SHAREHOLDER SERVICES AGREEMENT
THIS AGREEMENT is entered into the ___ day of _______, ____, by and
between PBHG Funds, a Delaware business trust (the "Fund") on behalf of its
series, and PBHG Fund Services, a Pennsylvania business trust ("Fund Services").
WITNESSETH:
WHEREAS, the Fund is engaged in business as an open-end management
investment company and is registered as such under the Investment Company Act of
1940, as amended (the "1940 Act"); and
WHEREAS, Fund Services serves as Administrator to the Fund and each of
its separate series (the "Portfolios") and classes and provides administrative
services pursuant to an administrative services agreement between the Fund and
Fund Services; and
WHEREAS, the Fund desires to retain Fund Services to provide certain
additional services to the Fund, its Portfolios and the holders of shares
thereof, which services are supplemental and related to services provided by DST
Systems, Inc. ("DST") pursuant to a transfer agency agreement between the Fund
and DST (the "DST Agreement"); and
WHEREAS, Fund Services proposes to engage UAM Shareholder Services
Center, Inc. ("UAM SSC") to assist in providing certain services provided for by
this Agreement pursuant to a sub-shareholder services agreement between Fund
Services and UAM SSC.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Fund and Fund Services, intending to be legally bound,
hereby agree as follows:
1. Scope. In addition to the Portfolio and classes of
shares thereof existing on the effective date of this Agreement, the Fund may
from time to time hereafter create additional Portfolios and issue separate
classes of shares of beneficial interest or classify and reclassify shares of
any Portfolio or class, and the appointment effected hereby shall constitute
appointment for the provision of services with respect to all existing
Portfolios and classes and any additional Portfolios and classes unless the
parties shall otherwise agree in writing.
2. Appointment. The Fund hereby appoints Fund Services to perform such services
and to serve such functions as are set forth in Appendix A hereto, which
appendix is incorporated herein by this reference. Appendix A may not be amended
except by written agreement between the Fund and Fund Services. Fund Services
hereby agrees to perform such services and serve such functions as provided in
Appendix A in accordance with the terms and conditions set forth in this
Agreement.
3. Obligations Under DST Agreement. To the extent that the provisions or
requirements of the DST Agreement and any agreement related thereto may impose
obligations on Fund Services to provide services, conform to a standard of
conduct, adhere to a stipulated process or procedure, or otherwise undertake to
perform a defined duty or responsibility, or may require the Fund to ensure that
Fund Services fulfills such obligations, Fund Services shall perform such
obligations and shall at all times use reasonable care and act in good faith in
performing such obligations.
4. Duties and Responsibilities of Fund Services. In connection with the
services provided by Fund Services pursuant to this Agreement, Fund Services
shall directly or indirectly:
a. Personnel. Provide the services of personnel competent to
perform the obligations of Fund Services under this Agreement.
b. Facilities. Furnish, at its own expense, such office
facilities, furnishings, office equipment and other property and resources as
are necessary for the fulfillment of the obligations of Fund Services under
this Agreement.
c. Books and Records. With respect to the services provided by Fund
Services, maintain customary records, and particularly shall maintain those
records required to be maintained pursuant to subparagraph (2)(iv) of paragraph
(b) of Rule 31a-1 under the 1940 Act. Fund Services may send periodically to the
Fund, or to where designated by the Secretary or an Assistant Secretary of the
Fund, all books, documents, and all records no longer deemed needed for current
purposes, upon the understanding that such books, documents, and records will be
maintained by the Fund under and in accordance with the requirements of Rule
17Ad-7 adopted under the Securities Exchange Act of 1934. Such materials will
not be destroyed by the Fund without the consent of Fund Services (which consent
will not be unreasonably withheld), but will be safely stored for possible
future reference.
d. Reports to the Fund. Furnish to or place at the disposal of the Fund
such information, reports, evaluations, analyses, and opinions relating to the
services performed by Fund Services under this Agreement, and performed by UAM
SSC (or other third party service provider) under any sub-shareholder services
agreement (as provided for hereunder), as the Fund may reasonably request or as
Fund Services may deem helpful to the Fund to make an informed determination
regarding the rendering of services by Fund Services, the continuation of this
Agreement, and the payments contemplated to be made hereunder.
