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EXHIBIT (g)(1)
CUSTODIAN AGREEMENT
AGREEMENT made as of this 3rd day of February, 1999, between The
Vantagepoint Funds, a Delaware business trust (the "Fund") and INVESTORS BANK
& TRUST COMPANY, a Massachusetts trust company (the "Bank").
The Fund, on behalf of the entities listed on Appendix A hereto (as
such Appendix A may be amended from time to time)(each a "Portfolio" and
collectively, the "Portfolios"), desires to place and maintain all of its
portfolio securities and cash in the custody of the Bank. The Bank has at
least the minimum qualifications required by Section 17(f)(l) of the
Investment Company Act of 1940 (the "1940 Act") to act as custodian of the
portfolio securities and cash of the Fund, and has indicated its willingness
to so act, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto agree as follows:
1. Bank Appointed Custodian. The Fund hereby appoints the Bank as
custodian of its portfolio securities and cash delivered to the Bank as
hereinafter described and the Bank agrees to act as such upon the terms and
conditions hereinafter set forth. For the services rendered pursuant to this
Agreement the Fund agrees to pay to the Bank the fees set forth on Appendix B
hereto.
2. Definitions. Whenever used herein, the terms listed below will
have the following meaning:
2.1 Authorized Person. Authorized Person will mean any of the
persons duly authorized to give Proper Instructions or otherwise act on behalf
of the Fund by appropriate resolution of its Board, and set forth in a
certificate as required by Section 4 hereof.
2.2 Board. Board will mean the Board of Trustees of the Fund.
2.3 Security. The term security as used herein will have the
same meaning assigned to such term in the Securities Act of 1933, as amended,
including, without limitation, any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation
in any profit sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security, fractional
undivided interest in oil, gas, or other mineral rights, any put, call,
straddle, option, or privilege on any security, certificate of deposit, or
group or index of securities (including any interest therein or based on the
value thereof), or any put, call, straddle, option, or privilege entered into
on a national securities exchange relating to a foreign currency, or, in
general, any interest or instrument commonly known as a "security", or any
certificate of interest or participation in, temporary or interim certificate
for, receipt for, guarantee of, or warrant or right to subscribe to, or option
contract to purchase or sell any of the foregoing, and futures, forward
contracts and options thereon.
2.4 Portfolio Security. Portfolio Security will mean any
security owned by the Fund.
2.5 Officers' Certificate. Officers' Certificate will mean,
unless otherwise indicated, any request, direction, instruction, or
certification in writing signed by any two Authorized Persons of the Fund.
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2.6 Book-Entry System. Book-Entry System shall mean the Federal
Reserve-Treasury Department Book Entry System for United States government,
instrumentality and agency securities operated by the Federal Reserve Bank,
its successor or successors and its nominee or nominees.
2.7 Depository. Depository shall mean The Depository Trust
Company ("DTC"), a clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities Exchange Act of 1934 ("Exchange
Act"), its successor or successors and its nominee or nominees. The term
"Depository" shall further mean and include any other person authorized to act
as a depository under the 1940 Act, its successor or successors and its
nominee or nominees, specifically identified in a certified copy of a
resolution of the Board.
2.8 Proper Instructions. Proper Instructions shall mean (i)
instructions regarding the purchase or sale of Portfolio Securities, and
payments and deliveries in connection therewith, given by an Authorized
Person, such instructions to be given in such form and manner as the Bank and
the Fund shall agree upon from time to time, and (ii) instructions (which may
be continuing instructions) regarding other matters signed or initialed by an
Authorized Person. Oral instructions will be considered Proper Instructions if
the Bank reasonably believes them to have been given by an Authorized Person.
The Fund shall cause all oral instructions to be promptly confirmed in
writing. The Bank shall act upon and comply with any subsequent Proper
Instruction which modifies a prior instruction and the sole obligation of the
Bank with respect to any follow-up or confirmatory instruction shall be to
make reasonable efforts to detect any discrepancy between the original
instruction and such confirmation and to report such discrepancy to the Fund.
The Fund shall be responsible, at the Fund's expense, for taking any action,
including any reprocessing, necessary to correct any such discrepancy or
error, and to the extent such action requires the Bank to act, the Fund shall
give the Bank specific Proper Instructions as to the action required. Upon
receipt by the Bank of an Officers' Certificate as to the authorization by the
Board accompanied by a detailed description of procedures approved by the
Fund, Proper Instructions may include communication effected directly between
electro-mechanical or electronic devices provided that the Board and the Bank
agree in writing that such procedures afford adequate safeguards for the
Fund's assets.
3. Separate Accounts. If the Fund has more than one series or
portfolio, the Bank will segregate the assets of each series or portfolio to
which this Agreement relates into a separate account for each such series or
portfolio containing the assets of such series or portfolio (and all
investment earnings thereon). Unless the context otherwise requires, any
reference in this Agreement to any actions to be taken by the Fund shall be
deemed to refer to the Fund acting on behalf of one or more of its series, any
reference in this Agreement to any assets of the Fund, including, without
limitation, any portfolio securities and cash and earnings thereon, shall be
deemed to refer only to assets of the applicable series, any duty or
obligation of the Bank hereunder to the Fund shall be deemed to refer to
duties and obligations with respect to such individual series and any
obligation or liability of the Fund hereunder shall be binding only with
respect to such individual series, and shall be discharged only out of the
assets of such series.
4. Certification as to Authorized Persons. The Secretary or Assistant
Secretary of the Fund will at all times maintain on file with the Bank his or
her certification to the Bank, in such form as may be acceptable to the Bank,
of (i) the names and signatures of the Authorized Persons and (ii) the names
of the members of the Board, it being understood that upon the occurrence of
any change in the information set forth in the most recent certification on
file (including without limitation any person named in the most recent
certification who is no longer an Authorized Person as designated therein),
the Secretary or Assistant Secretary of the Fund will sign a new or amended
certification setting forth the change and the new, additional or omitted
names or signatures. The Bank will be entitled to rely and act upon any
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Officers' Certificate given to it by the Fund which has been signed by
Authorized Persons named in the most recent certification received by the
Bank.
5. Custody of Cash. As custodian for the Fund, the Bank will open and
maintain a separate account or accounts in the name of the Fund or in the name
of the Bank, as Custodian of the Fund, and will deposit to the account of the
Fund all of the cash of the Fund, except for cash held by a subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, including borrowed funds,
delivered to the Bank, subject only to draft or order by the Bank acting
pursuant to the terms of this Agreement. Pursuant to the Bank's internal
policies regarding the management of cash accounts, the Bank may segregate
certain portions of the cash of the Fund into a separate savings deposit
account upon which the Bank reserves the right to require seven (7) days
notice prior to withdrawal of cash from such an account. Upon receipt by the
Bank of Proper Instructions (which may be continuing instructions) or in the
case of payments for redemptions and repurchases of outstanding shares of
common stock of the Fund, notification from the Fund's transfer agent as
provided in Section 7, requesting such payment, designating the payee or the
account or accounts to which the Bank will release funds for deposit, and
stating that it is for a purpose permitted under the terms of this Section 5,
specifying the applicable subsection, the Bank will make payments of cash held
for the accounts of the Fund, insofar as funds are available for that purpose,
only as permitted in subsections 5.1-5.9 below.
5.1 Purchase of Securities. Upon the purchase of securities for
the Fund, against contemporaneous receipt of such securities by the Bank or
against delivery of such securities to the Bank in accordance with generally
accepted settlement practices and customs in the jurisdiction or market in
which the transaction occurs registered in the name of the Fund or in the name
of, or properly endorsed and in form for transfer to, the Bank, or a nominee
of the Bank, or receipt for the account of the Bank pursuant to the provisions
of Section 6 below, each such payment to be made at the purchase price shown
on a broker's confirmation (or transaction report in the case of Book Entry
Paper (as that term is defined in Section 6.6 hereof)) of purchase of the
securities received by the Bank before such payment is made, as confirmed in
the Proper Instructions received by the Bank before such payment is made.
5.2 Redemptions. In such amount as may be necessary for the
repurchase or redemption of common shares of the Fund offered for repurchase
or redemption in accordance with Section 7 of this Agreement.
5.3 Distributions and Expenses of Fund. For the payment on the
account of the Fund of dividends or other distributions to shareholders as may
from time to time be declared by the Board, interest, taxes, management or
supervisory fees, distribution fees, fees of the Bank for its services
hereunder and reimbursement of the expenses and liabilities of the Bank as
provided hereunder, fees of any transfer agent, fees for legal, accounting,
and auditing services, or other operating expenses of the Fund.
5.4 Payment in Respect of Securities. For payments in connection
with the conversion, exchange or surrender of Portfolio Securities or
securities subscribed to by the Fund held by or to be delivered to the Bank.
5.5 Repayment of Loans. To repay loans of money made to the
Fund, but, in the case of final payment, only upon redelivery to the Bank of
any Portfolio Securities pledged or hypothecated therefor and upon surrender
of documents evidencing the loan;
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5.6 Repayment of Cash. To repay the cash delivered to the Fund
for the purpose of collateralizing the obligation to return to the Fund
certificates borrowed from the Fund representing Portfolio Securities, but
only upon redelivery to the Bank of such borrowed certificates.
5.7 Foreign Exchange Transactions.
(a) For payments in connection with foreign exchange
contracts or options to purchase and sell foreign currencies for spot and
future delivery (collectively, "Foreign Exchange Agreements") which may be
entered into by the Bank on behalf of the Fund upon the receipt of Proper
Instructions, such Proper Instructions to specify the currency broker or
banking institution (which may be the Bank, or any other subcustodian or agent
hereunder, acting as principal) with which the contract or option is made, and
the Bank shall have no duty with respect to the selection of such currency
brokers or banking institutions with which the Fund deals or for their failure
to comply with the terms of any contract or option.
(b) In order to secure any payments in connection with
Foreign Exchange Agreements which may be entered into by the Bank pursuant to
Proper Instructions, the Fund agrees that the Bank shall have a continuing
lien and security interest, to the extent of any payment due under any Foreign
Exchange Agreement, in and to any property at any time held by the Bank for
the Fund's benefit or in which the Fund has an interest and which is then in
the Bank's possession or control (or in the possession or control of any third
party acting on the Bank's behalf). The Fund authorizes the Bank, in the
Bank's sole discretion, at any time to charge any such payment due under any
Foreign Exchange Agreement against any balance of account standing to the
credit of the Fund on the Bank's books.
5.8 Other Authorized Payments. For other authorized transactions
of the Fund, or other obligations of the Fund incurred for proper Fund
purposes; provided that before making any such payment the Bank will also
receive a certified copy of a resolution of the Board signed by an Authorized
Person (other than the Person certifying such resolution) and certified by its
Secretary or Assistant Secretary, naming the person or persons to whom such
payment is to be made, and either describing the transaction for which payment
is to be made and declaring it to be an authorized transaction of the Fund, or
specifying the amount of the obligation for which payment is to be made,
setting forth the purpose for which such obligation was incurred and declaring
such purpose to be a proper corporate purpose.
5.9 Termination: Upon the termination of this Agreement as
hereinafter set forth pursuant to Section 8 and Section 16 of this Agreement.
6. Securities.
6.1 Segregation and Registration. Except as otherwise provided
herein, and except for securities to be delivered to any subcustodian
appointed pursuant to Sections 14.2 or 14.3 hereof, the Bank as custodian will
receive and hold pursuant to the provisions hereof, in a separate account or
accounts and physically segregated at all times from those of other persons,
any and all Portfolio Securities which may now or hereafter be delivered to it
by or for the account of the Fund. All such Portfolio Securities will be held
or disposed of by the Bank for, and subject at all times to, the instructions
of the Fund pursuant to the terms of this Agreement. Subject to the specific
provisions herein relating to Portfolio Securities that are not physically
held by the Bank, the Bank will register all Portfolio Securities (unless
otherwise directed by Proper Instructions or an Officers' Certificate), in the
name of a registered nominee of the Bank as defined in the Internal Revenue
Code and any Regulations of the Treasury Department issued thereunder, and
will execute and deliver all such certificates in connection therewith as may
be required by such Laws or regulations or under the laws of any state.
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The Fund will from time to time furnish to the Bank
appropriate instruments to enable it to hold or deliver in proper form for
transfer, or to register in the name of its registered nominee, any Portfolio
Securities which may from time to time be registered in the name of the Fund.
6.2 Voting and Proxies. Neither the Bank nor any nominee of the
Bank will vote any of the Portfolio Securities held hereunder, except in
accordance with Proper Instructions. The Bank will execute and deliver, or
cause to be executed and delivered, to the applicable Fund Sub-Adviser all
notices, proxies and proxy soliciting materials delivered to the Bank with
respect to such Securities, such proxies to be executed by the registered
holder of such Securities (if registered otherwise than in the name of the
Fund), but without indicating the manner in which such proxies are to be
voted.
6.3 Corporate Action. If at any time the Bank is notified that
an issuer of any Portfolio Security has taken or intends to take a corporate
action (a "Corporate Action") that affects the rights, privileges, powers,
preferences, qualifications or ownership of a Portfolio Security, including
without limitation, liquidation, consolidation, merger, recapitalization,
reorganization, reclassification, subdivision, combination, stock split or
stock dividend, which Corporate Action requires an affirmative response or
action on the part of the holder of such Portfolio Security (a "Response"),
the Bank shall notify the Fund and the Sub-Adviser promptly of the Corporate
Action, the Response required in connection with the Corporate Action and the
Bank's deadline for receipt from the Fund of Proper Instructions regarding the
Response (the "Response Deadline"). The Bank shall forward to the Sub-Adviser
via telecopier and/or overnight courier all notices, information statements or
other materials relating to the Corporate Action promptly after receipt of
such materials by the Bank.
(a) The Bank shall act upon a required Response only after
receipt by the Bank of Proper Instructions no later than 5:00 p.m. on the date
specified as the Response Deadline and only if the Bank (or its agent or
subcustodian hereunder) has actual possession of all necessary Securities,
consents and other materials no later than 5:00 p.m. on the date specified as
the Response Deadline.
(b) The Bank shall have no duty to act upon a required
Response if Proper Instructions relating to such Response and all necessary
Securities, consents and other materials are not received by and in the
possession of the Bank no later than 5:00 p.m. on the date specified as the
Response Deadline. Notwithstanding, the Bank may, in its sole discretion, use
its best efforts to act upon a Response for which Proper Instructions and/or
necessary Securities, consents or other materials are received by the Bank
after 5:00 p.m. on the date specified as the Response Deadline, it being
acknowledged and agreed by the parties that any undertaking by the Bank to use
its best efforts in such circumstances shall in no way create any duty upon
the Bank to complete such Response prior to its expiration.
(c) In the event that the Fund or the Sub-Adviser notifies
the Bank of a Corporate Action requiring a Response and the Bank has received
no other notice of such Corporate Action, the Response Deadline shall be 48
hours prior to the Response expiration time set by the depository processing
such Corporate Action.
(d) Section 14.3(e) of this Agreement shall govern any
Corporate Action involving Foreign Portfolio Securities held by a Selected
Foreign Sub-Custodian.
6.4 Book-Entry System. Provided (i) the Bank has received a
certified copy of a resolution of the Board specifically approving deposits of
Fund assets in the Book-Entry System, and (ii) for any
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subsequent changes to such arrangements following such approval, the Board has
reviewed and approved the arrangement and has not delivered an Officer's
Certificate to the Bank indicating that the Board has withdrawn its approval:
(a) The Bank may keep Portfolio Securities in the
Book-Entry System provided that such Portfolio Securities are represented in
an account ("Account") of the Bank (or its agent) in such System which shall
not include any assets of the Bank (or such agent) other than assets held as a
fiduciary, custodian, or otherwise for customers;
(b) The records of the Bank (and any such agent) with
respect to the Fund's participation in the Book-Entry System through the Bank
(or any such agent) will identify by book entry the Portfolio Securities which
are included with other securities deposited in the Account and shall at all
times during the regular business hours of the Bank (or such agent) be open
for inspection by duly authorized officers, employees or agents of the Fund.
Where securities are transferred to the Fund's account, the Bank shall also,
by book entry or otherwise, identify as belonging to the Fund a quantity of
securities in a fungible bulk of securities (i) registered in the name of the
Bank or its nominee, or (ii) shown on the Bank's account on the books of the
Federal Reserve Bank;
(c) The Bank (or its agent) shall pay for securities
purchased for the account of the Fund or shall pay cash collateral against the
return of Portfolio Securities loaned by the Fund upon (i) receipt of advice
from the Book-Entry System that such Securities have been transferred to the
Account, and (ii) the making of an entry on the records of the Bank (or its
agent) to reflect such payment and transfer for the account of the Fund. The
Bank (or its agent) shall transfer securities sold or loaned for the account
of the Fund upon
(i) receipt of advice from the Book-Entry
System that payment for securities sold or payment of the initial cash
collateral against the delivery of securities loaned by the Fund has been
transferred to the Account; and
(ii) the making of an entry on the records of
the Bank (or its agent) to reflect such transfer and payment for the account
of the Fund. Copies of all advices from the Book-Entry System of transfers of
securities for the account of the Fund shall identify the Fund, be maintained
for the Fund by the Bank and shall be provided to the Fund at its request. The
Bank shall send the Fund a confirmation, as defined by Rule 17f-4 of the 1940
Act, of any transfers to or from the account of the Fund;
(d) The Bank will promptly provide the Fund with any
report obtained by the Bank or its agent on the Book-Entry System's accounting
system, internal accounting control and procedures for safeguarding securities
deposited in the Book-Entry System;
6.5 Use of a Depository. Provided (i) the Bank has received a
certified copy of a resolution of the Board specifically approving deposits in
DTC or other such Depository and (ii) for any subsequent changes to such
arrangements following such approval, the Board has reviewed and approved the
arrangement and has not delivered an Officer's Certificate to the Bank
indicating that the Board has withdrawn its approval:
(a) The Bank may use a Depository to hold, receive,
exchange, release, lend, deliver and otherwise deal with Portfolio Securities
including stock dividends, rights and other items of like nature, and to
receive and remit to the Bank on behalf of the Fund all income and other
payments thereon and to take all steps necessary and proper in connection with
the collection thereof;
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(b) Registration of Portfolio Securities may be made in
the name of any nominee or nominees used by such Depository;
(c) Payment for securities purchased and sold may be
made through the clearing medium employed by such Depository for transactions
of participants acting through it. Upon any purchase of Portfolio Securities,
payment will be made only upon delivery of the securities to or for the
account of the Fund and the Fund shall pay cash collateral against the return
of Portfolio Securities loaned by the Fund only upon delivery of the
Securities to or for the account of the Fund; and upon any sale of Portfolio
Securities, delivery of the Securities will be made only against payment
therefor or, in the event Portfolio Securities are loaned, delivery of
Securities will be made only against receipt of the initial cash collateral to
or for the account of the Fund; and
(d) The Bank shall use its best efforts to provide
that:
(i) The Depository obtains replacement of any
certificated Portfolio Security deposited with it in the event such Security
is lost, destroyed, wrongfully taken or otherwise not available to be returned
to the Bank upon its request;
(ii) Proxy materials received by a Depository
with respect to Portfolio Securities deposited with such Depository are
forwarded immediately to the Bank for prompt transmittal to the Fund;
(iii) Such Depository promptly forwards to the
Bank confirmation of any purchase or sale of Portfolio Securities and of the
appropriate book entry made by such Depository to the Fund's account;
(iv) Such Depository prepares and delivers to the
Bank such records with respect to the performance of the Bank's obligations
and duties hereunder as may be necessary for the Fund to comply with the
recordkeeping requirements of Section 31(a) of the 1940 Act and Rule 31(a)
thereunder; and
(v) Such Depository delivers to the Bank all
internal accounting control reports, whether or not audited by an independent
public accountant, as well as such other reports as the Fund may reasonably
request in order to verify the Portfolio Securities held by such Depository.
