INVESTMENT COMPANY SERVICES AGREEMENT
This AGREEMENT, dated as of the ___________ day of _________________________
_____ , 1997, made by and between The Xxxxxxx Funds, Inc. (the "Company"), a
Maryland corporation operating as an open-end, management investment company
registered under the Investment Company Act of 1940, as amended (the "Act"),
duly organized and existing under the laws of the State of Maryland and FPS
Services, Inc. ("FPS"), a corporation duly organized and existing under the
laws of the State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Company is authorized by its Articles of Incorporation to
issue separate series of shares representing interests in separate investment
portfolios which are identified on Schedule "C" attached hereto, and which
Schedule "C" may be amended from time to time by mutual agreement of the Company
and FPS; and
WHEREAS, the Parties desire to enter into an agreement whereby FPS will
provide the services to the Company as specified herein and set forth in
particular in Schedule "A" which is attached hereto and made a part hereof.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
GENERAL PROVISIONS
SECTION 1. APPOINTMENT. The Company hereby appoints FPS as its servicing
agent and FPS hereby accepts such appointment. In order that FPS may perform
its duties under the terms of this Agreement, the Board of Directors of the
Company shall direct the officers, investment adviser, legal counsel,
independent accountants and custodian of the Company to cooperate fully with FPS
and, upon request of FPS, to provide such information, documents and advice
relating to the Company which FPS requires to execute its responsibilities
hereunder. In connection with its duties, FPS shall be entitled to rely, and
will be held harmless by the Company when acting in reasonable reliance, upon
any instruction, advice or document relating to the Company as provided to FPS
by any of the aforementioned persons on behalf of the Company. All fees charged
by any such persons acting on behalf of the Company will be deemed an expense of
the Company.
Any services performed by FPS under this Agreement will conform to the
requirements of:
(a) the provisions of the Act and the Securities Act of 1933, as amended,
and any rules or regulations in force thereunder;
(b) any other applicable provision of state and federal law;
(c) the provisions of the Company's Articles of Incorporation and the
By-Laws as amended from time to time and delivered to FPS;
(d) any policies and determinations of the Board of Directors of the
Company which are communicated to FPS; and
(e) the policies of the Company as reflected in the Company's registration
statement as filed with the U.S. Securities and Exchange Commission.
Nothing in this Agreement will prevent FPS or any officer thereof from
providing the same or comparable services for or with any other person, firm or
corporation. While the services supplied to the Company may be different than
those supplied to other persons, firms or corporations, FPS will provide the
Company equitable treatment in supplying services. The Company recognizes that
it will not receive preferential treatment from FPS as compared with the
treatment provided to other FPS clients.
SECTION 2. DUTIES AND OBLIGATIONS OF FPS.
Subject to the provisions of this Agreement, FPS will provide to the
Company the specific services as set forth in Schedule "A" attached hereto.
SECTION 3. DEFINITIONS. For purposes of this Agreement:
"CERTIFICATE" will mean any notice, instruction, or other instrument in
writing, authorized or required by this Agreement or the custody agreement
executed by the Company ("Custody Agreement"). To be effective, such
Certificate shall be given to and received by the custodian and shall be signed
on behalf of the Company by any two of its designated officers. The term
Certificate shall also include instructions communicated to the custodian by
FPS.
"CUSTODIAN" will refer to that agent which provides safekeeping of the
assets of the Company.
"INSTRUCTIONS" will mean communications containing instructions transmitted
by electronic or telecommunications media including, but not limited to,
Industry Standardization for Institutional Trade Communications ("I.S.I.T.C."),
computer-to-computer interface, dedicated
transmission line, facsimile transmission (which may be signed by an officer or
unsigned) and tested telex.
"ORAL INSTRUCTION" will mean an authorization, instruction, approval, item
or set of data, or information of any kind transmitted to FPS in person or by
telephone, telegram, telecopy or other mechanical or documentary means LACKING
ORIGINAL SIGNATURE, by a person or persons reasonably identified to FPS to be a
person or persons so authorized by a resolution of the Board of Directors of the
Company to give Oral Instructions to FPS on behalf of the Company.
"SHAREHOLDERS" will mean the registered owners of the shares of the Company
in accordance with the share registry records maintained by FPS for the Company.
"SHARES" will mean the issued and outstanding shares of the Company.
"SIGNATURE GUARANTEE" will mean the guarantee of signatures by an "eligible
guarantor institution" as defined in Rule 17Ad-15 under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). Eligible guarantor institutions
include banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings associations.
Broker-dealers guaranteeing signatures must be members of a clearing corporation
or maintain net capital of at least $100,000. Signature guarantees will be
accepted from any eligible guarantor institution which participates in a
signature guarantee program.
"WRITTEN INSTRUCTION" will mean an authorization, instruction, approval,
item or set of data or information of any kind transmitted to FPS in an original
writing CONTAINING AN ORIGINAL SIGNATURE or a copy of such document transmitted
by telecopy including transmission of such signature reasonably identified to
FPS to be the signature of a person or persons so authorized by a resolution of
the Board of Directors of the Company, or so identified by the Company to give
Written Instructions to FPS on behalf of the Company.
CONCERNING ORAL AND WRITTEN INSTRUCTIONS. For all purposes under this
Agreement, FPS is authorized to act upon receipt of the first of any
Written or Oral Instruction it receives from the Company or its
agents. In cases where the first instruction is an Oral Instruction
that is not in the form of a document or written record, a
confirmatory Written Instruction or Oral Instruction in the form of a
document or written record shall be delivered. In cases where FPS
receives an Instruction, whether Written or Oral, to enter a portfolio
transaction onto the Company's records, the Company shall cause the
broker/dealer executing such transaction to send a written
confirmation to the Custodian.
FPS shall be entitled to rely on the first Instruction received. For
any act or omission undertaken by FPS in compliance therewith, it
shall be free of liability and fully indemnified and held harmless by
the Company, provided however, that
in the event a Written or Oral Instruction received by FPS is countermanded
by a subsequent Written or Oral Instruction received prior to acting upon
such countermanded Instruction, FPS shall act upon such subsequent Written
or Oral Instruction. The sole obligation of FPS with respect to any
follow-up or confirmatory Written Instruction, Oral Instruction in
documentary or written form shall be to make reasonable efforts to detect
any such discrepancy between the original Instruction and such confirmation
and to report such discrepancy to the Company. The Company shall be
responsible and bear the expense of its taking any action, including any
reprocessing, necessary to correct any discrepancy or error. To the extent
such action requires FPS to act, the Company shall give FPS specific
Written Instruction as to the action required.
The Company will file with FPS a certified copy of each resolution of its
Board of Directors authorizing execution of Written Instructions or the
transmittal of Oral Instructions as provided above.
SECTION 4. INDEMNIFICATION.
(a) FPS, its directors, officers, employees, shareholders, and agents will
be liable for any loss suffered by the Company resulting from the willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
FPS in the performance of its obligations and duties under this Agreement.
