AMENDED AND RESTATED
FUND ACCOUNTING SERVICING AGREEMENT
This contract among Skyline Funds, a Massachusetts business trust ("Skyline"),
Skyline Asset Management, L.P., a Delaware limited partnership which acts as
investment adviser to Skyline ("Manager"), and Firstar Trust Company, a
Wisconsin corporation, (hereinafter called "FTC") is entered into on this 31st
day of August, 1995 and amended and restated on this 15th day of December, 1997.
WITNESSETH:
WHEREAS, Skyline is an open-end management investment company registered
under the Investment Company Act of 1940 and currently offering shares of
beneficial interest in series designated Skyline Special Equities Portfolio,
Skyline Special Equities II and Skyline Small Cap Contrarian (each a "Fund" and
together the "Funds"); and
WHEREAS, the Manager has entered into an Investment Advisory Agreement with
Skyline (the "Investment Advisory Agreement") for each Fund whereby Manager has
agreed to make certain payments and pay certain expenses on behalf of the Fund;
WHEREAS, FTC is in the business of providing, among other things, mutual
fund accounting services to investment companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. SERVICES. FTC agrees to provide the following mutual fund accounting
services to each Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis using
security trade information communicated from the Manager on a timely
basis.
(2) For each valuation date, obtain prices from a pricing source
approved by Skyline's Board of Trustees and apply those prices to the
portfolio positions. For those securities where market quotations are
not readily available, Skyline's Board of Trustees shall approve, in
good faith, the method for determining the fair value for such
securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on sales of portfolio securities of each
Fund and identify them as to short-short, short- or long-term status;
account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Funds as to methodology, rate or dollar
amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Fund.
(3) Account for Fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FTC and
the Fund.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for Fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other Fund share activity as
reported by the transfer agent on a timely basis.
(2) Apply equalization accounting as directed by the Fund.
(3) Determine net investment income (earnings) for the Fund as
of each valuation date. Account for periodic distributions of
earnings to shareholders and maintain undistributed net investment
income balances as of each valuation date.
(4) Maintain a general ledger for the Fund in the form as agreed
upon.
(5) For each business day of the Fund (as set forth in the
prospectus and statement of additional information of Skyline
(together, the "prospectus")) relating to shares of that Fund as in
effect from time to time, determine the net asset value per share of
the Fund according to the accounting policies and procedures set forth
in the prospectus.
(6) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of Fund operation at such time
as required by the nature and characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share net asset
value for each valuation date to parties as agreed upon from time to
time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
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D. Tax Accounting Services:
(1) Maintain tax accounting records for the investment portfolio
of each Fund to support the tax reporting required for regulated
investment companies under the Internal Revenue Code of 1986, as
amended, and regulations thereunder.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the tax
cost basis designated by the Fund.
(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to the
transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making Fund accounting records available to
Skyline, the Manager, the Securities and Exchange Commission, and
Skyline's outside auditors.
(2) Create and maintain accounting records in a manner and for
such time periods as are necessary to satisfy the obligations of the
Funds under the Investment Company Act of 1940 and regulations
provided thereunder including Section 31 thereof and rules 31a-1 and
31a-2 thereunder, and applicable federal and state tax laws.
2. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by Skyline's
Board of Trustees that affects accounting practices and procedures under this
agreement shall be effective upon written receipt and acceptance by FTC.
3. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. FTC reserves the right
to make changes from time to time, as it deems advisable, relating to its
services, systems, programs, rules, operating schedules and equipment, so long
as such changes do not adversely affect the service provided to the Funds under
this Agreement.
4. COMPENSATION. FTC shall be compensated by the Manager for providing
the services set forth in this Agreement in accordance with the Fee Schedule
attached hereto as Exhibit A and as mutually agreed upon and amended from time
to time.
5. PERFORMANCE OF SERVICE. FTC shall exercise reasonable care in the
performance of its duties under the Agreement. Skyline agrees to reimburse and
make FTC whole for any loss or damages (including reasonable fees and expenses
of legal counsel) to FTC arising out of or in connection with its actions under
this Agreement, including any act, omission to act, or delay by
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FTC in reliance on or in accordance with, any written or oral instruction FTC
receives from any duly authorized officer of Skyline, so long as FTC acts in
good faith and is not negligent or guilty of any willful misconduct.
Except as set forth below, FTC shall not be liable or responsible for
delays or errors occurring by reason of circumstances beyond its control,
including acts of civil or military authority, natural or state emergencies,
fire, mechanical breakdown, flood or catastrophe, acts of God, insurrection,
war, riots or failure of transportation, communication or power supply.
