CUSTODIAN CONTRACT
Between
ALLIANCE DIVIDEND SHARES, INC.
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
PAGE
1. Employment of Custodian and Property to be Held by
It................................................
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United
States............................................
2.1 Holding Securities...........................
2.2 Delivery of Securities.......................
2.3 Registration of Securities...................
2.4 Bank Accounts................................
2.5 Investment and Availability of Federal Funds
2.6 Collection of Income.........................
2.7 Payment of Fund Moneys.......................
2.8 Liability for Payment in Advance of Receipt
of Securities Purchased......................
2.9 Appointment of Agents........................
2.10 Deposit of Securities in Securities Systems..
2.11 Segregated Account...........................
2.12 Ownership Certificates for Tax Purposes......
2.13 Proxies......................................
2.14 Communications Relating to Fund Portfolio
Securities...................................
2.15 Reports to Fund by Independent Public
Accountants..................................
3. Duties of the Custodian with Respect to Property
of the Fund Held Outside of the United States.....
3.1 Appointment of Foreign Sub-Custodians........
3.2 Assets to be Held............................
3.3 Foreign Securities Depositories..............
3.4 Segregation of Securities....................
3.5 Agreements with Foreign Banking Institutions
3.6 Access of Independent Accountants of the Fund
3.7 Reports by Custodian.........................
3.8 Transactions in Foreign Custody Account......
3.9 Liability of Foreign Sub-Custodians..........
3.10 Monitoring Responsibilities..................
3.11 Branches of U.S. Banks.......................
4. Payments for Repurchases or Redemptions and Sales
of Shares of the Fund.............................
5. Proper Instructions...............................
2
6. Actions Permitted without Express Authority.......
7. Evidence of Authority.............................
8. Duties of Custodian with Respect to the Books of
Account and Calculations of Net Asset Value and
Net Income........................................
9. Records...........................................
10. Opinion of Fund's Independent Accountant..........
11. Compensation of Custodian.........................
12. Responsibility of Custodian.......................
13. Effective Period, Termination and Amendment.......
14. Successor Custodian...............................
15. Interpretive and Additional Provisions............
16. Massachusetts Law to Apply........................
17. Prior Contracts...................................
3
CUSTODIAN CONTRACT
This Contract between Alliance Dividend Shares Inc., a
corporation organized and existing under the laws of Maryland,
having its principal place of business at 0000 Xxxxxx xx xxx
Xxxxxxxx, 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 n 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 Be
Held By It
The Fund hereby employs the Custodian as the custodian
of its assets, including securities it desires to be held in
places within the United States ("domestic securities") and
securities it desires to be held outside the United States
("foreign securities") pursuant to the provisions of the Articles
of Incorporation. 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
4
time, and the cash consideration received by it for such new or
treasury shares of capital stock, $par value, ("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 Article 5), the Custodian shall from time to time
employ one or more sub-custodians located in the United States,
but only in accordance with an applicable vote by the Board of
Directors of the Fund, and provided that the Custodian shall have
no more or less responsibility or liability to the Fund on
account of any actions or omissions of any sub-custodian so
employed than any such sub-custodian has to the Custodian. The
Custodian may employ as sub-custodians for the Fund's securities
and other assets the foreign banking institutions and foreign
securities depositories designated in Schedule "A" hereto but
only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of
the Fund Held B the Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and
psychically aggregate for the account of the Fund all
non-cash property, to be held by it in the United
States, including all domestic securities owned by the
Fund, other than securities which are maintained
pursuant to Section 2.10 in a clearing agency which acts
5
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 and
deliver domestic 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 2.10 hereof;
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
6
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 2.9 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 delivered to the
Custodian;
7) Upon the sale of such securities for the account of
the Fund, to the broker or its clearing agent,
against a receipt, for examination in accordance
with "street delivery" custom, provided that in any
such case, the Custodian shall have no
responsibility or liability for any loss arising
from the delivery of such securities prior to
receiving payment for such securities except as may
arise from the Custodian's own negligence or
willful misconduct;
7
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;
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 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, ita 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
8
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 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 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
9
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, in addition to Proper
Instructions, a certified copy of a resolution of
the Board of Directors 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 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.
10
2.3 Registration of Securities. Domestic securities held by
the Custodian (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 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
2.9 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 bank account or accounts in the United States
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
11
Fund may be deposited by it to ita 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 every such bank or trust 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 Board of Directors 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 Investment and Availability of Federal Funds. Upon
mutual agreement between the Fund and the Custodian, the
Custodian shall, upon the receipt of Proper
Instructions, 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.
