FUND ACCOUNTING AGREEMENT
AGREEMENT made this 1st day of October 1993, between M.S.D. & T. FUNDS,
INC. (the "Company"), a Maryland corporation having its principal place of
business at Xxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, and THE WINSBURY
SERVICE CORPORATION ("Winsbury"), a corporation organized under the laws of the
State of Ohio and having its principal place of business at 0000 Xxxx Xxxxxx-
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Company desires that Winsbury perform certain fund accounting
services for each investment portfolio of the Company identified on Schedule A
hereto, as such Schedule may, from time to time, be supplemented or amended
(individually referred to herein as a "Fund" and collectively as the "Funds");
and
WHEREAS, Winsbury is willing to perform such services on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. SERVICES AS FUND ACCOUNTANT. Winsbury will keep, maintain and preserve
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the books and records of each Fund in accordance with Rules 31a-1 and 31a-2
under the Investment Company Act of 1940 (the "Rules") and will perform the
following functions on an ongoing basis in accordance with applicable laws and
resolutions adopted from time to time by the Company's Board of Directors:
a. Journalize the Company's investment, capital share and income
and expense activities to individual Funds;
b. Process investment buy/sell trade tickets when received from the
investment adviser for the Funds under the Investment Advisory
Agreement (the "Advisor"); Categorize securities by SEC prescribed
industry classifications as instructed by the Advisor;
c. Maintain individual ledgers for investment securities;
d. Maintain historical tax lots for each security;
e. Reconcile cash of the Company with the Custodian, and provide
the Advisor with the beginning cash balance available for
investment purposes;
f. Update the cash availability throughout the day as required by the
Advisor;
g. Post to and produce information for the Fund Accounting
System's Statement of Assets and Liabilities and the Statement of
Operations for each Fund;
h. Calculate various contractual expenses (e.g., advisory and
custody fees);
i. Post expense disbursements upon proper written instructions
from the Company's administrator under the Administration
Agreement (the "Administrator");
j. Provide reports to identify the nature of capital gains and losses
incurred as a result of security sales;
k. Determine each Fund's net income;
l. Obtain security market quotes from independent pricing
services, or if such quotes are unavailable, then obtain such
prices from the Advisor, and in either case calculate the market
value of the Company's investments and identify changes from
previous quotes;
m. Transmit a copy of the daily portfolio valuation to the Advisor;
n. Compute the net asset value of each Fund daily, using best
efforts to do so prior to NASDAQ deadline;
o. Compute each Fund's income and capital gains dividends payables,
dividend factors, 7-day, 7-day effective and 30-day yields,
expense ratios (on a monthly basis), portfolio turnover rate, and
portfolio average dollar-weighted maturity;
p. Review daily the calculation of the net asset value and
dividend factors of each portfolio prior to release to
shareholders, check and confirm the net asset values and dividend
factors for reasonableness and deviations and distribute net asset
values and yields to NASDAQ;
q. Provide reports identifying settlement status of trades,
including open and/or failed trades upon
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receipt of such information from the Company's Custodian;
r. Determine monthly outstanding receivables and payables for
security trades;
s. Determine monthly outstanding receivables and payables for Fund
share transactions;
t. Report to the Company the daily market pricing of securities in
money market portfolios, with the comparison to the amortized cost
basis;
u. Determine unrealized appreciation on securities held in variable
net asset value Funds;
v. Process accruals to account for income receivable for securities
held in Funds;
w. Amortize premiums and accrete discounts on securities purchased
at a price other than 100, if applicable;
x. Update system to reflect rate changes on variable interest rate
instruments;
y. Record income collected as reported by the Custodian;
z. Post Fund income and expense transactions to appropriate
categories;
aa. Accrue for expenses of each Fund per the instructions of the
Company management;
ab. Provide daily listing of balances in general ledger categories;
ac. Determine monthly the outstanding receivables and payables for
all income and expense accounts;
ad. Provide daily reports to the parties identified by the Company
summarizing Fund and general ledger activity;
ae. Provide monthly summaries of the daily activity reports listed
on Schedule C, as directed by the Company;
af. Provide accounting reports in connection with the Company's
regular annual audit and other audits and examinations by
regulatory agencies;
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ag. Provide special reports upon request of the Company, which may
result in an additional charge;
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((AH) THROUGH (AR) APPLY TO FOREIGN SECURITIES)
ah. Process all security trades in respective foreign currencies and
convert into U.S. dollars;
ai. Provide reports identifying the status of unsettled trades due
to widely varying standards in each country upon receipt of such
information from the Company's Custodian;
aj. Account for all gains and losses on securities on a daily basis in
accordance with Statement of Financial Accounting Standards #52 -
Foreign Currency Translation;
ak. Balance, on a daily basis, foreign currency positions in the
various countries in which the Fund does business;
al. Price each security every day in respective foreign currency and
then translate values into U.S. dollars;
am. Convert all foreign currency holdings into U.S. dollars on a
daily basis;
an. Accrue income, on a daily basis, on bonds in their respective
foreign currencies and translate total income accrued into U.S.
