1
Exhibit (h)(11)
Recordkeeping and Late Trading Agreement
between
One Group Mutual Funds and Bank One Trust Company, NA
2
RECORDKEEPING AND LATE TRADING AGREEMENT
AGREEMENT made as of September 13, 1999 by and between Bank One Trust Company,
NA ("Recordkeeper") and One Group(R) Mutual Funds (the "Fund Company").
WITNESSETH
WHEREAS, the Fund Company desires to enter into a Recordkeeping and Late Trading
Agreement pursuant to which the Fund Company will retain the Recordkeeper to
perform certain recordkeeping and accounting services and functions with respect
to transactions in shares ("Shares") of series ("Funds") of the Fund Company
made by or on behalf of participants, beneficiaries or plan sponsors
(collectively, "Participants") in certain employee pension benefit plans as
defined in Section 3(2)(A) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") ("Plans"), and with respect to holdings of Shares
maintained by or on behalf of such Participants, when with respect to the Fund
Company such Plans maintain with the Fund Company's transfer agent ("Transfer
Agent") a single master shareholder account; and
NOW, THEREFORE, in consideration of the following premises and mutual covenants,
the parties agree as follows:
1. Services Provided by the Recordkeeper
-------------------------------------
When and to the extent requested by the Fund Company, the Recordkeeper
agrees to perform recordkeeping and accounting services and functions
with respect to transactions in and holdings of Shares by or on behalf
of Participants in Plans which maintain Plan level shareholder accounts
with the Fund Company's Transfer Agent. To the extent requested, the
Recordkeeper will provide the following services:
A. Maintain separate records for each Participant reflecting
Shares purchased, redeemed and exchanged on behalf of such
Participant and outstanding balances of Shares owned by or for
the benefit of such Participant.
B. Prepare and transmit to each Plan and/or its Participants
periodic account statements indicating the number of Shares of
the Fund Company owned by or for the benefit of Participants
and purchases, redemptions and exchanges made on behalf of
Participants.
C. With respect to each Plan, aggregate all purchase, redemption
and exchange instructions ("Instructions") made by or on
behalf of the Plan's Participants and Sponsors and transmit
orders ("Orders") based an such aggregate Instructions to the
Transfer Agent for acceptance.
D. Provide to the Fund Company, the Transfer Agent and/or other
parties designated by them such other information relating to
transactions in and holdings of Shares by or on behalf of
Participants as is reasonably requested.
1
3
E. As agreed upon with the Fund Company, deliver or arrange for
the delivery of appropriate documentation in connections with
Orders.
2. Provision of Net Asset Value.
-----------------------------
The Fund Company or its designee shall furnish the Recordkeeper with
the confirmed net asset value ("NAV") information as of the close of
trading on the New York Stock Exchange (generally, 4:00 p.m., Eastern
Time ("ET")) ("Market Close") on any day that the Fund Company is open
for business ("Business Day"), and dividend and capital gains
information as it arises. The Fund Company or its designee shall use
its best efforts to provide such information by 6:30 p.m., ET on each
Business Day.
3. The Recordkeepers Receipt and Transmission of Orders.
-----------------------------------------------------
A. The Recordkeeper agrees that (i) Orders derived from
Participant Instructions received by the Recordkeeper prior to
the Market Close on any Business Day of the Fund Company, as
defined in the Fund Company's registration statement, ("Day
1") will be electronically transmitted to the Fund Company by
5:00 a.m., ET the next Business Day (such Orders are referred
to as "Day 1 Trades"); and (ii) orders derived from
Instructions received by the Recordkeeper after the Market
Close on Day 1 ("Day 2 Trades") will be electronically
transmitted to the Fund Company on the next Business Day
following Day 2 ("Day 3").
B. If the Recordkeeper cannot electronically transmit Day 1
Trades by 5:00 a.m. on Day 2, the Recordkeeper will transmit
such Orders by facsimile prior to the Market Open (generally
7:00 a.m.) on Day 2.
4. Pricing of Orders.
------------------
The Fund Company agrees that Day 1 Trades will be effected at the NAV
calculated as of the Market Close on Day 1, provided that such trades
are received by the Fund Company by 5:00 a.m., ET on Day 2 or prior to
7:00 a.m. on Day 2; and Day 2 Trades will be effected at the NAV
calculated as of the Market Close on Day 2, provided they are received
by the Fund Company by 5:00 a.m., ET on Day 3 or prior to 7:00 a.m. on
Day 3. The Fund Company agrees that, consistent with the foregoing, Day
1 Trades will have been received by the Fund Company prior to the
Market Close on Day 1, and Day 2 trades will have been received by the
Fund Company prior to the Market Close on Day 2 for all purposes,
including, without limitation, effecting distributions.
5. Confirmations
-------------
The Fund Company will send a confirmation of each Business Day's Order
via electronic transmission or facsimile by Market Close on Day 2 for
Day 1Trades received by 7:00 a.m. on Day 2 and by Day 3 for Day 2
trades received by 7:00 a.m. on Day 3.
