EX-99.(g)
Amended and Restated Custodian Agreement
This Agreement between Dodge & Xxx Funds, a business trust organized and
existing under the laws of the State of Delaware (the "Fund"), and State Street
Bank and Trust Company, a Massachusetts trust company (the "Custodian").
Witnesseth:
Whereas, Dodge & Xxx Balanced Fund and the Custodian entered into a
Custodian Agreement dated as of November 10, 1997 (the "Balanced Fund Custodian
Agreement");
Whereas, Dodge & Xxx Income Fund and the Custodian entered into a Custodian
Agreement dated as of November 10, 1997 (the "Income Fund Custodian Agreement");
Whereas, Dodge & Xxx Stock Fund and the Custodian entered into a Custodian
Agreement dated as of November 10, 1997 (the "Stock Fund Custodian Agreement");
Whereas, the Fund and the Custodian desire to replace the Balanced Fund
Custodian Agreement, the Income Fund Custodian Agreement and the Stock Fund
Custodian Agreement with this Amended and Restated Custodian Agreement;
Whereas, the Fund is authorized to issue shares in separate series, with
each such series representing interests in a separate portfolio of securities
and other assets;
Whereas, the Dodge & Xxx Balanced Fund, the Dodge & Xxx Income Fund, and
the Dodge & Xxx Stock Fund have each reorganized as separate series of shares of
the Fund; and
Whereas, the Fund intends that this Agreement be applicable to four series,
Dodge & Xxx Balanced Fund; Dodge & Xxx Income Fund; Dodge & Xxx Stock Fund, and
Dodge & Xxx International Stock Fund (such series together with all other series
subsequently established by the Fund and made subject to this Agreement in
accordance with Section 18, be referred to herein as the "Portfolio(s)").
Now Therefore, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
Section 1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the assets of the
Portfolios of the Fund, including securities which the Fund, on behalf of the
applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Fund's
Declaration of Trust. The Fund on behalf of the Portfolio(s) agrees to deliver
to the Custodian all securities and cash of the Portfolios, and all payments of
income, payments of principal or capital distributions received by it with
respect to all securities owned by the Portfolio(s) from time to time, and the
cash consideration received by it for such new or treasury shares of
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EX-99.(g)
beneficial interest of the Fund representing interests in the Portfolios
("Shares") as may be issued or sold from time to time. The Custodian shall not
be responsible for any property of a Portfolio held or received by the Portfolio
and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (as such term is defined in Section 6
hereof), the Custodian shall on behalf of the applicable Portfolio(s) from time
to time employ one or more sub-custodians located in the United States, but only
in accordance with an applicable vote by the Board of Trustees of the Fund (the
"Board") on behalf of the applicable Portfolio(s). The Custodian may employ as
sub-custodian for the Fund's foreign securities on behalf of the applicable
Portfolio(s) the foreign banking institutions and foreign securities
depositories designated in Schedules A and B hereto but only in accordance with
the applicable provisions of Sections 3 and 4. The Custodian shall have no more
or less responsibility or liability to the Fund on account of any actions or
omissions of any sub-custodian so employed than any such sub-custodian has to
the Custodian.
Section 2. Duties of the Custodian with Respect to Property of the Fund Held By
the Custodian in the United States
Section 2.1 Holding Securities. The Custodian shall hold and physically
segregate for the account of each Portfolio all non-cash property, to be held by
it in the United States, including all domestic securities owned by such
Portfolio other than securities which are maintained pursuant to Section 2.8 in
a clearing agency which acts as a securities depository or in a book-entry
system authorized by the U.S. Department of the Treasury (each, a "U.S.
Securities System").
Section 2.2 Delivery of Securities. The Custodian shall release and
deliver domestic securities owned by a Portfolio held by the Custodian or in a
U.S. Securities System account of the Custodian only upon receipt of Proper
Instructions on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, and only in the following
cases:
1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.8 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or
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EX-99.(g)
other consideration is to be delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of the
Portfolio or into the name of any nominee or nominees of the Custodian
or into the name or nominee name of any agent appointed pursuant to
Section 2.7 or into the name or nominee name of any sub-custodian
appointed pursuant to Section 1; or for exchange for a different
number of bonds, certificates or other evidence representing the same
aggregate face amount or number of units; provided that, in any such
case, the new securities are to be delivered to the Custodian;
7) Upon the sale of such securities for the account of the Portfolio, to
the broker or its clearing agent, against a receipt, for examination
in accordance with "street delivery" custom; provided that in any such
case, the Custodian shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to receiving
payment for such securities except as may arise from the Custodian's
own negligence or willful misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of the
securities of the issuer of such securities, or pursuant to provisions
for conversion contained in such securities, or pursuant to any
deposit agreement; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar securities
or the surrender of interim receipts or temporary securities for
definitive securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
10) For delivery in connection with any loans of securities made by the
Portfolio, but only against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Fund on behalf of the
Portfolio, which may be in the form of cash or obligations issued by
the United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is to be
credited to the Custodian's account in the book-entry system
authorized by the U.S. Department of the Treasury, the Custodian will
not be held liable or responsible for the delivery of securities owned
by the Portfolio prior to the receipt of such collateral;
11) For delivery as security in connection with any borrowing by the Fund
on behalf of the Portfolio requiring a pledge of assets by the Fund on
behalf of the Portfolio, but only against receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement among
the Fund on behalf of the Portfolio, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934 (the "Exchange
Act") and a member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to
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EX-99.(g)
compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other arrangements
in connection with transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any agreement among
the Fund on behalf of the Portfolio, the Custodian, and a futures
commission merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures Trading
Commission ("CFTC") and/or any contract market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Portfolio of the Fund;
14) Upon receipt of instructions from the transfer agent for the Fund (the
"Transfer Agent") for delivery to such Transfer Agent or to the
holders of Shares in connection with distributions in kind, as may be
described from time to time in the currently effective prospectus and
statement of additional information of the Fund related to the
Portfolio (the "Prospectus"), in satisfaction of requests by holders
of Shares for repurchase or redemption; and
15) For any other proper purpose, but only upon receipt of, in addition to
Proper Instructions from the Fund on behalf of the applicable
Portfolio, a copy of a resolution of the Board or of the Executive
Committee therof (the "Committee") signed by an officer of the Fund
and certified by the Secretary or an Assistant Secretary thereof (a
"Certified Resolution") specifying the securities of the Portfolio to
be delivered, setting forth the purpose for which such delivery is to
be made, declaring such purpose to be a proper trust purpose, and
naming the person or persons to whom delivery of such securities shall
be made.
Section 2.3 Registration of Securities. Domestic securities held by the
Custodian (other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the Portfolio
or of any nominee of the Custodian which nominee shall be assigned exclusively
to the Portfolio, unless the Fund has authorized in writing the appointment of a
nominee to be used in common with other registered investment companies having
the same investment adviser as the Portfolio, or in the name or nominee name of
any agent appointed pursuant to Section 2.7 or in the name or nominee name of
any sub-custodian appointed pursuant to Section 1. All securities accepted by
the Custodian on behalf of the Portfolio under the terms of this Agreement shall
be in "street name" or other good delivery form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian shall
utilize its best efforts only to timely collect income due the Fund on such
securities and to notify the Fund on a best efforts basis only of relevant
corporate actions including, without limitation, pendency of calls, maturities,
tender or exchange offers.
