EXHIBIT (h)(2)
FUND ADMINISTRATION SERVICING AGREEMENT
THIS AGREEMENT is made and entered into as of this 31st day of
December, 1999, by and between The Xxxxx Growth Fund, Inc. ("JGF"), Xxxxx Funds,
Inc. ("JFI") and American Eagle Funds, Inc. ("AEF"), each a corporation
organized under the laws of the State of Minnesota (each a "Company"), and
Firstar Mutual Fund Services, LLC, a limited liability company organized under
the laws of the State of Wisconsin (hereinafter referred to as "FMFS").
WHEREAS, each Company is an open-end investment management company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, FMFS is in the business of providing, among other things,
mutual fund administration services to investment companies; and
WHEREAS, each Company desires to retain FMFS to provide mutual fund
administration services to each fund of the Company (each a "Fund") listed on
Exhibit A attached hereto, as it may be amended from time to time.
NOW, THEREFORE, in consideration of the mutual agreements herein made,
each Company and FMFS agree as follows:
1. APPOINTMENT OF ADMINISTRATOR
Each Company hereby appoints FMFS as Administrator of the Company on
the terms and conditions set forth in this Agreement, and FMFS hereby
accepts such appointment and agrees to perform the services and duties
set forth in this Agreement in consideration of the compensation
provided for herein.
2. DUTIES AND RESPONSIBILITIES OF FMFS
A. General Fund Management
1. Acting as liaison among all service providers to each
Company;
2. Supplying to each Fund:
a. Corporate secretarial services, if required;
b. Office facilities and data processing facilities
(which may be in FMFS's or its affiliate's own
offices);
c. Non-investment-related statistical and research data
as needed.
3. Assisting independent legal counsel with board communication
by:
a. Preparing materials at the request of the board of
directors of each Company based on financial and
administrative data;
b. Making reports to the board of directors of each
Company evaluating the performance of independent
auditors, the custodian, sub-custodian, transfer
agent, dividend disbursing agent and dividend
reinvestment plan agents, among others;
c. Securing and monitoring fidelity bond and director and
officer liability coverage, and making the necessary
Securities and Exchange Commission ("SEC") filings
relating thereto;
d. Recommending dividend declarations to the board of
directors of each Company, preparing and distributing
to appropriate parties notices announcing declaration
of dividends and other distributions to shareholders;
e. Providing personnel to serve as officers of each
Company if so elected by the board of directors and
attending board of directors meetings in order to
present such materials for its review.
4. Assisting each Fund with Independent Audits:
a. Preparing appropriate schedules and assisting
independent auditors;
b. Providing information to the SEC and facilitating
audit process;
c. Providing office facilities to independent auditors.
5. Assisting in overall operations of the each Fund.
6. Arranging for payment of each Company's and each Fund's
expenses upon written authorization from such Company.
7. Responding to inquiries from each Fund's shareholders and/or
monitoring arrangements under shareholder services
agreements or similar plans.
B. Compliance
1. Regulatory Compliance
a. Monitoring compliance with 1940 Act requirements,
including without limitation: 1) Asset diversification
tests; 2) Total return and SEC yield calculations; 3)
Maintenance of books and records under Rule 31a-3; 4)
Code of Ethics for the disinterested directors of each
Company;
b. Monitoring each Fund's compliance with the policies
and investment limitations as set forth in its
prospectus and statement of additional information;
c. Maintaining awareness of applicable regulatory and
operational service issues and recommending
dispositions.
2. Blue Sky Compliance
a. Preparing and filing with the appropriate state
securities authorities any and all required compliance
filings relating to the registration of the securities
of each Fund so as to enable the Fund to make a
continuous offering of its shares in all states;
b. Monitoring status and maintaining registrations in
each state
c. Providing information regarding material developments
in state securities regulation
3. SEC Registration and Reporting
a. Assisting each Fund in updating its prospectus and
statement of additional information and in preparing
proxy statements and Rule 24f-2 notices;
b. Preparing and filing annual and semiannual reports,
Form N-SAR filings and Rule 24f-2 notices;
c. Coordinating the printing, filing and mailing of
publicly disseminated prospectuses and reports;
d. Preparing and filing fidelity bond under Rule 17g-1;
e. Preparing and filing shareholder reports under Rule
30b2-1;
f. Monitoring sales of each Fund's shares and ensuring
that such shares are properly registered with the SEC
and the appropriate state authorities;
g. Preparing and filing Rule 24f-2 notices.
