June 13, 1996
RCM Capital Funds, Inc.
RCM Equity Funds, Inc.
RCM Capital Management
Re: Fee Letter Agreement
Gentlemen:
This letter constitutes our agreement with respect to compensation to be paid to
Funds Distributor, Inc. ("FDI"), under the terms of an Agreement dated as of
June 13, 1996 by and among RCM Capital Management, a California limited
partnership ("RCM"), RCM Equity Funds, Inc. (the "Company"), RCM Capital Funds,
Inc. (the "Corporation") and FDI (the "Agreement"). All terms used herein shall
have the same meanings as set forth in the Agreement.
For the services provided by FDI under the Agreement, each of the Companies will
cause each of its Funds to pay a monthly fee (the "Fee") to FDI calculated as
follows:
[Qualifying Costs (as hereinafter defined)]
plus [Qualifying Expenses with respect to such Fund (as hereinafter
defined)]
plus [Excess Amount with respect to such Fund (as hereinafter defined)]
less [Qualifying Receipts with respect to such Fund (as hereinafter
defined)]
less [Qualifying Expense Advances with respect to such Fund (as hereinafter
defined)]
Within five business days following the end of each calendar month, RCM shall,
in accordance with the Procedures (as hereinafter defined), deliver to the
Corporation and the Company a statement setting forth its calculation of the
Fee for such preceding month with respect to each Fund. Within five business
days following receipt of RCM's statement and except as to any amount disputed
in good faith by the Company or the Corporation, each of the Companies shall pay
to FDI the Fee due for such preceding month with respect to each of its Funds.
FDI shall pay Qualifying Costs and Qualifying Expenses as and when they become
due. From time to time as and when requested by FDI, the Company and the
Corporation shall advance funds against Qualifying Expenses that FDI will need
to pay during the applicable calendar month ("Qualifying Expense Advances"),
provided FDI furnishes evidence satisfactory to the Company and the Corporation
that the Qualifying Expense Advance will be applied against such Qualifying
Expenses for that month. FDI shall not use monies received as a Qualifying
Expense Advance in a particular month with respect to a Fund for purposes other
than directly paying Qualifying Expenses of such Fund occurring during such
month. Unless otherwise agreed to in writing by the Company or the Corporation,
as the case may be, FDI shall immediately pay to the Company or the Corporation,
as the
case may be, the amount of any Qualifying Expense Advance that is not paid for
Qualifying Expenses within thirty days of receipt of such amount by FDI.
Neither the Company nor the Corporation shall be required to pay any Qualifying
Expense Advances to FDI during any such month with respect to a Fund to the
extent that Qualifying Receipts with respect to such Fund equal or exceed
Qualifying Expenses during such month with respect to such Fund.
If the sum of Qualifying Expense Advances and Qualifying Receipts for any
calendar month with respect to a Fund exceed the sum of Qualifying Costs,
Qualifying Expenses and the Excess Amount for such month with respect to such
Fund, FDI shall pay the Company or the Corporation, as the case may be, the
amount of such excess within fifteen business days after the end of such month,
unless otherwise agreed to in writing by the Company or the Corporation, as the
case may be.
In connection with FDI's services and duties required under this Fee Letter
Agreement and the Agreement, FDI, RCM and the Companies agree to comply with the
procedures set forth in Attachment 1 hereto (the "Procedures"). Attachment 1
may be amended from time to time by mutual agreement of FDI, RCM and the
Companies.
The allocation of each Fund's monthly share of the Excess Amount, Qualifying
Costs, Qualifying Expenses, Qualifying Expense Advances and Qualifying Receipts
shall be calculated by RCM based on information supplied by FDI (in accordance
with the Procedures) and shall be sent in an invoice to the Company and/or the
Corporation so that each Fund may pay its monthly fee to FDI.
