INVESTMENT SUB-ADVISORY AGREEMENT
Ex - (d)(viii)
AGREEMENT made this 1st day of July, 2007, by and between, Xxxxxxx Xxxxxx
Investment Management, Inc. (“CSIM”), and Tasho Investment, LLC, a recently formed entity that will
acquire substantially all of the assets of TAMRO Capital Partners LLC (“Sub-Adviser”) and will
assume the TAMRO name as soon as practicable.
WHEREAS, Schwab Capital Trust, a Massachusetts business trust (“Company”), is an open-end,
management investment company registered under the Investment Company Act of 1940 (“1940 Act”),
consisting of several series, each having its own investment objective and policies; and
WHEREAS, Company has entered into an Investment Advisory and Administration Agreement with
CSIM pursuant to which CSIM acts as investment manager to Company (“Management Agreement”); and
WHEREAS, CSIM, acting with the approval of Company, wishes to retain Sub-Adviser to provide
discretionary investment advisory services (“Services”) with respect to a portion of each series
identified on Schedule A hereto, as may be amended from time to time, (each a “Fund”) that may be
allocated by CSIM for management by the Sub-Adviser from time to time, together with all income
earned on those assets and all realized and unrealized capital appreciation related to those assets
(for each Fund, the “Managed Assets”), and Sub-Adviser is willing to render the Services.
NOW, THEREFORE, in consideration of mutual covenants herein contained, the parties agree as
follows:
1. APPOINTMENT. CSIM appoints Sub-Adviser to provide the Services for the period and term set
forth in this Investment Sub-Advisory Agreement (“Agreement”). Sub-Adviser accepts such
appointment and agrees to render the Services as provided herein.
2. DUTIES OF SUB-ADVISER.
(a) Subject to supervision of the Company, the Board of Trustees (“Trustees”) and CSIM
(collectively “Fund Parties”), Sub-Adviser shall be responsible for managing the investment and
reinvestment of the Managed Assets and determine in its discretion, the securities and other
property to be purchased or sold and the portion of the Managed Assets to be retained in cash, and
shall not be responsible for providing investment advice to any other portion of a Fund. In
performance of its duties and obligations under this Agreement, Sub-Adviser shall not consult with
any other sub-adviser to a Fund concerning the Managed Assets, except to the extent permitted under
the 1940 Act, or any rule, regulation or order thereunder. Sub-Adviser will use same skill and care
in providing the Services to each Fund as it utilizes in providing investment advisory services to
other fiduciary accounts for which it has investment responsibilities. Sub-Adviser will provide
Fund Parties with records concerning Sub-Adviser’s activities that Fund Parties are required to
maintain, and regular reports concerning Sub-Adviser’s performance of the Services.
(b) Unless CSIM provides written instructions to the contrary, CSIM will review all proxy
solicitation materials and will exercise any voting rights associated with securities comprising
the Managed Assets pursuant to its proxy voting policy and guidelines.
(c) Sub-Adviser will provide assistance to Company, Xxxxxxx Xxxxxx & Co, Inc. (“Distributor”)
and CSIM (collectively “Schwab Parties”), as may be reasonably requested by such parties, in
connection with the offering, sale and marketing of Fund shares. Such assistance will include,
without
limitation: (i) review of offering, marketing and sales materials; (ii) attendance and
participation at internal and external conferences (including in-person, telephonic and video),
conventions, road shows and other sales or educational meetings; and (iii) provision of discussion,
analysis and commentary and market and performance data for filings with the Securities and
Exchange Commission (“SEC”) and web and other medium based marketing and advertising. Schwab
parties may use the names, trade names, trademarks, service marks, artwork, designs, or other
copyrighted materials of Sub-Adviser in connection with the offering, sale and marketing of Fund
shares, subject to the written approval of Sub-Adviser, which will not be unreasonably withheld.
(d) Unless CSIM provides written instructions to the contrary, Sub-Adviser will be responsible
for determining, in good faith, the fair value of any securities of the Managed Assets for which
market quotations are not readily available in accordance with guidelines and procedures adopted by
the Trustees. In addition, Sub-Adviser will arrange for the provision of market values from at
least two parties independent of Sub-Adviser with respect to any securities of the Managed Assets
for which the Company’s pricing agent does not obtain prices in the ordinary course of business
from an automated pricing service.
