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EXHIBIT (9)(a)
ADMINISTRATION AGREEMENT
THIS AGREEMENT is made as of the 1st day of March, 1996, by and between
FMB Funds, Inc., a Maryland corporation (the "Company"), and SEI Financial
Management Corporation (the "Administrator"), a Delaware corporation.
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), whose shares are registered under the Securities Act of 1933, as amended
(the "1933 Act"); and
WHEREAS, the Company desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such portfolios of the Company (each, a "Portfolio" and, together, the
"Portfolios") as the Company and the Administrator may agree on and as listed on
Schedule A attached hereto and made a part of this Agreement, on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company and the Administrator hereby agree as
follows:
ARTICLE 1. Retention of the Administrator. The Company hereby retains
the Administrator to act as the administrator of the Portfolios and to furnish
the Portfolios with the management and administrative services as set forth in
Article 2 below. The Administrator hereby accepts such employment to perform the
duties set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Company in any way and shall
not be deemed an agent of the Company.
ARTICLE 2. Administrative and Accounting Services. The Administrator
shall perform or supervise the performance by others of administrative services
in connection with the operations of the Portfolios, and, on behalf of the
Company, will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, legal counsel, underwriters, brokers and
dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Portfolios' operations. The
Administrator shall provide the Board of Directors of the Company (the
"Directors") with such reports regarding investment performance and compliance
with investment policies and applicable laws, rules and regulations as they may
reasonably request but shall have no responsibility for supervising the
performance by any investment adviser or sub-adviser of its responsibilities.
The Administrator may appoint a sub-
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administrator to perform certain of the services to be performed by the
Administrator hereunder, subject to the prior written consent of the Company.
The Administrator shall provide the Company with administrative
services, regulatory reporting, fund accounting and related portfolio accounting
services, all necessary office space, equipment, personnel, compensation and
facilities (including facilities for shareholders' and Directors' meetings) for
handling the affairs of the Portfolios and such other services as the Directors
may, from time to time, reasonably request and the Administrator shall, from
time to time, reasonably determine to be necessary to perform its obligations
under this Agreement. In addition, at the request of the Directors, the
Administrator shall make reports to the Directors concerning the performance of
its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator shall:
(A) calculate contractual Company expenses and control all
disbursements for the Company, and, as appropriate, compute the
Company's yields, total return, expense ratios, portfolio turnover
rate and, if required, portfolio average dollar-weighed maturity;
(B) assist Company counsel with the preparation of prospectuses,
statements of additional information, registration statements, and
proxy materials;
(C) prepare such reports, applications and documents (including
reports regarding the sale and redemption of shares as may be
required in order to comply with Federal and state securities law)
as may be necessary or desirable to register the Company's shares
with state securities authorities, monitor sale of Company shares
for compliance with state securities laws and file with the
appropriate state securities authorities the registration
statements and reports for the Company and the Company's shares
and all amendments thereto as may be necessary or convenient to
register and keep effective the Company and the Company's shares
with state securities authorities to enable the Company to make a
continuous offering of its shares;
(D) develop and prepare communications to shareholders, including
the annual report to shareholders, coordinate mailing
prospectuses, notices, proxy statements, proxies and other reports
to Company shareholders, and supervise and facilitate the
solicitation of proxies solicited by the Company for all
shareholder meetings, including the tabulation process for
shareholder meetings;
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(E) coordinate with Company counsel the preparation and
negotiation of, and administer, contracts on behalf of the Company
with, among others, the Company's investment adviser, distributor,
custodian, and transfer agent;
(F) maintain the Company's general ledger and prepare the
Company's financial statements, including expense accruals and
payments, determine the net asset value of the Company's assets
and of the Company's shares, and supervise the Company's transfer
agent with respect to the payment of dividends and other
distributions to shareholders;
(G) calculate performance data of the Company and its portfolios
for dissemination to information services covering the investment
company industry;
