Exhibit (g)(i)
ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT is made as of this 22nd day of May, 2002, by and among
Schwab Capital Trust, Schwab Annuity Portfolios and Schwab Investments (each a
"Trust" and collectively the "Trusts"), and SEI Investments Mutual Funds
Services ("SEI"), a Delaware business trust.
WHEREAS, each Trust is an open-end registered investment company
consisting of multiple portfolios; and
WHEREAS, each Trust desires SEI to provide, and SEI is willing to
provide, fund accounting services to the portfolio(s) listed on Schedule A (the
"Portfolios") on the terms and conditions hereinafter set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Trusts and SEI hereby agree as follows:
ARTICLE 1. Retention of SEI. Each Trust hereby retains SEI to furnish
the Portfolios with the fund accounting services as set forth in Article 2
below. SEI hereby accepts such employment to perform the duties set forth below.
SEI shall, for all purposes herein, be deemed to be an independent contractor.
ARTICLE 2. Accounting Services. SEI shall perform or supervise the
performance by others of the fund accounting services set forth in Schedule B
hereto. SEI shall provide all necessary office space, equipment (including
back-up facilities in the event of equipment or systems failure), personnel,
compensation and facilities for providing such services. SEI shall enter into
and maintain in effect with appropriate parties agreements making adequate
provision for emergency data processing equipment. SEI shall take all reasonable
steps to minimize service disruptions. SEI may sub-contract with third parties
to perform certain of the services to be performed by SEI hereunder; provided,
however, that SEI shall remain principally responsible to each Trust for the
acts and omissions of such other entities. In meeting its duties hereunder, SEI
shall have the general authority to do all acts deemed in SEI's good faith
belief to be necessary and proper to perform its obligations under this
Agreement.
In connection with this Agreement, each Trust will furnish SEI with
copies, properly certified or authenticated, of the governing documents for each
of the Portfolios and such other documents as may be reasonably necessary to the
performance by SEI of the services set forth in this Agreement. Each Trust
agrees to furnish SEI with any amendments or supplements to such documents.
Each Trust agrees that it will use commercially reasonable efforts to
implement as soon as practicable an automated trade ticket transmission with
SEI's fund accounting systems to facilitate the timely and accurate calculation
of Portfolios net unit values. In the event a Trust does not implement an
automated trade ticket transmission by the first anniversary of this
Agreement, SEI reserves the right to assess a 5% per annum surcharge with
respect to fees described in Schedule C hereunder.
SEI undertakes to comply with all applicable requirements of the
securities and commodities laws, rules or regulations of governmental
authorities having jurisdiction with respect to all duties to be performed by
SEI under the Agreement.
ARTICLE 3. Allocation of Charges and Expenses.
SEI shall furnish at its own expense the executive, supervisory and
clerical personnel necessary to perform its obligations under this Agreement.
SEI shall not be responsible for any expenses of the Portfolios, including,
without limitation, organizational costs, taxes, expenses for legal and auditing
services, the costs of pricing services, the costs of custodial services,
insurance, interest, brokerage costs, and all fees and charges of service
providers to the Portfolios. The Trusts shall reimburse SEI for its reasonable
out-of-pocket expenses, including reasonable pricing services fees, and
reasonable copying, postage, telephone, and fax charges incurred by SEI in the
performance of its duties. SEI shall maintain detailed information about the
expenses allocated to the each Portfolio and shall provide such detail to the
Trusts in its monthly xxxxxxxx.
ARTICLE 4. Compensation of SEI. The Trusts shall pay to SEI
compensation at the annual rate specified in Schedule C to this Agreement until
this Agreement is terminated in accordance with Article 6 hereof. Such
compensation shall be calculated and accrued daily, and paid to SEI monthly. If
this Agreement becomes effective subsequent to the first day of a month or
terminates before the last day of a month, SEI's compensation for that part of
the month in which this Agreement is in effect shall be prorated in a manner
consistent with the calculation of the fees as set forth above. SEI will invoice
the Trusts each month for services rendered, each such payment to be due sixty
(60) days after the date of invoice.
