For period ended 07/31/02 Series 1, 2, 10
Sub-Item 77Q1(e): Exhibits
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The following is an interim investment sub-advisory agreement between USAA
INVESTMENT MANAGEMENT COMPANY and XXXXXXX CAPITAL MANAGEMENT, LLC, approved by
the Board of Directors of USAA Mutual Fund, Inc. at its special meeting on June
26, 2002.
INTERIM INVESTMENT SUBADVISORY AGREEMENT
AGREEMENT made as of the 28th day of June, 2002 (the Effective Date),
between USAA INVESTMENT MANAGEMENT COMPANY, a corporation organized under the
laws of the State of Delaware and having its principal place of business in San
Antonio, Texas (IMCO) and XXXXXXX CAPITAL MANAGEMENT, LLC, a limited liability
company organized under the laws of the State of Delaware and having its
principal place of business in Denver, Colorado (Marsico).
WHEREAS, IMCO serves as the investment adviser to USAA Mutual Fund,
Inc., a corporation organized under the laws of the state of Maryland (the
Company) and registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the 1940 Act); and
WHEREAS, under its Investment Advisory Agreement with the Company
(Investment Advisory Agreement), IMCO is authorized to appoint subadvisers for
series of the Company (each a Fund, or collectively Funds); and
WHEREAS, IMCO wishes to retain Marsico to render investment advisory
services to such series (or portions thereof) of the Company as now or hereafter
may be identified in Schedule A to this Agreement, as such Schedule A may be
amended from time to time (each such series or portion thereof referred to
herein as a Fund Account and collectively as Fund Accounts); and
WHEREAS, Marsico is willing to provide such services to the Fund
Accounts and IMCO upon the terms and conditions and for the compensation set
forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, and intending to be legally bound hereby, it is agreed between
the parties hereto as follows:
1. APPOINTMENT OF MARSICO. IMCO hereby appoints Marsico to act as an
investment adviser for each Fund Account in accordance with the terms and
conditions of this Agreement. Marsico will be an independent contractor and will
have no authority to act for or represent the Company or IMCO in any way or
otherwise be deemed an agent of the Company or IMCO except as expressly
authorized in this Agreement or another writing by the Company, IMCO and
Marsico. Marsico accepts such appointment and agrees to render the services
herein set forth for the compensation herein provided.
2. DUTIES OF MARSICO.
(A) AUTHORITY TO INVEST. Subject to the control and supervision of IMCO
and the Company's Board of Directors (the Board), Marsico, at its own expense,
shall have full discretion to manage, supervise and direct the investment and
reinvestment of Fund Accounts allocated to it by IMCO from time to time. It is
understood that a Fund Account may consist of all, a portion of, or none of the
assets of the Fund, and that IMCO has the right to allocate and reallocate such
assets to a Fund Account at any time. Marsico shall perform its duties described
herein in a manner consistent with the investment objectives, policies, and
restrictions set forth in
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the then-current prospectus and statement of additional information (SAI) for
each Fund. Should Marsico anticipate materially modifying its investment
process, it must provide written notice in advance to IMCO, and any affected
Prospectus and SAI should be amended accordingly.
With respect to the management of each Fund Account pursuant to this
Agreement, Marsico shall determine what investments shall be purchased, held,
sold or exchanged by each Fund Account and what portion, if any, of the assets
of each Fund Account shall be held in cash or cash equivalents, and purchase or
sell portfolio securities for each Fund Account; except that, to the extent
Marsico wishes to hold cash or cash equivalents in excess of 10% of a Fund
Account's assets, Marsico must request in writing and receive advance permission
from IMCO.
In accordance with Subsection (b) of this Section 2, Marsico shall
arrange for the execution of all orders for the purchase and sale of securities
and other investments for each Fund Account and will exercise full discretion
and act for the Company in the same manner and with the same force and effect as
the Company might or could do with respect to such purchases, sales, or other
transactions, as well as with respect to all other things necessary or
incidental to the furtherance or conduct of such purchases, sales, or other
transactions.