6.6 Use of Book-Entry System for Commercial Paper. Provided (i) the
Bank has received a certified copy of a resolution of the Board specifically
approving participation in a system maintained by the Bank for the holding of
commercial paper in book-entry form ("Book-Entry Paper") and (ii) for each
year following such approval the Board has received and approved the
arrangements, upon receipt of Proper Instructions and upon receipt of
confirmation from an Issuer (as defined below) that the Fund has purchased
such Issuer's Book-Entry Paper, the Bank shall issue and hold in book-entry
form, on behalf of the Fund, commercial paper issued by issuers with whom the
Bank has entered into a book-entry agreement (the "Issuers"). In maintaining
procedures for Book-Entry Paper, the Bank agrees that:
(a) The Bank will maintain all Book-Entry Paper held by
the Fund in an account of the Bank that includes only assets held by it for
customers;
(b) The records of the Bank with respect to the Fund's
purchase of Book-Entry Paper through the Bank will identify, by book-entry,
commercial paper belonging to the Fund which is
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included in the Book-Entry System and shall at all times during the regular
business hours of the Bank be open for inspection by duly authorized officers,
employees or agents of the Fund;
(c) The Bank shall pay for Book-Entry Paper purchased
for the account of the Fund upon contemporaneous (i) receipt of advice from
the Issuer that such sale of Book-Entry Paper has been effected, and (ii) the
making of an entry on the records of the Bank to reflect such payment and
transfer for the account of the Fund;
(d) The Bank shall cancel such Book-Entry Paper
obligation upon the maturity thereof upon contemporaneous (i) receipt of
advice that payment for such Book-Entry Paper has been transferred to the
Fund, and (ii) the making of an entry on the records of the Bank to reflect
such payment for the account of the Fund; and
(e) The Bank will send to the Fund such reports on its
system of internal accounting control with respect to the Book-Entry Paper as
the Fund may reasonably request from time to time.
6.7 Use of Immobilization Programs. Provided (i) the Bank has
received a certified copy of a resolution of the Board specifically approving
the maintenance of Portfolio Securities in an immobilization program operated
by a bank which meets the requirements of Section 26(a)(1) of the 1940 Act,
and (ii) for each year following such approval the Board has reviewed and
approved the arrangement and has not delivered an Officer's Certificate to the
Bank indicating that the Board has withdrawn its approval, the Bank shall
enter into such immobilization program with such bank acting as a subcustodian
hereunder.
6.8 Eurodollar CDs. Any Portfolio Securities which are Eurodollar CDs
may be physically held by the European branch of the U.S. banking institution
that is the issuer of such Eurodollar CD (a "European Branch"), provided that
such Portfolio Securities are identified on the books of the Bank as belonging
to the Fund and that the books of the Bank identify the European Branch
holding such Portfolio Securities. Notwithstanding any other provision of this
Agreement to the contrary, except as stated in the first sentence of this
subsection 6.8, the Bank shall be under no other duty with respect to such
Eurodollar CDs belonging to the Fund.
6.9 Options and Futures Transactions.
(a) Puts and Calls Traded on Securities Exchanges,
NASDAQ or Over-the-Counter.
(i) The Bank shall take action as to put
options ("puts") and call options ("calls") purchased or sold (written) by the
Fund regarding escrow or other arrangements (i) in accordance with the
provisions of any agreement entered into upon receipt of Proper Instructions
among the Bank, any broker-dealer registered with the National Association of
Securities Dealers, Inc. (the "NASD"), and, if necessary, the Fund, relating
to the compliance with the rules of the Options Clearing Corporation and of
any registered national securities exchange, or of any similar organization or
organizations.
(ii) Unless another agreement requires it to do
so, the Bank shall be under no duty or obligation to see that the Fund has
deposited or is maintaining adequate margin, if required, with any broker in
connection with any option, nor shall the Bank be under duty or obligation to
present such option to the broker for exercise unless it receives Proper
Instructions from the Fund. The Bank shall have no responsibility for the
legality of any put or call purchased or sold on behalf of the Fund, the
propriety of any such purchase or sale, or the adequacy of any collateral
delivered to a broker in
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connection with an option or deposited to or withdrawn from a Segregated
Account (as defined in subsection 6.10 below). The Bank specifically, but not
by way of limitation, shall not be under any duty or obligation to: (i)
periodically check or notify the Fund that the amount of such collateral held
by a broker or held in a Segregated Account is sufficient to protect such
broker or the Fund against any loss; (ii) effect the return of any collateral
delivered to a broker; or (iii) advise the Fund that any option it holds, has
or is about to expire. Such duties or obligations shall be the sole
responsibility of the Fund.
(b) Puts, Calls and Futures Traded on Commodities
Exchanges
(i) The Bank shall take action as to puts,
calls and futures contracts ("Futures") purchased or sold by the Fund in
accordance with the provisions of any agreement entered into upon the receipt
of Proper Instructions among the Fund, the Bank 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 Fund.
(ii) The responsibilities of the Bank as to
futures, puts and calls traded on commodities exchanges, any Futures
Commission Merchant account and the Segregated Account shall be limited as set
forth in subparagraph (a) (ii) of this Section 6.9 as if such subparagraph
referred to Futures Commission Merchants rather than brokers, and Futures and
puts and calls thereon instead of options.
6.10 Segregated Account. The Bank shall upon receipt of Proper
Instructions establish and maintain a Segregated Account or Accounts for and
on behalf of the Fund.
(a) Cash and/or Portfolio Securities may be transferred
into a Segregated Account upon receipt of Proper Instructions in the following
circumstances:
(i) in accordance with the provisions of any
agreement among the Fund, the Bank 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 organizations regarding escrow
or other arrangements in connection with transactions by the Fund;
(ii) for the purpose of segregating cash or
securities in connection with options purchased or written by the Fund or
commodity futures purchased or written by the Fund;
(iii) for the deposit of liquid-assets, such as
cash, U.S. Government securities or other high grade debt obligations, having
a market value (marked to market on a daily basis) at all times equal to not
less than the aggregate purchase price due on the settlement dates of all the
Fund's then outstanding forward commitment or "when-issued" agreements
relating to the purchase of Portfolio Securities and all the Fund's then
outstanding commitments under reverse repurchase agreements entered into with
broker-dealer firms;
(iv) for the purposes of compliance by the Fund
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;
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(v) for other proper corporate purposes, but
only, in the case of this clause (v), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board, or of the
executive committee of the Board signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary, setting forth the
purpose or purposes of such Segregated Account and declaring such purposes to
be proper corporate purposes.
(b) Cash and/or Portfolio Securities may be withdrawn
from a Segregated Account pursuant to Proper Instructions in the following
circumstances:
(i) with respect to assets deposited in
accordance with the provisions of any agreements referenced in (a)(i) or
(a)(ii) above, in accordance with the provisions of such agreements;
(ii) with respect to assets deposited pursuant
to (a)(iii) or (a)(iv) above, for sale or delivery to meet the Fund's
obligations under outstanding forward commitment or when-issued agreements for
the purchase of Portfolio Securities and under reverse repurchase agreements;
(iii) for exchange for other liquid assets of
equal or greater value deposited in the Segregated Account;
(iv) to the extent that the Fund's outstanding
forward commitment or when-issued agreements for the purchase of portfolio
securities or reverse repurchase agreements are sold to other parties or the
Fund's obligations thereunder are met from assets of the Fund other than those
in the Segregated Account;
(v) for delivery upon settlement of a forward
commitment or when-issued agreement for the sale of Portfolio Securities; or
(vi) with respect to assets deposited pursuant
to (a)(v) above, in accordance with the purposes of such account as set forth
in Proper Instructions.
6.11 Interest Bearing Call or Time Deposits. The Bank shall, upon
receipt of Proper Instructions relating to the purchase by the Fund of
interest-bearing fixed-term and call deposits, transfer cash, by wire or
otherwise, in such amounts and to such bank or banks as shall be indicated in
such Proper Instructions. The Bank shall include in its records with respect to
the assets of the Fund appropriate notation as to the amount of each such
deposit, the banking institution with which such deposit is made (the "Deposit
Bank"), and shall retain such forms of advice or receipt evidencing the deposit,
if any, as may be forwarded to the Bank by the Deposit Bank. Such deposits shall
be deemed Portfolio Securities of the Fund and the responsibility of the Bank
therefore shall be the same as and no greater than the Bank's responsibility in
respect of other Portfolio Securities of the Fund.
