Exhibit (h)(17)
SHAREHOLDERS' SERVICING AND TRANSFER AGENT AGREEMENT
Agreement made as of this 22nd 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"), Liberty Funds Services, Inc. ("LFS"), a
Massachusetts corporation, and Fleet Investment Advisors, Inc. (the
"Administrator"), a New York 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 those Funds of
the Trust identified on Appendix I hereto for such Funds' 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. For the services provided pursuant to this Agreement,
the Trust on behalf of each Fund listed on Appendix I hereto or, in the case of
Galaxy Fund II, the Administrator on behalf of each Fund of Galaxy Fund II
listed on Appendix I hereto, will pay LFS the fees set forth in the written Fee
Schedule attached hereto as Schedule A and incorporated herein, subject,
however, to the performance standards set forth in Schedule B attached hereto
and incorporated herein.
In addition to the fees set forth in Schedule A hereto, the Trust on
behalf of each Fund listed on Appendix I hereto or, in the case of Galaxy Fund
II, the Administrator on behalf of each Fund of Galaxy Fund II listed on
Appendix I hereto, agrees to pay, and will be billed separately for,
out-of-pocket expenses incurred by LFS in the performance of its duties
hereunder. Out-of-pocket expenses shall include, but shall not be limited to,
the items specified in the written schedule of out-of-pocket charges annexed
hereto as Schedule C and incorporated herein. Unspecified out-of-pocket expenses
shall be limited to those out-of-pocket expenses reasonably incurred by LFS in
the performance of its duties hereunder. In the event that the cost of
unspecified out-of-pocket expenses exceeds $1,000, LFS will receive prior
written approval from the Trust before incurring such expenses.
The Trust or, in the case of Galaxy Fund II, the Administrator agrees
to pay all fees and out-of-pocket expenses within thirty (30) days following the
receipt of the respective invoice. In addition to the fees set forth in Schedule
A hereto, the Trust agrees that as part of the compensation payable to LFS for
the services provided pursuant to this Agreement, LFS shall be entitled to
retain any interest or dividend income earned on the investment of the. Trust's
cash balances held in those cash management accounts maintained by LFS on behalf
of the Trust. LFS agrees to provide the Trust's Board of Trustees with periodic
reports, but no less frequently than annually, as to the amount of such dividend
or interest income retained by LFS.
3. COPIES OF DOCUMENTS. The Trust will furnish LFS with copies
of the following documents: the Declaration of Trust of the Trust and all
amendments thereto; the Code of Regulations or 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
notwithstanding 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 its cash management bank 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 shares 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,
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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 its custodian (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 the
shareholder records of the Trust maintained by LFS 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
(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 take such steps, including imposition of a reasonable
processing or handling fee, as LFS may, in LFS's discretion, deem appropriate,
or as the Trust or 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,
commissions or other amounts, 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 participating in the
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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 distributions with respect to Trust shares,
the amount of each 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 each such dividend or distribution. As Dividend
Disbursing Agent, US 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 US sufficient funds therefor in the dividend and distribution
account maintained by US with the Custodian. As Dividend Disbursing Agent, US
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, if
required, mail to shareholders a certificate in respect of such additional
shares. If additional shares are added to a shareholder's account by reason of
any dividend or distribution, confirmation will appear in that shareholder's
quarterly statement.
11. REPURCHASE AND REDEMPTIONS. LFS will receive and stamp with the
date of receipt all certificates and requests delivered to US for repurchase or
redemption of Trust shares and US 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, US 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 its cash management bank, the
appropriate repurchase or redemption price, as the case may be, as set forth in
the Prospectus;
(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) US 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 US 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.
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12. SYSTEMATIC WITHDRAWAL PLANS. US 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 US from the appropriate account maintained by the Trust with
its cash management bank. Prior to the payment date US 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 Trust's Prospectus.
13. LETTERS OF INTENT AND OTHER PLANS. LFS will process such letters of
intent for investing in Trust shares as are provided for in the Trust's
Prospectus. 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 charges 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 Trust shares as are
provided for in the Trust's Prospectus. In connection with any such plan or
program, and with withdrawal plans described in paragraph 12 hereof, US 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 the
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;
(e) Information with respect to withholdings of taxes on dividends paid
to foreign accounts; and
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(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. US 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 US and the Trust. US
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
permitting or refusing such inspection.
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 US and the Trust. US 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 annual and semi-annual reports to
shareholders, proxy material for meetings of shareholders and periodic
communications to shareholders. If so requested by the Trust, US will receive,
examine and tabulate return proxy cards for meetings of shareholders and certify
the vote to the Trust.