(e) Sub-Adviser will discharge the foregoing responsibilities subject to the supervision of
Fund Parties, and in compliance with the following: (i) such policies as Fund Parties may from time
to time establish; (ii) Company’s Prospectus and Statement of Additional Information (“Prospectus
and SAI”); (iii) Company’s Declaration of Trust and By-Laws; (iv) 1940 Act; (v) the Investment
Advisers Act of 1940 (“Advisers Act”); (vi) any exemptive or other relief granted by the SEC; (vii)
the Internal Revenue Code of 1986 (“Code”); (viii) the Commodities and Exchange Act (“CEA”); and
(ix) any other applicable laws. If a conflict in policies referenced herein occurs, the Prospectus
and SAI will control.
(f) Sub-Adviser agrees to perform such duties at its own expense and to provide the office
space, furnishings and equipment and the personnel required by it to perform the Services on the
terms and for the compensation provided herein. Sub-Adviser will not, however, pay for the cost of
securities, commodities, and other investments (including brokerage commissions and other
transaction charges, if any) purchased or sold for a Fund.
3. DUTIES OF CSIM. CSIM will continue to have responsibility for all services to be provided to a
Fund pursuant to the Management Agreement and will oversee and review Sub-Adviser’s performance of
the Services. CSIM will furnish to Sub-Adviser current and complete copies of the Declaration of
Trust and By-laws of Company, and the current Prospectus and SAI as those documents may be amended
from time to time.
4. CUSTODY. Company will designate one or more custodians to hold the Managed Assets (“Custodian”)
in the name of each Fund. Each custodian will be responsible for the custody, receipt and delivery
of securities and other assets of a Fund including the Managed Assets, and Sub-Adviser will have no
authority, responsibility or obligation with respect to the custody, receipt or delivery of
securities or other assets of a Fund. In the event that any cash or securities of a Fund are
delivered to Sub-Adviser, Sub-Adviser will promptly deliver the same to the Custodian for the
benefit of and in the name of Fund. Sub-Adviser will provide to the Custodian and Fund Accountant
on each business day, information relating to all transactions in the Managed Assets and will
provide such information to Fund Parties upon request. Sub-Adviser will make all reasonable
efforts to notify Custodian and Fund Accountant of all orders to brokers for the Managed Assets by
9:00 am EST on the day following the trade date and will affirm the trade to the Custodian and Fund
Accountant before the close of business one business day after the trade date.
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5. PORTFOLIO TRANSACTIONS.
(a) Sub-Adviser is authorized to select brokers or dealers that will execute the purchases and
sales of portfolio securities and other property for a Fund in a manner that implements the policy
with respect to brokerage set forth in the Prospectus and SAI, or as Fund Parties may direct from
time to time, and in conformity with the federal securities laws.
(b) In effecting transactions for a Fund and selecting brokers or dealers, Sub-Adviser will
use its best efforts to seek on behalf of the Fund the best overall terms available. In assessing
the best overall terms for any transaction, Sub-Adviser will consider any factors that it deems
relevant, including price paid for the security, commission paid for the transaction, clearance,
settlement, reputation, financial strength and stability, efficiency of execution and error
resolution, block trading and block positioning capabilities, willingness to execute related or
unrelated difficult transactions and order of call.
(c) Consistent with any policies established by Fund Parties and in compliance with the
Prospectus and SAI and 1940 Act, Sub-Adviser is authorized, in its discretion, to utilize the
services of a broker or dealer that provides brokerage or research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934).
(d) In no instance will Sub-Adviser cause Managed Assets to be purchased from or sold to
Distributor, CSIM, Sub-Adviser or any affiliated person of either Company, Distributor, CSIM, or
Sub-Adviser (collectively “Related Parties”), except to the extent permitted by the 1940 Act or any
exemptive or other relief granted by the SEC. Sub-adviser will not execute any transactions with
brokers or dealers that are Related Parties without the prior written approval of CSIM.
(e) Consistent with any policies established by Fund Parties, Sub-Adviser may aggregate orders
for purchase or sale of Managed Assets with similar orders being made concurrently for other
accounts managed by Sub-Adviser, if, in Sub-Adviser’s reasonable judgment, such aggregation will
result in an overall economic benefit to Fund, taking into consideration the transaction price,
brokerage commission and other expenses. In any single transaction in which purchases or sales of
securities of any issuer for the account of a Fund are aggregated with other accounts managed by
Sub-Adviser, the actual prices applicable to the transaction will be averaged among the accounts
for which the transaction is effected, including the account of the Fund.
