CUSTODY AGREEMENT
This Agreement is made as of the fourth day of August, 1994, by and between
Utilities Stock Portfolio (the "Portfolio"), a trust organized under the laws of
the State of New York, with its principal office at 0000 Xxxxxxxx Xxxxx, X. X.
Xxx 0000, Xxxxxx, Xxxx, 00000, and Star Bank, N.A. (the "Custodian"), a national
banking association with its principal office and place of business at Star Bank
Center, 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx, 00000, which Agreement provides for
provision of custodian services to the Portfolio.
Custodian agrees to retain custody of U.S. Government Securities and
securities issued and sold primarily in the United States. Pursuant to Paragraph
7 of Article IX of this Agreement, Custodian hereby appoints Bankers Trust
Company as Sub-Custodian to retain custody of foreign securities in accordance
with the terms and conditions of the Agreement dated as of __________ between
Bankers Trust Company and Star Bank, N.A. attached hereto as Appendix D (the
"Sub-Custodian Agreement"). The Trust hereby acknowledges such appointment and
expressly agrees to the terms and conditions set forth in the Sub-Custodian
Agreement.
W I T N E S S E T H:
that for and in consideration of the mutual promises hereinafter set forth
the Portfolio and the Custodian agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
1 "AUTHORIZED PERSON" shall be deemed to include the Chairman, President,
Secretary, Treasurer, and the Vice President, or any other person, whether or
not any such person is an officer or employee of the Portfolio, duly authorized
by the Board of Trustees of the Portfolio to give Oral Instructions and Written
Instructions on behalf of the Portfolio and listed in the Certificate annexed
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hereto as Appendix A or such other Certificate as may be received by the
Custodian from time to time, subject in each case to any limitations on the
authority of such person as set forth in Appendix A or any such Certificate.
2 "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, provided the Custodian has received a
certified copy of a resolution of the Board of Trustees of the Portfolio
specifically approving deposits in the Book-Entry System.
3. "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 signed on behalf of the Portfolio by an Authorized Person and is
actually received by the Custodian.
4 "Depository" shall mean The Depository Trust Company ("DTC"), a clearing
agency registered with the Securities and Exchange Commission, its successor or
successors and its nominee or nominees. The term "Depository" shall further mean
and include any other person or clearing agency authorized to act as a
depository under the Investment Company Act of 1940, its successor or successors
and its nominee or nominees, provided that the Custodian has received a
certified copy of a resolution of the Board of Trustees of the Portfolio
specifically approving such other person or clearing agency as a depository.
5. "Dividend and Transfer Agent" shall mean the dividend and transfer agent
active, from time to time, in such capacity pursuant to a written agreement with
the Portfolio, changes in which the Portfolio shall immediately report to the
Custodian in writing.
6. "Global Government Security" shall be deemed to include, without
limitation, debt obligations issued or guaranteed as to principal and/or
interest by the government of the United States or agencies or instrumentalities
thereof; and short-term debt instruments denominated in certain foreign
currencies, including government bills, notes, and bonds of the U.S. and other
foreign nations, including, but not limited to Canada, the Xxxxxx Xxxxxxx,
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Xxxxxxx, Xxxxxx, Xxxxx and Australia. "Global Government Security" shall also
include, without limitation, short-term debt instruments of Supranational
Government agencies; foreign government agencies (when guaranteed by the foreign
government); certificates of deposit, bankers acceptances; short-term debt
issued by foreign banks with AAA long-term debt ratings; and foreign currency
denominated short-term instruments of U.S. banks and corporations. All
securities will have a maximum remaining maturity of three years. "Global
Government Security" shall also include U.S. money market instruments.
7. "Officers" shall be deemed to include the Chairman and President, the
Secretary, Treasurer, Vice President, Assistant Treasurer and Assistant
Secretary of the Portfolio listed in the annexed Appendix A or such other
Certificate as may be received by the Custodian from time to time.
8. "ORAL INSTRUCTIONS" shall mean oral instructions actually received by
the Custodian from an Authorized Person (or from a person which the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions from Authorized Persons in such manner so that such Written
Instructions are received by the Custodian on the next business day.
9. "Registration Statement" shall mean the Portfolio's registration
statement on Form N-1A, as filed with the Securities and Exchange Commission.
10. "Security or Securities" shall mean Global Government Securities, Money
Market Securities common or preferred stocks, options, bonds, debentures,
corporate debt securities, notes, mortgages or other obligations, and any
certificates, receipts, warrants or other instruments representing rights to
receive, purchase or subscribe for the same, or evidencing or representing any
other rights or interest therein, or any property or assets.