6.12 Transfer of Securities. The Bank will transfer, exchange,
deliver or release Portfolio Securities held by it hereunder, insofar as such
Securities are available for such purpose, provided that before making any
transfer, exchange, delivery or release under this Section only upon receipt
of Proper Instructions. The Proper Instructions shall state that such
transfer, exchange or delivery is for a purpose permitted under the terms of
this Section 6.12, and shall specify the applicable subsection, or describe
the purpose of the transaction with sufficient particularity to permit the
Bank to ascertain the applicable subsection. After receipt of such Proper
Instructions, the Bank will transfer, exchange, deliver or release Portfolio
Securities only in the following circumstances:
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(a) Upon sales of Portfolio Securities for the account
of the Fund, against contemporaneous receipt by the Bank of payment therefor
in full, or against payment to the Bank in accordance with generally accepted
settlement practices and customs in the jurisdiction or market in which the
transaction occurs, each such payment to be in the amount of the sale price
shown in a broker's confirmation of sale received by the Bank before such
payment is made, as confirmed in the Proper Instructions received by the Bank
before such payment is made;
(b) In exchange for or upon conversion into other
securities alone or other securities and cash pursuant to any plan of merger,
consolidation, reorganization, share split-up, change in par value,
recapitalization or readjustment or otherwise, upon exercise of subscription,
purchase or sale or other similar rights represented by such Portfolio
Securities, or for the purpose of tendering shares in the event of a tender
offer therefor, provided, however, that in the event of an offer of exchange,
tender offer, or other exercise of rights requiring the physical tender or
delivery of Portfolio Securities, the Bank shall have no liability for failure
to so tender in a timely manner unless such Proper Instructions are received
by the Bank at least two business days prior to the date required for tender,
and unless the Bank (or its agent or subcustodian hereunder) has actual
possession of such Security at least two business days prior to the date of
tender;
(c) Upon conversion of Portfolio Securities pursuant to
their terms into other securities;
(d) For the purpose of redeeming in-kind shares of the
Fund upon authorization from the Fund;
(e) In the case of option contracts owned by the Fund,
for presentation to the endorsing broker;
(f) When such Portfolio Securities are called, redeemed
or retired or otherwise become payable;
(g) For the purpose of effectuating the pledge of
Portfolio Securities held by the Bank in order to collateralize loans made to
the Fund by any bank, including the Bank; provided, however, that such
Portfolio Securities will be released only upon payment to the Bank for the
account of the Fund of the moneys borrowed, provided further, however, that in
cases where additional collateral is required to secure a borrowing already
made, and such fact is made to appear in the Proper Instructions, Portfolio
Securities may be released for that purpose without any such payment. In the
event that any pledged Portfolio Securities are held by the Bank, they will be
so held for the account of the lender, and after notice to the Fund from the
lender in accordance with the normal procedures of the lender and any loan
agreement between the fund and the lender that an event of deficiency or
default on the loan has occurred, the Bank may deliver such pledged Portfolio
Securities to or for the account of the lender;
(h) for the purpose of releasing certificates
representing Portfolio Securities, against contemporaneous receipt by the Bank
of the fair market value of such security, as set forth in the Proper
Instructions received by the Bank before such payment is made;
(i) for the purpose of delivering securities lent by
the Fund to a bank or broker dealer, but only against receipt in accordance
with street delivery custom except as otherwise provided herein, of adequate
collateral as agreed upon from time to time by the Fund and the Bank, and upon
receipt of payment in connection with any repurchase agreement relating to
such securities entered into by the Fund;
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(j) for other authorized transactions of the Fund or
for other proper corporate purposes; provided that before making such
transfer, the Bank will also receive a certified copy of resolutions of the
Board, signed by an authorized officer of the Fund (other than the officer
certifying such resolution) and certified by its Secretary or Assistant
Secretary, specifying the Portfolio Securities to be delivered, setting forth
the transaction in or purpose for which such delivery is to be made, declaring
such transaction to be an authorized transaction of the Fund or such purpose
to be a proper corporate purpose, and naming the person or persons to whom
delivery of such securities shall be made; and
(k) upon termination of this Agreement as hereinafter
set forth pursuant to Section 8 and Section 16 of this Agreement.
As to any deliveries made by the Bank pursuant to this Section 6.12,
securities or cash receivable in exchange therefor shall be delivered to the
Bank.
7. Redemptions. In the case of payment of assets of the Fund held by
the Bank in connection with redemptions and repurchases by the Fund of
outstanding common shares, the Bank will rely on notification by the Fund's
transfer agent of receipt of a request for redemption and certificates, if
issued, in proper form for redemption before such payment is made. Payment
shall be made in accordance with the Articles of Incorporation or Declaration
of Trust and By-laws of the Fund (the "Articles"), from assets available for
said purpose.
8. Merger, Dissolution, etc. of Fund. In the case of the following
transactions, not in the ordinary course of business, namely, the merger of
the Fund into or the consolidation of the Fund with another investment
company, the sale by the Fund of all, or substantially all, of its assets to
another investment company, or the liquidation or dissolution of the Fund and
distribution of its assets, the Bank will deliver the Portfolio Securities
held by it under this Agreement and disburse cash only upon the order of the
Fund set forth in an Officers' Certificate, accompanied by a certified copy of
a resolution of the Board authorizing any of the foregoing transactions. Upon
completion of such delivery and disbursement and the payment of the fees,
disbursements and expenses of the Bank, this Agreement will terminate and the
Bank shall be released from any and all obligations hereunder.
9. Actions of Bank Without Prior Authorization. Notwithstanding
anything herein to the contrary, unless and until the Bank receives an
Officers' Certificate to the contrary, the Bank will take the following
actions without prior authorization or instruction of the Fund or the transfer
agent:
9.1 Endorse for collection and collect on behalf of and in the
name of the Fund all checks, drafts, or other negotiable or transferable
instruments or other orders for the payment of money received by it for the
account of the Fund and hold for the account of the Fund all income,
dividends, interest and other payments or distributions of cash with respect
to the Portfolio Securities held thereunder;
9.2 Present for payment all coupons and other income items held
by it for the account of the Fund which call for payment upon presentation and
hold the cash received by it upon such payment for the account of the Fund;
9.3 Receive and hold for the account of the Fund all securities
received as a distribution on Portfolio Securities as a result of a stock
dividend, share split-up, reorganization, recapitalization, merger,
consolidation, readjustment, distribution of rights and similar securities
issued with respect to any Portfolio Securities held by it hereunder.
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9.4 Execute as agent on behalf of the Fund all necessary
ownership and other certificates and affidavits required by the Internal
Revenue Code or the regulations of the Treasury Department issued thereunder,
or by the laws of any state, now or hereafter in effect, inserting the Fund's
name on such certificates as the owner of the securities covered thereby, to
the extent it may lawfully do so and as may be required to obtain payment in
respect thereof. The Bank will execute and deliver such certificates in
connection with Portfolio Securities delivered to it or by it under this
Agreement as may be required under the provisions of the Internal Revenue Code
and any Regulations of the Treasury Department issued thereunder, or under the
laws of any State;
9.5 Present for payment all Portfolio Securities which are
called, redeemed, retired or otherwise become payable, and hold cash received
by it upon payment for the account of the Fund; and
9.6 Exchange interim receipts or temporary securities for
definitive securities.
10. Collections and Defaults. The Bank will use reasonable efforts to
collect any funds which may to its knowledge become collectible arising from
Portfolio Securities, including dividends, interest and other income, and to
transmit to the Fund notice actually received by it of any call for
redemption, offer of exchange, right of subscription, reorganization or other
proceedings affecting such Securities. If Portfolio Securities upon which such
income is payable are in default or payment is refused after due demand or
presentation, the Bank will notify the Fund in writing of any default or
refusal to pay within two business days from the day on which it receives
knowledge of such default or refusal.
11. Maintenance of Records and Accounting Services. The Bank will
maintain records with respect to transactions for which the Bank is
responsible pursuant to the terms and conditions of this Agreement, and in
compliance with the applicable rules and regulations of the 1940 Act. The
books and records of the Bank pertaining to its actions under this Agreement
and reports by the Bank or its independent accountants concerning its
accounting system, procedures for safeguarding securities and internal
accounting controls will be open to inspection and audit at reasonable times
by officers of or auditors employed by the Fund and will be preserved by the
Bank in the manner and in accordance with the applicable rules and regulations
under the 1940 Act.
The Bank shall perform fund accounting and shall keep the books of
account and render statements or copies from time to time as reasonably
requested by the Treasurer or any executive officer of the Fund.
The Bank shall assist generally in the preparation of reports to
shareholders and others, audits of accounts, and other ministerial matters of
like nature.
12. Fund Evaluation and Yield Calculation
12.1 Fund Evaluation. The Bank shall compute and, unless
otherwise directed by the Board, determine as of the close of regular trading
on the New York Stock Exchange on each day on which said Exchange is open for
unrestricted trading and as of such other days, or hours, if any, as may be
authorized by the Board, the net asset value and the public offering price of
a share of capital stock of the Fund, such determination to be made in
accordance with the provisions of the Articles and By-laws of the Fund and the
Prospectus and Statement of Additional Information relating to the Fund, as
they may from time to time be amended, and any applicable resolutions of the
Board at the time in force and applicable; and promptly to notify the Fund,
the proper exchange and the NASD or such other persons as the Fund may request
of the results of such computation and determination. In computing the net
asset value hereunder, the Bank may rely in good faith upon information
furnished to it by any Authorized Person in
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respect of(i) the manner of accrual of the liabilities of the Fund and in
respect of liabilities of the Fund not appearing on its books of account kept
by the Bank, (ii) reserves, if any, authorized by the Board or that no such
reserves have been authorized, (iii) the source of the quotations to be used
in computing the net asset value, (iv) the value to be assigned to any
security for which no price quotations are available, and (v) the method of
computation of the public offering price on the basis of the net asset value
of the shares, and the Bank shall not be responsible for any loss occasioned
by such reliance or for any good faith reliance on any quotations received
from a source pursuant to (iii) above.
12.2. Yield Calculation. The Bank will compute the performance
results of the Fund (the "Yield Calculation") in accordance with the
provisions of Release No. 33-6753 and Release No. IC-16245 (February 2, 1988)
(the "Releases") promulgated by the Securities and Exchange Commission, and
any subsequent amendments to, published interpretations of or general
conventions accepted by the staff of the Securities and Exchange Commission
with respect to such releases or the subject matter thereof ("Subsequent Staff
Positions"), subject to the terms set forth below:
(a) The Bank shall compute the Yield Calculation for
the Fund for the stated periods of time as shall be mutually agreed upon, and
communicate in a timely manner the result of such computation to the Fund.
(b) In performing the Yield Calculation, the Bank will
derive the items of data necessary for the computation from the records it
generates and maintains for the Fund pursuant Section 11 hereof. The Bank
shall have no responsibility to review, confirm, or otherwise assume any duty
or liability with respect to the accuracy or correctness of any such data
supplied to it by the Fund, any of the Fund's designated agents or any of the
Fund's designated third party providers.
