Exhibit (h)(4)
XXXXXXX XXXXXX INVESMENTS, INC.
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxxxxx 0, 0000
XXXX Financial Services Corp.
c/o American Association of Retired Persons
000 X Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000
Member Services Agreement
Dear Sirs:
Reference is made to the Omnibus Agreement, dated as of October 9,
1984, between American Association of Retired Persons ("AARP") and us; the
Partnership Agreement, dated as of October 9, 1984, between you and us; and the
Investment Company Service Agreement (the "ICS Agreement"), dated as of October
9, 1984, among AARP, AARP/Xxxxxxx Financial Management Company (the
"Partnership") 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.
This Agreement supersedes all prior Member Services Agreements entered
into between you and the Partnership.
We hereby agree with you as follows:
1. You agree to provide us with such advice and services relating to
investments by members of AARP in the AARP Cash Investment Funds, the AARP
Growth Trust, the AARP Income Trust, and the AARP Tax Free Income Trust, each
established as a Massachusetts business trust to engage in the business of an
investment management company (each a "Fund" and, collectively, the "Funds"),
and any separate portfolios of the Funds, created from time to time by action of
the Trustees (each a "Portfolio" and, collectively, the "Portfolios"), as we
shall from time to time reasonably request, including advice and services as to
product design of the Funds and Portfolios, the development of new products and
services for the Funds and Portfolios and such other information as will assist
us in tailoring the Funds and Portfolios 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 Funds and
Portfolios to assist in the organization and operation of the Funds and
Portfolios, including "seed money" for the Funds and assistance in monitoring
our activities and the services provided by Xxxxxxx and other agents of the
Funds and Portfolios. You agree to make available certain of your directors,
officers and staff to assist in the operation of the Funds and Portfolios, 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 of
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 there be made
available to us, in
accordance with AARP's policies and practices, membership lists of AARP and of
AARP's publications and access to advertising space in AARP publications.
Further, AARP and we have agreed to grant to the Partnership the right and
license to do business under the name "AARP/Xxxxxxx Financial Management
Company," and each of AARP and we have agreed to grant to the Funds a license to
use certain of our respective service marks.
2. 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. The
Monthly Member Services Fee shall be a monthly fee calculated for each calendar
day of each year in an amount equal to the sum of: 1/365 (1/366 in each leap
year) of .07 of 1% of the average daily net assets as defined below of all
Portfolios within the AARP Investment Program from Xxxxxxx, including any new
fund or portfolio which may be organized in the future, for such month; provided
that, for any calendar month during which the average of such values exceed $6
billion, the fee payable for that month based on the portion of the average of
such values in excess of $6 billion shall be 1/365 (1/366 in each leap year) of
.06 of 1% of such portion; provided that, for any calendar month during which
the average of such values exceed $16 billion, the fee payable for that month
based on the portion of the average of such values in excess of $16 billion
shall be 1/365 (1/366 in each leap year) of .05 of 1% of such portion. The value
of the average daily net assets of the Portfolios shall be determined in the
manner set forth in the respective Investment Management Agreements dated as of
September 7, 1998, between us and each Fund.
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 Portfolio of each Fund, until
August 31, 1999 and shall continue in effect thereafter with respect to each
Portfolio 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 of each
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; and (ii) the Trustees
of each Fund or, with respect to each Portfolio of such Fund, the holders of a
majority of the outstanding voting securities of such Portfolio. In the event
that the Trustees or security holders of fewer than all of the Portfolios of a
Fund, fail to approve this Agreement in the manner described in the preceding
sentence, this Agreement shall remain in effect only with respect to such
Portfolio 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 to such Fund or by vote of
holders of a majority of the outstanding voting securities of each Portfolio, as
to a Fund, or the Portfolio, as to that Portfolio, 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 as to
any Portfolio by mutual agreement, but only after authorization of such
amendment by the affirmative vote of (i) the holders of a majority of the
outstanding voting securities of such Portfolio; and (ii) the Trustees of each
Fund, including a majority of the Trustees of such Fund who are not interested
persons of such Fund, the Partnership, 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, provided, however, that nothing herein shall be construed as
being inconsistent with the Investment Company Act of 1940, as amended. As used
herein the terms "interested persons," "assignments" and
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"vote of a majority of the outstanding voting securities" shall have the
meanings set forth in the Investment Company Act of 1940, as amended.
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,
XXXXXXX XXXXXX INVESTMENTS, INC.
By: /s/Xxxxxx Xxxxxx
-----------------
Managing Director
The foregoing Agreement is
hereby accepted as of the date
first written above.
AARP FINANCIAL SERVICES CORP.
By: /s/Xxxxx Xxxxxxxx
-----------------
Title:
Accepted:
AARP CASH INVESTMENT FUNDS
By: /s/Xxxxxx X. XxXxxxxxx
----------------------
Vice President
AARP GROWTH TRUST
By: /s/Xxxxxx X. XxXxxxxxx
----------------------
Vice President
AARP INCOME TRUST
By: /s/Xxxxxx X. XxXxxxxxx
----------------------
Vice President
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AARP TAX FREE INCOME TRUST
By: /s/Xxxxxx X. XxXxxxxxx
----------------------
Vice President
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