(H) coordinate and supervise the preparation and filing of the
Company's tax returns;
(I) examine and review the operations and performance of the
various organizations providing services to the Company or any
Portfolio, including, without limitation, the Company's investment
adviser, distributor, custodian, transfer agent, outside legal
counsel and independent public accountants, and at the request of
the Directors, report to the Directors on the performance of such
persons;
(J) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate the layout and
printing of the Company's semi-annual and annual reports to
shareholders;
(K) provide internal legal and administrative services as
requested by the Company from time to time;
(L) assist with the design, development, and operation of the
Company, including new portfolio and class investment objectives,
policies and structure;
(M) provide individuals acceptable to the Directors for
nomination, appointment, or election as officers of the Company,
who will be responsible for the management of certain of the
Company's affairs as determined by the Directors;
(N) advise the Company and its Directors on matters concerning the
Company and its affairs;
(O) obtain and keep in effect fidelity bonds and Directors and
officers errors and omissions insurance policies for the Company
in accordance with the requirements
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of Rules 17g-1 and 17d-1(d)(7) under the 1940 Act, as such bonds
and policies are approved by the Company's Board of Directors;
(P) monitor and advise the Company and its Portfolios on their
regulated investment company status under the Internal Revenue
Code of 1986, as amended;
(Q) perform all administrative services and functions of the
Company and each Portfolio to the extent administrative services
and functions are not provided to the Company or such Portfolio
pursuant to the Company's or such Portfolio's investment advisory
agreement, distribution agreement, custodian agreement and
transfer agent agreement;
(R) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Company and the Administrator shall determine desirable;
(S) prepare and file with the SEC the semi-annual report for the
Company on Form N-SAR and all required notices pursuant to Rule
24f-2;
(T) prepare and distribute materials for all Directors' meetings,
including the mailing of all materials to be reviewed by the
Directors, except that Company counsel shall record the minutes of
any meeting of the Directors and provide the Administrator,
promptly upon request of the Administrator, with a copy of such
minutes for inclusion in any Board materials; and
(U) assist, including routine compliance testing, the Company and
any investment adviser retained by the Company (the "Investment
Adviser") in complying with the requirements of (i) any federal or
state law or reguation applicable to the Company or the Investment
Adviser, including, but not limited to, the 1940 Act and the
Investment Advisers Act of 1940, and (ii) the Company's current
Prospectus and Statement of Additional Information; provided
however that such compliance shall be the obligation of the
Company or the Investment Adviser, as the case may be.
Also, the Administrator will perform such other services for the Company as
agreed from time to time, including, but not limited to performing internal
audit examinations; mailing the annual reports of the Portfolios; preparing an
annual list of shareholders; and mailing notices of shareholders' meetings,
proxies and proxy statements, for all of which the Company will pay the
Administrator's out-of-pocket expenses.
ARTICLE 3. Allocation of Charges and Expenses.
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(A) The Administrator. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Company as well as all Directors of the
Company who are affiliated persons of the Administrator or any affiliated
corporation of the Administrator; provided, however, that unless otherwise
specifically provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Company retained by the Directors of the
Company to perform services on behalf of the Company.
(B) The Company. The Company assumes and shall pay or cause to be paid
all other expenses of the Company not otherwise allocated herein, including,
without limitation, organizational costs, taxes, expenses for legal and auditing
services, the expenses of preparing (including typesetting), printing and
mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the shares under
Federal and state securities laws, fees and out-of-pocket expenses of Directors
who are not affiliated persons of the Administrator or the investment adviser to
the Company or any affiliated person of the Administrator or any investment
adviser of the Company, the costs of Directors' meetings, insurance, interest,
brokerage costs, litigation and other extraordinary or nonrecurring expenses,
and all fees and charges of investment advisers to the Company.
ARTICLE 4. Compensation of the Administrator.
(A) Administration Fee. For the services to be rendered, the facilities
furnished and the expenses assumed by the Administrator pursuant to this
Agreement, the Company shall pay to the Administrator compensation at an annual
rate specified in Schedule A. Such compensation shall be calculated and accrued
daily, and paid to the Administrator monthly.
