[CHASE LOGO]
GLOBAL CUSTODY AGREEMENT
AGREEMENT, effective April 19, 1996, between THE CHASE MANHATTAN BANK, N.A.
(the "Bank") and THE VANGUARD GROUP, INC. (the "Customer") on behalf of certain
of its portfolios listed on Schedule A hereto (individually a "Portfolio" and
collectively the "Portfolios").
1. CUSTOMER ACCOUNTS.
The Bank agrees to establish and maintain the following accounts
("Accounts"):
(a) A custody account in the name of the Customer on behalf of each Portfolio
("Custody Account") for any and all stocks, shares, bonds, debentures,
notes, mortgages or other obligations for the payment of money, bullion,
coin and any certificates, receipts, warrants or other instruments
representing rights to receive, purchase or subscribe for the same or
evidencing or representing any other rights or interests therein and other
similar property whether certificated or uncertificated as may be received
by the Bank or its Subcustodian (as defined in Section 3) for the account
of the Customer ("Securities"); and
(b) A deposit account in the name of the Customer ("Deposit Account") for any
and all cash in any currency received by the Bank or its Subcustodian for
the account of the Customer, which cash shall not be subject to withdrawal
by draft or check.
The Customer warrants its authority to: 1) deposit the cash and Securities
("Assets") received in the Accounts and 2) give Instructions (as defined in
Section 11) concerning the Accounts. In the case of fungible Securities, the
Bank may deliver securities of the same class and in the same number in place of
those deposited in the Custody Account.
Upon written agreement between the Bank and the Customer, additional
Accounts may be established and separately accounted for as additional Accounts
under the terms of this Agreement.
2. MAINTENANCE OF SECURITIES AND CASH AT BANK AND SUBCUSTODIAN LOCATIONS.
Unless Instructions specifically require another location acceptable to the
Bank:
(a) Securities will be held in the country or other jurisdiction in which the
principal trading market for such Securities is located, where such
Securities are to be presented for payment or where such Securities are
acquired; and
(b) Cash will be credited to an account in a country or other jurisdiction in
which such cash may be legally deposited or is the legal currency for the
payment of public or private debts.
Cash may be held pursuant to Instructions in either interest or
non-interest bearing accounts as may be available for the particular currency.
To the extent Instructions are issued and the Bank can comply with such
Instructions, the Bank is authorized to maintain cash balances on deposit for
the Customer with itself or one of its affiliates at such reasonable rates of
interest as may from time to time be paid on such accounts, or in non-interest
bearing accounts as the Customer may direct, if acceptable to the Bank.
If the Customer wishes to have any of its Assets held in the custody of an
institution other than the established Subcustodians as defined in Section 3 (or
their securities depositories), such arrangement must be authorized by a written
agreement, signed by the Bank and the Customer.
3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
The Bank may act under this Agreement through the subcustodians listed in
Schedule B of this Agreement with which the Bank has entered into subcustodial
agreements ("Subcustodians"). The Customer authorizes the Bank to hold Assets in
the Accounts in accounts which the Bank has established with one or more of its
branches or Subcustodians. The Bank and Subcustodians are authorized to hold any
of the Securities in their account with any securities depository in which they
participate.
The Bank reserves the right to add new, replace or remove Subcustodians.
The Customer will be given reasonable notice by the Bank of any amendment to
Schedule B. Upon request by the Customer, the Bank will identify the name,
address and principal place of business of any Subcustodian of the Customer's
Assets and the name and address of the governmental agency or other regulatory
authority that supervises or regulates such Subcustodian.
4. USE OF SUBCUSTODIAN.
(a) The Bank will identify the Assets on its books as belonging to the
Customer.
(b) A Subcustodian will hold such Assets together with assets belonging to
other customers of the Bank in accounts identified on such Subcustodian's
books as special custody accounts for the exclusive benefit of customers of
the Bank.
(c) Any Assets in the Accounts held by a Subcustodian will be subject only to
the instructions of the Bank or its agent. Any Securities held in a
securities depository for the account of a Subcustodian will be subject
only to the instructions of such Subcustodian.
(d) Any agreement the Bank enters into with a Subcustodian for holding its
customer's assets shall provide that: (i) such assets will not be subject
to any right, charge, security interest, lien or claim of any kind in favor
of such Subcustodian except for safe custody or administration, (ii) the
beneficial ownership of such assets will be freely transferable without the
payment of money or value other than for safe custody or administration;
(iii) adequate records will be maintained identifying the assets held
pursuant to such agreement as belonging to the customers of the Bank; (iv)
subject to applicable law, Subcustodian shall permit independent public
accountants for Bank and customers of the Bank reasonable access to
Subcustodian's books and records as they pertain to the subcustody account
in connection with such accountants' examination of the books and records
of such account; and (v) the Bank will receive periodic reports with
respect to the safekeeping of assets in the subcustody account, including
advices and/or notifications of any transfers to or from such subcustody
account. The foregoing shall not apply to the extent of any special
agreement or arrangement made by the Customer with any particular
Subcustodian.
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(e) Upon request of the Customer, the Bank shall deliver to the Customer
annually a report stating: (i) the identity of each Subcustodian then
acting on behalf of the Bank and the name and address of the governmental
agency or other regulatory authority that supervises or regulates such
Subcustodian; (ii) the countries in which each Subcustodian is located; and
(iii) as long as SEC Rule 17f-5 under the Investment Company Act of 1940
("Act"), as amended, requires the Customer's Board of Directors/Trustees
directly to approve its foreign custody arrangements, such other
information relating to such Subcustodians as may reasonably be requested
by the Customer to ensure compliance with Rule 17f-5. As long as Rule 17f-5
requires the Customer's Board of Directors/Trustees directly to approve its
foreign custody arrangements, the Bank shall also furnish annually to the
Customer information concerning such Subcustodians similar in kind and
scope as that furnished to the Customer in connection with the initial
approval hereof. The Bank shall advise the Customer of any material adverse
changes in the facts or circumstances upon which such information is based
where such changes would affect the eligibility of the Subcustodian under
Rule 17f-5 as soon as practicable after it becomes aware of any such
material adverse changes in the normal course of its custodial activities.
5. DEPOSIT ACCOUNT TRANSACTIONS
(a) The Bank or its Subcustodians will make payments from the Deposit Account
upon receipt of Instructions which include all information required by the
Bank.
(b) In the event that any payment to be made under this Section 5 exceeds the
funds available in the Deposit Account, the Bank, in its discretion, may
advance the Customer such excess amount which shall be deemed a loan
payable on demand, bearing interest at the rate customarily charged by the
Bank on similar loans.
(c) If the Bank credits the Deposit Account on a payable date, or at any time
prior to actual collection and reconciliation to the Deposit Account, with
interest, dividends, redemptions or any other amount due, the Customer will
promptly return any such amount upon oral or written notification: (i) that
such amount has not been received in the ordinary course of business or
(ii) that such amount was incorrectly credited. If the Customer does not
promptly return any amount upon such notification, the Bank shall be
entitled, upon oral or written notification to the Customer, to reverse
such credit by debiting the Deposit Account for the amount previously
credited. The Bank or its Subcustodian shall have no duty or obligation to
institute legal proceedings, file a claim or a proof of claim in any
insolvency proceeding or take any other action with respect to the
collection of such amount, but may act for the Customer upon Instructions
after consultation with the Customer.
6. CUSTODY ACCOUNT TRANSACTIONS.
(a) Securities will be transferred, exchanged or delivered by the Bank or its
Subcustodian upon receipt by the Bank of Instructions which include all
information required by the Bank. Settlement and payment for Securities
received for, and delivery of Securities out of, the Custody Account may be
made 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. Delivery of Securities out of the
Custody Account may also be made in any manner specifically required by
Instructions acceptable to the Bank.
(b) The Bank, in its discretion, may credit or debit the Accounts on a
contractual settlement date with cash or Securities with respect to any
sale, exchange or purchase of Securities. Otherwise, such transactions will
be credited or debited to the Accounts on the date cash or Securities are
actually received by the Bank and reconciled to the Account.
(i) The Bank may reverse credits or debits made to the Accounts in its
discretion if the related transaction fails to settle within a
reasonable period, determined by the Bank in its discretion, after
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the contractual settlement date for the related transaction; provided
that, where feasible, the Bank shall give Customer prior notification
of any such reversal and otherwise shall give notification promptly
thereafter. Where the foregoing notification is oral, the Bank shall
promptly provide written confirmation of the same (which confirmation
may be electronic).
(ii) If any Securities delivered pursuant to this Section 6 are
returned by the recipient thereof, the Bank may reverse the credits and
debits of the particular transaction at any time.
7. ACTIONS OF THE BANK.
The Bank shall follow Instructions received regarding assets held in the
Accounts. However, until it receives Instructions to the contrary, the Bank
will:
(a) Present for payment any Securities which are called, redeemed or
retired or otherwise become payable and all coupons and other income
items which call for payment upon presentation, to the extent that the
Bank or Subcustodian is actually aware of such opportunities.
(b) Execute in the name of the Customer such ownership and other
certificates as may be required to obtain payments in respect of
Securities.
(c) Exchange interim receipts or temporary Securities for definitive
Securities.
(d) Appoint brokers and agents for any transaction involving the
Securities, including, without limitation, affiliates of the Bank or
any Subcustodian.
(e) Issue statements to the Customer, at times mutually agreed upon,
identifying the Assets in the Accounts.
The Bank will send the Customer an advice or notification of any
transfers of Assets to or from the Accounts. Such statements, advices or
notifications shall indicate the identity of the entity having custody of the
Assets. Unless the Customer sends the Bank a written exception or objection to
any Bank statement within ninety (90) days of receipt, the Customer shall be
deemed to have approved such statement. In such event, or where the Customer has
otherwise approved any such statement, the Bank shall, to the extent permitted
by law, be released, relieved and discharged with respect to all matters set
forth in such statement or reasonably implied therefrom as though it had been
settled by the decree of a court of competent jurisdiction in an action where
the Customer and all persons having or claiming an interest in the Customer or
the Customer's Accounts were parties.
All collections of funds or other property paid or distributed in
respect of Securities in the Custody Account shall be made at the risk of the
Customer. Subject to the standard of care in ss.12 hereof, the Bank shall have
no liability for any loss occasioned by delay in the actual receipt of notice by
the Bank or by its Subcustodians of any payment, redemption or other transaction
regarding Securities in the Custody Account in respect of which the Bank has
agreed to take any action under this Agreement.
8. CORPORATE ACTIONS; PROXIES; TAX RECLAIMS.
a. Corporate Actions. Whenever the Bank receives information concerning
the Securities which requires discretionary action by the beneficial
owner of the Securities (other than a proxy), such as subscription
rights, bonus issues, stock repurchase plans and rights offerings, or
legal notices or other material intended to be transmitted to
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securities holders ("Corporate Actions"), the Bank will give the
Customer written notice (which may be electronic) of such Corporate
Actions to the extent that the Bank's central corporate actions
department has actual knowledge of a Corporate Action in time to
notify its customers.
When a rights entitlement or a fractional interest resulting from a
rights issue, stock dividend, stock split or similar Corporate Action is
received which bears an expiration date, the Bank will endeavor to obtain
Instructions from the Customer or its Authorized Person (as defined in ss.10
hereof), but if Instructions are not received in time for the Bank to take
timely action, or actual notice of such Corporate Action was received too late
to seek Instructions, the Bank is authorized to sell such rights entitlement or
fractional interest and to credit the Deposit Account with the proceeds or take
any other action it deems, in good faith, to be appropriate in which case it
shall be held harmless for any such action.
b. Proxy Voting.
