Exhibit (h)(1)
FUND ACCOUNTING SERVICING AGREEMENT
This contract between Xxxxx & Power Balanced Fund, Inc., a Minnesota
corporation, hereinafter called the "Fund," and Firstar Mutual Fund Services,
LLC, a Wisconsin corporation, hereinafter called "Firstar," is entered into on
this 18th day of March, 1999.
WHEREAS, Xxxxx & Power Balanced Fund, Inc., is an open-ended management
investment company registered under the Investment Company Act of 1940; and
WHEREAS, Firstar Mutual Fund Services, LLC (Firstar) is in the business of
providing, among other things, mutual fund accounting services to investment
companies;
NOW, THEREFORE, the parties do mutually promise and agree as follows:
1. SERVICES. Firstar agrees to provide the following mutual fund
accounting services to the Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date +1 basis using
security trade information communicated from the investment manager on
a timely basis.
(2) For each valuation date, obtain prices from a pricing source
approved by the Board of Trustees and apply those prices to the
portfolio positions. For those securities where market quotations are
not readily available, the Board of Trustees shall approve, in good
faith, the method for determining the fair value for such securities.
(3) Identify interest and dividend accrual balances as of each
valuation date and calculate gross earnings on investments for the
accounting period.
(4) Determine gain/loss on security sales and identify them as to
short-short, short- or long-term status; account for periodic
distributions of gains or losses to shareholders and maintain
undistributed gain or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) For each valuation date, calculate the expense accrual
amounts as directed by the Fund as to methodology, rate or dollar
amount.
(2) Record payments for Fund expenses upon receipt of written
authorization from the Fund.
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(3) Account for fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by Firstar
and the Fund.
(4) Provide expense accrual and payment reporting.
C. Fund Valuation and Financial Reporting Services:
(1) Account for fund share purchases, sales, exchanges,
transfers, dividend reinvestments, and other fund share activity as
reported by the transfer agent on a timely basis.
(2) Not applicable
(3) Determine net investment income (earnings) for
the Fund as of each valuation date. Account for periodic
distributions of earnings to shareholders and maintain
undistributed net investment income balances as of each valuation
date.
(4) Maintain a general ledger for the Fund in the
form as agreed upon.
(5) For each day the Fund is open as defined in the prospectus,
determine the net asset value of the Fund according to the
accounting policies and procedures set forth in the prospectus.
(6) Calculate per share net asset value, per share net earnings,
and other per share amounts reflective of fund operation at such
time as required by the nature and characteristics of the Fund.
(7) Communicate, at an agreed upon time, the per share price for
each valuation date to parties as agreed upon from time to time.
(8) Prepare monthly reports which document the adequacy of
accounting detail to support month-end ledger balances.
D. Tax Accounting Services:
(1) Maintain accounting records for the investment portfolios of
the Fund to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
(3) Calculate taxable gain/loss on security sales using the
tax lot relief method designated by the Fund.
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(4) Provide the necessary financial information to support the
taxable components of income and capital gains distributions to
the transfer agent to support tax reporting to the shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support financial
statement preparation by making the fund accounting records
available to Xxxxx and Power Balanced Fund, Inc., the Securities
and Exchange Commission, and the outside auditors.
(2) Maintain accounting records according to the Investment
Company Act of 1940 and regulations provided thereunder.
2. PRICING OF SECURITIES. For each valuation date, obtain prices from
a pricing source selected by Firstar but approved by the Fund's Board and
apply those prices to the portfolio positions. For those securities where
market quotations are not readily available, the Fund's Board shall approve, in
good faith, the method for determining the fair value for such securities.
If the Fund desires to provide a price which varies from the
pricing source, the Fund shall promptly notify and supply Firstar with the
valuation of any such security on each valuation date. All pricing changes
made by the Fund will be in writing and must specifically identify the
securities to be changed by CUSIP, name of security, new price or rate to be
applied, and, if applicable, the time period for which the new price(s) is
effective.
3. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the
Board of Trustees that affects accounting practices and procedures under this
agreement shall be effective upon written receipt and acceptance by Firstar.
4. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. Firstar reserves the
right to make changes from time to time, as it deems advisable, relating to
its services, systems, programs, rules, operating schedules and equipment, so
long as such changes to not adversely affect the service provided to the Fund
under this Agreement.
5. COMPENSATION. Firstar 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 mutually agreed upon and amended from time
to time.
6. PERFORMANCE OF SERVICE.
A. Firstar shall exercise reasonable care in the performance
of its duties under this Agreement. Firstar shall not be liable for
any error of judgment or mistake of law or for any loss suffered by
the Fund in connection with matters to which this Agreement
relates, including losses resulting from mechanical breakdowns or
the failure of communication or power supplies beyond Firstar's
control, except a loss
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resulting from Firstar's refusal or failure to comply with the
terms of this Agreement or from bad faith, negligence, or willful
misconduct on its part in the performance of its duties under this
Agreement. Notwithstanding any other provision of this Agreement,
the Fund shall indemnify and hold harmless Firstar from and against
any and all claims, demands, losses, expenses, and liabilities
(whether with or without basis in fact or law) of any and every
nature (including reasonable attorneys' fees) which Firstar may
sustain or incur or which may be asserted against Firstar by any
person arising out of any action taken or omitted to be taken by it
in performing the services hereunder (i) in accordance with the
foregoing standards, or (ii) in reliance upon any written or oral
instruction provided to Firstar by any duly authorized officer of
the Fund, such duly authorized officer to be included in a list of
authorized officers furnished to Firstar and as amended from time
to time in writing by resolution of the Board of Directors of the
Fund.