Section 2.4 Bank Accounts. The Custodian shall open and maintain a
separate bank account or accounts in the United States in the name of each
Portfolio of the Fund, subject only to draft or order by the Custodian acting
pursuant to the terms of this Agreement, and shall hold in such account or
accounts, subject to the provisions hereof, all cash received by it from or for
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EX-99.(g)
the account of the Portfolio, other than cash maintained by the Portfolio in a
bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940, as amended (the "1940 Act"). Funds held by the
Custodian for a Portfolio may be deposited by it to its credit as Custodian in
the banking department of the Custodian or in such other banks or trust
companies as it may in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be qualified to act as a
custodian under the 1940 Act and that each such bank or trust company and the
funds to be deposited with each such bank or trust company shall on behalf of
each applicable Portfolio be approved by vote of a majority of the Board. Such
funds shall be deposited by the Custodian in its capacity as Custodian and shall
be withdrawable by the Custodian only in that capacity.
Section 2.5 Collection of Income. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all income and other payments
with respect to registered domestic securities held hereunder to which each
Portfolio shall be entitled either by law or pursuant to custom in the
securities business, and shall collect on a timely basis all income and other
payments with respect to bearer domestic securities if, on the date of payment
by the issuer, such securities are held by the Custodian or its agent thereof
and shall credit such income, as collected, to such Portfolio's custodian
account. Without limiting the generality of the foregoing, the Custodian shall
detach and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when due on
securities held hereunder. Income due each Portfolio on securities loaned
pursuant to the provisions of Section 2.2 (10) shall be the responsibility of
the Fund. The Custodian will have no duty or responsibility in connection
therewith, other than to provide the Fund with such information or data as may
be necessary to assist the Fund in arranging for the timely delivery to the
Custodian of the income to which the Portfolio is properly entitled.
Section 2.6 Payment of Fund Monies. Upon receipt of Proper Instructions
on behalf of the applicable Portfolio, which may be continuing instructions when
deemed appropriate by the parties, the Custodian shall pay out monies of a
Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures contracts
or options on futures contracts for the account of the Portfolio but
only (a) against the delivery of such securities or evidence of title
to such options, futures contracts or options on futures contracts to
the Custodian (or any bank, banking firm or trust company doing
business in the United States or abroad which is qualified under the
1940 Act to act as a custodian and has been designated by the
Custodian as its agent for this purpose) registered in the name of the
Portfolio or in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer; (b) in the case of
a purchase effected through a U.S. Securities System, in accordance
with the conditions set forth in Section 2.8 hereof; (c) in the case
of repurchase agreements entered into between the Fund on behalf of
the Portfolio and the Custodian, or another bank, or a broker-dealer
which is a member of NASD, (i) against delivery of the securities
either in certificate form or through an entry crediting the
Custodian's account at the Federal Reserve Bank with such securities
or (ii) against delivery of the receipt evidencing purchase by the
Portfolio of securities owned by the Custodian along with written
evidence of the
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EX-99.(g)
agreement by the Custodian to repurchase such securities from the
Portfolio; or (d) for transfer to a time deposit account of the Fund
in any bank, whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from the Fund as
defined herein;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued as set forth in
Section 5 hereof;
4) For the payment of any expense or liability incurred by the Portfolio,
including but not limited to the following payments for the account of
the Portfolio: interest, taxes, management, accounting, transfer agent
and legal fees, and operating expenses of the Fund whether or not such
expenses are to be in whole or part capitalized or treated as deferred
expenses;
5) For the payment of any dividends on Shares declared pursuant to the
governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short; and
7) For any other proper trust purpose, but only upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the
Portfolio, a copy of a Certified Resolution specifying the amount of
such payment, setting forth the purpose for which such payment is to
be made, declaring such purpose to be a proper trust purpose, and
naming the person or persons to whom such payment is to be made.
Section 2.7 Appointment of Agents. The Custodian may at any time or times
in its discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a custodian, as
its agent to carry out such of the provisions of this Section 2 as the Custodian
may from time to time direct; provided, however, that the appointment of any
agent shall not relieve the Custodian of its responsibilities or liabilities
hereunder.
Section 2.8 Deposit of Fund Assets in U.S. Securities Systems. The
Custodian may deposit and/or maintain securities owned by a Portfolio in a U.S.
Securities System subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are represented in an
account of the Custodian in the U.S. Securities System (the "U.S.
Securities System Account") which account shall not include any assets
of the Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
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EX-99.(g)
2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the account of
the Portfolio upon (i) receipt of advice from the U.S. Securities
System that such securities have been transferred to the U.S.
Securities System Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and transfer for the
account of the Portfolio. The Custodian shall transfer securities
sold for the account of the Portfolio upon (i) receipt of advice from
the U.S. Securities System that payment for such securities has been
transferred to the U.S. Securities System Account, and (ii) the making
of an entry on the records of the Custodian to reflect such transfer
and payment for the account of the Portfolio. Copies of all advices
from the U.S. Securities System of transfers of securities for the
account of the Portfolio shall identify the Portfolio, be maintained
for the Portfolio by the Custodian and be provided to the Fund at its
request. Upon request, the Custodian shall furnish the Fund on behalf
of the Portfolio confirmation of each transfer to or from the account
of the Portfolio in the form of a written advice or notice and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transactions in the U.S.
Securities System for the account of the Portfolio;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian on the U.S. Securities System's accounting system, internal
accounting control and procedures for safeguarding securities
deposited in the U.S. Securities System;
5) The Custodian shall have received from the Fund the initial or annual
certificate, as the case may be, required by Section 15 hereof; and
6) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the Portfolio
for any loss or damage to the Portfolio resulting from use of the U.S.
Securities System by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or of any of its or
their employees or from failure of the Custodian or any such agent to
enforce effectively such rights as it may have against the U.S.
Securities System; at the election of the Fund, it shall be entitled
to be subrogated to the rights of the Custodian with respect to any
claim against the U.S. Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage if and
to the extent that the Portfolio has not been made whole for any such
loss or damage.
Section 2.9 Segregated Account. The Custodian shall upon receipt of
Proper Instructions on behalf of each applicable Portfolio establish and
maintain a segregated account or accounts for and on behalf of each such
Portfolio, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by the Custodian
vii
EX-99.(g)
pursuant to Section 2.8 hereof, (i) in accordance with the provisions of any
agreement among the Fund on behalf of the Portfolio, the Custodian and a broker-
dealer registered under the Exchange Act and a member of the NASD (or any
futures commission merchant registered under the Commodity Exchange Act),
relating to compliance with the rules of The Options Clearing Corporation and of
any registered national securities exchange (or the CFTC or any registered
contract market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the Portfolio,
(ii) for purposes of segregating cash or government securities in connection
with options purchased, sold or written by the Portfolio or commodity futures
contracts or options thereon purchased or sold by the Portfolio, (iii) for the
purposes of compliance by the Portfolio with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release of the SEC,
or interpretative opinion of the staff of the SEC, relating to the maintenance
of segregated accounts by registered investment companies, and (iv) for other
proper trust purposes, but only, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions from the Fund on behalf of the applicable
Portfolio, a copy of a Certified Resolution setting forth the purpose or
purposes of such segregated account and declaring such purpose(s) to be a proper
trust purpose.
