TRANSFER AGENT SERVICES AGREEMENT
This Agreement, dated as of the __ day of __________, 1997, made by and
between Metropolitan West Funds, (the "Trust") a business trust operating as an
open-end management investment company registered under the Investment Company
Act of 1940, as amended (the "Act"), duly organized and existing under the laws
of the State of Delaware and FPS Services, Inc. ("FPS"), a corporation duly
organized and existing under the laws of the State of Delaware (collectively,
the "Parties").
WITNESSETH THAT:
WHEREAS, the Trust is authorized by its Trust Instrument to issue
separate series of shares representing interests in separate investment
portfolios (the "Series"), which Series are identified on Schedule "C" attached
hereto and which Schedule "C" may be amended from time to time by mutual
agreement of the Trust and FPS; and
WHEREAS, the Trust desires to retain FPS to perform share transfer
agency, redemption and dividend disbursing services as set forth in this
Agreement and in Schedule "A" attached hereto, and to perform certain other
functions in connection with these duties; and
WHEREAS, FPS is registered with the Securities and Exchange Commission
as a Transfer Agent as required under Section 17A(c) of the Securities Exchange
Act of 1934, as amended; and
WHEREAS, FPS is willing to serve in such capacity and perform such
functions upon the terms and conditions set forth below; and
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and in exchange of good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the Parties hereto,
intending to be legally bound, do hereby agree as follows:
Section 1. The terms as defined in this Section wherever used in this
Agreement, or in any amendment or supplement hereto, shall have the meanings
herein specified unless the context otherwise requires.
Shareholders shall mean the registered owners of the shares of the
Series in accordance with the share registry records maintained by FPS for the
Trust.
Shares shall mean the issued and outstanding shares of the Series.
Signature Guarantee shall mean the guarantee of signatures by an
"eligible guarantor institution" as defined in rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended. Eligible guarantor institutions include banks,
brokers, dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings associations.
Broker-dealers guaranteeing signatures must be members of a clearing corporation
or maintain net capital of at least $100,000. Signature guarantees will be
accepted from any eligible guarantor institution which participates in a
signature guarantee program.
Oral Instruction shall mean an authorization, instruction, approval,
item or set of data, or information of any kind transmitted to FPS in person or
by telephone, telegram, telecopy or other mechanical or documentary means
lacking original signature, by a person or persons reasonably identified to FPS
to be a person or persons so authorized by a resolution of the Board of Trustees
of the Trust.
Written Instruction shall mean an authorization, instruction, approval,
item or set of data or information of any kind transmitted to FPS in an original
writing containing an original signature or a copy of such document transmitted
by telecopy including transmission of such signature reasonably identified to
FPS to be the signature of a person or persons so authorized by a resolution of
the Board of Trustees of the Trust to give Written Instructions to FPS.
TRANSFER AGENCY SERVICES
Section 2. FPS shall make original issues of Shares in accordance with
this Agreement and with the Trust's Prospectus and Statement of Additional
Information then in effect, upon the written request of the Trust, and upon
being furnished with (i) a certified copy of a resolution or resolutions of the
Board of Trustees of the Trust authorizing such issue; (ii) an opinion of
counsel as to the validity of such Shares; and (iii) necessary funds for the
payment of any original issue tax applicable to such Shares.
Section 3. Transfers of Shares shall be registered and new Shares
issued by FPS upon redemption of outstanding Shares, (i) in the form deemed by
FPS to be properly endorsed for transfer, (ii) with all necessary endorser's
signatures guaranteed pursuant to Rule 17Ad-15 under the Securities Exchange Act
of 1934, as amended, and accompanied by, (iii) such assurances as FPS shall deem
necessary or appropriate to evidence the genuineness and effectiveness of each
necessary endorsement, and (iv) satisfactory evidence of compliance with all
applicable laws relating to the payment or collection of taxes.
