For period ended 07/31/2002 Series 14
Sub-Item 77Q1(e): Exhibits
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The following is an interim investment sub-advisory agreement between USAA
INVESTMENT MANAGEMENT COMPANY and EAGLE ASSET MANAGEMENT, INC., 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 EAGLE ASSET MANAGEMENT, INC., a corporation organized
under the laws of the State of Florida and having its principal place of
business in St. Petersburg, Florida (Eagle).
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 Eagle 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, Xxxxx 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 EAGLE. IMCO hereby appoints Eagle to act as an
investment adviser for each Fund Account in accordance with the terms and
conditions of this Agreement. Eagle 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 Eagle.
Xxxxx accepts such appointment and agrees to render the services herein set
forth for the compensation herein provided.
2. DUTIES OF EAGLE.
(A) AUTHORITY TO INVEST. Subject to the control and supervision of IMCO
and the Company's Board of Directors (the Board), Eagle, 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. Eagle
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shall perform its duties described herein in a manner consistent with the
investment objective, policies, restrictions set forth in the then current
Prospectus and Statement of Additional Information (SAI) for each Fund. Should
Eagle 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, Eagle 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
Eagle wishes to hold cash or cash equivalents in excess of 10% of a Fund
Account's assets for longer than two consecutive business days, Eagle must
request in writing and receive advance permission from IMCO.
In accordance with Subsection (b) of this Section 2, Eagle 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, Eagle 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. Eagle shall establish compliance procedures reasonably calculated to
ensure compliance with the foregoing. IMCO shall be responsible for providing
Eagle 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
Eagle with prior written notice of any material change to the Company's
Registration Statement that would affect Eagle's management of a Fund Account.
(B) PORTFOLIO TRANSACTIONS. In connection with the management of the
investment and reinvestment of the Fund Accounts' assets, Eagle 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, Eagle 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, Eagle, 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
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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), Eagle 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 Eagle 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 Eagle 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 Xxxxx's overall
responsibilities with respect to the Fund and to other clients of Eagle as to
which Eagle exercises investment discretion. The Board or IMCO may direct Eagle
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 Eagle deems the purchase or sale of a security to be
in the best interest of a Fund as well as other clients of Eagle, Eagle, 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 Eagle 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.
Eagle 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, Eagle may effectuate cross transactions between a Fund Account and
such other account if it deems this to be advantageous.
Eagle 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. Eagle 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 Eagle giving proper instructions to the custodian,
Eagle shall have no responsibility or liability for the acts, omissions or other
conduct of the custodian.
Notwithstanding the foregoing, Xxxxx 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,
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without limitation, brokers or dealers affiliated with IMCO. Eagle 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, Xxxxx
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 Eagle, except as permitted under the 1940 Act. IMCO agrees
that it will provide Eagle 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 Eagle 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. Eagle, 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 Eagle's duties under this Agreement.
However, Eagle 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, Eagle, 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. Eagle 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. Eagle, 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
Eagle set forth herein. Eagle, 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 Xxxxx's duties
hereunder.
(F) COMPLIANCE MATTERS. Eagle, 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. Xxxxx 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
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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. Xxxxx 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, Xxxxx 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, Eagle may maintain copies of such records to comply with its
recordkeeping obligations.
(H) PROXIES. Eagle 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 Eagle's proxy voting
guidelines, as amended from time to time, which shall be provided to IMCO.
3. ADVISORY FEE. IMCO shall pay to Eagle as compensation for Eagle'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 Eagle 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) EAGLE. Eagle represents and warrants to IMCO that (i) the retention
of Eagle by IMCO as contemplated by this Agreement is authorized by Eagle's
governing documents; (ii) the execution, delivery and performance of this
Agreement does not violate any obligation by which Eagle 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 Eagle and when
executed and delivered by Eagle will be a legal, valid and binding obligation of
Eagle, enforceable against Eagle 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) Eagle is
registered as an investment adviser under the Advisers Act; (v) Eagle has
adopted a written code of ethics complying with the requirements of Rule 17j-1
under the 1940 Act and that Eagle 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, and with respect to such persons, Eagle shall
furnish to IMCO all reports and information provided under Rule 17j-1(c)(2);
(vi) Eagle is not prohibited by the
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1940 Act, the Advisers Act or other law, regulation or order from performing the
services contemplated by this Agreement; (vii) Eagle will promptly notify IMCO
of the occurrence of any event that would disqualify Eagle from serving as
investment manager of an investment company pursuant to Section 9(a) of the 1940
Act or otherwise; (viii) Eagle 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) Eagle will notify IMCO of any "assignment" (as defined in
the 1940 Act) of this Agreement or change of control of Eagle, as applicable,
and any changes in the key personnel who are either the portfolio manager(s) of
any Fund Account or senior management of Eagle, in each case prior to or
promptly after, such change; and (x) Eagle 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 Eagle that (i) the retention
of Eagle 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 Eagle 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) EAGLE. Eagle 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 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 Eagle 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 Eagle 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
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IMCO or the Company by Eagle Indemnities (as defined below) for use therein.
Eagle 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). However, Eagle shall have no liability to a Fund or
its shareholders for damages or losses connected with or arising out of services
rendered under this Agreement, unless such damages or losses result from Eagle's
negligence, willful misconduct, bad faith or reckless disregard of its duties
and obligations.
(B) IMCO. IMCO shall be liable for any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses) to
which Eagle, 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, Eagle 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. IMCO shall indemnify and hold harmless Eagle 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 Eagle (Independent Board
Members), approve the retention of Eagle in accordance with Section 15(a) of the
1940 Act and IMCO executes a Subadvisory Agreement with Eagle; 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 Eagle on sixty days' written
notice to the other party. Any notice of termination served on Eagle by the
Company or IMCO shall be without prejudice to the obligation of Eagle 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).
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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 Eagle to IMCO in connection
with the Funds hereunder are not to be deemed exclusive, and Eagle 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 Xxxxx 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 Eagle 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 Eagle, or IMCO
itself, to perform investment advisory services to any portion of the Funds.
10. ADDITIONAL AGREEMENTS.
(A) ACCESS TO INFORMATION. Eagle shall, upon reasonable notice, afford
IMCO at all reasonable times access to Eagle'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 Eagle to provide IMCO with
access to the books and records of Eagle relating to any other accounts other
than the Funds.
(B) CONFIDENTIALITY. Xxxxx, 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 Eagle 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. Eagle 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.
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(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. Xxxxx agrees that it will promptly notify IMCO in
the event that Eagle 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. Xxxxx 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 Xxxxx'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
Eagle, including, without limitation, a change of control of Eagle, Eagle 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.
Eagle: Eagle Asset Management, Inc.
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: Executive Vice President, Sales and Marketing
(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
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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 Eagle 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: EAGLE ASSET MANAGEMENT, INC.
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------- ---------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxx
Title: Secretary Title: President
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SCHEDULE A
USAA SMALL CAP 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 Small Cap Stock Fund 0.56% -- First $100 million
0.45% -- Amounts above $100 million
