Exhibit k
SERVICE AGREEMENT FOR STOCK TRANSFER SERVICES
between SOUTHWEST SMALL CAP EQUITY FUND, INC..
and STAR BANK, N.A.
This Agreement, dated as of ____________, 1995 is by and between SOUTHWEST SMALL
CAP EQUITY FUND, INC. (the "Fund") and Star Bank, N.A. (the "Company") for the
purpose of the Company to act as Stock Transfer Agent, Registrar and Dividend
Disbursing Agent for the Fund. The Company agrees to provide all necessary
administrative and managerial services of a Stock Transfer Agent, Registrar, and
Dividend/Capital Gain Disbursing Agent as outlined in this agreement to the
Fund.
TRANSFER AGENT SERVICES
The Company agrees to transfer the registration of the Fund's Common stock
certificates of ownership within the Rules and Regulations established by the
Securities Transfer Association and other applicable industry guidelines.
Routine transfers, as defined by Securities and Exchange Commission (SEC) Rule
17, will be transferred within the Rule's 72 hour turnaround standard. The
Company will process all other transfer of registration transactions promptly
and maintain complete and accurate records of such transactions pursuant to SEC
record keeping requirements.
REGISTRAR SERVICES
The Company will monitor and maintain the issued and outstanding share balances
of the Fund's Common Stock to insure issuance within the authorized limit of
each equity class. The Company will provide to the Fund's internal or external
audit group certification as to the issued and outstanding shares of each equity
class upon request.
DIVIDEND AND CAPITAL GAIN DISBURSEMENT SERVICES
The Company will annually disburse checks and maintain applicable records
representing dividend and/or capital gain payments to the shareholders of record
of the Fund's Common stock. On the business day following the Fund's Board of
Directors approval of a cash dividend or capital gain distribution the Fund will
deliver in writing to the Company the Payment Declaration which outlines the
rate per share, record date, and payable date of the payment. The Company will
release to the United States Post Office all payment checks for mailing no later
than one business day prior to the payable date. The Fund agrees to provide the
Company, in available funds, the total of the cash disbursement by 10:00 a.m. on
the payable date. Payment may be made in the form of a wire transfer, check, or
charge to a Star Bank, N.A. checking account.
DIVIDEND REINVESTMENT SERVICES
The Company will perform and maintain applicable records for Dividend
Reinvestment Services on behalf of the shareholders of the Fund pursuant to the
terms and conditions of the Fund's Dividend Reinvestment Plan ("the Plan"). The
Company must receive, in writing, any alteration to the terms nad conditions of
the Plan at least 60 calendar days prior to implementation of the alteration.
STOCK OPTIONS
Upon written request of the Fund, the Company will issue from authorized but
unissued shares certificates of ownership of the Fund pursuant to any Stock
Option Plan which has been approved by the Fund's Board of Directors.
Certificates will be issued in accordance with routine transfer turnaround
requirements.
SPECIAL MAILING SERVICES
The Company will perform special mailing for quarterly reports or other
correspondence to shareholders for $75.00 for each 1,000 registered holders per
mailing plus out of pocket expenses.
PROXY SERVICES
The Company will perform Proxy Solicitation and Tabulation Services for the Fund
annually or at any other Special Meeting if requested by the shareholders or the
Fund's Board of Directors. The Fund will provide written notice of Annual and
Special Meetings to the Company on the business day following the announcement
of such meeting. Any Special Meeting Proxy Solicitation and Tabulation in
addition to the Annual Meeting will be billed at the rate noted in the FEES,
CHARGES, AND EXPENSES section of this agreement.
TAX REPORTING SERVICES
The Company agrees to make the required annual reporting of income and capital
gain disbursements and brokerage transactions to shareholders and the Internal
Revenue Service according to government guidelines.
REORGANIZATION SERVICES
The Company will provide reorganization Services for events (e.g. stock splits
and stock dividends) approved by the Fund's Board of Directors. The Fund will
deliver in writing to the Company the terms and conditions of the reorganization
on the business day following Board approval.
CONVERSION EXPENSE
The Fund agrees to pay the Company a one time charge for the conversion of
shareholder data including but not limited to name, address, social security or
taxpayer identification number, certificate number, share amount, and
disbursement address. This charge of $3,000.00 will be billed with the first
quarterly invoice issued to the Fund.
FEES, CHARGES, AND EXPENSES
In exchange for the services enumerated in this agreement the Fund agrees to pay
the Company the following outline of fees, charges, and expenses:
Service Fee Annual Cost Number of Shareholders
----------- ----------- ----------------------
$4.00 per shareholder first 1,000 registered holders
$3.00 per shareholder next 4,000 registered holders
$2.00 per shareholder all remaining registered holders
The Service Fee is an annual fee inclusive of the provision by the Company of
the Transfer Agent, Registrar, Dividend and Capital Gain Disbursement, Dividend
Reinvestment, Stock Option, and Proxy Services (Annual Meeting only) outlined
above in this agreement.
Reorganization Services 1.00 per certificate issuance
Special Meeting Services 1.00 per proxy card issued
This fee is for additional meetings requiring Proxy Solicitation and Tabulation
Services over and above the Annual Meeting.
Out of Pocket Expenses at prevailing market costs
- including but not limited to: postage and insurance
mail supplies (envelopes)
check inventory
certificate inventory
An invoice for fees, charges, and expenses will be issued to the Fund quarterly
every January, April, July and October. The number of shareholders will be the
number of active and inactive accounts maintained by the Company as of the end
of the months of December, March, June, and September. Out of Pocket expenses
will be included on the quarterly billing after occurrence of the expense by the
Company. The Company reserves the right to invoice the Fund for the advancement
of out of pocket expenses.
LENGTH OF AGREEMENT
This agreement will be in effect for a period of 2 years from the date the
Company begins Stock Transfer Services. The Agreement will be automatically
extended for successive 1 year periods unless either party notifies the other of
intent to terminate, in writing, 6 months prior to the end of the agreement
period. The Fund may terminate the Agreement with 90 calendar days prior written
notice within 30 calendar days following receipt by the Fund of the Company's
intention to increase fees at the end of any Agreement period.
AMENDMENTS
Any amendments to the terms and conditions of this agreement must be agreed to
in writing by the Fund and the Company and will attain effect 30 calendar days
subsequent to the written acceptance by both parties.
LIABILITIES
The Company will not be held liable for its actions performed with due care and
in good faith during the normal course of business which are absent of
negligence. The Company makes no claims as to the validity of the shareholder
information provided by the prior Transfer Agent and will perform its duties on
a best efforts basis when the integrity of this information is in question.
PERFORMANCE
The Fund and the Company agree to provide the documentation and service as
outlined in this Agreement. The Company will comply with all applicable rules
and regulations of the SEC and any Stock Exchange trading the shares of the Fund
with respect to maintenance and retention of data and documentation.
ENTIRETY
The Fund and the Company agree that this Agreement is the only document which
enumerates the terms and conditions of the Stock Transfer Services provided by
the Company. Neither party may rely on arrangements outside of the Agreement,
implied, oral, or otherwise.
AUTHORIZATIONS
By their signature below the following authorized representatives of the Fund
and the Company agree to the terms and conditions of this Service Agreement as
of the _____th day of _______________, 1995.
SOUTHWEST SMALL CAP EQUITY STAR BANK, N.A.
FUND, INC.
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Signature Signature
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Title Title
------------- ----------------
Date Date
0269807.01
11/21/95 7:53 PM
