FRANKLIN XXXXXXXXX INVESTOR SERVICES, LLC
TRANSFER AGENT AND SHAREHOLDER SERVICES AGREEMENT
Investment Company: XXXXXXXXX FUNDS, INC.
Date: January 1, 2003
The parties to this Agreement are the Investment Company named above
("Investment Company"), an open-end investment company registered as such under
the Investment Company Act of 1940 ("1940 Act"), on behalf of each class of
shares of each series of the Investment Company which now exists or may
hereafter be created (individually, a "Fund" and collectively, the "Funds") and
FRANKLIN XXXXXXXXX INVESTOR SERVICES, LLC ("FTIS"), a registered transfer agent
formerly known as Franklin Administrative Services, Inc. This Agreement
supersedes prior Shareholder Services Agreements between the parties, as stated
below in section 16(d).
WITNESSETH:
That, for and in consideration of the mutual promises hereinafter set
forth, the Investment Company and FTIS agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
(a) "Articles" shall mean the Articles of
Incorporation, Declaration of Trust or Agreement of Limited Partnership, as
appropriate, of the Investment Company as the same may be amended from time to
time;
(b) "Authorized Person" shall be deemed to include any
person, whether or not such person is an officer or employee of the Investment
Company, duly authorized to give Oral Instructions or Written Instructions on
behalf of the Investment Company, as indicated in a resolution of the Investment
Company's Board which was valid at the time of this Agreement, or as indicated
in a certificate furnished to FTIS pursuant to Section 4(c) hereof;
(c) "Board" shall mean the Investment Company's Board
of Directors, Board of Trustees or Managing General Partners, as appropriate;
(d) "Custodian" shall mean a custodian and any
sub-custodian of securities and other property which the Investment Company may
from time to time deposit, or cause to be deposited or held under the name or
account of such custodian pursuant to the Custody Agreement;
(e) "Oral Instructions" shall mean instructions
(including without limitation instructions received by telephone, facsimile,
electronic mail or other electronic mail), other than written instructions,
actually received by FTIS from a person reasonably believed by FTIS to be an
Authorized Person;
(f) "Shares" shall mean shares of each class of capital
stock, beneficial interest or limited partnership interest, as appropriate, of
each series of the Investment Company; and
(g) "Written Instructions" shall mean a written
communication signed by a person reasonably believed by FTIS to be an Authorized
Person and actually received by FTIS.
2. APPOINTMENT OF FTIS. The Investment Company hereby appoints
FTIS as transfer agent for Shares of the Investment Company, as service agent in
connection with dividend and distribution functions, and as shareholder
servicing agent for the Investment Company, and FTIS accepts such appointment
and agrees to perform the following duties.
3. COMPENSATION.
(a) PAYMENT TO FTIS:
(i) COMPENSATION FOR SERVICING: The Investment
Company will compensate FTIS for the performance of its obligations hereunder in
accordance with the fees set forth in the written schedule of fees annexed
hereto as Schedule A and incorporated herein. FTIS will xxxx the Investment
Company as soon as practicable after the end of each calendar month, in
accordance with Schedule A. The Investment Company will promptly pay to FTIS the
amount of such billing.
(ii) REIMBURSEMENT FOR OUT-OF-POCKET EXPENSES: The
Investment Company will reimburse FTIS for out-of-pocket disbursements paid to
third parties by FTIS in the performance of its obligations hereunder including,
but not limited to, the items specified in the written schedule of out-of-pocket
expenses paid to third parties annexed hereto as Schedule B and incorporated
herein. Unspecified out-of-pocket expenses shall be limited to those
out-of-pocket expenses reasonably incurred by FTIS in the performance of its
obligations hereunder, subject to approval by the Board. Reimbursement by the
Investment Company for out-of-pocket disbursements paid by FTIS in any month
shall be made as soon as practicable after the receipt of an itemized xxxx from
FTIS.