(c) At the request of the Bank, the Fund shall provide,
and the Bank shall be entitled to rely on, written standards and guidelines to
be followed by the Bank in interpreting and applying the computation methods
set forth in the Releases or any Subsequent Staff Positions as they
specifically apply to the Fund. In the event that the computation methods in
the Releases or the Subsequent Staff Positions or the application to the Fund
of a standard or guideline is not free from doubt or in the event there is any
question of interpretation as to the characterization of a particular security
or any aspect of a security or a payment with respect thereto (e.g., original
issue discount, participating debt security, income or return of capital,
etc.) or otherwise or as to any other element of the computation which is
pertinent to the Fund, the Fund or its designated agent shall have the full
responsibility for making the determination of how the security or payment is
to be treated for purposes of the computation and how the computation is to be
made and shall inform the Bank thereof on a timely basis. The Bank shall have
no responsibility to make independent determinations with respect to any item
which is covered by this Section, and shall not be responsible for its
computations made in accordance with such determinations so long as such
computations are mathematically correct.
(d) The Fund shall keep the Bank informed of all
publicly available information and of any non-public advice, or information
obtained by the Fund from its independent auditors or by its personnel or the
personnel of its investment adviser, or Subsequent Staff Positions related to
the computations to be undertaken by the Bank pursuant to this Agreement and
the Bank shall not be deemed to have knowledge of such information (except as
contained in the Releases) unless it has been furnished to the Bank in
writing.
13. Additional Services. The Bank shall perform the additional
services for the Fund as are set forth on Appendix C hereto. Appendix C may be
amended from time to time upon agreement of the
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parties to include further additional services to be provided by the Bank to
the Fund, at which time the fees set forth in Appendix B shall be
appropriately increased.
14. Duties of the Bank.
14.1 Performance of Duties and Standard of Care. In performing
its duties hereunder and any other duties listed on any Schedule hereto, if
any, the Bank will be entitled to receive and act upon the advice of
independent counsel of its own selection, which may be counsel for the Fund,
and will be without liability for any action taken or thing done or omitted to
be done in accordance with this Agreement in good faith in conformity with
such advice.
The Bank will be under no duty or obligation to inquire into and will
not be liable for:
(a) the validity of the issue of any Portfolio
Securities purchased by or for the Fund, the legality of the purchases thereof
or the propriety of the price incurred therefor;
(b) the legality of any sale of any Portfolio
Securities by or for the Fund or the propriety of the amount for which the
same are sold;
(c) the legality of an issue or sale of any common
shares of the Fund or the sufficiency of the amount to be received therefor;
(d) the legality of the repurchase of any common shares
of the Fund or the propriety of the amount to be paid therefor;
(e) the legality of the declaration of any dividend by
the Fund or the legality of the distribution of any Portfolio Securities as
payment in kind of such dividend; and
(f) any property or moneys of the Fund unless and until
received by it, and any such property or moneys delivered or paid by it
pursuant to the terms hereof.
Moreover, the Bank will not be under any duty or obligation to
ascertain whether any Portfolio Securities at any time delivered to or held by
it for the account of the Fund are such as may properly be held by the Fund
under the provisions of its Articles, By-laws, any federal or state statutes
or any rule or regulation of any governmental agency, except to the extent
that such duty or obligation is assumed by the Bank as part of another
agreement with the Fund or its Affiliates.
14.2 Agents and Subcustodians with Respect to Property of the Fund
Held in the United States. The Bank may employ agents of its own selection in
the performance of its duties hereunder and shall be responsible for the acts
and omissions of such agents as if performed by the Bank hereunder. Without
limiting the foregoing, certain duties of the Bank hereunder may be performed
by one or more affiliates of the Bank.
Upon receipt of Proper Instructions, the Bank may employ
subcustodians selected by or at the direction of the Fund, provided that any
such subcustodian meets at least the minimum qualifications required by
Section 17(f)(1) of the 1940 Act to act as a custodian of the Fund's assets
with respect to property of the Fund held in the United States. The Bank shall
have no liability to the Fund or any other person by reason of any act or
omission of any such subcustodian and the Fund shall indemnify the Bank and
hold it harmless from and against any and all actions, suits and claims,
arising directly or indirectly out of the performance of any subcustodian.
Upon request of the Bank, the Fund shall assume the entire
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defense of any action, suit, or claim subject to the foregoing indemnity. The
Fund shall pay all fees and expenses of any subcustodian.
14.3 Duties of the Bank with Respect to Property of the Fund Held
Outside of the United States.
(a) Appointment of Foreign Custody Manager.
(i) If the Fund has appointed the Bank Foreign
Custody Manager (as that term is defined in Rule 17f-5 under the 1940 Act),
the Bank's duties and obligations with respect to the Fund's Portfolio
Securities and other assets maintained outside the United States shall be, to
the extent not set forth herein, as set forth in the Delegation Agreement
between the Fund and the Bank (the "Delegation Agreement").
(ii) If the Fund has appointed any other person
or entity Foreign Custody Manager, the Bank shall act only upon Proper
Instructions from the Fund with regard to any of the Fund's Portfolio
Securities or other assets held or to be held outside of the United States,
and the Bank shall be without liability for any Claim (as that term is defined
in Section 15 hereof) arising out of maintenance of the Fund's Portfolio
Securities or other assets outside of the United States. The Fund also agrees
that it shall enter into a written agreement with such Foreign Custody Manager
that shall obligate such Foreign Custody Manager to provide to the Bank in a
timely manner all information required by the Bank in order to complete its
obligations hereunder. The Bank shall not be liable for any Claim arising out
of the failure of such Foreign Custody Manager to provide such information to
the Bank.
(b) Segregation of Securities. The Bank shall identify
on its books as belonging to the Fund the Foreign Portfolio Securities held by
each foreign sub-custodian (each an "Eligible Foreign Custodian") selected by
the Foreign Custody Manager, subject to receipt by the Bank of the necessary
information from such Eligible Foreign Custodian if the Foreign Custody
Manager is not the Bank.
(c) Access of Independent Accountants of the Fund. If
the Bank is the Fund's Foreign Custody Manager, upon request of the Fund, the
Bank 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 an Eligible Foreign Custodian insofar as such books
and records relate to the performance of such foreign banking institution with
regard to the Fund's Portfolio Securities and other assets.
(d) Reports by Bank. If the Bank is the Fund's Foreign
Custody Manager, the Bank will supply to the Fund the reports required under
the Delegation Agreement.
(e) Transactions in Foreign Custody Account.
Transactions with respect to the assets of the Fund held by an Eligible
Foreign Custodian shall be effected pursuant to Proper Instructions from the
Fund to the Bank and shall be effected in accordance with the applicable
agreement between the Foreign Custody Manager and such Eligible Foreign
Custodian. If at any time any Foreign Portfolio Securities shall be registered
in the name of the nominee of the Eligible Foreign Custodian, the Fund agrees
to hold any such nominee harmless from any liability by reason of the
registration of such securities in the name of such nominee.
Notwithstanding any provision of this Agreement to
the contrary, settlement and payment for Foreign Portfolio Securities received
for the account of the Fund and delivery of Foreign Portfolio Securities
maintained for the account of the Fund may be effected in accordance with the
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customary established securities trading or securities processing practices
and procedures in the jurisdiction or market in which the transaction occurs,
including, without limitation, delivering securities to the purchaser thereof
or to a dealer therefor (or an agent for such purchaser or dealer) against a
receipt with the expectation of receiving later payment for such securities
from such purchaser or dealer.
In connection with any action to be taken with
respect to the Foreign Portfolio Securities held hereunder, including, without
limitation, the exercise of any voting rights, subscription rights, redemption
rights, exchange rights, conversion rights or tender rights, or any other
action in connection with any other right, interest or privilege with respect
to such Securities (collectively, the "Rights"), the Bank shall promptly
transmit to the Fund such information in connection therewith as is made
available to the Bank by the Eligible Foreign Custodian, and shall promptly
forward to the applicable Eligible Foreign Custodian any instructions, forms
or certifications with respect to such Rights, and any instructions relating
to the actions to be taken in connection therewith, as the Bank shall receive
from the Fund pursuant to Proper Instructions. Notwithstanding the foregoing,
the Bank shall have no further duty or obligation with respect to such Rights,
including, without limitation, the determination of whether the Fund is
entitled to participate in such Rights under applicable U.S. and foreign laws,
or the determination of whether any action proposed to be taken with respect
to such Rights by the Fund or by the applicable Eligible Foreign Custodian
will comply with all applicable terms and conditions of any such Rights or any
applicable laws or regulations, or market practices within the market in which
such action is to be taken or omitted.
(f) Tax Law. The Bank shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund or the Bank
as custodian of the Fund by the tax laws of any jurisdiction, and it shall be
the responsibility of the Fund to notify the Bank of the obligations imposed
on the Fund or the Bank as the custodian of the Fund by the tax law of any
non-U.S. jurisdiction, including responsibility for withholding and other
taxes, assessments or other governmental charges, certifications and
governmental reporting. The sole responsibility of the Eligible Foreign
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.
14.4 Insurance. The Bank shall use the same care with respect to
the safekeeping of Portfolio Securities and cash of the Fund held by it as it
uses in respect of its own similar property but it need not maintain any
special insurance for the benefit of the Fund.
14.5. Fees and Expenses of the Bank. The Fund will pay or
reimburse the Bank from time to time for any transfer taxes payable upon
transfer of Portfolio Securities made hereunder, and for all necessary proper
disbursements, expenses and charges made or incurred by the Bank in the
performance of this Agreement (including any duties listed on any Schedule
hereto, if any) including any indemnities for any loss, liabilities or expense
to the Bank as provided above. For the services rendered by the Bank
hereunder, the Fund will pay to the Bank such compensation or fees at such
rate and at such times as shall be agreed upon in writing by the parties from
time to time. The Bank will also be entitled to reimbursement by the Fund for
all reasonable expenses incurred in conjunction with termination of this
Agreement.