If this Agreement becomes effective subsequent to the first day of a
month or terminates before the last day of a month, the Administrator's
compensation for that part of the month in which this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees as set
forth above. Payment of the Administrator's compensation for the preceding month
shall be made promptly.
(B) Compensation from Transactions. The Company hereby authorizes any
entity or person associated with the Administrator which is a member of a
national securities exchange to effect any transaction on the exchange for the
account of the Company which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 (the "1934 Act") and Rule 11a2-2(T)
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thereunder, and the Company hereby consents to the retention of compensation for
such transactions in accordance with Rule 11a2-2(T) (a) (2) (iv).
(C) Survival of Compensation Rates. All rights of compensation under
this Agreement for services performed prior to its date of termination shall
survive the termination of this Agreement.
ARTICLE 5. Limitation of Liability of the Administrator. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or gross negligence in the performance of its
duties, or by reason of reckless disregard of its obligations and duties
hereunder, except as may otherwise be provided under provisions of applicable
law which cannot be waived or modified hereby. (As used in this Article 5, the
term "Administrator" shall include Directors, officers, employees and other
agents of the Administrator as well as that corporation itself.)
So long as the Administrator, or its agents, acts in good faith and
with due diligence and without gross negligence, the Company assumes full
responsibility and shall indemnify the Administrator and hold it harmless from
and against any and all actions, suits and claims, whether groundless or
otherwise, and from and against any and all losses, damages, costs, charges,
reasonable counsel fees and disbursements, payments, expenses and liabilities
(including reasonable investigation expenses) arising directly or indirectly out
of said administration, relationship to the Company or any other service
rendered to the Company hereunder. The indemnity and defense provisions set
forth herein shall indefinitely survive the termination of this Agreement.
The rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Company may be asked to indemnify or hold the
Administrator harmless, the Company shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Company promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Company, but failure to do so in good faith shall not affect the rights
hereunder.
The Company shall be entitled to participate at its own expense or, if
it so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the
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Company elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by the Company and satisfactory to the
Administrator, whose approval shall not be unreasonably withheld. In the event
that the Company elects to assume the defense of any suit and retain counsel,
the Administrator shall bear the fees and expenses of any additional counsel
retained by it. If the Company does not elect to assume the defense of a suit,
it will reimburse the Administrator for the reasonable fees and expenses of any
counsel retained by the Administrator.
The Administrator may apply to the Company at any time for instructions
and may consult counsel for the Company or its own counsel and with accountants
and other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any action taken or omitted by it in good faith in accordance with such
instruction or with the opinion of such counsel, accountants or other experts.
The Administrator shall be protected in acting upon any document which
it reasonably believes to be genuine and to have been signed or presented by the
proper person or persons. Nor shall the Administrator be held to have notice of
any change of authority of any officers, employee or agent of the Company until
receipt of written notice thereof from the Company.
ARTICLE 6. Activities of the Administrator. The services of the
Administrator rendered to the Company are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. It is understood that Directors, officers, employees
and shareholders of the Company are or may be or become interested in the
Administrator as Directors, officers, employees and shareholders or otherwise
and that Directors, officers, employees and shareholders of the Administrator
and its counsel are or may be or become similarly interested in the Company, and
that the Administrator may be or become interested in the Company as a
shareholder or otherwise.
ARTICLE 7. Confidentiality. The Administrator agrees on behalf of
itself and its employees to treat confidentially all records and other
information related to the Company and its prior, present or potential
shareholders and related to any investment adviser and its prior, present or
potential customers, 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 the Administrator 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.
ARTICLE 8. Equipment Failures. In the event of equipment failures
beyond the Administrator's control, the Administrator shall, at no additional
expense to the Company, take reasonable steps to minimize service interruptions
but shall have no liability with respect thereto. The Administrator shall
develop and maintain a plan for recovery from equipment failures which
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may include contractual arrangements with appropriate parties making reasonable
provision for emergency use of electronic data processing equipment to the
extent appropriate equipment is available.