6. COMPENSATION OF SUB-ADVISER. For the Services provided and expenses assumed by Sub-Adviser
under this Agreement, CSIM will pay to Sub-Adviser compensation at the rate specified in Schedule
B, as may be amended from time to time. Such compensation will be paid at the times and on the
terms set forth in Schedule B. All rights of compensation under this Agreement for Services
performed as of the termination date will survive the termination of this Agreement. Except as
otherwise prohibited by law or regulation, Sub-Adviser may, in its discretion, from time to time,
waive a portion of its compensation.
7. REPORTS.
(a) Sub-Adviser will provide written quarterly reports to Fund Parties regarding the Managed
Assets. CSIM will specify the information to be included in such quarterly reports. Sub-Adviser
will make available to Fund Parties any economic, statistical and investment services that
Sub-Adviser makes available to its other institutional clients.
(b) Sub-Adviser will promptly communicate to Fund Parties any information relating to
transactions in the Managed Assets, as Fund Parties may reasonably request.
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(c) Sub-Adviser will promptly notify Fund Parties of any financial or regulatory condition
that is likely to impair the ability of Sub-Adviser to perform the Services. In addition,
Sub-Adviser will promptly notify Fund Parties of any intended change in control of Sub-Adviser and
of any intended change in portfolio or senior management, as far in advance of such change as
possible.
(d) Sub-Adviser will make its officers and employees available to meet with Fund Parties at
such times and places, as Fund Parties may reasonably request, including at quarterly and special
meetings of the Trustees in San Francisco, California.
8. STATUS OF SUB-ADVISER. Sub-Adviser is and will continue to be registered under the Advisers
Act. The Services of Sub-Adviser to Company for each Fund are not to be deemed exclusive, and
Sub-Adviser is free to render similar services to others so long as its Services to the Fund are
not impaired thereby. Sub-Adviser is and will continue to be an independent contractor and, unless
otherwise expressly provided or authorized, has no authority to act for or represent Company in any
way or otherwise act as agent of Company.
9. CODE OF ETHICS. Sub-Adviser will furnish to Fund Parties a current copy of its code of ethics
that complies with the requirements of Rule 17j-1 under the 1940 Act. Upon written request of CSIM,
Sub-Adviser will permit Fund Parties to examine the reports made by Sub-Adviser pursuant to Rule
17j-1 and other records relevant to Sub-Adviser’s code of ethics. Sub-Adviser will provide an
annual certification to Fund Parties certifying that there have been no material violations of
Sub-Adviser’s code of ethics or, if such violations have occurred, that appropriate actions have
been taken in response to such violations.
10. CERTAIN RECORDS.
(a) Sub-Adviser will maintain all books and records with respect to transactions involving the
Managed Assets required by subparagraphs (b)(5), (6), (7), (9), (10) and (11) and paragraph (f) of
Rule 31a-1 under the 1940 Act. Sub-Adviser will provide to Fund Parties periodic and special
reports, balance sheets, profitability analyses, financial information, and such other information
with regard to Sub-Adviser’s affairs, as Fund Parties may reasonably request, including any
information requested by Fund Parties to assist the Trustees in evaluating the terms of this
Agreement and any renewal thereof under Section 15(c) of the 0000 Xxx.
(b) Sub-Adviser will keep the books and records relating to the Managed Assets required to be
maintained by Sub-Adviser under this Agreement and will timely furnish to Fund Parties all
information relating to Sub-Adviser’s Services under this Agreement needed by Fund Parties to keep
the other books and records of the Company required by Rule 31a-1 under the 1940 Act. Sub-Adviser
will also furnish to Fund Parties any other information relating to the Managed Assets that must be
filed by Company with the SEC or sent to shareholders under the 1940 Act, and any exemptive or
other relief granted by the SEC. Sub-Adviser agrees that all records that it maintains on behalf
of Company are property of Company and Sub-Adviser will surrender promptly to Company any of such
records upon Fund Parties’ request; provided, however, Sub-Adviser may retain a copy of such
records. In addition, Sub-Adviser will preserve for the periods prescribed by Rule 31a-2 under
1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and
will transfer said records to any successor sub-adviser upon the termination of this Agreement (or,
if there is no successor sub-adviser, to CSIM).
11. LIMITATION OF LIABILITY OF SUB-ADVISER. Sub-Adviser will not be liable for any claims,
liabilities, damages, costs or losses (“collectively” claims) arising out of this Agreement, except
to the extent such claims arise out of: (a) Sub-Adviser’s negligence, bad faith or willful
misfeasance; or (b) Sub-Adviser’s breach of this Agreement. Nothing in this Section 11 will be
deemed a waiver or limitation of any obligation or duty that may not by law be waived or limited.
