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EXHIBIT 1.A(1)(b)
CUSTODIAN AGREEMENT
between
A I M DISTRIBUTORS, INC.
and
STATE STREET BANK AND TRUST COMPANY
May 1, 1996
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TABLE OF CONTENTS
Page No.
CUSTODIAN AGREEMENT
I. THE PLAN AND CUSTODIANSHIP
A. THE PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1. Nature of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Changes in the Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. CUSTODIANSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. Custodianship. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. Termination of Custodianship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
a. By Sponsor (Existing Plans and/or New Plans) . . . . . . . . . . . . . . . . . . . 4
b. By Custodian (Existing Plans and New Plans). . . . . . . . . . . . . . . . . . . . 4
c. Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
II. CUSTODIAN'S FUNCTIONS
A. PROCESSING OF PLANHOLDERS INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1. Initial Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2. Systematic Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3. Pre-Authorized Check Payments Program. . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. Automated Clearinghouse ("ACH") Payment Program. . . . . . . . . . . . . . . . . . . . . . 8
5. Reinvestment of Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6. Acceleration of Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7. Additional Investment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8. Change in Denomination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
9. Rights of Accumulation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
10. Plan Reinstatement Privilege. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
11. Individual Retirement Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
12. Federal Income Tax Withholding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
B. PROCESSING OF REFUNDS, SURRENDERS, WITHDRAWALS, LIQUIDATIONS, TRANSFERS, ASSIGNMENTS,
TERMINATIONS AND COMPLETIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2. Refund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3. Eighteen-Month Surrender. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4. Partial Withdrawal and Liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5. Systematic Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6. Transfer or Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7. Termination of Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
a. Termination by Planholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
b. Termination by Sponsor or Custodian . . . . . . . . . . . . . . . . . . . . . . . . 24
c. Termination Under Other Circumstances . . . . . . . . . . . . . . . . . . . . . . . 26
8. Completion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
C. PURCHASE, SALE, MAINTENANCE, VOTING AND SUBSTITUTION OF FUND SHARES . . . . . . . . . . . . . . . . 28
1. Purchase and Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2. Maintenance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3. Bank Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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4. Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5. Voting of Fund Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6. Substitution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
a. By Sponsor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
b. By Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
c. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7. Furnishing of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
D. DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
1. Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2. Performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3. Administrative Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4. Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
5. Delegation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
E. FEES AND CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
1. Remuneration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2. Payments to Sponsor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
III. SPONSOR'S FUNCTIONS
A. ADMINISTRATION OF PLANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
1. General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
2. Operations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3. Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4. Creation and Sales Charges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
5. Wrongful Retention Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
B. FURNISHING OF DOCUMENTS, FORMS AND INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
1. Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
2. Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3. Sponsor's Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4. Plan Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
5. Distribution Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
C. SUBSTITUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
1. SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
2. Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
3. Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4. Planholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
IV. MISCELLANEOUS
A. ASSIGNMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
B. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
C. COMMUNICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
D. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
E. INSPECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
F. SCHEDULES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
G. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
H. CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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CUSTODIAN AGREEMENT
AGREEMENT made this 1st day of May, 1996 between A I M DISTRIBUTORS,
INC., a Delaware corporation with its principal office at Eleven Xxxxxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx (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 and the Custodian have entered into a Custodian
Agreement dated as of June 1, 1983 (the "Prior Agreement");
WHEREAS, the Sponsor is engaged in the business of selling shares of
mutual funds and similar securities and presently wishes to continue the
services of the Custodian in connection with the administration of a plan for
the accumulation of shares of AIM Summit Fund, Inc. (the "Fund") which the
Sponsor sells and distributes for the benefit of Planholders (as defined
herein) of Summit Investors Plans (the "Plan");
WHEREAS, the Sponsor and the Custodian wish to amend and restate the
Custodian Agreement to take into account the elimination of Plan Certificates
under the Plan, changes in the Custodian's role in processing applications and
changes in the schedule of fees.
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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 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".
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.
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B. CUSTODIANSHIP
1. Appointment. Effective as of the approval of this Agreement
by plan participants, Custodian hereby accepts appointment as custodian under
this Agreement with respect to Plans for which such approval has been obtained.
Custodian hereby agrees to continue to serve as custodian under and pursuant to
the terms of the Prior Agreement as such terms affect the substantive legal
rights of the plan participants for those plan participants who do not approve
this Agreement. A copy of the Prior Agreement is attached hereto and made a
part hereof.
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 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
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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 Plan 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, 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
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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, 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 paragraphs II(B)(2), (3) and (4)
below.
2. Systematic Payment. Upon receipt by the Custodian of each
Planholder 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 apply the
appropriate amounts to the purchase of the necessary documentary stamps or to
payments to the proper taxing authorities;
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d. Deduct from the payment applicable fees of the
Sponsor and the Custodian as set forth in the attached schedules, and the
Prospectus, and credit such deductions to the Sponsor 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, 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 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
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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 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
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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 schedules, 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 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
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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 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
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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 and subject to a custodian fee. 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 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.
