FUND ADMINISTRATION AGREEMENT BETWEEN
XXXXXXXXX FUNDS, INC.
AND
FRANKLIN XXXXXXXXX SERVICES, INC.
AGREEMENT dated as of October 1, 1996, and restated June 1,
1997, between Xxxxxxxxx Funds, Inc. (the "Investment Company"), an investment
company registered under the Investment Company Act of 1940 ("1940 Act"), on
behalf of Xxxxxxxxx World Fund and Xxxxxxxxx Foreign Fund (each a "Fund"),
separate series of the Investment Company, and Franklin Xxxxxxxxx Services, Inc.
("FTS" or "Administrator").
In consideration of the mutual promises herein made, the
parties hereby agree as follows:
(1) The Administrator agrees, during the life of this Agreement, to
provide the following services to each Fund:
(a) providing office space, telephone, office equipment and supplies for
the Fund;
(b) providing trading desk facilities for the Fund, unless these facilities
are provided by the Fund's investment adviser;
(c) authorizing expenditures and approving bills for payment on behalf of
the Fund;
(d) supervising preparation of periodic reports to shareholders, notices of
dividends, capital gains distributions and tax credits; and attending to
routine correspondence and other communications with individual
shareholders when asked to do so by the Fund's shareholder servicing agent
or other agents of the Fund;
(e) coordinating the daily pricing of the Fund's investment portfolio,
including collecting quotations from pricing services engaged by the Fund;
providing fund accounting services, including preparing and supervising
publication of daily net asset value quotations, periodic earnings reports
and other financial data; and coordinating trade settlements;
(f) monitoring relationships with organizations serving the Fund, including
custodians, transfer agents, public accounting firms, law firms, printers
and other third party service providers;
(g) supervising compliance by the Fund with recordkeeping requirements
under the federal securities laws, including the 1940 Act and the rules and
regulations thereunder, and under other applicable state and federal laws;
and maintaining books and records for the Fund (other than those maintained
by the custodian and transfer agent);
(h) preparing and filing of tax reports including the Fund's income tax
returns, and monitoring the Fund's compliance with subchapter M of the
Internal Revenue Code, as amended, and other applicable tax laws and
regulations;
(i) monitoring the Fund's compliance with: 1940 Act and other federal
securities laws, and rules and regulations thereunder; state and foreign
laws and regulations applicable to the operation of investment companies;
the Fund's investment objectives, policies and restrictions; and the Code
of Ethics and other policies adopted by the Investment Company's Board of
Directors ("Board") or by the Fund's investment adviser and applicable to
the Fund;
(j) providing executive, clerical and secretarial personnel needed to carry
out the above responsibilities;
(k) preparing and filing regulatory reports, including without limitation
Forms N-1A and N-SAR, proxy statements, information statements and U.S. and
foreign ownership reports; and
(l) providing support services incidental to carrying out these duties.
Nothing in this Agreement shall obligate the Investment Company or any Fund to
pay any compensation to the officers of the Investment Company. Nothing in this
Agreement shall obligate FTS to pay for the services of third parties, including
attorneys, auditors, printers, pricing services or others, engaged directly by
the Fund to perform services on behalf of the Fund.
(2) The Investment Company agrees, during the life of this Agreement,
to pay to FTS as compensation for the foregoing a monthly fee equal on an annual
basis to 0.15% of the first $200 million of the combined average daily net
assets of the Funds during the month preceding each payment, reduced as follows:
on such net assets in excess of $200 million up to $700 million, a monthly fee
equal on an annual basis to 0.135%; on such net assets in excess of $700 million
up to $1.2 billion, a monthly fee equal on an annual basis to 0.10%; and on such
net assets in excess of $1.2 billion, a monthly fee equal on an annual basis to
0.075%.
From time to time, FTS may waive all or a portion of its fees provided for
hereunder and such waiver shall be treated as a reduction in the purchase price
of its services. FTS shall be contractually bound hereunder by the terms of any
publicly announced waiver of its fee, or any limitation of each affected Fund's
expenses, as if such waiver or limitation were fully set forth herein.
(3) This Agreement shall remain in full force and effect through for
one year after its execution and thereafter from year to year to the extent
continuance is approved annually by the Board of the Investment Company.
(4) This Agreement may be terminated by the Investment Company at any
time on sixty (60) days' written notice without payment of penalty, provided
that such termination by the Investment Company shall be directed or approved by
the vote of a majority of the Board of the Investment Company in office at the
time or by the vote of a majority of the outstanding voting securities of the
Investment Company (as defined by the 1940 Act); and shall automatically and
immediately terminate in the event of its assignment (as defined by the 1940
Act).
(5) In the absence of willful misfeasance, bad faith or gross
negligence on the part of FTS, or of reckless disregard of its duties and
obligations hereunder, FTS shall not be subject to liability for any act or
omission in the course of, or connected with, rendering services hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers.
FRANKLIN XXXXXXXXX SERVICES, INC.
By:/s/XXXXXX X. XXXXXXXX
Xxxxxx X. Xxxxxxxx
President
XXXXXXXXX FUNDS, INC.
By:/s/XXXX X. XXX
Xxxx X. Xxx
Vice President