For purposes this Fee Letter Agreement, the following terms shall have the
meaning indicated:
"EXCESS AMOUNT" means: (a) a monthly fee of $8,334 for the Corporation; plus (b)
the greater of a monthly fee of $6,250 or a fee calculated daily and paid
monthly at an annual rate equal of 0.02 of 1% of the combined average daily net
assets of the Company and the average daily net retail assets of the Corporation
(as used herein "retail assets" of the Corporation shall mean Shares of the
Funds offered by the Corporation that are held by investors that are not
institutional, high net worth, or other clients of RCM) up to $1 billion; plus
0.015 of 1% of the combined average daily net assets of the Company and the
average daily net retail assets of the Corporation in excess of $1 billion up to
$2.5 billion; plus 0.01 of 1% of the combined average daily net assets of the
Company and the average daily retail net assets of the Corporation in excess of
$2.5 billion up to $5 billion; plus 0.005 of 1% of the combined average daily
net assets of the Company and the average daily net retail assets of the
Corporation in excess of $5 billion. For any calendar month in which the
Agreement is not in effect for the full month, this amount shall be prorated.
The portion of the Excess Amount described under (a) above for each month shall
be allocated among the Corporation's Funds in proportion to the average daily
net assets of each Fund of the Corporation for such month. The portion of the
Excess Amount described under (b) above for each month shall be allocated among
the Funds in proportion to the average daily net assets of the Company and the
average daily net retail assets of the Corporation for such month.
"QUALIFYING COSTS" means any of those costs set forth on Attachment 2 hereto, to
the extent such costs were undertaken and billed in accordance with the
Procedures and to the extent such costs do not exceed the limits set forth in
the Procedures. Qualifying Costs reasonably attributable to the operations of a
Fund for a month shall be allocated to such Fund, and all other Qualifying Costs
shall be allocated among the Funds in proportion to the average daily net assets
of the Company and the average daily net retail assets of the Corporation for
such month. Attachment 2 may be amended from time to time by mutual agreement
of RCM, the Companies and FDI. The Companies and RCM acknowledge and agree that
the costs set forth in Attachment 2 are intended to represent FDI's reasonable
costs of providing the services and duties required of it under the Agreement,
and that to the extent such services and duties materially change from time to
time and/or to the extent such costs materially change, RCM, the Companies and
FDI shall in good faith negotiate written amendments to Attachment 2 that
reasonably reflect such circumstance.
"QUALIFYING EXPENSES" with respect to a Fund means any payment by FDI for sales,
marketing, telemarketing and fulfillment services and payments to a third party,
made or required to be made during the applicable calendar month, to the extent
such payment has been identified in writing by the Company or the Corporation,
as the case may be, in accordance with the Procedures as a Qualifying Expense
with respect to such Fund. FDI will only pay for Qualifying Expenses that have
been preapproved by RCM for reimbursement to the Company and/or the Corporation
in accordance with the Procedures.
"QUALIFYING RECEIPTS" with respect to a Fund means any payment during the
applicable calendar month by such Fund to FDI which has been identified in
writing by the Company or the Corporation, as the case may be, in accordance
with the Procedures as a Qualifying Receipt.
If the foregoing accurately sets forth our agreement and you intend to be
legally bound thereby, please execute a copy of this letter and return it to us.
Very truly yours,
FUNDS DISTRIBUTOR, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
Accepted By:
RCM CAPITAL MANAGEMENT
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Operating Officer
RCM CAPITAL FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
RCM EQUITY FUNDS, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Attachment 1
PROCEDURES
Funds Distributor, Inc. /RCM
Financial Procedures
I. SUMMARY
The following procedures identify the process agreed to by Funds
Distributor, Inc. (FDI) and the "Companies", as defined in the agreement
between FDI and RCM Capital Management, RCM Capital Funds, Inc., RCM Equity
Funds, Inc. for the presentment, approval and payment of all amounts due to
FDI for services as outlined in the Fee Letter Agreement.
II. MONTHLY INVOICE PROCESS
1.) FDI will provide to RCM an invoice detailing amounts due to FDI
in a form consistent with the attached example. This invoice
will be delivered to RCM via facsimile machine and mail on the
third business day after the end of the applicable month.
2.) RCM will review and deliver to the Corporation and the Company a
statement setting forth its calculation of the fee within 5
business days following the end of the month. The fee owed will
be calculated on a per fund basis.
3.) The Companies will remit to FDI within 5 days of receipt of RCM's
statement. Payments due by wire transfer to FDI:
Bank Name: Boston Safe Deposit and Trust
ABA No.: 000000000
Account No.: 162272
Attention: Funds Distributor, Inc. Attn: Xxxx Xxxxxxxx
RCM Distribution Fees
4.) RCM will repay the Companies within one business day after
delivery of satisfactory evidence of such obligations consistent
with paragraph 3(d) of the agreement between FDI, RCM and the
Companies.
