Exhibit (h)(10)
FORM OF SHAREHOLDERS' SERVICING AND TRANSFER AGENT AGREEMENT
Agreement made as of this day of July, 2002, between each of the
Massachusetts business trusts listed on Appendix I hereto (as the same may from
time to time be amended to add one or more additional investment companies
advised by an affiliate of Columbia Management Group, Inc. ("CMG") or to delete
one or more of such trusts), each of such trusts acting severally on its own
behalf and not jointly with any of such other trusts (each of such trusts being
hereinafter referred to as the "Trust"), and Liberty Funds Services, Inc.
("LFS") a Massachusetts corporation. Each Trust may offer an unlimited number of
separate investment series (Funds), each of which may have multiple classes of
shares. "Fund" shall be substituted for "Trust" in the Agreement except when not
applicable in context.
WHEREAS, the Trust is a registered investment company and desires that
LFS perform certain services for the Trust; and
WHEREAS, LFS is willing to perform such services upon the terms and
subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the parties hereto agree as follows:
1. APPOINTMENT. The Trust hereby appoints LFS to act as Transfer Agent,
Dividend Disbursing Agent and Shareholders' Servicing Agent for the Trust and as
agent for the Trust's shareholders in connection with the shareholder plans
described in the Prospectus, and LFS accepts such appointments and will perform
the respective duties and functions of such offices in the manner hereinafter
set forth.
2. COMPENSATION. The Trust shall pay to LFS for its services rendered
and its costs incurred in connection with the performance of its duties
hereunder, such compensation and reimbursement as may from time to time be
approved by vote of the Trustees of the Trust.
Schedule A attached hereto sets forth the compensation and reimbursement
arrangements to be effective July , 2002 and the treatment of all interest
earned with respect to balances in the accounts maintained by LFS with the
Trust's custodian (the "Custodian"), referred to in paragraphs 6, 10 and 11
hereof, net of any charges by the Custodian in connection with such accounts,
and all interest earned with respect to balances in the accounts maintained by
Liberty Funds Distributor, Inc. (the "Distributor"), a subsidiary of CMG, in
connection with the sale and redemption of shares of the Trust, net of any
charges by the bank in connection with such accounts.
3. COPIES OF DOCUMENTS. The Trust will furnish LFS with copies of the
following documents: the Agreement and Declaration of Trust of the Trust and all
amendments thereto; the By-Laws of the Trust, as amended from time to time; and
the Trust's Registration Statement as in effect on the date hereof under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, and all amendments or supplements thereto hereafter filed. Each
Prospectus and Statement
of Additional Information contained in such Registration Statement, as from
time to time amended and supplemented, together are herein collectively
referred to as the "Prospectus."
4. SHARE CERTIFICATES. Unless the Trustees of the Trust shall have
resolved that all of the Trust's shares of beneficial interest, or all of the
shares of a particular series or class of such shares, shall be issued in
uncertificated form, LFS shall maintain a sufficient supply of blank share
certificates representing such shares, in the form approved from time to time by
the Trustees of the Trust. Such blank share certificates shall be properly
signed, manually or by facsimile signature, by the duly authorized officers of
the Trust, and shall bear the seal or facsimile thereof of the Trust; and not
withstanding the death, resignation or removal of any officer of the Trust
authorized to sign such share certificates, LFS may continue to countersign
certificates which bear the manual or facsimile signature of such officer until
otherwise directed by the Trust.
5. LOST OR DESTROYED CERTIFICATES. In case of the alleged loss or
destruction of any share certificate, no new certificate shall be issued in lieu
thereof, unless there shall first be furnished to LFS an affidavit of loss or
non-receipt by the holder of shares with respect to which a certificate has been
lost or destroyed, supported by an appropriate bond satisfactory to LFS and the
Trust issued by a surety company satisfactory to LFS.
