FREMONT MUTUAL FUNDS, INC.
CUSTODY AGREEMENT
AGREEMENT dated as of November 1, 1995, between Fremont
Mutual Funds, Inc., a corporation organized under the laws of the
State of Maryland, having its principal office and place of
business at 00 Xxxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000 (the "Company"), and THE NORTHERN TRUST COMPANY (the
"Custodian"), an Illinois Company with its principal place of
business at 00 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
W I T N E S S E T H:
That for and in consideration of the mutual promises
hereinafter set forth, the Company and the Custodian agree as
follows:
1. Definitions.
Whenever used in this Agreement or in any Schedules to this
Agreement, the following words and phrases, unless the context
otherwise requires, shall have the following meanings:
(a) The "1940 Act" shall mean the Investment Company Act of
1940, and the Rules and Regulations thereunder, all as
amended from time to time.
(b) "Administrator" shall mean the person at the Company
which performs the administration functions for the Company.
(c) "Articles of Incorporation" shall mean the Articles of
Incorporation of the Company dated October 4, 1988, as
amended.
(d) "Authorized Person" shall be deemed to include the
Chairman of the Board of Directors, the President, and any
Vice President, the Secretary, the Treasurer or any other
person, whether or not any such person is an officer or
employee of the Company, duly authorized by the Board of
Directors to give Oral Instructions and Written Instructions
on behalf of the Company and listed in the certification
annexed hereto as Schedule A or such other certification as
may be received by the Custodian from time to time.
(e) "Board of Directors" shall mean the Board of Directors
of the Company.
fremont\custody.agr
(f) "Book-Entry System" shall mean the Federal Reserve/
Treasury book-entry system for United States and federal
agency Securities, its successor or successors and its
nominee or nominees.
(g) "Certificate" shall mean any notice, instruction or
other instrument in writing, authorized or required by this
Agreement to be given to the Custodian, which is actually
received by the Custodian and signed on behalf of the
Company by any two Authorized Persons or any two officers
thereof.
(h) "Depository" shall mean The Depository Trust Company, a
clearing agency registered with the Securities and Exchange
Commission under Section 17(a) of the Securities Exchange
Act of 1934, as amended, its successor or successors and its
nominee or nominees, in which the Custodian is hereby
specifically authorized to make deposits. The term
"Depository" shall further mean and include any other person
to be named in a Certificate authorized to act as a
depository under the 1940 Act, its successor or successors
and its nominee or nominees.
(i) "Fund Accountant" shall mean the person appointed by
the Company who performs the daily calculations of the net
asset values of each of the Portfolios and determines the
amount of cash available in each portfolio on a daily basis
for investment. The Fund Accountant shall be identified to
the Custodian in writing.
(j) "Money Market Security" shall be deemed to include,
without limitation, debt obligations issued or guaranteed as
to interest and principal by the Government of the United
States or agencies or instrumentalities thereof, commercial
paper, bank certificates of deposit, bankers' acceptances
and short-term corporate obligations, where the purchase or
sale of such securities normally requires settlement in
federal funds on the same day as such purchase or sale, and
repurchase agreements with respect to any of the foregoing
types of securities.
(k) "Oral Instructions" shall mean an oral communication
actually received by the Custodian from a person reasonably
believed by the Custodian to be an Authorized Person.
(l) "Portfolio" refers to the Bond Fund, the California
Intermediate Tax-Free Fund, the Global Fund, the Growth
Fund, the International Growth Fund, the International Small
Cap Fund, the Money Market Fund, the U.S. Micro-Cap Fund,
or any such other separate and distinct investment portfolio
as may from time to time be created and designated by the
Company in accordance with the provisions of the Articles of
Incorporation and which the Company and the Custodian shall
have agreed in writing shall be subject to this Agreement
pursuant to the provisions of Section 5(b).
(m) "Prospectus" shall mean the Company's current
prospectus and statement of additional information relating
to the registration of the Portfolio's Shares under the
Securities Act of 1933, as amended.
(n) "Shares" refers to the shares of beneficial interest of
the Company.
(o) "Security" or "Securities" shall be deemed to include
bonds, debentures, notes, stocks, shares, evidences of
indebtedness, and other securities, commodity interests and
investments from time to time owned by the Company.
(p) "Sub-Custodian" shall mean and include (i) any branch
of the Custodian, (ii) any branch of a "qualified U.S.
bank," as that term is defined in Rule 00x-0 xxxxx xxx 0000
Xxx, (xxx) any "eligible foreign custodian," as that term is
defined in Rule 17f-5 under the 1940 Act, approved by the
Board of Directors and having a contract with the Custodian
which contract has been approved by the Board of Directors,
and (iv) any securities depository or clearing agency,
incorporated or organized under the laws of a country other
than the United States, which operates the central system
for handling of securities or equivalent book-entries in
that country or a transnational system for the central
handling of securities or equivalent book-entries, which
securities depository or clearing agency has been approved
by the Board of Directors; provided, that the Custodian or a
Sub-Custodian has entered into an agreement with such
securities depository or clearing agency.
(q) "Transfer Agent" shall mean the person which performs
as the transfer agent, dividend disbursing agent and
shareholder servicing agent for the Company.
(r) "Written Instructions" shall mean a written
communication actually received by the Custodian from a
person reasonably believed by the Custodian to be an
Authorized Person by any system whereby the receiver of such
communication is able to verify through codes or otherwise
with a reasonable degree of certainty the authenticity of
the sender of such communication; however, "Written
Instructions" from the Administrator to the Custodian shall
mean an electronic communication transmitted by fund
accountants and their managers (who have been provided an
access code by the Administrator) and actually received by
the Custodian. Except as otherwise provided in this
Agreement, "Written Instructions" may include instructions
given on a standing basis.
2. Appointment of Custodian.
(a) The Company hereby constitutes and appoints the
Custodian as custodian of all the Securities and monies
owned by or in the possession of the Portfolio during the
period of this Agreement.
(b) The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as
hereinafter set forth.
3. Appointment and Removal of Sub-Custodians.
(a) The Custodian may appoint one or more Sub-Custodians to
act as Depository or Depositories or as sub-custodian or
sub-custodians of Securities and moneys at any time owned by
any Portfolio, upon terms and conditions as are specified in
this Agreement. The Custodian shall oversee the maintenance
of any Securities or moneys of any Portfolio by any Sub-
Custodian.
(b) If, after the initial approval of Sub-Custodians by the
Board of Directors in connection with this Agreement, the
Custodian wishes to appoint other Sub-Custodians to hold
property of the Portfolios, it will so notify the Company
and provide it with information reasonably necessary to
determine any such new Sub-Custodian's eligibility under
Rule 17f-5 under the 1940 Act, including a copy of the
proposed agreement with such Sub-Custodian. The Company
shall within 30 days after receipt of such notice and
information give a written approval or disapproval of the
proposed action.
(c) The Agreement between the Custodian and each Sub-
Custodian acting hereunder shall contain the required
provisions set forth in Rule 17f-5(a)(1)(iii).
(d) If the Custodian intends to remove any Sub-Custodian
previously approved by the Board of Directors, it shall so
notify the Company and move the property of the Portfolio(s)
deposited with such Sub-Custodian to another Sub-Custodian
previously approved by the Board of Directors. The
Custodian shall promptly take such steps as may be required
to remove any Sub-Custodian that has ceased to meet the
requirements of Rule 17f-5 under the 1940 Act.
