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EXHIBIT 2
CUSTODIAN CONTRACT
Between
INSURANCE COMPANY
and
STATE STREET BANK AND TRUST COMPANY
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TABLE OF CONTENTS
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Page
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1. Employment of Custodian and Property to be Held By It . . . . . . . . . 1
2. Duties of the Custodian with Respect to Property
of the Portfolios Held by the Custodian . . . . . . . . . . . . . . . . 1
2.1 Holding Fund Shares . . . . . . . . . . . . . . . . . . . . . . 1
2.2 Delivery of Fund Shares . . . . . . . . . . . . . . . . . . . . 1
2.3 Registration of Fund Shares . . . . . . . . . . . . . . . . . . 2
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.5 Collection of Income. . . . . . . . . . . . . . . . . . . . . . 3
2.6 Payment of Portfolio Monies . . . . . . . . . . . . . . . . . . 3
2.7 Appointment of Agents . . . . . . . . . . . . . . . . . . . . . 4
2.8 Ownership Certificates for Tax Purposes . . . . . . . . . . . . 4
3. Proper Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Evidence of Authority . . . . . . . . . . . . . . . . . . . . . . . . . 4
5. Duties of Custodian With Respect to the Books of Account;
Calculation of Portfolio Value and Reports. . . . . . . . . . . . . . . 5
6. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7. Opinion of Company's Independent Accountants. . . . . . . . . . . . . . 5
8. Reports to Company by Independent Public Accountants. . . . . . . . . . 6
9. Compensation of Custodian . . . . . . . . . . . . . . . . . . . . . . . 6
10. Responsibility of Custodian . . . . . . . . . . . . . . . . . . . . . . 6
11. Effective Period, Termination and Amendment . . . . . . . . . . . . . . 7
12. Successor Custodian . . . . . . . . . . . . . . . . . . . . . . . . . . 7
13. Interpretive and Additional Provisions. . . . . . . . . . . . . . . . . 8
14. Additional Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . 9
15. Massachusetts Law to Apply. . . . . . . . . . . . . . . . . . . . . . . 9
16. Prior Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
17. Provisions Concerning ERISA Assets. . . . . . . . . . . . . . . . . . . 9
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CUSTODIAN CONTRACT
This Contract between [Name of Insurance Company], a corporation organized
and existing under the laws of the , having its principal place of
business at (hereinafter called the "Company"), and State Street Bank and Trust
Company, a Massachusetts trust company, having its principal place of business
at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, hereinafter called the
"Custodian",
WITNESSETH:
WHEREAS, the Company has established certain separate accounts which will
be made available for investment by customers of the Company, including employee
benefit plans, and desires to establish separate custody accounts with the
Custodian for the deposit of securities and monies held for such separate
accounts; and
WHEREAS, the Company intends to deposit with the Custodian assets held for
the separate accounts listed on Exhibit A hereto (such separate accounts,
together with all other separate accounts subsequently established by the
Company and made subject to this Contract in accordance with paragraph 14, being
herein referred to as the "Portfolio(s)"), which assets will consist of shares
of certain mutual funds ("Fund Shares");
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Company hereby employs the Custodian as the custodian of the assets of
the Portfolios. The Company on behalf of the Portfolio(s) agrees to deliver to
the Custodian all Fund Shares purchased on behalf of the Portfolios, and all
payments of income, payments of principal or capital distributions received by
it with respect to all Fund Shares owned by the Portfolio(s) from time to time.
The Custodian shall not be responsible for any property of a Portfolio held or
received by the Company and not delivered to the Custodian.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE PORTFOLIOS HELD BY
THE CUSTODIAN
2.1 HOLDING FUND SHARES. The Custodian shall hold for the account of each
Portfolio all Fund Shares owned by such Portfolio
2.2 DELIVERY OF FUND SHARES. The Custodian shall release and deliver Fund
Shares owned by a Portfolio held by the Custodian only upon receipt of
Proper Instructions from the Company on behalf of the applicable Portfolio,
which may be continuing instructions when deemed appropriate by the
parties, and only in the following cases:
1) Upon sale of such Fund Shares for the account of the Portfolio and
receipt of payment therefor;
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2) To the issuer thereof or its agent when such Fund Shares are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
3) To the issuer thereof, for exchange for a different number of units or
other evidence representing the same aggregate face amount or number
of units; PROVIDED that, in any such case, the new securities are to
be delivered to the Custodian;
4) For any other proper corporate purpose, BUT ONLY upon receipt of, in
addition to Proper Instructions from the Company on behalf of the
applicable Portfolio, a certified copy of a resolution of the Board of
Directors or of the Executive Committee signed by an officer of the
Company and certified by the Secretary or an Assistant Secretary,
specifying the securities of the Portfolio 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.
