Transfer Agency Services Agreement between DEM, Inc. and
Fund/Plan Services, Inc.
J:\WDATA\ADMIN\DEM\TRANSFER.AGR; Draft dated: November 15, 1995Page 1 of 14
TRANSFER AGENCY SERVICES AGREEMENT
This Agreement, dated as of the 30th day of November,
1995, made by and between DEM, Inc. (the "Company") a corporation
operating as a closed-end management investment company
registered under the Investment Company Act of 1940, as amended
(the "Act"), duly organized and existing under the laws of the
State of Maryland and Fund/Plan Services, Inc. ("Fund/Plan"), a
corporation duly organized and existing under the laws of the
State of Delaware (collectively, the "Parties").
WITNESSETH THAT:
WHEREAS, the Company desires to appoint Fund/Plan as
its Registrar, Transfer Agent and Dividend Disbursing Agent as
set forth in this Transfer Agency Services Agreement (the
"Agreement") and in Schedule "A" attached hereto, and to perform
certain other functions in connection with these duties; and
WHEREAS, Fund/Plan is registered with the Securities
and Exchange Commission as a Transfer Agent as required under
Section 17A(c) of the Securities Exchange Act of 1934, as
amended; and
WHEREAS, Fund/Plan is willing to serve in such capacity
and perform such functions upon the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein, the Parties hereto, intending
to be legally bound, do hereby agree as follows:
Section 1. The terms as defined in this Section
wherever used in this Agreement, or in any amendment or
supplement hereto, shall have the meanings herein specified
unless the context otherwise requires.
Share Certificates shall mean the share certificates
representing shares of stock of the Company.
Shareholders shall mean the registered owners of the
shares of the Company in accordance with the share registry
records maintained by Fund/Plan for the Company.
Shares shall mean the issued and outstanding shares of
the Company.
Signature Guarantee shall mean the guarantee of
signatures by an "eligible guarantor institution" as defined in
rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended. Eligible guarantor institutions include banks, brokers,
dealers, credit unions, national securities exchanges, registered
securities associations, clearing agencies and savings
associations. Broker-dealers guaranteeing signatures must be
members of a clearing corporation or maintain net capital of at
least $100,000. Signature guarantees will be accepted from any
eligible guarantor institution which participates in a signature
guarantee program.
Oral Instruction shall mean an authorization,
instruction, approval, item or set of data, or information of any
kind transmitted to Fund/Plan in person or by telephone,
telegram, telecopy or other mechanical or documentary means
lacking original signature, by a person or persons reasonably
identified to Fund/Plan to be a person or persons so authorized
by a resolution of the Board of Directors of the Company to give
Oral Instructions on behalf of the Company.
Written Instruction shall mean an authorization,
instruction, approval, item or set of data or information of any
kind transmitted to Fund/Plan in an original writing containing
an original signature or a copy of such document transmitted by
telecopy including transmission of such signature reasonably
identified to Fund/Plan to be the signature of a person or
persons so authorized by a resolution of the Board of Directors
of the Company to give Written Instructions to Fund/Plan.
TRANSFER AGENCY SERVICES
Section 2. The Company shall furnish to Fund/Plan
as Transfer Agent, a sufficient supply of blank Share
Certificates and from time to time will renew such supply upon
the request of Fund/Plan. Such blank Share Certificates shall be
signed manually or by facsimile signatures of officers of the
Company authorized by law or the by-laws of the Company to sign
Share Certificates and, if required, shall bear the corporate
seal or a facsimile thereof.
Section 3. Fund/Plan, as Transfer Agent, shall make
original issues of Shares in accordance with this Agreement and
with the Company's Prospectus and Statement of Additional
Information upon the written request of the Company and upon
being furnished with (i) a certified copy of a resolution or
resolutions of the Board of Directors of the Company authorizing
such issue; (ii) an opinion of counsel as to the validity of such
additional Shares; and (iii) necessary funds for the payment of
any original issue tax applicable to such additional Shares.