(b) BENEFICIAL OWNER SERVICING FEES TO THIRD PARTIES: Subject
to the limitation set forth in paragraph (d) below, the Investment Company will
reimburse FTIS for servicing fee payments ("Beneficial Owner Servicing Fees")
made by FTIS on the Investment Company's behalf to institutions that:
(i) maintain a master account with a Fund in the
institution's name ("Omnibus Account") on behalf of numerous beneficial owners
of Omnibus Account assets; or
(ii) maintain a master account with a Fund in the
institution's name on behalf of an employer sponsored retirement plan (a "Plan
Account") and provide, directly or indirectly under separate contract with the
retirement plan, participant level accounting for each plan participant with a
beneficial ownership in Plan Account assets.
Each beneficial owner with an interest in Fund shares held in an Omnibus Account
and each plan participant with an interest in Fund shares held in a Plan Account
is referred to in this Agreement as a "Beneficial Owner".
(c) NETWORKED ACCOUNT SERVICING FEES TO THIRD PARTIES:
Subject to the limitation set forth in paragraph (d) below, the Investment
Company will reimburse FTIS for servicing fee payments ("Networked Account
Servicing Fees") made by FTIS on the Investment Company's behalf to an
institution for each Fund account (a "Networked Account") maintained by FTIS in
which servicing is shared with that institution by the exchange of account data
through the National Securities Clearing Corporation (NSCC) networking system.
(d) MAXIMUM REIMBURSEMENT AMOUNT FOR BENEFICIAL OWNER
SERVICING FEES AND NETWORKED ACCOUNT SERVICING FEES. The Investment Company
authorizes FTIS to negotiate Beneficial Owner Servicing Fees and Networked
Account Servicing Fees on the Investment Company's behalf and shall reimburse
FTIS for those fees negotiated and paid up to the "Maximum Reimbursement
Amount". The Maximum Reimbursement Amount for each fiscal year of the Investment
Company, calculated on the basis of all Omnibus Accounts and all Networking
Accounts open during that fiscal year, shall equal the total amount (including
out-of-pocket expenses) that would otherwise have been payable by the Investment
Company to FTIS under the terms of this Agreement if (i) all Beneficial Owners
for which Beneficial Owner Servicing fees were paid had been Fund shareholders
of record; and (ii) all Networked Accounts for which Networked Account Servicing
Fees were paid had been Full Service Accounts (as defined in Schedule A).
(e) COMPENSATION ADJUSTMENTS. Any compensation agreed to
hereunder may be adjusted from time to time by mutual agreement by attaching
revised Schedules A or B to this Agreement.
4. DOCUMENTS. In connection with the appointment of FTIS, the
Investment Company shall, within a reasonable period of time for FTIS to prepare
to perform its duties hereunder, deliver to FTIS the following documents:
(a) If applicable, specimens of the certificates for
the Shares;
(b) All account application forms and other documents
relating to Shareholder accounts or to any plan, program or service offered by
the Investment Company;
(c) A certificate identifying the Authorized Persons
and specimen signatures of Authorized Persons who will sign Written
Instructions; and
(d) All documents and papers necessary under the laws
of the Investment Company's state of domicile, under the Investment Company's
Articles, and as may be required for the due performance of FTIS's duties under
this Agreement or for the due performance of additional duties as may from time
to time be agreed upon between the Investment Company and FTIS.
5. DUTIES OF THE TRANSFER AGENT. FTIS shall be responsible for
administering and/or performing transfer agent functions; for acting as service
agent in connection with dividend and distribution functions; and for performing
shareholder account and administrative agent functions in connection with the
issuance, transfer, exchange, redemption or repurchase (including coordination
with the Custodian) of Shares. FTIS shall be bound to follow its usual and
customary operating standards and procedures, as they may be amended from time
to time, and each current prospectus and Statement of Additional Information
(hereafter, collectively, the "prospectus") of the Investment Company. Without
limiting the generality of the foregoing, FTIS agrees to perform the specific
duties listed on Schedule C.
The duties to be performed by FTIS shall not include the engagement,
supervision or compensation of any service providers, or any registrations or
fees of any kind, which are required by the laws of any foreign country in which
the Fund may choose to invest portfolio assets or sell Shares.