19. INSURANCE. US 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. US will at all times use
reasonable care and act in good faith in performing its duties hereunder. US
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
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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 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 US against and hold US 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 reasonably 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.
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. 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, provided 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.
All costs and expenses associated with services provided by any such third
parties shall be borne by LFS or such parties.
23. 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.
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24. 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. US 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, US 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 used in connection therewith and, on an
exclusive basis, any proprietary rights or interest which it has under such
agreements or licenses.
25. CONFIDENTIALITY. US agrees on behalf of itself and its employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Trust and its prior, present or potential
shareholders, and not the use such records and information for any purpose other
than performance of its responsibilities and duties under this Agreement, except
after prior notification to and approval in writing by the Trust, which approval
shall not be unreasonably withheld and may not be withheld where US may be
exposed to civil or criminal contempt proceedings for failure to comply, when
requested to divulge such information by duly constituted authorities, or when
so requested by the Trust.
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
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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.
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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
/s/ Xxxx X. X'Xxxxx
--------------------------------------------
By: Xxxx X. X'Xxxxx Title: President
LIBERTY FUNDS SERVICES, INC.
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
By: Xxxxxx X. Xxxxxxx Title: President
Solely for the purposes of Paragraph 2 of this Agreement:
FLEET INVESTMENT ADVISORS, INC.
/s/ Xxxxx X. Xxxxx
-----------------------------------------------------
Xxxxx X. Xxxxx
Title: Chairman, CEO & President
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APPENDIX I
TRUST FUNDS
----- -----
The Galaxy Fund Galaxy Short-Term Bond Fund
Galaxy Intermediate Government Income Fund
Galaxy High Quality Bond Fund
Galaxy Corporate Bond Fund
Galaxy Tax-Exempt Bond Fund
Galaxy Intermediate Tax-Exempt Bond Fund
Galaxy Connecticut Municipal Bond Fund
Galaxy Connecticut Intermediate Municipal Bond Fund
Galaxy Florida Municipal Bond Fund
Galaxy Massachusetts Municipal Bond Fund
Galaxy Massachusetts Intermediate Municipal Bond Fund
Galaxy New Jersey Municipal Bond Fund
Galaxy New York Municipal Bond Fund
Galaxy Pennsylvania Municipal Bond Fund
Galaxy Rhode Island Municipal Bond Fund
Galaxy Asset Allocation Fund
Galaxy Equity Value Fund
Galaxy Equity Growth Fund
Galaxy Growth Fund II
Galaxy Equity Income Fund
Galaxy Growth and Income Fund
Galaxy International Equity Fund
Galaxy Small Company Equity Fund
Galaxy Small Cap Value Fund
Galaxy Strategic Equity Fund
Galaxy Large Cap Growth Fund
Galaxy Large Cap Value Fund
The Galaxy VIP Fund Galaxy VIP Money Market
Galaxy VIP Equity Fund
Galaxy VIP Growth and Income Fund
Galaxy VIP Small Company Growth Fund
Galaxy VIP Columbia Real Estate Equity Fund II
Galaxy VIP Asset Allocation Fund
Galaxy VIP High Quality Bond Fund
Galaxy VIP Columbia High Yield Fund II
Galaxy Fund II Galaxy II Large Company Index Fund
Galaxy II Small Company Index Fund
Galaxy II Utility Index Fund
Galaxy II U.S. Treasury Index Fund
Galaxy II Municipal Bond Fund
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Schedule A
FEE SCHEDULE
For the services to be rendered, the facilities to be furnished and the
payments to be made by LFS, as provided for in this Agreement, the Trust, on
behalf of each Fund identified in Appendix I hereto or, in the case of Galaxy
Fund II, the Administrator on behalf of each Fund of Galaxy Fund II listed on
Appendix I hereto, will pay LFS on the first business day of each month a fee
for the previous month at the rates listed below. Upon any termination of this
Agreement before the end of any month, the fee for such part of a month shall be
prorated according to the proportion which such period bears to the full monthly
period and shall be payable upon the date of termination of this Agreement.
SHAREHOLDER SERVICES
ANNUAL FUND MINIMUM
Fees based on annual per shareholder account charge for account maintenance and
fees for certain shareholder-generated transactions plus all out-of-pocket
expenses. There is a minimum annual fee per Fund of $5,000 per year.
