EXHIBIT 2(k)(1)
SERVICE AGREEMENT
THIS AGREEMENT made as of the 1st day of March, 1990, between Blue Chip
Value Fund, Inc., a corporation organized under the laws of the State of
Maryland (hereinafter called "COMPANY") and Mellon Securities Trust Company, a
New York Trust Company with its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ (hereinafter called "MELLON, TRUST COMPANY, REGISTRAR, OR TRANSFER AGENT").
WITNESSETH:
NOW THEREFORE, in consideration of the mutual covenants herein set forth,
the company and Mellon agree as follows:
1. Mellon will be named as Transfer Agent, Registrar, and Dividend
Disbursement Agent for the Company.
2. Attached to this Agreement and designated as "Exhibit A" is a listing
of certain services which Mellon agrees to provide to the Company and a Fee
Schedule setting forth the compensation the Company will pay to Mellon for its
services to the Company pursuant to this Agreement. Should there be a
termination of the transfer agency after the initial one year period, there will
be a charge of $1.00 per account upon termination.
3. Attached to this Agreement and designated as "Exhibit B" is a
statement of Procedures and Requirements For The Transfer and Registration of
Stock and the Disbursement of Dividends. Exhibit B is revised as attached.
4. It is agreed between Mellon and the Company that the term of this
Agreement shall be for a period of not less than one year commencing on March 1,
1990.
5. It is understood that Mellon's fee will not be increased during the
initial (12) month period of this Agreement. In the event there is an increase
in the cost of performance of the services due to changes in applicable
regulations of any regulatory agencies, the amount of such cost shall be paid by
the Company. It is further provided that Mellon shall comply with all
applicable laws and regulations relating to pricing which may then be in effect.
6. These fees do not include out-of-pocket expenses such as (a)
stationary, the issuance of stock certificates or other services related to
special work, such as stock dividends, mergers, tenders, acquisitions or other
services not presently being performed by Mellon, (b) proxies issued and
tabulated for
special meetings, (c) supplies, magnetic tapes, overtime charges, folding, bulk
mailing, manual and machine insertion, (d) expenses connected with special
reporting for year-end fees, commissions and State Information Returns. Mellon
shall be reimbursed for the cost of any and all forms, including blank checks,
and proxies, used by it in communicating with shareholders of the Company, or
especially prepared for use in connection with its actions hereunder, as well as
the cost of postage, telephone and telegraph used in communicating with
Shareholders of the Company, provided that Mellon, prior to ordering any forms
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in such supply as it estimates will be adequate for more than two years' use,
shall obtain written consent of the Company. All forms for which Mellon has
received reimbursement from the Company shall be and remain the property of the
Company until used. Mellon shall also receive from the Company reimbursement
for reasonable counsel fees incurred by Mellon in connection with the
performance of its duties under this Agreement, unless such fees are incurred on
a matter involving Mellon's willful misconduct or negligence provided that the
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Company's prior written approval of the use of counsel shall be obtained.
Mellon shall assess service charges against shareholders of the Company with the
written consent of the Company.
7. This Agreement may not be terminated prior to the expiration for any
reason except for unacceptable service performance by Mellon, or the non-payment
by the Company of Mellon's monthly bills within a period of the time deemed
reasonable by Mellon. Unacceptable service performance shall mean noncompliance
with the then current generally accepted service standards of the securities
transfer industry.
8. For Services performed under this Agreement, Mellon will send monthly
invoices to the Company, and payment of said invoices is due within 30 days of
receipt.
9. This Agreement may not be amended or modified in any manner except by
a written agreement by both Mellon and the Company with the same formality as
this Agreement.
10. During the last ninety days of this Agreement, either Mellon or the
Company may by thirty days written notice to the other request that the terms
herein be renegotiated or the Agreement terminated. In the absence of such
written notification by either party to the other during such ninety day period,
this Agreement will automatically continue for an additional one year period and
subsequent one year periods thereafter under the same conditions.
