INTERIM INVESTMENT MANAGEMENT AGREEMENT, POWER OF ATTORNEY,
AND SERVICE AGREEMENT
THIS AGREEMENT is entered into this 1st day of March
2012, by and between Aster Investment Management, Inc. (the
"Investment Manager") and Meridian Fund, Inc., a series
investment company (the "Company").
WHEREAS, the Investment Manager and the Company had
previously entered into that certain Investment Management
Agreement and Service Agreement dated as of the 1st day of
November 2000 (the "Previous Agreement"); and
WHEREAS, upon the death of Xxxxxxx X. Xxxxx, Xx.,
President and majority owner of the Investment Manager, his
ownership interest in the Investment Manager was transferred
to a trust on February 16, 2012 (the "Transfer"); and
WHEREAS, the Transfer resulted in the assignment and
termination of the Previous Agreement as of February 16, 2012
(the "Termination Date");
NOW, THEREFORE, the parties agree as follows:
1. APPOINTMENT AND ACCEPTANCE OF APPOINTMENT OF THE
INVESTMENT MANAGER
Subject to the express provision and limitations set
forth in the Company's Articles of Incorporation, Bylaws, Form
N-1A Registration Statement under the Investment Company Act
of 1940, as amended (the "1940 Act") under the Securities Act
of 1933, as amended (the "1933 Act"), and prospectus as in use
from time to time, as well as to the factors affecting the
Company's status as a "regulated investment company" under the
Internal Revenue Code of 1954, as amended, the Company hereby
grants to the Investment Manager and the Investment Manager
hereby accepts full discretionary authority to manage the
investment and reinvestment of the cash and securities in the
accounts of the Company comprised of the Meridian Growth Fund
series and the Meridian Value Fund series (the "Funds"). For
all purposes hereunder, unless the context shall otherwise
require, the references to "Portfolio" in the Agreement shall
refer, individually and collectively, to the Meridian Growth
Fund series and to the Meridian Value Fund series presently
held by the Bank of New York Mellon (the "Custodian"), the
proceeds thereof, and any additions thereto, in the Investment
Manager's discretion. In its duties hereunder, the Investment
Manager shall further be bound by any and all determinations
by the Board of Directors of the Company relating to
investment policy, which determinations shall in writing be
communicated to the Investment Manager. The Investment
Manager shall, for all purposes herein, be deemed an
independent contractor of the Company.
2. POWERS OF THE INVESTMENT MANAGER
The Investment Manager is empowered, through any of its
officers or employees:
(a) to invest and reinvest in equity securities, debt
securities and other obligations of every description issued
or incurred by governmental bodies, corporations, mutual
funds, trusts, associations or firms, in money market
instruments, and in loans and deposits at interest on call or
on time, whether or not secured by collateral;
(b) to buy, sell, and exercise warrants and other rights
to subscribe for or sell stock or other securities; and
(c) to take such other action, or direct the Custodian
to take such other action, as may be necessary or desirable to
carry out the purpose and intent of the foregoing.
The Investment Manager is not empowered to have custody
or possession of, or have authority to obtain custody or
possession of securities or funds of the Company.
3. EXECUTION OF PORTFOLIO TRANSACTIONS
(a) The Investment Manager shall provide adequate
facilities and qualified personnel for the placement of, and
shall place, orders for the purchase, or other acquisition,
and sale, or other disposition, of portfolio securities and
other assets for the Company;
(b) Unless otherwise specified in writing to the
Investment Manager by the Company, all orders for the purchase
and sale of securities for the Portfolio shall be placed in
such markets and through such brokers as in the Investment
Manager's best judgment shall offer the most favorable price
and market for the execution of each transaction; provided,
however, that, subject to the above, the Investment Manager
may place orders with brokerage firms which have sold shares
of the Company or which furnish statistical and other
information to the Investment Manager, taking into account the
value and quality of the brokerage services of such firms,
including the availability and quality of such statistical and
other information. Receipt by the Investment Manager of any
such statistical and other information and service shall not
be deemed to give rise to any requirement for abatement of the
advisory fee payable to the Investment Manager pursuant to
Section 5 hereof and Appendix A and Appendix B hereto;
(c) The Company understands and agrees that the
Investment Manager may effect securities transactions which
cause the Company to pay an amount of commission in excess of
the amount of commission another broker or dealer would have
charged; provided, however, that the Investment Manager
determines in good faith that such amount of commission is
reasonable in relation to the value of the Company share
sales, statistical, brokerage and other services provided by
such broker or dealer, viewed in terms of either the specific
transaction of the Investment Manager's overall
responsibilities to the Company and other non-investment
company clients for which the Investment Manager exercises
investment discretion. The Company also understands that the
receipt and use of such services will not reduce the
Investment Manager's customary and normal research activities;
(d) The Company understands and agrees:
(i) that the Investment Manager performs investment
management services for various clients and the
Investment Manager may take action with respect to any of
its other clients which may differ from action taken or
from the timing or nature of action taken with respect to
the Portfolio, so long as it is the Investment Manager's
policy, to the extent practical, to allocate investment
opportunities to the Portfolio over a period of time on a
fair and equitable basis relative to other clients;
(ii) that the Investment Manager shall have no
obligation to purchase or sell for the Portfolio any
security or other assets which the Investment Manager or
its officers or employees, may purchase or sell for its
or their own accounts or the account of any other client,
if in the opinion of the Investment Manager such
transaction or investment appears unsuitable, impractical
or undesirable for the Portfolio; and
(iii) that on occasions when the Investment Manager
deems the purchase or sale of a security or other asset
to be in the best interests of the Company as well as
other clients of the Investment Manager, the Investment
Manager, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or
purchased when the Investment Manager believes that to do
so will be in the best interests of the Company.
