EXHIBIT 10.26
FRANKLIN/TEMPLETON INVESTOR SERVICES, INC.
TRANSFER AGENT AND SHAREHOLDER SERVICES AGREEMENT
Investment Company:
Date:
The parties to this Agreement are the Investment Company named above
("Investment Company"), an open-end investment company registered as such under
the Investment Company Act of 1940 ("1940 Act"), on behalf of each class of
shares of each series of the Investment Company which now exists or may
hereafter be created (collectively, the "Funds") and FRANKLIN/TEMPLETON INVESTOR
SERVICES, INC. ("FTIS"), a registered transfer agent formerly known as Franklin
Administrative Services, Inc. This Agreement supersedes prior Shareholder
Services Agreements between the parties, as stated below in section 16(d).
W I T N E S E T H:
That for and in consideration of the mutual promises hereinafter set forth,
the Investment Company and FTIS agree as follows:
1. DEFINITIONS. Whenever used in this Agreement, the following words and
phrases, unless the context otherwise requires, shall have the following
meanings:
(a) "Articles" shall mean the Articles of Incorporation, Declaration
of Trust or Agreement of Limited Partnership, as appropriate, of the
Investment Company as the same may be amended from time to time;
(b) "Authorized Person" shall be deemed to include any person, whether
or not such person is an officer or employee of the Investment Company,
duly authorized to give Oral Instructions or Written Instructions on behalf
of the Investment Company, as indicated in a resolution of the Investment
Company's Board which was valid at the time of this Agreement, or as
indicated in a certificate furnished to FTIS pursuant to Section 4(c)
hereof;
(c) "Board" shall mean the Investment Company's Board of Directors,
Board of Trustees or Managing General Partners, as appropriate;
(d) "Custodian" shall mean a custodian and any sub-custodian of
securities and other property which the Investment Company may from time to
time deposit, or cause to be deposited or held under the name or account of
such custodian pursuant to the Custody Agreement;
(e) "Oral Instructions" shall mean instructions (including without
limitation instructions received by telephone, facsimile, electronic mail
or other electronic mail), other than written instructions, actually
received by FTIS from a person reasonably believed by FTIS to be an
Authorized Person;
(f) "Shares" shall mean shares of each class of capital stock,
beneficial interest or limited partnership interest, as appropriate, of
each series of the Investment Company; and
(g) "Written Instructions" shall mean a written communication signed
by a person reasonably believed by FTIS to be an Authorized Person and
actually received by FTIS.
2. APPOINTMENT OF FTIS. The Investment Company hereby appoints FTIS as
transfer agent for Shares of the Investment Company, as service agent in
connection with dividend and distribution functions, and as shareholder
servicing agent for the Investment Company, and FTIS accepts such appointment
and agrees to perform the following duties.
3. COMPENSATION.
(a) The Investment Company will compensate FTIS for the performance of
its obligations hereunder in accordance with the fees set forth in the
written schedule of fees annexed hereto as Schedule A and incorporated
herein. Schedule A does not include out-of-pocket disbursements of FTIS for
which FTIS shall be separately reimbursed by the Investment Company. FTIS
will bill the Investment Company as soon as practicable after the end of
each calendar month, in accordance with Schedule A. The Investment Company
will promptly pay to FTIS the amount of such billing.
Out-of-pocket disbursements shall include, but shall not be limited
to, the items specified in the written schedule of out-of-pocket expenses
annexed hereto as Schedule B and incorporated herein. Unspecified
out-of-pocket expenses shall be limited to those out-of-pocket expenses
reasonably incurred by FTIS in the performance of its obligations
hereunder, subject to approval by the Board. Reimbursement by the
Investment Company for expenses incurred by FTIS in any month shall be made
as soon as practicable after the receipt of an itemized bill from FTIS.
Out-of-pocket disbursements may also include payments made by FTIS to
entities including affiliated entities which provide sub-shareholder
services, recordkeeping and/or transfer agency services to beneficial
owners of the Investment Company, where such services are substantially
similar to the services provided by FTIS to account holders of record. The
amount of these disbursements per benefit plan participant fund account per
year shall not exceed the per account transfer agency fees payable by the
Fund to FTIS in connection with maintaining actual shareholder accounts. On
an annual basis, FTIS shall provide a report to the Board showing, with
respect to each entity receiving such fees, the number of beneficial owners
serviced by such entity and the value of the assets in the Fund represented
by such accounts.