Section 4. In registering transfers, FPS may rely upon the applicable
commercial code or any other applicable law which, in the written opinion of
counsel (a copy of which shall previously have been furnished to the Trust),
protect FPS and the Trust in not requiring complete documentation, in
registering transfer without inquiry into adverse claims, in delaying
registration for purposes of such inquiry, or in refusing registration where in
its judgment an adverse claim requires such refusal.
Section 5. With respect to confirmed trades received by FPS from a
registered representative of an NASD member, FPS shall periodically notify the
Trust of the current status of outstanding confirmed trades. FPS is authorized
to cancel confirmed trades which have been outstanding for thirty (30) days.
Upon such cancellation, FPS shall instruct the accounting agent
to adjust the books of the Trust accordingly. FPS will not accept telephone
purchases directly from shareholders.
Section 6. FPS will maintain stock registry records in the usual form
in which it will note the issuance, transfer and redemption of Shares. FPS is
responsible to provide reports of Share purchases, redemptions, and total Shares
outstanding on the next business day after each net asset valuation. FPS is
authorized to keep records, which will be part of the stock transfer records, in
which it will note the names and registered address of Shareholders and the
number of Shares and fractions thereof owned by them.
Section 7. In addition to the duties and functions above-mentioned, FPS
will perform the usual duties and functions of a stock transfer agent for an
investment company as listed in Schedule "A" attached hereto. FPS may rely
conclusively and act without further investigation upon any list, instruction,
certification, authorization or other instrument or paper reasonably believed by
FPS in good faith, to be genuine and unaltered, and to have been signed,
countersigned, or executed by duly authorized person or persons, or upon the
instructions of any officer of the Trust or upon the advice of counsel for the
Trust or for FPS. FPS may record any transfer of Shares which it reasonably
believes to have been duly authorized or may refuse to record any transfer of
Shares if in good faith FPS deems such refusal necessary in order to avoid any
liability either of the Trust or FPS. The Trust agrees to indemnify and hold
harmless FPS from and against any and all losses, costs, claims, and liability
which it may suffer or incur by reason of such reliance or acting or refusing to
act. FPS shall maintain and reconcile all operating bank accounts necessary to
facilitate all transfer agency processes; including, but not limited to,
distribution disbursements, redemptions and payment clearance accounts.
Section 8. In the event of any request or demand for the inspection of
the Share records of the Series is received, FPS shall use its best efforts to
notify the Trust and to secure instructions
as to permitting or refusing such inspection. FPS may, however, exhibit such
records to any person in any case where it is advised by its counsel that it may
be held liable for failure to do so.
ISSUANCE OF SHARES
Section 9. Prior to the daily determination of net asset value in
accordance with the Series' Prospectus and Statement of Additional Information,
FPS shall process all purchase orders received since the last determination of
the Series' net asset value.
FPS shall calculate daily the amount available for investment in Shares
at the net asset value determined by the Series' pricing agent as of the close
of regular trading on the New York Stock Exchange, the number of Shares and
fractional Shares to be purchased and the net asset value to be deposited with
the Trust's custodian bank (the "Custodian"). FPS shall place a purchase order
daily with the appropriate Series for the proper number of Shares and fractional
Shares to be purchased and confirm such number to the Trust, in writing.
Section 10. Share certificates will not be issued in conjunction with
the sale of Shares.
Section 11. FPS, having made the calculations provided for above, shall
thereupon pay over the net asset value of Shares purchased to the Custodian. The
proper number of Shares and fractional Shares shall then be issued daily and
credited by FPS to the Shareholder Registration Records. The Shares and
fractional Shares purchased for each Shareholder will be credited by FPS to that
Shareholder's separate account. FPS shall mail to each Shareholder a
confirmation of each purchase, with copies to the Trust, if requested. Such
confirmations will show the prior Share balance, the new Share balance, the
amount invested and the price paid for the newly purchased Shares.