(b) Any director, officer, employee, shareholder or agent of FPS, who may
be or become an officer, director, employee or agent of the Company, will be
deemed, when rendering services to the Company, or acting on any business of the
Company (other than services or business in connection with FPS' duties
hereunder), to be rendering such services to or acting solely for the Company
and not as a director, officer, employee, shareholder or agent of, or under the
control or direction of FPS even though such person may be receiving
compensation from FPS.
(c) The Company agrees to indemnify and hold FPS harmless, together with
its directors, officers, employees, shareholders and agents from and against any
and all claims, demands, expenses and liabilities (whether with or without basis
in fact or law) of any and every nature which FPS may sustain or incur or which
may be asserted against FPS by any person by reason of, or as a result of:
(i) any action taken or omitted to be taken by FPS except claims,
demands, expenses and liabilities arising from willful misfeasance, bad faith,
gross negligence or reckless disregard on the part of FPS in the performance of
its obligations and duties under this Agreement; or
(ii) any action taken or omitted to be taken by FPS in reliance
upon any Certificate, instrument, order or stock certificate or other
document reasonably believed by FPS to be genuine and signed, countersigned
or executed by any duly authorized person, upon the Oral Instructions or
Written Instructions of an authorized person of the Company, or upon the
written opinion of legal counsel for the Company or FPS; or
(iii) the offer or sale of shares of the Company to any person,
natural or otherwise, which is in violation of any state or federal law.
If a claim is made against FPS as to which FPS may seek indemnity under
this Section, FPS will notify the Company promptly after receipt of any written
assertion of such claim threatening to institute an action or proceeding with
respect thereto and will notify the Company promptly of any action commenced
against FPS within ten (10) days after FPS has been served with a summons or
other legal process. Failure to notify the Company will not, however, relieve
the Company from any liability which it may have on account of the indemnity
under this Section so long as the Company has not been prejudiced in any
material respect by such failure.
The Company and FPS will cooperate in the control of the defense of any
action, suit or proceeding in which FPS is involved and for which indemnity is
being provided by the Company to FPS. The Company may negotiate the settlement
of any action, suit or proceeding subject to FPS' approval, which will not be
unreasonably withheld. FPS reserves the right, but not the obligation, to
participate in the defense or settlement of a claim, action or proceeding with
its own counsel. Costs or expenses incurred by FPS in connection with, or as a
result of, such participation will be borne solely by the Company if:
(i) FPS has received an opinion of counsel from counsel to the
Company stating that the use of counsel to the Company by FPS would present an
impermissible conflict of interest;
(ii) the defendants in, or targets of, any such action or proceeding
include both FPS and the Company, and legal counsel to FPS has reasonably
concluded that there are legal defenses available to it which are different from
or additional to those available to the Company or which may be adverse to or
inconsistent with defenses available to the Company (in which case the Company
will not have the right to direct the defense of such action on behalf of FPS);
or
(iii) the Company authorizes FPS to employ separate counsel at the
expense of the Company.
(d) The terms of this Section will survive the termination of this
Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
(a) FPS represents and warrants that:
(i) it is a corporation duly organized and existing and in
good standing under the laws of Delaware;
(ii) it is empowered under applicable laws and by its
Certificate of Incorporation and By-Laws to enter into and perform this
Agreement;
(iii) all requisite corporate proceedings have been taken to
authorize FPS to enter into and perform this Agreement;
(iv) it has and will continue to have, access to the
facilities, personnel and equipment required to fully perform its duties and
obligations hereunder;
(v) no legal or administrative proceeding have been
instituted or threatened which would impair FPS's ability to perform its
duties and obligations under this Agreement;
(vi) its entrance into this Agreement shall not cause a
material breach or be in material conflict with any other agreement or
obligation of FPS or any law or regulation applicable to it;
(vii) it is registered as a transfer agent under Section
17A(c)(2) of the Exchange Act;
(viii) this Agreement has been duly authorized by FPS, and when
executed and delivered, will constitute valid, legal and binding obligation of
FPS, enforceable in accordance with its terms.
(b) The Company represents and warrants that:
(i) it is a corporation duly organized and existing and in
good standing under the laws of the State of Maryland;
(ii) it is empowered under applicable laws and by its
Articles of Incorporation and By-Laws to enter into and perform this
Agreement;
(iii) all requisite proceedings have been taken to authorize
the Company to enter into and perform this Agreement;
(iv) no legal or administrative proceedings have been
instituted or threatened which would impair the Company's ability to perform
its duties and obligations under this Agreement;
(v) the Company's entrance into this Agreement shall not
cause a material breach or be in material conflict with any other agreement
or obligations of the Company, or any law or regulation applicable to either;
(vi) the Shares are properly registered or otherwise authorized
for issuance and sale;
(vii) this Agreement has been duly authorized by the Company
and, when executed and delivered, will constitute valid, legal and binding
obligation of the Company, enforceable in accordance with its terms.
(c) Delivery of Documents
The Company will furnish or cause to be furnished to FPS the following
documents;
(i) current Prospectus and Statement of Additional Information;
(ii) most recent Annual Report;
(iii) most recent Semi-Annual Report for registered investment
companies on Form N-SAR;
(iv) certified copies of resolutions of the Company's Board of
Directors authorizing the execution of Written Instructions or the transmittal
of Oral Instructions and those persons authorized to give those Instructions.
(d) Record Keeping and Other Information
FPS will create and maintain all records required of it pursuant to its
duties hereunder and as set forth in Schedule "A" in accordance with all
applicable laws, rules and regulations, including records required by Section
31(a) of the Act. All such records will be the property of the Company and will
be available during regular business hours for inspection, copying and use by
the Company. Where applicable, such records will be maintained by FPS for the
periods and in the places required by Rule 31a-2 under the Act. Upon termination
of this Agreement, FPS will deliver all such records to the Company or such
person as the Company may designate.
In case of any request or demand for the inspection of the Share
records of the Company, FPS shall notify the Company and secure instructions as
to permitting or refusing such inspection. FPS may, however, 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.
SECTION 6. COMPENSATION. The Company agrees to pay FPS compensation for
its services, and to reimburse it for expenses, at the rates, times, manner and
amounts as set forth in Schedule "B" attached hereto and incorporated herein by
reference, and as will be set forth in any amendments to such Schedule "B"
agreed upon in writing by the Parties. Upon receipt of an invoice therefor, FPS
is authorized to collect such fees by debiting the Company's custody account.
In addition, the Company agrees to reimburse FPS for any out-of-pocket expenses
paid by FPS on behalf of the Company within ten (10) calendar days of the
Company's receipt of an invoice therefor.
For the purpose of determining fees payable to FPS, the value of the
Company's net assets will be computed at the times and in the manner specified
in the Company's Prospectus and Statement of Additional Information then in
effect.
During the term of this Agreement, should the Company seek services or
functions in addition to those outlined below or in Schedule "A" attached
hereto, a written amendment to this Agreement specifying the additional services
and corresponding compensation will be executed by the Parties.
SECTION 7. DAYS OF OPERATION. Nothing contained in this Agreement is
intended to or will require FPS, in any capacity hereunder, to perform any
functions or duties on any holiday, day of special observance or any other day
on which the New York Stock Exchange ("NYSE") is closed. Functions or duties
normally scheduled to be performed on such days will be performed on, and as of,
the next succeeding business day on which the NYSE is open. Notwithstanding
the foregoing, FPS will compute the net asset value of the Company on each day
required pursuant to Rule 22c-1 promulgated under the Act.
