AMENDED AND RESTATED
FUND ACCOUNTING AND ADMINISTRATIVE SERVICES AGREEMENT
AGREEMENT made as of December 31, 1999, in Denver, Colorado, by and
between Dreyfus Founders Funds, Inc., a Maryland corporation (the "Fund"), and
Founders Asset Management LLC, a Delaware limited liability company (hereinafter
referred to as "Founders").
WHEREAS, the Fund is engaged in business as an open-end management
investment company, is registered as such under the Investment Company Act of
1940, as amended (the "Act"), and is authorized to issue shares representing
interests in the separate portfolios of investments listed on Appendix 1 to this
Agreement, which Appendix 1 is incorporated into this Agreement by this
reference (the "Portfolios"); and
WHEREAS, Founders is registered as an investment adviser under the
Investment Advisers Act of 1940, and engages in the business of acting as
investment adviser and providing certain other administrative, shareholder
servicing, accounting, and record keeping services to the Fund; and
WHEREAS, the Fund desires to retain Founders to render certain additional
administrative, accounting, and recordkeeping services (the "Services") in the
manner and on the terms and conditions hereinafter set forth; and
WHEREAS, Founders desires to be retained to perform such services on said
terms and conditions;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and Founders agree as follows:
1. SERVICES. The Fund hereby retains Founders to provide the following
Services to the Portfolios:
A. ACCOUNTING SERVICES.
(1) Prepare and maintain, according to generally accepted accounting
principles, general ledgers and financial statements of the Fund and the
Portfolios, including the following:
(a) DAILY PREPARATION AND MAINTENANCE:
(i) Detailed transaction ledgers listing all transactions
affecting the Fund;
-1-
(ii) Trial balance listing by account the beginning balance,
all debits and credits, and the ending balance;
(iii) Balance sheet, income statement and a portfolio listing
summarizing net assets, net income, capitalization, and realized and
unrealized gains and losses.
(b) MONTHLY PREPARATION AND MAINTENANCE:
Statements of assets and liabilities, operations and changes
in net assets, statements of gains and losses and statements of
sales and redemptions.
(c) SEMI-ANNUAL PREPARATION AND MAINTENANCE:
The same ledgers as are prepared monthly, plus per share
statements, appreciation/ depreciation statements, and fund share
activity statements.
(2) Obtain such data from the Fund's transfer agent(s), custodian, and
investment adviser as is necessary to calculate the net asset value of each
class of shares of each Portfolio in the manner, and at such times and
frequencies, as is required by the Act and by the Fund's prospectus and
statement of additional information.
B. CONTROL AND COMPLIANCE.
(1) Audit certain data and transactions of the Fund's custodian,
transfer agent(s) and investment adviser by engaging in the following:
(a) DAILY AUDIT/RECONCILIATION PROCEDURES:
(i) Reconciliation of the custodian's trust account activity
including cash movement, cash balances, settlement of security
purchases and sales, and settlement of Fund share purchases and
sales;
(ii) Reconciliation of the transfer agents' activity in regard
to Fund share movements and "as of" transactions;
(iii) Monitoring of the investment adviser's trading activity,
including compliance and brokerage allocations.
(b) MONTHLY AUDIT/RECONCILIATION PROCEDURES:
-2-
(i) Audit of the custodian's holding of Fund assets and assets
in transit, audit of the custodian's fees charged to the Fund, and
audit of credits for the Fund's compensating balances;
(ii) Audit of the transfer agents' activity concerning
dividend and redemption payouts and of the transfer agents' fees
charged to the Fund;
(iii) Audit of the investment adviser's fees charged to the
Funds, including servicing and accounting fees.
(c) MONITOR COMPLIANCE WITH THE ACT:
(i) Daily monitoring of the investment adviser's trading activity,
including compliance and brokerage allocation and commissions;
(ii) Periodic monitoring of disclosures and record keeping.
