EXHIBIT (g)(1)
CUSTODY AND INVESTMENT ACCOUNTING AGREEMENT
THIS AGREEMENT, as restated and amended, (the "Agreement") is made and
entered into effective as of June 1, 2001 by and among PACIFIC SELECT FUND, a
Massachusetts business trust having its principal office and place of business
at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 ("Fund"), STATE
STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A, a national banking association
chartered by the Comptroller of the Currency having its principal office and
place of business at 000 Xxxx 0/xx/ Xxxxxx, 00/xx/ Xxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 ("Custodian") and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts banking corporation having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("State Street Boston").
WITNESSETH:
WHEREAS, Fund appointed Custodian as custodian of the securities, other
investments, monies, and other properties at any time owned by the Fund's
investment portfolios (each a "Portfolio" and collectively the "Portfolios") and
as agent to perform certain accounting and recordkeeping functions pursuant to
the terms and conditions of the Custody Agreement dated December 1, 1987, as
amended by Addenda dated January 17, 1989, January 4, 1994, August 15, 1994,
November 20, 1995, May 15, 1997, December 18, 1998, and December 15, 1999 and by
Assignment, Amendment and Consent dated June 1, 2000.
WHEREAS, Fund, Custodian, and State Street Boston desire to restate
such Custody Agreement together with such Addenda and Assignment, Amendment and
Consent and to further amend and restate certain provisions to, among other
things, reflect the adoption of Rule 17f-7 ("Rule 17f-7").
NOW THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
I. APPOINTMENT OF CUSTODIAN. Fund has appointed Custodian as its custodian
with respect to each Portfolio currently existing or which may be added
from time to time by notice from Fund to Custodian, and Custodian
accepts such appointment, which includes:
A. Appointment as Custodian for the safekeeping of securities, other
investments, monies and other property received from each
Portfolio (the "Assets"). Custodian agrees that it shall hold all
Assets in an account (as defined below) at Custodian or at State
Street Boston as sub-custodian, or as otherwise provided in this
Agreement; provided, however, that Custodian shall be the legal
situs of each account.
B. Appointment as agent to perform certain accounting and
recordkeeping functions required of a duly registered investment
company in compliance with applicable provisions of federal, state
and local laws, rules and regulations including, as may be
required:
1. Providing information necessary for Fund to file required
financial reports; maintaining and preserving required books,
accounts and records
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(collectively the "Records") as the basis for such reports;
and performing certain daily functions in connection with
such Records,
2. Calculating daily net asset values and per share net asset
values of each Portfolio, and
3. Acting as liaison with independent auditors.
II. DUTIES AND RESPONSIBILITIES OF CUSTODIAN
A. Delivery of Assets. Fund will deliver or cause to be delivered to
Custodian from time to time, all Assets, except as permitted by
the Investment Company Act of 1940 and the Rules and Regulations
thereunder, as amended (the "1940 Act"). Custodian shall have no
responsibility or liability whatsoever for or on account of Assets
not so delivered. All Assets so delivered (other than bearer
securities) shall be registered in the name of Fund and the
appropriate Portfolio, or of a nominee of Custodian, or shall be
properly endorsed and in form for transfer satisfactory to
Custodian.
B. Delivery of Records. Fund shall turn over to Custodian all Records
needed by it to knowledgeably perform its function hereunder.
Custodian shall be entitled to rely conclusively on the
completeness and correctness of the Records turned over to it by
Fund, and Fund shall indemnify and hold Custodian harmless of and
from any and all expenses, damages and losses whatsoever arising
out of or in connection with any such Records or in the failure of
Fund to provide any portion of such Records.
C. Delivery of Assets to Third Parties
1. Custodian will receive delivery and keep safely the Assets
delivered to it from time to time segregated in a separate
account or accounts (each an "Account"). Custodian will not
deliver, assign, pledge or hypothecate any such Assets to
any person except as permitted by the provisions of this
Agreement or any agreement executed by it according to the
terms of Section II.U hereof.
2. Custodian is responsible for the Assets only until they
have been transmitted to and received by other persons as
permitted under the terms of this Agreement, except
Custodian remains responsible for all Assets held by a
sub-custodian employed pursuant to Section II.U, a nominee,
correspondent, depository or the Federal Reserve Book-Entry
system, or other agent, all of which entities shall be
deemed agents of Custodian.
3. Notwithstanding any other provision of the Agreement,
Custodian, subject to approval and annual review of the
arrangement by the Board of Trustees of the Fund (the
"Board"), is hereby authorized to deposit or arrange for
the deposit of Assets eligible for book entry deposit in
Federal Reserve Banks under book entry to the extent
acceptable under applicable regulations of the Department
of the Treasury of the United States and the
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Federal Reserve Bank involved, which shall be considered an
agent of Custodian and which shall at all times show such
Assets as part of the Account of the applicable Portfolio.
4. Notwithstanding any other provision of this Agreement,
Custodian, subject to approval and annual review of the
arrangement by the Board, is authorized in its capacity as
Custodian and agent for Fund to use the facilities and
services of the Depository Trust Company, or any regional
system for the central handling of securities with which
securities may be deposited under the provisions of section
17(f) of the 1940 Act, which shall be considered an agent
of Custodian for such purpose.
D. Registration of Assets and Bearer Form Securities
1. Custodian will hold stocks and other registrable Assets
registered in the name of the Portfolios or in the name of
any nominee of Custodian for whose fidelity and liability
Custodian will be fully responsible, with or without any
indication of fiduciary capacity. Unless otherwise
instructed, Custodian will register all such Assets in the
name of its authorized nominee, provided that such nominee
is either "doing business as" Custodian, a partnership
consisting solely of Custodian's officers, employees,
directors and affiliated entities subject to the legal and
operational control of Custodian, or the nominee of a
depository that has been registered with or approved by the
Securities and Exchange Commission (the "SEC"), and
provided further that Custodian and any sub-custodian will
use only one nominee each for the Fund. All Assets, and the
ownership thereof by Fund, which are held by Custodian, its
sub-custodian, nominee, correspondent, depository or the
Federal Reserve Book Entry System hereunder, however, shall
at all times be identifiable on the records of Custodian
and, where applicable, its sub-custodian.
2. All Assets issued in bearer form shall be maintained in
that form and not be subject to reregistration in
definitive form; that is, bearer form securities shall not
be reregistered in the name of a nominee of Custodian,
sub-custodian, or any depository, except upon specific
instructions from Fund as to a given Asset. Bearer form
securities shall be retained by Custodian or sub-custodian,
unless deposited with a depository authorized by the SEC
and, if applicable, a State Insurance Commissioner.
3. At least quarterly, Custodian shall provide Fund an updated
list of all Assets including Assets held by a
sub-custodian, or re-deposited by Custodian (or
sub-custodian) with a depository, Federal Reserve Bank, or
correspondent bank.
E. Exchange of Assets. Upon receipt of "Instructions" as defined in
SectionV.A, Custodian will exchange, or cause to be exchanged,
Assets of the applicable Portfolio for other Assets issued or paid
in connection with any reorganization, recapitalization, merger,
consolidation, split-up of shares, change of par value, conversion
or otherwise, and will deposit any such Assets in accordance with
the
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terms of any reorganization or protective plan. Without
Instruction, and with the understanding that Custodian may deliver
or cause to be delivered securities for payment in accordance with
the customs prevailing among dealers in securities, Custodian is
authorized to (i) exchange Assets held by it in temporary form for
Assets in definitive form, (ii) effect an exchange of shares when
the par value of the stock is changed, and, (iii) upon receiving
payment therefore, surrender bonds or other securities held by it
at maturity or when advised of earlier call for redemption.
Custodian shall receive instructions prior to surrendering any
convertible security.
F. Purchases of Assets. Fund will, on each business day on which a
purchase of Assets shall be made by it, deliver to Custodian
Instructions which shall specify with respect to each such
purchase:
1. The name of the issuer and description of the Assets;
2. The number of shares or the principal amount purchased, and
accrued interest, if any;
3. The trade date;
4. The settlement date;
5. The purchase price per unit and the brokerage commission,
taxes and other expenses payable in connection with the
purchase;
6. The total amount payable by the Portfolio upon such purchase;
7. The name of the person from whom or the broker or dealer
through whom the purchase was made; and
8. The name of the Portfolio with respect to which such purchase
was made.
In accordance with such Instructions, Custodian will pay for out
of monies held for the Account of the applicable Portfolio, but
only insofar as monies are available therein for such purpose, and
receive the Assets so purchased by or for the Account of the
applicable Portfolio. Such payment will be made only upon receipt
by Custodian of the Assets so purchased in form for transfer
satisfactory to Custodian.
G. Sales and Deliveries of Assets - Other Than Options and Futures.
Fund will, on each business day on which a sale of Assets has been
made, deliver to Custodian Instructions specifying with respect to
each such sale:
1. The name of the issuer and description of the Assets;
2. The number of shares or principal amount sold, and the accrued
interest, if any;
3. The date on which the Assets sold were purchased or other
information identifying the Assets sold and to be delivered;
4. The trade date;
5. The settlement date;
6. The sale price per unit and the brokerage commission, taxes or
other information identifying the Assets sold and to be
delivered;
7. The total amount to be received by the Portfolio upon such
sale;
8. The name of the broker or dealer through whom or person to
whom the sale was made; and
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9. The name of the Portfolio with respect to which the sale
was made.
In accordance with such Instructions, Custodian will deliver or
cause to be delivered the Assets thus designated as sold for the
Account of the applicable Portfolio to the broker or other person
specified in the Instructions relating to such sale, such delivery
to be made only upon receipt of payment therefor in such form as
is satisfactory to Custodian, with the understanding that
Custodian may deliver or cause to be delivered securities for
payment in accordance with the customs prevailing among dealers in
securities.
H. Purchases or Sales of Security Options, Options on Indices,
Security Index Futures Contracts, Interest Rate Futures Contracts
or Foreign Currency Futures Contracts and Options on Index Futures
Contracts. Fund will, on each business day on which a purchase or
sale of the following options and/or futures shall be made by it,
deliver to Custodian Instructions which shall specify with respect
to each such purchase or sale:
1. The name of the Portfolio making such purchase or sale; and
2. In the case of security options:
a. The underlying security;
b. The price at which purchased or sold;
c. The expiration date;
d. The number of contracts;
e. The exercise price;
f. Whether the transaction is an opening, exercising,
expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased;
i. Market on which option traded; and
j. Name and address of the broker or dealer through whom
the sale or purchase was made.
3. In the Case of options on indices
a. The index;
b. The price at which purchased or sold;
c. The exercise price;
d. The premium;
e. The multiple;
f. The expiration date;
g. Whether the transaction is an opening, exercising,
expiring or closing transaction;
h. Whether the transaction involves a put or call;
i. Whether the option is written or purchased; and
j. The name and address of the broker or dealer through
whom the sale or purchase was made, or other
applicable settlement instructions.
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4. In the case of security index futures contracts, interest
rate futures contracts or foreign currency futures
contracts
a. The last trading date specified in the contract and,
when available, the closing level, thereof;
b. The index level, or value of the underlying security
or currency on the date the contract is entered
into;
c. The multiple;
d. Any margin requirements;
e. The need for a segregated margin account (in
addition to Instructions, and if not already in the
possession of Custodian, Fund shall deliver a
substantially complete and executed "Procedural and
Safekeeping Agreement" which shall be incorporated
by reference into this Agreement); and
f. The name and address of the futures commission
merchant through whom the sale or purchase was made,
or other applicable settlement instructions.
5. In the case of options on index futures contracts
a. The underlying index futures contract;
b. The premium;
c. The expiration date;
d. The number of options;
e. The exercise price;
f. Whether the transaction involves an opening,
exercising, expiring or closing transaction;
g. Whether the transaction involves a put or call;
h. Whether the option is written or purchased; and
i. The market on which the option is traded
In accordance with such Instructions, Custodian will pay for
out of monies held for the Account of the applicable
Portfolio, but only insofar as monies are available therein
for such purpose, and receive the Assets so purchased by or
for the Account of the applicable Portfolio. Such payment will
be made only upon receipt by Custodian of the Assets so
purchased in form for transfer satisfactory to Custodian.
I. Assets Pledged or Loaned. If specifically allowed for in the
prospectus of Fund and upon receipt of Instructions:
1. Custodian will release or cause to be released Assets to
the pledgee designated in such Instructions by way of
pledge or hypothecation to secure any loan incurred by a
Portfolio; provided, however, that the Assets shall be
released only upon payment to Custodian of the monies
borrowed, except that in cases where additional
collateral is required to secure a borrowing already
made, additional Assets may be released or caused to be
released for that purpose upon receipt of Instructions.
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2. Custodian will pay, but only from funds available for
such purpose, any such loan upon redelivery to it of the
Assets pledged or hypothecated therefor and upon
surrender of the note or notes evidencing such loan.
3. Custodian will release Assets to the borrower designated
in such Instructions; provided, however, that if the
borrower is a bank or securities broker-dealer, the
Assets will be released only upon deposit with Custodian
of full collateral consisting of U.S. Government
securities or cash or obligations fully guaranteed by the
United States of America or any agency or instrumentality
thereof as specified in such Instructions, and that each
Portfolio will retain the right to any dividends,
interest or distribution on such loaned Assets.
4. Upon receipt of Instructions and the loaned Assets,
Custodian will release the collateral to the borrower.
J. Routine Matters. Custodian will, in general, attend to all
routine and mechanical matters in connection with the sale,
exchange, substitution, purchase, transfer, or other dealings
with Assets except as may be otherwise provided in this
Agreement or directed from time to time by the Board.
K. Deposit Account. Custodian will open and maintain a special
purpose deposit account or accounts in the name of Custodian,
subject only to draft or order by Custodian upon receipt of
Instructions. All monies received by Custodian from or for an
Account of a Portfolio shall be deposited in said Account,
barring events not in control of Custodian (such as strikes,
lockouts or labor disputes, riots, war or equipment or
transmission failure or damages, fire, flood, earthquake or
other natural disaster, action or inaction of governmental
authority or other causes beyond its control) at 8:00 a.m.,
Eastern time, on the next business day after deposit of any
check, and will be available for withdrawal by Fund in the
form of Federal Funds. Custodian may open and maintain an
account in such other banks or trust companies as may be
designated by it or by properly authorized resolution of the
Board, such account, however, to be in the name of Custodian
and subject only to its draft or order.
L. Cash Accounts. Any cash account maintained by Fund with
Custodian under this Agreement, wherein there is deposited
cash, interest, dividends or the proceeds of Asset sales,
shall be deemed to be a part of the Account and shall be
subject to all of the other terms and provisions of the
Agreement.
M. Sweep Accounts. Any "sweep" account maintained by the
sub-custodian or foreign sub-custodian on behalf of a
Portfolio wherein available cash is automatically invested
shall be deemed a part of the Account subject to the terms and
provisions of this Agreement. Fund shall have the option of
selecting the type of account into which the funds are to be
swept and, if the available accounts are mutual funds, the
particular mutual fund.
