Exhibit (h)(1)
ADMINISTRATION AGREEMENT
THIS AGREEMENT, made as of the ___ day of ___________, 2001, by and
among Portico Funds, Inc., a Minnesota corporation (the "Fund"), U.S. Bancorp
Xxxxx Xxxxxxx Asset Management, Inc., a Delaware corporation ("USBPJAM"), and
Firstar Mutual Fund Services, LLC, a Wisconsin limited liability company ("MFS"
and, together with USBPJAM, the "Administrator").
WHEREAS, the Fund is an open-end diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares of Common Stock; and
WHEREAS, the Fund desires the Administrator to provide, and the
Administrator is willing to provide, administrative and other services as set
forth herein to such portfolios of the Fund as the Fund and the Administrator
may agree ("Portfolios") and as listed on Schedule A attached hereto and made a
part of this Agreement, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Fund and the Administrator hereby agree as follows:
ARTICLE 1. Retention of the Administrator. The Fund hereby retains the
Administrator to act as the administrator of the Portfolios and to furnish the
Portfolios with the administrative and other services set forth in Article 2
below. The Administrator hereby accepts such employment to perform the duties
set forth below.
The Administrator shall, for all purposes herein, be deemed to be an
independent contractor and, unless otherwise expressly provided or authorized,
shall have no authority to act for or represent the Fund in any way and shall
not be deemed an agent of the Fund.
ARTICLE 2. Administrative Services. For the compensation set forth in
Schedule A hereto, the Administrator shall perform, or supervise the performance
by others of, administrative and other services as set forth herein in
connection with the operations of the Portfolios. The Administrator is
authorized to appoint and compensate from its resources one or more other
entities to perform such services on a subcontracted basis in connection with
the operations of the Portfolios. If the Administrator appoints one or more
other entities to perform services called for by this Agreement on a
subcontracted basis as aforesaid, the Administrator nevertheless shall remain
liable to the Fund and the Portfolios for the acts and omissions of such other
entities as if the Administrator itself performed such services. The
Administrator shall promptly notify the Fund of any persons appointed on a
subcontracted basis pursuant to this provision.
In addition, on behalf of the Fund, the Administrator will conduct
relations with custodians, depositories, accountants, the Fund's legal counsel,
underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and
persons in any other capacity deemed to be
necessary or desirable for the Portfolios' operations and, at the request of the
Fund's Board of Directors, will investigate and assist in the selection of such
service providers.
(A) Administrative and Accounting Services. The Administrator
shall provide the Fund with regulatory reporting, fund accounting and
related portfolio accounting services, all necessary office space,
equipment, personnel, compensation and facilities (including facilities
for Shareholders' and Directors' meetings) for handling the affairs of
the Portfolios and such other services as the Administrator shall, from
time to time, determine to be necessary to perform its obligations
under this Agreement. In addition, at the request of the Fund's Board
of Directors, the Administrator shall make reports to the Fund's
Directors concerning the performance of its obligations hereunder
including such activities as are set forth on Exhibit A hereto, as
amended by agreement of the parties from time to time. Without limiting
the generality of the foregoing, the Administrator, under the
supervision of the Fund's Board of Directors, shall:
* calculate Fund expenses and control all disbursements
for the Fund, and as appropriate, compute the Fund's
yields, total return, expense ratios, portfolio
turnover rate and, if required, portfolio average
dollar-weighted maturity;
* assist outside Fund counsel with preparation of
prospectuses, statements of additional information,
registration statements and proxy materials;
* prepare such reports, applications and documents
(including reports regarding the sale and redemption
of shares as may be required in order to comply with
Federal and state securities law) as may be necessary
or desirable to register the Fund's shares with state
securities authorities, monitor sale of Fund shares
for compliance with state securities laws, and file
with the appropriate securities authorities the
registration statements and reports for the Fund and
the Fund's shares and all amendments thereto, as may
be necessary or convenient to register and keep
effective the Fund and the Fund's shares with state
securities authorities to enable the Fund to make a
continuous offering of its shares;
* prepare communications to shareholders, including the
annual and semi-annual reports to shareholders,
coordinate mailing prospectuses, notices, proxy
statements, proxies and other reports to Fund
shareholders, and supervise and facilitate the
solicitation of proxies solicited by the Fund for all
shareholder meetings, including the tabulation
process for shareholder meetings;
* prepare, negotiate, and administer contracts on
behalf of the Fund with, among others, the Fund's
distributor, subject to any approvals or reapprovals
by the Fund's Board of Directors required by
applicable law or Board procedures;
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* maintain the Fund's general ledger and prepare the
Fund's financial statements, including expense