Allocation, in such event, of the securities or other
assets so purchased or sold, as well as the expenses
incurred in the transaction, shall be made by the
Investment Manager in the manner the Investment Manager
considers to be the most equitable and consistent with
its fiduciary obligations to the Company and to such
other clients.
4. ALLOCATION OF EXPENSES OF THE COMPANY
(a) The Company is responsible for payment of the
following ordinary operating expenses: (i) brokerage and
commission expenses; (ii) Federal, state or local taxes,
incurred by, or levied on, the Company; (iii) interest charges
on borrowings, (iv) charges and expenses of the Company's
custodian, stock transfer and dividend disbursing agents; (v)
cost of the designing, printing and mailing of reports, proxy
statements and notices to stockholders; (vi) cost of the
printing and distributing of the prospectuses of the Company
and supplements thereto to the Company's stockholders; (vii)
expenses of the issuance and redemption of the shares of the
Company (including stock certificates, securities registration
and qualification fees and expenses); (viii) legal and
auditing expenses; (ix) compensation, fees and expenses paid
to Company directors unaffiliated with the Investment Manager;
(x) association dues; (xi) cost of stationery and forms
prepared exclusively for the Company; and (xii) payment of all
investment management or advisory fees, including fees and
expenses payable under Section 5 hereof and Appendix A and
Appendix B hereto.
(b) The Investment Manager shall pay for all costs of
organizing the Company, shall provide persons to perform all
executive, administrative, clerical and bookkeeping functions
of the Company and shall assume all ordinary operating
expenses not assumed by the Company under 4(a) hereof.
(c) The Company is responsible for payment of any
extraordinary expenses incurred. A good faith determination
of what constitutes an extraordinary expense shall be made by
the Board of Directors of the Company, which good faith
determination shall include the affirmative vote of all non-
interested directors of the Company.
5. COMPENSATION OF THE INVESTMENT MANAGER
(a) In consideration of the services performed by the
Investment Manager hereunder, the Company will pay or cause to
be paid to the Investment Manager, as they become due and
payable, management fees determined in accordance with the
attached schedules of fees (Appendix A) for Meridian Growth
Fund and (Appendix B) for the Meridian Value Fund. In the
event of termination any management fees paid in advance
pursuant to such fee schedule will be prorated as of the date
of termination and the unearned portion thereof will be
returned to the Company.
(b) The net asset value of the Company used in fee
calculations shall be determined in the manner set forth in
the Articles of Incorporation, By-laws and Prospectus of the
Company after the close of the New York Stock Exchange on each
business day on which the New York Stock Exchange is open.
(c) The Company hereby authorizes the Investment Manager
to charge the Portfolio, subject to the provisions in Section
6 hereof, for the full amount of fees as they become due and
payable pursuant to the attached schedules of fees; provided,
however, that a copy of a fee statement covering said payment
shall be sent to the Custodian and to the Company.
6. EXPENSE LIMITATION
The Manager agrees to reduce the fee payable to it under
this Agreement by the amount by which the ordinary operating
expenses of the Company for any fiscal year of the Company,
excluding interest, taxes and extraordinary expenses, shall
exceed the amount, if any, by which ordinary operating
expenses of the Company for the preceding fiscal year (except
interest, taxes and extraordinary expenses) exceed the most
stringent limits prescribed by any state in which the Company
shares are offered for sale (the "Expense Limit"). Such
Expense Limit as provided herein shall be calculated and
administered separately with respect to each separate series
of the Company (the "Funds"), as opposed to the Company in
aggregate, if and to the extent so required by state
securities authorities. Costs incurred in connection with
brokerage fees and commissions, which are capitalized in
accordance with generally accepted accounting principles
applicable to investment companies, shall be accounted for as
capital items and not as expenses. Proper accruals shall be
made by the Funds for any projected reduction hereunder and
corresponding amounts shall be withheld from the fees paid by
the Funds to the Manager. Any additional reduction computed
at the end of the fiscal year shall be deducted from the fee
for the last month of such fiscal year, and any excess shall
be paid to the Funds immediately after the Funds fiscal year
end, and in any event prior to publication of the Funds annual
report, as a reduction of the fees previously paid during the
fiscal year.