III. QUALIFYING EXPENSES
Qualifying expenses as defined in the "Agreement" include Telemarketing,
Fulfillment, Marketing, Sales and Third Party Payments. Reimbursement for
these expenditures are based on a pre-approval process for a contract or
budget for certain types of expenditures as shown in the Qualified Expense
Approval Form.
1.) Determine the amount of required expenditure, contract or budget
for specific initiatives.
2.) Complete qualified expense approval form for planned
expenditures.
3.) Submit form to FDI/RCM for approval.
4.) As invoices/payment requests for approved expenditures are
received by FDI invoices will be paid and subsequently disclosed
to RCM through the invoicing process.
5.) In cases where a qualified expense advance is required, FDI will
follow step VI as shown in these procedures.
IV. QUALIFYING COSTS
1.) As FDI hires new San Francisco based employees to support RCM, a
budget must be done, or updated to show the anticipated total
costs for the employee (see Budget Qualified Cost Form).
2.) All budgets and budget updates must be reviewed and approved by
both FDI and RCM.
3.) Qualifying costs will be included in the monthly invoice process,
as described in step II of these procedures.
4.) As long as costs billed are conforming to the budgeted amounts,
payment to FDI cannot be reasonably withheld.
5.) Upon request, FDI will provide additional support for
miscellaneous expenses such as postage, supplies and other
administrative expenses not specifically budgeted for.
V. QUALIFYING RECEIPTS
1.) During the course of any month FDI may receive payments from the
Funds, RCM or a third party which are deemed as qualified
receipts. These payments will be used to offset expenditures
made by FDI in performance of the services described in the
agreement.
2.) Using the attached Qualifying Receipts Form, RCM must identify
the receipts by FDI as qualifying receipts to be used to pay for
services provided. Without this notification/approval from RCM,
FDI will not consider receipts as a qualifying receipts.
3.) Qualifying receipts will be used in the month received to pay for
services being rendered and will be shown as part of the monthly
invoice presented to RCM.
VI. QUALIFYING EXPENSE ADVANCES
1.) During the course of any month FDI may be required to pay certain
qualifying expenses to include marketing, sales, telemarketing,
fulfillment and third party payments. To the extent that
required qualifying expenses exceed qualifying receipts received
in the current month, FDI may request an advance payment to be
used to satisfy the qualified expense requirement.
2.) FDI will provide to RCM a detailed listing of the proposed
qualified expenses for which it is seeking an advance.
3.) FDI will adjust the qualified expense total for any qualified
receipts received in the current month.
4.) Qualified expense advances, if approved by RCM, will be provided
to FDI within two days of receipt of the request.
5.) FDI will process payments to the identified parties in the
qualified expense request within 24 hours of the receipt of cash
from the Companies. Payments to FDI as part of the qualified
expense advance should be sent to:
Bank Name: Boston Safe Deposit and Trust
ABA No.: 000000000
Account No.: 162272
Attention: Funds Distributor, Inc., Attn: Xxxx Xxxxxxxx
Qualified Expense Advance
VII. BOARD REPORTING
RCM will allocate to each fund its proportionate share of Qualifying Costs,
Qualifying Expenses, Excess Amount Qualifying Receipts and Qualifying Expense
Advances. RCM and FDI will report to the Board of the Company and the
Corporation on a quarterly basis` expenses paid by each fund and reimbursed by
RCM under the Fee Letter Agreement for their ratification.
INVOICE
RCM
Address
City, State, Zip
ATTENTION:
===============================================================
DESCRIPTION OF SERVICES RENDERED:
For services rendered to RCM as outlined and defined in the Fee Letter Agreement
dated: ___________ and the Distribution Agreement dated: ___________.
I. Excess Amount: (A) Monthly Fee Corporation $8,334
(B) Retail Asset Based Fee for the
Quarter of $6,250 or 6,250
The Calculated/Asset Based Fee _________
Total Excess Amount $14,584
II. Qualifying Costs:
[Detail]
Total Qualifying Costs _________
III. Qualifying Expenses:
Sales
Marketing
Telemarketing
Fulfillment
Third Party Payments
Total Qualifying Expenses _________
Total Gross Payments Required _________
Less Qualifying Receipts Received (________)
Qualifying Expense Advance Received (________)
Net Payment due to FDI (owed) to RCM $_________
If you have any questions regarding this invoice, please contact Xxxx Xxxxxxxx
at (000)000-0000.
