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Exhibit (8)(b)
April 1, 1995
Mercantile Bank of St. Louis National Association
One Mercantile Center
St. Louis, Missouri 63101
Re: Custody Fees for The ARCH Money Market, Treasury
Money Market, Growth & Income Equity, Government &
Corporate Bond, U.S. Government Securities,
Emerging Growth, Balanced and International Equity
Portfolios
Gentlemen:
This letter constitutes our agreement with respect to
compensation to be paid to Mercantile Bank of St. Louis National Association
("Mercantile") with respect to The ARCH Money Market Portfolio (comprised of
Class A, Class A - Special Series 1 and Class A - Special Series 2 shares), The
ARCH Treasury Money Market Portfolio (comprised of Class B, Class B - Special
Series 1 and Class B - Special Series 2 shares), The ARCH Growth & Income Equity
Portfolio (comprised of Class C, Class C - Special Series 1, Class C - Special
Series 2 and Class C - Special Series 3 shares), The ARCH Emerging Growth
Portfolio (comprised of Class D, Class D - Special Series 1, Class D - Special
Series 2 and Class D - Special Series 3 shares), The ARCH Government & Corporate
Bond Portfolio (comprised of Class E, Class E - Special Series 1, Class E -
Special Series 2 and Class E - Special Series 3 shares), The ARCH U.S.
Government Securities Portfolio (comprised of Class F, Class F - Special Series
1, Class F Special Series 2 and Class F - Special Series 3 shares), The ARCH
Balanced Portfolio (comprised of Class G, Class G - Special Series 1, Class G -
Special Series 2 and Class G - Special Series 3 shares), and The ARCH
International Equity Portfolio (comprised of Class H, Class H - Special Series
1, Class H - Special Series 2 and Class H - Special Series 3 shares) (each class
a "Series") under the terms of the Custodian Agreement dated as of April 1, 1992
(the "Custodian Agreement") between The ARCH Fund, Inc. (the "Fund") and
Mercantile. Pursuant to Paragraph 23 of the Custodian Agreement, and in
consideration of the services to be provided by you, we will pay Mercantile the
following:
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Mercantile Bank of St. Louis, N.A.
April 1, 1995
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1. An annual custody fee (exclusive of any transaction charges for the
non-money market portfolios), which shall be calculated daily and paid monthly
(in arrears) for each Series as follows:
- The ARCH Money Market Portfolio - $.125 for each $1000
of the Series' average daily net assets;
- The ARCH Treasury Money Market Portfolio - $.125 for
each $1000 of the Series' average daily net assets;
- The ARCH Growth & Income Equity Portfolio - the greater of
$6,000 or $.30 for each $1000 of the Series' average daily net
assets;
- The ARCH Emerging Growth Portfolio - the greater of
$6000 or $.30 for each $1000 of the Series' average
daily net assets;
- The ARCH Government & Corporate Bond Portfolio - the greater
of $6000 or $.30 for each $1000 of the Series' average daily
net assets;
- The ARCH U.S. Government Securities Portfolio - the
greater of $6000 or $.30 for each $1000 of the Series'
average daily net assets;
- The ARCH Balanced Portfolio - the greater of $6000 or
$.30 for each $1000 of the Series' average daily net
assets; and
- The ARCH International Equity Portfolio - .17% of the Series'
average daily net assets for the first $50 million in assets;
.155% of the Series' average daily net assets for the next $50
million; .13% of the Series average daily net assets for the
next $150 million; and .105% of the Series' average daily net
assets thereafter.
2. For the non-money market portfolios, a transaction charge of $15.00
for each purchase, sale or delivery of a security upon its maturity date, $50.00
for each interest collection or claim item, $20.00 for each transaction
involving GNMA, tax-free or other non-depository registered items with
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Mercantile Bank of St. Louis, N.A.
April 1, 1995
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monthly dividends or interest, $30.00 for each purchase, sale or expiration of
an option contract, $50.00 for each purchase, sale or expiration of a futures
contract, and $15.00 for each repurchase trade with an institution other than
Mercantile;
3. Mercantile's incremental costs in providing foreign custody services
for foreign denominated and held securities; and
4. Mercantile's out-of-pocket expenses, including but not limited to
postage, telephone, telex, Federal Express and Federal Reserve wire fees, on
behalf of the Series.
The fee and expenses attributable to each Series shall be the
obligation of that Series and not of any other portfolio of the Fund. The fee
for the period from the day of the year this agreement is entered into until the
end of that fiscal year of the Series, or for any portion of a fiscal year
immediately prior to its termination, shall be pro-rated according to the
proportion which such period bears to the full annual period.
If the foregoing accurately sets forth our agreement and you
intend to be legally bound thereby, please execute a copy of this letter and
return it to us.
Very truly yours,
THE ARCH FUND, INC.
By:/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, President
ACCEPTED: MERCANTILE BANK OF ST. LOUIS NATIONAL ASSOCIATION
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Senior Vice President
Dated as of: April 1, 1995