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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 obtained from a
liquidation of Fund shares. The Custodian will charge the fee set forth in
Schedule A for any change in a Plan denomination. For a period of six months
following a face change increase, the Planholder
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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 sixth 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," 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 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 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
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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 60 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 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
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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 a 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 XXX.
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
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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 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
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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 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, following the
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expiration of 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 Sponsor
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 a 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 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
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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 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 26 of the Rules of Fair
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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 XXX rollovers. All reinvestments
must be at least 25% of the amount withdrawn or $2,000, whichever is less.
(v) The Custodian will charge the fee set forth in Schedule A
for each partial withdrawal, liquidation or restoration, and the Planholder
will be liable for any transfer taxes that may be required.
(vi) The Sponsor reserves the right to limit the exercise of
partial liquidations and restoration to once during a period of a year.
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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.
The Custodian will charge the fee set forth in Schedule A for each
check relating to a withdrawal under a Systematic Withdrawal Program. This
charge is collected by redeeming the necessary fractional shares. For any
payment made ten years after the issuance of a Plan, the charge may be
increased to the amount specified in the then current Prospectus. However,
this
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charge may not exceed $1.75. The Sponsor reserves the right (upon 90 days'
notice) to discontinue offering Systematic Withdrawal Programs.
6. Transfer or Assignment. The Custodian and the Sponsor agree
that a Planholder may, subject to the Custodian fee set forth in Schedule A
plus transfer taxes, if any, (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
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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:
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 an 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
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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 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
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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, 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 changes 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
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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 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.
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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, in
lieu of the monthly charge specified in the attached schedules. This fee will
normally be deducted from the last combined income 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
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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 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.
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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 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.
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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 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
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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.
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
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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 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.
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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 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
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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; and
f. Answer all inquiries from Planholders concerning
their Plan.
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 the 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.
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5. Delegation. Any and all duties of the Custodian enumerated in
the foregoing provisions of this subparagraph II.D are hereby delegated to the
Sponsor until such time as the Custodian notifies the Sponsor that it is
terminating such delegation. The effect of such termination will be that the
Custodian will perform the foregoing duties, but the Sponsor will continue to
receive the delegated duty fee described in the Schedule attached hereto for
such performance. The Custodian will xxxx the Sponsor for all expenses
associated with the performance of the foregoing duties.
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
Schedules, 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
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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 delegated duty fee described
in the attached Schedule.
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 Agreement and the Prospectus.
2. Operations. The Sponsor shall use its best efforts to sell
and distribute Plans, 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 and Sales Charges. 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 and for all selling expenses and
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commissions with respect to the Plans. This charge is deducted from each
payment by a Planholder.
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.
B. FURNISHING 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 agreement between the Sponsor and the Fund and a
copy of any new agreement entered into in lieu thereof.
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
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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 must be generally
comparable in character and quality to Fund Shares and must be registered under
the 1933 Act.
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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)(1)(c) 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, 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
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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 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.
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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 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 or omitted to
be done or suffered in connection with the Custodianship except for their own
lack of good faith, willful misconduct or negligence.
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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.
Eleven Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: General Counsel
State Street Bank and Trust Company
c/o Summit Investors Plan
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.
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
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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 the rights and privileges of any Planholder without first
obtaining his written consent.
H. CONSTRUCTION. This Agreement shall be subject to and construed under
the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, and their respective corporate
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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
SEAL
ATTEST:
/s/ XXXXXXX X. XXXXX
-----------------------------
Assistant Secretary
STATE STREET BANK AND TRUST
COMPANY
BY: /s/ [ILLEGIBLE]
-----------------------------
Executive Vice President
ATTEST:
/s/ X. XXXXX
-----------------------------
Vice President and Counsel
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SCHEDULE A
FEE CATEGORY PER TRANSACTION COMMENTS
------------ --------------- --------
*CUSTODIAN FEES
Payments $ 1.50 Charged to planholder account (per Prospectus)
Liquidations 2.50 All of these invoiced monthly to sponsor, per
AIM's request. Prospectus makes reference to
these fees, but sponsor currently pays them.
Terminations 2.50
Face Changes 2.50
Transfers 2.50
Option Changes 2.50
SWP's 1.00
*INACTIVE/COMPLETE PLANS $12.00 annually Charged to planholder account (per Prospectus)
*BOUNCED CHECKS $ 5.00 per check Invoiced monthly to sponsor
*COMMUNICATIONS FEES
Phone Calls $ 2.50 Invoiced monthly to sponsor
Letters 2.50 Invoiced monthly to sponsor
*FIDUCIARY ACCOUNTS $10.00 annually Charged to planholder account (per Prospectus)
*DELEGATED DUTY FEE Not to exceed $10.00 Charged to planholder account and paid to
annually sponsor (per Prospectus)
*OUT-OF-POCKETS Forms, postage, phone lines, microfiche, etc.
Invoiced monthly to sponsor.