6. (a) DISTRIBUTIONS PAYABLE IN SHARES. In the event
that the Board of the Investment Company shall declare a distribution payable in
Shares, the Investment Company shall deliver to FTIS written notice of such
declaration signed on behalf of the Investment Company by an officer thereof,
upon which FTIS shall be entitled to rely for all purposes, certifying (i) the
number of Shares involved, and (ii) that all appropriate action has been taken
to effect such distribution.
(b) DISTRIBUTIONS PAYABLE IN CASH; REDEMPTION PAYMENTS.
In the event that the Board of the Investment Company shall declare a
distribution payable in cash, the Investment Company shall deliver to FTIS
written notice of such declaration signed on behalf of the Investment Company by
an officer thereof, upon which FTIS shall be entitled to rely for all purposes,
certifying (i) the amount per share to be distributed, (ii) the record and
payment dates for the distribution, and (iii) that all appropriate action has
been taken to effect such distribution. Once the amount and validity of any
dividend or redemption payments to shareholders have been determined, the
Investment Company shall transfer the payment amounts from the Investment
Company's accounts to an account or accounts held in the name of FTIS, as paying
agent for the shareholders, in accordance with any applicable laws or
regulations, and FTIS shall promptly cause payments to be made to the
shareholders.
7. RECORDKEEPING AND OTHER INFORMATION. FTIS shall create,
maintain and preserve all necessary records in accordance with all applicable
laws, rules and regulations. Such records are the property of the Investment
Company, and FTIS will promptly surrender them to the Investment Company upon
request or upon termination of this Agreement. In the event of such a request or
termination, FTIS shall be entitled to make and retain copies of all records
surrendered, and to be reimbursed by the Investment Company for reasonable
expenses actually incurred in making such copies. FTIS will take reasonable
actions to maintain the confidentiality of the Investment Company's records,
which may nevertheless be disclosed to the extent required by law or by this
Agreement, or to the extent permitted by the Investment Company.
8. OTHER DUTIES. In addition, FTIS shall perform such other
duties and functions, and shall be paid such amounts therefor, as may from time
to time be agreed upon in writing between the Investment Company and FTIS. Such
other duties and functions shall be reflected in a written amendment to Schedule
C, and the compensation for such other duties and functions shall be reflected
in a written amendment to Schedule A.
9. RELIANCE BY TRANSFER AGENT; INSTRUCTIONS.
(a) FTIS will be protected in acting upon Written or
Oral Instructions reasonably believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any notice of
any change of authority of any person until receipt of a Written Instruction
thereof from an officer of the Investment Company. FTIS will also be protected
in processing Share certificates which it reasonably believes to bear the proper
manual or facsimile signatures of the officers of the Investment Company and the
proper countersignature of FTIS.
(b) At any time FTIS may apply to any Authorized Person
of the Investment Company for Written Instructions, or may seek advice at the
Investment Company's expense from legal counsel for the Investment Company, with
respect to any matter arising in connection with this Agreement. FTIS shall not
be liable for any action taken or not taken or suffered by it in good faith in
accordance with such Written Instructions or in accordance with the opinion of
counsel for the Investment Company. Written Instructions requested by FTIS will
be provided by the Investment Company within a reasonable period of time.
10. ACTS OF GOD, ETC. FTIS will not be liable or responsible for
delays or errors by reason of circumstances beyond its control, including acts
of civil or military authority, national emergencies, labor difficulties, fire,
mechanical breakdown beyond its control, earthquake, flood or catastrophe, acts
of God, insurrection, war, riots or failure beyond its control of
transportation, communication or power supply.