Section 2.10 Ownership Certificates for Tax Purposes. The Custodian shall
execute ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in connection
with transfers of securities.
Section 2.11 Proxies. The Custodian shall, with respect to the domestic
securities held hereunder, cause to be promptly executed by the registered
holder of such securities, if the securities are registered otherwise than in
the name of the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting materials
and all notices relating to such securities.
Section 2.12 Communications Relating to Portfolio Securities. Subject to
the provisions of Section 2.3, the Custodian shall transmit promptly to the Fund
for each Portfolio all written information (including, without limitation,
pendency of calls and maturities of domestic securities and expirations of
rights in connection therewith and notices of exercise of call and put options
written by the Fund on behalf of the Portfolio and the maturity of futures
contracts purchased or sold by the Portfolio) received by the Custodian from
issuers of the securities being held for the Portfolio. With respect to tender
or exchange offers, the Custodian shall transmit promptly to the Portfolio all
written information received by the Custodian from issuers of the securities
whose tender or exchange is sought and from the party (or its agents) making the
tender or exchange offer. If the Portfolio desires to take action with respect
to any tender offer, exchange offer or any other similar transaction, the
Portfolio shall notify the Custodian at least three business days prior to the
date on which the Custodian is to take such action.
Section 2.13 Availability of Federal Funds. Upon mutual agreement between
the Fund and the Custodian, the Custodian shall, upon the receipt of Proper
Instructions from the Fund, make federal funds available to the Fund on behalf
of the Portfolio, as of specified times agreed upon from time to time by the
Fund and the Custodian in the amount of checks received
viii
EX-99.(g)
in payment for Shares which are deposited into the Portfolio's account.
Section 3. Provisions Relating to Rules 17f-5 and 17f-7
Section 3.1. Definitions. Capitalized terms in this Section 3 shall have
the following meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment, economic and financial infrastructure
(including any Eligible Securities Depository operating in the country),
prevailing or developing custody and settlement practices, and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the U.S. Securities and Exchange Commission (the "SEC")), or a foreign
branch of a Bank (as defined in Section 2(a)(5) of the 0000 Xxx) meeting the
requirements of a custodian under Section 17(f) of the 1940 Act; the term does
not include any Eligible Securities Depository.
"Eligible Securities Depository" has the meaning set forth in section (b)(1) of
Rule 17f-7.
"Foreign Assets" means any of the Portfolios' investments (including foreign
currencies) for which the primary market is outside the United States and such
cash and cash equivalents as are reasonably necessary to effect the Portfolios'
transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule
17f-5.
"Rule 17f-5" means Rule 17f-5 promulgated under the 1940 Act.
"Rule 17f-7" means Rule 17f-7 promulgated under the 1940 Act.
Section 3.2. The Custodian as Foreign Custody Manager.
3.2.1 Delegation to the Custodian as Foreign Custody Manager. The
Fund, by resolution adopted by its Board, hereby delegates to the Custodian,
subject to Section (b) of Rule 17f-5, the responsibilities set forth in this
Section 3.2 with respect to Foreign Assets of the Portfolios held outside the
United States, and the Custodian hereby accepts such delegation as Foreign
Custody Manager with respect to the Portfolios.
3.2.2 Countries Covered. The Foreign Custody Manager shall be
responsible for performing the delegated responsibilities defined below only
with respect to the countries and custody arrangements for each such country
listed on Schedule A to this Contract, which list of countries may be amended
from time to time by the Fund with the agreement of the Foreign Custody Manager.
The Foreign Custody Manager shall list on Schedule A the Eligible Foreign
Custodians selected by the Foreign Custody Manager to maintain the assets of the
Portfolios,
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EX-99.(g)
which list of Eligible Foreign Custodians may be amended from time to time in
the sole discretion of the Foreign Custody Manager. The Foreign Custody Manager
will provide amended versions of Schedule A in accordance with Section 3.2.5
hereof.
Upon the receipt by the Foreign Custody Manager of Proper Instructions to open
an account or to place or maintain Foreign Assets in a country listed on
Schedule A, and the fulfillment by the Fund, on behalf of the Portfolios, of the
applicable account opening requirements for such country, the Foreign Custody
Manager shall be deemed to have been delegated by the Board on behalf of the
Portfolios responsibility as Foreign Custody Manager with respect to that
country and to have accepted such delegation. Execution of this Amendment by
the Fund shall be deemed to be a Proper Instruction to open an account, or to
place or maintain Foreign Assets, in each country listed on Schedule A in which
the Custodian has previously placed or currently maintains Foreign Assets
pursuant to the terms of the Contract. Following the receipt of Proper
Instructions directing the Foreign Custody Manager to close the account of a
Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody
Manager in a designated country, the delegation by the Board on behalf of the
Portfolios to the Custodian as Foreign Custody Manager for that country shall be
deemed to have been withdrawn and the Custodian shall immediately cease to be
the Foreign Custody Manager of the Portfolios with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Thirty (30) days (or such longer period to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further responsibility as Foreign Custody Manager to the Fund with respect to
the country as to which the Custodian's acceptance of delegation is withdrawn.
3.2.3 Scope of Delegated Responsibilities:
(a) Selection of Eligible Foreign Custodians. Subject to the provisions of
this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign
Assets in the care of the Eligible Foreign Custodian selected by the Foreign
Custody Manager in each country listed on Schedule A, as amended from time to
time. In performing its delegated responsibilities as Foreign Custody Manager
to place or maintain Foreign Assets with an Eligible Foreign Custodian, the
Foreign Custody Manager shall determine that the Foreign Assets will be subject
to reasonable care, based on the standards applicable to custodians in the
country in which the Foreign Assets will be held by that Eligible Foreign
Custodian, after considering all factors relevant to the safekeeping of such
assets, including, without limitation the factors specified in Rule 17f-5(c)(1).
(b) Contracts With Eligible Foreign Custodians. The Foreign Custody
Manager shall determine that the contract governing the foreign custody
arrangements with each Eligible Foreign Custodian selected by the Foreign
Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).
(c) Monitoring. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian selected by the
Foreign Custody Manager, the
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EX-99.(g)
Foreign Custody Manager shall establish a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such Eligible Foreign
Custodian and (ii) the contract governing the custody arrangements established
by the Foreign Custody Manager with the Eligible Foreign Custodian. In the event
the Foreign Custody Manager determines that the custody arrangements with an
Eligible Foreign Custodian it has selected are no longer appropriate, the
Foreign Custody Manager shall notify the Board in accordance with Section 3.2.5
hereunder.
3.2.4 Guidelines for the Exercise of Delegated Authority. For
purposes of this Section 3.2, the Board shall be deemed to have considered and
determined to accept such Country Risk as is incurred by placing and maintaining
the Foreign Assets in each country for which the Custodian is serving as Foreign
Custody Manager of the Portfolios.
3.2.5 Reporting Requirements. The Foreign Custody Manager shall
report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian
and the placement of such Foreign Assets with another Eligible Foreign Custodian
by providing to the Board an amended Schedule A at the end of the calendar
quarter in which an amendment to such Schedule has occurred. The Foreign
Custody Manager shall make written reports notifying the Board of any other
material change in the foreign custody arrangements of the Portfolios described
in this Section 3.2 after the occurrence of the material change.
