EXHIBIT 99.B8
CUSTODIAN CONTRACT
Between
PRUDENTIAL-BACHE EQUITY INCOME FUND
and
STATE STREET BANK AND TRUST COMPANY
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 Fund
Held By the Custodian...............................................................2
2.1. Holding Securities.........................................................2
2.2. Delivery of Securities.....................................................2
2.3. Registration of Securities.................................................6
2.4. Bank Accounts..............................................................6
2.5. Payments for Shares........................................................7
2.6. Investment and Availability of Federal Funds...............................7
2.7. Collection of Income.......................................................7
2.8. Payment of Fund Moneys.....................................................8
2.9. Liability for Payment in Advance of Receipt of
Securities Purchased......................................................10
2.10. Payments for Repurchases or Redemptions of Shares
of the Fund...............................................................10
2.11. Appointment of Agents.....................................................11
2.12. Deposit of Fund Assets in Securities Systems..............................11
2.13. Segregated Account........................................................14
2.14. Ownership Certificates for Tax Purposes...................................15
2.15. Proxies...................................................................15
2.16. Communications Relating to Fund Portfolio Securities......................15
2.17. Proper Instructions.......................................................16
2.18. Actions Permitted without Express Authority...............................17
2.19. Evidence of Authority.....................................................17
3. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income......................................18
4. Records............................................................................18
5. Opinion of Fund's Independent Accountants..........................................19
6. Reports to Fund by Independent Public Accountants..................................19
7. Compensation of Custodian..........................................................20
8. Responsibility of Custodian........................................................20
9. Effective Period, Termination and Amendment........................................21
10. Successor Custodian................................................................22
11. Interpretive and Additional Provisions.............................................23
12. Massachusetts Law to Apply.........................................................24
13. Prior Contracts....................................................................24
14. Trustees...........................................................................24
CUSTODIAN CONTRACT
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This Contract between Prudential-Bache Equity Income Fund, a business
trust organized and existing under the laws of Massachusetts, having its
principal place of business at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts corporation, having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, hereinafter called the
"Custodian",
WITNESSETH, that 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
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The Fund hereby employs the Custodian as the custodian of its assets
pursuant to the provisions of the Declaration of Trust. The Fund agrees to
deliver to the Custodian all securities and cash owned by it, and all payments
of income, payments of principal or capital distributions received by it with
respect to all securities owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares of beneficial
interest ("Shares") of the Fund as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Fund held or received
by the Fund and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section
2.17), the Custodian shall from time to time employ one or more sub-custodians,
but if such sub-custodian is located outside the U.S. only in accordance with
Rule 17f-5 of the 1940 Act, and provided that the Custodian shall have the same
responsibility or liability to the Fund on account of any actions or omissions
of any sub-custodian so employed as any such sub-custodian has to the Custodian,
provided that the Custodian agreement with any such sub-custodian shall impose
on such sub-
custodian responsibilities and liabilities similar in nature and scope to those
imposed by this Agreement with respect to the functions to be performed by such
sub-custodian.
2. Duties of the Custodian with Respect to Property of the Fund
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Held By the Custodian
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2.1. Holding Securities. The Custodian shall hold and
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physically segregate for the account of the Fund all non-cash
property, including all securities owned by the Fund, other than
securities which are maintained pursuant to Section 2.12 in a clearing
agency which acts as a securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury, collectively
referred to herein as "Securities System".
