1
Exhibit 8(e)
TRANSFER AGENCY AGREEMENT
AGREEMENT made this 1st day of May, 1993, between Schwab Investments
(the "Trust"), a Massachusetts business trust having its principal place of
business at 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, and XXXXXXX
XXXXXX & CO., INC. ("Schwab"), a corporation organized under the laws of the
State of California which is a Securities and Exchange Commission licensed
transfer agent and which has its principal place of business at 000 Xxxxxxxxxx
Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
WHEREAS, the Trust desires that Schwab perform certain services for the
Trust, and for its series denominated as "Funds" and whose shares of beneficial
interest currently comprise the shares of the Trust identified on Schedule A
hereto (individually referred to herein as a "Fund" and collectively as the
"Funds"); and
WHEREAS, Schwab is willing to perform such services on the terms and
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. SERVICES; USE OF SUBTRANSFER AGENTS. Schwab will perform for the
Trust the services set forth in Schedule B hereto, including services as
Transfer Agent.
Schwab also agrees to perform for the Trust such special services
incidental to the performance of the services enumerated herein as agreed to by
the parties from time to time. Schwab will perform such additional services as
are provided on an amendment to Schedule B hereof, in consideration of such fees
as the parties hereto may agree.
Schwab may, in its discretion, appoint in writing other parties
qualified to perform transfer agency and shareholder services (individually, a
"Subtransfer Agent") to carry out some or all of its responsibilities under this
Agreement with respect to a Fund; provided, however, that the Subtransfer Agent
will be the agent of Schwab and not the agent of the Trust or such Fund, and
that Schwab will be fully responsible for the acts of such Subtransfer Agent and
shall not be relieved of any of its responsibilities hereunder by the
appointment of such Subtransfer Agent.
2. FEES. The Trust will pay Schwab for the services to be provided by
Schwab under this Agreement in accordance with, and in the manner set forth in,
Schedule C hereto. Schwab will not change the fees it charges pursuant to the
fee schedule until the
2
expiration of one year from the Effective Date of this Agreement (as defined
below), unless the Trust otherwise agrees to such change in writing; thereafter,
Schwab may change its fees only upon the written consent of the Trust. Fees for
any additional services to be provided by Schwab pursuant to an amendment to
Schedule B hereto shall be subject to mutual agreement at the time such
amendment to Schedule B is proposed.
3. REIMBURSEMENT OF EXPENSES. In addition to paying Schwab the fees
described in Section 2 hereof, the Trust agrees to reimburse Schwab for Xxxxxx'x
out-of-pocket expenses in providing services hereunder, including without
limitation the following:
A. All freight and other delivery and bonding charges
incurred by Schwab in delivering materials to and
from the Trust and in delivery of all materials to
shareholders;
B. All direct telephone, telephone transmission and
telecopy or other electronic transmission expenses
incurred by Schwab in communication with the Trust,
the Trust's investment adviser, sub-investment
advisers or custodian, dealers, shareholders or
others as required for Schwab to perform the services
to be provided hereunder;
C. Costs of postage, couriers, stock computer paper,
statements, labels, envelopes, checks, reports,
letters, tax forms, proxies, notices or other forms
of printed material which shall be required by Schwab
for the performance of the services to be provided
hereunder;
D. The cost of microfilm or microfiche of records or
other materials; and
E. Any expenses Schwab may incur at the written
direction of an officer of the Trust thereunto duly
authorized.
4. EFFECTIVE DATE. This Agreement will become effective with respect to
each Fund as of the date set forth across from its name on Schedule A, such date
for each Fund to be referred to herein as the "Effective Date."