ARTICLE 5. Limitation of Liability. The duties of SEI shall be confined
to those expressly set forth herein, and no implied duties are assumed by or may
be asserted against SEI hereunder. SEI shall not be liable for any error of
judgment or mistake of law or for any loss arising out of any investment or for
any act or omission in carrying out its duties hereunder, except a loss
resulting from willful misfeasance, bad faith or negligence in the performance
of its duties, or by reason of material breach of its obligations and duties
hereunder. (As used in this Article 5, the term "SEI" shall include Trustees,
officers, employees and other agents of SEI as well as that entity itself.)
Under no circumstances shall either party be liable to the other for
consequential, indirect or punitive damages. The Trusts shall be solely
responsible for each Portfolio's compliance with applicable investment policies,
and any laws and regulations governing the manner in which a Portfolio's assets
may be invested, and shall be solely responsible for any losses attributable to
non-compliance with such investment policies, laws and regulations.
So long as SEI and its agents, act without willful misfeasance, bad
faith or negligence in the performance of their duties, and without material
breach of their obligations and duties hereunder, each Trust assumes full
responsibility and shall indemnify SEI and hold it harmless from and against any
and all actions, suits and claims, whether groundless or otherwise, and from and
against
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any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of any act or
omission of SEI in carrying out its duties hereunder.
So long as each Trust, and its agents, act without willful misfeasance,
bad faith or negligence in the performance of their duties, and without material
breach of their obligations and duties, SEI assumes full responsibility and
shall indemnify the Trusts and hold each harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of SEI's and its
agents willful misfeasance, bad faith or negligence in the performance of its
duties, or by reason of material breach of SEI's obligations and duties
hereunder.
The indemnification rights of either party hereunder shall include the
right to reasonable advances of defense expenses in the event of any pending or
threatened litigation with respect to which indemnification hereunder may
ultimately be merited. In order that the indemnification provisions contained
herein shall apply, however, it is understood that if in any case the
indemnifying party may be asked to indemnify or hold the indemnified party
harmless, the indemnifying party shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the indemnified party will use all reasonable care to identify
and notify the indemnifying party promptly concerning any situation which
presents or appears likely to present the probability of such a claim for
indemnification against the indemnifying party, but failure to do so shall not
affect the rights hereunder.
An indemnifying party shall be entitled to participate at its own
expense or, if it so elects, to assume the defense of any suit brought to
enforce any claims subject to this indemnity provision. If the indemnifying
party elects to assume the defense of any such claim, the defense shall be
conducted by counsel chosen by the indemnifying party and satisfactory to the
indemnified party, whose approval shall not be unreasonably withheld. In the
event that the indemnifying party elects to assume the defense of any suit and
retain counsel, the indemnified party shall bear the fees and expenses of any
additional counsel retained by it. If the indemnifying party does not elect to
assume the defense of a suit, it will reimburse the indemnified party for the
fees and expenses of any counsel retained by the indemnified party. The
indemnity and defense provisions set forth herein shall indefinitely survive the
termination of this Agreement.
SEI may apply to the Trusts at any time for instructions and may, with
the consent of the Trusts, consult counsel for the Trusts or accountants for the
Trusts with respect to any matter arising in connection with SEI's duties, and
SEI shall not be liable or accountable for any action taken or omitted by it in
good faith in accordance with such instruction or with the opinion of counsel
for the Trusts or accountants for the Trusts.
Also, SEI shall be protected in acting upon any document which it
reasonably believes to be genuine and to have been signed or presented by the
proper person or persons. Nor shall SEI be
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held to have notice of any change of authority of any officers, employee or
agent of the Trusts until receipt of written notice thereof from the Trusts.
Except for the performance or omissions of its agents (including any
sub-contractors), SEI shall not be liable for the performance or omissions of
unaffiliated third parties not under SEI's reasonable control such as, by way of
example and not limitation, custodians, investment advisers or sub-advisers,
postal or delivery services, telecommunications providers and processing and
settlement services.
