FUND ACCOUNTING SERVICING AGREEMENT
This contract between X'Xxxxxxxxxxx Funds, Inc., a Maryland corporation,
hereinafter called the ("Funds"), and Firstar Trust Company, a Wisconsin
corporation, hereinafter called "FTC," is entered into on this eighth day of
October, 1996.
WHEREAS, X'Xxxxxxxxxxx Funds, Inc., is an open-ended management investment
company registered under the Investment Company Act of 1940; and
WHEREAS, Firstar Trust Company ("FTC") is in the business of providing,
among other things, mutual fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. Services. FTC agrees to provide the following mutual fund accounting
services to the Funds:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade +1 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 Directors and apply those prices to the
portfolio positions. For those securities where market quotations are
not readily available, the Board of Directors 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 to
short-short, short- or long-term status; 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 the Funds as to methodology, rate or dollar
amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Funds.
(3) Account for fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FTC and
the Funds.
(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 Funds.
(3) Determine net investment income (earnings) for 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.
(4) Maintain a general ledger for the Funds in the form as agreed
upon.
(5) For each day the Funds are open as defined in the
prospectuses, determine the net asset value of the Funds according to
the accounting policies and procedures set forth in the prospectuses.
(6) 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.
(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 Funds to support the tax
reporting required for IRS-defined regulated investment companies.
(2) Maintain tax lot detail for the Funds.
(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 accounting records available
to
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X'Xxxxxxxxxxx Funds Inc., the Securities and Exchange Commission, and
the outside auditors.
(2) Maintain accounting records according to the Investment
Company Act of 1940 and regulations provided thereunder.
2. Pricing of Securities. For each valuation date, obtain prices from a
pricing source selected by FTC but approved by the Fund's Board and apply those
prices to the portfolio positions in accordance with the Fund's valuation
procedures. For those securities where market quotations are not readily
available, the Fund's Board shall approve, in good faith, the method for
determining the fair value for such securities.
If the Funds desire to provide a price which varies from the pricing
source, in accordance with the Fund's valuation procedures, the Funds shall
promptly notify and supply FTC with the valuation of any such security on each
valuation date. All pricing changes made by the Funds 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 prices are effective.
3. Changes in Accounting Procedures. Any resolution passed by the Board of
Directors that affects accounting practices and procedures under this agreement
shall be effective upon written receipt and acceptance by the FTC.
4. Changes in Equipment, Systems, Services, Etc. FTC 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 Funds under this
Agreement.
5. Compensation. FTC shall be compensated for providing the services set
forth in this Agreement in accordance with the Fee Schedule attached hereto as
Exhibit A and A.1 and as mutually agreed upon and amended from time to time.
6. Performance of Service.
A. FTC shall exercise reasonable care and diligence, act in good faith
and use its best efforts within reasonable limits in the performance of its
duties under this Agreement. FTC shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with matters to which this Agreement relates, including losses
resulting from mechanical breakdowns or the failure of communication or
power supplies beyond FTC's control, except a loss resulting from FTC'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 duties under this Agreement. Notwithstanding any other provision of
this Agreement, the Funds shall indemnify and hold harmless FTC 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 FTC may sustain or incur or
which may be asserted against FTC by any person arising out of any action
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taken or omitted to be taken by it in performing the services hereunder (i)
in accordance with the foregoing standards, or (ii) in reliance upon any
written or oral instruction provided to FTC which the agent reasonably
believes to have been executed by any duly authorized officer of the Funds,
such duly authorized officer to be included in a list of authorized
officers furnished to FTC and as amended from time to time in writing by
resolution of the Board of Directors of the Funds.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, FTC shall take all reasonable steps to
minimize service interruptions for any period that such interruption
continues beyond FTC's control. FTC 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 FTC. FTC 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 Funds shall be entitled to inspect FTC's premises and operating
capabilities, and any and all of FTC's books and records which relate to
any transaction or function performed by FTC pursuant to this agreement, at
any time during regular business hours of FTC, upon reasonable notice to
FTC.
Regardless of the above, FTC 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 Fund may be
asked to indemnify or hold FTC harmless, the Funds shall be fully and
promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that FTC will use all reasonable
care to notify the Fund promptly concerning any situation which presents or
appears likely to present the probability of such a claim for
indemnification against the Funds. The Funds shall have the option to
defend FTC against any claim which may be the subject of this
indemnification. In the event that the Funds so elects, it will so notify
FTC and thereupon the Funds shall take over complete defense of the claim,
and FTC shall in such situation initiate no further legal or other expenses
for which it shall seek indemnification under this section. FTC shall in no
case confess any claim or make any compromise in any case in which the
Funds will be asked to indemnify FTC except with the Fund's prior written
consent.