SECTION 8. ACTS OF GOD, ETC. FPS will not be liable or responsible for
delays or errors caused by acts of God or by reason of circumstances beyond its
control, including acts of civil or military authority, national emergencies,
labor difficulties, mechanical breakdown, insurrection, war, riots, or failure
or unavailability of transportation, communication or power supply, fire, flood
or other catastrophe.
In the event of equipment failures beyond FPS' control, FPS will, at no
additional expense to the Company, take reasonable steps to minimize service
interruptions but will have no liability with respect thereto. The foregoing
obligation will not extend to computer terminals located outside of premises
maintained by FPS. FPS has entered into and maintains in effect
agreements making reasonable provision for emergency use of electronic data
processing equipment to the extent appropriate equipment is available.
SECTION 9. INSPECTION AND OWNERSHIP OF RECORDS. In the event that any
request or demand for the inspection of the records of the Company, FPS will use
its best efforts to notify the Company and to secure instructions as to
permitting or refusing such inspection. FPS may, however, make such records
available for inspection to any person in any case where it is advised in
writing by its counsel that it may be held liable for failure to do so after
notice to the Company.
FPS recognizes that the records it maintains for the Company are the
property of the Company and will be surrendered to the Company upon written
notice to FPS as outlined under Section 10(c) below and the payment in advance
of any fees owed to FPS. FPS agrees to maintain the records and all other
information of the Company in a confidential manner and will not use such
information for any purpose other than the performance of FPS' duties under this
Agreement.
SECTION 10. DURATION AND TERMINATION.
(a) The initial term of this Agreement will be for the period of three (3)
years, commencing on the date hereinabove first written (the "Effective Date")
and will continue thereafter subject to termination by either Party as set forth
in subsection (c) below.
(b) The fee schedules set forth in Schedule "B" attached hereto will be
fixed for two (2) years commencing on the Effective Date of this Agreement and
will continue thereafter subject to their review and any adjustment.
(c) After the initial term of this Agreement, a Party may give written
notice to the other (the day on which the notice is received by the Party
against which the notice is made shall be the "Notice Date") of a date on which
this Agreement shall be terminated ("Termination Date"). The Termination Date
shall be set on a day not less than one hundred eighty (180) days after the
Notice Date. The period of time between the Notice Date and the Termination
Date is hereby identified as the "Notice Period". Any time up to, but not later
than fifteen (15) days prior to the Termination Date, the Company will pay to
FPS such compensation as may be due as of the Termination Date and will likewise
reimburse FPS for any out-of-pocket expenses and disbursements reasonably
incurred or expected to by incurred by FPS up to and including the Termination
Date.
(d) In connection with the termination of this Agreement, if a successor
to any of FPS' duties or responsibilities under this Agreement is designated by
the Company by written notice to FPS, FPS will promptly, on the Termination Date
and upon receipt by FPS of any payments owed to it as set forth in Section
10.(c) above, shall transfer to the successor, at the Company's expense, all
records which belong to the Company and will provide appropriate, reasonable and
professional cooperation in transferring such records to the named successor.
(e) Should the Company desire to move any of the services outlined in this
Agreement to a successor service provider prior to the Termination Date, FPS
shall make a good faith effort to facilitate the conversion on such prior date,
however, there can be no guarantee that FPS will be able to facilitate a
conversion of services prior to the end of the Notice Period. Should services
be converted to a successor service provider prior to the end of the Notice
Period, or if the Company is liquidated or its assets merged or purchased or the
like with another entity, payment of fees to FPS shall be accelerated to a date
prior to the conversion or termination of services and calculated as if the
services had remained at FPS until the expiration of the Notice Period and
calculated at the asset levels on the Notice Date.
(f) Notwithstanding the foregoing, this Agreement may be terminated at any
time by either Party in the event of a material breach by the other Party
involving gross negligence, willful misfeasance, bad faith or a reckless
disregard of its obligations and duties under this Agreement provided that such
breach shall have remained unremedied for sixty (60) days or more after receipt
of written specification thereof.
SECTION 11. RIGHTS OF OWNERSHIP. All computer programs and procedures
developed to perform services required to be provided by FPS under this
Agreement are the property of FPS. 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 furnished to the Company in appropriate
form as soon as practicable after termination of this Agreement for any reason.
SECTION 12. AMENDMENTS TO DOCUMENTS. The Company will furnish FPS written
copies of any amendments to, or changes in, the Company's Articles of
Incorporation or By-Laws, and each Prospectus or Statement of Additional
Information in a reasonable time prior to such amendments or changes becoming
effective. In addition, the Company agrees that no amendments will be made to
the Prospectus or Statement of Additional Information of the Company which might
have the effect of changing the procedures employed by FPS in
providing the services agreed to hereunder or which amendment might affect the
duties of FPS hereunder unless the Company first obtains FPS' approval of such
amendments or changes.
SECTION 13. CONFIDENTIALITY. Both Parties hereto agree that any
non-public information obtained hereunder concerning the other Party is
confidential and may not be disclosed to any other person without the consent of
the other Party, except as may be required by applicable law or at the request
of the U.S. Securities and Exchange Commission or other governmental agency. FPS
agrees that it will not use any non-public information for any purpose other
than performance of its duties or obligations hereunder. The obligations of the
Parties under this Section will survive the termination of this Agreement. The
Parties further agree that a breach of this Section would irreparably damage the
other Party and accordingly agree that each of them is entitled, without bond or
other security, to an injunction or injunctions to prevent breaches of this
provision.
SECTION 14. NOTICES. Except as otherwise provided in this Agreement,
any notice or other communication required by or permitted to be given in
connection with this Agreement will be in writing, and will be delivered in
person or sent by first class mail, postage prepaid or by prepaid overnight
delivery service to the respective parties as follows:
IF TO THE XXXXXXX FUNDS, INC.: IF TO FPS:
------------------------------ -----------
The Xxxxxxx Funds, Inc. FPS Services, Inc.
000 Xxxx Xxxxx Xxxxxx, 00xx Xxxxx 0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 King of Prussia, PA 19406
Attention: Xxxxxx X. Xxxxxxx, Xx. Attention: Xxxxxxx X. Xxxxx
President President
SECTION 15. AMENDMENT. No provision of this Agreement may be amended or
modified in any manner except by a written agreement properly authorized and
executed by FPS and the Company. This Agreement may be amended from time to time
by supplemental agreement executed by the Company and FPS and the compensation
stated in Schedule "B" attached hereto may be adjusted accordingly as mutually
agreed upon.
SECTION 16. AUTHORIZATION. The Parties represent and warrant to each
other that the execution and delivery of this Agreement by the undersigned
officer of each Party has been duly and validly authorized; and when duly
executed, this Agreement will constitute a valid and legally binding enforceable
obligation of each Party.
SECTION 17. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which when so executed will be deemed to be an original,
but such counterparts will together constitute but one and the same instrument.