FUNDS DISTRIBUTOR, INC./RCM
QUALIFYING EXPENSE FORM
For the period ending:
QUALIFYING EXPENSES
CATEGORIES
MARKETING: (Examples of expenditures)
- Materials
- Prospectus
- Image Work
- NASD Filing Fees
- Graphics & Design
Sub Total $__________
SALES:
- Promotions
- Sales Meetings
Sub Total $__________
TELEMARKETING:
- Vendor Contracts
- 1-800 Lines (where applicable)
- Client Specific Systems Enhancements
Sub Total $__________
FULFILLMENT EXPENSES:
- Postage
- Kit Assembly
Sub Total $__________
THIRD PARTY PAYMENTS:
- Shareholder Servicing Fees
- 12b-1 Fees
Sub Total $__________
Funds Distributor, Inc.
Prepared by: _________________________ Date: ______________
FUNDS DISTRIBUTOR, INC./RCM
QUALIFYING RECEIPTS APPROVAL
For The Period: ___________ Date:___________
Qualifying Receipts:
DATE RECEIVED $AMOUNTS RECEIVED SOURCE
________________________________ Date:__________
Funds Distributor, Inc.
Acknowledgment of Qualified Receipt
________________________________ Date:__________
RCM
Acknowledgment of Qualified Receipt
FUNDS DISTRIBUTOR, INC./RCM
QUALIFYING EXPENSE ADVANCE REQUEST
Date:___________
QUALIFYING EXPENSES: The amounts identified below represent expenditures FDI
will make on behalf of RCM/the Companies. Upon receipt of
advance, FDI will process these payments.
CATEGORIES
MARKETING:
[Detail]
Sub Total $__________
SALES:
[Detail]
Sub Total $__________
TELEMARKETING:
[Detail]
Sub Total $__________
FULFILLMENT EXPENSES:
[Detail]
Sub Total $__________
THIRD PARTY PAYMENTS:
[Detail]
Sub Total $__________
________________________________ Date:__________
Funds Distributor, Inc.
Acknowledgment of Qualified Expense Advance
________________________________ Date:__________
RCM
Acknowledgment of Qualified Expense Advance
FUNDS DISTRIBUTOR, INC./RCM
QUALIFYING COSTS BUDGET
CATEGORY OF COSTS $AMOUNTS
----------------- --------
Salary
Benefits
Incentives
Travel and Entertainment
Conferences
Training
Occupancy
Equipment
Telephone
Registered Representative Costs
Miscellaneous and Office Administration
Total Annual Cost $_____________
Approved By:
________________________________ Date:__________
Funds Distributor, Inc.
________________________________ Date:__________
RCM
FUNDS DISTRIBUTOR, INC./RCM
QUALIFYING EXPENSE APPROVAL
CATEGORY OF EXPENSE: (Please Check One) APPROVAL REQUIRED: (Please Check One)
------------------- -----------------
_ Marketing _ Budgeted
_ Sales _ Annual Contract
_ Telemarketing
_ Fulfillment
_ Third Party Payments
1.) Description of Expenditure
2.) Estimated/Actual Cost
3.) Time Period Covered
4.) Note attachments if any which further describes the
requirement (s): _ Yes _ No
________________________________ Date:__________
Submitted By
Approved By:
________________________________ Date:__________
Funds Distributor, Inc.
________________________________ Date:__________
RCM
1
SIGNATURE/OVERSIGHT PROCEDURES
EXECUTION OF NEW SELLING AGREEMENT PROCEDURES
The following procedures will apply to the execution of all new selling
agreements entered into between Funds Distributor, Inc. ("Funds Distributor")
and new selling agents as determined by Registered Representatives.
