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Exhibit (d)
INVESTMENT MANAGEMENT AGREEMENT, POWER OF ATTORNEY,
AND SERVICE AGREEMENT
THIS AGREEMENT is entered into this 20th day of November, 1985, by and between
Aster Capital Management, Inc. (the "Investment Manager") and Meridian Fund,
Inc. (the "Company").
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, By-Laws, Form N-lA 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 account of the Company (the
"Portfolio") presently held by First Pennsylvania Bank, N.A. (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 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;
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(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 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
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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 schedule of fees (Appendix A). 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, Bylaws and
Prospectus of the Company after the close of the New York Stock Exchange
composite tape on each business day on which the New York Stock Exchange is
open.
(e) 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 schedule 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 Fund for any fiscal year
of the Fund, 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 Fund shares are
offered for sale (the "Expense Limit"). 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 Fund for any projected reduction hereunder and
corresponding amounts shall be withheld from the fees paid by the Fund 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 Fund immediately after the Fund's fiscal year end, and in
any event prior to publication of the Fund's annual report, as a reduction of
the fees previously paid during the fiscal year.
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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 effective on January 1, 1986, and shall, unless
terminated as hereinafter provided, continue in effect until the close of
business on December 31, 1987. This Agreement may be renewed thereafter from
year to year by mutual consent, provided that such renewal shall be specifically
approved at least annually by (I) 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, and (II) a majority of those directors who are not
parties to this Agreement or interested persons (as defined in the 0000 Xxx) of
any such approval. Such mutual consent to renewal shall not be deemed to have
been given unless evidenced by a writing signed by both parties hereto.
10. TERMINATION
This Agreement may be terminated at any time, without payment of any penalty, 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 on sixty
(60) day's written notice to the Investment Manager, or by the Investment
Manager on like notice to the Company. This Agreement shall terminate
automatically in the event of its assignment (as defined in the 1940 Act).
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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 CAPITAL MANAGEMENT INC.
MERIDIAN FUND INC.
By: By:
Xxxxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxxxxx
President Vice President
ATTEST: ATTEST:
Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx
Vice President of Operations Secretary
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APPENDIX A
INVESTMENT MANAGEMENT AGREEMENT, POWER OF ATTORNEY,
AND SERVICE AGREEMENT
BETWEEN ASTER CAPITAL MANAGEMENT, INC. AND MERIDIAN FUND, INC.
SCHEDULE OF FEES
Effective Date: January 1, 1986
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:
ASTER CAPITAL MANAGEMENT, INC. MERIDIAN FUND, INC.
By By
Xxxxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxxxxx
President Vice President
ATTEST: ATTEST:
Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx
Vice President of Operations Secretary
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AMENDMENT TO INVESTMENT MANAGEMENT AGREEMENT,
POWER OF ATTORNEY, AND
SERVICE AGREEMENT
This Amendment ("Amendment") to Investment Management Agreement, Power of
Attorney, and Service Agreement (the "Agreement") is entered into this 7th day
of February, 1994, by and between Aster Capital Management, Inc. (the
"Investment Manager") and Meridian Fund, Inc. (the "Company").
(1) Meridian Fund.
Effective as of January 6, 1994, the Company has adopted and filed an Amended
and Restated Articles of Incorporation establishing the Company as a series
investment company and designating the initial portfolio of the Company to
constitute the "Meridian Fund" series. It is understood and agreed among the
parties that references in the Agreement to the "Portfolio" shall, except as
provided hereinbelow, hereinafter refer to the Meridian Fund series of the
Company unless the context otherwise requires. The Schedule of Fees attached as
Appendix A to the Agreement, and dated as of January 1, 1989, shall be in force
and effect with respect to the Investment Manager's services under the Agreement
with respect to the Meridian Fund series.
(2) Meridian Value Fund; Additional Series.