(e) The Custodian hereby warrants to the Company that in
its opinion, after due inquiry, the established procedures
to be followed by each Sub-Custodian (that is not being used
as a foreign securities depository or clearing agency) in
connection with the safekeeping of property of a Portfolio
pursuant to this Agreement afford protection for such
property not materially different from that afforded by the
Custodian's established safekeeping procedures with respect
to similar property held by it (and its securities
depositories) in Chicago, Illinois.
4. Use of Sub-Custodians.
With respect to property of a Portfolio which is maintained by
the Custodian in the custody of a Sub-Custodian pursuant to
Section 3:
(a) The Custodian will identify on its books as belonging
to the particular Portfolio any property held by such Sub-
Custodian.
(b) In the event that a Sub-Custodian permits any of the
Securities placed in its care to be held in an eligible
foreign securities depository, such Sub-Custodian will be
required by its agreement with the Custodian to identify on
its books such Securities as being held for the account of
the Custodian as a custodian for its customers.
(c) Any Securities held by a Sub-Custodian will be subject
only to the instructions of the Custodian or its agents; and
any Securities held in an eligible foreign securities
depository for the account of a Sub-Custodian will be
subject only to the instructions of such Sub-Custodian.
(d) The Custodian will only deposit property of a Portfolio
in an account with a Sub-Custodian which includes
exclusively the assets held by the Custodian for its
customers, and will cause such account to be designated by
such Sub-Custodian as a special custody account for the
exclusive benefit of customers of the Custodian.
5. Compensation.
(a) The Company will compensate the Custodian for its
services rendered under this Agreement in accordance with
the fees set forth in the Fee Schedule annexed hereto as
Schedule B and incorporated herein for the existing
Portfolios. Such Fee Schedule does not include out-of-
pocket disbursements of the Custodian for which the
Custodian shall be entitled to xxxx separately. Out-of-
pocket disbursements may include only the items specified in
Schedule B and which may be modified by the Custodian if the
Company consents in writing to the modification.
(b) The parties hereto will agree upon the compensation for
acting as Custodian for any Portfolio hereafter established
and designated, and at the time that the Custodian commences
serving as such for said Portfolio, such agreement shall be
reflected in a Fee Schedule for that Portfolio, dated and
signed by an officer of each party hereto, which shall be
attached to Schedule B of this Agreement.
(c) Any compensation agreed to hereunder may be adjusted
from time to time by attaching to Schedule B of this
Agreement a revised Fee Schedule, dated and signed by an
officer of each party hereto.
(d) The Custodian will xxxx the Company for its services to
each Portfolio hereunder as soon as practicable after the
end of each calendar quarter, and said xxxxxxxx will be
detailed in accordance with the Fee Schedule for the
Company. The Company will promptly pay to the Custodian the
amount of such billing. The Custodian shall have a claim of
payment against the property in each Portfolio for any
compensation or expense amount owing to the Custodian in
connection with such Portfolio from time to time under this
Agreement.
(e) The Custodian (not the Company) will be responsible for
the payment of the compensation of each Sub-Custodian.
6. Custody of Cash and Securities
(a) Receipt and Holding of Assets. The Company will
deliver or cause to be delivered to the Custodian and the
Sub-Custodians all Securities and monies owned by the
Company at any time during the period of this Agreement and
shall specify the Portfolio to which the Securities and
monies are to be specifically allocated. The Custodian will
not be responsible for such Securities and monies until
actually received by it or by a Sub-Custodian. The Company
shall instruct the Custodian from time to time in its sole
discretion, by means of Written Instructions, as to the
manner in which and in what amounts Securities, and monies
of a Portfolio are to be deposited on behalf of such
Portfolio in the Book-Entry System or a Depository;
provided, however, that prior to the deposit of Securities
of a Portfolio in the Book-Entry System or a Depository,
including a deposit in connection with the settlement of a
purchase or sale, the Custodian shall have received a
Certificate specifically approving such deposits by the
Custodian or a Sub-Custodian in the Book-Entry System or a
Depository. Securities and monies of a Portfolio deposited
in the Book-Entry System or a Depository will be deposited
in accounts which include only assets held by the Custodian
for its customers.
(b) Accounts and Disbursements. The Custodian shall
establish and maintain a separate account for each Portfolio
and shall credit to the separate account all monies received
by it or a Sub-Custodian for the account of such Portfolio
and shall disburse, or cause a Sub-Custodian to disburse,
the same only:
1. In payment for Securities purchased for the
Portfolio, as provided in Section 7 hereof;
2. In payment of dividends or distributions with
respect to the Shares of such Portfolio, as provided in
Section 9 hereof;
3. In payment of original issue or other taxes with
respect to the Shares of such Portfolio, as provided in
Section 10(c) hereof;
4. In payment for Shares which have been redeemed by
such Portfolio, as provided in Section 10 hereof;
5. In payment of fees and in reimbursement of the
expenses and liabilities of the Custodian attributable to
the Company, as provided in Sections 5 and 14(h) hereof;
6. Pursuant to Written Instructions setting forth the
name of the Portfolio and the name and address of the person
to whom the payment is to be made, the amount to be paid
and the purpose for which payment is to be made.
(c) Fail Float. In the event that any payment made for a
Portfolio under this Section 6 exceeds the funds available
in that Portfolio's account, the Custodian or relevant Sub-
Custodian, as the case may be, may, in its discretion,
advance the Company on behalf of that Portfolio an amount
equal to such excess and such advance shall be deemed an
overdraft from the Custodian or such Sub-Custodian to that
Portfolio payable on demand, bearing interest at the rate of
interest customarily charged by the Custodian or such Sub-
Custodian on similar overdrafts.
(d) Confirmation and Statements. Promptly after the close
of business on each business day, the Custodian shall
furnish the Company with confirmations and a summary of all
transfers to or from the account of each Portfolio during
said day. Such summary shall include without limitation, as
to property acquired for a Portfolio, the identity of the
entity having physical possession of such property. Where
securities purchased by a Portfolio are in a fungible bulk
of securities registered in the name of the Custodian (or
its nominee) or shown on the Custodian's account on the
books of a Depository, the Book-Entry System or a Sub-
Custodian, the Custodian shall by book entry or otherwise
identify the quantity of those securities belonging to such
Portfolio. At least monthly, the Custodian shall furnish
the Company with a detailed statement of the Securities and
monies held by it and all Sub-Custodians for each Portfolio.
In the absence of the filing in writing with the Custodian
by the Company of exceptions or objections to any such
statement within 120 days after the date that a material
defect is reasonably discoverable, the Company shall be
deemed to have approved such statement; and in such case or
upon written approval of the Company of any such statement
the Custodian shall, to the extent permitted by law and
provided the Custodian has met the standard of care in
Section 14 hereof, be released, relieved and discharged with
respect to all matters and things set forth in such
statement as though such statement had been settled by the
decree of a court of competent jurisdiction in an action in
which the Company and all persons having any equity interest
in the Company were parties.
(e) Registration of Securities and Physical Separation.
All Securities held for a Portfolio which are issued or
issuable only in bearer form, except such Securities as are
held in the Book-Entry System, shall be held by the
Custodian or a Sub-Custodian in that form; all other
Securities held for a Portfolio may be registered in the
name of that Portfolio, in the name of any duly appointed
registered nominee of the Custodian or a Sub-Custodian as
the Custodian or such Sub-Custodian may from time to time
determine, or in the name of the Book-Entry System or a
Depository or their successor or successors, or their
nominee or nominees. The Company reserves the right to
instruct the Custodian as to the method of registration and
safekeeping of the Securities. The Company agrees to
furnish to the Custodian appropriate instruments to enable
the Custodian or any Sub-Custodian to hold or deliver in
proper form for transfer, or to register in the name of its
registered nominee or in the name of the Book-Entry System
or a Depository, any Securities which the Custodian of a
Sub-Custodian may hold for the account of a Portfolio and
which may from time to time be registered in the name of a
Portfolio. The Custodian shall hold all such Securities
specifically allocated to a Portfolio which are not held in
the Book-Entry System or a Depository in a separate account
for such Portfolio in the name of such Portfolio physically
segregated at all times from those of any other person or
persons.