In the event of a mechanical breakdown or failure of
communication or power supplies beyond its control, Firstar shall
take all reasonable steps to minimize service interruptions for any
period that such interruption continues beyond Firstar's control.
Firstar 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 Firstar. Firstar 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 the Fund shall be entitled to inspect
Firstar's premises and operating capabilities at any time during
regular business hours of Firstar, upon reasonable notice to
Firstar.
Regardless of the above, Firstar reserves the right to
reprocess and correct administrative errors at its own expense.
B. In order that the indemnification provisions contained in this
section shall apply, it is understood that if in any case the Fund
may be asked to indemnify or hold Firstar harmless, the Fund shall
be fully and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that Firstar
will use all reasonable care to notify the Fund promptly concerning
any situation which presents or appears likely to present the
probability of such a claim for indemnification against the Fund.
The Fund shall have the option to defend Firstar against any claim
which may be the subject of this indemnification. In the event
that the Fund so elects, it will so notify Firstar and thereupon
the Fund shall take over complete defense of the claim, and Firstar
shall in such situation initiate no further legal or other expenses
for which it shall seek indemnification under this section. Firstar
shall in no case confess any claim or make any compromise in any
case in which the Fund will be asked to indemnify Firstar except
with the Fund's prior written consent.
C. Firstar shall indemnify and hold the Fund harmless from and
against any and all claims, demands, losses, expenses, and
liabilities (whether with or without
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basis in fact or law) of any and every nature (including reasonable
attorneys' fees) which may be asserted against the Fund by any
person arising out of any action taken or omitted to be taken by
Firstar as a result of Firstar's refusal or failure to comply with
the terms of this Agreement, its bad faith, negligence, or willful
misconduct.
7. RECORDS. Firstar 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 the Fund but not inconsistent with the
rules and regulations of appropriate government authorities, in particular,
Section 31 of The Investment Company Act of 1940 as amended (the "Investment
Company Act"), and the rules thereunder. Firstar agrees that all such records
prepared or maintained by Firstar relating to the services to be performed by
Firstar hereunder are the property of the Fund and will be preserved,
maintained, and made available with such section and rules of the Investment
Company Act and will be promptly surrendered to the Fund on and in
accordance with its request.
8. CONFIDENTIALITY. Firstar shall handle in confidence all information
relating to the Fund's business, which is received by Firstar during the
course of rendering any service hereunder.
9. DATA NECESSARY TO PERFORM SERVICES. The Fund or its agent, which
may be Firstar, shall furnish to Firstar the data necessary to perform the
services described herein at times and in such form as mutually agreed upon.
10. NOTIFICATION OF ERROR. The Fund will notify Firstar of any
balancing or control error caused by Firstar within three (3) business days
after receipt of any reports rendered by Firstar to the Fund, or within three
(3) business days after discovery of any error or omission not covered in the
balancing or control procedure, or within three (3) business days of receiving
notice from any shareholder.
11. TERM OF AGREEMENT. This Agreement may be terminated by either party
upon giving ninety (90) days prior written notice to the other party or such
shorter period as is mutually agreed upon by the parties. However, this
Agreement may be replaced or modified by a subsequent agreement between the
parties.
12. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a Successor to any of Firstar's duties or responsibilities
hereunder is designated by Xxxxx and Power Balanced Fund, Inc. by written
notice to Firstar, Firstar will promptly, upon such termination and at the
expense of Xxxxx and Power Balanced Fund, Inc., transfer to such Successor
all relevant books, records, correspondence and other data established or
maintained by Firstar under this Agreement in a form reasonably acceptable to
Xxxxx and Power Balanced Fund, Inc. (if such form differs from the form in
which Firstar has maintained the same, Xxxxx and Power Balanced Fund, Inc.
shall pay any expenses associated with transferring the same to such form),
and will cooperate in the transfer of such duties and responsibilities,
including provision for assistance from Firstar's personnel in the
establishment of books, records and other data by such successor.
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13. 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 Firstar shall be sent to Xxxxxx XxXxx, 000
Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, and notice to Fund shall be
sent to Xxxx Xxxxxxxx, W-1420 First National Bank Building, 000 Xxxxxxxxx
Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000.
14. CHOICE OF LAW. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
ATTEST: Firstar Mutual Fund Services, LLC
/s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. XxXxx
---------------------------------- By -----------------------------------
ATTEST: Xxxxx & Power Balanced Fund, Inc.
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxx
---------------------------------- By -----------------------------------
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