Section 4. Transfers of Shares shall be registered
and new Share Certificates issued by Fund/Plan upon surrender of
outstanding Share Certificates (i) in the form deemed by
Fund/Plan to be properly endorsed for transfer, (ii) with all
necessary endorsers' signatures guaranteed pursuant to Rule 17Ad-
15 under the Securities Exchange Act of 1934, as amended, and
accompanied by, (iii) such assurances as Fund/Plan shall deem
necessary or appropriate to evidence the genuineness and
effectiveness of each necessary endorsement, and (iv)
satisfactory evidence of compliance with all applicable laws
relating to the payment or collection of taxes.
Section 5. When mail is used for delivery of Share
Certificates, Fund/Plan shall forward Share Certificates in "non-
negotiable" form by first-class mail, and Share Certificates in
"negotiable" form by registered mail, all mail deliveries to be
covered while in transit to the addressee by insurance aranged
for by Fund/Plan.
Section 6. In registering transfers, Fund/Plan as
Transfer Agent, may rely upon the applicable commercial code or
any other applicable law which, in the written opinion of counsel
(a copy of which shall previously have been furnished to the
Company), protect Fund/Plan and the Company in not requiring
complete documentation, in registering transfer without inquiry
into adverse claims, in delaying registration for purposes of
such inquiry, or in refusing registration where in its judgment
an adverse claim requires such refusal.
Section 7. Fund/Plan, as Transfer Agent, may issue
new Share Certificates in place of Share Certificates represented
to have been lost, destroyed or stolen, upon receiving indemnity
satisfactory to Fund/Plan and may issue new Share Certificates in
exchange for and upon surrender of mutilated Share Certificates.
Section 8. In case any officer of the Company who
shall have signed manually or whose facsimile signature shall
have been affixed to blank Share Certificates shall die, resign
or be removed prior to the issuance of such Share Certificates,
Fund/Plan, as Transfer Agent may issue or register such Share
Certificates as the Share Certificates of the Company
notwithstanding such death, resignation or removal; and the
Company shall file promptly with Fund/Plan such approval,
adoption or ratification as may be required by law.
Section 9. Fund/Plan will maintain stock registry
records in the usual form in which it will note the issuance and
transfer of Shares and the issuance, transfer and cancellation of
Share Certificates, and is also authorized to maintain an account
entitled Unissued Certificate Account in which it will record the
Shares and fractions issued and outstanding from time to time for
which issuance of Share Certificates is deferred.
The Company is responsible to provide Fund/Plan reports
of Share purchases, redemptions, and total Shares outstanding on
the next business day after each net asset valuation. Fund/Plan
is authorized to keep records, which will be part of the stock
transfer records, in which it will note the names and registered
address of Shareholders and the number of Shares and
fractions from time to time owned by them for which no Share
Certificates are outstanding. Each Shareholder will be assigned
a single account number even though Shares for which Certificates
have been issued will be accounted for separately.
Section 10. Fund/Plan shall perform the usual duties
and functions of a Stock Transfer Agent for a corporation. It
will countersign for issuance or reissuance Share Certificates
representing original issue or reissued treasury Shares as
directed by the Written Instructions of the Company and will
transfer Share Certificates registered in the name of
Shareholders from one Shareholder to another in the usual manner.
Fund/Plan may rely conclusively and without further investigation
upon any lists, instruction, certification, authorization, Share
Certificate or other instrument or paper believed by it in good
faith to be genuine and unaltered, and to have been signed,
countersigned, or executed by duly authorized person or persons,
or upon the instructions of any officer of the Company, or upon
the advice of counsel for the Company or for Fund/Plan.