11. DUTY OF CARE AND INDEMNIFICATION. FTIS will indemnify the
Investment Company against and hold it harmless from any and all losses, claims,
damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit resulting from
willful misfeasance, bad faith or gross negligence on the part of FTIS, and
arising out of, or in connection with, its duties hereunder. However, FTIS shall
have no liability for or obligation to indemnify the Investment Company against
any losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) incurred by the Investment Company as a result of:
(i) any action taken in accordance with Written or Oral Instructions; (ii) any
action taken in accordance with written or oral advice reasonably believed by
FTIS to have been given by counsel for the Investment Company; (iii) any action
taken as a result of any error or omission in any record (including but not
limited to magnetic tapes, computer printouts, hard copies and microfilm copies)
delivered, or caused to be delivered, by the Investment Company to FTIS in
connection with this Agreement; or (iv) any action taken in accordance with
shareholder instructions which meet the standards described in the Investment
Company's current prospectus, including without limitation oral instructions
which meet the standards described in the section of the prospectus dealing with
telephone transactions, so long as FTIS believes such instructions to be
genuine. The obligations of the parties hereto under this Section shall survive
the termination of this Agreement.
12. TERM AND TERMINATION.
(a) This Agreement shall be effective as of the date
first written above, shall continue through December 31, 2003, and thereafter
shall continue automatically for successive annual periods ending on December 31
of each year, provided such continuance is specifically approved at least
annually by the Investment Company's Board.
(b) Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date of such
termination, which shall be not less than 60 days after the date of receipt of
such notice. Upon such termination, FTIS will (i) deliver to such successor a
certified list of shareholders of the Investment Company (with names and
addresses) and an historical record of the account of each Shareholder and the
status thereof; (ii) surrender all other relevant records in accordance with
section 7 of this Agreement, above, and (iii) cooperate in the transfer of such
duties and responsibilities, including provisions for assistance from FTIS's
personnel in the establishment of books, records and other data by such
successor or successors. FTIS shall be entitled to charge the Investment Company
a reasonable fee for services rendered and expenses actually incurred in
performing its duties under this paragraph.
13. AMENDMENT. This Agreement may not be amended or modified in
any manner except by a written agreement executed by both parties.
14. SUBCONTRACTING. The Investment Company agrees that FTIS may,
in its discretion, subcontract for all or any portion of the services described
under this Agreement or the Schedules hereto; provided that the appointment of
any such agent shall not relieve FTIS of its responsibilities hereunder.
15. DATA PROCESSING SYSTEM, PROGRAM AND INFORMATION
(a) The Investment Company shall not, solely by virtue
of this Agreement, obtain any rights, title and interest in and to the computer
systems and programs, including all related documentation, employed by FTIS in
connection with rendering services hereunder; provided however, that the records
prepared, maintained and preserved by FTIS pursuant to this Agreement shall be
the property of the Investment Company.
(b) Any modifications, changes and improvements in the
automatic data processing system (the "System") or in the manner in which the
services are rendered shall be made or provided as follows, and provided further
that modifications for which the Investment Company will be required to bear any
expenses shall be made only as set forth herein.
(i) FTIS shall, at no expense to the Investment
Company, make any revisions in the System necessary to (1) perform the services
which it has contracted to perform and (2) create and maintain the records which
it has contracted to create and maintain hereunder or (3) enhance or update the
System to the extent and in the manner necessary to maintain said System.
However, if specific reprogramming, coding or other changes are necessary in the
records of the Investment Company or in its shareholder accounts in order to
complete a system revision, the costs for completing work specific to the
Investment Company shall be subject to a subsequent agreement between the
parties. The System is at all times to be competitive with that which is
generally available to the mutual fund industry from transfer agents.
(ii) To the extent that the System is modified to
comply with changes in the accounting or record-keeping rules applicable to
mutual funds, the Investment Company agrees to pay a reasonable pro rata portion
of the costs of the design, revision and programming of the System; provided,
however, that if the Investment Company's pro rata portion exceeds $1,000 per 12
month period, the Investment Company's obligation to pay a reasonable pro rata
portion shall be conditioned upon FTIS's having obtained prior Written
Instructions from the Investment Company for any charge. The determination that
such modifications or revisions are necessary, and that the System as so
modified produces records which comply with the record-keeping requirements, as
amended, shall be by mutual agreement; provided, however, that upon written
request by the Investment Company, FTIS will provide the Investment Company with
a written opinion of counsel to FTIS to the effect that the modifications were
required by changes in the applicable laws or regulations and that the System,
as modified, complies with the laws or regulations as amended. Upon completion
of the changes FTIS shall render a statement to the Investment Company, in
reasonably detailed form, identifying the nature of the revisions, the services,
expenses and costs, and the basis for determining the Investment Company's
reasonable pro rata portion. Any determination by FTIS of the Investment
Company's pro rata portion based upon the ratio of the number of shareholder
accounts of the Investment Company to the total number of shareholder accounts
of all clients for which FTIS provides comparable services shall conclusively be
presumed to be reasonable unless the nature of the change to the System relates
to certain types of shareholder accounts, in which case the pro rata portion
will be determined on a mutually agreeable basis.