2.2. Delivery of Securities. The Custodian shall release
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and deliver securities owned by the Fund held by the Custodian or in a
Securities System account of the Custodian only upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 2.12 hereof;
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4) To the depository agent in connection with tender or other similar
offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities 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;
6) To the issuer thereof, or its agent, for transfer into the name of
the Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.11 or into the name or nominee name of any
sub-custodian appointed pursuant to Article 1; or for exchange for
a different number of bonds, certificates 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
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delivered to the Custodian;
7) To the broker selling the same for examination in accordance with
the "street delivery" custom, provided that the Custodian shall
adopt such procedures as the Fund may from time to time approve
to ensure prompt return of the securities to the Custodian by the
broker if the broker elects not to accept them;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or
pursuant to any deposit agreement;
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provided that, in any such case, the new securities and cash, if
any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that, in
any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of securities made by
the Fund, but only against receipt of adequate collateral as
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agreed upon from time to time by the Custodian and the Fund,
which may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is
to be credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the delivery
of securities owned by the Fund prior to the receipt of such
collateral;
11) For delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Fund, but only against
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receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered
under the Securities Exchange Act of 1934 (the "Exchange Act")
and a member of The
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National Association of Securities Dealers, Inc. ("NASD"),
relating to compliance with the rules of The Options Clearing
Corporation and of any registered national securities exchange,
or of any similar organization or organizations, regarding escrow
or other arrangements in connection with transactions by the
Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind,
as may be described from time to time in the Fund's currently
effective prospectus and statement of additional information
("prospectus"), in satisfaction of requests by holders of Shares
for repurchase or redemption; and
15) For any other proper corporate purpose, but only upon receipt of,
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in addition to Proper Instructions, a certified copy of a
resolution of the Trustees or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary or an
Assistant Secretary, specifying the securities to be delivered,
setting forth the purpose for which such delivery
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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 Securities. Securities held by the Custodian
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(other than bearer securities) shall be registered in the
name of the Fund or in the name of any nominee of the Fund or of any
nominee of the Custodian which nominee shall be assigned exclusively
to the Fund, unless the Fund has authorized in writing the appointment
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of a nominee to be used in common with other registered investment
companies having the same investment adviser as the Fund, or in the
name or nominee name of any agent appointed pursuant to Section 2.11
or in the name or nominee name of any sub-custodian appointed pursuant
to Article 1. All securities accepted by the Custodian on behalf of
the Fund under the terms of this Contract shall be in "street name" or
other good delivery form.
2.4. Bank Accounts. The Custodian shall open and maintain a separate
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bank account or accounts in the name of the Fund, 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 Fund, other than cash maintained by the Fund in a bank
account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for the
Fund 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,
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however, that every such bank or trust
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company shall be qualified to act as a custodian under the Investment
Company Act of 1940 and that each such bank or trust company and the
funds to be deposited with each such bank or trust company shall be
approved by vote of a majority of the Trustees of the Fund. 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. Payments for Shares. The Custodian shall receive from
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the distributor for the Fund's Shares or from the Transfer Agent of
the Fund and deposit into the Fund's account such payments as are
received for Shares of the Fund issued or sold from time to time by
the Fund. The Custodian will provide timely notification to the Fund
and the Transfer Agent of any receipt by it of payments for Shares of
the Fund.
2.6. Investment and Availability of Federal Funds. Upon mutual agreement
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between the Fund and the Custodian, the Custodian shall, upon the
receipt of Proper Instructions, (i) invest in such instruments as may
be set forth in such instructions on the same day as received all
federal funds received after a time agreed upon between the Custodian
and the Fund, (ii) make federal funds available to the Fund as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of
the Fund which are deposited into the Fund's account.
2.7. Collection of Income. The Custodian shall collect on a timely
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basis all income and other payments with respect to registered
securities held hereunder to which the Fund shall be entitled either
by law or pursuant to custom in the securities
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business, and shall collect on a timely basis all income and other
payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or its agent
thereof and shall credit such income, as collected, to the Fund's
custodian account. Without limiting the generality of the foregoing,
the Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder.
Income due the Fund on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. The
Custodian will have no duty or responsibility in connection therewith,
other than to provide the Fund with such information or data as may be
necessary to assist the Fund in arranging for the timely delivery to
the Custodian of the income to which the Fund is properly entitled.
