FRANKLIN XXXXXXXXX INVESTOR SERVICES, LLC
TRANSFER AGENT AND SHAREHOLDER SERVICES AGREEMENT
Investment Company: ADJUSTABLE RATE SECURITIES PORTFOLIOS
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 services 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) provide record keeping and related services for each
individual (a "Participant") with a direct or indirect beneficial interest in
Fund shares issued to or for the benefit of an IRS recognized tax-deferred
savings plan (a "Plan"), including without limitation employer sponsored
retirement plans and Section 529 plans, so long as under the terms of the Plan
and subject to limitations imposed by the Plan each Participant has the
independent authority to direct the investment of his or her interest in Fund
shares (each such Plan is referred to as a "Participant Directed Plan").
Each person with an interest in Fund shares recorded in an Omnibus Account and
each Participant with an interest in Fund shares issued to or for the benefit of
a Participant Directed Plan 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, Participant Directed Plans and all
Networked 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
Full Service Accounts (as defined in Schedule A) ; and (ii) all Networked
Accounts for which Networked Account Servicing Fees were paid had been Full
Service Accounts .
(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.
ADJUSTABLE RATE FRANKLIN XXXXXXXXX
SECURITIES PORTFOLIOS INVESTOR SERVICES, LLC
BY: /s/ Xxxxxx X. Xxxxxxx /s/ Xxxxx X. Xxx, Xx.
------------------------ -----------------------
NAME: Xxxxxx X. Xxxxxxx 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 Participant level record keeping account
maintained by or on behalf of FTIS for a Participant Directed Plan (as defined
in Section 3(b)(ii) of this Agreement).
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 surrendered 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.
