Exhibit to Form N-1A
Exhibit (9)(c)(i) Accounting Services Agreement
ACCOUNTING SERVICES AGREEMENT
-----------------------------
THIS AGREEMENT, dated as of the ____ day of , 1995 (the
"Effective Date") by and between The Xxxxxxx Funds, a Delaware Business Trust
(the "Trust") operating as an open-end management investment company, and
Fund/Plan Services, Inc. ("Fund/Plan"), a corporation duly organized and
existing under the laws of the State of Delaware.
W I T N E S S E T H T H A T:
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WHEREAS, the Trust is an investment company registered under the Investment
Company Act of 1940, as amended (the "Act"); and
WHEREAS, the Trust is authorized by its Agreement and Declaration of Trust
to issue separate series of shares representing interests in separate investment
portfolios (the "Series"), which Series are identified on Schedule "C" attached
hereto, and which Schedule "C" may be amended from time to time by mutual
agreement of the Trust and Fund/Plan; and
WHEREAS, the Trust desires to appoint Fund/Plan as its Accounting Services
Agent to maintain and keep current the books, accounts, records, journals or
other records of original entry relating to the business of the Series as set
forth in Section 2 of this Agreement (the "Accounts and Records") and to perform
certain other functions in connection with such accounts and records; and
WHEREAS, Fund/Plan is willing to perform such functions upon the terms and
conditions set forth below; and
WHEREAS, the Trust will cause to be provided certain information to
Fund/Plan as set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto, intending to be legally bound, do hereby
agree as follows:
SECTION 1. APPOINTMENT The Trust hereby appoints Fund/Plan as Accounting
Services Agent and Fund/Plan hereby accepts such appointment. Also, the Trust
agrees to appoint Fund/Plan as Accounting Services Agent for any additional
Series which, from time to time, may be added to the Trust.
SECTION 2. DEFINITIONS. For purposes of this Agreement, the terms Oral
Instructions and Written Instructions shall mean:
ORAL INSTRUCTIONS: The term Oral Instruction shall mean an
authorization, instruction, approval, item or set of data, or
information of any kind transmitted to Fund/Plan in person or by
telephone, telegram, telecopy, or other mechanical or documentary
means lacking a signature, by a person or persons believed in good
faith by Fund/Plan to be a person or persons authorized by a
resolution of the Board of Trustees of the Trust, to give Oral
Instructions on behalf of the Series.
WRITTEN INSTRUCTIONS: The term Written Instruction shall mean an
authorization, instruction, approval, item or set of data or
information of any kind transmitted to Fund/Plan in original writing
containing original signatures or a copy of such document
transmitted by telecopy including transmission of such signature
believed in good faith by Fund/Plan to be the signature of a person
authorized by a resolution of the Board of Trustees of the Trust to
give Written Instructions on behalf of the Series.
The Trust shall file with Fund/Plan a certified copy of each
resolution of its Board of Trustees authorizing execution of Written
Instructions or the transmittal of Oral Instructions as provided
above.
SECTION 3. To the extent Fund/Plan receives the necessary information from the
Trust or its agents by Written or Oral Instructions, Fund/Plan shall
maintain and keep current the following Accounts and Records and any
other records required to be kept pursuant to Rule 31a-1 of the
Investment Company Act relating to the business of the Trust in such
form as may be mutually agreed upon between the Trust and Fund/Plan:
(a) Net Asset Value Calculation Reports;
(b) Cash Receipts Journal;
(c) Cash Disbursements Journal;
(d) Dividends Paid and Payable Schedule;
(e) Purchase and Sales Journals - Portfolio Securities;
(f) Subscription and Redemption Journals;
(g) Security Ledgers - Transaction Report and Tax Lot Holdings
Report;
(h) Broker Ledger - Commission Report;
(I) Daily Expense Accruals;
(j) Daily Interest Accruals;
(k) Daily Trial Balance;
(l) Portfolio Interest Receivable and Income Journal;
(m) Portfolio Dividend Receivable and Income Register;
(n) Listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security; and
(o) Average Daily Net Assets provided on a monthly basis.
The necessary information to perform the above functions and the
calculation of the respective net asset values of the Series is to
be furnished by Written or Oral Instructions to Fund/Plan daily (in
accordance with the time frame identified in Section 7) prior to the
close of trading on the New York Stock Exchange.
SECTION 4. Fund/Plan shall perform the ministerial calculations necessary to
calculate the respective net asset values daily for the Series, in
accordance with their respective current Prospectus and utilizing
the information described in this Section. Portfolio items for which
market quotations are available by Fund/Plan's use of automated
financial information service (the "Service") shall be based on the
closing prices of the Service, except where the Trust has given or
caused to be given specific Written or Oral Instructions to utilize
a different value. All of the portfolio securities shall be given
such values as the Trust provides by Written or Oral Instructions
including all restricted securities and other securities requiring
valuation not readily ascertainable solely by the Service. Fund/Plan
shall have no responsibility or liability for the accuracy of prices
quoted or corporate action information supplied by the Service; for
the accuracy of the information supplied by the Trust; or for any
loss, liability, damage, or cost arising out of any inaccuracy of
such data. Fund/Plan shall have no responsibility or duty to include
information or valuations to be provided by the Trust, on behalf of
the Series, in any computation unless and until it is timely
supplied to Fund/Plan in usable form. Fund/Plan shall record
corporate action (including but not limited to dividends, record
date, rights issues, stock dividends, stock splits, and tender
offers) information as received from the Custodian, the Service, the
Trust or its advisors as received. Fund/Plan shall have no duty to
gather or record corporate action information not supplied by these
sources.
Fund/Plan will assume no liability for price changes caused by: the
investment advisor(s), custodian, suppliers of security prices and
corporate action and dividend information, or any party other than
Fund/Plan itself.
