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Exhibit (8)(e)
, 1996
Mercantile Bank of St. Louis National Association
One Mercantile Center
St. Louis, Missouri 63101
RE: Custody Fees for the ARCH Equity Income, National Municipal Bond and
Short-Intermediate Corporate Bond Portfolios
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Gentlemen:
This letter constitutes our agreement with respect to compensation to be
paid to Mercantile Bank of St. Louis National Association ("Mercantile") with
respect to The ARCH Equity Income Portfolio (comprised of Class M, Class M -
Special Series 1, Class M - Special Series 2 and Class M - Special Series 3
shares), The ARCH National Municipal Bond Portfolio (comprised of Class N,
Class N - Special Series 1 and Class N - Special Series 2 shares) and The ARCH
Short-Intermediate Corporate Bond Portfolio (comprised of Class O, Class O -
Special Series 1 and Class O - Special Series 2 shares) (each class a "Series")
under the terms of the Custodian Agreement dated as of April 1, 1992 (the
"Custodian Agreement") between The ARCH Fund, Inc. (the "Fund") and Mercantile.
Pursuant to Paragraph 23 of the Custodian Agreement, and in consideration of
the services to be provided by you, we will pay Mercantile the following:
1. An annual custody fee (exclusive of any transaction charges), which shall
be calculated daily and paid monthly (in arrears) for each Series as follows:
* The ARCH Equity Income Portfolio - the greater of $6,000.00 or $.30
for each $1,000.00 of the Series' average daily net assets;
* The ARCH National Municipal Bond Portfolio - the greater of $6,000.00 or
$.30 for each $1,000.00 of the Series' average daily net assets; and
* The ARCH Short-Intermediate Corporate Bond Portfolio - the greater of
$6,000.00 or $.30 for each $1,000.00 of the Series' average daily net
assets.
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Mercantile Bank of St. Louis, N.A.
, 1996
Page Two
2. A transaction charge of $15.00 for each purchase, sale or delivery of a
security upon its maturity date, $50.00 for each interest collection or claim
item, $20.00 for each transaction involving GNMA, tax-free or other
non-depository registered items with monthly dividends or interest, $30.00 for
each purchase, sale or expiration of an option contract, $50.00 for each
purchase, sale or expiration of a futures contract, and $15.00 for each
repurchase trade with an institution other than Mercantile;
3. Mercantile's incremental costs in providing foreign custody services for
foreign denominated and held securities; and
4. Mercantile's out-of-pocket expenses, including but not limited to postage,
telephone, telex, Federal Express and Federal Reserve wire fees, on behalf of
the Series.
The fee and expenses attributable to each Series shall be the obligation of
that Series and not of any other portfolio of the Fund. The fee for the period
from the day of the year this agreement is entered into until the end of that
fiscal year of the Series, or for any portion of a fiscal year immediately
prior to its termination, shall be pro-rated according to the proportion which
such period bears to the full annual period.
If the foregoing accurately sets forth our agreement and you intend to be
legally bound thereby, please execute a copy of this letter and return it to
us.
Very truly yours,
THE ARCH FUND, INC.
By:___________________________
Xxxxx X. Xxxxxxx, President
ACCEPTED: MERCANTILE BANK OF ST. LOUIS
NATIONAL ASSOCIATION
By:___________________________
Xxxxxx X. Xxxxxx, Senior Vice President
Dated as of: , 1996