3.2.6 Standard of Care as Foreign Custody Manager of a Portfolio.
In performing the responsibilities delegated to it, the Foreign Custody Manager
agrees to exercise reasonable care, prudence and diligence such as a person
having responsibility for the safekeeping of assets of management investment
companies registered under the 1940 Act would exercise.
3.2.7 Representations with Respect to Rule 17f-5. The Foreign
Custody Manager represents to the Fund that it is a U.S. Bank as defined in
section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the
Board has determined that it is reasonable for the Board to rely on the
Custodian to perform the responsibilities delegated pursuant to this Contract to
the Custodian as the Foreign Custody Manager of the Portfolios.
3.2.8 Effective Date and Termination of the Custodian as Foreign
Custody Manager. The Board's delegation to the Custodian as Foreign Custody
Manager of the Portfolios shall be effective as of the date hereof and shall
remain in effect until terminated at any time, without penalty, by written
notice from the terminating party to the non-terminating party. Termination
will become effective thirty (30) days after receipt by the non-terminating
party of such notice. The provisions of Section 3.2.2 hereof shall govern the
delegation to and termination of the Custodian as Foreign Custody Manager of the
Portfolios with respect to designated countries.
Section 3.3 Eligible Securities Depositories.
3.3.1 Analysis and Monitoring. The Custodian shall (a) provide the
Fund (or its duly-authorized investment manager or investment adviser) with an
analysis of the
xi
EX-99.(g)
custody risks associated with maintaining assets with the Eligible Securities
Depositories set forth on Schedule B hereto in accordance with section
(a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a continuing basis,
and promptly notify the Fund (or its duly-authorized investment manager or
investment adviser) of any material change in such risks, in accordance with
section (a)(1)(i)(B) of Rule 17f-7.
3.3.2 Standard of Care. The Custodian agrees to exercise reasonable
care, prudence and diligence in performing the duties set forth in Section
3.3.1.
Section 4. Duties of the Custodian with Respect to Property of the Portfolios
Held Outside the United States
Section 4.1 Definitions. Capitalized terms in this Section 4 shall have
the following meanings:
"Foreign Securities System" means an Eligible Securities Depository listed on
Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
Section 4.2. Holding Securities. The Custodian shall identify on its
books as belonging to the Portfolios the foreign securities held by each Foreign
Sub-Custodian or Foreign Securities System. The Custodian may hold foreign
securities for all of its customers, including the Portfolios, with any Foreign
Sub-Custodian in an account that is identified as belonging to the Custodian for
the benefit of its customers, provided however, that (i) the records of the
Custodian with respect to foreign securities of the Portfolios which are
maintained in such account shall identify those securities as belonging to the
Portfolios and (ii), to the extent permitted and customary in the market in
which the account is maintained, the Custodian shall require that securities so
held by the Foreign Sub-Custodian be held separately from any assets of such
Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.
Section 4.3. Foreign Securities Systems. Foreign securities shall be
maintained in a Foreign Securities System in a designated country through
arrangements implemented by the Custodian or a Foreign Sub-Custodian, as
applicable, in such country.
Section 4.4. Transactions in Foreign Custody Account.
4.4.1. Delivery of Foreign Assets. The Custodian or a Foreign Sub-
Custodian shall release and deliver foreign securities of the Portfolios held by
the Custodian or such Foreign Sub-Custodian, or in a Foreign Securities System
account, only upon receipt of Proper Instructions, which may be continuing
instructions when deemed appropriate by the parties, and only in the following
cases:
(i) upon the sale of such foreign securities for the Portfolio in
accordance with
xii
EX-99.(g)
commercially reasonable market practice in the country where such
foreign securities are held or traded, including, without
limitation: (A) delivery against expectation of receiving later
payment; or (B) in the case of a sale effected through a Foreign
Securities System, in accordance with the rules governing the
operation of the Foreign Securities System;
(ii) in connection with any repurchase agreement related to foreign
securities;
(iii) to the depository agent in connection with tender or other similar
offers for foreign securities of the Portfolios;
(iv) to the issuer thereof or its agent when such foreign securities are
called, redeemed, retired or otherwise become payable;
(v) to the issuer thereof, or its agent, for transfer into the name of
the Custodian (or the name of the respective Foreign Sub-Custodian
or of any nominee of the Custodian or such Foreign Sub-Custodian)
or for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units;
(vi) to brokers, clearing banks or other clearing agents for examination
or trade execution in accordance with market custom; provided that
in any such case the Foreign Sub-Custodian shall have no
responsibility or liability for any loss arising from the delivery
of such securities prior to receiving payment for such securities
except as may arise from the Foreign Sub-Custodian's own negligence
or willful misconduct;
(vii) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(ix) for delivery as security in connection with any borrowing by the
Portfolios requiring a pledge of assets by the Portfolios;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) for any other proper trust purpose, but only upon receipt of, in
addition to Proper Instructions, a copy of a Certified Resolution
specifying the foreign securities to
xiii
EX-99.(g)
be delivered, setting forth the purpose for which such delivery is
to be made, declaring such purpose to be a proper trust purpose and
naming the person or persons to whom delivery of such securities
shall be made.
4.4.2. Payment of Portfolio Monies. Upon receipt of Proper
Instructions, which may be continuing instructions when deemed appropriate by
the parties, the Custodian shall pay out, or direct the respective Foreign Sub-
Custodian or the respective Foreign Securities System to pay out, monies of a
Portfolio in the following cases only:
(i) upon the purchase of foreign securities for the Portfolio, unless
otherwise directed by Proper Instructions, by (A) delivering money
to the seller thereof or to a dealer therefor (or an agent for such
seller or dealer) against expectation of receiving later delivery
of such foreign securities; or (B) in the case of a purchase
effected through a Foreign Securities System, in accordance with
the rules governing the operation of such Foreign Securities
System;
(ii) in connection with the conversion, exchange or surrender of foreign
securities of the Portfolio;
(iii) for the payment of any expense or liability of the Portfolio,
including but not limited to the following payments: interest,
taxes, investment advisory fees, transfer agency fees, fees under
this Contract, legal fees, accounting fees, and other operating
expenses;
(iv) for the purchase or sale of foreign exchange or foreign exchange
contracts for the Portfolio, including transactions executed with
or through the Custodian or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vi) for payment of part or all of the dividends received in respect of
securities sold short;
(vii) in connection with the borrowing or lending of foreign securities;
and
(viii) for any other proper trust purpose, but only upon receipt of, in
addition to Proper Instructions, a copy of a Certified Resolution
specifying the amount of such payment, setting forth the purpose
for which such payment is to be made, declaring such purpose to be
a proper trust purpose and naming the person or persons to whom
such payment is to be made.
4.4.3. Market Conditions. Notwithstanding any provision of this
Contract to the contrary, settlement and payment for Foreign Assets received for
the account of the Portfolios and delivery of Foreign Assets maintained for the
account of the Portfolios may be effected in accordance with the customary
established securities trading or processing practices
xiv
EX-99.(g)
and procedures in the country or market in which the transaction occurs,
including, without limitation, delivering Foreign Assets to the purchaser
thereof or to a dealer therefor (or an agent for such purchaser or dealer) with
the expectation of receiving later payment for such Foreign Assets from such
purchaser or dealer.
The Custodian shall provide to the Board the information with respect to custody
and settlement practices in countries in which the Custodian employs a Foreign
Sub-Custodian, including without limitation information relating to Foreign
Securities Systems, described on Schedule C hereto at the time or times set
forth on such Schedule. The Custodian may revise Schedule C from time to time,
provided that no such revision shall result in the Board being provided with
substantively less information than had been previously provided hereunder.
