EXHIBIT (6)(c)
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Form of Operating Agreement
between Transamerica Investors, Inc.
and Xxxxxxx Xxxxxx & Co.
XXXXXXX XXXXXX
Mutual Fund Marketplace(R)
OPERATING AGREEMENT
This Agreement is made as of __________, 199__, between Xxxxxxx Xxxxxx &
Co., Inc. ("Schwab"), a California corporation, and each registered investment
company executing this Agreement ("Fund Company"), on its own behalf and on
behalf of each of the series or classes of shares, if any, listed on Schedule I,
as amended from time to time (such series or classes being referred to as the
"Fund(s)"). In the event there are no series or classes of shares listed on
Schedule I, then the term "Fund(s)" shall mean "Fund Company".
WHEREAS Fund Company wishes to have shares of the Fund(s) available for
purchase and redemption by Xxxxxx'x brokerage customers through Xxxxxx'x Mutual
Fund Marketplace ("MFMP");
WHEREAS certain policies, procedures and information are necessary to
enable the Fund(s) to participate in the MFMP; and
WHEREAS Schwab is willing to permit the Fund(s) to participate in its MFMP
pursuant to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
set forth below, the parties agree as follows:
1. Operating Procedures
--------------------
Schwab will open an omnibus account (the "Account") with each Fund
through which it will purchase and redeem shares, settle transactions, reconcile
transactions, obtain pricing, reinvest distributions and maintain records in
accordance with the Operating Procedures set forth in Exhibit A hereto. In
addition, the parties agree to transfer accounts, communicate with Fund
shareholders and perform other obligations in accordance with the Operating
Procedures.
2. Registration Requirements
-------------------------
x. Xxxxxx will only place purchase orders for shares of a Fund on
behalf of its customers whose addresses recorded on Xxxxxx'x books are in states
or other jurisdictions in which Fund Company has advised Schwab that such Fund
has registered or qualified its shares for sale under applicable law. Fund
Company shall advise Schwab immediately if any such registration or
qualification is terminated or if it wishes Schwab not to place purchase orders
for a Fund on behalf of its customers who reside in a particular state or other
jurisdiction.
x. Xxxxxx will, upon request, (i) furnish Fund Company with monthly
written statements of the number of shares of each Fund purchased on behalf of
Schwab customers resident in one or more states or other jurisdictions indicated
by Fund Company or (ii) on a daily basis, transmit to an electronic database
provider with whom Schwab has established effective systems interfaces
information regarding the number of shares of each Fund sold in each state for
retrieval by Fund Company. Fund Company shall be responsible for all reasonable
fees and other reasonable charges of such database provider in connection with
Xxxxxx'x transmission of such information to and Fund Company's retrieval of
such information from such database provider.
c. Fund Company agrees that any recission offer that is made to
shareholders who own shares directly with a Fund will also be made to Schwab
customers who would be entitled to such recission offer if they owned shares
directly with the Fund. Fund Company will provide Schwab with a letter on Fund
Company letterhead containing the terms of any such recission offer, and Schwab
may send this writing, or any derivation thereof, to the affected Schwab
customers. To assist Fund Company in effecting any such recission offer, Schwab
agrees to provide Fund Company with relevant information regarding any affected
Schwab customer, including the account number, the number of shares purchased
and redeemed, if any, the dates of the purchase(s) and redemption(s), if any,
and the dollar amount of such transactions.
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3. Compliance Responsibilities
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a. Fund Company is responsible for (i) the compliance of each
prospectus, registration statement, annual or other periodic report, proxy
statement and item of advertising or marketing material of or relating to each
Fund with all applicable laws, rules and regulations (except for advertising or
marketing material prepared by Schwab which contains an untrue statement of
material fact or an omission of a material fact necessary in order to make the
statements made, in light of the circumstances under which they were made, not
misleading and that was not published or provided to Schwab by Fund Company or
any Affiliate (defined below) or accurately derived from information published
or provided by them), (ii) the distribution and tabulation of proxies in
accordance with all applicable laws, rules and regulations (except for such
proxy related services provided by Xxxxxx'x mailing agent), (iii) the
registration or qualification of the shares of each Fund under all applicable
laws, rules and regulations, and (iv) the compliance by Fund Company and each
"affiliated person" of Fund Company as that term is defined under the Investment
Company Act of 1940, as amended ("1940 Act"), herein referred to as "Affiliate"
with all applicable laws, rules and regulations (including the 1940 Act and the
Investment Advisers Act of 1940, as amended), and the rules and regulations of
each self-regulatory organization with jurisdiction over Fund Company or
Affiliate, except to the extent that the failure to so comply by Fund Company or
any Affiliate is caused by Xxxxxx'x breach of this Agreement.
b. In the event that the Account holds more than five percent (5%)
of the outstanding Fund shares, Fund Company will be responsible for requesting
Schwab to confirm its status as shareholder of record and to confirm whether any
Schwab customer beneficially owns more than five percent (5%) of the outstanding
Fund shares through its Schwab brokerage account. For this purpose, Fund Company
shall indicate in its inquiry the number of Fund shares that equal five percent
(5%) of outstanding Fund shares. Schwab shall promptly reply to any such
inquiries.
x. Xxxxxx is responsible for Xxxxxx'x compliance with all
applicable laws, rules and regulations governing Xxxxxx'x performance under this
Agreement, except to the extent that Xxxxxx'x failure to comply with any law,
rule or regulation is caused by Fund Company's breach of this Agreement.
d. Except as set forth in this Agreement or as otherwise agreed
upon in writing by the parties, any communication, instruction or notice made
pursuant to this Agreement shall be made orally, provided that such oral
communication is on a recorded telephone line or is promptly confirmed in
writing by facsimile transmission. Schwab is entitled to rely on any
communications, instructions or notices which it reasonably believes were
provided to it by Fund Company, any Affiliate or their agents authorized to
provide such communications, instructions or notices to Schwab, and on
communications, instructions or notices provided to it by its customers. Fund
Company is entitled to rely on any communications, instructions or notices it
reasonably believes were provided to it by Schwab, or its agents authorized to
provide such communications, instructions or notices to Fund Company.
e. Except to the extent otherwise expressly provided in this
Agreement, neither party assumes any responsibility hereunder, or will be liable
to the other, for any damage, loss of data, delay or any other loss whatsoever
caused by events beyond its reasonable control.
f. Fund Company and each Fund shall indemnify and hold harmless
Schwab and each director, officer, employee and agent of Schwab from and against
any and all losses, claims, liabilities and expenses (including reasonable
attorney's fees) ("Losses") incurred by any of them arising out of (i) any
untrue statement of material fact or any omission of a material fact necessary
in order to make the statements made, in light of the circumstances under which
they were made, not misleading in any prospectus, registration statement, annual
or other periodic report or proxy statement of the Fund or in any advertising or
promotional material generated by Fund Company or any Affiliate or accurately
derived from information published or provided by Fund Company or any Affiliate,
(ii) any violation of any law, rule or regulation relating to the registration
or qualification of shares of the Fund, (iii) any breach by Fund Company of any
representation, warranty or agreement contained in this Agreement, (iv) any
willful misconduct or negligence by Fund Company or a Fund in the performance
of, or failure to perform, its obligations under this Agreement, or (v) any
action taken or omitted to be taken by Schwab pursuant to this Agreement or any
other agreement related to services under this Agreement, except to the extent
such Losses are caused by Xxxxxx'x breach of this Agreement or its willful
misconduct or negligence in the performance, or failure to perform, its
obligations under this Agreement. This Section 3(f) shall survive termination of
this Agreement.
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4. Representation and Warranties
-----------------------------
a. Fund Company represents and warrants to Schwab that each Fund is
in compliance with the conditions and qualifications set forth in the Rules of
Fair Practice of the National Association of Securities Dealers, Inc. ("NASD"),
Article III, Section 26, as amended from time to time ("Section 26"), which
enable an NASD member to offer or sell shares in the Fund. Fund Company
represents and warrants that each Fund marked with an asterisk on Schedule I is
a "no load" or "no sales charge" Fund as defined in Section 26. If a Fund, for
any reason, fails to satisfy the terms and conditions of Section 26, Fund
Company will notify Schwab immediately of the Fund's disqualification and the
reason therefor.
x. Xxxxxx represents and warrants that Schwab is a member of the
NASD.
5. Use of Parties' Names
---------------------
a. Without Xxxxxx'x prior written consent, Fund Company will not
cause or permit the use, description, or reference to Schwab, or to the
relationship contemplated by this Agreement in any advertisement or promotional
materials or activities.
b. Fund Company authorizes Schwab to use the names or other
identifying marks of, and certain information about, Fund Company and Fund in
connection with the operation of the MFMP. Fund Company may withdraw this
authorization as to any particular use of any such name or identifying marks at
any time (i) upon Fund Company's reasonable determination that such use would
have a material adverse effect on the reputation or marketing efforts of Fund
Company or such Fund, or (ii) if any of the Funds cease to be available through
the MFMP; provided, however, that Schwab may, in its discretion, continue to use
materials prepared or printed prior to the withdrawal of such authorization or
in the process of being prepared or printed at the time of such withdrawal.
6. Proprietary Information
-----------------------
Each party hereto acknowledges that the identities of the other
party's customers, information maintained by such other party regarding those
customers, and all computer programs and procedures developed by such other
party or such other party's Affiliates or agents in connection with such other
party's performance of its duties hereunder constitute the valuable property of
such other party. Each party agrees that should it come into possession of any
list or compilation of the identities of or other information about the other
party's customers, or any other property of such party, pursuant to this
Agreement or any other agreement related to services under this Agreement, the
party who acquired such information or property shall use its best efforts to
hold such information or property in confidence and refrain from using,
disclosing, or distributing any of such information or other property, except
(i) with the other party's prior written consent, or (ii) as required by law or
judicial process. Each party acknowledges that any breach of the foregoing
agreements as to another party would result in immediate and irreparable harm to
such other party for which there would be no adequate remedy at law and agrees
that in the event of such a breach such other party will be entitled to
equitable relief by way of temporary and permanent injunctions, as well as such
other relief as any court of competent jurisdiction deems appropriate.
7. Assignability
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This Agreement is not assignable by either party without the other
party's prior written consent, and any attempted assignment in contravention
hereof shall be null and void; provided, however, that Schwab may, without the
consent of Fund Company, assign its rights and obligations under this Agreement
to any Affiliate.
