Exhibit (h)(1): Fund Accounting, Dividend Disbursing & Transfer Agent,
-------------- and Administration Agreement
FUND ACCOUNTING,
DIVIDEND DISBURSING & TRANSFER AGENT,
AND ADMINISTRATION AGREEMENT
THIS AGREEMENT, made and entered into as of the date the registration statement
of the Capital Management Equity Fund of the Capital Management Investment Trust
becomes effective with the Securities and Exchange Commission, by and between
CAPITAL MANAGEMENT INVESTMENT TRUST, a Massachusetts business trust (the
"Trust"), and THE NOTTINGHAM COMPANY, INC., a North Carolina corporation (the
"Administrator").
WHEREAS, the Trust is an open-end management investment company of the series
type which is registered under the Investment Company Act of 1940 (the "1940
Act"); and
WHEREAS, the Administrator is in the business of providing administrative
services to investment companies.
NOW THEREFORE, the Trust and the Administrator do mutually promise and agree as
follows:
1. Employment. The Trust hereby employs Administrator to act as fund accountant,
dividend disbursing and transfer agent and fund administrator for each Fund of
the Trust, unless the Administrator and an individual Fund of the Trust
determine it is in the best interests of that individual Fund to negotiate a
separate Schedule of Compensation under Exhibit C. Administrator, at its own
expense, shall render the services and assume the obligations herein set forth
subject to being compensated therefore as herein provided.
2. Delivery of Documents. The Trust has furnished the Administrator with copies
properly certified or authenticated of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State of
Massachusetts (such Declaration, as presently in effect and as
it shall from time to time be amended, is herein called the
"Declaration");
(b) The Trust's By-Laws (such By-Laws, as presently in effect and
as they shall from time to time be amended, are herein called
the "By-Laws");
(c) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Administrator and approving this Agreement;
and
(d) The Trust's Registration Statement on Form N-1A under the 1940
Act and under the Securities Act of 1933 as amended, (the
"1933 Act"), including all exhibits, relating to shares of
beneficial interest of, and containing the Prospectus of, each
Fund of the Trust (herein called the "Shares") as filed with
the Securities and Exchange Commission and all amendments
thereto.
The Trust will furnish the Administrator with copies, properly certified or
authenticated, of all amendments of or supplements to the foregoing.
3. Duties of the Administrator. Subject to the policies and direction of the
Trust's Board of Trustees, the Administrator will provide a continuous executive
management program and day to day supervision for each of the Trust's Funds.
Services to be provided shall be in accordance with the Trust's organizational
and registration documents as listed in paragraph 2 hereof and with the
Prospectus of each Fund of the Trust. The Administrator further agrees that it:
(a) Will conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and will, in addition,
conduct its activities under this Agreement in accordance with
regulations of any other Federal and State agencies which may
now or in the future have jurisdiction over its activities;
(b) Will maintain, except as may be required to be maintained by
third parties hired by the Trust under Rule 31a-3 of the 1940
Act, the account books and records of the Trust and each Fund
of the Trust as required by Rule 31a-1 of the 1940 Act and
will preserve such records in accordance with Rule 31a-2 of
the 1940 Act;
(c) Will provide, at its expense the necessary non-executive
personnel and data processing equipment and software to
perform the Portfolio Accounting Services, Expense Accrual and
Payment Services, Fund Valuation and Financial Reporting
Services, Tax Accounting Services, Compliance Control Services
Registration Services, SEC Filing Services, Drafting of Board
of Trustee Meeting Minutes, and Proxy Material Services shown
on Exhibit A hereof;
(d) Will provide, at its expense the non-executive personnel and
data processing equipment and software necessary to perform
the Shareholder Servicing functions shown on Exhibit B hereof;
(e) Will provide, at its expense, certain executive personnel for
the Trust as may be agreed upon from time to time with the
Board of Trustees; and
(f) Will provide all office space and general office equipment
necessary for the activities of the Trust except as may be
provided by third parties pursuant to separate agreements with
the Trust.
