ADMINISTRATION AGREEMENT
Agreement made this 31st day of December, 2001, between FMI Funds,
Inc., a Maryland corporation (the "Company"), and Fiduciary Management, Inc., a
Wisconsin corporation (the "Administrator").
W I T N E S S E T H:
WHEREAS, the Company is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940 (the "Act") as an open-end
management investment company consisting of two series, including FMI Large Cap
Fund (the "Fund"); and
WHEREAS, the Company desires to retain the Administrator to be the
Administrator for the Fund and as such to perform the services set forth in this
Agreement.
NOW, THEREFORE, the Company and the Administrator do mutually promise
and agree as follows:
1. Employment. The Company hereby employs the Administrator to be the
Administrator for the Fund for the period and on the terms set forth in this
Agreement. The Administrator hereby accepts such employment for the compensation
herein provided and agrees during such period to render the services and to
assume the obligations herein set forth.
2. Authority and Duties of the Administrator. The Administrator shall
supervise all aspects of the operations of the Fund except those performed by
the Fund's investment adviser under the Fund's investment advisory agreement,
subject to such policies as the board of directors of the Company may determine.
The Administrator shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Company or the Fund in any way or
otherwise be deemed to be an agent of the Company or the Fund. However, one or
more shareholders, officers, directors or employees of the Administrator may
serve as directors and/or officers of the Company, but without compensation or
reimbursement of expenses for such services from the Company. Nothing herein
contained shall be deemed to require the Company to take any action contrary to
its Articles of Incorporation or any applicable statute or regulation, or to
relieve or deprive the board of directors of the Company of its responsibility
for and control of the affairs of the Fund.
In connection with its supervision of the operations of the Fund, the
Administrator shall perform the following services for the Fund:
(a) Prepare and maintain the books, accounts and other documents
specified in Rule 31a-1 under the Act in accordance with the requirements
of Rule 31a-1 and Rule 31a-2 under the Act;
(b) Calculate the Fund's net asset value in accordance with the
provisions of the Company's Articles of Incorporation and By-Laws and its
Registration Statement;
(c) Respond to stockholder inquiries forwarded to it by the Fund:
(d) Prepare the financial statements contained in reports to
stockholders of the Fund:
(e) Prepare for execution by the Company and file all of the Fund's
federal excise tax returns;
(f) Prepare reports to and filings with the Securities and Exchange
Commission;
(g) Prepare reports to and filings with state Blue Sky authorities;
(h) Furnish statistical and research data, clerical, accounting and
bookkeeping services and stationery and office supplies; and
(i) Keep and maintain the Fund's financial accounts and records, and
generally assist in all aspects of the Fund's operations to the extent
agreed to by the Administrator and the Company.
3. Expenses. The Administrator, at its own expense and without
reimbursement from the Company or the Fund, shall furnish office space, and all
necessary office facilities, equipment and executive personnel for performing
the services required to be performed by it under the Agreement. The
Administrator shall not be required to pay any expenses of the Fund. The
expenses of the Fund's operations borne by the Fund include by way of
illustration and not limitation, directors fees paid to those directors who are
not officers of the Company, the professional costs of preparing and the costs
of printing its registration statements required under the Securities Act of
1933 and the Act (and amendments thereto), the expense of registering its shares
with the Securities and Exchange Commission and in the various states, the
printing and distribution cost of prospectuses mailed to existing shareholders,
the cost of stock certificates (if any), director and officer liability
insurance, the printing and distribution costs of reports to stockholders,
reports to government authorities and proxy statements, interest charges, taxes,
legal expenses, association membership dues, auditing services, insurance
premiums, brokerage and other expenses associated with the execution of
portfolio securities transactions, fees and expenses of the custodian of the
Fund's assets, printing and mailing expenses and charges and expenses of
dividend disbursing agents, registrars and stock transfer agents.
4. Compensation of the Administrator. For the services to be rendered
by the Administrator hereunder, the Company, through and on behalf of the Fund,
shall pay to the Administrator an administration fee, paid monthly, based on the
average net assets of the Fund, as determined by valuations made as of the close
of each business day of the month.
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The administration fee shall be 1/12 of 0.2% of such average net assets up to
and including $30,000,000, 1/12 of 0.1% of the next $70,000,000 of such average
net assets and 1/12 of 0.05% of such average net assets of the Fund in excess of
$100,000,000; provided, however, that for any month in which this Agreement is
not in effect for the entire month, such fee shall be reduced proportionately on
the basis of the number of calendar days during which it is in effect and the
fee computed upon the daily net assets of the business days during which it is
so in effect. In addition to the above fees, the Company, through and on behalf
of the Fund, shall pay the Administrator annually a fee of $100 for each state
in which shares of the Fund are qualified for sale, a fee of $80 for each state
in which the Fund is registered as an issuer-dealer and a fee of $50 for each
agent registration maintained on behalf of the Fund, none of which fees shall be
reduced if registrations are maintained for less than an entire fiscal year.
5. Ownership of Shares of the Fund. Except in connection with the
initial capitalization of the Fund, the Administrator shall not take an
ownership position in the Fund, and shall not permit any of its shareholders,
officers, directors or employees to take a long or short position in the shares
of the Fund, except for the purchase of shares of the Fund for investment
purposes at the same price as that available to the public at the time of
purchase.
6. Exclusivity. The services of the Administrator to the Fund
hereunder are not to be deemed exclusive and the Administrator shall be free to
furnish similar services to others as long as the services hereunder are not
impaired thereby. During the period that this Agreement is in effect, the
Administrator shall be the Fund's sole administrator.
7. Liability. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator, the Administrator shall not be subject to liability to the
Fund or to any shareholder of the Fund for any act or omission in the course of,
or connected with, rendering services hereunder, or for any losses that may be
sustained in the purchase, holding or sale of any security.
8. Amendments. This Agreement may be amended by the mutual consent of
the parties; provided, however, that in no event may it be amended without the
approval of the board of directors of the Company in the manner required by the
Act.
9. Termination. This Agreement may be terminated at any time, without
the payment of any penalty, by the board of directors of the Company or by a
vote of the majority of the outstanding voting securities of the Fund as defined
in the Act, upon the giving of sixty (60) days' written notice to the
Administrator. This Agreement may be terminated by the Administrator at any time
upon the giving of sixty (60) days' written notice to the Company. This
Agreement shall terminate automatically in the event of its assignment (as
defined in Section 2(a)(4) of the Act). Subject to prior termination as
hereinbefore provided, the Agreement shall continue in effect for two (2) years
from the date hereof and indefinitely thereafter, but only so long as the
continuance after such two (2) year period is specifically approved annually by
(i) the board of directors of the Company. Upon termination of the Agreement the
Administrator shall deliver to the Company all books, accounts and other
documents then maintained by it pursuant to Section 2 hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the day first above written.
FIDUCIARY MANAGEMENT, INC.
(the "Administrator")
By:
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President
FMI FUNDS, INC.
(the "Company")
By:
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President
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