FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this _____ day of _______,
2000, by and among Xxxxxx X. Xxxxx & Co. Incorporated, a Wisconsin corporation
(the "Advisor"), the Baird Funds, Inc., a Wisconsin corporation (the "Company"),
and Firstar Mutual Fund Services, LLC, a Wisconsin limited liability company
("FMFS").
WHEREAS, the Advisor is a registered investment adviser under the
Investment Advisers Act of 1940, as amended, and serves as the investment
manager of open-end investment management companies registered under the
Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Company is an open-end management investment company that
is registered under the 1940 Act;
WHEREAS, FMFS is in the business of providing, among other things,
mutual fund administration services to investment companies; and
WHEREAS, the Advisor and the Company desire to retain FMFS to provide
mutual fund administration services to each of the portfolios of the Company and
each additional series of the Company listed on Exhibit A attached hereto (each
a "Fund"), as it may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
the Advisor, the Company and FMFS agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Advisor and the Company hereby appoint FMFS as Administrator
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. General Fund Management
1. Act as liaison among all Fund service providers
2. Supply:
a. Corporate secretarial services
b. Office facilities (which may be in FMFS's or its
affiliate's own offices)
c. Non-investment-related statistical and research data
as needed
3. Coordinate the Company's Board of Directors' ("Board of
Directors") communication:
a. Establish meeting agendas
b. Prepare Board of Directors reports based on financial
and administrative data
c. Evaluate independent auditor
d. Secure and monitor fidelity bond and director and
officer liability coverage, and make the necessary SEC
filings relating thereto
e. Prepare minutes of meetings of the Board of Directors
and the Company's shareholders ("Shareholders")
f. Recommend dividend declarations to the Board of
Directors, prepare and distribute to appropriate
parties notices announcing declaration of dividends
and other distributions to Shareholders
g. Provide personnel to serve as officers of the Company
if so elected by the Board of Directors and attend the
Board of Directors meetings to present materials for
the Board of Directors review
4. Audits
a. Prepare appropriate schedules and assist independent
auditors
b. Provide information to SEC and facilitate audit
process
c. Provide office facilities
5. Assist in overall operations of the Fund
6. Pay Fund expenses upon written authorization from the
Company or the Advisor, respectively
7. Monitor arrangements under shareholder services or similar
plan
B. Compliance
1. Regulatory Compliance
a. Monitor compliance with 1940 Act requirements,
including: 1) Asset diversification tests 2) Total
return and SEC yield calculations 3) Maintenance of
books and records under Rule 31a-3 4) Code of Ethics
for the disinterested directors of the Company
b. Monitor each Fund's compliance with the policies and
investment limitations of the Company as set forth in
its current prospectus ("Prospectus") and statement of
additional information ("Statement of Additional
Information")
c. Maintain awareness of applicable regulatory and
operational service issues and recommend dispositions
2. Blue Sky Compliance
a. Prepare and file with the appropriate state securities
authorities any and all required compliance filings
relating to the registration of the securities of the
Company so as to enable the Company to make a
continuous offering of its shares in all states
b. Monitor status and maintain registrations in each
state
c. Provide information regarding material developments in
state securities regulation
3. SEC Registration and Reporting
a. Assist Company counsel in updating Prospectus and
Statement of Additional Information and in preparing
proxy statements and Rule 24f-2 notices
b. Prepare the Company's annual and semiannual reports,
Form N-SAR filings and Rule 24f-2 notices
c. Coordinate the printing, filing and mailing of
publicly disseminated Prospectuses and reports
d. File fidelity bond under Rule 17g-1
e. File Shareholder reports under Rule 30b2-1
f. Monitor sales of each Fund's shares and ensure that
such shares are properly registered with the SEC and
the appropriate state authorities
g. File Rule 24f-2 notices
4. IRS Compliance
a. Monitor each Fund's status as a regulated investment
company under Subchapter M, including without
limitation, review of the following:
1) Asset diversification requirements
2) Qualifying income requirements
3) Distribution requirements
b. Calculate required distributions (including excise tax
distributions)
C. Financial Reporting
1. Provide financial data required by each Fund's Prospectus
and Statement of Additional Information
2. Prepare financial reports for officers, Shareholders, tax
authorities, performance reporting companies, the Board of
Directors, the SEC, and independent auditors
3. Supervise the Company's custodian and accountants in the
maintenance of the Company's general ledger and in the
preparation of the Funds' financial statements, including
oversight of expense accruals and payments, of the
determination of net asset value of the Company's net assets
and of the Company's shares, and of the declaration and
payment of dividends and other distributions to Shareholders
4. Compute the yield, total return and expense ratio of each
class of each Fund, and each Fund's portfolio turnover rate
5. Monitor the expense accruals and notify Company management
of any proposed adjustments
6. Prepare monthly financial statements, which will include without
limitation the following items:
a. Schedule of investments
b. Statement of assets and liabilities
c. Statement of operations
d. Statement of changes in net assets
e. Cash statement
f. Schedule of capital gains and losses
7. Prepare quarterly broker security transaction summaries.
D. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and
state tax returns including, without limitation, Forms
1120/8610 with any necessary schedules
2. Prepare state income breakdowns where relevant
3. File Form 1099 Miscellaneous for payments to directors and
other service providers
4. Monitor wash losses
5. Calculate eligible dividend income for corporate
Shareholders
3. 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.
For the Fund(s) set forth below the Advisor's and the Company's
respective names on Exhibit A, the Advisor and the Company each agree
to pay their respective fees and reimbursable expenses within ten (10)
business days following receipt of the billing notice for the
appropriate Fund(s).
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
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 or
the Advisor 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 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 and/or the Advisor 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 Company or the Advisor, such duly authorized officer to
be included in a list of authorized officers furnished to FMFS, as
amended from time to time, in writing by resolution of the Board of
Directors of the Company or the Advisor, respectively.
FMFS shall indemnify and hold the Company and Advisor 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) that the Company or
Advisor may sustain or incur or that may be asserted against the
Company or Advisor 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 and the Advisor
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.
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(s)
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(s) 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(s) against any claim that may be the subject of this
indemnification. In the event that the indemnitor so elects, it will so
notify the indemnitee(s) and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee(s) shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. Except with the
indemnitor's prior written consent, the indemnitee(s) 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(s).
5. 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
Company and the Advisor, all records and other information relative to
the Company and the Advisor, respectively, and prior, present, or
potential Shareholders of the Company (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 or the Advisor, respectively, 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 Company or the Advisor,
respectively.
6. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and
will continue in effect for a period of two years. After the initial
two-year term, unless sooner terminated as provided herein, this
Agreement shall continue automatically in effect for successive annual
periods. This Agreement may be terminated by any party upon giving
ninety (90) days prior written notice to the other parties 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.
7. 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 Company 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
and the Advisor agree 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 Company on and in accordance with
its request.
8. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and 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.
9. 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 and the Advisor by written notice to FMFS, FMFS will promptly,
upon such termination and at the expense of the Company and the
Advisor, 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 and the
Advisor (if such form differs from the form in which FMFS has
maintained such information, the Company and the Advisor shall pay any
expenses associated with transferring the data 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.
10. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower
FMFS to act as agent for any other party to this Agreement, or to
conduct business in the name of, or for the account of, the other
parties to this Agreement.
11. DATA NECESSARY TO PERFORM SERVICES
The Advisor, the Company, or such parties' agent, which may be
FMFS, shall furnish to FMFS the data necessary to perform the services
described herein at times and in such form as mutually agreed upon. If
FMFS is also acting in another capacity for the Company or the Advisor,
respectively, nothing herein shall be deemed to relieve FMFS of any of
its obligations in such capacity.
12. NOTICES
Notices of any kind to be given by a party to the other parties
shall be in writing and shall be duly given upon receipt at the
following addresses:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
notice to the Advisor shall be sent to:
Xxxxxx X. Xxxxx & Co. Incorporated
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxxxx
and notice to the Company shall be sent to:
Baird Funds, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: Xxxx Xxxxxxxx
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.
XXXXXX X. XXXXX & CO. INCORPORATED FIRSTAR MUTUAL FUND SERVICES, LLC
By: ______________________________ By: ________________________________
Title: ____________________________ Title: _____________________________
BAIRD FUNDS, INC.
By: ______________________________
Title:_____________________________