Fund/Plan may record any transfer of Share Certificates which in
good faith it reasonably believes to have been duly authorized or
may refuse to record any transfer of Share Certificates if in
good faith Fund/Plan, in its capacity as Transfer Agent,
reasonably determines such refusal necessary in order to avoid
any liability either to the Company or to Fund/Plan. Fund/Plan
shall solicit from the Company or its counsel instructions as to
the disposition of Share Certificates which Fund/Plan reasonably
determines to be questionable for transfer. The Company agrees
to indemnify and hold harmless Fund/Plan from and against any and
all losses, costs, claims, and liability which it may suffer or
incur by reason of so relying or acting or refusing to act.
Section 11. In case of any request or demand for the
inspection of the Share records of the Company, Fund/Plan as
Transfer Agent shall endeavor to notify the Company and to secure
instructions as to permitting or refusing such inspection.
Fund/Plan may, however, exhibit such records to any person in any
case where it is advised by its counsel that it may be held
liable for failure to do so.
DIVIDEND REINVESTMENT PLAN
Section 12. Upon the declaration of each dividend
and each capital gains distribution (all dividends and
distributions being herinafter referred to as "distributions") by
the Board of Directors of the Company, the Company shall notify
Fund/Plan of the date of such declaration, the amount payable per
share, the record date for determining the shareholders entitled
to payment, the payment date, and whether it is payable in cash,
common stock or otherwise.
Written instructions may be received from any
Shareholder that they wish to participate in the Plan thus
subjecting to the provisions of the Plan all of the shares of
capital stock then or thereafter registered to the identical name
and address of the Participant. For written notice that a
Participant wishes to withdraw from the Plan to be effective as
to any distribution, it must be received by Fund/Plan not less
than 10 days before the record date for such distribution.
Upon the termination of the Plan, Fund/Plan shall send
to the Shareholder or his transferee a stock certificate or
certificates for the whole shares remaining in the account, and
shall pay to the Shareholder an amount equal to the market value
of any fractional interest in the account based on the "market
price" of the Company's shares on the effective date of
termination.
On or before each payment date, the Company will
transfer, or will cause the Custodian to transfer to Fund/Plan in
its capacity as Dividend Disbursing Agent, the total amount of
the distribution currently payable. Fund/Plan shall credit the
appropriate shares to the Participants in the Plan. In cases
where the Shareholders have elected to receive distributions in
cash, Fund/Plan will mail distribution checks to the Shareholders
for the proper amounts payable to them.
The Company shall be responsible to arrange purchases
of the Company's shares at market price in accordance with the
Plan.
FEES
Section 13. The Company agrees to pay Fund/Plan
compensation for its services and to reimburse it for expenses,
as set forth in Schedule "B" attached hereto, and as shall be set
forth in any amendments to such Schedule "B" approved by the
Company and Fund/Plan. The Company authorizes Fund/Plan to debit
the Company's custody account for invoices which are rendered for
the services performed for the applicable function. The invoices
for the service will be sent to the Company after the debiting
with the indication that payment has been made.
(ii) reimbursement of any reasonable out-of-pocket
expenses paid by Fund/Plan on behalf of the Trust, which out-of-
pocket expenses will be billed to the Trust within the first ten
calendar days of the month following the month in which such out-
of-pocket expenses were incurred. The Trust agrees to reimburse
Fund/Plan for such expenses within ten calendar days of receipt
of such xxxx.
During the term of this Agreement, should the Company
seek services or functions in addition to those outlined above or
in Schedule "A" attached, a written amendment to this Agreement
specifying the additional services and corresponding compensation
shall be executed by both Fund/Plan and the Company.
GENERAL PROVISIONS
Section 14. Fund/Plan shall maintain records (which
may be part of the stock transfer records) in connection with the
issuance of Shares, and the disbursement of dividends
and dividend reinvestments, in which will be noted the
transactions effected for each Shareholder and the number of
Shares and fractional Shares owned by each for which no Share
Certificates
are outstanding. Fund/Plan agrees to make available upon request
and to preserve for the periods prescribed in Rule 31a-2 under
the Act, any records relating to services provided under this
Agreement which are required to be maintained by Rule 31a-1 under
the Act.
