AARP/XXXXXXX FINANCIAL MANAGEMENT COMPANY
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
November 30, 1984
AARP Financial Services Corp.
c/o American Association of
Retired Person:
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Member Services Agreement
Dear Sirs:
Reference is made to the Omnibus Agreement, dated as of October 9,
1984, between Xxxxxxx, Xxxxxxx & Xxxxx ("Xxxxxxx") and American Association of
Retired Persons ("AARP"); the Partnership Agreement, dated as of October 9,
1984, between you and Xxxxxxx; and the Investment Company Service Agreement (the
"ICS Agreement"), dated as of October 9, 1984, among Xxxxxxx, AARP and us.
Capitalized terms used herein without definition shall have the meanings
assigned thereto in the ICS Agreement.
This Agreement constitutes the agreement required to be entered into
by you and us pursuant to Section 5 of the ICS Agreement and referred to as the
"Member Services Agreement" therein.
We hereby agree with you as follows:
1. You agree to provide us with such advice and services relating to
investment by members of AARP in the Funds as we shall from time to time
reasonably request, including advice and services as to product design of the
Funds, the development of new products and services for the Funds and such other
information as will assist us in tailoring the Funds best to meet the investment
objectives and needs of the AARP membership, based upon your analysis thereof.
You agree to contribute or cause to be contributed certain resources to the Fund
to assist in the organization and operation of the Funds, including "seed
money" for the Funds and assistance in monitoring our activities and the
services provided by Xxxxxxx and other agents of the Funds. You agree to make
available certain of your directors, officers and staff to assist in the
operation of the Funds, and, subject to their individual consent, to serve as
directors and officers of the Funds. You also agree to facilitate communications
with and the provision of services to the AARP membership by analyzing the needs
of AARP members and recommending the appropriate services and methods of
communication for the purpose of disseminating information and providing
services relating to the Account and the Services. For this purpose, you will
arrange that
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there be made available to us and Xxxxxxx, in accordance with AARPs policies and
practices, membership lists of AARP and of AARPs publications and access to
advertising space in AARP publications. Further, AARP and Xxxxxxx have granted
to us the right and license to do business under the name "AARP/Xxxxxxx
Financial Management Company", and each of AARP and Xxxxxxx will grant to the
Funds a license to use certain of your respective service marks.
2. Commencing on the earlier of (a) the second anniversary of the
initial public offering of the first of the Funds to be so offered and (b) such
time as Xxxxxxx shall have recovered, through partnership distributions by us
whenever made and through fees received by Xxxxxxx under agreements between
Xxxxxxx and us (including the Subadvisory Agreement (the "Subadvisory
Agreement"), dated as of November 30, 1984, between us and Xxxxxxx) relating to
investment management and advisory services with respect to the Funds (but only
to the extent that such fees exceed the costs and expenses incurred by Xxxxxxx
in the performance of such agreements) the full amount of the start-up expenses
(including the expenses described in Section 4 of the Investment Company
Services Agreement) incurred by Xxxxxxx in connection
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with the Funds and the Account, we agree to pay you, as compensation for the
services to be rendered by you hereunder, a monthly fee equal to the Monthly
Member Services Fee less one half of the Account Manager Monthly Budget for the
same month. The Monthly Member Services Fee shall be a monthly fee equal to the
sum of: 1/1200 of 1% of the value of the average daily net assets of each of
AARP U.S. Treasury and GNMA Fund, AARP General Bond Fund, AARP Insured Tax Free
Short Term Fund, AARP Insured Tax Free General Bond Fund, AARP Capital Growth
Fund and AARP Growth and Income Fund as described in the Prospectus dated
November 30, 1984 (collectively, the "Portfolios") over $300 million for a
Portfolio up to and including $600 million for such Portfolio; 1/600 of 1% of
the value of the average daily net assets of a Portfolio over $600 million up to
and including $900 million; 1/300 of 1% of the value of the average daily net
assets of a Portfolio over $900 million up to and including $1,200 million;
1/200 of 1% of the value of average daily net assets of a Portfolio over $1,200
million up to and including $1,500 million; 1/150 of 1% of the value of average
daily net assets of a Portfolio over $1,500 million up to and including $1,800
million; and 1/120 of 1% of the value of the average daily net assets of a
Portfolio over $1,800
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million. The value of the average daily net assets of the portfolios shall be
determined in the manner set forth in the respective Investment Management and
Advisory Agreements, dated as of November 30, 1984, between us and each of AARP
Income Trust, AARP Insured Tax Free Income Trust and AARP Growth Trust. The
Account Manager Monthly Budget shall mean, with respect to a given month, the
greater of (a) our costs and expenses (other than fees owed by us pursuant to
this Agreement or the Subadvisory Agreement) actually incurred in that month
and (b) one-twelfth of our annual budget (other than for amounts to be paid by
us pursuant to this Agreement and the Subadvisory Agreement) most recently
adopted by our Management Committee.
3. Nothing herein shall be construed as constituting you as an agent
of us or of the Funds.
4. This Agreement shall become effective as of the date hereof and
shall remain in effect, with respect to each series of each Fund, until
September 30, 1986 and shall continue in effect thereafter so long as such
continuance is specifically approved at least annually by the affirmative vote
of (i) a majority of the members of the Trustees or Board of Directors, as the
case may be, of each Fund who are not interested persons of such Fund,
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you or us, cast in person at a meeting called for the purpose of voting on such
approval; and (ii) the Trustees or Board of Directors, as the case may be, of
each Fund or, with respect to each series of such Fund, the holders of a
majority of the outstanding voting securities of such series of such Fund. In
the event that the Trustees or Boards of Directors, as the case may be, or
security holders of fewer than all of the Funds, or all of the series of a Fund,
fail to approve this Agreement in the manner described in the preceeding
sentence, this Agreement shall remain in effect only with respect to such Funds,
or series, as the case may be, as do so approve this Agreement. This Agreement
may, on 60 days' written notice, be terminated at any time without the payment
of any penalty by us or, as to a particular Fund, by the Trustees or Board of
Directors, as the case may be, of such Fund or by vote of holders of a majority
of the outstanding voting securities of such Fund, or series, with respect only
to that series or by you.
5. This Agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by either party hereto. It may be amended by
mutual agreement, but only after authorization of such amendment by the
affirmative vote of (i) the holders of a majority
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of the outstanding voting securities of each series of the Funds; and (ii) the
Trustees or Board of Directors, as the case may be, of each Fund, including a
majority of the Trustees or directors of such Fund who are not interested
persons of such Fund, you or us, cast in person at a meeting called for the
purpose of voting on such approval.
6. This Agreement shall be construed in accordance with the laws of
the State of New York.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart hereof and return the same to us.
Very truly yours,
AARP/XXXXXXX FINANCIAL
MANAGEMENT COMPANY
By: XXXXXXX, XXXXXXX & XXXXX
A General Partner
By: /s/ [Illegible]
----------------------------
Title: General Partner
The foregoing agreement is
hereby accepted as of the
date first written above.
AARP FINANCIAL SERVICES
CORP.
By: /s/ [Illegible]
----------------------------
Title:
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Accepted:
AARP INSURED TAX FREE
INCOME TRUST
By: /s/ [Illegible]
----------------------------
Title: President
AARP GROWTH TRUST
By: /s/ [Illegible]
----------------------------
Title: President
AARP INCOME TRUST
By: /s/ [Illegible]
----------------------------
Title: President
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