Exhibit (9)(c)
ACCOUNTING SERVICES AGREEMENT
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THIS AGREEMENT is made as of the first day of May, 1989, by and between
PENN SERIES FUNDS, INC. ("Penn Series") a Maryland corporation, and PROVIDENT
FINANCIAL PROCESSING CORPORATION ("PFPC"), a Delaware corporation which is an
indirect wholly-owned subsidiary of PNC Financial Corp.
W I T N E S S E T H :
WHEREAS, Penn Series, is registered as an open-end, diversified
management investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), series fund and advised by the Advisor; and
WHEREAS, the Penn Series wishes to retain PFPC to provide certain
accounting services for each of the series of Penn Series, and PFPC is willing
to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed parties hereto as follows:
1. Appointment. Penn Series hereby appoints PFPC to provide certain
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accounting services to each of the series of Penn Series for the period and on
the terms set forth in this Agreement. PFPC accepts such appointment and agrees
to furnish the services herein set forth in return for the compensation as
provided in Paragraph 12 of this Agreement. PFPC agrees to comply with all
relevant provisions of the 1940 Act and applicable rules and regulations
thereunder. Penn Series may from time to time issue additional series or classes
or classify and
reclassify shares of such series or class. PFPC shall identify to each such
series or class property belonging to such series or class and in such reports,
confirmations and notices to Penn Series called for under this Agreement shall
identify the series or class to which such report, confirmation or notice
pertains.
2. Delivery of Documents. Penn Series has furnished PFPC with copies
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properly certified or authenticated of each of the following:
(a) Resolutions of Penn Series' Board of Directors authorizing
the appointment of PFPC to provide certain accounting services to Penn Series;
(b) Appendix A identifying and containing the signatures of
Penn Series' officers and other persons authorized to issue Oral Instructions
and to sign Written Instructions, as hereinafter defined, on behalf of Penn
Series';
(c) Penn Series' Articles of Incorporation filed with the
Maryland Department of Assessments and Taxation on April 22, 1982 and all
amendments thereto (such Articles of Incorporation, as presently in effect and
as they shall from time to time be amended, are herein called the "Charter");
(d) Penn Series' By-Laws and all amendments thereto (such By-
Laws, as presently in effect and as they shall from time to time be amended, are
herein called "By-Laws");
(e) The Investment Advisory Agreement between Penn Series and ▇.
▇▇▇▇ Price dated May 1, 1989, (the "Advisory Agreement");
(f) The Administrative and Corporate Services Agreement between
Penn Series and The Penn Mutual Life Insurance Company dated as of May 1, 1989
(the "Corporate Services Agreement);
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(g) Penn Series' Notification of Registration filed pursuant
to Section 8(a) of the 1940 Act on Form N-8A under the 1940 Act as filed with
the Securities and Exchange Commission ("SEC") on November 7, 1969;
(h) Penn Series' most recent Registration Statement on Form
N-lA under the Securities Act of 1933 ("▇▇▇ ▇▇▇▇ ▇▇▇") (File No. 2-35305) and
under the 1940 Act, as filed with the SEC relating to shares (hereinafter
"Shares") of the Fund's Common Stock, $0.10 par value, and all amendments
thereto; and
(i) Penn Series' most recent prospectus or prospectuses
relating to Shares (such prospectus, or prospectuses, and all amendments and
supplements thereto are herein called the "Prospectus").
Penn Series will furnish PFPC from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
3. Definitions.
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(a) "Authorized Person". As used in this Agreement, the term
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"Authorized Person" means any officer of Penn Series and any other person,
whether or not any such person is an officer or employee of Penn Series, duly
authorized by the Board of Directors of Penn Series to give Oral and Written
Instructions on behalf of Penn Series and listed on Appendix A listing persons
duly authorized to give Oral and Written Instructions on behalf of Penn Series
as may be received by PFPC from time to time.
(b) "Oral Instructions". As used in this Agreement, the term "Oral
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Instructions" means oral instructions actually received by PFPC from an
Authorized Person or from a person reasonably believed by PFPC to be an
Authorized Person. Penn Series agrees to
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deliver to PFPC, at the time and in the manner specified in Paragraph 4 (b) of
this Agreement, Written Instructions confirming Oral Instructions.
