EXHIBIT 1
CUSTODIAN AGREEMENT
To:
Gentlemen:
The undersigned ("State Street") hereby requests that you (the Bank)
establish a custody account and a cash account for each custodian/employee
benefit plan identified in the Schedule attached to this Agreement and each
additional account which is identified to this Agreement. Each such custody or
cash account as applicable will be referred to herein as the "Account" will be
subject to the following terms and conditions:
1. The Bank shall hold as agent for State Street and shall physically
segregate in the Account such cash, bullion, coin, stocks, shares
bonds, debentures, notes and other securities and other property which
is delivered to the Bank for that State Street Account (the
"Property").
2. a. Without the prior approval of State Street it will not deposit
securities in any securities depository or utilize a clearing
agency, incorporated or organized under the laws of a country
other than the United States, unless such depository or clearing
house operates the central system for handling of securities or
equivalent book-entries in that country or operates a
transnational system for the central handling of securities or
equivalent book-entries;
b. When securities held for an Account are deposited in a securities
depository or clearing agency by the Bank, the Bank shall
identify on its books as belonging to State Street as agent for
such Account, the securities so deposited.
3. The Bank represents that either:
a. It currently has stockholders' equity in excess of $200 million
(U.S. dollars or the equivalent of U.S. dollars computed in
accordance with generally accepted U.S. accounting principles)
and will promptly inform State Street in the event that there
appears to be a substantial likelihood that its stockholders'
equity will decline below $200 million, or in the event, at such
time as its stockholders' equity in fact declines below $200
million; or
b. It is the subject of an exemptive order issued by the United
States Securities and Exchange Commission, which such order
permits State Street to employ the Bank as a subcustodian,
notwithstanding the fact that the Bank's stockholders' equity is
currently below $200 million or may in the future decline below
$200 million due to currency fluctuation.
4. Upon the written instructions of State Street, as permitted by
Paragraph 8, the Bank is authorized to pay cash from the Account and
to sell, assign, transfer, deliver or exchange, or to purchase for the
Account, any and all stocks, shares, bonds, debentures, notes and
other securities ("Securities"), bullion, coin and other property, but
only as provided in such written instruction. The bank shall not be
held liable for any act or omission to act ?? instructions given on
purported to be given should there be any in such instructions.
5. Unless the Bank receives written instructions of State Street to the
contrary, the Bank is authorized:
a. To promptly receive and collect all income and principal with
respect to the Property and to credit cash receipts to the
Account;
b. To promptly exchange securities where the exchange is pur???
ministerial (including, without limitation, the exchange of
temporary securities for those in definitive form and the
exchange of warrants, or other documents of entitlement to
securities, for the securities themselves);
c. To promptly surrender securities at maturity or when called for
redemption upon receiving payment therefor;
d. Whenever notification of a rights entitlement or a fracti??
interest resulting from a rights issue, stock dividend or split
is received for the Account and such rights entitlement or
fractional interest bears an expiration date, the ??
endeavor to obtain State Street Bank's instructions, ???????
these not be received in time for the Bank to take timely action,
the Bank is authorized to sell such rights entitl??? or
fractional interest and to credit the Account;
e. To hold registered in the name of the nominee of the Bank ??? its
agents such Securities as are ordinarily held in registered form;
f. To execute in State Street's name for the Account, whenever the
Bank deems it appropriate, such ownership and other certificates
as may be required to obtain the payment of income from the
Property; and
g. To pay or cause to be paid, from the Account any and all taxes
and levies in the nature of taxes imposed on such assets by any
governmental authority and shall use reasonable efforts, to
promptly reclaim any foreign withholding tax relating to the
Account.
6. If the Bank shall receive any proxies, notices, reports or other
communications relative to any of the Securities of the Account in
connection with tender offers, reorganization, mergers,
consolidations, or similar events which may have an impact upon
issuer thereof, the Bank shall promptly transmit any such
communication to State Street Bank by means as will permit State
Street Bank to take timely action with respect thereto.
7. The Bank is authorized in its discretion to appoint brokers and agents
in connection with the Bank's handling of transactions relating to the
Property provided that any such appointment shall not relieve the Bank
of any of its responsibilities or liabilities hereunder.
