CUSTODIAN AGREEMENT
THIS AGREEMENT is made and entered into on this ___day of __________,
199_, between STRONG _____________________, INC., a Wisconsin corporation (the
"Corporation"), on behalf of the Funds (as defined below) of the Corporation,
and FIRSTAR TRUST COMPANY, a Wisconsin corporation (the "Custodian").
WITNESSETH:
WHEREAS, the Corporation is registered with the Securities and Exchange
Commission as an open-end management investment company under the Investment
Company Act of 1940 (the "Investment Company Act");
WHEREAS, the Corporation is authorized to create separate series, each
with its own separate investment portfolio, and the beneficial interest in each
such series will be represented by a separate series of shares (each series
indicated on Schedule A is hereinafter individually referred to as a "Fund" and
collectively as the "Funds"); and,
WHEREAS, the Corporation desires to retain the Custodian to hold and
administer the securities and cash of each Fund listed in Schedule A hereto,
and any additional Funds the Corporation and the Custodian may agree upon and
include in Schedule A as such Schedule may be amended from time to time,
pursuant to the terms of this Agreement.
NOW, THEREFORE, the Corporation and the Custodian do mutually agree and
promise as follows:
1. DEFINITIONS
The word "securities" as used herein includes stocks, shares, bonds,
debentures, notes, mortgages or other obligations, and any certificates,
receipts, warrants or other instruments representing rights to receive,
purchase or subscribe for the same, or evidencing or representing any other
rights or interests therein, or in any property or assets.
The words "officers' certificate" shall mean a request or direction or
certification in writing signed in the name of the Corporation by any two of
the President, a Vice President, the Secretary and the Treasurer of the
Corporation, or any other persons duly authorized to sign by the Board of
Directors.
The word "Board" shall mean the Board of Directors of the Corporation.
2. NAMES, TITLES AND SIGNATURES OF THE CORPORATION'S OFFICERS
An officer of the Corporation will certify to the Custodian the names and
signatures of those persons authorized to sign the officers' certificates
described in Section 1, hereof, and the names of the members of the Board of
Directors, together with any changes which may occur from time to time.
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3. RECEIPT AND DISBURSEMENT OF MONEY
A. The Custodian shall open and maintain a separate account or
accounts in the name of each Fund, subject only to draft or order by the
Custodian acting pursuant to the terms of this Agreement. The Custodian shall
hold in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of a Fund. The Custodian shall make
payments of cash to, or for the account of, a Fund from such cash only:
(a) for the purchase of securities for the portfolio of a Fund upon the
delivery of such securities to the Custodian, registered in the name of the
Fund or of the nominee of the Custodian referred to in Section 7 or in proper
form for transfer;
(b) for the purchase or redemption of shares of common stock of a Fund upon
delivery thereof to Custodian, or upon proper instructions from the Fund;
(c) for the payment of interest, dividends, taxes, investment adviser's
fees or operating expenses (including, without limitation thereto, fees for
legal, accounting, auditing and custodian services and expenses for printing
and postage);
(d) for payments in connection with the conversion, exchange or surrender
of securities owned or subscribed to by a Fund held by or to be delivered to
Custodian; or
(e) for other proper corporate purposes certified by resolution of the
Board of Directors of the Corporation, on behalf of a Fund.
Before making any such payment, the Custodian shall receive (and may rely upon)
an officers' certificate requesting such payment and stating that it is for a
purpose permitted under the terms of items (a), (b), (c) or (d) of this
Subsection A, and also, in respect of item (e), upon receipt of an officers'
certificate specifying the amount of such payment, setting forth the purpose
for which such payment is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such payment is to
be made, provided, however, that an officers' certificate need not precede the
disbursement of cash for the purpose of purchasing a money market instrument,
or any other security with same or next-day settlement, if the President, a
Vice President, the Secretary or the Treasurer of the Corporation, on behalf of
a particular Fund, issues appropriate oral or facsimile instructions to the
Custodian and an appropriate officers' certificate is received by the Custodian
within two business days thereafter.
Regardless of the foregoing, if the Corporation's investment advisor (the
"Advisor") is a member of the Institutional Delivery ("ID") system and desires
to affirm trades on behalf of a Fund with the Depository Trust Company ("DTC")
for those transactions affirmed through the ID system; or (ii) has established
an automated interface to transmit trade authorization detail to the Custodian,
then no officers' certificate is required; provided that the appropriate ID/DTC
letter agreement or automated trade authorization agreement has been executed
by both the Advisor and the Custodian.