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N. Income and Other Payments to Fund. Dividends, rights and
similar items from equity securities, interest payments and
final principal redemptions (collectively, "Income") shall
generally be credited to applicable Portfolio on their payable
dates; provided, however, that Custodian may provide Fund with
a list of exceptions, if any, for foreign securities or
securities denominated in foreign currencies (the
"Exceptions"). Any credit of Income shall be conditional until
Custodian is actually paid the amount it has so credited Fund,
and Custodian may reverse or adjust any conditional Income
credited; provided however, that Custodian will use its
reasonable best efforts to actively pursue collection of such
Income as promptly as possible. Unless prior Instructions to
the contrary have been received, Custodian will:
1. Collect, claim and receive and deposit for the Account of
each Portfolio on their payable dates all Income and
other payments which become due and payable on or after
the effective date of this Agreement with respect to the
Assets, and credit the Account of each Portfolio with
such Income on their payable dates;
2. Execute ownership and other certificates and affidavits
for all federal, state and local tax purposes in
connection with the collection of bond and note coupons;
3. Take such other action as may be necessary or proper
connection with:
a. the collection, receipt and deposit of such Income
and other payments, including but not limited to the
presentation for payment of: (1) all coupons and
other income items required for such purpose; and
(2) all other Assets which may mature or be called,
redeemed, retired or otherwise become payable and
regarding which Custodian has actual knowledge, or
notice which is contained in publications of the
type to which it normally subscribes for such
purpose; and
b. the endorsement for collection, in the name of each
Portfolio, of all checks, drafts or other negotiable
instruments.
4. Sell any rights held for the Account of each Portfolio on
the last trade date prior to the date of expiration of
such rights;
5. With respect to any other income or payments to Fund,
including but not limited to the Exceptions, Custodian
will use its reasonable best efforts to actively pursue
collection of such income and other payments as promptly
as possible. Custodian, however, will not be required to
institute suit or take other extraordinary action to
enforce collection except upon receipt of Instructions
and upon being indemnified to its satisfaction against
the costs and expenses of such suit or other actions.
O. Payment of Dividends and other Distributions. On the
declaration of any dividend or other distribution on the
shares of beneficial interest of a Portfolio
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("Fund Shares") by the Board, Fund shall deliver to Custodian
Instructions with respect thereto, including a copy of the
Resolution of said Board certified by the Secretary or an
Assistant Secretary of Fund wherein there shall be set forth
the record date as of which shareholders entitled to receive
such dividend or other distribution shall be determined, the
date of payment of such dividend or distribution, and the
amount payable per share on such dividend or distribution.
Except if the ex-dividend date and the reinvestment date of
any dividend are the same, in which case funds shall remain in
the Account, on the date specified in such Resolution for the
payment of such dividend or other distribution, Custodian will
pay out of the monies held for the Account, insofar as the
same shall be available for such purposes, and credit to the
account of the Dividend Disbursing Agent for Fund, such amount
as may be necessary to pay the amount per share payable in
cash on Fund Shares issued and outstanding on the record date
established by such Resolution.
P. Shares of Fund Repurchased or Redeemed. Whenever any Fund
Shares for a Portfolio are repurchased or redeemed by Fund,
Fund or its agent shall advise Custodian of the aggregate
dollar amount to be paid for such shares and shall confirm
such advice in writing. Upon receipt of such advice, Custodian
shall charge such aggregate dollar amount to the Account of
the Portfolio and either deposit the same in the account
maintained for the purpose of paying for the repurchase or
redemption of Fund Shares or deliver the same in accordance
with such advice.
Custodian shall not have any duty or responsibility to
determine that Fund Shares repurchased or redeemed by Fund
have been removed from the proper shareholder account or
accounts or that the proper number of such shares have been
cancelled and removed from the shareholder records.
Q. Shares of Fund Purchased from Fund. Whenever Fund Shares are
purchased from Fund, Fund will deposit or cause to be
deposited with Custodian the amount received for such shares.
Custodian shall not have any duty or responsibility to
determine that Fund Shares purchased from Fund have been added
to the proper shareholder account or accounts or that the
proper number of such shares have been added to the
shareholder records.
R. Proxies and Notices. Custodian will promptly deliver or mail
or have delivered or mailed to Fund all proxies properly
signed, all notices of meetings, all proxy statements and
other notices, requests or announcements affecting or relating
to the Assets and will, upon receipt of Instructions, execute
and deliver or cause its nominee to execute and deliver or
mail or have delivered or mailed such proxies or other
authorizations as may be required. Except as provided by this
Agreement or pursuant to Instructions, neither Custodian nor
its nominee will exercise any power inherent in any such
Assets, including any power to vote the same, or execute any
proxy, power of attorney, or other similar instrument voting
any of
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such Assets, or give any consent, approval or waiver with
respect thereto, or take any other similar action.
S. Disbursements. Custodian will pay or cause to be paid insofar
as funds are available for the purpose, bills, statements and
other obligations of Fund or a Portfolio (including but not
limited to obligations in connection with the conversion,
exchange or surrender of Assets, interest charges, dividend
disbursements, taxes, management fees, custodian fees, legal
fees, auditors' fees, transfer agents' fees, brokerage
commissions, compensation to personnel, and other operating
expenses of Fund or a Portfolio) pursuant to Instructions
setting forth the name of the person to whom payment is to be
made, the amount of the payment, the Portfolio to be charged,
and the purpose of the payment.
T. Daily Statement of Accounts. Custodian will, within a
reasonable time, render to Fund as of the close of business on
each day, a detailed statement of the amounts received or paid
and of Assets received or delivered for the Account of each
Portfolio during said day. Custodian will, from time to time,
upon request by Fund, render a detailed statement of the
Assets held for one or more of the Portfolios under this
Agreement, and Custodian will maintain such Records as are
necessary to enable it to do so and will permit such persons
as are authorized by Fund, and if demanded, federal and state
regulatory agencies to examine the Assets and Records. In any
requested review by a regulatory authority having the
requisite authority over Fund's Assets or Records, Custodian
will furnish any information or reports regarding such Assets
or Records which may be requested in order to ascertain
whether the operations of Fund are being conducted in a manner
consistent with applicable laws and regulations. Upon
Instructions or as demanded by federal or state regulatory
agencies, Custodian will instruct sub-custodian to permit such
persons as are authorized by Fund and if demanded, federal and
state regulatory agencies to examine the Assets and Records
held by sub-custodian.
Custodian acknowledges and understands that Fund engages in
securities lending and overnight investing (often through
repurchase transactions). In connection therewith, Custodian
agrees to provide to Fund, to any portfolio manager of Fund,
to the Adviser of Fund, or to any third party authorized by
Fund, Asset holdings, the cash amount available for investing,
and sale transaction information, on a real time basis or at
such times as may be required in order for such parties to
conduct securities lending and overnight investment programs.
Custodian agrees to cooperate with Fund, its Adviser, its
portfolio managers, and authorized third party lending agents
and overnight investment agents to facilitate communications,
and to permit on-line access and appropriate interfaces to
facilitate computer and personal access to such information as
is necessary to effect securities lending and overnight
investment programs.
U. Appointment of Sub-Custodian. Notwithstanding any other
provisions of this Agreement, all or any of the Assets may be
held in Custodian's own custody or in the custody of one or
more other banks or trust companies acting as sub-custodians
as may be selected by Custodian. Any such sub-custodian must
have the qualifications required for a custodian under the
1940 Act. The sub-custodian
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may participate directly or indirectly pursuant to the approval of the
Board in the Depository Trust Company, any other depository approved
by Fund, or the Treasury/Federal Reserve Book Entry System (as such
entity is defined at 17 CFR Sec. 270.17f-4(b)). Neither Custodian nor
sub-custodian will be entitled to reimbursement by Fund for any fees
or expenses of any sub-custodian. The appointment of a sub-custodian
will not relieve Custodian of any of its obligations hereunder.
Custodian may appoint as sub-custodian for Fund's foreign securities
on behalf of the applicable Portfolio(s) the foreign banking
institutions and foreign securities depositories designated in
Exhibits C and D hereto, but only in accordance with the applicable
provisions of Sections III and IV. Custodian shall have no more or
less responsibility or liability to Fund on account of any actions or
omissions of any sub-custodian so appointed than any such
sub-custodian has to Custodian.
Custodian shall furnish annually to Fund upon request, information
concerning any sub-custodian and any foreign sub-custodians employed
by Custodian. Such information shall be similar in kind and scope to
that furnished to Fund in connection with the initial approval of this
Agreement. In addition, Custodian will promptly inform Fund in the
event that Custodian learns of a material adverse change in the
financial condition of a sub-custodian or foreign sub-custodian or is
notified by a foreign banking institution employed as a foreign
sub-custodian that there appears to be a substantial likelihood that
its shareholders' equity will decline below $200 million (U.S. dollars
or the equivalent thereof) or that its shareholders' equity has
declined below $200 million (in each case computed in accordance with
generally accepted U.S. accounting principals).
V. Accounts and Records
1. To the extent customarily maintained by custodians of open-end
management investment companies, and as agreed upon between the
parties, Custodian will prepare and maintain complete, accurate
and current the Records required to be maintained by Fund (a)
under the 1940 Act, and (b) to the extent necessary to maintain
records for regulated investment companies (but not for tax
accounting purposes) under the Internal Revenue Code ("Code").
Custodian will preserve said Records in the manner and for the
periods prescribed in said Code and the 1940 Act, or for such
longer period as is agreed upon by the parties.
2. Custodian shall allow, upon not more than 48 hours' notice and
during the course of Custodian's regular business hours, any
insurance or banking authority having the requisite authority to
inspect the Assets and Records.
3. Custodian relies upon Fund to furnish, in writing, accurate and
timely information to complete the Records and perform daily
calculation of the Portfolios' net asset value, as provided in
Section II.V hereof.
4. Custodian shall incur no liability and Fund shall indemnify and
hold harmless Custodian from and against any liability arising
from any failure
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of Fund to furnish such information in a timely and accurate
manner, even if Fund subsequently provides accurate but
untimely information. It shall be the responsibility of Fund
to furnish Custodian with the declaration, record and
payment dates and amounts of any dividends or income and any
other special actions required concerning each Asset when
such information is not readily available from generally
accepted securities industry services or publications.
5. Custodian acknowledges that all of the Accounts and Records
are the property of Fund, and will be made available to Fund
for inspection or reproduction within a reasonable period of
time, upon demand. Custodian will assist Fund's independent
auditors, or upon approval of Fund, or upon demand, any
regulatory body, in any requested review of Fund's Accounts
and Records but shall be reimbursed for all expenses and
employee time invested in any such review outside of routine
and normal periodic reviews. Upon receipt from Fund of the
necessary information, Custodian will supply necessary data
for Fund's completion of any necessary tax returns,
questionnaires, periodic reports to regulatory authorities
and Shareholders and such other reports and information
requests as Fund and Custodian shall agree upon from time to
time.
W. Adoption of Procedures. Custodian and Fund agree to adopt Funds
Transfer Operating Guidelines ("FTOG"). The current FTOG is
attached hereto as Exhibit A. Custodian and Fund may from time to
time amend FTOG and/or adopt such additional procedures as they
agree upon. Custodian may conclusively assume that no procedure
approved by Fund, or directed by Fund, conflicts with or violates
any requirements of its prospectus, Declaration of Trust, Bylaws,
or any rule or regulation of any regulatory body or governmental
agency. Fund will be responsible to notify Custodian of any
changes in state statutes, regulations, rules or policies which
might necessitate changes in Custodian's responsibilities or
procedures with respect to such FTOG.
X. Calculation of Net Asset Value. Custodian will calculate the net
asset value of each Portfolio, in accordance with Fund's
prospectus, once daily at or about 4:00 p.m. New York City time,
or at such other time as instructed by the Board that, subject to
applicable law, is agreeable to Custodian. Custodian will prepare
and maintain a daily evaluation of Assets for which market
quotations are available by the use of outside services normally
used and contracted for this purpose; all other Assets will be
evaluated in accordance with Fund's Instructions. Custodian will
have no responsibility for the accuracy of the prices quoted by
these outside services or for the information supplied by Fund or
upon Instructions. Custodian will value the Assets utilizing the
outside pricing services designated by Fund. The current list of
authorized pricing services is attached on Exhibit B-1. The
parties may agree to follow alternative pricing methods and
verification/confirmation procedures from time to time. When Fund
and Custodian agree to such procedures, they shall be attached
hereto as Exhibit B-2.
Y. Advances. If Custodian advances its own funds at Fund's request
to pay for Assets purchased by Fund and Custodian promptly
notifies Fund of the amount
12
and nature of the debit to the Account, a banker's lien will be
permitted in the amount of the funds advanced. In the case of such a
permitted lien, and after adequate written notice to Fund, Custodian
may sell or exchange such Assets as may be necessary to pay for the
outstanding debt covered by the lien. Custodian may settle such
transactions in the normal course of business.
Z. Tax Reclaims.
1. Subject to the provisions hereof, Custodian shall apply for a
reduction of withholding tax and any refund of any tax paid or
tax credits which apply in each applicable market in respect of
income payments on the Assets for Fund's benefit which Custodian
is aware may be available to Fund.
2. The provision of tax reclaim services by Custodian is conditional
upon Custodian's receiving from Fund or, to the extent the Assets
are beneficially owned by others, from each beneficial owner, (a)
a declaration of the beneficial owner's identity and place of
residence and (b) certain other documentation (pro forma copies
of which are available from Custodian). Fund acknowledges that,
if Custodian does not receive such declarations, documentation
and information Custodian shall be unable to provide tax reclaim
services.
3. Custodian shall not be liable to Fund or any third party for any
taxes, fines or penalties payable by Custodian on behalf of Fund
or by Fund, and shall be indemnified accordingly, whether these
result from the inaccurate completion of documents by Fund or any
third party, or as a result of the provision to Custodian or any
third party of inaccurate or misleading information or the
withholding of material information by Fund or any other third
party, or as a result of any delay of any revenue authority or
any other matter beyond Custodian's control. Custodian shall,
however, be liable for any fines or penalties resulting from its
own mistakes of negligence or delays in filing with respect to
tax reclaim filings.
4. Custodian shall perform tax reclaim services with respect to
taxation levied by the revenue authorities in each country in
which Fund invests, provided such country has a tax reclaim
procedure. Other than as expressly provided in this Amendment,
Custodian shall have no responsibility with regard to Fund's tax
position or tax status in any jurisdiction.
5. Fund confirms that Custodian is authorized to disclose any
information requested by any revenue authority or any
governmental body in relation to Fund or the Assets.
6. Tax reclaim services may be provided by Custodian or, in whole or
in part, by one or more third parties appointed by Custodian
(which may be Custodian's affiliates); provided that Custodian
shall be liable for the performance of any such third party to
the same extent as Custodian would have been if Custodian
performed such services.