5. TERM AND TERMINATION. This Agreement will continue in effect with
respect to the Trust and to each Fund, unless earlier terminated as to a Fund by
either party hereto as provided hereunder, for an initial term of one year from
the Effective Date. Thereafter, this Agreement will continue in effect unless
either party hereto terminates this Agreement with respect to a
-2-
3
Fund by giving 90 days' written notice to the other party, whereupon this
Agreement with respect to that Fund will terminate automatically upon the
expiration of said 90 days; provided, however, that after such termination, for
so long as Schwab, with the written consent of the Trust, in fact continues to
perform any one or more of the services contemplated by this Agreement or any
Schedule or exhibit hereto, the provisions of this Agreement, including without
limitation the provisions dealing with indemnification, shall continue in full
force and effect. Fees and out-of-pocket expenses incurred by Schwab but unpaid
by the Trust upon such termination shall be immediately due and payable upon and
notwithstanding such termination. Schwab will be entitled to collect from the
Trust, in addition to the fees and disbursements provided by Paragraphs 2 and 3
hereof, the amount of all of Xxxxxx'x cash disbursements and a reasonable fee
(which fee shall be not less than the actual costs incurred by Schwab in
performing such service) for services in connection with Xxxxxx'x activities in
effecting such termination, including without limitation, the delivery to the
Trust and/or its distributors or investment advisers and/or other parties, of
the Trust's property, records, instruments and documents, or any copies thereof.
6. XXXXXX'X RELIANCE ON RECORDS AND INSTRUCTIONS. Schwab may rely on
any written records or instructions provided to it by the Trust or any
investment adviser and on any written records provided by any prior transfer
agent or custodian thereof, and each Fund agrees to indemnify Schwab and hold
it, its employees, officers, directors and agents harmless from and against any
and all claims, demands, actions, suits, judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature arising
out of or in any way relating to any actions taken by Schwab with respect to
such Fund in reasonable reliance upon such records or instructions.
7. UNCONTROLLABLE EVENTS. Schwab assumes no responsibility hereunder,
and will not be liable, for any damage, loss of data, delay or any other loss
whatsoever caused by events beyond its reasonable control.
8. STANDARD OF CARE. Schwab will use its best efforts to insure the
accuracy of all services performed under this Agreement, but will not be liable
to the Trust for any action taken or omitted by Schwab in the absence of bad
faith, willful misconduct or gross negligence.
9. LEGAL ADVICE. Schwab will notify the Trust at any time Schwab
believes that it is in need of the advice of counsel (other than counsel in the
regular employ of Schwab or any affiliated companies) with regard to Xxxxxx'x
responsibilities and duties pursuant to this Agreement; and after so notifying
the Trust, Schwab, at its discretion, will be entitled to seek,
-3-
4
receive and act upon advice of legal counsel of its choosing, such advice to be
at the expense of the Trust or the Fund involved unless such advice relates to a
matter involving Xxxxxx'x bad faith, willful misconduct or gross negligence with
respect to Xxxxxx'x responsibilities and duties hereunder, and Schwab in no
event be liable to the Trust or the Fund involved or any shareholder or
beneficial owner of the Trust or such Fund for any action reasonably taken
pursuant to such advice.
10. INSTRUCTIONS. Whenever Schwab is requested or authorized to take
action hereunder pursuant to instructions from a shareholder concerning an
account in the Trust, Schwab will be entitled to rely upon any certificate,
letter or other instrument or communication, whether in writing or by electronic
or telephone transmission, believed by Schwab to be genuine and to have been
properly made, signed or authorized by an officer or other authorized agent of
the Trust or by the shareholder, as the case may be, and shall be entitled to
receive as conclusive proof of any fact or matter required to be ascertained by
it hereunder a certificate signed by an officer of the Trust or any other person
authorized by the Trust's Board of Trustees or by the shareholder, as the case
may be.
As to the services to be provided hereunder, Schwab may rely
conclusively upon the terms of the Prospectus of a Fund and the Statement of
Additional Information of the Trust to the extent that such services are
described therein unless Schwab receives written instructions to the contrary in
a timely manner from the Trust.