(b) Any compensation agreed to hereunder may be adjusted from time to
time by mutual agreement by attaching revised Schedules A or B to this
Agreement.
4. DOCUMENTS. In connection with the appointment of FTIS, the Investment
Company shall, within a reasonable period of time for FTIS to prepare to perform
its duties hereunder, deliver to FTIS the following documents:
(a) If applicable, specimens of the certificates for the Shares;
(b) All account application forms and other documents relating to
Shareholder accounts or to any plan, program or service offered by the
Investment Company;
(c) A certificate identifying the Authorized Persons and specimen
signatures of Authorized Persons who will sign Written Instructions; and
(d) All documents and papers necessary under the laws of the
Investment Company's state of domicile, under the Investment Company's
Articles, and as may be required for the due performance of FTIS's duties
under this Agreement or for the due performance of additional duties as may
from time to time be agreed upon between the Investment Company and FTIS.
5. DUTIES OF THE TRANSFER AGENT. FTIS shall be responsible for
administering and/or performing transfer agent functions; for acting as service
agent in connection with dividend and distribution functions; and for performing
shareholder account and administrative agent functions in connection with the
issuance, transfer, exchange, redemption or repurchase (including coordination
with the Custodian) of Shares. FTIS shall be bound to follow its usual and
customary operating standards and procedures, as they may be amended from time
to time, and each current prospectus and Statement of Additional Information
(hereafter, collectively, the "prospectus") of the Investment Company. Without
limiting the generality of the foregoing, FTIS agrees to perform the specific
duties listed on Schedule C.
The duties to be performed by FTIS shall not include the engagement,
supervision or compensation of any service providers, or any registrations or
fees of any kind, which are required by the laws of any foreign country in which
the Fund may choose to invest portfolio assets or sell Shares.
6. (a) DISTRIBUTIONS PAYABLE IN SHARES. In the event that the Board of the
Investment Company shall declare a distribution payable in Shares, the
Investment Company shall deliver to FTIS written notice of such declaration
signed on behalf of the Investment Company by an officer thereof, upon which
FTIS shall be entitled to rely for all purposes, certifying (i) the number of
Shares involved, and (ii) that all appropriate action has been taken to effect
such distribution.
(b) DISTRIBUTIONS PAYABLE IN CASH; REDEMPTION PAYMENTS. In the event
that the Board of the Investment Company shall declare a distribution
payable in cash, the Investment Company shall deliver to FTIS written
notice of such declaration signed on behalf of the Investment Company by an
officer thereof, upon which FTIS shall be entitled to rely for all
purposes, certifying (i) the amount per share to be distributed, (ii) the
record and payment dates for the distribution, and (iii) that all
appropriate action has been taken to effect such distribution. Once the
amount and validity of any dividend or redemption payments to shareholders
have been determined, the Investment Company shall transfer the payment
amounts from the Investment Company's accounts to an account or accounts
held in the name of FTIS, as paying agent for the shareholders, in
accordance with any applicable laws or regulations, and FTIS shall promptly
cause payments to be made to the shareholders.
7. RECORDKEEPING AND OTHER INFORMATION. FTIS shall create, maintain and
preserve all necessary records in accordance with all applicable laws, rules and
regulations. Such records are the property of the Investment Company, and FTIS
will promptly surrender them to the Investment Company upon request or upon
termination of this Agreement. In the event of such a request or termination,
FTIS shall be entitled to make and retain copies of all records surrendered, and
to be reimbursed by the Investment Company for reasonable expenses actually
incurred in making such copies. FTIS will take reasonable actions to maintain
the confidentiality of the Investment Company's records, which may nevertheless
be disclosed to the extent required by law or by this Agreement, or to the
extent permitted by the Investment Company.
8. OTHER DUTIES. In addition, FTIS shall perform such other duties and
functions, and shall be paid such amounts therefor, as may from time to time be
agreed upon in writing between the Investment Company and FTIS. Such other
duties and functions shall be reflected in a written amendment to Schedule C,
and the compensation for such other duties and functions shall be reflected in a
written amendment to Schedule A.