14.6 Advances by the Bank. The Bank may, in its sole discretion,
advance funds on behalf of the Fund to make any payment permitted by this
Agreement upon receipt of any proper authorization required by this Agreement
for such payments by the Fund. Should such a payment or payments, with
advanced funds, result in an overdraft (due to insufficiencies of the Fund's
account with the Bank, or for any other reason) this Agreement deems any such
overdraft or related indebtedness a loan made by the Bank to the Fund payable
on demand. Such overdraft shall bear interest at the current rate charged by
the
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Bank for such loans unless the Fund shall provide the Bank with agreed upon
compensating balances. The Fund agrees that the Bank shall have a continuing
lien and security interest to the extent of any overdraft or indebtedness, in
and to any property at any time held by it for the Fund's benefit or in which
the Fund has an interest and which is then in the Bank's possession or control
(or in the possession or control of any third party acting on the Bank's
behalf). The Fund authorizes the Bank, in the Bank's sole discretion, at any
time to charge any overdraft or indebtedness, together with interest due
thereon, against any balance of account standing to the credit of the Fund on
the Bank's books.
15. Limitation of Liability.
15.1 Notwithstanding anything in this Agreement to the contrary, in
no event shall the Bank or any of its officers, directors, employees or agents
(collectively, the "Indemnified Parties") be liable to the Fund or any third
party, and the Fund shall indemnify and hold the Bank and the Indemnified
Parties harmless from and against any and all loss, damage, liability,
actions, suits, claims, costs and expenses, including legal fees, (a "Claim")
arising as a result of any act or omission of the Bank or any Indemnified
Party under this Agreement, except to the extent that any Claim results from
the negligence, willful misfeasance or bad faith of the Bank or any
Indemnified Party. Without limiting the foregoing, neither the Bank nor the
Indemnified Parties shall be liable for, and the Bank and the Indemnified
Parties shall be indemnified against, any Claim arising as a result of:
(a) Any act or omission by the Bank or any Indemnified
Party in good faith reliance upon the terms of this Agreement, any Officer's
Certificate, Proper Instructions, resolution of the Board, telegram,
telecopier, notice, request, certificate or other instrument reasonably
believed by the Bank to genuine;
(b) Any act or omission of any subcustodian selected by
or at the direction of the Fund;
(c) Any act or omission of any Foreign Custody Manager
other than the Bank or any act or omission of any Eligible Foreign Custodian
if the Bank is not the Foreign Custody Manager;
(d) Any Corporate Action, distribution or other event
related to Portfolio Securities which, at the direction of the Fund, have not
been registered in the name of the Bank or its nominee;
(e) Any Corporate Action requiring a Response for which
the Bank has not received Proper Instructions or obtained actual possession of
all necessary Securities, consents or other materials by 5:00 p.m. on the date
specified as the Response Deadline;
(f) Any act or omission of any European Branch of a
U.S. banking institution that is the issuer of Eurodollar CDs in connection
with any Eurodollar CDs held by such European Branch;
(g) Information relied on in good faith by the Bank and
supplied by any Authorized Person in connection with the calculation of (i) the
net asset value and public offering price of the shares of capital stock of
the Fund or (ii) the Yield Calculation; or
(h) Any acts of God, earthquakes, fires, floods, storms
or other disturbances of nature, epidemics, strikes, riots, nationalization,
expropriation, currency restrictions, acts of war, civil war or terrorism,
insurrection, nuclear fusion, fission or radiation, the interruption, loss or
malfunction of utilities, transportation or computers (hardware or software)
and computer facilities, the unavailability of energy sources and other
similar happenings or events.
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15.2 The Bank shall be liable to the Fund for any Claim to the extent
that such Claim results from the negligence, willful misfeasance or bad faith
of the Bank, provided that the Fund uses all reasonable efforts, and assists
the Bank in its efforts, to limit or mitigate such Claim.
15.3 Year 2000 Compliance. The Bank certifies that the occurrence in
or use by the Bank's own proprietary internal systems (the "Systems") of dates
on or after January 1, 2000 (the "Millennial Dates") will not adversely affect
the performance of the Systems with respect to date dependent data,
computations, output or other functions (including, without limitation,
calculating, computing and sequencing) and that the Systems will create, store
and generate output data related to or including Millennial Dates without
errors or omissions ("Year 2000 Compliance").
The parties acknowledge that the Bank relies on automated
data communications with vendors and other third parties, as well as certain
third party hardware and software providers such as Electronic Data Systems.
The Bank also relies on other third party relationships in the conduct of its
business. For example, the Bank relies on the services of the landlords of its
facilities, telecommunication companies, utilities and commercial airlines,
among others. The parties to this Agreement acknowledge that the Bank can make
no certification as to the Year 2000 Compliance of third-parties utilized by
the Bank in its day to day operations or with which the Systems interact or
communicate, from which the Systems receive data or to which the Systems send
data. The parties further acknowledge that while the Bank has contacted such
third-party providers regarding Year 2000 Compliance and will use reasonable
efforts to monitor the status of such third-party providers' Year 2000
Compliance, failure by such third-party providers to achieve timely Year 2000
Compliance could adversely affect the Bank's performance of its obligations
hereunder.
The Bank further certifies that it has or will have in place
contingency plans that it believes will mitigate business interruption caused
by failure of the Systems to be Year 2000 Compliant and/or failure of third
parties to be Year 2000 Compliant. These contingency plans include, among
other things, supplemental staffing and procedures for manual processing of
system-based tasks.
15.4 Notwithstanding anything to the contrary in this Agreement, in
no event shall the Bank or the Indemnified Parties be liable to the Fund or
any third party for lost profits or lost revenues or any special,
consequential, punitive or incidental damages of any kind whatsoever in
connection with this Agreement or any activities hereunder.
16. Termination.
16.1 The term of this Agreement shall be three years commencing upon
the date hereof (the "Initial Term"), unless earlier terminated as provided
herein. After the expiration of the Initial Term, the term of this Agreement
shall automatically renew for successive one-year terms (each a "Renewal
Term") unless notice of non-renewal is delivered by the non-renewing party to
the other party no later than ninety days prior to the expiration of the
Initial Term or any Renewal Term, as the case may be.
(a) Either party hereto may terminate this Agreement
prior to the expiration of the Initial Term in the event the other party
violates any material provision of this Agreement, provided that the
non-violating party gives written notice of such violation to the violating
party and the violating party does not cure such violation within 90 days of
receipt of such notice.
(b) Notwithstanding the above, if the Fund determines,
during the Initial Term, that the Bank's performance under this Agreement
fails to meet reasonable industry standards, then the Fund
19
20
shall provide to the Bank a written notice, executed by an officer of the
Fund, setting forth such failure (the "Notice"). If the Bank has not cured or
taken substantial steps to cure such failure within 90 days of its receipt of
the Notice (the "Cure Period"), the Fund may terminate this agreement 90 days
after expiration of the Cure Period.
(c) Either party may terminate this Agreement during
any Renewal Term upon ninety days written notice to the other party. Any
termination pursuant to this paragraph 16.1(b) shall be effective upon
expiration of such ninety days, provided, however, that the effective date of
such termination may be postponed to a date not more than one hundred twenty
days after delivery of the written notice: (i) at the request of the Bank, in
order to prepare for the transfer by the Bank of all of the assets of the Fund
held hereunder; or (ii) at the request of the Fund, in order to give the Fund
an opportunity to make suitable arrangements for a successor custodian.
16.2 In the event of the termination of this Agreement, the Bank will
immediately upon receipt or transmittal, as the case may be, of notice of
termination, commence and prosecute diligently to completion the transfer of
all cash and the delivery of all Portfolio Securities duly endorsed and all
records maintained under Section 11 to the successor custodian when appointed
by the Fund. The obligation of the Bank to deliver and transfer over the
assets of the Fund held by it directly to such successor custodian will
commence as soon as such successor is appointed and will continue until
completed as aforesaid. If the Fund does not select a successor custodian
within ninety (90) days from the date of delivery of notice of termination the
Bank may, subject to the provisions of subsection 16.3, deliver the Portfolio
Securities and cash of the Fund held by the Bank to a bank or trust company of
the Bank's own selection which meets the requirements of Section 17(f)(1) of
the 1940 Act and has a reported capital, surplus and undivided profits
aggregating not less than $2,000,000, to be held as the property of the Fund
under terms similar to those on which they were held by the Bank, whereupon
such bank or trust company so selected by the Bank will become the successor
custodian of such assets of the Fund with the same effect as though selected
by the Board. Thereafter, the Bank shall be released from any and all
obligations under this Agreement.
16.3 Prior to the expiration of ninety (90) days after notice of
termination has been given, the Fund may furnish the Bank with an order of the
Fund advising that a successor custodian cannot be found willing and able to
act upon reasonable and customary terms and that there has been submitted to
the shareholders of the Fund the question of whether the Fund will be
liquidated or will function without a custodian for the assets of the Fund
held by the Bank. In that event the Bank will deliver the Portfolio Securities
and cash of the Fund held by it, subject as aforesaid, in accordance with one
of such alternatives which may be approved by the requisite vote of
shareholders, upon receipt by the Bank of a copy of the minutes of the meeting
of shareholders at which action was taken, certified by the Fund's Secretary
and an opinion of counsel to the Fund in form and content satisfactory to the
Bank. Thereafter, the Bank shall be released from any and all obligations
under this Agreement.
16.4 The Fund shall reimburse the Bank for any reasonable expenses
incurred by the Bank in connection with the termination of this Agreement.
16.5 At any time after the termination of this Agreement, the Fund
may, upon written request, have reasonable access to the records of the Bank
relating to its performance of its duties as custodian.
20
21
17. Additional Representations of the Bank
17.1 The Bank represents that, to its knowledge, the statements
made in its Response to Request for Proposal dated September 11, 1998 were
accurate in all material respects at the time they were made.