(c) "Written Instructions". As used in this Agreement, the term
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"Written Instructions" means written instructions in readable form delivered by
hand, mail, tested telegram, cable, telex or facsimile sending device, and
received by PFPC, signed by two Authorized Persons.
4. Instructions Consistent with Charter, etc.
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(a) Unless otherwise provided in this Agreement, PFPC shall act
only upon Oral and Written Instructions. Although PFPC may know of the
provisions of the Charter and By-Laws of Penn Series, PFPC may assume that any
Oral or Written Instructions received hereunder are not in any way inconsistent
with any provisions of such Charter or By-Laws or any vote, resolution or
proceeding of the Shareholders, or of the Board of Directors or of any committee
thereof.
(b) PFPC shall be entitled to rely upon any Oral Instructions and
any Written Instructions actually received by PFPC pursuant to this Agreement.
Penn Series agrees to forward to PFPC or cause to be forwarded to PFPC, Written
Instructions confirming Oral Instructions in such manner that the Written
Instructions are received by PFPC, whether by hand delivery, telex, facsimile
sending device or otherwise, by no later than the close of business of the
business day next following the day that such Oral Instructions are given to
PFPC. PFPC agrees to notify immediately Penn Series in the event that Written
Instructions actually received by PFPC pursuant to this Paragraph 4 do not
confirm the Oral Instructions given PFPC. Penn Series agrees that the fact that
confirming Written Instructions are not received by PFPC shall in no way affect
the
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validity of the transactions or enforceability of the transactions authorized by
Oral Instructions. Penn Series agrees that PFPC shall incur no liability to Penn
Series in acting upon Oral Instructions given to PFPC hereunder concerning such
transactions, provided such instructions reasonably appear to have been received
from an Authorized Person.
5. Services on a Continuing Basis.
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(a) PFPC will perform the following accounting functions, on a
daily basis:
(1) Journalize Penn Series' investment, capital share and
income and expense activities, and maintain a daily trial balance, general
ledger and subsidiary records of Penn Series;
(2) Verify investment buy/sell trade tickets when received
from the Advisor and transmit trades to the Penn Series' custodian for proper
settlement;
(3) Maintain individual ledgers for investment securities,
including amortized bond and foreign dollar denominated costs as directed by the
Advisor;
(4) Maintain historical tax lots for each security, including
amortized bond and foreign dollar denominated costs as directed by the Advisor;
(5) Reconcile cash and investment balances of the Penn Series
Funds with the custodian, and provide the Advisor with the beginning cash
balance available for investment purposes;
(6) Update the cash availability throughout the day as
required by the Advisor;
(7) Post to and prepare Penn Series' Statement of Assets and
Liabilities and the Statement of Operations;
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(8) Calculate various contractual expenses (e.g., advisory,
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administrative and custody fees);
(9) Monitor the expense accruals and notify Penn Series
management of any proposed adjustments.
(10) Control all disbursements from Penn Series' and authorize
such disbursements upon Written Instructions;
(11) Calculate capital gains and losses and foreign exchange
gains and losses;
(12) Determine Penn Series' net income;
(13) Determine Penn Series' dividend distributions;
(14) Obtain security market quotes and foreign exchange
selling rates from services approved by the Advisor, or if such quotes are
unavailable, then obtain such prices from the Advisor, and in either case
calculate market value of the Penn Series Funds investments;
(15) Transmit or mail a copy of the weekly or, where
appropriate daily, portfolio valuation to Penn Series and Advisor;
(16) Compute on a daily basis the net asset value of the Penn
Series Funds for purposes of the sale and redemption of Fund shares;