11. "Written Instructions" shall mean communication actually received by
the Custodian from one Authorized Person or from one person which the Custodian
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reasonably believes in good faith to be an Authorized Person in writing or by
telex or any other such system whereby the receiver of such communication is
able to verify by codes or otherwise with a reasonable degree of certainty the
authenticity of the senders of such communication.
12. "Foreign Securities" include securities issued and sold primarily
outside of the United States by a foreign government, a national of any foreign
country or a corporation or other organization incorporated or organized under
the laws of any foreign country and securities issued or guaranteed by the
Government of the United States or by any state or any political subdivision
thereof or by any agency thereof by any entity organized under the laws of the
United States or of any state thereof which have been issued and sold primarily
outside the United States.
ARTICLE II
APPOINTMENT OF CUSTODIAN
1. The Portfolio hereby constitutes and appoints the Custodian as custodian
of all Securities and monies at any time owned by the Portfolio during the
period of this Agreement (the "Portfolio Assets").
2. The Custodian hereby accepts appointment as such Custodian and agrees to
perform the duties thereof as hereinafter set forth. ARTICLE III
DOCUMENTS TO BE FURNISHED BY THE PORTFOLIO
The Portfolio hereby agrees to furnish to the Custodian the following
documents:
1. A copy of its Declaration of Trust (the "Declaration of Trust")
certified by its Secretary.
2. A copy of its Bylaws certified by its Secretary.
3. A copy of the resolution of its Board of Trustees appointing the
Custodian certified by its Secretary.
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4. A copy of the then current Prospectus of the Portfolio.
5. A Certificate of the President and Secretary setting forth the names
and signatures of the present officers of the Portfolio.
ARTICLE IV
CUSTODY OF CASH AND SECURITIES
1. The Portfolio will deliver or cause to be delivered to the Custodian all
Portfolio Assets, including cash received for the issuance of its beneficial
interests ("shares"), at any time during the period of this Agreement. The
Custodian will not be responsible for such Portfolio Assets until actually
received by it. Upon such receipt, the Custodian shall hold in safekeeping and
physically segregate at all times from the property of any other persons, firms
or corporations all Portfolio Assets received by it from or for the account of
the Portfolio. The Custodian will be entitled to reverse any credits made on the
Portfolio's behalf where such credits have been previously made on the
Portfolio's behalf where such credits have been previously made and monies are
not finally collected within 90 days of the making of such credits. The
Custodian is hereby authorized by the Portfolio to actually deposit any
Portfolio Assets in the Book-Entry System or in a Depository, provided, however,
that the Custodian shall always be accountable to the Portfolio for the
Portfolio Assets so deposited. Portfolio Assets deposited in the Book-Entry
System or the Depository will be represented in accounts which include only
assets held by the Custodian for customers, including but not limited to
accounts in which the Custodian acts in a fiduciary or representative capacity.
2. The Custodian shall credit to a separate account or accounts in the name
of the Portfolio all monies received by it for the account of the Portfolio, and
shall disburse the same only:
(a) In payment for Securities purchased for the account of the Portfolio,
as provided in Article V;
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(b) In payment of dividends or distributions, as provided in Article VI
hereof;
(c) In payment of original issue or other taxes, as provided in Article
VII hereof;
(d) In payment for shares of the Portfolio redeemed by it, as provided in
Article VII hereof;
(e) Pursuant to Certificates (i) directing payment and setting forth the
name and address of the person to whom the payment is to be made, the
amount of such payment and the purpose for which payment is to be made
(the Custodian not being required to question such direction) or (ii)
if reserve requirements are established for the Portfolio by law or by
valid regulation, directing the Custodian to deposit a specified
amount of collected funds in the form of U.S. dollars at a specified
Federal Reserve Bank and stating the purpose of such deposit; or
(f) In reimbursement of the expenses and liabilities of the Custodian, as
provided in paragraph 10 of Article IX hereof.
3. Promptly after the close of business on each day the Portfolio is open
and valuing its portfolio, the Custodian shall furnish the Portfolio with a
detailed statement of monies held for the Portfolio under this Agreement and
with confirmations and a summary of all transfers to or from the account of the
Portfolio during said day. Where Securities are transferred to the account of
the Portfolio without physical delivery, the Custodian shall also identify as
belonging to the Portfolio a quantity of Securities 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 the Book-Entry System or the Depository.
At least monthly and from time to time, the Custodian shall furnish the
Portfolio with a detailed statement of the Securities held for the Portfolio
under this Agreement.
