FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of
September, 2000, by and between The Xxxxxxxx Mutual Funds, Inc., a Maryland
business company (the "Company") and Firstar Mutual Fund Services, LLC, a
Wisconsin limited liability company ("FMFS").
WHEREAS, the Company is a registered investment company under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company is authorized to create separate series, each
with its own separate investment portfolio;
WHEREAS, FMFS is in the business of providing, among other things,
mutual fund administration services to investment companies; and
WHEREAS, the Company desires to retain FMFS to provide mutual fund
administration services to each of the portfolios of the Company, (each a
"Fund") and each additional series of the Company listed on Exhibit A attached
hereto, as Exhibit A may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Company and FMFS agree as follows:
1. Appointment of Administrator
The Company hereby appoints FMFS as Administrator of the Company on
the terms and conditions set forth in this Agreement, and FMFS hereby
accepts such appointment and agrees to perform the services and duties
set forth in this Agreement in consideration of the compensation
provided for herein.
2. Duties and Responsibilities of FMFS
A. General Fund Management
1. Act as liaison among all Fund service providers
2. Supply:
a. Corporate secretarial services
b. Office facilities (which may be in FMFS's or its
affiliate's own offices)
c. Non-investment-related statistical and research
data as needed
3. Coordinate board communication:
a. Establish meeting agendas
b. Prepare board reports based on financial and
administrative data
c. Evaluate independent auditors
d. Secure and monitor fidelity bond and director and
officer liability coverage, and make the necessary
Securities and Exchange Commission ("SEC") filings
relating thereto
e. Prepare minutes of meetings of the board and
shareholders
f. Recommend dividend declarations to the Board,
prepare and distribute to appropriate parties
notices announcing declaration of dividends and
other distributions to shareholders
g. Provide personnel to serve as officers of the
Company if so elected by the Board and attend
Board meetings to present materials for Board
review
4. Audits
a. Prepare appropriate schedules and assist
independent auditors
b. Provide information to the SEC and facilitate
audit process
c. Provide office facilities
5. Assist in overall operations of the Fund
6. Pay Fund expenses upon written authorization from the
Company
7. Monitor arrangements under shareholder services or
similar plan
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements,
including:
1) Asset diversification tests
2) Total return and SEC yield calculations
3) Maintenance of books and records under Rule
31a-3
4) Code of Ethics for the disinterested Directors
of the Fund
b. Monitor Fund's compliance with the policies and
investment limitations of the Company as set forth
in its Prospectus and Statement of Additional
Information
c. Maintain awareness of applicable regulatory and
operational service issues and recommend
dispositions
2. Blue Sky Compliance
a. Prepare and file with the appropriate state
securities authorities any and all required
compliance filings relating to the registration of
the securities of the Company so as to enable the
Company to make a continuous offering of its
shares in all states
b. Monitor status and maintain registrations in each
state
c. Provide information regarding material
developments in state securities regulation
3. SEC Registration and Reporting
a. Assist Company counsel in updating Prospectus and
Statement of Additional Information and in
preparing proxy statements and Rule 24f-2 notices
b. Prepare annual and semiannual reports, Form N-SAR
filings and Rule 24f-2 notices
c. Coordinate the printing, filing and mailing of
publicly disseminated Prospectuses and reports
d. File fidelity bond under Rule 17g-1
e. File shareholder reports under Rule 30b2-1
f. Monitor sales of each Fund's shares and ensure
that such shares are properly registered with the
SEC and the appropriate state authorities
g. File Rule 24f-2 notices
4. IRS Compliance
a. Monitor Company's status as a regulated investment
company under Subchapter M, including without
limitation, review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Calculate required distributions (including excise
tax distributions)
C. Financial Reporting
1. Provide financial data required by the Fund's
Prospectus and Statement of Additional Information
2. Prepare financial reports for officers, shareholders,
tax authorities, performance reporting companies, the
board, the SEC, and independent auditors
3. Supervise the Company's custodian and accountants in
the maintenance of the Company's general ledger and in
the preparation of the Fund's financial statements,
including oversight of expense accruals and payments,
of the determination of net asset value of the
Company's net assets and of the Company's shares, and
of the declaration and payment of dividends and other
distributions to shareholders
4. Compute the yield, total return and expense ratio of
each class of each Portfolio, and each Portfolio's
portfolio turnover rate
5. Monitor the expense accruals and notify Company
management of any proposed adjustments
6. Prepare monthly financial statements, which will
include without limitation the following items:
a. Schedule of Investments
b. Statement of Assets and Liabilities
c. Statement of Operations
d. Statement of Changes in Net Assets
e. Cash Statement
f. Schedule of Capital Gains and Losses
7. Prepare quarterly broker security transaction summaries
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal
and state tax returns including, without limitation,
Forms 1120/8610 with any necessary schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to directors
and other service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate
shareholders
3. Compensation
EMFS shall be compensated for providing the services set forth in this
Agreement in accordance with the Fee Schedule attached hereto as
Exhibit A and as mutually agreed upon and amended from time to time.
