EXHIBIT 4(b)
ADMINISTRATION AND SERVICING AGREEMENT
AGREEMENT made as of the 1st day of August, 2001, between USAA
INVESTMENT MANAGEMENT COMPANY, a corporation organized under the laws of the
state of Delaware and having a place of business in San Antonio, Texas (IMCO),
and USAA INVESTMENT TRUST, a business trust organized under the laws of the
state of Massachusetts and having a place of business in San Antonio, Texas
(the Trust).
WHEREAS, the Trust is engaged in business as an open-end management
investment company and is so registered under the Investment Company Act of
1940, as amended (the 1940 Act); and
WHEREAS, the Trust is authorized to issue shares of capital stock (the
Shares) in separate classes with each such class representing interests in a
separate portfolio of securities and other assets; and
WHEREAS, the Trust offers Shares in each of the classes identified in
Exhibit A hereto (the Existing Funds) (such classes, together with all other
classes subsequently established by the Trust with respect to which the Trust
desires to retain IMCO to provide administrative and shareholder services
hereunder and with respect to which IMCO is willing so to do, being herein
collectively referred to as the Funds); and
WHEREAS, the Trust desires to retain IMCO to render certain
administrative and shareholder services to the Trust with respect to the Funds;
and
WHEREAS, IMCO is willing to perform such services:
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. APPOINTMENT OF IMCO.
(a) EXISTING FUNDS. The Trust hereby appoints IMCO to act as
administrator and shareholder servicing agent for the Existing Funds for the
period and on the terms herein set forth. IMCO accepts such appointment and
agrees to render the services herein set forth, for the compensation herein
provided.
(b) ADDITIONAL FUNDS. In the event that the Trust desires to retain IMCO
to render administrative and shareholder services hereunder with respect to any
Fund other than an Existing Fund, it shall so notify IMCO in writing. If IMCO
is willing to render such services it shall notify the Trust in writing,
whereupon the Trust shall appoint IMCO to act as administrator and shareholder
servicing agent for such Fund for the period and on the terms herein set forth,
IMCO shall accept such appointment and agree to render the services herein set
forth for the compensation herein provided.
2. DUTIES OF IMCO.
IMCO shall administer the affairs of the Trust and provide
shareholder-related services with respect to the Funds; provided, that IMCO
shall not have any obligation to provide under this Agreement any services
related to the distribution of Fund shares or any other services which are the
subject of a separate agreement or arrangement between the Trust and IMCO with
respect to the Funds. Subject to the foregoing, IMCO shall provide the
following services and facilities to the Trust:
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(a) OFFICE SPACE, EQUIPMENT AND FACILITIES. Furnish without cost to the
Trust, or pay the cost of, such office space, office equipment and office
facilities as are adequate for the Trust's needs with respect to the Funds.
(b) PERSONNEL. Provide, without remuneration from or other cost to the
Trust, the services of individuals competent to perform all of the Trust's
executive, administrative and clerical functions which are not performed by
employees or other agents engaged by the Trust or by IMCO acting in some other
capacity pursuant to a separate agreement or arrangement with the Trust with
respect to the Funds.
(c) AGENTS. Assist the Trust in selecting and coordinating the
activities of the other agents engaged by the Trust with respect to the Funds,
including the Trust's transfer agent, custodian, independent auditors and legal
counsel.
(d) TRUSTEES AND OFFICERS. Authorize and permit IMCO's directors,
officers and employees who may be elected or appointed as trustees or officers
of the Trust to serve in such capacities, without remuneration from or other
cost to the Trust.
(e) BOOKS AND RECORDS. Assure that all financial, accounting and other
records required to be maintained and preserved by the Trust with respect to
the Funds are maintained and preserved by it or on its behalf in accordance
with applicable laws and regulations.
(f) REGULATORY REPORTS AND FILINGS. Assist in the preparation of (but
not pay for) all periodic reports by the Trust with respect to the Funds and
all reports and filings required to maintain the registration and qualification
of the Trust and the Shares, or to meet other regulatory or tax requirements
applicable to the Funds under federal and state securities and tax laws.
(g) BOARD REPORTS. Prepare and coordinate materials relating to the
Funds to be presented to the Trust's Board of Trustees in preparation for its
meetings.