8. Written instructions shall include (i) instructions in writing signed
by such persons as are designated in writing by State Street; (ii)
telex or tested telex instructions of State Street; (iii) other forms
of instruction in computer readable form as shall be customarily
utilized for the transmission of like information; and (iv) such other
forms of communication as from time to time shall be agreed upon by
State Street and the Bank.
9. The Bank shall supply periodic reports with respect to the safekeeping
of assets held by it under this agreement. The content of such reports
shall include but not be limited to any transfer to or from any
account held by the Bank hereunder and such other information as State
Street may reasonably request.
10. In addition to its obligations under Section 23 hereof, the Bank shall
maintain such other records as may be necessary to identify the assets
hereunder as belonging to each custodian/employee benefit plan
identified in our Schedule attached to this agreement and each
additional account which is identified to this agreement.
11. The Bank agrees that its books and records relating to its actions
under this Agreement shall be opened to the physical, on-premises
inspection and audit at reasonable times by officers of, auditors
employed by or other representatives of State Street (including to the
extent permitted under law) the independent public accountants
for any entity whose Property is being held hereunder and shall be
retained for such period as shall be agreed by State Street and the
Bank.
12. The Bank shall be entitled to reasonable compensation for its services
and expenses as custodian under this Agreement, as agreed upon from
time to time by the Bank and State Street.
13. The Bank shall exercise reasonable care in the performance of its
duties, as are set forth or contemplated herein or contained in
instructions given to the Bank which are not contrary to this
Agreement, shall maintain adequate insurance and agrees to indemnify
and hold harmless, State Street and each Account from and against
loss, damage, cost, expense, liability or claim arising out of or in
connection with the Bank's performance of its obligations hereunder.
14. The bank agrees (i) the property held hereunder is not subject to any
right, charge, security interest, lien or claim of any kind in favor
of the Bank or any of its agents or its creditors except a claim or
payment for their safe custody and administration and (ii) the
beneficial ownership of the property shall be freely transferable
without the payment of money or other value other than for safe
custody or administration.
15. The bank agrees to meet State Street Operating Requirements (See
Exhibit A).
16. This Agreement may be terminated by the Bank or State Street by 60
days' written notice to the other, sent by registered mail or express
courier. The Bank, upon the date this Agreement ???????? pursuant to
notice which has been given in a timely fashion, ??????? deliver
the Property to the beneficial owner unless the Bank ????????
received from the beneficial owner 60 days' prior to the date on which
this Agreement is to be terminated written instructions of State
Street specifying the name(s) of the person(s) to whom the Property
shall be delivered.
17. The Bank and State Street shall each use its best efforts to
???????? the confidentiality of the Property in each Account,
subject, however, to the provisions of any laws requiring the
disclosure of the Property.
18. Unless otherwise specified in this Agreement, all notices with respect
to matters contemplated by this Agreement shall be deemed duly given
when received in writing or by confirmed telex by the Bank or State
Street at their respective addresses set forth below or at such other
address as be specified in each case in a notice similarly given:
To State Street Master Trust Division, Global Cust???
STATE STREET BANK AND TRUST COMPANY
X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
X.X.X.
To the Bank
19. This Agreement shall be governed by and construed in accordance with
the laws of except to the extent that such laws are
preempted by the laws of the United States of America.
Please acknowledge your agreement to the foregoing by executing a copy of
this letter.
Very truly yours,
STATE STREET BANK AND TRUST COMPANY
By: /s/ [ILLEGIBLE]
----------------------------------------
Vice President
Date:
--------------------------------------
Agreed to by:
By: /s/ X. X. XXXXXX
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Date: 12/1/87
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0043k/4
PRUDENTIAL MUTUAL FUNDS(1)
State Street
Global Custody Network
----------------------
SECURITIES DEPOSITORY
OR
COUNTRY BANK CLEARING AGENCY
------- ---- ---------------
Luxembourg -- Cedel
Transnational -- The Euroclear System
Cedel
United Kingdom State Street Bank and The Bank of England,
Trust Company, London The Central Gilts Office
branch, and State Street (CGO); The Central London
Limited, a subsidiary Moneymarkets Office (CMO)
of State Street Bank
and Trust Company
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(1) This schedule applies to money market funds and to the following
non-money market funds:
Prudential Government Income Fund, Inc.
Prudential High Yield Fund, Inc.
Prudential High Yield Income Fund, Inc.
Prudential Structured Maturity Fund, Inc.
