EXHIBIT (d)(xviv)
SUB-MANAGEMENT AGREEMENT
This AGREEMENT made this ______ day of __________, 2003, between Janus
Capital Management LLC, a Delaware limited liability company ("JCM") and
Perkins, Wolf, XxXxxxxxx and Company, a Delaware corporation ("PWM").
WHEREAS, JCM has entered into a Subadvisory Agreement (the "Subadvisory
Agreement") with Xxxxxxx Xxxxxx Investment Management, Inc. ("CSIM") with
respect to the Schwab Balanced MarketMasters Fund(TM) (the "Series"), a series
of the Schwab Capital Trust, a Massachusetts Trust (the "Trust") listed on
Exhibit A attached hereto; and
WHEREAS, PWM is engaged in the business of rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, JCM desires to delegate to PWM its duties and responsibilities
for providing investment advisory services to the Series, and PWM is willing to
accept such delegation and to render such investment advisory services.
NOW, THEREFORE, the parties agree as follows:
1. Delegation. JCM hereby delegates to PWM all the duties and
responsibilities required to be performed by JCM for the Series pursuant to
Section ___ of the Subadvisory Agreement, a copy of which is attached hereto as
Exhibit B. PWM hereby accepts such delegation and agrees to perform such duties
and assume such responsibilities, subject to the oversight of JCM and CSIM and
to the overall control of the officers and the Board of Trustees (the
"Trustees") of the Trust. No provision of this Agreement shall relieve JCM of
its duties or responsibilities under the Subadvisory Agreement, and JCM shall
appropriately oversee, monitor and evaluate PWM's performance of its duties and
responsibilities under this Agreement.
2. Further Obligations.
(a) In all matters relating to the performance of this Agreement, PWM
shall act in conformity with the objectives, policies and limitations for the
applicable Series set forth in the Trust's current prospectus and statement of
additional information, such policies as the Trustees may from time to time
establish and which have been furnished to PWM in writing, the provisions of the
Internal Revenue Code (the Code) applicable to "regulated investment companies"
(as defined in Section 851 of the Code), all as from time to time in effect, and
with all applicable federal and state laws governing such Series' operations and
investments including without limitation the provisions of the Investment
Company Act of 1940, as amended (the "1940 Act"), and rules adopted thereunder
and applicable federal and state securities, tax and banking laws. For purposes
of compliance with the foregoing, PWM shall be entitled to treat each such
portion of the assets of each such Series set forth in Exhibit A managed by PWM
as though such portion of the assets constituted the entire Series, and PWM
shall not be responsible in any way for the compliance of any assets of the
Series other than such portion of the assets of such Series managed by PWM, with
any of the foregoing or for the compliance of the Series, taken as a whole, with
any of the foregoing.
(b) PWM shall provide timely reports to JCM on its activities under
this Agreement as agreed on from time to time, and shall provide JCM with all
information or documents that JCM may reasonably request in connection with this
Agreement, including but not limited to
certified copies of its financial statements, and such other information with
regard to its affairs as JCM may reasonably request.
(c) PWM shall maintain all books and records required to be maintained
by PWM pursuant to the Investment Advisers Act of 1940, as amended, and shall
make such records available to JCM upon reasonable request.
3. Compensation. JCM shall pay to PWM for its services under this
Agreement a fee, payable in United States dollars, at the annual rate set forth
in Exhibit A attached hereto. This fee shall be based on the average daily net
asset value of the portion of the assets of the Series for which PWM actually
provides advisory services, and shall be determined by taking an average of all
determinations of such net asset value during the month. This fee shall be
computed and accrued daily and payable monthly as soon as practicable after the
end of each month. For the month during which this Agreement becomes effective
and the month during which it terminates, however, there shall be an appropriate
proration of the fee payable for such month based on the number of calendar days
of such month during which this Agreement is effective.