In the event an error is made by Fund/Plan which creates a price
change, consideration must be given to the effect of the price
change as described below. Notwithstanding the provisions of Section
12, the following provisions govern Fund/Plan's liability for errors
in calculating the NAV of the Series:
If the NAV should have been higher for a date or dates in the past,
the error would have the effect of having given more shares to
subscribers and less money to redeemers to which they were entitled.
Conversely, if the NAV should have been lower, the error would have
the effect of having given less shares to subscribers and overpaying
redeemers.
If the error affects the prior business day's NAV only, and if
Fund/Plan can rerun the prior day's work before shareholder
statements and checks are mailed, the Trust hereby accepts this
manner of correcting the error.
If the error spans five (5) business days or less, Fund/Plan shall
reprocess shareholder purchases and redemptions where redeeming
shareholders have been underpaid. Fund/Plan shall assume liability
to the Trust for overpayments to shareholders who have fully
redeemed.
If the error spans more than five (5) business days, Fund/Plan would
bear the liability to the Trust for, 1) paying for the excess shares
given to shareholders if the NAV should have been higher, or, 2)
funding overpayments to shareholders who have redeemed if the NAV
should have been lower. The cost of any reprocessing required for
shareholders who have been credited with fewer shares than
appropriate, or for redeeming shareholders who are due additional
amounts of money will also be borne by Fund/Plan.
SECTION 5. For all purposes under this Agreement, Fund/Plan is authorized to
act upon receipt of the first of any Written or Oral Instruction it
receives from the Trust or its agents on behalf of the
Series of the Trust. In cases where the first instruction is an Oral
Instruction that is not in the form of a document or written record,
a confirmatory Written Instruction or Oral Instruction in the form
of a document or written record shall be delivered, on behalf of the
Series, and in cases where Fund/Plan receives an Instruction,
whether Written or Oral, to enter a portfolio transaction on the
records, the Trust shall cause the broker/dealer executing such
transaction to send a written confirmation to the Custodian.
Fund/Plan shall be entitled to rely on the first Instruction
received, and for any act or omission undertaken in compliance
therewith shall be free of liability and fully indemnified and held
harmless by the Trust, provided however, that in the event a Written
or Oral Instruction received by Fund/Plan is countermanded by a
timely later Written or Oral Instruction received by Fund/Plan prior
to acting upon such countermanded Instruction, Fund/Plan shall act
upon such later Written or Oral Instruction. The sole obligation of
Fund/Plan with respect to any follow-up or confirmatory Written
Instruction, Oral Instruction in documentary or written form, or
broker/dealer written confirmation shall be to make reasonable
efforts to detect any such discrepancy between the original
Instruction and such confirmation and to report such discrepancy to
the Trust. The Trust shall be responsible, at the Trust's expense,
for taking any action, including any reprocessing, necessary to
correct any discrepancy or error, and to the extent such action
requires Fund/Plan to act, the Trust shall give Fund/Plan specific
Written Instruction as to the action required.
SECTION 6. The Trust shall cause the Trust's Custodian, on behalf of the
Series, to forward to Fund/Plan: (i) a daily statement of cash and
portfolio transactions based upon the prior business day; and (ii)
at the end of each month, to forward to Fund/Plan a monthly
statement of portfolio transactions, which will be reconciled with
Fund/Plan's Accounts and Records maintained for the Series of the
Trust. Fund/Plan will report any discrepancies to the Custodian, and
report any unreconciled items to the Trust.
SECTION 7. Fund/Plan shall promptly supply daily and periodic reports of the
Trust, on behalf of the Series, as requested by the Trust and agreed
upon by Fund/Plan.
SECTION 8. The Trust, on behalf of the Series, shall provide and shall require
each of its agents (including without limitation its Transfer Agent
and its Custodian), to provide Fund/Plan as of the close of each
business day, or on such other schedule as the Trust determines is
necessary, with Written or Oral Instructions (to be delivered to
Fund/Plan by 11:00 AM Eastern Time the next following business day)
containing all data and information necessary for Fund/Plan to
maintain the Trust's Accounts and Records and Fund/Plan may
conclusively assume that the information it receives by Written or
Oral Instructions is complete and accurate. The Trust, on behalf of
the Series, is responsible to provide or cause to be provided to
Fund/Plan reports of share purchases, redemptions, and total shares
outstanding on the next business day after each net asset valuation.
SECTION 9. The Accounts and Records, in the agreed upon format, maintained by
Fund/Plan shall be the property of the Trust, and shall be made
available to the Trust promptly upon request and shall be maintained
for the periods prescribed in Rule 31a-2 under the Act. Fund/Plan
shall assist the Trust's independent auditors, or upon approval of
the Trust, or upon demand, any regulatory body, in any requested
review of the Trust's Accounts and Records but shall be reimbursed
for all expenses and employee time invested in any such review of
the Trust's Accounts and Records outside of routine and normal
periodic review and audits. Upon receipt from the Trust of the
necessary information, Fund/Plan shall supply the necessary data for
the Trust or the auditor's completion of any necessary tax returns,
questionnaires, periodic reports to Shareholders and such other
reports and information requests as the Trust and Fund/Plan shall
agree upon from time to time.
SECTION 10. In case of any request or demand for the inspection of the Share
records of the Trust, Fund/Plan, as Accounting Services Agent, shall
endeavor to notify the Trust and to secure instructions as to
permitting or refusing such inspection. However, Fund/Plan may
exhibit such records to any person in any case where it is advised
by its counsel that it may be held liable for failure to do so.