2.3 REGISTRATION OF FUND SHARES. Fund Shares held by the Custodian (other than
bearer securities) shall be registered in the name of the Company or in the
name of any nominee of the Company on behalf of the Portfolio or of any
nominee of the Custodian which nominee shall be assigned exclusively to the
Portfolio, UNLESS the Company has authorized in writing the appointment of
a nominee to be used in common with other investment pools having the same
investment adviser as the Portfolio, or in the name or nominee name of any
agent appointed pursuant to Section 2.7.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio,
subject only to draft or order by the Custodian acting pursuant to the
terms of this Contract, and shall hold in such account or accounts, subject
to the provisions hereof, all cash received by it from or for the account
of the Portfolio. Funds held by the Custodian for a Portfolio may be
deposited by it to its credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; PROVIDED, however, that each such
bank or trust company and the funds to be deposited with each such bank or
trust company shall on behalf of each applicable Portfolio be approved by
vote of a majority of the Board of Directors of the Company. Such funds
shall be deposited by the Custodian in its capacity as Custodian and shall
be withdrawable by the Custodian only in that capacity.
2.5 COLLECTION OF INCOME. The Custodian shall collect on a timely basis all
income and other payments with respect to Fund Shares held hereunder to
which a Portfolio shall be entitled either by law or pursuant to custom in
the securities business, and shall credit such income, as collected, to
such Portfolio's custodian account.
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2.6 PAYMENT OF PORTFOLIO MONIES. Upon receipt of Proper Instructions from the
Company on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of Fund Shares for the account of the Portfolio but
only (a) against the delivery of such Fund Shares or evidence of title
to such Fund Shares to the Custodian registered in the name of the
Company or in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer;
2) In connection with conversion, exchange or surrender of Fund Shares
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the payment of any expense or liability incurred by the Portfolio,
including but not limited to the following payments for the account of
the Portfolio: interest, taxes, management, accounting and legal fees,
and operating expenses whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
4) For any other proper purpose, BUT ONLY upon receipt of, in addition to
Proper Instructions from the Company on behalf of the Portfolio, a
certified copy of a resolution of the Board of Directors or of the
Executive Committee of the Company signed by an officer of the Company
and certified by its Secretary or an Assistant Secretary, 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 purpose,
and naming the person or persons to whom such payment is to be made.
2.7 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company as its agent to carry out such of the provisions of this Article 2
as the Custodian may from time to time direct; PROVIDED, however, that the
appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.8 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to Fund Shares of each Portfolio held by it and in connection with
transfers of securities.
3. PROPER INSTRUCTIONS
Proper Instructions as used throughout this Contract means a writing signed
or initialed by one or more person or persons as the Board of Directors of the
Company shall have from time to time authorized. Each such writing shall set
forth the specific transaction or type of
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transaction involved, including a specific statement of the purpose for which
such action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Company shall cause all oral instructions to be confirmed in
writing. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by the Board of Directors of the Company
accompanied by a detailed description of procedures approved by the Board of
Directors, Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Board of
Directors and the Custodian are satisfied that such procedures afford adequate
safeguards for the Portfolios' assets.
4. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions,
notice, request, consent, certificate or other instrument or paper believed
by it to be genuine and to have been properly executed by or on behalf of the
Company. The Custodian may receive and accept a certified copy of a vote of
the Board of Directors of the Company as conclusive evidence (a) of the
authority of any person to act in accordance with such vote or (b) of any
determination or of any action by the Board of Directors as described in such
vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
5. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT; CALCULATION OF
PORTFOLIO VALUE AND REPORTS
The Custodian shall keep the books of account of each Portfolio and, on a
[monthly] basis, calculate the market value of each Portfolio.
The Custodian shall, within five business days after the end of each month,
furnish to the Company an accounting report summarizing the activity in each
Portfolio for the month. Each such report shall include a market valuation of
each Portfolio.
The Custodian shall, upon request, furnish such other reports as the
Company may reasonably request.
6. RECORDS
The Custodian shall with respect to each Portfolio create and maintain all
records relating to its activities and obligations under this Contract in such
manner as shall be agreed upon from time to time by the Company and the
Custodian. All such records shall be the property of the Company and shall at
all times during the regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of the Company and
employees and agents of the Securities and Exchange Commission or any other
appropriate regulatory body. The Custodian shall, at the Company's request,
supply the Company with a tabulation of securities owned by each Portfolio and
held by the Custodian and shall, when requested to do so
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by the Company and for such compensation as shall be agreed upon between the
Company and the Custodian, include certificate numbers in such tabulations.
7. OPINION OF COMPANY'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Company on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Company's independent accountants with respect
to its activities hereunder in connection with the preparation of the Company's
annual reports to the Securities and Exchange Commission and with respect to any
other requirements of such Commission.