11. INDEMNIFICATION. Each Fund agrees to indemnify and hold harmless
Schwab and Xxxxxx'x employees, agents, directors, officers and nominees from and
against any and all claims, demands, actions and suits, whether groundless or
otherwise, and from and against any and all judgments, liabilities, losses,
damages, costs, charges, counsel fees and other expenses of every nature and
character arising out of or in any way relating to Xxxxxx'x actions taken or
non-actions with respect to the performance of services under this Agreement
with respect to such Fund or based, if applicable, upon information,
instructions or requests with respect to such Fund given or made to Schwab by an
officer of the Trust thereunto duly authorized; provided that this
indemnification shall not apply to actions or omissions of Schwab in cases of
its own bad faith, willful misconduct or gross negligence, and further provided
that prior to confessing any claim against it which may be the subject of this
indemnification, Schwab shall give the Trust written notice of and reasonable
opportunity to defend against said claim in its own name or in the name of
Schwab.
12. RECORD RETENTION AND CONFIDENTIALITY. Schwab will keep and maintain
on behalf of the Trust all records which the Trust
-4-
5
or Schwab is, or may be, required to keep and maintain pursuant to any
applicable statutes, rules and regulations, including without limitation Rules
31a-1 and 31a-2 under the Investment Company Act of 1940, relating to the
maintenance of records in connection with the services to be provided hereunder.
Schwab agrees to make such records available for inspection by the Trust or by
the Securities and Exchange Commission at reasonable times and otherwise to keep
confidential all records and other information relative to the Trust and its
shareholders, except when requested to divulge such information by
duly-constituted authorities or court process, or requested by a shareholder
with respect to information concerning an account as to which such shareholder
has either a legal or beneficial interest or when requested by the Trust, the
shareholder, or the dealer of record as to such account.
13. REPORTS. Schwab will furnish to the Trust and to the Trust's
properly-authorized auditors, investment advisers, examiners, distributors,
dealers, underwriters, salesmen, insurance companies and others designated by
the Trust in writing, such reports at such times as are prescribed in Schedule D
attached hereto, or as subsequently agreed upon by the parties pursuant to an
amendment to Schedule D. The Trust agrees to examine each such report or copy
promptly and will report or cause to be reported any errors or discrepancies
therein no later than three business days from the receipt thereof. In the event
that errors or discrepancies, except such errors and discrepancies as may not
reasonably be expected to be discovered by the recipient within three days after
conducting a diligent examination, are not so reported within the aforesaid
period of time, a report will for all purposes be accepted by and binding upon
the Trust and any other recipient, and Schwab shall have no liability for errors
or discrepancies therein and shall have no further responsibility with respect
to such report except to perform reasonable corrections of such errors and
discrepancies within a reasonable time after requested to do so by the Trust.
14. RIGHTS OF OWNERSHIP. All computer programs and procedures developed
to perform services required to be provided by Schwab under this Agreement are
the property of Schwab. All records and other data except such computer programs
and procedures are the exclusive property of the Trust and all such other
records and data will be furnished to the Trust in appropriate form as soon as
practicable after termination of this Agreement for any reason.
15. RETURN OF RECORDS. Schwab may at its option at any time, and shall
promptly upon the Trust's demand, turn over to the Trust and cease to retain
Xxxxxx'x files, records and documents created and maintained by Schwab pursuant
to this Agreement which are no longer needed by Schwab in the performance of its
services or for its legal protection. If not so turned
-5-
6
over to the Trust, such documents and records will be retained by Schwab for six
years from the year of creation. At the end of such six-year period, such
records and documents will be turned over to the Trust unless the Trust
authorizes in writing the destruction of such records and documents.
16. BANK ACCOUNTS. The Trust and a Fund shall establish and maintain
such bank accounts with such bank or banks as are selected by the Trust, as are
necessary in order that Schwab may perform the services required to be performed
hereunder. To the extent that the performance of such services shall require
Schwab directly to disburse amounts for payment of dividends, redemption
proceeds or other purposes, the Trust and a Fund will provide such bank or banks
with all instructions and authorizations necessary for the Fund to effect such
disbursements.