4. All Securities held for the Portfolio, which are issued or issuable only
in bearer form, except such Securities as are held in the Book-Entry System,
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shall be held by the Custodian in that form; all other Securities held for the
Portfolio may be registered in the name of the Portfolio, in the name of any
duly appointed registered nominee of the Custodian as the Custodian may from
time to time determine, or in the name of the Book-Entry System or the
Depository or their successor or successors, or their nominee or nominees. The
Portfolio agrees to furnish to the Custodian appropriate instruments to enable
the 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
the Depository, any Securities which it may hold for the account of the
Portfolio and which may from time to time be registered in the name of the
Portfolio. The Custodian shall hold all such Securities which are not held in
the Book-Entry System by the Depository or a Sub-Custodian in a separate account
or accounts in the name of the Portfolio segregated at all times from those of
any other Portfolio from those of any other person or persons.
5. Unless otherwise instructed to the contrary by a Certificate, the
Custodian shall with respect to all Securities held for the Portfolio in
accordance with this Agreement:
(a) Collect all income due or payable to the Portfolio with respect to the
Portfolio assets;
(b) Present for payment and collect the amount payable upon all Securities
which may mature or be called, redeemed, or retired, or otherwise
become payable;
(c) Surrender Securities in temporary form for definitive Securities;
(d) Execute, as Custodian, any necessary declarations or certificates of
ownership under the Federal income tax laws or the laws or regulations
of any other taxing authority, including any foreign taxing authority,
now or hereafter in effect; and
(e) Hold directly, or through the Book-Entry System or the Depository with
respect to Securities therein deposited, for the account of the
Portfolio all rights and similar securities issued with respect to any
Securities held by the Custodian hereunder.
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6. Upon receipt of a Certificate and not otherwise, the Custodian directly
or through the use of the Book-Entry System or the Depository shall:
(a) Execute and deliver to such persons as may be designated in such
Certificate proxies, consents, authorizations, and any other
instruments whereby the authority of the Portfolio as owner of any
Securities may be exercised;
(b) Deliver any Securities held for the 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;
(c) Deliver any Securities held for the account of the Portfolio to any
protective committee, reorganization committee or other person in
connection with the reorganization, refinancing, merger,
consolidation, recapitalization or sale of assets of any corporation,
and receive and hold under the terms of this Agreement such
certificates of deposit, interim receipts or other instruments or
documents as may be issued to it to evidence such delivery; and
(d) Make such transfers or exchanges of the assets of the Portfolio and
take such other steps as shall be stated in said Certificate to be for
the purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the
Portfolio.
7. The Custodian shall promptly deliver to the Portfolio all notices, proxy
material and executed but unvoted proxies pertaining to shareholder meetings of
Securities held by the Portfolio. The Custodian shall not vote or authorize the
voting of any Securities or give any consent, waiver or approval with respect
thereto unless so directed by a Certificate or Written Instruction.
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8. The Custodian shall promptly deliver to the Portfolio all material
received by the Custodian and pertaining to Securities held by the Portfolio
with respect to tender or exchange offers, calls for redemption or purchase,
expiration of rights, name changes, stock splits and stock dividends, or any
other activity involving ownership rights in such Securities.
ARTICLE V
PURCHASE AND SALE OF INVESTMENTS OF THE PORTFOLIO
1. Promptly upon each purchase of Securities by the Portfolio, the
Portfolio shall deliver to the Custodian (i) with respect to each purchase of
Securities which are not Money Market Securities, a Certificate or Written
Instructions, and (ii) with respect to each purchase of Money Market Securities,
Written Instructions, a Certificate or Oral Instructions, specifying with
respect to each such purchase: (a) the name of the issuer and the title of the
Securities, (b) the principal amount purchased and accrued interest, if any, (c)
the date of purchase and settlement, (d) the purchase price per unit, (e) the
total amount payable upon such purchase, and (f) the name of the person from
whom or the broker through whom the purchase was made. The Custodian shall upon
receipt of Securities purchased by or for the Portfolio, pay out of the monies
held for the account of the Portfolio the total amount payable to the person
from whom or the broker through whom the purchase was made, provided that the
same conforms to the total amount payable as set forth in such Certificate,
Written Instructions or Oral Instructions.
2. Promptly upon each sale of Securities by the Portfolio, the Portfolio
shall deliver to the Custodian (i) with respect to each sale of Securities which
are not Money Market Securities, a Certificate or Written Instructions, and (ii)
with respect to each sale of Money Market Securities, Written Instructions, a
Certificate or Oral Instructions, specifying with respect to each such sale: (a)
the name of the issuer and the title of the Security, (b) the principal amount
sold, and accrued interest, if any, (c) the date of sale, (d) the sale price per
unit, (e) the total amount payable to the Portfolio upon such sale, and (f) the
name of the broker through whom or the person to whom the sale was made. The
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Custodian shall deliver the Securities upon receipt of the total amount payable
to the Portfolio upon such sale, provided that the same conforms to the total
amount payable as set forth in such Certificate, Written Instructions or Oral
Instructions. Subject to the foregoing, the 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 delivers in Securities.