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12. INDEMNIFICATION.
(a) Sub-Adviser will indemnify and hold harmless Fund Parties, their affiliates and their
respective employees, officers and directors from and against all claims arising out of this
Agreement to the extent such claims arise out of: (i) Sub-Adviser’s negligence, bad faith or
willful misfeasance; or (ii) Sub-Adviser’s breach of this Agreement.
(b) CSIM will indemnify and hold harmless Sub-Adviser, its affiliates, and their respective
employees, officers and directors from and against all claims arising out of this Agreement, except
to the extent such claims arise out of: (i) Sub-Adviser’s negligence, bad faith or willful
misfeasance; or (ii) Sub-Adviser’s breach of this Agreement.
13. CONFIDENTIALITY. The Mutual Confidentiality and Non-Disclosure Agreement (“Confidentiality
Agreement”) previously entered into between the parties is attached hereto as Schedule C and
incorporated herein by reference. The Confidentiality Agreement will remain in effect throughout
the term of this Agreement, and each party will abide by all of the provisions set forth therein.
Upon termination of this Agreement, each party will continue to hold any Confidential Information
(as that term is defined in the Confidentiality Agreement) in strict confidence for ten years from
the date of termination, except with regard to: (a) trade secrets of either party which will be
held in confidence for as long as such information remains a trade secret; and (b) Schwab Customer
Information (as that term is defined in the Confidentiality Agreement) which will be held by
Sub-Adviser in strict confidence in perpetuity and which will be used by Sub-Adviser only to
perform the Services and for no other purpose. In addition, Sub-Adviser will not use any
information concerning each Funds’ portfolio holdings, including, without limitation, the names of
the portfolio holdings and the values thereof or other Schwab Confidential Information, for
purposes of making any decision about whether to purchase or redeem shares of each Fund or to
execute any other securities transaction. In the event any of the provisions of the
Confidentiality Agreement conflict with any of the provisions of this Agreement, the latter will
control.
14. PUBLICITY. During and after the term of this Agreement, Sub-Adviser will not make any media
release or other public announcement relating to this Agreement without Schwab Parties’ prior
written consent. Sub-Adviser will acquire no right to use, and will not use, without Schwab
Parties’ prior written consent, with respect to each use, the terms or existence of this Agreement,
the names, trade names, trademarks, service marks, artwork, designs, or copyrighted materials of
Schwab Parties or their affiliates in any sales or advertising materials, press releases, client
lists, presentations, promotions or other publicity related materials or media.
15. DURATION AND TERMINATION.
(a) This Agreement will become effective for each Fund upon its approval by the Trustees and
by a vote of the majority of the outstanding voting securities of each 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
each effectiveness, and thereafter, for periods of one year so long as such continuance thereafter
is specifically approved at least annually (i) by the vote of a majority of those Trustees who are
not parties to this Agreement or interested persons of any such party, cast in person at a meeting
called for the purpose of voting on such approval, and (ii) by the Trustees, or by the vote of a
majority of the outstanding voting securities of the Fund; provided, however, that if the
shareholders of a Fund fail to approve the Agreement as provided herein, Sub-Adviser may continue
to serve hereunder in the manner and to the extent permitted by the 1940 Act. The foregoing
requirement that
5
continuance of this Agreement be “specifically approved at least annually” will be construed in a
manner consistent with the 1940 Act.
(b) This Agreement may be terminated at any time, without cause and without payment of any
penalty by Fund Parties, by vote of a majority of the Trustees or by vote of a majority of the
outstanding voting securities of a Fund on not more than 60 days’ written notice to the
Sub-Adviser, or by CSIM upon 90 days’ written notice to Sub-Adviser. In addition, this Agreement
may be terminated, with cause, by CSIM at any time, without payment of any penalty by Fund Parties,
upon written notice to Sub-Adviser. As used herein, “with cause” means: (i) any material breach of
the Agreement by Sub-Adviser; (ii) any federal or state regulatory violation by Sub-Adviser; and
(iii) any material financial or other impairment that in the reasonable judgment of CSIM impairs
Sub-Adviser’s ability to perform the Services.
(c) This Agreement may not be terminated by the Sub-Adviser prior to July 1, 2009.