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AA. Monitoring Tax Laws. With respect to Assets held by Custodian, its
agents, sub-custodians, foreign sub-custodians, Eligible Foreign
Custodians, nominees, depositories or correspondents (hereinafter,
collectively, "Sub-Agents"), Custodian will monitor the tax laws in
those countries in which Fund invests. Custodian will advise Fund of
any required tax reports, tax filings, exemption forms or other
required filings and will provide such information to Fund as it may
require in order to prepare or support such reports or filings.
III. PROVISIONS RELATING TO RULES 17F-5 AND 17F-7
A. Delegation to State Street Boston as FCM. Fund, pursuant to resolution
adopted by the Board, hereby delegates to State Street Boston, subject
to section (b) of Rule 17f-5, the responsibilities set forth in this
Section III with respect to Foreign Assets held outside the United
States, and State Street Boston hereby accepts such delegation as FCM
of each Portfolio.
B. Definitions. As used throughout this Agreement, the capitalized terms
set forth below 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 financial institutions such as any
Eligible Securities Depositories 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 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.
"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 in amounts deemed by Fund to
be reasonably necessary to effect the Portfolios' transactions in such
investments.
"Foreign Custody Manager" or "FCM" has the meaning set forth in
section (a)(3) of Rule 17f-5.
"Eligible Securities Depository" has the meaning set forth in section
(b)(1) of Rule 17f-7.
"Custody Risk" includes those risks associated with maintaining Assets
with Eligible Securities Depositories (as defined below), which
include but are not
14
limited to risks involving an Eligible Securities Depository's
expertise and market reputation, the quality of the Depository's
services, its financial strength, any insurance or indemnification
arrangements, the extent and quality of regulation and independent
examination of the Depository, its standing in published ratings, its
internal controls and other procedures for safeguarding investments,
and any related legal protections.
C. Countries Covered. The FCM is responsible for performing the delegated
responsibilities defined below only with respect to the countries and
custody arrangements for each such country provided on a list from
FCM, which may be amended from time to time. The current list is
attached as Exhibit C hereto. The FCM will list on Exhibit C the
Eligible Foreign Custodians selected by the FCM to maintain the assets
of each Portfolio, which list may be amended from time to time by the
FCM. The FCM shall provide a list of Eligible Securities Depositories.
The current list is attached hereto as Exhibit D hereto. The FCM will
provide amended versions of Exhibits C and D in accordance with
subsection III.F.
Upon receipt by the FCM of Instructions to open an account, or to
place or maintain Foreign Assets in a country listed on Exhibit C, and
the fulfillment by Fund, on behalf of the Portfolios, of the
applicable account opening requirements for such country, the FCM is
deemed to have been delegated by the Board, on behalf of the
Portfolios, responsibility as FCM with respect to that country and to
have accepted such delegation. Execution of this Agreement by Fund
will be deemed to be an Instruction to open an account, or to place or
maintain Foreign Assets, in each country listed on Exhibit C in which
Custodian has previously placed or currently maintains Foreign Assets
pursuant to the terms of this Agreement. Following the receipt of
Instructions directing the FCM to close the account of a Portfolio
with the Eligible Foreign Custodian selected by the FCM in a
designated country, the delegation by the Board on behalf of the
Portfolios to State Street Boston as FCM for that country is deemed to
have been withdrawn and State Street Boston will immediately cease to
be the FCM of the Portfolios with respect to that country.
The FCM may withdraw its acceptance of delegated responsibilities with
respect to a designated country upon written notice to Fund. Thirty
days (or such longer period as to which the parties agree in writing)
after receipt of any such notice by Fund, State Street Boston will
have no further responsibility as FCM to Fund with respect to the
country as to which State Street Boston's acceptance of delegation is
withdrawn.
D. Scope of Delegated Responsibilities.
1. Selection of Eligible Foreign Custodians. Subject to the
provisions of this Section III, the FCM may place and maintain
the Foreign Assets in the care of the Eligible Foreign Custodian
selected by the FCM in each country listed on Exhibit C, as
amended from time to time, in accordance with the requirements of
Rule 17f-5(b)(3).
15
2. Maintaining Assets with Eligible Foreign Custodians. The
FCM may place and maintain Foreign Assets in the care of an
Eligible Foreign Custodian in accordance with Rule
17f-5(c)(1).
3. Contracts With Eligible Foreign Custodians. The FCM will
determine that the contract governing the foreign custody
arrangements with each Eligible Foreign Custodian selected
by the FCM will satisfy the requirements of Rule
17f-5(c)(2).
4. Monitoring. In each case in which the FCM maintains Foreign
Assets with an Eligible Foreign Custodian selected by the
FCM, the FCM will establish a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such
Eligible Foreign Custodian and (ii) the performance of the
contract governing the custody arrangements established by
the FCM with the Eligible Foreign Custodian. In the event
the FCM determines that the custody arrangements with an
Eligible Foreign Custodian it has selected are no longer
appropriate or no longer meet the requirements of Rule
17f-5, the FCM will notify the Board, in accordance with
subsection III.F, and withdraw the Foreign Assets from the
Eligible Foreign Custodian as soon as reasonably
practicable.
5. Risk Analysis and Monitoring. Custodian shall provide Fund
with an analysis of the custody risks associated with
maintaining Foreign Assets with Eligible Securities
Depositories set forth in Exhibit D hereto in accordance
with section (a)(1)(i)(A) of Rule 17f-7. Custodian shall
monitor continually the Custody Risks associated with
maintaining Foreign Assets with Eligible Securities
Depositories, and Custodian must promptly notify Fund (or
its duly authorized investment manager or adviser) of any
material change in such custody risks.
E. Guidelines for the Exercise of Delegated Authority. For purposes
of this Section III, subject to State Street Boston meeting its
obligations under this Section III, the Board is 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 State Street Boston is serving as Foreign
Custody Manager of the Portfolios.
F. Reporting Requirements. The FCM will 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 Exhibit C and D
at the end of the calendar quarter in which an amendment to
either Exhibit has occurred. The FCM will make written reports
notifying the Board of any other material change in the foreign
custody arrangements of a Portfolio described in this Section
III promptly after the occurrence of the material change.
G. Representations with Respect to Rule 17f-5. The FCM represents
to Fund that it is a U.S. Bank as defined in section (a)(7) of
Rule 17f-5.
16
Fund represents to Custodian and FCM that the Board has determined
that it is reasonable for the Board to rely on FCM to perform the
responsibilities delegated pursuant to this Agreement to State Street
Boston as the FCM of each Portfolio.
H. Effective Date and Termination of State Street Boston as FCM. The
Board's delegation to State Street Boston as FCM of the Portfolios
will be effective as of the date hereof and will 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 days after receipt by the non-terminating
party of such notice. The provisions of subsection III.H govern the
delegation to and termination of State Street Boston as FCM of the
Portfolios with respect to designated countries.
IV. DUTIES OF CUSTODIAN WITH RESPECT TO ASSETS HELD OUTSIDE THE UNITED STATES
A. Definitions. As used throughout this Agreement, the capitalized terms
set forth below shall have the following meanings:
"Foreign Securities System" means an Eligible Securities Depository
listed on Exhibit D hereto.
"Foreign Sub-Custodian" means an Eligible Foreign Custodian.
B. Holding Foreign Assets. Custodian shall identify on its books as
belonging to the Portfolios the Foreign Assets held by each Foreign
Sub-Custodian or Foreign Securities System. Custodian may hold Foreign
Assets for all of its customers, including the Portfolios, with any
Foreign Sub-Custodian in an account that is identified as belonging to
Custodian for the benefit of its customers, provided however, that (i)
the records of Custodian with respect to Foreign Assets 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, 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.
C. Foreign Securities System. Foreign securities shall be maintained in
a Foreign Securities System in a designated country through
arrangements implemented by Custodian or a Foreign Sub-Custodian, as
applicable, in such country.
D. Transactions in Foreign Custody Account.
1. Delivery of Foreign Assets. Custodian or a Foreign Sub-Custodian
shall release and deliver Foreign Assets of the Portfolios held
by Custodian or such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Instructions,
which may be continuing Instructions when deemed appropriate by
the parties, and only in the following cases:
17
a. upon the sale of such Foreign Assets for the Portfolio
in accordance with commercially reasonable market
practice in the country where such Foreign Assets 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;
b. in connection with any repurchase agreement related to
Foreign Assets;
c. to the depository agent in connection with tender or
other similar offers for Foreign Assets of the
Portfolios;
d. to the issuer thereof or its agent when such Foreign
Assets are called, redeemed, retired or otherwise
become payable;
e. to the issuer thereof, or its agent, for transfer into
the name of Custodian (or the name of the respective
Foreign Sub-Custodian or of any nominee of 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;
f. 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;
g. 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;
h. in the case of warrants, rights or similar Foreign
Assets, 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;
i. for delivery as security in connection with any
borrowing by the Fund requiring a pledge of assets by
the Fund;
j. in connection with trading in options and futures
contracts, including delivery as original margin and
variation margin;
18
k. in connection with the lending of Foreign Assets; and
l. for any other purpose, but only upon Instructions
specifying the Foreign Assets to be delivered and
naming the person or persons to whom delivery of such
securities shall be made.
2. Payment of Portfolio Monies. Upon receipt of Instructions,
which may be continuing Instructions when deemed
appropriate by the parties, 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:
a. upon the purchase of Foreign Assets for the Portfolio,
unless otherwise directed by Instructions, by (A)
delivering money to the seller thereof or to a dealer
therefore (or an agent for such seller or dealer)
against expectation of receiving later delivery of
such Foreign Assets; 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;
b. in connection with the conversion, exchange or
surrender of Foreign Assets of the Portfolio;
c. 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 Agreement, legal
fees, accounting fees, and other operating expenses;
d. for the purchase or sale of foreign exchange or
foreign exchange contracts for the Portfolio,
including transactions executed with or through
Custodian or its Foreign Sub-Custodians;
e. in connection with trading in options and futures
contracts, including delivery as original margin and
variation margin;
f. for payment of part or all of the dividends received
in respect of securities sold short;
g. in connection with the borrowing or lending of Foreign
Assets; and
h. for any other purpose, but only upon receipt of
Instructions specifying the amount of such payment and
naming the person or persons to whom such payment is
to be made.
3. Market Conditions. Notwithstanding any provision of this
Agreement 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
19
customary established securities trading or processing practices
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.
Custodian shall provide to the Board the information with respect
to custody and settlement practices in countries in which
Custodian employs a Foreign Sub-Custodian, including without
limitation, information relating to Foreign Securities Systems,
described on Exhibit E hereto at the time or times set forth on
such Exhibit. Custodian may revise Exhibit E 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.
E. Registration of Foreign Assets. The Foreign Assets 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 Custodian or in the name of any Foreign Sub-Custodian or in
the name of any nominee of the foregoing, and Fund on behalf of such
Portfolio agrees to hold any such nominee harmless from any liability
as a holder of record of such Foreign Assets. Custodian or a Foreign
Sub-Custodian shall not be obligated to accept securities on behalf of
a Portfolio under the terms of this Agreement unless the form of such
securities and the manner in which they are delivered are in
accordance with reasonable market practice.
F. Bank Accounts. Custodian will identify on its books as belonging to
Fund cash (including cash denominated in foreign currencies) deposited
with Custodian. Where Custodian is unable to maintain, or market
practice does not facilitate the maintenance of cash on the books of
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 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 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.
G. Collection of Income. 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 extraordinary measures are required to collect
such income, Fund and Custodian shall consult as to such measures and
as to the compensation and expenses of Custodian relating to such
measures.
20
H. Shareholder Rights. With respect to the Foreign Assets held pursuant
to this Section IV 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. Fund
acknowledges that local conditions, including lack of regulations,
onerous procedural obligations, lack of notice and other factors may
have the effect of severely limiting the ability of Fund to exercise
shareholder rights.
I. Communications Relating to Foreign Securities. Custodian shall
transmit promptly to Fund written information with respect to
materials received by Custodian via the Foreign Sub-Custodians from
issuers of the Foreign Assets being held for the account of the
Portfolios (including, without limitation, pendency of calls and
maturities of Foreign Assets and expirations of rights in connection
therewith). With respect to tender or exchange offers, Custodian shall
transmit promptly to Fund written information with respect to
materials so received by Custodian from issuers of the Foreign Assets
whose tender or exchange is sought or from the party (or its agent)
making the tender or exchange offer. Custodian shall not be liable for
any untimely exercise of any tender, exchange or other right or power
in connection with Foreign Assets or other property of the Portfolios
at any time held by it unless (i) Custodian or the respective Foreign
Sub-Custodian is in actual possession of such Foreign Assets or
property and (ii) Custodian receives 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 Custodian is to
take action to exercise such right or power.
J. 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.
K. Tax Law. Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on Fund, the Portfolios or
Custodian as custodian of the Portfolios by the tax law of the United
States or of any state or political subdivision thereof. It shall be
the responsibility of Fund to notify Custodian of the obligations
imposed on Fund with respect to the Portfolios or Custodian as
custodian of the Portfolios by the tax law of countries other than
those mentioned in the above sentence, including responsibility for
withholding and other taxes, assessments or other governmental
charges, certifications and governmental reporting. The sole
responsibility of Custodian with regard to such tax law shall be to
use reasonable efforts to assist Fund with respect to any claim for
exemption
21
or refund under the tax law of countries for which Fund has provided
such information.
V. INSTRUCTIONS
A. The term "Instructions", as used herein, means written or oral
instructions to Custodian from a designated representative of Fund.
Certified copies of Resolutions of the Board naming one or more
designated representatives to give instructions in the name and on
behalf of Fund, may be received and accepted from time to time by
Custodian as conclusive evidence of the authority of any designated
representative to act for Fund and may be considered to be in full
force and effect (and Custodian will be fully protected in acting in
reliance thereon) until receipt by Custodian of notice to the
contrary. Unless the Resolution delegating authority to any person to
give instructions specifically requires that the approval of anyone
else will first have been obtained, Custodian will be under no
obligation to inquire into the right of the person giving such
instructions to do so. Notwithstanding any of the foregoing provisions
of this Section V., no authorizations or Instructions received by
Custodian from Fund, will be deemed to authorize or permit any
trustee, officer, employee, or agent of Fund to withdraw any of the
Assets upon the mere receipt of such authorization or Instructions
from such trustee, officer, employee or agent.
B. Notwithstanding any other provision of this Agreement, Custodian, upon
receipt (and acknowledgment if required at the discretion of
Custodian) of the Instructions of a designated representative of Fund
will undertake to deliver for an Account monies (provided such monies
are on hand or available) in connection with the Portfolio's
transactions and to wire transfer such monies to such broker, dealer,
sub-custodian, bank or other agent specified in such Instructions.
C. No later than the next business day immediately following each oral
Instruction, Fund will send Custodian written confirmation of such
oral Instruction. At Custodian's sole discretion, Custodian may record
on tape, or otherwise, any oral Instruction whether given in person or
via telephone, each such recording identifying the parties, the date
and the time of the beginning and ending of such oral Instruction.