accruals and payments, determine the net asset value
of the Fund's assets and of the Fund's shares, and
provide for the payment of dividends and other
distributions to shareholders;
* calculate performance data of the Fund and the
Portfolios for dissemination to information services
covering the investment company industry;
* coordinate and supervise the preparation and filing
of the Fund's tax returns;
* examine and review the operations and performance of
the various organizations providing services to the
Fund or any Portfolio directly or on a subcontracted
basis as provided for herein and, at the request of
the Fund's Board of Directors, report to the Board on
the performance of such organizations;
* provide for and coordinate the layout and printing of
publicly disseminated prospectuses and the Fund's
semi-annual and annual reports to shareholders;
* provide internal legal and administrative services as
requested by the Fund from time to time;
* provide for and coordinate the design, development,
and operation of the Fund, including new portfolio
and class investment objectives, policies and
structure;
* provide individuals reasonably acceptable to the
Fund's Board of Directors for nomination,
appointment, or election as officers of the Fund, who
will be responsible for the management of certain of
the Fund's affairs as determined by the Fund's Board
of Directors;
* advise the Fund and its Board of Directors on matters
concerning the Fund and its affairs;
* obtain and keep in effect fidelity bonds and
directors and officers/errors and omissions insurance
policies for the Fund in accordance with the
requirements of Rules 17g-1 and 17d-1(7) under the
1940 Act as such bonds and policies are approved by
the Fund's Board of Directors;
* monitor and advise the Fund and the Portfolios on
their registered investment company status under the
Internal Revenue Code of 1986, as amended;
* perform all administrative services and functions
required for the operation of the Fund and each
Portfolio to the extent such administrative services
and functions are not provided to the Fund or such
Portfolio pursuant to the
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Fund's or such Portfolio's investment advisory
agreement, distribution agreement and custodian
agreement;
* furnish advice and recommendations with respect to
other aspects of the business and affairs of the
Portfolios as the Fund and the Administrator shall
determine desirable;
* prepare and file with the Securities and Exchange
Commission the semi-annual reports for the Fund on
Form N-SAR and all required notices pursuant to Rule
24f-2; and
* organize and coordinate meetings of the Fund's Board
of Directors and the committees thereof.
The Administrator will also perform such other services for the Fund as
agreed from time to time at the request of the Fund's Board of
Directors, including, but not limited to, performing internal audit
examinations; mailing annual reports of the Portfolios; preparing a
list of shareholders; and mailing notices of shareholders' meetings,
proxies and proxy statements, for all of which the Fund will pay the
Administrator's out-of-pocket expenses.
(B) Transfer Agency and Dividend Disbursing Services. Subject
to the supervision of, and in accordance with procedures established
by, the Fund's Board of Directors, MFS agrees to perform the usual and
ordinary services of transfer agent and dividend disbursing agent
including, without limitation, the following:
* receiving for acceptance orders for the purchase of
Fund shares, and promptly delivering payment and
appropriate documentation therefor to the Fund's
custodian;
* pursuant to purchase orders, issuing the appropriate
number of Fund shares and holding such shares in the
appropriate shareholder account;
* effecting transfers of Fund shares by the registered
owners thereof upon receipt of appropriate
instructions;
* calculating any sales charges payable by a
shareholder on purchases and/or redemptions of Fund
shares as such charges are reflected in the Fund's
prospectus;
* maintaining all shareholder accounts;
* preparing shareholder meeting lists;
* mailing shareholder reports and prospectuses;
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* tracking shareholder accounts for Blue Sky and Rule
12b-1 purposes;
* withholding taxes on non-resident alien and foreign
corporation accounts;
* preparing and mailing checks for disbursement of
income dividends and capital gains distributions;
* preparing and filing U.S. Treasury Department Form
1099 for all shareholders;
* preparing and mailing confirmation forms to
shareholders and dealers with respect to all
purchases, exchanges and liquidations of Fund shares
and other transactions in shareholder accounts for
which confirmations are required;
* recording reinvestments of dividends and
distributions in Fund shares;
* recording redemptions and Fund shares;
* preparing and mailing checks for payments upon
redemption and for disbursements to withdrawal plan
holders; and
* recording the issuance of shares of the Fund and
maintaining pursuant to Rule 17Ad-10(e) under the
Securities Exchange Act of 1934, as amended, a record
of the total number of shares of the Fund which are
authorized, based upon data provided to it by the
Fund, and issued and outstanding. MFS shall also
provide and shall notify the Fund in case any
proposed issue of shares by the Fund would result in
an over issue. In case any issue of Fund shares would
result in an over issue, MFS shall refuse to issue
such shares and shall not countersign and issue any
certificates requested for such shares.
