FORM OF
ADMINISTRATION AGREEMENT
September 21, 1999
SSB Citi Fund Management LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Centurion Funds, Inc (the "Fund"), a corporation organized
under the laws of the State of Maryland, confirms its agreement
with SSB Citi Fund Management LLC ("SSB Citi ") with respect to
Series of the Fund that may be offered from time to time (each a
"Portfolio" and collectively the "Portfolios"), as follows:
1. Investment Description; Appointment
The Fund desires to employ the Portfolios' capital by
investing and reinvesting in investments of the kind and in
accordance with the limitations specified in its Charter dated
August 20, 1998 as amended from time to time (the "Charter"), in
its Prospectus and Statement of Additional Information as from
time to time in effect and in such manner and to such extent as
may from time to time be approved by the Board of Directors of the
Fund (the "Board"). Copies of the Fund's Prospectus, Statement of
Additional Information and Charter have been or will be submitted
to SSB Citi. Centurion Trust Company ("The Adviser") serves as
the Fund's investment adviser; BEA Associates and Parametric
Portfolio Associates serve as the sub-investment advisers of the
Centurion U.S. Equity Fund; BEA Associates and Friends Ivory &
Sime, Inc. serve as the sub-investment advisers to the Centurion
International Equity Fund; BEA Associates serves as the sub-
investment adviser to the Centurion U.S. Contra Fund; and BEA
Associates serves as the sub-investment adviser to the Centurion
International Contra Fund, respectively; and the Fund desires to
employ and hereby appoints SSB Citi to act as its administrator.
SSB Citi accepts this appointment and agrees to furnish the
services to the Fund for the compensation set forth below. SSB
Citi is hereby authorized to retain third parties and is hereby
authorized to delegate some or all of its duties and obligations
hereunder to such persons provided that such persons shall remain
under the general supervision of SSB Citi .
2. Services as Administrator
Subject to the supervision and direction of the Board,
SSB Citi will: (a) assist in supervising all aspects of the
Portfolio's operations except those performed by other parties
pursuant to written agreements with the Fund; (b) supply the Fund
with office facilities (which may be in SSB Citi 's own offices),
statistical and research data, data processing services, clerical,
accounting and bookkeeping services, including, but not limited
to, the calculation of (i) the net asset value of shares of the
Portfolios, (ii) distribution fees, internal auditing and legal
services, internal executive and administrative services, and
stationary and office supplies; and (c) prepare reports to
shareholders of the Portfolios, tax returns and reports to and
filings with the Securities and Exchange Commission (the "SEC")
and state blue sky authorities.
3. Compensation
In consideration of services rendered pursuant to this
Agreement, the Fund will pay SSB Citi on the first business day
of each month a fee for the previous month at an annual rate of
0.20% of each Portfolio's average daily net assets or a minimum of
$50,000 for each Portfolio depending upon which amount is greater.
The fee for the period from the date the Fund's initial
registration statement is declared effective by the SEC to the end
of the month during which the initial registration statement is
declared effective shall be prorated according to the proportion
that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of any month, the fee
for such part of a month shall be prorated according to the
proportion which such period bears to the full monthly period and
shall be payable upon the date of termination of this Agreement.
For the purpose of determining fees payable to SSB Citi , the
value of the each Portfolio's net assets shall be computed at the
times and in the manner specified in the Fund's Prospectus and
Statement of Additional Information as from time to time in
effect.
4. Expenses
SSB Citi will bear all expenses in connection with
the performance of its services under this Agreement. The Fund
will bear certain other expenses incurred by it in connection with
operation of the Portfolios, including: taxes, interest,
brokerage fees and commissions, if any; fees of the members of the
Board of the Fund who are not officers, directors or employees of
Centurion or its affiliates or any person who is an affiliate of
any person to whom duties may be delegated hereunder; SEC fees and
state blue sky qualification fees; charges of custodians and
transfer and dividend disbursing agents; the Fund's and Board
members' proportionate share of insurance premiums, professional
association dues and/or assessments; outside auditing and legal
expenses; costs of maintaining the Fund's existence; costs
attributable to investor services, including, without limitation,
telephone and personnel expenses; costs of preparing and printing
prospectuses and statements of additional information for
regulatory purposes and for distribution to existing shareholders;
costs of shareholders' reports and meetings of the officers or
Board and any extraordinary expenses
5 Standard of Care
SSB Citi shall exercise its best judgment in
rendering the services listed in paragraph 2 above, and SSB Citi
shall not be liable for any error of judgment or mistake of law or
for any loss suffered by the Fund or the Portfolios in connection
with the matters to which this Agreement relates, provided that
nothing herein shall be deemed to protect or purport to protect
SSB Citi against liability to the Fund or the Portfolios or to
the Fund's shareholders to which SSB Citi would otherwise be
subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or by
reason of SSB Citi's reckless disregard of its obligations and
duties under this Agreement.