SECTION 11. Fund/Plan and the Trust may from time to time adopt such procedures
as they agree upon in writing, and Fund/Plan may conclusively assume
that any procedure approved by the Trust or directed by the Trust,
does not conflict with or violate any requirements of the Series'
Prospectuses, Agreement and Declaration of Trust or By-Laws. The
Trust shall be responsible for notifying Fund/Plan of any changes in
regulations or rules which might necessitate changes in Fund/Plan's
procedures, and for working out with Fund/Plan such changes.
SECTION 12. (a) Fund/Plan, its directors, officers, employees,
shareholders and agents shall not be liable for any error
of judgment or mistake of law or for any loss suffered by
the Trust in connection with the performance of this
Agreement, except losses resulting from willful
misfeasance, bad faith or negligence on the part of
Fund/Plan in the performance of its obligations and duties
under this Agreement.
(b) Any person, even though also a director, officer,
employee, shareholder or agent of Fund/Plan, who may be or
become a(n) trustee, officer, employee or agent of the
Trust, shall be deemed, when rendering services to the
Trust or acting on any business of the Trust (other than
services or business in connection with Fund/Plan's duties
hereunder), to be rendering such services to or acting
solely for the Trust and not as a(n) trustee, officer,
employee, shareholder or agent of, or one under the
control or direction of Fund/Plan even though paid by it.
(c) Notwithstanding any other provision of this Agreement, the
Trust shall indemnify and hold harmless Fund/Plan, its
directors, officers, employees, shareholders and agents
from and against any and all claims, demands, expenses and
liabilities (whether with or without basis in fact or law)
of any and every nature which Fund/Plan may sustain or
incur or which may be asserted against Fund/Plan by any
person by reason of, or as a result of:
(i) any action taken or omitted to be taken by Fund/Plan in
good faith hereunder;
(ii) in reliance upon any certificate, instrument, order or
stock certificate or other document reasonably believed by
it to be genuine and to be signed, countersigned or
executed by any duly authorized person, upon the Oral
Instructions or Written Instructions of an authorized
person of the Trust or upon the opinion of legal counsel
for the Trust or its own counsel; or
(iii) any action taken or omitted to be taken by Fund/Plan in
connection with its appointment in good faith in reliance
upon any law, act, regulation or interpretation of the
same even though the same may thereafter have been
altered, changed, amended or repealed. However,
indemnification under this subparagraph shall not apply to
actions or omissions of Fund/Plan or its directors,
officers, employees, shareholders, or agents in cases of
its or their own negligence, willful misconduct, bad
faith, or reckless disregard of its or their own duties
hereunder.
(d) Fund/Plan shall give written notice to the Trust within
fifteen (15) business days of receipt by Fund/Plan of a
written assertion or claim of any threatened or pending
legal proceeding which may be subject to this
indemnification. However, the failure to notify the Trust
of such written assertion or claim shall not operate in
any manner whatsoever to relieve the Trust of any
liability arising from this Section or otherwise.
(e) For any legal proceeding giving rise to this
indemnification, the Trust shall be entitled to defend or
prosecute any claim in the name of Fund/Plan at its own
expense and through counsel of its own choosing if it
gives written notice to Fund/Plan within ten (10) business
days of receiving notice of such claim. Notwithstanding
the foregoing, Fund/Plan may participate in the litigation
at its own expense through counsel of its own choosing. If
the Trust does choose to defend or prosecute such claim,
then the parties shall cooperate in the defense or
prosecution thereof and shall furnish such records and
other information as are reasonably necessary.
(f) The Trust shall not settle any claim without Fund/Plan's
express written consent which shall not be unreasonably
withheld. Fund/Plan shall not settle any claim without the
Trust's express written consent which shall not be
unreasonably withheld.
SECTION 13. All financial data provided to, processed by, and reported by
Fund/Plan under this Agreement shall be stated in United States
dollars. Fund/Plan's obligation to convert, equate or deal in
foreign currencies or values extends only to the accurate
transposition of information received from the various pricing
and informational services into Fund/Plan's Investment Accounting
System.
SECTION 14. The Trust agrees to pay Fund/Plan compensation for its services
and to reimburse it for expenses, at the rates and amounts as set
forth in Schedule "B" attached hereto, and as shall be set forth
in any amendments to such Schedule "B" approved by the Trust and
Fund/Plan. The Trust agrees and understands that Fund/Plan's
compensation be comprised of two components and payable on a
monthly basis as follows:
(i) a combined asset based fee, subject to a minimum fee, and
an additional minimum fee for subsequent classes of shares
for each Series of the Trust, which fees are to be paid by
the Trust within ten calendar days of receipt of an
invoice from Fund/Plan after the end of each month. Such
asset based fee is calculated by using that month's
combined classes' average daily net assets of the Trust;
and
(ii) reimbursement of any reasonable out-of-pocket expenses
paid by Fund/Plan on behalf of the Trust, which out-of-
pocket expenses will be billed to the Trust within the
first ten calendar days of the month following the month
in which such out-of-pocket expenses were incurred. The
Trust agrees to reimburse Fund/Plan for such expenses
within ten calendar days of receipt of such xxxx.
For the purpose of determining fees payable to Fund/Plan, the
value of the Series' net assets shall be computed at the times
and in the manner specified in each Series' Prospectuses and
Statement of Additional Information then in effect.
During the term of this Agreement, should the Trust seek services
or functions in addition to those outlined above or in Schedule
"A" attached, a written amendment to this Agreement specifying
the additional services and corresponding compensation shall be
executed by both Fund/Plan and the Trust.
SECTION 15. Nothing contained in this Agreement is intended to or shall
require Fund/Plan, in any capacity hereunder, to perform any
functions or duties on any holiday, day of special observance or
any other day on which the New York Stock Exchange is closed.