SECTION 18. ASSIGNMENT. This Agreement will extend to and be binding upon
the Parties hereto and their respective successors and assigns; provided,
however, that this Agreement will not be assignable by the Company without the
written consent of FPS or by FPS without the written consent of the Company
which consent be authorized or approved by a resolution of the Company's Board
of Directors or FPS' Board of Directors.
SECTION 19. GOVERNING LAW. This Agreement will be governed by the laws of
the State of Pennsylvania and the exclusive venue of any action arising under
this Agreement will be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
SECTION 20. SEVERABILITY. If any part, term or provision of this
Agreement is held by any court to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions will be considered
severable and not be affected and the rights and obligations of the Parties will
be construed and enforced as if the Agreement did not contain the particular
part, term or provision held to be illegal or invalid, provided that the basic
Agreement is not thereby materially impaired.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement
consisting of twelve (12) typewritten pages, together with Schedules "X," "X"
and "C" to be signed by their duly authorized officers as of the day and year
first above written.
THE XXXXXXX FUNDS, INC. FPS SERVICES, INC.
By: /s/ XXXXXX X. XXXXXXX, XX. By: /s/ XXXXXXX X. XXXXX
Xxxxxx X. Xxxxxxx, Xx., President Xxxxxxx X. Xxxxx, President
SCHEDULE "A"
SERVICES TO BE PROVIDED BY FPS SERVICES, INC.
FPS Services, Inc. ("FPS") will (i) provide its own office space, facilities,
equipment and personnel for the performance of its duties under this Agreement;
and (ii) take all actions it deems necessary to properly execute its
responsibilities hereunder.
1. SERVICES RELATED TO SHAREHOLDERS AND SHARE TRANSACTIONS
I. Shareholder File
A. Establish new accounts and enter demographic data into shareholder
base. Includes in-house processing and NSCC - FundSERV - Networking
transmissions.
B. Create Customer Information File (CIF) to link accounts within the
Fund and across Funds within the Fund Group. Facilitates account
maintenance, lead tracking, quality control, household mailings and
combined statements.
C. 100% quality control of new account information including verification
of initial investment.
D. Maintain account and customer file records, based on shareholder
request and routine quality review.
E. Maintain tax ID certification and NRA records for each account,
including backup withholding.
F. Provide written confirmation of address changes.
G. Produce shareholder statements for daily activity, dividends,
on-request, third party and periodic mailings.
H. Establish and maintain dealer file by Fund Group, including dealer,
branch, representative number and name.
I. Automated processing of dividends and capital gains with daily,
monthly, quarterly or annual distributions. Payment options include
reinvestment, directed payment to another Fund, cash via mail, Fed
wire or ACH.
J Image all applications, account documents, data changes,
correspondence, monetary transactions, and other pertinent shareholder
documents.
II. Shareholder Services
A. Provide quality service through a staff of highly trained NASD
licensed customer service personnel, including phone, research and
correspondence representatives.
B. Answer shareholder calls: provide routine account information,
transaction details including direct and wire purchases, redemptions,
exchanges systematic withdraws, pre-authorized drafts, FundSERV and
wire order trades, problem solving and process telephone transactions.
C. Silent monitoring of telephone representative calls by the phone
supervisor during live conversations to ensure exceptional customer
service.
D. Record and maintain tape recordings of all shareholder calls for a six
month period.
E. Phone Supervisor produces daily management reports of shareholder
calls which include tracking volumes, call lengths, average wait time
and abandoned call rates to ensure quality service.
F. Provide quality assurance of phone routing by the unit Assistant phone
Supervisor through verification of the Rolm in house computer terminal
linkage.
G. Phone representatives are throughly trained through in house training
programs on the techniques of providing Exceptional Customer Service.
H. Customer inquiries received by letter or telephone are researched by a
correspondence team with an average tenure of 15 years. These
inquiries include such items as, account/customer file information,
complete historical account information, stop payments on checks,
transaction details and lost certificates.
I. Provide written correspondence in response to shareholder inquiries
and request through the XXXXX Letter Writer system and our in house
letter processing programs. Provide written requests for
informational purposes (e.g., received unclear shareholder
instructions). Whenever possible, unclear shareholder instructional
letters are handled by a phone call to the shareholder from our phone
representatives to avoid delay in processing of the request.
III. Investment Processing
A. Establish and maintain Rights of Accumulation and Letter of Intent
files.
B. Initial investment (checks or Fed wires).
C. Subsequent investments processed through lock box.
D. Pre-authorized investments (PAD) through ACH system.
E. Government allotments through ACH system.
F. Wire order and NSCC - Fund/SERV trades.
G. Prepare and process daily bank deposit of shareholder investments.
IV. Redemption Processing
A. Process letter redemption requests.
B. Process telephone redemption transactions.
C. Establish Systematic Withdrawal file and process automated
transactions on monthly basis.
D. Provide wire order and NSCC - Fund/SERV trade processing.
E. Redemption proceeds distributed to shareholder by check, Fed wire or
ACH processing.
V. Exchange & Transfer Processing
A. Process legal transfers.
B. Process ACATS transfers.
C. Issue and cancel certificates.
D Replace certificates through surety bonds (separate charge to
shareholders).
E. Process exchange transactions (letter and telephone requests).
VI. Retirement Plan Services
A. Fund sponsored IRAs offered using Semper Trust Company as custodian.
Services include:
1. Contribution processing
2. Distribution processing
3. Apply rollover transactions
4. Process Transfer of Assets
5. Letters of Acceptance to prior custodians
6. Notify XXX holders of 70 1/2 requirements
7. Calculate Required Minimum Distributions (RMD)
8. Maintain beneficiary information file
9. Solicit birth date information
B. Fund sponsored SEP-XXX plans offered using Semper Trust Company as
custodian. Services include those listed under IRAs and:
1. Identification of employer contributions
C. Fund sponsored Qualified plans offered:
1. Plan document available
2. Omnibus/master account processing only
3. Produce annual statements
4. Process contributions
5. Process distributions
6. Process rollover and Transfer of Assets transactions
VII. Commission Processing
A. Settlement and payment of dealer commissions on the 10th and 25th of
each month for front end load Funds. Dealer checks are sent to the
main branch only.
B. Settlement and payment of Distributor/Underwriter fees on the 10th and
25th of each month for front end load Funds.
C. Settlement and payment of CDSC fees on the 1st of each month for back
end load Funds.
VIII. Settlement & Control
A. Daily review of processed shareholder transactions to assure input was
processed correctly. Accurate trade activity figures passed to Funds'
Accounting Agent by 11:00 a.m. Eastern time.
B. Preparation of daily cash movement sheets to be passed to Funds'
Accounting Agent and Custodian Bank by 10:00 a.m. Eastern time for use
in determining Funds' daily cash availability.
C. Prepare a daily share reconcilement which balances the shares on the
Transfer Agent system to those on the books of the Fund.
D. Resolve any outstanding share or cash issues that are not cleared by
trade date + 2.
E. Process shareholder adjustments to include also the proper
notification of any booking entries needed, as well as any necessary
cash movement.
F. Settlement and review of Fund's declared dividends and capital gains
to include the following:
1. Review record date report for accuracy of shares.
2. Preparation of dividend settlement report after dividend is
posted. Verify the posting date shares, the rate used and the
NAV price of reinvest date to ensure dividend was posted
properly.
