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INVESTMENT MANAGEMENT AGREEMENT
Between
X. XXXX PRICE CORPORATE INCOME FUND, INC.
and
X. XXXX PRICE ASSOCIATES, INC.
INVESTMENT MANAGEMENT AGREEMENT, made as of September 20,
1995, by and between X. XXXX PRICE CORPORATE INCOME FUND, INC., a
Maryland corporation (hereinafter called the "Fund"), and X. XXXX
PRICE ASSOCIATES, INC., a corporation organized and existing
under the laws of the State of Maryland (hereinafter called the
"Manager").
W I T N E S S E T H:
WHEREAS, the Fund is engaged in business as an open-end
management investment company and is registered as such under the
federal Investment Company Act of 1940, as amended (the "Act");
and
WHEREAS, the Manager is engaged principally in the business
of rendering investment supervisory services and is registered as
an investment adviser under the federal Investment Advisers Act
of 1940, as amended; and
WHEREAS, the Fund desires the Manager to render investment
supervisory services to the Fund in the manner and on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual promises hereinafter set forth, the parties hereto agree
as follows:
1.Duties and Responsibilities of Manager.
A. Investment Management Services. The Manager shall act
as investment manager and shall supervise and direct the
investments of the Fund in accordance with the Fund's investment
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objectives, program and restrictions as provided in its
prospectus, as amended from time to time, and such other
limitations as the Fund may impose by notice in writing to the
Manager. The Manager shall obtain and evaluate such information
relating to the economy, industries, businesses, securities
markets and securities as it may deem necessary or useful in the
discharge of its obligations hereunder and shall formulate and
implement a continuing program for the management of the assets
and resources of the Fund in a manner consistent with its
investment objectives. In furtherance of this duty, the Manager,
as agent and attorney-in-fact with respect to the Fund, is
authorized, in its discretion and without prior consultation with
the Fund, to:
(i) buy, sell, exchange, convert, lend, and
otherwise trade in any stocks, bonds, and other
securities or assets; and
(ii) place orders and negotiate the
commissions (if any) for the execution of
transactions in securities with or through such
brokers, dealers, underwriters or issuers as the
Manager may select.
B. Financial, Accounting, and Administrative Services.
The Manager shall maintain the corporate existence and corporate
records of the Fund; maintain the registrations and
qualifications of Fund shares under federal and state law;
monitor the financial, accounting, and administrative functions
of the Fund; maintain liaison with the various agents employed by
the Fund (including the Fund's transfer agent, custodian,
independent accountants and legal counsel) and assist in the
coordination of their activities on behalf of the Fund.
C. Reports to Fund. The Manager shall furnish to or
place at the disposal of the Fund such information, reports,
evaluations, analyses and opinions as the Fund may, at any time
or from time to time, reasonably request or as the Manager may
deem helpful to the Fund.
D. Reports and Other Communications to Fund Shareholders.
The Manager shall assist the Fund in developing all general
shareholder communications, including regular shareholder
reports.
E. Fund Personnel. The Manager agrees to permit
individuals who are officers or employees of the Manager to serve
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(if duly elected or appointed) as officers, directors, members of
any committee of directors, members of any advisory board, or
members of any other committee of the Fund, without remuneration
from or other cost to the Fund.
F. Personnel, Office Space, and Facilities of Manager.
The Manager at its own expense shall furnish or provide and pay
the cost of such office space, office equipment, office
personnel, and office services as the Manager requires in the
performance of its investment advisory and other obligations
under this Agreement.
2. Allocation of Expenses.
A.Expenses Paid by Manager.
(1) Salaries and Fees of Officers. The Manager shall
pay all salaries, expenses, and fees of the officers and
directors of the Fund who are affiliated with the
Manager.
(2) Assumption of Fund Expenses by Manager. The
payment or assumption by the Manager of any expense of
the Fund that the Manager is not required by this
Agreement to pay or assume shall not obligate the Manager
to pay or assume the same or any similar expense of the
Fund on any subsequent occasion.