Notwithstanding anything contained in this Agreement to the contrary, the
Administrator (including its directors, officers, employees and agents) shall
not be required to perform any of the duties of, assume any of the obligations
or expenses of, or be liable for any of the acts or omissions of, any investment
advisor of a Fund of the Trust or other third party subject to separate
agreements with the Trust. The Administrator shall not be responsible hereunder
for the administration of the Code of Ethics of the Trust which shall be under
the responsibility of the investment advisors, except insofar as the Code of
Ethics applies to the personnel of the Administrator. It is the express intent
of the parties hereto that the Administrator shall not have control over or be
responsible for the placement (except as specifically directed by a Shareholder
of the Trust), investment or reinvestment of the assets of any Fund of the
Trust. The Administrator may from time to time, subject to the approval of the
Trustees, obtain at its own expense the services of consultants or other third
parties to perform part or all of its duties hereunder, and such parties may be
affiliates of the Administrator.
4. Services Not Exclusive. The management and administrative services furnished
by the Administrator hereunder are not to be deemed exclusive, and the
Administrator shall be free to furnish similar services to others so long as its
services under this Agreement are not impaired thereby.
5. Books and Records. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Administrator hereby agrees that all records which it
maintains for the Trust are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
6. Expenses. During the term of this Agreement, the Administrator will pay all
expenses incurred by it in connection with the performance of its obligations
under this Agreement.
Notwithstanding the foregoing, the Trust shall pay the expenses and costs of the
following:
(a) Taxes;
(b) Brokerage fees and commissions with regard to portfolio
transaction of the Funds;
(c) Interest charges, fees and expenses of the custodian of the
Funds' portfolio securities;
(d) Fees and expenses of the Trust's dividend disbursing and
transfer agent, fund accounting agent and administrator, in
accordance with paragraph 7 herein;
(e) Costs, as may be allocable to and agreed upon in advance by
the Trustees and the Administrator, of all non-executive and
clerical personnel and all data processing equipment and
software in connection with the provision of fund accounting
and recordkeeping services and shareholder servicing functions
as contemplated herein;
(f) Auditing and legal expenses of the Trust;
(g) Cost of maintenance of the Trust's existence as a legal
entity;
(h) Cost of special forms, stationery and telephone services (but
not telephone equipment) for the Trust;
(i) Compensation of Independent Trustees who are not interested
persons of the Trust as that term is defined by law;
(j) Costs of Trust meetings;
(k) Federal and State registration fees and expenses;
(l) Costs of setting in type, printing and mailing Prospectuses,
reports and notices to existing shareholders;
(m) The Advisory fees payable to each Funds' Investment Advisor;
(o) Direct out-of-pocket costs in connection with Trust
activities, such as the costs of long distance telephone and
wire charges, postage and the printing of special forms and
stationery, copying charges, financial publications used in
connection with Trust activities, etc., and
(p) Other actual out-of-pocket expenses of the Administrator as
may be agreed upon in writing from time to time by the
Administrator and the Trustees.
7. Compensation. For the services provided and the expenses assumed by the
Administrator pursuant to this Agreement, the Trust will pay the Administrator
and the Administrator will accept as full compensation the administrative fees
and expenses as set forth on Exhibit C attached hereto. Special projects, not
included herein and requested in writing by the Trustees, shall be completed by
the Administrator and invoiced to the Trust as mutually agreed upon.
8.(a) Limitation of Liability. The Administrator shall not be liable for any
loss, damage or liability related to or resulting from the placement (except as
specifically directed by a Shareholder of the Trust), investment or reinvestment
of assets in any Fund of the Trust or the acts or omissions of any Fund's
investment advisor or any other third party subject to separate agreements with
the Trust. Further, the Administrator shall not be liable for any error of
judgment or mistake of law or for any loss or damage suffered by the Trust in
connection with the performance of this Agreement or any agreement with a third
party, except a loss resulting directly from (i) a breach of fiduciary duty on
the part of the Administrator with respect to the receipt of compensation for
services; or (ii) willful misfeasance, bad faith or gross negligence on the part
of the Administrator in the performance of its duties or from reckless disregard
by it of its duties under this Agreement.
