FUND ACCOUNTING SERVICING AGREEMENT
This Agreement between The Xxxxxxx Funds, a Delaware business trust
(hereinafter called the "Trust"), on behalf of its separate series of shares
("Series") or classes of such Series ("Classes"), all as described herein (as
such part may be amended from time to time), and Firstar Mutual Fund Services,
LLC, a limited liability company organized under the laws of the State of
Wisconsin (hereinafter called "Firstar"), is effective as of the 18th day of
December, 1998.
WHEREAS, the Trust, is an open-ended management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, Firstar is in the business of providing mutual fund accounting
services to investment companies.
NOW, THEREFORE, the Trust and Firstar do mutually promise and agree as
follows:
1. SERVICES. Firstar agrees to provide the following mutual fund
accounting services to the Trust on a per Series or per Class basis as
appropriate:
A. Portfolio Accounting Services:
(1) Maintain portfolio trading records (purchase and sale
journals for each Series) on a trade date +1 basis using security
trade information communicated from the Series' investment
manager on a timely basis.
(2) Monitor corporate action to identify and record interest and
dividend income on portfolio securities and maintain accrual
balances as of each valuation date and calculate gross earnings
on investments for the accounting period.
(3) Determine gain/loss on portfolio security sales and identify
them as to short-short, short- or long-term status; account for
periodic distributions of gains or losses to shareholders and
maintain undistributed gain or loss balances as of each valuation
date.
(4) Maintain appropriate records of brokerage activity for
transactions in portfolio securities to enable Firstar to provide
monthly brokerage reports showing brokers and commission amounts.
(5) Maintain a daily listing of portfolio holdings by Series
showing cost, market value, and the percentage of portfolio
comprised of each security.
(6) Reconcile accounting asset listings against custodian's
asset listings on at least a monthly basis and report any
securities balance discrepancies promptly to the Trust and
Custodian.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Trust as to methodology, rate or
dollar amount.
(2) Upon receipt of written authorization from the Trust, make
and record payments for Trust expenses.
(3) Account for Trust and Series expenditures and maintain
expense accrual balances at the level of accounting detail, as
agreed upon by Firstar and the Trust.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Calculate and maintain daily records of the net asset value
(and offering price if appropriate) of each Series (or class of
such Series if appropriate), at such times (each a "valuation
date") as directed and authorized by the Trust through Firstar's
questionnaire and in accordance with: (i) relevant regulatory
requirements; (ii) the Trust's Declaration of Trust and By-Laws;
(iii) the Trust's registration statement or Form N-IA; and (iv)
any procedures approved by the Board of Trustees of the Trust and
supplied to Firstar in writing.
(2) In connection with the calculation of relevant net asset
values, Firstar shall obtain prices for portfolio securities from
pricing services approved by the Trust, and will apply those
prices to the portfolio securities. For those securities where
market quotations are not readily available, the Board of
Trustees shall approve, in good faith, the method for determining
the fair value for such securities. If the Trust desires to
provide a price which varies from the pricing source, the Trust
shall promptly notify and supply Firstar with the valuation of
any such security on each valuation date. All pricing changes
made by the Trust will be in writing and must specifically
identify the securities to be changed by CUSIP, name of security,
new price or rate to be applied, and, if applicable, the time
period for which the new price(s) is/are effective.
(3) On trade date +1, account for and record purchases, sales,
exchanges, transfers, dividend reinvestments, and other
transactions in shares of the Trust, its Series as reported by
the transfer agent on a timely basis.
(4) Apply equalization accounting as directed by the Trust.
(5) Determine net investment income (earnings) for each Series
of the Trust as of each valuation date. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances as of each
valuation date.
(6) Maintain a general ledger for the Trust and each of its
Series in the form as agreed upon.
(7) Communicate, at an agreed upon time, the per share price for
each valuation date to the Trust and its investment advisers as
agreed upon from time to time.
D. Tax Accounting Services:
(1) Maintain accounting records for each Series' investment
portfolio to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for each Series' investment
portfolio.
(3) Calculate taxable gain/loss on security sales using the tax
lot relief method designated by the Trust.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to
the transfer agent to support tax reporting to the shareholders.
(5) Maintain schedules of dividends paid and payable.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the Trust's accounting records
available to the Trust and its investment manager, the Securities
and Exchange Commission, and the outside auditors.
(2) Maintain accounting records according to the 1940 Act and
regulations provided thereunder.
2. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the Board
of Trustees of the Trust that affects accounting practices and procedures under
this agreement shall be effective upon written receipt and acceptance by the
Firstar.
3. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. Firstar reserves the
right to make changes from time to time, as it deems advisable, relating to its
services, systems, programs, rules, operating schedules and equipment, so long
as such changes do not adversely affect the service provided to the Trust under
this Agreement.
4. COMPENSATION. Firstar 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.
5. PERFORMANCE OF SERVICE.
A. Firstar shall exercise reasonable care in the performance of its
duties under this Agreement. Firstar shall not be liable for any loss suffered
by the Fund in connection with matters to which this Agreement relates,
including losses resulting from mechanical breakdowns or the failure of
communication or power supplies beyond Firstar's control, except a loss
resulting from Firstar'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, the Fund shall indemnify and hold harmless Firstar
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 Firstar may sustain or incur or
which may be asserted against Firstar 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 standards, or (ii) in reliance upon any written or
oral instruction provided to Firstar by any duly authorized officer of the Fund,
such duly authorized officer to be included in a list of authorized officers
furnished to Firstar and as amended from time to time in writing by resolution
of the Board of Directors of the Fund.