6. RECEIPT OF FUNDS FOR INVESTMENT. LFS will maintain one or more
accounts with the Custodian, into which it will deposit funds payable to LFS as
agent for, or otherwise identified as being for the account of, the Trust or the
Distributor, prior to crediting such funds to the respective accounts of the
Trust and the Distributor. Thereafter, LFS will determine the amount of any such
funds due the Trust (equal to the number of Trust shares sold by the Trust
computed pursuant to paragraph 7 hereof, multiplied by the net asset value of
Trust share next determined after receipt of such purchase order) and the
Distributor (equal to the sales charge applicable to such sale, computed
pursuant to paragraph 9 hereof), respectively, deposit the portion due the
Distributor in its account with such bank as may from time to time be designated
by the Distributor, deposit the net amount due the Trust in its account with the
Custodian, notify the Distributor and the Custodian, respectively, (such
notification to the Distributor to include the amount of such sales charge to be
remitted by the Distributor to the dealer participating in the sale, calculated
pursuant to paragraph 9 hereof) of such deposits, such notification to be given
as soon as practicable on the next business day stating the total amount
deposited to said accounts during the previous business day. Such notification
shall be confirmed in writing.
7. SHAREHOLDER ACCOUNTS. Upon receipt of any funds referred to in
paragraph 6 hereof, LFS will compute the number of shares purchased by the
shareholder according to the net asset value of Trust shares next determined
after such receipt less the applicable sales charge, calculated pursuant to
paragraph 9 hereof, and:
(a) In the case of a new shareholder, open and maintain an open
account for such shareholder in the name or names set forth in the subscription
application form;
(b) Unless the Trustees of the Trust have resolved that all of
the Trust's shares of beneficial interest, or all of the shares of a particular
series or class, shall be issued in uncertificated form, and if specifically
requested in writing by the shareholder, countersign, issue and mail, by first
class mail, to the shareholder at his or her address as set forth in a share
certificate for full shares purchased;
(c) Send to the shareholder a confirmation indicating the amount
of full and fractional shares purchased (in the case of fractional shares,
rounded to three decimal places) and the price per share; and
2
(d) In the case of a request to establish an accumulation plan,
withdrawal plan, group plan or other plan or program being offered by the
Trust's Prospectus, open and maintain such plan or program for the shareholder
in accordance with the terms thereof;
all subject to any reasonable instructions which the Distributor or the Trust
may give to LFS with respect to rejection of orders for shares.
8. UNPAID CHECKS. In the event that any check or other order for payment
of money on the account of any shareholder or new investor is returned for any
reason, LFS will:
(a) Give prompt notification to the Distributor of such
non-payment; and
(b) Take such other steps, including imposition of a reasonable
processing or handling fee, as LFS may, in LFS's discretion, deem appropriate,
or as the Trust of the Distributor may instruct LFS.
9. SALES CHARGE. In computing the number of shares to credit to the
account of a shareholder pursuant to paragraph 7 hereof, LFS will calculate the
total of the applicable Distributor and representative sales charges, commission
or other amount, with respect to each purchase as set forth in the Prospectus
and in accordance with any notification filed with respect to combined and
accumulated purchases; LFS will also determine the portion of each sales charge,
commission or other amount, payable by the Distributor to the dealer or other
amount, payable by the Distributor to the dealer participating in the sale in
accordance with such schedules as are from time to time delivered by the
Distributor to LFS.
10. DIVIDENDS AND DISTRIBUTIONS. The Trust will promptly notify LFS of
the declaration of any dividends or distribution with respect to Trust shares,
the amount of such dividend or distribution, the date each such dividend or
distribution shall be paid, and the record date for determination of
shareholders entitled to receive such dividend or distribution. As Dividend
Disbursing Agent, LFS will, on or before the payment date of any such dividend
or distribution notify the Custodian of the estimated amount of cash required to
pay such dividend or distribution, and the Trust agrees that on or before the
mailing date of such dividend or distribution it will instruct the Custodian to
make available to LFS sufficient funds therefor in the dividend and distribution
account maintained by LFS with the Custodian. As Dividend Disbursing Agent, LFS
will prepare and distribute to shareholders any funds to which they are entitled
by reason of any dividend or distribution and, in the case of shareholders
entitled to receive additional shares by reason of any such dividend or
distribution, LFS will make appropriate credits to their accounts and prepare
and mail to shareholders a confirmation statement and, if required, a
certificate in respect of such additional shares.
