HomeMy WebLinkAbout1997-04-22 - AGENDA REPORTS - SELECTION BANK INVESTMENT CITY (2)F.TFIRF)WITNOTM
City Manager Approv
/`��
Item to be presented by:
Steve Stark
CONSENT CALENDAR
DATE: April 22, 1997
SUBJECT: SELECTION OF BANK TO PROVIDE INVESTMENT
CUSTODIAL/SAFEKEEPING SERVICES TO THE CITY
DEPARTMENT: Administrative Services
The City is currently utilizing Bank of America for safekeeping of the City's investments. Due to
recent.changes in the legislation, it was necessary for the City to select a new bank to provide
custodial/safekeeping services. Therefore, a Request for Proposal (RFP) for Investment Safekeeping
Services was issued on January 28, 1997.
Nineteen (19) RFP's were sent to various banks. Three banks, Wells Fargo, Union Bank of
California, and State Street Bank, submitted proposals.
The banks were evaluated on the types and quality of services they were able to provide to the City,
as well as the cost of those services. Based on all criteria, it was determined that Union Bank of
California offered the best quality and the lowest price for investment safekeeping services. The
annual fee for these services is $2,500 per account. The City will require two separate accounts, one
for the Public Financing Authority and one for the City of Santa Clarita; therefore, the total annual
fee for safekeeping/custodial services will be $5,000 which will be requested in the FY 1997-98
budget submittal.
City Council award contract for investment custodial/safekeeping services to Union Bank of
California effective July 1, 1997, for three (3) years, with an option to renew for two (2)
additional years.
2. City Council authorize the City Manager to negotiate the terms of the Custody Agreement and
to sign all documents, subject to City Attorney approval.
AP� i 00U Agenda item:
��1II11I:C�,I�.Y�•y
Union Bank of California's Proposal for Investment Safekeeping Services (Located in City Clerk's
Office Reading File)
Custody Agreement (Located in City Clerk's Office Reading File)
s:Tin\apr11Wp\agenda2.wpd
City of Santa Clarita
Custody & Safekeeping Services
Proposal
n
TABLE OF CONTENTS
Response Data ............................................... Section 1
Submission Package ...................................... Section 2
Request for Proposal
Required Services
Bank Stability Measures
Fee Schedule
Sample Statements ........................................ Section 3
Sample Agreement ........................................ Section 4
Dial -In System ................................................ Section 5
Financial Statements ..................................... Enclosed
City of Santa Clarita
Proposal for Custody and Safekeeping Services
(.OVERVIEW
EXPERIENCE AND CAPABILITY
Union Bank of California (UBOC) is the third-largest commercial bank in
California and is among the 30 largest banks in the United States, based
on assets. Its common stock is approximately 81 percent owned by The
Bank of Tokyo - Mitsubishi, Ltd.
Union Bank of California has 257 offices in California, Oregon, and
Washington and 16 overseas facilities. These are located in Bangkok,
Bombay, the Cayman Islands, Cebu, Guam (2), Hong Kong, Jakarta,
Kuala Lumpur, Manila, Nassau, Saipan, Sao Paolo, Seoul, Taipei and
Tokyo.
RATINGS
Standard & Poor's and Moody's are both widely recognized sources of
bank rating data. Both evaluate favorably the short- and long-term debt
ratings of Union Bank of California and the bank's parent, Bank of Tokyo -
Mitsubishi Ltd. Bank of Tokyo -Mitsubishi's current long-term debt rating
from Moody's is Aa3 (on review for possible upgrade). The Aa3
designation is termed by Moody's as being "debt judged to be of high
quality by all standards." For both Bank of Tokyo -Mitsubishi and Union
Bank of Califomia, the short-term debt rating is P-1, the highest rating
attainable. Union Bank of California's long-term debt rating is A-1, a
rating described by Moody's as possessing "favorable investment
attributes and is to be considered as upper grade with security ranking in
the top range of its generic rating category."
'.Ratm `s.�<i fig. 3
Short Term P-1 A-1
Long Term Al A
EQUAL OPPORTUNITY POLICY
It is the Policy of Union Bank of California and its subsidiaries to provide
equal employment opportunity in all employment decisions, including
hiring, training, promoting, compensation, benefits, transfers, leaves of
absence, education, tuition assistance, and social and recreational
programs for all qualified applicants and employees without discrimination
based on race, color, religion, sex, age, national origin or.ancestry,
City of Santa Clarita
Proposal for Custody and Safekeeping Services
citizenship, disability or veteran status, medical condition, marital status,
or sexual orientation.
In accordance with applicable laws the bank prepares a yearly Affirmative
Action plan. The purpose of the plan is to establish and communicate the
bank's commitment to equal opportunity and affirmative action. The plan
contains results -oriented programs, community-based outreach networks,
and good faith efforts toward achieving affirmative action goals.
The Senior Vice President of the Human Resources Group oversees the
implementation of the Affirmative Action Program, with the Human
Resources Compliance Department responsible for coordinating the
program and for acting as a liaison with and reporting to the regulatory
agencies.
