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Exhibit (8)(m)
ACCOUNTING SERVICES AGREEMENT
This Agreement is made as of March 29, 1994 by and between SCHWAB
ANNUITY PORTFOLIOS, a Massachusetts business trust (the "Fund"), and PFPC INC.
("PFPC"), a Delaware corporation which is an indirect wholly-owned subsidiary of
PNC Bank Corp.
The Fund is registered as an open-end investment company under the
Investment Company Act of 1940, as amended (the "1940 Act").
The Fund wishes to retain PFPC to provide accounting services to each
of the Fund's investment portfolios listed on Schedule A, hereto (each a
"Portfolio" and collectively the "Portfolios"), and PFPC wishes to furnish such
services.
In consideration of the premises and mutual covenants herein contained,
the parties agree as follows:
1. Definitions.
(a) "Authorized Person". The term "Authorized Person" shall
mean any officer of the Fund and any other person, who is duly authorized by the
Fund's Governing Board, to give Oral and Written Instructions on behalf of the
Fund. Such persons are listed in the Certificate attached hereto as the
Authorized Persons Appendix to each Services Attachment to this Agreement. If
PFPC provides more than one service hereunder, the Fund's designation of
Authorized Persons may vary by service.
(b) "Book-Entry System". The term "Book-Entry System" means
Federal Reserve Treasury book-entry system for United States and federal agency
securities, its successor or successors, and its nominee or nominees and any
book-entry system maintained by an
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exchange registered with the SEC under the 1934 Act.
(c) "CFTC". The term "CFTC" shall mean the Commodities Futures
Trading Commission.
(d) "Governing Board". The Term "Governing Board" shall mean
the Fund's Board of Directors if the Fund is a corporation or the Fund's Board
of Trustees if the Fund is a trust, or, where duly authorized, a competent
committee thereof.
(e) "Oral Instructions". The term "Oral Instructions" shall
mean oral instructions received by PFPC from an Authorized Person or from a
person reasonably believed by PFPC to be an Authorized Person.
(f) "SEC". The term "SEC" shall mean the Securities and
Exchange Commission.
(g) "Securities and Commodities Laws". The terms the "1933
Act" shall mean the Securities Act of 1933, as amended, the "1934 Act" shall
mean the Securities Exchange Act of 1934, as amended, the "1940 Act" shall mean
the Investment Company Act of 1940, as amended, and the "CEA" shall mean the
Commodities Exchange Act, as amended.
(h) "Services". The term "Services" shall mean the service
provided to each of the Portfolios by PFPC.
(i) "Shares". The terms "Shares" shall mean the shares of
stock of any series or class of the Fund, or, where appropriate, units of
beneficial interest in a trust where the Fund is organized as a Trust.
(j) "Property". The term "Property" shall mean:
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(i) any and all securities and other investment
items which the Fund may from time to time
deposit, or cause to be deposited, with PNC
Bank, National Association ("PNC Bank") or
which PNC Bank may from time to time hold
for the Fund;
(ii) all income in respect of any of such
securities or other investment items;
(iii) all proceeds of the sale of any of such
securities or investment items; and
(iv) all proceeds of the sale of securities
issued by the Fund, which are received by
PNC from time to time, from or on behalf of
the Fund.
(k) "Written Instructions". The term "Written Instructions"
shall mean written instructions signed by two Authorized Persons and received by
PFPC. The instructions may be delivered by hand, mail, tested telegram, cable,
telex or facsimile sending device.
2. Appointment. The Fund hereby appoints PFPC to provide accounting
services to each of the Portfolios listed on Schedule A, hereto, in accordance
with the terms set forth in this Agreement. PFPC accepts such appointment and
agrees to furnish such services.
The Fund may from time to time issue separate series or
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classes or classify and reclassify shares of such series or class. PFPC shall
identify to such series or class property belonging to such series or class and
in such reports, confirmations and notices to the Fund called for under this
Agreement shall identify the series or class to which such report, confirmation
or notice pertains.
3. Delivery of Documents. The Fund has provided or, where applicable,
will provide PFPC with the following:
(a) certified or authenticated copies of the resolutions of
the Fund's Governing Board, approving the appointment of PFPC or its affiliates
to provide services;
(b) a copy of the Fund's most recent effective registration
statement;
(c) a copy of the Fund's advisory agreement or agreements;
(d) a copy of the Fund's distribution agreement or agreements;
(e) copies of any shareholder servicing agreements made in
respect of the Fund; and
(f) certified or authenticated copies of any and all
amendments or supplements to the foregoing.