ARTICLE 6. Duration and Termination of this Agreement. This Agreement
shall become effective on May 22, 2002, and shall remain in effect unless
terminated in accordance with the provisions of this Article 6. This Agreement
may be terminated by either party hereto on 60 days' prior written notice to the
other party.
ARTICLE 7. Activities of SEI. The services of SEI rendered to the
Trusts are not to be deemed to be exclusive. SEI is free to render such services
to others and to have other businesses and interests.
ARTICLE 8. Confidentiality. SEI agrees on behalf of itself and its
employees to treat confidentially all records and other information relative to
the Portfolios and its beneficial holders received by SEI in connection with
this Agreement, including any non-public personal information, and that it shall
not use or disclose any such information except for the purpose of carrying out
the terms of this Agreement; provided, however, that SEI may disclose such
information as required by law or after prior notification to and approval in
writing by the relevant Trust, which approval may not be withheld where SEI may
be exposed to civil or criminal contempt proceedings or penalties for failure to
comply.
SEI will not gather, store, or use any Customer Information (as defined
below), and will not disclose, distribute, sell, share, rent or otherwise
transfer any Customer Information to any third party, except as provided in this
Agreement or as SEI may be directed in advance in writing by a Trust or as
required in connection with the provision of services under this Agreement or as
permitted or required by applicable law. SEI represents, covenants, and warrants
that SEI will use Customer Information only in compliance with: (a) this
Agreement; (b) any applicable Trust or Schwab privacy policies provided to SEI
and accepted by SEI; and (c) all applicable laws, policies and regulations
(including but not limited to applicable laws, policies and regulations related
to spamming, privacy, and consumer protection). As soon as SEI no longer needs
to retain such Customer Information in order to perform its duties under this
Agreement, SEI will upon request promptly return or (if so instructed by a Trust
in writing) destroy all originals and copies of such Customer Information,
except to the extent SEI is prohibited by law from doing so. "Customer
Information" means all intentionally or unintentionally disclosed non-public
personal information, however collected, including without limitation, through
"cookies", Web bugs or non-electronic means, pertaining to or identifiable to a
Customer (as defined below), including without limitation, name, address, e-mail
address, passwords, personal financial information, personal preferences,
demographic data, marketing data, data about securities
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transactions, credit data, or any other identification data. "Customer" means
any individual record or beneficial shareholder of a Portfolio.
ARTICLE 9. Certain Records. SEI shall maintain customary records in
connection with its duties as specified in this Agreement. Any records prepared
or maintained by SEI on behalf of the Portfolios shall be prepared and
maintained at the expense of SEI, but shall be the property of the Portfolios
and will be made available to or surrendered promptly to the Trusts or the
Portfolios on request.
In case of any request or demand for the inspection of such records by
another party, SEI shall notify the Trusts and follow the Trusts' instructions
as to permitting or refusing such inspection; provided that SEI may exhibit such
records to any person in any case where it is advised by its counsel that it may
be held liable for failure to do so, unless (in cases involving potential
exposure only to civil liability) the Trusts have agreed to indemnify SEI
against such liability.
ARTICLE 10. Entire Agreement; Amendments. This Agreement constitutes
the entire agreement between the parties hereto and supersedes any prior
agreement, draft or proposal with respect to the subject matter hereof. This
Agreement or any part hereof may be changed or waived only by an instrument in
writing signed by the party against which enforcement of such change or waiver
is sought.
ARTICLE 11. Assignment. This Agreement shall not be assignable by
either party without the prior written consent of the other party; provided,
however, that SEI and the Trusts will each have the right to assign or delegate
all or part of its respective rights, responsibilities, or duties hereunder to
any subsidiary, parent or affiliate of such party upon the provision of prior
written notice to the other party, but no such assignment or delegation will
relieve the Trusts of their payment obligations under Article 4 hereof. Such
assignment or delegation will be valid only so long as the assignee or delegate
remains a subsidiary, affiliate or parent of SEI or the Trusts and in the event
of any such assignment, SEI or the Trusts will remain responsible for the acts
or omissions of any such entity.
ARTICLE 12. Waiver. Any term or provision of this Agreement may be
waived at any time by the party entitled to the benefit thereof by written
instrument executed by such party. No failure of either party hereto to exercise
any power or right granted hereunder, or to insist upon strict compliance with
any obligation hereunder, and no custom or practice of the parties with regard
to the terms of performance hereof, will constitute a waiver of the rights of
such party to demand full and exact compliance with the terms of this Agreement.
ARTICLE 13. Notice. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent by registered or
certified mail, federal express (or substantially similar delivery service),
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Trusts, at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, XX 00000, Attention: Secretary
; and if to SEI at Xxx Xxxxxxx Xxxxxx Xxxxx, Xxxx, Xxxxxxxxxxxx, 00000.
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ARTICLE 14. Force Majeure. No breach of any obligation of a party to
this Agreement will constitute an event of default or breach to the extent it
arises out of a cause, existing or future, that is beyond the control and
without negligence of the party otherwise chargeable with breach or default,
including without limitation: work action or strike; lockout or other labor
dispute; flood; war; riot; theft; earthquake or natural disaster. Either party
desiring to rely upon any of the foregoing as an excuse for default or breach
will, when the cause arises, give to the other party prompt notice of the facts
which constitute such cause; and, when the cause ceases to exist, give prompt
notice thereof to the other party.
ARTICLE 15. Headings. All Article headings contained in this Agreement
are for convenience of reference only, do not form a part of this Agreement and
will not affect in any way the meaning or interpretation of this Agreement.
Words used herein, regardless of the number and gender specifically used, will
be deemed and construed to include any other number, singular or plural, and any
other gender, masculine, feminine, or neuter, as the contract requires.
ARTICLE 16. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of California and applicable federal law.
To the extent that the laws of the State of California, or any of the provisions
herein, conflict with the applicable federal law, the latter shall control.
ARTICLE 17. Multiple Originals. This Agreement may be executed in two
or more counterparts, each of which when so executed shall be deemed to be an
original, but such counterparts shall together constitute but one and the same
instrument.
ARTICLE 18. Binding Agreement. This Agreement, and the rights and
obligations of the parties hereunder, shall be binding on, and inure to the
benefit of, the parties and their respective successors and assigns.
ARTICLE 19. Severability. If any part, term or provision of this
Agreement is held to be illegal, in conflict with any law or otherwise invalid,
the remaining portion or portions shall be considered severable and not be
affected, and the rights and obligations of the parties shall be construed and
enforced as if the Agreement did not contain the particular part, term or
provision held to be illegal or invalid.
ARTICLE 20. Trustees' Liability. A copy of the Declaration of Trust for
the Trusts is on file with the Secretary of State of the Commonwealth of
Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Trusts as Trustees and not individually and that
the obligations of this instrument are not binding upon any of the Trustees,
officers or shareholders of the Trusts individually, but are binding only upon
the assets and property of the Portfolio in question. The names "Schwab Annuity
Portfolios," "Schwab Capital Trust," "Schwab Investments", "Trustees of Schwab
Annuity Portfolios", "Trustees of Schwab Capital Trust" and Trustees of Schwab
Investments" refer, respectively, to the Trusts created and the Trustees as
trustees but not individually or personally, acting from time to time under the
applicable Declarations of Trust which are hereby referred to and copies of
which are on file at the office of the Secretary of the Commonwealth of
Massachusetts and at the principal office of
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the Trusts. The obligations of "Schwab Annuity Portfolios", "Schwab Capital
Trust and Schwab Investments," entered into in the name or on behalf thereof by
any of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders,
representatives of the Trusts personally, but bind only the property of the
Portfolios in question, and all persons dealing with any class of shares of the
Portfolios must look solely to the Portfolios property belonging to such class
for the enforcement of any claims against the Portfolios.