Functions or duties normally scheduled to be performed on such
days shall be performed on, and as of, the next succeeding
business day on which the New York Stock Exchange is open. Not
withstanding the foregoing, Fund/Plan shall compute the net asset
values of the Series on each day required pursuant to Rule 22c-1
promulgated under the Investment Act of 1940, as amended and as
described in the Series' respective Prospectuses.
SECTION 16. (a) This Agreement shall go into effect on the Effective Date
and shall continue in effect until October 31, 1996. This
Agreement shall continue in force from year to year
thereafter, but only so long as such continuance is
approved: (1) by Fund/Plan; (2) by vote, cast in person at a
meeting called for the purpose, of a majority of the Trust's
Trustees who are not parties to this Agreement or interested
persons (as defined in the Act) of any such party; and (3)
by vote of a majority of the Trust's Board of Trustees or a
majority of the Trust's outstanding voting securities.
(b) The Fee Schedule shall be fixed for the initial term of this
Agreement, with a fee increase thereafter not to exceed 10%.
(c) The Trust or Fund/Plan may give written notice to the other
of the termination of this Agreement, such termination to
take effect at the time specified in the notice, not less
than one hundred and eighty (180) days after the giving of
the notice. Upon the effective termination date, the Trust
shall pay to Fund/Plan such compensation as may be due as of
the date of termination and shall likewise reimburse
Fund/Plan for any reasonable out-of-pocket expenses and
disbursements reasonably incurred by Fund/Plan to such date.
(d) In the event that in connection with termination of this
Agreement a successor to any of Fund/Plan's duties or
responsibilities under this Agreement is designated by the
Trust by written notice to Fund/Plan, Fund/Plan shall,
promptly upon such termination and at the expense of the
Trust, transfer all Required Records and shall cooperate in
the transfer of such duties and responsibilities.
(e) The Trust acknowledges that in order for Fund/Plan to
perform the services contemplated hereunder, Fund/Plan has
made and will make significant investments of time and
money. If this Agreement is terminated for reasons other
than a material breach by Fund/Plan prior to the expiration
of the initial term of this contract, the Trust will pay
Fund/Plan twenty percent (20%) of the minimum fees remaining
for the unexpired term of the Agreement.
SECTION 17. Any notice or other communication required by or permitted to be
given in connection with this Agreement shall be in writing, and
shall be delivered in person or sent by first class mail, postage
prepaid to the respective parties as follows:
If to the Trust: The Xxxxxxx Funds
000 X. XxXxxxx Xx.
Xxxxxxx, XX 00000
Attention: E. Xxxxxx XxXxxxxx, President
If to Fund/Plan: Fund/Plan Services, Inc.
X.X. Xxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, President
SECTION 18. This Agreement may be amended from time to time by supplemental
agreement executed by the Trust and Fund/Plan and the
compensation stated in Schedule "B" attached hereto may be
adjusted accordingly as mutually agreed upon.
SECTION 19. This Agreement shall be construed according to the laws of the
Commonwealth of Pennsylvania.
SECTION 20. This contract sets forth the entire understanding of the parties
with respect to the provisions contemplated hereby, and
supersedes any and all prior agreements, arrangements and
understandings relating to such services.
SECTION 21. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original agreement but
such counterparts shall together constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement consisting of
ten typewritten pages, together with Schedules "A", "B" and "C", to be signed
by their duly authorized officers and their seals hereunto duly affixed and
attested, as of the day and year first above written.
THE XXXXXXX FUNDS
____________________________________
By: E. Xxxxxx XxXxxxxx, President
____________________________________
Attest: Xxxxx X. Xxxxxxx, Assistant
Secretary
(SEAL)
FUND/PLAN SERVICES, INC.
____________________________________
By: Xxxxxxx X.Xxxxx, President
____________________________________
Attest: Xxxxx X. Xxxxx, Secretary
(SEAL)
SCHEDULE "A"
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ACCOUNTING & PORTFOLIO VALUATION
FOR
THE XXXXXXX FUNDS
The Accounting Services Unit (ASU) is pleased to provide a comprehensive level
of service to The Xxxxxxx Funds. You may expect services as follows with
respect to Series and their Multiple Classes of Shares (additional services may
be completed upon request):
DAILY ACCOUNTING SERVICES
-------------------------
1) Calculate Net Asset Value (and Offering Price) Per Share:
Series Level
. Update the daily market value of securities held by the Series using
Fund/Plan Services' standard agents for pricing domestic equity, bond
and foreign securities. The domestic equity pricing services are
Reuters, Inc., Xxxxxx Data Corporation and Interactive Data
Corporation (IDC). Xxxxxx Data Corporation/Extel Financial, Telerate,
Bloomberg and IDC are used for bond and foreign prices/exchange rates.
. Enter manual prices supplied by client and/or broker.
. Review variance reporting on-line and in hard copy for price changes
in individual securities using variance levels established by client.
Verify US dollar security prices exceeding variance levels by
notifying client and pricing sources of noted variances.
. Complete daily variance analysis on foreign exchange rates and local
foreign prices. Notify client of changes exceeding established levels
for the client's verification.
. Review for ex-dividend items indicated by pricing sources; trace to
Series' general ledger for agreement.
Series and Each class
. Allocate daily unrealized Series appreciation/depreciation, unrealized
currency gains/losses, and unrealized gains/losses on futures and
forwards to classes based upon value of outstanding class shares.
. Prepare NAV proof sheets. Review components of change in NAV for
reasonableness. (Complete fund and class control proofs).
. Communicate required pricing information (NAV) to client, transfer
agent and, electronically, to NASDAQ.
2) Determine and Report Cash Availability to Series by 9:30 AM Eastern Time:
Series Level
. Receive daily cash and transaction statements from the custodian by
8:30 AM Eastern time.