5. Fees. In consideration of the services performed by Fund Services under this
Agreement, the Fund shall such pay fees to Fund Services as are set forth in
Appendix B hereto, which appendix is incorporated herein by this reference. In
addition to the fees set forth in Appendix B, Fund Services shall be entitled to
reimbursement from the Fund for all reasonable out-of-pocket expenses without
xxxx-up incurred by Fund Services in connection with the performance of the
services provided for in this Agreement. Fund Services shall conduct an
evaluation of the fees payable under this Agreement at six month intervals and
shall advise the Fund as to any adjustments in fees that Fund Services deems
appropriate, but in any event, Appendix B may not be amended except by the
written agreement of the Fund and Fund Services.
6. Third Party Service Providers. The Fund agrees that Fund Services may enter
into a sub-shareholder services agreement or related agreements with UAM SSC or
other service providers to perform certain services provided for by this
Agreement. Fund Services' obligations and the standards of care under which Fund
Services has undertaken to fulfill such obligations, and the indemnification
that Fund Services has agreed to provide under this Agreement may not, however,
be impaired or assigned by Fund Services without the consent and approval of the
Board of Trustees of the Fund.
7. Certain Representations and Warranties of Fund Services. Fund Services
represents and warrants to the Fund that:
a. It is a business trust duly formed and validly subsisting
under the laws of the Commonwealth of Pennsylvania.
b. It is duly qualified to carry on its business in the
Commonwealth of Pennsylvania.
c. It is empowered under applicable laws and by its Declaration
of Trust and Bylaws to enter into and perform the services contemplated in this
Agreement.
d. It is registered as a transfer agent to the extent required
under the Securities Exchange Act of 1934.
e. All requisite proceedings of the Trustees have been taken to
authorize it to enter into and perform this Agreement.
f. It has and will continue to have and maintain the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
8. Certain Representations and Warranties of the Fund. The Fund represents and
warrants to Fund Services that:
a. It is a business trust duly organized and existing and in
good standing under the laws of the State of Delaware.
b. It is an open-end management investment company registered
under the 1940 Act.
c. A registration statement under the Securities Act of 1933 has
been filed and will be effective with respect to all shares of the Fund being
offered for sale.
d. All requisite steps have been and will continue to be taken to
register the Fund's shares for sale in all applicable states and such
registration will be effective at all times shares are offered for sale in such
states.
e. The Fund is empowered under applicable laws and by its
Declaration of Trust and Bylaws to enter into and perform this Agreement.
9. Certtain Covenants of Fund Services and the Fund.
a. Records are Property of the Fund. To the extent required by Section
31 of the 1940 Act, and the rules thereunder, Fund Services agrees that all
records maintained by Fund Services relating to the services to be performed by
Fund Services under this Agreement are the property of the Fund and will be
preserved and will be surrendered promptly to the Fund on request.
b. Financial Statements. Fund Services agrees to furnish to the
Fund annual reports of its financial condition, consisting of a balance sheet,
earnings statement and any other financial information reasonably requested by
the Fund. The annual financial statements shall be certified by the
independent auditors retained by the parent of Fund Services.
c. Information Concerning the Fund. The Fund agrees to furnish or
otherwise make available to Fund Services such information relating to the
business and affairs of the Fund as Fund Services may reasonably require to
discharge its duties and obligations hereunder. The Fund further agrees to
provide Fund Services with information and updates relating to new product and
service introductions and sales and marketing efforts that may reasonably be
expected to impact on shareholder or prospective shareholder telephone call
volume so that Fund Services can properly allocate the resources necessary to
fulfill its obligations under this Agreement.
d. Cooperation in Shareholder Responses. The Fund agrees that the Fund
will, and shall cause the Fund's investment adviser to, cooperate with Fund
Services to the extent necessary to formulate appropriate responses to written
inquiries from shareholders concerning investment strategy and philosophy and
market commentary.
10. Quality Control.
a. Audits. Fund Services shall be responsible for periodically
conducting quality control audits with respect to telephone purchase, redemption
and exchange requests and account changes received and processed by Fund
Services or any third party service provider with which Fund Services has
contracted to perform any of the services provided for under this Agreement.