17.2 The Bank represents that the conversion of the Fund's
securities to the Bank's Systems shall be completed in accordance with the
terms and schedule agreed by the parties. The Bank agrees to indemnify the
Fund for any Claim arising from: (i) failure of the Bank to complete the
conversion in accordance with those terms and schedules, or (ii) any
inaccurate conversions of records, securities or financial information
maintained by the predecessor custodian, provided, however, that such failure
or inaccuracy is due to matters within the reasonable control of the Bank. The
Fund agrees to review and approve a reconciliation list between the Bank and
the predecessor custodian as of the date of conversion.
18. Confidentiality. Both parties hereto agree than any non-public
information obtained hereunder concerning the other party is confidential and
may not be disclosed without the consent of the other party, except as may be
required by applicable law or at the request of a governmental agency. The
parties further agree that a breach of this provision would irreparably
damage the other party and accordingly agree that each of them is entitled, in
addition to all other remedies at law or in equity to an injunction or
injunctions without bond or other security to prevent breaches of this
provision.
19. Notices. Any notice or other instrument in writing authorized or
required by this Agreement to be given to either party hereto will be
sufficiently given if addressed to such party and delivered via (i) United
States Postal Service registered mail, (ii) telecopier with written
confirmation, (iii) hand delivery with signature to such party at its office
at the address set forth below, namely:
(a) In the case of notices sent to the Fund to:
Vantagepoint Funds
000 Xxxxx Xxxxxxx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx, General Counsel
With a copy to: Xxxx Xxxxxxx, Treasurer
(b) In the case of notices sent to the Bank to:
Investors Bank & Trust Company
000 Xxxxxxxxx Xxxxxx, X.X. Xxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, Director -
Client Management
With a copy to: Xxxx X. Xxxxx, General Counsel
or at such other place as such party may from time to time
designate in writing.
20. Amendments. This Agreement may not be altered or amended, except
by an instrument in writing, executed by both parties.
21. Parties. This Agreement will be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns;
provided, however, that this Agreement will not be assignable by the Fund
without the written consent of the Bank or by the Bank without the written
21
22
consent of the Fund, authorized and approved by its Board; and provided
further that termination proceedings pursuant to Section 16 hereof will not be
deemed to be an assignment within the meaning of this provision.
22. Governing Law. This Agreement and all performance hereunder will
be governed by the laws of the Commonwealth of Massachusetts, without regard
to conflict of laws provisions.
23. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
24. Entire Agreement. This Agreement, together with its Appendices,
the Securities Lending Agency Agreement, the Administration Agreement, the
Transfer Agency Agreemenet and the Master Repurchase Agreement of even date
herewith between the Bank and the Fund, constitute the sole and entire
agreements between the parties relating to the subject matter herein and
therein and do not operate as an acceptance of any conflicting terms or
provisions of any other instrument and terminate and supersede any and all
prior agreements and undertakings between the parties relating to the subject
matter herein and therein.
25. Limitation of Liability. The Bank agrees that the obligations
assumed by the Fund hereunder shall be limited in all cases to the assets of
the Fund and that the Bank shall not seek satisfaction of any such obligation
from the officers, agents, employees, trustees, or shareholders of the Fund.
26. Several Obligations of the Portfolios. This Agreement is an
agreement entered into between the Bank and the Fund with respect to each
Portfolio. With respect to any obligation of the Fund on behalf of any
Portfolio arising out of this Agreement, the Bank shall look for payment or
satisfaction of such obligation solely to the assets of the Portfolio to which
such obligation relates as though the Bank had separately contracted with the
Fund by separate written instrument with respect to each Portfolio.
[Remainder of Page Intentionally Left Blank]
22
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first written above.
VANTAGEPOINT FUNDS, on behalf of the
Portfolios listed in Appendix A
By: /s/ XXXX X. XXXXXXX
--------------------------
Name:
Title:
INVESTORS BANK & TRUST COMPANY
By: /s/ XXXXXX X. XXXXXX
--------------------------
Name: XXXXXX X. XXXXXX
Title: DIRECTOR, CLIENT MANAGEMENT
23
24
Appendices
Appendix A................................... Portfolios
Appendix B................................... Fee Schedule
Appendix C................................... Additional Services
24
25
Appendix A
Funds
Vantagepoint Aggressive Opportunities Fund
Vantagepoint International Fund
Vantagepoint Growth Stock Fund
Vantagepoint Growth & Income Fund
Vantagepoint Equity Income Fund
Vantagepoint Asset Allocation Fund
Vantagepoint U.S. Treasury Fund
Vantagepoint Money Market Fund
Vantagepoint Overseas Equity Index Fund
Vantagepoint Mid/Small Company Index Fund
Vantagepoint Broad Market Index Fund
Vantagepoint 500 Stock Index Fund
Vantagepoint Core Bond Index Fund
26
ICMA RETIREMENT CORPORATION APPENDIX B
VANTAGEPOINT FUNDS
ICMA RETIREMENT TRUST
(PORTFOLIOS)
FEE SCHEDULE**
1/19/99
CUSTODY, FUND ACCOUNTING, CALCULATION OF N.A.V, MUTUAL FUND
ADMINISTRATION, TRANSFER AGENCY & PERFORMANCE
MEASUREMENT AND PORTFOLIO ANALYTICS
A. CUSTODY, FUND ACCOUNTING, CALCULATION OF N.A.V, TRANSFER AGENCY &
PERFORMANCE MEASUREMENT AND PORTFOLIO ANALYTICS
- The following basis point fee is based on all assets.
Annual Asset Based Fees per Fund:
First $250 Million in Net Assets 2.0 BASIS POINTS
Next $1 Billion in Net Assets 1.5 BASIS POINTS
Above $1.25 Billion in Net Assets 1.0 BASIS POINT
Annual Minimum per Fund: $35,000
The annual minimum fee will be waived as long as total assets in
the RC complex of funds with Investors Bank exceed $4 Billion.
Annual Asset Based Fees per PLUS Fund (GIC) portfolio:
First $150 Million in Net Assets 2.0 BASIS POINTS
Above $150 Million in Net Assets 1.0 BASIS POINT
Annual Minimum per PLUS Fund (GIC) Portfolio: $25,000
The annual minimum fee will be waived as long as total assets in
the RC complex of funds with Investors Bank exceed $4 Billion.
27
B. MUTUAL FUND ADMINISTRATION
- The following basis point fee is based on all assets.
Annual Asset Based Fees per Vantagepoint Fund:
First $250 Million in Net Assets 2.65 BASIS POINTS
Next $1 Billion in Net Assets 2.00 BASIS POINTS
Above $1.25 Billion in Net Assets 1.00 BASIS POINT
Annual Minimum per Vantagepoint Fund: $55,000
The annual minimum fee will be waived as long as total assets in the
ICMA complex of funds with Investors Bank exceed $4 Billion.
- Blue Sky registration costs are charged at $100.00 per permit
processed by IBT. State filing fees are passed on to the funds as an
out-of-pocket expense.
C. DOMESTIC CUSTODY TRANSACTIONS
- Transaction fees: PER TRANSACTION
DTC/Fed Book Entry $10.00
Physical Securities $35.00
Options and Futures $18.00
GNMA Securities $40.00
Principal Paydown $ 5.00
Third Party Foreign Exchange $18.00
Outgoing Wires $ 7.00
Incoming Wires $ 5.00
D. FOREIGN SUBCUSTODIAN FEES
- Incremental basis point and transaction fees will be charged for all
foreign assets for which we are custodian. The asset based fees and
transaction fees vary by country, based upon the attached global
custody fee schedule. Local duties, scrip fees, handling of proxies,
postage, delivery and legal fees and other market charges are
out-of-pocket.
- Investors Bank will require the funds to hold all assets at the
subcustodian of our choice.
- Fees for additional markets to be discussed with your client manager.
2 Investors Bank-
Confidential
28
MISCELLANEOUS
A. XXX ACCOUNT CUSTODIAN/TRUSTEE AND 457 PLAN TRUSTEE (PASSIVE/NAME ONLY)
XXX Account $15.00 PER ACCOUNT
457 Plan $50.00 PER PLAN
Annual minimum combined $25,000
B. SECURITIES LENDING, FOREIGN EXCHANGE AND CASH MANAGEMENT
Investors Bank will perform Securities Lending, foreign exchange and cash
management for the ICMA Retirement Trust and the Vantagepoint Funds.
Securities lending revenue is split with the funds and Investors Bank on
a 65/35% basis: 65% going to the funds.
OUT-OF-POCKET & BALANCE CREDITS
A. OUT-OF-POCKET
These charges consist of:
- Pricing & Verification Services - Micro Rental
- Printing, Delivery & Postage - Forms & Supplies
- Telephone - Support Equipment Rental
- Third Party Review - Legal Expenses
- Systems Development Costs - Data Transmissions
B. DOMESTIC BALANCE CREDIT
We allow use of balance credit against fees (excluding out-of-pocket
charges) for balances arising out of the custody relationship. The credit
is based on collected balances reduced by balances required to support
the activity charges of the accounts. The monthly earnings allowance is
equal to 75% of the 90-day T-xxxx rate.
3 Investors Bank-
Confidential
29
C. SYSTEMS
The details of any systems work will be determined after a thorough
business analysis. Systems work will be billed on a time and material
basis. Investors Bank provides an allowance of 10 systems hours for data
extract set up and reporting extract set up. Additional systems hours will
be billed on a time and materials basis.
NOTES
** A letter of intent accompanied by a $25,000 deposit to be credited
against future fees, is required to begin this implementation. This fee
schedule is valid for 1 year from date of issue and assumes the execution
of our standard contractual agreements for a minimum term of three years.
** Custody and Fund Accounting fees are quoted separately for presentation
purposes only. These services are integrated at Investors Bank and,
therefore, are not provided independent from one another.
** The above fees will be charged against the fund's custodial checking
account five business days after the invoice is mailed. All fees are to be
billed monthly.
** This fee schedule is confidential information of the parties and shall
not be disclosed to any third party without prior written consent of
both parties.