(f) Segregated Accounts. Upon receipt of a Written
Instruction, the Custodian will establish segregated
accounts on behalf of a Portfolio to hold liquid or other
assets as it shall be directed by a Written Instruction and
shall increase or decrease the assets in such Segregated
Accounts only as it shall be directed by subsequent Written
Instruction.
(g) Collection of Income and Other Matters Affecting
Securities. Unless otherwise instructed to the contrary by
a Written Instruction, the Custodian, by itself or through
the use of the Book-Entry System or a Depository with
respect to Securities therein deposited, shall, or shall
instruct the relevant Sub-Custodian to:
1. Collect all income due or payable with respect to
Securities held for a Portfolio in accordance with this
Agreement;
2. Present for payment and collect the amount payable
upon all Securities which may mature or be called, redeemed
or retired, or otherwise become payable;
3. Surrender Securities in temporary form for
derivative Securities;
4. Execute any necessary declarations or certificates
of ownership under the federal income tax laws or the laws
or regulations of any other taxing authority now or
hereafter in effect; and
5. Hold directly, or through the Book-Entry System or
a Depository with respect to Securities therein deposited,
for the account of each Portfolio all rights and similar
Securities issued with respect to any Securities held by the
Custodian or relevant Sub-Custodian for each Portfolio.
If the Custodian or any Sub-Custodian causes the
account of a Portfolio to be credited on the payable date
for interest, dividends or redemptions, the particular
Portfolio involved will promptly return to the Custodian any
such amount or property so credited upon oral or written
notification that neither the custodian nor the relevant
Sub-Custodian can collect such amount or property in the
ordinary course of business. The Custodian or such Sub-
Custodian, as the case may be, shall have no duty or
obligation to institute legal proceedings, file a claim or
proof of claim in any insolvency proceeding or take any
other action with respect to the collection of such amount
or property beyond its ordinary collection procedures unless
it is specifically requested to do so by the Company and
indemnified to its satisfaction for any liability, cost or
expense arising therefrom.
(h) Delivery of Securities and Evidence of Authority. Upon
receipt of a Written Instruction and not otherwise, except
for subparagraphs 5, 6, 7, and 8 of this section 6(h) which
may be effected by Oral or Written Instructions, the
Custodian, directly or through the use of the Book-Entry
System or a Depository, shall, or shall instruct the
relevant Sub-Custodian to:
1. Execute and deliver or cause to be executed and
delivered to such persons as may be designated in such
Written Instructions, proxies, consents, authorizations, and
any other instruments whereby the authority of the Company
as owner of any Securities may be exercised;
2. Deliver or cause to be delivered any Securities held
for a Portfolio in exchange for other Securities or cash
issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any
conversion privilege;
3. Deliver or cause to be delivered any Securities held
for a Portfolio to any protective committee, reorganization
committee or other person in connection with the
reorganization, refinancing, merger, consolidation or
recapitalization or sale of assets of any corporation, and
receive and hold under the terms of this Agreement in the
separate account for each such Portfolio certificates of
deposit, interim receipts or other instruments or documents
as may be issued to it to evidence such delivery;
4. Make or cause to be made such transfers or exchanges of
the assets specifically allocated to the separate account of
a Portfolio and take such other steps as shall be stated in
Written Instructions to be for the purpose of effectuating
any duly authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Company;
5. Deliver Securities upon sale of such Securities
for the account of a Portfolio pursuant to Section 7;
6. Deliver Securities upon the receipt of payment in
connection with any repurchase agreement related to such
Securities entered into by a Portfolio;
7. Deliver Securities owned by a Portfolio to the issuer
thereof or its agent when such Securities are called,
redeemed, retired or otherwise become payable; provided,
however, that in any such case the cash or other
consideration is to be delivered to the Custodian or Sub-
Custodian, as the case may be;
8. Deliver Securities for delivery in connection with any
loans of securities made by a Portfolio but only against
receipt of adequate collateral as agreed upon from time to
time by the Custodian and the Company which may be in the
form of cash or obligations issued by the United States
Government, its agencies or instrumentalities;
9. Deliver Securities for delivery as security in
connection with any borrowings by a Portfolio requiring a
pledge of Portfolio assets, but only against receipt of the
amounts borrowed;
10. Deliver Securities to the Transfer Agent or to the
holders of Shares in connection with distributions in kind,
as may be described from time to time in the Prospectus, in
satisfaction of requests by holders of Shares for repurchase
or redemption;
11. Deliver Securities owned by any Portfolio as collateral
in connection with short sales by such Portfolio of common
stock for which such Portfolio owns the stock or owns
preferred stocks of debt securities convertible or
exchangeable, without payment of further consideration, into
shares of the common stock sold short;
12. Deliver Securities owned by any Portfolio for any
purpose expressly permitted by and in accordance with
procedures described in the Prospectus; and
13. Deliver Securities owned by any Portfolio for any other
proper business purpose, but only upon receipt of, in
addition to Written Instructions, a certified copy of a
resolution of the Board of Directors signed by an Authorized
Person and certified by the Secretary of the Company,
specifying the Securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring
such purpose to be a proper business purpose, and naming the
person or persons to whom delivery of such Securities shall
be made.
(i) Endorsement and Collection of Checks, Etc. The
Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money
received by the Custodian for the account of a Portfolio.
7. Purchase and Sale of Investments of a Portfolio.
(a) Promptly after each purchase of Securities for a
Portfolio, the Company shall deliver to the Custodian (i)
with respect to each purchase of Securities which are not
Money Market Securities, a Written Instruction and (ii) with
respect to each purchase of Money Market Securities, either
a Written Instruction or Oral Instruction, in either case
specifying with respect to each purchase: (1) the name of
the Portfolio to which such Securities are to be
specifically allocated; (2) the name of the issuer and the
title of the Securities; (3) the number of shares or the
principal amount purchased and accrued interest, if any; (4)
the date of purchase and settlement; (5) the purchase price
per unit; (6) the total amount payable upon such purchase;
and 7) the name of the person from whom or the broker
through whom the purchase was made, if any. The Custodian
or specified Sub-Custodian shall receive the Securities
purchased by or for a Portfolio and upon receipt thereof
shall pay to the broker or other person designated by the
Company out of the monies held for the account of such
Portfolio the total amount payable upon such purchase,
provided that the same conforms to the total amount payable
as set forth in such Written or Oral Instruction.
(b) Promptly after each sale of Securities of a Portfolio,
the Company shall deliver to the Custodian (i) with respect
to each sale of Securities which are not Money Market
Securities, a Written Instruction, and (ii) with respect to
each sale of Money Market Securities, either Written
Instructions or Oral Instructions, in either case specifying
with respect to such sale: (1) the name of the Portfolio to
which the Securities sold were specifically allocated; (2)
the name of the issuer and the title of the Securities; (3)
the number of shares or principal amount sold, and accrued
interest, if any; (4) the date of sale; (5) the sale price
per unit; (6) the total amount payable to the Portfolio upon
such sale; and (7) the name of the broker through whom or
the person to whom the sale was made. The Custodian or
relevant Sub-Custodian shall deliver or cause to be
delivered the Securities to the broker or other person
designated by the Company upon receipt of the total amount
payable to such Portfolio upon such sale, provided that the
same conforms to the total amount payable to such Portfolio
as set forth in such Written or Oral Instruction. Subject
to the foregoing, the Custodian or relevant Sub-Custodian
may accept payment in such form as shall be satisfactory to
it, and may deliver Securities and arrange for payment in
accordance with the customs prevailing among dealers in
Securities.