9. RELIANCE BY TRANSFER AGENT; INSTRUCTIONS.
(a) FTIS will be protected in acting upon Written or Oral Instructions
reasonably believed to have been executed or orally communicated by an
Authorized Person and will not be held to have any notice of any change of
authority of any person until receipt of a Written Instruction thereof from
an officer of the Investment Company. FTIS will also be protected in
processing Share certificates which it reasonably believes to bear the
proper manual or facsimile signatures of the officers of the Investment
Company and the proper countersignature of FTIS.
(b) At any time FTIS may apply to any Authorized Person of the
Investment Company for Written Instructions, or may seek advice at the
Investment Company's expense from legal counsel for the Investment Company,
with respect to any matter arising in connection with this Agreement. FTIS
shall not be liable for any action taken or not taken or suffered by it in
good faith in accordance with such Written Instructions or in accordance
with the opinion of counsel for the Investment Company. Written
Instructions requested by FTIS will be provided by the Investment Company
within a reasonable period of time.
10. ACTS OF GOD, ETC. FTIS will not be liable or responsible for delays or
errors by reason of circumstances beyond its control, including acts of civil or
military authority, national emergencies, labor difficulties, fire, mechanical
breakdown beyond its control, earthquake, flood or catastrophe, acts of God,
insurrection, war, riots or failure beyond its control of transportation,
communication or power supply.
11. DUTY OF CARE AND INDEMNIFICATION. FTIS will indemnify the Investment
Company against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses)
resulting from any claim, demand, action or suit resulting from willful
misfeasance, bad faith or gross negligence on the part of FTIS, and arising out
of, or in connection with, its duties hereunder. However, FTIS shall have no
liability for or obligation to indemnify the Investment Company against any
losses, claims, damages, liabilities or expenses (including reasonable counsel
fees and expenses) incurred by the Investment Company as a result of: (i) any
action taken in accordance with Written or Oral Instructions; (ii) any action
taken in accordance with written or oral advice reasonably believed by FTIS to
have been given by counsel for the Investment Company; (iii) any action taken as
a result of any error or omission in any record (including but not limited to
magnetic tapes, computer printouts, hard copies and microfilm copies) delivered,
or caused to be delivered by the Investment Company to FTIS in connection with
this Agreement; or (iv) any action taken in accordance with shareholder
instructions which meet the standards described in the Investment Company's
current prospectus, including without limitation oral instructions which meet
the standards described in the section of the prospectus dealing with telephone
transactions, so long as FTIS believes such instructions to be genuine. The
obligations of the parties hereto under this Section shall survive the
termination of this Agreement.
12. TERM AND TERMINATION.
(a) This Agreement shall be effective as of the date first written
above, shall continue through December 31, 1996, and thereafter shall
continue automatically for successive annual periods ending on December 31
of each year, provided such continuance is specifically approved at least
annually by the Investment Company's Board.
(b) Either party hereto may terminate this Agreement by giving to the
other party a notice in writing specifying the date of such termination,
which shall be not less than 60 days after the date of receipt of such
notice. Upon such termination, FTIS will (i) deliver to such successor a
certified list of shareholders of the Investment Company (with names and
addresses) and an historical record of the account of each Shareholder and
the status thereof; (ii) surrender all other relevant records in accordance
with section 7 of this Agreement, above, and (iii) cooperate in the
transfer of such duties and responsibilities, including provisions for
assistance from FTIS's personnel in the establishment of books, records and
other data by such successor or successors. FTIS shall be entitled to
charge the Investment Company a reasonable fee for services rendered and
expenses actually incurred in performing its duties under this paragraph.
13. AMENDMENT. This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties.
14. SUBCONTRACTING. The Investment Company agrees that FTIS may, in its
discretion, subcontract for all or any portion of the services described under
this Agreement or the Schedules hereto; provided that the appointment of any
such agent shall not relieve FTIS of its responsibilities hereunder.
