EXHIBIT (h)(3)
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 31st day of December,
1999, by and between Xxxxx Growth Fund, Inc., Xxxxx Funds, Inc. and American
Eagle Funds, Inc., corporations organized under the laws of the State of
Minnesota (each hereinafter referred to as the "Company"), and Firstar Mutual
Fund Services, LLC, a limited liability company organized under the laws of the
State of Wisconsin (hereinafter referred to as "FMFS").
WHEREAS, the Company is an open-end investment management company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create separate series, each with its
own separate investment portfolio;
WHEREAS, FMFS is in the business of providing, among other things, mutual
fund accounting services to investment companies; and
WHEREAS, the Company desires to retain FMFS to provide accounting services
to each of the portfolios of the Company, (each a "Fund") and each additional
series of the Company listed on Exhibit A attached hereto, as it may be amended
from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and FMFS agree as follows:
1. APPOINTMENT OF FUND ACCOUNTANT
The Company hereby appoints FMFS as Fund Accountant of the Company on the
terms and conditions set forth in this Agreement, and FMFS hereby accepts such
appointment and agrees to perform the services and duties set forth in this
Agreement in consideration of the compensation provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1 basis using
security trade information communicated from the investment manager.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Directors of the Company and apply those
prices to the portfolio positions. For those securities where market
quotations are not readily available, the
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Board of Directors of the Company shall approve, in good faith, the
method for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on security sales and identify them as,
short-term or long-term; account for periodic distributions of gains
or losses to shareholders and maintain undistributed gain or loss
balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by Company as to methodology, rate or dollar
amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from Company.
(3) Account for Fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FMFS and
the Company.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other Fund share activity as
reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Company.
(3) Determine net investment income (earnings) for the Fund as of
each valuation date. Account for periodic distributions of earnings to
shareholders and maintain undistributed net investment income balances
as of each valuation date.
(4) Maintain a general ledger and other accounts, books, and
financial records for the Fund in the form as agreed upon.
(5) Determine the net asset value of the Fund according to the
accounting policies and procedures set forth in the Fund's Prospectus.
(6) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of Fund operations at such time
as required by the nature and characteristics of the Fund.
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(7) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports, which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolio of
the Fund to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax
lot relief method designated by the Funds.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to the
transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the Fund's accounting records
available to Company, the Securities and Exchange Commission, and the
outside auditors.
(2) Maintain accounting records according to the 1940 Act and
regulations provided thereunder
F. FMFS will perform the following accounting functions on a daily
basis:
(1) Reconcile cash and investment balances of each Portfolio with
the Custodian, and provide the Advisor with the beginning cash balance
available for investment purposes;
(2) Transmit or mail a copy of the portfolio valuation to the
Advisor;
(3) Review the impact of current day's activity on a per share
basis, review changes in market value.
G. In addition, FMFS will:
(1) Prepare monthly security transactions listings;
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(2) Supply various Company, Portfolio and class statistical data
as requested on an ongoing basis.
3. PRICING OF SECURITIES
For each valuation date, obtain prices from a pricing source selected by FMFS
but approved by the Board of Directors of the Company and apply those prices to
the portfolio positions of the Fund. For those securities where market
quotations are not readily available, the Board of Directors of the Company
shall approve, in good faith, the method for determining the fair value for such
securities.
If the Company desires to provide a price, which varies from the pricing source,
the Company shall promptly notify and supply FMFS with the valuation of any such
security on each valuation date. All pricing changes made by the Company will be
in writing and must specifically identify the securities to be changed by CUSIP,
name of security, new price or rate to be applied, and, if applicable, the time
period for which the new price(s) is/are effective.
4. CHANGES IN ACCOUNTING PROCEDURES
Any resolution passed by the Board of Directors of the Company that affects
accounting practices and procedures under this Agreement shall be effective upon
written receipt and acceptance by the FMFS.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
FMFS reserves the right to make changes from time to time, as it deems
advisable, relating to its services, systems, programs, rules, operating
schedules and equipment, so long as such changes do not adversely affect the
service provided to the Company under this Agreement.