MINORITY AND WOMEN VENDOR BUSINESS DEVELOPMENT
Union Bank of California's Minority and Women Vendor Business
Development Program encourages increased participation of minority and
women -owned businesses in bid solicitation and purchasing selection. It
is the bank's policy to provide minority and women -owned businesses the
maximum practicable opportunity to participate in the bank's vendor
bidding process.
Additionally, Union Bank of California will make every effort to work with
primary vendors to encourage their use of minority and women -owned
subcontractors.
COMMUNITY REINVESTMENT ACT
Union Bank of California's CRA rating as of the last evaluation of March
8, 1993 is: Excellent record of meeting community credit needs.
URBAN ENTERPRISE BANKING
The bank has established the Urban Enterprise Banking program to focus
the marketing of loans to small businesses and individuals located in
specific low to moderate -income areas.
Urban Enterprise Banking from Union Bank of California gives small
businesses the personal attention and many of the same custom banking
services that used to be available only to large companies.
3
City of Santa Clarita
Proposal for Custody and Safekeeping Services
LOCATION OF BANK
The Institutional Custody Services unit of The Bank of California is
located in San Francisco. The work contemplated under this proposal,
including securities lending will be done in the State of California, Any
questions regarding this proposal should be directed to:
Union Bank of California N. A:
Institutional Custody Services
475 Sansome Street, 15th Floor
San Francisco, CA 94111
Aftn.: Andy Jeremi
Vice President
(415) 296-6435
II. CUSTODY SERVICES
AN ATTITUDE OF SERVICE
Institutional Custody Services at Union Bank of California is a specialty
service from a bank known for its specialty services. Our service is
specifically designed to meet the Government Accounting Standards
Board (GASB) requirements.
We can settle your security trades whatever the particulars. We are
experienced in the settlement procedures of DTC -eligible and ineligible
securities, even proprietary issues marketed by brokerage houses.
At Union Bank of California, managers who monitor our trade settlement
area have an average of 20 years experience. Their tenure means they
know the ropes. Over the years they have built a solid network of
relationships with other professionals they can call upon to expedite
transactions. Their ability to anticipate difficulties often means the
difference between a failed trade and a routine transaction.
In keeping with the premium we put on client service, we make it easy to
stay in touch. We have a toll-free number you can use to reach your
account officer with any inquiry. There is also a toll-free fax number for
transmitting trade information and instructions.
Our operating systems are completely integrated. So all information, from
pricing to settlement status, is immediately available.
0
City of Santa Clarita
Proposal for Custody and Safekeeping Services
Many clients also choose a dial-up link from their personal computers to
our system for up-to-the-minute information on account status or activity.
Strict security procedures help ensure confidentiality.
We think you will find our statements especially easy to read and
understand. All information is available in both summary and detail form.
In addition, a variety of special statements options are available for those
with unique format preferences. Reports also can be generated on
whatever frequency cycle you need. -
COMMITMENT TO THE CUSTODY BUSINESS
Union Bank of California is one of the largest providers of trust and
investment management services on the West Coast. We act as
custodian for over $50 billion in assets. The Bank processes over 1000
trades daily.
Under the direction of Senior Vice President Greg King, this unit offers a
variety of services to investment managers, individuals, municipalities,
and businesses. The Group's strategy is to market aggressively in its
traditional geographic and product markets, while at the same time
developing options to expand into new markets.
As part of its growth plan, the bank acquired the trust business of
Westamerica Bank, headquartered in Marin County, California, as well as
the trust business of Central Bank, headquartered in Contra Costa
County. These acquisitions have positioned us to better serve our clients.
At a time when other banks are cutting back on traditional, full service
approaches to clients, we are standing fast. In fact, we're willing to invest
the time and the resources necessary to develop and deliver high-value
products and services, because we believe that the ultimate beneficiaries
are our clients.
Our commitment is to be the premier provider of Trust and Investment
Management Services in the West.
DATA PROCESSING AND SYSTEMS
The Bank uses SEI 3000 Trust Accounting System.
The SEI 3000 Trust Accounting System is complemented by various
subsystems such as: A Custody Interface Subsystem, an Order Entry
Subsystem, a Report Generator Subsystem, a Depository Trust Company
5
City of Santa Clarita
Proposal for Custody and Safekeeping Services
Institutional Delivery (DTC -ID) Subsystem, and an On-line Access
Subsystem.
Union Bank of California is one of the first banks on the WestCoast to
offer direct access to the clients' account information. The dial -in system
helps to simplify and enhance the ability to manage accounts and
increase the efficiency of operations personnel. Through a simple
process, this system provides on-line real-time to the transaction and
position information vital to the day-to-day investment responsibilities.
Some of the advantages of the system are the ability to inquire and print
transaction reports at your discretion, without the delays associated with
mailed reports or phone calls to the bank Specialized reports can be
generated which allow you to see account activity in a variety of ways.
And you gain freedom from handling and storage of paper since the
information is stored for 18 months.
CUT OFF TIMES
The Bank is a member of the 12th Federal Reserve District.