(17) Compute the Penn Series Funds yields, total return,
expense ratios, portfolio turnover rate and, where appropriate, portfolio
weighted average maturity; and
(18) For the money-market portfolio of the Fund, compute the
daily dividend amounts required to comply with the prospectus of the Fund, the
1940 Act and the Internal Revenue Code of 1986, as amended (the "I.R.C.").
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(b) In addition to the accounting services described in the
foregoing Paragraph 5 (a) , PFPC will:
(1) Prepare monthly financial statements, which will
include the following items (the form and content of such statements shall be in
accordance with generally accepted accounting principles or such procedures as
requested by the Penn Series):
Schedule of Investments
Statement of Assets and Liabilities Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses
Supplementary Financial Data
Supplemental Notes to Financial Statements
Securities Transactions (Purchases, Sales and Maturities)
(2) Prepare quarterly broker security transactions summaries in
accordance with SEC requirements;
(3) Supply various Fund statistical data and summary financial
information as requested on an ongoing basis
(4) Assist in the preparation of support schedules necessary
for completion of Federal and state tax returns;
(5) Assist in the preparation of the Penn Series' Semi-Annual
Reports with the SEC on Form N-SAR;
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(6) Assist in the preparation of Penn Series' annual, semi-
annual, and quarterly Shareholder reports;
(7) Assist with the preparation of registration statements on
Form N-lA and other filings relating to the registration of Shares;
(8) Assist in monitoring Penn Series' compliance with certain
requirements of the 1940 Act and the Prospectus as agreed upon in writing
between the Advisor and PFPC; and
(9) Monitor-on a monthly basis Penn Series' status as a
regulated investment company under Sub-chapter of the I.R.C.
6. Records. PFPC shall keep the following records:
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(a) all books and records with respect to Penn Series' books of
account;
(b) records of Penn Series' securities transactions.
(c) all books, records and other documents that Penn Series is
required to maintain and keep current pursuant to Rule 3la-l(a) and (b)
promulgated under the 1940 Act and from time to time amended, other than those
documents listed in sub-paragraph (4) of Rule 3la- l(b).
The books and records pertaining to Penn Series which are in the
possession of PFPC, including magnetic tapes and written procedures to the
extent they are readily accessible to PFPC and exclude proprietary information
of third parties, but specifically excluding computer programs which are
proprietary information of PFPC or third parties, shall be the property of Penn
Series. Such books and records shall be prepared and maintained as required by
the 1940 Act and
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other applicable securities laws and rules and regulations. Penn Series, or Penn
Series' authorized representatives, shall have access to such books and records
at all times during PFPC's normal business hours. Upon the reasonable request of
Penn Series, copies of any such books and records shall be provided by PFPC to
Penn Series or Penn Series' authorized representative at the Fund's expense.
7. Liaison With Accountants. As requested by Penn Series, PFPC shall
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act as liaison with Penn Series' independent public accountants and shall
provide account analyses, fiscal year summaries, and other audit related
schedules. PFPC shall take all reasonable action in the performance of its
obligations under this Agreement to assure that the necessary information is
made available to such accountants for the expression of their opinion, as such
may be required by Penn Series from time to time.
8. Confidentiality. PFPC agrees on behalf of itself and its employees
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to treat confidentially all records and other information relative to Penn
Series and its prior, present or potential Shareholders and relative to the
Advisor and its prior, present or potential customers, except, after prior
notification to and approval in writing by Penn Series, which approval shall not
be unreasonably withheld and may not be withheld where PFPC 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 Penn Series.
9. Right to Receive Advice.
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(a) Advice of Penn Series. If PFPC shall be in doubt as to any
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action to be taken or omitted by it, it may request, and shall receive, from
Penn Series directions or advice, including Oral or Written Instructions where
appropriate.
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(b) Protection of PFPC. PFPC shall be protected in any action
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or inaction which it takes in reliance on any directions, advice or Oral or
Written Instructions received pursuant to subsection (a) of this Paragraph 9
which PFPC, after receipt of any such directions, advice or Oral or written
Instructions, in good faith believes to. be consistent with such directions,
advice or Oral or Written Instructions, as the case may be. However, nothing in
this paragraph shall be construed as imposing upon PFPC any obligation (i) to
seek such directions, advice or oral or Written Instructions, or (ii) to act in
accordance with such directions, advice or oral or Written Instructions when
received, unless, under the terms of another provision of this Agreement, the
same is a condition to PFPC's properly taking or omitting to take such action.
Nothing in this subsection shall excuse PFPC when an action or omission on the
part of PFPC constitutes willful misfeasance, bad faith, negligence or
misconduct in the performance by PFPC of its duties under this Agreement.