4. Expenses and Excluded Expenses. PWM shall pay all its own costs and
expenses incurred in rendering the services required under this Agreement.
Notwithstanding any other provision hereof, it is expressly agreed that PWM
shall not be responsible to pay any organizational, operation or business
expenses of JCM or the Trust including, without limitation, brokerage
commissions and other costs in connection with the purchase or sale of
securities or other investment instruments with respect to the Series.
5. Termination. This Agreement shall continue in full force and effect
with respect to each Series until two years from the date hereof, and from year
to year thereafter so long as such continuance 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 vote of a majority of the outstanding voting securities of the
Series voting separately from any other series of the Trust.
With respect to each Series, this Agreement may be terminated at any
time, without penalty, by vote of a majority of the Trustees, or by vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
the Series, voting separately from any other series of the Trust, on 60 days'
written notice to PWM. With respect to each Series, this Agreement may be
terminated by JCM at any time, without payment of any penalty, on 90 days
written notice to the Trust and PWM. With respect to each Series, this Agreement
may be terminated by PWM at any time, without the payment of any penalty, on 90
days' written notice to JCM and the Trust; provided, however, that this
Agreement may not be terminated by PWM unless another subadvisory agreement has
been approved by the Trust in accordance with the 1940 Act, or after six months'
written notice, whichever is earlier. The termination of this Agreement with
respect to any Series or the addition of any Series to Exhibit A hereto (in the
manner required by the 0000 Xxx) shall not affect the continued effectiveness of
this Agreement with respect to each other Series subject hereto. This Agreement
shall automatically terminate in the event of its assignment (as defined by the
1940 Act). This Agreement will also terminate in the event that the Subadvisory
Agreement by and between JCM and CSIM is terminated.
6. Limit of Liability; Indemnification.
(a) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations or duties hereunder ("Disabling
Conduct") on the part of PWM (or its officers, directors, agents, employees,
controlling persons, shareholders and any other person or entity affiliated with
PWM) PWM shall not be subject to liability to JCM for any act or omission in the
course of, or connected with, rendering services hereunder, including without
limitation, any error of judgment or mistake of law or for any loss suffered by
any of them in connection with the matters to which this Agreement relates,
except to the extent specified in Section 36(b) of the 1940 Act concerning loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services. Except for such Disabling Conduct, JCM shall
indemnify and hold harmless PWM (and its officers, directors, partners, agents,
employees, controlling persons, shareholders and any other person or entity
affiliated with PWM) (collectively, the "Indemnified Parties") from and against
any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expense) arising from PWM's conduct under this
Agreement.
(b) PWM agrees to indemnify and hold harmless JCM and its affiliates
and each of their respective directors and officers and each person, who
controls JCM within the meaning of Section 15 of the Securities Act of 1933, as
amended (the "1933 Act") against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to
which JCM or its affiliates or such directors, officers or controlling person
may become subject under the 1933 Act, under other statutes, at common law or
otherwise, which may be based upon such Disabling Conduct or any material breach
of this Agreement by PWM; provided, however, that in no case is PWM's indemnity
in favor of any person deemed to protect or apply to such person against any
liability to which such person would otherwise by subject by reasons of willful
misfeasance, bad faith, or gross negligence in the performance of his, her or
its duties or by reason of his, her or its reckless disregard of such person's
obligations and duties under this Agreement.
(c) PWM shall not be liable to JCM for (i) any acts or omission of JCM
or any other subadviser to the Series with respect to the portion of the assets
of a Series not managed by PWM and (ii) acts of PWM which result from acts or
omissions of JCM, including, but not limited to, a failure of JCM to provide
accurate and current information with respect to any records maintained by JCM
or any other subadviser to a Series, which records are not also maintained by
PWM. JCM agrees that PWM shall manage the portion of the assets of a Series
hereunder as if it was a separate operating series and shall comply with
Sections 1 and 2 of this Agreement (including, but not limited to, the
investment objectives, policies and restrictions applicable to a Series and
qualifications of a Series as a regulated investment company under the Code)
with respect to the portion of assets of a Series managed by PWM pursuant to
this Agreement. JCM shall indemnify and hold harmless the Indemnified Parties
from and against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) arising from the conduct of JCM
or any other subadviser with respect to the portion of a Series' assets not
managed by PWM pursuant to this Agreement.