The Company agrees to pay all fees and reimbursable expenses within
ten (10) business days following the receipt of the billing notice.
4. Performance of Service; Limitation of Liability
A. FMFS shall exercise reasonable care in the performance of
its duties under this Agreement. FMFS shall not be liable
for any error of judgment or mistake of law or for any loss
suffered by the Company in connection with matters to which
this Agreement relates, including losses resulting from
mechanical breakdowns or the failure of communication or
power supplies beyond FMFS's control, except a loss arising
out of or relating to FMFS's refusal or failure to comply
with the terms of this Agreement or from bad faith,
negligence, or willful misconduct on its part in the
performance of its duties under this Agreement.
Notwithstanding any other provision of this Agreement, if
FMFS has exercised reasonable care in the performance of its
duties under this Agreement, the Company shall indemnify and
hold harmless FMFS from and against any and all claims,
demands, losses, expenses, and liabilities (whether with or
without basis in fact or law) of any and every nature
(including reasonable attorneys' fees) which FMFS may
sustain or incur or which may be asserted against FMFS by
any person arising out of any action taken or omitted to be
taken by it in performing the services hereunder, except for
any and all claims, demands, losses, expenses, and
liabilities arising out of or relating to FMFS's refusal or
failure to comply with the terms of this Agreement or from
bad faith, negligence or from willful misconduct on its part
in performance of its duties under this Agreement, (i) in
accordance with the foregoing standards, or (ii) in reliance
upon any written or oral instruction provided to FMFS by any
duly authorized officer of the Company, such duly authorized
officer to be included in a list of authorized officers
furnished to FMFS and as amended from time to time in
writing by resolution of the Board of Directors of the
Company.
FMFS shall indemnify and hold the Company harmless from and
against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any
and every nature (including reasonable attorneys' fees) which the
Company may sustain or incur or which may be asserted against the
Company by any person arising out of any action taken or omitted
to be taken by FMFS as a result of FMFS's refusal or failure to
comply with the terms of this Agreement, its bad faith,
negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, FMFS shall
take all reasonable steps to minimize service interruptions for
any period that such interruption continues beyond FMFS's
control. FMFS will make every reasonable effort to restore any
lost or damaged data and correct any errors resulting from such a
breakdown at the expense of FMFS. FMFS agrees that it shall, at
all times, have reasonable contingency plans with appropriate
parties, making reasonable provision for emergency use of
electrical data processing equipment to the extent appropriate
equipment is available. Representatives of the Company shall be
entitled to inspect FMFS's premises and operating capabilities at
any time during regular business hours of FMFS, upon reasonable
notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in
this section shall apply, it is understood that if in any
case the indemnitor may be asked to indemnify or hold the
indemnitee harmless, the indemnitor shall be fully and
promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the
indemnitee will use all reasonable care to notify the
indemnitor promptly concerning any situation which presents
or appears likely to present the probability of a claim for
indemnification. The indemnitor shall have the option to
defend the indemnitee against any claim which may be the
subject of this indemnification. In the event that the
indemnitor so elects, it will so notify the indemnitee and
thereupon the indemnitor shall take over complete defense of
the claim, and the indemnitee shall in such situation
initiate no further legal or other expenses for which it
shall seek indemnification under this section. The
indemnitee shall in no case confess any claim or make any
compromise in any case in which the indemnitor will be asked
to indemnify the indemnitee except with the indemnitor's
prior written consent.