11. Indemnification
(a) The Company shall indemnify and hold harmless Mellon against claims and
liabilities (including reasonable expenses and
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reasonable attorneys' fees) incurred arising out of (i) the transactions which
occurred prior to the date on which Mellon assumed duties under the Agreement;
(ii) errors in the COMPANY'S records and out-of-proof records which were present
as of such date; (iii) any act done or suffered by Mellon in good faith in
connection with such duties in reliance upon any instructions, order, stock
certificate, assignment, affidavit, certificate, or other instrument reasonably
believed by it to be genuine and to bear the genuine signature of any person or
persons authorized to sign, countersign, or execute the same; (iv) any act done
or suffered by Mellon in good faith in reliance upon any instructions received
from any officer of the Company or advice or counsel for the Company or for
Mellon as long as the instructions or advice are writing; and (v) any other act
done or suffered by Mellon in good faith and without negligence in connection
with such duties.
UNDER NO CIRCUMSTANCES SHALL MELLON BE RESPONSIBLE FOR SPECIAL OR CONSEQUENTIAL
DAMAGES ARISING FROM THE PERFORMANCE OF DUTIES UNDER THIS AGREEMENT.
(b) Mellon may subcontract or delegate duties under this Agreement to
affiliate corporations, provided, however, no such delegation or subcontracting
shall relieve Mellon of its liabilities and responsibilities to the Company
under this Agreement. In the event that Mellon desires to subcontract any of
its duties under this Agreement to a third party, Mellon may do so, provided
that it provides prior notice to the Company and provided further that such
subcontracting does not relieve Mellon of its liabilities and responsibilities
to the Company under this Agreement.
12. This Agreement shall be governed by and construed, and interpreted in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement by
their duly authorized officers as of the day and year first above written.
BLUE CHIP VALUE FUND, INC.
BY: /s/ ▇▇▇▇▇▇ ▇. Wine
MELLON SECURITIES TRUST COMPANY
BY: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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BLUE CHIP VALUE FUND
TRANSFER AGENT FEE SCHEDULE AND SERVICES
EXHIBIT A
The minimum annual account maintenance fee is $46,000 based on 7,500 shareowner
accounts and 6,600 Dividend Reinvestment accounts. Voluntary cash investments
will be charged the applicable rates outlined below. If the above-mentioned
shareowner and dividend reinvestment base account numbers are exceeded, the
following fee schedule will apply:
Annual Account Maintenance Fee, per account $3.50
Certificate Issuance, per certificate 1.50
Certificates Cancelled, each .20
Dividend Reinvestment, each .75
Voluntary Cash Investments:
voluntary Cash, per account 2.00
Voluntary Cash Acknowledgement Letter, each 1.00
The above account charges include the services described, except as otherwise
specifically provided.
Maintenance of Accounts
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Update records daily - posting for debit/credit transactions. Answer shareowner
correspondence.
Change addresses.
open and close accounts.
Maintenance of stop transfer - including placing and removing.
The rate for accounts maintained will be applied to the number of accounts
existing at the end of the billing period, plus all new accounts opened during
the billing period.
Stock Transfer
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Receive, examine, record, mail or deliver.
Process window and mail items and legal transfers.
Cancel and issue certificates.
Process Indemnity Bonds and replace lost certificates.
Forward transfer reports daily.
Dividend Disbursement
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Purchase shares on market to meet requirements of the Dividend Reinvestment
Plan.
Reinvest dividends, prepare statements, or issue dividend checks.
Solicit certified TIN numbers.
File 1099 Forms with IRS.
Special Lists
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Statistical Summary Report to show geographic, share range, and class code.
Annual Meeting
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Issue and mail proxies first class with proxy statements, return envelopes, and
Annual Reports.
Mail Broker Search Notices.
Receive, examine, and tabulate proxies.
Report vote.
Act as Inspectors of Election. If attendance is required, travel expenses will
be reimbursed to Mellon.