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B. The Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received by the
Custodian for each Fund's account.
C. The Custodian shall, upon receipt of proper instructions, make
federal funds available to the Funds as of specified times agreed upon from
time to time by the Corporation, on behalf of the Funds, and the Custodian in
the amount of checks received in payment for shares of the Funds which are
deposited into the respective Fund's account.
4. SEGREGATED ACCOUNTS
Upon receipt of proper instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of each Fund, into
which account or accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to paragraph 14
hereof, (i) in accordance with the provisions of any agreement among the
Corporation, on behalf of a Fund or Funds, the Custodian and a broker-dealer
registered under the Exchange Act and a member of the National Association of
Securities Dealers, Inc. (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of the
Options Clearing Corporation and of any registered national securities exchange
(or the Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding escrow or
other arrangements in connection with transactions for a Fund, (ii) for the
purpose of segregating cash or securities in connection with options purchased,
sold or written for a Fund or commodity futures contracts or options thereon
purchased or sold for a Fund, (iii) for the purpose of compliance by the
Corporation or a Fund with the procedures required by any release or
interpretations of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies, and (iv)
as mutually agreed upon from time to time between the Corporation, on behalf of
a Fund or Funds, and the Custodian.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES
The Custodian shall have sole power to release or deliver any securities
of the Funds held by it pursuant to this Agreement. The Custodian agrees to
transfer, exchange or deliver securities held by it hereunder only:
(a) for sales of such securities for the account of a Fund upon receipt by
Custodian of payment therefore;
(b) when such securities are called, redeemed or retired or otherwise
become payable;
(c) for examination by any broker selling any such securities in accordance
with "street delivery" custom;
(d) in exchange for, or upon conversion into, other securities alone or
other securities and cash whether pursuant to any plan of merger,
consolidation, reorganization, recapitalization or readjustment, or otherwise;
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(e) upon conversion of such securities pursuant to their terms into other
securities;
(f) upon exercise of subscription, purchase or other similar rights
represented by such securities;
(g) for the purpose of exchanging interim receipts or temporary securities
for definitive securities;
(h) for the purpose of redeeming in kind shares of common stock of a Fund
upon delivery thereof to the Custodian; or
(i) for other proper corporate purposes.
As to any deliveries made by the Custodian pursuant to items (a), (b),
(d), (e), (f), and (g), securities or cash receivable in exchange therefore
shall be deliverable to the Custodian.
Before making any such transfer, exchange or delivery, the Custodian shall
receive (and may rely upon) an officers' certificate requesting such transfer,
exchange or delivery, and stating that it is for a purpose permitted under the
terms of items (a), (b), (c), (d), (e), (f), (g) or (h) of this Section 5 and
also, in respect of item (i), upon receipt of an officers' certificate
specifying the securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of such securities
shall be made, provided, however, that an officers' certificate need not
precede any such transfer, exchange or delivery of a money market instrument,
or any other security with same or next-day settlement, if the President, a
Vice President, the Secretary or the Treasurer of the Corporation, on behalf of
a particular Fund, issues appropriate oral or facsimile instructions to the
Custodian and an appropriate officers' certificate is received by the Custodian
within two business days thereafter.
Regardless of the foregoing, if the Advisor is a member of the ID system and
desires to affirm trades on behalf of a Fund with the DTC for those
transactions affirmed through the ID system; or (ii) has established an
automated interface to transmit trade authorization detail to the Custodian,
then no officers' certificate is required; provided that the appropriate ID/DTC
letter agreement or automated trade authorization agreement has been executed
by both the Advisor and the Custodian.
6. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS
Unless and until the Custodian receives an officers' certificate to the
contrary, the Custodian shall: (a) present for payment all coupons and other
income items held by it for the account of each Fund which call for payment
upon presentation, and hold the cash received by it upon such payment for the
account of the respective Fund; (b) collect interest and cash dividends
received, with notice to each Fund, for the account of the respective Fund; (c)
hold for the account of each Fund hereunder all stock dividends, rights and
similar securities issued with respect to any securities held by it hereunder;
and (d) execute, as agent on behalf of each Fund, all necessary ownership
certificates required by the Internal Revenue Code or the Income Tax
Regulations of the United States Treasury Department or under the
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laws of any state now or hereafter in effect, inserting the Fund's name on such
certificates as the owner of the securities covered thereby, to the extent it
may lawfully do so.