The security transfer cut-off time is: 2:30 P.M. E.S.T.
The money transfer cut-off time is: 2:30 P.M. E.S.T. W_ r
The cut-off time outside the 12th District is: 2:00 P.M. E.S.T.
L
City of Santa Clarita
Proposal for Custody and Safekeeping Services
LOCATION OF SECURITIES
Federal Reserve Bank of San Francisco
101 Market Street
San Francisco, CA 94105
Type of security: U.S. Government and
Agency"Securities
Citibank
20 Exchange Place, Level C
New York, NY 10043
Type of security: Repurchase agreements
Bankers acceptances
Certificates of Deposit
Depository Trust Company of New York
55 Water Street
New York, NY 10041
Type of security: Equity issues
Municipal Bonds
Medium Term Notes
Corporate bonds
SDFS issues
Commercial paper
Participants Trust Company
20 Exchange Place, Level C
New York, NY 10043
Type of Security: GNMNS
Euroclear Operations Center
Rue De La Regence 4
Brussels, Belgium
Type of Security: Foreign Issues
7
City of Santa Clarita
Proposal for Custody and Safekeeping Services
CASH MANAGEMENT/SWEEP ACCOUNT
The Bank provides a daily cash sweep for custody and safekeeping
accounts. You can direct excess cash to a family of funds for which
Union Bank of California is the investment advisor. Our Government fund
has an AAA rating from both Moody's and Fitch.
A separate demand deposit account is not required. Our automatic
sweep works directly with the Custody Account.
SECURITIES LENDING
Union Bank of California also offers a comprehensive securities
lending/reverse repurchase program. A complete description of our
program will be sent to you upon request.
SAMPLE STATEMENTS
Samples of our statements and confirmations are enclosed. The flexibility
of our system allows the user to choose a statement format from a number
of choices. The most popular statement formats are enclosed.
ON-LINE REPORTING
The Bank will provide on-line real-time inquiry and reporting access to the
City of Santa Clarita via personal computer and modem at no charge. A
full description of our Dial -In System can be found in Section 5.
INCOME COLLECTION
The Bank will credit the City of Santa Clarita's account on payable date
for all interest and other sums paid by the issuers of securities held by the
Bank. Certificates of deposit are credited on actual receipt of funds from
the issuer.
FAILED TRANSACTIONS
All transactions will be settled on contractual settlement date. The Bank
will follow up on buy/sell fails.
D
City of Santa Clarita
Proposal for Custody and Safekeeping Services
OWNERSHIP STRUCTURE
Parent Company Union BanCal Corporation
350 California Street
San Francisco, CA 94104
Majority Stockholder
Listed on the NASDAQ National Market
System under the trading symbols of
UNBC (common stock) -- -
UNBCZ (preferred stock)
Bank of Tokyo -Mitsubishi, Limited
7-1, Marunouchi 2 chome,
Chiyoda-ku
Tokyo 100, Japan
Bank of Tokyo -Mitsubishi Ltd., the largest bank in the world, is a publicly
held company listed on the New York and Tokyo stock exchanges.
III. PRICING PROPOSAL
Please refer to Section II of this proposal for a complete fee schedule.
IV. STAFF INFORMATION AND SUPPORT
ACCOUNT ADMINISTRATION
Ms. Moon Lee is a Vice President and Manager of the administrative unit
that handles Financial Institutions and Municipalities. Ms. Lee has been
with Union Bank of California since 1987, managing various trust
operations and administration groups.. She has extensive background in
cash management, mutual funds, securities settlement and domestic
custody. Previously her experiences were in retail banking with Security
Pacific Bank and Great Western Bank. Ms. Lee received her:bachelors
degree in biochemistry and economics from the University of California at
Berkeley.
The Bank will assign Ms. Suzi Beodeker as a primary person for the
account. Ms. Boedeker is an Assistant Vice President and Account
Executive. She has been with Union Bank of California for over eight
years in the safekeeping and custody area. Prior to joining the Bank, she
was with Dean Witter Reynolds for twenty-five years where she held
various management positions in stock transfer and trading. As a result
V.
City of Santa Clarita
Proposal for Custody and Safekeeping Services
she has a broad and in depth knowledge of the securities industry and its
products.
The back-up person responsible for the relationship will be Mrs. Edda
Sydow. Mrs. Sydow functions as an Institutional Custody Services
Associate. She has been with Union Bank of California for eighteen
years. Her extensive industry experience includes commercial finance
and trust trading, with emphasis on municipal and government securities,
investments and safekeeping.
The City of Santa Clarita, may contact the following clients for reference
information:
City of Anchorage
City of Riverside
Ellen Braden
Jerry Rogers
Treasurer
Revenue Manager
(907) 343-6661
(714) 782-5619
City os Anes
City of Los Angeles
Gerald Gap.odieciVFlenry
Davis
Chief Deputy Treasurer
Chief Investment Officer
(213)485-2384.
