CUSTODIAN AGREEMENT
This Agreement, dated the 1st day of May, 1994, made by and between
STRATUS Fund, Inc. (the "Fund"), a corporation operating as an open-end
management investment company, duly organized under the laws of the State of
Minnesota, and Union Bank and Trust Company, Lincoln, Nebraska (the
"Custodian"), a duly organized state bank with principal offices in Lincoln,
Nebraska:
WITNESSETH THAT:
WHEREAS, the Fund desires to appoint Custodian as custodian of the
securities and cash of the Fund's various Portfolios, and Custodian is willing
to act in such capacity upon the terms and conditions herein set forth; and
WHEREAS, Custodian 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 promises and of the mutual
covenants herein contained, the parties hereto, intending to be legally bound,
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 shall mean Union Bank and Trust Company, in its capacity as
custodian under this Agreement.
Fund shall mean STRATUS FUND, Inc., and each of its Portfolios.
Oral Instruction shall mean an authorization, instruction or approval
transmitted to the Custodian in person or by telex, telephone, telegram,
telecopy or other mechanical or documentary means lacking signatures, by the
person or persons authorized by a resolution of the Board of Directors of the
Fund to give oral instructions on behalf of the Fund.
Securities shall mean bonds, debentures, notes, stocks, evidences of
indebtedness, and other securities and investments from time to time owned by
the Fund and held within the United States.
Shareholders shall mean the registered owners from time to time of the
Shares in accordance with the stock registry records maintained by the Fund's
Transfer Agent.
Shares shall mean the shares of common stock of the Fund, whether or
not such Shares shall be evidenced by certificates.
Written Instructions shall mean an authorization, instruction,
certification or approval in form acceptable to the Custodian, signed by one or
more officers of the Fund or other signatories authorized to sign Written
Instructions by a resolution of the Board of Directors 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
execution of Written Instructions and specifying the number of signatories
required, together with certified signatures of authorized signatories. If the
certifying officer is authorized to sign Written Instructions, the certification
also shall be signed by a second officer of the Fund.
The Fund shall, from time to time, file with the Custodian a certified
copy of each resolution of its Board of Directors authorizing the transmission
of Oral Instructions and specifying the person or persons authorized to give
Oral Instructions in accordance with this Agreement. If the certifying officer
is authorized to give Oral Instructions, the certification also shall be signed
by a second officer of the Fund. Upon transmitting any Oral Instruction, the
Fund shall promptly forward to the Custodian a Written Instruction confirming
the authorization, instruction or approval transmitted by such Oral Instruction.
Each resolution filed with the Custodian in accordance with the terms
hereof shall be considered in full force and effect and the Custodian shall be
fully protected in acting in reliance thereon until such time as it receives
written notice to the contrary.
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 be and remain the sole property of the
Fund. Funds held by the Custodian may be deposited in a general checking
account. The Securities of the Fund shall be held by the Custodian or a
recognized securities depository and shall, unless payable to bearer, be
registered in the name of the Custodian or in the name of its nominee or in the
name of a recognized securities depository. Securities, excepting 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. Notwithstanding any other provision of this Agreement, the
parties hereto agree that the Custodian shall be authorized in the performance
of its duties hereunder to deposit all or any part of the Securities owned by
the Fund in the Federal Reserve/ U.S. Treasury book-entry system in accordance
with applicable law, including Rule 17f-4 under the Investment Company Act of
1940, as hereafter amended or supplemented.
The Custodian is further specifically authorized to enter into a
sub-custodian agreement with the Bank of New York for the holding of the Funds'
securities, provided that the Custodian shall be subject to all the terms and
conditions of this Agreement.
Section 4. The Fund will 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 deposit of cash 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 net proceeds from the sale of Shares, if any, whether representing
initial issue or reinvestments of dividends and/or distributions payable to
Shareholders.