7. REGISTRATION OF SECURITIES
Except as otherwise directed by an officers' certificate, the Custodian
shall register all securities, except such as are in bearer form, in the name
of a registered nominee of the Custodian as defined in the Internal Revenue
Code and any Regulations of the Treasury Department issued hereunder or in any
provision of any subsequent federal tax law exempting such transaction from
liability for stock transfer taxes, and shall execute and deliver all such
certificates in connection therewith as may be required by such laws or
regulations or under the laws of any state. The Custodian shall use its best
efforts to the end that the specific securities held by it hereunder shall be
at all times identifiable in its records.
The Corporation shall from time to time furnish to the Custodian
appropriate instruments to enable the Custodian to hold or deliver in proper
form for transfer, or to register in the name of its registered nominee, any
securities which it may hold for the account of the Funds and which may from
time to time be registered in the name of a particular Fund.
8. VOTING AND OTHER ACTION
Neither the Custodian nor any nominee of the Custodian shall vote any of
the securities held hereunder by or for the account of any Fund, except in
accordance with the instructions contained in an officers' certificate. The
Custodian shall deliver, or cause to be executed and delivered, to the
Corporation all notices, proxies and proxy soliciting materials with relation
to such securities, such proxies to be executed by the registered holder of
such securities (if registered otherwise than in the name of a Fund), but
without indicating the manner in which such proxies are to be voted.
9. TRANSFER TAX AND OTHER DISBURSEMENTS
The Corporation, on behalf of the Funds, shall pay or reimburse the
Custodian from time to time for any transfer taxes payable upon transfers of
securities made hereunder, and for all other necessary and proper disbursements
and expenses made or incurred by the Custodian in the performance of this
Agreement.
The Custodian shall execute and deliver such certificates in connection
with securities delivered to it or by it under this Agreement as may be
required under the provisions of the Internal Revenue Code and any Regulations
of the Treasury Department issued thereunder, or under the laws of any state,
to exempt from taxation any exemptable transfers and/or deliveries of any such
securities.
10. CONCERNING CUSTODIAN
The Custodian shall be paid as compensation for its services pursuant to
this Agreement such compensation as may from time to time be agreed upon in
writing between the Corporation, on behalf of the Funds, and the Custodian.
Until modified in writing, such compensation shall be as set forth in Schedule
B attached hereto.
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The Custodian shall not be liable for any action taken in good faith upon
any certificate herein described or certified copy of any resolution of the
Board, and may rely on the genuineness of any such document which it may in
good faith believe to have been validly executed.
The Corporation, on behalf of the Funds, agrees to indemnify and hold
harmless the Custodian and its nominee from all taxes, charges, expenses,
assessments, claims and liabilities (including counsel fees) incurred or
assessed against it or by its nominee in connection with the performance of
this Agreement, except such as may arise from its or its nominee's own
negligent action, negligent failure to act or willful misconduct. The
Custodian is authorized to charge the applicable account of a Fund for such
items. In the event of any advance of cash by the Custodian which results in
any overdraft of a Fund, which is a money market fund subject to Rule 2a-7
under the Investment Company Act, the Custodian is granted a security interest
in such Fund's assets limited to the extent of the overdraft.
11. SUBCUSTODIANS
The Custodian is hereby authorized to engage another bank or trust company
as a Subcustodian for all or any part of the Corporation's assets, so long as
any such bank or trust company meets the requirements of the Investment Company
Act, as amended and the rules and regulations thereunder and provided further
that, if the Custodian utilizes the services of a Subcustodian, the Custodian
shall remain fully liable and responsible for any losses caused to any of the
Funds by the Subcustodian as fully as if the Custodian was directly responsible
for any such losses under the terms of the Custodian Agreement.
Notwithstanding anything contained herein, if the Corporation requires the
Custodian to engage specific Subcustodians for the safekeeping and/or clearing
of assets, the Corporation agrees to indemnify and hold harmless the Custodian
from all claims, expenses and liabilities incurred or assessed against it in
connection with the use of such Subcustodian in regard to the Corporation's
assets, except as may arise from its own negligent action, negligent failure to
act or willful misconduct.