REDEMPTIONS
Section 12. FPS shall, prior to the daily determination of net asset
value in accordance with the Series' Prospectus and Statement of Additional
Information, process all requests from Shareholders to redeem Shares and
determine the number of Shares required to be redeemed to
make monthly payments, automatic payments or the like. Thereupon, FPS shall
advise the Trust of the total number of Shares available for redemption and the
number of Shares and fractional Shares requested to be redeemed. FPS shall
furnish the Trust with an appropriate confirmation of the redemption and process
the redemption by filing with the Custodian an appropriate statement and make
the proper distribution and application of the redemption proceeds in accordance
with the Series' Prospectus and Statement of Additional Information then in
effect. The stock registry books recording outstanding Shares, the shareholder
registration records and the individual account of the Shareholder shall be
properly debited.
Section 13. The proceeds of redemption shall be remitted by FPS by
check mailed to the Shareholder at the Shareholder's registered address or wired
to an authorized bank account in accordance with the Series' Prospectus and
Statement of Additional Information then in effect.
For the purposes of redemption of Shares which have been purchased
within 15 days of a redemption request, the Trust shall provide FPS, from time
to time, with Written Instructions concerning the time within which such
requests may be honored.
DIVIDENDS
Section 14. The Trust shall notify FPS of the date of each dividend
declaration or capital gains distribution. In addition, the Trust shall provide
to FPS five business days' prior written notice of the record date for
determining the Shareholders entitled to payment. The per-share payment amount
of any dividend or capital gain shall be determined by the Trust and
communicated to FPS.
Section 15. On or before each payment date, the Trust will notify FPS
of the total amount of the dividend or distribution currently payable. FPS will,
on the designated payment date, automatically reinvest all dividends in
additional Shares except in cases where Shareholders have elected to receive
distribution in cash, in which case FPS will mail distribution checks to the
Shareholders for the proper amounts payable to them from monies transferred by
the Custodian to FPS for that purpose.
FEES
Section 16. The Trust agrees to pay FPS compensation for its services
and to reimburse it for expenses, at the rates and amounts as set forth in
Schedule "B" attached hereto, and as shall be set forth in any amendments to
such Schedule "B" approved by the Trust and FPS. The Trust agrees and
understands that FPS's compensation will be comprised of two components, payable
on a monthly basis, as follows:
(i) an annual shareholder Account Maintenance Fee calculated
by multiplying the monthly average number of accounts for Class A Shares and
Class D Shares of the Trust by one twelfth (1/12th) the respective account fee
as stated in Schedule "B", subject to a minimum fee per class, which the Trust
hereby authorizes FPS to collect by debiting the Trust's custody account for
invoices which are rendered for the services performed for the applicable
function. The invoices for the services performed will be sent to the Trust
after such debiting with the indication that payment has been made; and
(ii) reimbursement of any reasonable out-of-pocket expenses
paid by FPS on behalf of the Trust, which out-of-pocket expenses will be billed
to the Trust within the first ten calendar days of the month following the month
in which such out-of-pocket expenses were incurred. The Trust agrees to
reimburse FPS for such expenses within ten calendar days of receipt of such
xxxx.
For the purpose of determining fees payable to FPS, the value of the
Series' net assets shall be computed at the times and in the manner specified in
the Series' Prospectus and Statement of Additional Information then in effect.
During the term of this Agreement, should the Trust seek services or
functions in addition to those outlined above or in Schedule "A" attached, a
written amendment to this Agreement
specifying the additional services and corresponding compensation shall be
executed by both FPS and the Trust.
GENERAL PROVISIONS
Section 17. FPS shall maintain records (which may be part of the stock
transfer records) in connection with the issuance and redemption of Shares, and
the disbursement of dividends and dividend reinvestments, in which will be noted
the transactions effected for each Shareholder and the number of Shares and
fractional Shares owned by each Shareholder. FPS agrees to make available upon
request and to preserve for the periods prescribed in Rule 31a-2 under the Act,
any records relating to services provided under this Agreement which are
required to be maintained by Rule 31a-1 under the Act.
Section 18. In addition to the services as Transfer Agent and dividend
disbursing agent set forth above, FPS may perform other services for the Trust
as agreed upon from time to time, including but not limited to, preparation of
and mailing Federal Tax Information Forms and mailing semi-annual reports to
shareholders of the Trust.