dollars for each bond held;
ao. Record security dividend income net of taxes withheld at the
source;
ap. Provide daily reports in both local currencies and in U.S.
dollars where available;
aq. Maintain records as required by federal tax regulations;
ar. Provide reports in accordance with appropriate accounting
standards (primarily Statement of Financial Accounting Standards
#52 - Foreign Currency Translation); and
as. Perform other similar services as may reasonably be requested by
the Company.
In addition to the accounting services described above, Winsbury will:
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a. Provide a download (and hard copy thereof) of the Financial
Statement Package, upon request of the Company or the
Administrator. For such download there will be an additional
charge. The download will include the following items:
(i) Schedule of Investments
(ii) Statement of Assets and Liabilities
(iii) Statement of Operations
(iv) Statement of Changes in Net Assets
(v) Condensed Financial Information
b. Provide monthly broker security transaction reports;
c. Provide monthly security transaction reports;
d. Provide accounting information for the following:
(i) federal and state income tax returns and federal
excise tax returns;
(ii) the Company's Semi-Annual Reports with the Securities
and Exchange Commission on Form N-SAR;
(iii) the Company's annual, semi-annual, and quarterly
shareholder reports;
(iv) registration statements on Form N-1A and other
filings relating to the registration of shares;
(v) the Company's Administrator's monitoring of the
Company's status as a regulated investment company
under Subchapter M of the Internal Revenue Code of
1986, as amended;
(vi) annual audit by the Company's auditors; and
(vii) examinations performed by the SEC.
e. Keep the following records:
(i) all books and records with respect to the Company's
books of account; and
(ii) records of the Company's securities transactions.
Winsbury is not responsible for calculating or monitoring expense accruals
for the Funds. In addition, in the event that the Company has Funds which have
two or more classes of shares each having different net asset values or paying
different daily dividends, Winsbury will not be responsible for creating the
accounting methodology for the multiple classes of shares, but
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will, in accordance with section 8 hereto, follow such methodology in performing
the services under this Agreement.
In compliance with the requirements of Rule 31a-3 under the Investment
Company Act of 1940, Winsbury hereto agrees that all books and records which it
maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any such records upon the Company's request.
Such books and records shall be prepared, maintained and preserved as required
by the Rules, the Investment Company Act of 1940 generally and other applicable
securities laws and rules and regulations. The Company, or the Company's
authorized representatives, shall have access to such books and records at all
times during Winsbury's normal business hours. Upon the reasonable request of
the Company, copies of any such books and records shall be provided by Winsbury
to the Company or the Company's authorized representative at the Company's
expense.
2. SUBCONTRACTING. Winsbury may, at its expense, upon forty-five (45)
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days written notice to the Company, subcontract with any entity or person
concerning the provision of the services contemplated hereunder; provided,
however, that Winsbury shall not be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that Winsbury shall be responsible, to the extent provided in Section 7 hereof,
for all acts of such subcontractor as if such acts were its own.
3. COMPENSATION. For its accounting services and assumption of related
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expenses, Winsbury shall be entitled to receive a fee, computed daily and
payable monthly, in accordance with, and in the manner set forth in Schedule B,
as amended from time to time. The fee allocable to and payable by each Fund
shall be the several (and not joint or joint and several) obligation of such
Fund.