VI. STANDARDS OF CARE AND LIABILITY OF CUSTODIAN
A. Custodian shall be liable to Fund for any failure to meet any standard
of care described below and as otherwise described below.
1. Custodian's Standard of Care for Services. In connection with all
the duties and responsibilities of Custodian under this
Agreement, Custodian shall exercise the standard of reasonable
care, prudence and diligence that a professional custodian
engaged in the banking or trust company industry and having
professional expertise in financial and securities processing
transactions and custody for mutual funds would observe.
22
2. Custodian's Liability for Safekeeping of Assets. Custodian shall
have strict liability for and assume the entire responsibility
for physical loss, damage or injury to custodied Assets
occasioned by robbery, burglary, fire, theft or mysterious
disappearance irrespective of whether such losses occur while the
Assets are in possession of Custodian or any Sub-Agents,
including any officers, directors and employees thereof
(hereinafter, "Affiliates").
In addition, in the event of any loss to the Assets due to other
cause, unless Custodian can prove that it and its Sub-Agents or
Affiliates were not negligent and did not act with willful
misconduct, Custodian will be liable for such loss. In the event
of loss, damage or injury to the Assets while on deposit in an
Account, whether held by Custodian or its Sub-Agents (including
Federal Reserve Book Entry System), upon Fund's demand, Custodian
will promptly cause said Assets to be replaced with Assets of
like kind and quality, together with all rights and privileges
pertaining thereto, or, if acceptable to Fund, remit cash equal
to the fair market value of the Assets as of the date when the
loss was discovered, which acceptance will not unreasonably be
denied.
3. Liability of Custodian respecting Safekeeping of Foreign Assets
by Foreign Sub-Custodian. In connection with Foreign Assets held
under agreements with Sub-Agents, including Eligible Securities
Depositories as provided in Section IV, Custodian shall be liable
to Fund for any loss which shall occur as the result of the
failure of Sub-Agents or Affiliates to exercise reasonable care
with respect to the safekeeping of such Foreign Assets to the
same extent that Sub-Agents would be liable to Fund if Custodian
were holding such Foreign Assets in California. In the event of
any loss to Fund by reason of the failure of Custodian,
Sub-Agents or Affiliates to utilize reasonable care, Custodian
shall be liable to Fund to the extent of Fund's damages, to be
determined based on the market value of the Foreign Assets which
are the subject of the loss at the date of discovery of such loss
and without reference to any special conditions or circumstances.
4. Liability of Custodian respecting Foreign Sub-Custodians. In
connection with the duties and responsibilities of Custodian,
other than those duties and responsibilities provided in Section
III, each agreement pursuant to which Custodian or sub-custodian
employs a Foreign Sub-Custodian shall require the institution to
exercise reasonable care (which may be defined in such agreement
according to the standards of the country of such Foreign
Sub-Custodian) in the performance of its duties, and to
indemnify, and hold harmless, Custodian or sub-custodian and Fund
from and against any loss or liability arising out of or in
connection with the institution's performance of such
obligations.
5. FCM's Standard of Reasonable Care for Selection of Eligible
Foreign Custodians. In connection with the duties and
responsibilities of the FCM as provided in Section III to place
or maintain Foreign Assets with an
23
Eligible Foreign Custodian, the FCM will 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, those set forth in Rule
17f-5(c)(1)(i) through (iv). The FCM will determine that the
contract (or the rules or established practices or procedures in
the case of an Eligible Foreign Custodian that is a foreign
securities depository or clearing agency) governing the foreign
custody arrangements with each Eligible Foreign Custodian
selected by the FCM will provide reasonable care for the Foreign
Assets held by that Eligible Foreign Custodian based on the
standards applicable to custodians in the particular country.
Each such contract will include the provisions set forth in Rule
17f-5(c)(2)(i)(A) through (F), or, in lieu of any or all of the
provisions set forth in said (A) through (F), such other
provisions that the FCM determines will provide, in their
entirety, the same or greater level of care and protection for
the Foreign Assets as the provisions set forth in said (A)
through (F) in their entirety.
6. FCM Standard of Reasonable Care, Prudence and Diligence. In
connection with the duties and responsibilities of the FCM as
provided in Section III, other than those duties and
responsibilities addressed by subsection VI.A(5), the FCM agrees
to exercise reasonable care, prudence and diligence that a
professional custodian engaged in the banking or trust company
industry and having professional expertise in financial and
securities processing transactions and custody for mutual funds
would observe.
7. Indemnification of Custodian. Custodian shall be held to the
standards provided in this Section VI.A in carrying out this
Agreement, and provided such standards are met, shall be
indemnified by, and shall be without liability to, Fund for any
action taken or omitted by Custodian in good faith without
negligence or willful misconduct.
8. Subrogation to Claims against Foreign Sub-Custodian. At Fund's
election, the Portfolios shall be entitled to be subrogated to
the rights of 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.
9. Liability of Custodian for Country Risk. Except as may arise from
Custodian's own negligence or willful misconduct or the
negligence or willful misconduct of a Sub-Custodian or failure to
meet its obligations under Section III, Custodian shall be
without liability to Fund for any loss, liability, claim or
expense resulting from or caused by anything which is part of
Country Risk. 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 Agreement and,
regardless of whether
24
assets are maintained in the custody of a Foreign Sub-Custodian
or a Foreign Securities System, 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.
10. Custodian may request and obtain the advice and opinion of
counsel for Fund with respect to questions or matters of law, and
it shall be without liability to Fund for any action taken or
omitted by it in good faith, in conformity with such advice or
opinion.
B. Custodian may rely upon statements of Fund's independent certified
public accountants and any representative of Fund authorized to give
Instructions, and Custodian shall not be liable for any actions taken,
in good faith, upon such statements.
C. If Fund requires Custodian in any capacity to take, with respect to
any Assets, any action which involves the payment of money by it, or
which in Custodian's opinion might make it or its nominee liable for
payment of monies or in any other way, Custodian, upon notice to Fund
given prior to such actions, shall be and be kept indemnified by Fund
in an amount and form satisfactory to Custodian against any liability
on account of such action.
D. Custodian shall be entitled to receive, and Fund agrees to pay to
Custodian, on demand, reimbursement for such cash disbursements, costs
and expenses as may be agreed upon from time to time by Custodian and
Fund.
E. Custodian shall be protected in acting as custodian hereunder upon any
Instructions, advice, notice, request, consent, certificate or other
instrument or paper reasonably appearing to it to be genuine and to
have been properly executed and shall, unless otherwise specifically
provided herein, be entitled to receive as conclusive proof of any
fact or matter required to be ascertained from Fund hereunder, a
certificate signed by Fund's President, or other officer specifically
authorized for such purpose.
F. Without limiting the generality of the foregoing, Custodian shall be
under no duty or obligation to inquire into, and shall not be liable
for:
1. The legality of the purchase of any Asset by or for a Portfolio
or evidence of ownership required by Fund to be received by
Custodian, or the propriety of the decision to purchase or amount
paid therefore;
2. The legality of the sale of any Assets by or for a Portfolio, or
the propriety of the amount for which the same are sold;
3. The legality of the issue or sale of any beneficial interest of
Fund, or the sufficiency of the amount to be received therefore;
25
4. The legality of the repurchase or redemption of any shares of
beneficial interest of, or the propriety of the amount to be paid
therefore; or
5. The legality of the declaration of any dividend of a Portfolio by
Fund, or the legality of the issue of any shares of beneficial
interest of a Portfolio in payment of any stock dividend.
G. Custodian shall not be liable for, or considered to be Custodian of,
any money represented by any check, draft, wire transfer, clearing
house funds, uncollected funds, or instrument for the payment of money
received by it on behalf of Fund, until Custodian actually receives
such money, provided only that it shall advise Fund promptly if it
fails to receive any such money in the ordinary course of business,
and use its best efforts and cooperate with Fund toward the end that
such money shall be received.
H. Notwithstanding anything herein to the contrary, Custodian may provide
Fund for its approval, agreements with banks or trust companies which
will act as sub-custodians for Fund pursuant to Section II.U.
VII. COMPENSATION. Fund will pay to Custodian such compensation as may be set
forth in a fee schedule agreed to in writing by the parties from time to
time. The current Fee Schedule is attached hereto as Exhibit F. The Fee
Schedule will apply to any new Portfolio which may be added from time to
time, unless the parties agree otherwise in writing. Such compensation
will be computed monthly on the last trading day each month and billed
to, and paid by, Fund monthly. Custodian may not charge such compensation
or other fees for which it may be entitled to reimbursement under the
provisions of this Agreement against monies held by it for any Account.
Custodian will not be entitled to reimbursement by Fund for any loss or
expenses of any sub-custodian or eligible foreign custodian.
VIII. TERMINATION. Either party to this Agreement may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other
party hereto and received not less than sixty (60) days prior to the date
upon which such termination will take effect. Fund may terminate this
Agreement without payment of any penalty, forfeiture, compulsory buyout
amount or performance of any other obligation which would deter
termination. Upon termination:
1. Fund will pay to Custodian such compensation and reimbursable
disbursements, fees, costs and expenses paid or incurred to such date.
2. Fund will use its best efforts to obtain a successor custodian. Unless
the holders of a majority of the outstanding shares of beneficial
interest vote to have the Assets and Records delivered and paid over
to some other person, firm or corporation specified in the vote
(having not less than two million dollars ($2,000,000) aggregate
capital, surplus and undivided profits, as shown by its last published
report, and meeting such other qualifications for Custodian as set
forth in the Bylaws of Fund or under applicable law), the Board will,
forthwith upon giving or receiving notice of termination of this
Agreement, appoint as successor custodian a bank or trust company
having such qualifications.
26
3. Custodian will deliver, free from any claim of rights respecting the
Assets and Records, to the successor custodian so specified or
appointed, at Custodian's office, all Assets and Records then held by
Custodian hereunder, duly endorsed and in form for transfer, or will
cooperate in effecting changes in book-entries at the Depository Trust
Company or in the Treasury/Federal Reserve Book Entry System pursuant
to 31 CFR Sect. 306.118.
4. In the event no such vote has been adopted by the holder of shares of
beneficial interest of Fund and no written order designating a
successor custodian has been delivered to Custodian on or before the
date when such termination becomes effective, then Custodian will
deliver the Assets and Records to a bank or trust company at the
selection of Custodian and meeting the qualifications for Custodian,
if any, set forth in the Bylaws of Fund and having not less than two
million dollars ($2,000,000) aggregate capital, surplus and undivided
profits, as shown by its last published report.
Upon either such delivery to a successor custodian, Custodian will
have no further duties under this Agreement, although any liabilities
pursuant to Section VI will survive termination of this Agreement.
Thereafter such bank or trust company will be entitled to reasonable
compensation for its services.
In the event that no such successor custodian can be found, Fund will
submit to its shareholders, before permitting delivery of the Assets
and Records to anyone other than a successor custodian, the question
of whether Fund will be liquidated or function without a custodian.
Notwithstanding the foregoing requirement as to delivery upon
termination of this Agreement, Custodian may make any other delivery
of the Assets and Records which is permitted by the 1940 Act, Fund's
Declaration of Fund and Bylaws then in effect or apply to a court of
competent jurisdiction for the appointment of a successor custodian.
IX. NOTICES. Notices, requests, Instructions and other writings received by
Fund at X.X. Xxx 0000, 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx Xxxxx,
Xxxxxxxxxx 00000 or at such other address as Fund may have designated to
Custodian in writing, will be deemed to have been properly given to Fund
hereunder; and notices, requests, Instructions and other writings
received by Custodian or State Street Boston as its offices at State
Street Bank and Trust Company, 000 Xxxxxxxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000-0000 Attention: Custody Department or to such other
address as it may have been designated to Fund in writing, will be deemed
to have been properly given to Custodian hereunder.
X. EMPLOYEES. Custodian shall be responsible for making inquiries for
reasonably ensuring and, upon request of Fund, for providing an annual
certification to Fund that, to the best of Custodian's knowledge,
Custodian or any employee thereof, or any sub-custodian or any employee
thereof, having any material connection with the handling of the Assets,
has not:
A. been convicted, in the last 10 years, of any felony or misdemeanor
arising out of conduct involving embezzlement, fraudulent conversion,
or misappropriation of
27
funds or securities, or involving violations of Section 1341, 1342, or
1343 of Xxxxx 00, Xxxxxx Xxxxxx Code; or
B. been found by any state regulatory authority, within the last 10
years, to have violated or to have acknowledged violation of any
provision of any state insurance law involving fraud, deceit or
knowing misrepresentation; or
C. been found by any federal or state regulatory authorities, within the
last 10 years, to have violated or to have acknowledged violation of
any provision of federal or state securities laws involving fraud,
deceit or knowing misrepresentation.
XI. CONFIDENTIALITY. Custodian, sub-custodian, or any agent thereof shall not
disclose or use any records or information obtained pursuant to this
Agreement in any manner whatsoever except as expressly authorized in the
Agreement, will keep confidential any information obtained pursuant to
the arrangements under this Agreement and will disclose such information
only if Fund has authorized such disclosure, or if such disclosure is
expressly required by applicable federal or state regulatory authorities.
XII. RESERVATION OF AUTHORITY. Notwithstanding any other provision of this
Agreement, it is understood and agreed that Fund shall at all times
retain the ultimate responsibility for direction and control of all
services provided pursuant to this Agreement, and retain the right to
direct, approve, or disapprove any action hereunder, which responsibility
and right shall be reasonably exercised.
XIII. DATA ACCESS; THE SYSTEMS; CONFIDENTIALITY.
A. If Custodian or FCM provides Fund, or its designated investment
advisors, consultants, auditors, or other third parties authorized by
Custodian who agree to abide by the terms of this Section XIII
("Authorized Designees") with access to the computerized investment
portfolio recordkeeping and accounting systems used by Custodian or
FCM (the "System") on a remote basis for the purpose of obtaining and
analyzing reports and information (the "Remote Access Services"), Fund
agrees to comply, and to cause its Authorized Designees to comply,
with remote access operating standards and procedures and with user
identification or other password control requirements and other
security procedures as may be issued from time to time by Custodian or
FCM for use of the System and access to the Remote Access Services.
Fund agrees to advise Custodian or FCM immediately in the event that
it learns or has reason to believe that any person to whom Fund has
given access to the System or the Remote Access Services has violated
or intends to violate the terms of this Section XIII and will
cooperate with Custodian or FCM in seeking injunctive or other
equitable relief.
B. The term "System" shall include, and this Amendment shall govern,
Fund's access to and use of any computerized system made available by
Custodian or FCM and accessed by Fund.
C. Fund agrees to discontinue use of the System and Remote Access
Services, if requested, for any security reasons cited by Custodian or
FCM.