2.6 Collection of Income. The Custodian shall collect on a
timely basis all income and other payments with respect
to United States registered securities held hereunder to
which the Fund shall be entitled either by law or
12
pursuant to custom in the securities business, and shall
collect on a timely basis all income and other payments
with respect to United States 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 United States 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.
2.7 Payment of Fund Moneys. Upon receipt of Proper
Instructions, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall
pay out moneys of the Fund in the foil-owing cases only:
1) Upon the purchase of domestic securities, futures
contracts or options on futures contracts for the
13
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 ita agent for this 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
2.10 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 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
14
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 Article 4 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;
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 addition to Proper Instructions, a certified
copy of a resolution of the Board of Directors 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
15
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.
2.8 Liability for Payment in Advance of Receipt of
Securities Purchased. In any and every case where
payment for purchase of domestic 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.
2.9 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 which is itself
qualified under the Investment Company Act of 1940, as
amended, to act as a custodian, 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.
2.10 Deposit of Securities in Securities Systems. The
Custodian may deposit and/or maintain domestic
16
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 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 domestic 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
domestic 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 domestic 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
17
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 domestic 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 domestic 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, 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 to the Fund
copies of daily transaction 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
18
control and procedures for safeguarding domestic
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 13 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 ita agents or of any of
ita 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
lose or damage if and to the extent that the Fund
has not been made whole for any such lose or
damage.
2.11 Segregated Account. The Custodian shall upon receipt of
Proper Instructions establish and maintain a segregated
account or accounts for and on behalf of the Fund, into
19
which account or accounts may be transferred cash and/or
securities, including securities maintained in an
account by the Custodian pursuant to Section 2.10
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 or
government securities 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
20
clause (iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the
Board of Directors or of the Executive Committee signed
by an officer of the Fund and certified by the Secretary
or an Assistant Secretary, setting forth the purpose or
purposes of such segregated account and declaring such
purposes to be proper corporate purposes.
2.12 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 domestic securities of the Fund held by it
and in connection with transfers of such securities.
2.13 Proxies. The Custodian shall, with respect to the
domestic 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 prosy soliciting materials and all
notices relating to such securities.
21
2.14 Communications Relating to Fund Portfolio
Securities.
The Custodian shall transmit promptly to the Fund all
written information (including, without limitation,
pendency of calls and maturities of domestic securities
and expirations of rights in connection therewith and
notices of exercise of call and p~t 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 domestic 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 domestic 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 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 i9 to take
such action.
2.15 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,
22
internal accounting control and procedures for
safeguarding securities, futures contracts and options
on futures contracts, including domestic 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.
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States
3.1 Appointment of Foreign Sub-Custodians.
The Custodian is authorized and instructed to employ as
sub-custodians for the Fund's securities and other
assets maintained outside of the United States the
foreign banking institutions and foreign securities
depositories designated on Schedule A hereto ("foreign
sub-custodians"). Upon receipt of "Proper Instructions",
together with a certified resolution of the Fund's Board
of Directors, the Custodian and the Fund may agree to
amend Schedule A hereto from time to time to designate
additional foreign banking institutions and foreign
securities depositories to act as sub-custodians. Upon
23
receipt of Proper Instructions from the Fund the
Custodian shall cease the employment of any one or more
of such sub-custodians for maintaining custody of the
Fund's assets.
3.2 Assets to be Held. The Custodian shall limit the
securities and other assets maintained in the custody of
the foreign sub-custodians to: (a) "foreign securities,
as defined in paragraph (c)(l) of Rule 17f-5 under the
Investment Company Act of 1940, and (b) cash and cash
equivalents in such amounts as the Custodian or the Fund
may determine to be reasonably necessary to effect the
Fund's foreign securities transactions.
3.3 Foreign Securities Depositories. Except as may otherwise
be agreed upon in writing by the Custodian and the Fund,
assets of the Fund shall be maintained in foreign
securities depositories only through arrangements
implemented by the foreign banking institutions serving
as sub-custodians pursuant to the terms hereof.