Section 4.5. Registration of Foreign Securities. The foreign securities
maintained in the custody of a Foreign Sub-Custodian (other than bearer
securities) shall be registered in the name of the applicable Portfolio or in
the name of the Custodian or in the name of any Foreign Sub-Custodian or in the
name of any nominee of the foregoing, and the Fund on behalf of such Portfolio
agrees to hold any such nominee harmless from any liability as a holder of
record of such foreign securities. The Custodian or a Foreign Sub-Custodian
shall not be obligated to accept securities on behalf of a Portfolio under the
terms of this Contract unless the form of such securities and the manner in
which they are delivered are in accordance with reasonable market practice.
Section 4.6 Bank Accounts. The Custodian shall identify on its books as
belonging to the Fund cash (including cash denominated in foreign currencies)
deposited with the Custodian. Where the Custodian is unable to maintain, or
market practice does not facilitate the maintenance of, cash on the books of the
Custodian, a bank account or bank accounts shall be opened and maintained
outside the United States on behalf of a Portfolio with a Foreign Sub-Custodian.
All accounts referred to in this Section shall be subject only to draft or order
by the Custodian (or, if applicable, such Foreign Sub-Custodian) acting pursuant
to the terms of this Agreement to hold cash received by or from or for the
account of the Portfolio. Cash maintained on the books of the Custodian
(including its branches, subsidiaries and affiliates), regardless of currency
denomination, is maintained in bank accounts established under, and subject to
the laws of, The Commonwealth of Massachusetts.
Section 4.7. Collection of Income. The Custodian shall use reasonable
commercial efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Portfolios shall be entitled and
shall credit such income, as collected, to the applicable Portfolio In the event
that extraordinary measures are required to collect such income, the Fund and
the Custodian shall consult as to such measures and as to the compensation and
expenses of the Custodian relating to such measures.
Section 4.8. Shareholder Rights. With respect to the foreign securities
held pursuant to this Section 4, the Custodian will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder rights,
subject always to the laws, regulations and practical constraints that may exist
in the country where such securities are issued. The Fund acknowledges that
local conditions, including lack of regulation, onerous procedural obligations,
xv
EX-99.(g)
lack of notice and other factors may have the effect of severely limiting the
ability of the Fund to exercise shareholder rights.
Section 4.9. Communications Relating to Foreign Securities. The Custodian
shall transmit promptly to the Fund written information with respect to
materials received by the Custodian via the Foreign Sub-Custodians from issuers
of the foreign securities being held for the account of the Portfolios
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith). With respect to
tender or exchange offers, the Custodian shall transmit promptly to the Fund
written information with respect to materials so received by the Custodian from
issuers of the foreign securities whose tender or exchange is sought or from the
party (or its agents) making the tender or exchange offer. The Custodian shall
not be liable for any untimely exercise of any tender, exchange or other right
or power in connection with foreign securities or other property of the
Portfolios at any time held by it unless (i) the Custodian or the respective
Foreign Sub-Custodian is in actual possession of such foreign securities or
property and (ii) the Custodian receives Proper Instructions with regard to the
exercise of any such right or power, and both (i) and (ii) occur at least three
business days prior to the date on which the Custodian is to take action to
exercise such right or power.
Section 4.10. Liability of Foreign Sub-Custodians. Each agreement
pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the
extent possible, require the Foreign Sub-Custodian to exercise reasonable care
in the performance of its duties, and to indemnify, and hold harmless, the
Custodian from and against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Foreign Sub-Custodian's performance of
such obligations. At the Fund's election, the Portfolios shall be entitled to
be subrogated to the rights of the Custodian with respect to any claims against
a Foreign Sub-Custodian as a consequence of any such loss, damage, cost,
expense, liability or claim if and to the extent that the Portfolios have not
been made whole for any such loss, damage, cost, expense, liability or claim.
Section 4.11. Tax Law. Except to the extent that imposition of any tax
liability arises from the Custodian's failure to perform in accordance with the
terms of this Section 4.11, the Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund, the
Portfolio or the Custodian as custodian of the Portfolio by the tax law of the
United States or of any state or political subdivision thereof. It shall be the
responsibility of the Custodian to use reasonable efforts and due care to
perform such ministerial steps as are required to collect any tax refund, to
ascertain the appropriate rate of tax withholding and to provide such documents
as may be required to enable the Fund, on behalf of the Portfolio, to receive
appropriate tax treatment under applicable tax laws and any applicable treaty
provisions. Unless otherwise informed by the Fund, the Custodian in performance
of its duties under this Section 4.11, shall be entitled to apply categorical
treatment to the Portfolio, according to the nationality of the Portfolio, the
particulars of its organization and other relevant details that shall be
supplied to the Custodian by the Fund on behalf of the Portfolio. The Custodian
may engage reasonable professional advisors disclosed to the Fund by the
Custodian, which may include attorneys, accountants or financial institutions in
the regular business of investment administration and may rely upon advice
received therefrom. It shall be the duty of the Fund to inform the Custodian of
xvi
EX-99.(g)
any change in the organization, domicile or other relevant fact concerning tax
treatment of the Portfolio and further to inform the Custodian if the Portfolio
is or becomes the beneficiary of any special ruling or treatment not applicable
to the general nationality and category of entity of which the Portfolio is a
part under general laws and treaty provisions.
Section 4.12. Liability of Custodian. Except as may arise from the
Custodian's own negligence or willful misconduct or the negligence or willful
misconduct of a Sub-Custodian, the Custodian shall be without liability to the
Fund for any loss, liability, claim or expense resulting from or caused by
anything which is part of Country Risk.
The Custodian shall be liable for the acts or omissions of a Foreign Sub-
Custodian to the same extent as set forth with respect to sub-custodians
generally in the Contract and, regardless of whether assets are maintained in
the custody of a Foreign Sub-Custodian or a Foreign Securities System, the
Custodian shall not be liable for any loss, damage, cost, expense, liability or
claim resulting from nationalization, expropriation, currency restrictions, or
acts of war or terrorism, or any other loss where the Sub-Custodian has
otherwise acted with reasonable care.
Section 4.13. Conflict. If the Custodian is delegated the
responsibilities of Foreign Custody Manager pursuant to the terms of Section 3
hereof, in the event of any conflict between the provisions of Sections 3 and 4
hereof, the provisions of Section 3 shall prevail.
Section 5. Payments for Sales or Repurchases or Redemptions of Shares
The Custodian shall receive from the distributor for the Shares or from the
Transfer Agent and deposit into the account of the appropriate Portfolio such
payments as are received for Shares thereof issued or sold from time to time by
the Fund. The Custodian will provide timely notification to the Fund on behalf
of each such Portfolio and the Transfer Agent of any receipt by it of payments
for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Fund's Declaration of Trust and any applicable votes of the
Board pursuant thereto, the Custodian shall, upon receipt of instructions from
the Transfer Agent, make funds available for payment to holders of Shares who
have delivered to the Transfer Agent a request for redemption or repurchase of
their Shares. In connection with the redemption or repurchase of Shares, the
Custodian is authorized upon receipt of instructions from the Transfer Agent to
wire funds to or through a commercial bank designated by the redeeming
shareholders. In connection with the redemption or repurchase of Shares, the
Custodian shall honor checks drawn on the Custodian by a holder of Shares, which
checks have been furnished by the Fund to the holder of Shares, when presented
to the Custodian in accordance with such procedures and controls as are mutually
agreed upon from time to time between the Fund and the Custodian.