Section 19. Nothing contained in this Agreement is intended to or shall
require FPS in any capacity hereunder, to perform any functions or duties on any
holiday, day of special observance or any other day 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 the
New York Stock Exchange is open.
Section 20. Limitation of Liability
(a) FPS, its directors, officers, employees, shareholders and agents
shall only be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust in connection with the performance of this Agreement that
result from willful misfeasance, bad faith, negligence or reckless disregard on
the part of FPS in the performance of its obligations and duties under this
Agreement.
(b) Any person, even though a director, officer, employee, shareholder
or agent of FPS, who may be or become an officer, director, employee or agent of
the Trust, shall be deemed when rendering services to such entity or acting on
any business of such entity (other than services or business in connection with
FPS's duties under the Agreement), to be rendering such services to or acting
solely for the Trust and not as a director, officer, employee, shareholder or
agent of, or under the control or direction of FPS even though such person may
receive compensation from FPS.
(c) Notwithstanding any other provision of this Agreement, the Trust
shall indemnify and hold harmless FPS, its directors, officers, employees,
shareholders and agents from and against any and all claims, demands, expenses
and liabilities (whether with or without basis in fact or law) of any and every
nature which FPS may sustain or incur or which may be asserted against FPS by
any person by reason of, or as a result of (i) any action taken or omitted to be
taken by FPS in good faith; (ii) any action taken or omitted to be taken by FPS
in good faith in reliance upon any certificate, instrument, order or stock
certificate or other document reasonably believed by FPS to be genuine and
signed, countersigned or executed by any duly authorized person, upon the oral
or written instruction of an authorized person of the Trust or upon the opinion
of legal counsel to the Trust; or (iii) any action taken in good faith or
omitted to be taken by FPS in connection with its appointment in reliance upon
any law, act, regulation or interpretation of the same even though the same may
thereafter have been altered, changed, amended or repealed. Indemnification
under this subparagraph shall not apply, however, to actions or omissions of FPS
or its directors, officers, employees, shareholders or agents in cases of its or
their willful misfeasance, bad faith, negligence or reckless disregard of its or
their duties hereunder.
If a claim is made against FPS as to which FPS may seek indemnity under
this Section, FPS shall notify the Trust promptly after any written assertion of
such claim threatening to institute an action or proceeding with respect thereto
and shall notify the Trust promptly of any
action commenced against FPS within ten (10) days after FPS shall have been
served with a summons or other legal process, giving information as to the
nature and basis of the claim. Failure to notify the Trust shall not, however,
relieve the Trust from any liability which it may have on account of the
indemnity under this Section 20(c) if the Trust has not been prejudiced in any
material respect by such failure.
The Trust and FPS shall cooperate in the control of the defense of any
action, suit or proceeding in which FPS is involved and for which indemnity is
being provided by the Trust to FPS. The Trust may negotiate the settlement of
any action, suit or proceeding subject to FPS's approval, which shall not be
unreasonably withheld. FPS shall have the right, but not the obligation, to
participate in the defense or settlement of a claim or action, with its own
counsel, but any costs or expenses incurred by FPS in connection with, or as a
result of, such participation will be borne solely by FPS.
FPS shall have the right to participate in the defense of an action or
proceeding and to retain its own counsel, and the reasonable fees and expenses
of such counsel shall be borne by the Trust (which shall pay such fees, costs
and expenses at least quarterly) if:
(i) FPS has received an opinion of counsel stating that the
use of counsel chosen by the Trust to represent FPS would present such counsel
with a conflict of interest;
(ii) the defendants in, or targets of, any such action or
proceeding include both FPS and the Trust, and legal counsel to FPS shall have
reasonably concluded that there are legal defenses available to it which are
different from or additional to those available to the Trust or which may be
adverse to or inconsistent with defenses available to the Trust (in which case
the Trust shall not have the right to direct the defense of such action on
behalf of FPS); or
(iii) the Trust shall authorize FPS to employ separate counsel
at the expense of the Trust. Notwithstanding anything to the contrary herein, it
is understood that the Trust shall not, in connection with any action, suit or
proceeding or related action, suit or proceeding, be liable under this Agreement
for the fees and expenses of more than one firm.
