Exhibit to Form N-1A
Exhibit (9)(c)(ii) Amendment to Accounting Services Agreement
AMENDMENT TO ACCOUNTING SERVICES AGREEMENT
This AGREEMENT, dated as of the ________ day of August, 1995 made by
and between The Xxxxxxx Funds, a Delaware business trust (the "Trust") and
Fund/Plan Services, Inc. ("Fund/Plan"), a corporation duly organized and
existing under the laws of the State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust and Fund/Plan have entered into an agreement dated
April 25, 1995, wherein Fund/Plan has agreed to serve as accounting services
agent to maintain and keep current the accounts and records of the Trust and to
perform certain other functions in connection with such accounts and records
("Accounting Services Agreement"); and
WHEREAS, the Parties wish to amend the Accounting Services Agreement
to reflect the creation of a multiple class structure for each Series of the
Trust;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the Parties hereto, intending to be legally bound, do hereby
agree:
1. To amend Schedules "B" and "C" to the Accounting Services
Agreement in the form attached hereto as Schedules "B" and "C".
2. This Amendment's Effective Date shall be July 31, 1995.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
consisting of one type written page, together with Schedules "B" and "C", to be
signed by their duly authorized officers and their corporate seals hereunto duly
affixed as of the day and year first above written.
The Xxxxxxx Funds Fund/Plan Services, Inc.
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By: By:
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E. Xxxxxx XxXxxxxx, President Xxxxxxx X. Xxxxx, President
SCHEDULE "B"
MULTIPLE CLASS FEE SCHEDULE
FOR
THE XXXXXXX FUNDS
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FUND ACCOUNTING AND PORTFOLIO VALUATION SERVICES
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I. ANNUAL FEE SCHEDULE PER GLOBAL AND NON-US PORTFOLIO WITH MULTIPLE CLASSES
OF SHARES: (1/12th payable monthly)
Present 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)
Present 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
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 $ .50 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)
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
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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.
SCHEDULE "C"
ACCOUNTING SERVICES UNIT BASIC ASSUMPTIONS FOR
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THE XXXXXXX FUNDS
BASIC ASSUMPTIONS:
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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, and 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.
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 payable/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 11:30 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 AM Eastern time on
trade date plus one for non-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 yield, 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 annualization 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.
SCHEDULE "C"
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.
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 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 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
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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
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,
64B, 71, 72, 73, 74, 75, 76