8. Exhibits and Schedules
----------------------
All Exhibits and Schedules to this Agreement, as they may be amended
from time to time, are by this reference incorporated into and made a part of
this Agreement.
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9. Amendment
---------
This Agreement may be amended only by a writing executed by each
party hereto that is to be bound by such amendment, except as provided in this
Section 9. Exhibit A may be amended by Schwab on forty (40) days' written notice
to Fund Company or such earlier time as shall be agreed to by the parties.
Exhibits B and C shall be amended by Fund Company in the event of any change to
the information contained therein.
10. Governing Law
-------------
This Agreement will be governed by and interpreted under the laws of
the State of California, as applied to contracts entered into and to be
performed entirely within the state.
11. Counterparts
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This Agreement may be executed in one or more counterparts, each of
which will be deemed an original, but all of which together shall constitute one
and the same instrument.
12. Effectiveness and Termination
-----------------------------
a. The effective date of this Agreement as to any Fund is the later
of the date set forth opposite the name of the Fund on Schedule I or the date
Schedule I is accepted by Schwab
b. This Agreement may be terminated as to any Fund by Schwab
immediately upon written notice to Fund Company. This Agreement may be
terminated as to any Fund by Fund Company upon thirty (30) days' written notice
to Schwab.
c. Upon the termination date for any Fund, Schwab will no longer
make the Fund shares available for purchase by Xxxxxx'x customers through the
MFMP. Schwab reserves the right to transfer the Fund shares of its customers out
of the Account. If Schwab continues to hold the Fund shares on behalf of its
customers in the Account, the parties agree to be obligated under, and act in
accordance with, the terms and conditions of this Agreement with respect to such
shares.
IN WITNESS WHEREOF, this Agreement has been executed by a duly authorized
representative of the parties hereto.
Xxxxxxx Xxxxxx & Co., Inc. ___________________________
[Fund Company]
on its own behalf and on behalf of each
of its Funds listed on Schedule I
hereto as amended from time to time.
By: ____________________ By: ____________________________
Xxxxxxx Xxxxxx
Senior Vice President/Mutual Funds
Operations Administration Name: __________________________
Title: _________________________
Date: _________________________ Date: __________________________
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SCHEDULE I
TO THE OPERATING AGREEMENT
Funds Effective Date
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* Indicates that Fund is a "no load" or "no sales charge" Fund as defined in
Section 26 of the NASD's Rules of Fair Practice.
_____________________________________
Name of Fund Company
By: _________________________________
Name: _______________________________
Title: ______________________________
Date: _______________________________
Accepted by Xxxxxxx Xxxxxx & Co. Inc.
By: _________________________________
Xxxxxxx Xxxxxx
Senior Vice President/ Mutual Funds
Operations Administration
Date: _______________________________
-5- 6/14/95
EXHIBIT A
Operating Procedures
1. The Account
-----------
x. Xxxxxx will open an omnibus account with each Fund. The Account
shall be registered:
Xxxxxxx Xxxxxx & Co., Inc.
Special Custody Account for the Exclusive Benefit of Customers
Attention: Mutual Funds
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
The Account will be set up for the reinvestment of capital gains and dividend
distributions.
b. The Fund shall designate the Account with account numbers.
Account numbers will be the means of identification when the parties are
transacting in the Account.
c. The parties acknowledge that the Account in an omnibus account
in Xxxxxx'x name with shares held by any number of beneficial owners. Schwab
represents that the shares in the Account are customer securities and are
segregated from Xxxxxx'x own assets. Fund Company represents that the shares in
the Account are carried free of any charge, lien or payment of any kind in favor
of the Fund or any person claiming through the Fund.
d. The Account shall be kept open on the Fund's books regardless of
a lack of activity or small position size, except to the extent that Schwab
takes specific action to close the Account, or to the extent the Fund's
prospectus reserves the right to close accounts that are inactive. In the latter
case, Fund Company will give prior notice to Schwab before closing any Account.
x. Xxxxxx has the right to open additional accounts from time to
time to accommodate other investment options and features, and to consolidate
existing accounts if and when appropriate to meet the needs of the MFMP. In the
event that it is necessary for Schwab to open an account with a Fund for the
payment of distributions in cash, the term "Account" shall mean both the account
for the reinvestment of capital gains and dividend distributions and the account
for the payment of distributions in cash.
x. Xxxxxx reserves the right to issue instructions to each Fund to
move shares between the Account and any other account Schwab may open.
2. Purchase and Redemption Orders
------------------------------
For each day on which any Schwab customer places with Schwab a
purchase or redemption order for shares of a Fund, Schwab shall aggregate all
such purchase orders and aggregate all such redemption orders and communicate to
the Fund an aggregate purchase order and an aggregate redemption order. Schwab
will accept orders to purchase and redeem Fund shares from its customers no
later than 1:00 P.M. Pacific Time (market close). Schwab will communicate the
order to the Fund prior to a mutually agreed upon time.