ARTICLE 9. Compliance With Governmental Rules and Regulations. The
Administrator undertakes to comply with all applicable requirements of the 1933
Act, the 1934 Act, the 1940 Act and any laws, rules and regulations of
governmental authorities having jurisdiction with respect to the duties to be
performed by the Administrator hereunder.
ARTICLE 10. Duration and Termination of this Agreement. This Agreement
shall become effective on the date set forth in Schedule A and shall remain in
effect for the initial term of the Agreement (the "Initial Term") and each
renewal term thereof (each, a "Renewal Term"), each as set forth in Schedule A
unless terminated in accordance with the provisions of this Article 10. This
Agreement may be terminated only: (a) by the mutual written agreement of the
parties; (b) by either party hereto on 90 days' written notice, as of the end of
the Initial Term or the end of any Renewal Term; (c) by either party hereto on
such date as is specified in written notice given by the terminating party in
the event of a material breach of this Agreement by the other party, provided
the terminating party has notified the other party of such breach at least 45
days prior to the specified date of termination and the breaching party has not
remedied such breach by the specified date; (d) effective upon the liquidation
of the Administrator; or (e) as to any Portfolio or the Company, effective upon
the liquidation of such Portfolio or the Company, as the case may be. For
purposes of this Article 10, the term "liquidation" shall mean a transaction in
which the assets of the Administrator, the Company or a Portfolio are sold or
otherwise disposed of and proceeds therefrom are distributed in cash to the
shareholders in complete liquidation of the interests of such shareholders in
the entity.
This Agreement shall not be assignable by the Administrator, without
the prior written consent of the Company, except to an entity that is controlled
by, or under common control, with, the Administrator.
ARTICLE 11. Amendments. This Agreement or any part hereof may be
changed or waived only by an instrument in writing signed by the party against
which enforcement of such change or waiver is sought.
ARTICLE 12. Certain Records. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Company shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Company and will be made
available to or surrendered promptly to the Company on request.
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In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Company and follow the
Company's instructions as to permitting or refusing such inspection; provided
that the Administrator 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,
unless (in cases involving potential exposure only to civil liability) the
Company has agreed to indemnify the Administrator against such liability.
ARTICLE 13. Definitions of Certain Terms. The terms "interested person"
and "affiliated person," when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 14. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the party giving
notice: if to the Company, at c/o Xxxxx X. Xxxxxx, General Counsel, SEI
Financial Management Corporation, 000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx, XX 00000; and
if to the Administrator at 000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx, XX 00000-0000.
ARTICLE 15. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Maryland and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Maryland, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 16. Multiple Originals. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 17. Binding Agreement. This Agreement, and the rights and
obligations of the parties and the Portfolios hereunder, shall be binding on,
and inure to the benefit of, the parties and the Portfolios and the respective
successors and assigns of each of them.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
FMB Funds, Inc.
By:
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Attest:
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SEI FINANCIAL MANAGEMENT CORPORATION
By:
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Attest:
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
DATED AS OF ______________, 1995
BETWEEN
FMB FUNDS, INC.
AND
SEI FINANCIAL MANAGEMENT CORPORATION
Portfolios: This Agreement shall apply to all Portfolios of the
Company, either now in the future created. The following is a
listing of the current portfolios of the Company: FMB Money Market
Fund, FMB Intermediate Government Income Fund, FMB Michigan
Tax-Free Bond Fund and FMB Diversified Equity Fund (together, the
"Current Portfolios").
Fees: Pursuant to Article 4, Section A, the Company shall pay the
Administrator compensation for services rendered to each Portfolio
at an annual rate, which is calculated daily and paid monthly, at
a maximum administrative fee equal to (a) with respect to the
Current Portfolios, 0.20% of such Portfolio's average daily net
assets and (b) with respect to any other Portfolio, the greater of
0.20% of such Portfolio's average daily net assets, or $100,000.
Term: This Agreement shall become effective on _____________________,
and shall remain in effect for an Initial Term of five (5) years
from such date and, thereafter, for successive Renewal Terms of
two (2) years each, unless and until this Agreement is terminated
in accordance with the provisions of Article 10 hereof.
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