(c) Notwithstanding (a) and (b) above, cash in any of the
Portfolios may be invested by the Custodian for short term
purposes pursuant to standing Written Instructions from the
Company.
8. Lending of Securities.
If any Portfolio is permitted by the terms of the Articles
of Incorporation and the Prospectus to lend Securities, then
the Board of Directors may approve a separate written
agreement between the Company and the Custodian authorizing
the Custodian to lend such Securities. Such agreement may
provide for the payment of additional reasonable
compensation to the Custodian.
8a. Investment in Futures
The Custodian shall pursuant to Written Instructions from an
Authorized Person (i) transfer initial margin to a
safekeeping bank; (ii) pay on demand variation margin to or
from a designated futures commission merchant based on daily
marking to market calculation and in accordance with
accepted industry practices and (iii) subject to consent of
the Custodian, enter into separate procedural, safekeeping
or other agreements with futures commission merchants and
safekeeping banks pursuant to which such banks will act as
custodian for initial margin deposits in transactions
involving futures contracts and options on futures
contracts. The Custodian shall have no custodial or
investment responsibility for any assets transferred to a
safekeeping bank or futures commission merchant pursuant to
this paragraph.
9. Payment of Dividends or Distributions.
(a) The Company shall furnish to the Custodian the vote of
the Board of Directors or the Dividend Committee thereof, as
the case may be, certified by the Secretary of the Company
(i) authorizing the declaration of distributions with
respect to a Portfolio on a specified periodic basis and
authorizing the Custodian to rely on Oral or Written
Instructions specifying the date of the declaration of such
distribution, the date of payment thereof, the record date
as of which shareholders entitled to payment shall be
determined, the amount payable per Share to the shareholders
of record as of the record date and the total amount payable
to the Transfer Agent on the payment date, or (ii) setting
forth the date of declaration of any distribution by a
Portfolio, the date of payment thereof, the record date as
of which shareholders entitled to payment shall be
determined, the amount payable per share to the shareholders
of record as of the record date and the total amount payable
to the Transfer Agent on the payment date.
(b) Upon the payment date specified in such vote, Oral
Instructions, or Written Instructions, as the case may be,
the Custodian shall pay the total amount payable to the
Transfer Agent out of the monies specifically allocated to
and held for the account of the appropriate Portfolio.
10. Sale and Redemption of Shares of the Company.
(a) Whenever the Company shall sell any Shares of a
Portfolio, the Company shall deliver or cause to be
delivered to the Custodian a Written Instruction duly
specifying:
1. The name of the Portfolio whose Shares were
sold;
2. The number of Shares sold, trade date, and
price; and
3. The amount of money to be received by the
Custodian
for the sale of such Shares.
The Custodian understands and agrees that Written
Instructions may be furnished subsequent to the purchase of
Shares of a Portfolio and that the information contained
therein will be derived from the sales of Shares as reported
to the Company by the Transfer Agent.
(b) Upon receipt of such money from the Transfer Agent, the
Custodian shall credit such money to the separate account of
the Portfolio specified in (a)(1) above.
(c) Upon issuance of any Shares of a Portfolio in
accordance with the foregoing provisions of this Section 10,
the Custodian shall pay all original issue or other taxes
required to be paid in connection with such issuance upon
the receipt of a Written Instruction specifying the amount
to be paid.
(d) Except as provided hereafter, whenever any Shares of a
Portfolio are redeemed, the Company shall cause the Transfer
Agent to promptly furnish to the Custodian Written
Instructions specifying:
1. The name of the Portfolio whose Shares were
redeemed;
2. The number of Shares redeemed; and
3. The amount to be paid for the Shares redeemed.
The Custodian further understands that the information
contained in such Written Instructions will be derived from
the redemption of Shares as reported to the Company by the
Transfer Agent.
(e) Upon receipt from the Transfer Agent of advice setting
forth the number of Shares of a Portfolio being redeemed
pursuant to valid instructions as described in the
Prospectus, the Custodian shall make payment to the Transfer
Agent out of the monies specifically allocated to and held
for the account of the Portfolio specified in (d)(1) above
of the total amount specified in a Written Instruction
issued pursuant to paragraph (d) of this Section 10.
11. Indebtedness.
(a) The Company will cause to be delivered to the Custodian
by any bank (excluding the Custodian) from which the Company
borrows money, using Securities as collateral, a notice or
undertaking in the form currently employed by any such bank
setting forth the amount which such bank will loan to the
Company against delivery of a stated amount of collateral.
The Company shall promptly deliver to the Custodian Written
Instructions stating with respect to each such borrowing:
(1) the name of the Portfolio for which the borrowing is to
be made; (2) the name of the bank; (3) the amount and terms
of the borrowing, which may be set forth by incorporating by
reference an attached promissory note, duly endorsed by the
Company, or other loan agreement; (4) the time and date, if
known, on which the loan is to be entered into (the
"borrowing date"); (5) the date on which the loan becomes
due and payable; (6) the total amount payable to the Company
for the separate account of the Portfolio on the borrowing
date; (7) the market value of Securities to be delivered as
collateral for such loan, including the name of the issuer,
the title and the number of shares or the principal amount
of any particular Securities; (8) whether the Custodian is
to deliver such collateral through the Book-Entry System or
a Depository; and (9) a statement that such loan is in
conformance with the 1940 Act and the Prospectus.
(b) Upon receipt of the Written Instruction referred to in
paragraph (a) above, the Custodian shall deliver on the
borrowing date the specified collateral and the executed
promissory note, if any, against delivery by the lending
bank of the total amount of the loan payable, provided that
the same conforms to the total amount payable as set forth
in the Written Instruction. The Custodian may, at the
option of the lending bank, keep such collateral in its
possession, but such collateral shall be subject to all
rights therein given the lending bank by virtue of any
promissory note or loan agreement. The Custodian shall
deliver as additional collateral in the manner directed by
the Company from time to time such Securities specifically
allocated to such Portfolio as may be specified in Written
Instruction to collateralize further any transaction
described in this Section 11. The Company shall cause all
Securities released from collateral status to be returned
directly to the Custodian, and the Custodian shall receive
from time to time such return of collateral as may be
tendered to it. In the event that the Company fails to
specify in Written Instruction all of the information
required by this Section 11, the Custodian shall not be
under any obligation to deliver any Securities. Collateral
returned to the Custodian shall be held hereunder as it was
prior to being used as collateral.
12. Corporate Action
Whenever the Custodian or any Sub-Custodian (other than a
foreign securities depository or clearing agency) receives
information concerning Securities held for a Portfolio which
requires discretionary action by the beneficial owner of the
Securities (other than a proxy), such as subscription
rights, bond issues, stock repurchase plans and rights
offerings, or legal notices or other material intended to be
transmitted to Securities holders ("Corporate Actions"), the
Custodian will give the Company notice of such Corporate
Actions to the extent that the Custodian'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 Custodian will endeavor to obtain Written or Oral
Instructions from the Company, but if such Instructions are
not received in time for the Custodian to take timely
action, or actual notice of such Corporate Action was
received too late to seek such Instructions, the Custodian
is authorized to sell, or cause a Sub-Custodian to sell,
such rights entitlement or fractional interest and to credit
the applicable account with the proceeds and to take any
other action it deems, in good faith, to be appropriate, in
which case, provided it has met the standard of care in
Section 14 hereof, it shall be held harmless by the
particular Portfolio involved for any such action.