4. REIMBURSEMENT OF EXPENSES. In addition to paying Winsbury the fees
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described in Section 3 hereof, the Company agrees to reimburse Winsbury for the
following out-of-pocket expenses:
a. Costs of pricing the portfolio securities of each Fund; and
b. Any expenses Winsbury shall incur at the written direction of
an officer of the Company thereunto duly authorized.
5. EFFECTIVE DATE. This Agreement shall become effective with respect
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to a Fund as of the date first above written (the "Effective Date").
-7-
6. PROPRIETARY AND CONFIDENTIAL INFORMATION. Administrator agrees on
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behalf of itself and its employees to treat confidentially and as proprietary
information of the Company all records and other information relative to the
Company 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 Administrator 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.
7. TERM. Unless sooner terminated, this Agreement shall continue with
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respect to each Fund until July 20, 1994 and thereafter shall continue
automatically for successive 12-month periods, provided such continuance with
respect to each Fund is specifically approved at least annually by the Company's
Board of Directors or vote of the lesser of (a) 67% of the shares of such Fund
represented at a meeting if holders of more than 50% of the outstanding shares
of the Fund are present in person or by proxy or (b) more than 50% of the
outstanding shares of such Fund, provided that in either event its continuance
also is approved by a 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 at any time with respect to any
Fund or all Funds without penalty, on 60 days' notice, by Winsbury or by the
Company's Board of Directors or by vote of the lesser of (a) 67% of the shares
of such Fund represented at a meeting if holders of more than 50% of the
outstanding shares of the Fund are present in person or by proxy or (b) more
than 50% of the outstanding shares of such Fund. This Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).
8. STANDARD OF CARE; LIMITATION OF LIABILITY. Winsbury shall exercise
-----------------------------------------
due care and diligence to ensure the accuracy of all services performed under
this Agreement, but shall not be liable to the Company for any action taken or
omitted by Winsbury in the absence of bad faith, willful misconduct, negligence
or reckless disregard of its duties. Each Fund agrees to indemnify and hold
harmless Winsbury, its employees, agents, directors, officers and nominees from
and against any and all claims, demands, actions and suits, whether groundless
or otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to Winsbury's actions taken or
nonactions with respect to the performance of services under this Agreement with
respect to such Fund or based, if applicable, upon reasonable reliance on
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information, records, instructions or requests with respect to such Fund given
or made to Winsbury by a duly authorized representative of the Company; provided
that this indemnification shall not apply to actions or omissions of Winsbury in
cases of its own bad faith, willful misfeasance, negligence or from reckless
disregard by it of its obligations and duties, and further provided that prior
to confessing any claim against it which may be the subject of this
indemnification, Winsbury shall give the Company written notice of and
reasonable opportunity to defend against said claim in its own name or in the
name of Winsbury. Winsbury assumes no responsibility hereunder, and shall not be
liable, for any damage, loss of data, delay or any other loss whatsoever caused
by events beyond its reasonable control.
9. REPORTS. Winsbury will furnish to the Company and to its properly
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authorized auditors, investment advisers, examiners, administrators,
distributors, dealers, underwriters, salesmen, insurance companies and others
designated by the Company in writing, such reports from Schedule C as are
requested from Winsbury by the Company at such times as are prescribed pursuant
to the terms and the conditions of this Agreement or as subsequently agreed upon
by parties pursuant to an amendment hereto. The Adviser has agreed to review
the reports listed below within a reasonable time not to exceed five (5)
business days and to report any errors or discrepancies therein to the Company
or its designee:
(a) a current security position report;
(b) a summary report of transactions and pending maturities
(including the principal, cost and accrued interest on each
portfolio security in maturity date order); and
(c) a current cash position report (including cash available
from portfolio sales and maturities and sales of a Fund's
shares less cash needed for redemptions and settlement of
portfolios purchases).
Winsbury will perform reasonable corrections of any errors or discrepancies
that are identified by the Adviser within a reasonable time not to exceed five
(5) business days following its receipt of such information from the Adviser or
the Company.
10. RIGHTS OF OWNERSHIP. All computer programs and procedures developed
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by Winsbury at Winsbury's expense to perform services required to be provided by
Winsbury under this Agreement are the property of Winsbury. All records and
other data except such computer programs and procedures are the exclusive
property of the Company and all such other records and data will be
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furnished to the Company in appropriate form as soon as practicable after
termination of this Agreement for any reason.