3. Distribute copies to the Funds' Accounting Agent.
4. Preparation of the checks prior to being mailed.
5. Sending of any dividends via wires if requested.
6. Preparation of cash movement sheets for the cash portion of the
dividend payout on payable date.
G. Placement of stop payments on dividend and liquidation checks as well
as the issuance of their replacements.
H. Maintain inventory control for stock certificates and dividend check
form.
I. Aggregate tax filings for all FPS clients. Monthly deposits to the IRS
of all taxes withheld from shareholder disbursements, distributions
and foreign account distributions. Correspond with the IRS concerning
any of the above issues.
J. Timely settlement and cash movement for all NSCC/FundSERV activity.
IX. Year End Processing
A. Maintain shareholder records in accordance with IRS notices for
under-reporting and invalid Tax IDs. This includes initiating 31%
backup withholding and notifying shareholders of their tax status and
the corrective action which is needed.
B. Conduct annual W-9 solicitation of all uncertified accounts. Update
account tax status to reflect backup withholding or certified status
depending upon responses.
C. Conduct periodic W-8 solicitation of all non-resident alien
shareholder accounts. Update account tax status with updated
shareholder information and treaty rates for NRA tax.
D. Review IRS Revenue Procedures for changes in transaction and
distribution reporting and specifications for the production of forms
to ensure compliance.
E. Coordinate year-end activity with client. Activities include
producing year-end statements, scheduling record dates for year-end
dividends and capital gains, production of combined statements and
printing of inserts to be mailed with tax forms.
F. Distribute Dividend Letter to Funds for them to sign off on all
distributions paid year to date. Dates and rates must be authorized
so that they can be used for reporting to the IRS.
G. Coordinate the ordering of form stock envelopes form vendor in
preparation of tax reporting. Review against IRS requirements to
ensure accuracy. Upon receipt of forms and envelopes allocate space
for storage.
H. Prepare form flashes for the microfiche vendor. Test and oversee the
production of fiche for year-end statements and tax forms.
I. Match and settle tax reporting totals to Fund records and on-line data
from INVESTAR.
J. Produce forms 1099R, 1099B, 1099Div, 5498, 1042S and year-end
valuations. Quality assure forms before mailing to shareholders.
K. Monitor IRS deadlines and special events such as crossover dividends
and prior year XXX contributions.
L. Prepare IRS magnetic tapes and appropriate forms for the filing of all
reportable activity to the IRS.
X. Client Services
A. An Account Manager is assigned to each relationship. The Account
Manager acts as the liaison between the Fund and the Transfer Agency
staff. Responsibilities include scheduling of events, system
enhancement implementation, special promotion/event implementation and
follow-up, and constant Fund interaction on daily operational issues.
Specifically:
1. Scheduling of dividends, proxies, report mailings and special
mailings.
2. Coordinate with the Fund shipment of materials for scheduled
mailings.
3. Liaison between the Fund and support services for preparation of
proofs and eventual printing of statement forms, certificates,
proxy cards, envelopes, etc.
4. Handle all notification to the client regarding proxy tabulation
through the meeting. Coordinate scheduling of materials
including voted cards, tabulation letters, and shareholder list
to be available for the meeting.
5. Order special reports, tapes, discs for special systems requests
received.
6. Implement new operational procedures, e.g., check writing
feature, load discounts, minimum waivers, sweeps, telephone
options, PAD promotions, etc.
7. Coordinate with systems, services and operations, special events,
e.g., mergers, new Fund start ups, household mailings, additional
mail files.
8. Prepare standard operating procedures and review prospectuses for
new start up Funds and our current client base. Coordinate
implementation of suggested changes with the Fund.
9. Liaison between the Fund and the Transfer Agency staff regarding
all service and operational issues.
B. Proxy Processing (Currently one free per year)
1. Coordinate printing of cards with vendor.
2. Coordinate mailing of cards with Account Manager and mailroom.
Tabulation of returned cards.
3. Provide daily report totals to Account Manager for client
notification.
4. Preparation of affidavit of mailing documents.
5. Provide one shareholder list.
6. Prepare final tabulation letter.
C. Blue Sky Processing
1. Maintain file with additions, deletions, changes and updates at
the Funds' direction.
XI. Other Related Services
A. Systematic linkage of shareholder accounts with exact matches on SSN
and address for the purpose of consolidated account history reporting.
Periodic production of laser printed combined statements.
B. Production of household mailing labels which enable the Fund to do
special mailings to each address in the Fund Group rather than each
account.
C. Produce shareholder lists, labels and ad hoc reports to Fund
management as requested.
DAILY REPORTS
REPORT NUMBER REPORT DESCRIPTION
-- Daily Activity Register
024 Tax Reporting Proof
051 Cash Receipts and Disbursement Proof
053 Daily Share Proof
091 Daily Gain/Loss Report
104 Maintenance Register
044 Transfer/Certificate Register
056 Blue Sky Warning Report
MONTHLY REPORTS
REPORT DESCRIPTION
Blue Sky
Certificate Listing
State Sales and Redemption
Monthly Statistical Report
Account Demographic Analysis
MTD Sales - Demographics by Account Group
Account Analysis by Type
2. SERVICES RELATED TO PORTFOLIO VALUATION AND MUTUAL FUND ACCOUNTING
All financial data provided to, processed and reported by FPS under this
Agreement shall be in United States dollars. FPS' obligation to convert, equate
or deal in foreign currencies or values extends only to the accurate
transposition of information received from the various pricing and information
services.
I. Daily Accounting Services
A. Calculate Net Asset Value ("NAV") and Offering Price Per Share ("POP")
Fund Level
- Update the daily market value of securities held by the Fund
using FPS's standard agents for pricing U.S. equity, bond and
foreign securities. The U.S. equity pricing services are
Reuters, Inc., Xxxxxx Data Corporation, X.X. Xxxxx Co., Inc. and
Interactive Data Corporation (IDC). Xxxxxx Data, Dow Xxxxx
Markets (formerly Telerate Systems, Inc.), X.X. Xxxxx Co., Inc.,
Municipal Market Data and IDC are also used for bond, money
market prices/yields. Bloomberg is available and used for price
research.
- Enter limited number of manual prices supplied by the Fund and/or
broker.
- Review variance reporting on-line and in hard copy for price
changes in individual securities using variance levels
established by the Funds. Verify US dollar security prices
exceeding variance levels by notifying the Funds and pricing
sources of noted variances.
- Review for ex-dividend items indicated by pricing sources; trace
to Fund's general ledger for agreement.
Fund and Each Class
- Allocate daily unrealized Fund appreciation/depreciation and
unrealized gains/losses on futures to classes based upon value of
outstanding class shares.
- Prepare NAV proof sheets. Review components of change in NAV for
reasonableness. Complete Fund and class control proofs.
- Communicate pricing information (NAV/POP) to the Funds, the
Funds' transfer agent (the "Transfer Agent") and electronically
to NASDAQ.