Section 15. In addition to the services as Transfer
Agent and Dividend Disbursing Agent as set forth above, Fund/Plan
will perform other services for the Company as agreed upon from
time to time, including but not limited to, preparation of and
mailing Federal Tax Information Forms and mailing semi-annual
reports to shareholders of the Company.
Section 16. Nothing contained in this Agreement is
intended to or shall require Fund/Plan in any capacity hereunder,
to perform any functions or duties on any holiday, day of special
observance or any other day on which the Custodian or the New
York Stock Exchange are closed. Functions or duties normally
scheduled to be performed on such days shall be performed on, and
as of, the next business day on which both the New York Stock
Exchange and the Custodian are open.
Section 17.
(a) Fund/Plan, its directors, officers, employees,
shareholders and agents shall only be liable for any error of
judgment or mistake of law or for any loss suffered by the
Company in connection with the performance of this Agreement that
result from willful misfeasance, bad faith, negligence or
reckless disregard on the part of Fund/Plan in the performance of
its obligations and duties under this Agreement.
(b) Any person, even though also a director, officer,
employee, shareholder or agent of Fund/Plan, who may be or become
an officer, trustee, employee, or agent of the Company shall be
deemed, when rendering services to such entity or acting on any
business of
the Company (other than services or business in connection with
Fund/Plan's duties hereunder), to be rendering such services to
or acting solely for the Company and not as a director, officer,
employee, shareholder or agent of, or one under the control or
direction of Fund/Plan even though that person is being paid
salary by Fund/Plan.
(c) Notwithstanding any other provision of this
Agreement, the Company shall indemnify and hold harmless
Fund/Plan, its directors, officers, employees, shareholders or
agents from and against any and all claims, demands, expenses and
liabilities (whether with or without basis in fact or law) of any
and every nature which Fund/Plan may sustain or incur or which
may be asserted against Fund/Plan by any person by reason of, or
as a result of (i) any action taken or omitted to be taken by
Fund/Plan in good faith hereunder; (ii) any action taken or
omitted to be taken by Fund/Plan in good faith in reliance upon
any certificate, instrument, order, or stock certificate or other
document reasonably believed by it to be genuine and to be
signed, countersigned or executed by any duly authorized person,
upon the Oral Instructions or Written Instructions of an
authorized person of the Company or upon the opinion of legal
counsel to the Company, or its own counsel; or (iii) any action
taken or omitted to be taken by Fund/Plan in connection with its
appointment under this Agreement, which action or omission was
taken in good faith in reliance upon any law, act, regulation or
interpretation of the same even though the same may thereafter
have been altered, changed, amended or repealed. Indemnification
under this subparagraph, however, shall not apply to actions or
omissions of Fund/Plan or its directors, officers, employees,
shareholders, or agents in cases of its or their willful
misfeasance, bad faith, negligence or reckless disregard of its
or their duties hereunder.
If a claim is made against Fund/Plan as to which
Fund/Plan may seek indemnity under this Section, Fund/Plan shall
notify the Company promptly after any written assertion of such
claim threatening to institute an action or proceeding with
respect thereto and shall notify the Company promptly of any
action commenced against Fund/Plan within ten (10) days after
Fund/Plan shall have been served with a summons or other legal
process, giving information as to the nature and basis of the
claim. Failure so to notify the Company shall not, however,
relieve
the Company from any liability which it may have on account of
the indemnity under this Section 8(d) if the Company has not been
prejudiced in any material respect by such failure.
The Company shall have the sole right to control the
defense of any action, suit or proceeding in which Fund/Plan is
involved and for which indemnity is being provided by the Company
to Fund/Plan. The Company shall have the sole right to control
the settlement of any action, suit or proceeding subject to
Fund/Plan's approval, which shall not be unreasonably withheld.