7. SERVICE TO OTHER CLIENTS
Nothing contained in this Agreement shall be construed to
prohibit the Investment Manager from performing investment
advisory, management, distribution or other services for other
investment companies and other persons, trusts or companies,
or to prohibit affiliates of the Investment Manager from
engaging in such business or in other related or unrelated
businesses.
8. INDEMNIFICATION
The Investment Manager shall have no liability to the
Company, or its stockholders, for any error of judgment,
mistake of law, or for any loss arising out of its obligations
to the Company not involving willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations and
duties hereunder.
9. DURATION OF AGREEMENT
This Agreement shall be deemed to be effective on the
Termination Date, and shall, unless terminated as hereinafter
provided, or extended by grant of relief by the Securities and
Exchange Commission, continue in effect until the close of
business on the 150th day after the Termination Date (July 15,
2012).
10. TERMINATION
This Agreement may be terminated at any time by the Board
of Directors of the Company or by the vote of a majority (as
defined in the 0000 Xxx) of the outstanding voting securities
of the Company, without payment of any penalty, on thirty (30)
days' written notice to the Investment Manager. The
Investment Manager may terminate this Agreement at any time,
without payment of any penalty, on sixty (60) days' written
notice to the Company. This Agreement shall terminate
automatically in the event of its assignment (as defined in
the 1940 Act).
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in duplicate originals by their
officers thereunto duly authorized as of the date first above
written.
ASTER INVESTMENT MANAGEMENT, INC. MERIDIAN FUND, INC.
BY: /s/ Xxxxxxx X. Xxx BY: /s/ Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxx Xxxxx X. Xxxxxxx
Sole Director Acting President
ATTEST: /s/ Xxxxx Xxxxxx ATTEST: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx Xxxxx Xxxxxx
APPENDIX A
INTERIM INVESTMENT MANAGEMENT AGREEMENT, POWER OF ATTORNEY,
AND SERVICE AGREEMENT
BETWEEN ASTER INVESTMENT MANAGEMENT, INC. AND
MERIDIAN FUND, INC.
SCHEDULE OF FEES
MERIDIAN GROWTH FUND
Effective Date: February 16, 2012
The fee for each one-month period from the effective date
referred to above shall be the amount obtained by computing
the Net Asset Value of the Portfolio as of the close of
business on each business day, computing the total of such
figures on the last day of each month and multiplying the
resultant total Net Asset Value by 1/365 of the applicable
annual fee rate indicated below. This fee shall be payable
upon receipt of the Fee Statement.
On all sums from $0 through $50 million: 1% per Annum
On all sums in excess of $50 million: 3/4 of 1% per Annum
Dated: March 1, 2012
ASTER INVESTMENT MANAGEMENT, INC. MERIDIAN FUND, INC.
BY: /s/ Xxxxxxx X. Xxx BY: /s/ Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxx Xxxxx X. Xxxxxxx
Sole Director Acting President
ATTEST: /s/ Xxxxx Xxxxxx ATTEST: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx Xxxxx Xxxxxx
APPENDIX B
INTERIM INVESTMENT MANAGEMENT AGREEMENT, POWER OF ATTORNEY,
AND SERVICE AGREEMENT
BETWEEN ASTER INVESTMENT MANAGEMENT, INC. AND
MERIDIAN FUND, INC.
SCHEDULE OF FEES
MERIDIAN VALUE FUND
Effective Date: February 16, 2012
With respect to the Meridian Value Fund series, the fee
for each one-month period from the effective date referred to
above shall be the amount obtained by computing the Net Asset
Value of the Portfolio as of the close of business on each
business day, computing the total of such figures on the last
day of each month and multiplying the resultant total Net
Asset Value by 1/365 of the applicable annual fee rate
indicated below. This fee shall be payable upon receipt of
the Fee Statement.
On all sums: 1% per Annum
Dated: March 1, 2012
ASTER INVESTMENT MANAGEMENT, INC. MERIDIAN FUND, INC.
BY: /s/ Xxxxxxx X. Xxx BY: /s/ Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxx Xxxxx X. Xxxxxxx
Sole Director Acting President
ATTEST: /s/ Xxxxx Xxxxxx ATTEST: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx Xxxxx Xxxxxx