The Custodian will deliver proxies to the Company or its
designated agent pursuant to special arrangements which may
have been agreed to in writing between the parties hereto.
Such proxies shall be executed in the appropriate nominee
name relating to Securities registered in the name of such
nominee but without indicating the manner in which such
proxies are to be voted; and where bearer Securities are
involved, proxies will be delivered in accordance with
Written or Oral Instructions from Authorized Persons.
13. Persons Having Access of the Portfolios.
(a) No officer, director, employee or agent of the Company,
or of the Company's investment advisor or, of any sub-
investment adviser of the Company, or of the Administrator,
shall have physical access to the assets of any Portfolio
held by the Custodian or any Sub-Custodian or be authorized
or permitted to withdraw any investments of a Portfolio, nor
shall the Custodian or any Sub-Custodian deliver any assets
of a Portfolio to any such person. No officer, director,
employee or agent of the Custodian who holds any similar
position with the Company's investment adviser, with any
sub-investment adviser of the Company or with the
Administrator shall have access to the assets of any
Portfolio.
(b) Nothing in this Section 13 shall prohibit any officer,
employee or agent of the Company, or any officer, director,
employee or agent of the investment adviser, of any sub
investment adviser of the Company or of the Administrator,
from giving Oral Instructions or Written Instructions to the
Custodian or executing a Certificate so long as it does not
result in delivery of or access to assets of a Portfolio
prohibited by paragraph (a) of this Section 13.
(c) The Custodian represents that it maintains a system
that is reasonably designed to prevent unauthorized persons
from having access to the assets that it holds (by any
means) for its customers.
14. Concerning the Custodian.
(a) Scope of Services. The Custodian shall be obligated to
perform only such services as are set forth in this
Agreement or expressly contained in a Certificate, Written
Instructions or Oral Instructions given to the Custodian
which are not contrary to the provisions of this Agreement.
(b) Standard of Care.
1. The Custodian will use reasonable care with
respect to its obligations under this Agreement and the
safekeeping of property of the Portfolios. The
Custodian shall be liable to, and shall indemnify and
hold harmless the Company from and against any loss
which shall occur as the result of the failure of the Custodian
or a Sub-Custodian (other than a foreign securities depository or
clearing agency) to exercise reasonable care with respect to
their respective obligations under this Agreement and the
safekeeping of such property. The determination of whether the
Custodian or Sub-Custodian has exercised reasonable care in
connection with the safekeeping of Portfolio property shall be
made in light of the standards applicable to a professional asset
custodian acting without negligence. The determination of
whether the Custodian or Sub-Custodian has exercised reasonable
care in connection with their other obligations under this
Agreement shall be made in light of prevailing standards
applicable to professional custodians in the jurisdiction in
which such custodial Services are performed. In the event of any
loss to the Company by reason of the failure of the Custodian or
a Sub-Custodian (other than a foreign securities depository or
clearing agency) to exercise reasonable care, the Custodian shall
be liable to the Company to the extent of all of the Company's
direct damages and expenses, incurred or borne on account of such
loss which damages, for purposes of property only, shall be
determined based on the market value of the property which is the
subject of the loss.
2. Subject to the provisions of subparagraph (b)1.
above the Custodian will not be responsible for any
act, omission, default or for the solvency of any
foreign securities depository or clearing agency
utilized in connection with the provision of services
under this agreement.
3. The Custodian will not be responsible for any act,
omission, default or for the solvency of any broker or
agent (not referred to in paragraph (b)(2) above) which
it or a Sub-Custodian appoints and uses unless such
appointment and use is made or done negligently or in
bad faith. In the event such an appointment and use is
made or done negligently or in bad faith, the Custodian
shall be liable to the Company only for direct damages
and expenses (determined in the manner described in
paragraph (b)(1) above) resulting from such appointment
and use and, in the case of any loss due to an act,
omission or default of such agent or broker, only to
the extent that such loss occurs as a result of the
failure of the agent or broker to exercise reasonable
care ("reasonable care" for this purpose to be
determined in light of the prevailing standards
applicable to agents or brokers, as appropriate, in the
jurisdiction where services are performed).
4. The Custodian shall be entitled to rely, and may
act upon the advice of counsel (who may be counsel for
the Company) on all matters and shall be without
liability for any action reasonably taken or omitted in
good faith and without negligence pursuant to such
advice.
5. The Custodian shall be entitled to rely upon any
Certificate, notice or other instrument in writing
received by the Custodian and reasonably believed by
the Custodian to be genuine and to be signed by two
officers of the Company. The Custodian shall be
entitled to rely upon any Written Instructions or Oral
Instructions actually received by the Custodian
pursuant to the applicable Sections of this Agreement
and reasonably believed by the Custodian to be genuine
and to be given by an Authorized Person. The Company
agrees to forward to the Custodian Written Instructions
from an Authorized Person confirming such Oral
Instructions in such manner so that such Written
Instructions are received by the Custodian, whether by
hand delivery, telex or otherwise, by the close of
business on the same day that such Oral Instructions
are given to the Custodian. The Company agrees that
the fact that such confirming instructions are not
received by the Custodian shall in no way affect the
validity of the transactions or enforceability of the
transactions hereby authorized by the Company. The
Company agrees that the Custodian shall incur no
liability to the Company in (i) acting upon Oral
Instructions given to the Custodian hereunder
concerning such transactions provided such instructions
reasonably appear to have been received from a duly
Authorized Person or (ii) deciding not to act solely
upon Oral Instructions, provided that the Custodian
shall be required to contact the giver of such Oral
Instructions and request written confirmation
immediately following any such decision not to act.
6. The Custodian shall supply the Administrator
and/or Fund Accountant with such daily information
regarding the cash and securities positions and
activity of each Portfolio as the Custodian and the
Administrator and/or Fund Accountant shall from time to
time agree. It is understood that such information
will not be audited by Custodian and Custodian
represents that such information will be the best
information then available to the Custodian. The
Custodian shall have no responsibility whatsoever for
the pricing of Portfolio Securities or for the failure
of the Administrator and/or Fund Accountant to
reconcile differences between the information supplied
by the Custodian and information obtained by the
Administrator and/or Fund Accountant from other
sources, including but not limited to pricing vendors
and the Company's investment adviser. Subject to the
foregoing, to the extent that any miscalculation by the
Administrator and/or Fund Accountant of a Portfolio's
net asset value is attributable to the willful
misfeasance, bad faith or negligence of the Custodian
(including any Sub-Custodian other than a foreign
securities depository or clearing agency) in supplying
or omitting to supply the Administrator and/or Fund
Accountant with information as aforesaid, the Custodian
shall be liable to the Company for any resulting loss
(subject to such de minims rule of change in value as
the Board of Directors may from time to time adopt).