Thereafter, this Agreement may be terminated by the Sub-Adviser at any time, without cause and
without payment of any penalty, upon 90 days’ written notice to CSIM.
(d) This Agreement will automatically and immediately terminate in the event of its assignment
or in the event of the termination of the Management Agreement.
(e) Any termination of this Agreement in accordance with the terms hereof will not affect the
obligations or liabilities accrued prior to termination. As used in this Section 15, the terms
“assignment”, “interested persons,” and a “vote of a majority of the outstanding voting securities”
will have the respective meanings set forth in the 1940 Act; subject to such exceptions and other
relief as may be granted by the SEC.
16. NOTICE. All notices required or permitted hereunder will be deemed sufficient upon receipt if
sent by: (a) hand; (b) registered or certified mail, postage prepaid; (c) overnight courier; or (d)
facsimile transmission to the last address furnished by the other party to the party giving notice.
At the outset, such notices will be delivered to the following addresses:
| CSIM: | Xxxxxxx Xxxxxx Investment Management, Inc. | |||
| 000 Xxxxxxxxxx Xxxxxx | ||||
| Xxx Xxxxxxxxx, XX 00000 | ||||
| Attention: Treasurer and Principal Financial Officer | ||||
| Telephone: (000) 000-0000 | ||||
| Facsimile: (000) 000-0000 | ||||
| Sub-Adviser: | Tasho Investment, LLC, operating as, | |||
| TAMRO Capital Partners LLC | ||||
| 0000 Xxxx Xxxxxx, Xxxxx 000 | ||||
| Xxxxxxxxxx, XX 00000 | ||||
| Attention: Client Service | ||||
| Telephone: (000) 000-0000 | ||||
| Facsimile: (000) 000-0000 |
17. NONCOMPETE PROVISIONS. Except as set forth in Schedule D, Sub-Adviser is not and will not
become a party to any noncompete agreement or other agreement or arrangement that would restrict,
limit or otherwise interfere with the ability of Schwab Parties and their affiliates to employ or
engage any person or entity, now or in the future, to provide investment advisory or other
services.
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18. SEVERABILITY. If any provision of this Agreement will be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not be affected thereby.
19. GOVERNING LAW. This Agreement will be construed in accordance with the laws of the State of
California and the applicable provisions of the 1940 Act. To the extent that the applicable laws
of the State of California, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter will control. Any legal action or proceeding arising out of
this Agreement will be brought only in the courts of the State of California located in the City
and County of San Francisco or in the United States District Court for the Northern District of
California. Each party will submit to the jurisdiction of such courts and venue in such courts and
will waive any claims that such courts lack jurisdiction or are inconvenient forums.
20. MISCELLANEOUS.
(a) This Agreement constitutes the entire agreement and understanding between the parties
relating to the Services. Any prior agreements, promises or representations not expressly set
forth in this Agreement are of no force and effect. No waiver or modification of this Agreement
will be effective unless reduced to writing and signed by the party to be charged. No failure to
exercise and no delay in exercising on the part of any party hereto of any right, remedy, power or
privilege hereunder will operate as a waiver thereof.
(b) This Agreement is entered into on behalf of each Fund severally, and not jointly, with the
express intention that the provisions contained herein will apply separately with respect to each
Fund, as if contained in separate agreements.
(c) Except as set forth in Section 15, this Agreement binds and inures to the benefit of
parties, their successors and assigns. This Agreement may be executed in more than one counterpart
each of which will be deemed an original and both of which, taken together, will be deemed to
constitute one and the same instrument.
(d) Company refers to Schwab Capital Trust and its Trustees, as Trustees but not individually
or personally, acting under a Declaration of Trust dated May 7, 1993. A copy of the Certificate of
Trust of Company is on file with the Secretary of State of the State of Massachusetts. Notice is
hereby given that the obligations of Company entered into in the name of or on behalf of Company by
any of its Trustees, representatives or agents are made not individually, but in such Company
capacities. Such obligations are not binding upon any of the Trustees, shareholders or
representatives of Company personally, but bind only the assets of Company belonging to such Fund
for the enforcement of any claims against Company.
(e) As used in this Agreement, any references to any laws (including, without limitation, the
1940 Act, Advisers Act, Code and CEA) incorporate the effects of: (i) any amendments to such laws;
(ii) any rules or regulations promulgated under such laws; and (iii) any interpretations of such
laws, rules or regulations by the applicable regulatory authorities.
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NOW THEREFORE, the parties hereto have caused this Agreement to be executed as of the day and year
first written above.