. Receive previous day shareholder activity reports from the Series'
transfer agent by 8:30 AM Eastern time. Class level shareholder
activity will be accumulated into the Series' available cash balances.
. Fax hard copy Cash Availability calculations with all details to
client.
. Supply client with 5-day cash projection report.
. For the Series, prepare and complete daily bank cash reconciliations
including documentation of any reconciling items and notify the
custodian/client.
3) Reconcile and Record All Daily Expense Accruals:
Series Level
. Accrue expenses based on client supplied budget either as percentage
of Series' net assets or specific dollar amounts.
. Monitor expense limitations established by client.
. Accrue daily amortization of Organizational Expense.
Series and Each Class
. Class specific accruals completed such as daily accrual of 12b-1
expenses.
. Allocate Series expenses to classes based upon value of outstanding
class shares.
4) Verify and Record All Daily Income Accruals for Debt Issues:
Series Level
. Review and verify all system generated Interest and Amortization
reports.
. Establish unique security codes for bond issues to permit segregated
Trial Balance income reporting.
SCHEDULE "A"
------------
Series and Each Class
. Allocate Series income to classes based upon value of outstanding
class shares.
5) Monitor Domestic Securities Held for Cash Dividends, corporate actions and
capital changes such as splits, mergers, spinoffs, etc. and process
appropriately.
Series Level
. Monitor electronically received information from Xxxxxx Data
Corporation for all domestic securities.
. Review current daily security trades for dividend activity.
. Interface with custodian to monitor timely collection and postings of
corporate actions, dividends and interest.
. Process international dividend and capital change information received
from the custodian and advisor. Back-up information on foreign
dividends and corporate actions may also be obtained from Xxxxxx Data
Corporation/Extel Financial, Telerate, Bloomberg and IDC (as pricing
agents for the Series).
. Provide xxxx-to-market analysis for currency exchange rate
fluctuations on unsettled dividends and interest.
Series and Each Class
. Allocate Series dividend income and unrealized currency gains/losses
on dividends/interest to classes based upon value of outstanding class
shares.
6) Enter All Security Trades on Investment Accounting System (IAS) based on
written instructions from the client.
Series Level
. Review system verification of trade and interest calculations.
. Verify settlement through the custodian statements.
. Maintain security ledger transaction reporting.
. Maintain tax lot holdings.
. Determine realized gains or losses on security trades.
. Provide complete broker commission reporting.
. Provide foreign currency exchange rate realized and unrealized
gains/losses detail.
. Determine realized gains or losses on security trades.
Series and Each Class
. Allocate all realized and unrealized capital and currency gains/losses
to classes based upon value of class outstanding shares.
7) Enter All Series Share Transactions on IAS:
Each Class
. Process activity identified on the transfer agent reports.
. Verify settlement through the Series' custodian statements.
. Reconcile to the Fund/Plan Services' transfer agent report balances.
. Roll each classes' capital share values into each Series and determine
allocation percentages based upon the value of each classes'
outstanding shares to the Series total.
8) Prepare and Reconcile/Prove Accuracy of the Daily Trial Balance (listing
all asset, liability, equity, income and expense accounts)
Series Level
. Post manual entries to the general ledger.
. Post custodian bank activity.
. Post security transactions.
. Post and verify system generated activity, i.e., income and expense
accruals.
. Segregate foreign tax expense.
. Prepare daily xxxx-to-market analysis for all unrealized foreign
currency exchange rate gains/losses by asset/liability category.
Series and Each Class
. Prepare Series general ledger net cash proof used in NAV calculation.
. Post class specific shareholder activity and roll values into each
Series.
. Allocate all Series level net cash accounts on the Series Trial
Balance to each
SCHEDULE "A"
------------
specific class based upon value of class outstanding shares.
. Maintain allocated Trial Balance accounts on class specific Allocation
Report.
. Maintain class-specific expense accounts.
. Prepare class-specific proof/control reports to ensure accuracy of
allocations.
9) Review and Reconcile with Custodian Statements:
Series Level
. Verify all posted interest, dividends, expenses, and shareholder and
security payments/receipts, etc. (Discrepancies will be reported to
and resolved by the Custodian.)
. Post all cash settlement activity to the Trial Balance.
. Reconcile to ending cash balance accounts.
. Clear IAS subsidiary reports with settled amounts.
. Track status of past due items and failed trades handled by the
Custodian.
10) Submission of Daily Accounting Reports to Client: (Additional reports
readily available.)
Series Level
. Portfolio Valuation (listing inclusive of holdings, costs, market
values, unrealized appreciation/depreciation and percentage of
portfolio comprised of each security sorted according to Xxxxxxx'x
categories - stocks (foreign), stocks (domestic), bonds (foreign),
bonds (domestic), currency (foreign), money market (domestic).
. Cash availability.
. 3-Day Cash Projection Report
Series and Each Class
. Trial Balance and Class Allocation Report
. NAV Calculation Report
MONTHLY ACCOUNTING SERVICES
---------------------------
1) For the Series, full Financial Statement Preparation (automated Statements
of Assets and Liabilities, of Operations and of Changes in Net Assets) and
submission to Client by 10th business day.
. Class specific capital share activity and expenses will be disclosed
also.
2) Submission of Monthly Automated IAS Reports to Fund/Client:
Series Level
. Security Purchase/Sales Journal
. Interest and Maturity Report
. Brokers Ledger (Commission Report)
. Security Ledger Transaction Report with Realized Gains/Losses
. Security Ledger Tax Lot Holdings Report
. Additional reports available upon request
3) Reconcile Accounting Asset Listing to Custodian Asset Listing:
Series Level
. Report any security balance discrepancies to the custodian/client.
