Exhibit 13
ADMINISTRATION AND TRANSFER AGENT AGREEMENT
July 24, 1998
Advance Capital Group, Inc.
Xxx Xxxxx Xxxxxx, Xxx. 000
Xxxxxxxxxx, Xxxxxxxx 00000
Dear Sirs:
Advance Capital I, Inc., a Maryland corporation (the "Company"),
herewith confirms its agreement with Advance Capital ,Group, Inc. ("ACG") as
follows:
The Company desires to employ the capital of its existing five
portfolios, the Equity Growth Fund, the Bond Fund, the Balanced Fund, the
Retirement Income Fund, and the Cornerstone Stock Fund (the "Funds") by
investing and reinvesting the same in investments of the type and in accordance
with the limitations specified in the Company's Articles of Incorporation and in
the Funds' Prospectus as from time to time in effect, copies of which have been
or will be submitted to ACG, and resolutions of the Company's Board of
Directors. The Company desires to employ ACG as its administrator, transfer
agent and dividend disbursing agent for the Funds.
1. Services as Administrator. Subject to the direction and
control of the Board of Directors of the Company, ACG will (a) assist in
maintaining office facilities (which may be in the offices of ACG or a corporate
affiliate but shall be in such location as the Company shall reasonably
determine); (b) furnish statistical and research data, clerical services, and
stationery and office supplies; (c) prepare for periodic distribution to
shareholders listings of the Funds' portfolio securities; (d) compile data for
and prepare with respect to the Funds timely Notices to the Securities and
Exchange Commission required pursuant to Rule 24 f-2 under the Investment
Company Act of 1940 (the "1940 Act"), Annual Reports on Form N-1R and Quarterly
Reports on Form N-1Q: (e) compile data for and prepare for execution and filing
by the Company all the Company's federal and state tax returns and required tax
filings other than those required to be made by the Company's custodian and
transfer agent; (f) prepare compliance filings pursuant to state securities laws
with the advice of the Company's counsel; (g) assist to the extent requested by
the Company with the Company's preparation of the Annual and Semi-Annual Reports
to Funds shareholders, the Registration Statements for the Funds (on Form N1-A
or any replacement therefor) and proxy statements, shareholder reports and any
other reports required by law; (h) keep and maintain the Funds' financial
accounts and records and portfolio records; (i) compute daily the Funds' net
asset value, net income and net capital gains in accordance with the Company's
Board of Directors and (j) generally assist in the Funds' operations.
2. Services as Transfer Agent and Dividend Disbursing Agent.
Subject to the direction and control of the Board of Directors of the Company,
ACG will (a) arrange for the processing by the Company's distributor of share
purchase and redemption orders of the Funds;
(b) maintain shareholders record accounts; (c) serve as dividend agent and
perform all duties involving calculation of dividends and capital gains
distributions, issuing of dividend and capital gains checks, authorizing payment
by the custodian and maintaining dividend payment records; (d) prepare and mail
to shareholders periodic account statements, federal tax information and daily
confirmations of transactions in Fund shares; (e) issue share certificates upon
request by shareholders; and (f) respond to telephone and mail inquiries
concerning the status of shareholder accounts.
3. Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, ACG agrees that all records which it maintains for the Funds
are the property of the Company and further agrees to surrender promptly to the
Company any of such records upon the Company's request. ACG further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by Rule 31a-1 under the 1940 Act.
4. Expenses; Expense Reimbursement. ACG will be reimbursed for
all expenses in connection with the performance of its services under this
Agreement except as otherwise provided herein. Other expenses to be incurred in
the operation of the Funds, including taxes, interest, brokerage fees and
commissions, if any, salaries and fees of officers and directors who are not
officers, directors, shareholders or employees of ACG, or the Company's
investment adviser or distributor for the Funds, Securities and Exchange
Commission fees and state Blue Sky qualification fees, advisory and
administration fees, charges of the custodians, certain insurance premiums,
outside auditing and legal expenses, costs of maintenance of corporate
existence, typesetting and printing of prospectuses for regulatory purposes and
for distribution to current Fund shareholders, costs of shareholders' reports
and corporate meetings and any extraordinary expenses, will be borne by the
Funds.
If in any fiscal year any Fund's aggregate expenses (as defined under
the securities regulations of any state having jurisdiction over the fund)
exceed the expense limitations of any such state, ACG will reimburse such fund
for a portion of its payments under an allocation method that would call for the
Company's Investment Adviser to share equally with ACG the dollar amount of the
reimbursement (not to exceed the total amount of the expense reimbursement
previously made by the Funds to ACG in that fiscal year). Such expense
reimbursement, if any, will be estimated, reconciled and paid on a monthly
basis.
5. Proprietary and Confidential Information. ACG agrees on behalf
of itself and its employees to treat confidentially and as proprietary
information of the Company all records and other information relative to the
Funds and prior, present or potential shareholders, and not to use such records
and information for any purpose other than performance of its responsibilities
and duties hereunder, except after prior notification to and approval in writing
by the Company, which approval shall not be unreasonably withheld and may not be
withheld where ACG may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities or when so requested by the Company.
6. Limitation of Liability. ACG shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Company in
connection with the matters to which this Agreement relates, except for a loss
resulting from willful misfeasance, bad faith or gross
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negligence on its part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this Agreement. Any person,
even though also an officer, partner, employee or agent of ACG, who may be or
become an officer, director, employee or agent of the Company, shall be deemed
when rendering services to the Company or acting on any business of the Company
(other than services or business in connection with ACG's duties as
administrator hereunder) to be rendering such services to or acting solely for
the Company and not as an officer, partner, employee or agent or one under the
control or direction of ACG even though paid by it.
7. Term. This Agreement shall become effective July 24, 1998 and,
unless sooner terminated as provided herein, shall continue until December 31,
1998 and thereafter shall continue automatically with respect to each Fund for
successive annual periods ending on December 31st of each year, provided such
continuance is specifically approved at least annually (i) by the Company's
Board of Directors or (ii) by a vote of the majority (as defined in the 0000
Xxx) of the outstanding voting securities of the Fund, provided that in either
event the continuance is also approved by the majority of the Company's
directors who are not interested persons (as defined in the 0000 Xxx) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. This Agreement is terminable, without
penalty, by the Company's Board of Directors, by vote of a majority (as defined
in the 0000 Xxx) of the outstanding voting securities of a Fund, with respect to
that Fund, or by ACG, on not less than 60 days' written notice. This Agreement
will also terminate automatically in the event of its assignment (as defined in
the 1940 Act). This Agreement shall be governed by Michigan law.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to us the enclosed copy hereof.
Very truly yours,
ADVANCE CAPITAL I, INC.
By: /S/ XXXX X. XXXXXXXXX
Xxxx X. Xxxxxxxxx
President and Director
Accepted:
ADVANCE CAPITAL GROUP, INC.
By:___________________________
Its Vice President
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