28
D. The System and Remote Access Services described herein and the
databases, computer programs, screen formats, report formats,
interactive design techniques, formulae, processes, systems, software,
know how, algorithms, programs, training aids, printed materials,
methods, books, records, files, documentation and other information
made available to Fund by Custodian or FCM as part of the Remote
Access Services and through the use of the System and all copyrights,
patents, trade secrets and other proprietary rights of Custodian or
FCM related thereto are the exclusive, valuable and confidential
property of Custodian or FCM and its relevant licensors (the
"Proprietary Information"). Fund agrees on its behalf and on behalf of
its Authorized Designees to keep the Proprietary Information
confidential and to limit access to its employees and Authorized
Designees (under a similar duty of confidentiality) who require access
to the System for the purposes intended. In the event of termination
of this Agreement, Fund will return to Custodian or FCM all copies of
documentation and other Proprietary Information in its possession or
in the possession of its Authorized Designees. The foregoing shall not
apply to Proprietary Information in the public domain or required by
law to be made public.
E. Fund agrees to use the Remote Access Services only in connection with
the proper purposes of this Agreement. Fund will not, and will cause
its employees and Authorized Designees not to, (i) permit any third
party to use the System or the Remote Access Services, (ii) sell,
rent, license or otherwise use the System or the Remote Access
Services in the operation of a service bureau or for any purpose other
than as expressly authorized under this Agreement, (iii) use the
System or the Remote Access Services for any fund, trust or other
investment vehicle without the prior written consent of Custodian or
FCM, as appropriate, or (iv) allow or cause any information
transmitted from Custodian's or FCM's databases, including data from
third party sources, available through use of the System or the Remote
Access Services, to be redistributed or retransmitted for other than
use for or on behalf of Fund, as Custodian's or FCM's customer. The
foregoing shall not restrict Fund from providing access to the System
to its auditors or to applicable regulatory authorities.
F. Fund will not, and will cause its employees and Authorized Designees
not to, modify the System in any way, enhance or otherwise create
derivative works based upon the System, nor will Fund or its
Authorized Designees reverse engineer, decompile or otherwise attempt
to secure the source code for all or any part of the System.
G. Fund acknowledges that the disclosure of any Proprietary Information,
or of any information which at law or equity ought to remain
confidential, will immediately give rise to continuing irreparable
injury to Custodian or FCM inadequately compensable in damages at law
and that Custodian or FCM shall be entitled to obtain immediate
injunctive relief against the breach or threatened breach of any of
the foregoing undertakings, in addition to any other legal remedies
which may be available.
H. Custodian and FCM represent and warrant that one or both is the owner
of and has the right to grant access to the System and to provide the
Remote Access
29
Services contemplated herein. Because of the nature of computer
information technology and the necessity of relying upon third party
sources, and data and pricing information obtained from third parties,
the System and Remote Access Services are provided "AS IS", and Fund
and its Authorized Designees shall be solely responsible for the
investment decisions, regulatory reports and statements produced using
the Remote Access Services. Custodian or FCM and its relevant
licensors will not be liable to Fund or its Authorized Designees for
any direct or indirect, special, incidental, punitive or consequential
damages arising out of or in any way connected with the System or the
Remote Access Services, nor shall either party be responsible for
delays or nonperformance under this Agreement arising out of any cause
or event beyond such party's control.
I. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, CUSTODIAN AND FCM,
EACH FOR ITSELF AND ITS RELEVANT LICENSORS EXPRESSLY DISCLAIMS ANY AND
ALL WARRANTIES CONCERNING THE SYSTEM AND THE SERVICES TO BE RENDERED
HEREUNDER, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION
ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
J. Custodian and/or FCM will defend or, at its option, settle any claim
or action brought against Fund to the extent that it is based upon an
assertion that access to the System or use of the Remote Access
Services by Fund under this Agreement constitutes direct infringement
of any United States patent or copyright or misappropriation of a
trade secret, provided that Fund notifies Custodian or FCM promptly in
writing of any such claim or proceeding and cooperates with Custodian
or FCM in the defense of such claim or proceeding. Should the System
or the Remote Access Services or any part thereof become, or in
Custodian's or FCM's opinion be likely to become, the subject of a
claim of infringement or the like under the patent or copyright or
trade secret laws of the United States, Custodian or FCM shall have
the right, at Custodian's or FCM's sole option, to (i) procure for
Fund the right to continue using the System or the Remote Access
Services, (ii) replace or modify the System or the Remote Access
Services so that the System or the Remote Access Services becomes
noninfringing, or (iii) terminate access to the System.
XIV. CALFORNIA DEPARTMENT OF INSURANCE. The parties acknowledge that Fund is
subject to laws, rules and regulations of the California Department of
Insurance. During the term of this Agreement, Custodian represents that:
A. It is domiciled and has its principal place of business in the State
of California and is a member of the Federal Reserve System;
B. It will comply with section 1104.9 of the Insurance Code, as amended
from time to time;
C. It is a wholly owned subsidiary of Xxxxx Xxxxxx Xxxxxx, xxx Xxxxx
Xxxxxx Xxxxxx has a net worth of at least one hundred million dollars
($100,000,000);
00
X. Xxxxx Xxxxxx Xxxxxx is a member of and the Depositories shall be
limited to, the Federal Reserve System, The Depository Trust Company,
Participants Trust Company, Euroclear and Cedel;
E. No Assets shall be held in a Depository that is not a qualified
depository within the meaning of section 1104.9(2);
F. Assets shall be held by Custodian for the benefit of Fund, and the
books and records of Custodian shall so designate;
G. Beneficial title to the Assets shall remain in Fund, and State Street
Boston, any Sub-Agent, including the Federal Reserve bank maintaining
book-entry securities, shall be the agents of Custodian;
H. Assets held by Custodian (other than bearer securities) shall be
registered in the name of Custodian, any nominee of Custodian, Foreign
Sub-Custodian, any nominee of such Foreign Sub-Custodian, or in the
name of any nominee of a qualified depository. The nominees of
Custodian shall consist of a partnership composed only of its
employees, officers, and/or corporate affiliates;
I. Assets held by Custodian in bearer form shall be maintained in that
form and not re-registered in any nominee name, except on specific
Instructions of Fund;
J. Insurance and banking regulatory authorities and Fund's independent
accountants will be allowed to inspect the Assets promptly on demand;
and
K. A sweep account may be used for automatic investment of cash. The
sweep account shall be part of the Account and subject to the terms
and provisions of this Agreement. Investments in sweep accounts shall
be made only upon the Instructions of Fund.
XV. MISCELLANEOUS
A. This Agreement is executed and delivered in the Commonwealth of
Massachusetts and shall be governed by the laws of said state.
B. All the terms and provisions of this Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the respective
successor and assigns of the parties hereto.
C. No provisions of the Agreement may be amended or modified, in any
manner except by a written agreement properly authorized and executed
by both parties hereto.
D. The captions in this Agreement are included for convenience of
reference only, and in no way define or delimit any of the provisions
hereof or otherwise affect their construction of effect.
31
E. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be deemed an original but all of
which together will constitute one and the same instrument.
F. If any part, term or provision of this Agreement is by the courts held
to be illegal, in conflict with any law or otherwise invalid, the
remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be
construed and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or invalid.
G. This Agreement may not be assigned by either party without prior
written consent of the other party.
H. If any provision of the Agreement, either in its present form or as
amended from time to time, limits, qualifies or conflicts with the
1940 Act, such statutes, rules and regulations shall be deemed to
control and supersede such provision without nullifying or terminating
the remainder of the provisions of this Agreement.
I. A copy of the Fund's Declaration of Trust is on file with the
Secretary of the Commonwealth of Massachusetts. The Declaration of
Trust has been executed on behalf of Fund by a Trustee of Fund in her
capacity as Trustee of Fund and not individually. The obligations of
this Agreement shall be binding upon the Assets and shall not be
binding upon any Trustee, Officer or shareholder of Fund individually.
J. Notwithstanding the provisions of this Agreement, the maximum standard
of care applicable to Custodian will be the greater of (1) the
standard imposed by applicable California law and/or federal law under
the 1940 Act, and (2) the standard under which Custodian shall hold
harmless and indemnify Fund from and against any loss or liability
arising out of Custodian's failure to comply with the terms of this
Agreement or arising out of Custodian's negligence, willful
misconduct, or bad faith.
K. Custodian represents that it does meet all requirements of a custodian
of section 17(f) of the 1940 Act and agrees to immediately notify Fund
in the event that Custodian, for any reason, no longer meets such
requirements.
32
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers to be effective as of the date first above
written.
STATE STREET BANK AND TRUST PACIFIC SELECT FUND
COMPANY OF CALIFORNIA, N.A.
By: /s/ Xxxxx X. Xxxxxx
By: /s/ Xxxxx X. Xxxxx ---------------------------------
----------------------------------- Name/Title: Xxxxx X. Xxxxxx.
Name/Title: Xxxxx X. Xxxxx Vice President & Assistant Secretary
Senior Vice President/Managing Director
STATE STREET BANK AND TRUST
COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Name/Title: Xxxxxx X. Xxxxxxxxx
Senior Vice President
33
Exhibit A--FTOG
Exhibit B-1--Price Sources
Exhibit B-2--Pricing Procedures
Exhibit C--Eligible Foreign Custodians
Exhibit D--Eligible Securities Depositories
Exhibit E--Market Information
Exhibit F--Fee Schedule
34
EXHIBIT A
FUNDS TRANSFER
OPERATING GUIDELINES
1. OBLIGATION OF THE SENDER
State Street Bank and Trust Company of California, N.A. ("State Street")
is authorized to promptly debit Client's account(s) upon the receipt of a
payment order in compliance with the Security Procedures on the attached
Addendum, as that may be updated from time to time by Client, for funds
transfers and in the amount of money that State Street has been instructed to
transfer. State Street is hereby instructed to accept funds transfer
instructions only via delivery methods and Security Procedures indicated on the
attached Addendum (and any update executed by the Client). The Client agrees
that the Security Procedures are reasonable and adequate for its wire transfer
transactions and agrees to be bound by any payment orders, amendments and
cancellations, whether or not authorized, issued in its name and accepted by
State Street after being confirmed by any of the selected Security Procedures.
State Street shall execute payment orders in compliance with the attached
Security Procedures. State Street will use reasonable efforts to execute on the
execution date payment order received after the customary deadline (2:30 p.m.
Pacific Time), but if it is unable to execute any such payment order on the
execution date, such payment order will be deemed to have been received on the
next business day.
2. SECURITY PROCEDURES
The Client must notify State Street immediately of any change in the
Client's authorized personnel. State Street shall verify the authenticity of all
instructions according to the Security Procedures attached hereto. Client
acknowledges that State Street offered it a variety of Security Procedures.
3. ACCOUNT NUMBERS
State Street shall process all payment orders on the basis of the
attached Security Procedures.
4. REJECTION
State Street reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of State Street's receipt of such payment
order; (b) if State Street, in good faith, is unable to satisfy itself that the
transaction has been properly authorized.
5. RECALL OR CANCELLATION
STATE STREET shall act on all authorized requests to recall or cancel
payment orders received in compliance with the attached Security Procedures,
provided that such requests are received on the same business day (prior to 2:30
p.m., Pacific Time).
6. ERRORS
State Street shall assume no responsibility for failure to detect any
erroneous payment order provided that State Street complies with the payment
order instructions as received and State Street complies with the attached
Security Procedures. The Security Procedures are established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
7. INTEREST AND LIABILITY PAYMENTS
State Street shall assume no responsibility for lost interest with
respect to the refundable amount of any unauthorized payment order, unless State
Street is notified of the unauthorized payment order within thirty (30) days of
notification by State Street of the acceptance of such payment order. In no
event (including but not limited to failure to execute a payment order) shall
State Street be liable for special, indirect or consequential damages, even if
advised of the possibility of such damages.
8. CONFIRMATIONS
Confirmation of State Street's execution of payment order shall
ordinarily be
35
provided within 24 hours. Notice may be delivered through State Street's account
statements, advices, information systems, or by facsimile or callback. The
Client must report any objections to the execution of a payment order within 90
days.
9. MISCELLANEOUS
State Street may use the Federal Reserve System Fedwire to execute payment
orders, and any payment order carried in whole or in part through Fedwire will
be subject to applicable Federal Reserve Board rules and regulations. State
Street and the Client agree to cooperate to attempt to recover any funds
erroneously paid to wrong parties, regardless of any fault of State Street or
the Client, but the party responsible for the erroneous payment shall bear all
costs and expenses incurred in trying to effect such recovery. These Guidelines
shall not be amended except by a written agreement signed by the parties.
Each party signing below represents that he or she is fully authorized to sign
this Agreement.
EFFECTIVE DATE: June 1, 2000
AGREED TO AND ACCEPTED BY:
PACIFIC SELECT FUND STATE STREET BANK AND
TRUST COMPANY OF
CALIFORNIA, N.A.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
------------------------------- ---------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
-------------------------
Title: Vice President & Assistant Secretary Title: Senior Vice President
------------------------
36
Addendum to Exhibit A
Fund Transfer Operating Guidelines
SECURITY PROCEDURES
1. State Street is authorized to transfer funds, upon appropriate
instructions as set forth in paragraph 3 below, from the Fund to the
one or more of the 3 accounts listed below. Transfer of funds to any
other party is strictly prohibited.
(a) Pacific Life Insurance Company
Account No. 9102599504
ABA No.: 000000000
Chase Manhattan Bank
(b) Pacific Life & Annuity Company
Account No. 9102691756
ABA No. 000-000-000
Chase Manhattan Bank
(c) Pacific Select Distributors, Inc.
Account No. 14172-06783
ABA No. 000-000-000
Bank of America
2. The bank, account numbers and routing instructions (ABA Numbers) set
forth in paragraph 1 above may only be changed in writing, executed by
then current authorized parties as designated in resolutions adopted by
the Board of the entity seeking the change. A current Secretary's
Certificate and a Certificate of Encumbency for each of Pacific Life
Insurance Company (Pacific Life), Pacific Life & Annuity Company (PL&A)
and Pacific Select Distributors, Inc. (PSD) is attached. Note that
current Board resolutions of Pacific Life and PL&A require two
authorized signatories:
(1) Chairman of the Board
or
President
or
Senior Vice President & Chief Financial Officer
and
(2) Vice President & Treasurer
or
Assistant Treasurer
PSD Board resolutions currently require 2 authorized signatories as
follows:
(1) Chairman of the Board
or
President
and
(2) Chief Financial Officer or Secretary
37
An updated Secretary's Certificate and Certificate of Encumbency must
accompany any request to change banks, bank account numbers or routing
instructions to confirm authorized signatories. Only an originally
signed document executed by the authorized signatories is acceptable to
affect such change (no copies or facsimiles). Signatures must be
matched against specimen signatures, which are on file with State
Street.