In the event of a mechanical breakdown beyond its control, FTC shall
take all reasonable steps to minimize service interruptions for any period that
such interruption continues beyond FTC's control. FTC will make every
reasonable effort to restore any lost or damaged data and the correcting of any
errors resulting from such a breakdown will be at the expense of FTC. FTC
agrees that it shall at all times have reasonable contingency plans with
appropriate parties, making reasonable provision for emergency use of electrical
data processing equipment to the extent appropriate equipment is available.
Representatives of Skyline and the Manager and their agents shall be entitled to
inspect FTC's premises and operating capabilities at any time during regular
business hours of FTC, upon reasonable notice to FTC.
Regardless of the above, FTC reserves the right to reprocess and
correct administrative errors at its own expense.
6. NO AGENCY RELATIONSHIP. Nothing herein contained shall be deemed to
authorize or empower FTC to act as agent for any other party to this Agreement,
or to conduct business in the name of, or for the account of, any other party to
this Agreement.
7. OWNERSHIP OF RECORDS. All records prepared or maintained by FTC on
behalf of the Funds remain the property of the Funds and will be surrendered
promptly on the written request of an authorized officer of the Funds.
8. CONFIDENTIALITY. FTC shall handle in confidence all information
relating to the Funds' business, which is received by FTC during the course of
rendering any service hereunder.
9. DATA NECESSARY TO PERFORM SERVICES. Skyline or its agent, which may
be the Manager or FTC, shall furnish to FTC the data necessary to perform the
services described herein at times and in such form as mutually agreed upon.
10. NOTIFICATION OF ERROR. Skyline will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of any
reports rendered by FTC to the Funds, or within three (3) business days after
discovery of any error or omission not covered in the balancing or control
procedure, or within three (3) business days of receiving notice from any
shareholder.
11. TERM OF AGREEMENT. This Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to each party or such shorter
period as is mutually agreed upon by the parties. However, this Agreement may
be replaced or modified by a
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subsequent agreement between the parties. This Agreement supersedes and
terminates, as of the close of business on the date hereof, all prior agreements
between Skyline and FTC relating to Fund Accounting services.
12. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a successor to any of FTC's duties or responsibilities
hereunder is designated by Skyline by written notice to FTC, FTC will promptly,
upon such termination and at the expense of the Manager, transfer to such
Successor all relevant books, records, correspondence and other data established
or maintained by FTC under this Agreement in a form reasonably acceptable to
Skyline (if such form differs from the form in which FTC has maintained the same
in accordance with the terms of this Agreement, the Manager shall pay any
expenses associated with transferring the same to such form), and will cooperate
in the transfer of such duties and responsibilities, including provision for
assistance from FTC's personnel in the establishment of books, records and other
data by such successor.
13. CHOICE OF LAW. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin.
14. ADDITIONAL SERIES. Skyline is authorized to issue separate classes of
shares of beneficial interest representing interests in separate investment
portfolios. The parties intend that each portfolio established by Skyline, now
or in the future, be covered by the terms and conditions of this Agreement. In
order for a future portfolio to be covered by this Agreement, Skyline shall give
notice to the Custodian of the designation of and the expected effective date of
such portfolio.
15. MISCELLANEOUS. This Agreement is executed on behalf of Skyline by its
officers in their capacities as officers and not individually. The obligations
of Skyline under this Agreement are not binding upon Skyline's trustees,
officer, or shareholders individually but are binding only upon the assets and
property of Skyline, or of the Fund to which the services performed pursuant to
this Agreement relate. Skyline's Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and their respective corporate seals to be affixed hereto as of the
date first above-written by their respective officers thereunto duly authorized.
Executed in several counterparts, each of which is an original.
Attest: FIRSTAR TRUST COMPANY
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxx X. Xxxxx
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Title: Senior Trust President Title: Vice President
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Attest: SKYLINE ASSET MANAGEMENT, L.P.
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------- ------------------------------
Title: Chief Financial Officer Title: Managing Partner
----------------------------------- ---------------------------
Attest: SKYLINE FUNDS
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------- ------------------------------
Title: Secretary Title: President
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EXHIBIT A
FUND VALUATION AND ACCOUNTING
I. Asset Pricing Costs
Charge per Item per Valuation
Asset Type (daily, weekly, etc.)
---------- -----------------------------
Domestic and Canadian Equities $0.15
Options $0.15
Corporate/Government/Agency Bonds $0.50
CMOs $0.80
International Equities and Bonds $0.50
Municipal Bonds $0.80
Money Market Instruments $0.80
PRICING COSTS ARE BILLED MONTHLY
II. Annual Base Fees
Skyline Special Equities Portfolio: $22,000 base/year on 1st $40 M
1 bp > $40 M
Skyline Special Equities II: $22,000 base/year on 1st $40 M
1 bp > $40 M
Skyline Small Cap Contrarian: $18,000 base/year on 1st $40 M
1 bp on next $200 M
1/2 bp > $240 M