(a) In connection with the reorganization of the Company into series investment
company format, the Company has as of February 7, 1994, established the Meridian
Value Fund Series as an additional series of the Company. The Company desires to
retain the Investment Manager to render management and investment advisory
services under the Agreement with respect to the Meridian Value Fund series, and
the Investment Manager is willing and able to provide such services. The
Investment Manager agrees to provide to the Company all services enumerated in
the Agreement, and to bear all responsibilities related thereto, as if the
Meridian Fund series and the Meridian Value Fund series were each referred to as
the "Portfolio" in the Agreement. For all purposes hereafter, unless the context
shall otherwise require, the references to "Portfolio" in the Agreement shall
refer, individually and collectively, to the Meridian Fund series and to the
Meridian Value Fund series.
(b) In consideration of the services performed by the Investment Manager under
the Agreement with respect to the Meridian Value Fund series, the Company will
pay or cause to be paid to the Investment Manager, as they become due and
payable, management fees determined in accord with the attached Schedule of Fees
(Appendix B). In the event of termination any management fees paid in advance
pursuant to such Schedule of Fees will be prorated as of the date of termination
and the unearned portion thereof will be returned to the Company.
(c) In the event that the Company establishes one or more series of shares other
than the Meridian Fund series and the Meridian Value Fund series with respect to
which the Company desires to retain the Investment Manager to render management
and investment advisory services under the Agreement, the Company shall so
notify the Investment Manager in writing, indicating the advisory fee which will
be payable with respect to the additional series of shares. If the Investment
Manager is willing to render such services, it shall so notify the Company in
writing, whereupon such series of shares shall be considered a "Portfolio" under
the Agreement as provided herein.
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(3) Expense Limitation
The administration of the "Expense Limit" as provided in Section 6 of the
Agreement is hereby amended to provide that such Expense Limit shall be
calculated and administered separately with respect to each separate series of
the Company, as opposed to the Company in the aggregate, if and to the extent so
required by state securities authorities.
(4) Duration of Agreement
(a) The Agreement, as amended herein, with respect to the Meridian Value Fund
series shall be effective on February 7, 1994, and shall, unless terminated as
hereinafter provided, continue in effect until the close of business on December
31, 1994. This Agreement, with respect to the Meridian Value Fund shall be
renewed thereafter from year to year by mutual consent, provided that such
renewal shall be specifically approved at least annually by (i) the Board of
Directors of the Company, or by the vote of a majority (as defined in the
Investment Company Act of 1940) of the outstanding voting securities of the
Meridian Value Fund series, and, (ii) a majority of those Directors who are not
parties to the Agreement or interested persons (as defined in the Investment
company Act of 1940) of any such approval. Such mutual consent to renewal shall
not be deemed to have been given unless evidenced by a writing signed by both
parities hereto.
(b) The Agreement, as amended herein, with respect to the Meridian Value Fund
may be terminated as provided in Section 10 of the Agreement.
(5) Agreement as Amended.
The Agreement and this Amendment, shall hereafter constitute the Agreement in
its entirety unless and to the extent that it shall be further amended or
terminated in whole or in part by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Agreement
to be executed and duplicate originals by their officers hereon to be duly
authorized as of the date first above written.
ASTER CAPITAL MANAGEMENT, INC. MERIDIAN FUND, INC.
BY: BY:
Xxxxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxx, Xx.
President President
ATTEST: ATTEST:
Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx
Vice President of Operations Secretary
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APPENDIX B
INVESTMENT MANAGEMENT AGREEMENT, POWER OF ATTORNEY,
AND SERVICE AGREEMENT
BETWEEN ASTER CAPITAL MANAGEMENT, INC. AND MERIDIAN FUND, INC.
SCHEDULE OF FEES
MERIDIAN VALUE FUND
Effective Date: February 7, 1994
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: February 7, 1994
ASTER CAPITAL MANAGEMENT, INC. MERIDIAN FUND, INC.
BY: BY:
Xxxxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxx, Xx.
President President
ATTEST: ATTEST:
Xxxx X. Xxxxxxxx Xxxx X. Xxxxxxxx
Vice President of Operations Secretary
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