12. REPORTS BY CUSTODIAN
The Custodian shall furnish the Corporation periodically as agreed upon
with a statement summarizing all transactions and entries for the account of
each Fund. The Custodian shall furnish to the Corporation, at the end of every
month, a list of the securities held by each Fund, showing the aggregate cost
of each issue. The books and records of the Custodian pertaining to its
actions under this Agreement shall be open to inspection and audit at
reasonable times by officers of, and of auditors employed by, the Corporation.
13. TERMINATION OR ASSIGNMENT
This Agreement may be terminated by the Corporation, on behalf of the
Funds, or by the Custodian, on ninety (90) days notice, given in writing and
sent by registered mail to the Custodian at P. O. Xxx 0000, Xxxxxxxxx,
Xxxxxxxxx 00000, or to the Corporation at 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxx
Xxxxx, Xxxxxxxxx 00000, as the case may be. Upon any termination of this
Agreement, pending appointment of a successor to the Custodian or a vote of the
shareholders of the Corporation to dissolve
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or to function without a custodian of its cash, securities and other property,
the Custodian shall not deliver cash, securities or other property of the
Corporation to the Corporation, but may deliver them to a bank or trust company
of its own selection, that meets the requirements of the Investment Company Act
as a Custodian for the Corporation to be held under terms similar to those of
this Agreement, provided, however, that the Custodian shall not be required to
make any such delivery or payment until full payment shall have been made by
the Corporation of all liabilities constituting a charge on or against the
properties then held by the Custodian or on or against the Custodian, and until
full payment shall have been made to the Custodian of all its fees,
compensation, costs and expenses, subject to the provisions of Section 10 of
this Agreement.
This Agreement may not be assigned by the Custodian without the consent of
the Corporation, authorized or approved by a resolution of its Board of
Directors.
14. DEPOSITS OF SECURITIES IN SECURITIES DEPOSITORIES
No provision of this Agreement shall be deemed to prevent the use by the
Custodian of a central securities clearing agency or securities depository,
provided, however, that the Custodian and the central securities clearing
agency or securities depository meet all applicable federal and state laws and
regulations, including the requirements of the Investment Company Act, and the
Board of Directors of the Corporation approves by resolution the use of such
central securities clearing agency or securities depository.
15. RECORDS
To the extent that the Custodian in any capacity prepares or maintains any
records required to be maintained and preserved by the Corporation pursuant to
the provisions of the Investment Company Act, the Custodian agrees to make any
such records available to the Corporation upon request and to preserve such
records for the periods prescribed in Rule 31a-2 under the Investment Company
Act.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.
Attest: Firstar Trust Company
---------------------------- -------------------------------
By: By:
Its: Its:
Attest: Strong __________________, Inc.
------------------------------- -------------------------------
By: Xxxx X. Xxxxxxx By: Xxxxxxx X. Xxxxxxxxxxx
Its: Vice President Its: Vice President
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SCHEDULE A
The Fund(s) of the Corporation currently subject to this Agreement are as
follows:
Date of Addition
FUND(S) TO THIS AGREEMENT
Strong __________ Fund ____________, 199__
Attest: Firstar Trust Company
------------------------------- -------------------------------
By: By:
Its: Its:
Attest: Strong __________________, Inc.
------------------------------- -------------------------------
By: Xxxx X. Xxxxxxx By: Xxxxxxx X. Xxxxxxxxxxx
Its: Vice President Its: Vice President
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ADDENDUM TO SCHEDULE B
FIRSTAR TRUST COMPANY
MUTUAL FUND SERVICES
MUTUAL FUND CUSTODIAL AGENT SERVICE
ANNUAL FEE SCHEDULE FOR THE
STRONG MUTUAL FUNDS
EFFECTIVE APRIL 1, 1998 THROUGH MARCH 31, 1999
*Annual fee on all Strong Mutual Funds
$500,000 Base fee on total fund family
*Investment transactions (purchase, sale, exchange, tender, redemption,
maturity, receipt, delivery)
$ 7.00 per Depository Trust Company or Federal Reserve System trade,
automated and non-automated
$25.00 per definitive security (physical)
$ 8.50 per commercial paper trade
$50.00 per Euroclear
$ 6.00 per principal reduction on pass-through certificates
$35.00 per option/futures contract
$ 10.00 per variation margin transaction
$ 15.00 per Fed wire deposit or withdrawal