(d) The terms of this Section 20 shall survive the termination of this
Agreement.
Section 21. FPS is authorized, upon receipt of Written Instructions
from the Trust, to make payment upon redemption of Shares without a signature
guarantee. The Trust hereby agrees to indemnify and hold FPS, its successors and
assigns, harmless of and from any and all expenses, damages, claims, suits,
liabilities, actions, demands, losses whatsoever arising out of or in connection
with a payment by FPS upon redemption of Shares pursuant to Written Instructions
and without a signature guarantee.
Section 22.
(a) The term of this Agreement shall be for a period of two (2) years,
commencing on the date which the Trust's registration statement is declared
effective by the U.S. Securities and Exchange Commission ("Effective Date") and
shall continue thereafter on a year to year term subject to termination by
either Party as set forth in (c) below.
(b) The fee schedule set forth in Schedule "B" attached shall be fixed
for two (2) years commencing on the Effective Date of this Agreement and shall
continue thereafter subject to review and adjustment as determined by the
Parties.
(c) After the initial term of this Agreement, the Trust or FPS may give
written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice, which date shall
not be less than one hundred eighty (180) days after the date of receipt of such
notice. Upon the effective termination date, the Trust shall pay to FPS such
compensation as may be due as of the date of termination and shall likewise
reimburse FPS for any out-of-pocket expenses and disbursements reasonably
incurred by FPS to such date.
(d) If a successor to any of FPS's duties or responsibilities under
this Agreement is designated by the Trust by written notice to FPS in connection
with the termination of this Agreement, FPS shall promptly, upon such
termination and at the expense of the Trust, transfer all required records which
are the property of the Trust and shall cooperate in the transfer of such
records, and its duties and responsibilities under the Agreement.
Section 23. The Trust shall file with FPS a certified copy of each
resolution of its Board of Trustees authorizing the execution of Written
Instructions or the transmittal of Oral Instructions, as provided in Section 1
of this Agreement.
Section 24. This Agreement may be amended from time to time by a
supplemental agreement executed by the Trust and FPS.
Section 25. Except as otherwise provided in this Agreement, 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 Trust: If to FPS:
--------------- ---------
Metropolitan West Funds FPS Services, Inc.
00000 Xxxxxxxx Xxxx., Xxxxx 0000 3200 Horizon Drive, X.X. Xxx 00000
Xxx Xxxxxxx, XX 00000 King of Prussia, PA 19406-0903
Attention: Xxxxx X. Dubchansky Attention: Xxxxxxx X. Xxxxx
Chief Executive Officer and Trustee President
Section 26. Authority of Signatories The Parties represent and warrant
to each other that the execution and delivery of this Agreement by the
undersigned officer of each Party has been duly and validly authorized; and,
when duly executed, this Agreement will constitute a valid and legally binding
enforceable obligation of each Party. The obligations under this Agreement shall
be binding upon the assets and property of the Trust and shall not be binding
upon any officer or shareholder of the Series individually.
Section 27. 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 28. This Agreement shall extend to and shall be binding upon
the Parties and their respective successors and assigns; provided, however, that
this Agreement shall not be assignable by the Trust without the written consent
of FPS or by FPS without the written consent of the Trust, authorized or
approved by a resolution of their respective Boards of Directors or Trustees.
Section 29. This Agreement shall be governed by the laws of the State
of California and the exclusive venue of any action arising under this Agreement
shall be Xxxxxxxxxx County, Commonwealth of Pennsylvania.
Section 30. No provision of this Agreement may be amended or modified,
in any manner except in writing, properly authorized and executed by FPS and the
Trust.
