Exhibit (h)(1)
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 1st day of August,
2000, by and between Firstar Funds, Inc., a corporation organized under the laws
of the State of Wisconsin (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 management investment company which is
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 Company, (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
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 board communication by:
a. Establishing meeting agendas
b. Preparing Board of Directors' ("Board") reports based on
financial and administrative data
c. Evaluating independent auditor
d. Securing and monitoring fidelity bond and director and officer
liability coverage, and making the necessary Securities and
Exchange Commission ("SEC") filings relating thereto
e. Preparing minutes of meetings of the Board and shareholders
f. Recommend dividend declarations to the Board, 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 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 each 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 each Fund's compliance with the policies and investment
limitations of the Company 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 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 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 each 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 Company's custodian and accountants in the
maintenance of the Company's general ledger and in the
preparation of each Fund's 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; and
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:
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.
X.Xxx 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 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, 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.
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 Company 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.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its members, 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 Company.
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 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 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 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 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 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 Company
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
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
and notice to the Company shall be sent to:
Firstar Funds, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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.
FIRSTAR FUNDS, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
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Print name: Xxxxx X. Xxxxxx Print name: Xxxxxx X. Xxxxxxxxx
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FUND ADMINISTRATION AND COMPLIANCE
ANNUAL FEE SCHEDULE
EXHIBIT A
NAME OF SERIES DATE ADDED
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Institutional Money Market Fund
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Money Market Fund
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U.S. Treasury Money Market Fund
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U.S. Government Fund
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Tax-Exempt Money Market Fund
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Short-Term Bond Market Fund
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Intermediate Bond Market Fund
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Bond IMMDEXTM Fund
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Tax-Exempt Intermediate Bond Fund
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Balanced Income Fund
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Balanced Growth Fund
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Growth and Income Fund
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Equity Index Fund
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Growth Fund
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MidCap Index Fund
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Special Growth Fund
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Emerging Growth Fund
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MicroCap Fund
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Core International Equity Fund
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International Equity Fund
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Small Cap Aggressive Growth Fund
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Annual fee based upon fund group assets:
12.5 basis points on first $2 billion
10.0 basis points on the balance
Extraordinary services quoted separately.
Plus out-of-pocket expense reimbursements, including but not limited to:
Postage
Programming
Stationery
Proxies
Retention of records
Special reports
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of Directors meetings
Auditing and legal expenses
Fees and out-of-pocket expense reimbursements are billed to the Company monthly.