11. REPURCHASE AND REDEMPTIONS. LFS will receive and stamp with the date
of receipt all certificates and requests delivered to LFS for repurchase or
redemption of shares and LFS will process such repurchases as agent for the
Distributor and such redemptions as agent for the Trust as follows:
(a) If such certificate or request complies with standards for
repurchase or redemption approved from time to time by the Trust, LFS will, on
or prior to the seventh calendar day succeeding the receipt of any such request
for repurchase or redemption in good order, deposit any contingent deferred
sales charge ("CDSC") due the Distributor in its account with such bank as may
from time to time be designated by the Distributor and pay to the shareholder
from funds deposited by the Trust from time to time in the repurchase and
redemption account maintained by LFS with the Custodian, the appropriate
repurchase or redemption price, as the case may be, as set forth in the
Prospectus;
3
(b) If such certificate or request does not comply with said
standards for repurchase or redemption as approved by the Trust, LFS will
promptly notify the shareholder of such fact, together with the reason therefor,
and shall effect such repurchase or redemption at the price in effect at the
time of receipt of documents complying with said standards, or, in the case of a
repurchase, at such other time as the Distributor, as agent for the Trust, shall
so direct; and
(c) LFS shall notify the Trust and the Distributor as soon as
practicable on each business day of the total number of Trust shares covered by
requests for repurchase or redemption which were received by LFS in proper form
on the previous business day, and shall notify the Distributor of deposits to
its account with respect to any CDSC, such notification to be confirmed in
writing.
12. SYSTEMATIC WITHDRAWAL PLANS. LFS will administer systematic
withdrawal plans pursuant to the provisions of withdrawal orders duly executed
by shareholders and the Trust's Prospectus. Payments upon such withdrawal orders
shall be made by LFS from the appropriate account maintained by the Trust with
the Custodian. Prior to the payment date LFS will withdraw from a shareholder's
account and present for repurchase or redemption as many shares as shall be
sufficient to make such withdrawal payment pursuant to the provisions of the
shareholder's withdrawal plan and the Prospectus.
13. LETTERS OF INTENT AND OTHER PLANS. LFS will process such letters of
intent for investing in shares as are provided for in the Prospectus, and LFS
will act as escrow agent pursuant to the terms of such letters of intent duly
executed by shareholders. LFS will make appropriate deposits to the account of
the Distributor for the adjustment of sales charges as therein provided and will
currently report the same to the Distributor, it being understood, however, that
computations of any adjustment of sales charge shall be the responsibility of
the Distributor or the Trust. LFS will process such accumulation plans, group
programs and other plans or programs for investing in shares as are provided for
in the Prospectus. In connection with any such plan or program, and with
withdrawal plans described in paragraph 12 hereof, LFS will act as plan agent
for shareholders and in so acting shall not be the agent of the Trust.
14. TAX RETURNS AND REPORTS. LFS will prepare, file with the Internal
Revenue Service and any other federal, state or local governmental agency which
may require such filing, and, if required, mail to shareholders such returns for
reporting dividends and distributions paid by the Trust as are required to be so
prepared, filed and mailed by applicable laws, rules and regulations, and LFS
will withhold such sums as are required to be withheld under applicable Federal
and state income tax laws, rules and regulations.
15. RECORD KEEPING. LFS will maintain records, which at all times will
be the property of the Trust and available for inspection by the Trust and
Distributor, showing for each shareholder's account the following:
(a) Name, address and United States taxpayer identification or
Social Security number, if provided (or amounts withheld with respect to
dividends and distributions on shares if a taxpayer identification or Social
Security number is not provided);
(b) Number of shares held and number of shares for which
certificates have been issued;
(c) Historical information regarding the account of each
shareholder, including dividends and distributions paid, if any, and the date
and price for all transactions on a shareholder's account;
(d) Any stop or restraining order placed against a shareholder's
account;
4
(e) Information with respect to withholdings of taxes on dividends
paid to foreign accounts; and
(f) Any instruction as to letters of intent, record address, and any
correspondence or instructions relating to the current maintenance of a
shareholder's account.