4) Provide Monthly Analysis and Reconciliation of Additional Trial Balance
Accounts, such as:
Series Level
. Security cost and realized gains/losses
. Interest/dividend receivable and income
. Payable/receivable for securities purchased and sold
. Unrealized and realized currency gains/losses
Series and Each Class
. Payable/receivable for Fund shares; issued and redeemed
. Expense payments and accruals analysis
5) If Appropriate, Prepare and Submit to Client:
Series Level
. Income by state reporting
. Standard Industry Code Valuation Report
. Alternative Minimum Tax Income segregation schedule
SCHEDULE "A"
------------
ANNUAL (AND SEMI-ANNUAL) ACCOUNTING SERVICES
--------------------------------------------
1) Assist and supply auditors with schedules supporting securities and
shareholder transactions, income and expense accruals, etc. for the Series
and each Class during the year in accordance with standard audit assistance
requirements.
2) Provide NSAR Reporting (Accounting Questions):
---------------------------------------------
If applicable for the Series and Classes, answer the following items:
2, 12B, 20, 21, 22, 23, 28, 30A, 31, 32, 35, 36, 37, 43, 53, 55, 62, 63,
00X, 00, 00, 00, 00, 00, 00
XXXXXXXX "A"
------------
ACCOUNTING SERVICES UNIT BASIC ASSUMPTIONS FOR
THE XXXXXXX FUNDS
--------------------------------------------------------------------------------
BASIC ASSUMPTIONS:
-----------------
1) The Trust's Administrator, on behalf of the Series, will complete all
necessary compliance reports (Sub-Chapter "M"), as well as monitoring of
the various limitations and restrictions.
2) The portfolio asset composition of the Series will be comparable as
described in the Profile Document prepared by Xxxxxxx Partners, Inc.
Trading activity is expected to approximate 270 transactions per month
inclusive of equity, debt, currency and money market transactions.
3) The Trust has a tax year-end which coincides with its fiscal year-end. No
additional accounting requirements are necessary to identify or maintain
book-tax differences.
To the extent tax accounting, on behalf of the Series (as applicable), for
certain securities differs from the book accounting, it will be done by the
Trust's Administrator or the Trust's independent accountants.
The Accounting Services Unit will supply segregated Trial Balance account
details to assist the Administrator, on behalf of the Series (as
applicable), in proper identification by category of all appropriate
realized and unrealized currency gains/losses.
4) The Trust, on behalf of the Series (as applicable) foresees no difficulty
in using Fund/Plan's standard pricing agents for domestic equity, bond, ADR
and foreign securities. Fund/Plan currently uses Reuters, Inc., Xxxxxx
Data and Interactive Data (IDC) for domestic equities and listed ADR's.
IDC, Telerate, Bloomberg and Xxxxxx Data Corporation for bonds, synthetic
ADR's and foreign issues.
Xxxxxx Data Corporation/Extel Financial and IDC are the primary foreign
security pricing vendors for the Trust, on behalf of the Series (as
applicable) and supply ASU with daily (spot) foreign exchange rates to be
used in market value calculations of non-US dollar denominated securities
and currency xxxx-to-market requirements. To the extent IDC or Xxxxxx Data
are unable to supply certain foreign security prices, they will be provided
by Xxxxxxx Partners or a Xxxxxxx Partners' recommended pricing source.
Telerate Systems, Inc. is used for daily forward currency contract prices.
The Accounting Unit will work closely with Xxxxxxx Partners to ensure the
accuracy of the Series' NAVs and to obtain the most satisfactory pricing
sources and specific methodologies.
5) To the extent the Series require daily security prices from specific
brokers for domestic or foreign securities, these manual prices will be
obtained by Xxxxxxx Partners (or brokers) and faxed to the ASU by
approximately 4:00 PM Eastern time for inclusion in the NAV calculations.
Xxxxxxx Partners will supply ASU with the appropriate pricing contacts for
these manual quotes.
6) To the extent the Series should ever purchase/hold open-end registered
investment companies (RICs), procedural discussions should take place
between ASU and Xxxxxxx Partners clarifying the appropriate pricing and
dividend rate sources. Depending on the methodologies selected by the
Trust, additional fees may apply.
7) ASU will supply daily Portfolio Valuation Reports on behalf of the Series
(as applicable), to Xxxxxxx Partners identifying current security
positions, original/amortized cost, security market values and changes in
unrealized appreciation/depreciation.
It will be the responsibility of Xxxxxxx Partners to review these reports
and to promptly notify ASU of any possible problems, trade discrepancies,
incorrect security prices, corporate action/capital change information or
exchange rate discrepancies that could result in a misstated NAV.
8) All foreign currency will be held within the Custodian and sub-custodian
network on behalf of the Series (as applicable). Time deposits and
interest bearing currency accounts will all be reflected on the Custodian
asset listings. The Trust or Custodian will supply ASU with appropriate
and timely information for any trades/changes in the currency accounts, as
well as interest rates to ensure income accrual accuracy for the debt
issues, time deposits and currency accounts. Income accrual adjustments
(expected to be immaterial) will be completed when the interest is actually
collected and posted on the Custodian's statements.
SCHEDULE "A"
------------
9) On behalf of the Series (as applicable), it is assumed for all debt issues
that Xxxxxxx Partners will supply the Accounting Unit with critical income
information such as accrual methods, interest payment frequency details,
coupon payment dates, floating rate reset dates, and complete security
descriptions with issue types and sedol/cusip numbers.
10) On behalf of the Series (as applicable), the Custodian will provide the
Accounting Unit with daily custodian statements (or on-line access to the
custody system) reflecting all prior day cash activity by 8:30 AM Eastern
time. Complete and clear descriptions of any postings, inclusive of
sedol/cusip numbers, interest/dividend payment dates, capital stock
details, expense authorizations, beginning/ending balances, etc. will be
provided by the Custodian's reports or system.
