EXHIBIT (h) (47)
SERVICES AGREEMENT
This Agreement is made as of June 17, 1999, between Xxxxxxx Xxxxxx & Co.,
Inc. ("Schwab"), a California corporation, each registered investment company
("Fund Company") executing this Agreement, on its own behalf and on behalf of
each of its series or classes of shares ("Fund(s)") listed on Schedule I, as
amended from time to time, and Firstar Investment Research and Management
Company, LLC ("Fund Affiliate"). Fund Company and Fund Affiliate are
collectively referred to herein as "Fund Parties." "In the event that there are
no series or classes of shares listed on Schedule I, the term "Fund(s)" shall
mean "Fund Company."
WHEREAS, Fund Affiliate is either an investment adviser to or an
administrator for the Funds or the principal underwriter for the Funds.
WHEREAS, Fund Parties wish to have certain recordkeeping, shareholder
communication, and other such administrative services performed for each Fund;
and
WHEREAS, Schwab is willing to perform or cause to be performed such
administrative services on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Services
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a. During the term of this Agreement, Schwab shall perform or cause
to be performed the administrative services set forth on Exhibit A hereto, as
such exhibit may be amended from time to time by mutual consent of the parties
(the "Services").
b. The parties agree that the Operating Agreement, dated as of June
17, 1999, between Schwab, Fund Affiliate and Fund Company, as amended from time
to time ("Operating Agreement"), is incorporated herein by this reference. In
processing purchase, redemption, transfer and exchange orders placed by Schwab
on behalf of investors, and in order to facilitate the performance of Services,
all terms and conditions of the Operating Agreement shall be binding as between
Schwab and Fund Parties, and the references to Fund Company therein shall be
deemed to mean Fund Parties for the purposes of this Agreement. In the event of
any inconsistency between the Operating Agreement and this Agreement, this
Agreement shall control.
2. Fees
----
For the Services, Schwab shall receive a fee (the "Fee") which shall
be calculated and paid in accordance with Exhibit B hereto. Schedule II
identifies the amount of components of the Fee as follows: (A) that portion of
the Fee, if any, determined by the Fund's board of directors to be payable by
the Fund for non-distribution related services, and not paid pursuant to a plan
of distribution or shareholder servicing adopted and maintained pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended ("1940 Act" and "Rule
12b-1 Plan"); (B) that portion of the Fee, if any, paid pursuant to a Rule 12b-1
Plan; (C) that portion of the Fee, if any, not payable by the Fund and not paid
pursuant to a Rule 12b-1 Plan. Fund Parties acknowledge and agree that (i) Fund
Company will pay to Schwab component A, and Fund Affiliate will be jointly and
severally responsible to Schwab with Fund Company for component A; and, either
(ii) Fund Affiliate is the Fund's principal underwriter and will pay to Schwab
any remaining Fee (component B and/or component C), or (iii) Fund Affiliate, on
behalf of the Fund's principal underwriter, will pay to Schwab any remaining Fee
(component B and/or component C).
3. Transaction Charges
-------------------
The parties acknowledge and agree that Schwab may collect transaction
fees from certain customers (including "Active Traders," as Schwab may define
that term) for certain services and from other customers upon such other
customers' redemption of certain shares.
4. Indemnification
---------------
x. Xxxxxx shall indemnify and hold harmless Fund Parties and their
directors, officers, employees, and agents ("Indemnified Parties") from and
against any and all losses, claims, liabilities and expenses (including
reasonable attorney's fees) ("Losses") incurred by any of them arising out of
(i) Xxxxxx'x dissemination of information regarding Fund Parties or a Fund that
contains an untrue statement of material fact or any omission of a material fact
necessary in order to make the statements made, in light of the circumstances
under which they were made, not misleading and that was not published or
provided to Schwab by or on behalf of Fund Company or its affiliated persons
("Affiliates") as defined under the Investment Company Act of 1940, as amended
(the "1940 Act"), or accurately derived from information published or provided
by or on behalf of Fund Company or any Affiliate, (ii) any breach by Schwab of
any representation, warranty or agreement contained in this Agreement, or (iii)
any willful misconduct or negligence by Schwab in the performance of, or failure
to perform, its obligations under this Agreement, except to the extent such
Losses are caused by Fund Company or Fund's breach of this Agreement or Fund
Company or Fund's willful misconduct or negligence in the performance, or
failure to perform, its obligations under this Agreement. This Section 4(a)
shall survive termination of this Agreement.
b. In any event, no party shall be liable for any special,
consequential or incidental damages.
