AMENDED AND RESTATED
ADMINISTRATION AND FUND ACCOUNTING AGREEMENT
THIS AGREEMENT is made as of this 30th day of April, 1997, by and
between The Yacktman Funds, Inc., a Maryland corporation (the
"Corporation"), and Sunstone Financial Group, Inc., a Wisconsin
corporation (the "Administrator").
WHEREAS, the Corporation is an open-end investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act") and
is authorized to issue shares of common stock (the "Shares") in separate
series with each such series representing interests in a separate
portfolio of securities and other assets; and
WHEREAS, the Corporation and the Administrator desire to enter into
an agreement pursuant to which the Administrator shall provide
administration and fund accounting services to such investment portfolios
of the Corporation as are listed on Schedule A hereto and any additional
investment portfolios the Corporation and Administrator may agree upon and
include on Schedule A as such Schedule may be amended from time to time
(such investment portfolios and any additional investment portfolios are
individually referred to as a "Fund" and collectively the "Funds").
NOW, THEREFORE, in consideration of the mutual promises and
agreements herein contained and other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto, intending to
be legally bound, do hereby agree as follows:
1. Appointment
The Corporation hereby appoints the Administrator as administrator and
fund accountant of the Funds for the period and on the terms set forth in
this Agreement. The Administrator accepts such appointment and agrees to
render the services herein set forth, for the compensation herein
provided.
2. Services as Administrator
(a) Subject to the direction and control of the Corporation's Board
of Directors and utilizing information provided by the Corporation and its
agents, the Administrator will: (1) provide office space, facilities,
equipment and personnel to carry out its services hereunder; (2) compile
data for and prepare with respect to the Funds timely Notices to the
Securities and Exchange Commission (the "Commission") required pursuant to
Rule 24f-2 under the 1940 Act and Semi-Annual Reports on Form N-SAR; (3)
assist in the preparation for execution by the Corporation and file all
federal income and excise tax returns and state income tax returns (and
such other required tax filings as may be agreed to by the parties) other
than those required to be made by the Corporation's custodian or transfer
agent, subject to review and approval of the Corporation and the
Corporation's independent accountants; (4) prepare the financial
statements for the Annual and Semi-Annual Reports required pursuant to
Section 30(d) under the 1940 Act; (5) assist the Corporation's legal
counsel in the preparation of the Registration Statement for the
Corporation (on Form N-1A or any replacement therefor) and any amendments
thereto; (6) determine and periodically monitor each Fund's income and
expense accruals and cause all appropriate expenses to be paid from
Corporation assets on proper authorization from the Corporation; (7)
calculate daily net asset values and income factors of each Fund; (8)
maintain all general ledger accounts and related subledgers; (9) perform
security valuations; (10) assist in the acquisition of the Corporation's
fidelity bond required by the Act, monitor the amount of the bond and make
the necessary Commission filings related thereto; (11) from time to time
as the Administrator deems appropriate, check each Fund's compliance with
the policies and limitations of each Fund relating to the portfolio
investments as set forth in the Prospectus and Statement of Additional
Information and monitor each Fund's status as a regulated investment
company under Subchapter M of the Internal Revenue Code of 1986, as
amended (but these functions shall not relieve the Corporation's
investment adviser of its primary day-to-day responsibility for assuring
such compliance); (12) maintain, and/or coordinate with the other service
providers the maintenance of, the accounts, books and other documents
required pursuant to Rule 31a-1(a) and (b) under the 1940 Act; (13)
prepare and/or file securities registration compliance filings with the
states identified by the Corporation to maintain the Funds' securities
registrations, with the advice of the Corporation's legal counsel; (14)
develop with legal counsel and secretary of the Corporation an agenda for
each board meeting and, if requested by the Directors, attend board
meetings and prepare minutes; (15) prepare Form 1099s for directors and
other fund vendors; (16) calculate dividend and capital gains
distributions subject to review and approval by the Corporation and its
independent accountants; and (17) generally assist in the Corporation's
administrative operations as mutually agreed to by the parties. The duties
of the Administrator shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against
the Administrator hereunder.
(b) The Directors of the Corporation shall cause the officers,
investment adviser, legal counsel, independent accountants, transfer agent
and custodian for the Funds to cooperate with the Administrator and to
provide the Administrator, upon request, with such information, documents
and advice relating to the Funds and the Corporation as is within the
possession or knowledge of such persons, in order to enable the
Administrator to perform its duties hereunder. In connection with its
duties hereunder, the Administrator shall be entitled to rely, and shall
be held harmless by the Corporation when acting in reliance, upon the
instruction, advice, information or any documents relating to the Funds
provided to the Administrator by an officer or representative of the Funds
or by any of the aforementioned persons The Administrator shall be
entitled to rely on any document which it reasonably believes to be
genuine and to have been signed or presented by the proper party. Fees
charged by such persons shall be an expense of the Corporation. The
Administrator shall be entitled to rely on any document which it
reasonably believes to be genuine and to have been signed or presented by
the proper party. The Administrator shall not be held to have notice of
any change of authority of any officer, agent, representative or employee
of the Corporation until receipt of written notice thereof from the
Corporation.