In addition to and not in lieu of the services set forth above, unless
otherwise provided by the Administrator pursuant to the terms of this
Agreement, MFS shall perform all of the customary services of a
transfer agent, dividend disbursing agent and, as relevant, shareholder
servicing agent, including, but not limited to, mailing proxies,
receiving and tabulating proxies, preparing and filing appropriate
forms required with respect to dividends and distributions by federal
tax authorities for all Fund shareholders, preparing and mailing
activity statements for shareholders and providing shareholder account
information. MFS may also provide such additional services and
functions not specifically described herein as may be mutual agreed to
between MFS and the Fund.
MFS has and will maintain all registrations required under applicable
law in order for it to perform such transfer agency services and
maintains and will maintain such records as are required under
applicable law in connection with the provision of such services.
(C) Shareholder Services. The Administrator may provide the
Fund with other services to shareholders not otherwise the subject of
this Article 2. These
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shareholder services may include personal services provided to
shareholders, such as answering shareholder inquiries regarding a
Portfolio and providing reports and other information and services
related to the maintenance of shareholder accounts. The Fund hereby
also authorizes the Administrator to contract with qualifying
broker-dealers, financial institutions and other such entities for the
provision of such services to Fund shareholders. Any such arrangements
shall be outside any shareholder servicing plans or agreements entered
into by the Fund, and the Administrator shall pay the amounts due to
such qualifying broker-dealers, financial institutions and other
entities under any such arrangements from the Administrator's own
resources.
ARTICLE 3. Allocation of Charges and Expenses.
(A) The Administrator. The Administrator shall furnish at its
own expense the executive, supervisory and clerical personnel necessary
to perform its obligations under this Agreement. The Administrator
shall also provide the items which it is obligated to provide under
this Agreement, and shall pay all compensation, if any, of officers of
the Fund as well as all Directors of the Fund who are officers or
employees of the Administrator or any affiliated corporation of the
Administrator; provided, however, that unless otherwise specifically
provided, the Administrator shall not be obligated to pay the
compensation of any employee of the Fund retained by the Directors of
the Fund to perform services on behalf of the Fund.
(B) The Fund. The Fund assumes and shall pay or cause to be
paid all other expenses of the Fund not otherwise allocated herein,
including, without limitation, organizational costs, taxes, expenses
for outside Fund counsel (including, if applicable, counsel to the
Fund's independent directors) and independent auditing services, the
expenses of preparing (including typesetting), printing and mailing
reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing shareholders, all
expenses incurred in connection with issuing and redeeming shares, the
costs of custodial services, the cost of initial and ongoing
registration of the shares under Federal and state securities laws,
fees and out-of-pocket expenses of Directors who are not affiliated
officers or employees of the Administrator or any affiliated
corporation of the Administrator, insurance, interest, brokerage costs,
dues and other expenses incident to the Fund's membership in the
Investment Company Institute and other like associations, shareholder
meetings, corporate reports and reports and notices to shareholders,
litigation and other extraordinary or nonrecurring expenses, all fees
and charges of investment advisers to the Fund, Rule 12b-1 fees and
reasonable reimbursement for out-of-pocket expenses including, without
limitation, postage and telephone communications expense. The
Administrator shall provide such information to the Board at such times
as the Board may reasonably request to enable the Board to monitor such
Fund expenses.
ARTICLE 4. Compensation of the Administrator.
(A) Administration Fee. For the services to be rendered, the
facilities furnished and the expenses assumed by the Administrator
pursuant to this Agreement, the Fund (for and on behalf of each
Portfolio or class of shares thereof, as applicable) shall pay to the
Administrator compensation as specified in Schedule A. Such
compensation shall be calculated and accrued daily, and paid to the
Administrator monthly.
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If this Agreement becomes effective subsequent to the first
day of a month or terminates before the last day of a month, the
Administrator's compensation for that part of the month in which this
Agreement is in effect shall be prorated in a manner consistent with
the calculation of the fees as set forth above. Payment of the
Administrator's compensation for the preceding month shall be made
promptly.
(B) Compensation from Transactions. The Fund hereby authorizes
any entity or person associated with the Administrator which is a
member of a national securities exchange to effect any transaction on
the exchange for the account of the Fund which is permitted by Section
11(a) of the Securities Exchange Act of 1934, as amended, and Rule
11a2-2(T) thereunder, and the Fund hereby consents to the retention of
compensation for such transactions in accordance with Rule
11a2-2(T)(a)(2)(iv).
(C) Survival of Compensation Rates. All rights of compensation
under this Agreement for services performed as of the termination date
shall survive the termination of this Agreement.
ARTICLE 5. Limitation of Liability of the Administrator. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any investment or for any act or
omission in carrying out its duties hereunder, except a loss resulting from
willful misfeasance, bad faith or negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable law which
cannot be waived or modified hereby. (As used in this Article 5, the term
"Administrator" shall include directors, officers, employees and other corporate
agents of the Administrator as well as that corporation itself.)