Section 31. If any part, term or provision of this Agreement is held by
any court to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be affected,
and the rights and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or provision held to
be illegal or invalid, provided that the basic agreement is not thereby
substantially impaired.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
consisting in its entirety, of eleven typewritten pages, together with Schedules
"X," "X" and "C," to be signed by their duly authorized officers as of the day
and year first above written.
Metropolitan West Funds FPS Services. Inc.
----------------------- ------------------
------------------------------------------- -----------------------------
By: Xxxxx X. Dubchansky By: Xxxxxxx X. Xxxxx
Chief Executive Officer and Trustee President
SCHEDULE "A"
TRANSFER AGENT/SHAREHOLDER SERVICES
FOR
METROPOLITAN WEST FUNDS
The following is a list of Services to be provided under this Agreement:
I. - Shareholder File Services
1. Establish new accounts and enter demographic data into shareholder
base. Includes in-house processing and NSCC - FundSERV - Networking
transmissions.
2. Create Customer Information File (CIF) to link accounts within the Fund
and across funds within the Fund Group. Facilitates account
maintenance, lead tracking, quality control, household mailings and
combined statements.
3. 100% quality control of new account information including verification
of initial investment.
*4. Systematic linkage of shareholder accounts with exact matches on SSN
and address for the purpose of consolidated account history reporting.
Periodic production of laser printed combined statements.
*5. Production of household mailing labels which enable the Fund to do
special mailings to each address in the Fund Group rather than each
account.
6. Maintain account and customer file records based on shareholder request
and routine quality review.
7. Maintain tax ID certification and NRA records for each account,
including backup withholding.
8. Provide written confirmation of address changes.
9. Produce shareholder statements for daily activity, dividends,
on-request, third party and periodic mailings.
*10. Produce shareholder lists, labels and ad hoc reports to Fund
management as requested.
11. Automated processing of dividends and capital gains with daily,
monthly, quarterly or annual distributions. Payment options include
reinvestment, directed payment to another fund, cash via mail, Fed wire
or ACH.
12. Image all applications, account documents, data changes,
correspondence, monetary transactions, and other pertinent shareholder
documents.
II. - Shareholder Services
1. Provide quality service through a staff of highly trained NASD licensed
customer service personnel, including phone, research and
correspondence representatives.
2. Answer shareholder calls: provide routine account information,
transaction details including direct and wire purchases, redemptions,
exchanges systematic withdraws, pre-authorized drafts, FundSERV and
wire order trades, problem solving and process telephone transactions.
3. Silent monitoring of shareholder calls by the phone supervisor to
ensure exceptional customer service.
4. Record and maintain tape recordings of all shareholder calls for a six
month period.
5. Phone Supervisor produces daily management reports of shareholder calls
which track volumes, length of calls, average wait time and abandoned
call rates to ensure quality service.
6. Phone representatives are thoroughly trained through in house training
programs on the techniques of providing Exceptional Customer Service.
7. Customer inquiries received by letter or telephone are thoroughly
researched by a correspondence team member. These inquiries include
such items as account/customer file information, complete historical
account information, stop payments on checks, transaction details and
lost certificates.
III. - Investment Processing
1. Initial investment (checks or Fed wires).
2. Subsequent investments (checks or Fed wires) processed through lock
box.
3. Pre-authorized investments (PAD) through ACH system.
4. Government allotments through ACH system.
5. Prepare and process telephone purchase transactions.
*6. NSCC - Fund/SERV trades.
IV. - Redemption Processing
1. Process letter redemption requests.
2. Process telephone redemption transactions.
3. Establish Systematic Withdrawal file and process automated transactions
on monthly basis.
4. Issue checkbooks and process checkbook redemption through agent bank.
5. Redemption proceeds distributed to shareholder by check, Fed wire or
ACH processing.
*6. Provide NSCC - Fund/SERV trade processing.
V. - Exchange & Transfer Processing
1. Process legal transfers.
2. Issue and cancel certificates.
3. Replace certificates through surety bonds (separate charge to
shareholder).