(c) 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 Corporation are the property of the Corporation and further agrees
to surrender promptly to the Corporation any of such records upon the
Corporation's request. Subject to the terms of Section 6, the
Administrator further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records described in (a) above which are
maintained by the Administrator for the Corporation.
(d) It is understood that in determining security valuations, the
Administrator employs one or more pricing services to determine valuations
of portfolio securities for purposes of calculating net asset values of
the Funds. The Administrator shall identify to the Corporation and the
Board of Directors any such pricing service utilized on behalf of the
Corporation. The Administrator is authorized to rely on the prices
provided by such service(s) or by the Funds' investment adviser or other
authorized representative of the Funds, and shall not be liable for losses
to the Corporation or its securityholders as a result of its reliance on
the valuations provided by the approved pricing service(s) or the
representative.
(e) The Corporation's Board of Directors and the Funds' investment
adviser have and retain primary responsibility for all compliance matters
relating to the Funds including but not limited to compliance with the
Investment Company Act of 1940, as amended, the Internal Revenue Code of
1986, as amended, and the policies and limitations of each Fund relating
to the portfolio investments as set forth in the Prospectus and Statement
of Additional Information.
3. Fees; Delegation; Expenses
(a) In consideration of the services rendered pursuant to this
Agreement, the Corporation will pay the Administrator a fee, computed
daily and payable monthly, as provided in Schedule B hereto, plus out-of-
pocket expenses. The Corporation shall also pay the Administrator for
organizational start-up services provided on behalf of the Funds as
specified in Schedule B. Out-of-pocket expenses include, but are not
limited to, travel, lodging and meals in connection with travel on behalf
of the Corporation, programming and related expenses (previously incurred
or to be incurred by Administrator) in connection with providing
electronic transmission of data between the Administrator and the Funds'
other service providers, brokers, dealers and depositories, fees and
expenses of pricing services, and photocopying, postage and overnight
delivery expenses. Fees shall be paid by each Fund at a rate that would
aggregate at least the applicable minimum fee for each Fund.
(b) For the purpose of determining fees payable to the
Administrator, net asset value shall be computed in accordance with the
Corporation's Prospectuses and resolutions of the Corporation's Board of
Directors. The fee for the period from the day of the month this Agreement
is entered into until the end of that month shall be pro-rated according
to the proportion which such period bears to the full monthly period.
Upon any termination of this Agreement before the end of any month, the
fee for such part of a month shall be pro-rated according to the
proportion which such period bears to the full monthly period and shall be
payable upon the date of termination of this Agreement. Should the
Corporation be liquidated, merged with or acquired by another fund or
investment company, any accrued fees shall be immediately payable. Such
fee as is attributable to each Fund shall be a separate charge to each
Fund and shall be the several (and not joint or joint and several)
obligation of each such Fund.
(c) The Administrator will bear all expenses in connection with the
performance of its services under this Agreement except as otherwise
provided herein. Other costs and expenses to be incurred in the operation
of the Funds, including, but not limited to: taxes; interest; brokerage
fees and commissions, if any; salaries, fees and expenses of officers and
Directors; Commission fees and state Blue Sky fees; advisory fees; charges
of custodians, transfer agents, dividend disbursing and accounting
services agents; security pricing services; insurance premiums; outside
auditing and legal expenses; costs of organization and maintenance of
corporate existence; typesetting, printing, proofing and mailing of
prospectuses, statements of additional information, supplements, notices
and proxy materials for regulatory purposes and for distribution to
current shareholders; typesetting, printing, proofing and mailing and
other costs of shareholder reports; expenses in connection with the
electronic transmission of documents and information including electronic
filings with the Commission and the states: expenses incidental to holding
meetings of the Fund's shareholders and Directors; and any extraordinary
expenses; will be borne by the Funds or their investment adviser.
Expenses incurred for distribution of shares, including the typesetting,
printing, proofing and mailing of prospectuses for persons who are not
shareholders of the Corporation, will be borne by the investment adviser,
except for such expenses permitted to be paid by the Corporation under a
distribution plan adopted in accordance with applicable laws.
4. Proprietary and Confidential Information
The Administrator agrees on behalf of itself and its employees to
treat confidentially and as proprietary information of the Corporation all
records relative to the Funds and prior, present or potential shareholders
of the Corporation (and clients of said shareholders), and not to use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to
and approval in writing by the Corporation, which approval shall not be
unreasonably withheld and may not be withheld where the Administrator may
be exposed to civil or criminal proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities,
when subject to governmental or regulatory audit or investigation, or when
so requested by the Corporation. Records and information which have become
known to the public through no wrongful act of the Administrator or any of
its employees, agents or representatives shall not be subject to this
paragraph.
5. Limitation of Liability
(a) The Administrator shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Funds in
connection with the matters to which this Agreement relates, except for a
loss resulting from the Administrator's willful misfeasance, bad faith or
gross negligence in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement.