6 Term of Agreement
This Agreement shall continue automatically (unless
terminated as provided herein) for successive annual periods,
provided that such continuance is specifically approved at least
annually by the Board. This Agreeement is terminable, without
penalty, on 90 days' written notice, by the Board or by vote of
holders of a majority of the Fund's shares, or upon 60 days'
written notice, by SSB Citi .
7 Service to Other Companies or Accounts
The Fund understands that SSB Citi now acts, will
continue to act and may act in the future as administrator to one
or more other investment companies, and the Fund has no objection
to SSB Citi so acting. In addition, the Fund understands that
the persons employed by SSB Citi or its affiliates to assist in
the performance of its duties hereunder will not devote their full
time to such service and nothing contained herein shall be deemed
to limit or restrict the right of SSB Citi or its affiliates to
engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
8 Indemnification
The Fund agrees to indemnify SSB Citi and its
officers, directors, employees, affiliates, controlling persons,
agents (including persons to whom responsibilities are delegated
hereunder) ("indemnitees") against any loss, claim, expense or
cost of any kind (including reasonable attorney's fees) resulting
or arising in connection with this Agreement or from the
performance or failure to perform any act hereunder, provided that
no such indemnification shall be available if the indemnitee
violated the standard of care in paragraph 5 above. This
indemnification shall be limited by the Investment Company Act of
1940 and relevant state law. Each indemnitee shall be entitled to
advancement of its expenses in accordance with the requirements of
the 1940 Act and the rules, regulations and interpretations
thereof as in effect from time to time.
If the foregoing is in accordance with your understanding,
kindly indicate your acceptance hereof by singing and returning to
us the enclosed copy hereof.
Very truly yours,
Centurion Funds, Inc.
By:
Title:
Accepted:
SSB Citi Fund Management LLC.
By: _________________________________
Title:
APPENDIX A
ADMINISTRATIVE SERVICES
Fund Accounting. Fund accounting services involve comprehensive
accrual-based recordkeeping and management information. They
include maintaining the Fund's books and records in accordance
with the Investment Company Act of 1940, as amended (the "1940
Act"), net asset value calculation, daily dividend calculation,
tax accounting and portfolio accounting.
The designated fund accountants interact with the Fund's
custodians, transfer agent and investment adviser daily. As
required, the responsibilities of each fund accountant may
include:
? Cash Reconciliation - Reconcile prior day's ending
cash balance per custodians' records and the
accounting system to the prior day's ending cash
balance per fund accounting's cash availability
report;
? Cash Availability - Combine all activity affecting the
Fund's cash account and produce a net cash amount
available for investment;
? Formal Reconciliations - Reconcile system generated
reports to prior day's calculations of interest,
dividends, amortization, accretion, distributions,
capital stock and net assets;
? Trade Processing - Upon receipt of instructions from
the investment adviser review, record and transmit
buys and sells to the custodian;
? Journal Entries - Input entries to the accounting
system reflecting shareholder activity and Fund
expense accruals;
? Reconcile and Calculate N.O.A. (net other assets) -
Compile all activity affecting asset and liability
accounts other than investment account;
? Calculate Net Income, Mil Rate and Yield for Daily
Distribution Funds - Calculate income on purchase and
sales, calculate change in income due to variable rate
change, combine all daily income less expenses to
arrive at net income, calculate mil rate and yields (1
day, 7 day and 30 day);
? Mini-Cycle (except for Money Market Funds) - Review
intra day trial balance and reports, review trial
balance N.O.A.;
? Holdings Reconciliation - Reconcile the portfolio
holdings per the system to custodian records;
? Pricing - Determine N.A.V. for Portfolios using market
value of all securities and currencies (plus N.O.A.),
divided by the shares outstanding, and investigate
securities with significant price changes (over 5%);
? System Check-Back - Verify the change in market value
of securities which saw trading activity per the
system;
? Net Asset Value Reconciliation - Identify the impact
of current day's Portfolio activity on a per share
basis;
? Reporting of Price to NASDAQ - 5:30 P.M. is the final
deadline for Fund prices being reported to the
newspaper;
? Reporting of Price to Transfer Agent- N.A.V.s are
reported to transfer agent upon total completion of
above activities.