3.4 Segregation of Securities. The Custodian shall identify
on its books as belonging to the Fund, the foreign
securities of the Fund held by each foreign sub-
custodian. Each agreement pursuant to which the
Custodian employs a foreign banking institution shall
require that such institution establish a custody
account for the Custodian on behalf of the Fund and
24
physically segregate in that account securities and
other assets of the Fund, and, in the event that such
institution deposits the Fund's securities in a foreign
securities depository, that it shall identify on its
books as belonging to the Custodian, as agent for the
Fund, the securities so deposited (all collectively
referred to as the "Account").
3.5 Agreements with Foreign Banking Institutions. Each
agreement with a foreign banking institution shall be
substantially in the form set forth in Exhibit 1 hereto
and shall provide that: (a) the Fund's assets will not
be subject to any right, charge, security interest, lien
or claim of any kind in favor of the foreign banking
institution or its creditors, except a claim of payment
for their safe custody or administration; (b) beneficial
ownership for the Fund's assets will be freely
transferable without the payment of money or value other
than for custody or administration; (c) adequate records
will be maintained identifying the assets as belonging
to the Fund; (d) officers of or auditors employed by, or
other representatives of the Custodian, including to the
extent permitted under applicable law the independent
public accountants for the Fund, will be given access to
the books and records of the foreign banking institution
relating to its actions under its agreement with the
25
Custodian; and (e) assets of the Fund held by the
foreign sub-custodian will be subject only to the
instructions of the Custodian or its agents.
3.6 Access of Independent Accountants of the Fund. Upon
request of the Fund, the Custodian will use its best
efforts to arrange for the independent accountants of
the Fund to be afforded access to the books and records
of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate
to the performance of such foreign banking institutions
under its agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the
Fund from time to time, as mutually agreed upon,
statements in respect of the securities and other assets
of the Fund held by foreign sub-custodians, including
but not limited to an identification of entities having
possession of the Fund's securities and other assets and
advices or notifications of any transfers of securities
to or from each custodial account maintained by a
foreign banking institution for the Custodian on behalf
of the Fund indicating, as to securities acquired for
the Fund, the identity of the entity having physical
possession-of such securities.
3.8 Transactions in Foreign Custody Account. (a) Upon
receipt of Proper Instructions, which may be continuing
26
instructions when deemed appropriate by the parties, the
Custodian shall make or cause ita foreign sub-custodian
to transfer, exchange or deliver foreign securities
owned by the Fund, but except to the extent explicitly
provided herein only in any of the cases specified in
Section 2.2 (b) Upon receipt of Proper Instructions,
which may be continuing instructions when deemed
appropriate by the parties the Custodian shall pay out
or cause its foreign sub-custodians to pay out monies of
the Fund, but except to the extent explicitly provided
herein only in any of the cases specified in Section
2.7.
(c) Notwithstanding any provision of this Contract to
the contrary, settlement and payment for
securities received for the account of the Fund and
delivery of securities maintained for the account
of the Fund may be effected in accordance with the
customary or established securities trading or
securities processing practices and procedures in
the Jurisdiction or market in which the transaction
occurs, including, without limitation, delivering
securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer)
against a receipt with the expectation of receiving
27
later payment for such securities from such
purchaser or dealer.
(d) Securities maintained in the custody of a foreign
sub-custodian may be maintained in the name of such
entity's; nominee to the same extent as set forth
in Section 2.3 of this Contract and the Fund agrees
to hold any such nominee harmless from any
liability as a holder of record of such securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement
pursuant to which the Custodian employs a foreign
banking institution as a foreign sub-custodian shall
require the institution to exercise reasonable care in
the performance of its duties and to indemnify, and hold
harmless, the Custodian and Fund from and against any
loss, damage, coat, expense, liability or claim arising
out of or in connection with the institution's
performance of such obligations. At the election of the
Fund, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claims
against a foreign banking institution as a consequence
of any such 1088, damage, cost, expense, liability or
claim if and to the extent that the Fund has not been
made whole for any such 1098, damage, coat, expense,
liability or claim.
28
3.10 Monitoring Responsibilities. The Custodian shall furnish
annually to the Fund, during the month of June,
information concerning the foreign sub-custodians
employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund
in connection with the initial approval of this
Contract. In addition, the Custodian will promptly -
inform the Fund in the event that the Custodian learns
of a material adverse change in the financial condition
of a foreign sub-custodian or is notified by a foreign
banking institution employed as a foreign sub-custodian
that there appears to be a substantial likelihood that
its shareholders' equity will decline below 6200 million
(U.S. dollars or the equivalent thereof) or that its
shareholders' equity has declined below $200 million (in
each case computed in accordance with generally accepted
U.S. accounting principles).