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With respect to domestic U.S. and Canadian Securities (the latter if
held in DTC), the Bank will send to the Customer or the Authorized Person
(as defined in ss.10) for a Custody Account, such proxies (signed in blank,
if issued in the name of the Bank's nominee or the nominee of a central
depository) and communications with respect to Securities in the Custody
Account as call for voting or relate to legal proceedings within a
reasonable time after sufficient copies are received by the Bank for
forwarding to its customers. In addition, the Bank will follow coupon
payments, redemptions, exchanges or similar matters with respect to
Securities in the Custody Account and advise the Customer or the Authorized
Person for such Account of rights issued, tender offers or any other
discretionary rights with respect to such Securities, in each case, of
which the Bank has received notice from the issuer of the Securities, or as
to which notice is published in publications routinely utilized by the Bank
for this purpose. With respect to Securities other than the foregoing, the
Bank will deliver proxies to the Customer or its designated agent pursuant
to the special arrangements which may have been agreed to in writing. As of
the date hereof, there is no such agreement.
c. Tax Reclaims.
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(i) Subject to the provisions hereof, the Bank will apply for a reduction
of withholding tax and any refund of any tax paid or tax credits which
apply in each applicable market in respect of income payments on Securities
for the benefit of the Customer which the Bank believes may be available to
such Customer. Where such reports are available, the Bank shall
periodically report to Customer concerning the making of applications for a
reduction of withholding tax and refund of any tax paid or tax credits
which apply in each applicable market in respect of income payments on
Securities for the benefit of the Customer.
(ii) The provision of tax reclaim services by the Bank is conditional upon
the Bank receiving from the beneficial owner of Securities (A) a
declaration of its identity and place of residence and (B) certain other
documentation (pro forma copies of which are available from the Bank). The
Bank shall use reasonable means to advise the Customer of the declarations,
documentation and information which the Customer is to provide to the Bank
in order for the Bank to provide the tax reclaim services described herein.
The Customer acknowledges that, if the Bank does not receive such
declarations, documentation and information, additional United Kingdom
taxation will be deducted from all income received in respect of Securities
issued outside the United Kingdom and that U.S. non-resident alien tax or
U.S. backup withholding tax will be deducted from U.S. source income. The
Customer shall provide to the Bank such documentation and information as it
may require in connection with taxation, and warrants that, when given,
this information shall be true and correct in every respect, not misleading
in any way, and contain all material information. The Customer undertakes
to notify the Bank immediately if any such information requires updating or
amendment.
(iii) The Bank shall not be liable to the Customer or any third party for
any tax, fines or penalties payable by the Bank or the Customer, and shall
be indemnified accordingly, whether these result from the inaccurate
completion of documents by the Customer or any
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third party, or as a result of the provision to the Bank or any third party
of inaccurate or misleading information or the withholding of material
information by the Customer or any other third party, or as a result of any
delay of any revenue authority or any other matter beyond the control of
the Bank.
(iv) The Customer confirms that the Bank is authorized to deduct from any
cash received or credited to the Cash Account any taxes or levies required
by any revenue or governmental authority for whatever reason in respect of
the Securities or Cash Accounts.
(v) The Bank shall perform tax reclaim services only with respect to
taxation levied by the revenue authorities of the countries notified to the
Customer from time to time and the Bank may, by notification in writing, at
its absolute discretion, supplement or amend the markets in which the tax
reclaim services are offered. Other than as expressly provided in this
sub-clause, the Bank shall have no responsibility with regard to the
Customer's tax position or status in any jurisdiction. Except as provided
in ss.8(c)(ii) and pursuant to Instructions, the Bank shall take no action
in the servicing of the Customer's Securities which, in and of itself,
creates a taxable nexus for the Customer in any jurisdiction other than
with respect to interest, dividends and capital gains that may otherwise be
subject to tax by such jurisdiction with respect to a foreign investor not
otherwise engaged in a trade or business in such jurisdiction in a given
taxable year. Bank shall not be liable for any tax liability caused,
directly or indirectly, by Customer's actions or status in any
jurisdiction.
(vi) In connection with obtaining tax relief, the Customer confirms that
the Bank is authorized to disclose any information requested by any revenue
authority or any governmental body in relation to the Customer or the
Securities and/or Cash held for the Customer. This provision does not
authorize any other voluntary disclosure to any revenue authority or any
governmental body without the prior written consent of Customer.
(vii) Tax reclaim services may be provided by the Bank or, in whole or in
part, by one or more third parties appointed by the Bank (which may be
affiliates of the Bank); provided that the Bank shall be liable for the
performance of any such third party to the same extent as the Bank would
have been if it performed such services itself.
9. NOMINEES.
Securities which are ordinarily held in registered form may be
registered in a nominee name of the Bank, Subcustodian or securities depository,
as the case may be. The Bank may without notice to the Customer cause any such
Securities to cease to be registered in the name of any such nominee and to be
registered in the name of the Customer. In the event that any Securities
registered in a nominee name are called for partial redemption by the issuer,
the Bank may allot the called portion to the respective beneficial holders of
such class of security in any manner the Bank deems to be fair and equitable.
The Customer agrees to hold the Bank, Subcustodians, and their respective
nominees harmless from any liability arising directly or indirectly from their
status as a mere record holder of Securities in the Custody Account.
10. AUTHORIZED PERSONS.
As used in this Agreement, the term "Authorized Person" means employees
or agents including investment managers as have been designated by written
notice from the Customer or its designated agent to act on behalf of the
Customer under this Agreement. Such persons shall continue to be Authorized
Persons until such time as the Bank receives Instructions from the Customer or
its designated agent that any such employee or agent is no longer an Authorized
Person.
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11. INSTRUCTIONS.
The term "Instructions" means instructions of any Authorized Person
received by the Bank, via telephone, telex, TWX, facsimile transmission, bank
wire or other teleprocess or electronic instruction or trade information system
acceptable to the Bank which the Bank believes in good faith to have been given
by Authorized Persons or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Bank may specify.
Unless otherwise expressly provided, all Instructions shall continue in full
force and effect until canceled or superseded.
Any Instructions delivered to the Bank by telephone shall promptly
thereafter be confirmed in writing by an Authorized Person (which confirmation
may bear the facsimile signature of such Person), but the Customer will hold the
Bank harmless for the failure of an Authorized Person to send such confirmation
in writing, the failure of such confirmation to conform to the telephone
instructions received or the Bank's failure to produce such confirmation at any
subsequent time. The Bank may electronically record any Instructions given by
telephone, and any other telephone discussions with respect to the Custody
Account. The Customer shall be responsible for safeguarding any testkeys,
identification codes or other security devices which the Bank shall make
available to the Customer or its Authorized Persons.
12. STANDARD OF CARE; LIABILITIES.
(a) The Bank shall be responsible for the performance of only such duties
as are set forth in this Agreement or expressly contained in Instructions which
are consistent with the provisions of this Agreement as follows:
(i) The Bank will use reasonable care with respect to its obligations
under this Agreement and the safekeeping of Assets. The Bank shall be
liable to the Customer for any loss which shall occur as the result of
the failure of a Subcustodian to exercise reasonable care with respect
to the safekeeping of such Assets to the same extent that the Bank
would be liable to the Customer if the Bank were holding such Assets
in New York. In the event of any loss to the Customer by reason of the
failure of the Bank or its Subcustodian to utilize reasonable care,
the Bank shall be liable to the Customer only to the extent of the
Customer's direct damages, to be determined based on the market value
of the property which is the subject of the loss at the date of
discovery of such loss and without reference to any special conditions
or circumstances. The Bank will not be responsible for the insolvency
of any Subcustodian which is not a branch or affiliate of Bank.
(ii) The Bank will not be responsible for any act, omission, default or the
solvency of any broker or agent which it or a Subcustodian appoints
unless such appointment was made negligently or in bad faith.
(iii)(a)The Bank shall be indemnified by, and without liability to the
Customer for any action taken or omitted by the Bank whether pursuant
to Instructions or otherwise pursuant to this Agreement if such act or
omission was in good faith, without negligence. In performing its
obligations under this Agreement, the Bank may rely on the genuineness
of any document which it believes in good faith to have been validly
executed. (b) The Bank shall hold Customer harmless from, and shall
indemnify Customer for, any loss, liability, claim or expense incurred
by Customer (including, but not limited to, Customer's reasonable
legal fees) to the extent that such loss, liability, claim or expense
arises from the negligence or willful misconduct on the part of the
Bank itself. In no event shall the Bank be liable for special,
indirect or consequential loss or
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damage of any kind whatsoever (including but not limited to lost
profits), even if the Bank has been advised of the likelihood of such
loss or damage and regardless of the form of action.
(iv) The Customer agrees to pay for and hold the Bank harmless from any
liability or loss resulting from the imposition or assessment of any
taxes or other governmental charges, and any related expenses with
respect to income from or Assets in the Accounts.
(v) The Bank shall be entitled to rely, and may act, upon the advice of
counsel (who may be counsel for the Customer) on all matters and shall
be without liability for any action reasonably taken or omitted
pursuant to such advice.
(vi) The Bank need not maintain any insurance for the benefit of the
Customer.
(vii)Without limiting the foregoing, the Bank shall not be liable for any
loss which results from: 1) the general risk of investing, or 2)
investing or holding Assets in a particular country including, but not
limited to, losses resulting from nationalization, expropriation or
other governmental actions; regulation of the banking or securities
industry; currency restrictions, devaluations or fluctuations; and
market conditions which prevent the orderly execution of securities
transactions or affect the value of Assets.
(viii) Neither party shall be liable to the other for any loss due to
forces beyond their control including, but not limited to strikes or
work stoppages, acts of war or terrorism, insurrection, revolution,
nuclear fusion, fission or radiation, or acts of God.
(b) Consistent with and without limiting the first paragraph of this
Section 12, it is specifically acknowledged that the Bank shall have no duty or
responsibility to:
(i) question Instructions or make any suggestions to the Customer or an
Authorized Person regarding such Instructions;
(ii) supervise or make recommendations with respect to investments or the
retention of Securities;
(iii)advise the Customer or an Authorized Person regarding any default in
the payment of principal or income of any security other than as
provided in Section 5(c) of this Agreement;
(iv) evaluate or report to the Customer or an Authorized Person regarding
the financial condition of any broker, agent or other party to which
Securities are delivered or payments are made pursuant to this
Agreement;
(v) except for trades settled at DTC where the broker provides to the Bank
the trade confirmation and the Customer provides for the Bank to
receive the trade instruction, review or reconcile trade confirmations
received from brokers. The Customer or its Authorized Persons (as
defined in Section 10) issuing Instructions shall bear any
responsibility to review such confirmations against Instructions
issued to and statements issued by the Bank.
(c) The Customer authorizes the Bank to act under this Agreement
notwithstanding that the Bank or any of its divisions or affiliates may have a
material interest in a transaction, or circumstances are such that the Bank may
have a potential conflict of duty or interest including the fact that the Bank
or any of its affiliates may provide
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brokerage services to other customers, act as financial advisor to the issuer of
Securities, act as a lender to the issuer of Securities, act in the same
transaction as agent for more than one customer, have a material interest in the
issue of Securities, or earn profits from any of the activities listed herein.
13. FEES AND EXPENSES.
The Customer agrees to pay the Bank for its services under this
Agreement such amount as may be agreed upon in writing ("Fee Schedule"),
together with the Bank's reasonable out-of-pocket or incidental expenses (as
further defined in the Fee Schedule), including, but not limited to, legal fees.
The Bank shall have a lien on and is authorized to charge any Accounts of the
applicable Portfolio for any amount owing to the Bank under any provision of
this Agreement.
14. MISCELLANEOUS.
(a) Foreign Exchange Transactions.
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To facilitate the administration of the Customer's trading and investment
activity, the Bank is authorized to enter into spot or forward foreign exchange
contracts with the Customer or an Authorized Person for the Customer and may
also provide foreign exchange through its subsidiaries, affiliates or
Subcustodians. Instructions, including standing instructions, may be issued with
respect to such contracts but the Bank may establish rules or limitations
concerning any foreign exchange facility made available. In all cases where the
Bank, its subsidiaries, affiliates or Subcustodians enter into a foreign
exchange contract related to Accounts, the terms and conditions of the then
current foreign exchange contract of the Bank, its subsidiary, affiliate or
Subcustodian and, to the extent not inconsistent, this Agreement shall apply to
such transaction.