In the performance of its duties, Marsico will act in the best
interests of each Fund and will comply with (i) applicable laws and regulations,
including, but not limited to, the 1940 Act and the Investment Advisers Act of
1940, as amended (Advisers Act), and the rules under each, (ii) the terms of
this Agreement, (iii) the stated investment objective, policies and restrictions
of each Fund, as stated in the then-current Registration Statement of each Fund,
(iv) the Company's compliance procedures and other policies, procedures or
guidelines as the Board or IMCO reasonably may establish from time to time, (v)
the provisions of the Internal Revenue Code of 1986, as amended (Code),
applicable to "regulated investment companies" (as defined in Section 851 of the
Code), as from time to time in effect, and (vi) the written instructions of
IMCO. Marsico shall establish compliance procedures reasonably calculated to
ensure compliance with the foregoing. IMCO shall be responsible for providing
Marsico with the Company's Articles of Incorporation, as amended and
supplemented, the Company's By-Laws and amendments thereto and current copies of
the materials specified in Subsections (a)(iii) and (iv) of this Section 2. IMCO
shall provide Marsico with prior written notice of any material change to the
Company's Registration Statement that would affect Xxxxxxx'x management of a
Fund Account.
No statement in this Agreement or any other document constitutes a
representation by Marsico regarding the rate of growth or return of a Fund
Account. Neither Marsico nor any of its officers, directors, or employees make
any representations or warranties, express or implied, that any level of
performance or investment results will be achieved by any Fund Account, or that
any Fund Account will perform comparably with any standard or index, including
the performance achieved for other clients of Marsico.
(B) PORTFOLIO TRANSACTIONS. In connection with the management of the
investment and reinvestment of the Fund Accounts' assets, Marsico will select
the brokers or dealers that will execute purchase and sale transactions for the
Fund Accounts, subject to the conditions herein. In the selection of
broker-dealers and the placement of orders for the purchase and sale of
portfolio investments for the Fund Accounts, Marsico shall use its best efforts
to obtain for the Fund Accounts the most favorable price and execution
available, except to the extent it may be permitted
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to pay higher brokerage commissions for brokerage or research services as
described below. In using its best efforts to obtain the most favorable price
and execution available, Marsico, bearing in mind each Fund's best interests at
all times, shall consider all factors it deems relevant, including by way of
illustration, price, the size of the transaction, the nature of the market for
the security, the amount of the commission and dealer's spread or mark-up, the
timing of the transaction taking into account market prices and trends, the
reputation, experience and financial stability of the broker-dealer involved,
the general execution and operational facilities of the broker-dealer and the
quality of service rendered by the broker-dealer in other transactions.
Subject to such policies as the Board may determine and to the extent
authorized by Section 28(e) of the Securities Exchange Act of 1934 (Exchange
Act), Marsico shall not be deemed to have acted unlawfully or to have breached
any duty created by this Agreement or otherwise solely by reason of its having
caused a Fund Account to pay a broker-dealer that provides brokerage or research
services to Marsico an amount of commission for effecting a portfolio investment
transaction in excess of the amount of commission another broker-dealer offering
equally good execution capability in the portfolio investment would have charged
for effecting that transaction if Marsico determines in good faith that such
amount of commission was reasonable in relation to the value of the brokerage or
research services provided by such broker-dealer, viewed in terms of either that
particular transaction or Xxxxxxx'x overall responsibilities with respect to the
Fund and to other clients of Marsico as to which Marsico exercises investment
discretion. The Board or IMCO may direct Marsico to effect up to 25% of all
transactions in portfolio securities for a Fund Account through broker-dealers
in a manner that will help generate resources to pay the cost of certain
expenses that the Company is required to pay or for which the Company is
required to arrange payment. Marsico will treat such a direction as a decision
by the Board or IMCO to retain, to the extent of the direction, the discretion
that Marsico otherwise would exercise to select broker-dealers and negotiate
commissions for the Fund Account.
On occasions when Marsico deems the purchase or sale of a security to
be in the best interest of a Fund as well as other clients of Marsico, Marsico,
to the extent permitted by applicable laws and regulations, may aggregate the
securities to be purchased or sold to attempt to obtain a more favorable price
or lower brokerage commissions and efficient execution. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transaction, will be made by Marsico in the manner it considers
to be the most equitable and consistent with its fiduciary obligations to the
Fund and to its other clients over time.
Marsico may buy securities for a Fund Account at the same time it is
selling such securities for another client account and may sell securities for a
Fund Account at the time it is buying such securities for another client
account. In such cases, subject to applicable legal and regulatory requirements,
and in compliance with such procedures of the Company as may be in effect from
time to time, Marsico may effectuate cross transactions between a Fund Account
and such other account if it deems this to be advantageous.