5. Role and Relationship of Schwab
-------------------------------
The parties acknowledge and agree that the Services under this
Agreement are recordkeeping, shareholder communication and related services only
and are not the services of an underwriter or a principal underwriter of any
Fund within the meaning of the Securities Act of 1933, as amended, or the 1940
Act, although certain of these services may be distribution related. This
Agreement does not xxxxx Xxxxxx any right to purchase shares from any Fund
(although it does not preclude Schwab from purchasing any such shares), nor does
it constitute Schwab an agent of Fund Parties or any Fund for purposes of
selling shares of any Fund to any dealer or the public. To the extent Schwab is
involved in the purchase of shares of any Fund by Xxxxxx'x customers, such
involvement will be as agent of such customer only.
6. Information to be Provided
--------------------------
Fund Parties shall provide to Schwab prior to the effectiveness of
this Agreement or as soon thereafter as practicable, two (2) copies of the then-
current prospectus and statement of additional information of each Fund. Fund
Party shall provide Schwab with written copies of any amendments to or changes
in the Fund's prospectus or statement of additional information immediately upon
their effective date.
7. Representations and Warranties
------------------------------
a. Each Fund Party represents and warrants that it has obtained
certified resolutions of its board of directors authorizing such Fund Party to
enter into this Agreement.
b. Each Fund Party represents and warrants that the person signing
this Agreement on its behalf is an officer authorized to execute this Agreement
on behalf of such Fund Party.
8. Notices
-------
All notices required by this Agreement (excluding the Operating
Agreement) shall be in writing and delivered personally or sent by first class
mail. Such notices will be deemed to have been received as of the earlier of
actual physical receipt or three (3) days after deposit, first class postage
prepaid, in the United States mail. All such notices shall be made:
if to Schwab, to: Xxxxxxx Xxxxxx & Co., Inc.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Senior Vice President/Mutual Funds
with a copy to: General Counsel, Mutual Funds & International
at the same address;
if to Fund Party, to the address given below in the signature block.
9. Nonexclusivity
--------------
Each party acknowledges that the other may enter into agreements
similar to this Agreement with other parties for the performance of services
similar to those to be provided under this Agreement, unless otherwise agreed to
in writing by the parties.
10. Assignability
-------------
This Agreement is not assignable by any party without the other
parties' prior written consents and any attempted assignment in contravention
hereof shall be null and void; provided, however, that Schwab may, without the
consent of Fund Parties, assign its rights and obligations under this Agreement
to any Affiliate.
11. Exhibits and Schedules; Entire Agreement
----------------------------------------
All Exhibits and Schedules to this Agreement, as they may be amended
from time to time, are by this reference incorporated into and made a part of
this Agreement. This Agreement (including the Exhibits and Schedules hereto),
together with the Operating Agreement, constitute the entire agreement between
the parties as to the subject matter hereof and supersede any and all
agreements, representations and warranties, written or oral, regarding such
subject matter made prior to the time at which this Agreement has been executed
and delivered by Schwab and Fund Parties.
12. No Waiver
---------
The failure of either party to insist upon exercising any right under
this Agreement shall not be construed as a waiver or relinquishment to any
extent of such party's right to assert or rely upon such provision or right in
any other instance.
13. Amendment
---------
This Agreement and the Exhibits and Schedules hereto may be amended
only by a writing executed by each party hereto that is to be bound by such
amendment.
14. Governing Law
-------------
This Agreement shall be governed by and interpreted under the laws of
the State of California, applicable to contracts between California residents
entered into and to be performed entirely within the state.
15. Effectiveness of Agreement; Termination
---------------------------------------
a. The effective date of this Agreement as to any Fund shall be the
later of the date on which this Agreement is made or the date set forth opposite
the name of the Fund on Schedule I.
b. This Agreement may be terminated as to a Fund (i) by any party
upon ninety (90) days' written notice to the other parties or (ii) by any party
upon such shorter notice as is required by law, order, or instruction by a court
of competent jurisdiction or a regulatory body or self-regulatory organization
with jurisdiction over such terminating party or (iii) by Fund Parties, upon
notice to Schwab of the termination of any Rule 12b-1 Plan as to any Fund that
had such Rule 12b-1 Plan in effect as of its effective date on this Agreement,
provided that a portion of the Fee is paid pursuant to the Rule 12b-1 Plan.
c. Notwithstanding any termination, Fund Parties will remain
obligated to pay Schwab the Fee as to each share of the Fund that was considered
in the calculation of the Fee as of the date of termination, and as to each
share of the Fund which results from reinvesting the dividends or capital gains
distributed on such shares (each a "Pre-Termination Share"), for so long as such
Pre-Termination Share is held in any of the Account(s) (as defined in the
Operating Agreement) and Schwab continues to perform substantially all of the
Services as to such Pre-Termination Share. Further, for so long as Schwab
continues to perform the Services as to any Pre-Termination Shares, this
Agreement will otherwise remain in full force and effect as to such Pre-
Termination Shares. Fund Parties shall reimburse Schwab promptly for any
reasonable expenses Schwab incurs in effecting any termination of this
Agreement, including delivery to a Fund Party of any records, instruments, or
documents reasonably requested by the Fund Party.
IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized representative of the parties hereto.
XXXXXXX XXXXXX & CO., INC. FIRSTAR FUNDS, INC. on its own behalf
and on behalf of each Fund listed on
Schedule I hereto
By:/s/ Xxxxx X. Xxxxx
-------------------------
Xxxxxx X. Xxxxx
Senior Vice President By: /s/ Xxxx Xxxxx Xxxxxx
Mutual Funds ----------------------------------
Name: Xxxx Xxxxx Xxxxxx
---------------------------------
Date: June 30, 1999 Title: President
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Date: June 21, 1999
---------------------------------
FIRSTAR INVESTMENT RESEARCH
AND MANAGEMENT COMPANY, LLC
By: /s/ Xxxxx Xxxxxx Address: 000 X. Xxxxxxxxx Xxx. Ste. 800
------------------------- --------------------------------
Name: Xxxxx Xxxxxx Xxxxxxxxx, XX 00000
------------------------ --------------------------------
Title: Vice President Attn: Xxxxx Xxxxxx
----------------------- -----------------------------------
Date June 21, 1999
-------------------------
Address: 000 X. Xxxxxxxxx Xxx. Ste. 800
--------------------------------
Xxxxxxxxx, XX 00000
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Attn: Xxxxx Xxxxxx
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EXHIBIT A
SERVICES
1. Record Maintenance
------------------
Schwab shall maintain, and require any correspondent brokers or banks
to maintain with respect to their customers, the following records with respect
to a Fund for each customer who holds Fund shares in a Schwab brokerage account:
a. Number of shares;
b. Date, price and amount of purchases and redemptions (including
dividend reinvestments) and dates and amounts of dividends paid for at least the
current year to date;
c. Name and address of the customer, including zip codes and social
security numbers or taxpayers identification numbers;
d. Records of distributions and dividend payments;
e. Any transfers of shares; and
f. Overall control records.
2. Shareholder Communications
--------------------------
Schwab shall:
a. Provide to a shareholder mailing agent for the purpose of mailing
certain Fund-related materials the names and addresses of all Schwab customers
who hold shares of such Fund in their Schwab brokerage accounts. The
shareholder mailing agent shall be a person or entity with whom the Fund has
arranged for the distribution of certain Fund-related material in accordance
with the Operating Agreement. The Fund-related materials shall consist of
updated prospectuses and any supplements and amendments thereto, annual and
other periodic reports, proxy or information statements and other appropriate
shareholder communications. In the alternative, in accordance with the
Operating Agreement, Schwab may distribute the Fund-related materials to its
customers.
b. Mail current Fund prospectuses and statements of additional
information and annual and other periodic reports upon customer request and, as
applicable, with confirmation statements;
c. Mail statements to customers on a monthly basis (or, as to
accounts in which there has been no activity in a particular month, no less
frequently than quarterly) showing, among other things, the number of shares of
each Fund owned by such customer and the net asset value of such Fund as of a
recent date;
d. Produce and mail to customers confirmation statements reflecting
purchases and redemptions of shares of each Fund in Schwab brokerage accounts;
e. Respond to customer inquiries regarding, among other things,
share prices, account balances, dividend amounts and dividend payment dates; and
f. With respect to Fund shares purchased by customers after the
effective date of this Agreement, provide average cost basis reporting to
customers to assist them in preparation of income tax returns.
g. If Schwab clears transactions in Fund shares for any
correspondent brokers or banks in an omnibus relationship, it will require each
such correspondent broker or bank to provide such shareholder communications as
set forth in 2(a) through to 2(f) to its own customers.
3. Transactional Services
----------------------
Schwab shall communicate, as to shares of each Fund, purchase,
redemption and exchange orders reflecting the orders it receives from its
customers or from any correspondent brokers and banks for their customers.
Schwab shall also communicate to beneficial owners holding through it, and to
any correspondent brokers or banks for beneficial owners holding through them,
as to shares of each Fund, mergers, splits and other reorganization activities,
and require any correspondent broker or bank to communicate such information to
its customers.
4. Tax Information Returns and Reports
-----------------------------------
Schwab shall prepare and file, and require to be prepared and filed by
any correspondent brokers or banks as to their customers, with the appropriate
governmental agencies, such information, returns and reports as are required to
be so filed for reporting (i) dividends and other distributions made, (ii)
amounts withheld on dividends and other distributions and payments under
applicable federal and state laws, rules and regulations, and (iii) gross
proceeds of sales transactions as required.