2
4
6. Verification
------------
Each party shall, as soon as practicable after notification that a
report, confirmations, notification or other information has been
transmitted by the other party via facsimile or other electronic
transmission, confirm the receipt of such report, notification or other
information. Such confirmation shall be in oral, written or electronic
format. In the absence of such confirmation, a party to whom the
transmission was sent shall not be held liable for any failure to act
in accordance with the transmission, and absent evidence to the
contrary, the sending party may not claim that the transmission was
received by the other party. Each party shall promptly notify the other
of any errors, omission or interruptions in, or delay or unavailability
of, any such transmission as promptly as possible.
7. Appointment as Agent for Limited Purpose
----------------------------------------
The Recordkeeper shall be deemed the agent of the Fund Company for the
sole and limited purpose of receiving purchase, redemption and exchange
Instructions from Participants or Plan sponsors and transmitting
corresponding Orders to the Transfer Agent. Except as provided
specifically herein, neither the Recordkeeper nor any person to which
the Fund Company may delegate any of its duties hereunder shall be or
hold itself out as an agent of the Transfer Agent or the Fund Company.
8. Representations of Recordkeeper
-------------------------------
The Recordkeeper agrees, represents and warrants that:
A. It will forward Orders within such time periods and to such
parties as are specified by the Fund Company, the Transfer
Agent, the Fund Company's prospectuses and applicable law and
regulation.
B. If and to the extent required under applicable federal and
state securities laws and regulations, it is duly registered
pursuant to such laws and regulations; and the receipt of any
fees by it from the Fund Company will not constitute a
non-exempt "prohibited transaction" for purposes of Title I of
ERISA, and section 4975 of the Internal Revenue Code of 1986,
as amended.
C. At all times during the term of this contract, the
Recordkeeper will maintain errors and omissions coverage in an
amount not less than $1,000,000 per occurrence, and in the
aggregate. A certificate of insurance evidencing such coverage
will be provided by the Recordkeeper to the Fund Company as
soon as is practicable after commencement of this agreement.
D. It is a national banking association with its principal
offices in Columbus, Ohio.
E. It possesses full power and authority to enter into and
perform services under this Agreement.
3
5
F. It understands and agrees to comply with the Fund Company's
As-of-Trade Processing Policy, attached hereto as Exhibit A.
9. Records and Reporting
---------------------
A. The Recordkeeper will maintain and preserve all records as
required by the Investment Company Act of 1940 (the "1940
Act"), as amended, and the rules thereunder, in connection
with its provision of services under this Agreement. All
records maintained by the Recordkeeper hereunder are the
property of the Fund Company and shall be made available in
accordance with the 1940 Act and the rules thereunder. Upon
the reasonable request of the Fund Company and at its sole
reasonable expense, the Transfer Agent, or the independent
accountants for the Fund Company, the Recordkeeper will
promptly provide copies, or originals if required, of (i)
historical records relating to transactions involving the Fund
Company and Participants; (ii) written communications
regarding the Fund Company to or from Participants; (iii) and
other materials relating to the provision of services by the
Recordkeeper under this Agreement. The Recordkeeper will
comply with any reasonable request for such information and
documents made by the Fund Company or its board of Trustees or
any governmental body or self-regulatory organization.
B. The Recordkeeper agrees that, with respect to the Plans for
which it is providing services under this Agreement, the
Recordkeeper will permit the Fund Company, the Transfer Agent,
or their representatives, to have reasonable access to its
personnel and records in order to facilitate the monitoring of
the quality of the services provided by the Recordkeeper.
Notwithstanding anything herein to the contrary, the
Recordkeeper shall not be required to provide the names and
addresses of Participants to the Transfer Agent or the Fund
Company, unless applicable law or regulation otherwise
requires.
C. This Section 9 shall survive termination of this Agreement.
10. Ability to Provide Services
---------------------------
The Recordkeeper agrees to notify the Fund Company promptly if for any
reason it is unable to perform its obligations under this Agreement.
11. Compensation
------------
A. In consideration of performance of the services by the
Recordkeeper hereunder, the Fund Company will compensate the
Recordkeeper per year at a rate of eighteen dollars ($18.00)
per participant account, or such other amount as to which the
Fund Company and the Recordkeeper shall agree from
time-to-time in writing. The Recordkeeper shall invoice the
Fund Company quarterly. Said compensation will commence with
the calendar quarter ending June 30, 1999.
B. The Recordkeeper will permit the Fund Company and its
representatives (including counsel and independent
accountants) at its sole cost, reasonable
4
6
access to its records to enable the Fund Company to verify
that the Recordkeeper's charges hereunder comply with the
provisions of this Agreement. Such access shall include, but
not be limited to, up to four on-site inspections of the
Recordkeeper's records each calendar year.