Prior to the execution of any selling agreement by an officer of Funds
Distributor, the following will occur:
- The Registered Representative will forward to Funds Distributor's
legal department a completed Selling Agent Request Form (copy attached
hereto) which contains a manually executed signature of the Registered
Representative along with accompanying due diligence information. The
execution of such Selling Agent request form will represent to Funds
Distributor's legal department that the Registered Representative has
undertaken sufficient measures to ensure that the proposed selling
agent meets all requirements established for selling Broker-Dealers by
applicable law, the Funds or Funds Distributor.
- Completed Selling Agent Request Form will be reviewed by Funds
Distributor's legal department for proper authorization and due
diligence.
- Any questions which arise during Funds Distributor's legal department
review will be directed to the Registered Representative.
- If in order, Agreement will be signed by an officer of Funds
Distributor and returned to the Registered Representative for the
selling agents execution.
*Contact Person:
Xxxx Xxxxxxxxx
Xxxxx Xxxxxxx-Xxxx
SELLING AGREEMENT REQUEST FORM
To:
------------------------------
From:
------------------------------
Tel. #: Fax #
---------------------- -----------------
Date:
------------------------------
Proposed Selling Agent name and address:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Type of Agreement (check one):
___ Bank Agreement
___ Bank Affiliated Broker-Dealer Agreement
___ Broker-Dealer Agreement
___ RIA Agreement
-----------------------------------
Authorized Registered Representative
FUNDS DISTRIBUTOR CONTACT PERSONS
Xxxx Xxxxxxxxx
Xxxxx Xxxxxxx-Xxxx
2
DRAFT
SIGNATURE/OVERSIGHT PROCEDURES
REGISTRATION STATEMENTS
Registration Statements, Pre-effective Amendments, and Post-effective Amendments
filed on Form N-1A will be prepared by the RCM Legal Department. After the
filing has been prepared and reviewed by the RCM Legal Department, the following
will occur:
- Registration Statements, accompanied by a completed signature request
form (see copy attached), will be forwarded to Funds Distributor* for
appropriate fund officer's signature.
- Completed signature request form will be reviewed for proper
authorization.
- Any questions which may arise during review will be directed to RCM
Legal Department.
- If not in order, documents will be returned to RCM Legal Department
with explanation.
- If in order, Registration Statement will be signed by fund officer and
returned to RCM Legal Department.
*Contact Person:
Xxxx Xxxxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx-Xxxx
LEGAL DEPARTMENT
SIGNATURE REQUEST FORM
To:
------------------------------
From:
------------------------------
Tel. #: Fax #
---------------------- -----------------
Date:
------------------------------
RIC/Fund Name:
------------------------------------
Document Title:
-----------------------------------
Purpose of
Document:
----------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Due Date:
-----------------------------
RCM Approval:
Signature: Date:
---------------------------------------- ----------
Name:
Title:
FDI Approval:
Signature: Date:
---------------------------------------- ----------
Fund Officer
RCM Authorized Signatories Funds Distributor Contact Persons
-------------------------- ---------------------------------
Xxxxxxx Xxx Xxxx Xxxxxxxxx
Xxxxxxx Xxxxxx Xxxx Xxxxxx
Xxxxx Xxxxxxx-Xxxx
2a
SIGNATURE/OVERSIGHT PROCEDURES
RESOLUTION OF FAILED TRADES
Representatives of Funds Distributor will review RCM's internal procedures
regarding the resolution of failed trades (Procedures to be attached). In
facilitating Funds Distributor's oversight role regarding the resolution of
failed trades, Funds Distributor also requests the following:
- RCM will provide to Funds Distributor a (Weekly/Monthly) aging report
detailing all outstanding/delinquent trades.
*Contact Person:
Xxxx Xxxxxx
Xxxx Xxxxxx
2b
SIGNATURE/OVERSIGHT PROCEDURES
SHAREHOLDER COMPLAINTS
Representatives of Funds Distributor, Inc. ("Funds Distributor") will review
RCM's internal procedures regarding shareholder complaints (Procedures to be
attached). In facilitating Funds Distributor's oversight role regarding
shareholder complaints, Funds Distributor requests the following:
- RCM will provide to Funds Distributor a (Weekly/Monthly) report
detailing the volume of shareholder complaints and a record of the
timely response to such complaints.
- In instances where Funds Distributor directly receives a shareholder
complaint, Funds Distributor will forward a copy of such complaint to
RCM's Correspondence Secretary.