In addition, fund accounting personnel: communicate
corporate actions of portfolio holdings to portfolio managers;
initiate notification to custodian procedures on outstanding
income receivables; provide information to the Fund's treasurer
for reports to shareholders, SEC, Board members, tax authorities,
statistical and performance reporting companies and the Fund's
auditors; interface with the Fund's auditors; prepare monthly
reconciliation packages, including expense pro forma; prepare
amortization schedules for premium and discount bonds based on the
effective yield method; prepare vault reconciliation reports to
indicate securities currently "out-for-transfer;" and calculate
daily expenses based on expense ratios supplied by Fund's
treasurer.
Financial Administration. The financial administration services
made available to the Fund fall within three main categories:
Financial Reporting; Statistical Reporting; and Publications. The
following is a summary of the services made available to the Fund
by the Financial Administration Division:
Financial Reporting
? Coordinate the preparation and review of the
annual, semi-annual and quarterly portfolio of
investments and financial statements included in
the Fund's shareholder reports.
Statistical Reporting
? Total return reporting;
? SEC 30-day yield reporting;
? Prepare dividend summary;
? Prepare quarter-end reports;
? Communicate statistical data to the financial
media (Donoghue, Lipper, Morningstar, et al.)
Publications
? Coordinate the printing and mailing process with
outside printers for annual and semi-annual
reports, prospectuses, statements of additional
information, proxy statements and special
letters or supplements;
? Provide graphics and design assistance relating
to the creation of marketing materials and
shareholder reports.
Treasury. The following is a summary of the treasury services
available to the Fund:
? Provide a Controller for the Fund;
? Determine expenses properly chargeable to the
Fund;
? Authorize payment of bills for expenses of the
Fund;
? Establish and monitor the rate of expense
accruals;
? Prepare financial materials for review by the
Fund's Board (e.g., 10f-3, 17a-7 and 17e-1
reports, repurchase agreement dealer lists,
securities transactions);
? Recommend dividends to be voted by the Fund's
Board;
? Monitor xxxx-to-market comparisons for money
market funds;
? Recommend valuation to be used for securities
which are not readily saleable;
? Function as a liaison with the Fund's outside
auditors and arrange for audits;
? Provide accounting, financial and tax support
relating to portfolio management and any
contemplated changes in the Fund's structure or
operations;
? Prepare and file forms with the Internal Revenue
Service
* Form 8613
* Form 1120-RIC
* Board Members' and Shareholders' 1099s
* Mailings in connection with Section 852
and related regulations.
Legal and Regulatory Services. The legal and regulatory services
made available to the Fund fall within four main areas: SEC and
Public Disclosure Assistance; Corporate and Secretarial Services;
Compliance Services; and Blue Sky Registration. The following is
a summary of the legal and regulatory services available to the
Fund:
SEC and Public Disclosure Assistance
? File annual amendments to the Fund's
registration statements, including updating the
prospectus and statement of additional
information where applicable;
? File annual and semi-annual shareholder reports
with the appropriate regulatory agencies;
? Prepare and file proxy statements;
? Review marketing material for SEC and NASD
clearance;
? Provide legal assistance for shareholder
communications.
Corporate and Secretarial Services
? Provide an Assistant Secretary for the Fund;
? Maintain general corporate calendar;
? Prepare agenda and background materials for Fund
board meetings, make presentations where
appropriate, prepare minutes and follow-up
matters raised at Board meetings;
? Organize, attend and keep minutes of shareholder
meetings;
? Maintain Articles of Incorporation and By-Laws
of the Fund.
Legal Consultation and Business Planning
? Provide general legal advice on matters relating
to portfolio management, Fund operations and any
potential changes in the Fund's investment
policies, operations or structure;
? Maintain continuing awareness of significant
emerging regulatory and legislative developments
which may affect the Fund, update the Fund's
Board and the investment adviser on those
developments and provide related planning
assistance where requested or appropriate;
? Develop or assist in developing guidelines and
procedures to improve overall compliance by the
Fund and its various agents;
? Manage Fund litigation matters and assume full
responsibility for the handling of routine Fund
examinations and investigations by regulatory
agencies.
Compliance Services
The Compliance Department is responsible for preparing
compliance manuals, conducting seminars for fund accounting and
performing on-going testing of the Fund's portfolio to assist the
Fund's investment adviser in complying with prospectus guidelines
and limitations, 1940 Act requirements and Internal Revenue Code
requirements. The Department may also act as liaison to the SEC
during its routine examinations of the Fund.