12. Indemnification
---------------
The Recordkeeper shall indemnify and hold harmless the Fund Company
from and against any and all losses and liabilities that it may incur,
including without limitation reasonable attorneys' fees, expenses and
costs arising out of or related to the performance or non-performance
of the Recordkeeper of its responsibilities under this Agreement;
excluding, however, any such claims, suits, loss, damage or costs
caused by, contributed to or arising from any noncompliance by the Fund
Company with its obligations under this Agreement, including the late
or inaccurate provision of NAV information. Fund Company shall
indemnify and hold harmless the Recordkeeper from and against any and
all losses and liabilities that it may incur, including without
limitation reasonable attorneys' fees, expenses and costs arising out
of or related to the performance or non-performance of the Fund Company
of its responsibilities under this Agreement; excluding, however, any
such claims, suits, loss, damage or costs caused by, contributed to or
arising from any noncompliance by the Recordkeeper with its obligations
under this Agreement. This Section 12 shall survive termination of this
Agreement.
13. Termination
-----------
The Fund Company will provide the Recordkeeper with ninety (90) days
prior written notice if purchase Orders may no longer be effected in
accordance with this Agreement. Such termination shall not affect the
remaining provisions of this Agreement and redemption Orders shall
continue to be effected. Either party may terminate this Agreement upon
ninety (90) day's prior written notice to the other party.
14. Limitation of Liability of Trustees, Directors and Shareholders
---------------------------------------------------------------
a. It is expressly agreed that the obligations of the
Recordkeeper hereunder shall not be binding upon any of the
directors, shareholders, nominees, officers, agents or
employees of the Recordkeeper personally, but shall bind only
the Recordkeeper.
B. The execution and delivery of this Agreement have been
authorized by the Trustees of the Fund Company and the
directors of the Recordkeeper, and this Agreement has been
signed and delivered by an authorized officer of the Fund
Company and the Recordkeeper.
15. NOTICES. Unless otherwise specified, all notices and other
communications shall be in writing and shall be duly given if hand
delivered, delivered by facsimile with written confirmation, or mailed
by first class mail to the following addresses:
5
7
If to the Fund Company:
-----------------------
One Group Mutual Funds
Attn: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
If to the Recordkeeper:
-----------------------
Bank One Trust Company, NA
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
16. SEVERABILITY. If any provision of this Agreement are held or made
invalid by a statute, rule, regulation , decision of a tribunal or
otherwise, the remainder of this Agreement shall not be affected and,
to this extent, the provisions of this Agreement shall be deemed to be
severable.
17. GOVERNING LAW. This Agreement shall be governed by the laws of the
state of Ohio, except as such laws are superseded by or preempted by
any Federal law.
18. ASSIGNMENT. This Agreement may not be assigned by either party without
the prior written consent of the other party.
19. DISPUTE RESOLUTION AND ARBITRATION. Any controversy or claim arising
out of or relating to this Agreement, or the breach of the same which
gives rise to a remedy at law, shall be settled through consultation
and negotiation in good faith and a spirit of mutual cooperation.
However, if those attempts fail, the parties agree that any
misunderstandings or disputes arising from this Agreement shall be
decided by arbitration which shall be conducted, upon request by either
party, before a single arbitrator designated by the American
Arbitration Association (the "AAA"), in accordance with the terms of
the Commercial Arbitration Rules of the AAA, and, to the maximum extent
applicable, the United States Arbitration Act (Title 9 of the United
States Code), or if such Act is not applicable, any substantially
equivalent Ohio state law. The parties further agree that the
arbitrator(s) will decide which party must bear the expenses of the
arbitration proceedings. The arbitration will take place in Columbus,
Ohio.
20. ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties, supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, and shall not be
modified or amended except by a writing signed by both parties.
21. FUND COMPANY LIABILITY. The names "One Group Mutual Funds" and
"Trustees of One Group Mutual Funds" refer, respectively, to the trust
created and the trustees, as trustees, but not individually or
personally, acting from time to time under a Declaration of Fund
Company dated as of May 23, 1985 to which reference is hereby made and
a copy of
6
8
which is on file at the office of the Secretary of the Commonwealth of
Massachusetts and elsewhere as required by law, and to any and all
amendments thereto so filed or hereafter filed. The obligations of "One
Group Mutual Funds" entered into in the name or on behalf thereof by
any of the Trustees, representatives or agent are made not
individually, but in such capacities, and are not binding upon any of
the Trustees, Shareholders, or representatives of the Fund Company
personally, but bind only the assets of the Fund Company, and all
persons dealing with any series of Shares of the Fund Company must look
solely to the assets of the Fund Company belonging to such series for
the enforcement of any claim against the Fund Company.
IN WITNESS HEREOF, the parties hereto have executed and delivered this Agreement
as of the date first above written.
One Group(R) Mutual Funds Bank One Trust Company, NA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------ --------------------------------
Title: President Title: Senior Managing Director
--------------------- -----------------------------
7