EXHIBIT 1.(8)(e)(ii)
AMENDED EXPENSE ALLOCATION AGREEMENT
This Agreement is made as of the 16th day of December, 1994, and amended
as of the 16th day of March, 1998, by and between USAA Life Insurance Company,
a Texas corporation ("USAA Life"), Xxxx Xxxxx & Company, Incorporated, a
Delaware corporation ("Distributor"), and Xxxx Xxxxx Management, Inc., a New
York corporation ("Adviser") (collectively, the "Parties").
W I T N E S S E T H:
WHEREAS, the Distributor and Adviser serve as the principal underwriter
and investment adviser, as amended, respectively, of The Xxxxx American Fund,
a Massachusetts business trust ("Trust"), which currently consists of six
separate series (each, a "Portfolio"); and
WHEREAS, USAA Life has entered into an agreement, dated December 16th,
1994, with the Trust, Distributor, and Adviser, as amended ("Participation
Agreement"), pursuant to which the Trust and Distributor will make shares of
each Portfolio listed from time to time on Schedule A thereto available to
USAA Life at net asset value and with no sales charges, subject to the terms
of the Participation Agreement; and
WHEREAS, the Participation Agreement provides that the Trust will bear
the costs of preparing, filing with the Securities and Exchange Commission and
setting for printing the Trust's prospectus, statement of additional
information and any amendments or supplements thereto, periodic reports to
shareholders, Trust proxy material and other shareholder communications
(collectively, the "Trust Materials"), and that the Trust will provide USAA
Life with camera ready copies of all Trust Materials required by law to be
sent to owners of Contracts ("Contract owners") or Policies ("Policy owners")
who have allocated any Contract or Policy value to a Portfolio; and
WHEREAS, the Participation Agreement provides that USAA Life shall print
in quantity and deliver to existing Contract or Policy owners the Trust
Materials, and that the costs of printing in quantity and delivering to
existing Contract owners such Trust Materials will be allocated between USAA
Life or its affiliates and the Trust or its affiliates as they shall determine
by separate agreement; and
WHEREAS, the Participation Agreement provides that the expenses of
distributing a Portfolio's shares and the Contracts and the Polices will be
allocated between USAA Life, or its affiliates and the Trust, or its
affiliates, as they shall determine by separate agreement; and
WHEREAS, USAA Life will incur various administrative expenses in
connection with the servicing of Contract or Policy owners who have allocated
Contract or Policy value to a Portfolio, including, but not limited to,
responding to various Contract or Policy owner inquiries regarding a
Portfolio; and
WHEREAS, the Parties hereto wish to allocate the expenses in a manner
that is fair and equitable, and consistent with the best interests of Contract
and Policy owners; and
WHEREAS, the Parties hereto wish to establish a means for allocating the
expenses that does not entail the expense and inconvenience of separately
identifying and accounting for each item of Trust expense;
NOW THEREFORE in consideration of the mutual benefits and promises
contained herein, the Parties hereto agree as follows:
1. EXPENSE ALLOCATIONS.
1.1. TRUST MATERIALS.
(a) Subject to Section 2 hereof, USAA Life or its affiliates shall
initially bear the costs of printing in quantity and distributing all Trust
Materials required by law to be distributed to existing Contract or Policy
owners who have allocated Contract or Policy value to a Portfolio.
(b) Subject to Section 2 hereof, USAA Life or its affiliates shall
initially bear the costs of printing in quantity and mailing all Trust
Materials to prospective Contract or Policy owners.
1.2. SALES MATERIALS.
(a) The Distributor and Adviser, as they may allocate between
themselves, shall bear the costs of preparing all sales literature or other
promotional material relating to each Portfolio (collectively, "Trust Sales
Materials").
(b) Subject to Section 2 hereof, USAA Life or its affiliates shall
initially bear the costs of printing in quantity all Trust Sales Materials,
and preparing and printing in quantity all sales literature or other
promotional material relating to the Contracts or Policies (collectively,
"USAA Sales Materials").
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(c) Subject to Section 2 hereof, USAA Life or its affiliates shall
initially bear the costs of mailing all Trust and USAA Sales Materials to
prospective Contract or Policy owners.
1.3. CONTRACT OWNER SERVICING.
Subject to Section 2 hereof, USAA Life or its affiliates shall initially
bear all costs of servicing Contract or Policy owners who have allocated
Contract or Policy value to a Portfolio, which servicing shall include, but is
not limited to, responding to various Contract owner inquiries regarding a
Portfolio.
2. PAYMENT OF EXPENSES.
(a) The Distributor and Adviser, as they may allocate between
themselves, shall pay to USAA Life a quarterly fee equal to a percentage of
the average daily net assets of the Portfolio attributable to Contracts and
Policies, at the annual rate of .10% (hereinafter, "Quarterly Fee"), in
connection with the expenses incurred by USAA Life under Section 1.1, Section
1.2 and Section 1.3 hereof. The payment of the Quarterly Fee shall commence at
the end of the first calendar quarter in which Contract or Policy value has
been allocated to a Portfolio.
(b) From time to time, the Parties hereto shall review the Quarterly
Fee to determine whether it reasonably approximates the incurred and
anticipated costs, over time, of USAA Life in connection with its duties
hereunder. The Parties agree to negotiate in good faith any change to the
Quarterly Fee proposed by a Party in good faith.
3. TERM OF AGREEMENT.
This Agreement shall continue in effect for so long as the Adviser or
its successor(s) in interest, or any affiliate thereof, continues to perform
in a similar capacity for the Trust, and for so long as any Contract or Policy
value or any monies attributable to USAA Life is allocated to a Portfolio.
4. NOTICES.
Notices and communications required or permitted hereby will be given to
the following persons at the following addresses and facsimile numbers, or
such other persons, addresses or facsimile numbers as the Party receiving such
notices or communications may subsequently direct in writing:
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USAA Life Insurance Company
0000 Xxxxxxxxxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx, Esq.
FAX: 000-000-0000
Xxxx Xxxxx Management, Inc.
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
FAX: 000-000-0000
Xxxx Xxxxx & Company, Incorporated
00 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxx
FAX: 000-000-0000
5. APPLICABLE LAW.
Except insofar as the 1940 Act or other federal laws and regulations may
be controlling, this Agreement will be construed and the provisions hereof
interpreted under and in accordance with Texas law, without regard for that
state's principles of conflict of laws.
6. EXECUTION IN COUNTERPARTS.
This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together will constitute one and the same
instrument.
7. SEVERABILITY.
If any provision of this Agreement is held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Agreement will not
be affected thereby.
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8. RIGHTS CUMULATIVE.
The rights, remedies and obligations contained in this Agreement are
cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, that the Parties are entitled to under
federal and state laws.
9. HEADINGS.
The headings used in this Agreement are for purposes of reference only
and shall not limit or define the meaning of the provisions of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers signing below.
USAA LIFE INSURANCE COMPANY
By /s/ XXXXX X. XXXXXX
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Title President
XXXX XXXXX MANAGEMENT, INC.
By /s/ XXXXXXX X. XXXX
-------------------
Title Executive Vice President
XXXX XXXXX & COMPANY, INCORPORATED
By /s/ XXXXXXX X. XXXX
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Title Executive Vice President