3. Settlement of Transactions
--------------------------
x. Xxxxxx will transmit the purchase price of the aggregate
purchase order to the Fund by wire transfer on the next business day after the
trade date. For purposes of this Agreement, a "business day" is any day the New
York Stock Exchange is open for trading.
b. For each business day on which Schwab places a redemption order
for a Fund within the time designated by the Fund, Fund Company will cause the
Fund(s) to send to Schwab the aggregate proceeds of all redemption orders for
the Fund(s) placed by Schwab on that day. Such redemption proceeds
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will be sent by wire transfer on the next business day following the trade date
for the redemption orders; provided that Fund Company may, in its discretion,
send such proceeds by check if the aggregate amount is less than $250. Wire
transfers of redemption proceeds shall be separate from wire transfers for other
purposes.
c. Each wire transfer of redemption proceeds shall indicate, on the
Fed Funds wire system, the amount thereof attributable to each Fund; provided,
however, that if the number of entries would be too great to be transmitted
through the Fed Funds wire system, Fund Company shall, on the day the wire is
sent, notify Schwab of such entries. The cost of the wire transfer is the
responsibility of the party sending the wire. The interest cost associated with
any delayed wire is the responsibility of the party sending the wire.
d. Should a Fund need to extend settlement on a trade, Fund Company
must contact Schwab on trade date to discuss the extension. For purposes of
determining the length of settlement, Fund Company agrees to treat shareholders
that hold Fund shares through the Account the same as it treats shareholders
that hold Fund shares directly with the Fund.
e. In the event that a Fund cannot verify redemption proceeds, Fund
Company will settle trades and forward redemption proceeds in accordance with
this Agreement based on the information provided by Schwab. Schwab will be
responsible for the accuracy of all trade information provided by it.
f. If a trade is settled in error, Fund Company shall notify Schwab
orally and confirm in writing the name of the Fund, the Account number and the
date and amount of the error. If the error results in an overpayment to Schwab,
it shall be corrected by debiting the Account. If the error results in an
underpayment to Schwab, it shall be corrected by crediting the Account.
g. Fund Company represents that each Fund that has reserved the
right to redeem in kind has filed Form N-18F-1 with the Securities and Exchange
Commission. For purposes of complying with the Fund's election on Form N-18F-1,
Fund Company agrees that it will treat as a "shareholder" each shareholder that
holds Fund shares through the Account, provided that Schwab provides to Fund
Company, upon request, the name or account number, number of Fund shares and
other relevant information for each such shareholder. Fund Company acknowledges
that treatment of Schwab as the sole shareholder of Fund shares held in the
Account for purposes of applying the limits in Rule 18f-1 under the 1940 Act
would be inconsistent with the intent of Rule 18f-1 and the Fund's election on
Form N-18F-1 and could unfairly prejudice shareholders that hold Fund shares
through the Account.
4. Account Reconciliation Requirements
-----------------------------------
x. Xxxxxx shall verify, on a next day basis, orders placed for the
Account with each Fund. All activity in the Account must be reflected. Therefore
any "as of" activity must be shown with its corresponding "as of" dates.
b. The parties agree to notify each other and correct any error in
the Account with any Fund upon discovery. Fund Company agrees to make best
efforts to avoid any errors, made by Fund Company, any Fund or agents of Fund
Company or the Fund and not corrected on a next day basis, from hindering any
routine daily requests such as transactions, transfer, dividends, etc. Fund
Company agrees to promptly notify Schwab of any adjustments to an Account with
any Fund initiated by Fund Company, any Fund, or any agent of either.
x. Xxxxxx must receive statements on or before the eighth business
day of each month, even if there has been no activity in the Account during the
period, unless Schwab can verify transactions by direct or indirect systems
access.
5. Pricing
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Every business day on which there is a transaction in the Account and
for each month-end business day, Fund Company will provide to Schwab prior to
7:00 p.m., Eastern Time, each Fund's closing net asset value and public offering
price (if applicable) for that day and/or notification of no price for that day.
Fund Company shall provide such information on a best efforts basis taking into
consideration any extraordinary circumstances arising at the Fund (e.g. natural
disasters, etc.).
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6. Distributions
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a. Fund Company shall provide distribution information to Schwab in
a timely manner to enable Schwab to pay distributions to its customers on or as
close to payable date as practicable. As to each Fund, Fund Company or such Fund
shall provide Schwab with (i) the record date, ex-dividend date, and payable
date with respect to a Fund as soon as practicable after it is announced, but no
later than three (3) business days prior to record date, (ii) the record date
share balance in the Account and the distribution rate per share on the first
business day after record date, and (iii) the reinvest price per share as soon
as it is available. Other distribution information contained in, and in the same
format as, Xxxxxx'x Dividend Information Sheet (provided separately) shall be
provided on such dates as are agreed upon between Schwab and Fund Company, but
no later than payable date.
b. As to each Fund, Schwab shall hold the information as to the
amount of the pending distribution in strictest confidence, and shall use such
information only for the purpose of computing the amounts of cash distributions
to be paid to Schwab customers until Fund or Fund Company shall have made such
information generally available to the public. Schwab will maintain and enforce
rules and policies designed to protect against unauthorized access to, or use
of, the information during such period by anyone other than Schwab employees who
have a need to know the information for this purpose.
c. Prior to 10:00 a.m., Eastern Time on the next business day
following receipt of the reinvest price per share as provided in paragraph
6(a)(iii) above, Schwab shall notify Fund Company of the aggregate number of
Fund shares with respect to which the purchase is required to be rescinded in
order to pay the distribution in cash to Schwab customers who have elected to
receive their capital gain distributions and/or dividends in cash. Fund Company
agrees that the purchase of such aggregate number of Fund shares may be
rescinded. Fund Company or such Fund shall wire the proceeds of such rescission
from the Fund to the Account on the same business day.
