EXHIBIT (h)(2)
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 31st day of December,
1999, by and between Xxxxx Growth Fund, Inc., Xxxxx Funds, Inc. and American
Eagle Funds, Inc., corporations organized under the laws of the State of
Minnesota (each hereinafter referred to as the "Company"), and Firstar Mutual
Fund Services, LLC, a limited liability company organized under the laws of the
State of Wisconsin (hereinafter referred to as "FMFS").
WHEREAS, the Company is an open-end investment management company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Company is authorized to create separate series, each with its
own separate investment portfolio;
WHEREAS, FMFS is in the business of providing, among other things, mutual
fund administration services to investment companies; and
WHEREAS, the Company desires to retain FMFS to provide mutual fund
administration services to each of the portfolios of the Funds, (each a "Fund")
and each additional series of the Company listed on Exhibit A attached hereto,
as it may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Company and FMFS agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
The Company hereby appoints 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, if required
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. Assist independent legal counsel with board communication by:
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a. Preparing board materials based on financial and administrative
data
b. Evaluating independent auditor
c. Securing and monitoring fidelity bond and director and officer
liability coverage, and making the necessary SEC filings relating
thereto
d. Recommend dividend declarations to the Board, prepare and
distribute to appropriate parties' notices announcing declaration
of dividends and other distributions to shareholders
e. Provide personnel to serve as officers of the Funds if so elected
by the Board and attend Board meetings to present materials for
Board 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
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 Fund
b. Monitor Fund's compliance with the policies and investment
limitations of the Funds as set forth in its Prospectus and
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 Funds so as to enable
the Funds to make a continuous offering of its shares in all
states
b. Monitor status and maintain registrations in each state
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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 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 Company'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 Fund's Prospectus and
Statement of Additional Information;
2. Prepare financial reports for officers, shareholders, tax
authorities, performance reporting companies, the board, the SEC,
and independent auditors;
3. Supervise the Funds Custodian and Accountants in the maintenance
of the Funds general ledger and in the preparation of the Fund's
financial statements, including oversight of expense accruals and
payments, of the determination of net asset value of the Funds
net assets and of the Funds 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 Portfolio, and each Portfolio's portfolio turnover rate;
and
5. Monitor the expense accruals and notify Company management of any
proposed adjustments.
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6. Prepare monthly financial statements, which will include without
limitation the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
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.
The Company agrees to pay all fees and reimbursable expenses within ten
(10) business days following the receipt of the billing notice.
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. 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 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 Funds 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
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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, such duly authorized officer to be included in a list of
authorized officers furnished to FMFS and as amended from time to time
in writing by resolution of the Board of Directors of the Company.
FMFS shall indemnify and hold the Company 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 the Company may sustain
or incur or which may be asserted against the Company 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
Funds 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.
B. 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 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 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 against any claim, which may be the subject of this
indemnification. In the event that the indemnitor so elects, it will
so notify the indemnitee and thereupon the indemnitor shall take over
complete defense of the claim, and the indemnitee shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. The indemnitee 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 except with
the indemnitor's prior written consent.
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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 all records and other information relative to the Company
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, 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 Funds.
6. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof and,
unless sooner terminated as provided herein, shall continue subject to
Board approval in effect for successive annual periods. The 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
amended by mutual written consent of 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 Funds 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
agrees that all such records prepared or maintained by FMFS relating
to the services to be performed by FMFS hereunder are the property of
the Funds 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 Funds 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 Securities and Exchange Commission 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 by written notice to FMFS, FMFS will promptly, upon such
termination and at the expense of the Company, transfer
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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 (if such form differs from
the form in which FMFS has maintained, the Funds 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 the other party to this Agreement, or to conduct
business in the name of, or for the account of the other party to this
Agreement.
11. DATA NECESSARY TO PERFORM SERVICES
The Company or its 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, 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 either party to the other party
shall be in writing and shall be duly given if mailed or delivered as
follows: Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
Attn: Xxxxx Xxxxxx
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Funds shall be sent to:
Xxxxx Associates, Inc.
Attn: Xxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer or one or more counterparts as of the day and year
first written above.
XXXXX GROWTH FUND, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
XXXXX FUNDS, INC.
AMERICAN EAGLE FUNDS, INC.
By:______________________________ By: ________________________________
Attest:__________________________ Attest:_____________________________
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FUND ADMINISTRATION AND COMPLIANCE
ANNUAL FEE SCHEDULE
EXHIBIT A
NAME OF SERIES DATE ADDED
-------------- ----------
Xxxxx Growth Fund, Inc. 12/31/99
Xxxxx Growth Fund (Class A, B, C, I)
Xxxxx Funds, Inc. 12/31/99
Xxxxx Opportunity Fund (Class A, B, C, I)
Xxxxx Twenty-Five Fund (Class A, B, C, I)
Xxxxx U. S. Emerging Growth Fund (Class A, B, C, I)
American Eagle Funds, Inc. 12/31/99
American Eagle Capital Appreciation
Xxxxx Growth Fund and Xxxxx Funds (4 classes each Fund)
Annual fee based upon fund group assets:
11 basis points on the first $200 million
9 basis points on the next $500 million
7 basis points on the balance
Minimum annual fee: $45,000 per fund
American Eagle Funds (1 Class, NL)
Annual fee based upon fund group assets:
6 basis points on the first $200 million
5 basis points on the next $500 million
3 basis points on the balance
Minimum annual fee:
$20,000 per fund year 1
$25,000 per fund year 2
$30,000 per fund year 3
Extraordinary services quoted separately.
Plus out-of-pocket expense reimbursements, including but not limited to:
Postage
Programming
Stationery
Proxies
Insurance
Retention of records
Special reports
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of Directors meetings
Auditing and legal expenses
Multiple class funds quoted separately
Assumes Firstar services Xxxxx Funds
Fees and out-of-pocket expense reimbursements are billed to the Funds monthly