4. Process exchange transactions (letter and telephone requests).
5. Process ACATS transfers.
VI. - Retirement Plan Services
1. Fund sponsored IRAs offered using Semper Trust Company as custodian.
Services include:
a. Contribution processing
b. Distribution processing
c. Apply rollover transactions
d. Process Transfer of Assets
e. Letters of Acceptance to prior custodians
f. Notify XXX holders of 70 `f: requirements
g. Calculate Required Minimum Distributions (RMD)
h. Maintain beneficiary information file
i. Solicit birth date information
2. Fund sponsored SEP-XXX plans offered using Semper Trust Company as
custodian. Services include those listed under IRAs and:
a. Identification of employer contributions
3. Fund sponsored Qualified plans offered:
a. Plan document available
b. Omnibus/master account processing only
c. Produce annual statements
d. Process contributions
e. Process distributions
f. Process rollover and Transfer of Assets transactions
VII. Settlement & Control
1. Daily review of processed shareholder transactions to assure input was
processed correctly. Accurate trade activity figures passed to Fund's
Accounting Agent by 10:00 am EST.
2. Preparation of daily cash movement information to be passed to the
Fund's Accounting Agent and Custodian Bank by 10:00 a.m. EST for use in
determining the Fund's daily cash availability.
3. Prepare a daily share reconcilement which balances the shares on the
Transfer Agent system to those on the books of the Fund.
4. Resolve any outstanding share or cash issues that are not cleared by
trade date + 2.
5. Process shareholder adjustments to include the proper notification of
any booking entries needed, as well as any necessary cash movement.
6. Settlement and review of the Fund's declared dividends and capital
gains to include the following:
a. Review record date report for accuracy of shares.
b. Preparation of dividend settlement report after dividend is
posted. Verify the posting date shares, the rate used and the
NAV price of reinvest date to ensure dividend was posted
properly.
c. Distribute copies to the Fund's Accounting Agent.
d. Preparation of the checks prior to being mailed.
e. Sending of any dividends via wires if requested.
f. Preparation of cash movement sheets for the cash portion of the
dividend payout on payable date.
7. Placement of stop payments on dividend and liquidation checks as well
as the issuance of their replacements.
8. Maintain inventory control for dividend check form.
9. Aggregate tax filings for all FPS clients. Monthly deposits to the IRS
of all types withheld from shareholder disbursements, distributions and
foreign account distributions. Correspond with the IRS concerning any
of the above issues.
10. Timely settlement and cash movement for all NSCC/FundSERV activity.
VIII. - Year End Processing
1. Maintain shareholder records in accordance with IRS notices for
under-reporting and invalid Tax IDs This includes initiating 31% backup
withholding and notifying shareholders of their tax status and the
corrective action which is needed.
2. Conduct annual W-9 solicitation of all uncertified accounts. Update
account tax status to reflect backup withholding or certified status
depending upon responses.
3. Conduct periodic W-8 solicitation of all non-resident alien shareholder
accounts. Update account tax status with updated shareholder
information and treaty rates for NRA tax.
4. Review IRS Revenue Procedures for changes in transaction and
distribution reporting and specifications for the production of forms
to ensure compliance.
5. Coordinate year end activity with client. Activities include producing
year end statements, scheduling record dates for year dividends and
capital gains, production of combined statements and printing of
inserts to be mailed with tax forms.
6. Distribute Dividend Letter to Funds for them to sign off on all
distributions paid year to date. Dates and rates must be authorized so
that they can be used for reporting to the IRS.
7. Coordinate the ordering of form and stock envelopes from vendor in
preparation of tax reporting. Review against IRS requirements to ensure
accuracy.
8. Prepare form flashes for the microfiche vendor. Test and oversee the
production of fiche for year end statements and tax forms.
9. Match and settle tax reporting totals to fund records and on-line data
from Investar.
10. Produce forms 1099R, 1099B, 1099Div, 5498, 1042S and year end
valuations. Quality assure forms before mailing to shareholders.
11. Monitor IRS deadlines and special events such as cross over dividends
and prior year XXX contributions.
