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EXHIBIT 9B
FUND ACCOUNTING SERVICING AGREEMENT
This contract between Xxxxxx Investment Funds, Inc., a Maryland series
company currently sponsoring the Bond Fund and the Growth Stock Fund, (each, a
"Fund," and together, the "Funds") and Firstar Trust Company, a Wisconsin
corporation, hereinafter called "FTC," is entered into on this 5th day of
November, 1996.
WHEREAS, Xxxxxx Investment Funds, Inc. is an open-ended management
investment company which shall be registered under the Investment Company Act
of 1940, as amended (the "Investment Company Act"); and
WHEREAS, FTC 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. FTC agrees to provide the following mutual fund accounting
services to the Funds:
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 Directors and apply those prices to
the portfolio positions. For those securities where market
quotations are not readily available, the Board of Directors 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 Funds as to methodology, rate or dollar
amount.
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(2) Record payments for Fund expenses upon receipt of written
authorization from the Funds.
(3) Account for fund expenditures and maintain expense accrual
balances at the level of accounting detail, as agreed upon by FTC
and the Funds.
(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) Apply equalization accounting as directed by the Funds.
(3) Determine net investment income (earnings) for the Funds
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 Funds in the form as
agreed upon.
(5) For each day the Funds are open as defined in the
prospectus, determine the net asset value of the 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
Funds.
(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 Funds to support the tax reporting required for IRS-defined
regulated investment companies.
(2) Maintain tax lot detail for the investment portfolio.
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(3) Calculate taxable gain/loss on security sales using the
tax lot relief method designated by the Funds.
(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 Xxxxxx Investment Funds, Inc., the Securities
and Exchange Commission, and the outside auditors.
(2) Maintain accounting records according to the Investment
Company Act and regulations provided thereunder.
2. PRICING OF SECURITIES. For each valuation date, obtain prices from a
pricing source selected by FTC but approved by the Funds' Board and apply those
prices to the portfolio positions. For those securities where market
quotations are not readily available, the Funds' Board shall approve, in good
faith, the method for determining the fair value for such securities.
If the Funds desire to provide a price which varies from the pricing
source, the Funds shall promptly notify and supply FTC with the valuation of
any such security on each valuation date. All pricing changes made by the
Funds 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 prices are effective.
3. CHANGES IN ACCOUNTING PROCEDURES. Any resolution passed by the Board
of Directors that affects accounting practices and procedures under this
Agreement shall be effective upon written receipt and acceptance by FTC.
4. CHANGES IN EQUIPMENT, SYSTEMS, SERVICE, ETC. FTC 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 do not adversely affect the service provided to the Funds under
this Agreement.
5. COMPENSATION. FTC 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.
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6. PERFORMANCE OF SERVICE.
A. FTC shall exercise reasonable care in the performance of its
duties under this Agreement. FTC 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 FTC's control, except a loss resulting from FTC'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 FTC 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 FTC may sustain
or incur or which may be asserted against FTC 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 FTC by
any duly authorized officer of the Fund, such duly authorized officer to
be included in a list of authorized officers furnished to FTC 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, FTC shall take all reasonable steps
to minimize service interruptions for any period that such interruption
continues beyond FTC's control. FTC 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 FTC. FTC 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 FTC's premises
and operating capabilities at any time during regular business hours of
FTC, upon reasonable notice to FTC.
Regardless of the above, FTC 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 FTC harmless, the Fund shall be fully and
promptly advised of all pertinent facts concerning the situation in
question, and it is further understood that FTC 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 FTC against any claim which may be the subject of this
indemnification. In the event that the Fund so elects, it will so notify
FTC and thereupon the Fund
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shall take over complete defense of the claim, and FTC shall in such
situation initiate no further legal or other expenses for which it shall
seek indemnification under this section. FTC shall in no case confess any
claim or make any compromise in any case in which the Fund will be asked
to indemnify FTC except with the Fund's prior written consent.
C. FTC shall indemnify and hold the Fund harmless 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 may be asserted against the Fund by any
person arising out of any action taken or omitted to be taken by FTC as a
result of FTC's refusal or failure to comply with the terms of this
Agreement, its bad faith, negligence, or willful misconduct.
7. RECORDS. FTC 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 Funds but not inconsistent with the rules and
regulations of appropriate government authorities, in particular, Section 31 of
the Investment Company Act and the rules thereunder. FTC agrees that all such
records prepared or maintained by FTC relating to the services to be performed
by FTC hereunder are the property of the Funds 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 Funds on and in accordance
with its request.
8. CONFIDENTIALITY. FTC shall handle in confidence all information
relating to the Funds' business, which is received by FTC during the course of
rendering any service hereunder.
9. DATA NECESSARY TO PERFORM SERVICES. The Funds or its agent, which
may be FTC, shall furnish to FTC the data necessary to perform the services
described herein at times and in such form as mutually agreed upon.
10. NOTIFICATION OF ERROR. The Funds will notify FTC of any balancing or
control error caused by FTC within three (3) business days after receipt of any
reports rendered by FTC to the Funds, 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. ADDITIONAL SERIES. In the event that the Xxxxxx Investment Funds,
Inc. establishes one or more series of shares with respect to which it desires
to have FTC render accounting services, under the terms hereof, it shall so
notify FTC in writing, and if FTC agrees in writing to provide such services,
such series will be subject to the terms and conditions of this Agreement, and
shall be maintained and accounted for by FTC on a discrete basis. The
portfolios currently covered by this Agreement are: the Bond Fund and the
Growth Stock Fund.
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12. TERM OF AGREEMENT. This Agreement may be terminated by either party
upon giving sixty (60) 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.
13. DUTIES IN THE EVENT OF TERMINATION. In the event that in connection
with termination a Successor to any of FTC's duties or responsibilities
hereunder is designated by Xxxxxx Investment Funds, Inc. by written notice to
FTC, FTC will promptly, upon such termination and at the expense of Xxxxxx
Investment Funds, Inc., transfer to such Successor all relevant books, records,
correspondence and other data established or maintained by FTC under this
Agreement in a form reasonably acceptable to Xxxxxx Investment Funds, Inc. (if
such form differs from the form in which FTC has maintained the same, Xxxxxx
Investment Funds, 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 FTC's personnel in
the establishment of books, records and other data by such successor.
14. 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 FTC shall be sent to Mutual Fund Services, 000 X. Xxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, and notice to Funds shall be sent to X.X.
Xxx 0000, Xx. Xxxxx, Xxxxxxxxx 00000.
15. CHOICE OF LAW. This Agreement shall be construed in accordance with
the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
Xxxxxx Investment Funds, Inc. Firstar Trust Company
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
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Its: President Its: Vice President
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Attest: /s/ Xxxxxxx X. XxXxxxx Attest: /s/ Xxxxxx XxXxx
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Assistant Secretary
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Exhibit A
Fund Accounting Annual Fee Schedule
Xxxxxx Funds
Annual fees based on market value of assets
Stock Fund $22,000 for the first $40 million
1 basis point on the next $200 million
1/2 basis point on the balance
Bond Fund $25,000 for the first $40 million
2 basis points on the next $200 million
1 basis point on the balance
15% discount for the first year
10% discount for the second year
Daily pricing
Domestic & Canadian equities .15
Options .15
Corporate/Government/Agency bonds .50
CMOs .80
International equities & bonds .50
Municipal bonds .80
Money Market instruments .80