11. INFORMATION TO BE FURNISHED BY THE COMPANY AND FUNDS. The Company has
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furnished to Winsbury the following:
(a) Copies of the Articles of Incorporation of the Company and of
any amendments thereto, certified by the proper official of the
state in which such Articles have been filed.
(b) Copies of the following documents:
(i) The Company's By-Laws and any amendments thereto;
(ii) Certified copies of resolutions of the Board of
Directors covering the approval of this Agreement,
authorization of a specified officer of the Company to
execute and deliver this Agreement and authorization for
specified officers of the Company to instruct Winsbury
thereunder.
(c) A list of all the officers of the Company, together with
specimen signatures of those officers who are authorized to
instruct Winsbury in all matters.
(d) Two copies of the Prospectuses and Statements of Additional
Information for each Fund.
12. INFORMATION FURNISHED BY WINSBURY. Winsbury has furnished to the
---------------------------------
Company the following:
(a) Winsbury's Articles of Incorporation.
(b) Winsbury's Bylaws and any amendments thereto.
(c) Certified copies of actions of Winsbury covering the following
matters:
(i) Approval of this Agreement, and authorization of a
specified officer of Winsbury to execute and deliver this
Agreement;
(ii) Authorization of Winsbury to act as fund accountant for
the Company and to provide accounting services for the
Company.
13. AMENDMENTS TO DOCUMENTS. The Company shall furnish Winsbury written
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copies of any amendments to, or changes in, any
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of the items referred to in Section 8 hereof forthwith upon such amendments or
changes becoming effective. In addition, the Company agrees that no amendments
will be made to the Prospectuses or Statements of Additional Information of the
Company which might have the effect of changing the procedures employed by
Winsbury in providing the services agreed to hereunder or which amendment might
affect the duties of Winsbury hereunder unless the Company first obtains
Winsbury's approval of such amendments or changes.
14. HEADINGS. Paragraph headings in this Agreement are included for
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convenience only and are not to be used to construe or interpret this Agreement.
15. ASSIGNMENT. This Agreement and the rights and duties hereunder shall
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not be assignable with respect to a Fund by either of the parties hereto except
by the specific written consent of the other party.
16. GOVERNING LAW. This Agreement shall be governed by and provisions
shall be construed in accordance with the laws of the State of
Maryland.
17. COUNTERPARTS. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers designated below all as of the day
and year first above written.
[SEAL] M.S.D. & T. FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Title: President
[SEAL] THE WINSBURY SERVICE CORPORATION
By: [signature illegible]
Title: Senior Vice President
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SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN THE WINSBURY SERVICE CORPORATION
AND M.S.D. & T. FUNDS, INC.
DATED OCTOBER 1, 1993
NAME OF FUND
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Prime Money Market Fund
Government Money Market Fund
Tax-Exempt Money Market Fund
Value Equity Fund
Intermediate Fixed Income Fund
Maryland Tax-Exempt Bond Fund
Tax-Exempt Money Market Fund (Trust)
International Equity Fund
[SEAL] M.S.D. & T. FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------
Title: President
Date: October 1, 1993
[SEAL] THE WINSBURY SERVICE CORPORATION
By: [signature illegible]
---------------------
Title: Senior Vice President
Date: October 1, 1993
A-1
SCHEDULE B
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN THE WINSBURY SERVICE CORPORATION
AND M.S.D. & T. FUNDS, INC.