8. REPORTS TO COMPANY BY INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall provide the Company, on behalf of each of the
Portfolios at such times as the Company may reasonably require, with reports by
independent public accountants on the accounting system, internal accounting
control and procedures for safeguarding securities, relating to the services
provided by the Custodian under this Contract; such reports, shall be of
sufficient scope and in sufficient detail, as may reasonably be required by the
Company to provide reasonable assurance that any material inadequacies would be
disclosed by such examination, and, if there are no such inadequacies, the
reports shall so state.
9. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon from time to time between the
Company on behalf of each applicable Portfolio and the Custodian.
10. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties. The Custodian shall
be held to the exercise of reasonable care in carrying out the provisions of
this Contract, but shall be kept indemnified by and shall be without liability
to the Company for any action taken or omitted by it in good faith without
negligence. It shall be entitled to rely on and may act upon advice of counsel
(who may be counsel for the Company) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice.
If the Company requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Company being liable for the payment of money or incurring liability of some
other form, the Company, as a prerequisite to requiring the
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Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
If the Company requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for the benefit of a Portfolio for any
purpose or in the event that the Custodian or its nominee shall incur or be
assessed any taxes, charges, expenses, assessments, claims or liabilities in
connection with the performance of this Contract with respect to any Portfolio,
except such as may arise from its or its nominee's own negligent action,
negligent failure to act or willful misconduct, any property at any time held
for the account of the Portfolio shall be security therefor and should the
Company fail to repay the Custodian promptly, the Custodian shall be entitled to
utilize available cash and to dispose of such Portfolio's assets to the extent
necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
11. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
This Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than thirty (30)
days after the date of such delivery or mailing; PROVIDED, that the Company
shall not amend or terminate this Contract in contravention of any applicable
federal or state regulations, and further provided, that the Company on behalf
of one or more of the Portfolios may at any time by action of its Board of
Directors (i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a conservator or receiver for
the Custodian by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Company on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
12. SUCCESSOR CUSTODIAN
If a successor custodian for one or more of the Portfolios shall be
appointed by the Board of Directors of the Company, the Custodian shall, upon
termination, deliver to such successor custodian at the office of the Custodian,
all securities and funds of each applicable Portfolio than held by it hereunder.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Company, deliver at the office of the Custodian and transfer
such securities, funds and other properties in accordance with such vote.
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In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio. Thereafter,
such bank or trust company shall be the successor of the Custodian under this
Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Company to procure the certified copy of the vote referred to or
of the Board of Directors to appoint a successor custodian, the Custodian shall
be entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
13. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and the
Company on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, PROVIDED that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations. No interpretive or additional provisions made as provided in
the preceding sentence shall be deemed to be an amendment of this Contract.
14. ADDITIONAL PORTFOLIOS
In the event that the Company establishes one or more separate accounts in
addition to those listed on Exhibit A with respect to which it desires to have
the Custodian render services as custodian under the terms hereof, it shall so
notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such separate accounts shall become a Portfolio
hereunder.
15. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
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16. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Company on behalf of each of the Portfolios and the
Custodian relating to the custody of the Portfolio's assets.
17. PROVISIONS CONCERNING ERISA ASSETS
(a) The Company acknowledges that certain of the assets of the Portfolios
being placed in Custodian's custody may be subject to the Employee Retirement
Security Act of 1974, as amended ("ERISA"). Company and Custodian agree that in
connection therewith Custodian is a service provider only and not a fiduciary of
any plan or trust to which the assets are related. Custodian shall not be
considered a party to any underlying plan or trust and the Company hereby
assumes all responsibility to assure that any instructions issued under this
agreement with respect to the Portfolios are in compliance with such plan or
trust and all applicable requirements of ERISA.
(b) This Agreement will be interpreted so as to be in compliance with
ERISA 404(b) and the Department of Labor Regulations Section 2550.4040-1
concerning the maintenance of the indicia of ownership of plan assets outside of
the jurisdiction of the district courts of the United States. The Company
represents that: The assets of the Portfolios are "plan assets" of various
employee benefit plans subject to ERISA as defined in Department of Labor
Regulations Section 2510.3-101; that the Company is an insurance company exempt
from registration under the Investment Advisers Act of 1940; that the Company
has been duly appointed to manage and control the assets of the Portfolios with
power to employ agents or delegates with respect to such duties; and that
notwithstanding such employment of agents or delegates, the Company retains its
responsibility and duty to manage and control the assets of such plans.
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IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the day of , 1997.
ATTEST NAME OF INSURANCE COMPANY
By:
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ATTEST STATE STREET BANK AND TRUST COMPANY
By:
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Executive Vice President
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SCHEDULE A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of Name of Insurance
Company for use as sub-custodians for the Portfolio's securities and other
assets:
(Insert banks and securities depositories)
Certified:
Company's Authorized Officer
Date:
