Exhibit (e)(2)
AUTOMATIC DIVIDEND INVESTMENT PLAN AGREEMENT
THIS AGREEMENT, by and between The Bank of New York, a commercial bank
organized and existing under the laws of the State of New York ("Bank"), Xxxxxxx
X'Xxxxx & Co., Inc. a registered broker/dealer ("X'Xxxxx) and CNA Income Shares,
Inc., a registered closed-end, diversified management investment company, dated
as of April 1, 1986.
WITNESSETH:
WHEREAS, CNA Income Shares, Inc. ("CNA") is registered as a closed-end,
diversified, management investment company under the Investment Company Act of
1940, as amended; and
WHEREAS, CNA has adopted an "Automatic Dividend Investment Plan" ("Plan"),
whereby those shareholders that participate in the Plan ("Participants") may
make voluntary payments and also agree to have all dividends and distributions
on their shares invested in additional shares of CNA stock as long as they
continue to participate in the Plan; and
WHEREAS, X'Xxxxx has been appointed as Purchasing Agent by the Participants
in the Plan; and
WHEREAS, CNA will bear the costs of administering the Plan.
NOM THEREFORE, Bank, CNA and X'Xxxxx, in consideration of the premises and
of other good and valuable consideration, receipt of which is hereby
acknowledged, and intending to be legally bound, do hereby agree as follows:
REINVESTMENT OF DIVIDENDS AND DISTRIBUTIONS
1. Promptly after the last trading day in any month in which a dividend or
other distribution has been declared by the Board of Directors of CNA, Bank or
its duly authorized agent, will inform X'Xxxxx, as Purchasing Agent, of the net
asset value per share as of the close of business on such last trading day, the
dollar amount available fur the purchase of shares of CNA and the dividend
payment date. As use herein, the term "trading day" shall mean any day on which
the major securities markets are open for business.
2. Upon receipt of such information, X'Xxxxx, as Purchasing Agent, will use
its best efforts to buy CNA shares for the accounts of Participants, in
accordance with the terms of the Automatic Dividend Investment Plan Agreement
between the CNA and X'Xxxxx dated July 28, 1978, attached hereto as Exhibit I.
The term "Record Keeping Agent" as used in the automatic Dividend Investment
Plan Agreement shall mean the Bank.
VOLUNTARY PAYMENTS
3. Promptly after the last trading day of each month, Bank or its duly
authorized agent, will inform X'Xxxxx, as Purchasing Agent, of the total dollar
amount of voluntary payments received from shareholders during that month for
the purchase of shares of CNA.
4. Upon receipt of such information, X'Xxxxx, as Purchasing Agent, shall
invest the total dollar amount of voluntary payments in shares of CNA in Open
Market Purchases. If dividends and distributions are being used to make Open
Market Purchases at any time that voluntary payments are also being used to make
Open Market Purchases, voluntary payments and dividends and distributions may
be combined into one purchase program as provided in the ADIP Agreement.
GENERAL
5. Promptly after completion of each purchase of shares of CNA, X'Xxxxx
will give written confirmation of the same to Bank or its duly authorized agent
including copies of relevant trade data such as the number of shares purchased,
the purchase price, and the costs of purchase. Should X'Xxxxx not be able to
complete the market purchases prior to such dividend payment date, X'Xxxxx will
promptly notify Bank or its duly authorized agent.
6. Bank as Transfer Agent for CNA, or its duly authorized agent, will
maintain the individual shareholder account records of the Participants and
will furnish each Participant with written confirmation of any dividend or
voluntary payment transaction in his or her account, including information
needed for tax purposes or other personal needs. X'Xxxxx shall not be
responsible for the performance of any of the functions described in this
paragraph.
7. CNA hereby agrees to pay X'Xxxxx a commission of eight cents per share
for each Open Market purchase transaction, or fee of $100 per dividend or other
distribution invested in stock issued by CNA.
8. X'Xxxxx may resign as Purchasing Agent by giving 90 days' written notice
to Bank and CNA at the addresses provided in paragraph 10 hereto. Such
resignation shall not be effective until such written notice is so delivered.
When such resignation is effective, Bank or its duly authorized agent shall be
responsible for giving notice of such resignation and of any successor to the
Participants at their last address of record. Such notice may be given along
with Bank's communications with the Participants in connection with the next
regular CNA cash dividend.
9. It is expressly agreed by the parties hereto that neither CNA nor Bank
shall be responsible for the time, manner, or amounts of purchases made by
X'Xxxxx pursuant to paragraph 2 and 4 hereof, and that X'Xxxxx hereby assumes
full responsibility therefor.
10. Any notice given to Bank or to X'Xxxxx hereunder shall be sufficiently
given if sent by First Class mail, postage prepaid, addressed (until another
address is delivered in writing to the other party) as follows:
If to Bank:
The Bank of New York
00 Xxxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx Attention: Xxxx X. Xxxxxx
Assistant Secretary Assistant Secretary
Dividend Reinvestment CNA Income Shares, Inc.
Department -- 18th Floor Administrator -- 27th Floor
If to X'Xxxxx:
Xxxxxxx X'Xxxxx & Co., Inc.
00000 Xx Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
If to CNA:
CNA Income Shares, Inc.
CNA Plaza -- 41S
Xxxxxxx XX 00000
Attention: Secretary
11. This Agreement may be modified in writing by a Supplemental Agreement
signed by Bank, CNA and X'Xxxxx, or their respective successors, provided such
Supplemental Agreement is not inconsistent with the Terms and Conditions of the
Plan.
12. This Agreement shall terminate on the first to occur of termination of
the Plan or termination of the Agreement of even date herewith between Bank and
CNA pertaining to Bank's appointment as administrator of the Plan and as
CNA's transfer agent and dividend disbursing agent.
13. This Agreement shall be governed by and construed in accordance with
the laws of New York.
IN WITNESS WHEREOF, the parties hereto have duly executed this
agreement as of the date first above written.
(SEAL) The Bank of New York
Attest: /s/ Xxxx Xxxxxx By: /s/
-------------------------- ----------------------------
Assistant Secretary Vice President
(SEAL) Xxxxxxx X'Xxxxx & Co., Inc.
Attest: /s/ Xxxxxx X. Xxxxxxx By: /s/
-------------------------- ----------------------------
Title: Vice President
(SEAL) CNA Income Shares, Inc.
Attest: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
-------------------------- ----------------------------
Secretary Vice President