(b) Certification of Residency, etc.
--------------------------------
The Customer certifies that it is a resident of the United States and agrees to
notify the Bank of any changes in residency. The Bank may rely upon this
certification or the certification of such other facts as may be required to
administer the Bank's obligations under this Agreement. The Customer will
indemnify the Bank against all losses, liability, claims or demands arising
directly or indirectly from any such certifications.
(c) Access to Records.
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The Bank shall allow the Customer's independent public accountant reasonable
access to the records of the Bank relating to the Assets as is required in
connection with their examination of books and records pertaining to the
Customer's affairs. Subject to restrictions under applicable law, the Bank shall
also obtain an undertaking to permit the Customer's independent public
accountants reasonable access to the records of any Subcustodian which has
physical possession of any Assets as may be required in connection with the
examination of the Customer's books and records.
(d) Governing Law; Successors and Assigns.
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This Agreement shall be governed by the laws of the State of New York and shall
not be assignable by either party, but shall bind the successors in interest of
the Customer and the Bank.
(e) Entire Agreement; Applicable Riders.
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Customer represents that the Assets deposited in the Accounts are Mutual Fund
assets subject to certain Securities and Exchange Commission ("SEC") rules and
regulations.
This Agreement consists exclusively of this document together with
Schedules A and B, Exhibits I - II _______ and the following Rider(s)
[Check applicable rider(s)]:
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X MUTUAL FUND
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SPECIAL TERMS AND CONDITIONS
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There are no other provisions of this Agreement and this Agreement
supersedes any other agreements, whether written or oral, between the parties.
Any amendment to this Agreement must be in writing, executed by both parties.
(f) Severability.
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In the event that one or more provisions of this Agreement are held invalid,
illegal or enforceable in any respect on the basis of any particular
circumstances or in any jurisdiction, the validity, legality and enforceability
of such provision or provisions under other circumstances or in other
jurisdictions and of the remaining provisions will not in any way be affected or
impaired.
(g) Waiver.
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Except as otherwise provided in this Agreement, no failure or delay on the part
of either party in exercising any power or right under this Agreement operates
as a waiver, nor does any single or partial exercise of any power or right
preclude any other or further exercise, or the exercise of any other power or
right. No waiver by a party of any provision of this Agreement, or waiver of any
breach or default, is effective unless in writing and signed by the party
against whom the waiver is to be enforced.
(h) Notices.
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All notices under this Agreement shall be effective when actually received. Any
notices or other communications which may be required under this Agreement are
to be sent to the parties at the following addresses or such other addresses as
may subsequently be given to the other party in writing:
Bank: The Chase Manhattan Bank, N.A.
0 Xxxxx XxxxxXxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Global Custody Division
or telex:___________________________
Customer: The Vanguard Group, Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attention: Fund Financial Services
or telex:__________________________
(i) Termination.
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This Agreement may be terminated by the Customer or the Bank by giving sixty
(60) days written notice to the other, provided that such notice to the Bank
shall specify the names of the persons to whom the Bank shall deliver the Assets
in the Accounts. If notice of termination is given by the Bank, the Customer
shall, within sixty (60) days following receipt of the notice, deliver to the
Bank Instructions specifying the names of the persons to whom the Bank shall
deliver the Assets. In either case the Bank will deliver the Assets to the
persons so specified, after deducting any amounts which the Bank determines in
good faith to be owed to it under Section 13. If within sixty (60) days
following receipt of a notice of termination by the Bank, the Bank does not
receive Instructions from the Customer specifying the names of the persons to
whom the Bank shall deliver the Assets, the Bank, at its
10
election, may deliver the Assets to a bank or trust company doing business in
the State of New York to be held and disposed of pursuant to the provisions of
this Agreement, or to Authorized Persons, or may continue to hold the Assets
until Instructions are provided to the Bank.
THE VANGUARD GROUP, INC.
By:_/s Xxxxx X. West__________________________
Title: Principal/Controller
THE CHASE MANHATTAN BANK, N.A.
By: /s Xxxxxxxx David________________________
Title: Vice President
11
STATE OF PENNSYLVANIA )
: ss.
COUNTY OF XXXXXXX )
On this 19th day of April, 1996, before me personally came Xxxxx X. Xxxx, to me
known, who being by me duly sworn, did depose and say that he/she resides in
Malvern, Pennsylvania; that he/she is Controller of The Vanguard Group, Inc.,
the entity described in and which executed the foregoing instrument; that he/she
knows the seal of said entity, that the seal affixed to said instrument is such
seal, that it was so affixed by order of said entity, and that he/she signed
his/her name thereto by like order.
Sworn to before me this 19th
day of April, 1996.
/s Xxxxxxxxx X. Xxxxxxxxxx
Notary
STATE OF NEW YORK )
: ss.
COUNTY OF NEW YORK )
On this 22nd day of April,1996, before me personally came Xxxxxxxx
Xxxxx, to me known, who being by me duly sworn, did depose and say that he/she
resides in Brooklyn, New York at 0 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000;
that he/she is a Vice President of THE CHASE MANHATTAN BANK, (National
Association), the corporation described in and which executed the foregoing
instrument; that he/she knows the seal of said corporation, that the seal
affixed to said instrument is such corporate seal, that it was so affixed by
order of the Board of Directors of said corporation, and that he/she signed
his/her name thereto by like order.
Sworn to before me this 22nd
day of April, 1996.
/s Layee Ng
Notary
Mutual Fund Rider to Global Custody Agreement
Between The Chase Manhattan Bank, N.A. and
The Vanguard Group, Inc.
effective April 19, 1996
Customer represents that the Assets being placed in the Bank's custody
are subject to the Investment Company Act of 1940 (the Act), as the same may be
amended from time to time.
Except to the extent that the Bank has specifically agreed to comply
with a condition of a rule, regulation, interpretation promulgated by or under
the authority of the SEC or the Exemptive Order applicable to accounts of this
nature issued to the Bank (Investment Company Act of 1940, Release No. 12053,
November 20, 1981), as amended, or unless the Bank has otherwise specifically
agreed, the Customer shall be solely responsible to assure that the maintenance
of Assets under this Agreement complies with such rules, regulations,
interpretations or exemptive order promulgated by or under the authority of the
Securities Exchange Commission.
THE FOLLOWING MODIFICATIONS ARE MADE TO THE AGREEMENT:
SECTION 3. SUBCUSTODIANS AND SECURITIES DEPOSITORIES.
------------------------------------------
Add the following language to the end of Section 3:
The terms Subcustodian and securities depositories as used in this
Agreement shall mean a branch of a qualified U.S. bank, an eligible
foreign custodian or an eligible foreign securities depository, which
are further defined as follows:
(a) "qualified U.S. Bank" shall mean a qualified U.S. bank as defined
in Rule 17f-5 under the Investment Company Act of 1940;
(b) "eligible foreign custodian" shall mean (i) a banking institution
or trust company incorporated or organized under the laws of a country
other than the United States that is regulated as such by that
country's government or an agency thereof and that has shareholders'
equity in excess of
$200 million in U.S. currency (or a foreign currency equivalent
thereof), (ii) a majority owned direct or indirect subsidiary of a
qualified U.S. bank or bank holding company that is incorporated or
organized under the laws of a country other than the United States and
that has shareholders' equity in excess of $100 million in U.S.
currency (or a foreign currency equivalent thereof) (iii) a banking
institution or trust company incorporated or organized under the laws
of a country other than the United States or a majority owned direct
or indirect subsidiary of a qualified U.S. bank or bank holding
company that is incorporated or organized under the laws of a country
other than the United States which has such other qualifications as
shall be specified in Instructions and approved by the Bank; or (iv)
any other entity that shall have been so qualified by exemptive order,
rule or other appropriate action of the SEC; and
(c) "eligible foreign securities depository" shall mean a securities
depository or clearing agency, incorporated or organized under the
laws of a country other than the United States, which operates (i) the
central system for handling securities or equivalent book-entries in
that country, or (ii) a transnational system for the central handling
of securities or equivalent book-entries.
The Customer represents that its Board of Directors has approved each
of the Subcustodians listed in Schedule B to this Agreement and the terms of the
subcustody agreements between the Bank and each Subcustodian, which are attached
as Exhibits I through of Schedule B, and further represents that its Board has
determined that the use of each Subcustodian and the terms of each subcustody
agreement are consistent with the best interests of the Fund(s) and its (their)
shareholders. The Bank will supply the Customer with any amendment to Schedule B
for approval. The Customer has supplied or will supply the Bank with certified
copies of its Board of Directors resolution(s) with respect to the foregoing
prior to placing Assets with any Subcustodian so approved.
Section 11. Instructions.
-------------
Add the following language to the end of Section 11:
Deposit Account Payments and Custody Account Transactions made pursuant
to Section 5 and 6 of this Agreement may be made only for the purposes
listed below. Instructions must specify the purpose for which any
transaction is to be made and Customer shall be solely responsible to
assure that Instructions are in accord with any limitations or
restrictions applicable to the Customer by law or as may be set forth
in its prospectus.
2
(a) In connection with the purchase or sale of Securities at prices as
confirmed by Instructions;
(b) When Securities are called, redeemed or retired, or otherwise become
payable;
(c) In exchange for or upon conversion into other securities alone or other
securities and cash pursuant to any plan or merger, consolidation,
reorganization, recapitalization or readjustment;
(d) Upon conversion of Securities pursuant to their terms into other
securities;
(e) Upon exercise of subscription, purchase or other similar rights represented
by Securities;
(f) For the payment of interest, taxes, management or supervisory fees,
distributions or operating expenses;
(g) In connection with any borrowings by the Customer requiring a pledge of
Securities, but only against receipt of amounts borrowed;
(h) In connection with any loans, but only against receipt of adequate
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer;
(i) For the purpose of redeeming shares of the capital stock of the Customer
and the delivery to, or the crediting to the account of, the Bank, its
Subcustodian or the Customer's transfer agent, such shares to be purchased
or redeemed;
(j) For the purpose of redeeming in kind shares of the Customer against
delivery to the Bank, its Subcustodian or the Customer's transfer agent of
such shares to be so redeemed;
(k) For delivery in accordance with the provisions of any agreement among the
Customer, the Bank 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 Customer;
3
(l) For release of Securities to designated brokers under covered call options,
provided, however, that such Securities shall be released only upon payment
to the Bank of monies for the premium due and a receipt for the Securities
which are to be held in escrow. Upon exercise of the option, or at
expiration, the Bank will receive from brokers the Securities previously
deposited. The Bank will act strictly in accordance with Instructions in
the delivery of Securities to be held in escrow and will have no
responsibility or liability for any such Securities which are not returned
promptly when due other than to make proper request for such return;
(m) For spot or forward foreign exchange transactions to facilitate security
trading, receipt of income from Securities or related transactions;
(n) For other proper purposes as may be specified in Instructions issued by an
officer of the Customer which shall include a statement of the purpose for
which the delivery or payment is to be made, the amount of the payment or
specific Securities to be delivered, the name of the person or persons to
whom delivery or payment is to be made, and a certification that the
purpose is a proper purpose under the instruments governing the Customer;
and
(o) Upon the termination of this Agreement as set forth in Section 14(i).
Section 12. Standard of Care; Liabilities.
------------------------------
Add the following subsection (c) to Section 12:
(c) The Bank hereby warrants to the Customer that in its opinion, after due
inquiry, the established procedures to be followed by each of its branches,
each branch of a qualified U.S. bank, each eligible foreign custodian and
each eligible foreign securities depository holding the Customer's
Securities pursuant to this Agreement afford protection for such Securities
at least equal to that afforded by the Bank's established procedures with
respect to similar securities held by the Bank and its securities
depositories in New York.
Section 14. Access to Records.
------------------------------
Add the following language to the end of Section 14(c):
--------------------------------------------------------
4
Applicable accounts, books and records of the Bank shall be open to
inspection and audit at all reasonable times during normal business hours upon
reasonable advance notice by Customer's independent public accountants and by
employees of Customer designated to the Bank. All such materials shall, to the
extent applicable, be maintained and preserved in conformity with the Act and
the rules and regulations thereunder, including without limitation, SEC Rule
31a.