5. Proprietary and Confidential Information
FMFS agrees on behalf of itself and its directors, officers, and
employees to treat confidentially and as proprietary information of
the Company all records and other information relative to the Company
and prior, present, or potential shareholders of the Company (and
clients of said shareholders), and not to use such records and
information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification
to and approval in writing by the Company, which approval shall not be
unreasonably withheld and may not be withheld where FMFS may be
exposed to civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company.
6. Term of Agreement
This Agreement shall become effective as of the date hereof and,
unless sooner terminated as provided herein, shall continue subject to
Board approval in effect for successive annual periods. The Agreement
may be terminated by either party upon giving ninety (90) days prior
written notice to the other party or such shorter period as is
mutually agreed upon by the parties. However, this Agreement may be
amended by mutual written consent of the parties.
7. Records
FMFS shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to the Company but not inconsistent with
the rules and regulations of appropriate government authorities, in
particular, Section 31 of the 1940 Act and the rules thereunder. FMFS
agrees that all such records prepared or maintained by FMFS relating
to the services to be performed by FMFS hereunder are the property of
the Company and will be preserved, maintained, and made available in
accordance with such section and rules of the 1940 Act and will be
promptly surrendered to the Company on and in accordance with its
request.
8. Governing Law
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of
Wisconsin. However, nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation promulgated
by the SEC thereunder.
9. Duties in the Event of Termination
In the event that, in connection with termination, a successor to any
of FMFS's duties or responsibilities hereunder is designated by the
Company by written notice to FMFS, FMFS will promptly, upon such
termination and at the expense of the Company, transfer to such
successor all relevant books, records, correspondence, and other data
established or maintained by FMFS under this Agreement in a form
reasonably acceptable to the Company (if such form differs from the
form in which FMFS has maintained, the Company shall pay any expenses
associated with transferring the data to such form), and will
cooperate in the transfer of such duties and responsibilities,
including provision for assistance from FMFS's personnel in the
establishment of books, records, and other data by such successor.
10. No Agency Relationship
Nothing herein contained shall be deemed to authorize or empower FMFS
to act as agent for the other party to this Agreement, or to conduct
business in the name, or for the account, of the other party to this
Agreement.
11. Data Necessary to Perform Services
The Company or its agent, which may be FMFS, shall furnish to FMFS the
data necessary to perform the services described herein at times and
in such form as mutually agreed upon. If FMFS is also acting in
another capacity for the Company, nothing herein shall be deemed to
relieve FMFS of any of its obligations in such capacity.
12. Notices
Notices of any kind to be given by either party to the other party
shall be in writing and shall be duly given if mailed or delivered as
follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Company shall be sent to:
The Xxxxxxxx Mutual Funds, Inc.
The Courtyard Square
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
THE XXXXXXXX MUTUAL FUNDS, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
By: By:
---------------------------- -------------------------------
Title: Title:
------------------------- ----------------------------
Exhibit A
to the
Fund Administration Servicing Agreement
by and between
The Xxxxxxxx Mutual Funds, Inc.
and
Firstar Mutual Fund Services, LLC
Annual Fee Schedule
Name of Fund Date Added
------------ ----------
Xxxxxxxx Cornerstone Growth Fund September 1, 2000
Xxxxxxxx Cornerstone Value Fund September 1, 2000
Annual fee per fund:
8 basis points on the first $200 million of fund assets 7 basis points
on the next $500 million of fund assets 5 basis points on the balance
Subject to a minimum annual fee of $30,000 per fund.
Extraordinary services quoted separately.
Plus out-of-pocket expense reimbursements, including but not limited to:
Postage
Programming
Stationery
Proxies
Retention of records
Special reports
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of directors meetings
Auditing and legal expenses
Fees and out-of-pocket expense reimbursements are billed to the Company monthly.