(iii) If system improvements are requested by the
Investment Company and are not otherwise required under this subsection 15(b),
FTIS shall be entitled to request a reasonable fee before agreeing to make the
improvements and shall be entitled to refuse to make any requested improvements
which FTIS reasonably believes to be incompatible with its systems providing
services to other funds.
16. MISCELLANEOUS.
(a) Any notice or other instrument authorized or
required by this Agreement to be given in writing to the Investment Company or
FTIS shall be sufficiently given if addressed to that party and received by it
at its office at the place described in the Investment Company's most recent
registration statement or at such other place as it may from time to time
designate in writing.
(b) This Agreement shall extend to and shall be binding
upon the parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by either party without the
written consent of the other party.
(c) This Agreement shall be construed in accordance
with the laws of the State of California applicable to contracts between
California residents which are to be performed primarily within California.
(d) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument. This Agreement
supersedes all prior Shareholder Services Agreements between the parties, and
supersedes all prior agreements between the parties relating to the subject
matters of this Agreement to the extent they are inconsistent with this
Agreement.
(e) The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(f) It is understood and expressly stipulated that
neither the holders of Shares of the Investment Company nor any member of the
Board, officer, agent or employee of the Investment Company shall be personally
liable hereunder, nor shall any resort be had to other private property for the
satisfaction of any claim or obligation hereunder, but the Investment Company
only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized as of
the day and year first above written.
XXXXXXXXX FUNDS, INC. FRANKLIN XXXXXXXXX
INVESTOR SERVICES, LLC
BY:/s/XXXXXXX X. XXXXX /s/XXXXX X. XXX, XX.
---------------------------- ---------------------------------------
NAME: Xxxxxxx X. Xxxxx Xxxxx X. Xxx, Xx.
TITLE: Secretary President
SCHEDULE A
ANNUAL BASE SERVICING FEE FOR EACH FULL SERVICE ACCOUNT. A "Full Service
Account" is (i) an account maintained by FTIS for a Fund shareholder of record,
other than a Networked Account (as defined in Section 3[c] of this Agreement) or
an account on which Beneficial Owner Servicing Fees (as defined in Section 3[b]
of this Agreement) are paid; or (ii) a plan participant level record keeping
account maintained by FTIS for an employer sponsored retirement plan.
EQUITY FUND $24.00 per annum
FIXED INCOME FUND $28.00 per annum
MONEY FUND $19.50 per annum
CLOSED ACCOUNT $ 3.50 per annum (pro-rated beginning with
the calendar month in which the account is closed and continuing through the
month of the following calendar year in which the account is purged from the
operative record system)
ANNUAL BASE SERVICING FEE FOR EACH NETWORKED ACCOUNT (AS DEFINED IN SECTION 3(C)
OF THIS AGREEMENT):
EQUITY FUND $12.00 per annum
FIXED INCOME FUND $14.00 per annum
MONEY FUND $10.00 per annum
CLOSED ACCOUNT $ 3.50 per annum (pro-rated beginning with
the calendar month in which the account is closed and continuing through the
month of the following calendar year in which the account is purged from the
operative record system)
ANNUAL BASE SERVICING FEE FOR EACH BENEFICIAL OWNER (AS DEFINED IN SECTION 3(B)
OF THIS AGREEMENT):
OPEN ACCOUNT $6.00 per annum
SCHEDULE B
OUT-OF-POCKET EXPENSES
In addition to Beneficial Owner Servicing Fees and Networked Account
Servicing Fees paid in accordance with Section 3 of this Agreement, the
Investment Company shall reimburse FTIS monthly for the following out-of-pocket
expenses paid to third parties in connection with the servicing of Full Service
Accounts (as defined in Schedule A) as required under the terms of this
Agreement:
o postage, mailing and freight
o forms for shareholder transactions and shareholder communications
o outgoing wire charges
o telephone
o ACH and Federal Reserve charges for check clearance and wire transfers
o magnetic tape (or other means for storing information electronically)
o retention of records
o microfilm/microfiche
o stationery for shareholder mailings
o insurance against loss of Share certificates when in transit
o if applicable, terminals, transmitting lines and any expenses incurred in
connection with such terminals and lines
o all other miscellaneous expenses reasonably incurred by FTIS in the
performance of its obligations under the Agreement
o NSCC Networking/Commission Settlement Expenses
This Schedule B may be amended by FTIS upon not less than 30 days' written
notice to the Investment Company, subject to approval by the Board.