B. Expenses Paid by Fund. The Fund shall bear all
expenses of its organization, operations, and business not
specifically assumed or agreed to be paid by the Manager as
provided in this Agreement. In particular, but without limiting
the generality of the foregoing, the Fund shall pay:
(1) Custody and Accounting Services. All expenses of
the transfer, receipt, safekeeping, servicing and
accounting for the Fund's cash, securities, and other
property, including all charges of depositories,
custodians, and other agents, if any;
(2) Shareholder Servicing. All expenses of
maintaining and servicing shareholder accounts, including
all charges of the Fund's transfer, shareholder
recordkeeping, dividend disbursing, redemption, and other
agents, if any;
(3) Shareholder Communications. All expenses of
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preparing, setting in type, printing, and
distributing reports and other communications to
shareholders;
(4) Shareholder Meetings. All expenses incidental to
holding meetings of Fund shareholders, including the
printing of notices and proxy material, and proxy
solicitation therefor;
(5) Prospectuses. All expenses of preparing, setting
in type, and printing of annual or more frequent
revisions of the Fund's prospectus and of mailing them to
shareholders;
(6) Pricing. All expenses of computing the Fund's
net asset value per share, including the cost of any
equipment or services used for obtaining price
quotations;
(7) Communication Equipment. All charges for
equipment or services used for communication between the
Manager or the Fund and the custodian, transfer agent or
any other agent selected by the Fund;
(8) Legal and Accounting Fees and Expenses. All
charges for services and expenses of the Fund's legal
counsel and independent auditors;
(9) Directors' Fees and Expenses. All compensation
of directors, other than those affiliated with the
Manager, and all expenses incurred in connection with
their service;
(10) Federal Registration Fees. All fees and
expenses of registering and maintaining the registration
of the Fund under the Act and the registration of the
Fund's shares under the Securities Act of 1933, as
amended (the "'33 Act"), including all fees and expenses
incurred in connection with the preparation, setting in
type, printing, and filing of any registration statement
and prospectus under the '33 Act or the Act, and any
amendments or supplements that may be made from time to
time;
(11) State Registration Fees. All fees and expenses
of qualifying and maintaining qualification of the Fund
and of the Fund's shares for sale under securities laws
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of various states or jurisdictions, and of registration
and qualification of the Fund under all other laws
applicable to the Fund or its business activities
(including registering the Fund as a broker-dealer, or
any officer of the Fund or any person as agent or
salesman of the Fund in any state);
(12) Issue and Redemption of Fund Shares. All
expenses incurred in connection with the issue,
redemption, and transfer of Fund shares, including the
expense of confirming all share transactions, and of
preparing and transmitting the Fund's stock certificates;
(13) Bonding and Insurance. All expenses of bond,
liability, and other insurance coverage required by law
or deemed advisable by the Fund's board of directors;
(14) Brokerage Commissions. All brokers' commissions
and other charges incident to the purchase, sale, or
lending of the Fund's portfolio securities;
(15) Taxes. All taxes or governmental fees payable
by or with respect of the Fund to federal, state, or
other governmental agencies, domestic or foreign,
including stamp or other transfer taxes;
(16) Trade Association Fees. All fees, dues, and
other expenses incurred in connection with the Fund's
membership in any trade association or other investment
organization; and
(17) Nonrecurring and Extraordinary Expenses. Such
nonrecurring expenses as may arise, including the costs
of actions, suits, or proceedings to which the Fund is a
party and the expenses the Fund may incur as a result of
its legal obligation to provide indemnification to its
officers, directors, and agents.
3. Management Fee. The Fund shall pay the Manager a fee
("Fee") which will consist of two components: a Group Management
Fee ("Group Fee") and an Individual Fund Fee ("Fund Fee"). The
Fee shall be paid monthly to the Manager on the first business
day of the next succeeding calendar month and shall be calculated
as follows:
A. Group Fee. The monthly Group Fee ("Monthly Group
Fee") shall be the sum of the daily Group Fee accruals ("Daily
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Group Fee Accruals") for each month. The Daily Group Fee Accrual
for any particular day will be computed by multiplying the Price
Funds' group fee accrual as determined below ("Daily Price Funds'
Group Fee Accrual") by the ratio of the Fund's net assets for
that day to the sum of the aggregate net assets of the Price
Funds for that day. The Daily Price Funds' Group Fee Accrual for
any particular day shall be calculated by multiplying the
fraction of one (1) over the number of calendar days in the year
by the annualized Daily Price Funds' Group Fee Accrual for that
day as determined in accordance with the following schedule:
Price Funds' Annual Group
Base Fee Rate for Each Level of Assets
_____________________________________
0.480% First $1 billion
0.450% Next $1 billion
0.420% Next $1 billion
0.390% Next $1 billion
0.370% Next $1 billion
0.360% Next $2 billion
0.350% Next $2 billion
0.340% Next $5 billion
0.330% Next $10 billion
0.320% Next $10 billion
0.310% Thereafter
The Price Funds shall include all the mutual funds
distributed by X. Xxxx Price Investment Services, Inc., excluding
institutional or private label mutual funds. For the purpose of
calculating the Daily Price Funds' Group Fee Accrual for any
particular day, the net assets of each Price Fund shall be
determined in accordance with the Fund's prospectus as of the
close of business on the previous business day on which the Fund
was open for business.
