Exhibit (h)(3)
ACCOUNTING SERVICES AGREEMENT
XXXXXX XXXXXX SELECT FUND, INC.
AND
MUTUAL FUNDS SERVICE CO.
This Accounting Services Agreement (the "Agreement"), dated the ___ day of
_____________, 2000, made by and between XXXXXX XXXXXX SELECT FUND, INC. (the
"Company"), a diversified open-end investment company, duly organized and
existing under the laws of the State of Maryland, on behalf of two of its
series, which have been designated Xxxxxx Xxxxxx Core Equity Fund and Xxxxxx
Xxxxxx Utility Fund (the "Fund"), and MUTUAL FUNDS SERVICE CO. ("Agent"), a
corporation duly organized and existing in the State of Ohio;
WITNESSETH THAT:
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940; and
WHEREAS, the Company desires to appoint the Agent as its Accounting
Services Agent for the Fund to perform certain accounting and record keeping
functions required of a duly registered investment company; to file certain
financial reports; to maintain and preserve certain books, accounts, and records
as the basis for such reports; and to perform certain daily functions in
connection with such accounts and records;
WHEREAS, the Agent is willing to perform such functions upon the terms and
conditions herein set forth; and
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
Section 1. The Company shall provide any information reasonably needed by
the Agent knowledgeably to perform its functions hereunder.
Section 2. The Agent shall maintain and keep current the following books,
accounts, records, journals, or other records of original entry, relating to the
business of the Fund, and necessary or advisable for compliance with applicable
regulations, including Rules 31(a)-1 and 31(a)-2 under the Investment Company
Act of 1940, as amended, and as may be mutually agreed to between the Company
and the Agent:
(a) Cash Receipts
(b) Cash Disbursements
(c) Dividend Record
(d) Purchase and Sales of Portfolio Securities
(e) Subscription and Redemption Journals
(f) Security Ledger
(g) Broker Ledger
(h) General Ledger
(i) Daily Expense Accruals
(j) Daily Interest Accruals
(k) Securities and Monies borrowed or loaned and collateral therefor
(l) Trial Balances
Unless appropriate information necessary to perform the above functions is
furnished to the Agent in a timely manner, the Agent shall incur no liability to
the Trust Company or any other person.
It shall be the responsibility of the Company to furnish the Agent with the
declaration, record, and payment dates and amounts of any dividends or income
and any other special actions required concerning each of the Fund's Securities.
The Agent shall maintain all accounts and records above mentioned as
required by regulation and as agreed upon between the Company and the Agent.
Section 3. Upon receipt by the Agent of written or oral instructions, the
Agent shall make proper accounting entries in accordance therewith. The Company
shall direct that each broker-dealer, or other person through whom a transaction
has occurred, shall send a confirmation thereof to the Agent. The Agent shall
verify this confirmation against the written or oral instructions when received
from the Company and forward the confirmation to the Custodian. The Agent shall
promptly notify the Company of any discrepancy between the confirmation and the
Company's written instructions when received from the Company but shall incur no
responsibility or liability for such discrepancy. The Company shall cause any
necessary corrections to be made and shall advise the Agent and the Custodian
accordingly.
Section 4. The Agent shall calculate the net asset value and public
offering price of each class of each Fund in accordance with the Company's
currently effective prospectus, once daily. The Agent shall complete such daily
calculations by the time required for inclusion on the published price list of
the NASD and shall communicate such values and public offering prices to the
NASD promptly each day.
The Agent shall prepare and maintain a daily evaluation of Securities for
which market quotations are available by the Agent's use of Bloomberg Financial
Markets and ILX Quotation Services and the valuation of interests of the
portfolios in which each Fund invests; all other Securities shall be evaluated
in accordance with the Company's written instructions, and the Agent shall have
no responsibility or liability for the accuracy of the information supplied by
the Company or upon the written instructions.
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Section 5. At the end of each month, the Agent shall obtain from the
Custodian a monthly statement of cash and portfolio transactions, which the
Agent shall reconcile with its accounts and records maintained for the Fund. The
Agent shall report any discrepancies to the Custodian, and report any
unreconciled items to the Company.