3.11 Branches of U.S. Banks. Except as otherwise set forth in
this Contract, the provisions hereof shall not apply
where the custody of the Fund assets maintained in a
foreign branch of a banking institution which is a
"bank" as defined by Section 2(a) (5) of the Investment
Company Act of 1940 which meets the qualification set
forth in Section 26(a) of said Act. The appointment of
29
any such branch as a sub-custodian shall be governed by
Article 1 of this Contract.
4. Payments for Repurchases or Redemptions and Sales
of Shares of the Fund
From such funds as may be available for the purpose but
subject to the limitations of the Articles of Incorporation and
any applicable votes of the Board of Directors 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
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.
The Custodian shall receive from 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
30
Custodian will provide timely notification to the Fund and the
Transfer Agent of any receipt by it of payments for Shares of the
Fund.
5. Proper Instructions
Proper instructions as used herein means a writing
signed or initialed by one or more person or persons as the Board
of Directors 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. Upon receipt of a certificate of the
Secretary or an Assistant Secretary as to the authorization by
the Board of Directors of the Fund accompanied by a detailed
description of procedures approved by the Board of Directors,
Proper Instructions may include communications effected directly
between electromechanical or electronic devices provided that the
Board of Directors and the Custodian are satisfied that such
procedures afford adequate safeguards for the Fund's assets.
31
6. Actions Permitted without Express Authority.
The Custodian may in ita 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 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 Board of Directors
of the Fund.
7. 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 Fund. The Custodian may
receive and accept a certified copy of a vote of the Board of
Directors 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 Board of Directors pursuant
32
to the Articles of Incorporation 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.
8. Duties of Custodian with Respect to the Books of
Account and Calculation of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary
information to the entity or entities appointed by the Board of
Directors 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.
9. Records
The Custodian shall create and maintain all records
relating to ita activities and obligations under this Contract in
such manner as will meet the obligations of the Fund under the
33
Investment Company, Act of 1940, with particular attention to
Section 31 thereof and Rules 31a-1 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.
10. Opinion of Fund's Independent Accountant
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 ita 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.
34
11. 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.
12. 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.
35
The Custodian shall be liable for the acta or omissions
of a foreign banking institution appointed pursuant to the
provisions of Article 3 to the same extent as set forth in
Article 1 hereof with respect to sub-custodians located in the
United States and, regardless of whether assets are maintained in
the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank as contemplated
by paragraph 3.11 hereof, the Custodian shall not be liable for
any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Fund
to maintain custody or any securities or cash of the Fund in a
foreign country including, but not limited to, losses-resulting
from nationalization, expropriation, currency restrictions, or
acts of war or terrorism.
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 ita 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,
36
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 the Fund
assets to the extent necessary to obtain reimbursement. 13.
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, however that the Custodian shall
not act under Section -2.10 hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary
that the Board of Directors of the Fund have approved the initial
use of a particular Securities System and the receipt of an
annual certificate of the Secretary or an Assistant Secretary
that the Board of Directors 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
37
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 Articles of Incorporation,
and further provided, that the Fund 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 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
ita costs, expenses and disbursements.
14. Successor Custodian
If a successor custodian shall be appointed by the Board
of Directors 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
38
of a vote of the Board of Directors of the Fund, deliver at the
office of the Custodian and transfer such securities, funds and
other properties in accordance with such vote.
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 ita last published report, of not less than
S25,000,000, 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 Board of
Directors to appoint a successor custodian, the Custodian shall
be entitled to fair compensation for its services during such
39
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.
15. 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 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 provision shall contravene any
applicable federal or state regulations or any provision of the
Articles of Incorporation 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.
16. 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.
17. 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.
40
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 27th day of February, 1987.
ATTEST ALLIANCE DIVIDEND SHARES, INC.
/s/ Marry X. Xxxxx /s/ Xxxxx X. Xxxxxxx
____________________ _____________________________
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Xxx Xxxxxx /s/
____________________ _____________________________
Assistant Secretary Vice President
41
Schedule A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of
Alliance Growth and Income Fund, Inc. for use as sub-custodians
for the Fund's securities and other assets.
