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EXHIBIT (h)(3)
SUB-ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 14th day of May,
2001, by and between Xxxxxxx Asset Management, Inc., a Michigan corporation (the
"Company"), and Firstar Mutual Fund Services, LLC, a Wisconsin limited liability
company ("FMFS").
WHEREAS, the Company is a registered investment advisor under the
Investment Advisers Act of 1940;
WHEREAS, FMFS is a limited liability company and, among other things,
is in the business of providing fund administration services for the benefit of
its customers;
WHEREAS, the Company is administrator to Xxxxxxx Investments, a
business trust organized under the laws of the Commonwealth of Massachusetts
(the "Trust"), comprised of separate investment series listed on Schedule A (the
"Funds");
NOW, THEREFORE, the Company and FMFS do mutually promise and agree as
follows:
I. APPOINTMENT OF SUB-ADMINISTRATOR
The Company hereby appoints FMFS as Sub-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.
II. DUTIES AND RESPONSIBILITIES OF THE COMPANY AS ADMINISTRATOR OF THE
TRUST
A. General Fund Management
1. Act as liaison among the Funds' service providers.
2. Coordinate board communication by:
a. Assisting Trust counsel in establishing meeting
agendas.
b. Preparing and presenting board reports based on
financial and administrative data.
c. Supervising preparation of board minutes.
d. Evaluating independent auditors and Trust counsel for
Board of Trustees review and approval.
3. Coordinate overall operations of the Funds.
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B. Audits
1. Provide central coordination of interactions with SEC and
other regulatory agencies.
2. Provide office facilities to assist audit process.
C. SEC Registration
1. Update prospectus, statement of additional information and
proxies as requested.
2. Coordinate updates with Trust counsel.
3. Coordinate printing and distribution of required prospectus
updates and proxies.
D. Treasury Services
1. Provide staff to act as officers and signatures for the
Company to authorize official documents.
2. Review and approve all Fund expense items.
3. Maintain overall expense accrual targets for fiscal
reporting periods and co-ordinate with Trust Accountant.
III. DUTIES AND RESPONSIBILITIES OF FMFS AS SUB-ADMINISTRATOR
A. Financial Reporting
1. Prepare Annual and Semi-Annual reports.
2. Prepare financial highlights and expense summary for
prospectus updates.
3. Prepare and file Rule 24f-2 notices.
4. Prepare financial reports and schedules for the independent
auditors.
5. Assist in the coordination of board communication by:
a. Prepare financial reports as required by the Trust for
inclusion in board reports.
b. Prepare and disseminate regular quarterly board
materials.
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6. Supervise the Trust's Custodian and Fund Accountant in the
maintenance of the Trust's general ledger and in the
preparation of the Trust's financial statements including
oversight of expense accruals and payments, of the
determination of net asset value of each Fund's net assets
and of each Fund's shares, and of the declaration and
payment of dividends and other distributions to
shareholders.
B. Tax Reporting
1. Prepare and file on a timely basis appropriate federal and
state tax returns including 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 sales/losses.
5. Calculate eligible dividend income for corporate
shareholders.
C. Portfolio Regulatory Compliance
1. Monthly, quarterly and intra-monthly spot checks as needed
to monitor compliance with the Investment Company Act of
1940 requirements.
a. Asset diversification tests.
b. Total return and SEC yield calculations.
c. Maintenance of books and records under Rule
31a-3.
d. Code of Ethics monitoring for the Board of
Directors.
2. Periodically monitor the Funds' compliance with the policies
and investment limitations of the Funds as set forth in
their prospectuses and statements of additional information.
3. Monthly, quarterly and intra-monthly spot checks as needed
to monitor the Funds' status as regulated investment
companies under Subchapter M of the IRS Code through review
of the following:
a. Asset diversification requirements.
b. Qualifying income requirements.
c. Distribution requirements.
4. Calculate required distributions (including excise tax
distributions).
5. Blue Sky Filings
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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
Trust so as to enable the Trust to make a continuous
offering of its shares.
b. Prepare and file appropriate state registrations for
broker/dealer and/or agents of the Trust.
c. Monitor status and maintain registrations in each
state.
