EXHIBIT (h)(3)
FUND ACCOUNTING SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 31st day of
December, 1999, by and between The Xxxxx Growth Fund, Inc.("JGF"), Xxxxx Funds,
Inc. ("JFI") and American Eagle Funds, Inc.("AEF"), each a corporation organized
under the laws of the State of Minnesota (each a "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, each Company is a open-end investment management company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, FMFS is in the business of providing, among other things,
mutual fund accounting services to investment companies; and
WHEREAS, each Company desires to retain FMFS to provide accounting
services to each fund of the Company (each a "Fund") 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,
each Company and FMFS agree as follows:
1. APPOINTMENT OF FUND ACCOUNTANT
Each Company hereby appoints FMFS as "Fund Accountant" 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. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date+1
basis using security trade information communicated from the
investment manager of each Fund.
(2) For each valuation date, price the portfolio
position of each Fund in the manner set forth in Section 3 of
this Agreement.
(3) Identify interest and dividend accrual balances
for each Fund as of each valuation date and calculate gross
earnings on investments for the accounting period.
(4) Determine gain/loss on security sales for each
Fund and identify them as short-term or long-term, account for
periodic distributions of gains or losses to shareholders and
maintain undistributed gain or loss balances as of each
valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense
accrual amounts for each Fund as directed by the Company as to
methodology, rate or dollar amount.
(2) Record payments for each Fund's expenses upon
receipt of written authorization from the Company.
(3) Account for each Fund's expenditures and maintain
expense accrual balances at the level of accounting detail, as
agreed upon by FMFS and the Company.
(4) Provide expense accrual and payment reporting for
each Fund.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales,
exchanges, transfers, dividend reinvestments and other Fund
share activity as reported by the transfer agent on a timely
basis for each Fund.
(2) Apply equalization accounting as directed by each
Company.
(3) Determine net investment income (earnings) for
each Fund as of each valuation date. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances for each Fund as
of each valuation date.
(4) Maintain a general ledger and other accounts,
books, and financial records for each Fund in the form as
agreed upon.
(5) Determine the net asset value of each Fund
according to the accounting policies and procedures set forth
in each Fund's prospectus.
(6) Calculate per share net asset value, per share
net earnings, and other per share amounts reflective of each
Fund's operations at such time as required by the nature and
characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per
share price for each Fund for each valuation date to parties
as agreed upon from time to time.
(8) Prepare monthly reports for each Fund which
document the adequacy of accounting detail to support
month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment
portfolio of each Fund to support the tax reporting required
for Internal Revenue Service defined regulated investment
companies.
(2) Maintain tax lot detail for the investment
portfolio of each Fund.
(3) Calculate taxable gain/loss on security sales
using the tax lot relief method designated by each Fund.
(4) Provide the necessary financial information for
each Fund to support the taxable components of income and
capital gains distributions to the transfer agent to support
tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and
support financial statement preparation by making each Fund's
accounting records available to the Company, the Securities
and Exchange Commission ("SEC"), and the Company's independent
auditors.
(2) Prepare and maintain accounting records for each
Fund in accordance with the requirements of the 1940 Act and
regulations provided thereunder.
F. FMFS will perform the following accounting functions
on a daily basis for each Fund:
(1) Reconcile cash and investment balances with the
Custodian, and provide the Fund's advisor with the beginning
cash balance available for investment purposes;
(2) Transmit or mail a copy of the portfolio
valuation to the Fund's advisor;
(3) Review the impact of current day's activity on a
per share basis and review changes in market value.
G. In addition, FMFS will:
(1) Prepare monthly security transactions listings
for each Fund;
(2) Supply various Company, Fund and class
statistical data as may be requested by a Company on an
ongoing basis.
3. PRICING OF SECURITIES
For each valuation date, obtain prices from a pricing source selected
by FMFS but approved by the board of directors of each Company and apply those
prices to the portfolio positions of each Fund. For those securities where
market quotations are not readily available, the board of directors of such
Company shall approve, in good faith, the method for determining the fair value
for such securities.
If a Company desires to provide a price that varies from the pricing
source, the Company shall promptly notify and supply FMFS with the valuation of
any such security on each valuation date. All pricing changes made by a Company
must 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.
4. CHANGES IN ACCOUNTING PROCEDURES
Any resolution passed by the board of directors of a Company that
affects accounting practices and procedures under this Agreement shall be
effective upon written receipt and acceptance by the FMFS.
5. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC.
FMFS 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 any Company under this Agreement.
6. 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. Each Company agrees to
promptly pay all fees and reimbursable expenses following the receipt of the
billing notice.
7. 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 a Company,
except a loss relating to FMFS's refusal or failure to comply with the
terms of this Agreement or from bad faith, negligence, or willful
misconduct.
Each Company shall indemnify and hold harmless FMFS from and
against any and all claims, demands, losses, expenses, and liabilities
(including reasonable attorneys' fees) resulting from the negligence of
the Company (unless contributed to by FMFS' refusal or failure to
comply with this Agreement, negligence, bad faith or willful
misconduct) or resulting from FMFS' reasonable reliance upon any
written or oral instruction provided to FMFS by a duly authorized
officer of the Company (and included in a list of authorized officers
furnished to FMFS as amended from time to time in writing by resolution
of the board of directors of the Company).