17. PURCHASE AND REDEMPTION OF SHARES. Schwab will process instructions
from the Shareholders of the Trust to purchase and redeem shares of the Trust as
the agent for the Trust.
With respect to those Funds identified on Schedule A hereto as "Sweep
Funds" (if any), Schwab will perform such daily, and/or weekly monitoring and
other related tasks as is necessary to carry out the automatic investment and
redemption features associated with each individual shareholder's account with
Schwab.
18. REPRESENTATIONS OF THE TRUST. The Trust certifies to Schwab that:
(1) as of the close of business on the Effective Date, each Fund has authorized
unlimited shares and (2) by virtue of its Declaration of Trust, shares of each
Fund which are redeemed by the Trust may be sold by the Trust from its treasury
and (3) this Agreement has been duly authorized by the Trust and, when executed
and delivered by the Trust, will constitute a legal, valid and binding
obligation of the Trust, enforceable against the Trust in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting the rights and remedies of creditors and
secured parties.
19. REPRESENTATIONS OF SCHWAB. Schwab represents and warrants that the
various procedures and systems which Schwab has implemented with regard to
safeguarding from loss or damage attributable to fire, theft, or any other cause
of the blank checks, records, and other data of the Trust and Xxxxxx'x records,
data, equipment facilities and other property used in the performance of its
obligations hereunder are adequate and that it will make such changes therein
from time to time as are required for the secure performance of its obligations
hereunder.
20. INSURANCE. Schwab will use reasonable efforts to obtain insurance
covering the services to be performed by it
-6-
7
under this Agreement and shall notify the Trust in the event it is unable to do
so within 90 days after the Effective Date of this Agreement. Thereafter, Schwab
will notify the Trust should any of its insurance coverage be changed for any
reason. Such notification shall include the date of change and the reasons
therefor. Schwab will notify the Trust of any material claims against it with
respect to services performed under this Agreement, whether or not they may be
covered by insurance, and shall notify the Trust from time to time as may be
appropriate of the total outstanding claims made by Schwab under its insurance
coverage.
21. INFORMATION TO BE FURNISHED BY THE TRUST. The Trust has furnished
to Schwab the following:
A. Copies of the Declaration of Trust of the Trust and
of any amendments thereto, certified by the proper
official of the state in which such Declaration has
been filed.
B. Copies of the following documents:
1. The Trust's Bylaws and any amendments
thereto.
2. Certified copies of resolutions of the Board
of Trustees covering the following matters:
a. Approval of this Agreement,
authorization of an officer of the
Trust to execute and deliver this
Agreement and authorization for
officers of the Trust to instruct
Schwab hereunder; and
b. Authorization of Schwab to act as
Registrar, Transfer Agent and
Dividend Disbursing Agent for the
Trust.
C. A list of all the officers of the Trust, together
with specimen signatures of those officers who are
authorized to instruct Schwab in all matters.
D. Two copies of the following (if such documents are
employed by the Trust):
1. Prospectuses for each Fund and the Statement
of Additional Information of the Trust;
2. Distribution Agreement;
3. Investment Advisory and Administration
Agreement(s); and
-7-
8
4. All other forms commonly used by the Trust
or its Distributor with regard to their
relationships and transactions with
shareholders of the Trust.
E. A certified statement as to shares of beneficial
interest of the Trust authorized, issued, and
outstanding as of the Effective Date of Xxxxxx'x
appointment as Transfer Agent (or as of the date on
which Xxxxxx'x services are commenced, whichever is
the later date) and as to receipt of full
consideration by the Trust for all shares
outstanding, such statement to be certified by the
Treasurer of the Trust;
22. INFORMATION FURNISHED BY SCHWAB. Schwab has furnished to the
Trust the following:
X. Xxxxxx'x Articles of Incorporation.
X. Xxxxxx'x By-Laws and any amendments thereto.
C. Certified copies of actions of Schwab covering the
following matters:
1. Approval of this Agreement, and
authorization of an officer of Schwab to
execute and deliver this Agreement; and
2. Authorization of Schwab to act as Transfer
Agent for the Trust.