- RCM will provide Funds Distributor with immediate notification of any
shareholder lawsuits.
*Contact Person:
Xxxx Xxxxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx-Xxxx
3
SIGNATURE/OVERSIGHT PROCEDURES
(CUSTODY AGREEMENTS, TRANSFER AGENCY AGREEMENTS,
REPURCHASE AGREEMENTS, ETC.)
The following procedures will apply to the execution by officers of the RCM
Capital Funds and the RCM Equity Funds of any agreements not otherwise covered
under separate specific approval procedures.
Prior to the execution of any agreement by a fund officer, the following will
occur:
- RCM will forward to the appropriate fund officer at Funds Distributor
a completed Signature Request Form (copy attached hereto) which
contains a manually executed signature of an authorized RCM
representative along with all applicable due diligence information.
The execution of such Signature Request Form will represent to Funds
Distributor and the appropriate fund officer that RCM has undertaken
sufficient measures to ensure that the fund's execution of the
agreement meets all requirements established for such agreements by
applicable law, the RCM Capital Funds, the RCM Equity Funds or Funds
Distributor.
- Completed signature request form will be reviewed by Funds Distributor
for proper authorization.
- Any questions which may arise during Funds Distributor's review will
be directed to RCM Legal Department.
- If not in order, filing will be returned to RCM Legal Department with
explanation.
- If in order, documents will be signed by the appropriate fund officer
and returned to RCM Legal Department.
*Contact Person:
Xxxx Xxxxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx-Xxxx
LEGAL DEPARTMENT
SIGNATURE REQUEST FORM
To:
------------------------------
From:
------------------------------
Tel. #: Fax #
---------------------- -----------------
Date:
------------------------------
RIC/Fund Name:
------------------------------------
Document Title:
-----------------------------------
Purpose of
Document:
----------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Due Date:
-----------------------------
RCM Approval:
Signature: Date:
---------------------------------------- ----------
Name:
Title:
FDI Approval:
Signature: Date:
---------------------------------------- ----------
Fund Officer
RCM Authorized Signatories FDI Contact Persons
-------------------------- -------------------
Xxxxxxx Xxx Xxxx Xxxxxxxxx
Xxxxxxx Xxxxxx Xxxx Xxxxxx
Xxxxx Xxxxxxx-Xxxx
4
SIGNATURE/OVERSIGHT PROCEDURES
RULE 24e(2)/24f(2) SHARE REGISTRATION
Documents pertaining to filing of fund share registration statements pursuant to
Rule 24e(2) or 24f(2) will be prepared by the fund accountant. The fund
accountant will provide FDI with certain financial information contained in such
filing. After the filing documents have been prepared and reviewed by RCM, the
following will occur:
- Filing documents, accompanied by a completed signature request form
(see copy attached), will be forwarded to appropriate fund officer for
signature*.
- Financial statements providing the basis for the financial information
contained in the filing documents will be provided in "blueprint" form
to Funds Distributor by the fund accountant.
- Documents will be reviewed by Funds Distributor utilizing the
financial statements.
- Completed signature request form will be reviewed by Funds Distributor
for proper authorization.
- Any questions which may arise during review will be directed to RCM or
the fund accountant as appropriate.
- If not in order, Funds Distributor will contact the appropriate
entities or persons with an explanation and, if necessary, documents
will be returned to RCM and/or the fund accountant, as appropriate,
with explanation.
- If in order, documents will be signed by fund officer and returned to
the RCM Legal Department by the request date specified in the
completed signature request form.
To the extent that Funds Distributor must provide an opinion letter to
which another Fund service provider is the source of knowledge, that
service provider must provide Funds Distributor with an opinion letter
supporting the data that it provides Funds Distributor.
*Contact Persons:
Xxxx Xxxxxx
Xxxx Xxxxxx
5
SIGNATURE/OVERSIGHT PROCEDURES
FORM N-SAR SEMI-ANNUAL REPORT
Semi-annual report on form N-SAR will be prepared for filing by the fund
accountant. The fund accountant will provide the RCM and Funds Distributor with
certain financial information required on Form N-SAR. After form has been
completed, the following will occur:
- Form N-SAR, accompanied by completed signature request form (see copy
attached), will be forwarded to Funds Distributor for fund officer
signature*.
- Form will be reviewed by Funds Distributor.