11) On behalf of the Series (as applicable), the Custodian will be responsible
for supplying the foreign dividend, capital change information, and
interest rate changes to Accounting in a timely manner. Xxxxxxx Partners
will supplement and support as appropriate. If selected by the Trust, ASU
can receive supplemental capital change and dividend information on foreign
positions from IDC and Xxxxxx Data as the pricing vendors for the Trust's
foreign securities.
12) On behalf of the Series (as applicable), the Custodian will handle and
report on all settlement problems, failed trades and unsettled
dividends/interest and capital changes. Additionally, the Custodian will
process all applicable capital change and foreign reclaim paperwork based
upon advice from Xxxxxxx Partners. ASU will supply segregated Trial
Balance reporting and supplemental reports to assist in this process.
13) On behalf of the Series (as applicable):
a) ASU will maintain US Dollar denominated futures, qualified covered
call options and index options reporting on the daily Trial Balance
and value the respective options and underlying positions daily.
b) To the extent tax classifications are required, they will be computed
by the Trust's Administrator or independent accountant.
c) The Trust does not currently expect to invest in domestic futures,
options or designated xxxxxx. Advance notice is requested should the
Series commence trading in the above investments to clarify
operational procedures between ASU and Xxxxxxx Partners.
14) On behalf of the Series (as applicable), should Lines of Credit in
segregated accounts with the Custodian be established for temporary
administrative purposes, and/or leveraging/hedging a portfolio, Xxxxxxx
Partners will complete the appropriate paperwork/monitoring for segregation
of assets and adequacy of collateral. Accounting will reflect appropriate
Trial Balance account entries and interest expense accrual charges on the
daily Trial Balance, adjusting as necessary at month-end.
15) On behalf of the Series (as applicable), participation in Securities
Lending, Interest Rate Swaps, Leveraging, Precious Metals, Short Sales or
Foreign Currency (non-US dollar denominated) Futures and Options within
portfolio securities is not currently expected. To the extent such
techniques are utilized in the future, additional fees will apply. Forward
Currency Contracts that are directly related to payables/receivables on
trades and/or dividends/interest are included in Accounting Services and
are not to be considered an extra expense.
16) On behalf of the Series (as applicable), Xxxxxxx Partners or the
Administrator will supply ASU specific expense accrual procedures and
monitor the expense accrual balances for adequacy based on outstanding
liabilities monthly. The Trust's Administrator will promptly communicate
to the ASU any adjustments needed.
17) On behalf of the Series (as applicable):
a) Specific deadlines and complete information supplied will be
identified for all security trades in order to minimize any settlement
problems, NAV miscalculations or distribution rate adjustments.
b) Trade Authorization Forms, with the appropriate officer's signature,
should be faxed to ASU on all security trades placed by the Fund no
later than settlement/value date by 11:00 AM Eastern time for money
market and currency issues (it is assumed trade date equals settlement
date for money market/currency issues) and by 11:30 a.m. Eastern time
on trade date plus one for non-
SCHEDULE "A"
------------
money market securities. Receipt of trade information within these
identified deadlines may be via telex, fax or on-line system access.
Xxxxxxx Partners will also communicate all trade information directly
to the Fund's Custodian.
c) Foreign exchange contracts will be completed by the Trust's Custodian
or Xxxxxxx Partners and communicated to the Accounting Unit in a
timely manner, i.e., the earlier of trade date plus one or value date.
For security trade information called in after the above stated
deadlines, there is no assurance it can be included in that day's
work.
d) Cusip numbers and/or ticker symbols for all US Dollar denominated
trades and sedol numbers for all foreign trades will be supplied by
Xxxxxxx Partners via the Trade Authorization, telex or on-line
support. The ASU will not responsible for NAV changes or distribution
rate adjustments that result from incomplete information about a
trade.
18) On behalf of the Series (as applicable), the Trust's Administrator will
complete the applicable performance and rate of return calculations as
required by the SEC.
19) On behalf of the Series (as applicable):
a) We would establish mutually agreed upon amortization and accretion
requirements for debt issues held by the Series. It is extremely
important that requirements and proper amortization procedures be
clarified prior to SEC effectiveness of additional series.
b) Any issues with Original Issue Discounts ("OID") are not intended to
be held. It is Fund/Plan's position that OID is a tax requirement
and, as such, is not necessarily reflected on the books. To the
extent that securities with OID are owned in the future, it is
expected that the Trust's auditors will complete the necessary OID
adjustments for financial statements and/or tax reporting.
20) The percentage/margin of error for the Trust is determined in accordance
with the Pricing Procedures as approved by the Board of Trustees of the
Trust, as amended from time to time. Fund/Plan has access to this
information as part of their responsibilities as Administrator under this
Agreement. Each individual NAV change is reviewed and the necessary
corrective actions are taken on a case by case basis. if Partner
reprocessing is required or actions needed to "make the Fund whole," it
would be expected that the party who contributed to the error, would
compensate the Trust as necessary. If Fund/Plan caused the error, then it
would be its responsibility to analyze the events, work with the Adviser to
ensure that proper controls and procedures were in place to prevent it from
occurring again, and compensate the Trust as appropriate.