8.(b) Indemnification of Administrator. Subject to the limitations set forth in
this Subsection 8(b), the Trust shall indemnify, defend and hold harmless (from
the assets of the Fund or Funds to which the conduct in question relates) the
Administrator against all loss, damage and liability, including but not limited
to amounts paid in satisfaction of judgments, in compromise or as fines and
penalties, and expenses, including reasonable accountants' and counsel fees,
incurred by the Administrator in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, before any
court or administrative or legislative body, related to or resulting from this
Agreement or the performance of services hereunder, except with respect to any
matter as to which it has been determined that the loss, damage or liability is
a direct result of (i) a breach of fiduciary duty on the part of the
Administrator with respect to the receipt of compensation for services; or (ii)
willful misfeasance, bad faith or gross negligence on the part of the
Administrator in the performance of its duties or from reckless disregard by it
of its duties under this Agreement (either and both of the conduct described in
clauses (i) and (ii) above being referred to hereinafter as "Disabling
Conduct"). A determination that the Administrator is entitled to indemnification
may be made by (i) a final decision on the merits by a court or other body
before whom the proceeding was brought that the Administrator was not liable by
reason of Disabling Conduct, (ii) dismissal of a court action or an
administrative proceeding against the Administrator for insufficiency of
evidence of Disabling Conduct, or (iii) a reasonable determination, based upon a
review of the facts, that the Administrator was not liable by reason of
Disabling Conduct by, (a) vote of a majority of a quorum of Trustees who are
neither "interested persons" of the Trust as the quoted phrase is defined in
Section 2(a)(19) of the 1940 Act nor parties to the action, suit or other
proceeding on the same or similar grounds that is then or has been pending or
threatened (such quorum of such Trustees being referred to hereinafter as the
"Independent Trustees"), or (b) an independent legal counsel in a written
opinion. Expenses, including accountants' and counsel fees so incurred by the
Administrator (but excluding amounts paid in satisfaction of judgments, in
compromise or as fines or penalties), shall be paid from time to time by the
Fund or Funds to which the conduct in question related in advance of the final
disposition of any such action, suit or proceeding; provided, that the
Administrator shall have undertaken to repay the amounts so paid unless it is
ultimately determined that it is entitled to indemnification of such expenses
under this Subsection 8(b) and if (i) the Administrator shall have provided
security for such undertaking, (ii) the Trust shall be insured against losses
arising by reason of any lawful advances, or (iii) a majority of the Independent
Trustees, or an independent legal counsel in a written opinion, shall have
determined, based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Administrator
ultimately will be entitled to indemnification hereunder.
As to any matter disposed of by a compromise payment by the Administrator
referred to in this Subsection 8(b), pursuant to a consent decree or otherwise,
no such indemnification either for said payment or for any other expenses shall
be provided unless such indemnification shall be approved (i) by a majority of
the Independent Trustees or (ii) by an independent legal counsel in a written
opinion. Approval by the Independent Trustees pursuant to clause (i) shall not
prevent the recovery from the Administrator of any amount paid to the
Administrator in accordance with either of such clauses as indemnification of
the Administrator is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief that the
Administrator's action was in or not opposed to the best interests of the Trust
or to have been liable to the Trust or its Shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in its conduct under the Agreement.
The right of indemnification provided by this Subsection 8(b) shall not be
exclusive of or affect any of the rights to which the Administrator may be
entitled. Nothing contained in this Subsection 8(b) shall affect any rights to
indemnification to which Trustees, officers or other personnel of the Trust, and
other persons may be entitled by contract or otherwise under law, nor the power
of the Trust to purchase and maintain liability insurance on behalf of any such
person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Trust hereunder to pay the
indemnification required by this Subsection 8(b) including, without limitation,
to the extent needed, to determine whether the Administrator is entitled to
indemnification hereunder and the reasonable amount of any indemnity due it
hereunder, or employ independent legal counsel for that purpose.
8.(c) The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and protect the
Administrator and its directors, officers, employees and agents and shall inure
to the benefit of its/their respective successors, assigns and personal
representatives.
9. Duration and Termination. This Agreement shall become effective as of the
date of the registration statement of the Trust containing the Fund's Prospectus
is declared effective by the Securities and Exchange Commission, and shall
continue in force and effect for a period of two year thereafter and shall be
continued on its terms from year to year thereafter unless sooner terminated as
permitted herein. This Agreement may be terminated at any time, without payment
of any penalty, by the Trust or the Administrator upon ninety days' written
notice to the other party.
