EXHIBIT (h)(1)
ADMINISTRATION AGREEMENT
THIS AGREEMENT, made as of the 1st day of October, 2001, by and among
First American Funds, Inc., a Minnesota corporation (the "Fund"), U.S. Bancorp
Xxxxx Xxxxxxx Asset Management, Inc., a Delaware corporation ("PJAM"), and
Firstar Mutual Fund Services, LLC, a Wisconsin limited liability company ("MFS"
and, together with PJAM, 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:
o 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;
o assist outside Fund counsel with preparation of
prospectuses, statements of additional information,
registration statements and proxy materials;
o 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;
o 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;
o 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;
o 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;
o calculate performance data of the Fund and the Portfolios
for dissemination to information services covering the
investment company industry;
o coordinate and supervise the preparation and filing of the
Fund's tax returns;
o 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;
o provide for and coordinate the layout and printing of
publicly disseminated prospectuses and the Fund's
semi-annual and annual reports to shareholders;
o provide internal legal and administrative services as
requested by the Fund from time to time;
o provide for and coordinate the design, development, and
operation of the Fund, including new portfolio and class
investment objectives, policies and structure;
o 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;
o advise the Fund and its Board of Directors on matters
concerning the Fund and its affairs;
o 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;
o monitor and advise the Fund and the Portfolios on their
registered investment company status under the Internal
Revenue Code of 1986, as amended;
o 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
Fund's or such Portfolio's investment advisory agreement,
distribution agreement and custodian agreement;
o 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;
o 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
o 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:
o receiving for acceptance orders for the purchase of Fund
shares, and promptly delivering payment and appropriate
documentation therefor to the Fund's custodian;
o pursuant to purchase orders, issuing the appropriate number
of Fund shares and holding such shares in the appropriate
shareholder account;
o effecting transfers of Fund shares by the registered owners
thereof upon receipt of appropriate instructions;
o 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;
o maintaining all shareholder accounts;
o preparing shareholder meeting lists;
o mailing shareholder reports and prospectuses;
o tracking shareholder accounts for Blue Sky and Rule 12b-1
purposes;
o withholding taxes on non-resident alien and foreign
corporation accounts;
o preparing and mailing checks for disbursement of income
dividends and capital gains distributions;
o preparing and filing U.S. Treasury Department Form 1099 for
all shareholders;
o 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;
o recording reinvestments of dividends and distributions in
Fund shares;
o recording redemptions and Fund shares;
o preparing and mailing checks for payments upon redemption
and for disbursements to withdrawal plan holders; and
o 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 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.
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.
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.
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.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
FIRST AMERICAN FUNDS, INC.
By ______________________________
Name:
Title:
U.S. BANCORP XXXXX XXXXXXX ASSET
MANAGEMENT, INC.
By ______________________________
Name:
Title:
FIRSTAR MUTUAL FUND SERVICES, LLC
By ______________________________
Name:
Title:
M1:753189.01