Fund/Plan shall have the right, but not the obligation, to
participate in the defense or settlement of a claim or action,
with its own counsel, but any costs or expenses incurred by
Fund/Plan in connection with, or as a result of, such
participation will be borne solely by Fund/Plan. Fund/Plan shall
have the right to participate in the defense of an action or
proceeding and to retain its own counsel, and the reasonable fees
and expenses of such counsel shall be borne by the Company (which
shall pay such fees, costs and expenses at least quarterly) if:
(i) Fund/Plan has received an opinion of counsel
stating that the use of counsel chosen by the Company to
represent Fund/Plan would present such counsel with a conflict of
interest;
(ii) the defendants in, or targets of, any such
action or proceeding include both Fund/Plan and the Company, and
legal counsel to Fund/Plan shall have reasonably concluded that
there are legal defenses available to it which are different from
or additional to those available to the Company or which may be
adverse to or inconsistent with defenses available to the Company
(in which case the Company shall not have the right to direct the
defense of such action on behalf of Fund/Plan); or
(iii) the Company shall authorize Fund/Plan to
employ separate counsel at the expense of the Company.
Notwithstanding anything to the contrary herein, it is understood
that the Company shall not, in connection with any action, suit
or proceeding or related action,
suit or proceeding, be liable under this Agreement for the fees
and expenses of more than one firm.
Section 18. Fund/Plan is authorized, upon receipt of
Written Instructions from the Company, to make payment upon
redemption of Shares without a signature guarantee. The Company
hereby agrees to indemnify and hold Fund/Plan, its successors and
assigns, harmless of and from any and all expenses, damages,
claims, suits, liabilities, actions, demands, losses whatsoever
arising out of or in connection with a payment by Fund/Plan upon
redemption of Shares pursuant to Written Instructions and without
a signature guarantee.
Section 19.
(a) The term of this Agreement shall be for a period
of two (2) years, commencing on the date which the Company's
registration statement is declared effective by the U.S.
Securities and Exchange Commission ("Effective Date") and shall
continue thereafter on a year to year term subject to termination
by either Party as set forth in (c) below.
(b) The fee schedule set forth in Schedule "B"
attached shall be fixed for two (2) years commencing on the
Effective Date of this Agreement.
(c) After the initial term of this Agreement, the
Company or Fund/Plan may give written notice to the other of the
termination of this Agreement, such termination to take effect at
the time specified in the notice, which date shall not be less
than one hundred twenty (120) days after the date of receipt of
such notice. Upon the effective termination date, the Company
shall pay to Fund/Plan such compensation as may be due as of the
date of termination and shall likewise reimburse Fund/Plan for
any out-of-pocket expenses and disbursements reasonably incurred
by Fund/Plan to such date.
(d) If a successor to any of Fund/Plan's duties or
responsibilities under this Agreement is designated by the
Company by written notice to Fund/Plan in connection with the
termination of this Agreement, Fund/Plan shall promptly, upon
such termination and at the expense of the Company, transfer all
Required Records and shall cooperate in the transfer of such
duties and responsibilities.
Section 20. The Company shall file with Fund/Plan a
certified copy of each resolution of its Board of Directors
authorizing the execution of Written Instructions or the
transmittal of Oral Instructions, as provided in Section 1 of
this Agreement.
Section 21. This Agreement may be amended from time
to time by a supplemental agreement executed by the Company and
Fund/Plan.
Section 22. Except as otherwise provided in this
Agreement, any notice or other communication required by or
permitted to be given in connection with this Agreement shall be
in writing, and shall be delivered in person or sent by first
class mail, postage prepaid, to the respective parties as
follows:
If to the Company: If to
Fund/Plan:
DEM, Inc. Fund/Plan Services, Inc.