12. Prepare IRS magnetic tapes and appropriate forms for the filing of all
reportable activity to the Internal Revenue Service.
IX. - Client Services
1. An Account Manager is assigned to each relationship. The Account
Manager acts as the liaison between the Fund and the Transfer Agency.
Responsibilities include scheduling of events, system enhancement
implementation, special promotion/event implementation and follow-up,
and constant Fund interaction on daily operational issues.
Specifically:
a. Scheduling of dividends, proxies, report mailings and special
mailings.
b. Coordinate with the Fund the shipment of materials for scheduled
mailings.
c. Liaison between the Fund and support services for preparation of
proofs and eventual printing of statement forms, certificates,
proxy cards, envelopes, etc.
d. Handle all notification to the client regarding proxy tabulation
through the meeting. Coordinate scheduling of materials
including voted cards, tabulation letters, and shareholder list
to be available for the meeting.
e. Order special reports, tapes, discs for special systems requests
received.
f. Implement new operational procedures, i.e., check writing
feature, load discounts, minimum waivers, sweeps, telephone
options, PAD promotions, etc.
g. Coordinate with systems, services and operations, special
events, i.e., mergers, new fund start ups, small account
liquidations, combined statements, household mailings,
additional mail files, etc.
h. Prepare standard operating procedures and review prospectuses
for new start up funds and our current client base. Coordinate
implementation of suggested changes with the Fund.
i. Liaison between the Fund and the Transfer Agency staff regarding
all service and operational issues.
2. Proxy Processing (Currently one free per year)
a. Coordinate printing of cards with vendor.
b. Coordinate mailing of cards with Account Manager and mailroom.
c. Provide daily report totals to Account Manager for client
notification.
d. Preparation of affidavit of mailing documents.
e. Provide one shareholder list.
f. Prepare final tabulation letter.
3. Blue Sky Processing
a. Maintain file with additions, deletions, changes and updates at
the Fund's direction.
b. Provide daily and monthly reports to enable the Fund to do
necessary state filings.
* Separate fees will apply for these services.
DAILY REPORTS
REPORT NUMBER REPORT DESCRIPTION
------------- ------------------
-- Daily Activity Register
024 Tax Reporting Proof
051 Cash Receipts and Disbursement Proof
053 Daily Share Proof
091 Daily Gain/Loss Report
104 Maintenance Register
044 Transfer/Certificate Register
056 Blue Sky Warning Report
MONTHLY REPORTS
REPORT DESCRIPTION
------------------
Blue Sky
Certificate Listing
State Sales and Redemption
Monthly Statistical Report
Account Demographic Analysis
MTD Sales - Demographics by Account Group
Account Analysis by Type
SCHEDULE "B"
SHAREHOLDER SERVICES AND TRANSFER AGENT FEE SCHEDULE
FOR
METROPOLITAN WEST FUNDS
This Fee Schedule is fixed for a period of two (2J years from the Effective Date
as that term is defined in the Agreement.
I. Transfer Agent and Shareholder Services:
$20.00 per account per year per portfolio
Minimum monthly fee - $1,500 per portfolio
II. IRA's, 403(b) Plans, Defined Contribution/Benefit Plans:
Account Maintenance Fee - $12.00 per account per year
(normally charged to participants)
III. Out-of-Pocket-Expenses
The Funds will reimburse FPS Services, Inc. monthly for all reasonable
out-of-pocket expenses, including telephone, postage, overdraft
charges, XXXXX filings, Fund/SERV and Networking expenses,
telecommunications, special reports, record retention, special
transportation costs, copying and sending materials to auditors and/or
regulatory agencies, as incurred and approved.
SCHEDULE "C"
Identification of Series
Below are listed the "Series" to which services under this Agreement are to be
performed as of the execution date of the Agreement:
"Metropolitan West Funds"
1. Metropolitan West Total Return Bond Fund
2. Metropolitan West Low Duration Bond Fund
3 Metropolitan West Short Term Investment Fund
This Schedule "C" may be amended from time to time by agreement of the Parties.