In addition, LFS will keep and maintain on behalf of the Trust all records which
the Trust or LFS is required to keep and maintain pursuant to any applicable
statute, rule or regulation, including without limitation, Rule 31(a)-1 under
the Investment Company Act of 1940, relating to the maintenance of records in
connection with the services to be provided hereunder. LFS shall be obligated to
maintain at its expense only those records necessary to carry out its duties
hereunder and the remaining records will be preserved at the Trust's expense for
the periods prescribed by law.
16. OTHER INFORMATION FURNISHED. LFS will furnish to the Trust and the
Distributor such other information, including shareholder lists and statistical
information as may be agreed upon from time to time between LFS and the Trust.
LFS shall notify the Trust of any request or demand to inspect the share records
books of the Trust and will act upon the instructions of the Trust as to the
permitting or refusing such inspection.
5
17. SHAREHOLDER INQUIRIES. LFS will respond promptly to written
correspondence from shareholders, registered representatives of broker-dealers
engaged in selling Trust shares, the Trust and the Distributor relating to its
duties hereunder, and such other correspondence as may from time to time be
mutually agreed upon between LFS and the Trust. LFS also will respond to
telephone inquiries from shareholders with respect to existing accounts.
18. COMMUNICATIONS TO SHAREHOLDERS AND MEETINGS. LFS will determine all
shareholders entitled to receive, and will address and mail all communications
by the Trust to its shareholders, including quarterly and annual reports to
shareholders, proxy material for meetings of shareholders and periodic
communications to shareholders. LFS will receive, examine and tabulate return
proxy cards for meetings of shareholders and certify the vote to the Trust.
19. INSURANCE. LFS will not reduce or allow to lapse any of its
insurance coverage from time to time in effect, including but not limited to
Errors and Omissions, Fidelity Bond and Electronic Data Processing coverage,
without the prior written consent of the Trust.
20. DUTY OF CARE AND INDEMNIFICATION. LFS will at all times use
reasonable care and act in good faith in performing its duties hereunder. LFS
will not be liable or responsible for delays or errors by reason of
circumstances beyond its control, including without limitation, acts of civil or
military authority, national or state emergencies, labor difficulties, fire,
mechanical breakdown, flood or catastrophe, acts of God, insurrection, war,
riots or failure of transportation, communication or power supply.
LFS may rely on certifications of the Secretary, any Assistant
Secretary, the President, any Vice President, the Treasurer or any Assistant
Treasurer of the Trust as to proceedings or facts in connection with any action
taken by the shareholders or Trustees of the Trust, and upon instructions not
inconsistent with this Agreement from the President, any Vice President, the
Treasurer or any Assistant Treasurer of the Trust. LFS may apply to counsel for
the Trust, at the Trust's expense, or to its own counsel for advice whenever it
deems expedient. With respect to any action taken on the basis of such
certifications or instructions or in accordance with the advice of counsel for
instructions or in accordance with the advice of counsel for the Trust, the
Trust will indemnify and hold harmless LFS from any and all losses, claims,
damages, liabilities and expenses (including reasonable counsel fees and
expenses).
The Trust will indemnify LFS against and hold LFS harmless from any and
all losses, claims, damages, liabilities and expenses (including reasonable
counsel fees and expenses) in respect to any claim, demand, action or suit not
resulting from LFS's bad faith or negligence and arising out of, or in
connection with, its duties on behalf of the Trust under this Agreement.
LFS shall also be indemnified and held harmless by the Trust against any
loss, claim, damage, liability and expenses (including reasonable counsel fees
and expenses) by reason of any act done by it in good faith and in reliance upon
any instrument or certificate for shares believed by it (a) to be genuine and
(b) to be signed, countersigned or executed by any person or persons authorized
to sign, countersign, or execute such instrument or certificate.