Tax Returns
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Mellon shall prepare, file with the Internal Revenue Service and with the
appropriate state agencies and, if required, mail to shareholders such returns
for reporting, dividends and distributions paid as are required to be so filed
and mailed and shall withhold such sums as are required to be withheld under
applicable federal and state income tax laws, rules, and regulations.
Books and Records
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Mellon shall maintain records showing for each shareholder's account the
following:
A. Names, addresses, and tax identifying numbers;
B. Number of shares held;
C. Historical information regarding the account of each shareholder,
including dividends paid, voluntary cash investments and date and
price for all transactions;
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D. Any stop or restraining order placed against the account;
E. Information with respect to withholdings in the case of a foreign
account;
F. Any dividend reinvestment order, plan application, dividend address
and correspondence relating to the current maintenance of the account;
G. Certificate numbers and denominations for any shareholder holding
certificates;
H. Any information required in order for Mellon to perform the
calculations contemplated or required by this Agreement.
Any such records required to be maintained by Rule 31a-1 of the
General Rules and Regulations under the Investment Company Act of 1940
shall be preserved for the periods prescribed in Rule 31a-2 of said
rules as specifically noted below. Such record retention shall be at
the expense of the Company and records may be inspected by the Company
at reasonable times. Mellon may, at its option at any time, and shall
forthwith upon the Company's demand, turn over to the Company and
cease to retain in Mellon's files, records and documents created and
maintained by Mellon pursuant to this Agreement, which are no longer
needed by Mellon in performance of its services or for its protection.
If not so turned over to the Company, such records and documents will
be retained by Mellon for six years from the year of creation, during
the first two of which such documents will be in readily accessible
form. At the end of the six-year period, such records and documents
will either be turned over to the Company, or destroyed in accordance
with the Company's authorization.
Information
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Mellon shall furnish to the Company such information, including shareholder
lists, and statistical information as may be agreed upon from time to time.
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EXHIBIT B
MELLON SECURITIES TRUST COMPANY
PROCEDURES AND REQUIREMENTS
FOR THE TRANSFER AND REGISTRATION OF STOCK
AND THE DISBURSEMENT OF DIVIDENDS
IN GENERAL
1. Documents to be filed at time of Appointment.
When Mellon Securities Trust Company (hereinafter called "the Trust
Company") is appointed Transfer Agent or registrar of stock, the following
documents shall be furnished to the Trust Company:
(a) A copy of resolutions adopted by the Board of Directors of the
Corporation appointing the Trust Company as Transfer Agent and/or
Registrar, as the case may be, duly certified by the Secretary of the
Corporation under the corporate seal.
(b) A copy of the By-Laws of the Corporation as amended to date, duly
certified by the Secretary of the Corporation under the corporate
seal.
(c) A copy of the certificate of incorporation of the Corporation, and all
amendments thereto, certified by the Secretary of State of the state
of incorporation.
(d) Specimen stock certificates (both those currently in use and those
formerly in use, if any such be outstanding) of the class or classes
of stock for which the Trust Company is appointed, certified by the
Secretary of the Corporation to be specimens of the duly authorized
stock certificates of the Corporation.
(e) A certificate, in duplicate, executed by the Secretary of the
Corporation under the corporate seal, certifying as to the names,
offices and specimen signatures of the officers of the Corporation
who are authorized to sign stock certificates or who are authorized
to sign notices, requests, orders, instructions and other
communications to the Trust Company, and as to the names of the other
transfer agents and registrars, if applicable, for the stock with
respect to which the Trust Company is being appointed as Transfer
Agent and/or Registrar.
(f) List of certificate number and the registered holder thereof, against
which stop transfers have been placed and advice of any transfer
restrictions against outstanding certificates.
(g) Opinion of counsel for the Corporation to the effect that (i) the
Corporation is duly organized and existing under the laws of its
state of incorporation, (ii) all shares of stock of the Corporation
covered by the appointment have been duly registered under the
Securities Act of 1933 and the Securities Exchange Act of 1934, as
amended.