Fund Services shall promptly report the results of such quality control audits
to the Fund.
b. Inspections. Fund Services shall permit the Fund and its authorized
representatives, including, but not limited to, the Fund's independent auditors,
to have reasonable access to the personnel and records of Fund Services, and to
make periodic inspections of the operations of Fund Services as such would
involve the Fund at reasonable times during business hours for the purpose of
monitoring the quality of services performed by Fund Services, and the level of
fees and reimbursements to which Fund Services is entitled, under this
Agreement.
c. Monitoring of Exchange Privileges. Fund Services shall use its
reasonable efforts to detect and prevent shareholder violations of telephone
exchange privileges as described in the Fund's prospectuses.
d. Service Improvement. Fund Services shall use its reasonable efforts
to keep current on the trends of the investment company industry relating to
shareholder services and to continue to modernize and improve its service
delivery mechanisms.
11. Liability and Indemnification.
a. Indemnification by the Fund. Fund Services shall not be responsible
for, and the Fund shall indemnify and hold Fund Services harmless from and
against, any and all losses, liabilities, claims, demands, suits, costs and
expenses (including reasonable attorneys' fees) which may be asserted against
Fund Services or for which Fund Services may be held to be liable, arising out
of, or are attributable to, the Fund's failure to comply with the terms of this
Agreement, or arising out of or attributable to, the Fund's negligence or
willful misconduct or breach of any representation or warranty of the Fund
hereunder.
b. Indemnification by Fund Services. The Fund shall not be responsible
for, and Fund Services shall indemnify the Fund, its officers and trustees and
hold them harmless from and against, any and all losses, liabilities, claims,
demands, suits, costs and expenses (including reasonable attorneys' fees) which
may be asserted against the Fund or for which the Fund may be held to be liable,
arising out of, or attributable to, Fund Services' failure to comply with the
terms of this Agreement, or arising out of, or are attributable to, any
negligence or willful misconduct or breach of any representation or warranty of
Fund Services hereunder.
c. Notice of Potential Claims; Defense of Claims. Fund Services and the
Fund agree that each shall promptly notify the other in writing of any situation
which represents or appears to involve a claim which may be the subject of
indemnification hereunder, although the failure to provide such notification
shall not relieve the indemnifying party of its liability pursuant to this
Section 11. The indemnifying party shall have the option to defend against any
such claim. In the event the indemnifying party so elects, it will notify the
indemnified party and shall assume the defense of such claim, and the
indemnified party shall cooperate fully with the indemnifying party, at the
indemnifying party's expense, in the defense of such claim. If the indemnifying
party elects not to defend against such claim, the indemnified party shall be
entitled to advance of reasonable expenses to defend such claim. Notwithstanding
the foregoing, the indemnified party shall not enter into any settlement of such
matter without the written consent of the indemnifying party, which consent
shall not be withheld unreasonably. The indemnifying party shall not be
obligated to indemnify the indemnified party for any settlement entered into
without the written consent of the indemnifying party. If the consent of the
indemnified party is required to effectuate any settlement and the indemnified
party refuses to consent to any settlement negotiated by the indemnifying party,
the liability of the indemnifying party for losses arising out of or due to such
matter shall be limited to the amount to the rejected proposed settlement.
d. Except for violations of Section 17c. hereunder, in no event and
under no circumstances shall either party to this Agreement be liable to anyone,
including, without limitation, to the other party, for consequential damages for
any act or failure to act under any provision of this Agreement even if advised
of the possibility thereof.
e. Survival of Provisions. The obligations of Fund Services and the
Fund pursuant to this Section 11 shall survive the termination of this
Agreement.
12. Limitations on Liability
a. Subcontractors. Nothing herein shall impose any duty upon Fund
Services in connection with or make Fund Services liable for the actions or
omissions to act of unaffiliated third parties such as, by way of example and
not limitation, Airborne Services, the U.S. mails and telecommunication
companies, provided, if Fund Services selected such company, Fund Services shall
have exercised reasonable care in selecting the same. The foregoing limitation
of liability with respect to actions or omissions of unaffiliated third parties
shall not be construed to relieve Fund Services of any obligations under Section
6 hereof with respect to any services that Fund Services has agreed to perform
under this agreement that are ultimately performed by other parties.
b. Portfolios as Separate Parties. Each Portfolio shall be regarded for
all purposes hereunder as a separate party apart from each other Portfolio.
