CUSTODIAN CONTRACT
Between
TIAA-CREF MUTUAL FUNDS,
TEACHERS ADVISORS, INC.
and
STATE STREET BANK AND TRUST COMPANY
TABLE OF CONTENTS
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Page
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1. Employment of Custodian and Property to be Held By It.................... 1
2. Duties of the Custodian with Respect to Property
of the Fund Held by the Custodian in the United States................... 2
2.1 Holding Securities.............................................. 2
2.2 Delivery of Securities.......................................... 2
2.3 Registration of Securities...................................... 4
2.4 Bank Accounts................................................... 4
2.5 Availability of Federal Funds................................... 4
2.6 Collection of Income and Dividends.............................. 5
2.7 Payment of Fund Monies.......................................... 5
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased................................. 6
2.9 Appointment of Agents........................................... 6
2.10 Deposit of Fund Assets in U.S. Securities System................ 6
2.11 Fund Assets Held in the Custodian's Direct
Paper System.................................................... 7
2.12 Segregated Account.............................................. 8
2.13 Ownership Certificates for Tax Purposes......................... 9
2.14 Proxies......................................................... 9
2.15 Communications Relating to Portfolio Securities................. 9
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States............................... 9
3.1 Appointment of Foreign Sub-Custodians........................... 9
3.2 Assets to be Held............................................... 9
3.3 Foreign Securities Systems...................................... 9
3.4 Holding Securities.............................................. 10
3.5 Agreements with Foreign Banking Institutions.................... 10
3.6 Access of Independent Accountants of the Fund................... 10
3.7 Reports by Custodian............................................ 10
3.8 Transactions in Foreign Custody Account......................... 10
3.9 Liability of Foreign Sub-Custodians............................. 11
3.10 Liability of Custodian.......................................... 12
3.11 Monitoring Responsibilities..................................... 12
3.12 Branches of U.S. Banks.......................................... 12
3.13 Tax Law......................................................... 12
3.14 Proxies......................................................... 13
4. Payments for Sales or Repurchase or Redemptions
of Shares of the Fund.................................................... 13
5. Proper Instructions...................................................... 13
6. Actions Permitted Without Express Authority.............................. 14
7. Evidence of Authority.................................................... 14
8. Duties of Custodian With Respect to the Books of Account
and Calculation of Net Asset Value and Net Income........................ 14
9. Records ................................................................ 15
10. Opinion of Fund's Independent Accountants................................ 15
11. Reports to Fund by Independent Public Accountants........................ 15
12. Compensation of Custodian................................................ 15
13. Responsibility of Custodian, Indemnification............................. 16
13.1 Standard of Care................................................ 16
13.2 Liability of Custodian for Actions of Other Persons............. 17
13.3 Indemnification................................................. 18
13.4 Fund's Right to Proceed......................................... 20
14. Effective Period, Termination and Assignment............................. 20
15. Successor Custodian...................................................... 21
16. Amendments............................................................... 22
17. Interpretive and Additional Provisions................................... 22
18. Additional Funds......................................................... 22
19. Massachusetts Law to Apply............................................... 22
20. Prior Contracts.......................................................... 22
21. Reproduction of Documents................................................ 22
22. Shareholder Communications............................................... 23
23. No Liability of Shareholders............................................. 23
CUSTODIAN CONTRACT
This Contract between TIAA-CREF Mutual Funds, a business trust organized
and existing under the laws of Delaware, having its principal place of business
at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 hereinafter called the "Fund",
Teachers Advisors, Inc., a corporation organized under the laws of Delaware,
having its principal place of business at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 hereinafter called "Advisors" and State Street Bank and Trust Company, a
Massachusetts trust company, having its principal place of business at 000
Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, hereinafter called the
"Custodian",
WITNESSETH:
WHEREAS, the Fund is authorized to issue shares in separate series, with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund intends to initially offer shares in six series, the
International Equity Fund, Growth Equity Fund, Growth & Income Fund, Managed
Allocation Fund, Bond Plus Fund and Money Market Fund (such series together with
all other series subsequently established by the Fund and made subject to this
Contract in accordance with Article 17, being herein referred to as the
"Portfolio(s)");
WHEREAS, Advisors and the Fund have entered into an investment management
agreement pursuant to which Advisors will provide or arrange to provide overall
management to the Fund, including investment management and custody; and
WHEREAS, the Fund and Advisors desire to appoint the Custodian as
custodian on behalf of each of its Portfolios in accordance with the provisions
of the Investment Company Act of 1940, as amended (the "1940 Act"), and the
rules and regulations thereunder, under the terms and conditions set forth in
this Contract, and the Custodian has agreed so to act as custodian.
NOW THEREFORE, in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Fund hereby employs the Custodian as the custodian of the assets of
the Portfolios of the Fund, including securities which the Fund, on behalf of
the applicable Portfolio desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Fund's governing
documents. The Fund on behalf of the Portfolio(s) agrees to deliver to the
Custodian all securities and cash of the Portfolios, and all payments of income,
payments of principal or capital distributions received by it with respect to
all securities owned by the Portfolio(s) from time to time, and the cash
consideration received by it for such new or treasury shares of capital stock of
the Fund representing interests in the Portfolios, ("Shares") as may be issued
or sold from time to time. The Custodian shall be responsible for all
securities, cash and other property owned or held by the fund which is received
by the Custodian in accordance with the provisions of Article 13. The Custodian
shall not be responsible for any property of a Portfolio held or received by the
Portfolio and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall on behalf of the applicable Portfolio(s) from time to time
employ one or more sub-custodians, located in the United States but only in
accordance with an applicable vote by the Board of Trustees of the Fund on
behalf
of the applicable Portfolio(s), and provided that the Custodian shall have not
more or less responsibility to the Fund on account of any actions or omissions
of any sub-custodian so employed than any sub-custodian has to the Custodian,
and further provided that the Custodian shall not release the sub-custodian from
any responsibility or liability unless mutually agreed upon by the parties in
writing. The Custodian may employ as sub-custodian for the Fund's foreign
securities on behalf of the applicable Portfolio(s) the foreign banking
institutions and foreign securities depositories designated in Schedule A hereto
but only in accordance with the provisions of Article 3.
2. Duties of the Custodian with Respect to Property of the Fund Held By the
Custodian in the United States
2.1 Holding Securities. The Custodian shall hold and physically segregate for
the account of each Portfolio all non-cash property, to be held by it in
the United States including all domestic securities owned by such
Portfolio, other than (a) securities which are maintained pursuant to
Section 2.10 in a clearing agency which acts as a securities depository or
in a book-entry system authorized by the U.S. Department of the Treasury
and certain federal agencies (each, a "U.S. Securities System") and (b)
commercial paper of an issuer for which State Street Bank and Trust
Company acts as issuing and paying agent ("Direct Paper") which is
deposited and/or maintained in the Direct Paper System of the Custodian
(the "Direct Paper System") pursuant to Section 2.11.
2.2 Delivery of Securities. The Custodian shall release and deliver domestic
securities owned by a Portfolio held by the Custodian or in a U.S.
Securities System account of the Custodian or in the Custodian's Direct
Paper book entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions from the Fund on behalf of the applicable
Portfolio, which may be continuing instructions when deemed appropriate by
the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Portfolio and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Portfolio;
3) In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Portfolio;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to the
Custodian;
6) To the issuer thereof, or its agent, for transfer into the name of
the Portfolio or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.9 or into the name or nominee name of any
sub-custodian appointed pursuant to Article 1; or for exchange for a
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different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such case, the new securities are to be
delivered to the Custodian;
7) Upon the sale of such securities for the account of the Portfolio,
to the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom; provided
that in any such case, the Custodian shall have no responsibility or
liability for any loss arising from the delivery of such securities
prior to receiving payment for such securities except as may arise
from the Custodian's failure to act in accordance with its duties as
set forth in Section 13;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment of
the securities of the issuer of such securities, or pursuant to
provisions for conversion contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian;
9) In the case of warrants, rights or similar securities, the surrender
thereof in the exercise of such warrants, rights or similar
securities or the surrender of interim receipts or temporary
securities for definitive securities; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
10) For delivery in connection with any loans of securities made by the
Portfolio, but only against receipt of adequate collateral as agreed
upon from time to time by the Custodian and the Fund on behalf of
the Portfolio, which may be in the form of cash or obligations
issued by the United States government, its agencies or
instrumentalities or such other property as mutually agreed upon by
the parties.
