For period ended 07/31/2002 Series 6
Sub-Item 77Q1(e): Exhibits
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The following is an interim investment sub-advisory agreement between USAA
INVESTMENT MANAGEMENT COMPANY and THE BOSTON COMPANY ASSET 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 THE BOSTON COMPANY ASSET MANAGEMENT, LLC, a limited
liability company organized under the laws of the Commonwealth of Massachusetts
and having its principal place of business in Boston, Massachusetts (Boston
Company).
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 Boston Company 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, Boston Company 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 BOSTON COMPANY. IMCO hereby appoints Boston Company to
act as an investment adviser for each Fund Account in accordance with the terms
and conditions of this Agreement. Boston Company 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 Boston Company. Boston Company accepts such appointment and agrees to render
the services herein set forth for the compensation herein provided.
2. DUTIES OF BOSTON COMPANY.
(A) AUTHORITY TO INVEST. Subject to the control and supervision of IMCO
and the Company's Board of Directors (the Board), Boston Company, 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. Boston Company shall
perform its duties described herein in a manner consistent with the investment
objective, policies and restrictions
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set forth in the then current Prospectus and Statement of Additional Information
(SAI) for each Fund. Should Boston Company 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, Boston Company 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 Boston Company wishes to hold cash or cash equivalents in excess of 10%
of a Fund Account's assets, Boston Company must request in writing and receive
advance permission from IMCO.
In accordance with Subsection (b) of this Section 2, Boston Company
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, Boston Company 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. Boston Company shall establish compliance procedures reasonably calculated
to ensure compliance with the foregoing. IMCO shall be responsible for providing
Boston Company 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 Boston Company with prior written notice of any change to the
Company's Registration Statement that would affect Boston Company's management
of a Fund Account.
(B) PORTFOLIO TRANSACTIONS. In connection with the management of the
investment and reinvestment of the Fund Accounts' assets, Boston Company 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, Boston Company 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 to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain the most favorable price and execution available, Boston
Company, 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
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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), Boston Company 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 and
research services to Boston Company 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 Boston Company
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either that particular transaction or Boston
Company's overall responsibilities with respect to the Fund and to other clients
of Boston Company as to which Boston Company exercises investment discretion.
The Board or IMCO may direct Boston Company to effect transactions in portfolio
securities 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.
On occasions when Boston Company deems the purchase or sale of a
security to be in the best interest of a Fund as well as other clients of Boston
Company, Boston Company, 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 Boston Company
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.
Boston Company 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, Boston Company may effectuate cross transactions between a Fund
Account and such other account if it deems this to be advantageous.
Boston Company 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 Funds' custodian may need to settle a security's purchase or sale.
Boston Company 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 Boston Company giving proper
instructions to the custodian, Boston Company shall have no responsibility or
liability for the acts, omissions or other conduct of the custodian.
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Notwithstanding the foregoing, Boston Company 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. Boston Company
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, Boston Company 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 Boston Company, except as permitted
under the 1940 Act. IMCO agrees that it will provide Boston Company 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 Boston Company
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.
(C) EXPENSES. Boston Company, 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 Boston Company's
duties under this Agreement. However, Boston Company 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, Boston Company, 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, including providing market price
information relating to these assets of the Fund. Boston Company also shall
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. Boston Company, 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 Boston Company set forth herein. Boston Company, 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 Boston Company's duties hereunder.
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(F) COMPLIANCE MATTERS. Boston Company, 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. Boston Company 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. Boston Company 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, Boston Company 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 for any Fund Account.
Notwithstanding subsection (ii) above, Boston Company may maintain copies of
such records to comply with its recordkeeping obligations.
(H) PROXIES. Boston Company 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 Boston
Company's proxy voting guidelines, as amended from time to time, which shall be
provided to IMCO.