3. Promptly after the time as of which the Portfolio either -
(a) writes an option on Securities or writes a covered put option in
respect of a Security, or
(b) notifies the Custodian that its obligations in respect of any put or
call option, as described in the Registration Statement, require that
the Portfolio deposit Securities or additional Securities with the
Custodian, specifying the type and value of Securities required to be
so deposited, or
(c) notifies the Custodian that its obligations in respect of any other
Security, as described in the Registration Statement, require that the
Portfolio deposit Securities or additional Securities with the
Custodian, specifying the type and value of Securities required to be
so deposited, the Custodian will cause to be segregated or identified
as deposited, pursuant to the Portfolio's obligations as set forth in
the Registration Statement, Securities of such kinds and having such
aggregate values as are required to meet the Portfolio's obligations
in respect thereof.
The Portfolio will provide to the Custodian, as of the end of each trading
day, the market value of the Portfolio's option liability and the market value
of its portfolio of common stocks.
4. On contractual settlement date, the account of the Portfolio will be
charged for all purchases settling on that day, regardless of whether or not
delivery is made. On contractual settlement date, sale proceeds will likewise be
credited to the account of the Portfolio irrespective of delivery.
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In the case of "sale fails", the Custodian may request the assistance of
the Portfolio in making delivery of the failed Security.
ARTICLE VI
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS
1. The Portfolio shall furnish to the Custodian a copy of the resolution of
the Board of Trustees, certified by the Secretary, either (i) setting forth the
date of the declaration of any dividend or distribution in respect of shares of
the Portfolio, the date of payment thereof, the record date as of which holders
of Portfolio shares entitled to payment shall be determined, the amount payable
per share to holder of Portfolio shares of record as of that date and the total
amount to be paid by the Dividend and Transfer Agent of the Portfolio on the
payment date, or (ii) authorizing the declaration of dividends and distributions
in respect of shares of the Portfolio on a daily basis and authorizing the
Custodian to rely on Written Instructions or a Certificate setting forth the
date of the declaration of any such dividend or distribution, the date of
payment thereof, the record date as of which holders of Portfolio shares
entitled to payment shall be determined, the amount payable per share to holders
of Portfolio shares of record as of that date and the total amount to be paid by
the Dividend and Transfer Agent on the payment date.
2. Upon the payment date specified in such resolution, Written Instructions
or Certificate, as the case may be, the Custodian shall arrange for such
payments to be made by the Dividend and Transfer Agent out of monies held for
the account of the Portfolio.
ARTICLE VII
SALE AND REDEMPTION OF SHARES OF THE PORTFOLIO
1. The Custodian shall receive and credit to the account of the Portfolio
such payments for shares of the Portfolio issued or sold from time to time as
are received from the placement agent for the Portfolio's shares, from the
Dividend and Transfer Agent of the Portfolio, or from the Portfolio.
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2. Upon receipt of Written Instructions, the Custodian shall arrange for
payment of redemption proceeds to be made by the Dividend and Transfer Agent out
of the monies held for the account of the Portfolio in the total amount
specified in the Written Instructions.
ARTICLE VIII
INDEBTEDNESS
In connection with any borrowings, the Portfolio will cause to be delivered
to the Custodian by a bank or broker (including the Custodian, if the borrowing
is from the Custodian), requiring Securities as collateral for such borrowings,
a notice or undertaking in the form currently employed by any such bank or
broker setting forth the amount which such bank or broker will loan to the
Portfolio against delivery of a stated amount of collateral. The Portfolio shall
promptly deliver to the Custodian a Certificate specifying with respect to each
such borrowing: (a) the name of the bank or broker, (b) the amount and terms of
the borrowing, which may be set forth by incorporating by reference an attached
promissory note, duly endorsed by the Portfolio, or other loan agreement, (c)
the date and time, if known, on which the loan is to be entered into, (d) the
date on which the loan becomes due and payable, (e) the total amount payable to
the Portfolio on the borrowing date, (f) the market value of Securities
collateralizing the loan, including the name of the issuer, the title and the
number of shares or the principal amount of any particular Securities and (g) a
statement that such loan is in conformance with the Investment Company Act of
1940 and the Registration Statement. The Custodian shall deliver on the
borrowing date specified in a Certificate the specified collateral and the
executed promissory note, if any, against delivery by the lending bank or broker
of the total amount of the loan payable provided that the same conforms to the
total amount payable as set forth in the Certificate. The Custodian may, at the
option of the lending bank or broker, keep such collateral in its possession,
but such collateral shall be subject to all rights therein given the lending
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bank or broker, by virtue of any promissory note or loan agreement. The
Custodian shall deliver in the manner directed by the Portfolio from time to
time such Securities as additional collateral as may be specified in a
Certificate to collateralize further any transaction described in this
paragraph. The Portfolio 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 Portfolio fails to specify in a Certificate or Written
Instructions the name of the issuer, the title and number of shares or the
principal amount of any particular Securities to be delivered as collateral by
the Custodian, the Custodian shall not be under any obligation to deliver any
Securities. The Custodian may require such reasonable conditions with respect to
such collateral and its dealings with third-party lenders as it may deem
appropriate.
ARTICLE IX
CONCERNING THE CUSTODIAN
1. Except as otherwise provided herein, the Custodian shall not be liable
for any loss or damage, including counsel fees, resulting from its action or
omission to act or otherwise, except for any such loss or damage arising out of
its own negligence or willful misconduct. The Portfolio (or insurance purchased
by the Portfolio with respect to its liabilities hereunder), shall defend,
indemnify and hold harmless the Custodian and its directors, officers, employees
and agents with respect to any loss, claim, liability or cost (including
reasonable attorneys' fees) arising or alleged to arise from or relating to the
Portfolio's duties hereunder or any other action or inaction of the Portfolio or
its Trustees, officers, employees or agents, except such as may arise from the
negligent action, omission or willful misconduct of the Custodian, its
directors, officers, employees or agents. The Custodian shall defend, indemnify
and hold harmless the Portfolio and its Trustees, officers, employees or agents
with respect to any loss, claim, liability or cost (including reasonable
attorneys' fees) arising or alleged to arise from or relating to the Custodian's
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duties with respect to the Portfolio hereunder or any other action or inaction
of the Custodian or its directors, officers, employees, agents, nominees or
Sub-Custodians as to the Portfolio, except such as may arise from the negligent
action, omission or willful misconduct of the Portfolio, its Trustees, officers,
employees or agents. The Custodian may, with respect to questions of law, apply
for and obtain the advice and opinion of counsel to the Portfolio at the expense
of the Portfolio, or of its own counsel at its own expense, and shall be fully
protected with respect to anything done or omitted by it in good faith in
conformity with the advice or opinion of counsel to the Portfolio, and shall be
similarly protected with respect to anything done or omitted by it in good faith
in conformity with advice or opinion of its counsel, unless counsel to the
Portfolio shall, within a reasonable time after being notified of legal advice
received by the Custodian, have a differing interpretation of such question of
law. The Custodian shall be liable to the Portfolio for any proximate loss or
damage resulting from the use of the Book-Entry System or any Depository arising
by reason of any negligence, misfeasance or misconduct on the part of the
Custodian or any of its employees, agents, nominees or Sub-Custodians but not
for any special, incidental, consequential, or punitive damages; provided,
however, that nothing contained herein shall preclude recovery by the Portfolio
of principal and of interest to the date of recovery on, Securities incorrectly
omitted from the Portfolio's account or penalties imposed on the Portfolio for
any failures to deliver Securities.
In any case in which one party hereto may be asked to indemnify the other
or hold the other harmless, the party from whom indemnification is sought (the
"Indemnifying Party") shall be advised of all pertinent facts concerning the
situation in question, and the party claiming a right to indemnification (the
"Indemnified Party") will use reasonable care to identify and notify the
Indemnifying Party promptly concerning any situation which presents or appears
to present a claim for indemnification against the Indemnifying Party. The
Indemnifying Party shall have the option to defend the Indemnified Party against
any claim which may be the subject of the indemnification, and in the event the
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Indemnifying Party so elects, such defense shall be conducted by counsel chosen
by the Indemnifying Party and satisfactory to the Indemnified Party and the
Indemnifying Party will so notify the Indemnified Party and thereupon such
Indemnifying Party shall take over the complete defense of the claim and the
Indemnifying Party shall sustain no further legal or other expenses in such
situation for which indemnification has been sought under this paragraph, except
the expenses of any additional counsel retained by the Indemnified Party. In no
case shall any party claiming the right to indemnification confess any claim or
make any compromise in any case in which the other party has been asked to
indemnify such party (unless such confession or compromise is made with such
other party's prior written consent).
The obligations of the parties hereto under this paragraph shall survive
the termination of this Agreement.
2. Without limiting the generality of the foregoing, the Custodian, acting
in the capacity of Custodian hereunder, shall be under no obligation to inquire
into, and shall not be liable for:
(a) The validity of the issue of any Securities purchased by or for the
account of the Portfolio, the legality of the purchase thereof, or the
propriety of the amount paid therefor;
(b) The legality of the sale of any Securities by or for the account of
the Portfolio, or the propriety of the amount for which the same are
sold;
(c) The legality of the issue or sale of any shares of the Portfolio, or
the sufficiency of the amount to be received therefor;
(d) The legality of the redemption of any shares of the Portfolio, or the
propriety of the amount to be paid therefor;
(e) The legality of the declaration or payment of any dividend by the
Portfolio;
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(f) The legality of any borrowing by the Portfolio using Securities as
collateral;
(g) The sufficiency of any deposit made pursuant to a Certificate
described in clause (ii) of paragraph 2(e) of Article IV hereof.
3. The Custodian shall not be liable for any money or collected funds in
U.S. dollars deposited in a Federal Reserve Bank in accordance with a
Certificate described in clause (ii) of paragraph 2(e) of Article IV hereof, nor
be liable for or considered to be the Custodian of any money, whether or not
represented by any check, draft, or other instrument for the payment of money,
received by it on behalf of the Portfolio until the Custodian actually receives
and collects such money directly or by the final crediting of the account
representing the Portfolio's interest at the Book-Entry System or Depository.
4. The Custodian shall not be under any duty or obligation to take action
to effect collection of any amount due to the Portfolio from the Dividend and
Transfer Agent of the Portfolio nor to take any action to effect payment or
distribution by the Dividend and Transfer Agent of the Portfolio of any amount
paid by the Custodian to the Dividend and Transfer Agent of the Portfolio in
accordance with this Agreement.
5. Income due or payable to the Portfolio with respect to Portfolio Assets
will be credited to the account of the Portfolio as follows:
(a) Dividends will be credited on the first business day following payable
date irrespective of collection.
(b) Interest on fixed rate municipal bonds and debt securities issued or
guaranteed as to principal and/or interest by the government of the
United States or agencies or instrumentalities thereof (excluding
securities issued by the Government National Mortgage Association)
will be credited on payable date irrespective of collection.
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(c) Interest on fixed rate corporate debt securities will be credited on
the first business day following payable date irrespective of
collection.
(d) Interest on variable and floating rate debt securities and debt
securities issued by the Government National Mortgage Association will
be credited upon the Custodian's receipt of funds.
(e) Proceeds from options will be credited upon the Custodian's receipt of
funds.
6. Notwithstanding paragraph 5 of this Article IX, the Custodian shall not
be under any duty or obligation to take action to effect collection of any
amount, if the Securities upon which such amount is payable are in default, or
if payment if refused after due demand or presentation, unless and until (i) it
shall be directed to take such action by a Certificate and (ii) it shall be
assured to its satisfaction of reimbursement of its costs and expenses in
connection with any such action or, at the Custodian's option, prepayment.
7. The Custodian may appoint one or more financial or banking institutions,
as Depository or Depositories or a Sub-Custodian or Sub-Custodians, including,
but not limited to, banking institutions located in foreign countries, of
Securities and monies at any time owned by the Portfolio, upon terms and
conditions approved in a Certificate. Current Depository(s) and Sub-Custodian(s)
are noted in Appendix B. The Custodian shall not be relieved of any obligation
or liability under this Agreement in connection with the appointment or
activities of such Depositories or Sub-Custodians.
8. The Custodian shall not be under any duty or obligation to ascertain
whether any Securities at any time delivered to or held by the Portfolio under
the provisions of the Portfolio's By-Laws.
9. The Custodian shall treat all records and other information relating to
the Portfolio, and the Portfolio Assets as confidential and shall not disclose
17
any such records or information to any other person unless (a) the Portfolio
shall have consented thereto in writing or (b) such disclosure is compelled by
law.
10. The Custodian shall be entitled to receive and the Portfolio agrees to
pay to the Custodian, from Portfolio Assets only, such compensation as shall be
determined pursuant to Appendix C attached hereto, or as shall be determined
pursuant to amendments to such Appendix approved by the Custodian and the
Portfolio. The Custodian shall be entitled to charge against any money held by
it for the account of the Portfolio the amount of any loss, damage, liability or
expense, including counsel fees, for which it shall be entitled to reimbursement
under the provisions of this Agreement as determined by agreement of the
Custodian and the Portfolio or by the final order of any court or arbitrator
having jurisdiction and as to which all rights of appeal shall have expired. The
expenses which the Custodian may charge against the account of the Portfolio
include, but are not limited to, the expenses of Sub-Custodians incurred in
settling transactions involving the purchase and sale of Securities of the
Portfolio.
11. The Custodian shall be entitled to rely upon any Certificate. The
Custodian shall be entitled to rely upon any Oral Instructions and any Written
Instructions actually received by the Custodian pursuant to Article IV or V
hereof. The Portfolio agrees to forward to the Custodian Written Instructions
from Authorized Persons confirming Oral Instructions in such manner so that such
Written Instructions are received by the Custodian, whether by hand delivery,
telex or otherwise, on the first business day following the day on which such
Oral Instructions are given to the Custodian. The Portfolio 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 Portfolio. The Portfolio agrees that the
Custodian shall incur no liability to the Portfolio in acting upon Oral
Instructions given to the Custodian hereunder concerning such transactions.
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12. The Custodian will (a) set up and maintain proper books of account and
complete records of all transactions in the accounts maintained by the Custodian
hereunder in such manner as will meet the obligations of the Portfolio under the
Investment Company Act of 1940, with particular attention to Section 31 thereof
and Rules 31 a-1 and 31 a-2 thereunder, and (b) preserve for the periods
prescribed by applicable Federal statute or regulation all records required to
so preserved. The books and records of the Custodian shall be open to inspection
and audit at reasonable times and with prior notice by Officers and auditors
employed by the Portfolio.
13. The Custodian and its Sub-Custodians shall promptly send to the
Portfolio any report received on the systems of internal accounting control of
the Book-Entry System or the Depository and with such reports on their own
systems of internal accounting control as the Portfolio may reasonably request
from time to time.
14. The Custodian performs only the services of a custodian and shall have
no responsibility for the management, investment or reinvestment of the
Securities from time to time owned by the Portfolio. The Custodian is not a
selling agent for shares of the Portfolio and performance of its duties as a
custodial agent shall not e deemed to be a recommendation to the Custodian's
depositors or others of shares of the Portfolio as an investment.
ARTICLE X
TERMINATION
1. The terms of this agreement shall extend for a period of ___ years after
the date first mentioned above.
Thereafter, either of the parties hereto may terminate this Agreement for
any reason by giving to the other party a notice in writing specifying the date
of such termination, which shall be not less than ninety (90) days after the
date of the giving of such notice. If such notice is given by the Portfolio, it
shall be accompanied by a copy of a resolution of the Board of Trustees of the
19
Portfolio, certified by the Secretary or any Assistant Secretary, electing to
terminate this Agreement and designated a successor custodian or custodians,
each of which shall be a bank or trust company having not less than $100,000,000
aggregate capital, surplus and undivided profits. In the event such notice is
given by the Custodian, the Portfolio shall, on or before the termination date,
deliver to the Custodian a copy of a resolution of its Board of Trustees,
certified by the Secretary, designating a successor custodian or custodians to
act on behalf of the Portfolio. In the absence of such designation by the
Portfolio, the Custodian may designate a successor custodian which shall be a
bank or trust company having not less than $100,000,000 aggregate capital,
surplus, and undivided profits. Upon the date set forth in such notice this
Agreement shall terminate, and the Custodian, provided that it has received a
notice of acceptance by the successor custodian, shall deliver, on that date,
directly to the successor custodian all Securities and monies then owned by the
Portfolio and held by the Custodian as Custodian. Upon termination of this
Agreement, the Portfolio shall pay to the Custodian such compensation as may be
due as of the date of such termination. The Portfolio agrees that the Custodian
shall be reimbursed for its reasonable costs in connection with the termination
of this Agreement.
2. If a successor custodian is not designated by the Portfolio or by the
Custodian in accordance with the preceding paragraph, or the designated
successor cannot or will not serve, the Portfolio shall upon the delivery by the
Custodian to the Portfolio of all Securities (other than Securities held in the
Book-Entry System which cannot be delivered to the Portfolio) and monies then
owned by the Portfolio, other than monies deposited with a Federal Reserve Bank
pursuant to a Certificate described in clause (ii) of paragraph 2(e) of Article
IV, be deemed to be the custodian for the Portfolio, 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 Portfolio to hold such Securities
20
hereunder in accordance with this Agreement.
ARTICLE XI
MISCELLANEOUS
1. Appendix A sets forth the names and the signatures of all Authorized
Persons. The Portfolio agrees to furnish to the Custodian a new Appendix A in
form similar to the attached Appendix A, if any present Authorized Person ceases
to be an Authorized Person or if any other or additional Authorized Persons are
elected or appointed. Until such new Appendix A 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 Appendix A.
2. No recourse under any obligation of this Agreement or for any claim
based thereon shall be had against any organizer, shareholder, Officer, Trustee,
past, present or future as such, of the Portfolio or of any predecessor or
successor, either directly or through the Portfolio of any such predecessor or
successor, whether by virtue of any constitution, statute, or rule of law or
equity, or be the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Agreement and the obligations
thereunder are enforceable solely against Portfolio Assets, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
organizers, shareholders, Officers, Trustees of the Portfolio or of any
predecessor or successor, or any of them as such, because of the obligations
contained in this Agreement or implied therefrom and that any and all such
liability is hereby expressly waived and released by the Custodian as a
condition of, and as a consideration for, the execution of this Agreement.
3. The obligations set forth in this Agreement as having been made by the
Portfolio have been made by the Trustees of the Portfolio, acting as such
Trustees, pursuant to the authority vested in them under the laws of the State
of New York, the Declaration of Trust and the By-Laws of the Portfolio. This
21
Agreement has been executed by Officers of the Portfolio as officers, and not
individually, and the obligations contained herein are not binding upon any of
the Trustees, Officers, agents or holders of shares, personally, but bind only
the Portfolio.
4. Such provisions of the Registration Statement of the Portfolio and any
other documents specifically mentioning the Custodian (other than merely by name
and address) shall be reviewed with the Custodian by the Portfolio.
5. 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 Star
Bank Center, 000 Xxxxxx Xxxxxx, XX 0000, Xxxxxxxxxx, Xxxx 00000, attention
Mutual Fund Custody Services Department, or at such other place as the Custodian
may from time to time designate in writing.
6. Any notice or other instrument in writing, authorized or required by
this Agreement to be given to the Portfolio shall be sufficiently given when
delivered to the Portfolio or on the second business day following the time such
notice is deposited in the U.S. mail postage prepaid and addressed to the
Portfolio at its office at 0000 Xxxxxxxx Xxxxx, X. X. Xxx 0000, Xxxxxx, Xxxx
00000, or at such other place as the Portfolio may from time to time designate
in writing.
7. This Agreement with the exception of Appendices A & B 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, and authorized and approved by a
resolution of the Board of Trustees of the Portfolio.
8. 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 Portfolio or by the Custodian, and
no attempted assignment by the Portfolio or the Custodian shall be effective
without the written consent of the other party hereto.
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9. This Agreement shall be construed in accordance with the laws of the
State of Ohio.
10. 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 Officers, thereunto duly authorized as of the day
and year first written above.
ATTEST: Utilities Stock Portfolio
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------------ ---------------------------------
Xxxxxx X. Xxxxxx
ATTEST: Star Bank, N.A.
/s/ X.X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------ --------------------------------
Xxxxxxx X. Xxxxxx
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EXHIBIT A
APPROVED AUTHORIZED PERSONS
The following persons are hereby authorized to give Star Bank, N.A. oral
instructions, directions and orders under the Portfolio's Custody Agreement:
AUTHORIZED PERSONS SPECIMEN SIGNATURES
President: Xxxxxx X. Xxxxxx, Xx. ___________________
Secretary/Treasurer: Xxxxxx X. Xxxxxx ___________________
Vice President: Xxxxxx X. Xxxxxxx ___________________
Vice President: Xxxxxx X. Xxxxxx, Xx. ___________________
Assistant Treasurer: Xxxxxx X. XxXxxx ___________________
Advisor Associates: Xxxxxxx X. Xxxxx ___________________
Xxxxxx Xxxx ___________________
Xxxxxx Xxxxxxxx ___________________
Xxxxx Xxxxxxxx ___________________
Xxxxxxx Xxxxx ___________________
Xxxxxx Xxxxxx ___________________
Xxxxxx Xxxxxx ___________________
Xxxxxxx Xxxxxx ___________________
Xxxx Xxxxxxxx ___________________
Oral instructions, directions and orders are to be followed up and
supported with written instructions to Star Bank, N.A., signed and authorized by
any one, or in the authorization of Portfolio expenses and/or invoices, any two
of the following individuals: Xxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxxx, Xxxxxx X.
Xxxxxxx, Xxxxxx XxXxxx, Xxxxxx X. Xxxxxx, Xx. or Xxxxxx Xxxx.
APPENDIX B
The following Depository(s) and Sub-Custodian(s) are employed currently by
Star Bank, N.A. for securities processing and control . . .
Depository: The Depository Trust Company (New York)
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Depository: The Federal Reserve Bank
Cincinnati and Cleveland Branches
Sub-Custodian: Bankers Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
APPENDIX C
COMPENSATION
Star Bank, N.A., as Custodian, will receive compensation for custody of the
domestic securities held on behalf of the Utilities Stock Portfolio.
The subcustodian will receive a separate fee, listed in Appendix D for
custody of the foreign assets.