11) For delivery as security in connection with any borrowings by the
Fund on behalf of the Portfolio requiring a pledge of assets by the
Fund on behalf of the Portfolio, but only against receipt of amounts
borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian and a
broker-dealer registered under the Securities Exchange Act of 1934
(the "Exchange Act") and a member of The National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with the
rules of The Options Clearing Corporation and of any registered
national securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in connection
with transactions by the Portfolio of the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund on behalf of the Portfolio, the Custodian, and a
Futures Commission Merchant registered under the Commodity Exchange
Act, relating to compliance with the rules of the Commodity Futures
Trading Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Portfolio of the Fund;
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14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to the
holders of shares in connection with distributions in kind, as may
be described from time to time in the currently effective prospectus
and statement of additional information of the Fund, related to the
Portfolio ("Prospectus"), in satisfaction of requests by holders of
Shares for repurchase or redemption; and
15) For any other corporate purpose, but only upon receipt of, Proper
Instructions from the Fund on behalf of the applicable Portfolio.
2.3 Registration of Securities. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the
Portfolio or in the name of any nominee of the Fund on behalf of the
Portfolio or of any nominee of the Custodian which nominee shall be
assigned exclusively to the Portfolio, unless the Fund has authorized in
writing the appointment of a nominee to be used in common with other
registered investment companies having the same investment adviser as the
Portfolio, or in the name or nominee name of any agent appointed pursuant
to Section 2.9 or in the name or nominee name of any sub-custodian
appointed pursuant to Article 1. All securities accepted by the Custodian
on behalf of the Portfolio under the terms of this Contract shall be in
"street name" or other good delivery form. If, however, the Fund directs
the Custodian to maintain securities in "street name", the Custodian shall
utilize its best efforts only to timely collect income due the Fund on
such securities and to notify the Fund on a best efforts basis only of
relevant corporate actions including, without limitation, pendency of
calls, maturities, tender or exchange offers.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of each Portfolio of
the Fund, subject only to draft or order by the Custodian acting pursuant
to the terms of this Contract, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or for the
account of the Portfolio, other than cash maintained by the Portfolio in a
bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for a
Portfolio may be deposited by it to its credit as Custodian in the Banking
Department of the Custodian or in such other banks or trust companies as
it may in its discretion deem necessary or desirable; provided, however,
that every such bank or trust company shall be qualified to act as a
custodian under the Investment Company Act of 1940 and that each such bank
or trust company and the funds to be deposited with each such bank or
trust company shall on behalf of each applicable Portfolio be approved by
vote of a majority of the Board of Trustees of the Fund. Such funds shall
be deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 Availability of Federal Funds. Upon mutual agreement between the Fund on
behalf of each applicable Portfolio and the Custodian, the Custodian
shall, upon the receipt of Proper Instructions from the Fund on behalf of
a Portfolio, make federal funds available to such Portfolio as of
specified times agreed upon from time to time by the Fund and the
Custodian in the amount of checks received in payment for Shares of such
Portfolio which are deposited into the Portfolio's account.
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2.6 Collection of Income and Dividends. Subject to the provisions of Section
2.3, the Custodian shall collect on a timely basis all income and other
payments with respect to registered domestic securities held hereunder to
which each Portfolio shall be entitled either by law or pursuant to custom
in the securities business, and shall collect on a timely basis all income
and other payments with respect to bearer domestic securities if, on the
date of payment by the issuer, such securities are held by the Custodian
or its agent thereof and shall credit such income, as collected, to such
Portfolio's custodian account. Without limiting the generality of the
foregoing, the Custodian shall detach and present for payment all coupons
and other income items requiring presentation as and when they become due
and shall collect interest when due on securities held hereunder. Income
due each Portfolio on securities loaned pursuant to the provisions of
Section 2.2 (10) shall be the responsibility of the Fund. Unless otherwise
agreed to in writing, the Custodian will have no duty or responsibility in
connection therewith, other than to provide the Fund with such information
or data as may be necessary to assist the Fund in arranging for the timely
delivery to the Custodian of the income to which the Portfolio is properly
entitled.
2.7 Payment of Fund Monies. Upon receipt of Proper Instructions from the Fund
on behalf of the applicable Portfolio, which may be continuing
instructions when deemed appropriate by the parties, the Custodian shall
pay out monies of a Portfolio in the following cases only:
1) Upon the purchase of domestic securities, options, futures contracts
or options on futures contracts for the account of the Portfolio but
only (a) against the delivery of such securities or evidence of
title to such options, futures contracts or options on futures
contracts to the Custodian (or any bank, banking firm or trust
company doing business in the United States or abroad which is
qualified under the Investment Company Act of 1940, as amended, to
act as a custodian and has been designated by the Custodian as its
agent for this purpose) registered in the name of the Portfolio or
in the name of a nominee of the Custodian referred to in Section 2.3
hereof or in proper form for transfer; (b) in the case of a purchase
effected through a U.S. Securities System, in accordance with the
conditions set forth in Section 2.10 hereof; (c) in the case of a
purchase involving the Direct Paper System, in accordance with the
conditions set forth in Section 2.11; (d) in the case of repurchase
agreements entered into between the Fund on behalf of the Portfolio
and the Custodian, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting the Custodian's
account at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase by the Portfolio
of securities owned by the Custodian along with written evidence of
the agreement by the Custodian to repurchase such securities from
the Portfolio or (e) for transfer to a time deposit account of the
Fund in any bank, whether domestic or foreign; such transfer may be
effected prior to receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from the Fund as
defined in Article 5;
2) In connection with conversion, exchange or surrender of securities
owned by the Portfolio as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Portfolio
as set forth in Article 4 hereof;
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4) For the payment of any expense or liability incurred by the
Portfolio, including but not limited to the following payments for
the account of the Portfolio: interest, taxes, management,
accounting, transfer agent and legal fees, and operating expenses of
the Fund whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;
5) For the payment of any dividends on Shares of the Portfolio declared
pursuant to the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For repayment of a loan upon redelivery of pledged securities and
upon surrender of the loan note(s), if any, evidencing the loan;
8) For any other corporate purpose, but only upon receipt of Proper
Instructions from the Fund on behalf of the Portfolio.
2.8 Liability for Payment in Advance of Receipt of Securities Purchased.
Except as specifically stated otherwise in this Contract, in any and every
case where payment for purchase of domestic securities for the account of
a Portfolio is made by the Custodian in advance of receipt of the
securities purchased in the absence of specific written instructions from
the Fund on behalf of such Portfolio to so pay in advance, the Custodian
shall be absolutely liable to the Fund for such securities to the same
extent as if the securities had been received by the Custodian.
2.9 Appointment of Agents. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the Investment Company Act of
1940, as amended, to act as a custodian, as its agent to carry out such of
the provisions of this Article 2 as the Custodian may from time to time
direct; provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities hereunder.
2.10 Deposit of Fund Assets in U.S. Securities Systems. The Custodian may
deposit and/or maintain securities owned by a Portfolio in a clearing
agency registered with the Securities and Exchange Commission under
Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain federal agencies, collectively
referred to herein as "U.S. Securities System" in accordance with
applicable Federal Reserve Board and Securities and Exchange Commission
rules and regulations, if any, and subject to the following provisions:
1) The Custodian may keep securities of the Portfolio in a U.S.
Securities System provided that such securities are represented in
an account ("Account") of the Custodian in the U.S. Securities
System which shall not include any assets of the Custodian other
than assets held as a fiduciary, custodian or otherwise for
customers;
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2) The records of the Custodian with respect to securities of the
Portfolio which are maintained in a U.S. Securities System shall
identify by book-entry those securities belonging to the Portfolio;
3) The Custodian shall pay for securities purchased for the account of
the Portfolio upon (i) receipt of advice from the U.S. Securities
System that such securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to
reflect such payment and transfer for the account of the Portfolio.
