EXHIBIT (d)(viii)
SUB-ADVISORY AGREEMENT
SCHWAB MULTI-MANAGER BALANCED FUND
This SUB-ADVISORY AGREEMENT (the "Agreement") is entered into effective
as of the 14th day of January, 2002, by and between ▇▇▇▇▇▇ LLC, a Nevada limited
liability company ("▇▇▇▇▇▇") and PERKINS, WOLF, ▇▇▇▇▇▇▇▇▇ & COMPANY, a Delaware
corporation ("PWM").
WHEREAS, ▇▇▇▇▇▇ has entered into an Investment Sub-Advisory Agreement
(the "Advisory Agreement") with ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Investment Management, Inc.
("CSIM"), with respect to the Schwab Multi-Manager Balanced Fund (the "Fund"), a
series of the Schwab Capital Trust, a Massachusetts Trust (the "Trust") pursuant
to which ▇▇▇▇▇▇ has agreed to provide investment advisory services with respect
to the Fund; and
WHEREAS, PWM is engaged in the business of rendering investment advisory
services and is registered as an investment adviser under the Investment
Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, ▇▇▇▇▇▇ desires to retain PWM to furnish investment advisory
services with respect to the Fund, and PWM is willing to furnish such services;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Duties of PWM. ▇▇▇▇▇▇ hereby engages the services of PWM as subadviser
in furtherance of the Advisory Agreement. PWM agrees to perform the following
duties, subject to the oversight of ▇▇▇▇▇▇ and CSIM and to the overall control
of the officers and the Board of Trustees (the "Trustees") of the Trust:
(a) PWM shall manage the investment portfolio of the Fund
allocated to ▇▇▇▇▇▇ under the Advisory Agreement and the composition of such
portfolio, shall determine without prior consultation with the Trust or ▇▇▇▇▇▇,
what securities and other assets of such portfolio will be acquired, held,
disposed of or loaned, and shall direct ▇▇▇▇▇▇ with respect to the execution of
trades in connection with such determinations, in conformity with the investment
objectives, policies and restrictions and the other statements concerning the
Fund in the Trust's trust instrument, as amended from time to time (the "Trust
Instrument"), bylaws and registration statements under the 1940 Act and the
Securities Act of 1933, as amended (the "1933 Act"), the Advisers Act, the rules
thereunder and all other applicable federal and state laws and regulations, and
the provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
applicable to the Fund as a regulated investment company;
(b) PWM shall cause its officers to attend meetings and furnish
oral or written reports, as the Trust or ▇▇▇▇▇▇ may reasonably require, in order
to keep ▇▇▇▇▇▇, CSIM, the Trustees and appropriate officers of the Trust fully
informed as to the condition of the investment
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portfolio of the Fund allocated to ▇▇▇▇▇▇ under the Advisory Agreement, the
investment decisions of PWM, and the investment considerations which have given
rise to those decisions;
(c) PWM shall maintain all books and records required to be
maintained by PWM pursuant to the 1940 Act, the Advisers Act, and the rules and
regulations promulgated thereunder, as the same may be amended from time to
time, with respect to transactions on behalf of the Fund, and shall furnish the
Trustees, CSIM, and ▇▇▇▇▇▇ with such periodic and special reports as the
Trustees, CSIM, or ▇▇▇▇▇▇ reasonably may request. PWM hereby agrees that all
records which it maintains for the Fund or the Trust are the property of the
Trust, agrees to permit the reasonable inspection thereof by the Trust, CSIM,
▇▇▇▇▇▇, or its designees and agrees to preserve for the periods prescribed under
the 1940 Act and the Advisers Act any records which it maintains for the Trust
and which are required to be maintained under the 1940 Act and the Advisers Act,
and further agrees to surrender promptly to the Trust, CSIM, ▇▇▇▇▇▇, or their
designees any records which it maintains for the Trust upon request by the
Trust;
(d) At such times as shall be reasonably requested by the
Trustees, CSIM, or ▇▇▇▇▇▇, PWM shall provide the Trustees, CSIM, and ▇▇▇▇▇▇ with
economic, operational and investment data and reports, including without
limitation all information and materials reasonably requested by or requested to
be delivered to the Trustees of the Trust pursuant to Section 15(c) of the 1940
Act, and shall make available to the Trustees, CSIM and ▇▇▇▇▇▇ any economic,
statistical and investment services normally available to similar investment
company clients of PWM; and
(e) PWM will provide to ▇▇▇▇▇▇, CSIM, and the Trust for regulatory
filings and other appropriate uses materially accurate and complete information
relating to PWM as may reasonably be requested by ▇▇▇▇▇▇ and the Trust from time
to time and, notwithstanding anything herein to the contrary, PWM shall be
liable to ▇▇▇▇▇▇ for all damages, costs and expenses, including without
limitation reasonable attorneys' fees (hereinafter referred to collectively as
"Damages"), incurred by ▇▇▇▇▇▇ as a result of any material inaccuracies or
omissions in such information provided by PWM to ▇▇▇▇▇▇; provided, however, that
PWM shall not be liable to the extent that any Damages are based upon
inaccuracies or omissions made in reliance upon information furnished to PWM by
▇▇▇▇▇▇ or CSIM.