Add the following language to the end of Section 14(i):
--------------------------------------------------------
Termination as to One or More Portfolios.
-----------------------------------------
This Agreement may be terminated as to one or more Portfolios (but less than all
the Portfolios) by delivery of an amended Schedule A deleting all such
Portfolios, in which case termination as to the deleted Portfolios shall take
effect sixty (60) days after the date of such delivery. The execution and
delivery of an amended Schedule A which deletes one or more Portfolios, shall
constitute a termination hereof only with respect to such deleted Portfolios,
shall be governed by the preceding provisions of Section 14 as to the
identification of a successor custodian and the delivery of the Assets of the
Portfolio so deleted to such successor custodian, and shall not affect the
obligations of the Bank and the Customer hereunder with respect to the other
Portfolios set forth in Schedule A, as amended from time to time.
The following is added as Section 14(j):
-----------------------------------------
(j) Several Obligations of the Portfolios.
-------------------------------------------
With respect to any obligations of the Customer on behalf of the Portfolios and
their related Accounts arising hereunder, the Custodian shall look for payment
or satisfaction of any such obligation solely to the assets and property of the
Portfolio and such Accounts to which such obligation relates as though the
Customer had separately contracted with the Custodian by separate written
instrument with respect to each Portfolio and its Accounts.
5
Schedule A
----------
1. Vanguard World Fund Inc. - International Growth Portfolio
2. Vanguard Specialized Portfolios Inc. - Gold and Precious Metals
SCHEDULE B
----------
SUB-CUSTODIANS APPOINTED BY
---------------------------
THE CHASE MANHATTAN BANK, N.A., FOR GLOBAL CUSTODY
--------------------------------------------------
AS OF MARCH 1996
----------------
COUNTRY SUB-CUSTODIAN CORRESPONDENT BANK
--------------------------------------------------------------------------------
ARGENTINA The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, X.X.
Xxxxxxxx 000, 0xx Xxxxx Xxxxxx Xxxxx
Xx Mayo 130/140
1061 Buenos Aires
ARGENTINA
AUSTRALIA The Chase Manhattan Bank The Chase Manhattan Bank, N.A.
Australia Limited Australia Limited
00xx Xxxxx Xxxxxx
World Trade Centre
Xxxxxxx Xxxxxx
Xxxxxx
Xxx Xxxxx Xxxxx 0000
XXXXXXXXX
AUSTRIA Creditanstalt - Bankverein Credit Lyonnais
Xxxxxxxxxxxxx 0 Xxxxxx
A - 1011, Vienna
AUSTRIA
BANGLADESH Standard Chartered Bank Standard Chartered Bank
18-20 Motijheel C.A. Xxxxx
Xxx 000,
Xxxxx-0000
XXXXXXXXXX
XXXXXXX Generale Bank Credit Xxxxxxxx Xxxx
0 Xxxxxxxx Xx Xxxx Xxxxxxxx
0000 Bruxelles
BELGIUM
BOTSWANA Barclays Bank of Botswana Limited Barclays Bank of Botswana
Barclays House Gaborone
Khama Crescent
Gaborone
BOTSWANA
BRAZIL Banco Chase Manhattan, S.A. Banco Chase Manhattan X.X.
Xxxxx Manhattan Center San Xxxxx
Xxx Verbo Divino, 1400
Sao Paulo, SP 00000-000
XXXXXX
CANADA The Royal Bank of Canada Royal Bank of Canada
Royal Bank Plaza Toronto
Toronto
Xxxxxxx X0X 0X0
XXXXXX
Xxxxxx Trust Royal Bank of Canada
Canada Trust Tower Toronto
BCE Place
000 Xxx xx Xxxxx
Xxxxxxx
Xxxxxxx X0X 0X0
XXXXXX
CHILE The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Xxxxxxxxx 0000 Xxxxxxxx
Xxxxxxx 0000
Xxxxxxxx
XXXXX
COLOMBIA Cititrust Colombia S.A. Cititrust Colombia S.A.
Sociedad Fiduciaria Sociedad Fudiciaria
Carrera 9a No 99-02 Santafe de Bogota
Santafe de Bogota, DC
COLOMBIA
CZECH Ceskoslovenska Obchodni Banka, A.S. Komercni Banka, A.S.,,
REPUBLIC Xx Xxxxxxx 00 Xxxxx
000 00 Xxxxx 0
XXXXX XXXXXXXX
DENMARK Den Xxxxxx Xxxx Xxx Xxxxxx Xxxx
0 Xxxxxxx Xxxxxx XX 1091 Copenhagen
Copenhagen
DENMARK
EGYPT National Bank of Egypt National Bank of Egypt
00 Xxxxxx Xxxxxx Xxxxx
Xxxxx
XXXXX
2
EUROBONDS Cedel S.A. . ECU:Lloyds Bank PLC
67 Boulevard Grande Duchesse International Banking
Charlotte Division
LUXEMBOURG London
A/c The Chase Manhattan Bank, N.A. For all other currencies: see
London relevant country
A/c No. 17817
EURO CDS First Chicago Clearing Centre ECU:Lloyds Bank PLC
00 Xxxxxxxxxx Xxxxxx Banking Division Xxxxxx
Xxxxxx XX0X 0XX For all other currencies: see
UNITED KINGDOM relevant country
FINLAND Xxxxxx Bank XXX Xxxxxx Bank KOP
Xxxxxxx Xxxxx 3-5 Helsinki
00500 Helsinki
FINLAND
FRANCE Banque Paribas Societe Generale
Ref256 Paris
XX 000
0, Xxx X'Xxxxx
75078 Xxxxx
Xxxxx 00
XXXXXX
XXXXXXX Chase Bank X.X. Xxxxx Bank A.G.
Xxxxxxxxxxxxxxxx 00 Xxxxxxxxx
Xxxxxxxx 00 00 09
60441 Frankfurt/Main
GERMANY
GHANA Barclays Bank of Ghana Barclays Bank
Barclays House Accra
High Street
Accra
GHANA
GREECE Barclays Bank Pic National Bank of Greece S.A.
0 Xxxxxxxxxxx Xxxxxx Xxxxxx
00000 Athens A/c Chase Manhattan Bank, N.A.
GREECE London
A/c No. 040/7/921578-68
3
HONG KONG The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
00/X Xxx Xxxxxxxx Xxxxxx Xxxx Xxxx
0, Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxx Xxxx
XXXX XXXX
XXXXXXX Citibank Budapest Rt. Citibank Budapest Rt.
Xxxx Xxxx 00-00 Xxxxxxxx
0000 Xxxxxxxx X
XXXXXXX
XXXXX The Hongkong and Shanghai The Hongkong and Shanghai
Banking Corporation Limited Banking Corporation Limited
00/00 Xxxxxxx Xxxxxx Xxxx Xxxxxx
Xxxxxx 0000 001
INDIA
Deutsche Bank AG, Bombay Branch Deutsche Bank
Securities & Custody Services Bombay
Kodak House
222 D.N. Road, Fort
Bombay 4000 001
INDIA
INDONESIA The Hongkong and Shanghai The Chase Manhattan Bank, N.A.
Banking Corporation Limited Jakarta
World Trade Center
J1. Jend Xxxxxxxx Xxx. 00-00
Xxxxxxx 00000
XXXXXXXXX
IRELAND Bank of Ireland Allied Irish Bank
International Financial Services Xxxxxx
Xxxxxx
Xxxxxx 0
XXXXXXX
ISRAEL Bank Leumi Le-Israel B.M. Bank Leumi Le-Israel B.M.
00 Xxxxx Xxxxxx Xxx Xxxx
00000 Tel Aviv
ISRAEL
ITALY The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Xxxxxx Xxxx 0 Xxxxx
00000 Xxxxx
XXXXX
4
JAPAN The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
0-0 Xxxxxxxxxx 0-Xxxxx Xxxxx
Xxxxxxx-Xx
Xxxxx 000
XXXXX
JORDAN Arab Bank Limited Arab Bank Limited
P O Box 950544-5 Amman
Amman
Shmeisani
JORDAN
KENYA Barclays Bank of Kenya Barclays Bank of Xxxxx
Xxxxx Xxxxx Xxxxxxx
Xxxxxxxxx Xxxxx
Xxxxxxx
XXXXX
XXXXXXXXXX Banque Generale du Luxembourg S.A. Banque Generale du Luxembourg
50 Avenue X.X. Xxxxxxx X.X.
X-0000 XXXXXXXXXX Xxxxxxxxxx
MALAYSIA The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, X.X.
Xxxxxx International Kuala Lumpur
Xxxxx Xxxxxx Xxxxxx
00000, Xxxxx Xxxxxx
MALAYSIA
MAURITIUS Hongkong and Shanghai Banking Hongkong and Shanghai Banking
Corporation Ltd Corporation Ltd.
Curepipe Curepipe
MAURITIUS
MEXICO The Chase Manhattan Bank, S.A. No correspondent bank
(Equities) Xxxxxx Urales no. 470, 4th Floor
Col. Xxxxx xx Xxxxxxxxxxx
00000 Xxxxxx D.F.
(Government Banco Nacional de Mexico No correspondent bank
Bonds) Xxxxxxx Xxxxxx Xx. 000 - 00 Xxxx
00000 Xxxxxx D.F.
MEXICO
5
MORROCO Banque Commerciale du Maroc Banque Commercial du Maroc
2 Boulevard Xxxxxx Xxxxxxx Xxxxxxxxxx
Xxxxxxxxxx 00000
XXXXXXX
XXXXXXXXXXX ABN AMRO N.V. Generale Bank
Securities Centre Nederland N.V.
X X Xxx 0000 Xxxxxxxxx
0000 Xx Xxxxx
XXXXXXXXXXX
NEW ZEALAND National Nominees Limited National Bank of Xxx Xxxxxxx
Xxxxx 0 XXX Xxxxx Xxxxxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxx
XXX XXXXXXX
NORWAY Den Norske Bank Den Norske Bank
Xxxxxxxxxx 00 Xxxx
Xxxx 0
XXXXXX
XXXXXXXX Citibank N.A. Citibank N.A.
State Life Building No. 1 Karachi
X.X. Xxxxxxxxxx Xxxx
Xxxxxxx
XXXXXXXX
Deutsche Bank Deutsche Bank
Unitowers Karachi
X.X. Xxxxxxxxxx Xxxx
Xxxxxxx
XXXXXXXX
PERU Citibank, N.A. Citibank N.A.
Camino Real 457 Lima
XX Xxxxx Real - 5th Floor
San Xxxxxx, Lima 27
XXXX
0
XXXXXXXXXXX The Hongkong and Shanghai The Hongkong and Shanghai
Banking Corporation Limited Banking Corporation Limited
Hong Kong Bank Centre 3/F Manila
San Xxxxxx Avenue
Ortigas Commercial Centre
Pasig Metro Manila
PHILIPPINES
POLAND Bank Polska Kasa Opieki S.A. Bank Polska Kasa Opieki X.X.
Xxxxxx Plaza Warsaw
Xxxxxxx 00
00-000 Xxxxxx
XXXXXX
For Mutual Funds:
Bank Handlowy W. Warsawie. S.A. Bank Polska Kasa Opieki S.A.
Custody Dept. Warsaw
Capital Markets Centre
U1, Nowy Swiat 6/12
00-000 Xxxxxx
XXXXXX
PORTUGAL Banco Espirito Santo & Comercial Banco Nacional Ultra Marino
de Lisboa Lisbon
Servico de Gestaode Titulos
R. Mouzinho xx Xxxxxxxx, 00 x/x
0000 Xxxxxx
XXXXXXXX
RUSSIA Chase Manhattan Bank International Chase Manhattan Bank
("CMBI") New York
1st Tverskaya - Yamskaya, 23 A/C Chase Manhattan Bank
125047 Moscow London (US$ Nostro Account)
RUSSIA
SHANGHAI The Hongkong and Shanghai Citibank
(CHINA) Banking Corporation Limited New York
Shanghai Branch
Corporate Banking Centre
Xxxx 000, 0/X Xxxxxxxx Xxxxxx
0000 Xxxxxxx Xx Xx
Shanghai
THE PEOPLE'S REPUBLIC OF CHINA
7
SHENZHEN The Hongkong and Shanghai The Chase Manhattan Bank, N.A.
(CHINA) Banking Corporation Limited Hong Kong
1st Floor
Central Plaza Hotel
No.1 Xxxx Xxxx Lu
Shenzhen
THE PEOPLE'S REPUBLIC OF CHINA
SINGAPORE The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Shell Tower Singapore
00 Xxxxxxx Xxxxx
Xxxxxxxxx 0000
XXXXXXXXX
SLOVAK Ceskoslovenska Obchodni Banka, A.S. Ceskoslovenska Obchodni Banka
REPUBLIC Xxxxxxxxx 00 Xxxxxx Xxxxxxxx
000 00 Xxxxxxxxxx
XXXXXX XXXXXXXX
XXXXX XXXXXX Standard Bank of South Africa Standard Bank of South Africa
Standard Bank Xxxxxxxx South Africa
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx 0000
XXXXX XXXXXX
SOUTH KOREA The Hongkong and Shanghai The Hongkong and Shanghai
Banking Corporation Limited Banking Corporation Limited
0/X Xxxxx Xxxxxxxx Xxxxx
#0 Xxxxxxx, 0-xx Xxxxxxx-Xx
Xxxxx
XXXXX XXXXX
XXXXX The Chase Manhattan Bank, N.A. Banco Bilbao Vizcaya,
Xxxxx Xxxxxxx 0 Xxxxxx
0xx Xxxxx
Xx Xxxxxxx
00000 Xxxxxx
XXXXX
SRI LANKA The Hongkong and Shanghai The Hongkong and Shanghai
Banking Corporation Limited Banking Corporation Limited
Xxxx #00-00 Xxxx Xxxxx, Xxxxxxx
Xxxxx Trade Center
Xxxxxxx 0,
XXX XXXXX
0
XXXXXX Skandinaviska Enskilda Banken Svenska Handelsbanken
Xxxxxxxxxxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxx X-000 00
XXXXXX
SWITZERLAND Union Bank of Switzerland Union Bank of Xxxxxxxxxxx
00 Xxxxxxxxxxxxxx Xxxxxx
0000 Xxxxxx
XXXXXXXXXXX
TAIWAN The Chase Manhattan Bank, N.A. No correspondent Bank
115 Min Sheng East Road - Xxx 0,
0xx Xxxxx
Xxxxxx
XXXXXX
Xxxxxxxx of China
THAILAND The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Bubhajit Building Bangkok
00 Xxxxx Xxxxxxx Xxxx
Xxxxx, Xxxxxxx
Xxxxxxx 00000
XXXXXXXX
TUNISIA Banque Internationale Arabe Bangue Internationale Arabe
de Tunisie de Tunisie
00-00 Xxxxxx Xxxxx Xxxxxxxxx Tunisia
P. X. Xxx 000
0000 Xxxxx Xxxxx
XXXXXXX
XXXXXX The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Emirhan Cad. No: 145 Istanbul
Atakule, A Blok Kat:11
00000-Xxxxxxxxx/Xxxxxxxx
Xxxxxxxx
XXXXXX
U.K. The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A.
Xxxxxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
XXXXXX XXXXXXX
9
AMENDMENT #1
------------
The following is an amendment ("Amendment") to the Global Custody Agreement
dated April 16, 1996 (the "Agreement") by and between The Chase Manhattan Bank,
N.A. (the "Bank") and The Vanguard Group, Inc. ("Customer") on behalf of certain
of its portfolios listed on Schedule A thereto (individually a "Portfolio" and
collectively the "Portfolios"). Bank and Customer hereby agree that all of the
terms and conditions as set forth in the Agreement are hereby incorporated by
reference with respect to the Portfolios listed below.
Schedule A is hereby amended as follows:
The following Portfolios are hereby added to Schedule A:
Vanguard/Wellington Fund, Inc.
Vanguard/Wellesley Income Fund, Inc.
Vanguard Tax-Managed Fund, Inc.
Growth and Income Portfolio
Capital Appreciation Portfolio
Balanced Fund
Vanguard Fixed Income Securities Fund, Inc.
High-Yield Corporate Portfolio
Long-Term Corporate Portfolio
GNMA Portfolio
Vanguard Bond Index Fund, Inc.
Total Bond Market Portfolio
Vanguard LIFEStrategy Funds
Income Portfolio
Conservative Growth Portfolio
Moderate Growth Portfolio
Growth Portfolio
AGREED TO as of July 19, 1996 BY:
-------------
The Vanguard Group, Inc. The Chase Manhattan Bank, N.A.
By: /s Xxxxx X. Xxxx By: /s Xxxxxxxx Xxxxx
------------- ---------------
Title: Principal/Controller Title: Vice President
-------------------- --------------
AMENDMENT #2
------------
The following is an amendment ("Amendment") to the Global Custody
Agreement dated April 16, 1996 (the "Agreement") by and between The Chase
Manhattan Bank, N.A. (the "Bank") and The Vanguard Group, Inc. ("Customer") on
behalf of certain of its portfolios listed on Schedule A thereto (individually a
"Portfolio" and collectively the "Portfolios"). This Amendment serves to update
the names of the Portfolios listed on Schedule A and Amendment #1. Bank and
Customer hereby agree that all of the terms and conditions as set forth in the
Agreement are hereby incorporated by reference with respect to the Portfolios
listed below.
Schedule A and Amendment #1 are hereby amended as follows:
Vanguard World Funds
Vanguard International Growth Fund
Vanguard Specialized Funds
Vanguard Gold and Precious Metals Fund
Vanguard Wellington Fund
Vanguard Wellesley Income Fund
Vanguard Tax-Managed Funds
Vanguard Tax-Managed Growth and Income Fund
Vanguard Tax-Managed Capital Appreciation Fund
Vanguard Tax-Managed Balanced Fund
Vanguard Fixed Income Securities Funds
Vanguard High-Yield Corporate Fund
Vanguard Long-Term Corporate Fund
Vanguard GNMA Fund
Vanguard Bond Index Funds
Vanguard Total Bond Market Index Fund
Vanguard STAR Funds
Vanguard LifeStrategy Income Fund
Vanguard LifeStrategy Conservative Growth Fund
Vanguard LifeStrategy Moderate Growth Fund
Vanguard LifeStrategy Growth Fund
7
AGREED TO as of April 24, 2000 BY:
The Vanguard Group, Inc. The Chase Manhattan Bank, N.A.
By: /s Xxxxxxx X. Xxxxxxxxx By: /s Xxxxx X. Xxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxxxx X. Xxxxxx, Xx.
Title: Managing Director and Title: Vice President
Secretary
8
AMENDMENT #3
------------
The following is an amendment ("Amendment") to the Global Custody
Agreement dated April 16, 1996 (the "Agreement") by and between The Chase
Manhattan Bank (formerly known as The Chase Manhattan Bank, N.A.) (the "Bank")
and The Vanguard Group, Inc. ("Customer") on behalf of certain of its portfolios
listed on Schedule A thereto (individually a "Portfolio" and collectively the
"Portfolios"). This Amendment serves to update the names of the Portfolios
listed on Schedule A and Amendment #2. Bank and Customer hereby agree that all
of the terms and conditions as set forth in the Agreement are hereby
incorporated by reference with respect to the Portfolios listed below.
Schedule A and Amendment #2 are hereby amended as follows:
Vanguard World Funds
Vanguard International Growth Fund
Vanguard Specialized Funds
Vanguard Gold and Precious Metals Fund
Vanguard Health Care Fund
Vanguard Wellington Fund
Vanguard Wellesley Income Fund
Vanguard Tax-Managed Funds
Vanguard Tax-Managed Growth and Income Fund
Vanguard Tax-Managed Capital Appreciation Fund
Vanguard Tax-Managed Balanced Fund
Vanguard Tax-Managed Small-Cap Fund
Vanguard Fixed Income Securities Funds
Vanguard High-Yield Corporate Fund
Vanguard Long-Term Corporate Fund
Vanguard GNMA Fund
Vanguard Inflation-Protected Securities Fund
Vanguard Bond Index Funds
Vanguard Total Bond Market Index Fund
Vanguard STAR Funds
Vanguard LifeStrategy Income Fund
Vanguard LifeStrategy Conservative Growth Fund
Vanguard LifeStrategy Moderate Growth Fund
9
Vanguard LifeStrategy Growth Fund
Vanguard Developed Markets Index Fund
Vanguard Institutional Developed Markets Index Fund
Vanguard Index Funds
Vanguard 500 Index Fund
Vanguard Total Stock Market Index Fund
Vanguard Value Index Fund
Vanguard Growth Index Fund
Vanguard Small-Cap Index Fund
AGREED TO as of May 26, 2000 BY:
The Vanguard Group, Inc. The Chase Manhattan Bank, N.A.
By: /s Xxxxxxx X. Xxxxxxxxx By: /s Xxxxx X. Xxxxxx, Xx.
Name: Xxxxxxx X. Xxxxxxxxx Name: Xxxxx X. Xxxxxx, Xx.
Title: Managing Director and Title: Vice President
Secretary
10
FIXED INCOME GROUP
ASSET
FUND # NAME
---------------------------------------------------------------
MM Fund
50 Treasury Money Market Fund
33 Federal Money Market Fund
30 Prime Money Market Fund
66 Prime Money Market Fund Inst
ADMIRAL FUNDS
11 Admiral Treasury Money Market
12 Admiral Short-Term Treasury
19 Admiral Intermediate-Term Treasury
20 Admiral Long-Term Treasury
FIXED INCOME FUNDS
32 Short-Term Treasury Fund
49 Short-Term Federal Fund
39 Short-Term Corporate Fund
858 Short-Term Corporate Fund Inst
35 Intermediate-Term Treasury Fund
71 Intermediate-Term Corporate Fund
83 Long-Term Treasury Fund
INDEX FUNDS
02 Balanced Index Fund (40%)
314 Intermediate-Term Bond Index
522 Long-Term Bond Index
132 Short-Term Bond Index
84 Total Bond Market Index Fund
222 Total Bond Market Index Inst
TAX MANAGED
103 Tax-Managed Balanced Fund (50%)
VARIABLE ANNUITY
64 VVAP - Money Market
67 VVAP - High-Grade Bond
144 VVAP - Short-Term Corporate
FUND # NAME
------------------------------------------------------------
STATE TAX-EXEMPT MM
62 CA Tax-Exempt Money Market
95 NJ Tax-Exempt Money Market
163 NY Tax-Exempt Money Market
96 OH Tax-Exempt Money Market
63 PA Tax-Exempt Money Market
NATIONAL TAX-EXEMPT MM
45 Tax-Exempt Money Market (Nat'l)
TAX-EXEMPT INCOME FUNDS
41 Short-Term Tax-Exempt
31 Limited-Term Tax-Exempt
42 Intermediate-Term Tax-Exempt
58 Insured Long-Term Tax-Exempt
43 Long-Term Tax-Exempt
44 High Yield Tax-Exempt
STATE TAX-EXEMPT INCOME FUNDS
100 CA Insured IT Tax-Exempt Fund
75 CA Insured LT Tax-Exempt Fund
18 FL Insured LT Tax-Exempt Fund
168 MA Tax-Exempt Fund
14 NJ Insured LT Tax-Exempt Fund
76 NY Insured LT Tax-Exempt Fund
97 OH Insured LT Tax-Exempt Fund
77 PA Insured LT Tax-Exempt Fund
CUSTODIAN AGREEMENT
This Agreement, made as of this 3rd day of May, 1991, between Vanguard
Fixed Income Securities Fund, Inc ("The Fund"), a Corporation operating as an
open end investment company, duly organized under the laws of Maryland and
CoreStates Bank, N. A. a national bank:
WITNESSETH:
WHEREAS, the Fund desires to appoint CoreStates Bank, N.A as custodian of
its Securities and principal cash, CoreStates Bank, N.A. is willing to act in
such capacity upon the terms and conditions herein set forth; and
WHEREAS, CoreStates Bank, N.A. in its capacity as custodian hereunder will
also collect and apply the dividends and interest on said Securities in the
manner and to the extent herein set forth:
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bond, do
hereby agree as follows:
SECTION 1. The terms as defined in this Section wherever used in this
Agreement, or in any amendment or supplement hereto, shall have the meanings
herein specified unless the context otherwise requires.
Custodian: The term Custodian shall mean CoreStates Bank, N. A. in its
capacity as custodian under this Agreement.
Fund: The term Fund shall mean Vanguard Fixed Income Securities Fund, Inc.
The Fund an open-end diversified management investment trust commonly known as
"Mutual Fund".
Proper Instructions: For purposes of this Agreement the Custodian shall be
deemed to have received Proper Instructions by the affirmation of trades by the
Fund upon receipt of written, telephone or telegraphic instructions from a
person or persons reasonably believed by the Custodian to be a person or persons
authorized from time to time by the Board of Directors of the Fund to give the
particular class of instructions, including. the nature of the action to be
taken by the Board of Directors and providing information relevant thereto.
Telephone or telegraphic instructions shall be confirmed in writing by such
person or persons as the Board of Directors shall have from time to time
authorized to give the particular class of instructions in question. The
Custodian may act upon telephone or telegraphic instructions without awaiting
receipt of written confirmation, and shall not be liable for Funds failure to
confirm such
instructions in writing.
Securities: The term Securities shall mean bonds, debentures, notes,
stocks, evidences of indebtedness, and other securities and investments from
time to time owned by the Portfolios of the Fund.
Shareholders: The term Shareholders shall mean the registered owners from
time to time of the Shares of the Fund in accordance with the stock registry
records maintained by the Fund or agents on its behalf.
Shares: The term Shares shall mean the shares of stock of the Fund.
SECTION 2. The Fund shall from time to time file with the Custodian a
certified copy of each resolution of its Board of Directors authorizing the
person or persons to give Proper Instructions (as defined in SECTION 1) and
specifying the class of instructions that may be given by each person to the
Custodian under this Agreement, together with certified signatures of such
persons authorized to sign, which shall constitute conclusive evidence of the
authority of the officers and signatories designated therein to act, and shall
be considered in full force and effect with the Custodian fully protected in
acting in reliance thereon until it receives written notice to the contrary:
provided, however, that if the certifying officer is authorized to give Proper
Instructions, the certification shall be also signed by a second officer of the
Fund.
SECTION 3. The Fund hereby appoints the Custodian as custodian of the
Securities of the Fund and cash from time to time on deposit hereunder, to be
held by the Custodian and applied as provided in this Agreement. The Custodian
hereby accepts such appointment subject to the terms and conditions hereinafter
provided. Such Securities and cash shall, however, be segregated from the assets
of others and shall be and remain the sole property of the Fund and the
Custodian shall have only the bare custody thereof. The Securities held by the
Custodian shall, unless payable to bearer, be registered in the name of the
Custodian or in the name of its nominee. Securities except bearer securities,
delivered from time to time to the Custodian upon purchase or otherwise shall in
all cases be in due form for transfer or already registered as above provided.
SECTION 4. The Fund will initially deposit with the Custodian the
Securities owned by the Fund at the time this Agreement becomes effective.
Thereafter the Fund will cause to be deposited with the Custodian additional
Securities as the same are purchased or otherwise acquired from time to time.
The Fund will make an initial deposit of cash or securities to be held and
applied by the Custodian hereunder. Thereafter the Fund will cause to be
deposited with the Custodian hereunder
(i) the net proceeds of Securities sold from time to time and
(ii) the applicable net asset value of Shares sold from time to time whether
representing initial issue, other stock or reinvestment of dividends and/or
distributions payable to Shareholders.
The Fund warrants that it shall keep all of its Securities, similar
investment, cash proceeds and other cash assets of the Fund in the custody of
the Custodian, except where permitted to otherwise keep, deposit, loan, pledge
of otherwise dispose of or maintain such assets in accordance with applicable
law, including Section 17 (f) of the Investment Company Act of 1940, and rules,
regulations, or orders of the Securities and Exchange Commission.
SECTION 5. The Custodian will collect from time to time the dividends and
interest on the Securities held by it hereunder and will deposit the same in the
Fund's account. The Custodian is authorized to advance or pay out of -said
account accrued interest on bonds purchased and dividends on stocks sold and
like items. In the event that any dividends or interest payments are received by
the Fund, the Fund will endorse to the Custodian, or cause to be endorsed,
dividend and interest checks and will issue appropriate orders to the issuers of
the Securities to pay dividends and interest to the Custodian. Subject to proper
reserves for dividends owing on stocks sold and like items, the Custodian will
disburse the money from time to time on deposit in the account to or upon the
order of the Fund as it may from time to time direct in accordance with this
Agreement.
SECTION 6. The Custodian is hereby authorized and directed to disburse cash
from time to time as follows:
(a) to pay the proper compensation and expenses of the Custodian upon
receipt of Proper Instructions:
(b) to transfer funds to the Transfer Agent or other dividend disbursing
agent to pay dividends and/or distributions which may be declared by the Board
of Directors of the Fund-upon receipt of Proper Instructions;
(c) to pay, or provided the Fund with money to pay taxes upon receipt of
Proper Instructions;
(d) for the purpose of completing the purchase of securities purchased by
the Fund, upon receipt of (i) Proper Instructions specifying the securities and
stating the purchase price, and the name of the broker, investment banker or
other party to or upon whose order the purchase price is to be paid: and (ii)
upon receipt of such physical Securities by the custodian or on the Contractual
Settlement Date for trade affirmed through National Institutional Delivery
System (NIDS);
(e) for the purpose of redeeming or purchasing Shares, upon
receipt of Proper Instructions stating the applicable redemption amounts
payable, to the Transfer Agent or other appropriate party:
(f) for the purpose of exercising warrants and rights received upon the
Securities, upon timely (that is, not less than three business days on which the
Bank is open prior to any applicable deadline) receipt of Proper Instructions
authorizing the exercise of such warrants and rights and stating the
consideration to be paid:
(g) for the purpose of paying over to the Transfer Agent or dividend
disbursing agent such amounts as may be stated in Proper Instructions,
representing proceeds of the sale of warrants, rights, stock dividends, profit
and increases in values of the Securities, as the Fund may determine to include
in dividends and/or distributions on the shares:
(h) for the purpose of paying in whole or in part any loan of the fund upon
receipt of Proper Instructions directing payment and stating the Securities, if
any, to be received against payment:
(i) to pay interest, investment management or supervisory fees,
administration, dividend and transfer agency fees and costs, compensation of
personnel, or operating expenses (including, without limitation thereto, fees
for legal purposes. Before making any such payment or disbursement, however, the
Custodian shall receive (and may conclusively rely upon) Proper Instructions
requesting such payment or disbursement and stating that it is for one or more
of the purposes hereinabove enumerated,provided that if the disbursement is for
other proper purposes, the instructions shall be in writing and shall state that
the disbursement was authorized by resolution of the Board of Directors of the
Fund and is for a proper purpose.
SECTION 7. The Custodian is hereby authorized and directed to deliver
securities from time to time as follows:
(a) for the purpose of completing sales of Securities sold by the Fund,
upon receipt of (i) Proper Instructions specifying the Securities sold & stating
the amount to be received and the broker, investment banker or other party to or
upon whose order the Securities are to be delivered and (ii) for physical
Securities to be delivered against receipt by the purchaser or purchaser's agent
in accordance with the current "street delivery" custom or upon receipt of net
proceeds or on Contractual Settlement Date for those trades affirmed through the
National Institutional Delivery System (NIDS).
(b) for the purpose of exchanging Securities for other Securities and/or
cash upon timely (as defined in subsection 6f) receipt of (i) Proper
Instructions stating the Securities to be delivered and the Securities and/or
cash to be received in
1 exchange and the manner in which the exchange is to be made, and (ii) against
receipt of the other Securities and/or cash as specified in the Proper
Instructions:
(c) for the purpose of exchanging or converting securities pursuant to
their terms or pursuant to any plan of conversion, consolidation,
recapitalization, reorganization, readjustment or otherwise, upon timely (as
defined in Subsection 6f) receipt of (i) Proper Instructions authorizing such
exchange or conversion and stating the manner in which such exchange or
conversion is to t be made, and (ii) against receipt of the Securities,
certificates of deposit, interim receipts, and/or cash to be received as
specified in the Proper Instructions;
(d) for the purpose of presenting Securities for payment which have matured
or have been called for redemption upon receipt of appropriate Proper
Instructions;
(e) for the purpose of delivery of Securities upon redemption of Shares in
kind, upon receipt of appropriate Proper Instructions; or
(f) for the purpose of depositing with the lender Securities to be held as
collateral of a loan to the Fund upon receipt of Proper Instructions directing
delivery to the lender.
SECTION 8. The Custodian will upon receipt of Proper Instructions, which
may be continuing instructions, execute and deliver or cause its nominee to
execute and deliver such proxies or other authorizations as may be required.
Neither the Custodian nor its nominee shall vote thereon or give any consent or
take any action with respect thereto (except as otherwise therein provided)
unless ordered to do so by Proper Instructions.
SECTION 9. The Custodian's compensation shall be as set forth in Schedule A
hereto attached, or as shall be set forth in amendments to such schedule
approved by the Fund and the Custodian.
SECTION 10. The Custodian assumes only the usual duties or obligations
normally performed by custodians of mutual funds. It specifically assumes no
responsibility for the management, investment or reinvestment of the Securities
from time to time owned by the Fund whether or not on deposit hereunder, it
being understood that the responsibility for the proper and timely management,
investment and reinvestment of said Securities shall be that of the Fund and its
investment advisors.
In connection with its functions under the Agreement, the Custodian shall:
a) obtain a "due xxxx" for dividends, interest, or other distributions of
the insurer, due the purchaser in connection with securities delivered
to the Custodian;
b) render to the Fund a daily report of all monies received or paid on
behalf of the Fund and such listings of Securities held by the
Custodian for the account of the fund as may from time to time be
requested by the Fund;
c) execute ownership and other certificates and affidavits for all
Federal and State tax purposes in connection with the collection of
bond and note coupons;
d) present for payment on the date of payment all coupons and other
periodic income items requiring presentation; monitor and record the
collection of Funds in accounts maintained by the Custodian, in the
name of the Fund, on the actual settlement date of the transaction:
e) monitor and record the collection of Funds in accounts maintained by
the Custodian, in the name of the Fund, on the actual settlement date
of the transaction.
f) create, maintain and retain all records relating to its activities and
obligations under this Agreement in such manner as will meet the
obligations of the Fund with respect to said Custodian activities and
obligations under the Investment Company Act of 1940, particularly
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 records
maintained by the Custodian in connection with the performance of its
duties under this Agreement will remain the property of the Fund and
in the event of termination of this Agreement will be relinquished to
the Fund.
If the Custodian does not receive payment for items due under subsection
(a), (d), or (e) within a reasonable time after it has made proper demands for
the same, it shall so notify the Fund in writing, including copies of all demand
letters, and written responses thereto, and memoranda of all oral responses
thereto and to telephonic demands, and await Proper Instructions; the Custodian
shall not be obliged to take legal action for collection except by its consent
and unless and until reasonable indemnified to its satisfaction. It shall also
notify the Fund as soon as reasonably practicable whenever income due on
Securities is not collected in due course.
The Custodian shall not be liable for any taxes, assessments, or
governmental charges which may be levies or assessed upon the securities held
by it hereunder, or upon the income therefrom or otherwise whatsoever. The
Custodian may pay any such tax, assessment or charge and reimburse itself out
of the monies of the Fund or out of the Securities held hereunder.
SECTION 11. No liability of any kind shall be attached to or incurred
by the Custodian by reason of its custody of the funds, assets, or shares held
by it from time to time under this
Agreement, or otherwise by reason of its position as custodian hereunder, except
only for its own negligence, bad faith, or willful misconduct in the performance
of its duties as specifically set forth in the Agreement. Without limiting the
generality of the foregoing sentence, the Custodian:
(a) May rely upon the advice of counsel, who may be counsel for the Fund or
for the Custodian, and upon statements of accounts, brokers and other persons
believed by it in good faith to be expert in the matters upon which they are
consulted; and for any action taken or suffered in good faith based upon such
advice or statements the Custodian shall not be liable to anyone:
(b) Shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon information
furnished by, the Fund or its authorized officers or agents:
(c) Is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Fund, or Proper Instructions, to the effect that a resolution
in the form submitted has been duly adopted by its Board of Directors or by the
Shareholders, as conclusive evidence that such resolution has been duly adopted
and is in full force and effect;
(d) May rely and shall be protected in acting upon any signature, written
or oral (including telephone, telegraph or other mechanical) instructions,
request, letter of transmittal, certificate, opinion of counsel, statement,
instrument, report, notice, consent, order, or other paper or document believed
by it to be genuine and to have been signed, forwarded or presented by the Fund
or other proper party or parties.
SECTION 12. The Fund, its successors and assigns hereby indemnifies and
holds harmless the Custodian, its successors and assigns, of and from any and
all liability whatsoever arising out of or in connection with the Custodian's
status, acts, or ommissions under this Agreement, except only for liability
arising out of the Custodian's own negligence, bad faith, or willful misconduct
in the performance of its duties specifically set forth in this Agreement.
Without limiting the generality of the foregoing, the Fund, its successors and
assigns does hereby fully indemnify and hold harmless the Custodian, its
successors and assigns, from any and all loss, liability, claims, demand,
actions, suits and expenses of any nature as the same may arise from the failure
of the Fund to comply with any law, rule, regulations or order of the United
States, any State or any other jurisdiction, governmental authority, body, or
board relating to the sale, registration, qualification of the Securities sold
in connection therewith, or from the failure of the Fund to perform any duty or
obligation under this Agreement.
Upon written request of the Custodian, the Fund shall assume the entire
defense of any claim subject to the foregoing
indemnity, or the joint defense with the Custodian of such claim, as the
Custodian shall request. The indemnities and defense provisions of this SECTION
12 shall indefinitely survive termination of this Agreement.
SECTION 13. This Agreement may be amended from time to time without notice
to or approval of the Shareholders by a supplemental agreement executed by the
Fund and the Custodian and amending and supplementing this Agreement in the
manner mutually agreed.
SECTION 14. Either the Fund or the Custodian may give one hundred twenty
(120) days' written notice to the other of the termination of this Agreement,
such termination to take effect at the time specified in the notice. In case
such notice of termination is given either by the Fund or by the Custodian, the
Board of Directors of the Fund shall, be resolution duly adopted, promptly
appoint a Successor Custodian to serve upon the terms set forth in this
Agreement as then amended and supplemented. Each Successor Custodian shall be a
bank, trust company: or a bank and trust company in good. standing, with legal
capacity to accept custody of the securities of a mutual fund, and meeting all
of the requirements of SECTION 26 of the Investment Company Act of 1940. Upon
receipt of written notice from the Fund of the appointment of such successor and
upon receipt of Proper Instructions, the Custodian shall deliver such Securities
and cash as it may then be holding hereunder directly to and only to the
Successor Custodian. The Custodian ceasing to act shall neverless, upon request
of the Fund and the Successor Custodian and upon payment of its charges and
disbursements, execute an instrument in form approved by its counsel
transferring to the Successor Custodian all the predecessor's Custodian's
rights, duties, obligations and custody.
In case the Custodian shall consolidate with or merge into any other
corporation, the corporation remaining after -or resulting from such
consolidation or merger shall ipso facto, without the execution of filing of any
papers or other documents, succeed to and be substituted for the Custodian with
like effect as though originally named as such.
SECTION 15. This Agreement shall take effect on or such other date as the
parties agree to transfer the Funds assets to the Custodian.
SECTION 16. This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
SECTION 17. Subject to the requirements of the Investment Company Act of
1940 and the Rules thereunder, the Custodian may, at any time or times appoint
(and may at any time remove) any other bank, trust company or responsible
commercial agent as its
agent to carry out such of the provisions of this Agreement as the Custodian may
from time to time direct, provided, however, that the appointment of such agent
shall not relieve the Custodian of any of its responsibilities under this
Agreement, and provided that any such agent shall have been approved by vote of
the Directors of the Fund.
SECTION 18. .Subject to security requirements of the Custodian applicable
to its own employees having access to similar records within the Custodian and
such regulations as to the conduct of such monitors as may be reasonably imposed
by the Custodian after prior consultation with an officer of the Fund the books
and records of the Custodian pertaining to its actions under this Agreement
shall be open to inspection and audit at reasonable times by officer of,
attorneys for, and auditors employed by, the Fund.
SECTION 19. Nothing contained in this Agreement is intended to or shall
require the Custodian in any capacity hereunder to perform any functions or
duties on any holiday or other day of special observance ,on which the Custodian
is closed. Functions or duties normally scheduled to be performed on such days
shall be performed on, and as of, the next business day on which both the New
York Stock Exchange and the Custodian are open.
SECTION 20. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns: provided, however,
that this Agreement shall not be assignable by the Fund without the written
consent of the Custodian, or by the Custodian without the written consent of the
Fund, authorized or approved by a resolution of its Board of Directors.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed in its name and on its behalf by a duly authorized officer as of the
day and year first above written.
ATTEST VANGUARD FIXED INCOME SECURITIES FUND,
INC.
BY: Xxxxxxx Xxxxxxx BY: Xxxxx X. Xxxx
ATTEST PHILADELPHIA NATIONAL BANK
BY: BY:
CUSTODIAN CONTRACT
Between
VANGUARD FIXED INCOME SECURITIES FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
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 of Securities.........................................2
2.2 Delivery of Securities........................................3
2.3 Registration of Securities....................................8
2.4 Bank Accounts.................................................9
2.5 Payments for Shares..........................................10
2.6 Availability of Federal Funds................................10
2.7 Collection of Income.........................................10
2.8 Payment of Fund Monies.......................................11
2.9 Liability for Payment in Advance of
Receipt of Securities Purchased..............................14
2.10 Payments for Repurchases or Redemptions
of Shares of the Fund.......................................15
2.11 Appointment of Agents........................................15
2.12 Deposit of Fund Assets in Securities System..................16
2.12AFund Assets Held in the Custodian's Direct
Paper System.................................................19
2.13 Segregated Account...........................................21
2.14 Ownership Certificates for Tax Purposes......................22
2.15 Proxies......................................................22
2.16 Communications Relating to Portfolio Securities..............23
2.17 Proper Instructions..........................................24
2.18 Actions Permitted Without Express Authority..................25
2.19 Evidence of Authority........................................25
3. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income.................26
4. Records...........................................................27
5. Opinion of Fund's Independent Accountants.........................27
6. Reports to Fund by Independent Public Accountants.................28
7. Compensation of Custodian.........................................28
8. Responsibility of Custodian.......................................28
9. Effective Period, Termination and Amendment.......................30
10.Successor Custodian...............................................31
11.Interpretive and Additional Provisions............................33
12.Additional Funds..................................................33
13.Massachusetts Law to Apply........................................34
14. Prior Contracts..................................................34
CUSTODIAN CONTRACT
This Contract between Vanguard Fixed Income Securities Fund, Inc., a
corporation organized and existing under the laws of Maryland, having its
principal place of business at 0000 Xxxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxxxxxxxx,
hereinafter called the "Fund", and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, hereinafter called the
"Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets: and
WHEREAS, the Fund intends to initially offer shares in two series, the
Short Term Treasury Portfolio and the Intermediate Term Treasury Portfolio (such
series together with all other series subsequently established by the Fund and
made subject to this Contract in accordance with paragraph 12, being herein
referred to as the "Portfolio(s)"):
NOW THEREFOR, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
---------------------------------------------------------------------------
The Fund hereby employs the Custodian as the custodian of the assets of the
Portfolios of the Fund pursuant to the provisions of the Articles of
Incorporation. The Fund on behalf of the Portfolio(s) agrees to deliver to the
Custodian all
securities and cash of the Portfolios, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by the Portfolio(s) from time to time, and the cash consideration received
by it for such new or treasury shares of capital stock of the Fund representing
interests in the Portfolios, ("Shares") as may be issued or sold from time to
time. The Custodian shall not be responsible for any property of a Portfolio
held or received by the Portfolio and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section 2.17),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, but only in accordance with an applicable
vote by the Board of Directors of the Fund on behalf of the applicable
Portfolio(s), 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.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
-----------------------------------------------------------------------------
Custodian
---------
2.1 Holding Securities. The Custodian shall hold and physically segregate for
the account of each Portfolio all non-cash property, including all
securities owned by such Portfolio, other than (a) 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,
2
collectively referred to herein as "Securities System" and (b) commercial
paper of an issuer for which State Street Bank and Trust Company acts as
issuing and paying agent ("Direct Paper") which is deposited and/or
maintained in the Direct Paper System of the Custodian pursuant to Section
2.12A.
2.2 Deliverer of Securities. The Custodian shall release and deliver securities
owned by a Portfolio held by the Custodian or in a Securities System
account of the Custodian or in the Custodian's Direct Paper book entry
system account ("Direct Paper System Account") only upon receipt of Proper
Instructions from the Fund on behalf of the applicable Portfolio, which may
be continuing instructions when deemed appropriate by the parties, and only
in the following cases:
1) Upon sale of such securities for the account of the Portfolio 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 Portfolio,;
3) In the case of a sale effected through a securities system, in
accordance with the provisions of section 2.12 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio:
3
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
Portfolio 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 delivered to the Custodian:
7) Upon the sale of such securities for the account of the Portfolio, 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
4
prior to receiving payment for such securities except as may arise
from the Custodian's own negligence or willful misconduct;
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
Portfolio, but only against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Fund on behalf of the
5
Portfolio, 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 Portfolio prior to the receipt of such collateral:
11) For delivery as security in connection with any borrowings by the Fund
on behalf of the Portfolio requiring a pledge of assets by the Fund on
behalf of the Portfolio, but only against receipt of amounts borrowed:
12) For delivery in accordance with the provisions of any agreement among
the Fund on behalf of the Portfolio, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 0000 (xxx "Xxxxxxxx
Xxx(xxxxxx)) 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,
6
regarding escrow or other arrangements in connection with transactions
by the Portfolio of the Fund:
13) For delivery in accordance with the provisions of any agreement among
the Fund on behalf of the Portfolio, 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 Portfolio of 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 currently effective prospectus and
statement of additional information of the Fund, related to the
Portfolio ("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
7
Instructions from the Fund on behalf of the applicable Portfolio, a
certified copy of a resolution of the Board of Directors or of the
Executive Committee signed by an officer of the Fund and certified by
the Secretary or an Assistant Secretary, specifying the securities of
the Portfolio to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom delivery
of such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other than
bearer securities) shall be registered in the name of the Portfolio or in
the name of any nominee of the Fund on behalf of the Portfolio or of any
nominee of the Custodian which nominee shall be assigned exclusively to the
Portfolio, 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 Portfolio, 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 Portfolio under the
terms of this Contract shall be in "street name" or other good delivery
form.