The Custodian shall transfer securities sold for the account of the
Portfolio upon (i) receipt of advice from the U.S. Securities System
that payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such transfer and payment for the account of
the Portfolio. Copies of all advices from the U.S. Securities System
of transfers of securities for the account of the Portfolio shall
identify the Portfolio, be maintained for the Portfolio by the
Custodian and be provided to the Fund at its request. Upon request,
the Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio in the form of a written advice or notice and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transactions in the U.S.
Securities System for the account of the Portfolio.
4) The Custodian shall provide the Fund for the Portfolio with any
report obtained by the Custodian on the U.S. Securities System's
accounting system, internal accounting control and procedures for
safeguarding securities deposited in the U.S. Securities System;
5) The Custodian shall have received from the Fund on behalf of the
Portfolio the initial or annual certificate, as the case may be,
required by Article 14 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for the benefit of the
Portfolio for any loss or damage to the Portfolio resulting from use
of the U.S. Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or
of any of its or their employees or from failure of the Custodian or
any such agent to enforce effectively such rights as it may have
against the U.S. Securities System; at the election of the Fund, it
shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the U.S. Securities System or any
other person which the Custodian may have as a consequence of any
such loss or damage if and to the extent that the Portfolio has not
been made whole for any such loss or damage.
2.11 Fund Assets Held in the Custodian's Direct Paper System. The Custodian may
deposit and/or maintain securities owned by a Portfolio in the Direct
Paper System of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System
will be effected in the absence of Proper Instructions from the Fund
on behalf of the Portfolio;
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2) The Custodian may keep securities of the Portfolio in the Direct
Paper System only if such securities are represented in an account
("Account") of the Custodian in the Direct Paper System which shall
not include any assets of the Custodian other than assets held as a
fiduciary, custodian or otherwise for customers;
3) The records of the Custodian with respect to securities of the
Portfolio which are maintained in the Direct Paper System shall
identify by book-entry those securities belonging to the Portfolio;
4) The Custodian shall pay for securities purchased for the account of
the Portfolio upon the making of an entry on the records of the
Custodian to reflect such payment and transfer of securities to the
account of the Portfolio. The Custodian shall transfer securities
sold for the account of the Portfolio upon the making of an entry on
the records of the Custodian to reflect such transfer and receipt of
payment for the account of the Portfolio;
5) The Custodian shall furnish the Fund on behalf of the Portfolio
confirmation of each transfer to or from the account of the
Portfolio, in the form of a written advice or notice, of Direct
Paper on the next business day following such transfer and shall
furnish to the Fund on behalf of the Portfolio copies of daily
transaction sheets reflecting each day's transaction in the U.S.
Securities System for the account of the Portfolio;
6) The Custodian shall provide the Fund on behalf of the Portfolio with
any report on its system of internal accounting control as the Fund
may reasonably request from time to time.
2.12 Segregated Account. The Custodian shall upon receipt of Proper
Instructions from the Fund on behalf of each applicable Portfolio
establish and maintain a segregated account or accounts for and on behalf
of each such Portfolio, into which account or accounts may be transferred
cash and/or securities, including securities maintained in an account by
the Custodian pursuant to Section 2.10 hereof, (i) in accordance with the
provisions of any agreement among the Fund on behalf of the Portfolio, the
Custodian and a broker-dealer registered under the Exchange Act and a
member of the NASD (or any futures commission merchant registered under
the Commodity Exchange Act), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national securities
exchange (or the Commodity Futures Trading Commission or any registered
contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by
the Portfolio, (ii) for purposes of segregating cash or government
securities in connection with options purchased, sold or written by the
Portfolio or commodity futures contracts or options thereon purchased or
sold by the Portfolio, (iii) for the purposes of compliance by the
Portfolio with the procedures required by Investment Company Act Release
No. 10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other corporate purposes,
upon receipt of Proper Instructions from the Fund on behalf of the
applicable Portfolio.
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2.13 Ownership Certificates for Tax Purposes. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to domestic securities of each Portfolio held by it and in
connection with transfers of securities.
2.14 Proxies. The Custodian shall, with respect to the domestic securities held
hereunder, cause to be promptly executed by the registered holder of such
securities, if the securities are registered otherwise than in the name of
the Portfolio or a nominee of the Portfolio, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Portfolio such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.15 Communications Relating to Portfolio Securities. Subject to the provisions
of Section 2.3, the Custodian shall transmit promptly to the Fund for each
Portfolio all written information (including, without limitation, pendency
of calls and maturities of domestic securities and expirations of rights
in connection therewith and notices of exercise of call and put options
written by the Fund on behalf of the Portfolio and the maturity of futures
contracts purchased or sold by the Portfolio) received by the Custodian
from issuers of the securities being held for the Portfolio. With respect
to tender or exchange offers, the Custodian shall transmit promptly to the
Portfolio all written information received by the Custodian from issuers
of the securities whose tender or exchange is sought and from the party
(or his agents) making the tender or exchange offer. If the Portfolio
desires to take action with respect to any tender offer, exchange offer or
any other similar transaction, the Portfolio shall notify the Custodian to
take such action prior to the time agreed to by the Custodian and the
Fund.
3. Duties of the Custodian with Respect to Property of the Fund Held Outside
of the United States
3.1 Appointment of Foreign Sub-Custodians. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Portfolio's
securities, cash and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories
designated on Schedule A hereto ("foreign sub-custodians"). Upon receipt
of "Proper Instructions", as defined in Article 5 of this Contract,
together with a certified resolution of the Fund's Board of Trustees, the
Custodian and the Fund may agree to amend Schedule A hereto from time to
time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodian. Upon receipt of Proper
Instructions, the Fund may instruct the Custodian to cease the employment
of any one or more such sub-custodians for maintaining custody of the
Portfolio's assets.
3.2 Assets to be Held. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in Rule 17f-5 under the Investment
Company Act of 1940, (b) cash and cash equivalents in such amounts as the
Fund may determine; and (c) other assets as are mutually agreed by the
parties. The Custodian shall identify on its books as belonging to the
Fund, the foreign securities, cash and other assets of the Fund held by
each foreign sub-custodian.
3.3 Foreign Securities Systems. Except as may otherwise be agreed upon in
writing by the Custodian and the Fund, assets of the Portfolios shall be
maintained in a clearing agency which acts as a securities depository or
in a book-entry system for the central handling of securities located
outside
9
of the United States (each a "Foreign Securities System") only through
arrangements implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof (Foreign Securities Systems
and U.S. Securities Systems are collectively referred to herein as the
"Securities Systems"). Where possible, such arrangements shall include
entry into agreements containing the provisions set forth in Section 3.5
hereof.
3.4 Holding Securities. The Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash
property of the Fund which are maintained in such account shall identify
by book-entry those securities and other non-cash property belonging to
the Fund and (ii) the Custodian shall require that securities and other
non-cash property so held by the foreign sub-custodian be held separately
from any assets of the foreign sub-custodian or of others.
3.5 Agreements with Foreign Banking Institutions. Each agreement with a
foreign banking institution shall provide that: (a) the assets of each
Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or
its creditors or agent, except a claim of payment for their safe custody
or administration; (b) beneficial ownership for the assets of each
Portfolio will be freely transferable without the payment of money or
value other than for custody or administration; (c) adequate records will
be maintained identifying the assets as belonging to each applicable
Portfolio; (d) officers of or auditors employed by, or other
representatives of the Custodian, including to the extent permitted under
applicable law the independent public accountants for the Fund, will be
given access to the books and records of the foreign banking institution
relating to its actions under its agreement with the Custodian; and (e)
assets of the Portfolios held by the foreign sub-custodian will be subject
only to the instructions of the Custodian or its agents.