4. Internal Revenue Service Compliance
a. Monitoring each Fund's status as a regulated
investment company under Subchapter M, including
without limitation, review of the following:
1) Asset diversification requirements;
2) Qualifying income requirements;
3) Distribution requirements;
b. Calculating each Fund's required distributions
(including excise tax distributions);
C. Financial Reporting
1. Maintaining and keeping certain books and records of each
Company and each Fund;
2. Calculating and publishing, or arranging for the calculation
and publication, of the net asset value of each Fund's
shares;
3. Providing financial data required by each Fund's prospectus
and statement of additional information;
4. Preparing financial reports for officers, shareholders, tax
authorities, performance reporting companies, each Company's
board of directors, the SEC, and independent auditors;
5. Assisting and supervising each Fund's custodian and
accountants in the maintenance of the Fund's general ledger
and in the preparation of the Fund's financial statements,
including oversight of expense accruals and payments and
declaration and payment of dividends and other distributions
to shareholders;
6. Computing the yield, total return, portfolio turnover rate
and expense ratio of each class of each Fund;
7. Monitoring the expense accruals and notifying each Company's
management of any proposed adjustments;
8. Preparing monthly financial statements, which will include
without limitation the following items:
a. Schedule of Investments
b. Statement of Assets and Liabilities
c. Statement of Operations
d. Statement of Changes in Net Assets
e. Cash Statement
f. Schedule of Capital Gains and Losses
9. Preparing quarterly broker security transaction summaries
for each Fund.
D. Tax Reporting
1. Preparing and filing on a timely basis appropriate federal
and state tax returns including, without limitation, Forms
1120/8610 with any necessary schedules for each Fund;
2. Preparing state income breakdowns where relevant for each
Fund;
3. Preparing and filing Form 1099 Miscellaneous for payments to
directors and other service providers for each Fund;
4. Monitoring wash losses for each Fund;
5. Calculating eligible dividend income for corporate
shareholders for each Fund.
3. COMPENSATION
FMFS shall be compensated for providing the services set forth in
this Agreement in accordance with the Fee Schedule attached hereto as
Exhibit A and as may be mutually agreed upon and amended from time to
time. Each Company agrees to promptly pay all fees and reimbursable
expenses following the receipt of the billing notice.
4. PERFORMANCE OF SERVICE; LIMITATION OF LIABILITY
A. FMFS shall exercise reasonable care in the performance of its
duties under this Agreement. FMFS shall not be liable for any error of
judgment or mistake of law or for any loss suffered by a Company,
except a loss relating to FMFS's refusal or failure to comply with the
terms of this Agreement or from bad faith, negligence, or willful
misconduct.
Each Company shall indemnify and hold harmless FMFS from
and against any and all claims, demands, losses, expenses, and
liabilities (including reasonable attorneys' fees) resulting from the
negligence of the Company (unless contributed to by FMFS' refusal or
failure to comply with this Agreement, negligence, bad faith or willful
misconduct) or resulting from FMFS' reasonable reliance upon any
written or oral instruction provided to FMFS by a duly authorized
officer of the Company (and included in a list of authorized officers
furnished to FMFS as amended from time to time in writing by resolution
of the board of directors of the Company).
FMFS shall indemnify and hold each Company harmless from
and against any and all claims, demands, losses, expenses, and
liabilities of any and every nature (including reasonable attorneys'
fees) which the Company may sustain or incur or which may be asserted
against the Company by any person arising out of any action taken or
omitted to be taken by FMFS as a result of FMFS's refusal or failure to
comply with the terms of this Agreement, its bad faith, negligence, or
willful misconduct.
In the event of a mechanical breakdown or failure of
communication or power supplies, FMFS shall take all reasonable steps
to minimize service interruptions for any period that such interruption
continues. FMFS will make every reasonable effort to restore any lost
or damaged data and correct any errors resulting from such a breakdown
at the expense of FMFS.
FMFS 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 each Company
shall be entitled to inspect FMFS's premises and operating capabilities
at any time during regular business hours of FMFS, upon reasonable
notice to FMFS.
Regardless of the above, FMFS reserves the right to
reprocess and correct administrative errors at its own expense.
B. Upon the assertion of a claim for indemnification the
indemnitor shall be fully and promptly advised of all pertinent facts
concerning the claim; provided, however, that failure by the indemnitee
to advise the indemnitor shall not relieve the indemnitor of any
liability hereunder which it may have to the indemnitee. The indemnitor
shall have the option to participate in the defense of the indemnitee
against any claim, or to defend against the claim in its own name or in
the name of the indemnitee through counsel acceptable to the
indemnitee. The indemnitee shall in no case confess any claim or make
any compromise in any case in which the indemnitor will be asked to
indemnify the indemnitee except with the indemnitor's prior written
consent.
5. PROPRIETARY AND CONFIDENTIAL INFORMATION
FMFS agrees on behalf of itself and its directors, officers and
employees to treat confidentially and as proprietary information of
each Company, all records and other information related to the Company
and the Company's prior, present or potential shareholders (and clients
of such shareholders), and not to use such records and other
information for any purpose other than the performance of its
responsibilities and duties hereunder, except after prior notification
to and approval in writing from the Company, or as may be required by
law.