5. Fund Communications
-------------------
Schwab shall, upon request by Fund Parties, on each business day and
for each Fund, report the number of shares on which the Fee is to be paid
pursuant to this Agreement and the number of shares on which no such Fee is to
be paid. Schwab shall also provide each Fund with a monthly invoice.
EXHIBIT B
CALCULATION OF FEE
1. The Fee shall be calculated each month by multiplying the average
Daily Value of Qualifying Shares (defined below) for the month times 35 basis
points per annum. Notwithstanding the foregoing, the minimum Fee for each Fund
shall be $2,000 per month commencing with the first full month and terminating
with the last full month such Fund is effective under this Agreement. Any
Maintenance Fee as to the Account(s) of a Fund which would otherwise be assessed
under the Operating Agreement shall be waived for any month for which this
Agreement is in effect as to such Fund. The Fee shall be billed monthly in
arrears and paid in accordance with Section 5 below.
2. The Daily Value of Qualifying Shares is the aggregate daily value of
all shares of a Fund held in the Account(s), subject to the following exclusions
("Qualifying Shares"). There shall be excluded (i) shares held in the
Account(s) prior to the effective date of this Agreement as to the Fund, and
(ii) shares first held in the Account(s) after the termination of this Agreement
as to the Fund (except that Pre-Termination Shares resulting from reinvested
dividends or capital gains under Section 15(c) of this Agreement shall also be
Qualifying Shares).
3. For purposes of this Exhibit, the daily value of the shares of each
Fund will be the net asset value reported by such Fund to the National
Association of Securities Dealers, Inc. Automated Quotation System. No
adjustments will be made to the net asset values to correct errors in the net
asset values so reported for any day unless such error is corrected and the
corrected net asset value per share is reported to Schwab before 5 o'clock,
p.m., San Francisco time, on the first business day after the day to which the
error relates.
4. At the request of Fund Parties, Schwab shall provide, on each business
day, a statement of the aggregate Daily Value of the Qualifying Shares of each
Fund for such day and the estimated amount of the Fee for such day. As soon as
practicable after the end of the month, Schwab shall also provide to Fund
Parties an invoice for the amount of the Fee due for each Fund. In the
calculation of such Fee, Xxxxxx'x records shall govern unless an error can be
shown in the number of shares used in such calculation.
5. The Fee is due and payable by Fund Parties upon receipt of the invoice
setting forth the Fee. Payment shall be made by wire transfer. Such wire
transfer shall be separate from wire transfers of redemption proceeds or
distributions under the Operating Agreement. The amount of the Fee shall accrue
interest from the date of the invoice, and Schwab shall be entitled to charge
Fund Parties with payment of such accrued interest with respect to any
outstanding amount in the event that Schwab has not received full payment by the
last business day of the month in which such invoice is rendered. The rate of
interest shall be the Federal Funds "offered" rate for each day as published in
The Wall Street Journal, and shall be billed by Schwab in the following month's
invoice. Schwab shall not be entitled to charge Fund Parties with payment of
such accrued interest with respect to any amount for which Schwab has received
payment by the last business day of the month in which such invoice is rendered.
SCHEDULE I
TO THE SERVICES AGREEMENT
Fund Company/Funds Effective date
------------------ --------------
Firstar Funds, Inc.
Firstar Bond IMMDEX/TM Fund, Retail A Shares 6/17/99
Firstar Growth Fund, Retail A Shares 6/17/99
Firstar Growth & Income Fund, Retail A Shares 6/17/99
Firstar Intermediate Bond Market Fund, Retail A Shares 6/17/99
Firstar MicroCap Fund, Retail A Shares 6/17/99
* Indicates that Fund is a "no load" or "no sales charge" Fund as defined in
Rule 2830 of the Conduct Rules of the National Association of Securities
Dealers, Inc.
SI Indicates that Fund is available only to MFMP investors through Schwab
Institutional or another advice program offered or made available by
financial institutions clearing transactions through Schwab.
SCHEDULE II
TO THE SERVICES AGREEMENT
QUALIFYING
FEE (COMPONENT SECTION 2) SHARES FEE RATE MINIMUM FEE
------------------------- --------------- -----------
Component A (Fund payable, non-Rule 12b-1 Plan) 20 bps up to 25 bps
Component B (Rule 12b-1 Plan) 0 bps $ 0
Component C (non-Fund payable, non-12b-1 Plan) 10bps the difference
------ between 25 bps and
$2.000 if any
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Total Fee 35 bps $2,000