SCHEDULE C
AS TRANSFER AGENT FOR THE INVESTMENT COMPANY, FTIS WILL:
o Upon receipt of proper authorization, record the transfer of Fund shares
("Shares") in its transfer records in the name(s) of the appropriate
legal shareholder(s) of record;
o Upon receipt of proper authorization, redeem Shares, debit shareholder
accounts and provide for payment to Shareholders; and
o If the Fund issues certificated Shares, upon receipt of proper
authorization, countersign as transfer agent and deliver certificates
upon issuance, countersign certificates to reflect ownership
transfers, and cancel certificates when redeemed.
AS SHAREHOLDER SERVICE AGENT FOR THE INVESTMENT COMPANY, FTIS WILL:
o Receive from the Investment Company, from the Investment Company's
Principal Underwriter or from a Fund shareholder, in a manner
acceptable to FTIS, information necessary to record Share sales and
redemptions and to generate sale and/or redemption confirmations;
o Mail, or electronically transmit, sale and/or redemption confirmations;
o Accept and process payments from investors and their broker-dealers or
other agents, for the purchase of Shares;
o Support the use of automated systems for payment and other share
transactions, including NSCC Fund/Serv, PC Trades and other systems
which may be reasonably requested by FTIS customers;
o Keep records as necessary to implement any deferred sales charges,
exchange restrictions or other policies of the Investment Company
affecting Share transactions, including without limitation any
restrictions or policies applicable to certain classes of shares, as
stated in the applicable prospectus;
o Requisition Shares in accordance with instructions of the Principal
Underwriter;
o Produce periodic reports reflecting the accounts receivable and the paid
pending (free stock) items;
o Open, maintain and close shareholder accounts;
o Establish registration of ownership of Shares in accordance with
generally accepted form;
o Maintain records of (i) issued Shares and (ii) number of Shareholders and
their aggregate Shareholdings classified according to their residence
in each State of the United States or foreign country;
o Accept and process telephone exchanges and redemptions for Shares in
accordance with a Fund's Telephone Exchange and Redemption Privileges
as described in the Fund's current prospectus.