2. Further Obligations. In all matters relating to the performance of
this Agreement, PWM shall act in conformity with the Trust's Agreement and
Declaration of Trust, bylaws and currently effective registration statements
under the 1940 Act and the 1933 Act and any amendments or supplements thereto
(the "Registration Statements") and with the written policies, procedures and
guidelines of the Fund, and written instructions and directions of the Trustees,
CSIM, and ▇▇▇▇▇▇, and shall comply with the requirements of the 1940 Act, the
Advisers Act, the rules thereunder, and all other applicable federal and state
laws and regulations. ▇▇▇▇▇▇ agrees to provide to PWM copies of the Trust's
Agreement and Declaration of Trust, bylaws, Registration Statement, written
policies, procedures and guidelines and written instructions and directions of
the Trustees and ▇▇▇▇▇▇, and any amendments or supplements to any of them at,
or, if practicable, before the time such materials become effective.
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3. Obligations of ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall have the following obligations
under this Agreement:
(a) To keep PWM continuously and fully informed (or request the
custodian of the Fund's assets to keep PWM so informed) as to the composition of
the investment portfolio of the Fund and the nature of all of the Fund's assets
and liabilities from time to time as such information is made available to
▇▇▇▇▇▇;
(b) To furnish PWM with copies of any financial statements or
reports made available to ▇▇▇▇▇▇;
(c) To furnish PWM with any further materials or information which
PWM may reasonably request and made available to ▇▇▇▇▇▇ to enable it to perform
its function under this Agreement; and
(d) To compensate PWM for its services in accordance with the
provisions of Section 4 hereof.
4. Compensation. For PWM's services under this Agreement, ▇▇▇▇▇▇ shall
pay to PWM a fee equal to 50% of the advisory fee ▇▇▇▇▇▇ receives from CSIM.
Such fee shall be computed and accrued daily and payable 30 days from as of the
last day of each quarter during which or part of which this Agreement is in
effect. For the quarter during which this Agreement becomes effective and the
month during which it terminates, however, there shall be an appropriate
proration of the fee payable for such month based on the number of calendar days
of such month during which the Agreement is effective.
5. Expenses. PMW shall pay all its own costs and expenses incurred in
rendering its service under this Agreement.
6. Representations of PWM. PWM hereby represents, warrants and covenants
to ▇▇▇▇▇▇ as follows:
(a) PWM: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this Agreement; (iii) has met, and
will continue to meet for so long as this Agreement remains in effect, any other
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self-regulatory organization necessary to be met in order
to perform the services contemplated by this Agreement; (iv) has the legal and
corporate authority to enter into and perform the services contemplated by this
Agreement; and (v) will immediately notify ▇▇▇▇▇▇ of the occurrence of any event
that would disqualify PWM from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise, and of the
institution of any administrative, regulatory or judicial proceeding against PWM
that could have a material adverse effect upon PWM's ability to fulfill its
obligations under this Agreement.