(h) FIDELITY BOND. Provide and maintain a bond issued by a reputable
insurance company authorized to do business in the place where the bond is
issued, against larceny and embezzlement covering each officer and employee of
the Trust who may singly or jointly with others have access to funds or
securities of the Trust, with direct or indirect authority to draw upon such
funds or to direct generally the disposition of such funds. The bond shall be
in such reasonable amount as a majority of the Board of Trustees of the Trust
who are not officers or employees of the Trust shall determine, with due
consideration to the aggregate assets of the Trust to which any such officer or
employee may have access.
(i) PURCHASES/REDEMPTIONS. Process and coordinate requests by
shareholders of the Funds for the purchase and redemption of Shares of the
Funds.
(j) WIRE TRANSFERS. Coordinate and implement wire transfers in
connection with the purchase and redemption of Fund Shares.
(k) EXCHANGE OFFERS. Execute orders under any offer of exchange offered
by the Trust involving concurrent purchases and redemptions of Shares of one or
more Funds or Shares of other mutual funds within the USAA family of funds.
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(l) SHAREHOLDER INQUIRIES. Respond to shareholder inquiries requesting
information regarding matters such as shareholder account or transaction
status, net asset value of Fund shares, Fund performance, Fund services, plans
and options, Fund investment policies, Fund portfolio holdings and Fund
distributions and taxation thereof.
(m) SHAREHOLDER COMMUNICATIONS. Provide services in connection with
processing shareholder proxy statements, annual and semiannual reports,
prospectuses and other Fund and/or Trust communications with shareholders.
(n) ACCOUNT INFORMATION. Furnish (either separately or on an integrated
basis with other reports) monthly, quarterly and/or annual statements and
confirmations of all account activity with respect to each Fund to Fund
shareholders.
(o) SHAREHOLDER COMPLAINTS. Respond to shareholder complaints and other
correspondence directed to or brought to the attention of IMCO.
(p) DELEGATION. Delegate, at its expense, some or all of its duties
hereunder to other persons or entities approved by IMCO upon notice to the
Trust.
(q) OTHER SERVICES. Provide such other services as the parties may from
time to time agree in writing.
3. ALLOCATION OF EXPENSES.
Except for the services and facilities to be provided by IMCO set forth
in paragraph 2 above and the services provided by IMCO set forth in any other
Agreement between the Trust and IMCO, the Trust assumes and shall pay all
expenses for all other Fund operations and activities and shall reimburse IMCO
for any such expenses incurred by IMCO. The expenses to be borne by the Trust
shall include, without limitation:
(a) the charges and expenses of any registrar, share transfer or
dividend disbursing agent, custodian, or depository appointed by the Trust for
the safekeeping of a Fund's cash, portfolio securities and other property;
(b) the charges and expenses of auditors;
(c) brokerage commissions, if any, for transactions in the portfolio
securities of the Funds;
(d) all taxes, including issuance and transfer taxes, and fees payable
by a Fund to federal, state or other governmental agencies;
(e) the cost of share certificates representing Shares of a Fund;
(f) fees involved in registering and maintaining registrations of the
Trust and of its Shares with the Securities and Exchange Commission and various
states and other jurisdictions;
(g) all expenses of shareholders' and Directors' meetings and of
preparing, printing and mailing proxy statements, quarterly reports, semiannual
reports, annual reports and other communications (including prospectuses) to
existing shareholders;
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(h) computation of each Fund's net asset value per Share, including the
use of equipment or services to price or value the Fund's investment portfolio;
(i) compensation and travel expenses of Directors who are not
"interested persons" of the Trust within the meaning of the 1940 Act;
(j) the expense of furnishing or causing to be furnished to each
shareholder of a Fund a statement of the shareholder's account, including the
expense of mailing;
(k) charges and expenses of legal counsel in connection with matters
relating to the Funds, including, without limitation, legal services rendered
in connection with the Funds' legal and financial structure and relations with
its shareholders, issuance of Fund Shares, and registration and qualification
of securities under federal, state and other laws;
(l) membership or association dues for the Investment Company Institute
or similar organizations;
(m) interest payable on Fund borrowings; and
(n) postage.