B. Fund Fee. The monthly Fund Fee ("Monthly Fund Fee")
shall be the sum of the daily Fund Fee accruals ("Daily Fund Fee
Accruals") for each month. The Daily Fund Fee Accrual for any
particular day will be computed by multiplying the fraction of
one (1) over the number of calendar days in the year by the Fund
Fee Rate of 0.15% and multiplying this product by the net assets
of the Fund for that day, as determined in accordance with the
Fund's prospectus as of the close of business on the previous
business day on which the Fund was open for business.
C. Expense Limitation. As part of the consideration for
the Fund entering into this Agreement, the Manager hereby agrees
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to limit the aggregate expenses of every character incurred by
the Fund, including but not limited to Fees of the Manager
computed as hereinabove set forth, but excluding interest, taxes,
brokerage, and other expenditures which are capitalized in
accordance with generally accepted accounting principles and
extraordinary expenses, ("Manager Limitation"). Under the
Manager Limitation, the Manager agrees that through May 31, 1997,
such expenses shall not exceed 0.80% of the average daily net
assets of the Fund ("0.80% Expense Limitation"). To determine
the Manager's liability for the Fund's expenses over the 0.80%
Expense Limitation, the amount of allowable year-to-date expenses
shall be computed daily by pro rating the 0.80% Expense
Limitation based on the number of days elapsed within the fiscal
year of the Fund, or limitation period, if shorter ("Pro Rated
Limitation"). The Pro Rated Limitation shall be compared to the
expenses of the Fund recorded through the prior day in order to
produce the allowable expenses to be recorded for the current day
("Allowable Expenses"). If the Fund's Management Fee and other
expenses for the current day exceed the Allowable Expenses, the
Management Fee for the current day shall be reduced by such
excess ("Unaccrued Fees"). In the event the excess exceeds the
amount due as the Management Fee, the Manager shall be
responsible to the Fund for the additional excess ("Other
Expenses Exceeding Limit"). If at any time up through and
including May 31, 1997, the Fund's Management Fee and other
expenses for the current day are less than the Allowable
Expenses, the differential shall be due to the Manager as payment
of cumulative Unaccrued Fees (if any) or as payment for
cumulative Other Expenses Exceeding Limit (if any). If
cumulative Unaccrued Fees or cumulative Other Expenses Exceeding
Limit remain at May 31, 1997, these amounts shall be paid to the
Manager in the future provided that: (1) no such payment shall be
made to the Manager after May 31, 1999; and (2) such payment
shall only be made to the extent that it does not result in the
Fund's aggregate expenses exceeding an expense limit of 0.80% of
average daily net assets. The Manager may voluntarily agree to
an additional expense limitation (any such additional expense
limitation hereinafter referred to as an "Additional Expense
Limitation"), at the same or a different level and for the same
or a different period of time beyond May 31, 1997 (any such
additional period being hereinafter referred to an as "Additional
Period") provided, however, that: (1) the calculations and
methods of payment shall be as described above; (2) no payment
for cumulative Unaccrued Fees or cumulative Other Expenses
Exceeding Limit shall be made to the Manager more than two years
after the end of an Additional Period; and (3) payment for
cumulative Unaccrued Fees or cumulative Other Expenses Exceeding
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Limit after the expiration of the Additional Period shall only be
made to the extent it does not result in the Fund's aggregate
expenses exceeding the Additional Expense Limitation to which the
unpaid amounts relate.
In addition to the Manager Limitation, it is understood that
the expenses of the Fund will not exceed any expense limitation
prescribed by any state in which the Fund's shares are qualified
for sale ("State Expense Limit"). Any Management Fees not paid
or expenses assumed by the Manager pursuant to a State Expense
Limit shall be subject to reimbursement provided that no such
reimbursement shall be made more than two years after the fiscal
year in which such fees were not paid or expenses assumed.
D. Proration of Fee. If this Agreement becomes effective
or terminates before the end of any month, the Fee for the period
from the effective date to the end of such month or from the
beginning of such month to the date of termination, as the case
may be, shall be prorated according to the proportion which such
period bears to the full month in which such effectiveness or
termination occurs.