(213) 485-6183
County of Monterey
. Coun of M erey
vbouis Solton
Mike
County Treasurer
Invest entOfficer
(408) 755-5015
(408) 755-5015
Ciity of Oxnard
Helix Water District
Dale Belcher
Donald J. Kuhl
Treasurer
Treasurer
(805) 486-9462
(619) 667-6201
City of La Mesa
Otay Water District
Dennis M. Hackett
Suzanne Chambers
Director of Finance
Finance Director
(619)643-6611
(619)670-2250
County of Tulareadre
Dam Municipal Water Dist.
Gerald Fields
\,/Andrew B. Lovsted
Treasurer/Tax Collector
Finance Director
(209) 733-8574
(619) 448-3111
ce
CITY OF SANTA CLARITA
23920 VALENCIA BLVD., SUITE 300
SANTA CLARITA, CA 91355
REQUEST FOR PROPOSAL FOR SAFEKEEPING SERVICES
I. INTRODUCTION
The City of Santa Clarita is requesting proposals from financial institutions that will provide
safekeeping (custodial) services for the City's investments that meet the requirements set forth in
the California Government Code Sections 53608 attached. The City's objective is to obtain state-of-
the-art, high quality, comprehensive safekeeping services that will fully meet the City's growing and
varied needs at the lowest possible cost to the taxpayers. It is the intention of the City to evaluate
every three years its existing safekeeping arrangements to determine if demands are being adequately
satisfied.
H. CITY OVERVIEW
The City of Santa Clarita is a General law City incorporated in 1987, and operates under the
Council/Manager form of government. The City provides a wide range of municipal services
including: community planning, building and safety services, street maintenance, parkway and
landscape maintenance, public transportation, as well as numerous park and recreational programs.
The City has approximately 200 full-time employees, and may employ up to 150 part-time
employees on a seasonal basis. For fiscal year 1996-97, the City adopted an operating budget of
approximately $56 million.
III. RFP SUBMISSION PROCESS
After the City Clerk has published the "Notice Inviting RFD's" in the local newspapers, submission
packets will be available at the Finance Division counter at City Hall or will be distributed by request
to financial institutions by mail. The deadline for submitting the completed proposal is February 28.
IM. Proposals must be signed by an individual who is authorized to bind the financial institution
to all commitments purported in the proposal. Five copies of the proposal should be submitted in
a sealed envelope with the outside marked: "Safekeeping Services Proposal." Proposals will not
City of Santa Clarita — RFP for Safekeeping Services
be opened until after the deadline. Additionally, proposals will not be disclosed to competing firms
or to the public until after the recommended financial institution has been selected. You may submit
the proposal to the Administrative Services Department, General Services Division in person, or by
mailing to:
CITY OF SANTA CLARTTA
GENERAL SERVICES DIVISION
BANKING SERVICES RFP
23920 VALENCIA BLVD., SUITE 294
SANTA CLARTTA, CA 91355-- - -
ATTN: JON BISCHETSRIEDER
IV. PROPOSAL CONTENT
All proposals submitted must include the Proposal -Submission Package, as well as any other
information concerning the qualifications of the financial institution. This information may include,
but is not limited to:
• The institution's philosophy regarding its relationship with the client.
• Prior experience of the institution in providing services to major commercial or government
accounts.
• _Identification of staff capabilities, along with resumes of the key personnel who will be working
with the City of Santa Clarita at the branch level.
• Samples of reports to be provided to the City.
• Copies of the institution's Annual Financial Reports for the last three (3) most current years.
• Other information the financial institution believes to be appropriate.
V. PROPOSAL TERMS AND CONDITIONS
• Each proposal shall meet all of the specifications discussed in this RFP. If a proposal is provided
a for an individual safekeeping service requirement, it is assumed that the proposal meets or
L, exceeds the requirements as stated. If a service requirement cannot be met by the financial
institution, then the phrase "NO PROPOSAL' should be entered on the proposal form for that
service requirement. In the case of a "NO PROPOSAL" remark, the financial institution may
- offer an equivalent service, which must be described in detail on a supplemental attachment.
Any non -substantial deviations may be considered provided that the financial institution submits
: a full description and justification for the proposed deviation. The final determination regarding
City of Santa Clarita -- RFP for Safekeeping Services 2
any proposed equivalent to the service requested will be made by the City.
• All financial institutions must be F.D.I.C. insured in order to be eligible for consideration by the
City. '
All questions or requests for information must be submitted in writing only and will receive a
written response from the City. These responses will also be sent to all other financial
institutions that requested a Proposal Submission Package. Telephone communications with
City staff are not permitted, however, in the interest of time, questions may be faxed. The City's
fax number is (805) 259-8125. Please address the fax to April Jordan, Finance and provide
a fax number to which the City may send responses.
• Proposers must be a federally or State of California chartered institution during the term of the
contract.
• The number of transactions indicated in the Proposal Submission Package is believed to be a
reliable estimate of the City's banking activities. However, the actual number of transactions
may vary, and no guarantees are provided by the City regarding minimum or maximum volumes.