2. Limit of Authority - Changes in Capital Structure
The authority of the Trust Company as Transfer Agent or Registrar shall,
unless expressly limited by the resolution of appointment or subsequently by
corporate action, extend to all of the shares (of the class or classes which the
Trust Company is appointed) authorized to be issued at the time of such
appointment and subsequent thereto.
Should there be an increase of the number of shares authorized, or a
capitalization or other event requiring a change in the form of stock
certificate, the Trust Company will thereafter issue or register such new or
additional certificates, effect such exchanges and perform such other duties as
may be required in connection therewith upon receiving:
(a) A certified copy of the amendments to the certificate of incorporation
of the Corporation, certified by the Secretary of State of the state
of incorporation.
(b) A certified copy of the resolution of adopted by the Board of
Directors extending the authority of the Trust Company, if the
existing resolution of authority is limited.
(c) Specimens of any new stock certificates certified by the Secretary of
the Corporation to be specimens of the duly authorized stock
certificates of the Corporation.
(d) Opinion of counsel for the Corporation to the effect that all shares
have been duly registered under the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended.
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3. Future Amendments of Charter and By-Laws
The corporation will promptly file with the Trust Company appropriately
certified copies of all amendments to its certificate of incorporation and by-
laws subsequent to the date of certification of such documents previously filed.
4. Death, Resignation or Removal of officers of the Corporation
The Trust Company shall not be charged with notice of any change in the
officers of the Corporation until notice of such change shall be made in writing
by the Corporation to the Trust Company. In case any officer of the Corporation
who shall have signed blank stock certificates (or whose facsimile shall have
been used) shall die, resign or be removed prior to the issuance of such
certificates, the Trust Company, as Transfer Agent or Registrar, may issue or
register such stock certificates, as the stock certificates of the Corporation,
not withstanding such death, resignation or removal, until specifically directed
to the contrary by the Corporation in writing.
5. Resignation or Removal
The Trust Company may resign at any time, subject to any separate agreement
on this point which the Trust Company may have with the Corporation, by mailing,
postage prepaid, written notice of such resignation to the Corporation at its
last known address, and thereupon its duties as Transfer Agent or as Registrar
shall cease. The Trust Company may at any time, by a resolution of the Board of
Directors of the Corporation, be removed as Transfer Agent or as Registrar,
subject to any separate agreement on this point which the Trust Company may have
with the Corporation, such removal to become effective upon receipt by the Trust
Company of a certified copy of such resolution and upon the payment of all
amounts due the Trust Company in connection with such agency.
AS TRANSFER AGENT
6. Original Issue of Stock Certificates
The Trust Company as Transfer Agent will make original issues of stock
certificates upon the written instructions of any officer of the Corporation.
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7. Stock Certificates
The Corporation shall furnish the Transfer Agent with a sufficient supply
of blank stock certificates and from time to time will renew such supply upon
the request of the Trust Company. Such blank stock certificates shall be signed
manually or by facsimile signatures of officers of the Corporation authorized by
law or by the by-laws to sign stock certificates, and, if required, shall bear
the corporate seal or facsimile thereof.
8. Transfer of Stock
Shares of stock will be transferred or exchanged and new certificates
issued in lieu thereof upon the surrender of certificates properly endorsed (or
unendorsed if an endorsement is not necessary) accompanied by such requirements
as the Corporation and the Trust Company may deem necessary to evidence the
authority of the person making the transfer and accompanied by any required
stock transfer stamps. The Trust Company reserves the right to refuse to
transfer shares until it is satisfied that the endorsement on the certificates
is valid and genuine, and for that purpose it may require an acceptable guaranty
of signature. The Trust Company also reserves the right to withhold transfer of
the shares until it is satisfied that the requested transfer is properly
authorized, and it shall incur no liability for the refusal in good faith to
make transfers for which, in its judgment, there has been submitted insufficient
proof of the propriety of the transfer.
