SHAREHOLDERS SERVICE CONTRACT
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SHAREHOLDERS SERVICE CONTRACT (this "Agreement"), dated ________, 1997,
between COMPOSITE BOND & STOCK FUND (the "Fund"), a separate series of The
Composite Funds (the "Trust"), a Massachusetts business trust with offices
located at 000 Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, and
XXXXXXX XXXXX SECURITIES SERVICES, INC. (the "Transfer Agent"), a Washington
corporation with offices located at 000 Xxxx Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxx 00000:
W I T N E S S E T H
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WHEREAS, the Trust is a diversified, open-end series management investment
company registered under the Investment Company Act of 1940, whose shares are or
will be registered under the Securities Act of 1933; and
WHEREAS, the Transfer Agent engages in the business of rendering computer
and related services and acting as transfer agent and shareholder servicing
agent for investment companies;
WHEREAS, the Fund desires the Transfer Agent to perform the services set
forth in Schedule A attached hereto and incorporated herein by reference, and
the Transfer Agent is willing to perform such services;
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the Fund and the Transfer Agent agree as follows:
1. The Transfer Agent shall perform for the Fund the services set forth
in Schedule A for a monthly fee set forth in Schedule C attached hereto and
incorporated herein by reference (or in the case of certain identified extra
charge services, a charge set forth in Exhibit B attached hereto and
incorporated herein by reference).
2. The Fund agrees to reimburse the Transfer Agent for postage, the
procurement and/or printing of share certificates (if any), statements,
envelopes, checks, reports, tax forms, proxies, or other forms of printed
material required in the performance of its services to the Fund under this
Agreement.
3. The Fund agrees to reimburse the Transfer Agent for all freight and
other delivery charges and insurance or bonding charges incurred by the Transfer
Agent in delivering materials to and from the Fund and for certificates (if any)
delivered to shareholders.
4. The Fund agrees to reimburse the Transfer Agent for all direct
telephone expenses incurred by the Fund in calling shareholders regarding their
Fund transactions, accounts, and for any other Fund business.
5. The Transfer Agent at the end of each month during the term of this
Agreement will render an itemized statement to the Fund for its charges under
this Agreement. Payment by the Fund is due 10 (ten) days from the date such
statement is received.
6. The Fund agrees that all computer programs and procedures developed to
perform services required under this Agreement are the property of the Transfer
Agent and the Transfer Agent agrees that all records and other data, except
computer programs and procedures, are the property of the Fund. The Transfer
Agent agrees that it will furnish all records and other data as may be requested
to the Fund immediately upon termination of this Agreement for any reason
whatsoever.
7. The Transfer Agent agrees to treat all records and other information
relative to the Fund with utmost confidence and further agrees that all records
maintained by the Transfer Agent for the Fund shall be open to inspection and
audit at reasonable times by the officers, agents or auditors employed by the
Fund and that such records shall be preserved and retained by the Transfer Agent
so long as this Agreement shall remain in effect.
8. The Transfer Agent shall not be liable for any damage, loss of data,
delay or any other loss caused by any such power failure or machine breakdown,
except that the Transfer Agent shall be liable for actual out-of-pocket costs
caused by any such power failure or machine breakdown, and the Transfer Agent
shall recover the data in process that is assumed lost during any power failure
or machine breakdown.
9. The Transfer Agent will maintain in force through the duration of this
Agreement at least $1,000,000 or more fidelity bond written by a reputable
bonding company, covering theft, embezzlement, forgery and other acts of
malfeasance by the Transfer Agent, its employees, or agents in connection with
services performed for the Fund.
10. This Agreement may be terminated without the payment of any penalty by
either party upon (180) days' written notice thereof given by the Fund to the
Transfer Agent and upon one hundred eighty (180) days' written notice thereof
given by the Transfer Agent to the Fund.
11. Any notice shall be officially given when sent by registered or
certified mail by either party to the foregoing addresses, provided that either
party may notary the other of any changed address to which such notices should
be mailed thereunder.
12. This Agreement constitutes the entire Agreement between the parties
and shall be governed by, and its provisions shall be governed by, and construed
in accordance with, the laws of the Commonwealth of Massachusetts.
13. This Agreement will be subject to review annually.
14. A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State
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of the Commonwealth of Massachusetts, and notice is hereby given that this
Agreement is executed by an officer of the Trust on behalf of the trustees of
the Trust, as trustees and not individually, on further behalf of the Fund, and
that the obligations of this Agreement shall be binding upon the assets and
properties of the Fund only and shall not be binding upon the assets and
properties of any other series of the Trust or upon any of the trustees,
officers, employees, agents or shareholders of the Fund or the Trust
individually.