B. Determine and Report Cash Availability to the Funds by approximately
9:30 a.m. Eastern Time:
Fund Level
- Receive daily cash and transaction statements from the agent
responsible for the safekeeping of the Funds' assets (the
"Custodian") by 8:30 a.m. Eastern time
- Receive previous day shareholder activity reports from the
Transfer Agent by 8:30 a.m. Eastern time. Class level
shareholder activity will be accumulated into the Funds'
available cash balances
- Fax hard copy Cash Availability calculations with all details to
the Funds
- Supply the Funds with 3-day cash projection report.
- Prepare daily bank cash reconciliations. Notify the Custodian
and the Funds of any reconciling items.
C. Reconcile and Record All Daily Expense Accruals
Fund Level
- Accrue expenses based on budget supplied by the Funds either as
percentage of net assets or specific dollar amounts
- If applicable, monitor expense limitations established by the
Funds
- If applicable, accrue daily amortization of Organizational
Expense
- If applicable, complete daily accrual of 12b-1 expenses
Fund and Each Class
- Class specific accruals completed such as daily accrual of 12b-1
expenses.
- Allocate Fund expenses to classes based upon value of outstanding
class shares.
D. Verify and Record All Daily Income Accruals for Debt Issues
Fund Level
- Review and verify all system generated Interest and Amortization
reports.
- Establish unique security codes for bond issues to permit
segregated trial balance income reporting.
Fund and Each Class
- Allocate Fund income to classes based upon value of outstanding
class shares.
E. Monitor Securities Held for Cash Dividends, corporate actions and
capital changes such as splits, mergers, spinoffs, etc. and process
appropriately.
Fund Level
- Monitor electronically received information from Xxxxxx Data
Corporation for all domestic securities
- Review current daily security trades for dividend activity
- Monitor collection and postings of corporate actions, dividends
and interest
Fund and Each Class
- Allocate Fund dividend income to classes based upon value of
outstanding class shares.
F. Enter All Security Trades on Investment Accounting System (IAS) based
on written instructions from the Advisor
Fund Level
- Review system verification of trade and interest calculations
- Verify settlement through statements supplied by the Custodian
- Maintain security ledger transaction reporting
- Maintain tax lot holdings
- Determine realized gains or losses on security trades
- Provide broker commission reporting
Fund and Each Class
- Allocate all Fund level realized and unrealized capital
gains/losses to classes based upon value of class outstanding
shares
G. Enter All Fund Share Transactions on IAS
Each Class
- Process activity identified on reports supplied by the Transfer
Agent.
- Verify settlement through each Fund's statements supplied by the
Custodian.
- Reconcile to the FPS Services' Transfer Agent report balances.
- Roll each classes' capital share values into Fund and determine
allocation percentages based upon the value of each classes'
outstanding shares to the Fund total.
H. Prepare and Reconcile/Prove Accuracy of the Daily Trial Balance
(listing all asset, liability, equity, income and expense accounts)
Fund Level
- Post manual entries to the general ledger
- Post Custodian activity
- Post security transactions
- Post and verify system generated activity, i.e. income and
expense accruals
Fund and Each Class
- Prepare Funds' general ledger net cash proof used in NAV
calculation
- Post class specific shareholder activity and roll values into
each Fund
- Allocate all Fund level net cash accounts on the Fund's trial
balance to each specific class based upon value of class
outstanding shares
- Maintain allocated trial balance accounts on class specific
Allocation Reports
- Maintain class-specific expense accounts
- Prepare class-specific proof/control reports to ensure accuracy
of allocations.
I. Review and Reconcile with Custodian Statements
Fund Level
- Verify all posted interest, dividends, expenses, and shareholder
and security payments/receipts, etc. (Discrepancies will be
reported to and resolved by the Custodian)
- Post all cash settlement activity to the Trial Balance
- Reconcile to ending cash balance accounts
- Clear IAS subsidiary reports with settled amounts
- Track status of past due items and failed trades as reported by
the Custodian
J. Submission of Daily Accounting Reports to the Funds (additional
reports readily available)
Fund Level
- Portfolio Valuation (listing inclusive of holdings, costs, market
values, unrealized appreciation/depreciation and percentage of
portfolio comprised of each security.)
- Cash availability.
- 3-Day Cash Projection Report
Fund and Each Class
- Fund Trial Balance and Class Allocation Report
- NAV Calculation Report
II. Monthly Accounting Services
A. For each Fund, full Financial Statement Preparation (automated
Statements of Assets and Liabilities, of Operations and of Changes in
Net Assets) and submission to the Funds by 10th business day
- Class specific capital share activity and expenses will be disclosed
also.
B. Submission of Monthly Automated IAS Reports to the Funds
Fund Level
- Security Purchase/Sales Journal
- Interest and Maturity Report
- Brokers Ledger (Commission Report)
- Security Ledger Transaction Report with Realized Gains/Losses
- Security Ledger Tax Lot Holdings Report
- Additional reports available upon request
C. Reconcile Accounting Asset Listing to Custodian Asset Listing
Fund Level
- Report any security balance discrepancies to the Custodian/the
Funds
D. Provide Monthly Analysis and Reconciliation of Additional Trial
Balance Accounts, such as:
Fund Level
- Security cost and realized gains/losses
- Interest/dividend receivable and income
- Payable/receivable for securities purchased and sold
Fund and Each Class
- Payable/receivable for each Fund's shares; issued and redeemed
-- Expense payments and accruals analysis
III. Annual (and Semi-Annual) Accounting Services
A. Annually assist and supply the Funds' auditors with schedules
supporting securities and shareholder transactions, income and expense
accruals, etc. for each Fund and each Class during the year in
accordance with standard audit assistance requirements
B. Provide NSAR Reporting (Accounting Questions) on a Semi-Annual Basis
If applicable for Fund and Classes, answer the following items:
2, 12B, 20, 21, 22, 23, 28, 30A, 31, 32, 35, 36, 37, 43, 53, 55, 62,
63, 64B, 71, 72, 73, 74, 75, 76
ACCOUNTING SERVICES BASIC ASSUMPTIONS FOR THE FUNDS
The Accounting Fees as set forth in Schedule "B" are based on the following
assumptions. To the extent these assumptions are inaccurate or requirements
change, fee revisions may be necessary.
Basic Assumptions:
1. The Fund's portfolio asset composition will be primarily domestic equity
securities. Trading activity is expected to be 20 trades per month or
less, with an annual turnover rate not expected to exceed 100%. The Fund
will have 2 classes of shares, both with 12b-1 trail, and a distinction of
no-load and front end load.
2. Each Fund has a tax year-end which coincides with its fiscal year-end. No
additional accounting requirements are necessary to identify or maintain
book-tax differences. FPS does not provide security tax accounting which
differs from its book accounting under this fee schedule.
3. Each Fund agrees to the use of FPS' standard current pricing services for
domestic equity, debt, ADR and foreign securities.
4. To the extent a Fund requires a limited number of daily security prices
from specific brokers (as opposed to pricing information received
electronically), these manual prices will be obtained by the Funds' Advisor
and faxed to FPS by 4:00 p.m. Eastern time for inclusion in the NAV
calculations. The Advisor will supply FPS with the appropriate pricing
contacts for these manual quotes.