3.6 Access of Independent Accountants of the Fund. Upon request of the Fund,
the Custodian will use its best efforts to arrange for the independent
accountants of the Fund to be afforded access to the books and records of
any foreign banking institution employed as a foreign sub-custodian
insofar as such books and records relate to the performance of such
foreign banking institution under its agreement with the Custodian.
3.7 Reports by Custodian. The Custodian will supply to the Fund from time to
time, as mutually agreed upon, statements in respect of the securities,
cash and other assets of the Portfolio(s) held by foreign sub-custodians,
including but not limited to an identification of entities having
possession of the Portfolio(s) securities, cash and other assets and
advices or notifications of any transfers of securities to or from each
custodial account maintained by a foreign banking institution for the
Custodian on behalf of each applicable Portfolio indicating, as to
securities acquired for a Portfolio, the identity of the entity having
physical possession of such securities.
3.8 Transactions in Foreign Custody Account. (a) Except as otherwise provided
in paragraph (b) of this Section 3.8, the provision of Sections 2.2 and
2.7 of this Contract shall apply, mutatis mutandis to the foreign
securities of the Fund held outside the United States by foreign
sub-custodians.
10
(b) In the case of the purchase of securities, the settlement of
which occurs outside of the United States of America: (i) the Custodian
may make payment therefor and receive delivery of such securities in
accordance with local custom and practice generally accepted by
Institutional Clients (as hereinafter defined) in the country in which the
settlement occurs, but in all events subject to the standard of care set
forth in Section 13 hereof; (ii) in the case of the purchase of securities
in which, in accordance with standard industry custom and practice
generally accepted by Institutional Clients with respect to such
securities, the receipt of such securities and the payment therefor take
place in different countries, the Custodian may receive delivery of such
securities and make payment therefor in accordance with standard industry
custom and practice for such securities generally accepted by
Institutional Clients, but in all events subject to the standard of Care
set forth in Section 13 hereof.
In the case of the sale of securities, the settlement of which
occurs outside of the United States of America: (i) such securities shall
be delivered and paid for in accordance with local custom and practice
generally accepted by Institutional Clients in the country in which the
settlement occurs, but in all events subject to the standard of care set
forth in Section 13 hereof; (ii) in the case of the sale of securities in
which, in accordance with standard industry custom and practice generally
accepted by Institutional Clients with respect to such securities, the
delivery of such securities and receipt of payment therefor take place in
different countries, the Custodian may deliver such securities and receive
payment therefor in accordance with standard industry custom and practice
for such securities generally accepted by Institutional Clients, but in
all events subject to the standard of care set forth in Section 13 hereof;
and (iii) in the case of securities held in physical form, such securities
shall be delivered and paid for in accordance with "street delivery
custom" to a broker or its clearing agent, against delivery to the
Custodian of a receipt for such securities, prompt collection of the
payment for, or the return of, such securities by the broker or its
clearing agent, and provided further that the Custodian shall not be
responsible for the selection of or the failure or inability to perform of
such broker or its clearing agent.
For purposes of this Contract , an "Institutional Client" shall mean
a major commercial bank, corporation, insurance company or substantially
similar institution, which, as a substantial part of its business
operations, purchases or sells securities and makes use of custodial
services.
(c) Securities maintained in the custody of a foreign sub-custodian
may be maintained in the name of such entity's nominee to the same extent
as set forth in Section 2.3 of this Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of such
securities.
3.9 Liability of Foreign Sub-Custodians. Each agreement pursuant to which the
Custodian employs a foreign banking institution as a foreign
sub-custodian, other than a branch or subsidiary of the Custodian, shall
require the institution to exercise reasonable care in the performance of
its duties and to indemnify, and hold harmless, the Custodian and each
Fund from and against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the institution's performance of such
obligations. At the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to any claims
against a foreign banking institution as a consequence of any such loss,
damage, cost, expense, liability or claim if and to the extent that the
Fund has not been made whole for any such loss, damage, cost, expense,
liability or claim. A
11
foreign sub-custodian which is a branch or subsidiary of the Custodian
shall be held to the standard of care set forth in Section 13 for the
Custodian.
3.10 Liability of Custodian. Except as provided in paragraph 3.9 hereof with
respect to a branch or subsidiary of the Custodian, the Custodian shall be
liable for the acts or omissions of a foreign banking institution to the
same extent as set forth with respect to sub-custodians generally in this
Contract and, regardless of whether assets are maintained in the custody
of a foreign banking institution, a foreign securities depository or a
branch of a U.S. bank as contemplated by paragraph 3.13 hereof, the
Custodian shall not be liable for any loss, damage, cost, expense,
liability or claim resulting from nationalization, expropriation, currency
restrictions, or acts of war or terrorism or any loss where the
sub-custodian has otherwise exercised reasonable care. Notwithstanding the
foregoing provisions of this paragraph 3.10, in delegating custody duties
to State Street London Ltd., or other branches or subsidiaries of the
Custodian, the Custodian shall not be relieved of any responsibility to
the Fund for any loss due to such delegation, except such loss as may
result from (a) political risk (including, but not limited to, exchange
control restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other losses
(excluding a bankruptcy or insolvency of State Street London Ltd. not
caused by political risk) due to Acts of God, nuclear incident or other
losses under circumstances where the Custodian and State Street London
Ltd. have exercised the standard of care set forth in Article 13 hereof.
3.11 Monitoring Responsibilities. The Custodian shall furnish annually to the
Fund, during the month of June, or such other periods as the parties may
agree, information concerning the foreign sub-custodians employed by the
Custodian. Such information shall be similar in kind and scope to that
furnished to the Fund in connection with the initial approval of this
Contract. In addition, the Custodian will promptly inform the Fund in the
event that the Custodian learns of a material adverse change in the
financial condition of a foreign sub-custodian or any material loss of the
assets of the Fund or in the case of any foreign sub-custodian not the
subject of an exemptive order from the Securities and Exchange Commission
is notified by such foreign sub-custodian that there appears to be a
substantial likelihood that its shareholders' equity will not meet the
requirements of Rule 17f-5 under the Investment Company Act of 1940 for
custodians of an investment company.
3.12 Branches of U.S. Banks. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the
Portfolios assets are maintained in a foreign branch of a banking
institution which is a "bank" as defined by Section 2(a)(5) of the
Investment Company Act of 1940 meeting the qualification set forth in
Section 26(a) of said Act. The appointment of any such branch as a
sub-custodian shall be governed by paragraph 1 of this Contract. (b) Cash
held for each Portfolio of the Fund in the United Kingdom shall be
maintained in an interest bearing account established for the Fund with
the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.
3.13 Tax Law. The Custodian shall have no responsibility or liability for any
obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or
any state or political subdivision thereof. It shall be the responsibility
of the Fund to notify the Custodian of the obligations imposed on the Fund
or the Custodian as custodian of the Fund by the tax law of jurisdictions
other than those mentioned in the above sentence, including responsibility
for withholding and other taxes, assessments or other
12
governmental charges, certifications and governmental reporting. The sole
responsibility of the Custodian with regard to such tax law shall be to
use reasonable efforts to assist the Fund with respect to any claim for
exemption or refund under the tax law of jurisdictions for which the Fund
has provided such information.
3.14 Proxies. The Custodian will generally, with respect to foreign securities
held under this Article 3, use best efforts accepted by Institutional
Clients to facilitate the exercise of voting and other shareholder proxy
rights, subject always to the laws, regulations and practical constraints
that may obtain in the jurisdiction where such securities are issued. The
Fund acknowledges that local conditions may have the effect of severely
limiting the ability of the Fund to exercise shareholder rights.
4. Payments for Sales or Repurchases or Redemptions of Shares of the Fund
The Custodian shall receive from the distributor for the Shares or from
the Transfer Agent of the Fund and deposit into the account of the appropriate
Portfolio such payments as are received for Shares of that Portfolio issued or
sold from time to time by the Fund. The Custodian will provide timely
notification to the Fund on behalf of each such Portfolio and the Transfer Agent
of any receipt by it of payments for Shares of such Portfolio.