(c) Limit of Duties. Without limiting the generality of
the foregoing, the Custodian shall be under no duty or
obligation to inquire into, and shall not be liable for:
1. The validity of the issue of any Securities
purchased by any Portfolio, the legality of the
purchase thereof, or the propriety of the amount
specified by the Company for payment therefor;
2. The legality of the sale of any Securities by any
Portfolio or the propriety of the amount of
consideration for which the same are sold;
3. The legality of the issue or sale of any Shares,
or the sufficiency of the amount to be received
therefor;
4. The legality of the redemption of any Shares, or
the propriety of the amount to be paid therefor;
5. The legality of the declaration or payment of any
distribution of any Portfolio;
6. The legality of any borrowing.
(d) The Custodian need not maintain any insurance for the
exclusive benefit of the Company, but hereby warrants that
as of the date of this Agreement it is maintaining a bankers
Blanket Bond and hereby agrees to notify the Company in the
event that such bond is canceled or otherwise lapses.
(e) Consistent with and without limiting the language
contained in Section 14(b), it is specifically acknowledged
that the Custodian shall have no duty or responsibility to:
1. Question Written Instructions or Oral Instructions
or make any suggestions to the Company or an
Authorized Person regarding such Instructions;
2. Supervise or make recommendations with respect to
investments or the retention of Securities;
3. Subject to Section 14(b)(3) hereof, evaluate or
report to the Company 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.
4. Review or reconcile trade confirmations received
from brokers.
(f) Amounts Due for Transfer Agent. The Custodian shall
not be under any duty or obligation to take action to effect
collection of any amount due to any Portfolio from the
Transfer Agent nor to take any action to effect payment or
distribution by the Transfer Agent of any amount paid by the
Custodian to the Transfer Agent in accordance with this
Agreement.
(g) No Duty to Ascertain Authority. The Custodian shall
not be under any duty or obligation to ascertain whether any
Securities at any time delivered to or held by it for the
Company and specifically allocated to a Portfolio are such
as may properly be held by the Company under the provisions
of the Articles of Incorporation and the Prospectus.
(h) Indemnification. The Company agrees to indemnify and
hold the Custodian harmless from all loss, cost, taxes,
charges, assessments, claims, and liabilities (including,
without limitation, liabilities arising under the Securities
Act of 1933, the Securities Exchange Act of 1934 and the
1940 Act and state or foreign securities laws) and expenses
(including reasonable attorneys fees and disbursements)
arising directly or indirectly from any action taken or
omitted by the Custodian (i) at the request or on the
direction of or in reliance on the advice of the Company or
in reasonable reliance upon the Prospectus or (ii) upon a
Certificate or Oral or Written Instructions; provided, that
the foregoing indemnity shall not apply to any loss, cost,
tax, charge, assessment, claim, liability or expense to the
extent the same is attributable to the Custodian's or any
Sub-Custodian's (other than a foreign securities depository
or clearing agency) negligence, willful misconduct, bad
faith or reckless disregard of duties and obligations under
this Agreement or any other agreement relating to the
custody of Company property.
(i) The Company on behalf of the particular Portfolio
involved agrees to hold the Custodian harmless from any
liability or loss resulting from the imposition or
assessment of any taxes or other governmental charges on a
Portfolio.
(j) Without limiting the foregoing, the Custodian shall not
be liable for any loss which results from:
1. the general risk of investing, or
2. subject to Section 14(b) hereof, investing or
holding property 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
property held pursuant to this Agreement.
(k) No 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 (other than strikes or work
stoppages of the Custodian), acts of war or terrorism,
insurrection, revolution, nuclear fusion, fission or
radiation, or acts of God.
(1) Inspection of Books and Records. The books and records
of the Custodian shall be open to inspection and audit at
reasonable times by officers and auditors employed by the
Company and by the appropriate employees of the Securities
and Exchange Commission.
(m) Accounting Control Reports. The Custodian shall
provide the Company with any report obtained by the
Custodian on the system of internal accounting control of
the Book-Entry System, each Depository, and each Sub-
Custodian and with an annual report on its own systems of
internal accounting control.
15. Term and Termination.
(a) This Agreement shall become effective on the date first
set forth above (the "Effective Date") and shall continue in
effect thereafter as the parties may, mutually agree.
(b) Either of the parties hereto may terminate this
Agreement with respect to any Portfolio by giving to the
other party a notice in writing specifying the date of such
termination, which, in case the Company is the terminating
party, shall be not less than 60 days after the date of
receipt of such notice or, in case the Custodian is the
terminating party, shall be not less than 90 days after the
date of receipt of such notice. In the event such notice is
given by the Company, it shall be accompanied by a certified
vote of the Board of Directors, electing to terminate this
Agreement with respect to any Portfolio and designating a
successor custodian or custodians, which shall be a person
qualified to so act under the 1940 Act.
In the event such notice is given by the Custodian, the
Company shall, on or before the termination date, deliver to
the Custodian a certified vote of the Board of Directors,
designating a successor custodian or custodians. In the
absence of such designation by the Company, the Custodian
may designate a successor custodian, which shall be a person
qualified to so act under the 0000 Xxx. If the Company
fails to designate a successor custodian with respect to any
Portfolio, the Company shall upon the date specified in the
notice of termination of this Agreement and upon the
delivery by the Custodian of all Securities (other than
Securities held in the Book-Entry System which cannot be
delivered to the Company) and monies then owned by such
Portfolio, be deemed to be its own custodian and the
Custodian shall thereby be relieved of all duties and
responsibilities pursuant to this Agreement, other than the
duty with respect to Securities held in the Book-Entry
System which cannot be delivered to the Company.
(c) Upon the date set forth in such notice under paragraph
(b) of this Section 15, this Agreement shall terminate to
the extent specified in such notice, and the Custodian shall
upon receipt of a notice of acceptance by the successor
custodian on that date deliver directly to the successor
custodian all Securities and monies then held by the
Custodian and specifically allocated to the Portfolio or
Portfolios specified, after deducting all fees, expenses and
other amounts for the payment or reimbursement of which it
shall then be entitled with respect to such Portfolio or
Portfolios.
16. Limitation of Liability.
The Company and the Custodian agree that the obligations of
the Company under this Agreement shall not be binding upon
any of the Directors, shareholders, nominees, officers,
employees or agents, whether past, present or future, of the
Company individually, but are binding only upon the assets
and property of the Company or of the appropriate
Portfolio(s) thereof, as provided in the Articles of
Incorporation. The execution and delivery of this Agreement have
been authorized by the Board of Directors of the Company, and
signed by an authorized officer of the Company, acting as such,
and neither such authorization by such the Board of Directors nor
such execution and delivery by such officer shall be deemed to
have been made by any of them or any shareholder of the Company
individually or to impose any liability on any of them or any
shareholder of the Company personally, but shall bind only the
assets and property of the Company or of the appropriate
Portfolio(s) thereof as provided in the Articles of
Incorporation.
17. Miscellaneous.
(a) Annexed hereto as Schedule A is a certification signed
by two of the present officers of the Company setting forth
the names and the signatures of the present Authorized
Persons. The Company agrees to furnish to the Custodian a
new certification in similar form in the event that any such
present Authorized Person ceases to be such an Authorized
Person or in the event that other or additional Authorized
Persons are elected or appointed. Until such new
certification shall be received, the Custodian shall be
fully protected in acting under the provisions of this
Agreement upon Oral Instructions or signatures of the
present Authorized Persons as set forth in the last
delivered certification.
(b) Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Custodian,
shall be sufficiently given if addressed to the Custodian
and mailed or delivered to it at its offices at its address
stated on the first page hereof or at such other place as
the Custodian may from time to time designate in writing.
