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EXHIBIT 99.(H)(1)
FUND ACCOUNTING AND ADMINISTRATION SERVICING AGREEMENT
This contract between Hotchkis and Wiley Funds, a Massachusetts business trust,
hereinafter called the "Trust," and Xxxxxxx Xxxxx Asset Management, L.P. Fund
Accounting, hereinafter called "Fund Accounting," is entered into as of this
first day of July, 2000.
WITNESSETH:
WHEREAS, the Trust is an open-end, management investment company which is
registered under the Investment Company Act of 1940 and currently offers shares
of ten portfolios (the "Funds");
WHEREAS, Fund Accounting is in the business of providing, among other
things, mutual fund accounting and administration services to investment
companies;
NOW, THEREFORE, the Trust and Fund Accounting do mutually promise and
agree as follows:
1. Services. Fund Accounting agrees to provide the following mutual
fund accounting and administration services to the Trust for each Fund:
A. Portfolio Accounting Services:
(1) Maintain portfolio records on a trade date plus one
(T+1) basis or otherwise as mutually agreed by the parties using
security trade information communicated from the investment adviser
on a timely basis.
(2) For each valuation date, obtain prices in accordance
with the valuation guidelines adopted by the Trust's Board of
Trustees.
(3) Maintain 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- or long-term status; account for periodic distributions
of net capital gains to shareholders and maintain undistributed gain
or loss balances as of each valuation date.
B. Expense Accrual and Payment Services:
(1) Account for Fund expenditures and maintain expense
accrual balances at the level of accounting detail as directed by
the Trust.
(2) Coordinate payment of Fund expenses upon receipt of
written authorization as directed by the investment adviser and
monitor expense accruals
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and payments 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 for a Fund if directed by
the Trust.
(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 each of the Funds.
(5) For each day the Trust is open for business as described
in the prospectus, determine the net asset value of each Fund
according to the accounting policies and procedures set forth in the
prospectus and in the valuation guidelines adopted by the Trust's
Board of Trustees.
(6) Calculate per share net asset value and other per share
amounts reflective of Fund operations at such time as is 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) Maintain appropriate documents supporting month-end
ledger balances.
D. Tax Accounting and Reporting Services:
(1) Maintain tax accounting records for the investment
portfolios of the Trust to support the tax reporting required for
IRS-defined regulated investment companies.
(2) Maintain tax lot detail for the investment portfolios.
(3) Calculate taxable gain/loss on security sales using the
tax cost basis for each Fund.
(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.
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(5) Monitor each Fund's status as a regulated investment
company under Subchapter M through a review of (a) asset
diversification requirements, (b) qualifying income requirements and
(c) distribution requirements.
(6) Tax reporting: (a) calculate U.S. government interest
for state exclusion, (b) file Form 1099 Miscellaneous for payments
to Trustees and service providers, (c) monitor wash sale losses and
(d) calculate eligible dividend income for corporate shareholders.
E. Compliance Control Services:
(1) Support reporting to regulatory bodies and support
financial statement preparation by making the Fund accounting
records available to the Trust, the Securities and Exchange
Commission and the Trust's outside auditors.
(2) Maintain accounting records according to the Investment
Company Act of 1940 and regulations provided thereunder.
(3) Coordinate independent Fund audits and prepare necessary
audit schedules.
(4) Prepare and file with the appropriate state securities
authorities all necessary notice filings to enable each Fund to make
a continuous offering of its shares, and monitor and maintain
registrations in each state.
(5) SEC Registration and Financial Reporting: (a) prepare,
file and distribute annual and semiannual reports, (b) prepare and
file Form N-SAR and (c) assist Trust in updating prospectuses and
Statements of Additional Information.
F. General Fund Management Services:
(1) To the extent designated by the investment adviser, act
as liaison among Trust service providers.
(2) Compile information on Fund expenses in connection with
annual review of investment advisory contracts.
2. Changes in Accounting Procedures. Any resolution passed by the Board
of Trustees that affects accounting practices and procedures under this
Agreement shall be applied with respect to Fund Accounting's practices.
3. Changes in Equipment, Systems, Service, Etc. Fund Accounting
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 Trust under this Agreement.
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4. Compensation. The Trust will reimburse Fund Accounting for its costs
in providing accounting and administration services to the Funds.
5. Performance of Services. Fund Accounting shall exercise reasonable
care in the performance of its duties under the Agreement. The Trust agrees to
reimburse and make Fund Accounting whole for any loss or damages (including
reasonable fees and expenses of legal counsel) arising out of or in connection
with its actions under this Agreement so long as Fund Accounting acts in good
faith and is not negligent or guilty of any willful misconduct.
6. Ownership of Records. All records prepared or maintained by Fund
Accounting on behalf of the Trust remain the property of the Trust and will be
surrendered promptly on the written request of an authorized officer of the
Trust.
7. Confidentiality. Fund Accounting shall handle in confidence all
information relating to the Trust's business which is received by Fund
Accounting during the course of rendering any service hereunder.
8. Notification of Error. The Trust will notify Fund Accounting of any
balancing or control error caused by Fund Accounting within three (3) business
days after receipt of any reports rendered by Fund Accounting to the Trust
disclosing any such error, 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
disclosing any such error.
9. Additional Series. In the event that the Trust establishes
additional series of share, such series will be subject to the terms and
conditions of this Agreement, and shall be maintained and accounted for by Fund
Accounting on a discrete basis.
10. 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.
11. Duties in the Event of Termination. In the event that in connection
with termination a successor to any of Fund Accounting's duties or
responsibilities hereunder is designated by the Trust by written notice to Fund
Accounting, Fund Accounting will promptly, upon such termination and at the
expense of the Trust, transfer to such successor all relevant books, records,
correspondence and other data established or maintained by Fund Accounting under
this Agreement in a form reasonably acceptable to the Trust and will cooperate
in the transfer of such duties and responsibilities, including assisting such
successor in establishing books, records and other data.
12. Choice of Law. This Agreement shall be construed in accordance with
the laws of the State of New York, without giving effect to any choice or
conflict of law provision or rule that would cause application of the laws of
any jurisdiction other than the State of New York.
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13. Enforcement of Claims. The name "Hotchkis and Wiley Funds" is the
designation of the Trustees under a Declaration of Trust, and Fund Accounting
acknowledges that all persons dealing with the Trust must look solely to the
property of the Trust for the enforcement of claims against the Trust, as
neither the Trustees, officers, agents or shareholders assume any personal
liability for obligations entered into on behalf of the Trust.
IN WITNESS WHEREOF, the due execution hereof on the date first above
written.
HOTCHKIS AND WILEY FUNDS
By: /s/ XXXXX XXXXXX
________________________________
Xxxxx Xxxxxx
President
XXXXXXX XXXXX ASSET
MANAGEMENT, L.P.
By: /s/ XXXXXX X. XXXXX
________________________________
Title: EVP
____________________________
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