d. For each Fund that pays daily dividends, Fund Company shall
provide on a daily basis, the following record date information: daily rate,
account share balance, account accrual dividend amount (for that day), account
accrual dividend amount (for period to date), and account transfers and period-
to-date accrual amounts.
e. In the event that Schwab maintains an Account with a Fund for
the payment of distributions in cash, Fund Company shall wire, on payable date,
any cash distribution from the Fund to the Account.
f. Each Fund shall accrue dividends, commencing on the settlement
date for the purchase of Fund shares and terminating on the trade date for the
redemption of Fund shares.
g. For annual tax reporting purposes, Fund Company shall inform
Schwab of the portion of each Fund's distributions that include any of the
following: foreign source income, tax exempt income by state of origin or return
of capital.
x. Xxxxxx shall prepare and file with the appropriate governmental
agencies, such information, returns and reports as are required to be so filed
for reporting (i) dividends and other distributions made, (ii) amounts withheld
on dividends and other distributions and payments under applicable federal and
state laws, rules and regulations and (iii) gross proceeds of sales transactions
as required.
i. Upon notice from Fund Company, Schwab shall effect mergers,
splits and other reorganization activities of a Fund for its customers.
7. Price and Distribution Rate Errors
----------------------------------
a. In the event adjustments are required to correct any error in
the computation of the net asset value or public offering price of a Fund's
shares or in the distribution rate for a Fund's shares. Fund Company shall
notify Schwab as soon as possible after discovering the need for such
adjustments. Notification can be made orally, but must be confirmed in writing.
The letter shall be written on Fund Company letterhead and must state for each
day on which an error occurred the incorrect price or rate, the correct price or
rate, and the reason for the price or rate change. Fund Company agrees that
Schwab may
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send this writing, or derivation thereof, to Xxxxxx'x customers whose accounts
are affected by the price of rate change.
b. If Xxxxxx'x customers have received amounts in excess of the
amounts to which they are entitled, Schwab will, when requested by Fund Company,
and to the extent practicable and permitted by law, debit its customers
brokerage accounts in the amount of such excess and repay it to the Fund. In no
event, however, shall Schwab be liable to Fund Company or the Fund for any such
amounts.
c. If adjustment is necessary to correct an error which has caused
Xxxxxx'x customers to receive amounts less than the amounts to which they are
entitled, the Fund shall make all necessary adjustments to the number of shares
owned in the Account and distribute to Schwab any and all amounts of the
underpayment. Schwab will credit the appropriate amount of such payment to each
Schwab customer.
d. For purposes of making adjustments, including the collection of
overpayments, Fund Company agrees to treat shareholders that hold Fund shares
through the Account the same as it treats shareholders that hold Fund shares
directly with the Fund. When making adjustments for an error, a Fund shall not
net same day transactions in the Account. Schwab and Fund Company shall agree
promptly and in good faith to a resolution of the error, and no adjustment for
the error shall be taken in the account until such agreement is reached.
8. Record Maintenance
------------------
x. Xxxxxx shall maintain records for each of its customers who
holds Fund shares through the Account, which records shall include:
i. Number of shares;
ii. Date, price and amount of purchases and redemptions (including
dividend reinvestments) and date and amounts of dividends paid for at least the
current year to date;
iii. Name and address of each of its customers, including zip codes
and social security numbers or taxpayer identification numbers;
iv. Records of distributions and dividend payments;
v. Any transfers of shares; and
vi. Overall control records.
x. Xxxxxx will be responsible for accurately posting transactions
in Fund shares to its customers' brokerage accounts.
9. Transfer of Accounts
--------------------
a. Fund Company agrees to transfer shares between accounts for
Schwab customers or other street name brokers held directly with a Fund and the
Account on the Fund's records. For the purpose of expediting direct transfers
from accounts for Schwab customers, Fund Company will accept by facsimile
transmission a summary sheet of information indicating the customers' names,
account numbers, the Fund affected and the number of shares to be re-registered.
For record keeping purposes, actual copies of transfer forms will be forwarded
to a Fund upon its request for such forms.
x. Xxxxxx represents and warrants that for each transfer indicated
in the summary sheet of information, it holds each underlying instruction for
re-registration signed by its customer, and that its customer's signature on
such instruction is signature guaranteed by Schwab pursuant to the New York
Stock Exchange's Medallion Signature Program.
x. Xxxxxx agrees to indemnify and hold harmless Fund Company, the
Fund and each director, officer, employee and agent of Fund Company
("indemnified person") from and against any and all Losses incurred by any of
them arising out of the impropriety of any transfer effected by the Fund in
reliance on the summary sheet of information, except to the extent such Losses
arise out of the failure of any indemnified person to comply with the
instructions on the summary sheet of information.
d. Fund Company shall process all transfer requests into the
appropriate Account. Schwab as custodian is qualified to accept in the Accounts
shares from Fund XXX, Xxxxx or 401(k) accounts. At no time shall any Fund
establish separate accounts registered to Schwab for the benefit of individual
shareholders. In the event any such account is mistakenly opened, Schwab
reserves the right to instruct such Fund to move Fund shares to the Account.