10. Compliance with Governmental Rules and Regulations. PFPC undertakes
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to comply with all applicable requirements of the 1933 Act, the 1934 Act, and
the 1940 Act, or any laws, rules and regulations of governmental authorities
having jurisdiction, with respect to the duties to be performed by PFPC
hereunder.
11. Compensation. As compensation for the services rendered by PFPC
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during the term-of this Agreement, Penn Series will pay to PFPC an annual fee
calculated and payable monthly, as may be agreed to in writing from time to time
by Penn Series and PFPC. The fee may be revised from time to time as mutually
agreed upon by the parties.
12. Indemnification. Penn Series agrees to indemnify and hold harmless
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PFPC and its nominees from all taxes, charges, expenses, assessments, claims and
liabilities (including, without
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limitation, liabilities arising under the 1933 Act, the Securities Exchange Act
of 1934, the 1940 Act, the CEA, and any state and foreign securities and blue
sky laws, all as or to be amended from time to time) and expenses, including
(without limitation) attorneys' fees and disbursements, arising directly or
indirectly from any action or thing which PFPC takes or does or omits to take or
do (i) at the request or on the direction of or in reliance on the advice of
Penn Series or (ii) upon oral or Written Instructions, provided, that neither
PFPC nor any of its nominees shall be indemnified against any liability to Penn
Series (or any expenses incident to such liability) arising out of PFPC's own
willful misfeasance, bad faith, negligence or misconduct in the performance of
its duties and obligations under this Agreement.
13. Responsibility of PFPC. PFPC shall be under no duty to take any
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action on behalf of Penn Series except as specifically set forth herein or as
may be specifically agreed to by PFPC in writing. In the performance of its
duties hereunder, PFPC shall be obligated to exercise care and diligence and to
act in good faith and to use its best efforts within reasonable limits in
performing services provided for under this Agreement, but PFPC shall not be
liable for any act or omission which does not constitute willful misfeasance,
bad faith or negligence on the part of PFPC or misconduct by PFPC in the
performance of its duties under this Agreement. Without limiting the generality
of the foregoing or of any other provision of this Agreement, PFPC in connection
with its duties under this Agreement shall not be under any duty or obligation
to inquire into and shall not be liable for or in respect of (a) subject to
Paragraph 4(b) hereof, the validity or invalidity or authority or lack thereof
of any Oral or Written Instruction, notice or other instrument which conforms to
the applicable requirements of this Agreement, and which PFPC reasonably
believes to be genuine; or (b) delays or errors or loss of data occurring by
reason of
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circumstances beyond PFPC's control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical breakdown,
flood or catastrophe, acts of God, insurrection, war, riots or failure of the
mails, transportation, communication or power supply.
14. Duration and Termination. This Agreement shall continue until
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termination by Penn Series or PFPC on 90 days' written notice.
15. Notices. All notices and other communications, including Written
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Instructions (collectively referred to as "Notice" or "Notices" in this
Paragraph), hereunder shal1 be in writing or by confirming telegram, cable,
telex or sending device. Notices shall be addressed (a) if to PFPC, to the
attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Executive Vice President, Provident
Financial Processing Corporation, Bedford Building, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (b) if to Penn Series, to the attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, President; Penn Series Funds, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(c) if to neither of the foregoing, at such other address as shall have been
notified to the sender of any such Notice or other communication. If the
location of the sender of a Notice and the address of the addressee thereof are,
at the time of sending, more than 100 miles apart, the Notice may be mailed, in
which case it shall be deemed to have been given three days after it is sent, or
if sent by confirming telegram, cable, telex or facsimile sending device, it
shall be deemed to have been given immediately, and, if the location of the
sender of a notice and the address of the addressee thereof are, at the time of
sending, not more than 100 miles apart, the Notice may be sent by first-class
mail, in which case it shall be deemed to have been given two days after it is
sent, or if sent by messenger, it shall be deemed to have been given on the day
it is delivered, or if sent by confirming telegram, cable, telex and facsimile
sending device
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it shall be deemed to have been given immediately. All postage, cable, telex, or
facsimile sending device charges arising from the sending of a Notice hereunder
shall be paid the sender.
16. Further Actions Each party agrees such further acts and execute
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such further documents as are necessary to effectuate the purposes hereof.