4. Compliance with Government Rules and Regulations.
PFPC undertakes to comply with all applicable requirements of the
Securities and Commodities Laws, and any laws, rules and regulations of
governmental authorities having jurisdiction with
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respect to all duties to be performed by PFPC hereunder. Except as specifically
set forth herein, PFPC assumes no responsibility for such compliance by the
Fund.
5. Instructions. Unless otherwise provided in this Agreement, PFPC
shall act only upon Oral and Written Instructions.
PFPC shall be entitled to rely upon any Oral and Written Instructions
it receives from an Authorized Person (or from a person reasonably believed by
PFPC to be an Authorized Person) pursuant to this Agreement. In the exercise of
reasonable judgement, PFPC may assume that any Oral or Written Instruction
received hereunder is not in any way inconsistent with the provisions of
organizational documents or this Agreement or of any vote, resolution or
proceeding of the Fund's Governing Board or of the Fund's shareholders.
The Fund agrees to forward to PFPC Written Instructions confirming Oral
Instructions so that PFPC receives the Written Instructions by the close of
business on the same day that such Oral Instructions are received. The fact that
such confirming Written Instructions are not received by PFPC shall in no way
invalidate the transactions or enforceability of the transactions authorized by
the Oral Instructions. The Fund further agrees that PFPC shall incur no
liability to the Fund solely by reason of acting upon Oral or Written
Instructions provided such instructions reasonably appear to have been received
from an Authorized Person.
6. Right to Receive Advice.
(a) Advice of the Fund. If PFPC is in doubt as to any
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action it should or should not take, PFPC may request directions or advice,
including Oral or Written Instructions, from the Fund.
(b) Advice of Counsel. If PFPC shall be in doubt as to any
questions of law pertaining to any action it should or should not take, PFPC may
request advice at its own cost from such counsel of its own choosing (who may be
counsel for the Fund, the Fund's advisor or PFPC, at the option of PFPC).
(c) Conflicting Advice. In the event of a conflict between
directions, advice or Oral or Written Instructions PFPC receives from the Fund,
and the advice it receives from counsel, PFPC shall be entitled in good faith to
rely upon and follow the advice of counsel.
(d) Protection of PFPC. PFPC shall be protected in any action
it takes or does not take in reliance upon directions, advice or Oral or Written
Instructions it receives from the Fund or from counsel and which PFPC believes,
in good faith, to be consistent with those directions, advice and Oral or
Written Instructions.
Nothing in this paragraph shall be construed so as to impose an
obligation upon PFPC (i) to seek such directions, advice or Oral or Written
Instructions, or (ii) to act in accordance with such directions, advice or Oral
or Written Instructions unless, under the terms of other provisions of this
Agreement, the same is a condition of PFPC's properly taking or not taking such
action.
7. Records. The books and records pertaining to the Fund, which are in
the possession of PFPC, shall be the property of the
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Fund. Such books and records shall be prepared and maintained as required by the
1940 Act and other applicable securities laws, rules and regulations. The Fund,
or the Fund's Authorized Persons, shall have access to such books and records at
all times during PFPC's normal business hours. Upon the reasonable request of
the Fund, copies of any such books and records shall be provided by PFPC to the
Fund or to an Authorized Person of the Fund, at the Fund's expense.
PFPC shall keep the following records:
(a) all books and records with respect to the Fund's books of
account;
(b) records of the Fund's securities transaction;
(c) all other books and records as PFPC is required to
maintain pursuant to Rule 31a-1 of the 1940 Act and as specifically set forth in
Appendix A hereto.
8. Confidentiality. PFPC agrees to keep confidential all records of the
Fund and information relative to the Fund and its shareholders (past, present
and potential), unless the release of such records or information is otherwise
consented to, in writing, by the Fund. The Fund agrees that such consent shall
not be unreasonably withheld. The Fund further agrees that, should PFPC be
required to provide such information or records to duly constituted authorities
(who may institute civil or criminal contempt proceedings for failure to
comply), PFPC shall not be required to seek the Fund's prior written consent
before disclosing such information, but shall instead notify an officer of the
Fund
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and obtain the officer's oral consent, which consent shall be timely and shall
not be unreasonably withheld.