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e. Fund Company must confirm to Schwab the completion of each
transfer on the day it occurs. The confirming information shall include the
number of shares, date ("as of" date if unavoidable delay), transaction date,
account number of the customer and the Account, registration, accrued dividends
and account type (i.e., XXX, Xxxxx, 401(k), etc.).
f. Transfer processing after record date but prior to payable date
will include all accrued dividends. Each Fund is responsible for monitoring all
completed full transfers for "trailing" dividends. Should a "trailing" dividend
appear in an account, a Fund shall send such dividend to Schwab within five (5)
business days, along with a specific written notification thereof. Notification
shall include details of the dividend and customer, including the customer's
social security number or taxpayer identification number, and/or the account
number for the Account to which the transfer was made.
g. If Schwab customers submit share certificates for transfer into
their Schwab brokerage accounts, Schwab will send such certificates, properly
endorsed to the applicable Fund, for transfer into the Account with such Fund.
Upon Xxxxxx'x request, Fund Company agrees to provide the status of said
certificates and book share balances.
10. Shareholder Communication
-------------------------
a. Fund Company shall arrange with a mailing agent designated by
Schwab for the distribution of the materials listed below to all of Xxxxxx'x
customers who hold Fund shares, which distribution shall be so arranged by Fund
Company as to occur immediately upon the effective date of the materials:
i. All proxy or information statements prepared for circulation to
shareholders of record of such Fund;
ii. Annual reports;
iii. Semi-annual reports;
iv. Quarterly reports (if applicable); and
v. All updated prospectuses, supplements and amendments thereto.
Fund Company shall be responsible for providing the materials and for the
mailing agent's fees in connection with this service as well as for timely
distribution. Fund Company agrees to have the mailing agent consolidate mailings
of material to shareholders of more than one Fund if the mailing is identical
for all Funds in the Fund Company family.
b. In addition to the materials listed above, Fund Company agrees
to provide directly to Schwab all prospectuses, statements of additional
information and supplements and amendments thereto, and annual and other
periodic reports for each Fund in amounts reasonably requested by Schwab for
distribution to its customers. Fund Company is obligated to supply these
materials to Schwab in a timely manner so as to allow Schwab, at its expense, to
send current prospectuses and statements of additional information and periodic
reports, immediately upon their effective dates, to customers and prospective
customers requesting them through Schwab. Schwab will also send a current Fund
prospectus with purchase trade confirmations for the initial purchase of a Fund.
Fund Company shall notify Schwab immediately of any change to a Fund's
prospectus.
c. Fund Company shall ensure that the foregoing materials shall be
in compliance with all applicable provisions of the Securities Act of 1933, as
amended, the Securities Exchange Act of 1934, as amended, the Shareholder
Communications Improvement Act of 1990, all applicable rules and regulations
under any of such statutes, and any and all laws, rules and regulations that may
be adopted and become applicable in the future.
d. Fund Company shall ensure that the prospectus of each of its
Funds discloses (i) that a broker may charge transaction fees on the purchase
and/or sale of Fund shares, (ii) that duplicate mailings of Fund material to
shareholders who reside at the same address may be eliminated, (iii) that the
performance of the Fund may be compared in publications to the performance of
various indices and investments for which reliable performance data is
available, (iv) that the performance of the Fund may be compared in publications
to averages, performance rankings, or other information prepared by recognized
mutual fund statistical services, and (v) that the annual report contains
additional performance information and will be made available to investors upon
request and without charge.
A-5
x. Xxxxxx shall mail statements to its customers on a monthly basis
(or as to accounts in which there has been no activity in a particular month, no
less frequently than quarterly) showing, among other things, the number of
shares of each Fund owned by such customer and the net asset value of each such
Fund as of a recent date.
x. Xxxxxx shall respond to customer inquiries regarding, among
other things, share prices, account balances, dividend amounts and dividend
payment dates. With respect to Fund shares purchased by customers after the
effective date of this Agreement, Schwab shall provide average cost basis
reporting to assist customers in the preparation of income tax returns.
11. New Processing Systems
----------------------
Fund Company agrees to cooperate to the extent possible with Schwab
as Schwab develops and seeks to implement new processing systems for the MFMP.
A-6 6/14/95
XXXXXXX XXXXXX
Mutual Fund Marketplace(R)
EXHIBIT B
Fund Information
This exhibit must be completed for each Fund participating in Xxxxxx'x Mutual
Fund Marketplace.
A. General Information
1. a. Name of Fund Company ___________________________________________
b. Name of Fund ___________________________________________________
c. Name of family of funds (if applicable) ________________________
d. Date Fund was established ______________________________________
2. The investment objective of the Fund is: (circle one)
Note: if there is a difference, objective in parentheses indicates
objective that will appear in Mutual Funds Performance Guide.
EQUITY FUNDS
a. Aggressive Growth
b. Equity Income
c. Global (International/Global Equity)
d. Growth
e. Growth & Income
f. Index (Note: circle an additional objective. Fund will appear
under both "Index" and the circled objective in the Mutual Funds
Performance Guide.
g. International (International/Global Equity)
h. Specialty Financial (Specialized)
i. Specialty Health (Specialized)
j. Specialty Natural Resources (Specialized)
k. Specialty Precious Metals (Precious Metals/Gold)
l. Specialty Technology (Specialized)
m. Specialty Utility (Specialized)
n. Specialty (Unaligned) (Specialized)
o. Small Company (Aggressive Growth)
If you circled one of the categories above, your investment
philosophy is based on: (circle one)
a. Value
b. Growth
HYBRID FUNDS
a. Balanced
b. Asset Allocation (Flexible Portfolio)
B-1
TAXABLE BOND FUNDS
a. General Corporate Bond-Short/Intermediate Term
b. General Corporate Bond-Long Term
c. High Quality Corporate Bond-Short/Intermediate Term
d. High Quality Corporate Bond-Long Term
e. High Yield Corporate Bond
f. General Government Bond-Short/Intermediate Term
g. General Government Bond-Long Term
h. Mortgage-Backed Government Bond-GNMA/ARM
i. U.S. Treasury Bond-Short/Intermediate Term
j. U.S. Treasury Bond-Long/Term
k. International/Global Bond
MUNICIPAL BOND FUNDS
a. Municipal Bond-Short/Intermediate Term
b. Municipal Bond-Long Term
c. High Yield Municipal Bond
d. Insured Municipal Bond (Long or Short Muni Bond)
e. California State Municipal Bond
f. New York State Municipal Bond
g. State Municipal Bond (General State Muni)
Please describe the fund's investment orientation in 125 characters or less.
This information will be used in the Xxxxxxx Xxxxxx Mutual Funds Performance
Guide and the internal mutual fund screens accessed by our registered
representatives.
________________________________________________________________________________
________________________________________________________________________________
3. Omnibus Account Number(s)____________________________________________
4. Cusip Number ________________________________________________________
5. NASDAQ Quote Symbol _________________________________________________
6. Does the Fund provide daily quotations to quotation vendors? (yes
or no) _____
7. Is Fund price listed in the Wall Street Journal? (yes or no) _____
8. Assets in Fund ($) ______________ (as of date) ___________
9. Number of Shareholders ___________ (as of date)___________
10. What are the Fund's minimum investment requirements for order
placement?
a. Initial Investment ($) _________________________________________
b. Subsequent Investment ($) ______________________________________
B-2
c. If the Fund has a lower minimum investment for Qualified
RetirementPlans and that minimum would apply to retirement
accounts held by a Schwab customer (not fund prototype plans),
what is the minimum qualified plan investment for order
placement?
i. Initial XXX Investment ($) ________________
ii. Subsequent XXX Investment ($) _____________
iii. Initial Xxxxx Investment ($) ______________
iv. Subsequent Xxxxx Investment ($) ___________
v. Initial 401(k), 403(b) ($) ________________
vi. Subsequent 401(k), 403(b) ($) _____________
vii. Custodial account minimum ($) _____________
11. Does the Fund impose any load or other charges that result in
different prices for purchases and redemptions? (yes or no) _____
If yes, please indicate the type and amount of charges incurred when
purchasing or redeeming shares.
a. Front-end load (yes or no) _____ If yes, _____ %
b. Back-end load (yes or no) _____ If yes, _____ %
c. Is back-end load a contingent deferred load? (yes or no) _____
If yes, please explain_______________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
d. Redemption fee (yes or no) _____ If yes, _____ %
e. Is redemption fee based on age? (yes or no) _____
If yes, please explain__________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
f. 12b-1 fee (yes or no) _____ If yes, _____ %
If yes, what is the criteria for broker-dealers to assess the
Fund for their prorated portion of 12b-1 fees for their own
marketing and distribution expenses? ___________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
12. If the Fund charges loads, are there any privileged accounts (such as
accounts managed by an investment advisor or accounts for employee
trusts, pension, profit-sharing, or other employee benefit plans that
qualify under Sections 401, 403(b)(7), or 457 of the Internal Revenue
Code) that are not subject to a sales charge? (yes or no) _____
If yes, please list those accounts, their requirements and their
special privileges
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
B-3
13. Schwab places its usual customer purchase orders in dollars at the
Fund. On an exception basis, it is necessary to place orders in
shares to reconcile share differences. Does the fund allow purchase
orders in shares? (yes or no) _____
Does the Fund allow redemption orders in dollars? (yes or no) _____
14. Does the Fund and/or the transfer agent charge any special fees in
connection with any transaction? (yes or no) _____
If yes, please explain ______________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
15. a. Does the Fund allow telephone purchases? (yes or no) _____
b. Does the Fund allow telephone redemptions? (yes or no) _____
c. Will Schwab be allowed to place telephone orders for purchases
and redemptions? (yes or no) _____
d. Are there limits on the number of redemptions or round trips
among funds in fund family? (yes or no) _____
e. If answer to 14(d) is yes, will those limits be varied for
Schwab customers? (yes or no) _____
16. Does the Fund offer any exchange transaction privileges? (yes or no)
_____
If yes, is there a fee charged for this transaction? (yes or no) ____
If yes, please explain ______________________________________________
_____________________________________________________________________
_____________________________________________________________________
17. Does the Fund reserve the right to redeem in kind? (yes or no) _____
If no, please skip to #18. If yes, please answer the following:
a. Where can the language in the prospectus disclosing the
reservation of the right to redeem in kind be located? (page
number) _____
b. Has the Fund filed an election on Form N-18F-1 with the SEC
limiting its right to redeem in kind? (yes or no) _____
18. Is the Fund registered for sale in all 50 states? (yes or no) _____
If no, please list those states in which the Fund is not registered
_____________________________________________________________________
_____________________________________________________________________
Is the Fund registered for sale in Puerto Rico? (yes or no) ____
Has the fund authorized the sale of its shares in the Virgin Islands?
yes or no) _____ If yes, please list and explain any restriction on
such sale.