IV. COMPENSATION
The Company agrees to pay FMFS for performance of the duties listed in
this Agreement and the fees and out-of-pocket expenses as set forth in
the attached Schedule A.
These fees may be changed from time to time, subject to mutual written
agreement between the Company and FMFS.
The Company agrees to pay all fees and reimbursable expenses within 10
business days following the mailing of the billing notice.
V. ADDITIONAL SERIES
In the event that the Trust establishes one or more series of shares in
addition to the Funds, with respect to which it desires to have FMFS
render substantially similar sub-administration services, under the
terms hereof, it shall so notify FMFS in writing, and subject to FMFS'
consent, which consent shall not be unreasonably withheld, FMFS will
provide such services and such additional series will be subject to the
terms and conditions of this Agreement.
VI. 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 Trust or 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' control, except a loss
resulting from FMFS' 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 Company
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
(i) in accordance with the foregoing
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standards, or (ii) in reliance upon any written or oral instruction
provided to FMFS by any duly authorized officer of the Company or
Trust, 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 or
the Board of Trustees of the Trust.
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' 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 Trust
shall be entitled to inspect FMFS' 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 Company
may be asked to indemnify or hold FMFS harmless, the Company shall be
fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that FMFS will use
all reasonable care to notify the Company promptly in writing
concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Company
. The Company shall have the option to defend FMFS against any claim
which may be the subject of this indemnification. In the event that the
Company so elects, it will so notify FMFS and thereupon the Company
shall take over complete defense of the claim, and FMFS shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this section. FMFS shall in no case
confess any claim or make any compromise in any case in which the
Company will be asked to indemnify FMFS except with the Company's prior
written consent.
The Company will also indemnify and hold FMFS harmless
against any and all losses, claims, damages, liabilities or expenses
(including reasonable counsel fees and expenses) resulting from any
claim, demand, action, or suit that arises as a result of FMFS, acting
upon the written or telephonic instructions of the Chairman of the
Company, on a shareholder by shareholder basis, facilitating the
purchase, redemption or exchange of shares of any series of the Trust
to any non-U.S. resident, (unless contributed to by FMFS' breach of
this Agreement or other agreements between the Company and FMFS, or
FMFS' own negligence or bad faith).
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C. FMFS shall indemnify and hold the Company and/or Trust and 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 Company and/or Trust or the Funds by
any person arising out of any action taken or omitted to be taken by
FMFS as a result of FMFS' refusal or failure to comply with the terms
of this Agreement, its bad faith, negligence, or willful misconduct.
VII. CONFIDENTIALITY
FMFS shall handle, in confidence, all information relating to the Trust
or the Company's business that is received by FMFS during the course of
rendering any service hereunder.
VIII. DATA NECESSARY TO PERFORM SERVICE
The Trust, the Company or their agents, 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.
IX. TERM OF AGREEMENT
This Agreement shall become effective as of the day and year
first written above and shall continue in full force and effect
automatically for successive annual periods unless otherwise terminated
as provided herein. This Agreement may be terminated by either party at
any time upon giving 90 days prior written notice to the other party or
such shorter period as is mutually agreed upon by the parties. This
Agreement may be replaced or modified by a subsequent written agreement
between the parties.
X. DUTIES IN THE EVENT OF TERMINATION
In the event that, in connection with termination, a successor to
any of FMFS' duties or responsibilities hereunder is designated by the
Company and/or Trust by written notice to FMFS, FMFS will promptly,
upon such termination and at the expense of the Company and/or Trust,
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/or Trust (if such
form differs from the form in which FMFS has maintained, the Company
and/or Trust 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'
personnel in the establishment of books, records, and other data by
such successor.
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XI. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of
the State of Wisconsin. However nothing herein shall be construed in a
manner inconsistent with the Investment Company Act of 1940, as amended
(the "Investment Company Act") or any rule or regulation promulgated by
the SEC thereunder.
XII. 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
000 Xxxx Xxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
and notice to the Company shall be sent to:
Xxxxxxx Asset Management, Inc.
000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
XIII. 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 and/or Trust but not
inconsistent with the rules and regulations of appropriate government
authorities, in particular, Section 31 of the Investment Company Act as
amended (the "Investment Company 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
Company and/or Trust 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 Company and/or Trust on and in
accordance with their request.