The World Trade Center - Baltimore 0 Xxxx Xxx Xxxxxx
000 X. Xxxxx Xxxxxx, 00xx Xxxxx Xxxxxxxxxxxx, XX 00000
Xxxxxxxxx, XX 00000 Attention: Xxxxxxx X. Xxxxx, President
Attention: Xxxxxx X. Xxxxxxx, Xx.
Section 23. The Parties represent and warrant to
each other that the execution and delivery of this Agreement by
the undersigned officer of each Party has been duly and validly
authorized; and, when duly executed, this Agreement will
constitute a valid and legally binding enforceable obligation of
each Party.
Section 24. This Agreement may be executed in two or
more counterparts, each of which when so executed shall be
deemed to be an original, but such counterparts shall together
constitute but one and the same instrument.
Section 25. This Agreement shall extend to and shall
be binding upon the Parties and their respective successors and
assigns; provided, however, that this Agreement shall not be
assignable by the Company without the written consent of
Fund/Plan or by Fund/Plan without the written consent of the
Company, authorized or approved by a resolution of their
respective Boards of Directors.
Section 26. This Agreement shall be governed by the
laws of the State of Maryland and the exclusive venue of any
action arising under this Agreement shall be Xxxxxxxxxx County,
Commonwealth of Pennsylvania.
Section 27. No provision of this Agreement may be
amended or modified, in any manner except in writing, properly
authorized and executed by Fund/Plan and the Company.
Section 28. If any part, term or provision of this
Agreement is held by any court to be illegal, in conflict with
any law or otherwise invalid, the remaining portion or portions
shall be considered severable and not be affected, and the rights
and obligations of the parties shall be construed and enforced as
if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid, provided that the basic
agreement is not thereby substantially impaired.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement consisting in its entirety, of eleven typewritten
pages, together with Schedules "A" and "B" to be signed by their
duly authorized officers as of the day and year first above
written.
DEM, Inc. Fund/Plan Services, Inc.
/s/ XXXXXX X. XXXXXXX,
XX. /s/ XXXXXXX X.
By: Xxxxxx X. Xxxxxxx, Xx., XXXXX
President By: Xxxxxxx X. Xxxxx,
President
Schedule "A"
TRANSFER AGENCY STANDARD SERVICES
I. Shareholder File
1. Establish new accounts and enter demographic data
into shareholder base. Includes review and file
maintenance for all NSCC originated registrations and
data changes for FundServ, Networking and ACTS accounts
for compliance with Investar customer file
requirements.
2. Create Customer Information File (CIF) to link
accounts within the Fund and across funds within the
Fund Group. Facilitates account maintenance, lead
tracking, quality control, household mailings and
combined statements.
3. 100% quality control of new account information,
including verification of initial investment.
*4. Systematic linkage of shareholder accounts with
exact matches on SSN and address for the purpose of
consolidated account history reporting. Periodic
production of laser printed combined statements.
*5. Production of household mailing labels which
enable the Fund to do special mailings to each address
in the Fund Group rather than each account.
6. Maintain account and customer file records based
on shareholder request and routine quality review.
7. Maintain tax ID certification and NRA records for
each account, including backup withholding.
8. Provide written confirmation of address changes.
9. Produce shareholder statements for daily activity,
dividends, on-request, third party and periodic
mailings.
*10. Produce shareholder lists, labels and ad hoc
reports to Fund management as requested.
11. Automated processing of dividends and capital
gains with daily, monthly, quarterly or annual
distributions. Payment options include reinvestment,
directed payment to another fund, cash via mail, Fed
wire or ACH.
II Shareholder Services
1. Provide quality service through a staff of highly
trained NASD licensed customer service personnel,
including phone, research and correspondence
representatives.
2. Answer shareholder calls: provide routine account
information, transaction details and problem solving.
3. Silent monitoring of shareholder calls by the
phone supervisor to ensure exceptional customer
service.
4. Record and maintain tape recordings of all
shareholder calls for a six month period.