10. Amendment. This Agreement may be amended by mutual written consent of the
parties. If, at any time during the existence of this Agreement, the Trust deems
it necessary or advisable in the best interests of the Trust that any amendment
of this Agreement be made in order to comply with the recommendations or
requirements of the Securities and Exchange Commission or state regulatory
agencies or other governmental authority, or to obtain any advantage under state
or federal laws, and shall notify the Administrator of the form of Amendment
which it deems necessary or advisable and the reasons therefor, and if the
Administrator declines to assent to such amendment, the Trust may terminate this
Agreement forthwith.
11. Notice. Any notice that is required to be given by the parties to each other
under the terms of this Agreement shall be in writing, addressed or delivered,
or mailed postpaid to the other party at the principal place of business of such
party.
12. Construction. This Agreement shall be governed and enforced in accordance
with the laws of the State of North Carolina. If any provision of this
Agreement, or portion thereof, shall be determined to be void or unenforceable
by any court of competent jurisdiction, then such determination shall not affect
any other provision of this Agreement, or portion thereof, all of which other
provisions and portions thereof shall remain in full force and effect. If any
provision of this Agreement, or portion thereof, is capable of two
interpretations, one of which would render the provision, or portion thereof,
void and the other of which would render the provision, or portion thereof,
valid, then the provision, or portion thereof, shall have the meaning which
renders it valid.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
by their duly authorized officers effective as of the date indicated above.
Attest: CAPITAL MANAGEMENT INVESTMENT TRUST
/s/ C. Xxxxxx Xxxxxx, XX By: /s/ X.X. Xxxxxxx, Xx.
______________________________ ____________________________
(SEAL)
Attest: THE NOTTINGHAM COMPANY, INC.
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxx, III
______________________________ ____________________________
(SEAL)
Exhibit A
---------
FUND ACCOUNTING AND RECORDKEEPING SERVICES
Portfolio Accounting Services:
-----------------------------
(1) Maintain portfolio records on a trade date basis using
security trade information communicated from the investment
manager on a timely basis.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Trustees and apply those prices to
the portfolio positions. For those securities where market
quotations are not readily available, the Board of Trustees
shall approve, in good faith, the method for determining the
fair market 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 to
short-short, short or long term status. Account for periodic
distributions of gain to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
Expense Accrual and Payment Services:
------------------------------------
(5) For each valuation date, calculate the expense accrual amounts
as directed by the Trust as to methodology, rate, or dollar
amount.
(6) Issue payments for Fund expenses upon receipt of funds from
the Trust's Custodian.
(7) Account for Fund expenditures and maintain expense accrual
balances at the level of accounting detail specified by the
Fund.
(8) Support periodic expense accrual review, i.e., comparison of
actual expense activity versus accrual amounts.
(9) Provide expense accrual and payment reporting.
Fund Valuation and Financial Reporting Services:
-----------------------------------------------
(10) Account for Fund share purchases, sales, exchanges, transfers,
dividend reinvestments, and other Fund share activity, for
each of the Funds, as reported by the Trust on a timely basis.
(11) Determine net investment income (earnings) for each of the
Funds 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.
(12) Maintain a general ledger for each of the Funds in the form
defined by the Trust and produce a set of financial statements
as may be agreed upon from time to time as of each valuation
date.
(13) For each day the Funds are opened as defined in the
prospectuses, determine the net asset value of each of the
Funds according to the accounting policies and procedures set
forth in the prospectuses.
(14) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of fund operation at
such time as required by the nature and characteristics of the
Funds. Perform the calculations using the number of shares
outstanding reported by the Trust to be applicable at the time
of calculation.
(15) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to
time.
(16) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
Tax Accounting Services:
-----------------------
(17) Maintain tax accounting records for each of the Funds'
investment portfolio so as to support tax reporting required
for IRS defined regulated investment companies.
(18) Maintain tax lot detail for the investment portfolio.
(19) Calculate taxable gain/loss on security sales using the tax
cost basis defined for each Fund.
(20) Report the taxable components of income and capital gains
distributions to the Trust to support tax reporting to the
shareholders.
Compliance Control Services:
---------------------------
(21) Maintain accounting records to support compliance monitoring
by the Trust.