XIV. MERGER OF AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
matter hereof whether oral or written.
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XXXXXXX ASSET MANAGEMENT, INC. FIRSTAR MUTUAL FUND SERVICES,
LLC
By: /S/ XXXX X. XXXXXXXX By: /S/ XXXXXX X. XXXX
Title:Chairman Title: Senior Vice President
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SUB-ADMINISTRATION SERVICING AGREEMENT
ANNUAL FEE SCHEDULE
EXHIBIT A
FUND DATE ADDED
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Xxxxxxx Large-Cap Fund May 14, 2001
Xxxxxxx Small-Cap Fund May 14, 2001
Xxxxxxx Asset Allocation Fund May 14, 2001
Xxxxxxx Utility Fund May 14, 2001
Xxxxxxx Market Neutral Fund May 14, 2001
Xxxxxxx Government Money Market Fund May 14, 2001
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FIRSTAR MUTUAL FUND SERVICES, LLC
FUND ADMINISTRATION & COMPLIANCE SERVICES
ANNUAL FEE SCHEDULE
DOMESTIC FUNDS
Annual fee based upon assets per fund Year 1
(from May 14, 2001 until May 13, 2002)
7 basis points on the first $200 million
5 basis points on the next $500 million
4 basis points on the balance
Minimum annual fee: $50,000 largest fund, $30,000 for each additional
fund. Market Neutral, Small-Cap, Utility Funds minimum - $15,000
Annual fee based upon assets per fund Year 2*
8 basis points on the first $200 million
6 basis points on the next $500 million
4 basis points on the balance
Minimum annual fee: $50,000 largest fund, $30,000 for each additional
fund. Market Neutral, Small Cap, Utility Funds minimum - $20,000
Opportunities Fund - $800/month until liquidated.
Extraordinary services - quoted separately
FUND PERFORMANCE/AFTER-TAX PERFORMANCE
Initial Setup* (delivery up to 5 locations)
History Conversion and System Initialization - $500/fund
Delivery - Fax, File, E-mail included
FTP
Delivery - $2,500 /site or FTP address
Services
Daily Pricing Feed - $200/fund group/month
Performance Reporting Services - $1,100 /fund group/month
Plus out-of-pocket expenses, including but not limited to:
Postage, Stationery
Programming, Special Reports
Proxies, Insurance
XXXXX filing - Approx. $9.00/page
Retention of records
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of trustees meetings
Auditing and legal expenses
Blue Sky conversion expenses (if necessary)
All other out-of-pocket expenses
INTERNATIONAL FUNDS
Annual fee based upon assets per fund*
9 basis points on the first $200 million
7 basis points on the next $300 million
6 basis points on the next $500 million
5 basis points on the balance
Minimum annual fee: $45,000 per fund
Extraordinary services - quoted separately
Plus out-of-pocket expenses, including but not limited
To:
Postage, Stationery
Programming, Special Reports
Proxies, Insurance
XXXXX filing - Approx. $9.00/page
Retention of records
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of trustees meetings
Auditing and legal expenses
Blue Sky conversion expenses (if necessary)
All other out-of-pocket expenses
Fees are billed monthly
* LEGAL ADMIN - INCLUDES POST-EFFECTIVE AMENDMENTS FOR STANDARD/NOMINAL CHANGES.
MODIFICATIONS TO PRODUCT STRUCTURE, FUND ADDITIONS, CLASS CHANGES, PROXIES, ETC.
ARE BILLED AT $150 PER HOUR.
* EFFECTIVE THE FIRST DAY AFTER THE EXPIRATION OF THE SECOND YEAR OF THIS
AGREEMENT, AND EACH SUBSEQUENT ANNIVERSARY OF THE AGREEMENT, THE ANNUAL FEE
SHALL BE INCREASED OVER THE PRECEDING 12 MONTHS IN AN AMOUNT EQUAL TO THE
PERCENTAGE CHANGE IN THE CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS ("CPI-U"),
ALL ITEMS, INDEX BASED ON 0000-0000 000 AS LAST REPORTED BY THE U.S. BUREAU OF
LABOR STATISTICS DURING THE PRECEDING 12 MONTHS.
All fees are billed monthly.
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