5. Phone Supervisor produces daily management reports
of shareholder calls which track volumes, length of
calls, average wait time and abandoned call rates to
ensure quality service.
6. Phone representatives are thoroughly trained
through in house training programs on the techniques of
providing exceptional customer service.
7. Customer inquiries received by letter or telephone
are thoroughly researched by a correspondence team
member. These inquires include such items as,
account/customer file information, complete historical
account information, stop payments on checks,
transaction details and lost certificates.
III. Investment Processing
1. Initial investment (checks or Fed wires).
2. Prepare and process daily bank deposit of
shareholder investments.
*3. NSCC - Fund Serv trades.
IV. Exchange & Transfer Processing
1. Process legal transfers.
2. Issue and cancel certificates.
3. Replace certificates through surety bonds
(separate charge to shareholder).
V. Retirement Plans (only if Semper Trust is engaged as
trustee)
1. Fund sponsored IRAs offered using Semper Trust
Company as trustee. Services include:
a. Contribution processing
b. Distribution processing
c. Apply rollover transactions
d. Process Transfer of Assets
e. Letters of Acceptance to prior custodians
f. Notify XXX holders of 70 1/2 requirements
g. Calculate Required Minimum Distributions
h. Maintain beneficiary information file
i. Solicit birth date information
2. Fund sponsored SEP-XXX plans offered using Semper
Trust Company as Trustee. Services include those listed
under IRAs and:
a. Identification of employer contributions
3. Fund sponsored Qualified plans offered.
a. Plan document available
b. Omnibus/master account processing only
c. Produce annual statements
d. Process contributions
e. Process distributions
f. Process rollover and Transfer of Assets
transactions
VI. Settlement & Control
1. Daily review of processed shareholder transactions
to assure input was processed correctly.
2. Preparation of daily cash movement information to
be passed to the Fund's Accounting Agent and Custodian
Bank by 10:00 am EST.
3. Prepare a daily share reconcilement which balances
the shares on the Transfer Agent system to those on the
books of the Fund.
4. Resolve any outstanding share or cash issues that
are not cleared by trade date + 2.
5. Process shareholder adjustments to include the
proper notification of any booking entries needed, as
well as any necessary cash movement.
6. Settlement and review of Fund's declared dividends
and capital gains to include the following:
a. Review record date report for accuracy
of shares.
b. Preparation of dividend settlement
report after dividend is posted. Verify the
posting date shares, the rate used and the NAV
price of reinvest date to ensure dividend was
posted properly.
c. Distribute copies to the Fund's
Accounting Agent.
d. Preparation of the checks prior to being
mailed.
e. Sending of any dividends via wires if
requested.
f. Preparation of cash movement information
for the cash portion of the dividend payout on
payable date.
7. Placement of stop payments on dividend and
liquidation checks as well as the issuance of their
replacements.
8. Maintain inventory control for stock certificates
and dividend check form.
9. Aggregate tax filings for all Fund/Plan clients.
Monthly deposits to the IRS of all taxes withheld from
shareholder disbursements, distributions and foreign
account distributions. Correspond with the IRS
concerning any of the above issues.
VII. Year End Processing
1. Maintain shareholder records in accordance with
IRS notices for under-reporting and invalid Tax IDs.
This includes initiating 31% backup withholding and
notifying shareholders of their tax status and the
corrective action which is needed.
2. Conduct annual W-9 solicitation of all uncertified
accounts. Update account tax status to reflect backup
withholding or certified status depending upon
responses.
3. Conduct periodic W-8 solicitation of all non-
resident alien shareholder accounts. Update account
tax status with updated shareholder information and
treaty rates for NRA tax.
4. Review IRS Revenue Procedures for changes in
transaction and distribution reporting and
specifications for the production of forms to ensure
compliance.
5. Coordinate year end activity with client.
Activities include producing year end statements,
scheduling record dates for year dividends and capital
gains, production of combined statements, printing of
inserts to be mailed with tax forms.