15. DATA PROCESSING SYSTEM, PROGRAM AND INFORMATION
(a) The Investment Company shall not, solely by virtue of this
Agreement, obtain any rights, title and interest in and to the computer
systems and programs, including all related documentation, employed by FTIS
in connection with rendering services hereunder; provided however, that the
records prepared, maintained and preserved by FTIS pursuant to this
Agreement shall be the property of the Investment Company.
(b) Any modifications, changes and improvements in the automatic data
processing system (the "System") or in the manner in which the services are
rendered shall be made or provided as follows, and provided further that
modifications for which the Investment Company will be required to bear any
expenses shall be made only as set forth herein.
(i) FTIS shall, at no expense to the Investment Company, make any
revisions in the System necessary to (1) perform the services which it
has contracted to perform and (2) create and maintain the records
which it has contracted to create and maintain hereunder or (3)
enhance or update the System to the extent and in the manner necessary
to maintain said System. However, if specific reprogramming, coding or
other changes are necessary in the records of the Investment Company
or in its shareholder accounts in order to complete a system revision,
the costs for completing work specific to the Investment Company shall
be subject to a subsequent agreement between the parties. The System
is at all times to be competitive with that which is generally
available to the mutual fund industry from transfer agents.
(ii) To the extent that the System is modified to comply with
changes in the accounting or record-keeping rules applicable to mutual
funds, the Investment Company agrees to pay a reasonable pro rata
portion of the costs of the design, revision and programming of the
System; provided, however, that if the Investment Company's pro rata
portion exceeds $1,000 per 12 month period, the Investment Company's
obligation to pay a reasonable pro rata portion shall be conditioned
upon FTIS's having obtained prior Written Instructions from the
Investment Company for any charge. The determination that such
modifications or revisions are necessary, and that the System as so
modified produces records which comply with the record-keeping
requirements, as amended, shall be by mutual agreement; provided,
however, that upon written request by the Investment Company, FTIS
will provide the Investment Company with a written opinion of counsel
to FTIS to the effect that the modifications were required by changes
in the applicable laws or regulations and that the System, as
modified, complies with the laws or regulations as amended. Upon
completion of the changes FTIS shall render a statement to the
Investment Company, in reasonably detailed form, identifying the
nature of the revisions, the services, expenses and costs, and the
basis for determining the Investment Company's reasonable pro rata
portion. Any determination by FTIS of the Investment Company's pro
rata portion based upon the ratio of the number of shareholder
accounts of the Investment Company to the total number of shareholder
accounts of all clients for which FTIS provides comparable services
shall conclusively be presumed to be reasonable unless the nature of
the change to the System relates to certain types of shareholder
accounts, in which case the pro rata portion will be determined on a
mutually agreeable basis.
(iii) If system improvements are requested by the Investment
Company and are not otherwise required under this subsection 15(b),
FTIS shall be entitled to request a reasonable fee before agreeing to
make the improvements and shall be entitled to refuse to make any
requested improvements which FTIS reasonably believess to be
incompatible with its systems providing services to other funds.
16. MISCELLANEOUS.
(a) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Investment Company or FTIS shall be
sufficiently given if addressed to that party and received by it at its
office at the place described in the Investment Company's most recent
registration statement or at such other place as it may from time to time
designate in writing.
(b) This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable by either party
without the written consent of the other party.
(c) This Agreement shall be construed in accordance with the laws of
the State of California applicable to contracts between California
residents which are to be performed primarily within California.
(d) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original; but such counterparts shall,
together, constitute only one instrument. This Agreement supersedes all
prior Shareholder Services Agreements between the parties, and supersedes
all prior agreements between the parties relating to the subject matters of
this Agreement to the extent they are inconsistent with this Agreement.
(e) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
(f) It is understood and expressly stipulated that neither the holders
of Shares of the Investment Company nor any member of the Board, officer,
agent or employee of the Investment Company shall be personally liable
hereunder, nor shall any resort be had to other private property for the
satisfaction of any claim or obligation hereunder, but the Investment
Company only shall be liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective corporate officers thereunder duly authorized as of
the day and year first above written.
[NAME OF INVESTMENT COMPANY] FRANKLIN/TEMPLETON
INVESTOR SERVICES, INC.