• Each financial institution submitting a proposal shall include copies of its annual audited
financial report for the past three (3) years. These reports will be used to determine the financial
strength of the financial institution.
• The City reserves the right to retain all proposals submitted. The City reserves the right to waive
non -substantial irregularities in any proposal, to reject any or all proposals, and to reject part of
a proposal and accept the other, except to the extent that proposals are qualified by specific
limitations by the financial institution.
• The Proposal Submission Package must be completed in its entirety. The extensions of unit
price figures for the estimated quantities as well as lump -sum prices must be entered in the
spaces provided: If the unit price and total amount quoted by any financial institution for any
item are not quoted in agreement, the unit price alone will be considered as representing the
financial institution's intention, and the total will be corrected to conform to the specified unit
price. Unit price amounts for all services provided are to be included in the Proposal Submission
Package.
• Firms may withdraw their proposals, without prejudice, prior to the date and time specified for
proposal submission, by submitting a written request to the City's Director of Administrative
Services/City Treasurer for its withdrawal. No proposal received after the closing date or at any
location other than the location stated in the "Notice Requesting RFP" will be considered.
• The financial institution to whom award is made shall execute a written contract with the City
within ten (10) working days after Notice of Award has been sent by mail at the address provided
City of Santa Clarita -- RFP for Safekeeping Services 3
in the financial institution's proposal.
• If the financial institution to whom the award is made fails to enter into the, contract, the award
will be annulled and an award will be made to the next best proposer as determined by the City;
and that firm shall fulfill every stipulation as if it were the parry to whom the first award was
made.
• The financial institution to whom the award is made shall assist the City in converting current
safekeeping services to the new financial institution in order to insure a smooth transition from
one service to another.
• The successful financial institution shall not assign, transfer, convey, or otherwise dispose of the
contract, or right, title of interest, or power to execute such a contract to any person, firm, or
corporation without previous consent in writing by the City Manager of Santa Clarita.
• In the. performance of the terms of this RFP, the financial institution agrees that it will not
engage in or permit such subcontrators as the firm may employ to engage in discrimination in
the employment of persons because of age, race, color, sex, national origin or ancestry or religion
of such persons.
• The contract shall provide that the City reserves the right to terminate the contract at any time
upon sixty (60) days' prior written notice of the City's intent to terminate the contract.
• Causes for termination of the contract may include the following: failure to promptly and
faithfully provide the services required in this RFP; violation of any law governing any municipal
depository; failure to cooperate upon receiving any reasonable request for information or service;
and improper actions of the institution's officers or employees which, in the opinion of the City,
would adversely affect the City's interest or endanger the safety or liquidity of municipal funds.
• Term of contract shall be three (3) years with option to renew two additional years.
VI. REQUIRED SERVICES
Unit Monthly
Charge Charge
A. SAFEKEEPING OF INVESTMENTS
1. Under the rules and regulations of Government $ 2,500 $ 208.34
Code Section 53608, the Bank shall provide third per annum
party custodial services for all securities that the
City of Santa Clarita — RFP for Safekeeping Services 4
City purchases from any source. All securities
must be received and delivered using standard
delivery versus payment (DVP) procedures which
ensures that securities are deposited with the
custodian bank prior to the release of funds.
The average number of securities purchased
per month is: 2 to 3
The average number of maturities per month
is: 2 to 3
The average size of the City's investment
portfolio is $30,000,000. Of this amount
approximately 50% is invested in LAIF and
is not subject to safekeeping.
2. The Bank shall provide monthly statements Not Applicable
listing the securities inventory held in safe-
keeping and shall provide a receipt for
securities deposited and interest payments and
a credit advice for securities sold or matured.
3. Will Bank provide assured same-day credit
of the City's account at each investment
maturity date in the amount of all principal
and interest due, or will it credit only upon
receipt of that amount from the institution
which delivers the funds? (Note: The City
presently receives assured same-day credit
so that it inevitably may invest matured funds
on the maturity date. Lack of same-day
investment capability would be considered
a serious deprivation.) Indicate any charges
related to providing inevitable availability
of funds in these circumstances.
City of Santa Clatita — RFP for Safekeeping Services
VII. REFERENCES
A. The following reference information is required for at least two (2) local government
accounts currently serviced by your bank. By providing this information, it is understood
that the City may contact any of these account holders for reference information. In
particular, please include any Local Government Account serviced by your Santa Clarita
branch.
City of Riverside
Jerry Rogers
..80M
► ul: t
909-782-5619
City
of
Oxnard
Dale Belcher .
805-486-9462
City
of
Los Angeles
Jerry Capodieci
213-485-2383
B. The following reference information is required for at least two (2) commercial accounts
currently serviced by the branch location that will service the City's accounts. By providing
this information, it is understood that the City may contact any of these account holders for
reference information. Commercial accounts whose owners serve in any official capacity
with the proposing firm should not be listed as a reference.
PRINCIPAL PRODUCT COMPANY TELEPHONE
COMPANY NAME OR SERVICE CONTACT PERSON MB R
P
iL
City of Santa Clarita -- RFP for Safekeeping Services • 6
VIII.