ANNUAL MAINTENANCE FEE
Fees are billable on. a monthly basis at the rate of 1/12 of the annual fee. A
charge is made for an account in the month that an account opens or closes. The
Annual Maintenance Charge is as follows:
TYPE OF ACCOUNT ANNUAL MAINTENANCE FEE
--------------- ----------------------
Open Accounts
Non-Networked Accounts $14.00
Networked Accounts
0-100,000 $11.00
over 100,000 $ 8.00
Closed Accounts
0-100,000 $14.00
over 100,000 $11.00
NEW ACCOUNT SET-UP CHARGE
$5.00 per account
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PRODUCTION AND MASS MAIL
The per piece fees for production and mass mail exclude postage which will be
invoiced as an out-of-pocket expense at cost.
DAILY, MONTHLY AND DIVIDEND STATEMENTS
Printing, folding, inserting, metering,
(includes return envelope inserting) $.075/ea
Additional Inserts
1st .002/ea
2nd .005/ea
3rd .010/ea
4th .010/ea
5th .010/ea
FIDUCIARY FEE STATEMENTS
Printing, inserting, metering, mailing and
return envelope inserting
$.11/ea
W-8 STATEMENTS
Printing, folding, inserting, metering, mailing,
mailer or return envelope inserting
$.155/ea
W-8 STATEMENTS (BULK)
Printing, folding, inserting, metering, mailing,
mailer or return envelope inserting
$1.305/ea
Credit for return handling and processing .70/ea
Additional inserts
1st .002/ea
2nd .005/ea
3rd .010/ea
4th .010/ea
5th .010/ea
W-9 STATEMENTS
Printing, folding, inserting, metering, mailing
and mailer or return envelope inserting $.155/ea
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W-9 STATEMENTS (BULK)
Solicitation, printing, folding, inserting, metering, mailing,
mailer or return envelope inserting
$.905/ea
Credit for return handling and processing .50/ea
Additional inserts
1st .002/ea
2nd .005/ea
3rd .010/ea
4th .010/ea
5th .010/ea
LASER CHECKS
Printing, folding, inserting, metering and mailing
(includes return envelope inserting) $.085/ea
Additional inserts
1st .002/ea
2nd .005/ea
3rd .010/ea
4th .010/ea
5th .010/ea
PROXIES
Proxy Base Stock $.0238/ea
Printing plate charge 25.00/side
Copy setting fees 50.00/ea
Proxy printing
1 to 9,999 .15/ea
10,000 to 49,999 .05/ea
50,000 plus .025/ea
Inserting, bursting, metering and mailing
over 3,501 pieces .0105/ea
2,501 to 3,500 .12/ea
1,501 to 2,500 .15/ea
1 to 1,500 .17/ea
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Additional inserts
1st .002/ea
2nd .005/ea
3rd .010/ea
4th .010/ea
5th .010/ea
Manual processing/counting $13.00/hr
NEW ACCOUNT LETTERS
Printing, folding, inserting, metering $.070/pg
1st .002/ea
2nd .005/ea
3rd .010/ea
4th .010/ea
5th .010/ea
FULFILLMENT PRICING
SHAREHOLDER KITS
Self Mailer (68-71) .1480
Bond, Equity and Asset Allocation Kits (53-59) .1480
Fleet Payroll Kits - Money Market, Bond, Equity
(10,11,31-33) .3500
Money Mkt., Variable Instit. Kits, A/P Form XXX & Reg
(12, 63, 72, 50, 62) .4300
Annuity Kit, Exchange and Transfer (93-98) .4800
XXX, VIP & Retirement Kits (61, 85, 89, 90, 91) .6100
Total Service XXX Kit (91, 100) 1.3000
Annuity Fulfillment (99) .4800
College Investment Kit (100) 2.0000
New Kits (102, 110, 13) .4000
Nat West S/H Kit (103) .3500
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New Kits (20, 200, 201, 220-222, 109) .3500
New Kits (461A) .3500
New Broker Kit (FND-FIS) 55.0000
Investment Spec Report Dec. 1997 .1800
PK (Pro Kit w/supplements) (1-313) .0500
Individual Items - Components .0500
OTHER FULFILLMENT CHARGES
Warehouse Storage 9./pallet
Transportation Charges - pass through/out-of-pocket
Print Charges - pass through/out-of-pocket
LFS shall waive all fees for a period of three months from the commencement of
operations of any new Fund which is established by the Trust and added to
Appendix I hereto, provided that no fee shall be waived for any "shell" Fund
created pursuant to a merger or acquisition.