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(b) PWM has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide ▇▇▇▇▇▇ with a
copy of such code of ethics, together with evidence of its adoption. Upon
request of CSIM or ▇▇▇▇▇▇, the president or a vice president of PWM shall
certify to ▇▇▇▇▇▇ and to CSIM that PWM has complied with the requirements of
Rule 17j-1 during the previous year and that there has been no violation of
PWM's code of ethics or, if such a violation has occurred, that appropriate
action was taken in response to such violation. Upon the written request of
▇▇▇▇▇▇, PWM shall permit ▇▇▇▇▇▇, its employees or its agents to examine the
reports required to be made to PWM by Rule 17j-1(c)(1) and all other records
relevant to PWM's code of ethics.
(c) PWM has provided ▇▇▇▇▇▇ with a copy of its Form ADV as most
recently filed with the U.S. Securities and Exchange Commission ("SEC") and
will, promptly after filing any amendment to its Form ADV with the SEC, furnish
a copy of such amendment to ▇▇▇▇▇▇.
(d) PWM will notify ▇▇▇▇▇▇ of any change in the identity or
control of its shareholders owning a 10% or greater interest in PWM, or any
change that would constitute a change in control of PWM under the 1940 Act,
prior to any such change if PWM is aware, or should be aware, of any such
change, but in any event as soon as any such change becomes known to PWM.
7. Representations of ▇▇▇▇▇▇. ▇▇▇▇▇▇ hereby represents, warrants and
covenants to PWM as follows:
(a) ▇▇▇▇▇▇: (i) is registered as an investment adviser under the
Advisers Act and will continue to be so registered for so long as this Agreement
remains in effect; (ii) is not prohibited by the 1940 Act or the Advisers Act
from fulfilling its obligations under this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains in effect, any other
applicable federal or state requirements, or the applicable requirements of any
regulatory or industry self regulatory organization necessary to be met in order
to fulfill its obligations under this Agreement; (iv) has the legal and
corporate authority to enter into and perform this Agreement; and (v) will
immediately notify PWM of the occurrence of any event that would disqualify
▇▇▇▇▇▇ from serving as an investment adviser of an investment company pursuant
to Section 9(a) of the 1940 Act or otherwise, and of the institution of any
administrative, regulatory or judicial proceeding against ▇▇▇▇▇▇ that could have
a material adverse effect upon ▇▇▇▇▇▇'▇ ability to fulfill its obligations under
this Agreement.
(b) ▇▇▇▇▇▇ has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and will provide PWM with a copy
of such code of ethics, together with evidence of its adoption.
(c) ▇▇▇▇▇▇ has provided PWM with a copy of its Form ADV as most
recently filed with the U.S. Securities and Exchange Commission ("SEC") and
will, promptly after filing any amendment to its Form ADV with the SEC, furnish
a copy of such amendment to PWM.
(d) ▇▇▇▇▇▇ will notify PWM of any change in the identity or
control of its shareholders owning a 10% or greater interest in ▇▇▇▇▇▇, or any
change that would constitute a
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change in control of ▇▇▇▇▇▇ under the 1940 Act, prior to any such change if
▇▇▇▇▇▇ is aware, or should be aware, of any such change, but in any event as
soon as any such change becomes known to ▇▇▇▇▇▇.
8. Term. This Agreement shall become effective for the Fund upon its
approval by the Trustees of the Fund and by a vote of the majority of the
outstanding voting securities of the Fund; provided, however, if CSIM obtains
exemptive relief from the SEC permitting it to engage a Sub-Adviser without
first obtaining approval of the Agreement from a majority of the outstanding
voting securities of the Fund involved, the Agreement will become effective upon
its approval by the Trustees, without approval by the shareholders. This
Agreement will remain in effect until two years from date of such execution,
unless sooner terminated in accordance with its terms, and shall continue in
effect from year to year thereafter only so long as such continuance is
specifically approved at least annually by the vote of a majority of the
Trustees of the Trust who are not parties hereto or interested persons of the
Trust, ▇▇▇▇▇▇, CSIM, or PWM, cast in person at a meeting called for the purpose
of voting on the approval of the terms of such renewal, and by either the
Trustees of the Trust or the affirmative vote of a majority of the outstanding
voting securities of the Fund.
9. Termination. This Agreement may be terminated at any time, without
penalty, by the Trustees or by the shareholders of the Fund acting by vote of at
least a majority of its outstanding voting securities, provided in any such case
that 60 days' advance written notice of termination be given to PWM at its
principal place of business. This Agreement may also be terminated by ▇▇▇▇▇▇ or
the Trust: (i) upon a material breach by PWM of this Agreement; or (ii) if PWM
becomes unable to discharge its duties and obligations under this Agreement.