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Trustees of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of a Portfolio, the Custodian is authorized upon receipt
of instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian shall honor checks drawn on
the Custodian by a holder of Shares, which checks have been furnished by the
Fund to the holder of Shares, when presented to the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time
between the Fund and the Custodian.
5. Proper Instructions
Proper Instructions as used throughout this Contract means (a) with
respect to the purchase and sale of short-term debt securities with a maturity
of less than one year when value is exchanged, written instructions from the
Fund by any one individual authorized by the Board of Trustees and specified in
a separate list for this purpose which will be furnished to the Custodian from
time to time signed by the treasurer or any associate treasurer or any assistant
treasurer and by the secretary or any assistant secretary as certified under the
corporate seal of the Fund (an "Authorized Person"); (b) with respect to other
transaction, written instructions from the Fund signed by any two Authorized
Persons ; and (c) notwithstanding (a) and (b) above of this Article 5, with
respect to "Free of Payment" deliveries, a writing manually signed by any two
Authorized Persons who are officers of the Fund with the title Chairman,
President, Executive Vice President, or Treasurer. Upon receipt of a writing
manually signed by any two Authorized Persons who are officers of the Fund with
the title Chairman, President, Executive Vice President, or Treasurer
accompanied by a detailed description of procedures approved by such writing,
13
Proper Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Fund and the
Custodian are satisfied that such procedures afford adequate safeguards for the
Fund's assets. Oral instructions will be considered Proper Instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Fund shall
cause all oral instructions to be confirmed in writing. For purposes of this
Section, Proper Instructions shall include instructions received by the
Custodian pursuant to any three-party agreement which requires a segregated
asset account in accordance with Section 2.12.
6. Actions Permitted without Express Authority
The Custodian may in its discretion, without express authority from the
Fund on behalf of each applicable Portfolio:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under this
Contract, provided that all such payments shall be accounted for to
the Fund on behalf of the Portfolio;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Portfolio, checks, drafts
and other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Portfolio except as
otherwise directed by the Board of Trustees of the Fund.
7. Evidence of Authority
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Trustees of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Trustees pursuant to the Declaration of Trust as described in
such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
8. Duties of Custodian with Respect to the Books of Account and Calculation
of Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Trustees of the Fund to keep the
books of account of each Portfolio and/or compute the net asset value per share
of the outstanding shares of each Portfolio or, unless otherwise directed in
writing to do so by the Fund on behalf of the Portfolio, shall itself keep such
books of account and/or compute such net asset value per share. Until otherwise
directed in writing, the Custodian shall also calculate daily the net income of
the Portfolio as described in the Fund's currently effective prospectus related
to such Portfolio and shall advise the Fund and the Transfer Agent daily of the
total amounts of such
14
net income and, if instructed in writing by an officer of the Fund to do so,
shall advise the Transfer Agent periodically of the division of such net income
among its various components. The calculations of the net asset value per share
and the daily income of each Portfolio shall be made in accordance with and at
the time or times described from time to time in the Fund's currently effective
prospectus related to such Portfolio and in accordance with the procedures
agreed to in writing between the Fund and the Custodian and shall at all times
comply with the standard of care set forth in Section 13 hereof.
9. Records
The Custodian shall with respect to each Portfolio create and maintain all
records relating to its activities and obligations under this Contract in such
manner as will meet the obligations of the Fund under the Investment Company Act
of 1940, with particular attention to Section 31 thereof and Rules 31a-1 and
31a-2 thereunder. All such records shall be the property of the Fund and shall
at all times during the regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of the Fund and
employees and agents of the Securities and Exchange Commission. The Custodian
shall, at the Fund's request, supply the Fund with a tabulation of securities
owned by each Portfolio and held by the Custodian and shall, when requested to
do so by the Fund and for such compensation as shall be agreed upon between the
Fund and the Custodian, include certificate numbers in such tabulations.
10. Opinion of Fund's Independent Accountant
The Custodian shall take all reasonable action, as the Fund on behalf of
each applicable Portfolio may from time to time request, to obtain from year to
year favorable opinions from the Fund's independent accountants with respect to
its activities hereunder in connection with the preparation of the Fund's Form
N-1A, and Form N-SAR or other annual reports to the Securities and Exchange
Commission and with respect to any other requirements of such Commission.
11. Reports to Fund by Independent Public Accountants
The Custodian shall provide the Fund, on behalf of each of the Portfolios
at such times as the Fund may reasonably require, with reports by independent
public accountants on the accounting system, internal accounting control and
procedures for safeguarding securities, futures contracts and options on futures
contracts, including securities deposited and/or maintained in a Securities
System, relating to the services provided by the Custodian under this Contract;
such reports, shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there are
no such inadequacies, the reports shall so state.
12. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its
services and expenses as Custodian, as agreed upon in writing from time to time
between Advisors and the Custodian and initially set forth in the fee schedule
included in the Transfer Agency and Service Agreement between the Custodian and
Advisors of even date herewith.
15
13. Responsibility of Custodian, Indemnification
13.1 Standard of Care
1) General Standard of Care. The Custodian shall exercise reasonable
care and diligence in carrying out all of its duties and obligations
under this Contract, and shall be liable to the Fund on behalf of
the applicable Portfolio(s), for all loss, damage and expense
suffered or incurred by such Portfolio resulting from the failure of
the Custodian to exercise such reasonable care and diligence.
2) Actions Prohibited by Applicable Law, etc. Except as may arise from
the Custodian's own negligence, misfeasance or willful misconduct or
the negligence, misfeasance or willful misconduct of a domestic
sub-custodian or foreign banking institution acting as foreign
sub-custodian or agent, the Custodian shall be without liability to
the Fund for any loss, liability, claim or expense resulting from or
caused by: (i) any provision of any present or future law or
regulation or order of the United States of America, or any state
thereof, or of any foreign country, or political subdivision thereof
or of any court of competent jurisdiction; (ii) any act of God or
war or other similar circumstance beyond the control of the
Custodian, including, without limitation, nationalization or
expropriation, imposition of currency controls or restrictions, the
interruption, suspension or restriction of trading on or the closure
of any securities market, power or other mechanical or technological
failures or interruptions, computer viruses or communications
disruptions, acts of terrorism, riots, revolutions or work
stoppages; (iii) errors by the Fund or the Investment Advisor in
their instructions to the Custodian provided such instructions have
been in accordance with this Contract; (iv) the insolvency of or
acts or omissions by a Securities System; (v) any delay or failure
of any broker or agent selected by the Fund, or an intermediary or
agent of such broker, or any central bank or other commercially
prevalent payment or clearing system outside of the United States to
deliver to the Custodian's sub-custodian or agent securities
purchased or in the remittance or payment made in connection with
securities sold provided that the subcustodians or agents have acted
in accordance with the terms of this contract; (vi) any delay or
failure of any company, corporation, or other body in charge of
registering or transferring securities in the name of the Custodian,
the Fund, the Custodian's sub-custodians, nominees or agents or any
consequential losses arising out of such delay or failure to
transfer such securities including non-receipt of bonus, dividends
and rights and other accretions or benefits; (vii) delays or
inability to perform its duties due to any disorder in market
infrastructure with respect to any particular security or Securities
System. In no event shall the Custodian be liable for indirect,
special or consequential damages.
3) Reliance on Instruments, etc. So long as and to the extent that it
is in the exercise of reasonable care, the Custodian shall not be
responsible for the title, validity or genuineness of any property
or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon
any notice, request, consent, certificate or other instrument
reasonably believed by it to be genuine and to be
16
signed by the proper party or parties, including any futures
commission merchant acting pursuant to the terms of a three-party
futures or options agreement.
4) Mitigation by Custodian. Upon the occurrence of any event which
causes or may cause any loss, damage or expense to any Portfolio (i)
the Custodian shall, (ii) the Custodian shall cause State Street
London Ltd. to and (iii) the Custodian shall use all reasonable
efforts to cause any applicable Subcustodian (other than State
Street London Ltd.) appointed to hold assets in the U.S. or Foreign
banking institutions acting as a foreign subcustodian to, use all
reasonable efforts and take all reasonable steps under the
circumstances to mitigate the efforts of such event and to avoid
continuing harm to the Fund and the Portfolios.