- Completed Signature Request form will be reviewed for proper
authorization.
- Any questions which may arise during review will be directed to RCM or
the fund accountants as appropriate.
- If not in order, Funds Distributor will contact the appropriate
entities or persons with an explanation and, if necessary, form will
be returned to RCM and/or the fund accountant, as appropriate, with
explanation.
- If in order, form will be signed by fund officer and returned to RCM
by the request date specified in the completed signature request form.
*Contact Person:
Xxxx Xxxxxx
Xxxx Xxxxxx
6
SIGNATURE/OVERSIGHT PROCEDURES
TAX RETURNS
All tax and information returns will be prepared and reviewed by the funds
auditor. When returns are completed and reviewed, the following will occur:
- Tax and information returns, signed by independent auditors and
accompanied by a completed signature request form (see copy attached),
will be forwarded to Funds Distributor for fund officer signature*.
- All returns will be reviewed by Funds Distributor.
- Completed signature request form will be reviewed for proper
authorization.
- Any questions which arise during review will be directed to the funds
auditor.
- In not in order, return will be returned to the funds auditor with
explanation.
- If in order, return will be signed by fund officer and returned to the
fund auditor.
*Contact Persons:
Xxxx Xxxxxx
Xxxx Xxxxxx
7
SIGNATURE/OVERSIGHT PROCEDURES
SEC EXAMINATION/INQUIRIES
When the Securities and Exchange Commission conducts a periodic examination of
the Funds or makes written inquiries for specific information, the following
will occur:
- RCM* will promptly inform Funds Distributor* of such examination or
written inquiry.
- RCM will inform Funds Distributor of the specific nature of the
information requested for examination or by inquiry.
Funds Distributor will be actively involved with any SEC examinations.
- RCM will submit to Funds Distributor the written response to SEC
written inquiries.
- RCM will forward to Funds Distributor and each fund officer a copy of
the comment letter received from the SEC upon completion of
examination.
- RCM will forward to Funds Distributor and each fund officer a copy of
the response to the comment letter.
*Contact Person:
Xxxx Xxxxxxxxx
Xxxx Xxxxxx
Xxxxx Xxxxxxx-Xxxx
8
SIGNATURE/OVERSIGHT PROCEDURES
AUDIT REPRESENTATION LETTER
The process of examining financial statements of the Funds by independent
auditors includes the receipt of a letter from the Funds in which various
representations are made. This letter will be prepared by the independent
auditors. Upon completion of this letter, the following will occur:
- Letter will be reviewed and signed by RCM authorized signatory.
- Letter will be sent to Funds Distributor for review and fund officer
signature*.
- Letter will be reviewed by Funds Distributor.
To the extent that Funds Distributor must provide an audit
representation letter to which another Fund service provider is the source
of knowledge (i.e. the fund auditor), that service provider must provide
Funds Distributor with an opinion letter supporting the audit
representation letter or any other data that it provides Funds Distributor.
- If not in order, letter will be returned to RCM or the fund auditor
with explanation.
- If in order, letter will be signed by fund officer and returned to
independent auditors.
*Contact Persons:
Xxxx Xxxxxx
Xxxx Xxxxxx
9
SIGNATURE/OVERSIGHT PROCEDURES
VALUATION OF MUTUAL FUND PORTFOLIO SECURITIES
In connection with the valuation of mutual fund portfolio securities, it is
sometimes necessary to convene a meeting of the Funds Portfolio Securities
Pricing Committee to place a value on a portfolio security for the purpose of
calculating NAV per share.
- A fund officer will be present at meeting, either in person or by
conference call.
- Meeting minutes or memo of Pricing Committee decisions will be sent to
Funds Distributor.
In addition, because of the complexities or large universe of various portfolio
securities (i.e., GNMA and Tax-Exempt Securities), an independent pricing
service is utilized to price such securities.
- Funds Distributor* will be informed by RCM of any change of
independent pricing service.
In connection with money market funds, it is necessary to monitor any deviation
of a fund's net asset value per share calculated using market values from the
fund's net asset value per share calculated using amortized cost prices.
- RCM or the fund accountant will send Funds Distributor*, on a daily
basis, a schedule which indicates each money market fund's net asset
value per share calculated at amortized cost and market value.