BANK STABILITY MEASURES
Ratio
A.
CASH AND SECURITIES
4.701.164
DEPOSITS
21,532,960
B.
CAPITAL_, (1)
2.876.933
DEPOSITS
21,532,960
C.
CAPttAI,
2.876.933
ASSETS
D.
LOANS (2)
20-898,105
DEPOSITS
21,532,960
E.
NET CHARGE-OFFS (3)
71.203
LOANS
F.
INCOME BEFORE
246.757
SECURITIES TRANSACTIONS
B. Capital (ex sub capital notes, $382,000)
C. Capital (ex. sub capital notes $382,000)
(1) Shareholders' equity and subordinated capital notes
(2) Loans before reserve for loan losses (523,946)
(3) Annual average loans
Perczntaee
21,83%
13.36%
9.84%*
97.05%
0.35%
11.59%
8.53%
k
L.
OF FEES
FOR
FINANCIAL INSTITUTIONS, MUNICIPALITIES, INSURANCE COMPANIES,
CORPORATIONS, AND ORGANIZATIONS
11 t t�K �'
$ 50
Custodian fees for services rendered tinder a Custodian -Depository Agreement are as follows:
SERVICES AVAILABLE
• Trade Settlement
• Asset Safekeeping
• Income Collection
• Daily Cash Sweep into one of the HighMark money market funds
• Capital Changes - Proxies
• Monthly Cash and Asset Statements
• Personal Account Coordinator assigned to your account
• _Toll -Free 800 telephone line and 800 fax line
• Dial -in access to the Bank's Trustw are Accounting System
ITEMIZED FEES
Transaction Fee
Monthly Holding Fee
qr
Disbursements, Fedwires
Paydowns
Additional Asset/Cash Statements
Out of Pocket Expenses
MINIMUM ANNUAL AGGREGATE FEE
$15 Depository Eligible
$40 Depository Ineligible
$1 Depository Eligible
$ 4 Depository Ineligible
$10
$5
$10
As incurred
$2,500
• A transaction is defined as any activity affecting assets, such as purdum, sale, tender offer, stock dividend, free
deliveries, maturity, exchange, redemptions, etc. Fees for foreign securities, foreign exchange transactions, international
wires and non standard services are quoted separately:
• Fees charged monthly against the c&enf s account unless otherwise agreed. This fee schedule is subject to change upon 30
days written notice.
CUSTODY AGREEMENT
This agreement is made between ("Client") and Union Bank
of California, N.A. ("Bank")
TERMS AND CONDITIONS
1. APPOINTMENT AS AGENT
Client hereby appoints Bank as agent to act as custodian of cash, securities, and other
property ("Property") described on Schedule A, attached hereto, and other property which
may be deposited by Client with Bank from time to time to be held in the account
established by this Agreement ("Account") and Bank agrees to act as Client's agent for
such property according to the terms and conditions of this Agreement
2. HANDLING OF INCOME AND PRINCIPAL
2.1 Income. Bank shall collect the income, when paid on said Property, and hold it in a
demand deposit income account until invested or othervvise disposed of pursuant to
Client's written instructions.
2.2 Principal. Bank shall collect"principal of Property when paid on maturity, redemption,
sale, or otherwise, and hold it in a demand deposit principal account until invested or
otherwise disposed of pursuant to Client's written instructPons.
2.3 Collection Obligations. Bank shall diligently collect income and principal of which the
Bank has received actual notice in accordance with normal industry practices.
However, Bank shall be under no.. obligation or duty to take any action to effect
collection of any amount if the securities or other Property upon which such amount is
payable is in default, or if payment is refused after due demand unless the Bank has
been adequately indemnified by Client in advance. Bank, however, shall notify Client
promptly of such default or refusal to pay.
2.4 Additions to and Withdrawals from Account. Bank shall make all additions and
withdrawals of Property to and from this Account only upon receipt of and pursuant to
written instructions from Client except for those withdrawals provided for in Section 4.
Upon receipt of such order for each withdrawal, unless otherwise instructed in writing,
Bank shall deliver the Property so withdrawn to Client or to Client's designee, upon an
appropriate receipt.
3. INVESTMENT OF PROPERTY
3.1 Directions by Client. Client shall have sole responsibility for the investment, review,
and management of all Property held in this Account. Bank shall make all purchases,
sales, conversions, exchanges, investments and reinvestments of Property held in
this Account only upon receipt of and pursuant to written instructions from Client
Bank shall have no duty or obligation to review, or make recommendations for, the
investment and management of any Property held in this Account, including
uninvested cash.
Page 1
3.2 Handle Corporate Actions. Bank shall notify Client of the receipt of notices of
redemptions, conversions, maturities, exchanges, calls, puts, subscription rights, and
scrip certificates ("Corporate Actions'. Bank need not monitor financial publications
for notices of Corporate Actions and shall not be obligated to take any action without
waiting for Client's instruction. If a Corporate Action has a fixed expiration date, and
Bank has not received written instructions regarding it from Client five business days
prior to such date, -Bank shall take such action as it deems appropriate in its sole
discretion.