Xxxxxxx Xxxxxx Investment Management, Inc.
By:
|
/s/ XXXXXX X. XXXXXXX | |||
Name:
|
||||
Title:
|
Senior Vice President and Chief Financial Officer | |||
| Tasho Investment, LLC, operating as, TAMRO Capital Partners LLC |
||||
By:
|
/s/ XXXXXXXX XXXXXXX | |||
Name:
|
||||
Title:
|
President | |||
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SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
AND
TASHO INVESTMENT, LLC, OPERATING AS,
TAMRO CAPITAL PARTNERS LLC
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
AND
TASHO INVESTMENT, LLC, OPERATING AS,
TAMRO CAPITAL PARTNERS LLC
FUND(S)
Laudus Small-Cap MarketMasters Fund
Effective Date of this Schedule A: July 1, 2007
9
SCHEDULE B
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
AND
TASHO INVESTMENT, LLC, OPERATING AS,
TAMRO CAPITAL PARTNERS LLC
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
AND
TASHO INVESTMENT, LLC, OPERATING AS,
TAMRO CAPITAL PARTNERS LLC
FEES
Fees will be accrued each day by applying to the Net Asset Value of the Managed Assets at the end
of that day, the daily rate, using a 365-day year, equivalent to the applicable fee percentage set
forth below (“Company Percentage”). Sub-Adviser represents and warrants that the Company
Percentage now is and in the future will be equal to or less than the applicable fee percentage
payable to Sub-Adviser under any other advisory or sub-advisory agreement for comparable investment
advisory services (each a “Third Party Percentage”). If at any time, the Company Percentage is
greater than any Third Party Percentage, the Company Percentage will be reduced to the lowest Third
Party Percentage, including with respect to any advisory or sub-advisory agreement amended or
entered into by Sub-Adviser after the effective date of this Schedule. Fees will be paid within
30 days following the end of each calendar quarter.
COMPANY PERCENTAGE
If the assets are equal to or less than $80 million, the Company Percentage will be 70 Basis
Points.
If the assets are greater than $80 million, the Company Percentage will be 60 Basis Points on all
assets managed.
Effective Date of this Schedule B: July 1, 2007
10
SCHEDULE C
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
AND
TASHO INVESTMENT, LLC, OPERATING AS,
TAMRO CAPITAL PARTNERS LLC
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
AND
TASHO INVESTMENT, LLC, OPERATING AS,
TAMRO CAPITAL PARTNERS LLC
MUTUAL CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT
A true and correct copy of the MUTUAL CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT is attached
hereto.
Effective Date of this Schedule C: July 1, 2007
11
SCHEDULE D
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
AND
TASHO INVESTMENT, LLC, OPERATING AS,
TAMRO CAPITAL PARTNERS LLC
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
AND
TASHO INVESTMENT, LLC, OPERATING AS,
TAMRO CAPITAL PARTNERS LLC
NONCOMPETE PROVISIONS:
Effective Date of this Schedule D: July 1, 2007
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Confidentiality and Non-Disclosure Agreement
This Agreement is made effective as of this 1st day of July, 2007 (“Effective
Date”) by and between TAMRO Capital Partners LLC (“Company”), and Xxxxxxx Xxxxxx Investment
Management, Inc. (“CSIM”).
WHEREAS, Company and CSIM are considering entering into a business arrangement (“Business
Arrangement”); and
WHEREAS, Company and CSIM each desires to review and discuss certain proprietary and
confidential information of the other party and its affiliates in connection with analysis of the
Business Arrangement (“Analysis”); and
WHEREAS, Company and CSIM each desires that all of its and its affiliates confidential and
proprietary information revealed to the other party and its affiliates be subject to the
confidentiality and non-disclosure restrictions imposed by this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties agree
as follows:
1. Definition of Confidential Information. The term “Confidential Information” means
any information that Disclosing Party (as defined below) discloses in connection with the Analysis
or any resulting Business Arrangement, whether in writing, electronically or orally, to Receiving
Party (as defined below), whether in tangible or intangible form. Confidential Information
includes, without limitation, any information concerning: (a) Disclosing Party’s financial or
business plans or operations, such as research or investment activities and plans, marketing or
sales plans, pricing or pricing strategies, operational techniques, internal controls, compliance
policies, methods of operation, security procedures, strategic plans, Schwab Customer Information
(as defined below), and unpublished financial information, including information concerning
revenues, profits and profit margins; and (b) the compensation to be paid to Company under the
Business Arrangement. In addition, TAMRO Capital Partners LLC will not use any Confidential
Information concerning each Funds’ portfolio holdings, including, without limitation, the names of
the portfolio holdings and the values thereof or other Schwab Confidential Information, for
purposes of making any decision about whether to purchase or redeem shares of each Fund or to
execute any other securities transaction. In the event any of the provisions of the
Confidentiality Agreement conflict with any of the provisions of this Agreement, the latter will
control.