8
If, however, the Fund directs the Custodian to maintain securities in
"street name", the Custodian shall utilize its best efforts only to
timely collect income due the Fund on such securities and to notify
the Fund on a best efforts basis only of relevant corporate actions
including, without limitation, pendency of calls, maturities, tender
or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a . separate bank
account or accounts in the name of each Portfolio 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
Portfolio, other than cash maintained by the Portfolio 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 a Portfolio may be
deposited by it to its credit as Custodian in the Banking Department of the
Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however, that 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 on
behalf of each applicable Portfolio be approved by vote of a majority of
9
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 Payments for Shares. The Custodian shall receive from the distributor for
the Shares or from the Transfer Agent of the Fund and deposit into the
account of the appropriate Portfolio such payments as are received for
Shares of that Portfolio issued or sold from time to time by the Fund. The
Custodian will provide timely notification to the Fund on behalf of each
such Portfolio and the Transfer Agent of any receipt by it of payments for
Shares of such Portfolio.
2.6 Availability of Federal Funds. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Custodian, the Custodian shall,
upon the receipt of Proper Instructions from the Fund on behalf of a
Portfolio, make federal funds available to such Portfolio 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 such Portfolio which are
deposited into the Portfolio's account.
2.7 Collection of Income. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments
with respect to registered securities held hereunder to which each
Portfolio shall be entitled either by law or pursuant to
10
custom in the securities 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 such
Portfolio'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 each Portfolio 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 Portfolio is properly entitled.
2.8 Payment of Fund Monies. Upon receipt of Proper Instructions from the Fund
on behalf of the applicable Portfolio, which may be continuing instructions
when deemed appropriate by the parties, the Custodian shall pay out monies
of a Portfolio in the following cases only:
1) Upon the purchase of securities, options, futures contracts or
options on futures contracts for the account of the Portfolio
11
but only (a) against the delivery of such securities or evidence
of title to such options, 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 purpose) registered in the name of the
Portfolio 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;
(c) in the case of a purchase involving the Direct Paper System,
in accordance with the conditions set forth in Section 2.12A; (d)
in the case of repurchase agreements entered into between the
Fund on behalf of the Portfolio 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
12
Federal Reserve Bank with such securities or (ii) against
delivery of the receipt evidencing purchase by the Portfolio of
securities owned by the Custodian along with written evidence of
the agreement by the Custodian to repurchase such securities from
the Portfolio or (e) for transfer to a time deposit account or
pooled cash account of the Fund in any bank, whether domestic or
foreign: such transfer may be effected prior to receipt of a
confirmation from a broker and/or the applicable bank pursuant to
Proper Instructions from the Fund as defined in Section 2.17:
2) In connection with conversion, exchange or surrender of
securities owned by the Portfolio as set forth in Section 2.2
hereof;
3) For the redemption or repurchase of Shares issued by the
Portfolio as set forth in Section 2.10 hereof;
4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments
for the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses
of the Fund whether or not such expenses are to be
13
in whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio
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 from the Fund on behalf of the
Portfolio, 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 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 Purchased. Except
as specifically stated otherwise in this Contract, in any and every case
where payment for purchase of securities for the account of a Portfolio is
made by the Custodian in advance of receipt of the securities purchased in
the absence of specific written instructions from the Fund on behalf of
such Portfolio to
14
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. 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 a Portfolio, 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 at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself
15
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.
2.12 Deposit of Fund Assets in Securities Systems. The Custodian may deposit
and/or maintain securities owned by a Portfolio 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 securities of the Portfolio 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;
16
2) The records of the custodian with respect to securities of
the Portfolio which are maintained in a securities System
shall - identify by book-entry those securities belonging to
the Portfolio;
3) The Custodian shall pay for securities purchased for the
account of the Portfolio 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 Portfolio. The Custodian
shall transfer securities sold for the account of the
Portfolio 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 Portfolio. Copies of all
advices from the Securities System of transfers of
securities for the account of the Portfolio shall identify
the Portfolio, be maintained for the Portfolio by the
Custodian and be provided to the Fund at its request. Upon
request, the Custodian
17
shallfurnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio in the form of a written advice or notice and
shall furnish to the Fund on behalf of the Portfolio copies
of daily transaction sheets reflecting each day's
transactions in the Securities System for the account of
the Portfolio.
4) The Custodian shall provide the Fund for the Portfolio 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 from the Fund on behalf of
the Portfolio 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 the benefit of
the Portfolio for any loss or damage to the Portfolio
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
18
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 Portfolio has not been made whole for
any such loss or damage.
2.12 A Fund Assets Held in the Custodian's Direct Paper System The Custodian may
deposit and/or maintain securities owned by a Portfolio in the Direct Paper
System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper
System will be effected in the absence of Proper
Instructions from the Fund on behalf of the Portfolio;
2) The Custodian may keep securities of the Portfolio in the
Direct Paper System only if such securities are represented
in an account ("Account") of the Custodian in the Direct
Paper System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian
or otherwise for customers;
19
3) The records of the Custodian with respect to securities of
the Portfolio which are maintained in the Direct Paper
System shall identify by book-entry those securities
belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the
account of the Portfolio upon the making of an entry on the
records of. the Custodian to reflect such payment and
transfer of securities to the account of the Portfolio. The
Custodian shall transfer securities sold for the account of
the Portfolio upon the making of an entry on the records of
the Custodian to reflect such, transfer and receipt of
payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the
Portfolio confirmation of each transfer to or from the
account of the Portfolio, in the form of a written advice or
notice, of Direct Paper on the next business day following
such transfer and shall furnish to the Fund on behalf of the
Portfolio copies of daily transaction sheets reflecting each
days transaction in the Securities System for the account of
the Portfolio;
20
The Custodian shall provide the Fund on behalf of the
Portfolio with any report on its system of internal
accounting control as the Fund may reasonably request from
time to time.
2.13 Segregated Account. The Custodian shall upon receipt of Proper Instructions
from the Fund on behalf of each applicable Portfolio establish and maintain
a segregated account or accounts for and on behalf of each such Portfolio,
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 on behalf of the Portfolio, 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 Portfolio, (ii) for
purposes of segregating cash or government securities in connection with
options purchased, sold or written by the Portfolio or commodity futures
contracts or options thereon
21
purchased or sold by the Portfolio, (iii) for the purposes of compliance by
the Portfolio 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), upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the applicable
Portfolio, a certified copy of a resolution of the Board of Directors or of
the Executive Committee signed by an officer of the 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.
2.14 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 securities of each Portfolio held by it and in connection with
transfers of securities.
2.15 Proxies. The Custodian shall, with respect to the 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 Portfolio or a nominee of the Portfolio, all proxies,
22
without indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.16 Communications Relating to Portfolio Securities Subject to the provisions
of section 2.3, the Custodian shall transmit promptly to the Fund for each
Portfolio 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 on behalf of the Portfolio and the maturity of futures
contracts purchased or sold by the Portfolio) received by the Custodian
from issuers of the securities being held for the Portfolio. With respect
to tender or exchange offers, the Custodian shall transmit promptly to the
Portfolio 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 Portfolio desires
to take action with respect to any tender offer, exchange offer or any
other similar transaction, the Portfolio shall notify the Custodian at
least three business days prior to the date on which the Custodian is to
take such action unless special arrangements made to the contrary have been
agreed to by the Fund, on behalf of the Portfolio, and the Custodian.
23
2.17 Proper Instructions. Proper Instructions as used throughout this Article 2
means a writing signed or initialled 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 Portfolios' assets. For
purposes of this Section, Proper Instructions shall include instructions
received by the Custodian pursuant to any three-party agreement which
requires a segregated asset account in accordance with Section 2.13.
24
2.18 Actions Permitted without Express Authority. The Custodian may in its
discretion, without express authority from the Fund on behalf of each
applicable Portfolio:
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 on behalf
of the Portfolio;
2) surrender securities in temporary form for securities
in definitive form:
3) endorse for collection, in the name of the Portfolio,
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 Portfolio except as
otherwise directed by the Board of Directors 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 believed by it to be genuine and to have been properly executed by or
on behalf of the Fund. The Custodian may
25
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 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.
3. 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 each Portfolio and/or compute the net asset value
per share of the outstanding shares of each Portfolio or, if directed in
writing to do so by the Fund on behalf of the Portfolio, 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
Portfolio as described in the Fund's currently effective prospectus related
to such Portfolio 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 each
Portfolio shall be made at the time
26
or times described from time to time in the Fund's currently effective
prospectus related to such Portfolio.
4. Records
The Custodian shall with respect to each Portfolio create and maintain
all records relating to its activities and obligations under this Contract
in such manner as will meet the obligations of the Fund under the
Investment Company Act of 1940, with particular attention to Section 31
thereof and Rules 31a-1 and 31a-2 thereunder. 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 each Portfolio 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
The Custodian shall take all reasonable action, as the Fund on behalf
of each applicable Portfolio 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.
27
6. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the
Portfolios 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 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 on behalf of each applicable Portfolio 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
28
or parties, including any futures commission merchant acting pursuant to
the terms of a three-party futures or options agreement. 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.
If the Fund on behalf of a Portfolio 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 or the Portfolio being liable
for the payment of money or incurring liability of some other form, the
Fund on behalf of the Portfolio, 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, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose for the benefit of-a
Portfolio 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
29
any time held for the account of the applicable Portfolio 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
such Portfolio's 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 thirty (30) days after the date of such delivery or
mailing: provided, however that the Custodian shall not with respect to a
Portfolio act under Section 2.12 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 has approved the initial use of a particular
Securities System by such Portfolio and the receipt of an annual
certificate of the Secretary or an Assistant Secretary that the Board of
Directors has reviewed the use by such Portfolio of such Securities System,
as required in each case by Rule 17f-4 under the Investment Company Act of
1940, as amended and that the Custodian shall not with respect to a
Portfolio act under Section 2.12A hereof in the absence of receipt of an
initial certificate of the Secretary or an Assistant Secretary that the
Board of Directors has approved the initial use of the Direct Paper System
by such Portfolio and
30
the receipt of an annual certificate of the Secretary or an Assistant
Secretary that the Board of Directors has reviewed the use by such
Portfolio of the Direct Paper System; 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 Articles
of Incorporation, and further provided, that the Fund on behalf of one or
more of the Portfolios may at any time by action of its Board of Directors
(i) substitute another bank or trust company for the" Custodian by giving
notice as described above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a conservator or receiver
for the Custodian by the Comptroller of the Currency or upon the happening
of a like event at the direction of an appropriate regulatory agency or
court of competent jurisdiction.
Upon termination of the Contract, the Fund on behalf of each
applicable Portfolio shall pay to the Custodian such compensation as may be
due as of the date of such termination and shall likewise reimburse the
Custodian for its costs, expenses and disbursements.
10. Successor Custodian
If a successor custodian for the Fund, of one or more of the
Portfolios 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 of each applicable Portfolio then held by it hereunder and
shall transfer to an
31
account of the successor custodian all of the securities of each such
Portfolio 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
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 its last published report, of not less than $25,000,000, all
securities, funds and other properties held by the Custodian on behalf of
each applicable Portfolio and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract on
behalf of each applicable Portfolio and to transfer to an account of such
successor custodian all of the securities of each such Portfolio 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
32
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 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 on behalf of each of the Portfolios, may from time to time agree
on such provisions interpretive of or in addition to the provisions of this
Contract as may in their joint opinion be consistent with the general tenor
of this Contract. Any such interpretive or additional provisions shall be
in a writing signed by both parties and shall be annexed hereto, provided
that no such interpretive or additional provisions shall contravene any
applicable federal or state regulations 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
12. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to Short Term Treasury Portfolio and Intermediate Term Treasury
Portfolio with respect to which it desires to have the Custodian render
services as custodian under
33
the terms hereof, it shall so notify the Custodian in writing, and if the
Custodian agrees in writing to provide such services, such series of Shares
shall become a Portfolio hereunder.
13. 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.
14. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all
prior contracts between the Fund on behalf of each of the Portfolios and
the Custodian relating to the custody of the Fund's assets.
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 28th day of October, 1991.
ATTEST VANGUARD FIXED INCOME SECURITIES
FUND, INC.
BY:
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Assistant Controller Vice -President/Controller
ATTEST STATE THE BANK AND TRUST COMPANY
BY:
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Assistant Secretary Vice President