23. AMENDMENTS TO DOCUMENTS. The Trust shall furnish Schwab written
copies of any amendments to, and changes in, any of the items referred to in
Section 21 hereof forthwith upon such amendments and changes becoming effective.
In addition, the Trust agrees that no amendments will be made to the Prospectus
of a Fund or the Statement of Additional Information of the Trust which might
have the effect of changing the procedures employed by Schwab in providing the
services agreed to hereunder or which amendment might affect the duties of
Schwab hereunder unless the Trust first obtains Xxxxxx'x approval of such
amendments or changes.
24. RELIANCE ON AMENDMENTS. Schwab may rely on any amendments to or
changes in any of the documents and other items to be provided by the Trust
pursuant to Sections 21 and 23 of this Agreement and a Fund will indemnify and
hold harmless Schwab from and against any and all claims, demands, actions,
suits, judgments, liabilities, losses, damages, actions, suits, judgments,
liabilities, losses, damages, costs, charges, counsel
-8-
9
fees and other expenses of every nature and character which may result from
actions or omissions on the part of Schwab with respect to such Fund in reliance
upon such amendments and/or changes. Although Schwab is authorized to rely on
the abovementioned amendments to and changes in the documents and other items
to be provided pursuant to Sections 21 and 23 hereof, Schwab will be under no
duty to comply with or take any action as a result of any of such amendments or
changes unless the Trust first obtains Xxxxxx'x written consent to and approval
of such amendments or changes.
25. COMPLIANCE WITH LAW. Except for the obligations of Schwab set forth
in Section 12 hereof, the Trust assumes full responsibility for the preparation,
contents and distribution of each Prospectus of the Trust, as to compliance with
all applicable requirements of the Securities Act of 1933, as amended, the
Investment Company Act of 1940, as amended, and any other laws, rules and
regulations of governmental authorities having jurisdiction. Schwab will have no
obligation to take cognizance of any laws relating to the sale of the Trust's
shares.
26. NOTICES. Any notice provided hereunder shall be sufficient given
when sent by registered or certified mail to the party required to be served
with such notice, at the following address: 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000 or at such other address as such party may from time
to time specify in writing to the other party pursuant to this Section.
27. HEADINGS. Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
28. ASSIGNMENT. This Agreement and the rights and duties hereunder
shall not be assignable with respect to a Fund by either of the parties hereto
except by the specific written consent of the other party. This Section 28 shall
not limit or in any way affect Xxxxxx'x right to appoint a Subtransfer Agent
pursuant to Section 1 hereof.
29. GOVERNING LAW. This Agreement shall be governed by and provisions
shall be construed in accordance with the laws of the State of California.
30. LIMITATION OF LIABILITY. A copy of the Declaration of Trust of the
Trust is on file with the Secretary of The Commonwealth of Massachusetts, and
notice is hereby given that this instrument is executed on behalf of the
Trustees of the Trust as Trustees and not individually and that the obligations
of this instrument are not binding upon any of the Trustees or shareholders
individually but are binding only upon the assets and property of the Trust.
-9-
10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
SCHWAB INVESTMENTS
By: /s/ Xxx X. Xxxx
--------------------------------------
Name: Xxx X. Xxxx
-------------------------------------
Title: President
-------------------------------------
XXXXXXX XXXXXX & CO., INC.