In the event of a mechanical breakdown or failure of communication or
power supplies beyond its control, Firstar shall take all reasonable steps to
minimize service interruptions for any period that such interruption continues
beyond Firstar's control. Firstar 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 Firstar. Firstar 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 Fund shall be
entitled to inspect Firstar's premises and operating capabilities at any time
during regular business hours of Firstar, upon reasonable notice to Firstar.
Regardless of the above, Firstar 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 Trust may be asked
to indemnify or hold Firstar harmless, the Trust shall be fully and promptly
advised of all pertinent facts concerning the situation in question, and it is
further understood that Firstar will use all reasonable care to notify the Trust
promptly concerning any situation which presents or appears likely to present
the probability of such a claim for indemnification against the Trust. The
Trust shall have the option to defend Firstar against any claim which may be the
subject of this indemnification. In the event that the Fund so elects, it will
so notify Firstar and thereupon the Trust shall take over complete defense of
the claim, and Firstar shall in such situation initiate no further legal or
other expenses for which it shall seek indemnification under this section.
Firstar shall in no case confess any claim or make any compromise in any case in
which the Trust will be asked to indemnify Firstar except with the Trust's prior
written consent.
C. Firstar shall indemnify and hold the Trust 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 Trust by any
person arising out of any action taken or omitted to be taken by Firstar as a
result of Firstar's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
6. RECORDS. Firstar 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 Trust and as required by the rules and
regulations of appropriate government authorities, in particular, Section 31 of
the 1940 Act and the rules thereunder. Firstar agrees that all such records
prepared or maintained by Firstar relating to the services to be performed by
Firstar hereunder are the property of the Trust and will be preserved,
maintained, and made available with such section and rules of the 1940 Act and
will be promptly surrendered to the Trust on and in accordance with its request.
7. CONFIDENTIALITY. Firstar shall handle in confidence all information
relating to the Trust's or its investment manager's business, which is received
by Firstar during the course of rendering any service hereunder.
8. DATA NECESSARY TO PERFORM SERVICES. The Trust or its agent, which may
be Firstar, shall furnish to Firstar the data necessary to perform the services
described herein at times and in such form as mutually agreed upon.
9. NOTIFICATION OF ERROR. The Trust will notify Firstar of any balancing
or control error caused by Firstar within three (3) business days after receipt
of any reports rendered by Firstar to the Trust, or within three (3) business
days after discovery of any error or omission not covered in the balancing or
control procedure, or within three (3) business days of receiving notice from
any shareholder.
10. ADDITIONAL SERIES. In the event that the Trust establishes one or
more Series or Classes of shares with respect to which it desires to have
Firstar render accounting services, under the terms hereof, it shall so notify
Firstar in writing, and if Firstar agrees in writing to provide such services,
such series will be subject to the terms and conditions of this Agreement, and
shall be maintained and accounted for by Firstar on a discrete basis. The
series and classes currently covered by this Agreement are: "The Xxxxxxx Growth
Fund."
11. TERM OF AGREEMENT. This Agreement shall become effective on December
18, 1998 and, unless sooner terminated as provided herein, shall continue
automatically in effect for successive annual periods, provided that the
continuance of the Agreement is approved by a majority of the Trustees of the
Trust. The Agreement may also 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 and will terminate automatically upon its
assignment unless the parties offer consent in writing. However, this Agreement
may be replaced or modified by a subsequent agreement between the parties.
12. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a Successor to any of Firstar's duties or responsibilities
hereunder is designated by Trust by written notice to Firstar, Firstar will
promptly, upon such termination and at the expense of Trust, transfer to such
Successor all relevant books, records, correspondence and other data established
or maintained by Firstar under this Agreement in a form reasonably acceptable to
Trust (if such form differs from the form in which Firstar has maintained the
same, Trust shall pay any expenses associated with transferring the same to such
form), and will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from Firstar's personnel in the establishment
of books, records and other data by such successor.
13. 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 Firstar shall be sent to:
Firstar Mutual Fund Services, LLC
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Trust shall be sent to:
The Xxxxxxx Funds
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
14. CHOICE OF LAW. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
THE XXXXXXX FUNDS FIRSTAR MUTUAL FUND SERVICES, LLC
By: Xxxxxx X. Xxxxxx By: Xxxxxx Xxxxxxxxx
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Title: President Title: Senior Vice President
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Attest: Xxxxx Xxxxxx Attest: Xxxx X. Xxxxxx
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SCHEDULE A
FUND VALUATION AND ACCOUNTING
DOMESTIC PORTFOLIOS
ANNUAL FEE SCHEDULE
Fixed Income Funds
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o Annual fee per fund based on market value of assets;
o $25,000 for the first $40,000,000
o 2/100 of 1% (2 basis points) on the next $200,000,000
o 1/100 of 1% (1 basis point) on the balance
o out-of-pocket expenses, including daily pricing service
Equity/Balance Funds
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o Annual fee per fund based on market value of assets;
o $23,000 for the first $40,000,000
o 1/100 of 1% (1 basis point) on the next $200,000,000
o 5/1000 of 1% (1/2 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
Money Market Funds
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o Annual fee per fund based on market value of assets:
o $25,000 for the first $40,000,000
o 1/100 of 1% (1 basis point) on the next $200,000,000
o 5/1000 of 1% (1/2 basis point) on the balance
o Out-of-pocket expenses, including daily pricing service
All fees and out-of-pocket expenses are billed monthly.
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SCHEDULE B
FUND VALUATION AND ACCOUNTING ASSET PRICING COST
Charge per Item per Valuation
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Asset Type (daily, weekly, etc.)
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Domestic and Canadian Equities $0.15
Options $0.15
Corporate/Government/Agency Bonds $0.50
CMOs $0.80
International Equities and Bonds $0.50
Municipal Bonds $0.80
Money Market Instruments $0.80
Pricing costs are billed monthly.
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