Marsico will advise the Funds' custodian or such depository or agents
as may be designated by the custodian and IMCO promptly of each purchase and
sale of a portfolio security, specifying the name of the issuer, the description
and amount or number of shares of the security purchased, the market price, the
commission and gross or net price, the trade date and settlement date, the
identity of the effecting broker or dealer and any other pertinent data that the
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Funds' custodian may need to settle a security's purchase or sale. Marsico shall
not have possession or custody of any Fund's investments. The Company shall be
responsible for all custodial agreements and the payment of all custodial
charges and fees and, upon Marsico giving proper instructions to the custodian,
Marsico shall have no responsibility or liability for the acts, omissions or
other conduct of the custodian.
Notwithstanding the foregoing, Marsico agrees that IMCO shall have the
right by written notice to identify securities that may not be purchased on
behalf of any Fund and/or brokers and dealers through which portfolio
transaction on behalf of the Fund may not be effected, including, without
limitation, brokers or dealers affiliated with IMCO. Upon receipt of a list of
such securities or broker-dealers, Marsico shall refrain from purchasing such
securities for a Fund Account or directing any portfolio transaction to any such
broker or dealer on behalf of a Fund Account, unless and until the written
approval of IMCO to do so is obtained. In addition, Marsico agrees that it shall
not direct portfolio transactions for the Fund Accounts through any broker or
dealer that is an "affiliated person" (as that term is defined in the 1940 Act
or interpreted under applicable rules and regulations of the Commission) of
Marsico, except as permitted under the 1940 Act. IMCO agrees that it will
provide Marsico with a list of brokers and dealers that are affiliated persons
of the Funds, or affiliated persons of such persons, and shall timely update
that list as the need arises. The Funds agree that any entity or person
associated with IMCO or Marsico that is a member of a national securities
exchange is authorized to effect any transaction on such exchange for the
account of the Funds that is permitted by Section 11(a) of the Exchange Act, and
the Funds consent to the retention of compensation for such transactions.
IMCO and the Trust hereby approve Xxxxxxx'x placement of orders for the
purchase or sale of securities for a Fund Account with Banc of America
Securities LLC ("BAS") (a broker-dealer that is an affiliated person of Marsico
through their common ownership by Bank of America Corporation), or any other
affiliated broker-dealer, to the extent permitted by the 1940 Act and other law.
BAS or another affiliated broker-dealer will not deal as principal for its own
account in such transactions, but will act as agent for other persons including
the Fund Account. IMCO and the Trust are aware that the affiliation between
Marsico and an affiliated broker-dealer (such as BAS) could give Marsico or its
parent, Bank of America Corporation, an indirect interest in brokerage
commissions received by the affiliated broker-dealer, which could create a
potential conflict of interest when Marsico considers whether to use an
affiliated broker-dealer. Marsico generally will use an affiliated broker-dealer
for a Fund Account only when it believes that this is in the Fund Account's best
interests because the affiliated broker-dealer is expected to provide best
execution.
IMCO and the Trust hereby authorize Marsico and any affiliated
broker-dealer (including BAS) to effect agency cross transactions, in which the
affiliated broker-dealer acts as broker for parties on both sides of the
transaction, for any Fund Account, to the extent permitted by the 1940 Act and
other law. IMCO and the Trust acknowledge that Xxxxxxx'x affiliated
broker-dealer will generally receive compensation from the other party to such
transactions (the amount of which may vary), and that agency cross trades could
create potentially conflicting divisions of loyalties and responsibilities,
because the affiliated broker-dealer acts for and receives commissions from both
parties, while Marsico advise the Fund Account to enter into the trade.
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IMCO and the Trust may at any time revoke their consent to the execution of
future agency cross trades for a Fund account by giving written notice to
Marsico or the affiliated broker-dealer.
(C) EXPENSES. Marsico, at its expense, will furnish all necessary
facilities and personnel, including salaries, expenses and fees of any personnel
required for them to faithfully perform their duties under this Agreement and
administrative facilities, including bookkeeping, and all equipment and services
necessary for the efficient conduct of Xxxxxxx'x duties under this Agreement.
However, Marsico shall not be obligated to pay any expenses of IMCO, the Company
or the Funds, including without limitation, interest and taxes, brokerage
commissions and other costs in connection with the purchase or sale of
securities or other investment instruments for the Funds and custodian fees and
expenses.