Section 6. Proper Instructions
Proper Instructions as used throughout this Agreement means a writing signed or
initialed by two
xvii
EX-99.(g)
or more persons as the Board shall have from time to time authorized. Each such
writing shall set forth the specific transaction or type of transaction
involved, including a specific statement of the purpose for which such action is
requested. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. Proper Instructions may
include communications effected directly between electro-mechanical or
electronic devices provided that the Fund and the Custodian agree to security
procedures, including but not limited to, the security procedures selected by
the Fund in the Funds Transfer Addendum attached hereto. For purposes of this
Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three-party agreement which requires a segregated
asset account in accordance with Section 2.9.
Section 7. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the Fund on
behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Agreement, provided that all such payments shall be accounted for to
the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Portfolio except as
otherwise directed by the Board.
Section 8. Evidence of Authority
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a copy of a Certified Resolution as conclusive
evidence (a) of the authority of any person to act in accordance with such
resolution or (b) of any determination or of any action by the Board pursuant to
the Fund's Declaration of Trust as described in such resolution, and such
resolution may be considered as in full force and effect until receipt by the
Custodian of written notice to the contrary.
Section 8.A. Representations and Warranties
Section 8.A.1 Representations and Warranties of Custodian. The Custodian
xviii
EX-99.(g)
represents and warrants to the Fund that:
a) It is a trust company duly organized and existing and in good standing
under the laws of The Commonwealth of Massachusetts;
b) It is duly qualified to carry on its business in The Commonwealth of
Massachusetts;
c) It is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform this Agreement;
d) All requisite corporate proceedings have been taken to authorized it
to enter into and perform this Agreement;
e) It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement; and
f) It is a qualified custodian under the 1940 Act.
Section 8.A.2 Representations and Warranties of the Fund. The Fund
represents and warrants to the Custodian that:
a) It is a business trust company duly organized and existing and in good
standing under the laws of the State of Delaware;
b) It is empowered under applicable laws and by its Declaration of Trust
to enter into and perform this Agreement;
c) All proceedings required by said Declaration of Trust have been taken
to authorized it to enter into and perform this Agreement;
d) The Portfolio is an open-end, diversified management investment
company registered under the 1940 Act; and
e) A registration statement under the Securities Act of 1933, as amended,
is currently effective and will remain effective, and appropriate
state securities law filings have been made and will continue to be
made, with respect to all Shares of the Fund being offered for sale
and all Shares sold.
Section 9. Duties of Custodian with Respect to the Books of Account and
Calculation of Net Asset Value and Net Income
The Custodian agrees to provide the following mutual fund accounting
services to the Portfolios.
Section 9.1.A. Portfolio Accounting Services
xix
EX-99.(g)
1) Maintain Portfolio records on a trade date +1 basis using security
trade information communicated from the investment adviser of the
Portfolio on a timely basis;
2) For each valuation date of the Portfolio as stated in the Prospectus
("Valuation Date"), obtain prices from a pricing source selected by
the Fund on behalf of the Portfolio or the investment adviser to the
Portfolio except in the case of those categories of securities or
individual securities which the Fund on behalf of the Portfolio or the
investment adviser to the Portfolio chooses to price itself, as
indicated on the Price Source Authorization Form attached hereto as
Exhibit A (the "Price Source Authorization") or pursuant to the
valuation policies adopted by the Board from time to time, and
approved by the Board and apply those prices to the Portfolio
positions. For those securities for which market quotations are not
readily available, the Board shall approve, in good faith, the method
for determining the fair value for such securities;
3) Identify interest and dividend accrual balances as of each Valuation
Date and calculate gross earnings on investments for the accounting
period;
4) Account for and post to the Portfolio's accounting records all
relevant bond maturities, calls and paydowns, stock dividends, splits
and other corporate action activity;
5) Supply, upon request, the investment adviser of the Portfolio or other
tax accounting agent of the Portfolio with any available book
accounting information which may help such tax accounting agent (i)
determine gain/loss on security sales and identify them as short,
medium or long-term status; (ii) account for periodic distributions of
gains or losses to shareholders; and (iii) maintain undistributed gain
or loss balances as of each Valuation Date;
6) Maintain all accounting books and records in accordance with GAAP as
applied in the mutual fund industry; and
7) Prepare 30 day SEC yields for the Portfolio.
Section 9.1.B Expense Accrual and Payment Services
1) For each Valuation Date, calculate the expense accrual amounts as
directed by the Fund on behalf of the Portfolio, pursuant to a
methodology which is agreeable to both the Fund and the Custodian;
2) Record payments for Portfolio expenses upon receipt of written
authorization from the Fund on behalf of the Portfolio;
3) Account for Portfolio expenditures and maintain expense accrual
balances as instructed by the Fund on behalf of the Portfolio pursuant
to a methodology which is agreeable to both the Custodian and the
Fund; and
4) Provide expense accrual reports and reports of recorded payments.
xx
EX-99.(g)
Section 9.1.C. Fund Valuation and Financial Reporting Services
1) Account for Portfolio share purchases, sales, exchanges, transfers,
dividend reinvestments, and other Share activity as reported by the
Transfer Agent on a timely basis;
2) Determine net investment income (earnings ) for the Portfolio as of
each Valuation Date. Provide book accounting for use by the Portfolio
in determining periodic distributions of earnings to shareholders and
maintaining undistributed net investment income balances as of each
Valuation Date;
3) Maintain a general ledger for the Portfolio which will include (i)
daily cash reconciliations to custodian records with documentation of
exception items; (ii) monthly (or more frequently as appropriate)
reconciliations of security positions held to custody records; and
(iii) tie-out the Portfolio's net cash in- or outflows and net share
in-flows or out-flows generated by shareholder transactions to the
records of the Transfer Agent, so long as State Street Bank and Trust
Company or an affiliate is the transfer agent of the Portfolio; (iv)
assist the Transfer Agent in resolving any unusual shareholder
transaction data; and (v) report results of any of the above
reconciliations or tie-outs to the Fund on behalf of the Portfolio;
4) For each Valuation Date, determine the net asset value according to
the accounting policies and procedures set forth in the Price Source
Authorization and fair valuation procedures established by the Board,
in each case as instructed by the Fund on behalf of the Portfolio.
Further, the Custodian will review changes in the value of individual
securities and the Portfolio's net asset value per share pursuant to
the tolerance testing as described on the Price Source Authorization;
5) Calculate the per share net asset value of the Portfolio;
6) Communicate, at an agreed upon time, the per share price and periodic
book accounting distribution data for each Valuation Date to parties
as agreed upon from time to time; and
7) Prepare monthly reports which document the adequacy of accounting
detail to support month-end ledger balances.