5. Procedural discussions between FPS and a Fund are required to clarify the
appropriate pricing and dividend rate sources if the Fund invests in
open-end regulated investment companies (RIC's). Depending on the
methodologies selected by the Funds, additional fees may apply.
6. FPS will supply daily Portfolio Valuation Reports to each Funds' Advisor
identifying current security positions, original/amortized cost, security
market values and changes in unrealized appreciation/depreciation. It will
be the responsibility of the Advisor to review these reports and to
promptly notify FPS of any possible problems, trade discrepancies,
incorrect security prices or corporate action/capital change information
that could result in a misstated NAV.
7. The Funds do not currently expect to invest in REIT's, Swaps, Xxxxxx,
Derivatives or foreign (non-U.S. dollar) securities and currency. To the
extent these investment strategies should change, additional fees may apply
after the appropriate procedural discussions have taken place between FPS
and Fund management. (Two weeks advance notice is required should the
Funds commence trading in these investments.)
8. Each Fund will supply FPS with income information such as accrual methods,
interest payment frequency details, coupon payment dates, floating rate
reset dates, and
complete security descriptions with issue types and CUSIP/Sedol numbers for
all debt issues.
9. Each Fund is responsible for the establishment and monitoring of any
segregated accounts pertaining to any line of credit for temporary
administrative purposes, and/or leveraging/hedging the portfolio. FPS will
reflect appropriate trial balance account entries and interest expense
accrual charges on the daily trial balance adjusting as necessary at
month-end.
10. If a Fund commences participation in security lending or short sales within
its portfolio securities, additional fees may apply. Should a Fund
require these additional services, procedural discussions must take place
between FPS and the Funds' Advisor to clarify responsibilities. (Two weeks
advance notice to FPS is required should a Fund desire to participate in
the above.)
11. Each Fund will supply FPS with portfolio specific expense accrual
procedures and monitor the expense accrual balances for adequacy based on
outstanding liabilities monthly.
12. The following specific deadlines will be met and complete information will
be supplied by each Fund in order to minimize any settlement problems, NAV
miscalculations or income accrual adjustments.
Each Fund will direct the Advisor to provide Trade Authorization Forms to
FPS with the appropriate officer's signature on all security trades placed
by the Fund no later than 12:30 p.m. Eastern time on settlement/value date
for short term money market securities issues (assuming that trade date
equals settlement date); and by 11:00 a.m. Eastern time on trade date plus
one for non-money market securities. Receipt by FPS of trade information
within these identified deadlines may be made via telex, fax or on-line
system access. The Advisor will supply FPS with the trade details in
accordance with the above stated deadlines.
The Advisor will provide all information required by FPS, including
CUSIP/Sedol numbers and/or ticker symbols for all trades on the Trade
Authorization, telex or on-line support. FPS will not be responsible for
NAV changes or distribution rate adjustments that result from incomplete
trade information.
13. To the extent a Fund utilizes purchases in-kind (U.S. dollar denominated
securities only) as a method for shareholder subscriptions, FPS will
provide the Fund with procedures to properly handle and process such
transactions. Should a Fund prefer procedures other than those provided by
FPS, additional fees may apply. Discussions shall take place at least two
weeks in advance between FPS and the Fund to clarify the appropriate
in-kind operational procedures to be followed.
14. The Parties will establish mutually agreed upon amortization procedures and
accretion requirements for debt issues held by the Fund prior to
commencement of operations. Adjustments for financial statements regarding
any issues with original issue discount
(OID) are not included under this Agreement. Each Fund will direct its
independent auditors to complete the necessary OID adjustments for
financial statements and/or tax reporting.
15. The Accounting Fees as identified in Schedule "B" assume Transfer Agency
and Custody Administration services will be supplied by FPS.
4. SERVICES RELATED TO CUSTODY ADMINISTRATION
1. Assign a Custody Administrator to accept, control and process the Funds'
daily portfolio transactions through direct computer link with the
Custodian.
2. Match and review DTC eligible ID's and trade information with the Funds'
instructions for accuracy and coordinating with the Custodian and the
Funds' accounting agent for recording and affirmation processing with the
depository.
3. Systematically settle all depository eligible issues. Transactions
requiring physical delivery will be settled through the Custodian's New
York office.
4. Assist the Funds in placing cash management trades through the Custodian,
such as commercial paper, CDs and repurchase agreements.
5. Provide the Funds' fund accounting agent and investment advisor with daily
custodian statements reflecting all prior day cash activity on behalf of
each portfolio by 8:30 a.m. Eastern time. Complete descriptions of any
posting, inclusive of Sedol/CUSIP numbers, interest/dividend payment date,
capital stock details, expense authorizations, beginning/ending cash
balances, etc., will be provided by the Custodian's reports or system.
6. Provide monthly activity statements combining both cash changes and
security trades, and a full portfolio listing.
7. Communicate to the Funds and the Funds' fund accounting agent on any
corporate actions, capital changes and interest rate changes supported by
appropriate supplemental reports received from the Custodian. Follow-up
will be made with the Custodian to ensure all necessary actions and/or
paperwork is completed.
8. Work with fund accounting and the Custodian on monthly asset
reconciliations.
9. Coordinate and resolve unsettled dividends, interest, paydowns and capital
changes. Assist in resolution of failed transactions and any settlement
problems.
10. Arrange for securities lending, lines of credit, and/or letters of credit
through the Custodian.
11. Provide automated mortgage-backed processing through the Custodian.
12. Provide broker interface ensuring trade settlement with fail trade follow
up.
13. Provide the Funds' auditors with trade documentation to help expedite the
Funds' audit.
14. Cooperation and communication between Fund Accounting, Custodian and
Transfer Agent is facilitated smoothly when Custody Administration is
performed by FPS.
SCHEDULE "B"
FEE SCHEDULE
FOR
THE XXXXXXX FUNDS, INC.
I. Fees related to Shareholder Servicing
A. TRANSFER AGENT AND SHAREHOLDER SERVICES:
$20.00 per account per year per portfolio
Minimum monthly fee - $2,250 per portfolio (This fee is reduced to
$24,000/year for the first two years of a 3-year contract)
Each additional class minimum monthly fee is $1,250
B. IRA'S, 403(b) PLANS, DEFINED CONTRIBUTION/BENEFIT PLANS:
Annual Maintenance Fee - $12.00/account per year
(Normally charged to participants)
C. FUNDSERV PROCESSING: (If Applicable)
$1,000 One time start-up fee
$50.00 Per month/per fund monthly maintenance fee
D. NETWORKING PROCESSING: (If Applicable)
$1,000 One time start-up fee
$75.00 Per month/per fund monthly maintenance fee
II. Fees related to Portfolio Valuation and Mutual Fund Accounting
A. ANNUAL FEE SCHEDULE PER DOMESTIC PORTFOLIO: U.S. Dollar Denominated
Securities only (1/12th payable monthly)
$25,000 Minimum to $ 20 Million of Average Net Assets*
.0003 On Next $ 00 Xxxxxxx xx Xxxxxxx Xxx Xxxxxx*
.0000 Xx Next $ 50 Million of Average Net Assets*
.0001 Over $100 Million of Average Net Assets*
Each additional class is subject to a $10,000 minimum per year.