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Schedule B
Pursuant to paragraph 2 of this Agreement, LFS has agreed to perform
the services described in this Agreement in accordance with the Performance
Standards set forth in this Schedule B. The parties agree that such Performance
Standards, which are described below, may be revised from time to time upon the
mutual agreement of the parties.
Each of the performance standards will be monitored by a Quality
Assurance Team:
(a) In the event that LFS fails to meet a particular Performance
Standard (except any failure due to circumstances beyond its control) in any
particular month, LFS agrees to take appropriate corrective action within the
following thirty (30) day period.
(b) In the event that LFS fails to meet a particular Performance
Standard (except for any failure due to circumstances beyond its control) in two
(2) consecutive months; the fee payable to LFS hereunder for such service shall
be reduced by one percent (1%) for the second of those two months.
(c) In the event that LFS fails to meet a particular Performance
Standard (except for any failure due to circumstances beyond its control) for
any three (3) consecutive months, the fee payable to LFS hereunder for such
service shall be reduced by one and one-half percent (1.5%) for the third of
those three months.
(d) In the event that US fails to meet a particular Performance
Standard (except for any failure due to circumstances beyond its control) for
any three (3) months within a six (6) month period, the Fund shall have the
right to terminate this Agreement upon forty-five (45) days' written notice to
LFS.
(e) In the event that there is no specific fee for a particular service
set forth in Schedule A hereto, then any reduction in the fee payable to LFS as
a result of a failure to meet a particular performance standard for that service
hereunder shall be taken as a reduction in the annual per account maintenance
fee.
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REQUIRED
CATEGORY COMPONENTS PERFORMANCE LEVEL
-------- ---------- -----------------
A. QUALITY PERFORMANCE SCORE*
1. Financials Purchases, Redemptions, Exchanges, Adjustments (both 98%
financial and non-financial adjustments)
2. Non-Financials Maintenance (including address changes, option changes,
ROA/LO1), Legal Transfers, New Accounts 98%
3. Print/Mail Statements, Confirms, Checks 98%
4. Correspondence Financial and Non-Financial Correspondence 98%
B. PRODUCTIVITY PERFORMANCE SCORE
1. Completed on day of receipt Purchases, Redemptions, Exchanges, Financial
Adjustments, New Accounts 98%
2. Completed within five business days of Maintenance, Non-Financial, Legal Transfers 98%
receipt
Print/Mail:
3. Mailed on trade date + 1 Shareholder Checks 98%
4. Mailed on trade date + 2 Shareholder Confirms 98%
5. Mailed within 5 business days following Statements 98%
the end of the reporting period
Shareholder Services:
6. Mailed within two business days of Financial Correspondence 98%
receipt
7. Mailed within four business days of Non-Financial Correspondence 98%
receipt
Phones:
8. Abandonment Rate 3% or less
9. Average Speed of Answer 20 seconds or less
10. Service Level of Receipt 90% of all calls
answered in 20
seconds or less
11. Fulfillment Mailing Processed within 24 hours of receipt 98%
------------
* Accuracy rating based on routine sampling and accuracy analysis by Quality
Assurance area of LFS.
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Schedule C
OUT-OF-POCKET EXPENSES
The Trust shall reimburse US monthly for applicable out-of-pocket expenses,
including, but not limited to the following items:
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Printing costs, including certificates, envelopes, checks and
stationery
- Postage (bulk, pre-sort, ZIP+4, barcoding, first class) direct
pass through to the Trust
- Due diligence mailings
- Telephone and telecommunication costs, including all lease,
maintenance and line costs
- Ad hoc reports
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and insurance
- Year-end forms and mailings
- Terminals, communication lines, printers and other equipment
and any expenses incurred in connection with such terminals
and lines
- Duplicating services
- Courier services
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- Overtime, as approved in advance by the Trust
- Temporary staff, as approved in advance by the Trust
- Travel and entertainment, as approved in advance by the Trust
- Record retention as required by the Trust, retrieval and
destruction costs, including, but not limited to, exit fees
charged by third party record keeping vendors
- Third party audit reviews
- Ad Hoc SQL time
- Insurance
- Such other miscellaneous expenses reasonably incurred by US in
performing its duties and responsibilities under this
Agreement.
The Trust agrees that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with LFS. In addition, the Trust will
promptly reimburse LFS for any other unscheduled expenses incurred by US
whenever the Trust and US mutually agree that such expenses are not otherwise
properly borne by US as part of its duties under the Agreement.
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