C. FTC shall indemnify and hold the Funds 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 may be asserted against the Funds by any
person arising out of any action taken or omitted to be taken by FTC as a
result of FTC's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
7. Records. FTC 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
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agreeable to the Funds but not inconsistent with the rules and regulations of
appropriate government authorities, in particular, Section 31 of The Investment
Company Act of 1940 as amended (the "Investment Company Act"), and the rules
thereunder. FTC agrees that all such records prepared or maintained by FTC
relating to the services to be performed by FTC hereunder are the property of
the Funds and will be preserved, maintained, and made available with such
section and rules of the Investment Company Act and will be promptly surrendered
to the Funds on and in accordance with its request.
8. Confidentiality. FTC shall handle in confidence all information relating
to the Fund's business, which is received by FTC during the course of rendering
any service hereunder.
9. Data Necessary to Perform Services. The Funds or its agent, which may be
FTC, shall furnish to FTC the data necessary to perform the services described
herein at times and in such form as mutually agreed upon.
10. Notification of Error. The Funds will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of any
reports rendered by FTC to the Funds, or 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.
11. Additional Series. In the event that the X'Xxxxxxxxxxx Funds Inc.,
establishes one or more series of shares with respect to which it desires to
have FTC render accounting services, under the terms hereof, it shall so notify
FTC in writing, and if FTC agrees in writing to provide such services, such
series will be subject to the terms and conditions of this Agreement, and shall
be maintained and accounted for by FTC on a discrete basis. The portfolios
currently covered by this Agreement are listed on Schedule A.
12. Term of Agreement. 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.
13. Duties in the Event of Termination. In the event that in connection
with termination a Successor to any of FTC's duties or responsibilities
hereunder is designated by X'Xxxxxxxxxxx Funds Inc., by written notice to FTC,
FTC will promptly, upon such termination and at the expense of X'Xxxxxxxxxxx
Funds Inc., transfer to such Successor all relevant books, records,
correspondence and other data established or maintained by FTC under this
Agreement in a form reasonably acceptable to X'Xxxxxxxxxxx Funds, Inc., (if such
form differs from the form in which FTC has maintained the same, X'Xxxxxxxxxxx
Funds Inc., 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 FTC's personnel in the establishment of
books, records and other data by such successor.
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14. 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 FTC shall be sent to 000 Xxxx Xxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxxxx, Xxxxxxxxx 00000 and notice to the Funds shall be sent to
X'Xxxxxxxxxxx Funds Inc., 00 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000.
15. Choice of Law. This Agreement shall be construed in accordance with the
laws of the State of Wisconsin.
IN WITNESS WHEREOF, the due execution hereon on the date first above
written.
ATTEST: Firstar Trust Company
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ATTEST:
X'Xxxxxxxxxxx Funds Inc.
Date: Date:
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EXHIBIT A
Fund Valuation and Accounting
Domestic Portfolios
Annual Fee Schedule
Fixed Income Funds
o Annual fee per fund based on market value of assets:
o $25,000 for the first $40,000,000
o 2/100 of 1% (2 basis points) on the next $200,000,000
o 1/100 or 1% (1 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
Equity/Balance Funds
o Annual fee per fund based on market value of assets:
o $22,000 for the first $40,000,000
o 1/100 of 1% (1 basis point) on the next $200,000,000
o 5/1000 of 1% (1/2 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
Money Market Funds
o Annual fee per fund based on market value of assets:
o $25,000 for the first $40,000,000
o 1/100 of 1% (1 basis point) on the next $200,000,000
o 5/1000 of 1% (1/2 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
*(Discounts of 35% for year 1 and 15% for year 2 to be applied to minimums and
basis point charges, not to out-of-pocket expenses or pricing services)
All fees and out-of-pocket expenses are billed monthly.
Exhibit A.1
Fund Valuation and Accounting
Asset Pricing Cost
Charge per Item per Valuation
Asset Type (daily, weekly, etc.)
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Domestic and Canadian Equities $0.15
Options $0.15
Corporate/Government/Agency Bonds $0.50
CMOs $0.80
International Equities and Bonds $0.50
Municipal Bonds $0.80
Money Market Instruments $0.80
Note: No discounts apply to this schedule.
Pricing costs are billed monthly.
SCHEDULE A
(Series of the Funds)
X'Xxxxxxxxxxx Cornerstone Growth Fund
X'Xxxxxxxxxxx Cornerstone Value Fund
X'Xxxxxxxxxxx Aggressive Growth Fund
X'Xxxxxxxxxxx Dogs of the Market(TM) Fund
October 27, 1998
This agreement is hereby amended, pursuant to resolution of the X'Xxxxxxxxxxx
Funds, Inc. Board of Directors as follows:
Firstar Trust Company is changed to be Firstar Mutual Funds Services, LLC
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