5) Advice of Counsel. The Custodian shall be entitled to rely on and
act upon advice of counsel (who may be counsel for the Fund) on all
matters and shall be without liability for any action reasonably
taken or omitted in good faith pursuant to such advice; provided,
however, with respect to the performance of any action or omission
of any action upon such advice, the Custodian shall be required to
conform to the standard of care set forth herein.
6) Expenses of Fund. In addition to the liability of the Custodian
under this Section 13, the Custodian shall be liable to the Fund and
each applicable Portfolio for all reasonable out-of-pocket costs and
expenses incurred by the Fund in connection with any claim by the
Fund against the Custodian arising from the obligations of the
Custodian hereunder, including, without limitation, all reasonable
attorneys' fees and expenses incurred by the Fund in asserting any
such claim, and out-of-pocket expenses incurred by the Fund in
connection with any lawsuits or proceedings relating to such claim;
provided, that the Fund has recovered from the Custodian for such
claim.
13.2 Liability of Custodian for Actions of Other Persons
1) Subcustodians located in the United States and Foreign banking
institutions acting as foreign subcustodians. The Custodian shall be
liable for the actions or omissions of any subcustodian located in
the United States or any foreign banking institution acting as a
foreign subcustodian to the same extent as if such action or
omission were performed by the Custodian itself taking into account
standards applicable to custodians in the relevant market.
2) Securities System. Notwithstanding the provisions of Section 13 to
the contrary, the Custodian shall not be liable to the Fund or any
applicable Portfolio for any loss, damage or expense suffered or
incurred by the Fund or any of its Portfolios resulting from the use
by the Custodian or a subcustodian located in the United States or
foreign banking institution acting as a foreign subcustodian, of a
Securities System including, without limitation, the insolvency of a
Securities System, unless such loss, damage or expense is caused by,
or results from, the negligence, misfeasance or misconduct of the
Custodian or a subcustodian located in the United States or foreign
banking institution acting as a foreign subcustodian; provided,
however, that in the event of any such loss, damage or
17
expense, the Custodian shall take all reasonable steps to enforce
such rights as it or a subcustodian located in the United States or
foreign banking institution acting as a foreign subcustodian may
have against the Securities System to protect the interests of the
Fund and the Portfolios.
3) Reimbursement of Expenses. The Fund agrees to reimburse the
Custodian for all reasonable out-of-pocket expenses incurred by the
Custodian on behalf of such Fund in connection with the fulfillment
of its obligations under this Section 13; provided, however, that
such reimbursement shall not apply to expenses occasioned by or
resulting from the negligence, misfeasance or misconduct of the
Custodian.
13.3 Indemnification
1) Indemnification Obligations. Subject to the limitations set forth in
this Agreement, the Fund hereby indemnifies and holds harmless the
Custodian and its nominees from all loss, damage and expense
(including reasonable attorneys' fees) suffered or incurred by the
Custodian or its nominees caused by or arising from actions taken or
omitted by the Custodian on behalf of the Fund in the performance of
its duties and obligations under this Contract; provided, however,
that such indemnity shall not apply to loss, damage and expense
arising from the negligence, misfeasance or misconduct of the
Custodian or its nominee. In addition, the Fund hereby indemnifies
the Custodian, any subcustodian, Securities System, or their
respective nominees against any liability incurred by reason of
taxes assessed to such person, or other loss, damage or expenses
incurred by such person, resulting from the fact that securities and
other property of such Fund's Portfolios are registered in the name
of such person; provided, however, that in no event shall such
indemnification be applicable to income, franchise or similar taxes
which may be imposed or assessed against any person. Furthermore, if
the Fund on behalf of a Portfolio requires the Custodian to take any
action with respect to securities, which action involves the payment
of money or which action may, in the opinion of the Custodian,
result in the Custodian or its nominee assigned to the Fund or the
Portfolio being liable for the payment of money or incurring
liability of some other form, the Fund on behalf of the Portfolio,
as a prerequisite to requiring the Custodian to take such action,
shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or
agents, to advance cash or securities for any purpose (including but
not limited to securities settlements, foreign exchange contracts
and assumed settlement) or in the event that the Custodian or its
nominees shall incur or be assessed any taxes, charges, expenses or
assessments in connection with the performance of this Contract or
from any actions taken or omitted by the Custodian or its nominees
on behalf of the Fund in the performance of its duties under this
Contract, except such as may arise from its or its nominee's own
negligent action, negligent failure to act, misfeasance or willful
misconduct, any property at any time held for the account of the
applicable Portfolio shall be security therefor and should the Fund
fail to repay the Custodian promptly, the Custodian shall be
entitled to utilize available cash and to dispose of such
Portfolio's assets to the extent necessary to obtain reimbursement.
18
2) Notice of Litigation, Right to Prosecute, etc. If a person seeking
indemnification pursuant to Section 13.3(1) hereof fails to promptly
notify the Fund in writing of the commencement of any litigation or
any proceeding brought against such person (a "Proceeding"), the
Fund shall not be liable for indemnification under this Contract
with respect to such Proceeding to the extent that the Fund's
ability to defend is prejudiced by such failure.
With respect to claims in a Proceeding for which indemnity by the
Fund may be sought, the Fund shall be entitled to participate at its
own expense in the defense, or, if it so elects, to assume the
control of the defense of any Proceeding. In the event the Fund
elects to assume the control of the defense of any Proceeding, the
persons seeking indemnification pursuant to Section 13.3(1) hereof
involved in such Proceeding may retain additional counsel for
purposes of the Proceeding but shall bear all fees and expenses of
such retention of such counsel, unless (i) the Fund shall have
specifically authorized the retention of such counsel, or (ii) if
the Fund and such indemnified persons agree that the retention of
such counsel is required as a result of a conflict of interest. If
the Fund assumes control of any Proceeding hereunder, the Fund shall
keep the persons seeking indemnification pursuant to Section 13.3(1)
hereof notified of the progress of such Proceeding and, upon
request, consult with such persons and their counsel concerning such
Proceeding. The Fund will, upon request by the persons seeking
indemnification pursuant to Section 13.3(1) hereof, either pay in
the first instance or reimburse such persons for any expenses
subject to indemnity hereunder.
The Fund shall not settle or compromise any Proceeding without the
prior written consent of each person seeking indemnification
pursuant to Section 13.3(1) hereof involved in such Proceeding,
which consent shall not be unreasonably upheld, unless (i) such
settlement or compromise involves no admission of guilt, wrongdoing,
or misconduct by any such person, (ii) such settlement or compromise
does not impose any obligations or restrictions on any such person
other than obligations to pay money that are subject to the
indemnity under this Contract, and (iii) the Fund shall have paid,
or made arrangements satisfactory to such person for payment of, all
amounts payable by each such person in connection with such
settlement.
Except as part of a settlement or compromise by the Fund in
accordance with the provisions of the immediately preceding
paragraph, no person seeking indemnification pursuant to Section
13.3(1) hereof may consent to the entry of any judgment or settle
any Proceeding subject to indemnity hereunder without providing the
Fund with at least 15 days prior written notice of any such judgment
or settlement and without the prior written consent of the Fund,
which consent will not be reasonably withheld (to the extent such
Proceeding relates to such person).
Each person seeking indemnification pursuant to Section 13.3(1)
hereof shall submit written evidence to the Fund with respect to any
cost or expense for which such person is seeking indemnification in
such form and detail as the Fund may reasonably request.