By: /s/ Xxxxx X. XxXxxxxx
--------------------------------------
Name: Xxxxx X. XxXxxxxx
--------------------------------------
Title: Senior Vice President
--------------------------------------
-10-
11
SCHEDULE B
TRANSFER AGENCY SERVICES
I. Record Maintenance.
Schwab will provide full maintenance of all shareholder records for
each account in the Trust. Such records will include:
A. Share balance;
B. Account transaction history, including dividends paid and the
date and price for all transactions;
C. Name and address of the record shareholder (including zip
codes and tax identification numbers but will not include
responsibility for obtaining certified tax identification
numbers or impending back-up withholding);
D. Records of distributions and dividend payments;
E. Transfer records; and
F. Overall control records.
II. Regular Daily Operations.
Schwab will perform the following functions:
A. Process new accounts on the shareholder file by processing
directly from the Trust's distributor or dealer;
B. Process additional purchases to the records of accounts
already on the shareholder file. In such instances, on the
distributor's or dealer's instructions, allocate investor
payments among the Funds;
C. Process purchases and redemptions to accounts already on the
shareholder file in accordance with the terms of all automatic
purchase and redemption provisions set forth in shareholders'
account relationship with the Trust's distributor;
D. Transfer shares upon the receipt of proper instructions from
distributor or dealer; and
E. Process changes of dealer/representative on accounts.
A-2
12
III. Periodic Operations.
A. Upon receipt of instructions as to payment of dividends and
distributions, which may be standing instructions, compute
distributions and inform the Trust of the amount to be
reinvested in additional shares.
B. Process redemptions as instructed by distributor or dealer.
C. Mail semi-annual and annual Trust and/or Fund reports and
prospectuses.
D. Produce transcripts of account history as requested by the
Trust or by the distributor or dealer.
E. Prepare and file Form 1099's with Internal Revenue Service.
F. Monitor sales of the Funds' shares in the various States and
other jurisdictions where the Funds' shares are registered for
sale, and report on such monitoring efforts to the Funds'
Investment Manager.
IV. Controls.
A. Maintain all balance controls daily and produce monthly
summaries expressed in:
1. shares; and
2. dollar amounts.
V. Special Services Included.
A. Prepare envelopes/labels (from address data supplied by
distributor or dealer as to transmission accounts) and mail
proxy statements; tabulate and certify votes from returned
ballots.
SCHWAB INVESTMENTS
By: /s/ Xxx X. Xxxx
-----------------------------------------
Name: Xxx X. Xxxx
---------------------------------------
Title: President
--------------------------------------
XXXXXXX XXXXXX & CO., INC.
By: /s/ Xxxxx X. XxXxxxxx
-----------------------------------------
Name: Xxxxx X. XxXxxxxx
---------------------------------------
Title: Senior Vice President
--------------------------------------
B-2
13
SCHEDULE D
REPORTS
I. Daily Activity Report (liquidations processed that day)
II. Daily Share Summary Report (by Fund)
A. Beginning balance
B. Liquidations
C. Payments
D. Exchanges
E. Adjustments
F. Ending Balance
G. Sales by each State and jurisdiction
III. Daily Proof Sheet Summary and Transaction Register
IV. Daily Share Reconciliation Report (reconciling Share Summary Report to
Daily Proof Summary Sheet)
V. Weekly Position Reports (showing all account balances)
VI. Monthly Dividend Reports
VII. Report by independent public accountants concerning Xxxxxx'x accounting
system and internal accounting controls, at such times, as the Trust
may reasonably require. These reports shall be of sufficient detail and
scope to provide reasonable accuracy that any material inadequacies
would be disclosed by such examination, and, if there are no such
inadequacies, shall state.
SCHWAB INVESTMENTS
By: /s/ Xxx X. Xxxx
----------------------------------------
Name: Xxx X. Xxxx
----------------------------------------
Title: President
----------------------------------------
XXXXXXX XXXXXX & CO., INC.
By: /s/ Xxxxx X. XxXxxxxx
----------------------------------------
Name: Xxxxx X. XxXxxxxx
----------------------------------------
Title: Senior Vice President
----------------------------------------
D-1
