it is understood that if in any case the Company
may be asked to indemnify or save the Agent harmless, the Company shall be
fully and promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that the Agent will use all reasonable
care to identify and notify the Company promptly concerning any situation which
presents or appears likely to present the probability of such a claim for
indemnification against the Company. The Company shall have the option to
defend the Agent against any claim which may be the subject of this
indemnification and, in the event that the Company so elects, it will so notify
the Agent and thereupon the Company shall take over complete defense for the
claim, and the Agent shall in such situation incur no further legal or other
expenses for which it shall seek indemnification under this paragraph. The
Agent shall in no case confess any claim or make any compromise or settlement
in any case in which the Company will be asked to indemnify the Agent, except
with the Company's prior written consent.
8. Limitation of Shareholder Liability, etc. The Agent hereby
agrees that obligations assumed by the Company pursuant to this Agreement shall
be limited in all cases to the Company and its assets and that the Agent shall
not seek satisfaction of any such obligation from the shareholders or any
shareholder of the Company. It is further agreed that the Agent shall not seek
satisfaction of any such obligations from the Board of Directors or any
individual Director of the Company.
9. Notices. All notices or other communications hereunder to either
party shall be in writing or by confirming telegram, cable, telex or facsimile
sending device. Notices shall be addressed (a) if to the Company, at the
address of the Company, or (b) if to the Agent, at _______________________.
10. Further Assurances. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
11. Termination. This Agreement will continue in effect until two
years from the date hereof and thereafter for successive annual periods,
provided that such continuance is specifically approved at least annually (a)
by the Company's Board of Directors and (b) by the vote, cast in person at a
meeting called for the purpose, of a majority of the Company's directors who
are not parties to this Agreement or "interested persons" (as defined in the
1940 Act) of any such party. This Agreement may be terminated at any time,
without the payment of any penalty, by a vote of a majority of the Company's
outstanding voting securities (as defined in the 1940 Act) or by a vote of a
majority of the Company's entire Board of Directors on 60 days' written notice
to the Agent or by the Agent on (60) days' written notice to the Company.
Notice of termination of the Shareholder Servicing Plan by the Board of
Directors, pursuant to which this Agreement has been entered, shall constitute
a notice of termination of this Agreement.
12. Changes; Amendments. This Agreement may be changed or amended
only by written instrument signed by both parties.
13. Reports. The Agent will provide the Company or its designees
such information as the Company or its designees may reasonably request
(including, without limitation, periodic certifications confirming the
provision to Customers of the services described herein), and will otherwise
cooperate with the Company and its designees (including, without limitation,
any auditors designated by the Company), in connection with the preparation of
reports to its Board of Directors concerning this Agreement and the monies paid
or payable under this Agreement, as well as any other reports or filings that
may be required by law.
14. Subcontracting by Agent. The Agent may subcontract for the
performance of the Agent's obligations hereunder with any one or more persons,
including but not limited to any one or more persons which is an affiliate of
the Agent; provided, however, that the Agent shall be as fully responsible to
the Company for the acts and omissions of any subcontractor as it would be for
its own acts or omissions. The Agent shall notify the Company of any such
arrangements no later than the next meeting of the Company's Board of Directors
following the entry by the Agent into such arrangements. Notwithstanding this
paragraph or paragraph 11 of this Agreement, the Company reserves the right to
terminate this Agreement immediately or upon such notice as the Company, in its
sole discretion, determines to give, and without payment of any penalty, if the
Company notifies the Agent that any subcontractor of the Agent is unacceptable
to the Company for any reason and the Agent does not terminate its arrangements
with such subcontractor as promptly as reasonably practicable.
15. Governing Law. This Agreement shall be governed by the laws of
the State of New York.
16. Miscellaneous. 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. This
Agreement has been executed on behalf of the Company by the undersigned not
individually, but in the capacity indicated.
THE LIPPER FUNDS, INC.
By:____________________
Title:
