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EXHIBIT A.(1)
AIM SUMMIT INVESTORS PLANS II
CUSTODIAN AGREEMENT
between
A I M DISTRIBUTORS, INC.
and
STATE STREET BANK AND TRUST COMPANY
APRIL 29, 1999
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TABLE OF CONTENTS
AIM SUMMIT INVESTORS PLANS II
CUSTODIAN AGREEMENT
Page No.
I. THE PLAN AND CUSTODIANSHIP
A. THE PLAN................................................................................... -1-
1. Nature of the Plan................................................................ -1-
2. Changes in the Plan............................................................... -2-
B. CUSTODIANSHIP.............................................................................. -2-
1. Appointment....................................................................... -2-
2. Qualification..................................................................... -2-
3. Custodianship..................................................................... -2-
4. Termination of Custodianship...................................................... -3-
a. By Sponsor (Existing Plans and/or New Plans)............................. -3-
b. By Custodian (Existing Plans and New Plans).............................. -3-
c. Records.................................................................. -4-
II. CUSTODIAN'S FUNCTIONS
A. PROCESSING OF PLANHOLDERS INVESTMENTS...................................................... -5-
1. Initial Payment................................................................... -5-
2. Systematic Payment................................................................ -5-
3. Pre-Authorized Check Payments Program............................................. -7-
4. Automated Clearinghouse ("ACH") Payment Program................................... -7-
5. Reinvestment of Dividends......................................................... -8-
6. Acceleration of Payment........................................................... -9-
7. Additional Investment............................................................. -10-
8. Change in Denomination............................................................ -11-
9. Rights of Accumulation............................................................ -12-
10. Plan Reinstatement Privilege...................................................... -13-
11. Individual Retirement Accounts.................................................... -14-
12. Federal Income Tax Withholding.................................................... -15-
B. PROCESSING OF REFUNDS, SURRENDERS, WITHDRAWALS,
LIQUIDATIONS, TRANSFERS, ASSIGNMENTS, TERMINATIONS AND
COMPLETIONS................................................................................ -15-
1. General........................................................................... -15-
2. Refund............................................................................ -16-
3. Eighteen-Month Surrender.......................................................... -16-
4. Partial Withdrawal and Liquidation................................................ -17-
5. Systematic Withdrawal............................................................. -20-
6. Transfer or Assignment............................................................ -21-
7. Termination of Plans.............................................................. -21-
a. Termination by Planholder................................................ -22-
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b. Termination by Sponsor or Custodian...................................... -23-
c. Termination Under Other Circumstances.................................... -24-
8. Completion........................................................................ -25-
C. PURCHASE, SALE, MAINTENANCE, VOTING AND SUBSTITUTION OF
FUND SHARES................................................................................ -27-
1. Purchase and Sales................................................................ -27-
2. Maintenance....................................................................... -27-
3. Bank Accounts..................................................................... -28-
4. Statements........................................................................ -29-
5. Voting of Fund Shares............................................................. -29-
6. Substitution...................................................................... -30-
a. By Sponsor............................................................... -30-
b. By Custodian............................................................. -30-
c. Notice................................................................... -30-
7. Furnishing of Information......................................................... -31-
D. DUTIES..................................................................................... -31-
1. Records........................................................................... -31-
2. Performance....................................................................... -31-
3. Administrative Services........................................................... -32-
4. Limitations....................................................................... -33-
5. Delegation........................................................................ -33-
E. FEES AND CHARGES........................................................................... -34-
1. Remuneration...................................................................... -34-
2. Payments to Sponsor............................................................... -34-
III. SPONSOR'S FUNCTIONS
A. ADMINISTRATION OF PLANS.................................................................... -35-
1. General........................................................................... -35-
2. Operations........................................................................ -35-
3. Compliance........................................................................ -35-
4. Creation, Sales Charges and 12b-1 payments........................................ -35-
5. Wrongful Retention Insurance...................................................... -36-
X. XXXXXXXXXX OF DOCUMENTS, FORMS AND INFORMATION............................................. -36-
1. Financial Statements.............................................................. -36-
2. Tax Returns....................................................................... -36-
3. Sponsor's Agreement............................................................... -36-
4. Plan Materials.................................................................... -37-
5. Distribution Reports.............................................................. -37-
C. SUBSTITUTION............................................................................... -37-
1. SEC............................................................................... -37-
2. Shares............................................................................ -37-
3. Custodian......................................................................... -38-
4. Planholders....................................................................... -38-
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IV. MISCELLANEOUS
A. ASSIGNMENT................................................................................. -38-
B. INDEMNIFICATION............................................................................ -39-
C. COMMUNICATIONS............................................................................. -41-
D. COUNTERPARTS............................................................................... -42-
E. INSPECTION................................................................................. -42-
F. SCHEDULES.................................................................................. -42-
G. AMENDMENT.................................................................................. -42-
H. CONSTRUCTION............................................................................... -42-
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CUSTODIAN AGREEMENT
AGREEMENT made this ___ day of _________, 1999 between A I M
DISTRIBUTORS, INC., a Delaware corporation with its principal office at Xxxxxx
Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 (hereinafter called the
"Sponsor") and STATE STREET BANK AND TRUST COMPANY, a Massachusetts banking
corporation having an office at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
(hereinafter called the "Custodian").
WITNESSETH
WHEREAS, the Sponsor is engaged in the business of selling shares of
mutual funds and similar securities and presently wishes to engage the services
of the Custodian in connection with the administration of a plan for the
accumulation of Class II shares of AIM Summit Fund, Inc. which the Sponsor sells
and distributes for the benefit of Planholders (as defined herein) of AIM Summit
Investors Plans II (the "Plan").
NOW, THEREFORE, in consideration of the mutual covenants herein set
forth, the parties hereto agree as follows:
I. THE PLAN AND CUSTODIANSHIP
A. THE PLAN
1. Nature of the Plan. The Sponsor intends to offer one type of Plan
for the accumulation of Class II shares of the Fund, or any other shares
substituted therefor, under the terms of the Plan (all such shares being
hereinafter called the "Fund Shares" and the issuer of such shares being
hereinafter called the "Fund," unless the context indicates otherwise).
Beneficial owners of Fund Shares under the Plan are hereinafter called
"Planholders".
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2. Changes in the Plan. The Plan is subject to such changes in form and
content as the Sponsor may effect from time to time, with the approval of the
Custodian, which approval shall not unreasonably be withheld, but no changes in
the terms and conditions of any previously issued Plan which will adversely
affect any material right of a holder thereof may be made without notice to, and
consent of, the Planholder. The Sponsor or Custodian may substitute other shares
for Fund Shares on the conditions provided in paragraphs II(C)(6) and III(C)
below.
B. CUSTODIANSHIP
1. Appointment. Custodian hereby accepts appointment as custodian under
this Agreement with respect to Plans issued after the date of this Agreement.
2. Qualification. The Custodian and any successor custodian shall be a
bank having at all times an aggregate capital, surplus and undivided profits in
excess of $1,000,000. The Custodian certifies that it has now, and agrees that
so long as it acts as Custodian under any Plan it shall continue to have, such
qualifications.
3. Custodianship. The Custodian shall continue Custodianship under the
Plan on the terms and conditions set forth hereinafter and in the prospectus of
the Plan ("Prospectus"), so long as the Sponsor shall have furnished to the
Custodian, on a continuing basis:
a. Evidence satisfactory to the Custodian and its counsel that the
Sponsor has taken all necessary action to
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satisfy the requirements of the Securities Act of 1933, as amended (the "1933
Act") and the Investment Company Act of 1940, as amended (the "1940 Act") in
connection with the offer and issuance of the Plan; that the Sponsor is
registered as a broker-dealer under the Securities Exchange Act of 1934, as
amended (the "1934 Act") and is a member in good standing of the National
Association of Securities Dealers, Inc. (the "NASD"); that the Fund Shares are
the subject of a currently effective registration statement under the 1933 Act;
and the Sponsor has complied with all other Federal and State regulatory
requirements respecting the offer and issuance of the Plan.
b. A copy of the current Distribution Agreement between the Sponsor
and the Fund.
4. Termination of Custodianship
a. By Sponsor (Existing Plans and/or New Plans). The Sponsor shall
have the right, upon at least 90 days notice to the Custodian, to substitute, as
custodian, both under the Plan issued and still in force and/or under any Plans
issued thereafter, whether such Plans are otherwise identical with that issued
under this Agreement or not, any other bank having the qualifications prescribed
in paragraph I(B)(2) above.
b. By Custodian (Existing Plans and New Plans). The Custodian shall
have the right to resign as custodian under any existing Plan at any time but
only if either: (a) the Plan has been completely liquidated and the proceeds of
the liquidation distributed to the Planholders; or (b) a successor custodian,
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meeting with the approval of the Sponsor (which approval shall not be
unreasonably withheld) and having the qualifications prescribed in paragraph
I(B)(2) above, has been designated and has accepted such custodianship. The
Custodian shall have the right, upon at least 90 days' notice to the Sponsor, to
terminate its obligation to accept any new Plan for custodianship hereunder. In
addition, the obligation of the Custodian to accept any new Plan for
custodianship hereunder shall terminate if the Sponsor: (1) fails to maintain an
effective registration statement under the 1933 Act covering the Plans; (2)
fails to cause the requirements of the 1940 Act to remain satisfied in
connection with the issuance of the Plans; (3) has its membership in the NASD or
its registration as a broker-dealer under the 1934 Act, cancelled or revoked or
suspended for more than 120 days for any cause involving failure on the part of
an executive officer or director to follow ethical standards or serious neglect
of his duty to require representatives to follow such standards; or (4) defaults
in the performance of any other duty, covenant or agreement contained in this
Agreement and such default shall remain unremedied for 30 days after written
notice thereof shall have been given to the Sponsor by the Custodian.
c. Records. In connection with any termination of custodianship, the
Custodian shall furnish such records and other information as the Sponsor and
any successor Custodian reasonably believe to be necessary or appropriate to
effect the termination.
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II. CUSTODIAN'S FUNCTIONS
A. PROCESSING OF PLANHOLDERS INVESTMENTS
1. Initial Payment. Upon receipt by the Custodian from the dealer of
the original application for a Plan, a check payable to the Custodian
representing the initial payment for a Plan, and a Designation of Beneficiary
form (if the Planholder has executed one), the Custodian shall:
a. Process the payment as provided in paragraph II(A)(2) below;
b. Forward by first-class mail to the purchaser of the Plan, or if
requested by the purchaser to the dealer, the Custodian's letter of transmittal
and notice conforming to the requirements of Section 27(f) of the 1940 Act, Rule
27f-1 thereunder (or any successor rule), substantially in the form attached
hereto in Schedule B and such explanatory information or communication to the
Planholder as may be furnished by the Sponsor, and forward to the purchaser by
first-class mail any notice of the right of refund or surrender, as provided in
Part II paragraphs (B)(2), (3) and (4) below.
2. Systematic Payment. Upon receipt by the Custodian of each Planholder
payment, (including the initial payment) the Custodian shall:
a. Stamp and record the date of its receipt of the payment;
b. Forward for collection the payment check;
c. Deduct from the payment the amount, if any, of any original
issue, stock transfer or other taxes, if applicable, and
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apply the appropriate amounts to the purchase of the necessary documentary
stamps or to payments to the proper taxing authorities;
d. Deduct from the payment applicable fees of the Sponsor, dealers
of record and the Custodian as set forth in the attached schedules, and the
Prospectus, and credit such deductions to the Sponsor, dealers of record or the
Custodian as the case may be;
e. Apply the balance of the payment to the purchase of Fund Shares
as provided in paragraph II(C)(1) below;
f. Prepare and mail to the Planholder a confirmation of purchase of
Fund Shares in a form approved by the Sponsor, substantially in the form
attached hereto in Schedule C, which shall conform to Rule 10b-10 of the 1934
Act (or any successor rule) showing the Plan account number, amount of the
payment received, date of receipt, the amount and nature of authorized
deductions, the price paid per Fund Share, the number of such Fund Shares
purchased after the deductions, the total number of Fund Shares then held by the
Custodian for the Planholder, and the due date of the Planholder's next payment.
Confirmation of the purchase of Fund Shares shall be mailed promptly by the
Custodian to the Planholder, and to the Planholder's dealer;
g. In the event that any check or other order for the payment of
money is returned unpaid for any reason, the Custodian shall, in the absence of
other instructions from the Sponsor, take such steps as may be necessary to
cancel promptly any shares
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purchased on the basis of such returned check and shall cancel accumulated
dividends for such account. The Custodian shall notify the Planholder of the
cancellation of the purchase and return the check to the Planholder; and
h. Any notices, if generated by Custodian automatically, relating to
missed payments by Planholders shall be collected and delivered to the Sponsor
on a monthly basis.
3. Pre-Authorized Check Payments Program. The Custodian and the Sponsor
agree that if a Planholder wishes to have payments on his Plans made
automatically without having to write a check each month, he may request that
payments be made by means of pre-authorized checks. Under this program, each
month the Custodian will draft the Planholder's bank account in the amount of
the monthly payment. The proceeds of the draft will be invested in the
Planholder's account.
To initiate a Pre-Authorized Check Payment Program, the Planholder
should complete the Pre-Authorized Check Form and send it along with a voided
blank check to the Custodian. The Planholder may terminate a Pre-Authorized
Check Payment Program at any time by written notice to the Custodian.
4. Automated Clearinghouse ("ACH") Payment Program. The Custodian and
the Sponsor agree that if a Planholder wishes to have payments on his Plans made
automatically by ACH each month, he may request that payments be made by means
of ACH. Under this program, each month the Custodian will debit the Planholder's
bank account in the amount of the monthly payment. The proceeds
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of the ACH debit will be invested in the Planholder's account. To initiate an
ACH Payment Program, the Planholder should complete the Pre-Authorized Check
Form and send it to the Custodian. The Planholder may terminate an ACH Payment
Program at any time by written notice to the Custodian.
When the Custodian receives ACH credit and debit entries pursuant to
the rules of the National Automated Clearing House Association and the New
England Clearing House Association, the Custodian will act as an Originating
Depository Financial Institution and/or Receiving Depository Financial
Institution, as the case may be, with respect to such entries. Credits given by
the Custodian with respect to an ACH credit entry are provisional until the
Custodian receives final settlement from the Federal Reserve Bank. If the
Custodian does not receive such final settlement for such entry, the Sponsor
agrees that the Custodian shall receive a refund of the amount credited to the
Planholder in connection with such entry, and the Planholder making payment to
the Custodian via such entry shall not be deemed to have paid the amount of the
entry.
5. Reinvestment of Dividends. The Custodian shall reinvest all
dividends and capital gain distributions on the Fund Shares held by it as
Custodian for each Planholder, after deduction therefrom the applicable fees set
forth in the attached schedule, and/or specified in the Prospectus, and any
applicable taxes required by law to be withheld, in accordance with the terms of
the Prospectus, in Fund Shares on the dividend payment
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date, at the net asset value, determined on that date, as provided in paragraph
II(C)(1) below, unless the Planholder has instructed the Custodian, in writing,
at least seven days prior to the record date, to pay to him the dividends or
distributions in cash. The Custodian agrees that such instructions may be made
applicable to any single dividend or distribution, or to all subsequent
dividends or distributions, and may be cancelled at any time. Any distribution
in the form of additional Fund shares shall be credited to the Planholder's
account, and any distributions other than in cash or in Fund shares shall be
sold by the Custodian at such prices as it may be able to realize therefor and
the net proceeds applied to the purchase of additional Fund shares for the
Planholder's account. Authorized deductions and charges shall be applied to the
above transactions. In the event that any dividends or distributions shall be
payable at the option of the Custodian or its nominee in either cash or stock or
other property, the Custodian shall elect, as to all Fund shares held by it or
its nominee, to receive such dividends or distributions in Fund shares unless
otherwise instructed by the Sponsor.
6. Acceleration of Payment. The Custodian and the Sponsor agree that a
Planholder may complete his Plan ahead of schedule by making one or more
payments in advance of their due dates in accordance with the following
restrictions: the Planholder normally may make no more than 24 payments within
any calendar year period, and the Planholder may make an additional 24
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payments during the life of a Plan. Acceleration payments shall be first applied
to satisfy the obligation of the Planholder to pay for his next succeeding
payment or payments. There is no reduction in the Creation and Sales charges for
advance payments. Advance payments do not accelerate in any way the due dates of
unpaid payments; such unpaid payments will be considered to be due on that date
on which they would have originally been required if all prior payments (whether
or not in fact made in advance) had been made when respectively due.
Upon receipt by the Custodian of an advance payment by any Planholder
permitted under this Plan, the Custodian shall:
a. Process the payment as provided in paragraph II(A)(2) above.
b. Apply the balance of the payment to the next succeeding payment
or payments in the order due under the Plan.
The Sponsor may waive the limitation on advance payments for Plans
established in connection with Individual Retirement Accounts.
7. Additional Investment. The Custodian and the Sponsor agree that a
Planholder who owns any completed Plan may make additional investments, without
completing a new Plan application, thereby activating the Extended Investment
Option, subject to the same deductions as applied to the Planholder's last
scheduled payment. The Custodian may increase the Custodian fee applicable
during this period to the rate charged for new Plans of the same denomination at
the time of the first payment
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under the Extended Investment Option, but not more than 75% in excess of the
current annual rate of custodian fees as of the issue date of a particular Plan.
A Planholder who has elected the Extended Investment Option and has completed
his regularly scheduled payments may, upon written notice to the Custodian, stop
all future payments under the option, and thereafter he will not be permitted to
make additional payments and his plan will be deemed completed. Failure of a
Planholder, during the Extended Investment Option period, to make any payment
during any 6-month period (after any credit for any accelerated payment) will
result in the Planholder's forfeiture of his right to make any investment under
the Extended Investment Program and the Plan will be considered to have been
completed. All Extended Investment Options shall terminate after the 300th
payment made under the Plan.
8. Change in Denomination. The Custodian and the Sponsor agree that a
Planholder may change an existing Plan by providing the Custodian with a
completed Plan application for a new face amount. An increase in a Plan amount
shall not create new cancellation and refund rights that are created when a new
Plan is issued. The Creation and Sales Charges already paid on the existing Plan
will be recomputed and applied as a credit to the Creation and Sales Charges due
on the new Plan and the amount of any transfer taxes at the time that it is
established. Any additional Creation and Sales Charges due on the new Plan and
the amount of any transfer taxes will be deducted pro rata from each
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of the first twelve payments under the New Plan. For a period of twelve months
following a face change increase, the Planholder may decrease the increased Plan
to a smaller plan size, but not smaller than the original Plan prior to the
increase. A Planholder may increase the amount of his Plan at any time. A
Planholder may decrease the amount of his Plan up to a maximum of 50% of the
face amount of the Plan, provided that such request is made prior to the date of
the Planholder's twelfth payment.
9. Rights of Accumulation. The face amounts of two or more Plans
purchased at one time by "any person," as defined in the Prospectus under
"Rights of Accumulation," along with the then current net asset value of AIM
open-end mutual fund accounts (including current and completed AIM Summit
Investors Plans I accounts) owned by the person as provided to Custodian by
Sponsor or its designee, may be combined to take advantage of the lower Creation
and Sales Charges available on large purchases. To qualify for the reduced
Creation and Sales Charges, all of the applications for the Plans involved must
be submitted to the Custodian at the same time together with a letter requesting
that the face amounts of such Plans (and, if applicable, other AIM open-end
mutual fund accounts including current and completed AIM Summit Investors Plans
I accounts) be cumulated for the purpose of determining the applicable Creation
and Sales Charge. In the event payments on one or more of these Plans is
discontinued, the remaining Creation and Sales Charge will be changed to reflect
the charges applicable to the Plan that is still in effect.
The face amount of any Plans which have been completed (and not
liquidated) or on which payments are "current" (as defined in the Prospectus
under "Rights of Accumulation") may be aggregated
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with the face amount of a Plan being purchased by any person to ascertain the
Creation and Sales Charge applicable to the Plan being purchased but not to
reduce the custodial fees applicable to each such Plan. To qualify for a reduced
Creation and Sales Charge, the Custodian must be notified by the dealer or the
purchaser at the time of placing the order that the purchaser qualifies for the
reduced Creation and Sales Charges.
10. Plan Reinstatement Privilege. The Custodian and the Sponsor agree
that a Planholder may, within 90 days after he has terminated his Plan, on
written request to the Custodian, reinstate his Plan by including with the
request an amount equal to or less than the redemption proceeds, if no refunded
sales charges were provided in the termination, or by including with the request
the full amount of all refunded sales charges, plus an amount equal to or less
than the redemption proceeds, if the termination was done under the privileges
described in paragraph II(B)(2) or (3) below. Such reinstatement is subject to
the following restrictions: (1) a Planholder may not reinstate his Plan if he
has ever before exercised this Plan Reinstatement Privilege; and (2) if the Plan
Reinstatement Privilege is exercised, neither the total number of monthly
payments to be made nor the unpaid balance of monthly Plan payments under the
Plan will be affected.
In addition to the Plan Reinstatement Privilege described above, the
Sponsor may from time to time permit Planholders who
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have previously terminated their Plans to establish new Plans on the following
terms:
a. The Planholder must open the new Plan with an investment equal to
or less than the amount of the redemption proceeds received upon liquidation of
the former Plan. No Creation and Sales Charges or Custodian fees will be
subtracted from the initial investment.
b. The number of the next payment due on the new Plan will be the
number of the next payment due on the former Plan at the time it was terminated.
c. Creation and Sales Charges on the new Plan will be the Creation
and Sales Charges that would currently be applicable to the former Plan.
The ability to establish such new Plans will not be generally
available, but will be available only during such limited time periods as may be
specified by the Sponsor from time to time.
Upon receipt by the Custodian of appropriate notice from the
Planholder, the Custodian shall reinstate any Plan which has been terminated in
accordance with paragraphs II(B)(7)(a) or (b) below, subject to any
reinstatement fee set forth in the Prospectus, but without deduction for Sales
Charges, so long as the reinstatement is consistent with the terms of the
Prospectus.
11. Individual Retirement Accounts. A Plan may be used by qualified
individuals who wish to establish an IRA.
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12. Federal Income Tax Withholding. A Planholder who has elected
dividend and capital gain reinvestment may elect to have the Custodian withhold
28% of any income dividend or capital gains distribution by the Fund and send
that amount to the Internal Revenue Service as a credit against the Planholder's
tax liability, if any. The amount withheld may or may not be equal to the
additional taxes the Planholder may owe due to the dividend or distribution.
This service shall be available with respect to all Plans except qualified
retirement plans, including IRAs. This option shall be initiated upon written
request by the Planholder to the Custodian and, once initiated, shall remain in
effect until the Custodian is notified by the Planholder in writing to terminate
the withholding.
B. PROCESSING OF REFUNDS, SURRENDERS, WITHDRAWALS, LIQUIDATIONS,
TRANSFERS, ASSIGNMENTS, TERMINATIONS AND COMPLETIONS
1. General. Under the circumstances described below, the Custodian
shall liquidate Fund Shares in a Planholder's account as provided in paragraph
II(C)(1) below and pay the proceeds plus any additional amounts, if any, to him
within seven days thereof. The Custodian shall not suspend redemption or
postpone payment more than seven days after such date of receipt, except during
any period when: (a) trading on the New York Stock Exchange is restricted or
such exchange is closed for other than customary week-ends or holidays; (b) the
United States Securities and Exchange Commission (the "SEC") has by order
permitted such
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suspension; or (c) any emergency exists, as determined by the SEC, making
disposal of portfolio securities or valuation of new assets of the Fund not
reasonably practicable.
2. Refund. The Custodian and the Sponsor agree that a Planholder shall
have a right during a 45-day period to surrender his Plan and receive the net
asset value of the Fund Shares held in his account at the time, plus all
charges. The 45-day period shall run from the date on which the Planholder is
mailed a notice of his refund rights, a statements of charges to be deducted
from his projected payments, and a form for exercising his refund rights. This
information shall be mailed within 60 days after the issuance of the Plan. The
refund right may be exercised by submitting a completed refund right form or a
written request for cancellation to the Custodian within the 45-day period.
3. Eighteen-Month Surrender. The Custodian and the Sponsor agree that a
Planholder has a privilege for 18 months (or longer, if required by state law)
to surrender his Plan and receive the net asset value of the Fund Shares held in
his account at the time, plus the amount by which the Creation and Sales Charges
deducted from payments exceed 15% of the payments he has made up to the date of
the surrender of the Plan. Upon the written request by the Planholder, the
Custodian shall liquidate Fund Shares and pay the proceeds to the Planholder who
has exercised the foregoing privilege. Any excess amount due the Planholder
shall be paid directly by the Sponsor. The Planholder
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shall not be entitled to be refunded any custodial fees previously paid. The
18-month period (or such longer period as required by state law) shall run from
the date on which the Plan is issued. The Planholder must request his refund in
writing, addressed to the Custodian.
The Custodian will send to the Planholder a notice within 30 days if
either of the following occurs: (a) if, during the first 15 months after the
date of the issuance of a Plan, the Planholder has missed three payments or
more; or (b) if, following the first 15 months after the date of issuance of the
Plan (but prior to 18 months after such date) the Planholder has missed one
payment or more. In the event the Sponsor has previously sent a notice in
connection with (a) above, a second notice will not be sent even if additional
payments are missed. These notices will inform the Planholder of his rights of
cancellation as set forth above, of the value of his account at the time the
notice is sent and of the amount to which he is entitled.
4. Partial Withdrawal and Liquidation. The Custodian and Xxxxxxx agree
that a Planholder who has owned his Plan for at least 45 days may withdraw or
liquidate part of the Fund Shares held in his account without terminating his
Plan, subject to any applicable Custodian fee set forth in the Prospectus and to
the following:
a. A Planholder may partially withdraw by directing the Custodian to
transfer to his name record ownership of part of
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the Fund Shares held in his account. Following a partial withdrawal the
Planholder may, at any time prior to the termination of his Plan, redeposit the
same number of Fund Shares.
b. A Planholder may also partially liquidate by directing the
Custodian, as his agent, to sell or redeem part of the Fund Shares held in his
account and to forward the net proceeds to him. Following a partial liquidation,
the Planholder may redeposit an amount equal to the net proceeds and have the
Custodian purchase Fund Shares at net asset value as provided in paragraph
II(C)(1) below. Cash must be redeposited for cash received on liquidation.
c. Exercise of the foregoing privileges is subject to the following
conditions:
(i) Requests for partial withdrawal or partial liquidation must
be delivered in writing to the Custodian. Request for partial
withdrawal or portfolio liquidation for amounts of $50,000 or higher
must be in writing with the Planholder's signature guaranteed by a
member firm of the New York Stock Exchange, a trust company, a national
or state bank, a Xxxxxxx Xxxxxxx at the military installation where the
Planholder is located, or any other "eligible guarantor institution" as
defined in rules adopted by the SEC ("Approved Guarantor").
(ii) Partial withdrawal or partial liquidation shall not be
permitted if it involves less than $100 of net
-18-
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proceeds of sale or more than 90% of the Fund Shares held in the
Planholder's account.
(iii) The requests for partial withdrawal, partial liquidation
and restoration must be in accordance with the rulings or
interpretations of the NASD which require that requests meet good faith
business or personal needs of the Planholder. The Sponsor further
reserves the right to impose such additional restrictions as, in its
judgment, are necessary to conform to the requirements of Section 2830
of the Rules of Fair Practice of the NASD. The Custodian has no duty to
determine that such rulings, interpretations or restrictions are in
compliance with the requirements of the NASD and may rely on the
Sponsor.
(iv) The restoration of a partial liquidation may not be
effected earlier than 90 days following partial liquidation (45 days
for IRAs). Where a partial liquidation has been effected through the
redemption of Fund Shares by the Custodian, a Planholder may, but is
not required to, remit to the Custodian an amount equal to the cash
withdrawal which will be used to purchase Fund Shares for the account
of the Planholder at the next determined net asset value.
Notwithstanding these provisions, a Planholder may make a partial
withdrawal and reinvestment of the account in a manner which complies
with the rules of the Internal Revenue Code regarding IRA rollovers.
All
-19-
24
reinvestments must be at least $500 or the unrestored amount of the
cash withdrawn, whichever is less.
(v) The Sponsor reserves the right to limit the exercise of
partial liquidations and restoration to once during a period of a year.
5. Systematic Withdrawal. The Custodian and the Sponsor agree that a
Planholder may elect to establish a Systematic Withdrawal Program, after the
Planholder has completed all regularly scheduled payments (or in the case of
IRAs, Xxxxx plans or other retirement plans, if the Planholder has notified the
Sponsor or the Custodian that the Planholder does not intend to make any further
Plan payments). Under a Systematic Withdrawal Program, the Planholder can elect
to receive monthly or quarterly checks in any amount of $50.00 or more. To
provide funds for these payments, the Custodian, as agent for the Planholder,
will redeem shares held in the Planholder's account at the net-asset value in
effect at the time of each such redemption. The Planholder may change the amount
of payments under a Systematic Withdrawal Program or discontinue a Systematic
Withdrawal Program at any time.
While a Systematic Withdrawal Program is in effect, the Planholder may
not elect to receive dividends and distributions on Fund Shares held in his
account in cash. A Planholder may not simultaneously maintain an uncompleted
Plan and a Systematic Withdrawal Program.
-20-
25
6. Transfer or Assignment. The Custodian and the Sponsor agree that a
Planholder may (a) transfer the interest in his Fund Shares to another person,
trustee or custodian acceptable to the Sponsor and the Custodian who has made
application to the Sponsor for a similar Plan; (b) transfer his right, title and
interest to another person whose only right shall be to exercise the option of
complete withdrawal; or (c) assign his right, title and interest to a bank or
other lending institution, provided that the bank or other lending institution
shall not be entitled to exercise the right of partial withdrawal or partial
liquidation, and that the Planholder shall continue to be entitled to all
dividends and distributions on his Fund shares. In each case, documents
satisfactory to the Sponsor and the Custodian must be employed. If the
Planholder makes an assignment to a bank or other lending institution, the
Custodian will, upon the written request of the assignee, record such assignment
until the assignee shall have notified the Custodian that the assignment has
been released, but no such assignment shall be binding on the Custodian until
such assignment is recorded. Until the Sponsor and the Custodian have permitted
such assignment or transfer to be effective, they may treat the Planholder as
the sole and absolute owner of the Plan and the Fund shares applicable thereto.
7. Termination of Plans. The Custodian and Sponsor agree that Plans may
be terminated as follows:
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a. Termination by Planholder. A Planholder may, at any time up to
the time of his death, terminate his Plan in accordance with the provisions
thereof by notifying the Custodian in writing. The Planholder must instruct the
Custodian in writing either to deliver the Fund Shares held in his account to
him or to sell his Fund Shares, as his agent, and pay him the net proceeds. If
the Planholder requests delivery of his Fund Shares, sufficient shares shall be
sold by the Custodian to pay authorized deductions (including a Custodian fee as
set forth in the Prospectus) and transfer taxes, leaving no fractional shares,
and the balance of Fund Shares shall be delivered to him.
Instructions for liquidation of Fund Shares must be in the form of a
letter signed by the Planholder. Liquidations of $50,000 or higher must be in
the form of a letter signed by a Planholder with the signature guaranteed by an
Approved Guarantor. The redemption price shall be the net asset value of Fund
Shares next determined after all necessary documents have been received. The
proceeds of a liquidation shall be sent to the Planholder within seven days
after receipt of all necessary documents by the Custodian. The Custodian
reserves the right to delay the mailing of redemption proceeds until checks
received for the shares purchased have cleared. The payment period may be
extended if the Custodian's right to redeem shares of the Fund has been
suspended or restricted because (a) trading on the New York Stock Exchange is
restricted or such Exchange is closed for other than customary week-ends or
holidays; (b) the SEC has by
-22-
27
order permitted such suspension; or (c) an emergency exists, as determined by
the SEC, making disposal of portfolio securities or the valuation of the net
assets of the Fund not reasonably practicable. (A terminated Plan may be
reinstated as provided in paragraph II(A)(10) above).
b. Termination by Sponsor or Custodian. If a Planholder fails to
make any scheduled payment for six months after it becomes due under the Plan,
either the Sponsor or the Custodian may terminate the Plan on 60-days' written
notice, and the Custodian may charge the fee set forth in the Prospectus. The
six months of default will not start until the Planholder has been given full
credit for a period equal to the amount of any prepayments he may have made.
(Any scheduled payment made and accepted prior to termination extends the due
dates of all future payments for a period equal to the period during which no
payments were made.) The written notice of termination shall state that for a
period of 60 days from the date of mailing of such notice, the Planholder shall
have the election to have the Custodian either (a) sell all the Fund shares
standing in the Planholder's account and make any authorized deductions,
including fees and expenses, or (b) sell sufficient Fund shares standing in the
Planholder's account to pay all authorized deductions, including fees and
expenses, and leave no fractional shares. However, if neither the Sponsor nor
the Custodian receives the Planholder's notice of election within 60 days from
the date of the mailing of the aforesaid notice of termination,
-23-
28
the Custodian is authorized in its discretion to exercise such election as agent
for the Planholder. Upon receipt of a properly documented letter of instruction
from the Planholder, the Custodian will transfer and deliver to the Planholder
the Fund shares and/or their cash value less authorized deductions, including
fees and expenses. No interest will be payable by the Custodian upon any cash
held by it pending the surrender of the Plan. The Custodian may, in its
discretion, if the Planholder fails to surrender the Plan during the period of
60 days after the sending of the termination notice referred to above, fully
discharge its obligations by mailing to the Planholder at the appropriate
address noted upon its records, either its check for the cash value of all Fund
Shares then standing to the Planholder's credit, or by transferring to the
Planholder record ownership of all Fund Shares held in his account, and
thereafter the Planholder's Plan shall be deemed cancelled and the Planholder
shall have no further rights thereunder. Upon any such termination of a Plan,
the Custodian shall furnish the Planholder and the Sponsor with a statement
showing all charges in his account since the date of the last previous payment.
In the event that the Fund Shares and/or any cash balance are not delivered to
the Planholder, the Custodian shall hold the same in trust pursuant to
applicable state law.
c. Termination Under Other Circumstances. The Plan shall be
terminated if Fund Shares cannot be purchased for more than 90 days, and neither
the Sponsor nor the Custodian
-24-
29
substitutes another investment medium as provided in paragraphs II(C)(6)(b) and
III(C) below. If a Planholder fails to agree to a substitution by the Custodian
pursuant to paragraph II(C)(6)(b) below, the Custodian may consider the plan
terminated.
8. Completion. The Custodian and the Sponsor agree that a Planholder
who has completed his Plan has the following options for the disposition of Fund
Shares:
a. Have the Custodian hold the Fund Shares until after the 300th
payment has been made, during which period investments will be subject to such
deductions as the Custodian shall deem appropriate and neither the Custodian nor
the Sponsor may terminate the Custodianship except in accordance with the terms
of the Plan;
b. Elect to have the Fund Shares registered in his name;
c. Elect to have the Fund Shares redeemed and the cash proceeds paid
to him; or
d. Elect to have Fund Shares redeemed in accordance with the
systematic withdrawal program established in connection with the Plan on a
monthly or quarterly basis in amounts of $50.00 or more and have the cash
proceeds paid to him.
After the completion of all Plan payments or, if payments have been
made in advance, after the expiration of fifteen (15) years from the date of the
Plan, the Custodian receives the annual fee set forth in Schedule A. Unless
voluntarily paid by the Fund, this fee will be deducted from the last combined
income
-25-
30
dividend and capital gains distribution payments of each year, but may be
collected from the proceeds of the sale of Fund Shares held for the Planholder's
account if necessary.
The Custodian and the Sponsor agree that no Plan may be terminated by
the Sponsor or the Custodian until after the 300th payment so long as the
Planholder continues to make his payments in accordance with the terms of his
Plan. The Planholder or his legal representative may elect to continue the
Custodianship from year to year subsequent to the 300th payment, subject to the
right of the Sponsor or the Custodian to terminate the Plan. In the event the
Planholder fails to exercise his privilege of complete withdrawal, the Custodian
in its discretion may, as agent for the Planholder, (a) sell all the Fund Shares
in the Planholder's account, and, after making any authorized deductions, hold
the balance of the proceeds for the Planholder's account, or (b) sell sufficient
Fund Shares in the Planholder's account to pay any authorized deductions and
leave no fractional shares. Upon surrender of the Plan, the Custodian will
transfer record ownership to the Planholder of his full shares and will deliver
to the Planholder any balance of cash, or, if all Fund Shares have been sold,
the Custodian will deliver to the Planholder the net proceeds less deductions.
No interest shall be payable upon any funds held by the Custodian pending the
surrender of the Plan. If no response is received from the Planholder within 60
days after the sending of the termination notice, the Custodian may, in its
discretion, mail to the
-26-
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Planholder a check for all cash standing to the Planholder's credit and transfer
record ownership of such Fund Shares, if any, to the Planholder, and the
Planholder will be deemed to have no further rights under the Plan. In the event
a check cannot be delivered, or the Fund Shares cannot be transferred, to the
Planholder, the Custodian shall hold them in trust pursuant to the applicable
state abandoned property laws.
C. PURCHASE, SALE, MAINTENANCE, VOTING AND SUBSTITUTION OF FUND SHARES
1. Purchase and Sales. Purchases and sales of Fund Shares by the
Custodian pursuant to this Agreement shall be made in accordance with applicable
law, the Prospectus, the Fund prospectus and the Sponsor's Agreement with the
Fund. Consistent with the foregoing, the Custodian shall enter a gross purchase
and sale order for all Fund Shares and fractions which pursuant to the Plans it
is required to purchase and sell on each business day prior to the close of
trading on the New York Stock Exchange. If the number of Fund Shares to be
bought and to be sold shall include a fractional share, the Custodian shall
purchase or sell the additional fractional share.
2. Maintenance. The Custodian shall have possession of and shall
segregate and hold in trust, or shall hold in book share form, where applicable,
all securities in which the funds of the Planholders are invested, all monies
held for such investments, redemption and other special funds for the
Planholders, and all income and distributions upon, accretions to and proceeds
of such securities and funds, subject only to the
-27-
32
deductions specified herein or in the Prospectus until distribution thereof to
the Planholders. The Custodian also will effect partial or complete liquidation
of Plans in connection with withdrawals or terminations. The Custodian is
authorized to commingle payments, dividends and certificates for all Fund Shares
held by it hereunder and to cause all Fund certificates to be registered in its
name or the names of its nominees. Nothing herein shall be construed to allow
the Custodian to commingle the Fund Shares, funds, or securities with those of
any plans other than the Plans specifically covered herein. The Custodian shall
maintain a separate account for each Planholder showing the number of Fund
Shares (to three decimal places) and the amount of cash, if any, to the credit
of each account. The records of such account shall be maintained separate and
apart from the Custodian's corporate records.
The authorization conferred on the Custodian to make the various
deductions heretofore discussed, and in certain cases to sell Fund Shares, shall
be considered authorization to the Custodian to create liens upon the property
held by it.
3. Bank Accounts. All monies deposited with or received by the
Custodian hereunder shall be held by the Custodian without interest as part of
the custodianship until required to be disbursed in accordance with the
provisions of this Agreement or the Plan. The Custodian shall open and maintain
a separate bank account in the banking department of the Custodian in the name
and for the benefit of the Plan, subject only to the draft order
-28-
33
of the Custodian or order of the Custodian acting pursuant to the terms of this
Agreement and shall hold in such bank accounts all monies received by the
Custodian from and for the account of the Plan.
4. Statements. The Custodian shall render on an agreed upon basis to
the Sponsor records showing, for each account in which transactions were had
during the week, the number of the account, the amount and date of the payment
received, the number of such payment, the deductions made and the balance
applied to the purchase of Fund Shares.
5. Voting of Fund Shares. The Custodian will provide notice to
Planholders of all Fund stockholder meetings, together with proxy statements.
The Custodian shall vote Fund Shares held under any Plans in accordance with the
Planholder's instructions contained in a voting instruction card provided with
the proxy statement. The Custodian shall vote the Fund Shares for which no
instructions have been received in the same proportion as Fund Shares for which
such instructions have been received from all Planholders under the Plans. If
the voting instructions card is validly executed and returned without
specification of a choice, the shares will be voted in favor of the proposals of
the Fund's management.
If the Planholder desires to attend the Fund stockholder meeting and
vote shares held in his account in person, the Planholder must make a written
request to the Custodian for a proxy which will permit the shares to be voted in
person.
-29-
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6. Substitution
a. By Sponsor. The Custodian and the Sponsor agree that the Sponsor
may effect substitution of Fund Shares as provided in paragraph III(C) below.
b. By Custodian. If Fund Shares cannot be purchased by the Custodian
for more than 90 days, and the Sponsor fails to substitute shares, the
Custodian, may select another investment medium which it deems to be comparable
to the Fund Shares, subject to prior approval of the SEC. The Custodian shall
notify each Planholder in writing that the substitution will be made if the
Planholder, within 30 days, gives written approval to the Custodian and agrees
to bear his reasonable pro-rata share of the Custodian's related expenses,
including tax liability sustained by the Custodian. The Planholders failure to
give such written approval within the 30 day period shall give the Custodian
authority to terminate the Plan.
If the Fund Shares are not available for purchase for a period of 90
days or longer, and neither the Sponsor nor the Custodian substitutes other
shares, the Custodian shall have the authority without further action on its
part, to terminate the Plan.
c. Notice. The Custodian shall, within five days after any
substitution, deliver or mail to each Planholder a notice of substitution,
including an identification of the Fund Shares eliminated and the securities
substituted, and a
-30-
35
specification of the shares of such Planholder affected by the substitution.
7. Furnishing of Information. The Custodian shall furnish such records
and other information regarding the Plans and the Custodianship as the Sponsor
may reasonably believe necessary or appropriate for the administration of the
Plans, as provided in Part III below.
D. DUTIES
1. Records. It shall be the duty of the Custodian to keep records
showing the number and amount of payments made by the Planholder, the date and
amount of all dividends and distributions received by the Custodian on Fund
shares held for the account of the Planholder and all deductions made from such
investments, dividends and distributions, the number of Fund Shares purchased
with the net amount of all investments or reinvested dividends and
distributions, the number of Fund Shares sold or withdrawn, and the number of
Fund Shares which from time to time are held for the account of the Planholder
under this Plan.
2. Performance. The Custodian shall not cease to perform its functions
under this Plan or resign as Custodian hereunder unless the securities or other
property in which the funds of the Planholders are invested have been completely
liquidated and the proceeds of such liquidation distributed to the Planholders,
or a substitute Custodian has been designated by either the Sponsor or
-31-
36
the Custodian and has accepted such Custodianship, or the Plan has been
terminated as herein provided.
3. Administrative Services. The Custodian shall:
a. Mail to the Planholder a confirmation of Fund Shares purchased,
stating the purchase price per Fund Share, and number of Fund Shares purchased
after applicable deductions, and the total number of Fund Shares held for his
account together with a notice of the next payment due.
b. Obtain and mail to each Planholder prospectuses, periodic reports
of the issuer of Fund Shares as are required by law or regulation and a complete
list, compiled annually, of all securities held in the Fund's portfolio unless
such list is included in the prospectus or other periodic report of the issuer
of Fund Shares.
c. Obtain and mail to each Planholder such dividend statement, tax
notice and proxy soliciting material as are required by law or regulation;
d. Cause periodic audits of the books of the Custodian relating to
the Custodianship of the Plans to be made at least annually by independent
certified public accountants selected by the Sponsor and reasonably satisfactory
to the Custodian, and more frequently, if required by law or regulation;
e. Prepare and file such reports and returns as are required by law
or regulation to permit the Custodianship to continue in operation;
-32-
37
f. Answer all inquiries from Planholders concerning their Plan; and
g. Make payments to dealers of record and keep records to enable it
to do so as set forth in paragraph III(A)(4).
4. Limitations. The Custodian assumes no duties or obligations not
specifically assigned to the Custodian by the Prospectus and this Custodian
Agreement. Without limiting the generality of the foregoing, the Custodian
specifically does not assume the duties of investment ordinarily imposed upon a
trustee, and its only obligations shall be to perform its Custodianship duties
as specifically set forth in the Prospectus and in this Custodian Agreement and
the Custodian shall have no responsibility for the choice of investment, for the
investment policies of the investment company issuing the Fund Shares or for any
act or omission on the part of such investment company or on the part of the
Sponsor, and shall have no responsibility for the registration or qualification
of securities, or of any person or company (whether or not the issuer of any
such securities) under any Federal or state law or the law of any other
jurisdiction relating to the sale, registration or qualification of securities,
or under any rules, regulations or orders of any regulatory agencies or
commissions.
5. Delegation. Upon the written request of the Sponsor, the Custodian
will delegate any of its functions described in this Part II or in Part III
below, provided that such delegation
-33-
38
is consistent with Sections 26 and 27 of the 1940 Act. The Custodian will bill
the Sponsor for all expenses associated with the performance of the duties under
Section II.D.3.d. and e. to the extent not delegated to the Sponsor.
E. FEES AND CHARGES
1. Remuneration. As remuneration for the services to be performed by
the Custodian under this Agreement, the Custodian shall receive the fees,
charges, and reimbursements for expenses as set forth in the attached Schedule
A, this Agreement and the Prospectus, and for all other expenses incurred,
whether or not otherwise enumerated, in connection with the performance of its
duties under this Agreement. The Custodian shall also be reimbursed for all
expenses incurred by it in connection with the performance by the Sponsor of
duties delegated to it by the Custodian. During the life of the trust, the
Custodian, if not otherwise remunerated, may charge against and collect from the
income of the trust, and from the corpus thereof if no income is available, such
fees, charges and reimbursements for such services and expenses. However, no
such charge or collection shall be made except for services theretofore
performed or expenses theretofore incurred.
2. Payments to Sponsor. No payment to the Sponsor, or to any affiliated
person or agent of the Sponsor, shall be allowed the Custodian as an expense
except for payment to the Sponsor of the expenses incurred by it in connection
with the duties
-34-
39
delegated to it as described in the immediately preceding paragraph.
III. SPONSOR'S FUNCTIONS
A. ADMINISTRATION OF PLANS
1. General. The Sponsor agrees to perform the functions required of it
by the terms of this Custody Agreement and the Prospectus.
2. Operations. The Sponsor shall maintain a competent trained selling
staff, adequate office facilities and management staff and keep complete
up-to-date records.
3. Compliance. The Sponsor assumes full responsibility for the
preparation, contents and distribution of the Prospectus, for complying with all
applicable requirements of 1933 Act, and of the 1940 Act, and for the
preparation and filing of such other reports or documents as are required by law
or regulation, and covenants and agrees to take all action, and not to omit any
action, necessary to carry out such responsibilities.
4. Creation, Sales Charges and 12b-1 payments. The Sponsor receives a
Creation and Sales Charge to compensate it for its services and costs in
creating the Plans and arranging for their administration, for making the Fund
Shares available to Planholders at net asset value. This charge is deducted from
each payment by a Planholder and is remitted by the Custodian to the Sponsor and
the dealer reallowance portion of such charge is remitted by the Custodian to
dealers of record applicable to such purchase. Rule 12b-1 payments are paid by
the Class II Shares of
-35-
40
the Fund to the Sponsor who in turn will remit to the Custodian, as its agent,
amounts due to dealers of record. The Custodian will keep the records necessary
to, and will pay such amounts to, the appropriate dealer of record.
5. Wrongful Retention Insurance. The Sponsor may obtain insurance to
cover all claims of invalidity with regard to Planholders' written beneficiary
designation but such insurance shall include the Custodian individually and in
its fiduciary capacity as a named insured and all premiums for such insurance
shall be paid by the Sponsor.
X. XXXXXXXXXX OF DOCUMENTS, FORMS AND INFORMATION
The Sponsor shall furnish to the Custodian on a continuing basis:
1. Financial Statements. As soon as available, a copy of each audit
report and other financial statements relating to the custodianship of the
Plans.
2. Tax Returns. Not less than 20 days prior to the due date thereof,
all Federal income tax returns for the custodianship prepared in form for
execution and filing, together with advice concerning the proper allocation of
expenses and other items among the Planholders.
3. Sponsor's Agreement. Promptly after the execution thereof, a copy of
any amendment to the distribution agreement between the Sponsor and the Fund and
a copy of any new agreement entered into in lieu thereof.
-36-
41
4. Plan Materials. Draft copies of all sales literature, Prospectuses,
printed matter and other material which contain any references to the Custodian,
except material which is merely circulated among or sent to employees,
stockholders or representatives of the Sponsor and correspondence in the
ordinary course of business which refers in accurate terms to the Custodian's
functions under the Plans. The Sponsor agrees that none of the documents
specified in this clause shall be reproduced in final form or distributed
without the written approval (which will not be unreasonably withheld) of the
Custodian.
5. Distribution Reports. Not later than the time specified by Treasury
Regulations for advising Planholders of income and capital gains distributions
of regulated investment companies and within such time requirements as may be
specified by the SEC or other regulatory agency, information necessary for
reporting distributions to Planholders for income tax purposes.
C. SUBSTITUTION
The Sponsor may effect a substitution of Fund Shares whenever it deems
such substitution to be in the best interest of the Planholders, subject to the
following:
1. SEC. The Sponsor shall receive prior approval by the SEC for a
substitution under the provisions of Section 26(b) of the 1940 Act.
2. Shares. The Sponsor may substitute for Fund Shares then held and yet
to be purchased or both. Substituted shares
-37-
42
must be generally comparable in character and quality to Fund Shares and must be
registered under the 1933 Act.
3. Custodian. The Sponsor shall satisfy the Custodian that the
substitute shares may be purchased and redeemed on generally favorable terms,
arrange for the Custodian to acquire substitute shares having an aggregate value
at least equal to that of the Fund Shares replaced, and furnish to the Custodian
the documents described in paragraph III(B)above. The Sponsor shall also provide
the Custodian with a signed certificate stating that notice of the proposed
substitution has been given to each Planholder.
4. Planholders. The Sponsor shall notify each Planholder in writing
that, unless he surrenders his Plan within 30 days of the date of mailing of
such notice, he will be deemed to have authorized the substitution and agreed to
bear his pro-rata share of actual related expenses, if any.
IV. MISCELLANEOUS
A. ASSIGNMENT
This Agreement shall not be assigned by either of the parties without
the prior consent in writing of the other party, provided, however, that the
Custodian may, without further consent on the part of the Sponsor, subcontract
for the performance hereof with (a) Boston Financial Data Services, Inc., a
Massachusetts corporation ("BFDS."), which is duly registered as a transfer
agent pursuant to Section 17A(c)(2) of the 1934 Act ("Section 17A(c)(2)"); (b)
National Financial Data Services,
-38-
43
Inc., a subsidiary of BFDS, duly registered as a transfer agent pursuant to
Section 17A(c)(2); or (c) a BFDS affiliate; provided, however, that the
Custodian shall be as fully liable to the Sponsor for the acts and omissions of
any subcontractor as it is for its own acts and omissions.
B. INDEMNIFICATION
The Sponsor, its successors and assigns, shall at all times fully
indemnify, save and hold harmless the Custodian, its agents and its successors
from any and all liability and expense, including reasonable attorneys fees,
which may arise from the failure of the Sponsor to comply with any law, rule,
regulation or order of the United States, any State or any other jurisdiction
relating to the sale, registration or qualification of securities, including
Fund Shares and beneficial interests in the Plan, provided that no claim against
the Custodian or its agents which might be subject to the foregoing
indemnification provisions shall be confessed, settled or compromised by the
Custodian or its agents without the Custodian first having given seven days
notice in writing to the Sponsor of the material facts, and provided further
that the Sponsor shall have the right upon written demand delivered to the
Custodian within seven days following the date of such notice to contest or
defend such claim in the name of the Custodian by an attorney who will be
reasonably satisfactory to the Custodian.
The Sponsor, its successors and assigns, shall at all times
promptly reimburse the Custodian or its agents and its successors
-39-
44
for any and all reasonable expenses, including reasonable attorneys fees,
incurred by the Custodian from time to time in connection with its performance
under this Agreement.
The Sponsor, its successors and assigns, shall at all times fully
indemnify, save and hold harmless the Custodian or its agents and its successors
from any and all liability and expense, including reasonable attorneys' fees,
incurred where the Custodian or its agents have relied upon the signature
guarantee of Approved Guarantors.
The Custodian shall be entitled to act upon any written notice,
resolution, letter of transmittal, request, consent, order, certificate,
opinion, statement, plan assignment, designation or other document reasonably
believed by it to be genuine and to have been signed by the proper party or
parties or by a person or persons duly authorized to act on his or their behalf
and to require such proofs, including signature guarantees, as they may deem
necessary or upon any instructions, information data, records or documents
provided to the Custodian or its agents or subcontractors by machine readable
input, telex, tape, CRT data entry or other similar means authorized by the
Sponsor and shall not be held to have notice of any change of authority of any
person, until receipt of written notice thereof from the Sponsor. The Custodian
may consult with legal counsel to be selected with reasonable care by them and
they shall not be liable for any action taken or suffered by them in good faith
in accordance with the advice of such counsel nor for anything done
-40-
45
or omitted to be done or suffered in connection with the Custodianship except
for their own lack of good faith, willful misconduct or negligence.
Further the Custodian shall not be responsible for, and the Sponsor
shall at all times fully indemnify, save and hold harmless the Custodian its
agents and successors from any and all liability and expense, including
reasonable attorneys' fees, arising out of or attributable to (a) all actions of
the Custodian or its agents or subcontractors required to be taken pursuant to
this Agreement, provided that such actions are taken in good faith and without
negligence or willful misconduct, or (b) the Sponsor's lack of good faith,
negligence or willful misconduct.
C. COMMUNICATIONS
All communications provided for hereunder shall be in writing sent by
first class mail to the respective parties as follows:
A I M Distributors, Inc.
Xxxxxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000-1173
Attn: General Counsel
State Street Bank and Trust Company
c/o AIM Summit Investors Plan II
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
provided that either party may, by notice duly given in accordance herewith,
specify a different address for the purpose hereof.
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46
D. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original and all of which shall be deemed one and the
same instrument.
E. INSPECTION
An executed copy of this Agreement and all amendments thereto shall be
kept on file by the Custodian and shall be open to inspection by any Planholder
at any time during the business hours of the Custodian.
F. SCHEDULES
All references herein to Schedules shall be deemed to refer to the
Schedules attached to this Agreement which are hereby expressly made a part
hereof.
G. AMENDMENT
This Agreement shall not be amended in such a manner as to adversely
affect any material right of any Planholder without notice to and consent of
each Planholder.
H. CONSTRUCTION
This Agreement shall be subject to and construed under the laws of the
Commonwealth of Massachusetts.
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47
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
A I M DISTRIBUTORS, INC.
By: /s/ XXXXXXX X. XXXX
-------------------------------
President
ATTEST:
/s/ XXXXXXX X. XXXXX
-------------------------
Assistant Secretary
STATE STREET BANK AND TRUST
COMPANY
By: /s/ ILLEGIBLE
-------------------------------
Vice Chairman
ATTEST:
/s/ XXXXXXXX X. XXX
-------------------------
Assistant Vice President
and Associate Counsel
48
SCHEDULE A
FEES SCHEDULE FOR
STATE STREET BANK AND TRUST COMPANY
FOR SERVICES AS PLAN CUSTODIAN
---------------------------------------------
The following fees and charges will be deducted from the Fund,Plans or
from Planholder accounts and paid to the Custodian in accordance with the terms
of the Prospectus.
General
Account Service fees are based on an annual per shareholder account
charge for account maintenance plus transaction and out-of-pocket expenses.
There is a minimum charge of $1,500 per month(1). Fees are billable on a monthly
basis at the rate of 1/12 of the annual fee. A charge is made for an account in
the month that an account opens or closes.
Annual Account Service Fees
Open Account - active $19.00/year(1)
Activity Based Fees
Telephone Calls $ 2.50/each(1)
Correspondence $ 3.00/each(1)
New Account and Setup Kits $ 2.50/each(1)
Planholder Fees
IRA Annual Maintenance(3) $10.00/year
Bounced Checks $ 5.00/each
Transcripts $ 5.00/each year researched
Terminations $ 2.50/each
Inactive Accounts(2) $12.00/year
Out-of-Pocket Expenses(1)
Out-of-Pocket expenses include but are not limited to: Confirmation
statements, checks, postage, forms, telephone, microfilm, microfiche, year-end
forms and expenses incurred at the specific direction of A I M Distributors,
Inc.
-------------------------
(1) These are fees that the Fund has voluntarily elected to pay to the
Custodian on behalf of the Plans.
(2) A Plan that is not current and to which no investments have been made
for a 12-month period but does not include completed plans. This fee
will be paid annually to the Sponsor or its designee.
(3) The Custodian will receive $6.00 and A I M Distributors, Inc. will
receive $4.00.
49
SCHEDULE B
[AIM LOGO] AIM DISTRIBUTORS, INC.
IMPORTANT
DATE:
RE:
ACCOUNT NUMBER
DEAR PLANHOLDER:
WE ARE PLEASED TO WELCOME YOU AS A PLANHOLDER, ONE OF THE MANY MEN AND WOMEN
DEDICATED TO THE PRINCIPLE OF REGULARLY SETTING ASIDE A SMALL PART OF WHAT THEY
EARN IN AN INVESTMENT FOR THE FUTURE. AT THE SAME TIME, IT IS IMPORTANT THAT
YOU READ THE FOLLOWING NOTICE CAREFULLY AND RETAIN IT WITH YOUR FINANCIAL
RECORDS. THIS NOTICE EXPLAINS YOUR RIGHTS UNDER THE INVESTMENT COMPANY ACT.
OF THE $ YOU HAVE PAID ON YOUR SUMMIT INVESTORS PLAN, REPRESENTING
REGULAR MONTHLY PAYMENTS, $ OR PERCENT HAS BEEN DEDUCTED FROM
THOSE PAYMENTS FOR VARIOUS CHARGES. A TOTAL OF $ OR PERCENT OF
YOUR FIRST 12 MONTHLY PAYMENTS WILL BE DEDUCTED FROM THOSE PAYMENTS FOR SIMILAR
CHARGES. CHARGES OF $ OR PERCENT WILL BE DEDUCTED FROM EACH
SUBSEQUENT PAYMENT. YOU HAVE UNTIL TO SURRENDER YOUR CERTIFICATE
FOR ANY REASON AND RECEIVE A REFUND OF ALL THE CHARGES WHICH HAVE BEEN DEDUCTED
FROM YOUR PAYMENTS AND, IN ADDITION, THE VALUE OF YOUR ACCOUNT ON THE DATE YOUR
CERTIFICATE IS RECEIVED.
IN DETERMINING WHETHER OR NOT TO EXERCISE YOUR RIGHT YOU SHOULD CONSIDER, AMONG
OTHER THINGS, THE PROJECTED COST OF YOUR INVESTMENT AND YOUR ABILITY TO MAKE THE
SCHEDULED PAYMENTS OVER THE LIFE OF YOUR PLAN AS THEY BECOME DUE. YOUR PLAN
PROVIDES FOR 180 PAYMENTS OF $ PER MONTH, OR TOTAL PAYMENTS OF $ .
IF YOU HAVE MADE ALL OF THE SCHEDULED PAYMENTS OVER THE FULL TERM OF YOUR PLAN,
THE TOTAL DEDUCTIONS WOULD BE $ OR AN EFFECTIVE CHARGE OF PERCENT
OF YOUR TOTAL PAYMENTS. HOWEVER, IF YOU DO NOT COMPLETE YOUR PLAN, THE DEDUCTION
OF VARIOUS CHARGES FROM YOUR INITIAL PAYMENTS WILL RESULT IN YOUR PAYING
EFFECTIVE CHARGES IN EXCESS OF THAT RATE. FOR A MORE COMPLETE DESCRIPTION OF THE
CHARGES DEDUCTED UNDER YOUR PLAN. CAREFULLY REVIEW YOUR SUMMIT INVESTORS PLANS
PROSPECTUS.
IF YOU WISH TO EXERCISE YOUR RIGHT OF WITHDRAWAL, RETURN YOUR PLAN CERTIFICATE
(IF ISSUED) TO BOSTON FINANCIAL DATA SERVICES, INC., P.O. BOX 8300, BOSTON,
MA 02266 BY , IN ACCORDANCE WITH THE ENCLOSED INSTRUCTIONS.
SINCERELY,
SUMMIT INVESTORS PLANS
Xxxxxx Xxxxxxxx Xxxxx Xxxxx 0000 Xxxxxxx, Xxxxx 00000 Phone (000) 000-0000
50
[AIM LOGO APPEARS HERE]
[SUMMIT INVESTORS PLANS LETTERHEAD]
Letter of Instructions for
Cancellation and Refund
INSTRUCTIONS
If you wish to exercise your right to cancel your plan as described in the
accompanying letter, please forward the following items to A I M Distributors,
Inc., P.O. Box 4264, Houston, Texas 77210-4264, 0-000-000-0000.
1. If the proceeds of the cancellation and refund exceed $50,000, or if the
proceeds are to be sent anywhere other than the address of record, this
letter must be signed exactly as the plan is registered, including special
capacity, if any, and the signature must be guaranteed by a member firm of
the New York Stock Exchange, a trust company, a national or state bank, a
savings bank, and a savings and loan association. Notarization by a notary
public is NOT acceptable.
2. As required by federal law, I (we) certify under penalties of perjury:
(a) The number shown below on this form is my correct taxpayer
identification number and
(b) I am not subject to backup withholding either because:
I have not been notified by the Internal Revenue Service (IRS) that I
am subject to backup withholdings as a result of failure to report all
interest or dividends, or;
the IRS has notified me that I am no longer subject to backup
withholding
3. Certification Instructions - You must cross out item (b) above if you have
been notified by the IRS that you are subject to backup withholding because
of underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out item (b).
Social Security No. [_ _ _ - _ _ -_ _ _ _]
FOR IRA ACCOUNTS ONLY
Please check appropriate boxes:
I am aware of the federal tax consequence of a withdrawal from my IRA.
I [ ] am [ ] not 59 1/2 years old and [ ] am [ ] am not legally disabled.
I [ ] do [ ] do not elect to have federal income tax withheld from this
withdrawal.
The purpose of this redemption is for a rollover to another IRA within 60 days.
The undersigned planholder(s) of Summit Investors Plans Account # _____________
wish to exercise the Rights of Cancellation and Refund. This letter of
instruction must be signed by ALL of the persons shown in the account's
registration.
Signature of Owner X______________________________________ Date _______________
Signature of Joint Owner X________________________________ Date _______________
51
Schedule C
CONFIRMATION OF TRANSACTIONS SUMMIT INVESTORS PLANS
1999
I D
N E STATEMENT DATE
V A
E L
S E
T R
O
R
AIM DISTRIBUTORS, INC
IDENT. OR SOC. SEC. NO. PIP REP ELEVEN GREENWAY PLAZA
SUITE 1919
ACCOUNT NO. XXXXX XXXXXXX, TX 77046
IN ALL CORRESPONDENCE PLEASE REFER TO THE ABOVE ACCOUNT NUMBER
------------------------------------------------------------------------------------------------------------------------------------
SALES AND
DATE TRANSACTION AMOUNT THIS CREATION EXPENSE CUSTODIAN NET AMOUNT PRICE PER SHARES THIS
TRANSACTION CHARGE REIMBURSEMENT FEE INVESTED SHARE TRANSACTION
------------------------------------------------------------------------------------------------------------------------------------
BEGINNING BALANCE .000
-------------------------------------------------------------------------------------------------------------------------------
TOTAL DIVIDENDS LONG TERM CUSTODIAN
AND OTHER CAPITAL GAINS INCOME FEE TOTAL SHARES OWNED
DISTRIBUTIONS DISTRIBUTION DIVIDENDS DEDUCTED
------------------------------------------------ ------------------------------------
FEDERAL
IDENT. NO. 00-0000000
-------------------------------------------------------------------------------------------------------------------------------
CURRENT TOTALS NEXT INVESTMENT
TYPE OF PLAN ----------------------------- ---------------------
FACE AMOUNT PAID TO DATE NUMBER AMOUNT DUE
-------------------------------------------------------------------------------------------------------------------------------
15 YEAR SYSTEMATIC INVESTMENT
-------------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------
SPONSOR
SUMMIT INVESTORS PLANS AIM Distributors, Inc.
Xxxxxx Xxxxxxxx Xxxxx CUSTODIAN
Suite 1919 STATE STREET BANK & TRUST CO.
Houston, TX 77046 BOSTON, MA
-------------------------------------------------------
I IDENT. OR SOC. SEC. NO.
N ALPHA
V ACCOUNT NO.
E DEALER IDENTIFICATION
S
T REPRESENTATIVE NUMBER/NAME
O
R
---------------------------------------------------------------------------------
PLEASE MAKE CHECK PAYABLE TO: CONTRIBUTIONS
STATE STREET BANK AND TRUST COMPANY
and mail with this stub to: CURRENT YEAR $__________
BOSTON FINANCIAL DATA SERVICES, INC. PRIOR YEAR $__________
P.O. BOX 8300 ROLLOVER $__________
BOSTON, MA 02266-8300 TOTAL $__________
Please use reverse side to advise us of
corrections to your account and CHECK YOUR INVESTMENT MUST BE EQUAL TO OR A MULTIPLE OF YOUR
[ ] THE BOX TO THE LEFT. Corrections or MONTHLY PLAN AMOUNT
changes to the account registration may PLEASE CHECK BOX IF YOUR PAYMENT IS A REDEPOSIT
require further documentation. OF PREVIOUSLY WITHDRAWN FUNDS. [ ]
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