_____________________________________________________________________
_____________________________________________________________________
Is the Fund registered in any other U.S. territory? (yes or no) _____
If yes, please list those territories
_____________________________________________________________________
B-4
19. Is the Fund registered for sale in any foreign country? (yes or no)
_____
If yes, please list _________________________________________________
Are there restrictions on such sales? (yes or no) ______
If yes, please explain_______________________________________________
_____________________________________________________________________
_____________________________________________________________________
THE FUND AGREES TO NOTIFY IMMEDIATELY SCHWAB OF ANY CHANGES TO THE
ABOVE REGISTRATION INFORMATION.
20. What is the date of the current Fund prospectus?
_____________________________________________________________________
21. Does the Fund prospectus contain the disclosure that a broker may
charge a transaction fee if shares are purchased and/or redeemed
through a broker? (yes or no) _____ On what page number is the
disclosure mentioned? _____
22. At what intervals are new Fund prospectuses issued and available?
_____________________________________________________________________
23. Does the Fund currently have a supplement or sticker? (yes or no)
____
If yes, please explain_______________________________________________
_____________________________________________________________________
_____________________________________________________________________
24. What is the lead time on shipping prospectuses after the order has
been received?
_____________________________________________________________________
25. What method of shipment does the Fund normally use to ship its
prospectuses? (UPS, Federal Express, etc.) __________________________
_____________________________________________________________________
26. What is the Fund's policy on maximum/minimum order size for
literature? _____ (minimum) _____ (maximum)
B. Distribution Information
Questions B1-7 should be completed for all funds.
1. How many decimal places is the dividend rate? ________________
2. At what interval and in which month(s) does the fund pay dividends
(i.e., monthly, quarterly, semi-annually, annually, etc.)?
_____________________________________________________________________
_____________________________________________________________________
B-5
a. Are distributions declared and paid on a regular schedule? (yes
or no) _____
If so, what is the schedule or rule used to determine future
payments?
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
b. On what date are reinvested dividend shares posted to accounts?
(ex-date, payable date, other?)
_____________________________________________________________________
_____________________________________________________________________
3. Does the Fund pay its capital gain in December? (yes or no) _____ if
no, in what month is it paid?
4. Are distributions reinvested at the net asset value or public
offering price?
_____________________________________________________________________
5. At what day's price is dividend reinvestment calculated (ex-date,
payable date, other?)?
_____________________________________________________________________
a. What time of day is the reinvestment price available?___________
C Daily Dividend Fund Information
Questions C1-13 are for daily dividend funds only.
1. Distribution Accrual Period: For each dividend accrual period,
dividends are accrued beginning on the _____ day of the _____
(month/quarter) and ending on the _____ day of the _____
(month/quarter).
2. Distribution Payable Date: On what day of the month are dividends
payable?
_____________________________________________________________________
3. Daily Rate: To what number of decimal places is the daily dividend
rate calculated: _________
4. Does the Fund compound daily? _____ At what time of day are the daily
dividend rates available? ___________________________________________
5. Purchases begin accuring dividends on which days? (trade date plus
one calendar day, trade date plus one business day, settlement day,
settlement day plus one, other)
_____________________________________________________________________
6. Redemptions accrue dividends up to and including which date? (trade
date minus one calendar day, trade date minus one business day, trade
date, settlement date)
_____________________________________________________________________
7. Does the Fund process weekend cumulative rates on Friday or Monday?
_____________________________________________________________________
B-6
8. Does the Fund split its weekend rate (Friday/Saturday,
Sunday/Monday)?
_____________________________________________________________________
9. If the accrual period ends on a weekend or holiday, how does this
affect the Fund's accrual period?
_____________________________________________________________________
_____________________________________________________________________
10. At what day's price is dividend reinvestment calculated (payable,
other)?
_____________________________________________________________________
11. On which day of the Fund's accrual period do reinvested dividends and
capital gains begin accruing interest? (payable, payable date plus
one calendar day, payable date plus one business day)
_____________________________________________________________________
12. On a transfer of shares from an individual account to Xxxxxx'x
omnibus account, does the accrual: (check appropriate item)
a. _____ Follow the transferred shares
b. _____ Remain with the direct customer account as an accrual and
reinvested at the next payable date
c. _____ Remain at the customer account as an accrual to be paid in
cash at the next payable date
d. _____ Other (please explain)
B-7
Fund Company acknowledges and understands that Schwab will rely on
the information provided herein. Fund Company represents and warrants that the
information set forth in the foregoing Exhibit B is true, correct and complete
as of the date set forth beneath the signature below. Schwab will use this
information in determining whether to make the above Fund available to customers
through the MFMP. Fund Company agrees to notify Schwab immediately of any
changes to the foregoing information.
________________________________________
(Name of Fund Company)
On behalf of
________________________________________
(Name of Fund)
By: ____________________________________
Name: __________________________________
Title: _________________________________
Date: __________________________________
B-8