In any case in which a party to this Agreement may be asked to indemnify
or hold harmless the other party hereto, the party seeking indemnification shall
advise the other party of all pertinent facts concerning the situation giving
rise to the claim or potential claim for indemnification, and each party shall
use reasonable care to identify and notify the other promptly concerning any
situation which presents or appears likely to present a claim for
indemnification.
6
21. EMPLOYEES. LFS is responsible for the employment, control and
conduct of its agents and employees and for injury to such agents or employees
or to others caused by such agents or employees. LFS assumes full responsibility
for its agents and employees under applicable statutes and agrees to pay all
employer taxes thereunder.
LFS shall maintain at its own expense insurance against public liability
in a reasonable amount.
22. RENEGOTIATION OF COMPENSATION. LFS agrees that if it provides
services comparable to those contemplated by this Agreement to any other
investment company or group of companies on terms and conditions more favorable
than the terms and conditions applicable under this Agreement or in the event
CMA sells or licenses the CTRAN system to parties other than investment
companies advised by CMA that are parties to this Agreement, the parties hereto
agree to negotiate in good faith as to whether some adjustment in the
compensation arrangement hereunder might be appropriate. LFS and CMA agree to
notify the Trustees of the Trust of any plans to provide shareholder servicing
and transfer agent services to other investment companies or to sell or lease
the CTRAN system and will disclose to such Trustees all information concerning
the terms and conditions on which such services will be provided or such sale or
license is to be made.
23. USE OF AFFILIATED COMPANIES AND SUBCONTRACTORS. In connection with
the services to be provided by LFS under this Agreement, LFS may, to the extent
it deems appropriate, and subject to compliance with the requirements of
applicable laws and regulations and upon receipt of approval of the Trustees,
make use of (I) its affiliated companies and their directors, trustees,
officers, and employees and (ii) subcontractors selected by LFS, provides that
LFS shall supervise and remain fully responsible for the services of all such
third parties in accordance with and to the extent provided in this Agreement.
Except as otherwise provided in paragraph 4 herein, all costs and expenses
associated with services provided by any such third parties shall be borne by
LFS or such parties.
24. TERMINATION. This Agreement shall continue indefinitely until
terminated by not less than ninety (90) days' written notice given by the Trust
to LFS or, by six (6) months written notice given by LFS to the Trust. Upon
termination hereof, the Trust shall pay such compensation as may be due to LFS
as of the date of such termination.
25. SUCCESSORS. In the event that in connection with termination of
this Agreement a successor to any of LFS's duties or responsibilities
hereunder is designated by the Trust by written notice to LFS, LFS shall
promptly at the expense of the Trust, transfer to such successor, a certified
list of the shareholders of the Trust (with name, address and taxpayer
identification or Social Security number), and historical record of the
account of each shareholder and the status thereof, all other relevant books,
records, correspondence and other data established or maintained by LFS under
this Agreement in form reasonably acceptable to the Trust (if such form
differs from the form in which LFS has maintained the same, the Trust shall
pay any expenses associated with transferring the same to such form), and
will cooperate in the transfer of such duties and responsibilities, including
provision for assistance from LFS's personnel in the establishment of books,
records and other data by such successor. LFS shall be entitled to reasonable
compensation and reimbursement of its out-of-pocket expenses in respect of
assistance provided in accordance with the preceding sentence. Also, in the
event of the termination of this Agreement, to the extent permitted by the
agreements or licenses described below, LFS shall, if requested by the
Trustees of the Trust, assign to any entity wholly owned, directly or
indirectly, by CMG or by the funds distributed by the Distributor
collectively, or any of them, all of their rights under any existing
agreements to which it is a party and pursuant to which it has a right to
have access to data processing capability in connection with the services
contemplated by this Agreement and under any licenses to use third-party
software in connection therewith, and in connection with such assignment
shall grant to the assignee an irrevocable right and license or sublicenses,
on a non-exclusive basis, to use any software
7
used in connection therewith and, on an exclusive basis, any proprietary
rights or interest which it has under such agreements or licenses.