3.3 Fractional Interests. Bank shall receive and retain all stock distributed by a
corporation as a dividend, stock split, or otherwise. However, in connection therewith,
if a fractional share is received, Bank shall sell such fractional share.
3.4 Use of Nominees. Bank shall have the right to hold all registered securities in the
name of its nominee.
3.5 - Use of Securities Depository, Bank may, in its discretion, deposit in a securities
depository any securities which, under applicable law, are eligible to be deposited.
4. PLEDGE OF SECURITIES
Client shall inform Bank in writing in the event that Client has pledged any Property held in
the Account as collateral ("Pledged Collateral") for any loin or advance ("Secured
Obligation") made to Client by Union Bank of California. N.A.; or by any other lender
designated by Client ("Secured Party"). Clients notice to Bank shall precisely identify the
Pledged Collateral and state the name, address, telephone number and telex number of
the Secured Party and the appropriate officer, if any, to contact in connection with the
Pledged Collateral, and Client shall provide evidence that a copy of such notice has been
provided to the Secured Party. Client shall be responsible to Bank for keeping Bank
informed of any changes to this information, and Bank shall be fully protected in relying on
such notice until receipt of a notice providing additional or substituted information. Bank
shall segregate and identify such Property in its records as pledged. Notwithstanding
anything to the contrary contained in this Agreement, by providing the notice referred to
above, Client acknowledges and agrees that the terms of this Custody Agreement are
superseded by the terms of any pledge or security agreement covering the Pledged
Collateral, and that Bank cannot release the Pledge Collateral without the prior written
consent of the Secured Party. In the event that the Secured Party shall notify the Bank in
writing of a default of such Secured Obligation, Bank shall follow, with no further obligation,
the written Instructions of the Secured Party regarding the Pledged Collateral and shall be
fully protected In so doing. Any interest. or principal payments due on the Secured
Obligation may be charged to the Account upon written instruction from Client
5. PROXIES AND CORPORATE LITERATURE
5.1 Proxies. Bank shall forward all proxies and accompanying material issued by any
company whose securities are held in the Account to Client unless directed in writing
not to do so.
Page 2
5.2 Corporate Literature. Bank shall have no duty to forward or retain any other
corporate material received by the Account unless required to do so by law.
5.3 Disclosure to Issuers of Securities. Unless Client directs Bank in writing to the
contrary, Client agrees that Bank may disclose the name and address of the parry
with the authority to vote the probes of the securities held in this Account as well as
the number of shares held, to any issuer of said securities or its. agents upon the
written request of such issuer or agent in conformity with the provisions of the
applicable law.
6. CONFIRMATIONS
6.1 Confirmations. Bank shall have no responsibility to send confirmations of security
transactions occurring in this Account to Client; however, Client may request
confirmations for security transactions at any time at no additional cost to Client, and
such confirmations shall be sent to Client within the time prescribed by law.
6.2 Statements. Each month, Bank shall send Client a cash statement and an asset
statement showing market values. The statements will show all income and principal
transactions and cash, securities and other Property holdings. Client may approve or
disapprove such statement within sixty (60) days of their receipt and, if no written
objections are received within the sixty-day (60) period, such statements of the
account shall be deemed approved.
7. USE OF OTHER BANK SERVICES
Client may direct Bank to utilize for this Account other services or facilitiesprovided by
Bank, its subsidiaries or affiliates. Such services shall include, but not be limited to (1) the
purchase or sales of securities as principal to or from, or, (2) the placing of orders for the
purchase, sale, exchange, investment or reinvestment of securities through any brokerage
service conducted by, or (3) the placing of orders for the purchase or sale of units of any
investment company managed or advised by Bank, Union BanCal Corp., or their
subsidiaries or affiliates. Client hereby acknowledges that Bank will receive additional fees
for such services in accordance with Bank's standard fee schedules, which shall be
delivered to Client from time to time.. —
Notwithstanding the above, Client hereby directs Bank to utilize for this Account for cash
management purposes the HighMark Group of mutual funds advised by Bank. Client shall
designate the particular HighMark Fund that Client deems appropriate for the Account.
Client hereby acknowledges that Bank will receive management fees for. such services in
accordance with Bank's standard fee schedules, which shall be delivered to Client from
time to time. These management fees will be in addition to those fees charged by Bank as
agent for the Client's Custody Account
8. INSTRUCTIONS
All instructions from Client shall be in writing, and shall continue in force until changed by.
subsequent instructions. Pending receipt of written authority, Bank may, in its absolute
Page 3
discretion at any time, accept oral, wired, or electronically transmitted instructions from
Client provided Bank believes in good faith that the instructions are genuine.
9. COMPENSATION AND OTHER CHARGES
9.1 Compensation. Bank's annual fee as agent shall be based on the published standard
fee schedule of the Bank for Custody Accounts as it exists from time to time, Fees
shall be taken monthly.