Section 9.1.D Support to Tax Accounting Agent
1) Maintain book accounting records for the Portfolio to support the tax
reporting required by the Internal Revenue Service for regulated
investment companies;
2) Maintain book accounting security lot detail for the Portfolio; and
3) Provide the necessary book accounting financial information to support
the tax accounting agent's determination of the taxable components of
income and capital gain distributions reportable to shareholders.
xxi
EX-99.(g)
Section 9.1.E. Regulatory Reporting Assistance
1) Support reporting to regulatory bodies and support financial statement
preparation and other Fund administration tasks on behalf of the
Portfolio by making the Fund book accounting records maintained by the
Custodian available to the Fund on behalf of the Portfolio, the
Securities and Exchange Commission, and the Fund's independent public
auditors; and
2) Maintain book accounting records of the Portfolio according to the
1940 Act and regulations provided thereunder.
Section 9.1.F. Fund Override of Price Source Authorization.
If the Portfolio desires to provide a valuation for any security which
varies from the valuation determined by the authorized pricing source pursuant
to the Price Source Authorization, the Fund, on behalf of the Portfolio, shall
promptly notify and supply the Custodian with the valuation of any such security
on each Valuation Date. All such pricing overrides made by the Portfolio will
be in writing and must specifically identify the securities for which the
valuations are to be adjusted by CUSIP, name of security, new price or rate to
be applied, and, if applicable, the time period for which the new price(s)
is/are effective.
Section 9.2. Changes in Accounting Procedures. Any resolution passed by
the Board that affects accounting practices and procedures under this Agreement
shall be effective upon written receipt and acceptance by the Custodian.
Section 9.3. Confidentiality. The Custodian shall handle in confidence
all information relating to the Portfolio's business which is received by the
Custodian during the course of rendering any service hereunder. The Custodian
shall not release any Portfolio information to any other party (other than the
Fund, the Portfolio's independent auditors and NASDAQ) without the express
written permission of the Fund on behalf of the Portfolio, except that which is
required by state or federal law.
Section 9.4. Data Necessary to Perform Services. The Fund or its agents,
on behalf of the Portfolio, shall furnish to the Custodian the data necessary to
perform the services described herein at times and in such form as mutually
agreed upon.
Section 9.5. Notification of Error. The Fund on behalf of the Portfolio
will notify the Custodian of any balancing or control error caused by the
Custodian within thirty (30) business days after receipt of any reports rendered
by the Custodian to the Portfolio, or within thirty (30) business days after
discovery of any error or omission not covered in the balancing or control
procedure, or within thirty (30) business days of receiving notice from any
shareholder.
Section 10. Records
The Custodian shall with respect to each Portfolio create and maintain all
records required by
xxii
EX-99.(g)
law relating to its activities and obligations under this Agreement in such
manner as will meet the obligations of the Fund under the 1940 Act, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and employees and agents of
the SEC. The Custodian shall, at the Fund's request, supply the Fund with a
tabulation of securities owned by each Portfolio and held by the Custodian and
shall, when requested to do so by the Fund and for such compensation as shall be
agreed upon between the Fund and the Custodian, include certificate numbers in
such tabulations.
Section 11. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on behalf of each
applicable Portfolio may from time to time request, to obtain from year to year
favorable opinions from the Fund's independent accountants with respect to its
activities hereunder in connection with the preparation of the Fund's Form N-1A,
and Form N-SAR or other annual reports to the SEC and with respect to any other
requirements thereof.
Section 12. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the Portfolios at
such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a U.S. Securities
System or a Foreign Securities System, relating to the services provided by the
Custodian under this Agreement; such reports, shall be of sufficient scope and
in sufficient detail, as may reasonably be required by the Fund to provide
reasonable assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so state.
Section 13. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its services and
expenses as Custodian, as agreed upon from time to time between the Fund on
behalf of each applicable Portfolio and the Custodian.
Section 14. Responsibility of Custodian
So long as and to the extent that it is in the exercise of reasonable care, the
Custodian shall not be responsible for the title, validity or genuineness of any
property or evidence of title thereto received by it or delivered by it pursuant
to this Agreement and shall be held harmless in acting upon any notice, request,
consent, certificate or other instrument reasonably believed by it to be
xxiii
EX-99.(g)
genuine and to be signed by the proper party or parties, including any futures
commission merchant acting pursuant to the terms of a three-party futures or
options agreement. The Custodian shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement, but shall be kept
indemnified by and shall be without liability to the Fund for any action taken
or omitted by it in good faith without negligence. It shall be entitled to rely
on and may act upon advice of counsel (who may be counsel for the Fund) on all
matters, and shall be without liability for any action reasonably taken or
omitted pursuant to such advice. The Custodian shall be without liability to the
Fund and the Portfolios for any loss, liability, claim or expense resulting from
or caused by anything which is part of Country Risk (as defined in Section 3
hereof), including without limitation nationalization, expropriation, currency
restrictions, or acts of war, revolution, riots or terrorism.
If in any case the Fund is asked to indemnify and hold the Custodian harmless,
the Custodian shall use all reasonable care to identify and promptly inform the
indemnifying party of the facts, in the Custodian's actual knowledge, from which
the claim arises. The Fund shall be entitled, at its own expense, to
participate in the investigation and to be consulted as to the defense of any
such claim, and in such event, the Custodian shall keep the Fund fully and
currently informed of all developments relating to such investigation or
defense. At any time, the Fund shall be entitled at its own expense to conduct
the defenses of any such claim, provided that the Fund: (i) reasonably
demonstrates to the other party its ability to pay the full amount of potential
liability in connection with such claim and (ii) first admits in writing to the
other party that such claims are in respect of which the Fund is obligated to
indemnify the Custodian. Upon satisfaction of the foregoing conditions, the
Fund shall take over complete defense of the claim, and the Custodian shall
initiate no further legal or other expenses for which it shall seek
indemnification unless the possible liabilities or penalties to the Custodian
involve other than money damages. The Custodian shall in no case confess any
claim or make any compromise in any case in which the Fund may be asked to
indemnify the Custodian, except with the Fund's prior written consent.
Except as may arise from the Custodian's own negligence or willful misconduct or
the negligence or willful misconduct of a sub-custodian or agent, the Custodian
shall be without liability to the Fund for any loss, liability, claim or expense
resulting from or caused by; (i) events or circumstances beyond the reasonable
control of the Custodian or any sub-custodian or Securities System or any agent
or nominee of any of the foregoing, including, without limitation, the
interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, work stoppages,
natural disasters, or other similar events or acts; (ii) errors by the Fund or
the investment advisor of the Fund in their instructions to the Custodian
provided such instructions have been in accordance with this Agreement; (iii)
the insolvency of or acts or omissions by a Securities System; (iv) any delay or
failure of any broker, agent or intermediary, central bank or other commercially
prevalent payment or clearing system to deliver to the Custodian's sub-custodian
or agent securities purchased or in the remittance or payment made in connection
with securities sold; (v) any delay or failure of any company, corporation, or
other body in charge of registering or transferring securities in the name of
the Custodian, the Fund, the Custodian's sub-custodians, nominees or agents or
any consequential losses arising out of such delay or failure to transfer such
securities including non-receipt of bonus, dividends and rights and other
accretions or benefits; (vi) delays or inability to perform its duties due to
any
xxiv
EX-99.(g)
disorder in market infrastructure with respect to any particular security or
Securities System; and (vii) compliance with any change in any provision of any
present or regulation or order of the United States of America, or any state
thereof, or any other country, or political subdivision thereof or of any court
of competent jurisdiction.
The Custodian has a reasonable disaster recovery and safekeeping plan given
its services hereunder. The Custodian shall maintain commercially reasonable
amounts of (a) comprehensive general liability insurance coverage and (b) errors
and omissions insurance coverage and notify the Fund in the event that such
insurance is canceled
In the event of equipment failures beyond the Custodian's control, the
Custodian shall, at no additional expense to the Fund, take reasonable steps to
minimize service interruptions. The Custodian shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provision for (i) periodic back-up of the computer files and data
with respect to the Portfolio and (ii) emergency use of electronic data
processing equipment to provide services under this Agreement and the Remote
Access Services Addendum between State Street Bank and Trust Company and the
Fund.
The Custodian shall be liable for the acts or omissions of a Foreign Sub-
Custodian (as defined in Section 4 hereof) to the same extent as set forth with
respect to sub-custodians generally in this Agreement.
If the Fund on behalf of a Portfolio requires the Custodian to take any action
with respect to securities, which action involves the payment of money or which
action may, in the opinion of the Custodian, result in the Custodian or its
nominee assigned to the Fund or the Portfolio being liable for the payment of
money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form satisfactory to
it.
If the Fund requires the Custodian, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the applicable Portfolio shall
be security therefor and should the Fund fail to repay the Custodian promptly,
the Custodian shall be entitled to utilize available cash and to dispose of such
Portfolio's assets to the extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or consequential
damages.
Section 15. Effective Period, Termination and Amendment
This Agreement shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of
xxv
EX-99.(g)
the parties hereto and may be terminated by either party by an instrument in
writing delivered or mailed, postage prepaid to the other party, such
termination to take effect not sooner than ninety (90) days after the date of
such delivery or mailing; provided, however, that the Custodian shall not act
under Section 2.8 hereof in the absence of receipt of an initial certificate of
the Secretary or an Assistant Secretary of the Fund that the Board has approved
the initial use of a particular Securities System by the Fund on behalf of the
Portfolio, as required by Rule 17f-4 under the 1940 Act; provided further,
however, that the Fund shall not amend or terminate this Agreement in
contravention of any applicable federal or state regulations, or any provision
of the Fund's Declaration of Trust, and further provided, that the Fund on
behalf of one or more of the Portfolios may at any time by action of its Board
(i) substitute another bank or trust company for the Custodian by giving notice
as described above to the Custodian, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Agreement, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
actual costs, expenses and disbursements incurred.
Section 16. Successor Custodian
If a successor custodian for one or more Portfolios shall be appointed by the
Board, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities of each applicable Portfolio then held by it hereunder
and shall transfer to an account of the successor custodian all of the
securities of each such Portfolio held in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in like
manner, upon receipt of a copy of a Certified Resolution, deliver at the office
of the Custodian and transfer such securities, funds and other properties in
accordance with such resolution.
In the event that no written order designating a successor custodian or no copy
of a Certified Resolution shall have been delivered to the Custodian on or
before the date when such termination shall become effective, then the Custodian
shall have the right to deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, doing business in Boston, Massachusetts, or New York,
New York, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by the Custodian on
behalf of each applicable Portfolio and all instruments held by the Custodian
relative thereto and all other property held by it under this Agreement on
behalf of each applicable Portfolio, and to transfer to an account of such
successor custodian all of the securities of each such Portfolio held in any
Securities System. Thereafter, such bank or trust company shall be the
successor of the Custodian under this Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian
xxvi
EX-99.(g)
after the date of termination hereof owing to failure of the Fund to procure a
copy of the Certified Resolution referred to or of the Board to appoint a
successor custodian, the Custodian shall be entitled to fair compensation for
its services during such period as the Custodian retains possession of such
securities, funds and other properties and the provisions of this Agreement
relating to the duties and obligations of the Custodian shall remain in full
force and effect.
Section 17. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and the Fund
on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Agreement as
may in their joint opinion be consistent with the general tenor of this
Agreement. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, provided that no
such interpretive or additional provisions shall contravene any applicable
federal or state regulations or any provision of the Fund's Declaration of
Trust. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Agreement.
Section 18. Additional Funds
In the event that the Fund establishes one or more series of Shares in addition
to Dodge & Xxx Balanced Fund; Dodge & Xxx Income Fund; Dodge & Xxx Stock Fund
and Dodge & Xxx International Stock Fund, with respect to which it desires to
have the Custodian render services as custodian under the terms hereof, it shall
so notify the Custodian in writing, and if the Custodian agrees in writing to
provide such services, such series of Shares shall become a Portfolio hereunder.
Section 19. Massachusetts Law to Apply
This Agreement shall be construed and the provisions thereof interpreted under
and in accordance with laws of The Commonwealth of Massachusetts.
Section 20. Prior Agreements
This Agreement supersedes and terminates, as of the date hereof, all prior
Agreements between the Fund on behalf of each of the Portfolios and the
Custodian relating to the custody of the Fund's assets.
Section 21. Notices.
Any notice, instruction or other instrument required to be given hereunder may
be delivered in person to the offices of the parties as set forth herein during
normal business hours or delivered
xxvii
EX-99.(g)
prepaid registered mail or by telex, cable or telecopy to the parties at the
following addresses or such other addresses as may be notified by any party from
time to time.
To the Fund: Dodge & Xxx Funds
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
To the Custodian: State Street Bank and Trust Company
0000 Xxxxxxxx Xxxxx, XXX 0X
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof. Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive evidence
of posting.
Section 22. Reproduction of Documents
This Agreement and all schedules, addenda, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm, micro-
card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
Section 23. Remote Access Services Addendum
The Custodian and the Fund agree to be bound by the terms of the Remote Access
Services Addendum attached hereto.
Section 24. Limitations of Liability of the Trustees and Shareholders
Notice is hereby given that this instrument is executed on behalf of the
Trustees of the Fund as
xxviii
EX-99.(g)
Trustees and not individually and that the obligations of this instrument are
not binding upon any of the Trustees or shareholders of the Fund individually
but are binding only upon the assets and property of the Fund.
Section 25. Shareholder Communications Election
SEC Rule 14b-2 requires banks which hold securities for the account of customers
to respond to requests by issuers of securities for the names, addresses and
holdings of beneficial owners of securities of that issuer held by the bank
unless the beneficial owner has expressly objected to disclosure of this
information. In order to comply with the rule, the Custodian needs the Fund to
indicate whether it authorizes the Custodian to provide the Fund's name,
address, and share position to requesting companies whose securities the Fund
owns. If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian "yes" or
does not check either "yes" or "no" below, the Custodian is required by the rule
to treat the Fund as consenting to disclosure of this information for all
securities owned by the Fund or any funds or accounts established by the Fund.
For the Fund's protection, the Rule prohibits the requesting company from using
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address, and
share positions.
NO [X] The Custodian is not authorized to release the Fund's name, address,
and share positions.
[Remainder of page intentionally left blank.]
xxix
EX-99.(g)
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of February 9, 2001.
Dodge & Xxx Funds Fund signature attested to By:
By: By:
-------------------------- --------------------------
Name: Xxxxx X. Xxxxx Name: Xxxxxx X. Xxxxxxx
-------------------------- --------------------------
Title: Chairman Title: Secretary
-------------------------- --------------------------
State Street Bank and Trust Company Signature attested to By:
By: By:
-------------------------- --------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxxx X. XxXxxxxx
-------------------------- --------------------------
Title: Vice Chairman Title: VP & Assoc. Counsel
-------------------------- --------------------------
xxx