Subcustodian Bank Country
ANZ Banking Group Ltd. Australia
Banque Bruxelles Xxxxxxx Belgium
Canada Trust Company Canada
Kansallis-Osake Pankki Finland
Credit Commercial De France France
Berliner Handels Und Frankfurter Bank Germany
Standard Chartered Bank Hong Kong
Credito Italiano Italy
Sumitomo Trust & Banking Company Limited Japan
Bank Mees & Hope, N.V. Algemene Bank Nederland The Netherlands
Christisnis Bank OG Kreditkasse Norway
DBS Trustee Ltd. Singapore
Skandinaviska Enskilda Banken Sweden
Union Bank of Switzerland Switzerland
Girozentrale Und Bank Der Austria
Osterreichischen Sparkassen AG
Wertpapiersammelbank Bei Der Austria
Osterreichischen Kontrollbank AG
Standard Chartered Bank Malaysia
Kuala Lumpur Branch
Westpac Banking Corporation New Zealand
Standard Chartered Bank Indonesia
(Jakarta)
Certified:
/s/ Xxxx X. Xxxxx
__________________________
Fund's Authorized Officer
Date: 4/16/91
42
EXHIBIT I
CUSTODIAN AGREEMENT
To:
Gentlemen:
The undersigned ("State Street") hereby requests that
you (the Bank) establish a custody account and a cash account for
each custodian/employee benefit plan identifies in the Schedule
attached to this Agreement and each additional account which is
identified to this Agreement. Each such custody or cash account
as applicable will be referred to herein as the "Account" and
will be subject to the following terms and conditions:
1. The Bank shall hold as agent for State Street and shall
physically segregate in the Account such each, bullion, coin,
stocks, shares, bonds, debentures, notes and other securities
and other property which is delivered to the Bank for that
State Street Account (the "Property").
2. a. Without the prior approval of State Street it will not
deposit securities in any securities depository or
utilize a clearing agency, incorporated or organized
under the laws of a country other than the United
States, unless such depository or clearing house
operates-the central system for handling of securities
or equivalent book-entries in that country or operates a
transnational system for the central handling of
securities or equivalent book-entries;
b. When securities held for an Account are deposited in a
securities depository or clearing agency by the Bank,
the Bank shall identify on its books as belonging to
State Street as agent for such Account, the securities
so deposited.
3. The Bank represents that either:
a. It currently has stockholders' equity in excess of $200
million (U.S. dollars or the equivalent of U.S. dollars
computed in accordance with generally accepted U.S.
accounting principles) and will promptly inform State
Street in the event that there appear to be a
substantial likelihood that it stockholders' equity will
decline below $200 million, or in any event, at such
time as its stockholders' equity in fact decline below
$200 million; or
b. It is the subject of an exemptive order issued by the
United State. Securities and Exchange Commission, which
43
such order permits State Street to employ the Bank as a
subcustodian, notwithstanding the fact that the Bank's
stockholders' equity i currently below $200 million or
may in the future decline below $200 million due to
currency fluctuation.
4. Upon the written instructions of State Street, as permitted
by Paragraph 8, the Bank is authorized to pay cash from the
Account and to sell, assign, transfer, deliver or exchange,
or to purchase for the Account, any and all stocks, shares,
bonds, debentures, notes and other securities ("Securities"),
bullion, coin and any other property, but only as provided in
such written instructions. The bank shall not be held liable
for any act or omission to act on instructions given or
purported to be given should there be any error in such
instructions.
5. Unless the Bank receives written instructions of State Street
to the contrary, the Bank is authorized:
a. To promptly receive and collect all income and principal
with respect to the Property and to credit cash receipts
to the Account;
b. To promptly exchange securities where the exchange is
purely ministerial (including, without limitation, the
exchange of temporary securities for those in definitive
form and the exchange of warrants, or other documents of
entitle to securities, for the securities themselves);
c. To promptly surrender securities at maturity or when
called for redemption upon receiving payment therefor;
d. Whenever notification of a rights entitle or a
fractional interest resulting from a rights issue, stock
dividend or stock split is received for the Account and
such rights entitlement or fractional interest bears an
expiration date, the Bank will endeavor to obtain State
Street Bank's instructions, but should these not be
received in time for the Bank to take timely action, the
Bank is authorized to sell such rights entitlement or
fractional interest and to credit the Account;
e. To hold registered in the name of the nominee of the
Bank or its agents such Securities as are ordinarily
held in registered form;
f. To execute in State Street's name for the Account,
whenever the Bank deems it appropriate, such ownership
and other certificates as may be required to obtain the
payment of income from the Property; and
44
g. To pay or cause to be paid, from the Account any and all
taxes and levies in the nature of taxes imposed on such
assets by any governmental authority and shall use
reasonable efforts, to promptly reclaim any foreign
withholding tax relating to the Account.