6. COMPENSATION
FMFS shall be compensated for providing the services set forth in this Agreement
in accordance with the Fee Schedule attached hereto as Exhibit A and as mutually
agreed upon and amended from time to time. The Company agrees to pay all fees
and reimbursable expenses within ten (10) business days following the receipt of
the billing notice.
7. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Company in
connection with matters to which this Agreement relates, including losses
resulting from mechanical breakdowns or the failure of communication or
power supplies beyond FMFS's control, except a loss arising out of or
relating to FMFS's refusal or failure to comply with the terms of this
Agreement or from bad faith, negligence, or willful misconduct on its part
in the performance of its
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duties under this Agreement. Notwithstanding any other provision of this
Agreement, if FMFS has exercised reasonable care in the performance of its
duties under this Agreement, the Company shall indemnify and hold harmless
FMFS from and against any and all claims, demands, losses, expenses, and
liabilities (whether with or without basis in fact or law) of any and every
nature (including reasonable attorneys' fees) which FMFS may sustain or
incur or which may be asserted against FMFS by any person arising out of
any action taken or omitted to be taken by it in performing the services
hereunder, except for any and all claims, demands, losses, expenses, and
liabilities arising out of or relating to FMFS's refusal or failure to
comply with the terms of this Agreement or from bad faith, negligence or
from willful misconduct on its part in performance of its duties under this
Agreement, (i) in accordance with the foregoing standards, or (ii) in
reliance upon any written or oral instruction provided to FMFS by any duly
authorized officer of the Funds, such duly authorized officer to be
included in a list of authorized officers furnished to FMFS and as amended
from time to time in writing by resolution of the Board of Directors of the
Company.
FMFS shall indemnify and hold the Company harmless from and against
any and all claims, demands, losses, expenses, and liabilities (whether
with or without basis in fact or law) of any and every nature (including
reasonable attorneys' fees) which the Company may sustain or incur or which
may be asserted against the Company by any person arising out of any action
taken or omitted to be taken by FMFS as a result of FMFS's refusal or
failure to comply with the terms of this Agreement, its bad faith,
negligence, or willful misconduct.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, FMFS shall take all reasonable steps to
minimize service interruptions for any period that such interruption
continues beyond FMFS's control. FMFS will make every reasonable effort to
restore any lost or damaged data and correct any errors resulting from such
a breakdown at the expense of FMFS. FMFS agrees that it shall, at all
times, have reasonable contingency plans with appropriate parties, making
reasonable provision for emergency use of electrical data processing
equipment to the extent appropriate equipment is available. Representatives
of the Company shall be entitled to inspect FMFS's premises and operating
capabilities at any time during regular business hours of FMFS, upon
reasonable notice to FMFS.
Regardless of the above, FMFS reserves the right to reprocess and
correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the indemnitor
may be asked to indemnify or hold the indemnitee harmless, the indemnitor
shall be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the indemnitee
will use all reasonable care to notify the indemnitor promptly concerning
any situation which presents or appears likely to present the probability
of a claim for indemnification. The indemnitor shall have the option to
defend the indemnitee against
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any claim, which may be the subject of this indemnification. In the event
that the indemnitor so elects, it will so notify the indemnitee and
thereupon the indemnitor shall take over complete defense of the claim, and
the indemnitee shall in such situation initiate no further legal or other
expenses for which it shall seek indemnification under this section.
Indemnitee shall in no case confess any claim or make any compromise in any
case in which the indemnitor will be asked to indemnify the indemnitee
except with the indemnitor's prior written consent.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers, and employees to
treat confidentially and as proprietary information of the Funds all records and
other information relative to the Funds and prior, present, or potential
shareholders of the Funds (and clients of said shareholders), and not to use
such records and information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Company, which approval shall not be unreasonably
withheld and may not be withheld where FMFS may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Funds.
9. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and, unless sooner
terminated as provided herein, shall continue automatically in effect for
successive annual periods. This Agreement may be terminated by either party upon
giving ninety (90) days prior written notice to the other party or such shorter
period as is mutually agreed upon by the parties. However, this Agreement may be
replaced or modified by a subsequent agreement between the parties.