6. Distribute Dividend Letter to funds for them to
sign off on all distributions paid year to date. Dates
and rates must be authorized so that they can be used
for reporting to the IRS.
7. Coordinate the ordering of form stock and
envelopes from vendor in preparation of tax reporting.
Review against IRS requirements to ensure accuracy.
8. Prepare form flashes for the microfiche vendor.
Test and oversee the production of fiche for year end
statements and tax forms.
9. Match and settle tax reporting totals to fund
records and on-line date from Investar.
10. Produce forms 1099R, 1099B, 1099Div, 5498, 1042S
and year end valuations. Quality assure forms before
mailing to shareholders.
11. Monitor IRS deadlines and special events such as
cross over dividends and prior year XXX contributions.
12. Prepare IRS magnetic tapes and appropriate forms
for the filing of all reportable activity to the
Internal Revenue Service.
VIII. Client Services
1. An Account Manager is assigned to each
relationship. The Account Manager acts as the liaison
between the Fund and the Transfer Agency staff.
Responsibilities include scheduling of events, system
enhancement implementation, special promotion/event
implementation and follow-up, and constant fund
interaction on daily operational issues.
Specifically:
a. Scheduling of dividends, proxies, report
mailing and special mailings.
b. Coordinate with the Fund the shipment of
materials for scheduled mailings.
c. Liaison between the Fund and support
services for preparation of proofs and eventual
printing of statement forms, certificates, proxy
cards, envelopes.
d. Handle all notification regarding proxy
tabulation through the meeting. Coordinate
scheduling of materials, including voted cards,
tabulation letters, and shareholder list, to be
available for the meeting.
e. Order special reports, tapes, discs for
special systems requests received.
f. Implement new operational procedures,
e.g., check writing feature, load discounts,
minimum waivers, sweeps, telephone options, PAD
promotions.
g. Coordinate with systems, services and
operations on special events, e.g., mergers, new
fund start ups, small account liquidations,
combined statements, household mailings,
additional mail files.
h. Prepare standard operating procedures
and review prospectus for new funds and our
current client base. Coordinate implementation of
suggested changes with the Fund.
i. Liaison between the Fund and the
transfer agency staff regarding all service and
operational issues.
2. Proxy Processing (Currently one free per year)
a. Coordinate printing of cards with vendor.
b. Coordinate mailing of cards with Account
Manager and mailroom.
c. Provide daily report totals to Account
Manager for client notification.
d. Preparation of affidavit of mailing
documents.
e. Provide one shareholder list.
f. Prepare final tabulation letter.
3. Blue Sky Processing
a. Maintain file with additions, deletions,
changes and updates at the Fund's direction.
b. Provide daily and monthly reports to
enable the Fund to do necessary state filings.
Schedule "B"
Shareholder Services and Transfer Agent Fee Schedule
for
DEM, Inc.
This Fee Schedule is fixed for a period of two (2) years from the
Effective Date
as that term is defined in the Agreement.
I. Transfer Agency - Annual Fees (1/12 payable monthly)
$22.00 per account (minimum $30,000)
II. Out of Pocket Expenses:
DEM, Inc. will reimburse Fund/Plan Services monthly for all
reasonable out-of-pocket expenses, including postage,
stationery (statements), telecommunications (telephone, fax,
dedicated 800 line, on-line access), special reports,
transmissions, records retention, tapes, couriers and any
pre-approved travel expenses.
III. Other Services Not Covered By This Agreement
Activities of a non-recurring nature including but not
limited to fund consolidations, mergers, acquisitions,
reorganizations, the addition or deletion of a series, and
shareholder meetings/proxies are not included herein, and
will be quoted separately. To the extent DEM, Inc. should
decide to make an additional offering of shares, additional
fees will apply. Any enhanced services, programming
requests or reports will be quoted upon request.