17. Amendments. This Agreement or any part hereof may be changed or
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waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
18. Delegation. On thirty (30) day's prior written notice to the
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Advisor, PFPC may assign its rights and delegate its duties hereunder to any
wholly-owned direct or indirect subsidiary of Provident National Bank or PNC
Financial Corp, provided that (i) the delegate agrees with PFPC to comply with
all relevant provisions of the 1940 Act; and (ii) PFPC and such delegate shall
promptly provide such information as Penn Series may request, and respond to
such questions as Penn Series may ask, relative to the delegation, including
(without limitation) the capabilities of the delegate.
19. Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Miscellaneous. This Agreement embodies the entire agreement and
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understanding between the parties thereto, and supersedes all prior agreements
and understandings, relating to the subject matter hereof, provided that the
parties hereto may embody in one or more separate documents their agreement, if
any, with respect to delegated and/or Oral Instructions. The captions in this
Agreement are included for convenience of reference only and in no way define or
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delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be deemed to be a contract made in Delaware and
governed by Delaware law. 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. This Agreement shall be binding
and shall inure to the benefit of the parties hereto and their respective
successors.
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.
[SEAL] PENN SERIES FUNDS, INC.
Attest: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/
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SECRETARY PRESIDENT
[SEAL] PROVIDENT FINANCIAL
PROCESSING CORPORATION
Attest: /s/ By: /s/
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INDEX
Paragraph Page
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1. Appointment..................................................... 5
2. Delivery of Documents........................................... 5
3. Definitions..................................................... 7
4. Instructions Consistent with Charter, etc....................... 7
5. Services on a Continuing Basis.................................. 8
6. Records........................................................ 12
7. Liaison With Accountants....................................... 12
8. Confidentiality................................................ 13
9. Right to Receive Advice........................................ 13
10. Compliance with Governmental Rules and Regulations............. 14
11. Compensation................................................... 14
12. Indemnification................................................ 14
13. Responsibility of PFPC......................................... 15
14. Duration and Termination....................................... 15
15. Notices........................................................ 15
16. Further Actions................................................ 16
17. Amendments..................................................... 16
18. Delegation..................................................... 16
19. Counterparts................................................... 17
20. Miscellaneous.................................................. 17
May 1, 1989
Penn Series Funds, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Accounting Services Fees
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Gentlemen:
This letter constitutes our agreement with respect to compensation to
be paid to Provident Financial Processing Corporation ("PFPC") under the terms
of an Accounting Services Agreement dated May 1, 1989 between you ("Penn
Series") and PFPC. Pursuant to Paragraph 11 of that Agreement, and in
consideration of the services to be provided to you, the Penn Series Funds,
Inc., of which there are 6 portfolios, will pay PFPC an annual accounting fee to
be calculated daily and paid monthly. You will also reimburse PFPC for its
out-of-pocket expenses incurred on behalf of Penn Series, including, but not
limited to, postage, telephone, telex, Federal Express and outside pricing
service charges.
The total annual accounting fee shall be $165,000, exclusive of
out-of-pocket expenses. The fee for the period from the day of the year this
agreement is entered into until the end of that year shall be pro-rated
according to the proportion which period bears to the full annual period.
If the foregoing accurately sets forth our agreement, and you intend to
be legally bound thereby, please execute a copy of this letter and return it to
us.
Very truly yours,
PROVIDENT FINANCIAL PROCESSING
By: /s/
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Accepted: PENN SERIES FUNDS, INC.
By: /s/ Date:
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Appendix A
Authorized Persons
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Accounting Services Agreement
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Penn Series Funds, Inc. - Provident Financial Processing Corporation
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As Secretary of Penn Series Funds, Inc., I certify that the persons named below
presently hold the offices of Penn Series Funds, Inc. indicated, that the
signatures of such persons set forth are genuine and that such persons are
authorized to give oral and written instructions under the Accounting Services
Agreement between Penn Series Fund, Inc. and Provident Financial Processing
Corporation.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Vice President
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Asst. Vice President
C. ▇▇▇▇▇▇ ▇▇▇▇▇▇ Secretary
H. ▇▇▇▇ ▇▇▇▇▇▇ Treasurer
▇▇▇▇▇ ▇. ▇▇▇▇▇ Controller
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Assistant Controller
/s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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C. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Secretary
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Date