C. REPORTING AND ANALYSIS.
(1) Provide regulatory (Securities and Exchange Commission),
shareholder and other miscellaneous reporting and, in particular, prepare
and maintain the following required books, records, and other documents:
(a) journals containing daily itemized records of all
Portfolio securities purchases and sales, receipts and deliveries of
securities, receipts and disbursements of cash, and all other debits
and credits, in the form required by Rule 31a-1(b)(1) under the Act;
(b) general and auxiliary ledgers reflecting all asset,
liability, reserve, capital, income and expense accounts, in the
form required by Rules 31a-1(b)(1)(i) - (iii) under the Act;
(c) a securities record or ledger reflecting separately for
each portfolio security as of trade date all "long" and "short"
positions, if any, carried by the Portfolios for the accounts of the
Portfolios, and showing the location of all securities long and the
off-setting positions of all securities short, in the form required
by Rule 31a-1(b)(3) under the Act;
(d) a record of all Portfolio purchases or sales, in the form
required by Rule 31a-1(b)(6) under the Act;
(e) a record of all puts, calls, spreads, straddles and other
options, if any, in which the Portfolios have any direct or indirect
interest or which the Portfolios have granted or guaranteed, in the
form required by Rule 31a-1(b)(7) under the Act;
-3-
(f) a record of the proof of money balances in all ledger
accounts maintained pursuant to this Agreement, in the form required
by Rule 31a-1(b)(8) under the Act;
(g) price make-up sheets and such records as are necessary to
reflect the determination of the net asset values of each class of
the Portfolios;
(h) Regulatory: semi-annual and annual Form N-SARs and
quarterly Form 13-Fs.
(i) Shareholder: semi-annual and annual statements of
assets and liabilities, operations, changes in net assets, per
share data, appreciation/depreciation, and share activity; and
(j) Media: weekly, monthly, quarterly, semi- annual and annual
statistical data of the Funds, to be provided to newsletters and
other investment industry publications such as ICI, Xxxxxxx, Lipper
and the NASD.
The foregoing books and records shall be maintained and preserved by
Founders in accordance with and for the time periods specified by applicable
rules and regulations, including Rule 31a-2 under the Act. All such books and
records shall be the property of the Fund and, upon request therefor, Founders
shall surrender to the Fund such of the books and records so requested.
2. STAFF MAINTENANCE. Founders shall, at its own expense, maintain such staff
and employ or retain such personnel and consult with such other persons as it
shall from time to time determine to be necessary or useful to the performance
of its obligations under this Agreement. Without limiting the generality of the
foregoing, such staff and personnel may include officers of Founders and persons
employed or otherwise retained by Founders to provide or assist in providing
services to the Fund other than those Services to be provided pursuant to this
Agreement.
3. FACILITIES. Founders shall, at its own expense, provide such office space,
facilities and equipment (including, but not limited to, computer equipment,
communication lines, and supplies) and such clerical help and other services as
shall be necessary to provide the Services to the Portfolios. In addition,
Founders may arrange on behalf of the Fund to obtain pricing information
regarding the Portfolios' investment securities from such company or companies
as are approved by a majority of the Fund's board of directors. The Fund shall
be financially responsible to such company or companies for the reasonable cost
of providing such pricing information.
-4-
4. FUND INFORMATION. The Fund will, from time to time, furnish or otherwise make
available to Founders such information relating to the business and affairs of
the Portfolios as Founders may reasonably require in order to discharge its
duties and obligations hereunder.
5. FEES. For the services rendered and facilities furnished by Founders under
this Agreement, the Fund shall pay to Founders a fee computed on a daily basis
and paid on a monthly basis. The fee shall be computed at the annual rate of
0.06% of the daily net assets of the Fund from $0 to $500 million and at the
annual rate of 0.02% of the daily net assets of the Fund in excess of $500
million. Founders shall also be reimbursed for all out-of-pocket expenses
incurred by it in performing its services pursuant to the Agreement. For
purposes of each daily calculation of this fee, the most recently calculated net
asset value of the Fund, as determined by a valuation made in accordance with
the Fund's procedure for calculating the net asset value of each class of each
Portfolio as described in the Fund's prospectus and/or statement of additional
information, shall be used. During any period when the determination of the
Fund's net asset value is suspended by the directors of the Fund, the net asset
value of the Fund as of the last business day prior to such suspension shall,
for the purpose of this Paragraph 5, be deemed to be the net asset value at the
close of each succeeding business day until it is again determined.
6. ACCESS TO FOUNDERS' RECORDS. Founders will permit representatives of the
Fund, including the Fund's independent auditors, to have reasonable access to
the personnel and records of Founders in order to enable such representatives to
monitor the quality of services being provided and the level of fees due
Founders pursuant to this Agreement. In addition, Founders shall promptly
deliver to the board of directors of the Fund such information as may reasonably
be requested from time to time to permit the board of directors to make an
informed determination regarding continuation of this Agreement and the payments
contemplated to be made hereunder.