2.8. Payment of Fund Moneys. Upon receipt of Proper Instructions, which
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may be continuing instructions when deemed appropriate by the parties,
the Custodian shall pay out moneys of the Fund in the following cases
only:
1) Upon the purchase of securities, futures contracts or options on
futures contracts for the account of the Fund but only (a)
against the delivery of such securities, or evidence of title to
futures contracts or options on futures contracts, to the
Custodian (or any bank, banking firm or trust company doing
business in the United States or abroad which is qualified under
the Investment Company Act of 1940, as amended, to act as a
custodian and has been designated by the Custodian as its agent
for this
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purpose) registered in the name of the Fund or in the name of a
nominee of the Custodian referred to in Section 2.3 hereof or in
proper form for transfer; (b) in the case of a purchase effected
through a Securities System, in accordance with the conditions
set forth in Section 2.12 hereof or (c) in the case of repurchase
agreements entered into between the Fund and the Custodian, or
another bank, or a broker-dealer which is a member of NASD, (i)
against delivery of the securities either in certificate form or
through an entry crediting the Custodian's customer account at
the Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Fund of
securities owned by the Custodian along with written evidence of
the agreement by the Custodian to repurchase such securities from
the Fund;
2) In connection with conversion, exchange or surrender of
securities owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund as
set forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the
account of the Fund: interest, taxes, management, accounting,
transfer agent and legal fees, and operating expenses of the Fund
whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
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5) For the payment of any dividends declared pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, but only upon receipt of, in
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addition to Proper Instructions, a certified copy of a resolution
of the Trustees or of the Executive Committee of the Fund signed
by an officer of the Fund 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.
2.9. Liability for Payment in Advance of Receipt of Securities
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Purchased. In any and every case where payment for purchase of
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securities for the account of the Fund is made by the Custodian in
advance of receipt of the securities purchased in the absence of
specific written instructions from the Fund to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such securities
to the same extent as if the securities had been received by the
Custodian.
2.10. Payments for Repurchases or Redemptions of Shares of the Fund.
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From such funds as may be available for the purpose but
subject to the limitations of the Declaration of Trust and any
applicable votes of the Trustees of the Fund pursuant thereto, the
Custodian shall, upon receipt of instructions from the Transfer Agent,
make funds available for payment to holders of Shares who have
delivered to the Transfer Agent a request for redemption or repurchase
of their Shares. In
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connection with the redemption or repurchase of Shares of the Fund,
the Custodian is authorized upon receipt of instructions from the
Transfer Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders. In connection with the
redemption or repurchase of Shares of the Fund, the Custodian shall
honor checks drawn on the Custodian by a holder of Shares, which
checks have been furnished by the Fund to the holder of Shares, when
presented to the Custodian in accordance with such procedures and
controls as are mutually agreed upon from time to time between the
Fund and the Custodian.
2.11. Appointment of Agents. The Custodian may from time to time in its
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discretion appoint (and may at any time remove) any other
bank or trust company, which is itself qualified under the Investment
Company Act of 1940, as amended, to act as a custodian, as its agent
for a defined time period to carry out one or more designated duties
under the provisions of this Article 2 as the Custodian may direct;
provided, however, that the appointment of any agent shall not relieve
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the Custodian of its responsibilities or liabilities hereunder.
2.12. Deposit of Fund Assets in Securities Systems. The Custodian may
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deposit and/or maintain securities owned by the Fund in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the
U.S. Department of the Treasury and certain federal agencies,
collectively referred to herein as "Securities System" in accordance
with
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applicable Federal Reserve Board and Securities and Exchange
Commission rules and regulations, if any, and subject to the following
provisions:
1) The Custodian may keep securities of the Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Fund;
3) The Custodian shall pay for securities purchased for the account
of the Fund upon (i) receipt of advice from the Securities System
that such securities have been transferred to the Account, and
(ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the account of
the Fund upon (i) receipt of advice from the Securities System
that payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of
the Fund. Copies of all advices from the Securities System of
transfers of securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian
and be provided to the Fund at its request. Upon request,
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the Custodian shall furnish the Fund confirmation of each
transfer to or from the account of the Fund in the form of a
written advice or notice and shall furnish promptly to the Fund
copies of daily transactions sheets reflecting each day's
transactions in the Securities System for the account of the
Fund.
4) The Custodian shall provide the Fund with any report obtained by
the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
5) The Custodian shall have received the initial or annual
certificate, as the case may be, required by Article 9 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from failure
of the Custodian or any such agent to enforce effectively such
rights as it may have against the Securities System; at the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such loss or
damage.