ARTICLE. 21. Separate Transactions. Transactions entered into by a
particular Portfolio of a Trust are considered independent transactions and
shall in no way effect transactions entered into by any other Portfolio of such
Trust. Any amount owed by a Portfolio with respect to any obligation arising out
of this Agreement, as amended, shall be paid only out of the assets and property
of the particular Portfolio that entered into such transaction.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
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SCHWAB CAPITAL TRUST
By: /s/ Tai-Xxxx Xxxx
Name: Tai-Xxxx Xxxx
Title: Treasurer and Principal Financial Officer
SCHWAB ANNUITY PORTFOLIOS
By: /s/ Tai-Xxxx Xxxx
Name: Tai-Xxxx Xxxx
Title: Treasurer and Principal Financial Officer
SCHWAB INVESTMENTS
By: /s/ Tai-Xxxx Xxxx
Name: Tai-Xxxx Xxxx
Title: Treasurer and Principal Financial Officer
SEI INVESTMENTS MUTUAL FUNDS SERVICES
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
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SCHEDULE A
TO THE ACCOUNTING SERVICES AGREEMENT
DATED AS OF MAY 22, 2002
BETWEEN
SCHWAB CAPITAL TRUST AND SCHWAB ANNUITY PORTFOLIOS
AND
SEI INVESTMENTS MUTUAL FUNDS SERVICES
Portfolios: This Agreement shall apply with respect to the following
Portfolios (collectively, the "Portfolios"):
Schwab Capital Trust
Schwab MarketTrack All Equity Portfolio
Xxxxxx MarketTrack Growth Portfolio
Xxxxxx MarketTrack Balanced Portfolio
Schwab Market Track Conservative Portfolio
Schwab S&P 500 Fund: Investor Shares, Select Shares & e.Shares
Schwab Small-Cap Index Fund: Investor Shares & Select Shares
Schwab Total Stock Market Index Fund: Investor Shares & Select Shares Schwab Schwab
International Index Fund: Investor Shares & Select Shares
Institutional Select S&P 500 Fund
Institutional Select Large-Cap Value Index Fund
Institutional Select Small-Cap Value Index Fund
Schwab Core Equity Fund
Communications Focus Fund
Financial Services Focus Fund
Health Care Focus Fund
Technology Focus Fund
Schwab Annuity Portfolios
Schwab MarketTrack Growth Portfolio II
Schwab S&P 500 Portfolio
Schwab Investments
Schwab 1000 Fund: Investor Shares & Select Shares
[END OF SCHEDULE A]
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SCHEDULE B
TO THE ACCOUNTING SERVICES AGREEMENT
DATED AS OF MAY 22, 2002
BETWEEN
SCHWAB CAPITAL TRUST, SCHWAB ANNUITY PORTFOLIOS
AND SCHWAB INVESTMENTS
AND
SEI INVESTMENTS MUTUAL FUNDS SERVICES
Pursuant to Article 2 of the Agreement, SEI shall provide the following
services:
1. Assist in keeping, maintaining and preserving of all accounts, records
and other documents as may be required under Section 31(a) and Rule
31a-1 of the Investment Company Act relating to the services provided
by SEI hereunder;
2. Calculate the value of each asset and the current net asset value of
each Trust Series and Class in accordance with the requirements of the
Investment Company Act and the Registration Statement;
3. Verify the underlying fund net asset values and reconcile the positions
with the Portfolio's recordkeeping agent for any Fund-of-Funds;
4. Record and verify daily income, expense accruals and capital gains and
losses and provide notification of any proposed adjustments;
5. Maintain historical tax lots for each asset;
6. Record investment purchases and sales;
7. Monitor the activities of the Custodian, including, but not limited to,
the daily reconciliation of cash and investment positions;
8. Record the capital share activities and reconcile such activities daily
with the Transfer Agent;
9. Prepare the cash balances available for investment for each of the next
five business days and update cash availability throughout the day as
requested;
10. Prepare the annual and semiannual financial statements and any other
periodic financial statements and other reports as may be reasonably
requested from time to time;
11. Assist in the preparation and filing of any notices, statements or
other filings including, but not limited to, the following: the
Registration Statement; Pre-Effective and Post-Effective Amendments to
the Registration Statement;
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12. Assist in the preparation and filing of any reports including, but not