(D) VALUATION. Securities traded on a national securities exchange or
the NASDAQ market for which market quotes are readily available are valued on
each day the New York Stock Exchange is open for business. For those securities
for which market quotes are not readily available, Marsico, at its expense and
in accordance with procedures and methods established by the Board, which may be
amended from time to time, will provide assistance to IMCO in determining the
fair value of such securities. Marsico also shall make reasonable efforts to
monitor for "significant events" that occur after the closing of a market but
before the Funds calculate their net asset values and that may affect the
valuation of any Fund Account's portfolio securities and shall notify IMCO
immediately of the occurrence of any such events.
(E) REPORTS AND AVAILABILITY OF PERSONNEL. Marsico, at its expense,
shall render to the Board and IMCO such periodic and special reports as the
Board and IMCO may reasonably request with respect to matters relating to the
duties of Marsico set forth herein. Marsico, at its expense, will make available
to the Board and IMCO at reasonable times its portfolio managers and other
appropriate personnel in order to review investment policies of the Funds and to
consult with the Board and IMCO regarding the investment affairs of the Funds,
including economic, statistical and investment matters relevant to Xxxxxxx'x
duties hereunder.
(F) COMPLIANCE MATTERS. Marsico, at its expense, will provide IMCO with
such compliance reports relating to its duties under this Agreement as may be
agreed upon by such parties from time to time. Marsico also shall cooperate with
and provide reasonable assistance to IMCO, the Company's administrator, the
Company's custodian and foreign custodians, the Company's transfer agent and
pricing agents and all other agents and representatives of the Company and IMCO,
keep all such persons fully informed as to such matters as they may reasonably
deem necessary to the performance of their obligations to the Company and IMCO,
provide prompt responses to reasonable requests made by such persons and
maintain any appropriate interfaces with each so as to promote the efficient
exchange of information.
(G) BOOKS AND RECORDS. Marsico will maintain for the Funds all books
and records required to be maintained by the Funds pursuant to the 1940 Act and
the rules and regulations promulgated thereunder insofar as such records relate
to the investment affairs of the Fund Accounts. Pursuant to Rule 31a-3 under the
1940 Act, Marsico agrees that: (i) all records it maintains for a Fund Account
are the property of the Fund; (ii) it will surrender promptly to a Fund or IMCO
any such records (or copies of such records) upon the Fund's or IMCO's request;
and (iii) it will preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records it maintains
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for any Fund Account. Notwithstanding subsection (ii) above, Marsico may
maintain copies of such records to comply with its recordkeeping obligations.
(H) PROXIES. Marsico will, unless and until otherwise directed by IMCO
or the Board, vote proxies with respect to a Fund Account's securities and
exercise rights in corporate actions or otherwise in accordance with Xxxxxxx'x
proxy voting guidelines, as amended from time to time, which shall be provided
to IMCO.
3. ADVISORY FEE. IMCO shall pay to Marsico as compensation for
Xxxxxxx'x services rendered pursuant to this Agreement a fee based on the
average daily net assets of each Fund Account at the annual rates set forth in
Schedule B, which schedule can be modified from time to time, subject to any
appropriate approvals required by the 1940 Act. Such fees shall be calculated
daily and payable monthly in arrears within 15 business days after the end of
such month. IMCO (and not the Funds) shall pay such fees. If Marsico shall serve
for less than the whole of a month, the compensation as specified shall be
prorated based upon the number of calendar days during which this Agreement is
in effect during such month, and the fee shall be computed based upon the
average daily net assets of a Fund Account for such days.