Section 6. The Agent shall supply daily and periodic reports to the
Company, as required by law or regulation, and as requested by the Company and
agreed upon by the Agent.
Section 7. The Company shall report and confirm to the Transfer Agent all
Share purchases and redemptions of which it is aware. The Agent shall obtain
from the Transfer Agent daily reports of Share purchases, redemptions, and total
shares outstanding.
The Agent shall reconcile outstanding Shares with the Transfer Agent
periodically and certify at least monthly to the Company the reconciled Share
balance outstanding.
Section 8. The accounts and records of the Fund maintained by the Agent
shall be the property of the Company, and shall be made available to the
Company, within a reasonable period of time, upon demand. The Agent shall assist
the Company's independent auditors, or upon demand by any regulatory body, in
any requested review of the Fund's accounts and records but shall be reimbursed
for all expenses and employee time invested in any such review outside of
routine and normal periodic reviews and audits. The Agent shall supply the
necessary data for the Company's completion of any necessary tax returns,
questionnaires, periodic reports to Shareholders of the Fund, and such other
reports and information requests as the Company and the Agent shall agree upon
from time to time.
Section 9. The Agent and the Company may from time to time adopt uniform or
standing procedures, and the Agent may conclusively assume that any procedure
approved by the Company, or directed by the Company, does not conflict with or
violate any requirements of its prospectus, Articles of Incorporation, By-Laws,
or any rule or regulation of any regulatory body or governmental agency. The
Company shall be responsible to notify the Agent of any changes in regulations
or rules which might necessitate changes in the Agent's procedures.
Section 10. The Agent may rely upon the advice of the Company and upon
statements of the Company's accountants and other persons believed by it in good
faith to be expert in matters upon which they are consulted, and the Agent shall
not be liable for any actions taken in good faith upon such statements.
Section 11. The Agent shall not be liable for any action taken in good
faith reliance upon any authorized oral instructions, any written instructions,
any certified copy of any resolution of the Directors of the Company or any
other document reasonably believed by the Agent to be genuine and to have been
executed or signed by the proper person or persons. The Company will send
written instructions to cover oral instructions,
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and the Agent will compare the information against the oral instructions
previously furnished. The Agent will inform the Company immediately of any noted
discrepancy or will request, if no written instruction is received in a
reasonable time, that the Company forward same to Agent.
The Agent shall not be held to have notice of any change of authority of
any officer, employee, or agent of the Company until receipt of notification
thereof by the Company.
In addition to indemnification expressly provided elsewhere in this
Agreement, the Company shall indemnify and hold harmless the Agent from all
claims and liabilities (including reasonable expenses for legal counsel)
incurred by or assessed against the Agent in connection with the performance of
this Agreement, except such as may arise from the Agent's own negligent action,
omission, or willful misconduct; provided, however, that before confessing any
claim against it, the Agent shall give the Company reasonable opportunity to
defend against such claim in the name of the Company, the Fund or the Agent or
any of them.
Section 12. The Shareholders, Directors, officers, employees and agents of
the Company shall not be personally bound by or liable hereunder, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim hereunder.
Section 13. The Company acknowledges and agrees that the Growth Stock
Portfolio (the master fund in which all of the investable assets of the Core
Equity Fund are invested) will pay the Agent compensation for its services (and
reimburse the Agent for expenses) based in part on the average daily net assets
of the Core Equity Fund as set forth in Schedule A attached hereto, or as shall
be set forth in amendments to such schedule approved by the Growth Stock
Portfolio and the Agent.
The Company acknowledges and agrees that the Utilities Stock Portfolio (the
master fund in which all of the investable assets of the Utility Fund are
invested) will pay the Agent compensation for its services (and reimburse the
Agent for expenses) based in part on the average daily net assets of the Utility
Fund as set forth in Schedule A attached hereto, or as shall be set forth in
amendments to such schedule approved by the Utilities Stock Portfolio and the
Agent.
The Company agrees to reimburse the Agent for expenses, as set forth in
Schedule A attached hereto, or as shall be set forth in amendments to such
Schedule approved by the Company and the Agent.