limited to, the following: Annual and Semiannual Reports to
shareholders; Form N-SAR; Form N-30D; and Form 24f-2;
13. Assist in the preparation and filing of any federal, state or local tax
returns;
14. Assist in monitoring compliance with the requirements of Section 817(h)
of Subchapter L (as it relates to the Annuity Portfolios) and
Subchapter M of the Internal Revenue Code;
15. Assist in monitoring compliance with the requirements of the Investment
Company Act and current Registration Statement;
16. Monitor daily collateral asset segregation for futures and other
financial instruments;
17. Assist in the calculation of the Trust's income, excise tax, and
capital gain distributions;
18. Assist in the calculation and reporting (including to external
databases) of performance and other financial or portfolio information
in accordance with the requirements of the federal securities laws,
including, but not limited to: total return; yield; expense ratio;
turnover rate and, if applicable, maturity and duration;
19. Assist in the preparation of the annual budget, expense accruals,
waiver monitoring and invoice management;
20. Control disbursements and authorize such disbursements upon written
instructions as may be determined by the Portfolio;
21. Assist in the preparation of quarterly Board materials; and
22. Assist in any other matters as may be mutually agreed between the
parties from time to time.
[END OF SCHEDULE B]
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SCHEDULE C
TO THE ACCOUNTING SERVICES AGREEMENT
DATED AS OF MAY 22, 2002
BETWEEN
SCHWAB CAPITAL TRUST AND SCHWAB ANNUITY PORTFOLIOS
AND
SEI INVESTMENTS MUTUAL FUNDS SERVICES
Fees: Pursuant to Article 4, the Trusts shall pay SEI a fee at an
annual rate as follows:
(a) with respect to the combined value of the average daily
net assets (the "Combined Assets") of the Trusts:
(i) 0.04% (4 basis points) of the Combined Assets
with respect to those assets that are less than or
equal to $1 billion (one billion U.S. dollars); plus
(ii) 0.03% (3 basis points) of the Combined Assets
with respect to those assets that are greater than $1
billion (one billion dollars) but less than or equal
to $2 billion (two billion dollars); plus
(iii) 0.02% (2 basis points) of the Combined Assets
with respect to those assets that are greater than $2
billion (two billion dollars) but less than or equal
to $3 billion (three billion dollars); plus
(iv) 0.015% (1.5 basis points) of the Combined Assets
with respect to those assets that are greater than $3
billion (three billion dollars) but less than or
equal to $5 billion (five billion dollars); plus
(v) 0.0125% (1.25 basis points) of the Combined
Assets with respect to those assets that are greater
than $5 billion (five billion dollars) but less than
or equal to $9 billion (nine billion dollars); plus
(vi) 0.01% (1 basis point) of the Combined Assets
with respect to those assets that are greater than $9
billion (nine billion dollars) but less than or equal
to $20 billion (twenty billion dollars); plus
(vii) 0.0075% (Three quarters of one basis point) of
the Combined Assets with respect to those assets that
are in excess of $20 billion (twenty billion
dollars); plus
(viii) 0.0065% (0.65 basis points) of the combined
Assets with respect to those assets that are in
excess of $25 billion (twenty-five billion dollars);
plus
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(ix) 0.0055% (0.55 basis points) of the Combined
Assets with respect to those assets that are in
excess of $30 billion dollars); plus
(b) with respect to each class of shares other than the first
class of shares of each Portfolio, $15,000 per annum (fifteen
thousand dollars).
All fees payable to SEI shall accrue from the date indicated
for such Portfolio in Schedule A to this Agreement and be
calculated daily based on the daily net assets of each
Portfolio. SEI's fee shall be payable monthly in arrears from
the last business day of each month for the Portfolios. The
Trusts will limit the addition of new portfolios to Schedule A
to no more than 5 (five) per year in the aggregate.
[END OF SCHEDULE C]
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