SCHEDULE "B"
------------
MULTIPLE CLASS FEE SCHEDULE
FOR
THE XXXXXXX FUNDS
--------------------------------------------------------------------------------
FUND ACCOUNTING AND PORTFOLIO VALUATION SERVICES
------------------------------------------------
I. ANNUAL FEE SCHEDULE PER GLOBAL AND NON-US PORTFOLIO WITH MULTIPLE CLASSES
OF SHARES: (1/12th payable monthly)
Single Class Fees
-----------------
$45,000 On the First $10 Million of all Classes' Combined Average Net
Assets
.0004 On the Next $40 Million of all Classes' Combined Average Net Assets
.0003 On the Next $50 Million of all Classes' Combined Average Net Assets
.0001 On the Next $900 Million of all Classes' Combined Average Net Assets
.00005 Over $1 Billion of all Classes' Combined Average Net Assets
Fees with Multiple Classes
--------------------------
$15,000 Additional Per Class
II. ANNUAL FEE SCHEDULE PER DOMESTIC PORTFOLIO WITH MULTIPLE CLASSES OF SHARES:
(1/12th payable monthly)
Single Class Fees
-----------------
$30,000 On the First $10 Million of all Classes' Combined Average Net
Assets
.0004 On the Next $40 Million of all Classes' Combined Average Net Assets
.0003 On the Next $50 Million of all Classes' Combined Average Net Assets
.0001 On the Next $900 Million of all Classes' Combined Average Net Assets
.00005 Over $1 Billion of all Classes' Combined Average Net Assets
Fees with Multiple Classes
--------------------------
$10,000 Additional Per Class
III. PRICING SERVICE FEES: (Based on individual CUSIP/SEDOL or security
identification number) Specific costs will be identified based upon options
selected by the client and will be billed monthly.
A) XXXXXX DATA CORPORATION* (if applicable)
*Based on current vendor costs, subject to change
Government/Mortgage Backed/Corporate
Short and Long Term Quotes $ .50 per Quote per Issue
Tax-Exempt Short & Long Term Quotes $ .55 per Quote per Issue
CMOs/ARMs/ABS $1.00 per Quote per Issue
Foreign Security Quotes $ .50 per Quote per Issue
Foreign Security Supplemental
Corporation Actions, Dividends
& Capital Changes $2.00 per Issue per Month
Mortgage Backed Factors $1.00 per Issue per Month
MINIMUM WEEKLY FILE TRANSMISSION IS ASSUMED
SCHEDULE "B"
------------
Fund/Plan does not currently pass along charges for the domestic equity
security prices, dividend and capital change information transmitted daily
to Fund/Plan Services, Inc. from Xxxxxx Data Corporation.
B) FUTURES AND CURRENCY FORWARD CONTRACTS $2.00 per Issue per Day
C) TELERATE SYSTEMS, INC.* (if applicable)
*Based on current vendor costs, subject to change
Specific costs will be identified based upon options selected by the
client and will be billed monthly. Fund/Plan does not currently pass
along these charges to The Xxxxxxx Funds.
C) REUTERS, INC.*
*Based on current vendor costs, subject to change
Fund/Plan does not currently pass along the charges for the domestic
security prices supplied by Reuters, Inc.
D) INTERACTIVE DATA CORP.* (if applicable)
* Based on current vendor costs, subject to change.
Domestic Equities and Options $ .15 per Quote per Issue
Corporate/Government/Agency Bonds
including Mortgage-Backed
Securities (evaluated,
seasoned, and/or closing) $ .50 per Quote per Issue
US Municipal Bonds and Collateralized
Mortgage Obligations $ .80 per Quote per Issue
International Equities and Bonds $ .50 per Quote per Issue
Domestic Dividends and Capitalization
Changes $3.50 per Month per Holding
International Dividends and Capital
Changes $4.00 per Month per Holding
Interactive Data also charges monthly transmission costs and disk storage
charges.
F) XXXXX S&P*
*Based on current vendor costs, subject to change
High Yield Corporate Bonds $1.00 per Quote per Issue
($35/day minimum)
U.S. Municipal Bonds $ .50 per Quote per Issue
($25/day minimum)
Corporate/Government Bonds $ .25 per Quote per Issue
($35/day minimum)
CMO,ARM and ABS/Convertible $1.00 per Quote per Issue
Corporate Bonds ($35/day minimum)
Set up Fees $ .25 per Item
($1.00 if no CUSIP)
All Added Items $ .25 per Item
($1.00 if no CUSIP)
SCHEDULE "B"
------------
OUT-OF-POCKET EXPENSES
----------------------
The Trust will reimburse Fund/Plan Services, Inc. monthly for all reasonable
out-of-pocket expenses, including telephone, postage, telecommunications,
special reports, record retention, special transportation costs as incurred, and
unusual expenses incurred while establishing viable agreements between the Trust
and Fund/Plan Services, Inc. The cost of copying and sending materials to
auditors for audits will be an additional expense.
ADDITIONAL SERVICES
-------------------
To the extent the Trust commences using investment techniques such as Securities
Lending, Interest Rate Swaps, Leveraging, Short Sales, Precious Metals, or non-
US Dollar denominated Futures and Options on securities and currency, additional
fees may apply. Activities of a non-recurring nature such as consolidations,
mergers or reorganizations will be subject to negotiation. Any
additional/enhanced services or reports will be quoted upon request.
The Schedules will be amended as necessary to reflect the addition of other
services for additional portfolios or classes of the Trust.
IDENTIFICATION OF SERIES
------------------------
Below are listed the Series and Classes of Shares to which services under this
Agreement are to be performed as of the Effective Date of this Agreement:
SERIES
Global Fund
Global Equity Fund
Global Bond Fund
Short-Term Global Income Fund*
U.S. Balanced Fund
U.S. Equity Fund
U.S. Bond Fund
U.S. Cash Management Fund
Non-U.S. Equity Fund
Non-U.S. Bond Fund
CLASSES
Xxxxxxx Fund class
SwissKey Fund class
* Fee and procedures subject to change/review pending definitive structure of
Fund.
This Schedule "C" may be amended from time to time by agreement of the Parties.