9.2 Charoino the Account. Bank is authorized to charge the' Account for incidental.
expenses as well as for funds necessary for Bank to complete any purchase or
expense, to make any directed disbursement or take any other action regarding the
Account. Bank shall have no duty to make any purchases, exchanges, or
disbursements or to incur any expenses, _unless the funds necessary to cover the
amount of the expense are available in the Account.
10. COST BASES AND DATES OF ACQUISITION
Client agrees to furnish Bank with the income tax cost bases and dates of acquisition of all
Property held in the Account to be carried on its records. If Client does not furnish such
information for any such Property,. Bank shall carry the Property at any such nominal value
it determines, such value to be for bookkeeping purposes only. All statements and
reporting of any matters requiring this information will use this nominal value. Bank shall
have no duty to verify the accuracy of the cost bases and dates of acquisition furnished by
Client Property purchased in the Account shall be tamed at cost.
11. LIMITED POWER OF ATTORNEY
Bank is hereby granted a limited power of attorney by Client to execute on Client's behalf
any declarations, endorsements, assignments, stock or bond powers, affidavits, certificates
of ownership or other documents required (1) to effect the sale, transfer, or other
disposition of Property held in the Account, (2) to obtain payment with respect to Property
held in the Account, or (3) to take any other action required with respect to the Property
held in the Account, and in the Bank's own name to guarantee as Client's signature so
affixed.
12. INDEMNIFICATION
As additional consideration for the Bank's acceptance of this Account and Agreement to
act as "Agent," Client agrees to indemnify, and hold Bank, its officers, directors, employees
and agents harmless from and against any and all losses, liabilities, demands, claims, and
expenses, any attorney's fees and taxes (other than those based on Bank's net income)
arising out of or in connection with this Agreement, or out of any actions of Client or Client's
agents which are not caused by Bank's negligence or willful misconduct This provision
shall survive the termination of this Agreement and shall be binding upon each party's
successors, assigns, heirs and personal representatives.
Page 4
13. AMENDMENT AND TERMINATION OF AGREEMENT
13.1 Amendment. This Agreement may be amended only by a written agreement
executed by both Bank and Client.
13.2 Termination. This Agreement may be terminated at any time by written notice from
one party to the other. Such termination shall be effective immediately. In addition,
this Account shall terminate upon notification to the Bank of Client's incapacity or
Client's death. Upon termination, Bank shall have a reasonable amount of time to
transfer the Property held in the Account in accordance with the written instructions of
Client or the person or entity legally entitled to receive such property. Costs related to
termination, including without limitation, costs. for shipping securities and other
Property held in the Account and costs of re -registering securities, generating reports
and accounting for disposition of cash shall be charged to the Account.
14. ENTIRE AGREEMENT
This Agreement and Addendum (not Applicable) constitute the entire Agreement between
the parties. All previous agreements, whether written or oral, between the Bank and Client,
are hereby superseded, except any direction to Bank prohibiting it to disclose information
to issuers of securities as provided in Section 5.3.
15. SINGULAR AND PLURAL
If more than one person shall execute this Agreement, then where the context permits,
singular pronouns shall be deemed to be plural personal pronouns.
16. GOVERNING LAW
This agreement shall be governed, by, and construed under, the laws of the State of
Califomia/Oregon/Washington.
17. TAXATION OF ACCOUNT
17.1 W-9 Certification. Client agrees to provide a completed W-9 or W-8 certification, as
appropriate, to Bank.
17.2 Client's Tax Identification Number is:
17.3 Client's responsibility for Filing Tax Returns and Paying Taxes. Client is. responsible
for filing any and all tax returns and for paying all taxes on Property and income held
in this Account.
18. NOTICES
18.1 Mailing of Notices.. All notices, requests, demands and other communications under.
this Agreement shall be in writing and shall be deemed as having been duly given on
the date of service, if served personally on the party to whom noticejs to be given, or
Page 5
on the fifth day after mailing, if mailed to the party to whom notice is to be given, by
first Gass mail, registered or certified, postage prepaid, and properly addressed as
follows:
Client:
Bank: Union Bank of California
475 Sansome Street, 12th Floor
San Francisco, CA 94111
Attn: Moon Shil Lee
Vice President
18.2 Change of Address. Either party may change the address at which notice may be
given by giving ten (10) days prior written notice of such change to the other party.
19. EFFECTIVE DATE
This Agreement shall become effective upon the date of receipt by the Bank of the
securities and other property described in the attached Schedule A.
Client:
Title:
Date:
Accepted: UNION BANK OF CALIFORNIA, N.A., Agent
0 -
Title: Title:
Date:
Page 6
SCHEDULE A
Bank Accounts
Bankers Acceptances
Certificates of Deposit
Collateralized Mortgage Obligations
Commercial Paper
Common Stocks
Convertible Stocks
Corporate Bonds
Foreign Securities
Futures
Government Agency Issues
Government Bonds
Insurance Contracts
Publicly Traded Limited Partnership Units
Municipal Bonds
Mutual Fund
Options
Preferred Stocks
Private Placements
Repurchase Agreements
Reverse Repurchase Agreements
Page 7