7. Activities of PWM. The investment advisory services provided by PWM
hereunder are not exclusive, and PWM is free to render similar services to
others so long as its services under this Agreement are not materially adversely
affected or otherwise impaired thereby. Nothing in this Agreement shall limit or
restrict the right of any director, officer, or employee of PWM to engage in any
other business or to devote his or her time and attention in
part to the management or other aspects of any business, whether of a similar
nature or dissimilar nature.
8. Independent Contractor. PWM shall for all purposes hereunder be
deemed to be an independent contractor and shall, unless otherwise provided or
authorized, have no authority to act for or represent JCM, the Series or the
Trust in any way, nor otherwise be deemed an agent of, partner or joint venturer
with, JCM, the Series or the Trust.
9. Permissible Interests. It is understood that Directors, officers and
shareholders of the Trust are or may become interested in PWM as directors,
officers and shareholders of PWM, that directors, officers, employees and
shareholders of PWM are or may become similarly interested in the Trust, and
that PWM may become interested in the Trust as a shareholder or otherwise.
10. Notices. Any notice or other communication required to be given
pursuant to this Agreement shall be deemed duly given if delivered or mailed by
certified or registered mail, return receipt requested and postage prepaid:
(a) To Janus Capital Management LLC at:
Janus Capital Management LLC
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
(b) To Perkins, Wolf, XxXxxxxxx and Company at:
Perkins, Wolf, XxXxxxxxx and Company
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: President
11. Amendments. This Agreement may be amended by the parties only in a
written instrument signed by the parties to this Agreement and only if such
amendment is specifically approved (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 vote of a majority of the outstanding
voting securities of the Series voting separately from any other series of the
Trust.
12. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the 1940 Act. To the extent that the applicable
laws of the State of Colorado conflict with the applicable provisions of the
1940 Act, the latter shall control.
13. Miscellaneous. This Agreement may be executed in two or more
counterparts, which taken together shall constitute one and the same instrument.
The headings in this Agreement are included for convenience of reference only
and in no way define or limit any of the provisions thereof or otherwise affect
their construction or effect. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors.
14. Third Party Beneficiary. The parties expressly acknowledge and
agree that the Trust is a third party beneficiary of this Agreement and that the
Trust shall have the full right to xxx upon and enforce this Agreement in
accordance with its terms as if it were a signatory hereto.
15. Separate Series. NOTICE IS HEREBY GIVEN that the Trust is a
business trust organized under the State of Massachusetts pursuant to a
Certificate of Trust filed in the office of the Secretary of State of the State
of Massachusetts. All parties to this Agreement acknowledge and agree that the
Trust is a series trust and all debts, liabilities, obligations and expenses
incurred, contracted for or otherwise existing with respect to a particular
series shall be enforceable against the assets held with respect to such series
only, and not against the assets of the Trust generally or against the assets
held with respect to any other series and further that no Trustee, officer or
holder of shares of beneficial interest of the Trust shall be personally liable
for any of the foregoing.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
JANUS CAPITAL MANAGEMENT LLC
By: _____________________________
Title: __________________________
PERKINS, WOLF, XxXXXXXXX AND COMPANY
By: _____________________________
Title: __________________________
EXHIBIT A
SUB-MANAGEMENT AGREEMENT
FEE SCHEDULE
For services provided under this Agreement, JCM shall pay to
PWM a fee computed at the annual rate set forth below:
Series Fee
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Schwab Balanced MarketMasters Fund(TM) .25%
EXHIBIT B
SUBADVISORY AGREEMENT