9. Delivery of Stock Certificates by Mail
When mail is.used for delivery of stock certificates, the Trust Company
will forward stock certificates in non-negotiable form by first class mail and
stock certificates in negotiable form by registered mail, all such mail
deliveries to be covered while in transit to the addressees by insurance
arranged for by the Trust Company.
10. Lost Stock Certificates
The Trust Company may issue replacement certificates for certificates
represented to have been lost, stolen or destroyed upon the fulfillment of such
requirements as shall be deemed appropriate by the Corporation, the Transfer
Agent and the Registrar subject at all times to provisions of law or of the by
laws of the Corporation governing such matters. The Trust Company may issue new
certificates in exchange for and upon the cancellation of mutilated
certificates.
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11. Stockholder Information
The Trust Company will supply lists of stockholders and will address and
mail notices to stockholders upon receiving instructions for the particular
service from an officer of the Corporation.
12. Disposition of Cancelled Certificates
The Trust Company shall, from time to time, be entitled to send to the
Corporation stock certificates which have been cancelled in transfer or in
exchange, upon the understanding that such certificates shall not be destroyed
by the Corporation without the concurrence of the Trust Company but will be
safely stored for possible future reference. If the Corporation desires,
however, it may avail itself of the Trust Company's destruction procedure.
13. Inspection of Stock Books
In case of any request or demand for the inspection of the stock books of
the Corporation or any other books in the possession of the Trust Company, the
Trust Company will endeavor to notify the Corporation and to secure instructions
as to permitting or refusing such inspection. The Trust Company reserves the
right, however, to exhibit the stock books or other books to any person if it is
advised in writing by its counsel that it is legally obligated to exhibit the
stock books or other books to such person.
14. Shareholder Accounts
(a) The Trust Company shall also maintain, as agent for each Dividend
Reinvestment participant of the Corporation, an account in which the
Trust Company will record the number of whole and fractional shares
registered in the name of such shareholder except such whole shares
for which the shareholder requests and is issued stock certificates.
The Trust Company shall, upon written instructions from any
shareholder in a form acceptable to the Corporation, or a member firm
of the New York Stock Exchange, record transfers of whole shares each
time shares are credited to or withdrawn from his account, and the
Trust Company shall send a statement to the shareholder informing him
of the transaction. Transactions directly between buyer and seller
involving fractional shares shall be similarly processed. In
transactions involving
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brokers, dealers, or other third parties, fractional shares will not
be transferred; fractional shares shall remain in the selling
shareholder's account except where the selling shareholder transfers
all of his whole shares, in which case the fractions shall be disposed
of in accordance with Section 14(c).
(b) The Trust Company shall countersign share certificates representing
whole shares for issuance and delivery to any shareholder upon
receiving a written request for the issuance of share certificates.
Shareholders who hold share certificates may surrender such
certificates to the Trust Company, which may cancel the certificates
and credit such shares to the shareholder's account. In all cases the
Corporation authorizes the Trust Company to process transactions
involving non-certified shares by appropriate entries in its stock
transfer records.
(c) Upon any termination of a shareholder's account, the Trust Company
shall send to the shareholder or his transferee a stock certificate or
certificates for the whole shares remaining in the account, and shall
pay to the shareholder an amount equal to the value of a fractional
interest in the account based on the closing price of the
Corporation's shares on the New York Stock Exchange an the effective
date of termination.
(d) In order to provide the liquidation of fractional shares as provided
in Section 14(c) and to facilitate any other appropriate adjustments
in shareholder accounts, the Corporation shall establish and maintain
a special account with the Trust Company entitled the "Share Account."
In that connection:
(1) the Trust Company shall utilize the Share Account as follows:
(i) The Trust Company shall transfer into the Share Account
fractional shares purchased from shareholders in connection with
liquidations; such nominal shares or fractions as it removes from
shareholder accounts in account adjustments; and any excess fractional
shares resulting from its receipt of shares from the Corporation in
connection with a distribution or its purchase of shares in the open market
in connection with a dividend or distribution.