19
13.4 Fund's Right to Proceed. Notwithstanding anything to the contrary
contained herein, the Fund shall have, at its election upon
reasonable notice to the Custodian, the right to enforce, to the
extent permitted by any applicable agreement and applicable law, the
Custodian's right against any subcustodians, Securities System, or
other person for loss, damage or expense caused the Fund by such
subcustodian, Securities System, or other person, and shall be
entitled to enforce the rights of the Custodian with respect to any
claim against such subcustodian, Securities System, or other person,
which the Custodian may have as a consequence of any such loss,
damage or expense, if and to the extent that the Fund has not been
made whole for any such loss or damage. If the Custodian makes the
Fund whole for any such loss or damage, the Custodian shall retain
the ability to enforce its rights directly against such
subcustodian, Securities System or other person. Upon the Fund's
election to enforce any rights of the Custodian under this Section
13.4, the Fund shall reasonably prosecute all actions and
proceedings directly relating to the rights of the Custodian in
respect of the loss, damage or expense incurred by the Fund;
provided that, so long as the Fund has acknowledged in writing its
obligation to indemnify fully the Custodian under Section 13.3
hereof with respect to such claim, the Fund shall retain the right
to settle, compromise and/or terminate any action or proceeding in
respect of the loss, damage or expense incurred by the Fund without
the Custodian's consent and provided further, that if the Fund has
not made an acknowledgment of its obligation to indemnify, the Fund
shall not settle, compromise or terminate any such action or
proceeding without the written consent of the Custodian. The
Custodian agrees to cooperate with the Fund and take all actions
reasonably requested by such Fund in connection with the Fund's
enforcement of any rights of the Custodian. The Fund agrees to
reimburse the Custodian for all reasonable out-of-pocket expenses
incurred by the Custodian on behalf of the Fund in connection with
the fulfillment of its obligations under this Section 13.4;
provided, however, that such reimbursement shall not apply to
expenses occasioned by or resulting from the negligence, misfeasance
or misconduct of the Custodian.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
14. Effective Period, Termination and Assignment
This Contract shall become effective as of its execution and shall
continue in full force and effect until terminated by either party by an
instrument in writing, hand delivered or sent by certified mail, such
termination to take effect not sooner than sixty (60) days after the date of
such delivery or mailing; provided, however that the Custodian shall not with
respect to a Portfolio act under Section 2.10 hereof in the absence of receipt
of an initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees of the Fund has approved the initial use of a particular
Securities System by such Portfolio, as required by Rule 17f-4 under the
Investment Company Act of 1940, as amended and that the Custodian shall not with
respect to a Portfolio act under Section 2.11 hereof in the absence of receipt
of an initial certificate of the Secretary or an Assistant Secretary that the
Board of Trustees has approved the initial use of the Direct Paper System by
such Portfolio; provided further, however, that the Fund shall not amend or
terminate this Contract in contravention of any applicable federal or state
regulations, or any provision of the Articles of Incorporation, and further
provided, that the Fund on behalf of one or more of the Portfolios may at any
time by action of its Board of Trustees (i) substitute another bank or trust
company for the
20
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Contract in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Contract, the Fund on behalf of each applicable
Portfolio shall pay to the Custodian such compensation as may be due as of the
date of such termination and shall likewise reimburse the Custodian for its
costs, expenses and disbursements.
This Contract may not be assigned by either party without the consent of
the other party, which consent in the case of the Fund shall be authorized or
approved by a resolution of the Board of Trustees of the Fund.
15. Successor Custodian
If a successor custodian for the Fund, of one or more of the Portfolios
shall be appointed by the Board of Trustees of the Fund, the Custodian shall,
upon termination, deliver to such successor custodian at the office of the
Custodian, duly endorsed and in the form for transfer, all securities of each
applicable Portfolio then held by it hereunder and shall transfer to an account
of the successor custodian all of the securities of each such Portfolio held in
a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of Trustees
of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Trustees shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian on behalf of each applicable Portfolio and all
instruments held by the Custodian relative thereto and all other property held
by it under this Contract on behalf of each applicable Portfolio and to transfer
to an account of such successor custodian all of the securities of each such
Portfolio held in any Securities System. Thereafter, such bank or trust company
shall be the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Trustees to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
21
16. Amendments
This Contract may be amended at any time by mutual agreement of the
parties hereto; provided that no amendment or change to this Contract shall be
authorized by the Fund on behalf of its Accounts without the written consent
signed by an officer with the title of either Chairman, Vice Chairman or
President and any officer with the title of Executive Vice President or
Treasurer and accepted in writing by any Vice President or Managing Director of
the Bank.
17. Interpretive and Additional Provisions
In connection with the operation of this Contract, the Custodian and the
Fund on behalf of each of the Portfolios, may from time to time agree on such
provisions interpretive of or in addition to the provisions of this Contract as
may in their joint opinion be consistent with the general tenor of this
Contract. Any such interpretive or additional provisions shall be in a writing
signed by both parties and shall be annexed hereto, provided that no such
interpretive or additional provisions shall contravene any applicable federal or
state regulations or any provision of the Declaration of Trust of the Fund. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Contract.
18. Additional Funds
In the event that the Fund establishes one or more series of Shares in
addition to International Equity Fund, Growth Equity Fund, Growth & Income Fund,
Managed Allocation Fund, Bond Plus Fund and Money Market Fund with respect to
which it desires to have the Custodian render services as custodian under the
terms hereof, it shall so notify the Custodian in writing, and if the Custodian
agrees in writing to provide such services, such series of Shares shall become a
Portfolio hereunder.
19. Massachusetts Law to Apply
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of The Commonwealth of Massachusetts.
20. Prior Contracts
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund on behalf of each of the Portfolios and the Custodian
relating to the custody of the Fund's assets.
21. Reproduction of Documents
This Contract and all schedules, exhibits, attachments and amendments
hereto may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties hereto
all/each agree that any such reproduction shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not the
original is in existence and whether or not such reproduction was made by a
party in the regular course of business, and that any enlargement, facsimile or
further reproduction of such reproduction shall likewise be admissible in
evidence.
22
22. Shareholder Communications
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether the Fund authorizes
the Custodian to provide the Fund's name, address, and share position to
requesting companies whose stock the Fund owns. If the Fund tells the Custodian
"no", the Custodian will not provide this information to requesting companies.
If the Fund tells the Custodian "yes" or do not check either "yes" or "no"
below, the Custodian is required by the rule to treat the Fund as consenting to
disclosure of this information for all securities owned by the Fund or any funds
or accounts established by the Fund. For the Fund's protection, the Rule
prohibits the requesting company from using the Fund's name and address for any
purpose other than corporate communications. Please indicate below whether the
Fund consent or object by checking one of the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address,
and share positions.
NO [X] The Custodian is not authorized to release the Fund's name,
address, and share positions.
23. No Liability of Shareholders.
This Contract is executed by the Trustees of the Fund, not individually,
but rather in their capacity as Trustees under the Declaration of Trust made
January 13, 1997, as amended. None of the shareholders of the Fund, Trustees,
officers, employees, or agents of the Fund shall be personally bound or liable
under this Contract, nor shall resort be had to their private property for the
satisfaction of any obligation or claim hereunder but only to the property of
the Fund, and if the obligation or claim relates to the property held by the
Fund for the benefit of one or more but fewer than all Funds, then only to the
property held for the benefit of the affected Fund.
23
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 16th day of July, 1997.
ATTEST TIAA-CREF MUTUAL FUNDS
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxx
---------------------------- -------------------------------
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
/s/ Xxxxxxxx Xxxxx By /s/ Xxxxxx X. Xxxxx
---------------------------- -------------------------------
Executive Vice President
ATTEST TEACHERS ADVISORS, INC.