- RCM or the fund accountant will send Funds Distributor*, on a monthly
basis, a schedule for each fund, indicating the fund's total net
assets, dividend per share and net asset value per share calculated at
amortized cost and market value.
- RCM will notify Funds Distributor* when RCM intends to apprise a
fund's Board of Directors of information concerning the fund's net
asset value per share.
*Contact Persons:
Xxxx Xxxxxx
Xxxx Xxxxxx
10
SIGNATURE/OVERSIGHT PROCEDURES
CHANGE IN NET ASSET VALUE PER SHARE
If a fund's net asset value per share changes after the day of calculation and
shareholder account processing, the following will occur:
- RCM or the fund accountant will send Funds Distributor* a schedule
which will indicate the fund and change in net asset value per
share.
- RCM or the fund accountant will document the change in net asset
value per share and forward to Funds Distributor* accompanied by
completed signature request form (see copy attached).
*Contact Persons:
Xxxx Xxxxxx
Xxxx Xxxxxx
CHANGE IN NET ASSET VALUE PER SHARE
SIGNATURE REQUEST FORM
To:
------------------------------
From:
------------------------------
Tel. #: Fax #
---------------------- -----------------
Date:
------------------------------
RIC/Fund Name:
------------------------------------
Document Title:
-----------------------------------
Purpose of
Document:
----------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Due Date:
-----------------------------
RCM Approval:
Signature: Date:
---------------------------------------- ----------
Name:
Title:
FDI Approval:
Signature: Date:
---------------------------------------- ----------
Fund Officer
RCM Authorized Signatories FDI Contact Persons
-------------------------- -------------------
Xxxx Xxxxxxxxx Xxxx Xxxxxx
Xxxx Xxxxxx
11
SIGNATURE/OVERSIGHT PROCEDURES
RECLAIM OF TAXES WITHHELD FROM
DIVIDENDS ON FOREIGN SECURITIES
Forms necessary to reclaim taxes withheld from dividends paid on foreign
securities are coordinated by the funds auditor. When these forms require the
signature of a fund officer, the following will occur:
- Completed forms, accompanied by completed signature request form (see
copy attached), will be forwarded to Funds Distributor for fund
officer signature*.
- Form will be reviewed by Funds Distributor.
- Completed signature request form will be reviewed by Funds Distributor
for proper authorization.
- Any questions which arise during review will be directed to the funds
auditor.
- If not in order, form will be returned to the funds auditor with
explanation.
- If in order, form will be signed by fund officer and returned to the
funds auditor.
*Contact Persons:
Xxxx Xxxxxx
Xxxx Xxxxxx
12
PROCEDURES FOR AUTHORIZATION
AND PAYMENT OF FUND EXPENSES
These procedures are intended to ensure that all Fund expenses are properly
authorized and evidenced by two authorizing signatures. In addition, they
provide for a regular review of accrued expenses on the books of the Fund. This
review is intended to monitor actual bills received and paid as well as
anticipated future bills and compare them to the accrued balances on the books.
Accrued expenses shall be monitored to ensure that the daily NAV is accurate.
AUTHORIZATION AND PAYMENT
All bills for fund expenses should be first approved by Xxxx Xxxxxxxxx at RCM
Capital Management ("RCM"). Any bills received by the Funds will be forwarded
to RCM for the initial authorizing signature.
After reviewing the bill and providing the first approval signature, RCM will
forward the bill to FDI for approval by the Fund's Treasurer or his designee.
After providing the second authorizing signature, FDI will forward the bill to
RCM for payment. A copy of the bill should be delivered to the fund accountant
to record properly in the expenses of the Fund.
EXPENSE REVIEW AND PRO FORMA
Each month RCM or the fund accountant will prepare a schedule for each fund that
shows bills actually paid, adds all anticipated bills and compares this number
to the actual and anticipated accruals for fund expenses as shown on the books
of the Fund. This analysis will be forwarded to FDI as Treasurer of the Fund so
that the adequacy of the accruals are timely reviewed and adjusted, if
necessary.
*Contact Person:
Xxxx Xxxxxx
Xxxx Xxxxxx
ATTACHMENT 2
STAFFING RELATED COSTS:
None as of __________, 1996
OVERHEAD COSTS:
None as of __________, 1996