2. Definition of Disclosing Party and Receiving Party. The term “Disclosing Party”
means the party and its affiliates providing Confidential Information. The term “Receiving Party”
means the party and its affiliates receiving Confidential Information. As defined herein, CSIM’s
affiliates include, without limitation, Xxxxxxx Xxxxxx & Co., Inc. (“Schwab”) and Schwab Capital
Trust.
3. Restrictions on Use. Receiving Party will not use, without the prior written
consent of Disclosing Party, any portion of Disclosing Party’s Confidential Information for any
purpose
| Confidentiality Agreement | 1 | CSIM Confidential |
other than to perform the Analysis or to provide the services under any resulting Business
Arrangement. Receiving Party will: (a) hold Confidential Information of Disclosing Party in the
strictest confidence; (b) exercise no less care with respect to Disclosing Party’s Confidential
Information than the level of care exercised with respect to Receiving Party’s Confidential
Information; (c) not disclose, without Disclosing Party’s prior written consent, Disclosing Party’s
Confidential Information to any third party; (d) notify immediately Disclosing Party of any
unauthorized disclosure, and cooperate with Disclosing Party to protect all rights in and ownership
of the Confidential Information; and (e) restrict dissemination of Disclosing Party’s Confidential
Information to persons within Receiving Party who are directly involved in the Analysis or in
performing the services under any resulting Business Arrangement, and who are bound by
confidentiality provisions as stringent as the terms set forth herein.
4. Exceptions. The foregoing Restrictions on Use will not prohibit or limit Receiving
Party’s use, disclosure, reproduction or dissemination of any Confidential Information that: (a) is
or becomes public domain information or material through no fault or breach on the part of
Receiving Party; (b) is already lawfully known (without restriction on disclosure) to Receiving
Party prior to the information being disclosed to Receiving Party by Disclosing Party; (c) is or
becomes rightfully furnished to Receiving Party without restriction on disclosure by a third person
lawfully in possession thereof; (d) is independently developed, by or for Receiving Party, without
reference to Disclosing Party’s Confidential Information; and (e) is required to be disclosed by
court order, or pursuant to applicable law, regulation or self-regulatory organization rules;
provided that Receiving Party notifies Disclosing Party in order that Disclosing Party may have a
reasonable opportunity to obtain a protective order or other form of protection against disclosure.
It will be presumed that any Confidential Information in the possession of Receiving Party that
has been disclosed to it by Disclosing Party is not within any of the exceptions above, and the
burden is on Receiving Party to prove otherwise by records and documentation.
5. No License. This Agreement will not be construed as granting or conferring any
rights on either party by license or otherwise, expressly or implicitly, with respect to any
Confidential Information, Schwab Customer Information, or any invention, discovery or improvement
made, conceived or acquired prior to or after the Effective Date.
6. Termination. This Agreement will terminate as follows: (a) If the Parties do not
enter into a Business Arrangement, upon termination of this Analysis; or (b) If the Parties do
enter into a Business Arrangement, as provided in the written agreement memorializing the Business
Arrangement. Upon termination, each party will continue to hold the Confidential Information in
strict confidence as set forth herein for ten years from the date of termination, except with
regard to (a) trade secrets of Disclosing Party which will be held in confidence for as long as
such information remains a trade secret, and (b) Schwab Customer Information (as defined below)
which will be held by Company in strict confidence in perpetuity.
7. Return of Materials. Within ten days of this Agreement’s termination, Receiving
Party will: (a) return or destroy, at the option of Disclosing Party, all originals and copies of
all documents and materials Receiving Party has received from Disclosing Party containing
Confidential Information; (b) deliver or destroy, at the option of Disclosing Party, all originals
and copies of all summaries, records, descriptions, modifications, negatives, drawings, adoptions
and other documents or materials, whether in writing or in machine-readable form, prepared by
| Confidentiality Agreement | 2 | Xxxxxxx Xxxxxx & Co., Inc. |
Receiving Party or prepared under its direction or at its request from Disclosing Party’s
Confidential Information (‘Derivative Material”); and (c) provide a written statement to Disclosing
Party certifying that all Confidential Material and all Derivative Material have been delivered to
Disclosing Party or destroyed, as requested by Disclosing Party.