9. Liaison with Accountants. PFPC shall act as liaison with the Fund's
independent public accountants and shall provide account analyses, fiscal year
summaries, and other audit-related schedules. PFPC shall take all reasonable
action in the performance of its obligations under this Agreement to assure that
the necessary information is made available to such accountants for the
expression of their opinion, as such may be required by the Fund from time to
time.
10. Disaster Recovery. PFPC shall enter into and shall maintain in
effect with appropriate parties one or more agreements making reasonable
provision of emergency use of electronic data processing equipment to the extent
appropriate equipment is available. In the event of equipment failures, PFPC
shall, at no additional expense to the Fund, take reasonable steps to minimize
service interruptions but shall have no liability with respect thereto.
11. Compensation. The fees for services rendered by PFPC during the
term of this Agreement shall be paid by the Fund to PFPC as may be agreed to in
writing by the Fund and PFPC from time to time.
12. Indemnification. The Fund agrees to indemnify and hold harmless
PFPC and its nominees from all taxes, charges, expenses, assessments, claims and
liabilities (including, without limitation, liabilities arising under the
Securities and Commodities Laws, and
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any state and foreign securities and blue sky laws, and amendments thereto, and
expenses, including (without limitation) reasonable attorneys' fees and
disbursements, arising directly or indirectly from any action which PFPC takes
or does not take (i) at the request or on the direction of or in reliance on the
advice of the Fund or (ii) upon Oral or Written Instructions. Neither PFPC, nor
any of its nominees, shall be indemnified against any liability to the Fund or
to its shareholders (or any expenses incident to such liability) arising out of
PFPC's own willful misfeasance, gross negligence or reckless disregard of its
duties and obligations under this Agreement.
13. Responsibility of PFPC. PFPC shall be under no duty to take any
action on behalf of the Fund except as specifically set forth herein or as may
be specifically agreed to by PFPC, in writing. PFPC shall be obligated to
exercise reasonable care and diligence in the performance of its duties
hereunder, to act in good faith and to use its best efforts, within reasonable
limits, in performing services provided for under this Agreement. PFPC shall be
responsible for damages arising out of its failure to perform its duties under
this Agreement arising out of PFPC's gross negligence. Notwithstanding the
foregoing, PFPC shall not be responsible for losses beyond its reasonable
control, provided that PFPC has acted in accordance with the standard of care
set forth above; and provided further that PFPC shall only be responsible for
that portion of losses or damages suffered by the Fund that are attributable to
the gross negligence of PFPC.
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Without limiting the generality of the foregoing or of any other
provision of this Agreement, PFPC, in connection with its duties under this
Agreement, shall not be liable for (a) the validity or invalidity or authority
or lack thereof of any Oral or Written Instruction, notice or other instrument
which conforms to the applicable requirements of this Agreement, and which PFPC
reasonably believes to be genuine; or (b) delays or errors or loss of data
occurring by reason of circumstances beyond PFPC's reasonable control, including
acts of civil or military authority, national emergencies, labor difficulties,
fire, flood or catastrophe, acts of God, insurrection, war, riots or failure of
the mails, transportation, communication or power supply.
14. Description of Accounting Services.
(a) Services on a Continuing Basis. PFPC will perform the
following accounting functions if required:
(i) Journalize each Portfolio's investment,
capital share and income and expense
activities;
(ii) Verify investment buy/sell trade tickets
when received from the Fund's investment
advisor and transmit trades to the Fund's
custodian for proper settlement;
(iii) Maintain individual ledgers for investment
securities;
(iv) Maintain historical tax lots for each
security;
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(v) Reconcile cash and investment balances of
the Fund with the custodian, and provide the
Fund's investment advisor with the beginning
cash balance available for investment
purposes;
(vi) Update the cash availability throughout the
day as required by the Fund's advisor;
(vii) Post to and prepare each Portfolio's
Statement of Assets and Liabilities and the
Statement of Operations;
(viii) Calculate various contractual expenses
(e.g., advisory and custody fees);
(ix) Monitor the expense accruals and notify Fund
management of any proposed adjustments;
(x) Control all disbursements from each
Portfolio and authorize such disbursements
upon Written Instructions;
(xi) Calculate capital gains and losses;
(xii) Determine each Portfolio's net income;
(xiii) Obtain security market quotes from
independent pricing services approved by the
Advisor, or if such quotes are unavailable,
then obtain such prices from the Advisor,
and in either case calculate the market
value of each
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Portfolio's investments;
(xiv) Transmit or mail a copy of each daily
portfolio valuation to the Advisor;
(xv) Compute the net asset value of each of the
Portfolios;
(xvi) As appropriate, compute each of the
Portfolio's yields, total return, expense
ratios, Portfolio turnover rate, and, if
required, Portfolio average dollar-weighted
maturity; and
(xvii) Prepare a monthly financial statement, which
will include the following items:
Schedule of Investments
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Cash Statement
Schedule of Capital Gains and Losses.