Furthermore, the Administrator shall not be liable for any action taken or
omitted to be taken in accordance with instructions received by the
Administrator from an officer or representative of the Corporation.
(b) The Administrator assumes no responsibility hereunder, and
shall not be liable, for any damage, loss of data, errors, delay or any
other loss whatsoever caused by events beyond its reasonable control. The
Administrator will, however, take all reasonable steps to minimize service
interruptions for any period that such interruption continues beyond its
control.
6. Term
(a) This Agreement shall become effective with respect to each Fund
listed on Schedule A hereof as of the date hereof and, with respect to
each Fund not in existence on that date, on the date an amendment to
Schedule A to this Agreement relating to that Fund is executed. If not
terminated as provided herein, this Agreement shall continue in effect
with respect to each Fund until April 1, 1998. Thereafter, if not
terminated as provided herein, this Agreement shall continue automatically
in effect as to each Fund for successive annual periods.
(b) This Agreement may be terminated with respect to any one or more
particular Funds without penalty (i) upon mutual consent of the parties,
or (ii) by either party upon not less than ninety (90) days' written
notice to the other party (which notice may be waived by the party
entitled to the notice). The terms of this Agreement shall not be waived,
altered, modified, amended or supplemented in any manner whatsoever except
by a written instrument signed by the Administrator and the Corporation.
(c) Notwithstanding anything herein to the contrary, upon the
termination of this Agreement or the liquidation of a Fund or the
Corporation, the Administrator shall deliver the records of the Fund(s)
and/or Corporation as the case may be to the Corporation or person(s)
designated by the Corporation and thereafter the Corporation or its
designee shall be solely responsible for preserving the records for the
periods required by all applicable laws, rules and regulations. In
addition, in the event of termination of this Agreement, or the proposed
liquidation or merger of the Corporation or a Fund(s), and the Corporation
requests the Administrator to provide services in connection therewith,
the Administrator shall provide such services and be entitled to such
compensation as the parties may mutually agree.
7. Non-Exclusivity
The services of the Administrator rendered to the Corporation are not
deemed to be exclusive. The Administrator may render such services and
any other services to others, including other investment companies. The
Corporation recognizes that from time to time directors, officers and
employees of the Administrator may serve as trustees, directors, officers
and employees of other entities (including other investment companies),
that such other entities may include the name of the Administrator as part
of their name and that the Administrator or its affiliates may enter into
investment advisory or other agreements with such other entities.
8. Governing Law; Invalidity
This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois. To the extent that the applicable laws
of the State of Illinois, or any of the provisions herein, conflict with
the applicable provisions of the 1940 Act, the latter shall control, and
nothing herein shall be construed in a manner inconsistent with the 1940
Act or any rule or order of the Commission thereunder. Any provision of
this Agreement which may be determined by competent authority to be
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9. Notices
Any notice required or to be permitted to be given by either party to
the other shall be in writing and shall be deemed to have been given when
sent by registered or certified mail, postage prepaid, return receipt
requested, or by facsimile and followed within two business days by
registered or certified mail, postage prepaid, return receipt requested,
as follows: Notice to the Administrator shall be sent to Sunstone
Financial Group, Inc., 000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX,
00000, Attention Xxxxxx X. Xxxxxxx, and notice to the Corporation shall be
sent to The Yacktman Funds, Inc., 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxx Xxxxxxxx.
10. Entire Agreement
This Agreement constitutes the entire Agreement of the parties hereto.
11. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original agreement but such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by a duly authorized officer as of the day and year first
above written.
THE YACKTMAN FUNDS, INC.
By:____________________________
President
SUNSTONE FINANCIAL GROUP, INC.
By:____________________________
President
Schedule A
to the
Administration and Fund Accounting Agreement
by and between
THE YACKTMAN FUNDS, INC.
and
Sunstone Financial Group, Inc.
Name of Funds
Yacktman Fund
Yacktman Focused Fund
Schedule B
to the
Administration and Fund Accounting Agreement
by and between
THE YACKTMAN FUNDS, INC.
and
Sunstone Financial Group, Inc.
YACKTMAN FUND
Administration
Average Net Assets Annual Fees
Up to $50 Million 15.0 basis points
$50 Million to $100 Million 5.0 basis points
Over $100 Million 2.5 basis points
Fund Accounting
Up to $100 Million $20,000
$100 Million to $200 Million 1.0 basis point
Over $200 Million 0.5 basis point
YACKTMAN FOCUSED FUND
For administration and fund accounting services, Yacktman Focused Fund
shall pay Administrator an annual fee computed daily and payable monthly,
at the annual rate of Five One-Hundredths of One Percent (0.05%) on the
average daily net assets of the Yacktman Focused Fund, subject to a
minimum annual fee of $50,000.
The Trust shall also pay/reimburse the Administrator's out-of-pocket
expenses as described in the Agreement. The foregoing fee schedule assumes
a single class of shares for each Fund.