The Fund warrants that it shall keep all of its Securities, similar
investments, cash proceeds, and other cash assets of the Fund in the custody of
the Custodian, except where permitted to otherwise keep, deposit, loan, pledge
or otherwise dispose of or maintain such assets in accordance with applicable
law, including Section 17(f) of the Investment Company Act of 1940, 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 Written or Oral Instructions;
(b) to pay, or provide the Fund with money to pay taxes upon
receipt of appropriate Written Instructions;
(c) for the purpose of completing the purchase of Securities
purchased by the Fund, upon receipt of (i) Written or Oral 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
Securities by the Custodian;
(d) for the purpose of transferring to the Fund money to
purchase Shares, upon receipt of Written or Oral Instructions;
(e) for the purpose of exercising warrants and rights received
upon the Securities, upon timely receipt of Written Instructions
authorizing the exercise of such warrants and rights and stating the
consideration to be paid;
(f) for the purpose of paying over to the Transfer Agent or
dividend disbursing agent such amounts as may be stated in Written
Instructions, representing proceeds of the sale of warrants, rights,
stock dividends, profits and increases in values of the Securities, as
the Fund may determine to include in dividends and/or distributions on
the shares;
(g) to pay interest, 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, accounting and auditing services),
and to disburse cash for other proper corporate purposes. Before making
any such payment or disbursement, however, the Custodian shall receive
(and may conclusively rely upon) Written 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 corporate purposes, the Written Instructions shall
state that the disbursement was authorized by resolution of the Board
of Directors of the Fund and is for a proper corporate 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) the net proceeds of sale and (ii) Written
or Oral Instructions specifying the Securities sold and 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;
(b) for the purpose of exchanging Securities for other
Securities and/or cash upon timely receipt of (i) Written or Oral
Instructions stating the Securities to be delivered and the Securities
and/or cash to be received in 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 Written or Oral
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 receipt of (i) Written Instructions authorizing
such exchange or conversion and stating the manner in which such
exchange or conversion is to be made, and (ii) against receipt of the
Securities, certificates of deposit, interim receipts, and/or cash to
be received as specified in the Written Instructions;
(d) for the purpose of presenting Securities for payment which
have matured or have been called for redemption upon receipt of
appropriate Written or Oral Instructions;
(e) for the purpose of delivery of Securities upon redemption
of Shares in kind, upon receipt of (i) proper instruments of transfer
or other redemption documentation with respect to such Shares, and (ii)
appropriate Written Instructions.
Section 8. The Custodian assumes no duty, obligation or responsibility
whatsoever to exercise any voting or consent powers with respect to the
Securities held by it from time to time hereunder, it being understood that the
Fund, or such person or persons as it may designate, shall have the right to
vote, or consent or otherwise act with respect to such Securities. The Custodian
will, but only upon timely receipt of Written Instructions, furnish to the Fund
proxies or other appropriate authorizations with respect to Securities
registered in the name of the Custodian or its nominee so that such voting
powers, or powers to consent or otherwise act may be exercised by the Fund or
pursuant to its direction.
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. Except as otherwise expressly provided by law, the
Custodian assumes no duty, obligation or responsibility whatsoever to handle,
forward, or process in any way notices of stockholder meetings, proxy
statements, annual reports, conversion notices, call notices, or other notices
or written materials of any kind sent to the registered owners of securities
(hereafter referred to as "notices and materials"), excluding only stock
certificates and dividend and interest payments, it being understood that
responsibility for obtaining such notices and materials, and for taking action
thereon, is the sole responsibility of the Fund and its investment advisers, and
not the responsibility of the Custodian. As an accommodation only, the Custodian
will make reasonable efforts to forward such notices and written materials as it
receives to the Fund, but makes no warranty or representation that all notices
and materials will be forwarded, and the Fund hereby agrees that it shall make
no claim whatsoever against the Custodian for any expense, damage, or loss of
any kind arising out of or in connection with any act or omission of the
Custodian, including any intentional or negligent act or omission of the
Custodian, in connection with such notices and materials. Upon receipt by the
Custodian of warrants or rights issued in connection with the assets of the
Fund, the Custodian shall enter on its ledgers appropriate notations indicating
such receipt, but shall have no further obligation whatsoever to notify the Fund
or any other person of such receipt, or to take any action of any kind with
respect to such warrants or rights except upon receipt of Written Instructions
authorizing the exercise or sale of such warrants or rights.
Section 11. The Custodian assumes only the usual duties or obligations
normally performed by custodians of investment companies. 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 advisers.
The Custodian shall not be liable for any taxes, assessments or
governmental charges which may be levied 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 12. 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 gross negligence, bad
faith, or willful misconduct in the performance of its duties as specifically
set forth in this 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 accountants,
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 officers or
agents;
(c) Where authorized in this Agreement to act upon an Oral
Instruction, may act upon any Oral Instruction which it receives and
which it believes in good faith was transmitted by the person or
persons authorized by the Board of Directors of the Fund to give such
Oral Instructions. The Custodian shall have no duty or obligation to
request or require a confirmatory Written Instruction or to make any
inquiry or effort of certification of such Oral Instruction;
(d) Is authorized to accept a certificate of the Secretary or
Assistant Secretary of the Fund 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;
(e) May rely and shall be protected in acting upon any
signature, Written or Oral (including telephone, telegraph or
mechanical) Instruction, 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 purchaser, Fund or
other proper party or parties.