4. ADMINISTRATION AND SHAREHOLDER SERVICING FEE.
(a) For the services and facilities to be provided by IMCO as provided
in paragraph 2 hereof, the Trust shall pay to IMCO a monthly fee with respect
to each Fund computed as set forth in Exhibit A hereto.
(b) IMCO may from time to time and for such periods as it deems
appropriate voluntarily waive fees or otherwise reduce its compensation
hereunder.
5. LIABILITY AND INDEMNIFICATION.
IMCO shall exercise reasonable care in performing its services under
this Agreement and shall not be liable to the Trust for any action or inaction,
except for any action or inaction constituting willful misfeasance, bad faith
or negligence in the performance of its duties hereunder or the reckless
disregard of such duties.
The Trust shall indemnify and hold IMCO and its officers, directors and
employees harmless from and against any and all loss, cost, damage and expense
(a Loss), including reasonable expenses for counsel, incurred by it resulting
from any claim, demand, action or suit relating to the performance of its
duties under this Agreement, or any action or omission by it in the performance
of its duties hereunder; PROVIDED, HOWEVER, that this indemnification shall not
apply to any Loss resulting from any action or inaction of IMCO constituting
willful misconduct, bad faith or negligence in the performance of its duties or
the reckless disregard of its duties under this Agreement. Prior to confessing
any claim against it which may be the subject of this indemnification, IMCO
shall give the Trust reasonable opportunity to defend against said claim in its
own name or in the name of IMCO.
6. DURATION AND TERMINATION OF THIS AGREEMENT.
(a) DURATION. This Agreement shall become effective as of the date first
set forth above and unless terminated shall continue in force from year to year
thereafter, but only so long as such continuance is
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specifically approved annually (a) by the Trust's Board of Trustees or by a
vote of a majority of the Fund's outstanding voting securities (as that term is
defined in the 0000 Xxx) and (b) by a majority of the Trustees who are not
parties to this Agreement or "interested persons" of any such party (as defined
in the 1940 Act.)
(b) TERMINATION. This Agreement may be terminated at any time, without
payment of any penalty, by vote of the Board of Trustees of the Trust or by
vote of a majority of the outstanding shares (as defined in the 1940 Act), or
by IMCO on sixty (60) days' written notice to the other party. This Agreement
shall automatically terminate upon its assignment by IMCO; provided, however,
that IMCO may delegate its duties as provided in subparagraph (o) of paragraph
2 hereof.
7. PRIOR AGREEMENT SUPERSEDED.
This Agreement supersedes any prior agreement relating to the subject
matter hereof between the parties.
8. SERVICES NOT EXCLUSIVE.
The services of IMCO to the Trust hereunder are not to be deemed
exclusive, and IMCO shall be free to render similar services to others so long
as its services hereunder are not impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first set forth above.
USAA INVESTMENT TRUST USAA INVESTMENT MANAGEMENT
COMPANY
By: /s/ Xxxxxxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxxx
--------------------------- ---------------------------
Name: Xxxxxxxxxxx X. Xxxxx Name: Xxxxx X. Xxxxxxx
Title: President Title: Senior Vice President
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EXHIBIT A
LISTING OF FUNDS AND FEES
NAME OF FUND FEE RATE
Balanced Strategy Fund 0.15%
Income Strategy Fund 0.15%
Growth Strategy Fund 0.15%
Cornerstone Strategy Fund 0.15%
Growth and Tax Strategy Fund 0.15%
Emerging Markets Fund 0.15%
Gold (Precious Metals and Minerals
Fund effective October 1, 2001) 0.15%
International Fund 0.15%
World Growth Fund 0.15%
GNMA Trust 0.15%
Treasury Money Market Trust 0.10%
(a) The Trust shall pay IMCO a fee for each Fund, payable monthly in
arrears, computed as a percentage of the average net assets of the Fund for
such month at the rate set forth in this Exhibit.
(b) The "average net assets" of the Fund for any month shall be equal
to the quotient produced by dividing (i) the sum of the net assets of such
Fund, determined in accordance with procedures established from time to time by
or under the direction of the Board of Trustees of the Trust, for each calendar
day of such month, by (ii) the number of such days.
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