(ii) The Trust Company shall transfer out of the Share Account
fractional shares due shareholders in connection with a dividend or
distribution and such nominal
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shares or fractions as may be required for account adjustment.
(iii) Share transactions in the Share Account shall be based on
the net asset value last computed by the Corporation in the case of
adjustments resulting from a distribution of Corporation shares at net
asset value, or the most recent closing price of the Corporation's shares
on the New York Stock Exchange in other cases. Share balances in the Share
Account shall be computed to three decimal places.
(iv) The Trust Company shall make an appropriate entry in the
cash portion of the Share Account for each share transaction in the Share
Account. The Trust Company and the Corporation may from time to time adopt
such mutually agreeable procedures concerning the Share Account
transactions as they deem appropriate.
(2) The Trust Company shall sell shares held in the Share Account and
credit the proceeds to the Share Account from time to time upon the
written instruction of the Corporation.
(3) The Corporation shall, upon written notice supplied by the Trust
Company that the cash balance of the Share Account has fallen below
the sum of $250, or the share balance is inadequate for necessary
transactions or adjustments, deposit forthwith the sum necessary to
raise such cash balance to the sum of $500, or sufficient shares to
increase the share balance to an adequate level.
(4) The Trust Company shall, upon written request of the Corporation at
any time the cash balance of the Share Account exceeds $ 750, pay to
the Corporation an amount sufficient to reduce said cash balance to
$500.
AS ▇▇▇▇▇▇▇▇▇
▇▇. Registration of Original Issue of Stock Certificates
The Trust Company, as Registrar, will register original issues of stock
certificates upon the presentation to it for that purpose by the Transfer Agent
of signed and countersigned stock certificates. The Trust Company shall record
issues of shares of the stock of the Corporation, and shall notify the
Corporation in case any proposed issue of shares by the Corporation would result
in an over-issue as defined by Section 8-104(2) of the Uniform Commercial Code
and in such event, shall refuse to credit such
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shares and shall not countersign and issue certificates for such shares.
16. Registration in Transfer
Certificates of stock will be registered in transfer upon the presentation
to the Trust Company by the Transfer Agent of cancelled certificates theretofore
issued for a like amount of stock and not previously discharged from registry.
The Trust Company as Registrar will not be responsible for the validity of the
transfer of stock, the genuineness of the endorsement, the authority of the
transferor or the payment of taxes.
17. Lost Stock Certificates
The Trust Company may register replacement certificates for certificates
represented to have been lost, stolen or destroyed upon the fulfillment of such
requirements as shall be deemed appropriate by the Corporation, the Transfer
Agent and the Registrar subject at all times to provisions of law or of the by
laws of the Corporation governing such matters. The Company may register new
certificates in exchange for and upon the cancellation of mutilated
certificates.
AS DIVIDEND DISBURSING AGENT
18. Appointment
A copy of the resolution adopted by the Board of Directors of the
Corporation appointing the Trust Company Dividend Disbursing Agent, certified by
the Secretary of the Corporation under Corporate seal, shall be furnished to the
Trust Company.
19. Distributions
The Trust Company shall act as Dividend Disbursing Agent and Dividend
Reinvestment Agent under the Corporation's Automatic Dividend Reinvestment Plan
for the Corporation and as such, in accordance with the provisions of the
Corporation's Articles of Incorporation shall prepare and mail or credit income
and capital gain payments to shareholders. As the Dividend Disbursing Agent, it
shall, on or before the payment date of any such dividend or distribution,
notify the Custodian of the estimated amount required to pay any portion of said
dividend or distribution which is payable in cash, and the Corporation agrees
that on or before the payment date of such distribution, it shall instruct the
Custodian to make available to the Dividend Disbursing Agent sufficient funds
for the cash amount to be paid out. If a
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shareholder is entitled to receive additional shares by virtue of any
distribution or dividend, appropriate credits will be made to his account and/or
certificates delivered where requested, all in accordance with the Corporation's
Automatic Dividend Reinvestment Plan and Distribution Investment Plan.
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