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
---------------------------- -------------------------------
Schedule A
----------
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors/Board of Trustees of
for use as sub-custodians for the Fund's securities and other assets:
Schedule A
----------
17f-5 Approval
The Board of Directors/Trustees of TIAA-CREF Mutual Funds has approved
certain foreign banking institutions and foreign securities depositories within
State Street's Global custody Network for use as subcustodians for the Fund's
securities, cash and cash equivalents held outside of the United States. Board
approval is as indicated by the Fund's Authorized Officer:
Fund
Officer
Initials Country Subcustodian Central Depository
-------- ------- ------------ ------------------
/s/ RA State Street's entire Global Custody Network listed below
______ Argentina Citibank, N.A. Caja de Valores S.A.
______ Australia Westpac Banking Corporation Austraclear Limited;
Reserve Bank Information and
Transfer System (RITS)
______ Austria GiroCredit Bank Aktiengesellschaft Oesterreichische Kontrollbank AG
der Sparkassen (Wertpapiersammelbank Division)
______ Bangladesh Standard Chartered Bank None
______ Belgium Generale Bank Caisse Interprofessionnelle de Depots
et de Virements de Titres S.A. (CIK);
Banque Nationale de Belgique
______ Botswana Barclays Bank of Botswana Limited None
______ Brazil Citibank, N.A. Bolsa de Valores de Sao Paulo (Bovespa);
Banco Central do Brasil,
Systema Especial de Liquidacao e
Custodia (SELIC)
______ Canada Canada Trustco Mortgage Company The Canadian Depository
for Securities Limited (CDS)
Schedule A: 17f-5 Approval
Page 2
Fund
Officer
Initials Country Subcustodian Central Depository
-------- ------- ------------ ------------------
______ Chile Citibank, N.A. None
Co., Ltd. (SSCC)
______ People's Republic The Hongkong and Shanghai Shanghai Securities Central Clearing and
of China Banking Corporation Limited, Registration Corporation (SSCCRC);
Shanghai and Shenzhen branches
Shenzhen Securities Central Clearing
Co., Ltd. (SSCC)
______ Colombia Cititrust Colombia S.A. None
Sociedad Fiduciaria
______ Cyprus Barclays Bank PLC None
Cyprus Offshore Banking Unit
______ Czech Republic Ceskoslovenska Obchodni Stredisko cennych papirfi (SCP);
Banka A.S.
Czech National Bank (CNB)
______ Denmark Den Danske Bank Vaerdipapircentralen - The Danish
Securities Center (VP)
______ Ecuador Citibank, N.A. None
______ Egypt National Bank of Egypt Misr Company for Clearing, Settlement
and Central Depository (MCSD)
______ Finland Xxxxxx Bank Limited The Central Share Register of
Finland
______ France Banque Paribas Societe Interprofessionnelle
pour la Compensation des
Valeurs Mobilieres (SICOVAM);
Banque de France,
Saturne System
______ Germany Dresdner Bank AG The Deutscher Kassenverein AG
______ Ghana Barclays Bank of Ghana Limited None
Schedule A: 17f-5 Approval
Page 3
Fund
Officer
Initials Country Subcustodian Central Depository
-------- ------- ------------ ------------------
______ Greece National Bank of Greece S.A. The Central Securities Depository
(Apothetirion Titlon A.E.)
______ Hong Kong Standard Chartered Bank The Central Clearing and
Settlement System (CCASS)
______ Hungary Citibank Budapest Rt. The Central Depository and Clearing
House (Budapest) Ltd. (KELER Ltd.)
______ India Deutsche Bank AG None
______ The Hongkong and Shanghai None
Banking Corporation Limited
______ Indonesia Standard Chartered Bank None
______ Ireland Bank of Ireland None
The Central Bank of Ireland,
The Gilt Settlement Office (GSO)
______ Israel Bank Hapoalim B.M. The Clearing House of the
Tel Aviv Stock Exchange
______ Italy Bank Paribas Monte Titoli S.p.A.;
Banca d'Italia
______ Ivory Coast Societe Generale de Banques None
en Cote d'Ivoire
______ Japan The Daiwa Bank, Limited Japan Securities Depository
Center (JASDEC);
Bank of Japan Net System
______ The Fuji Bank, Limited Japan Securities Depository
Center (JASDEC);
Bank of Japan Net System
______ The Sumitomo Trust Japan Securities Depository
& Banking Co., Ltd. Center (JASDEC)
Bank of Japan Net System
Schedule A: 17f-5 Approval
Page 4
Fund
Officer
Initials Country Subcustodian Central Depository
-------- ------- ------------ ------------------
______ Jordan The British Bank of the Middle East None
______ Kenya Barclays Bank of Kenya Limited None
______ Republic of Korea SEOULBANK Korea Securities Depository (KSD)
______ Malaysia Standard Chartered Bank Malaysian Central Depository Sdn.
Malaysia Berhad Bhd. (MCD)
______ Mauritius The Hongkong and Shanghai The Central Depository & Settlement
Banking Corporation Limited Co. Ltd. (CDS)
______ Mexico Citibank Mexico, S.A. S.D. INDEVAL, S.A. de C.V.
(Instituto para el Deposito de
Valores);
Banco de Mexico
______ Morocco Banque Commerciale du Maroc None
______ Netherlands MeesPierson N.V. Nederlands Centraal Instituut voor
Giraal Effectenverkeer B.V. (NECIGEF)
______ New Zealand NAZ Banking Group New Zealand Central Securities
(New Zealand) Limited Depository Limited (NZCSD)
______ Norway Christiania Bank og Verdipapirsentralen - The Norwegian
Kreditkasse Registry of Securities (VPS)
______ Pakistan Deutsche Bank AG None
______ Peru Citibank, N.A. Caja de Valores (CAVAL)
______ Philippines Standard Chartered Bank The Philippines Central Depository
Inc. (PCD);
The Book-Entry-System (BES) of Bangko
Sentral ng Pilipinas, the Central Bank;
The Registry of Scripless Securities
(XXXX) of the Bureau of the Treasury,
Department of Finance.
Schedule A: 17f-5 Approval
Page 5
Fund
Officer
Initials Country Subcustodian Central Depository
-------- ------- ------------ ------------------
______ Poland Citibank Poland S.A. The National Depository of Securities
(Krajowy Depozyt Papierow
Wartosciowych);
National Bank of Poland
______ Portugal Banco Comercial Portugues Central de Valores Mobiliarios (Central)
______ Russia Credit Suisse First Boston, Zurich None
via Credit Suisse First Boston, Ltd.
Moscow
______ Singapore The Development Bank The Central Depository (Pte)
of Singapore Ltd. Limited (CDP)
______ Slovak Republic Ceskoslovenska Obchodna Stredisko Cennych Papierov (SCP);
Banka A.S.
National Bank of Slovakia
______ South Africa Standard Bank of South Africa Limited The Central Depository Limited
______ Spain Banco Santander, S.A. Servicio de Compensacion y
Liquidacion de Valores, S.A. (SCLV);
Banco de Espana
Anotaciones en Cuenta
______ Sri Lanka The Hongkong and Shanghai Central Depository System
Banking Corporation Limited (Pvt) Limited
______ Swaziland Barclays Bank of Swaziland Limited None
______ Sweden Skandinaviska Enskilda Banken Vardepapperscentralen VPC AB -
The Swedish Central Securities Depository
______ Switzerland Union Bank of Switzerland Schweizerische Effekten - Giro AG
(SEGA)
______ Taiwan - R.O.C. Central Trust of China The Taiwan Securities Central
or Depository Company, Ltd. (TSCD)
______ ________________________________
(Client Designated Subcustodian)
Schedule A: 17f-5 Approval
Page 6
Fund
Officer
Initials Country Subcustodian Central Depository
-------- ------- ------------ ------------------
______ Thailand Standard Chartered Bank Thailand Securities Depository
Company Limited (TSD)
______ Turkey Citibank, X.X. Xxxxx ve Saklama Bankasi A.S.
(TAKASBANK);
Central Bank of Trukey
______ United Kingdom State Street Bank and Trust Company None;
The Bank of England,
The Central Gilts Office (CGO);
The Central Moneymarkets Office (CMO)
______ Uruguay Citibank, N.A. None
______ Venezuela Citibank, N.A. None
______ Zambia Barclays Bank of Zambia Limited Lusaka Central Depository (LCD)
______ Zimbabwe Barclays Bank of Zimbabwe Limited None
______ Euroclear (The Euroclear System)/State Street London Limited
______ Cedel (Cedel Bank, societe anonyme)/State Street London Limited
Certified by:
/s/ Xxxxxxx X. Xxxxxxx 5/28/97
------------------------- -------
Fund's Authorized Officer Date