BY: _______________________ _______________________
NAME: Deborah R. Gatzek Frank J. Isola
TITLE: Secretary President
Schedule A
FEES
Shareholder account maintenance (per
annum, pro-rated payable monthly)
Money Market Funds
Other Funds - Monthly Dividends $ 18.00
Other Funds - Less Frequent Dividends
$ 11.00
$ 10.00
Schedule B
OUT-OF-POCKET EXPENSES
The Investment Company shall reimburse FTIS monthly for the following
out-of-pocket expenses:
postage, mailing and freight
forms for shareholder transactions and shareholder communications
outgoing wire charges telephone ACH and Federal Reserve charges for
check clearance and wire transfers
magnetic tape (or other means for storing information
electronically) retention of records microfilm/microfiche stationery
for shareholder mailings insurance against loss of Share
certificates when in transit if applicable, terminals, transmitting
lines and any expenses incurred in connection with such terminals
and lines all other miscellaneous expenses reasonably incurred by
FTIS in the performance of its obligations under the Agreement NSCC
Networking/Commission Settlement Expenses
This Schedule B may be amended by FTIS upon not less than 30 days' written
notice to the Investment Company, subject to approval by the Board.
Schedule C
DUTIES
AS TRANSFER AGENT FOR THE INVESTMENT COMPANY, FTIS WILL:
Upon receipt of proper authorization, record the issuance and sale
of Investment Company Shares in its transfer records in such names
and for such number of authorized but hitherto unissued Shares of
the Investment Company;
Upon receipt of proper authorization, transfer ownership of record
of certificated or uncertificated Investment Company Shares whether
now outstanding or hereafter issued;
Upon receipt of proper authorization, redeem Shares, debit
shareholder accounts and provide for payment to shareholders; and
If the Investment Company issues certificated shares, upon
receipt of proper authorization, countersign as transfer agent and
deliver certificates upon issuance, countersign certificates to
reflect ownership transfers, and cancel certificates when redeemed.
AS SHAREHOLDER SERVICE AGENT FOR THE INVESTMENT COMPANY, FTIS WILL:
Receive from the Investment Company, from the Investment Company's
Principal Underwriter or from a Shareholder, on a form acceptable to
FTIS, information necessary to record sales and redemptions and to
generate sale and/or redemption confirmations;
Mail sale and/or redemption confirmations using standard forms;
Accept and process cash payments from investors and their
broker-dealers or other agents, clear checks which represent
payments for the purchase of Shares;
Support the use of automated systems for payment and other
share transactions, including NSCC Fund/Serv, PC Trades and other
systems which may be reasonably requested by FTIS customers;
Keep records as necessary to implement any deferred sales
charges, exchange restrictions or other policies of the Investment
Company affecting share transactions, including without limitation
any restrictions or policies applicable to certain classes of
shares, as stated in the applicable prospectus;
Requisition Shares in accordance with instructions of the
Principal Underwriter of the Shares of the Investment Company;
Produce periodic reports reflecting the accounts receivable and
the paid pending (free stock) items;
Open, maintain and close Shareholder accounts;
Establish registration of ownership of Shares in accordance
with generally accepted form;
Maintain records of (i) issued Shares and (ii) number of
Shareholders and their aggregate Shareholdings classified according
to their residence in each State of the United States or foreign
country;
Accept and process telephone exchanges and redemptions for Shares in
accordance with a Fund's Telephone Exchange and Redemption
Privileges as described in the Fund's current prospectus.
Maintain and safeguard records for each Shareholder showing name(s),
address, number of any certificates issued, and number of Shares
registered in such name(s), together with continuous proof of the
outstanding Shares, and dealer identification, and reflecting all
current changes. On request, provide information as to an investor's
qualification for Cumulative Quantity Discount. Provide all accounts
with year-to-date and year-end historical confirmation statements;
Provide on request a duplicate set of records for file maintenance
in the Investment Company's office;
Provide for the proper allocation of proceeds of share sales to the
Investment Company and to the Principal Underwriter, in accordance
with the applicable prospectus;
Redeem Shares and provide for the preparation and delivery of
liquidation proceeds;
Provide for the processing of redemption checks, and maintain
checking account records;
Exercise reasonable and good-faith business judgment in the
registration of Share transfers, pledges and releases from pledges
in accordance with the California Uniform Commercial Code - -
Investment Securities;
From time to time make transfers of certificates for such Shares as
may be surrendered for transfer properly endorsed, and countersign
new certificates issued in lieu thereof;
Upon receipt of proper documentation, place stop transfers, obtain
necessary insurance forms, and reissue replacement certificates
against lost, stolen or destroyed Share certificates;
Check surrendered certificates for stop transfer restrictions.