Unless the context otherwise requires, with respect to every transaction covered
by this Agreement, every reference herein to the Fund shall be deemed to relate
solely to the particular Portfolio to which such transaction relates. Under no
circumstances shall the rights, obligations or remedies with respect to a
particular Portfolio constitute a right, obligation or remedy applicable to any
other Portfolio. The use of this single document to memorialize the separate
agreement of each Portfolio is understood to be for clerical convenience only
and shall not constitute any basis for joining the Portfolios for any reason.
c. Shareholders, Trustees and Portfolios of the Trust. As provided in
the governing instrument of the Trust and pursuant to Delaware Law:
(a) no Shareholder or Trustee of the Trust shall be
personally liable for any debts, liabilities, obligations or expenses incurred
by, or contracted for under this Agreement; and
(b) (i) the debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a particular
Portfolio of the Trust shall be enforceable against the assets of such Portfolio
only, and not against the assets of the Trust generally or assets belonging to
any other Portfolio of the Trust; and (ii) none of the debts, liabilities,
obligations and expenses incurred, contracted for or otherwise existing with
respect to the Trust generally that have not been allocated to a specified
Portfolio of the Trust, or with respect to any other Portfolio of the Trust,
shall be enforceable against the assets of such specified Portfolio.
13. Term of Agreement. This Agreement shall become effective on the day
and year first written above and, unless sooner terminated as hereinafter
provided, shall continue in effect for an initial period that will expire on
December 31, 2001, and thereafter shall continue in effect from year to year
provided such continuance is approved at least annually by the vote of a
majority of the trustees of the Fund who are not parties to this Agreement or
"interested persons" (as defined by the 0000 Xxx) of any such party.
14. Termination.
a. Material Breach. This Agreement may be terminated by either party in
the event of a material breach of the Agreement by the other party upon thirty
(30) days' prior written notice to the other party; provided, however, that the
Agreement shall not terminate if such material breach is cured within such
thirty (30) day period.
b. Termination by the Fund. The Fund may, without payment of
penalty, terminate this Agreement upon 90 days' written notice to Fund
Services.
c. Termination by Fund Services. Fund Services may, without
payment of penalty, terminate this Agreement upon 90 days' written notice to
the Fund.
d. Assignment. No assignment of this Agreement by Fund Services
shall occur without the written consent of the Fund and approval by the Board of
Trustees of the Fund as described in Section 13 herein.
15. Notices. All notices to be given hereunder shall be deemed properly given if
given in writing, delivered in person, or if sent by U.S. mail, first class,
postage prepaid, or if sent by facsimile and thereafter confirmed by mail, (i)
if to Fund Services, to PBHG Fund Services, 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx, XX
00000-0000, Attn: Xxxxx Xxxxxxxx, and (ii) if to the Fund, to The PBHG Funds,
Inc., 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxx, XX 00000-0000, Attn: Xxxxxxx Xxxxxxxxxx,
or to such other address as shall have been specified in writing by the party to
whom such notice is to be given.
16. Force Majeure. In the event Fund Services
is unable to perform its obligations or duties under the terms of this Agreement
because of any act of God, strike, riot, act of war, equipment failure, power
failure or damage or other causes reasonably beyond its control, Fund Services
shall not be liable for any losses, damages, costs, charges, counsel fees,
payments, expenses or liability to any other party (whether or not a party to
this Agreement) resulting from such failure to perform its obligations or duties
under this Agreement or otherwise from such causes. This provision, however,
shall in no way excuse Fund Services from being liable to the Fund for any and
all losses, damages, costs, charges, counsel fees, payments and expenses
incurred by the Fund due to the non-performance or delay in performance by Fund
Services of its duties and obligation under this Agreement if such
non-performance or delay in performance could have been reasonably prevented by
Fund Services through back-up systems and other procedures commonly employed by
other persons in the mutual fund industry who provide services similar to those
to be provided by Fund Services under this Agreement, provided that Fund
Services shall have the right, at all times, to mitigate or cure any losses,
including by making adjustments or corrections to any current or former
shareholder accounts.