Accepted and Approved By: /s/ XXXX X. XXXXXXX
----------------------------
Name : Xxxx X. Xxxxxxx
----------------------------
Title : Treasurer
----------------------------
Date : 2/3/99
----------------------------
4 Investors Bank-
Confidential
30
ICMA RETIREMENT CORPORATION
VANTAGEPOINT FUNDS
ICMA RETIREMENT TRUST
(PORTFOLIOS)
VANTAGEPOINT AGGRESSIVE OPPORTUNITIES FUND
VANTAGEPOINT INTERNATIONAL FUND
VANTAGEPOINT GROWTH STOCK FUND
VANTAGEPOINT GROWTH & INCOME FUND
VANTAGEPOINT EQUITY INCOME FUND
VANTAGEPOINT ASSET ALLOCATION FUND
VANTAGEPOINT U.S. TREASURY FUND
VANTAGEPOINT MONEY MARKET FUND (TRUST - CASH MANAGEMENT FUND)
VANTAGEPOINT OVERSEAS EQUITY INDEX FUND
ICMA RETIREMENT TRUST SYNTHETIC GIC PORTFOLIOS
5 Investors Bank-
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31
INVESTORS BANK & TRUST COMPANY
GLOBAL CUSTODY FEE SCHEDULE - ICMA RETIREMENT CORPORATION
-----------------------------------------------------------------------
COUNTRY BP CHARGE TRADE CHARGE
-----------------------------------------------------------------------
ARGENTINA * 17.00 $75.00
AUSTRALIA 5.00 $60.00
AUSTRIA 7.00 $60.00
BANGLADESH 41.00 $150.00
BELGIUM 7.00 $60.00
BAHRAIN 41.00 $140.00
BOTSWANA 50.00 $175.00
BRAZIL ** 29.00 $80.00
CANADA 5.00 $30.00
CHILE ** 45.00 $100.00
CHINA 20.00 $75.00
COLOMBIA *** 45.00 $140.00
CROATIA 45.00 $125.00
CYPRUS 50.00 $150.00
CZECH REPUBLIC 17.00 $75.00
DENMARK 5.00 $60.00
ECUADOR 45.00 $100.00
EGYPT 41.00 $100.00
ESTONIA 30.00 $125.00
EUROCLEAR 5.00 $20.00
FINLAND 7.00 $70.00
FRANCE 5.00 $60.00
GERMANY 5.00 $30.00
GHANA 50.00 $200.00
GREECE - EQUITY FUND***** 20.00 $100.00
GREECE - FIXED INCOME FUND**** 15.00 $100.00
HONG KONG 10.00 $65.00
HUNGARY 25.00 $100.00
INDIA 40.00 $600.00
INDONESIA 13.00 $65.00
IRELAND 7.00 $60.00
ISRAEL 20.00 $60.00
ITALY 5.00 $50.00
JAPAN 5.00 $30.00
JORDAN 41.00 $120.00
-------------------------------------------------------------------------------
INVESTORS BANK CONFIDENTIAL
PAGE 1
-------------------------------------------------------------------------------
As of 1/19/99
32
-----------------------------------------------------------------------
COUNTRY BP CHARGE TRADE CHARGE
-----------------------------------------------------------------------
KENYA 50.00 $200.00
KOREA 13.00 $65.00
LATVIA 30.00 $125.00
LEBANON 41.00 $140.00
LITHUANIA 20.00 $75.00
LUXEMBOURG 7.00 $60.00
MALAYSIA 10.00 $70.00
MAURITIUS 41.00 $140.00
MEXICO 10.00 $40.00
MOROCCO 40.00 $150.00
NAMIBIA 50.00 $200.00
NETHERLANDS 5.00 $40.00
NEW ZEALAND 5.00 $60.00
NORWAY 7.00 $90.00
OMAN 41.00 $140.00
PAKISTAN 41.00 $140.00
PERU 35.00 $100.00
PHILIPPINES 13.00 $65.00
POLAND 20.00 $100.00
PORTUGAL 15.00 $125.00
ROMANIA 45.00 $125.00
RUSSIA - EQUITY FUND***** 35.00 $250.00
RUSSIA - FIXED INCOME FUND***** 35.00 $140.00
SINGAPORE 10.00 $65.00
SLOVAKIA 20.00 $75.00
SLOVENIA 41.00 $100.00
SOUTH AFRICA 7.00 $40.00
SPAIN 5.00 $60.00
SRI LANKA 13.00 $65.00
SWAZILAND 50.00 $200.00
SWEDEN 5.00 $40.00
SWITZERLAND 5.00 $60.00
TAIWAN 13.00 $65.00
THAILAND 10.00 $65.00
TURKEY 15.00 $100.00
-------------------------------------------------------------------------------
INVESTORS BANK CONFIDENTIAL
PAGE 2
-------------------------------------------------------------------------------
As of 1/19/99
33
-----------------------------------------------------------------------
COUNTRY BP CHARGE TRADE CHARGE
-----------------------------------------------------------------------
UK 5.00 $50.00
URUGUAY 50.00 $150.00
VENEZUELA ** 45.00 $140.00
ZAMBIA 50.00 $200.00
ZIMBABWE 50.00 $175.00
-----------------------------------------------------------------------
EUROCLEAR CHARGES APPLY TO ONLY APPROVED CONTINENTAL EUROPEAN COUNTRIES
* BONDS BILLED AT RESIDUAL VALUE
** LOCAL ADMINISTRATOR FEES INCLUDED IN CUSTODY FEE
*** 20 BP LOCAL ADMINISTRATION CHARGE APPLIED TO TRADES
**** EUROCLEAR CROSS BORDER FEE OF $50 WHERE APPLICABLE
***** THE DESIGNATION AS AN EQUITY OR FIXED INCOME FUND SHALL BE DETERMINED
BASED ON 50% OR GREATER OF FUND ASSETS INVESTED IN EQUITY OR FIXED
INCOME SECURITIES.
OUT-OF POCKET CHARGES ARE PASSED THROUGH AS ACTUALS IN ALL MARKETS
-------------------------------------------------------------------------------
INVESTORS BANK CONFIDENTIAL
PAGE 3
As of 1/19/99
34
ICMA RETIREMENT CORPORATION APPENDIX B
(CONTINUED)
VANTAGEPOINT FUNDS
ICMA RETIREMENT TRUST
(FEEDER FUNDS)
FEE SCHEDULE**
1/19/99
================================================================================
CUSTODY, FUND ACCOUNTING AND CALCULATION OF N.A.V.
================================================================================
A. CUSTODY, FUND ACCOUNTING AND CALCULATION OF N.A.V.
- The following annual fee shall be charged for each Feeder Fund:
Annual Fee per Fund $12,000
For each additional class beyond the first class for any Fund, there
shall be an annual fee of $6,000 for the above services.
B. MUTUAL FUND ADMINISTRATION AND TRANSFER AGENCY
- The following basis point fee shall apply to each Feeder fund and
is based on all assets.
Annual Asset Based Fees per Vantagepoint Feeder Fund:
First $250 Million in Net Assets 1.75 BASIS POINTS
Next $1 Billion in Net Assets 1.50 BASIS POINTS
Above $1.25 Billion in Net Assets 1.00 BASIS POINT
Annual Minimum per Vantagepoint Feeder Fund: $50,000
For each additional class of shares beyond the first two classes, the
annual minimum fee shall be increased by $25,000.
The annual minimum fee will be waived as long as total assets in the 4
RC Feeder funds with Investors Bank exceed $750 million.
- Blue Sky registration costs are charged at $100.00 per permit
processed by IBT. State filing fees are passed on to the funds as an
out-of-pocket expense.
35
C. TRANSACTIONS COSTS
- Transaction fees:
PER TRANSACTION
---------------
Outgoing Wires $ 7.00
Incoming Wires $ 5.00
================================================================================
OUT-OF-POCKET, BALANCE CREDIT AND SYSTEMS
================================================================================
A. OUT-OF-POCKET
These charges consist of:
-Micro Rental -Ad Hoc Reporting
-Printing, Delivery, Postage -Forms & Supplies
-Telephone -Support Equipment Rental
-Third Party Review -Legal Expenses
-Systems Development Costs -Data Transmissions
B. DOMESTIC BALANCE CREDIT
We allow use of balance credit against fees (excluding out-of-pocket
charges) for balances arising out of the custody relationship. The credit
is based on collected balances reduced by balances required to support
the activity charges of the accounts. The monthly earnings allowance is
equal to 75% of the 90-day T-xxxx rate.
C. SYSTEMS
The details of any systems work will be determined after a thorough
business analysis. Systems work will be billed on a time and material
basis. Investors Bank provides an allowance of 10 systems hours for data
extract set up and reporting extract set up. Additional systems hours
will be billed on a time and materials basis.
2 Investors Bank-
Confidential
36
NOTES
** The above fees will be charged against the fund's custodial checking
account five business days after the invoice is mailed. All fees are to
be billed monthly.
** This fee schedule is confidential information of the parties and shall
not be disclosed to any third party without prior written consent of both
parties.
Accepted and Approved By: /s/ XXXX X. XXXXXXX
------------------------
Name : Xxxx X. Xxxxxxx
------------------------
Title : Treasurer
------------------------
Date : February 3, 1999
------------------------
3 Investors Bank-
Confidential
37
ICMA RETIREMENT CORPORATION
VANTAGEPOINT FUNDS
ICMA RETIREMENT TRUST
(FEEDER FUNDS)
VANATGEPOINT MID/SMALL COMPANY INDEX FUND
VANTAGEPOINT BROAD MARKET INDEX FUND
VANTAGEPOINT 500 STOCK INDEX FUND
VANTAGEPOINT CORE BOND INDEX FUND
4 Investors Bank-
Confidential
38
Appendix C
Other Services
The Bank shall, when requested, provide Trustee services for deferred
compensation plans (457 plans) and other qualified and non-qualified plans. Such
services shall be performed in a Directed and/or Passive Trustee capacity.
The Bank shall, when requested, serve as XXX Custodian for the Fund's XXX
product.
The fees for the above services are set forth in Appendix B.