3. The Chairman, President and any Vice President of the Pacific Select
Fund are authorized to give wire instructions for wires from Pacific
Select Fund to Pacific Life Insurance Company, Pacific Life & Annuity
Company and Pacific Select Distributors, Inc. as described in paragraph
1 above. Currently, those persons are:
Xxxxxx Xxxxxx, Chairman
Xxxxx Xxxxxxx, President
Xxxxx Xxxxxxx, Vice President & Treasurer
Xxxxxx Xxxxxxx, Vice President & Counsel
Xxxxx Xxxxxx, Vice President & Assistant Secretary
Xxxxxx Milfs, Vice President & Secretary
The Fund will advise State Street if there is any change to this list of
authorized signatories.
Such instructions may only be given in writing, including via
facsimile. Signatures must be matched against specimen signatures,
which are on file with State Street.
EFFECTIVE DATE: June 1, 2000
AGREED TO AND ACCEPTED BY:
PACIFIC SELECT FUND STATE STREET BANK AND
TRUST COMPANY OF
CALIFORNIA, N.A.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
------------------------------- ---------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
-------------------------
Title: Vice President & Assistant Secretary Title: Senior Vice President
------------------------
38
EXHIBIT B-1
OUTSIDE PRICING SERVICES
PRICING SERVICE PRIMARY SECURITIES PRICED
INTERACTIVE DATA CORPORATION INTERNATIONAL AND MORTGAGE
REUTERS DOMESTIC EQUITIES AND INTERNATIONAL
MULER DATA BONDS OTHER THAN MORTGAGE
XXXXXXX XXXXX XXXXX OTHER THAN MORTGAGE
BLOOMBERG VERFICATION SOURCE ONLY
EFFECTIVE DATE: June 1, 2000
AGREED TO AND ACCEPTED BY:
PACIFIC SELECT FUND STATE STREET BANK AND
TRUST COMPANY OF
CALIFORNIA, N.A.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
-------------------------------- -----------------------------------
Name: Xxxxx X. Ledgr Name: Xxxxx X. Xxxxx
Title: Vice President & Assistant Title: Senior Vice President
Secretary
39
EXHIBIT B2
PACIFIC SELECT FUND
VALUATION PROCEDURES
Pursuant to Rule 22c-1 under the Investment Company Act of 1940 (the "Act"),
Pacific Select Fund (the "Fund") values its securities each business day. The
procedures set forth below shall be used to ensure that the Fund's securities
are appropriately valued on a daily basis.
A. Valuation of securities - applicable requirements
The Fund's securities and other assets ("Securities") shall be valued consistent
with the requirements of the Act and the rules thereunder and the policies
described in the registration statement for the Fund as filed with the
Securities and Exchange Commission ("SEC") from time to time, which provides, in
particular, that all prices will be determined as of 4:00 p.m. Eastern time. In
addition, the Fund will look to the guidance provided by the SEC and other
pertinent authorities. Pacific Life (the "Adviser") and/or Portfolio Managers
will assist State Street Bank and Trust Company of California, N.A. ("State
Street") the Fund's Custodian, in determining or confirming the value of any
Securities for which State Street seeks assistance or identifies for review. To
assist in this review, Portfolio Managers may request such reports (e.g.,
"exception reports") as State Street regularly produces to assist Portfolio
Managers in fulfilling this review obligation.
B. Securities for which market quotations are readily available
1. The Securities held by the Money Market portfolio shall be valued in
accordance with the Fund's "Procedures for Amortized Cost Valuation of
Portfolio Securities of the Money Market Portfolio of Pacific Select
Fund".
2. For other portfolios, the value of Securities (domestic and
foreign) shall be obtained by State Street from pricing
sources approved by the Fund's Board of Trustees (the "Board")
as set forth on Attachment A, ("Approved Sources") which may
be amended from time to time. Prices used shall be:
(a) the last reported sales prices on the pricing tape from, or
otherwise provided by, an Approved Source for equity Securities; or
(b) the mean between the bid and asked prices for all debt
Securities; and for equity Securities, including options contracts,
if their last sale prices are not available. (If there is no bid for
an option contract that has an offer of $3.00 or less, the bid will
be assumed to be zero for purposes of determining the mean).
3. State Street shall implement reasonable procedures to verify Fund prices
and provide a copy of such procedures to the Board. State Street shall
notify the Adviser and the Board of any proposed changes to such
procedures prior to implementation.
4. With respect to Securities denominated in a foreign currency, State
Street shall convert quotations to U.S. dollar equivalents using currency
exchange rates from such provider as it deems reliable. (The rate may be
determined at a time earlier than 4:00 p.m. Eastern time.)
If information becomes known to State Street after the time the net asset value
is calculated on any business day, such information may be assessed
prospectively to adjust the price of a Security. Such information may include
late dividend notification, corporate actions, and corrected/adjusted last sale
prices from an exchange.
If an exchange or market closes earlier than its regularly scheduled closing
time, if there is a trading halt for individual Securities, or if there is an
unscheduled market closure (e.g., in the event of a natural disaster, strikes,
news of significant governmental actions, regulatory trading halts, system
failures, terrorist threats or activities, or armed conflict, etc.), prices
determined in accordance with Sections B and C of these procedures will be
presumed
40
reliable and accurate, unless or until the Adviser or Portfolio Manager believes
the value to be inaccurate; provided that, and on each day the Fund values its
shares while such closure or halt is effective, the Portfolio Manager shall
review the circumstances and confirm to the Adviser and State Street whether it
believes the value used by the Fund remains accurate.
C. Alternative valuation methods
In the event an Approved Source does not provide a price for a Security or the
Adviser or Portfolio Manager believes a price to be inaccurate, Securities may
be valued using an alternative valuation method described below. Since prices
determined under this Section C are determined objectively, they need not be
reviewed or ratified by the Valuation Committee described in Section E of these
procedures, although any such price determination remains subject to the
jurisdiction of the Valuation Committee and the Board.
1. Broker-Dealer quotes
a) The Portfolio Manager will obtain a price quotation from an
established market-maker in that particular Security and provide
that quote and identify the market-maker to State Street1; or,
the Adviser may direct State Street to seek to obtain a quote
from a market-maker; or
b) If a price cannot be obtained from an established market-maker,
the Portfolio Manager will seek to obtain quotations from at
least two broker/dealers and provide those quotes and identify
the broker/dealers to State Street1; or, the Adviser may direct
State Street to seek to obtain such quotes from at least two
broker/dealers. In the event that the price quotations from the
broker/dealers are different, an average of the quotations will
be used, provided, however, (i) the Portfolio Manager (or
Adviser) may reject a quotation that has been received from a
broker/dealer if the Portfolio Manager (or Adviser) reasonably
believes that it is inaccurate; and (ii) if, after contacting at
least three broker/dealers, State Street or the Portfolio Manager
is only able to obtain a price quotation for a particular
Security from one broker/dealer, the price quoted by that
broker/dealer may be used to value the Security.
2. Benchmark valuation method for debt securities
a) At the time of purchase of a debt Security for which market
quotations either are not readily available or are deemed to be
unreliable or inaccurate, the duration of the Security is to be
determined by the Portfolio Manager. A Treasury issue of similar
duration will then be selected by the Portfolio Manager to serve
as a proxy for the price movements of the Security. An initial
price spread will be established between the Security and the
selected Treasury issue. The price of the Security will then move
in tandem with price movements in the selected Treasury issue,
while maintaining the initial price spread.
b) The duration of the Security will be reviewed once a month by the
Portfolio Manager, and at any other time that the Portfolio
Manager believes that there may have been a material change in
the duration of the Security. Should the duration change, another
Treasury issue of similar duration will be chosen to serve as
proxy. The Portfolio Manager will also review (and update as
necessary) the price spread.
c) The Portfolio Manager will transmit prices generated by this
method to State Street in time for them to be incorporated into
the Fund's daily net asset value calculation (as requested by
State Street). A quarterly report will be prepared for the Board
to review the results of the benchmark valuations.
3. Procedure for valuation of stock rights of non-U.S. issuers
________________________
/1/ To avoid confusion, advice to State Street should include complete
name of Security, cusip number, and coupon and maturity date (if
applicable).
41
The following equation is to be used to determine the value of stock
rights for which market quotations are not readily available or for
which market quotations are available but, in the judgment of the
Portfolio Manager, the value that could be realized upon disposition
of the right is less than the market quotation:
Value of one right/2/ = Market Value of stock, ex rights - Subscription Price (X)
---------------------------------------------------------
Number of rights required to purchase one share
V\\r\\ = P\\r\\ - P/i/ (X)
------------------------
#
where:
P\\r\\ = Ex rights price of the stock
P/i/ = Subscription price
# = Number of rights required to purchase a new share of stock
V//r// = Value of one right
X = Discount factor (which must be 1.0 or less) that may apply at
the discretion of the Portfolio Manager, which takes into
account thin trading volume as determined by the Portfolio
Manager.
D. Valuation changes
If events materially affecting the value of Securities occur between the time of
their last sale on the exchange or market on which they trade and 4:00 p.m.
Eastern time, the procedures set forth in Section E of these procedures may be
followed. Under these circumstances, the Adviser or Portfolio Manager or both,
may, at its or their discretion, determine if the value of the Securities should
be re-evaluated to reflect a more current fair market value.
If any valuation change would be called for under these procedures, State Street
shall make any changes in a price required in accordance with the Guidelines
Regarding Standard of Materiality for Pricing Errors adopted by the Board.
E. Valuation committee and related procedures
If a market price or quotation for a Security cannot be determined based on the
above procedures, or if any market price or quotation is deemed to be unreliable
or inaccurate by the Adviser or a Portfolio Manager, the price of such a
Security shall be determined by or under the direction of the Valuation
Committee (the "Committee") under the procedures in this section.
1. In adopting these procedures, the Board has established a Committee.
The Committee is established to value Securities for which market
prices or quotations are not readily available or are deemed to be
unreliable and to review fair value determinations made by the Adviser
or a Portfolio Manager.
2. The members of the Committee shall consist of any two or more Trustees
of the Board, at least one of which shall be a Trustee who is not an
"interested person" of the Fund, as defined under the Act. The two or
more Trustees who serve as the members may vary from meeting to
meeting. The Committee shall be assisted by such of the Fund's
officers or employees of the Adviser or another Portfolio Manager as
deemed appropriate by the Committee or by the Adviser or pertinent
Portfolio Manager.
3. Two members shall be necessary to constitute a quorum of the
Committee. At any meeting of the Committee, the decision of a majority
of the members present and voting shall be determinative as to any
matter submitted to a vote. Committee meetings may be held in person
or by telephone or other media, or through written consent in lieu of
a meeting. Notice of the meeting may be in writing or by telephone or
________________________
/2/ In no instance should the value used be less than zero
42
other means of communication.
4. The Committee will consult with the Adviser and, if appropriate, with
the appropriate Portfolio Manager as needed to assist it in reaching
valuation determinations.
5. The pricing methodology for a Security for which market quotes either
are not readily available or are deemed to be unreliable or
inaccurate, shall be determined initially by or under the direction of
the Committee. Such determination shall be made in accordance with the
valuation procedures established herein and any of the pricing
policies established in the future by the Committee.
6. When the Committee determines the valuation of a particular Security,
it will utilize such information that it may deem appropriate to
arrive at a price. As a general principle, the price should be what a
portfolio might reasonably expect to receive from the current sale of
that Security. Sources of information may include broker/dealers or
other financial institutions, the issuer, analysts, publicly available
information from filings made with the SEC, other information believed
to be reliable, or, in the case of exchange-traded Securities, the
appropriate stock exchange. The Committee may consider the
recommendation of the Portfolio Manager and, where applicable, the
Adviser, with respect to the valuation of the Security; and may
consider different methodologies to determine fair value, such as (but
not limited to) multiple of earnings, discount from a similar freely
traded Security, yield to maturity, or a combination of the foregoing.
Information that the Committee may take into account includes, but is
not limited to, the following:
. The type of security and cost at purchase date;
. Size of a portfolio's holdings;
. Fundamental analytical data relating to the Security;
. Issuer financial statements;
. Any restrictions on disposing of the Security;
. Special reports prepared by analysts;
. Information concerning recent transactions or offers with respect
to the Security;
. Existence of merger proposals or tender offers affecting the
Security;
. Price and extent of public trading of the Security on foreign
exchanges, similar securities of the issuer or securities of
comparable issuers;
. Discount from market value of unrestricted securities of the same
class of security;
. Forces that may influence the market in which the Security is
traded;
. Information derived from world financial markets and comparable
financial products;
. The value of other financial instruments, including derivative
securities, traded on other markets or among dealers;
. Trading volumes on markets, exchanges or among dealers;
. Values of baskets of securities traded on other markets,
exchanges or among dealers;
. Change in interest rates;
. Observations from financial institutions;
. Government (domestic or foreign actions or pronouncements);
. Other news events; and
. Other matters deemed appropriate by the Committee.
In the case of emergencies or other unusual situations (an "Event"), the
following additional factors should be considered:
. Nature and duration of Event;
. Forces influencing the operation of the financial markets;
. Likelihood of recurrence of the Event;
. Whether the effects of the Event are isolated or whether they
affect entire markets, countries, or regions.
The information considered in any determination of fair value under this section
together with, to the extent practicable, judgment factors considered by the
Committee in reaching its decisions, shall be documented in minutes
43
that shall be kept of the proceedings of the Committee.
7. Delegation.
(a) A Pricing Adviser, as defined below, may, without a meeting of
the Committee:
(i) fair value, for any length of time, any number of Securities
if the aggregate change in value of all such Securities in a
particular portfolio prior to such fair value and afterwards
would not have a material effect on that portfolio; and
(ii) fair value, for a period not to exceed three business days,
an y Security or group of Securities if the aggregate change in
value would have a material effect on a portfolio.
(b) In addition, the Committee may, on a case by case basis, delegate
to the Adviser or a Portfolio Manager or to both (each a "Pricing
Adviser") the specific authority to determine fair value on
business days on which a meeting of the Committee is not held,
and the Pricing Adviser may determine the fair value of one or
more Securities in accordance with these procedures for so long
as permitted, on a case by case basis, by the Committee.
8. Ratification. Any determinations of fair value made by the Pricing
Adviser without a meeting of the Committee as provided under Paragraph
7 above shall be submitted for approval and ratification to either the
Committee or to the Board at the next regularly scheduled meeting.
9. If a Security that has been valued in accordance with this Section E
can on any subsequent business day be valued under the procedures in
Sections B or C of these procedures, then the procedures in Paragraphs
B or C shall be used, unless the Adviser or a Portfolio Manager
believes such value is not fair or reliable.
10. In the event of any fair value determined under the delegation
procedures described under Paragraph 7 above, the Pricing Adviser
shall report and provide such information to the Committee as the
Committee may reasonably request to document compliance with these
procedures, including the information considered in the determination
of fair value and, to the extent practicable, judgment factors
considered in reaching the pricing decision.
11. Any determination of fair value made by the Committee under this
Section E shall have the same effect as if made by the entire Board.
The Committee shall report to the Board at the next regularly
scheduled meeting following each meeting of the Committee or
circumstance in which a Security has been valued in accordance with
this Section. The Committee will provide the Board with minutes of its
meetings outlining decisions made and will make available, upon
request, all information considered in reaching its decisions, which
information shall be retained in the records of the meetings of the
Committee.