DATED OCTOBER 1, 1993
Name of Fund Compensation
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Prime Money Market Fund Annual rate of three one-hundredths of
one percent (.03%) of the Prime Money
Market Fund's average daily net assets
Government Money Market Fund Annual rate of three one-hundredths of
one percent (.03%) of the Government
Money Market Fund's average daily net
assets
Tax-Exempt Money Market Fund Annual rate of four one-hundredths of
one percent (.04%) of the Tax-Exempt
Money Market Fund's average daily net
assets
Value Equity Fund Annual rate of four one-hundredths of
one percent (.04%) of the Value Equity
Fund's average daily net assets
Intermediate Fixed Income Fund Annual rate of four one-hundredths of
one percent (.04%) of the Intermediate
Fixed Income Fund's average daily net
assets
Maryland Tax-Exempt Bond Fund Annual rate of five one-hundredths of
one percent (.05%) of the Maryland Tax
Exempt Bond Fund's average daily net
assets
Tax-Exempt Money Market Fund (Trust) Annual rate of four one-hundredths of
one percent (.04%) of the Tax-Exempt
Money Market Fund's (Trust) average
daily net assets
B-1
International Equity Fund Annual rate of five one-hundredths of
one percent (.05%) of the International
Equity Fund's average daily net assets,
with a minimum fee of $2000 per month
Multiple Classes of Shares:
--------------------------
Each class of shares within a Fund that maintains multiple classes of shares
having different net asset values or paying different daily dividends are
subject to a minimum annual fee of $10,000 per additional class.
M.S.D.& T. FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------
Title: President
Date: October 1, 1993
THE WINSBURY SERVICE CORPORATION
By: [signature illegible]
-----------------------
Title: Senior Vice President
Date: October 1, 1993
B-2
SCHEDULE C
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN THE WINSBURY SERVICE CORPORATION
AND M.S.D. & T. FUNDS, INC.
DATED OCTOBER 1, 1993
Account Valuation Balances - MF
Amortization/Accretion by State
Analysis of Cash Flow
Broker Commissions Paid on Portfolio Transactions
Broker Volumes
Cash Balances
Cash Disbursements Journal
Cash Receipts Journal
Detail Unsettled Fund Transactions at Quarter End
Earned Amortization/Accretion
Earned Income
Earned Income Audit
Equity Balances
Expense Summary
Form 13F
General Ledger Detail Transaction Listing
General Ledger Summary of Adjusting Entries
General Ledger Summary Listing
General Ledger Transaction Inquiry
General Ledger Trial Balance
Income Transaction Ledger
Intercompany Transaction Report
Investment Income Detail
Investment Income Summary
Investment Restriction Reports - Asset Group Exceptions
Investment Restriction Reports - Quality Exceptions
Investment Restriction Reports - Category Exceptions
Investment Restriction Reports - Industry Exceptions
Investment Restriction Reports - Issuer Exceptions
Investment Restriction Reports - Outstanding Shares/Par
Exceptions
Maturity Range Cross Tabulation - By Asset Group
Maturity Range Cross Tabulation - By Category
Maturity Range Cross Tabulation - By State
Maturity Schedule
Municipal Interest by State
Net Asset Value Reconciliation
Options - Closed Positions
Options - Open Positions
Per-Share Income and Capital Changes
Pricing Exception Report
Portfolio Transactions with Entities Acting as Principals
Portfolio Turnover
Purchase Journal
Rate Exchange Exception Report
Report to the Board of Directors - Weekly Fund Activity
Summary
Report to the Board of Directors - Summary of Realized
Gains/Losses
Report to the Board of Directors - Summary of Purchases and
Sales
Sales Journal
Schedule of Investments
Schedule of Investments - Tax Lot Level
Schedule of Investments Purchased, Sold, or Matured by
Issuer
Schedule of Investments Purchased, Sold or Matured by
Security
SEC Advertising Yield
SEC Advertising Yield Security Income Detail Report
Security Exposure
Statement of Assets and Liabilities
Statement of Changes in Net Assets
Statement of Cash Flows
Statement of Operations
Summary of Broker Commissions
Summary of Receivables/Payables
Total Contracts Outstanding
Unrealized Gain/Loss Report
Unsettled Fund Transactions at Quarter End
Valuation Comparison Report
Wash Sales Report
INTERNATIONAL FUNDS:
Aged Reclaim Receivable
Currency Balances
Earned Amortization/Accretion
Earned Income
Equity Holdings
Foreign Security Holdings
Income Journal
Net Asset Value Reconciliation
Purchases Journal
Sales Journal
Schedule of Investments - Position Level
Schedule of Investments - Tax Lot Level
Statement of Assets and Liabilities
Statement of Changes in Net Assets
Statement of Operations
Statement of Realized Capital Gains and Losses
Statement of 988 Gains and Losses
Summary of Investments
Summary of Receivables and Payables
C-1