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2.13. Segregated Account. The Custodian shall upon receipt of Proper
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Instructions establish and maintain a segregated account or
accounts for and on behalf of the Fund, into which account or accounts
may be transferred cash and/or securities, including securities
maintained in an account by the Custodian pursuant to Section 2.12
hereof, (i) in accordance with the provisions of any agreement among
the Fund, the Custodian and a broker-dealer registered under the
Exchange Act and a member of the NASD (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 by the Fund, (ii) for
purposes of segregating cash, government securities or liquid high
grade debt obligations in connection with options purchased, sold or
written by the Fund or commodity futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by
the Fund with the procedures required by Investment Company Act
Release No. 10666, or any subsequent release or releases of the
Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for
other proper corporate purposes, but only, in the case of clause (iv),
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upon receipt of, in addition to Proper Instructions, a certified copy
of a resolution of the Trustees or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary or an
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Assistant Secretary, setting forth the purpose or purposes of such
segregated account and declaring such purposes to be proper corporate
purposes.
2.14. Ownership Certificates for Tax Purposes. The Custodian
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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 securities of the Fund held by it and
in connection with transfers of securities.
2.15. Proxies. The Custodian shall, with respect to the executed
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securities held hereunder, cause to be promptly executed by
the registered holder of such securities, if the securities are
registered otherwise than in the name of the Fund or a nominee of the
Fund, all proxies, without indication of the manner in which such
proxies are to be voted, and shall promptly deliver to the Fund such
proxies, all proxy soliciting materials and all notices relating to
such securities.
2.16. Communications Relating to Fund Portfolio Securities. The Custodian
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shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of
securities and expirations of rights in connection therewith and
notices of exercise of call and put options written by the Fund and
the maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers of the securities being held
for the Fund. With respect to tender or exchange offers, the Custodian
shall transmit promptly to the Fund all written information received
by the Custodian from issuers of the securities whose tender or
exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Fund desires to take action with
15
respect to any tender offer, exchange offer or any other similar
transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.
2.17. Proper Instructions. Proper Instructions as used throughout this
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Article 2 means a writing signed or initialed by one or more person or
persons as the officers of the Fund shall have from time to time
authorized. Each such writing shall set forth the specific transaction
or type of 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 Fund shall
cause all oral instructions to be confirmed in writing. It is
understood and agreed that the Board of Trustees has authorized (i)
The Prudential Insurance Company of America ("Prudential"), as
investment adviser of the Fund pursuant to an Investment Advisory
Agreement, dated January 16, 1987, between Prudential and the Fund, to
deliver proper instructions with respect to all matters for which
proper instructions are required by this Article 2 except Section
2.2(13), Section 2.2(14), Section 2.8(3), Section 2.8(4), Section
2.8(5) and Section 2.8(7) hereof and (ii) Prudential-Bache Securities
Inc. ("Prudential-Bache"), as administrator of the Fund pursuant to an
Administration Agreement, dated January 16, 1987, between Prudential-
Bache and the Fund, to deliver proper instruction with respect to
matters set forth in Section 2.2(13), Section 2.8(3), Section 2.8(4)
and Section 2.8(5). The Custodian may rely upon the certificate of an
officer of Prudential or Prudential-Bache, as
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the case may be, with respect to the person or persons authorized on
behalf of Prudential and Prudential-Bache, respectively, to sign,
initial or give proper instructions for the purposes of this Article
2. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by an officer of the Fund
accompanied by a detailed description of procedures approved by the
Trustees, Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided
that the Fund and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets.
2.18. Actions Permitted without Express Authority. The Custodian may in
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its discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Contract, provided that all such payments shall be accounted
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for to the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Fund except
as otherwise directed by the Trustees of the Fund.
2.19. Evidence of Authority. The Custodian shall be protected in acting
---------------------
upon any instructions, notice, request, consent, certificate
or other instrument or paper
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believed by it to be genuine and to have been properly executed by or
on behalf of the Fund. The Custodian may receive and accept a
certified copy of a vote of the Trustees of the Fund 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 Trustees
pursuant to the Declaration of Trust 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.
3. Duties of Custodian with Respect to the Books of Account and
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Calculation of Net Asset Value and Net Income.
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The Custodian shall cooperate with and supply necessary information to
the entity or entities appointed by the Trustees of the Fund to keep the books
of account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate daily the net income
of the Fund as described in the Fund's currently effective prospectus and shall
advise the Fund and the Transfer Agent daily of the total amounts of such net
income and, if instructed in writing by an officer of the Fund to do so, shall
advise the Transfer Agent periodically of the division of such net income among
its various components. The calculations of the net asset value per share and
the daily income of the Fund shall be made at the time or times described from
time to time in the Fund's currently effective prospectus.
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4. Records
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The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-l and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All such records shall be
the property of the Fund 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 Fund and employees and agents of the Securities and
Exchange Commission. The Custodian shall, at the Fund's request, supply the
Fund with a tabulation of securities owned by the Fund and held by the Custodian
and shall, when requested to do so by the Fund and for such compensation as
shall be agreed upon between the Fund and the Custodian, include certificate
numbers in such tabulations.
5. Opinion of Fund's Independent Accountant
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The Custodian shall take all reasonable action, as the Fund may from time
to time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-1A, and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
6. Reports to Fund by Independent Public Accountants
-------------------------------------------------
The Custodian shall provide the Fund, at such times as the Fund may
reasonably require, with reports by independent public accountants on the
accounting system, internal accounting control and procedures for safeguarding
securities, futures contracts and options on
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futures contracts, including securities deposited and/or maintained in a
Securities System, 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 Fund 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.
7. 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
Fund and the Custodian.
8. 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 Fund 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 Fund) on all matters, and shall be
without liability for any action reasonably taken or omitted pursuant to such
advice. Notwithstanding the foregoing, the responsibility of the Custodian with
respect to redemptions effected by check shall be in accordance with a separate
Agreement entered into between the Custodian and the Fund.
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If the Fund 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 Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian to advance cash or securities 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, 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 Fund shall be
security therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of Fund
assets to the extent necessary to obtain reimbursement.
9. 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 sixty (60) days after the date of such delivery or mailing; provided,
--------
however that the Custodian shall not act under Section 2.12 hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Trustees of the Fund have approved the initial use of a
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particular Securities System and the receipt of an annual certificate of the
Secretary or an Assistant Secretary that the Trustees have reviewed the use by
the Fund of such Securities System, as required in each case by Rule 17f-4 under
the Investment Company Act of 1940, as amended; provided further, however, that
-------- -------
the Fund shall not amend or terminate this Contract in contravention of any
applicable federal or state regulations, or any provision of the Declaration of
Trust or the By-laws, and further provided, that the Fund may at any time by
action of its Trustees (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 Fund 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.
10. Successor Custodian
-------------------
If a successor custodian shall be appointed by the Trustees of the
Fund, the Custodian shall, upon termination, deliver to such successor custodian
at the office of the Custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder and shall transfer to an account of the
successor custodian all of the Fund's securities held in a Securities System.
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
Trustees of the Fund, 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 Trustees 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 and all instruments held by the Custodian relative thereto and all
other property held by it under this Contract and to transfer to an account of
such successor custodian all of the Fund's securities held in any Securities
System. 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 Fund to procure the certified copy of the vote referred to or of
the Trustees 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.
11. Interpretive and Additional Provisions
-------------------------------------
In connection with the operation of this Contract, the Custodian and
the Fund 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
23
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 or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
12. 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.
13. Prior Contracts
---------------
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund and the Custodian relating to the custody of
the Fund's assets.
14. Trustees
--------
All references to actions of or by Trustees herein shall require
action by such Trustees acting as a board or a formally constituted group and
not individually. The name "Prudential-Bache Equity Income Fund" is the
designation of the Trustees under the Declaration of Trust, and all persons
dealing with the Fund must look solely to the property of the Fund for the
enforcement of any claims against the Fund as neither the Trustees, officer,
agents or shareholders assume any personal responsibility for obligations
entered into on behalf of the Fund.
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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 16th day of January, 1987.
ATTEST PRUDENTIAL-BACHE EQUITY INCOME FUND
/s/ S. Xxxx Xxxx By /s/ Xxxxxx X. Xxxxxx
------------------------ ----------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ illegible By /s/ illegible
------------------------ ------------------------------------
Assistant Secretary Vice President
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