(c) Any notice or other instrument in writing, authorized
or required by this Agreement to be given to the Company,
shall be sufficiently given if addressed to the Company and
mailed or delivered to it at its offices at its address
shown on the first page hereof or at such other place as the
Company may from time to time designate in writing, with a
copy to:
(d) This Agreement may not be amended or modified in any
manner except by a written agreement executed by both
parties with the same formality as this Agreement, (i)
authorized and approved by a vote of the Board of Directors,
including a majority of the members of the Board of
Directors who are not "interested persons" of the Company
(as defined in the 1940 Act), or (ii) authorized and
approved by such other procedures as may be permitted or
required by the 1940 Act.
(e) 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 Company without the written consent of the
Custodian, or by the Custodian without the written consent
of the Company authorized or approved by a vote of the Board
of Directors, and any attempted assignment without such
written consent shall be null and void.
(f) This Agreement shall be construed in accordance with
the laws of the State of Illinois.
(g) The captions of the Agreement are included for
convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect
their construction or effect.
(h) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an
original, but such counterparts shall, together, constitute
only one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective representatives duly
authorized as of the day and year first above written.
FREMONT MUTUAL FUNDS, INC.
By: /s/ Xxxxx X. Redo
Name: Xxxxx X. Redo
Title: President
THE NORTHERN TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
EXHIBIT A
EXHIBIT A
Page 1 of 3
FREMONT INVESTMENT ADVISORS
AUTHORIZED SIGNATURES MATRIX: BY ACCOUNT
OFFICIAL REFERENCE for BANK, CUSTODIAN, TRUSTEE, TRANSFER AGENT, FUND ACCOUNTANT
August 28, 1995
(l)
OPEN/
(a) (b) (c) (d) CLOSE
NAME TITLE AUTHORIZED SIGNATURE INITIALS CONTRACTS TRADE FEES CHECKS ACCT AUTHORIZED ACCOUNTS: SEE KEY
Xxxxxxx, Xxxxx FGI Treasurer X X X 21-24, 51, 55, 69
Xxxx, Xxxxx FGI Ass't Controller X 0, 21, 22, 24, 26, 50 (N)
Copa, Kent FIA Vice President X X 2, 5, 11, 14, 51, 57
Xxxxxxxxxx, Xxxxx FGI Mgr Fin'l Analysis X 21-24
Xxxxx, Xxxx FGI President X 1
Xxxx, Xxxx FGI Controller Spl Svc. X 51, 55
Xxxxx, Xxxxxxxxxxxxx FIA Vice President X X 1, 11, 12, 14, 16-18, 20-24
Xxxxxx, Xxxxxxx FIA Vice President X 2, 3, 11, 13, 50, 52,
57, 58, 59, 60
Xxxxxx, Xxxxx FMF Salesman X 0, 1, 50
Xxxxxxx, Xxxxxxx FIA, FMF Controller X X 0, 10-18, 26, 50
Xxx, Xxxxxx FIA Vice President X 1, 11, 12, 14, 16-18, 20-24
Xxxxxxx, Xxxxxx FIA Vice President X 2, 11, 16, 26, 55
Hand, Xxxxxxx Accounting Manager X 10-18
Xxxxxxx, Xxx FGI CFO X X X 21-24, 26, 55
Xxxxxxxxx, Xxxxxxxx FMF Asst Vice Pres X:O 10 (k)
Xxxxx, Xxx C FGI Tax Manager X 51, 55
Xxxxx, Xxxxxx FGI Mgr Fin'l Plan & Treas X X 20-25
Xxxxxxx, Xxxxxxxxxx FIA Vice President X X(i) 2, 3, 11, 50, 51, 52,
57-59, 00-00
Xxxxxxxxxx, Xxxxxx FIA Sr Vice President X X X:O 0, 1-4, 10(k), 11-18, 21, 23,
24, 26, 50-52, 55, 58
Xxxx, Xxxxxxx FIA Exec Vice President X X X X X 0-73 (k) (n)
Page 2 of 3
FREMONT INVESTMENT ADVISORS
AUTHORIZED SIGNATURES MATRIX: BY ACCOUNT
OFFICIAL REFERENCE for BANK, CUSTODIAN, TRUSTEE, TRANSFER AGENT, FUND ACCOUNTANT
August 28, 1995
(l)
OPEN/
(a) (b) (c) (d) CLOSE
NAME TITLE AUTHORIZED SIGNATURE INITIALS CONTRACTS TRADE FEES CHECKS ACCT AUTHORIZED ACCOUNTS: SEE KEY
Xxxxx, Xxxxxxx FGI Controller X 0, 21, 24, 26, 50 (n)
Xxxxxxx, Xxxxx FIA Sr Vice Pres X X X:O 0, 1, 2, 5, 10, 11, 14,
16-18, 26, 51, 55, 57, (n)
Xxxx, Xxxxxx FIA Vice President X 2, 5, 11, 14, 16, 26, 51,
57, 64-66, 72-76
Redo, Xxxxx FIA President X X X X ALL (k) (n)
Xxxxx, Xxx FMF Vice Pres X X:O 0, 10(k)
Xxxxxx, Xxxxx FIA Acc'tg Supvsr X X 0, 1, 26, 50, (n)
Xxxxxx, Xxxx BTTF Chrmn/Ttee X X 1, 50, 60(h)
NOTES:
(a) Authorized to enter into contracts on behalf of client.
(b) Authorized to execute purchase/sale transactions for client.
(c) Authorized to approve of fees, expenses, and other accounting or billing matters re: advisor/custodial/trustee
(d) Authorized to transfer funds to/from client's account(s), via wire or check
(e) Req. 2 signatures on all transactions. All trans. over $50k must have original sig's (not facsimile-Xxxxx, Bond)
(f) Requires 2 signatures (min. of 1 from Group 1): Group 1:JSH, VPK, DLR; Group 2: SWK, AWK, ALP
(g) Requires 2 signatures for fees and expenses: DLR, VPK, IRS, PFL, JWF
(h) Xxxxxx is trustee for all "S" Trusts except '89 Family Trust, (G Argyris, Trustee).