4. REPRESENTATIONS AND WARRANTIES.
(A) MARSICO. Marsico represents and warrants to IMCO that (i) the
retention of Marsico by IMCO as contemplated by this Agreement is authorized by
Xxxxxxx'x governing documents; (ii) the execution, delivery and performance of
this Agreement does not violate any obligation by which Marsico or its property
is bound, whether arising by contract, operation of law or otherwise; (iii) this
Agreement has been duly authorized by appropriate action of Marsico and when
executed and delivered by Marsico will be a legal, valid and binding obligation
of Marsico, enforceable against Marsico in accordance with its terms, subject,
as to enforcement, to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or law);
(iv) Marsico is registered as an investment adviser under the Advisers Act; (v)
Marsico has adopted a written code of ethics complying with the requirements of
Rule 17j-1 under the 1940 Act and that Marsico and certain of its employees,
officers, partners and directors are subject to reporting requirements
thereunder and, accordingly, agrees that it shall, on a timely basis, furnish a
copy of such code of ethics to IMCO, and shall cause its employees, officers,
partners and directors to furnish to IMCO information that IMCO reasonably
requests concerning such code of ethics; (vi) Marsico is not prohibited by the
1940 Act, the Advisers Act or other law, regulation or order from performing the
services contemplated by this Agreement; (vii) Marsico will promptly notify IMCO
of the occurrence of any event that would disqualify Marsico from serving as
investment manager of an investment company pursuant to Section 9(a) of the 1940
Act or otherwise; (viii) Marsico has provided IMCO with a copy of its Form ADV,
which as of the date of this Agreement is its Form ADV as most recently filed
with the SEC, and promptly will furnish a copy of all amendments to IMCO at
least annually; (ix) Marsico will notify IMCO of any "assignment" (as defined in
the 1940 Act) of this Agreement or change of control of Marsico, as applicable,
and any changes in the key personnel who are either the portfolio manager(s) of
any Fund Account or senior management of Marsico, in each case prior to or
promptly after, such change; and (x) Marsico has adequate disaster recovery and
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interruption prevention measures to ensure business resumption in accordance
with applicable law and within industry standards.
(B) IMCO. IMCO represents and warrants to Xxxxxxx that (i) the
retention of Xxxxxxx by IMCO as contemplated by this Agreement is authorized by
the respective governing documents of the Company and IMCO; (ii) the execution,
delivery and performance of each of this Agreement and the Investment Advisory
Agreement does not violate any obligation by which the Company or IMCO or their
respective property is bound, whether arising by contract, operation of law or
otherwise; (iii) each of this Agreement and the Investment Advisory Agreement
has been duly authorized by appropriate action of the Company and IMCO and when
executed and delivered by IMCO will be a legal, valid and binding obligation of
the Company and IMCO, enforceable against the Company and IMCO in accordance
with its terms, subject, as to enforcement, to applicable bankruptcy, insolvency
and similar laws affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or law); (iv) IMCO is registered as an investment adviser under the
Advisers Act; (v) IMCO has adopted a written code of ethics complying with the
requirements of Rule 17j-1 under the 1940 Act and that IMCO and certain of its
employees, officers and directors are subject to reporting requirements
thereunder; (vi) IMCO is not prohibited by the 1940 Act, the Advisers Act or
other law, regulation or order from performing the services contemplated by this
Agreement; and (vii) IMCO will promptly notify Xxxxxxx of the occurrence of any
event that would disqualify IMCO from serving as investment manager of an
investment company pursuant to Section 9(a) of the 1940 Act or otherwise.
5. LIABILITY AND INDEMNIFICATION.
(A) XXXXXXX. Xxxxxxx shall be liable for any and all losses, claims,
damages, liabilities or litigation (including reasonable legal and other
expenses) to which the Company, a Fund, IMCO, any affiliated persons thereof
(within the meaning of the 1940 Act) and any controlling persons thereof (as
described in Section 15 of the Securities Act of 1933, as amended (the 1933
Act)) (collectively, IMCO Indemnitees) may become subject under the 1933 Act,
the 1940 Act, the Advisers Act, or under any other statute, at common law or
otherwise arising out of (i) any negligence, willful misconduct, bad faith or
reckless disregard of Xxxxxxx in the performance of any of its duties or
obligations hereunder or (ii) any untrue statement of a material fact contained
in the Prospectus and SAI, proxy materials, reports, advertisements, sales
literature, or other materials pertaining to the Funds or the omission to state
therein a material fact known to Xxxxxxx which was required to be stated therein
or necessary to make the statements therein not misleading, if such statement or
omission was made primarily in reliance upon information furnished to IMCO or
the Company by Xxxxxxx Indemnitees (as defined below) for use therein. Xxxxxxx
shall indemnify and hold harmless the IMCO Indemnitees for any and all such
losses, claims, damages, liabilities or litigation (including reasonable legal
and other expenses).