Although FTIS cannot insure the genuineness of certificates
surrendered for cancellation, it will employ all due reasonable care
in deciding the genuineness of such certificates and the guarantor
of the signature(s) thereon;
Cancel surrendered certificates and record and countersign
new certificates;
Certify outstanding Shares to auditors;
In connection with any meeting of Shareholders, upon receiving
appropriate detailed instructions and written materials prepared by
the Investment Company and proxy proofs checked by the Investment
Company, provide for: (a) the printing of proxy cards, (b) the
delivery to Shareholders of all reports, prospectuses, proxy cards
and related proxy materials of suitable design for enclosing, (c)
the receipt and tabulation of executed proxies, and (d) delivery of
a list of Shareholders for the meeting;
Answer routine correspondence and telephone inquiries about
individual accounts. Prepare monthly reports for correspondence
volume and correspondence data necessary for the Investment
Company's Semi-Annual Report on Form N-SAR;
Provide for the preparation and delivery of dealer commission
statements and checks;
Maintain and furnish the Investment Company and its Shareholders
with such information as the Investment Company may reasonably
request for the purpose of compliance by the Investment Company with
the applicable tax and securities laws of applicable jurisdictions;
Mail confirmations of transactions to investors and dealers in a
timely fashion;
Provide for the payment or reinvestment of income dividends and/or
capital gains distributions to Shareholders of record, in accordance
with the Investment Company's and/or Shareholder's instructions,
provided that:
(a) The Investment Company shall notify FTIS in writing
promptly upon declaration of any such dividend and/or
distribution, and in any event at least forty-eight (48)
hours before the record date;
(b) Such notification shall include the declaration date,
the record date, the payable date, the rate, and, if
applicable, the reinvestment date and the reinvestment
price to be used; and
(c) Prior to the payable date, the Investment Company shall
furnish FTIS with sufficient fully and finally collected
funds to make such distribution;
Prepare and file annual U.S. information returns of dividends and
capital gain distributions, gross redemption proceeds, foreign
person's U.S. source income, and other U.S. federal and state
information returns as required, and mail payee copies to
shareholders; report and pay U.S. backup withholding on all
reportable payments; report and pay U.S. federal income taxes
withheld from distributions and other payments made to nonresidents
of the U.S.; prepare and mail to shareholders any notice required by
the Internal Revenue Code as to taxable dividends, tax-exempt
interest dividends, realized net capital gains distributed and/ or
retained, foreign taxes paid and foreign source income distributed
or deemed distributed, U.S. source income and any tax withheld on
such income, dividends received deduction information, or other
applicable tax information appropriate for dissemination to
shareholders of the Trust;
Comply with all U.S. federal income tax requirements regarding the
collection of tax identification numbers and other required
shareholder certifications and information pertaining to shareholder
accounts; respond to all notifications from the U.S. Internal
Revenue Service regarding the application of the U.S. backup
withholding requirements including tax identification number
solicitation requirements;
Prepare transfer journals;
Set up wire order Share transactions on file;
Provide for receipt of payment for Share transactions, and update
the transaction file;
Produce delinquency and other trade file reports;
Provde dealer commission statements and provide for payments
thereof for the Principal Underwriter;
Sort and print shareholder information by state, social code,
price break, etc.; and
Mail promptly the Statement of Additional Information of the
Investment Company to each Shareholder who requests it, at no cost
to the Shareholder.
In connection with the Investment Company's Systematic Withdrawal Plan,
FTIS will:
Make payment of amounts withdrawn periodically by the Shareholder
pursuant to the Program by redeeming Shares, and confirm such
redemptions to the Shareholder; and
Provide confirmations of all redemptions, reinvestment of dividends
and distributions, and any additional investments in the Program,
including a summary confirmation at the year-end.