IN WITNESS WHEREOF, the parties hereto cause this Agreement to be executed
by their officers designated below as of the date first above-written.
THE COMPOSITE FUNDS, on behalf of its
series COMPOSITE BOND & STOCK FUND
By: __________________________________
President
XXXXXXX XXXXX SECURITIES SERVICES, INC.
By: __________________________________
Executive Vice President
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SCHEDULE A
I. Shareholder Services
A. Maintain all shareholder records on electronic data processing
equipment, including:
1. Share balances
2. Account transaction history
3. Names and addresses
4. Certificate records
5. Distribution records
6. Transfer records
7. Over-all control records
B. New Accounts
1. Deposit all monies received into a Fund custody account
maintained by the Custodian
2. Set up account according to shareholders' instructions as to:
a. Amount of shares purchased
b. Retain shares or deliver to shareholder
3. Issue and mail shareholder confirmations
C. Additional Purchases
1. Deposit monies received into a Fund custody account maintained by
the Custodian
2. Issue shareholder confirmations
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D. Liquidations - Full and Partial
1. Liquidate shares upon shareholder request
2. Issue checks for amount of liquidation
3. Issue and mail shareholder confirmation
E. Transfer shares as requested which includes obtaining necessary papers
and documents to satisfy transfer requirements. On irregular transfers
requiring special legal opinions, such special legal fees, if any, are
to be paid for by the Fund.
F. Prepare and mail certificates as requested by shareholders
G. Process changes, corrections of addresses and registrations
H. Maintain service with shareholders as follows:
1. Activity required to receive, process and reply to shareholders'
correspondence regarding account matters
2. Refer correspondence regarding investment matters to the Fund
with sufficient account data to answer
3. Contact shareholders directly to settle problems and answer
questions
I. Compute distributions, dividends and capital gains
1. Reinvest in additional shares
2. Advise each shareholder of amount of dividends received and tax
status annually
J. Replace lost certificates
K. Produce transcripts of shareholder account history as required
L. Maintain the controls associated with the computer programs and manual
systems to arrive at the Company's total shares outstanding.
M. Receive mail and perform other administrative functions relating to
transfer agent work.
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II. Reports and Schedules
A. Daily
1. Name and address changes
2. Name and address additions and deletions
3. Transaction Register
a. Purchases
b. Sales
c. Adjustments
4. Cash reconciliation - cash received for day
5. Check reconciliation - checks issued for day
6. Transaction reconciliation
a. Amount received
b. Total shares purchased
c. Number of purchase transactions
d. Amount liquidated
e. Total shares liquidated
f. Number of liquidations
g. Checks issued for liquidations
B. Monthly
1. Purchases, sales and adjustments
2. Certificates issued
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3. Certificate, redemptions and transfers
4. Certificate reconciliation by certificate number
5. Sales by states for month
C. Periodically
1. Alphabetical account listing
III. Other Services
*A. Mailing labels or other mailing services to shareholders
*B. Services in connection with any stock splits
*C. Develop special reports for Fund officers regarding statistical and
accounting data pertaining to the Fund. Fund shall pay for out-of-
pocket expenses charged by vendors to develop such reports or portions
thereof.
* Extra charge services, per Schedule B.
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SCHEDULE B
TIME AND MATERIAL SERVICES
Computer...................... $50/hour
Keypunch...................... $10/hour
Clerical...................... $10/hour
Programming and Direct Technical Management $25/hour
Travel and per diem expenses (chargeable only
when authorized by Company).. At Cost
Mailing Services.............. At Cost
Any of the above services when performed outside regular working hours of
Xxxxxxx may be billed at 150 percent of the above.
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SCHEDULE C: MONTHLY SHAREHOLDER SERVICING FEES
_____________________ , 1997
Fee Per Account Per Month
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Class A Class B Class I Class S
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Composite Bond & Stock Fund $1.25 $1.35 -0- $1.35
Composite Growth & Income Fund $1.25 $1.35 -0- $1.35
Composite Northwest Fund $1.25 $1.35 -0- $1.35
Composite Income Fund $1.45 $1.55 -0- $1.55
Composite Tax-Exempt Bond Fund $1.45 $1.55 -0- $1.55
Composite U.S. Government Securities $1.45 $1.55 -0- $1.55
Composite Cash Management Company
Money Market Fund
First 25,000 accounts $1.85 $1.95 - 0- $1.95
Each additional account $1.55 $1.65 - 0- $1.65
Composite Cash Management Company
Tax-Exempt Money Market
Fund $1.85 $1.95 - 0- $1.95
First 25,000 accounts $1.55 $1.65 - 0- $1.65
Each additional account
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