FMFS shall indemnify and hold each Company harmless from and
against any and all claims, demands, losses, expenses, and liabilities
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, FMFS shall take all reasonable steps
to minimize service interruptions for any period that such interruption
continues. 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 each 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. Upon the assertion of a claim for indemnification, the
indemnitor shall be fully and promptly advised of all pertinent facts
concerning the claim; provided, however, that failure by the indemnitee
to advise the indemnitor shall not relieve the indemnitor of any
liability hereunder which it may have to the indemnitee. The indemnitor
shall have the option to participate in the defense of the indemnitee
against any claim, or to defend against the claim in its own name or in
the name of the indemnitee through counsel acceptable to the
indemnitee. 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.
8. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers and
employees to treat confidentially and as proprietary information of each
Company, all records and other information related to the Company and the
Company's prior, present or potential shareholders (and clients of such
shareholders), and not to use such records and other information for any purpose
other than the performance of its responsibilities and duties hereunder, except
after prior notification to and approval in writing from the Company, or as may
be required by law.
9. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof with
respect to the AEF and on or about March 1, 2000 (with the parties to agree upon
the exact effective date) with respect to JGF and JFI and, unless sooner
terminated as provided herein, shall continue, subject to board of directors
approval, in effect for successive annual periods. This Agreement may be
terminated by any party to this Agreement upon giving ninety (90) days prior
written notice to the other parties or such shorter period as may be mutually
agreed upon by the parties.
10. 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 each Company and in accordance with Section 31 of the 1940
Act and other rules and regulations of governmental or regulatory authorities.
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 each 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 each
Company on and in accordance with its request.
11. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the
State of Wisconsin without reference to choice of laws principles thereof.
However, nothing herein shall be construed in a manner inconsistent with the
1940 Act or any rule or regulation promulgated by the SEC thereunder.
12. DUTIES IN THE EVENT OF TERMINATION
In the event of termination of this Agreement a successor to any of
FMFS's duties or responsibilities hereunder may be designated by the Company by
written notice to FMFS. FMFS will promptly upon such notice, transfer to such
successor all relevant books, records, correspondence and other data kept or
maintained by FMFS under this Agreement in a form reasonably acceptable to the
Company, 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. Should the Agreement be
terminated by the action of a Company, such Company shall bear all reasonable
costs incurred by FMFS and associated with the transfer of records and other
materials to its successor.
13. 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.
14. DATA NECESSARY TO PERFORM SERVICES
Each Company or its agent, which may be FMFS, shall furnish to FMFS the
data necessary to perform the services described herein at such times and in
such form as mutually agreed upon. If FMFS is also acting in another capacity
for any Company, nothing herein shall be deemed to relieve FMFS of any of its
obligations in such capacity.
15. NOTIFICATION OF ERROR
Each Company will notify FMFS of any balancing or control error caused
by FMFS upon the later of: within three (3) business days after receipt of any
reports rendered by FMFS to the Company, 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.
16. 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
Notice to a Company shall be sent to:
Xxxxx Associates, Inc.
Attn: Xxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer on one or more counterparts as of the day
and year first written above.
THE XXXXX GROWTH FUND, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ________________________________
Attest: _______________________ Attest:_____________________________
XXXXX FUNDS, INC.
By:______________________________
Attest: _______________________
AMERICAN EAGLE FUNDS, INC.
By:______________________________
Attest: _______________________
FUND ACCOUNTING SERVICES
ANNUAL FEE SCHEDULE
EXHIBIT A
NAME OF SERIES APPROXIMATE DATE ADDED
-------------- ----------------------
Xxxxx Growth Fund, Inc. 3/1/00
Xxxxx Growth Fund (Class A, B, C, I)
Xxxxx Funds, Inc. 3/1/00
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 Fund
American Eagle Twenty Fund
American Eagle Large-Cap Growth Fund 12/31/00
Xxxxx Growth Fund and Xxxxx Funds (4 classes each Fund)
Annual fee per fund:
$45,000 for the first $100 million in net assets
3 basis points on the next $200 million in net asset
1.5 basis points on the balance
American Eagle Funds (1 class)
Annual fee per Fund:
$30,000 for the first $100 million in net assets
($18,000 - First 12 months or until the Fund exceeds $10 million in net
assets)
1.25 basis points on the next $200 million in net assets
.75 basis point on the balance
Extraordinary services - quoted separately
Plus reasonable out-of-pocket expense reimbursements
Activity Fees:
Domestic and Canadian Equities $.15
Options $.15
Corp/Gov/Agency Bonds $.50
CMOs $.80
International Equities and Bonds $.50
Municipal Bonds $.80
Money Market Instruments $.80
Mutual Funds $125/fund/mo
NOTE: - All schedules subject to change depending upon the use of derivatives -
options, futures, short sales, etc.
Factor Services (BondBuyer)
Per CMO $1.50/month
Per Mortgage Backed $0.25/month
Minimum $300/month
Fees and reasonable out-of-pocket expenses are billed to the Company monthly