3. ADVISORY FEE. IMCO shall pay to Boston Company as compensation for
Boston Company's 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 Boston Company
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) BOSTON COMPANY. Boston Company represents and warrants to IMCO that
(i) the retention of Boston Company by IMCO as contemplated by this Agreement is
authorized by Boston Company's governing documents; (ii) the execution, delivery
and performance of this Agreement does not violate any obligation by which
Boston Company 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 Boston Company and when executed and delivered by Boston
Company will be a legal, valid and binding obligation of Boston Company,
enforceable against Boston Company in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general
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equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or law); (iv) Boston Company is registered as an investment
adviser under the Advisers Act; (v) Boston Company has adopted a written code of
ethics complying with the requirements of Rule 17j-1 under the 1940 Act and that
Boston Company 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,
with respect to such persons, Boston Company shall furnish to IMCO all reports
and information provided under Rule 17j-1(c)(2); (vi) Boston Company 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) Boston
Company will promptly notify IMCO of the occurrence of any event that would
disqualify Boston Company from serving as investment manager of an investment
company pursuant to Section 9(a) of the 1940 Act or otherwise; (viii) Boston
Company 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) Boston
Company will notify IMCO of any "assignment" (as defined in the 1940 Act) of
this Agreement or change of control of Boston Company, as applicable, and any
changes in the key personnel who are either the portfolio manager(s) of any Fund
Account or senior management of Boston Company, in each case prior to or
promptly after, such change; and (x) Boston Company has adequate disaster
recovery and interruption prevention measures to ensure business resumption in
accordance with applicable law and within industry standards.
(B) IMCO. IMCO represents and warrants to Boston Company that (i) the
retention of Boston Company 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 Boston
Company 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) BOSTON COMPANY. Boston Company 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)
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and any controlling persons thereof (as described in Section 15 of the
Securities Act of 1933, as amended (the 1933 Act)) (collectively, IMCO
Indemnities) 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 Boston
Company 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 Boston Company which was required to be stated therein or necessary to make
the statements therein not misleading, if such statement or omission was made in
reliance upon information furnished to IMCO or the Company by Boston Company
Indemnities (as defined below) for use therein. Boston Company shall indemnify
and hold harmless the IMCO Indemnities 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 Boston Company, 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, Boston Company Indemnities) 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 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 in reliance upon information furnished to IMCO or
the Company by Boston Company. IMCO shall indemnify and hold harmless Boston
Company Indemnities 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 Boston Company (Independent
Board Members), approve the retention of Boston Company in accordance with
Section 15(a) of the 1940 Act and IMCO executes a Subadvisory Agreement with
Boston Company; 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 Boston
Company on sixty days' written notice to the other party. Any notice of
termination served on Boston Company by the Company or IMCO shall be without
prejudice to the obligation of Boston Company 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).
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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 Boston Company to IMCO in
connection with the Funds hereunder are not to be deemed exclusive, and Boston
Company 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 Boston Company to assist in the performance of its duties
hereunder will not devote their full time to such services and nothing contained
herein shall be deemed to limit or restrict in any manner whatsoever the right
of Boston Company 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 Boston Company, or IMCO itself, to perform investment advisory
services to any portion of the Funds.
10. ADDITIONAL AGREEMENTS.
(A) ACCESS TO INFORMATION. Boston Company shall, upon reasonable
notice, afford IMCO at all reasonable times access to Boston Company's 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
Boston Company to provide IMCO with access to the books and records of Boston
Company relating to any other accounts other than the Funds.
(B) CONFIDENTIALITY. Boston Company, 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 Boston Company 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.
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(C) PRIVACY POLICY. Boston Company 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.
(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; 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.
(E) NOTIFICATIONS. Boston Company agrees that it will promptly notify
IMCO in the event that Boston Company expects to become the subject of an
administrative proceeding or enforcement action by the Commission or other
regulatory body with applicable jurisdiction.
(F) INSURANCE. Boston Company 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 Boston Company's 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 involving
Boston Company, including, without limitation, a change of control of Boston
Company, Boston Company 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.
Boston Company: The Boston Company Asset Management, LLC
Xxx Xxxxxx Xxxxx, 000-0000
Xxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Risk Management and Compliance Department
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(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.
(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 Boston Company 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: THE BOSTON COMPANY ASSET
MANAGEMENT, LLC
By: By: /s/ Xxxxx X. Xxxxxxx
-------------------------------- ------------------------------
Name: Name: Xxxxx X. Xxxxxxx
Title: Title: Chief Executive Officer
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SCHEDULE A
USAA INCOME STOCK FUND
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SCHEDULE B
FEES
Rate per annum of the average daily net
Fund Account assets of the Fund Account
------------ ---------------------------------------
USAA Income Stock Fund 0.17%
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