Section 13. The Fund (including its successors and assigns) hereby
agrees to indemnify and hold harmless the Custodian and 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 omissions under this Agreement,
except only for liability arising out of the Custodian's own gross 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 (including its successors and assigns) does hereby agree to fully
indemnify and hold harmless the Custodian, its successors and assigns, from any
and all loss, liability, claims, demands, actions, suits and expenses of any
nature as the same may arise from the failure of the Fund to comply with any
law, rule, regulation or order of the United States, any State or any other
jurisdiction, governmental authority, body or board relating to the sale,
registration, or qualification of the Securities, 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 13 shall indefinitely survive
termination of this Agreement.
Section 14. This Agreement may be amended from time to time without
notice to or approval of the Shareholders by a supplemental agreement, in form
approved by counsel, executed by the Fund and the Custodian and amending and
supplementing this Agreement in the manner mutually agreed.
Section 15. Either the Fund or the Custodian may give sixty (60) 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, by 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 Written Instructions, the Custodian shall deliver such Securities and
cash as it may then be holding hereunder directly to and only to the Successor
Custodian. Unless or until a Successor Custodian has been appointed as above
provided, the Custodian then acting shall continue to act as Custodian under
this Agreement. Every Successor Custodian appointed hereunder shall execute and
deliver an appropriate written acceptance of its appointment and shall thereupon
become vested with the rights, powers, obligations
and custody of its predecessor Custodian. The Custodian ceasing to act shall
nevertheless, 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
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 or 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 16. This Agreement shall take effect on the date the Fund's
Registration Statement filed with the Securities and Exchange Commission becomes
effective or such other date as the parties agree to transfer the Fund assets to
the Custodian.
Section 17. 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 18. Subject to the requirements of the Investment Company Act
of 1940, and the rules promulgated thereunder, the Custodian may from time to
time in its sole discretion delegate some or all of its duties hereunder to one
or more wholly owned subsidiaries of Custodian, which shall perform such
functions as the agent of the Custodian. To the extent of such delegation, the
term "Custodian" in this Agreement shall be deemed to refer to the Custodian,
such subsidiary or subsidiaries, or to any of them, as the context may indicate.
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 date 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, the Fund and Custodian have caused this Agreement
to be signed by their respective Presidents or Vice Presidents and their
corporate seals hereunto duly affixed, and attested by their respective
Secretaries or Assistant Secretaries, as of the day and year first above
written.
Attest: STRATUS FUND, INC.
/s/ Xxxxxxx Xxxxxx /s/ Xxxxxxx Xxxxxx
---------------------------- By ------------------------------
Secretary President
(CORPORATE SEAL)
Attest: UNION BANK AND TRUST COMPANY
/s/ Xxxxxxx Xxxxxx /s/ Xxxx Xxxxxx
--------------------------- By ------------------------------
(Title) (Vice) President
(CORPORATE SEAL)
SCHEDULE A
STRATUS FUND, INC.
CUSTODIAL FEE AGREEMENT
For purposes of annual fee charges based on market value of securities, the
following charges will apply to the Capital Appreciation Portfolio and the
Intermediate Government Bond Portfolio and will be grouped as one when applying
the following schedule of charges. There is no charge for custodial services
rendered hereunder for the other Portfolios of the Fund. This annual charge will
be calculated and billed quarterly and will exclude from the market value all
cash and cash equivalents in the money market sweep account.
Basis
Points Dollars
$ 1 - $10 million 11.00 $11,000.00
$10 - $20 million 6.00 6,000.00
Over $20 million 2.5
Plus $100 per account
Investment transaction charges of $12 each will be assessed to each fund in
which the following transactions occur:
1. Purchases/Sales
2. Maturities/Calls/Expirations
3. Principal Payments
4. Free Receipts/Deliveries
Assume $25 million and 6 accounts the cost would be as follows:
Basis
Points Dollars
Example: $ 0 - $10 million 11.00 $11,000.00
$10 - $20 million 6.00 6,000.00
Over $20 million 2.5 1,250.00
Plus $100 per account 600.00
Fee before transaction charges $-----.00
This schedule of fees shall remain in effect unless both parties shall agree to
changes due to changing needs or responsibilities associated with the custodial
services rendered.