(i) Authorized to approve fees for account 50, 51 & 57
(j) Consulting Contract; managers are B Xxxxxxx, V Xxxx, P Xxxxxxx, D Redo
(k) Authorized to act on behalf of FMF shareholders - administration & processing
(l) Authorized to open or close any account with Custodians
(m) Transmittals to IFTC for expense payments only
(n) Authorized to execute instructions & direct Fremont Group Retirement Plan
(o) Over $250 req. 2 signatures (min. of 1 from Group 1): Group 1: VPK, DLR, PFL, AWK; Group 2: IRS, GCH, CG, GJH --
FIA acct for FMF shareholders
(p) Requires 2 signatures (JSH, SCH, KDD); funds transfered only to related Xxxxx account
(q) Requires 2 signatures (min. of 1 from Group 1): Group 1: PFL, AWK, VPK, DLR; Group 2: HB, CG, RK, AW
Page 3 of 3
FREMONT INVESTMENT ADVISORS
AUTHORIZED SIGNATURES MATRIX: BY ACCOUNT
OFFICIAL REFERENCE for BANK, CUSTODIAN, TRUSTEE, TRANSFER AGENT,FUND ACCOUNTANT
August 28, 1995
KEY: (Corresponds with FIA Sub-File Codes)
0 Fremont Investment Advisors (o) 50 Bechtel Foundation (e)
1 Bechtel Trust & Thrift Plan (BTTF) 51 SDB Jr Foundation (p)
2 Fund A 52 SDB Jr Ch Unitrusts
3 Fund B 55 BF LP I & II (f)(p)
4 Fund C 57 LPB 89 Fam Trust
5 Fund D 58 ABE Trust
6 Fund E 59 XXX Trusts
7 Fund F 60 S Trusts (ALL)
10 Fremont Mutual Funds (FMF) (g) 64 KSJ
11 F Global 65 P&M S
12 F Money Market 66 MST
13 F Ca Int Tax Free 00 XXX Xx Xxxxxxxxx
00 X Xxxxxx 69 Xxxxxx Foundation
15 F Bond 70 AGS
16 F International Growth 71 PMS
17 F U.S. Micro-Cap 72 BSW
18 F International Small Cap 73 R&SB
20 Bechtel Power Corp 74 Foothill
21 Fremont Group Inc (formerly BII) 75 Shenandoah
22 Bechtel Investment Realty 76 Ramsay Foundation
23 Bechtel Int'l Constructors 77 X. Xxxxxx
24 Sequoia Ventures 78 X. Xxxxxx
25 Xxxxxxx Enterprises (j) 79 SST '95 Trust
26 Fremont Summit Partners (q) 80 S. Family Farm Trust
81 CHFT Pending
SCHEDULE B
A GLOBAL CUSTODY FEE SCHEDULE FOR
FREMONT MUTUAL FUNDS
DOMESTIC FUNDS:
U.S. Micro-Cap Fund
Growth Fund ( SIT Investments )
Growth Fund ( Fremont Investment Advisors )
Money Market Fund
California Intermediate Tax-Free Fund
INTERNATIONAL FUNDS:
Global Fund
International Growth Fund
International Small Cap Fund
Bond Fund
ASSUMPTIONS USED: (derived from the Annual Report dated October 31, 1994
for the Fremont Mutual Funds and a facsimile
dated June 8, 1995 provided by Xx. Xxxxxx Xxx).
Total market value = $ 857,585,327
Tier I * = $ 656,842,994
Tier II = $ 190,779,056
Tier III = $ 13,778,231
8 mutual funds
5 domestically invested funds
3 globally invested funds
Annualized purchase/sale activity was not provided by Fremont.
Northern Trust has assumed the following activity based upon
current average client transaction activity.
U.S. Equities = 1,754
U.S. Fixed Income = 515
U.S. Mortgage Back Securities = 16
Short Settlements = 380
Non-U.S. = 1,592
Security holdings
Total U.S. = 683
Equities = 480
Fixed Income = 140
Mortgage Back Securities = 16
Short Settlements = 47
Total Non-U.S. = 350
Utilization of Securities Lending
Daily on-line interface with Fund Accountant and Transfer Agent
Approximately 5% excess cash invested with Northern Utilization of
our on-line inquiry system for all parties involved At least 20%
of total foreign exchange volume transacted through Northern
SERVICES PROVIDED:
Safekeeping of securities
Settlement of trades
Foreign exchange services
Investment and management of excess cash balances Interest and
dividend collection and payable date crediting Tax withholding and
reclamation Corporate action and proxy handling
Relationship servicing to Fremont Mutual Funds, the Fund
Administrator/Accountant and Transfer Agent Daily on-line
reporting to all parties Monthly fund level reporting
CUSTODY FEE PROPOSAL:
ACCOUNT-BASED CHARGES:
$5,000 per portfolio/account per annum (9 x $5,000 = $45,000)
ASSET-BASED CHARGES:
Tier I * 0.5 Basis points on the market value
($656,842,994 x .00005 = $32,842)
Tier II 3.0 Basis points on the market value
($180,885,358 x .0003 = $54,266)
Tier III 20.0 Basis points on the market value
($19,856,975 x .0020 = $39,714)
TRANSACTION-BASED CHARGES (PER PURCHASE/SALE):
Tier I * Equities & Fixed Income $ 7
(2,269 x $7 = $15,883)
Mortgage Backed Securities $15
(16 x $15 = $240)
Short Settlements $15
(Comm. Paper, T-Bills, Repos)
(380 x $15 = $5,700)
Wire Transfers $ 7
Tiers II & III Equities & Fixed Income $15
(1,592 x $15 = $23,880)
Non-Northern Trust foreign $30
exchange contract
We do NOT impose additional charges for facsimile, telex, income
collection, tax reclamation, administration, or other "miscellaneous"
activities. Execution costs attributable, but not limited , to
settlement in specific markets, such as stamp duty and security
re-registration charges and subcustodian delivery/receipt charges
would be passed through at cost as and where applicable.
TOTAL ESTIMATED ANNUAL FEE = $217,525 OR 2.48 BASIS POINTS EQUIVALENT
TOTAL ESTIMATED ANNUAL BASIS POINT EQUIVALENT ON GLOBAL FUNDS = 3.26 BPTS.
TOTAL ESTIMATED ANNUAL BASIS POINT EQUIVALENT ON DOMESTIC FUNDS = 1.47 BPTS.
DESKTOP SERVICES:
Full access to Northern Trust's on-line customized reporting system,
Passport, will be made available free of charge. A one-time charge of
$5,000 applies for the licensing and installation of the Passport
software. Training on the software is included in the above charge
assuming that training is done in one location. Any telecommunication
charges incurred by Northern in supporting Passport would be passed
through at cost where applicable.
PERFORMANCE ANALYSIS SERVICES (PAS) AND FEE SCHEDULE:
Northern Trust is the largest bank provider of comprehensive
performance measurement. By providing accurate, timely and incisive
data our performance analytics service can help optimize your funds'
returns.
1. QUARTERLY PERFORMANCE FEES
PAS General Review $4,000 per account* per annum for the first six
Overview of Manager Mix managers, and $2,000 per account per annum
Intense Review thereafter Composite Information Package Workstation
Availability $4,000 X 2 ACCOUNTS = $8,000
Special projects are billed at $100 per hour plus expenses.
* Individually managed account, excluding cash, GIC, and single
asset accounts. Returns for these accounts are reported free of
charge when combined with an individually managed account.
SECURITIES LENDING:
Northern Trust has an extensive securities lending program.
Historically we have been very successful in offsetting significant
portions of client custody fees through lending activity.
Below are our evaluations of the October 31, 1994 Fremont Mutual Fund
portfolios detailing the currently loanable and non-loanable
components. Based upon those components, we estimated gross annual
Securities Lending earnings of $320,000- $425,000 of which
$210,000-$280,000 would be for Fremont Mutual Funds.
The portfolio also holds other non-U.S. securities which may be
loanable in the future and as Northern's lending program continues to
expand, these securities could generate additional income for the
client.
MATERIAL CHANGES:
The fees quoted above are offered contingent upon the information
provided and assume that actual experience will not be materially
different from projected activity. "Material" changes, for the
purposes of this provision, will be changes in excess of 10% from the
assumptions used.
REFERENCE:
Tier I * United States
Tier II Africa, Argentina, Australia, Austria,
Belgium, Canada, China Denmark, Euroclear,
Finland, France, Germany, Hong Kong,
Ireland, Italy, Japan, Luxembourg,
Malaysia, Mexico, Netherlands, New
Zealand, Norway, Portugal Singapore, South
Korea, Spain, Sri Lanka, Sweden,
Switzerland, Taiwan, Thailand, Turkey, and
the United Kingdom
Tier III Bangladesh, Botswana, Brazil, Czech
Republic, Chile, Columbia, Cyprus, Ghana,
Greece, Hungary, India, Indonesia, Israel,
Jordan, Morocco, Namibia, Nigeria,
Pakistan, Peru, Philippines, Poland,
Uruguay, Venezuela, and Zimbabwe