* For multiple class portfolios, fees are based on Combined Classes'
Average Net Assets
B. PRICING SERVICES QUOTATION FEE
Specific costs will be identified based upon options selected by the
Company and will be billed monthly.
FPS does not currently pass along the charges for the U.S. equity
prices supplied by Xxxxxx Data. Should the Series invest in security
types other than domestic equities supplied by Xxxxxx, the following
fees would apply.
----------------------------------------
XXXXXX DATA INTERACTIVE X.X. XXXXX
SECURITY TYPES CORP.* DATA CORP.* CO., INC.*
----------------------------------------------------------------------------------------------
Government Bonds $.50 $.50 $.25 (a)
----------------------------------------------------------------------------------------------
Mortgage-Backed (evaluated, seasoned, closing) .50 .50 .25 (a)
----------------------------------------------------------------------------------------------
Corporate Bonds (short and long term) .50 .50 .25 (a)
----------------------------------------------------------------------------------------------
U.S. Municipal Bonds (short and long term) .55 .80 .50 (b)
----------------------------------------------------------------------------------------------
CMO's/ARM's/ABS 1.00 .80 1.00 (a)
----------------------------------------------------------------------------------------------
Convertible Bonds .50 .50 1.00 (a)
----------------------------------------------------------------------------------------------
High Yield Bonds .50 .50 1.00 (a)
----------------------------------------------------------------------------------------------
Mortgage-Backed Factors (per Issue per Month) 1.00 n/a n/a
----------------------------------------------------------------------------------------------
U.S. Equities (d) .15 n/a
----------------------------------------------------------------------------------------------
U.S. Options n/a .15 n/a
----------------------------------------------------------------------------------------------
Domestic Dividends & Capital Changes
(per Issue per Month) (d) 3.50 n/a
----------------------------------------------------------------------------------------------
Foreign Securities .50 .50 n/a
----------------------------------------------------------------------------------------------
Foreign Securities Dividends & Capital Changes
(per Issue per Month) 2.00 4.00 n/a
-----------------------------------------------------------------------------------------------
Set-up Fees n/a n/a (e) .25 (c)
-----------------------------------------------------------------------------------------------
All Added Items n/a n/a .25 (c)
----------------------------------------------------------------------------------------------
* Based on current Vendor costs, subject to change. Costs are quoted
based on individual security CUSIP/identifiers and are per issue
per day.
(a) $35.00 per day minimum
(b) $25.00 per day minimum
(c) $ 1.00, if no CUSIP
(d) At no additional cost to FPS clients
(e) Interactive Data also charges monthly transmission costs and disk
storage charges.
1) Futures and Currency Forward Contracts $2.00 per Issue per Day
2) Dow Xxxxx Markets (formerly Telerate Systems, Inc.)* (if
applicable)
*Based on current vendor costs, subject to change.
Specific costs will be identified based upon options selected by
the Company and will be billed monthly.
3) Reuters, Inc.*
*Based on current vendor costs, subject to change.
FPS does not currently pass along the charges for the domestic
security prices supplied by Reuters, Inc.
4) Municipal Market Data* (if applicable)
*Based on current vendor costs, subject to change.
Specific costs will be identified based upon options selected
by the Company and will be billed monthly.
C. SEC Yield Calculation: (if applicable)
Provide up to 12 reports per year to reflect the yield calculation for
non-money market Funds required by the SEC, $1,000 per year per Fund.
For multiple class Funds, $1,000 per year per class. Daily SEC yield
reporting is available at $3,000 per year per Fund (US dollar
denominated securities only).
III. Fees related to Custody of Fund Assets using UMB Bank, NA
A. DOMESTIC SECURITIES AND ADRS PER PORTFOLIO: (1/12th payable monthly)
U.S. Dollar Denominated Securities only
.0002 On the First $ 30 Million of Average Net Assets
.00015 On the Next $ 70 Million of Average Net Assets
.0001 Over $100 Million of Average Net Assets
Minimum monthly fee is $400 per portfolio.
B. CUSTODY DOMESTIC SECURITIES TRANSACTIONS CHARGE: (billed monthly)
Book Entry DTC, Federal Book Entry, PTC $14.00
Physical Securities/Options/Futures $24.50
RIC's $24.50
P & I Paydowns $11.00
Wires $ 8.00
Check Request $ 8.00
A transaction includes buys, sells, maturities or free security
movements.
C. WHEN ISSUED, SECURITIES LENDING, INDEX FUTURES, ETC.:
Should any investment vehicle require a separate segregated custody
account, a fee of $250 per account per month will apply.
D. CUSTODY MISCELLANEOUS FEES:
Administrative fees incurred in certain local markets will be passed
onto the customer with a detailed description of the fees. Fees
include income collection, corporate action handling, overdraft
charges, funds transfer, special
local taxes, stamp duties, registration fees, messenger and courier
services and other out-of-pocket expenses.
IV. Out-of-Pocket Expenses
The Company will reimburse FPS monthly for all reasonable out-of-pocket
expenses, including telephone, postage, Fund/SERV and Networking expenses,
incoming wire charges, telecommunications, special reports, record
retention, special transportation costs, copying and sending materials to
auditors and/or regulatory agencies as incurred and approved.
V. Additional Services
To the extent the Company commences investment techniques such as Security
Lending, Swaps, Leveraging, Short Sales, Derivatives, Precious Metals, or
foreign (non-U.S. dollar denominated) securities and currency, additional
fees will apply. Activities of a non-recurring nature such as shareholder
in-kinds, fund consolidations, mergers or reorganizations will be subject
to negotiation. Any additional/enhanced services, programming requests, or
reports will be quoted upon request.
SCHEDULE "C"
IDENTIFICATION OF FUNDS
Below are listed the separate funds to which services under this Agreement are
to be performed as of the Execution Date of this Agreement:
THE XXXXXXX FUNDS, INC.
The Xxxxxxx U.S. Treasury Money Fund*
The Xxxxxxx Domestic Emerging Markets Equity Fund
"Investor Shares"
"Institutional Shares"
This Schedule "C" may be amended from time to time by agreement of the Parties.
* Services Related to Custody Administration only
APPENDIX B
CUSTODY AGREEMENT
The following open-end management investment companies ("Funds") are hereby
made parties to the Custody Agreement dated DECEMBER 23, 1994 with UMB Bank,
n.a. ("Custodian") and THE XXXXXXX FUNDS, INC., and agree to be bound by all the
terms and conditions contained in said Agreement:
LIST THE FUNDS
The Xxxxxxx U.S. Treasury Money Fund
The Xxxxxxx Domestic Emerging Markets Equity Fund
ATTEST:
/s/ M. XXXX XXXXXXX THE XXXXXXX FUNDS, INC.
--------------------- ------------------------
TREASURER
By: /s/ XXXXXX X. XXXXXXX, XX.
------------------------------
Name: Xxxxxx X. Xxxxxxx, XX.
------------------------------
Title: President
------------------------------
Date:
------------------------------
ATTEST:
UMB BANK, N.A.
--------------------- --------------
By: /s/ XXXXX X. XXXXXXX
------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------
Title: Vice President
------------------------------
Date: 8/04/97
------------------------------