10. RECORDS
FMFS shall keep records relating to the services to be performed hereunder, in
the form and manner, and for such period as it may deem advisable and is
agreeable to the Funds but not inconsistent with the rules and regulations of
appropriate government authorities, in particular, Section 31 of the 1940 Act,
and the rules thereunder. FMFS agrees that all such records prepared or
maintained by FMFS relating to the services to be performed by FMFS hereunder
are the property of the Company and will be preserved, maintained, and made
available in accordance with such section and rules of the 1940 Act and will be
promptly surrendered to the Funds on and in accordance with its request.
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Wisconsin. However, nothing herein shall be construed in a manner inconsistent
with the 1940 Act or any rule or regulation promulgated by the SEC thereunder.
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12. DUTIES IN THE EVENT OF TERMINATION
In the event that in connection with termination, a successor to any of FMFS's
duties or responsibilities hereunder is designated by the Company by written
notice to FMFS, FMFS will promptly, upon such termination and at the expense of
the Company transfer to such successor all relevant books, records,
correspondence and other data established or maintained by FMFS under this
Agreement in a form reasonably acceptable to the Company (if such form differs
from the form in which FMFS has maintained the same, the Company shall pay any
expenses associated with transferring the same to such form), and will cooperate
in the transfer of such duties and responsibilities, including provision for
assistance from FMFS's personnel in the establishment of books, records and
other data by such successor.
13. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower FMFS to act as
agent for the other party to this Agreement, or to conduct business in the name
of, or for the account of the other party to this Agreement.
14. DATA NECESSARY TO PERFORM SERVICES
The Company or its agent, which may be FMFS, shall furnish to FMFS the data
necessary to perform the services described herein at such times and in such
form as mutually agreed upon. If FMFS is also acting in another capacity for the
Company, nothing herein shall be deemed to relieve FMFS of any of its
obligations in such capacity.
15. NOTIFICATION OF ERROR
The Company will notify FMFS of any balancing or control error caused by FMFS
the later of: within three (3) business days after receipt of any reports
rendered by FMFS to the Funds; within three (3) business days after discovery of
any error or omission not covered in the balancing or control procedure, or
within three (3) business days of receiving notice from any shareholder.
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16. NOTICES
Notices of any kind to be given by either party to the other party shall be in
writing and shall be duly given if mailed or delivered as follows: Notice to
FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
Attn: Xxxxx Xxxxxx
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Funds shall be sent to:
Xxxxx Associates, Inc.
Attn: Xxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the day
and year first written above.
XXXXX GROWTH FUND, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
XXXXX FUNDS, INC.
AMERICAN EAGLE FUNDS, INC.
By: ______________________________ By: ________________________________
Attest: __________________________ Attest: ____________________________
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FUND ACCOUNTING SERVICES
ANNUAL FEE SCHEDULE
EXHIBIT A
NAME OF SERIES DATE ADDED
--------------- -----------
Xxxxx Growth Fund, Inc. 12/31/99
Xxxxx Growth Fund (Class A, B, C, I)
Xxxxx Funds, Inc. 12/31/99
Xxxxx Opportunity Fund (Class A, B, C, I)
Xxxxx Twenty-Five Fund (Class A, B, C, I)
Xxxxx U. S. Emerging Growth Fund (Class A, B, C, I)
American Eagle Funds, Inc. 12/31/99
American Eagle Capital Appreciation
American Eagle Twenty Fund
Xxxxx Growth Fund and Xxxxx Funds (4 classes each Fund)
Annual fee per fund:
$45,000 for the first $100 million
3 basis points on the next $200 million
1.5 basis points on the balance
American Eagle Funds (1 class)
Annual fee per fund:
$30,000 for the first $100 million
($18,000 - First 12 months or until the Fund exceeds $10 million in
assets)
1.25 basis points on the next $200 million
.75 basis point on the balance
Extraordinary services - quoted separately
NOTE: - All schedules subject to change depending upon the use of derivatives -
options, futures, short sales, etc.
Domestic and Canadian Equities $.15
Options $.15
Corp/Gov/Agency Bonds $.50
CMO's $.80
International Equities and Bonds $.50
Municipal Bonds $.80
Money Market Instruments $.80
Mutual Funds $125/fund/mo
Factor Services (BondBuyer)
Per CMO $1.50/month
Per Mortgage Backed $0.25/month
Minimum $300/month
Fees and out-of-pocket expenses are billed to the Company monthly
