EX-99.h.1 ADMIN AGREEMT
[EXHIBIT (h)(1)]
ADMINISTRATION AGREEMENT
THIS AGREEMENT, made as of this 1st day of January 2000, by and between
First American Funds, Inc., a Minnesota corporation (the "Fund"), and U.S. Bank
National Association, a national banking association organized and existing
under the laws of the United States of America (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 the schedules attached hereto
("Schedules") 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. 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 and, on behalf of the Fund,
will investigate, assist in the selection of and conduct relations with
custodians, depositories, accountants, 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. 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.
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(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 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 shall:
(a) 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;
(b) assist outside Fund counsel with preparation of prospectuses,
statements of additional information, registration statements
and proxy materials;
(c) 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;
(d) develop and prepare communications to shareholders, including
the annual report 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;
(e) 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;
(f) maintain the Fund's general ledger and prepare the Fund's
financial statements, including expense accruals and payments,
determine the net
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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;
(g) calculate performance data of the Fund and the Portfolios for
dissemination to information services covering the investment
company industry;
(h) coordinate and supervise the preparation and filing of the
Fund's tax returns;
(i) 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 including, without limitation, the Fund's distributor,
transfer agent, accounting services agent, outside Fund
counsel and independent public accountants, and at the request
of the Board of Directors, report to the Board on the
performance of such organizations;
(j) provide for and coordinate the layout and printing of publicly
disseminated prospectuses and the Fund's semi-annual and
annual reports to shareholders;
(k) provide internal legal and administrative services as
requested by the Fund from time to time;
(l) provide for and coordinate the design, development, and
operation of the Fund, including new portfolio and class
investment objectives, policies and structure;
(m) 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;
(n) 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;
(p) monitor and advise the Fund and the Portfolios on their
registered investment company status under the Internal
Revenue Code of 1986, as amended;
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(q) 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;
(r) 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; and
(s) prepare and file with the SEC the semi-annual reports for the
Fund on Form N-SAR and all required notices pursuant to Rule
24f-2.
Also, the Administrator will perform other services for the Fund as agreed from
time to time at the request of the 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. The Administrator
agrees to perform the usual and ordinary services of transfer agent and dividend
disbursing agent including, without limitation, the following: maintaining all
shareholder accounts; preparing shareholder meeting lists; mailing shareholder
reports and prospectuses; tracking shareholder accounts for Blue Sky and Rule
12b-1 purposes; withholding taxes on non-resident alien and foreign corporation
accounts; preparing and mailing checks for disbursement of income dividends and
capital gains distributions; preparing and filing U.S. Treasury Department Form
1099 for all shareholders; 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; recording reinvestments of dividends and
distributions in Fund shares; recording redemptions and Fund shares; and
preparing and mailing checks for payments upon redemption and for disbursements
to withdrawal plan holders. The Administrator 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
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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 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, reasonable disbursements in connection
with providing transfer agency services including, without limitation, postage
and telephone communications expense, 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, and
all fees and charges of investment advisers to the Fund. 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 shall pay to the Administrator compensation at an annual
rate specified in the Schedule. Such compensation shall be calculated and
accrued daily, and paid to the Administrator monthly. The Fund shall also
reimburse the Administrator for its reasonable out-of-pocket expenses including
the travel and lodging expenses incurred by officers and employees of the
Administrator in connection with attendance at Board meetings.
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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 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 rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited; provided,
however, that in the event that it is ultimately determined that indemnification
is not warranted, any such amounts advanced hereunder shall be repaid. 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
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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
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 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.
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. It is understood that directors, officers, employees
and shareholders of the Fund are or may be or become interested in the
Administrator, as directors, officers, employees and shareholders or otherwise
and that directors, officers, employees and shareholders of the Administrator
are or may be or become similarly interested in the Fund, and that the
Administrator may be or become interested in the Fund as a shareholder or
otherwise.
ARTICLE 7. Duration of this Agreement. The Term of this Agreement shall
be as specified in the Schedule.
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
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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.
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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
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Its
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U.S. BANK NATIONAL ASSOCIATION
By
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Its
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