17. Miscellaneous.
a. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the Commonwealth of Pennsylvania,
except as such laws may conflict with the 1940 Act and the rules thereunder or
other applicable federal laws or regulations.
b. Severability. If any provision of this Agreement shall be held or
made invalid in whole or in part by a court decision, statute, rule, or
otherwise, the remaining provisions of the Agreement shall not be affected
thereby. Invalid provisions shall, in accordance with the intent and purpose of
this Agreement, be replaced by mutual consent of the parties with such valid
provisions which in their economic effect come as closely as legally possible to
such invalid provisions.
c. Confidentiality. Fund Services agrees on behalf of itself and its
employees to treat confidentially all records and other information relative to
the Fund and its prior, present, or prospective shareholders, except, after
prior notification to and approval in writing by the Fund, which approval shall
not be withheld unreasonably and may not be withheld where Fund Services 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.
d. Amendments in Writing. Any part of this Agreement or any appendix
hereto may be amended or waived only by an instrument in writing signed by the
parties hereto.
e. Headings and Captions. The headings and captions contained in this
Agreement are included for convenience of reference only and in no way define or
delineate any of the provisions hereof or otherwise affect their construction or
effect.
f. Interpretation. Nothing herein contained shall be deemed to require
the Fund to take any action contrary to its Declaration of Trust or Bylaws, or
any applicable statutory or regulatory requirement to which it is subject or by
which it is bound, or to relieve or deprive the Board of Trustees of its
responsibility for and control of the conduct of the affairs of the Fund.
g. Enforceability by Successors and Assigns. All terms and provisions
of this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective successors and permitted
assigns.
h. Survival of Representations, Warranties and Indemnification. The
representations and warranties, and the indemnification extended hereunder, if
any, are intended to and shall continue after and survive the expiration,
termination or cancellation of this Agreement.
i. No Joint Venture. Neither the execution nor performance of this
Agreement shall be deemed to create a partnership or joint venture by and
between the Fund and Fund Services. It is understood and agreed that all
services performed hereunder by Fund Services shall be as an independent
contractor. This Agreement is between Fund Services and the Fund and neither
this Agreement nor the performance of the services provided for herein shall
create any rights in any third parties. There are no third party beneficiaries
hereto.
j. No Waiver. The failure of either party to insist upon the
performance of any terms or conditions of this Agreement or to enforce any
rights resulting from any breach of any of the terms or conditions of this
Agreement, including the payment of damages, shall not be construed as a
continuing or permanent waiver of any such terms, conditions, rights or
privileges, but the same shall continue and remain in full force and effect as
if no such forbearance or waiver had occurred.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers, to be effective as of the
day and year first above written.
PBHG FUNDS
By:
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Title:
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PBHG FUND SERVICES
By:
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Title:
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APPENDIX A
Services
Fund Services generally shall be responsible for providing shareholder
services, including but not limited to the following:
1. Provide "General" Shareholder Support.
2. Process "Phone" Transactions
ACH Buys from Bank of record
ACH Redemption to Bank of record
Process Purchase Orders (Wire or Check settlement)
Wire Redemption to Bank of record
Account Exchanges between funds
Wire Redemption to Bank of record
3. Process "Basic" Account Maintenance
Stop/restart/defer systematic investment purchase
Increase/decrease a systematic investment purchase
Increase/decrease/defer/discontinue a systematic
withdrawal plan Add a beneficiary birth date Change
dividend/capital gains distribution option Stop
dividend mail Add/change a dividend move Combine
identical accounts within same fund Add/delete "stop
mail" from an account Stop/Replace a redemption check
Add/change/delete systematic exchange with the same
registration
4. Research/Document/Request corrective processing by Transfer
Agent
5. Correspondence Services (Adviser and Call Center Related
Issues)
6. Problem Research and Resolution
7. Institutional Desk Servicing
Dealer Servicing
Account Maintenance
Dealer File Maintenance
Transaction Processing
Order Settlement Support
Adjustment Processing Support
NSCC Networking Support
Fund Info/Data Dissemination
8. Non-Signature Guaranteed address change
Stop/restart/defer a Systematic Monthly Investment
(SIP) Increase/decrease a Systematic Monthly
Investment (SIP) Increase/decrease/defer/discontinue
a systematic withdrawal plan (SWP) Add a beneficiary
birth date Change dividend/capital gains distribution
method Stop dividend mail Add/change a dividend move
Combine identical accounts within the same funds Add
or delete stop mail from the account Stop or replace
a redemption check after 15 days Add/change/delete
systematic exchanges (SYSEXCH) with the same
registration
Correct minor errors in names on registration if
clearly indicated on the application. Reissue
checkwriting drafts on a Cash Reserve account where
the privilege has been established Link/unlink
accounts for the INVESTOR statement product (managers
only)