(B) IMCO. IMCO shall be liable for any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses) to
which Xxxxxxx, any affiliated persons thereof (within the meaning of the 1940
Act) and any controlling persons thereof (as described in Section 15 of the 1933
Act) (collectively, Xxxxxxx Indemnitees) may become subject under the 1933 Act,
the 1940 Act, the Advisers Act, or under any other statute, at
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common law or otherwise arising out of (i) any negligence, willful misconduct,
bad faith or reckless disregard by IMCO in the performance of any of its duties
or obligations hereunder or (ii) any untrue statement of a material fact
contained in the Prospectus and SAI, proxy materials, reports, advertisements,
sales literature, or other materials pertaining to the Funds or the omission to
state therein a material fact known to IMCO which was required to be stated
therein or necessary to make the statements therein not misleading, unless such
statement or omission was made primarily in reliance upon information furnished
to IMCO or the Company. IMCO shall indemnify and hold harmless Xxxxxxx
Indemnitees for any and all such losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses).
6. DURATION AND TERMINATION OF THIS AGREEMENT. Unless sooner terminated
as provided herein, this Agreement shall continue in effect until the sooner of
(a) 150 days from the date this Agreement is entered into or (b) the date upon
which Fund shareholders and the Board, including a majority of the Board members
who are not "interested persons" of the Funds, IMCO or Xxxxxxx (Independent
Board Members), approve the retention of Xxxxxxx in accordance with Section
15(a) of the 1940 Act and IMCO executes a Subadvisory Agreement with Xxxxxxx;
provided, however, that this Agreement may continue for a period in excess of
150 days upon the written agreement of the parties and consistent with SEC or
SEC staff action or interpretation of applicable law. This Agreement may be
terminated at any time, without payment of any penalty, by vote of the Board, by
vote of a majority of the outstanding shares (as defined in the 1940 Act), or by
IMCO. In addition, this Agreement may be terminated by Xxxxxxx on sixty days'
written notice to the other party. Any notice of termination served on Xxxxxxx
by the Company or IMCO shall be without prejudice to the obligation of Xxxxxxx
to complete transactions already initiated or acted upon with respect to the
Fund. This Agreement shall terminate automatically in the event of its
assignment (as defined in the 1940 Act).
7. AMENDMENT OF AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, waiver,
discharge or termination is sought. No material amendment of this Agreement
shall be effective until approved in the manner required by the 1940 Act, any
rules thereunder or any exemptive or other relief granted by the SEC or its
staff (Applicable Law).
8. APPROVAL, AMENDMENT, OR TERMINATION BY INDIVIDUAL FUND. Any approval,
amendment, or termination of this Agreement by the holders of a majority of the
outstanding voting securities (as defined in the 1940 Act) of any Fund shall be
effective to continue, amend or terminate this Agreement with respect to any
such Fund notwithstanding (i) that such action has not been approved by the
holders of a majority of the outstanding voting securities of any other Fund
affected thereby, and/or (ii) that such action has not been approved by the vote
of a majority of the outstanding voting securities of the Company, unless such
action shall be required by any applicable law or otherwise.
9. SERVICES NOT EXCLUSIVE. The services of Xxxxxxx to IMCO in connection
with the Funds hereunder are not to be deemed exclusive, and Xxxxxxx shall be
free to render investment advisory services to others so long as its services
hereunder are not impaired thereby. It is understood that the persons employed
by Xxxxxxx to assist in the performance of its duties hereunder will not devote
their full time to such services and nothing contained herein shall be
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deemed to limit or restrict in any manner whatsoever the right of Xxxxxxx to
engage in or devote time and attention to other businesses or to render services
of whatever kind or nature. It is understood that IMCO may appoint at any time
in accordance with Applicable Law one or more subadvisers, in addition to
Xxxxxxx, or IMCO itself, to perform investment advisory services to any portion
of the Funds.
10. ADDITIONAL AGREEMENTS.
(A) ACCESS TO INFORMATION. Xxxxxxx shall, upon reasonable notice,
afford IMCO at all reasonable times access to Xxxxxxx'x officers, employees,
agents and offices and to all its relevant books and records and shall furnish
IMCO with all relevant financial and other data and information as requested;
provided, however, that nothing contained herein shall obligate Xxxxxxx to
provide IMCO with access to the books and records of Xxxxxxx relating to any
other accounts other than the Funds.
(B) CONFIDENTIALITY. Xxxxxxx, and its officers, employees and
authorized representatives, shall treat confidentially and as proprietary
information of the Company all records and information relative to the Company
and prior, present or potential shareholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Company, which approval shall not be unreasonably withheld and may not be
withheld where Xxxxxxx may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Company.