This Agreement may not be terminated by PWM prior to January 1, 2003.
Thereafter, this agreement may be terminated by ▇▇▇▇▇▇ or by PWM at any time,
without cause and without payment of any penalty, upon 120 days written notice
by either party. In addition, this Agreement shall terminate, without penalty,
upon the termination of the Advisory Agreement.
10. Assignment. This Agreement shall automatically terminate in the event
of its assignment.
11. Amendments. This Agreement may be amended by the parties only in a
written instrument signed by the parties to this Agreement and, if required by
applicable law, if such amendment is approved (i) by a majority of the Trustees,
including a majority of the Trustees who are not interested persons of the
Trust, CSIM, or ▇▇▇▇▇▇, PWM or their affiliates, and (ii) by the affirmative
vote of a majority of the outstanding voting securities of the Fund.
12. Limitation on Personal Liability. NOTICE IS HEREBY GIVEN that the
Trust is a business trust organized under the State of Massachusetts pursuant to
a Certificate of Trust filed in the office of the Secretary of State of the
State of Massachusetts. All parties to this Agreement acknowledge and agree that
the Trust is a series trust and all debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a particular
series shall be enforceable against the assets held with respect to such series
only, and not against the assets of the Trust generally or against the assets
held with respect to any other series and further that no Trustee, officer or
holder of shares of beneficial interest of the Trust shall be personally liable
for any of the foregoing.
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13. Limitation of Liability of PWM. ▇▇▇▇▇▇ will not seek to hold PWM, and
PWM shall not be, liable for any error of judgment or mistake of law or for any
loss arising out of any investment or any act or omission taken with respect to
the Fund, except for willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard of its obligations
and duties hereunder and except to the extent otherwise provided by law. As used
in this section, "PWM" shall include any affiliate of PWM performing services
for the Fund contemplated hereunder and directors, officers and employees of PWM
and such affiliates.
14. Activities of PWM. The services of PWM hereunder are not to be deemed
to be exclusive, and PWM is free to render services to other parties, so long as
its services under this Agreement are not materially adversely affected or
otherwise impaired thereby. Nothing in this Agreement shall limit or restrict
the right of any director, officer or employee of PWM to engage in any other
business or to devote his or her time and attention in part to the management or
other aspects of any business, whether of a similar nature or dissimilar nature.
15. Third Party Beneficiary. The parties expressly acknowledge and agree
that the Trust and CSIM are third party beneficiaries of this Agreement and that
the Trust and CSIM shall have the full right to ▇▇▇ upon and enforce this
Agreement in accordance with its terms as if it were a signatory hereto.
16. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered personally or
by overnight delivery service or mailed by certified or registered mail, return
receipt requested and postage prepaid, or sent by facsimile addressed to the
parties at their respective addresses set forth below, or at such other address
as shall be designated by any party in a written notice to the other party.
(a) To ▇▇▇▇▇▇ at:
▇▇▇▇▇▇ LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the following at the same address above:
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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(b) To PWM at:
Perkins, Wolf, ▇▇▇▇▇▇▇▇▇ & Company
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇. Short, Esq.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
17. Certain Definitions. As used in this Agreement, the terms "vote of a
majority of the outstanding voting securities," "assignment," "approved at least
annually," and "interested persons" shall have the respective meanings specified
in the 1940 Act, as now in effect or hereafter amended, and the rules and
regulations thereunder, subject to such orders, exemptions and interpretations
as may be issued by the SEC under the 1940 Act and as may be then in effect.
Where the effect of a requirement of the federal securities laws reflected in
any provision of this Agreement is made less restrictive by a rule, regulation,
order, interpretation or other authority of the SEC, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation, order, interpretation or other authority.
18. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
19. Miscellaneous. The headings in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions thereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an originally, but all of which
taken together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers designated below as of the day and year first
above written.
▇▇▇▇▇▇ LLC PERKINS, WOLF,
▇▇▇▇▇▇▇▇▇ & COMPANY
By: By:
----------------------------- -----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President Chief Operating Officer
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