So long as the Administrator acts in good faith and with due diligence
and without negligence, the Fund assumes full responsibility and shall indemnify
the Administrator and hold it harmless from and against any and all actions,
suits and claims, whether groundless or otherwise, and from and against any and
all losses, damages, costs, charges, reasonable counsel fees and disbursements,
payments, expenses and liabilities (including reasonable investigation expenses)
arising directly or indirectly out of said administration, transfer agency, and
dividend disbursing relationships to the Fund or any other service rendered to
the Fund hereunder. The indemnity and defense provisions set forth herein shall
indefinitely survive the termination of this Agreement.
The Administrator shall indemnify and hold harmless the Fund and each
Portfolio from and against any and all losses, damages, costs, charges,
reasonable counsel fees and disbursements, payments, expenses and liabilities
arising out of or attributable to any action or failure or omission to act by
the Administrator as a result of the Administrator's willful misfeasance, bad
faith or negligence.
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In order that the indemnification provision contained herein shall
apply, however, it is understood that if in any case the Fund may be asked to
indemnify or hold the Administrator harmless, the Fund shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the Administrator will use all reasonable care
to identify and notify the Fund promptly concerning any situation which presents
or appears likely to present the probability of such a claim for indemnification
against the Fund, but failure to do so in good faith shall not affect the rights
hereunder.
The Fund shall be entitled to participate at its own expense or, if it
so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the Fund elects to assume the defense of
any such claim, the defense shall be conducted by counsel chosen by the Fund and
reasonably satisfactory to the Administrator, whose approval shall not be
unreasonably withheld. In the event that the Fund elects to assume the defense
of any suit and retain counsel, the Administrator shall bear the fees and
expenses of any additional counsel retained by it. If the Fund does not elect to
assume the defense of a suit, it will reimburse, subject and pursuant to the
provisions of this Article 5, the Administrator for the reasonable fees and
expenses of any counsel retained by the Administrator.
The Administrator may apply to the Fund at any time for instructions
and may consult outside counsel for the Fund or its own counsel and with
accountants and other experts with respect to any matter arising in connection
with the Administrator's duties, and the Administrator shall not be liable or
accountable for any action taken or omitted by it in good faith in accordance
with such instruction or with the opinion of such counsel, accountants or other
experts.
Also, the Administrator shall be protected in acting upon any document
which it reasonably believes to be genuine and to have been signed or presented
by the proper person or persons, other than documents signed or presented by
officers, directors, employees and other corporate agents of the Administrator.
ARTICLE 6. Activities of the Administrator. The services of the
Administrator rendered to the Fund are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests.
ARTICLE 7. Duration of this Agreement. The Term of this Agreement shall
be as specified in Schedule A.
This Agreement shall not be assignable by either party without the
written consent of the other party.
ARTICLE 8. Amendments. This Agreement may be amended by the parties
hereto only if such amendment is specifically approved (i) by the vote of a
majority of the Directors of the Fund, and (ii) by the vote of a majority of the
Directors of the Fund who are not parties to this Agreement or interested
persons of any such party, cast in person at a Board of Directors meeting called
for the purpose of voting on such approval.
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ARTICLE 9. Certain Records. The Administrator shall maintain customary
records in connection with its duties as specified in this Agreement. Any
records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Fund shall be prepared and maintained at the expense of the
Administrator, but shall be the property of the Fund and will be made available
to or surrendered promptly to the Fund on request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Fund and follow the Fund's
instructions as to permitting or refusing such inspection; provided that the
Administrator may exhibit such records to any person in any case where it is
advised by its counsel that it may be held liable for failure to do so, unless
(in cases involving potential exposure only to civil liability) the Fund has
agreed to indemnify the Administrator against such liability.
ARTICLE 10. Definitions of Certain Terms. The terms "interested person"
and "affiliated person", when used in this Agreement, shall have the respective
meanings specified in the 1940 Act and the rules and regulations thereunder,
subject to such exemptions as may be granted by the Securities and Exchange
Commission.
ARTICLE 11. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, postage prepaid, addressed by the party giving notice to the
other party (a) in the case of notice to the Fund, to the Chair of the Board of
Directors of the Fund at the last address furnished by such person or, if the
Chair is an affiliated person or interested person of the Administrator, to the
Directors of the Fund who are not such affiliated persons or interested persons
at the last addresses furnished by such persons, and (b) in the case of notice
to the Administrator, to the last address furnished by the Administrator for
such purpose.
ARTICLE 12. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Minnesota and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Minnesota, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 13. Multiple Originals. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
PORTICO FUNDS, INC.
By
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Name:
Title:
U.S. BANCORP XXXXX XXXXXXX ASSET
MANAGEMENT, INC.
By
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Name:
Title:
FIRSTAR MUTUAL FUND SERVICES, LLC
By
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Name:
Title:
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