Section 14. In addition to the compensation and expense reimbursements
specified in Section 13 above, the Company shall pay the Agent a fee, payable in
monthly installments, equal to 0.07% per annum of the first $50 million of the
average daily net assets of each Fund and 0.05% per annum of the average daily
net assets of each Fund in excess of $50 million. The Agent will pay the entire
amount of the fees collected by it
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under this Section to Signature Financial Services, Inc. or its successor as
payment for Signature's third party spoke license fee.
Section 15. Nothing contained in this Agreement is intended to or shall
require the Agent, in any capacity hereunder, to perform any functions or duties
on any holiday or other day of special observance on which the New York Stock
Exchange is closed. Functions or duties normally scheduled to be performed on
such days shall be performed on, and as of, the next business day on which both
the New York Stock Exchange and the Agent are open.
Section 16. This Agreement shall have an initial term of one (1) year
beginning on the date the Company commences operations. Subsequent to the
initial term this Agreement may be terminated by either party upon 60 days'
prior written notice.
Section 17. Any notice or other communication required by or permitted to
be given in connection with this Agreement shall be in writing, and shall be
delivered in person or sent by first class mail, postage prepaid, to the
respective parties as follows:
If to the Company:
Xxxxxx Xxxxxx Select Fund, Inc.
Xxxxxx Xxxxxx Tower
00 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
If to the Agent:
Mutual Funds Service Co.
0000 Xxxxxxxx Xxxxx
Xxx 0000
Xxxxxx, XX 00000
Section 18. The Directors, officers, employees and agents of the Company
shall not be personally bound by or liable hereunder, nor shall resort be had to
their private property for the satisfaction of any obligation or claim
hereunder.
Section 19. This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 20. This Agreement shall be binding upon the parties hereto and
their respective successors and assigns; provided, however, that this Agreement
shall not be assignable by the Company without the written consent of the Agent,
or by the Agent without the written consent of the Company, authorized or
approved by a resolution of its Directors.
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Section 21. This Agreement shall be governed by the laws of the State of
Maryland.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their duly authorized officers as of the day and year first above
written.
XXXXXX XXXXXX SELECT FUND, INC.
By_________________________
MUTUAL FUNDS SERVICE CO.
By__________________________
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MUTUAL FUNDS SERVICE CO.
ACCOUNTING SERVICES
PORTFOLIO PRICING & GENERAL LEDGER SERVICES
DAILY
o Daily trial balance with a computation sheet of net asset value
o Daily performance sheet
o Daily cash available sheet
o Daily reconciliation of Fund shares
o Daily interest calculations
o Daily portfolio calculation with comparison to previous day
o Daily processing and settlement of all security trades
MONTHLY
o Balance Sheet and Income Statement
o Schedule of purchases and sales of securities
o Brokerage commission schedule for the month and year to date
o Security ledger
o Schedule of Fund shares sold and repurchased
o Compliance with Sub-M requirements and short-short gain limitations
QUARTERLY
o Compliance with diversification rules
SEMI-ANNUALLY
o Prepare answers to applicable items on Form NSAR
OTHER
o Assist with the preparation of the unaudited reports that are required
either quarterly or semi-annually
o Furnish reports for the independent auditor and to assist with the
audit
o Calculation of available or required income or capital gain
distributions to shareholders
o Provide requested material for Board meetings
Schedule A
MUTUAL FUNDS SERVICE COMPANY
FEE SCHEDULE FOR ACCOUNTING SERVICES
GROWTH STOCK AND UTILITIES STOCK PORTFOLIOS
A. BASIS POINT FEE
15 Basis Points on first $10 million of assets
10 Basis Points on next $20 million of assets
2 Basis Points on next $50 million of assets
1 Basis Point on assets over $80 million.
(Based on each Portfolio's average net assets - payable monthly).
B. MINIMUM ANNUAL FEE - $7,500 for each Portfolio
C. In addition, all out-of-pocket expenses shall be separately charged, shall
include but not be limited to: printed forms, postage, overnight mail, telephone
expense and costs associated with providing fund information to outside services
(NASDAQ, rating services, etc.).