(C) PRIVACY POLICY. Xxxxxxx acknowledges that nonpublic customer
information (as defined in Regulation S-P, including any amendments thereto) of
customers of the Funds received from IMCO is subject to the limitations on
redisclosure and reuse set forth in Section 248.11 of such Regulation, and
agrees such information (i) shall not be disclosed to any third party for any
purpose without the written consent of IMCO unless permitted by exceptions set
forth in Sections 248.14 or 248.15 of such Regulation and (ii) shall be
safeguarded pursuant to procedures adopted under Section 248.30 of such
Regulation if so required. Xxxxxxx may disclose nonpublic customer information
to broker-dealers, custodians, and other third parties to the extent necessary
or appropriate to perform its duties under this Agreement.
(D) PUBLIC ANNOUNCEMENTS. No party shall issue any press release or
otherwise make any public statements with respect to the matters covered by this
Agreement without the prior written consent of the other parties hereto, which
consent shall not be unreasonably withheld; provided, however, that consent
shall not be required if, in the opinion of counsel, such disclosure is required
by law (as in the case of registration statements and other documents that are
required to be publicly filed); provided further, however, that the party making
such disclosure shall provide the other parties hereto with as much prior
written notice of such disclosure as is practical under the circumstances.
Xxxxxxx also may disclose non-confidential information about its service as
sub-adviser to the Trust to other clients or potential clients after the
information has been disclosed in publicly filed documents.
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(E) NOTIFICATIONS. Xxxxxxx agrees that it will promptly notify IMCO in
the event that Xxxxxxx or any of its affiliates is or expects to become the
subject of an administrative proceeding or enforcement action by the Commission
or other regulatory body with applicable jurisdiction.
(F) INSURANCE. Xxxxxxx agrees to maintain errors and omissions or
professional liability insurance coverage in an amount that is reasonable in
light of the nature and scope of Xxxxxxx'x business activities.
(G) SHAREHOLDER MEETING EXPENSES. In the event that the Company shall
be required to call a meeting of shareholders solely due to actions initiated
solely by Xxxxxxx, including, without limitation, a change of control of
Xxxxxxx, Xxxxxxx shall bear all reasonable expenses associated with such
shareholder meeting.
11. MISCELLANEOUS.
(A) NOTICES. All notices or other communications given under this
Agreement shall be made by guaranteed overnight delivery, telecopy or certified
mail; notice is effective when received. Notice shall be given to the parties at
the following addresses:
IMCO: USAA Investment Management Company
0000 Xxxxxxxxxxxxxx Xxxx, X-X0-X
Xxx Xxxxxxx, Xxxxx 00000
Facsimile No.: (000) 000-0000
Attention: Securities Counsel & Compliance Dept.
Marsico: 0000 Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Legal/Compliance Dept. and Client Services Dept.
(B) SEVERABILITY. 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.
(C) GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of Texas, without giving effect to the conflicts of laws
principles thereof, and in accordance with the 1940 Act. To the extent that the
applicable laws of the State of Texas conflict with the applicable provisions of
the 1940 Act, the latter shall control.
(D) COUNTERPARTS. This Agreement may be executed simultaneously 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.
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(E) HEADINGS. 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.
(F) ENTIRE AGREEMENT. This Agreement states the entire agreement of the
parties hereto, and is intended to be the complete and exclusive statement of
the terms hereof. It may not be added to or changed orally, and may not be
modified or rescinded except by a writing signed by the parties hereto and in
accordance with the 1940 Act.
IN WITNESS WHEREOF, IMCO and Xxxxxxx have caused this Agreement to be
executed as of the date first set forth above.
Attest: USAA INVESTMENT MANAGEMENT COMPANY
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxxxxxx X. Xxxxx
------------------------- ----------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxxxxxxxx X. Xxxxx
Title: Assistant Secretary Title: President
Attest: XXXXXXX CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------- ----------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxxxxxx X. Xxxxxxx
Title: Vice President and Title: President and Chief Operating Officer
General Counsel
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SCHEDULE A
USAA AGGRESSIVE GROWTH FUND
USAA FIRST START GROWTH FUND
USAA GROWTH FUND
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SCHEDULE B
FEES
RATE PER ANNUM OF THE AVERAGE DAILY NET
ASSETS OF THE FUND ACCOUNT
FUND ACCOUNT
USAA Aggressive Growth Fund 0.20%
USAA First Start Growth Fund 0.20%
USAA Growth Fund 0.20%
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