26. MISCELLANEOUS. This Agreement shall be construed in accordance with
and governed by the laws of The Commonwealth of Massachusetts.
The captions in this Agreement are included for convenience of reference
only and in no way define or limit any of the provisions of this agreement or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of the Commonwealth of Massachusetts, and notice is hereby given that
this instrument is executed on behalf of the Trustees of the Trust as Trustees
and not individually and that the obligations of or arising out of the
instrument are not binding upon any of the Trustees or officers or shareholders
individually, but binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
THE TRUSTS LISTED ON APPENDIX I
------------------------------------
By:
Title:
LIBERTY FUNDS SERVICES, INC.
------------------------------------
By:
Title:
8
SCHEDULE A
Terms used in the Schedule and not defined herein shall have the meaning
specified in the SHAREHOLDERS' SERVICING AND TRANSFER AGENT AGREEMENT dated July
, 2002, and as amended from time to time (the "Agreement"). Payments under the
Agreement to LFS shall be made in the first two weeks of the month following the
month in which a service is rendered or an expense incurred. This Schedule A
shall be effective as of July , 2002.
1. Each Fund that is a series of the Trust shall pay LFS for the
services to be provided by LFS under the Agreement an amount equal
to the sum of the following:
(a) The Fund's Share of LFS Compensation
PLUS
(b) The Fund's Allocated Share of LFS Reimbursable Out-of-Pocket
Expenses.
In addition, LFS shall be entitled to retain as additional compensation for its
services all LFS revenues for Distributor Fees, fees for wire, telephone,
redemption and exchange orders, XXX trustee agent fees and account transcripts
due LFS from shareholders of any Fund and interest (net of bank charges) earned
with respect to balances in the accounts referred to in paragraph 2 of the
Agreement.
2. All determinations hereunder shall be in accordance with generally
accepted accounting principles and subject to audit by the Fund's
independent accountants.
3. DEFINITIONS
"ALLOCATED SHARE" for any month means that percentage of LFS
Reimbursable Out-of-Pocket Expenses which would be allocated to the
Fund for such month in accordance with the methodology described in
Exhibit 1 hereto.
"LFS REIMBURSABLE OUT-OF-POCKET EXPENSES" means (i) out-of-pocket
expenses incurred on behalf of the Fund by LFS for stationery,
forms, postage and similar items, (ii) networking account fees paid
to dealer firms by LFS on shareholder accounts established or
maintained pursuant to the National Securities Clearing
Corporation's networking system, which fees are approved by the
Trustees from time to time and (iii) fees paid by LFS or its
affiliates to third-party dealer firms or transfer agents that
maintain omnibus accounts with a Fund in respect of expenses similar
to those referred to in clause (i) above, to the extent the Trustees
have approved the reimbursement by the Fund of such fees.
"DISTRIBUTOR FEES" means the amount due LFS pursuant to any
agreement with the Fund's principal underwriter for processing,
accounting and reporting services in connection with the sale of
shares of the Fund.
"FUND" means each of the open-end investment companies advised or
administered by CMA that are series of the Trusts which are parties
to the Agreement.
9
"FUND'S SHARE OF LFS COMPENSATION" for any month means 1/12 of the
following applicable percentage of the average daily closing value
of the total net assets of such Fund for such month:
Agreed:
EACH TRUST ON BEHALF OF EACH FUND DESIGNATED
IN APPENDIX I FROM TIME TO TIME
By: __________________________________________
LIBERTY FUNDS SERVICES, INC.
By: ________________________________________
10
EXHIBIT 1
METHODOLOGY OF ALLOCATING LFS
REIMBURSABLE OUT-OF-POCKET EXPENSES
1. LFS Reimbursable Out-of-Pocket Expenses are allocated to the Funds as
follows:
A. Identifiable Based on actual services performed and
invoiced to a Fund.
B. Unidentifiable Allocation will be based on three evenly
weighted factors.
- number of shareholder
accounts
- number of transactions
- average assets
11
1. APPENDIX I
12