6. TERM OF AGREEMENT
This Agreement shall become effective as of the date hereof with
respect to AEF and on or about March 1, 2000 (with the parties to agree
upon the exact effective date) with respect to JGF and JFI and, unless
sooner terminated as provided herein, shall continue, subject to board
of directors approval, in effect for successive annual periods. This
Agreement may be terminated by any party to this Agreement upon giving
ninety (90) days prior written notice to the other parties or such
shorter period as is mutually agreed upon by the parties.
7. RECORDS
FMFS shall keep records relating to the services to be performed
hereunder, in the form and manner, and for such period as it may deem
advisable and is agreeable to each Company and in accordance with
Section 31 of the 1940 Act and other rules and regulations of
governmental or regulatory authorities. FMFS agrees that all such
records prepared or maintained by FMFS relating to the services to be
performed by FMFS hereunder are the property of each Company and will
be preserved, maintained, and made available in accordance with such
section and rules of the 1940 Act and will be promptly surrendered to
each Company on and in accordance with its request.
8. GOVERNING LAW
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of
Wisconsin without reference to the choice of laws principles thereof.
However, nothing herein shall be construed in a manner inconsistent
with the 1940 Act or any rule or regulation promulgated by the SEC
thereunder.
9. DUTIES IN THE EVENT OF TERMINATION
In the event of termination of this Agreement, a successor to any
of FMFS's duties or responsibilities hereunder maybe designated by each
Company by written notice to FMFS. FMFS will promptly upon such notice,
transfer to such successor all relevant books, records, correspondence
and other data kept or maintained by FMFS under this Agreement in a
form reasonably acceptable to the Company, and will cooperate in the
transfer of such duties and responsibilities, including provision for
assistance from FMFS's personnel in the establishment of books, records
and other data by such successor. Should the Agreement be terminated by
the action of a Company, such Company shall bear all reasonable costs
incurred by FMFS and associated with the transfer of records and other
materials to its successor.
10. NO AGENCY RELATIONSHIP
Nothing herein contained shall be deemed to authorize or empower
FMFS to act as agent for the other party to this Agreement, or to
conduct business in the name of, or for the account of the other party
to this Agreement.
11. DATA NECESSARY TO PERFORM SERVICES
Each Company or its agent, which may be FMFS, shall furnish to
FMFS the data necessary to perform the services described herein at
times and in such form as mutually agreed upon. If FMFS is also acting
in another capacity for any Company, nothing herein shall be deemed to
relieve FMFS of any of its obligations in such capacity.
12. NOTICES
Notices of any kind to be given by either party to the other
party shall be in writing and shall be duly given if mailed or
delivered as follows:
Notice to FMFS shall be sent to:
Firstar Mutual Fund Services, LLC
Attn: Xxxxx Xxxxxx
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Notice to each Company shall be sent to:
Xxxxx Associates, Inc.
Attn: Xxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer or one or more counterparts as of the day
and year first written above.
THE XXXXX GROWTH FUND, INC. FIRSTAR MUTUAL FUND SERVICES, LLC
By:______________________________ By: ______________________________
Attest:__________________________ Attest:___________________________
XXXXX FUNDS, INC.
By:______________________________
Attest:__________________________
AMERICAN EAGLE FUNDS, INC.
By:______________________________
Attest:__________________________
FUND ADMINISTRATION AND COMPLIANCE
ANNUAL FEE SCHEDULE
EXHIBIT A
NAME OF SERIES APPROXIMATE DATE ADDED
-------------- ----------------------
Xxxxx Growth Fund, Inc. 3/1/00
Xxxxx Growth Fund (Class A, B, C, I)
Xxxxx Funds, Inc. 3/1/00
Xxxxx Opportunity Fund (Class A, B, C, I)
Xxxxx Twenty-Five Fund (Class A, B, C, I)
Xxxxx U. S. Emerging Growth Fund (Class A, B, C, I)
American Eagle Funds, Inc. 12/31/99
American Eagle Capital Appreciation Fund
American Eagle Twenty Fund
Xxxxx Growth Fund and Xxxxx Funds (4 classes each Fund)
Annual fee based upon each Fund's net assets:
11 basis points on the first $200 million in net assets
9 basis points on the next $500 million in net assets
7 basis points on the balance
Minimum annual fee: $45,000 per Fund
American Eagle Funds (1 Class, No-Load)
Annual fee based upon each Fund's net assets:
6 basis points on the first $200 million in net assets
5 basis points on the next $500 million in net assets
3 basis points on the balance
Minimum annual fee:
$20,000 per Fund year 1
$25,000 per Fund year 2
$30,000 per Fund year 3
Extraordinary services quoted separately.
Plus reasonable out-of-pocket expense reimbursements, including but not limited
to:
Postage
Programming
Stationery
Proxies
Insurance
Retention of records
Special reports
Federal and state regulatory filing fees
Certain insurance premiums
Expenses from board of directors meetings
Auditing and legal expenses
Fees and reasonable out-of-pocket expense reimbursements are billed to the each
Fund monthly.