F. Reports
The Portfolio Managers shall report and provide such information to the Board as
the Board may reasonably request to show compliance with these pricing and fair
value procedures.
The Adviser shall provide a summary of all Securities fair valued pursuant to
Section E, Paragraph 7 of these procedures and minutes of any Committee meeting
held during a quarter at the next regularly scheduled Board meeting.
44
Attachment A
APPROVED PRICING SOURCES FOR PACIFIC SELECT FUND
Interactive Data Corporation
Reuters America, Inc.
Xxxxxx Data
Xxxxxxx Xxxxx Securities Pricing Services
Bloomberg LP/3/
FRI Corporation
Street Software
Any exchange or market on which Securities held by the Fund are traded
_____________________
/3/ Including broker quote pages and alternate exchange/market trades
or quotes
45
Pacific Life's
Internal Process For Potential Fair Valuation Situations
The following is the general process used in connection with valuation of Fund
Securities:
1. State Street advises Pacific Life if trading in a Security has halted or
an exchange has an unscheduled or early close. This may happen, for
example, in the event of a natural disaster, strikes, news of significant
governmental actions, regulatory trading halts, system failures, terrorist
threats or activities, or armed conflict.
2. State Street investigates circumstances and contacts the Portfolio Manager
for information about the subject Security(s) and to inquire if the
Portfolio Manager believes the Security(s) should be fair valued and if
the Portfolio Manager is fair valuing the Security for its proprietary
funds and, if so, at what value and the basis for such valuation. If the
Portfolio Manager believes the last reported sales price from an Approved
Source reflects the appropriate values then that value is used and the
"Fair Valuation Process" is not implemented. Otherwise, we proceed to
Paragraph 3 below.
3. State Street then provides Pacific Life with the above information, any
information it gathers independently, which may include news announcements
and articles, and when possible, information as to the value of related
securities, such as ADRs, EDRs, GDRs, I shares and derivatives, the value
of comparable shares traded on other exchanges, and valuation of the
Security(s) by other State Street clients.
4. Pacific Life may consult with other Portfolio Managers or third parties to
determine how other parties are valuing a Security(s). Within Pacific
Life, members of the Variable Regulatory Compliance staff who work on Fund
matters (currently, Xxxxxxx XxxXxxxx, Xxxx Xxx, Xxxxxxxxx Xxxxxxx,
Xxxxxxxx Xxxxx, and Xxxxx Xxxxxxx) and the "Valuation Team" from Pacific
Life's Enterprise Risk Management Unit (currently, Xxxx Xxxxxxxx, Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxx and Xxxx Xxx) consult with in-house counsel
(currently, Xxxxx Xxxxx; or in her absence, Xxxx Xxxx at Xxxxxxx, outside
counsel) to review and discuss the information obtained. Pacific Life
generally presumes that the value used by the Manager for its proprietary
accounts, or recommended or suggested to Pacific Life for use by the Fund,
is an accurate value. Pacific Life reviews those values to make sure they
are not unreasonable in light of the information obtained. Upon sign off
from Xxxx, Xxxxxx, Xxxxx or Xxxx, Pacific Life will generally parallel the
Portfolio Manager's actions for its proprietary funds or its
recommendation. If two or more Portfolio Managers recommend different
prices for the same Security, Pacific Life will review the information and
circumstances and determine one value to use for all portfolios holding
the same Security.
5. If trading or pricing sources do not resume within three business days,
Pacific Life will prepare a memo outlining the facts and situation, and
will call a Valuation Committee Meeting if required by the Fund's
Valuation Procedures.
6. When a price from an Approved Source remains unchanged for ten consecutive
business days, State Street will contact the Portfolio Manager to confirm
that the price being used is still valid or if we need to initiate the
Fair Valuation Process. We do not consider continued use of an unchanged
price to be a Fair Valuation.
If the information called for or personnel described above are not available,
Pacific Life uses its best efforts to use this process, to the extent
practicable, to make determinations in accordance with the Fund's Valuation
Procedures.
46
PACIFIC LIFE
PRICING PROCEDURES
Completion Goal
All daily functions impacting the NAV should be posted by 3:00 p.m. Pre-pricing
NAV roll forwards and senior checks should be completed and reviewed by 3:15
p.m. Post Pricing NAV roll forwards and pricing verification should be completed
by 5:00.
Review Goal
Either an Account Manager or Senior Accountant reviews all funds pricing on a
daily basis. All manual prices, securities that do not price on a pricing feed,
are updated by the Fund Accountant and input is verified to the source by the
Account Manager or Senior Accountant. This review should be completed by end of
day, before NAV's are reported to Pacific Life (Transfer Agency).
Manual Prices
. If a security does not price that normally comes through a feed,
Bloomberg, IDC and/or BCAR should be reviewed to ensure there wasn't a
corporate action on the security today.
. Pull price from IDC and input. See pricing source authorization
agreement for pricing methodology. Attach backup from Bloomberg, IDC
and/or BCAR showing there was no corporate action and turn in for
review.
. If the security continues to no-price further research needs to be done
to find out why the source no longer provides a price and to get the
security feeding in again.
NAV Automated Roll forward
. Ending general ledger balances are pulled from PAS before pricing. The
current day NAV roll forward amounts are compared to previous day's NAV
roll forward for reasonableness.
. Recalculate "as-of effect" using long formula. Large "as-of effects"
(**.001) should be checked and verified to funds share reports.
. Verify NAV roll forward to pricing reports.
Automated Senior Check
. The Senior check schedule is generated with the automated NAV roll
forward
. Account activity from previous day is compared to account activity for
current day on capital, income, and expense accounts.
. Schedule should be reviewed for reasonableness on all general ledger
accounts.
** Denotes greater than
47
Pricing Report Steps
Review all prices, including all manually priced securities as well as all
securities priced via a pricing feed.
Verify price changes that appear on the Pricing Stratification report (10003) as
well as fund impact on the Daily Pricing report (00000) xxxxx xxx following
guidelines:
Domestic and Foreign Stocks: (Common & Preferred)
If the change is over 10% and the price went down or
If the adjusted difference is over .01
. Verify the price with the primary source if it is a manual
. Verify the price to a second source (i.e., Bloomberg, Reuters,
IDC)
. Obtain supporting evidence from Bloomberg (i.e., stock
dividends, corporate actions or related
News)
. Review for materiality. If there is a material impact to the
fund, advise Manager or Advisor.
EXCEPTION** Small Cap Index - down 20%, up 40% or anything over .01
. Verify the price with the primary source if it is a manual
. Verify the Price to a second source (i.e., Bloomberg, Reuters,
IDC)
. Obtain supporting evidence from Bloomberg (i.e., stock
dividends, corporate actions or related
News)
If price goes down more than 15% for foreign and 20% for domestic then
pull the DVD and CACS screens from Bloomberg to ensure we didn't miss a
corporate action.
Bonds:
If % change is over 2%:
. Verify the price with the primary source if it is a manual
. Verify the Price to a second source (i.e., Bloomberg, Reuters,
IDC)
If % change is over 5% or the adjusted difference is over .01:
. Verify the price with the primary source if it is a manual
. Verify the Price to a second source (i.e., Bloomberg, Reuters,
IDC)
. Obtain supporting evidence from Bloomberg (i.e., stock
dividends, corporate actions or related
News)
48
Exchange Rate
If change is over 2%, check spot rate against Bloomberg and News for
the Country.
Verify Trades on Pricing (10157):
Check your trades for the day:
Change in price
X
Shares
= AP/DP
- Adjusted difference on Pricing report 10157
= difference
This difference should not be more than .125 (1/8 cent) of your fund
(1/2 cent divided by 4). If the difference is more, we will need a
histogram (GIMH) with rollforward. Please include the trade information
(shares and price) on your screen print. Verify your trade is within
the range for that security for the day. Note: If you had numerous
trades you need to verify any trade where the ap/dp is greater than a
xxxxx. Otherwise you need to verify all trades.
49
COUNTRY CURRENCY Time (15:00 CST)
------- -------- ----------------
INDIA INR 2:30
INDONESIA IDR 4:00
THAILAND THB 4:00
HONG KONG HKD 5:00
MALAYSIA MYR 5:00
PHILIPPINES PHP 5:00
SINGAPORE SGD 5:00
TAIWAN TWD 5:00
JAPAN JPY 6:00
SOUTH KOREA KRW 6:00
AUSTRALIA AUD 5:00-8:00
MEXICO MXN 13:00-15:00
CANADA CAD 13:30-16:00
BRAZIL BRL 14:00-18:00
PERU PEN 16:00
NETHERLANDS EUR 17:00
IRELAND GBP 21:00
PORTUGAL EUR 21:00
UNITED KINGDOM GBP 21:00
AUSTRIA EUR 22:00
CZECH REPUBLIC CZK 22:00
DENMARK DKK 22:00
FRANCE EUR 22:00
GERMANY EUR 22:00
HUNGARY HUF 22:00
ITALY EUR 22:00
NORWAY NOK 22:00
SPAIN EUR 22:00
SWEDEN SEK 22:00
SWITZERLAND CHF 22:00
EGYPT EGP 23:00
FINLAND EUR 23:00
GREECE EUR 23:00
ISRAEL ILS 23:00
SOUTH AFRICA ZAR 23:00
TRUKEY TRL 23:00
ZIMBABWE ZWD 23:00
50
EXHIBIT C: STATE STREET GLOBAL CUSTODY NETWORK SUBCUSTODIANS
September, 2002
Country Subcustodian
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
Austria Erste Bank der Osterreichischen Sparkassen AG
Bahrain HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Bangladesh Standard Chartered Bank
Belgium Fortis Bank nv-sa
Benin via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
Ivory Coast
Bermuda The Bank of Bermuda Limited
Bolivia Citibank, N. A.
Botswana Barclays Bank of Botswana Limited
Brazil Citibank, N.A.
Bulgaria ING Bank N.V.
Burkina Faso via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
Ivory Coast
Canada State Street Trust Company Canada
Cayman Islands Bank of Nova Scotia Trust Company (Cayman) Ltd.
Chile BankBoston, N.A.
People's Republic Hongkong and Shanghai Banking Corporation Limited,
of China Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Costa Rica Banco BCT S.A.
Croatia Privredna Banka Zagreb d.d
Cyprus Cyprus Popular Bank Ltd.
Czech Republic Eeskoslovenska Obchodni Banka, A.S.
Denmark Danske Bank A/S
Ecuador Citibank, N.A.
Egypt HSBC Bank Egypt S.A.E.
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
51
Estonia Hansabank
Finland Nordea Bank Finland Plc.
France BNP Paribas Securities Services, S.A.
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A.
Guinea-Bissau via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
Ivory Coast
Hong Kong Standard Chartered Bank
Hungary HVB Bank Hungary Rt.
Iceland Icebank Ltd.
India Deutsche Bank AG
Hongkong and Shanghai Banking Corporation Limited
Indonesia Standard Chartered Bank
Ireland Bank of Ireland
Israel Bank Hapoalim B.M.
Italy BNP Paribas Securities Services, S.A.
Ivory Coast Societe Generale de Banques en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant Bank Ltd.
Japan Mizuho Corporate Bank Ltd.
Sumitomo Mitsui Banking Corporation
Jordan HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Kazakhstan HSBC Bank Kazakhstan
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Kenya Barclays Bank of Kenya Limited
Republic of Korea Hongkong and Shanghai Banking Corporation Limited
Latvia A/s Hansabanka
Lebanon HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Lithuania Vilniaus Bankas AB
52
Malaysia Standard Chartered Bank Malaysia Berhad
Mali via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
Ivory Coast
Mauritius Hongkong and Shanghai Banking Corporation Limited
Mexico Banco Nacional de Mexico S.A.
Morocco Banque Commerciale du Maroc
Namibia Standard Bank Namibia Limited
Netherlands KAS BANK N.V.
New Zealand Westpac Banking Corporation
Niger via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
Ivory Coast
Nigeria Stanbic Bank Nigeria Limited
Norway Nordea Bank Norge ASA
Oman HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Pakistan Deutsche Bank AG
Palestine HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Panama BankBoston, N.A.
Peru Citibank, N.A.
Philippines Standard Chartered Bank
Poland Bank Handlowy w Warszawie S.A.
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
Romania ING Bank N.V.
Russia ING Bank (Eurasia) ZAO, Moscow
Senegal via Societe Generale de Banques en Cote d'Ivoire, Abidjan,
Ivory Coast
Singapore The Development Bank of Singapore Limited
Slovak Republic Ceskoslovenska Obchodni Banka, A.S., pobocka zahranicnej
banky v SR
Slovenia Bank Austria Creditanstalt d.d. - Ljubljana
South Africa Nedcor Bank Limited
00
Xxxxxxxx Xxxx xx Xxxxx Xxxxxx Limited
Spain Banco Santander Central Hispano S.A.
Sri Lanka Hongkong and Shanghai Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Banken
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
Thailand Standard Chartered Bank
Togo via Societe Generale de Banques en Cote d'Ivoire,
Abidjan, Ivory Coast
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, N.A.
Uganda Barclays Bank of Uganda Limited
Ukraine ING Bank Ukraine
United Arab Emirates HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking
Corporation Limited)
United Kingdom State Street Bank and Trust Company, London Branch
Uruguay BankBoston, N.A.
Venezuela Citibank, N.A.
Vietnam The Hongkong and Shanghai Banking Corporation Limited
Zambia Barclays Bank of Zambia Limited
Zimbabwe Barclays Bank of Zimbabwe Limited
54
EXHIBIT D: STATE STREET GLOBAL CUSTODY NETWORK DEPOSITORIES
OPERATING IN NETWORK MARKETS
September 2002
Country Depositories
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Bahrain Exchange Clearing, Settlement, and Depository System of
the Bahrain Stock
Belgium Caisse Interprofessionnelle de Depots et de
Virements de Titres, S.A.
Banque Nationale de Belgique
Benin Depositaire Central - Banque de Reglement
Bermuda Bermuda Securities Depository
Brazil Central de Custodia e de Liquidacao Financeira de
(CETIP) Titulos Privados
Companhia Brasileira de Liquidacao e Custodia
Sistema Especial de Liquidacao e de Custodia
(SELIC)
Bulgaria Bulgarian National Bank
Central Depository AD
Burkina Faso Depositaire Central - Banque de Reglement
Canada Canadian Depository for Securities Limited
Chile Deposito Central de Valores S.A.
People's Republic China Securities Depository and Clearing
of China Corporation Limited
Shanghai Branch
China Securities Depository and Clearing
Corporation Limited
Shenzhen Branch
Colombia Deposito Central de Valores
Deposito Centralizado de Valores de Colombia S.A.
(DECEVAL)
Costa Rica Central de Valores S.A.
Croatia Ministry of Finance
National Bank of Croatia
Sredisnja Depozitarna Agencija d.d.