8. Equitable Relief. Each party acknowledges that any breach of this Agreement would
cause Disclosing Party irreparable harm for which monetary damages would be inadequate.
Accordingly, Disclosing Party will be entitled to seek injunctive or other equitable relief to
remedy any threatened or actual breach of this Agreement by Receiving Party, as well as monetary
damages.
9. No Commitment. This Agreement will not constitute a commitment by either party to
enter into any Business Arrangement with the other party.
10. Definition of Schwab Customer Information. “Schwab Customer Information” means
all intentionally or unintentionally disclosed 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; (a) name, address, email address,
passwords, personal financial information, personal preferences, demographic data, marketing data,
data about securities transactions, credit data, or any other identification data; (b) any
information that reflects use of or interactions with a Schwab Service (as defined below),
including but not limited to, information concerning computer search paths, any profiles created,
or general usage data; or (c) any data otherwise submitted in the process of registering for, or
during the course of using, a Schwab Service. “Customer” means any (a) customer, (b) prospect, or
(c) subscriber or user of any Schwab Service. “Schwab Service” means any service that Schwab makes
available to its Customers through Web sites, desktops, email, wireless devices, or from any other
communications channel or other medium developed, owned, licensed, operated, hosted, or otherwise
controlled by or on behalf of Schwab.
11. Restrictions on Use of Schwab Customer Information. Without limiting any other
warranty or obligation of Company, during the term of this Agreement and thereafter in perpetuity,
Company will not gather, store, or use any Schwab Customer Information in any manner, and will not
disclose, distribute, sell, share, rent or otherwise transfer any Schwab Customer Information to
any third party, except as expressly provided in this Agreement or as Company may be expressly
directed in advance in writing by Schwab. Company represents, covenants, and warrants that Company
will use Schwab Customer Information only in compliance with: (i) this Agreement or any subsequent
Business Arrangement; (ii) Xxxxxx’x privacy policies; and (iii) all applicable laws, policies and
regulations (including but not limited to applicable laws, policies and regulations related to
spamming, privacy, and consumer protection). Company hereby agrees to indemnify and hold harmless
Schwab and its affiliates (including, without limitation, CSIM and Schwab Capital Trust) from
against any and all damages, losses, liabilities, settlements and expenses (including without
limitation costs and attorneys’ fees) in connection with any claim or action that arises from an
alleged violation of this Agreement. Company will not retain any Schwab Customer Information for
any period longer than necessary for Company to fulfill its obligations under this Agreement. As
soon as Company no longer needs to retain such Schwab Customer Information in order to perform its
| Confidentiality Agreement | 3 | Xxxxxxx Xxxxxx & Co., Inc. |
duties under this Agreement, Company will promptly return or (if so instructed by Schwab or its
affiliates) in writing) destroy all originals and copies of such Schwab Customer Information.
12. No Publicity. Company will not announce or disclose the existence of this
Agreement, the Analysis, and any subsequent Business Arrangement, or their contents or any
discussions relating thereto, to any third party without the prior written consent of CSIM, or
except as may be required by law, in which case Company will give CSIM the maximum feasible prior
notice of such disclosure.
13. Miscellaneous. This Agreement will be governed by the laws of the State of
California applicable to agreements between residents of California made and to be performed
entirely within the State of California. This Agreement will be binding upon, and will inure to
the benefit of, the parties and their respective successors and assigns. Any modifications to this
Agreement must be in writing and signed by both parties. This Agreement may be executed in one or
more counterparts, each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same Agreement.
IN WITNESS WHEREOF, the authorized representatives of the parties hereto have executed this
Agreement.
XXXXXXX XXXXXX INVESTMENT MANAGEMENT, INC.
By: |
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Name:
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Xxxxxxx Xxxxxxxx | |||
Title:
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Senior Vice President and Chief Investment Officer | |||
Telephone:
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(000) 000-0000 | |||
Facsimile:
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(000) 000-0000 | |||
Date: |
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| TAMRO CAPITAL PARTNERS LLC | ||||
By: |
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Name: |
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Title: |
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Telephone: |
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Facsimile: |
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Date: |
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| Confidentiality Agreement | 4 | Xxxxxxx Xxxxxx & Co., Inc. |