6. If the Bank shall receive any proxies, notices, reports or
other communications relative to any of the Securities of the
Account in connection with tender offers, reorganization,
mergers, consolidations, or similar events which may have an
impact upon the issuer thereof, the Bank shall promptly
transmit any such communication to State Street Bank by means
as will permit State Street Bank to take timely action with
respect thereto.
7. The Bank is authorized in its discretion to appoint brokers
and agents in connection with the Bank's handling of
transactions relating to the Property provided that any such
appointment shall not relieve the Bank of any of its
responsibilities or liabilities hereunder.
8. Written instructions shall include (i) instructions in
writing signed by such persons as are designated in writing
by State Street; (ii) telex or tested telex instructions of
State street; (iii) other forms of instruction in computer
readable form as shall be customarily utilized for the
transmission of like information; and (iv) such other forms
of communication as from time to time shall be agreed upon by
State Street and the Bank.
9. The Bank shall supply periodic reports with respect to the
safekeeping of assets held by it under this agreement. The
content of such reports shall include but not be limited to
any transfer to or from any account held by the Bank
hereunder and such other information as State Street may
reasonably request.
10. In addition to its obligations under Section 2B hereof, the
Bank shall maintain such other records as may be necessary to
identify the assets hereunder as belonging to each
subcustodian/employee benefit plan identified in our Schedule
attached to this agreement and each additional account which
is identified to this agreement.
11. The Bank agrees that its books and records relating to its
actions under this Agreement shall be opened to the physical,
on-premises inspection and audit at reasonable times by
officers of, auditors employed by or other representatives of
State Street (including to the extent permitted under law the
independent public accounts for any entity whose Property is
45
being held hereunder) and shall be retained for such period
as shall be agreed by State Street and the Bank.
12. The Bank shall be entitled to reasonable compensation for its
services and expenses as custodian under this Agreement, as
agreed upon from time to time by the Bank and State Street.
13. The Bank shall exercise reasonable care in the performance of
its duties, as are set forth or contemplated herein or
contained in instructions given to the Bank which are not
contrary to this Agreement, shall maintain adequate insurance
and agrees to indemnify and hold harmless, State Street and
each Account from and against all loss, damage, cost,
expense, liability or claim arising out of or in connection
with the Bank's performance of its obligations hereunder.
14. The bank agrees (i) the property held hereunder is not
subject to any right, charge, security interest, lien or
claim of any kind in favor of the Bank or any of its agents
or its creditors except a claim of payment for their safe
custody and administration and (ii) the beneficial ownership
of the property shall be freely transferable without the
payment of money or other value other than for safe custody
or administration.
15. The bank agrees to meet State Street Operating Requirements
(See Exhibit A).
16. This Agreement may be terminated the Bank or State Street by
60 days written notice to the other, sent by registered mail
or express courier. The Bank, upon the date this Agreement
terminates pursuant to notice which has been given in a
timely fashion, shall deliver the Property to the beneficial
owner unless the Bank has received from the beneficial owner
60 days prior to the date on which this Agreement is to be
terminated written instructions of State Street specifying
the name(s) of the person(s) to whom the Property shall be
delivered.
17. The Bank and State Street shall each use its best efforts to
maintain the confidentiality of the Property in each Account,
subject, however, to the provisions of any laws requiring
this disclosure of the Property.
18. Unless otherwise specified in this Agreement, all notices
with respect to matters contemplated by this Agreement shall
be deemed duly given when received in writing or by confirmed
telex by the Bank or State Street at their respective
addresses set forth below, or at such other address as to be
specified in each case in a notice similarly given:
46
To State Street Master Trust Division, Global Custody
STATE STREET BANK AND TRUST COMPANY
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
X.X.X.
To the Bank
19. This Agreement shall be governed by and construed in
accordance with the laws of [ ] except to the extent that
such laws are preempted by the laws of the United States of
America.
Please acknowledge your agreement to the foregoing by
executing a copy of this letter.
Very truly yours,
STATE STREET BANK AND TRUST COMPANY
By:________________________________
Vice President
Date:______________________________
Agreed to by:
By:________________________
Date:______________________
47
00250050.AO9