Cyprus Central Depository and Central Registry
Czech Republic Czech National Bank
Stredisko cennych papiru - Xxxxx xxxxxxxxx
00
Xxxxxxx Vaerdipapircentralen (Danish Securities Center)
Egypt Misr for Clearing, Settlement, and Depository
S.A.E.
Estonia Eesti Vaartpaberikeskus
Finland Suomen Arvopaperikeskus (Finnish Central
Securities Depository)
France Euroclear France
Germany Clearstream Banking AG, Frankfurt
Greece Apothetirion Titlon AE - Central Securities
Depository Bank of Greece, System for Monitoring
Transactions in Securities in Book-Entry Form
Guinea-Bissau Depositaire Central - Banque de Reglement
Hong Xxxx Xxxxxxx Xxxxxxxxxxxx Xxxx
Xxxx Xxxx Securities Clearing Company Limited
Hungary Kozponti Elszamolohaz es Ertektar (Budapest) Rt.
(KELER)
Iceland Iceland Securities Depository Limited
India Central Depository Services India Limited
National Securities Depository Limited
Reserve Bank of India
Indonesia Bank Indonesia
PT Kustodian Sentral Efek Indonesia
Israel Tel Aviv Stock Exchange Clearing House Ltd.
(TASE Clearinghouse)
Italy Monte Titoli S.p.A.
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica Jamaica Central Securities Depository
Japan Bank of Japan - Net System
Japan Securities Depository Center (JASDEC)
Incorporated
Kazakhstan Central Depository of Securities
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository
Latvia Latvian Central Depository
Lebanon Custodian and Clearing Center of Financial
Instruments for Lebanon and the Middle East
(Midclear) X.X.X. Banque du Liban
Lithuania Central Securities Depository of Xxxxxxxxx
00
Xxxxxxxx Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia
Mali Depositaire Central - Banque de Reglement
Mauritius Central Depository and Settlement Co. Ltd.
Bank of Mauritius
Mexico S.D. Indeval, S.A. de C.V.
Morocco Maroclear
Netherlands NECIGEF) Nederlands Centraal Instituut voor Giraal
Effectenverkeer B.V.
New Zealand New Zealand Central Securities Depository
Limited
Niger Depositaire Central - Banque de Reglement
Nigeria Central Securities Clearing System Limited
Norway Verdipapirsentralen (Norwegian Central
Securities Depository)
Oman Muscat Depository & Securities Registration
Company, SAOC
Pakistan Central Depository Company of Pakistan
Limited
State Bank of Pakistan
Palestine Clearing Depository and Settlement, a
department of the Palestine Stock Exchange
Panama Central Latinoamericana de Valores, S.A.
(LatinClear)
Peru Caja de Valores y Liquidaciones,
Institucion de Compensacion y Liquidacion
de Valores S.A
Philippines Philippine Central Depository, Inc.
Registry of Scripless Securities (XXXX) of
the Bureau of Treasury
Poland Krajowy Depozyt Papierow Wartosciowych S.A.
(National Depository of Securities)
Central Treasury Bills Registrar
Portugal INTERBOLSA - Sociedade Gestora de Sistemas
de Liquidacao e de Sistemas Centralizados
de Valores Mobiliarios, S.A.
Qatar Central Clearing and Registration (CCR), a
department of the Doha Securities Market
Romania Bucharest Stock Exchange Registry Division
National Bank of Romania
National Securities Clearing, Settlement
and Depository Company
Russia Vneshtorgbank, Bank for Foreign Trade of
the Russian Federation
57
Senegal Depositaire Central - Banque de Reglement
Singapore Central Depository (Pte) Limited
Monetary Authority of Singapore
Slovak Republic National Bank of Slovakia
Stredisko cennych papierov SR, a.s.
Slovenia KDD - Centralna klirinsko depotna xxxxxx
x.x.
South Africa Central Depository Limited
Share Transactions Totally Electronic
(STRATE) Ltd.
Spain Banco de Espana
Servicio de Compensacion y Liquidacion de
Valores, S.A.
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen VPC AB
(Swedish Central Securities Depository)
Switzerland SegaIntersettle AG (SIS)
Taiwan - R.O.C. Taiwan Securities Central Depository Company
Limited
Thailand Bank of Thailand
Thailand Securities Depository Company Limited
Togo Depositaire Central - Banque de Reglement
Trinidad and Tobago Trinidad and Tobago Central Bank
Tunisia Societe Tunisienne Interprofessionelle pour la
Compensation et de Depots des Valeurs
Mobilieres (STICODEVAM)
Turkey Central Bank of Turkey
Takas ve Saklama Bankasi A.S. (TAKASBANK)
Uganda Bank of Uganda
Ukraine Mizhregionalny Fondovy Souz
National Bank of Ukraine
United Arab Emirates Clearing and Depository System,
a department of theDubai Financial Market
Venezuela Banco Central de Venezuela
Vietnam Securities Registration, Clearing and
Settlement, Depository Department of the
Securities Trading Center
Zambia Bank of Zambia
XxXX Central Shares Depository Limited
58
TRANSNATIONAL
Euroclear
Clearstream Banking AG
59
EXHIBIT E: MARKET INFORMATION
Publication/Type of Information Brief Description
(scheduled frequency)
The Guide to Custody in World Markets An overview of settlement and safekeeping
(hardcopy annually and regular procedures, custody practices and foreign
website updates) investor considerations for the markets
in which State Street offers custodial
services.
Global Custody Network Review Information relating to Foreign
(annually) Sub-Custodians in State Street's Global
Custody Network. The Review stands as an
integral part of the materials that State
Street provides to its U.S. mutual fund
clients to assist them in complying with
SEC Rule 17f-5. The Review also gives
insight into State Street's market
expansion and Foreign Sub-Custodian
selection processes, as well as the
procedures and controls used to monitor
the financial condition and performance
of our Foreign Sub-Custodian banks.
Securities Depository Review Custody risk analyses of the Foreign Securities
Depositories presently
(annually) operating in Network markets. This publication is an
integral part of the materials that State Street provides to its U.S.
mutual fund clients to meet informational obligations created by
SEC Rule 17f-7.
Global Legal Survey With respect to each market in which
(annually) State Street offers custodial services,
opinions relating to whether local law
restricts (i) access of a fund's
independent public accountants to books
and records of a Foreign Sub-Custodian or
Foreign Securities System, (ii) a fund's
ability to recover in the event of
bankruptcy or insolvency of a Foreign
Sub-Custodian or Foreign Securities
System, (iii) a fund's ability to recover
in the event of a loss by a Foreign
Sub-Custodian or Foreign Securities
System, and (iv) the ability of a foreign
investor to convert cash and cash
equivalents to U.S. dollars.
Subcustodian Agreements Copies of the contracts that State Street
(annually) has entered into with each Foreign
Sub-Custodian that maintains U.S. mutual
fund assets in the markets in which State
Street offers custodial services.
Global Market Bulletin Information on changing settlement and
(daily or as necessary) custody conditions in markets where State
Street offers custodial services.
Includes changes in market and tax regulations, depository developments,
dematerialization information, as well as other market changes that may impact
State Street's clients.
Foreign Custody Advisories For those markets where State Street
(as necessary) offers custodial services that exhibit
special risks or infrastructures
impacting custody, State Street issues
market advisories to highlight those
unique market factors which might impact
our ability to offer recognized custody
service levels.
Material Change Notices Informational letters and accompanying
(presently on a quarterly materials confirming State Street's
basis or as otherwise necessary) foreign custody arrangements, including a
summary of material changes with Foreign
Sub-Custodians that have
60
occurred during the previous
quarter. The notices also identify
any material changes in the
custodial risks associated with
maintaining assets with Foreign
Securities Depositories.
61
Exhibit F
INVESTORS FIDUCIARY TRUST COMPANY
A State Street Company
PACIFIC SELECT SERIES FUND
FEE SCHEDULE
Effective July 1, 2000 through June 30, 2001
I. INVESTMENT ACCOUNTING
A. Minimum Monthly Fee
There is a monthly minimum fee of $2,625 per fund / portfolio.
The monthly minimum fee per portfolio does not apply to any
portfolio if the asset based fee discussed in I.B. below produces
greater revenue than the aggregate minimum.
B. Asset Based Fee on a Total Relationship Basis
1.70/100 of 1% (1.70 basis points) on the first $10.0 billion in
assets 1.25/100 of 1% (1.25 basis points) on the next $6.0
billion in assets 1.0/100 of 1% (1.0 basis points) on all assets
in excess of $16.0 billion in assets
C. Multi-class charges $350.00 per additional class
II. SECURITY CUSTODY
A. Domestic Custody
Asset-Based Fee on a total relationship basis:
.25/100 of 1% (.25 basis point) on the first $16.0 billion in
assets
No asset charge on all assets in excess of $16.0 billion
Transaction Fee, per transaction:
Basket Trades (Manual) - $10.00 per input security transaction
Basket Trades (Automated) - $9.00 per input security
transaction
Physical Delivery - $18.00
Book Entry - $10.00 DTC, PTC, FBE, BEMUNI, TIME DEP, FBE REPO,
TRI PARTY REPO
Mortgage Backed Securities Principal & Income Paydown - $9.00
Repo - $50.00 per Fund, Per Month
Federal Funds Wire Received or Delivered - $6.00 per wire
B. Foreign Securities
See Appendix I for Global Fee Agreement.
C. Balance Credits
IFTC will offset fees with balance credits calculated at 75% of
the bank credit rate (see below) applied to average custody
collected cash balances for the month. Balance credits can be
used to offset fees. Any credits in excess of fees will be
carried forward from month to month through the end of the
calendar year. For calculation purposes, IFTC uses an
actual/actual basis.
Note: The bank credit rate is the equivalent to the lesser of:
. The average 91-day Treasury Xxxx discount rate for the month
or
. The average Federal Funds rate for the month less 50 basis
points.
III. NOTES TO THE ABOVE FEE SCHEDULE
A. Asset based fees will be billed monthly at 1/12/th/ of the annual
stated rate based on monthly average net assets. Annual maintenance
fees are payable monthly at 1/12/th/ of the annual stated rate.
B. The above schedule does not include out-of-pocket expenses that would
be incurred by IFTC on the client's behalf. Examples of out-of-pocket
expenses include but are not limited to record retentions, microfiche,
disaster recovery, pricing and research services, overnight mailing
services, foreign registration and script fees, etc. IFTC bills
out-of-pocket expenses separately from service fees.
C. The fees stated above are exclusive of terminal equipment required in
the client's location(s) and communication line costs.
D. Any fees or out-of-pocket expenses not paid within 30 days of the date
of the original invoice will be charged a late payment fee of 1% per
month until payment of fees are received by IFTC.
E. The above fee schedule is applicable for selections made and
communicated within 90 days of the date of this proposal. The fees are
guaranteed for a one-year period commencing on the effective date of
the service agreement between IFTC and the client. All changes to the
fee schedule will be communicated in writing at least 60 days prior to
their effective date.
F. Overdrafts will be calculated at the monthly average Prime rate (as
published in the Wall Street Journal) and charged on the monthly
average overdraft balance.
G. Any fees, charges, costs, expenses, (including but not limited to
brokerage charges, transfer fees, registration and re-registration
fees) incurred as a result of terminating Chase Manhattan Bank as the
foreign sub-custodian and State Street assuming responsibility for
foreign custody shall be borne by State Street.
EFFECTIVE DATE: July 1, 2000
AGREED TO AND ACCEPTED BY:
PACIFIC SELECT FUND STATE STREET BANK AND TRUST COMPANY
OF CALIFORNIA, N.A.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
-------------------------- ---------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
-------------------------
Title: Vice President & Assistant Title: Senior Vice President
Secretary ------------------------
63
Appendix 1
Pacific Select Series Fund - Global Custody Fees
-----------------------------------------------------------------------------------------------------------------
ASSET TRANSACTION ASSET TRANSACTION
MARKET CHARGE CHARGE MARKET CHARGE CHARGE
-----------------------------------------------------------------------------------------------------------------
Argentina 20 $ 85 Lithuania 30 $ 50
Australia 3 $ 18 Luxembourg 7 $ 75
Austria 7.5 $ 20 Malaysia 7.5 $ 50
Bahrein 45 $150 Mauritius 35 $125
Bangladesh 35 $135 Mexico 9 $ 00
Xxxxxxx 7.5 $ 20 Morocco 35 $135
Belize 50 $125 Namibia 35 $100
Bermuda 15 $ 75 Netherlands 4 $ 20
Bolivia 35 $100 New Zealand 4 $ 20
Botswana 35 $135 Norway 5 $ 20
Brazil 15 $ 75 Oman 50 $150
Bulgaria 45 $100 Pakistan 35 $135
Canada 2 $ 20 Peru 35 $125
Chile 30 $125 Philippines 15 $ 90
China 30 $135 Poland 35 $ 95
Colombia 40 $135 Portugal 10 $100
Croatia 40 $100 Romania 40 $100
Cyprus 45 $125 Russia 35 $150
Czech Republic 25 $135 Singapore 9 $ 20
Denmark 4 $ 00 Xxxxxxxx 00 x000
Xxxxxxx 30 $ 00 Xxxxxx Xxxxxxxx 40 $ 75
Eqypt 35 $100 Slovania 45 $100
Estonia 45 $ 00 Xxxxx Xxxxxx 4 $ 20
Euroclear/Cedel 2 $ 00 Xxxxx Xxxxx 10 $ 55
Finland 10 $ 20 Spain 7.5 $ 00
Xxxxxx 0 x 00 Xxx Xxxxx 25 $125
Germany 4 $ 20 Swaziland 40 $100
Ghana 35 $100 Sweden 7.5 $ 20
Greece 25 $135 Switzerland 4 $ 18
Hong Kong 7.5 $ 20 Taiwan 22 $135
Hungary 35 $135 Thailand 10 $ 65
Iceland 30 $ 00 Xxxxxxxx & Xxxxxx 35 $100
India 40 $135 Tunisia 40 $100
Indonesia 7.5 $ 85 Turkey 15 $ 75
Ireland 4 $ 20 Ukraine 50 $275
Israel 30 $ 00 Xxxxxx Xxxxxxx 3 $ 20
Italy 4 $ 20 Uruguay 45 $125
Ivory Coast 75 $150 Venezuela 35 $135
Jamaica 40 $125 Zambia 35 $100
Japan 3 $ 18 Zimbabwe 30 $100
Jordan 35 $135
Kenya 30 $100
Latvia 50 $ 50
-----------------------------------------------------------------------------------------------------------------
NOTE: Any country not listed above will be negotiated at time of investment.
Out of Pocket Expenses: As incurred (e.g. stamp taxes, registration costs,
script fees, special transportation costs, etc.).
EFFECTIVE DATE: July 1, 2000
64
AGREED TO AND ACCEPTED BY:
PACIFIC SELECT FUND STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
---------------------- ------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxx
----------------------
Title: Vice President & Assistant Title: Senior Vice President
Secretary -----------------------
1 of 1 6/13/00
65