(22) Support reporting to regulatory bodies and support financial
statement preparation by making the Fund accounting records
available to the Trust, the Securities and Exchange
Commission, and the outside auditors.
(23) Maintain accounting records according to the Investment
Company Act of 1940 and regulations provided thereunder.
Registration Services:
---------------------
(24) Prepare all reports and filings required to maintain the
registration and qualification of the Fund and its shares
under federal and state securities laws, including the annual
amendment to its Registration Statement on From N-1A
containing an updated a Prospectus and Statement of Additional
Information.
SEC Filing Services:
-------------------
(25) Prepare and make periodic SEC filings, including From N-SAR,
annual and semi-annual shareholder reports, other shareholder
reports, and fidelity bond amendments but not including
preparation and filing of any sales literature and preparation
of President's letter contained in shareholder reports.
Minutes, Proxy Material Services:
--------------------------------
(26) Preparation of minutes and other records of meetings of the
Board of Trustees.
(27) Preparation of any proxy material and related shareholder
meetings and records.
Exhibit B
---------
SHAREHOLDER SERVICING FUNCTIONS
(1) Process new accounts.
(2) Process purchases, both initial and subsequent in accordance
with conditions set forth in the Fund's prospectus.
(3) Transfer shares of capital stock to an existing account or to
a new account upon receipt of required documentation in good
order.
(4) Distribute dividends and/or capital gain distributions. This
includes disbursement as cash or reinvestment and to change
the disbursement option at the request of shareholders.
(5) Process exchanges between funds, (process and direct
purchase/redemption and initiate new account or process to
existing account).
(6) Make miscellaneous changes to records, including, but not
necessarily limited to, address changes and changes in plans
(such as systematic withdrawal, dividend reinvestment, etc.).
(7) Prepare and mail a year-to-date confirmation and statement as
each transaction is recorded in a shareholder account as
follows: original to shareholder. Duplicate confirmations to
be available on request within current year.
(8) Handle telephone calls and correspondence in reply to
shareholder requests except those items otherwise set forth
herein.
(9) Daily control and reconciliation of Fund shares.
(10) Prepare address labels or confirmations for four reports to
shareholders per year.
(11) Mail and tabulate proxies for one Meeting of Shareholders
annually, including preparation of certified shareholder list
and daily report to Fund management, if required.
(12) Prepare and mail annual Form 1099, Form W-2P and 5498 to
shareholders to whom dividends or distributions are paid, with
a copy for the IRS.
(13) Provide readily obtainable data which may from time to time be
requested for audit purposes.
(14) Replace lost or destroyed checks.
(15) Continuously maintain all records for active and closed
accounts according to the Investment Company Act of 1940 and
regulations provided thereunder.
(16) Furnish shareholder data information for a current calendar
year in connection with XXX and Xxxxx Plans in a format
suitable for mailing to shareholders.
Exhibit C
---------
ADMINISTRATOR'S COMPENSATION SCHEDULE
For the services delineated in the FUND ACCOUNTING, DIVIDEND DISBURSING &
TRANSFER AGENT AND ADMINISTRATION AGREEMENT, the Administrator shall be
compensated monthly, as of the last day of each month, within five business days
of the month end, a base fee plus a fee based upon net assets according to the
following schedule. The fee is calculated based upon the average daily net
assets of each Fund:
Base Fee: $2,000 per month
--------
Equity and Balanced Funds
Annual
Net Assets Fee
---------- ------
On the first $50 million 0.20%
On the next $50 million 0.175%
On all assets over $100 million 0.15%
Fixed Income Funds
Annual
Net Assets Fee
---------- ------
On all assets 0.15%
Shareholder Fee
---------------
$9.00 per shareholder per year
Securities Pricing
------------------
$0.20 per equity per pricing day
$0.20 per corporate bond, government bond, medium-term bond
and mortgage-backed security per pricing day
$0.40 per asset backed security per pricing day priced
$2.00 per equity per month for corporate action
Blue Sky Administration
-----------------------
$100 per fund per state registration per year
Minimum fee per year
--------------------
Minimum fee of $3,000 per Fund of the Trust per month for all fees
taken in the aggregate as outlined above, analyzed monthly.