7. LIABILITY. Founders shall not be liable to the Fund for any action taken or
omitted to be taken by Founders or its employees, agents or contractors in
carrying out the provisions of this Agreement if such action was taken or
omitted in good faith and without gross negligence or willful misconduct on the
part of Founders or its employees, agents or contractors.
8. INDEMNIFICATION BY THE FUND. The Fund shall indemnify Founders and hold it
harmless from and against any and all losses, damages, and expenses, including
reasonable attorneys' fees and expenses, incurred by Founders which result from:
(i) any claim, action, suit or proceeding in connection with Founders' entry
into or performance of this Agreement; (ii) any action taken or omission to act
committed by Founders in the performance of its obligations hereunder; or (iii)
any action of Founders upon instructions reasonably believed in good faith by
-5-
it to have been executed by a duly authorized officer or representative of the
Fund; PROVIDED, HOWEVER, that Founders shall not be entitled to such
indemnification in respect of actions or omissions constituting gross negligence
or willful misconduct on the part of Founders or its employees, agents or
contractors. Before confessing any claim against it which may be subject to
indemnification by the Fund hereunder, Founders shall give the Fund reasonable
opportunity to defend against such claim in its own name or in the name of
Founders.
9. INDEMNIFICATION BY FOUNDERS. Founders shall indemnify the Fund and hold it
harmless from and against any and all losses, damages and expenses, including
reasonable attorneys' fees and expenses, incurred by the Fund which result from:
(i) Founders' lack of good faith in performing its obligations hereunder; or
(ii) the gross negligence or willful misconduct of Founders or its employees,
agents or contractors in connection herewith. The Fund shall not be entitled to
such indemnification in respect of actions or omissions constituting gross
negligence or willful misconduct on the part of the Fund or its employees,
agents or contractors other than Founders, unless such gross negligence or
willful misconduct results from or is accompanied by gross negligence or willful
misconduct on the part of Founders, any affiliated person of Founders, or any
affiliated person of an affiliated person of Founders. Before confessing any
claim against it which may be subject to indemnification hereunder, the Fund
shall give Founders reasonable opportunity to defend against such claim in its
own name or in the name of the Fund.
10. EFFECT OF AGREEMENT. Nothing herein contained shall be deemed to require the
Fund to take any action contrary to its Articles of Incorporation or its By-Laws
or any applicable law, regulation or order to which it is subject or by which it
is bound, or to relieve or deprive the directors of the Fund and the Fund of
their overall responsibility for and control of the conduct of the business and
affairs of the Fund.
11. TERM AND TERMINATION. This Agreement shall remain in effect until May 31,
2000 and from year to year thereafter provided such continuance is approved at
least annually by the vote of a majority of the directors of the Fund who are
not parties to this Agreement or "interested persons" (as defined in the Act) of
any such party, which vote must be cast in person at a meeting called for the
purpose of voting on such approval; provided, however, that (a) the Fund may, at
any time and without the payment of any penalty, terminate this Agreement upon
ninety days written notice to Founders; (b) the Agreement shall immediately
terminate in the event of its assignment (within the meaning of the Act and the
Rules thereunder) unless the board of directors of the Fund approves such
assignment; and (c) Founders may terminate this Agreement without payment of
penalty on ninety days written notice to the Fund. Any notice
-6-
under this Agreement shall be given in writing, addressed and delivered, or
mailed post-paid, to the other party at the principal office of such party.
12. APPLICATION OF LAW. This Agreement shall be construed in accordance with the
laws of the State of Colorado and the applicable provisions of the Act. To the
extent the applicable law of the State of Colorado or any of the provisions
herein conflict with the applicable provisions of the Act, the latter shall
control.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
on the day and year first above written.
DREYFUS FOUNDERS FUNDS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------
Xxxxx X. Xxxxxxxx, President
FOUNDERS ASSET MANAGEMENT LLC
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Xxxxxxx X. Xxxx, President
-7-
APPENDIX 1
TO
AMENDED AND RESTATED
FUND ACCOUNTING AND ADMINISTRATIVE SERVICES AGREEMENT
Dreyfus Founders Balanced Fund
Dreyfus Founders Discovery Fund
Dreyfus Founders Focus Fund
Dreyfus Founders Government Securities Fund
Dreyfus Founders Growth Fund
Dreyfus Founders Growth and Income Fund
Dreyfus Founders International Equity Fund
Dreyfus Founders Mid-Cap Growth Fund
Dreyfus Founders Money Market Fund
Dreyfus Founders Passport Fund
Dreyfus Founders Worldwide Growth Fund
-8-