o Maintain and safeguard records for each Shareholder showing name(s),
address, number of any certificates issued, and number of Shares
registered in such name(s), together with continuous proof of the
outstanding Shares, and dealer identification, and reflecting all
current changes. On request, provide information as to an investor's
qualification for Cumulative Quantity Discount. Provide all accounts
with year-to-date and year-end historical confirmation statements;
o Provide on request a duplicate set of records for file maintenance in the
Investment Company's office;
o Provide for the proper allocation of proceeds of share sales to the
Investment Company and to the Principal Underwriter, in accordance
with the applicable prospectus;
o Redeem Shares and provide for the preparation and delivery of liquidation
proceeds;
o Provide for the processing of redemption checks, and maintain checking
account records;
o Exercise reasonable and good-faith business judgment in the registration
of Share transfers, pledges and releases from pledges in accordance
with the California Uniform Commercial Code - - Investment Securities;
o From time to time make transfers of certificates for such Shares as may
be surrendered for transfer properly endorsed, and countersign new
certificates issued in lieu thereof;
o Upon receipt of proper documentation, place stop transfers, obtain
necessary insurance forms, and reissue replacement certificates
against lost, stolen or destroyed Share certificates;
o Check surrenderFed certificates for stop transfer restrictions. Although
FTIS cannot insure the genuineness of certificates surrendered for
cancellation, it will employ all due reasonable care in deciding the
genuineness of such certificates and the guarantor of the signature(s)
thereon;
o Cancel surrendered certificates and record and countersign new
certificates;
o Certify outstanding Shares to auditors;
o In connection with any meeting of Shareholders, upon receiving
appropriate detailed instructions and written materials prepared by
the Investment Company and proxy proofs checked by the Investment
Company, provide for: (a) the printing of proxy cards, (b) the
delivery to Shareholders of all reports, prospectuses, proxy cards and
related proxy materials of suitable design for enclosing, (c) the
receipt and tabulation of executed proxies, and (d) delivery of a list
of Shareholders for the meeting;
o Answer routine correspondence and telephone inquiries about individual
accounts. Prepare monthly reports for correspondence volume and
correspondence data necessary for the Investment Company's Semi-Annual
Report on Form N-SAR;
o Provide for the preparation and delivery of dealer commission statements
and checks;
o Maintain and furnish the Investment Company and its Shareholders with
such information as the Investment Company may reasonably request for
the purpose of compliance by the Investment Company with the
applicable tax and securities laws of applicable jurisdictions;
o Mail confirmations of transactions to investors and dealers in a timely
fashion;
o Provide for the payment or reinvestment of income dividends and/or
capital gains distributions to Shareholders of record, in accordance
with the Investment Company's and/or Shareholder's instructions,
provided that:
(a) The Investment Company shall notify FTIS in writing promptly upon
declaration of any such dividend and/or distribution, and in any
event at least forty-eight (48) hours before the record date;
(b) Such notification shall include the declaration date, the record
date, the payable date, the rate, and, if applicable, the
reinvestment date and the reinvestment price to be used; and
(c) Prior to the payable date, the Investment Company shall furnish
FTIS with sufficient fully and finally collected funds to make
such distribution;
o Prepare and file annual U.S. information returns of dividends and capital
gain distributions, gross redemption proceeds, foreign person's U.S.
source income, and other U.S. federal and state information returns as
required, and mail payee copies to shareholders; report and pay U.S.
backup withholding on all reportable payments; report and pay U.S.
federal income taxes withheld from distributions and other payments
made to nonresidents of the U.S.; prepare and mail to shareholders any
notice required by the Internal Revenue Code as to taxable dividends,
tax-exempt interest dividends, realized net capital gains distributed
and/ or retained, foreign taxes paid and foreign source income
distributed or deemed distributed, U.S. source income and any tax
withheld on such income, dividends received deduction information, or
other applicable tax information appropriate for dissemination to
shareholders of the Trust;
o Comply with all U.S. federal income tax requirements regarding the
collection of tax identification numbers and other required
shareholder certifications and information pertaining to shareholder
accounts; respond to all notifications from the U.S. Internal Revenue
Service regarding the application of the U.S. backup withholding
requirements including tax identification number solicitation
requirements;
o Prepare transfer journals;
o Set up wire order Share transactions on file;
o Provide for receipt of payment for Share transactions, and update the
transaction file;
o Produce delinquency and other trade file reports;
o Provide dealer commission statements and provide for payments thereof for
the Principal Underwriter;
o Sort and print shareholder information by state, social code, price
break, etc.; and
o Mail promptly the Statement of Additional Information of the Investment
Company to each Shareholder who requests it, at no cost to the
Shareholder.
In connection with the Investment Company's Systematic Withdrawal Plan,
FTIS will:
o Make payment of amounts withdrawn periodically by the Shareholder
pursuant to the Program by redeeming Shares, and confirm such
redemptions to the Shareholder; and
o Provide confirmations of all redemptions, reinvestment of dividends and
distributions, and any additional investments in the Program,
including a summary confirmation at the year-end.