(b) PFPC will provide the Funds' Administrator with the
following services:
(i) Assist with preparation of:
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Federal and State Tax Returns Excise Tax
Returns Annual and Semi-Annual Shareholder
Reports Rules 24(e)-2 and 24(f)-2 Notices;
(ii) Assist in the Blue Sky and Federal
registration and compliance process;
(iii) Assist in the review of registration
statements; and
(iv) Assist in monitoring compliance with Sub-
Chapter M of the Internal Revenue Code.
15. Duration and Termination. This Agreement shall continue, unless
sooner terminated by the Portfolio or by PFPC for "cause"
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(as defined below) on sixty (60) days prior written notice to the other party.
For purposes of this Agreement "cause" shall mean any circumstances which
materially impair the ability of either party to this Agreement to perform all
of its duties and obligations hereunder.
16. Notices. All notices and other communications, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. If notice is sent by confirming telegram, cable, telex
or facsimile sending device, it shall be deemed to have been given immediately.
If notice is sent by first-class mail, it shall be deemed to have been given
three days after it has been mailed. If notice is sent by messenger, it shall be
deemed to have been given on the day it is delivered. Notices shall be addressed
(a) if to PFPC at PFPC's address, 000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxxx
00000; (b) if to the Fund, at the address of the Fund; or (c) if to neither of
the foregoing, at such other address as shall have been notified to the sender
of any such Notice or other communication.
17. Amendments. This Agreement, or any term thereof, may be changed or
waived only by written amendment, signed by the party against whom enforcement
of such change or waiver is sought.
18. Delegation. PFPC may, with the prior written consent of the Fund,
which such consent may not be unreasonably withheld, assign its rights and
delegate its duties hereunder to any wholly-owned direct or indirect subsidiary
of PNC Bank, National Association or PNC Bank Corp., provided that (i) PFPC
gives the
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Fund a minimum of thirty (30) days in which to decide and consent by
written notice; (ii) the delegate agrees with PFPC to comply with all relevant
provisions of this Agreement and the 1940 Act; and (iii) PFPC and such delegate
promptly provide such information as the Fund may request, and respond to such
questions as the Fund may ask, relative to the delegation, including (without
limitation) the capabilities of the delegate.
19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20. Further Actions. Each party agrees to perform such further acts and
execute such further documents as are necessary to effectuate the purposes
hereof.
21. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof, provided that the parties
may embody in one or more separate documents their agreement, if any, with
respect to delegated and/or Oral Instructions.
A copy of the Declaration of Trust of the Fund is on file with the
Secretary of the Commonwealth of Massachusetts and notice is hereby given that
the Fund by the undersigned officer of the Fund in his/her capacity as an
officer of the Fund. The obligations of this Agreement shall only be binding
upon the assets and property of the Fund, and shall not be binding upon any
Trustee, officer or shareholder of the Fund individually.
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The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
This Agreement shall be deemed to be a contract made in California and
governed by California law. 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
and shall inure to the benefit of the parties hereto and their respective
successors.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below on the day and year first above
written.
PFPC INC.
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: Senior Vice President
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SCHWAB ANNUITY PORTFOLIOS
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
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Title: Senior Vice President and
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Chief Operating Officer
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Appendix A
[List of Books and Records to be
Maintained by PFPC]
Subject to Section 7, PFPC will keep and maintain the following books
and records of each Portfolio pursuant to Rule 31a-1 under the Investment
Company Act of 1940 (the "Rule"):
a. Journals containing an itemized daily record in detail of all
purchases and sales of securities, all receipts and disbursements of cash, and
all other debits and credits, as required by subsection (b) (1) of the Rule;
b. General and auxiliary ledgers reflecting all asset, liability,
reserve, capital, income and expense accounts, including interest accrued and
interest received, as required by subsection (b) (2) (i) of the Rule;
c. Separate ledger accounts required by subsection (b) (2) (ii) and
(iii) of the Rule; and
d. A monthly trial balance of all ledger accounts (except shareholder
accounts) as required by subsection (b) (8) of the Rule.
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