4. Brokerage. Subject to the approval of the board of
directors of the Fund, the Manager, in carrying out its duties
under Paragraph 1.A., may cause the Fund to pay a broker-dealer
which furnishes brokerage or research services [as such services
are defined under Section 28(e) of the Securities Exchange Act of
1934, as amended (the "'34 Act")], a higher commission than that
which might be charged by another broker-dealer which does not
furnish brokerage or research services or which furnishes
brokerage or research services deemed to be of lesser value, if
such commission is deemed reasonable in relation to the brokerage
and research services provided by the broker-dealer, viewed in
terms of either that particular transaction or the overall
responsibilities of the Manager with respect to the accounts as
to which it exercises investment discretion (as such term is
defined under Section 3(a)(35) of the '34 Act).
5. Manager's Use of the Services of Others. The Manager may
(at its cost except as contemplated by Paragraph 4 of this
Agreement) employ, retain or otherwise avail itself of the
services or facilities of other persons or organizations for the
purpose of providing the Manager or the Fund with such
statistical and other factual information, such advice regarding
economic factors and trends, such advice as to occasional
transactions in specific securities or such other information,
advice or assistance as the Manager may deem necessary,
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appropriate or convenient for the discharge of its obligations
hereunder or otherwise helpful to the Fund, or in the discharge
of Manager's overall responsibilities with respect to the other
accounts which it serves as investment manager.
6. Ownership of Records. All records required to be
maintained and preserved by the Fund pursuant to the provisions
of rules or regulations of the Securities and Exchange Commission
under Section 31(a) of the Act and maintained and preserved by
the Manager on behalf of the Fund are the property of the Fund
and will be surrendered by the Manager promptly on request by the
Fund.
7. Reports to Manager. The Fund shall furnish or otherwise
make available to the Manager such prospectuses, financial
statements, proxy statements, reports, and other information
relating to the business and affairs of the Fund as the Manager
may, at any time or from time to time, reasonably require in
order to discharge its obligations under this Agreement.
8. Services to Other Clients. Nothing herein contained
shall limit the freedom of the Manager or any affiliated person
of the Manager to render investment supervisory and corporate
administrative services to other investment companies, to act as
investment manager or investment counselor to other persons,
firms or corporations, or to engage in other business activities;
but so long as this Agreement or any extension, renewal or
amendment hereof shall remain in effect or until the Manager
shall otherwise consent, the Manager shall be the only investment
manager to the Fund.
9. Limitation of Liability of Manager. Neither the Manager
nor any of its officers, directors, or employees, nor any person
performing executive, administrative, trading, or other functions
for the Fund (at the direction or request of the Manager) or the
Manager in connection with the Manager's discharge of its
obligations undertaken or reasonably assumed with respect to this
Agreement, shall be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund in connection with
the matters to which this Agreement relates, except for loss
resulting from willful misfeasance, bad faith, or gross
negligence in the performance of its or his duties on behalf of
the Fund or from reckless disregard by the Manager or any such
person of the duties of the Manager under this Agreement.
10. Use of Manager's Name. The Fund may use the name "X.
Xxxx Price Corporate Income Fund, Inc." or any other name derived
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from the name "X. Xxxx Price" only for so long as this Agreement
or any extension, renewal or amendment hereof remains in effect,
including any similar agreement with any organization which shall
have succeeded to the business of the Manager as investment
manager. At such time as this Agreement or any extension,
renewal or amendment hereof, or such other similar agreement
shall no longer be in effect, the Fund will (by corporate action,
if necessary) cease to use any name derived from the name "X.
Xxxx Price," any name similar thereto or any other name
indicating that it is advised by or otherwise connected with the
Manager, or with any organization which shall have succeeded to
the Manager's business as investment manager.
11. Term of Agreement. The term of this Agreement shall
begin on the date first above written, and unless sooner
terminated as hereinafter provided, this Agreement shall remain
in effect through April 30, 1996. Thereafter, this Agreement
shall continue in effect from year to year, subject to the
termination provisions and all other terms and conditions hereof,
so long as: (a) such continuation shall be specifically approved
at least annually by the board of directors of the Fund or by
vote of a majority of the outstanding voting securities of the
Fund and, concurrently with such approval by the board of
directors or prior to such approval by the holders of the
outstanding voting securities of the Fund, as the case may be, by
the vote, cast in person at a meeting called for the purpose of
voting on such approval, of a majority of the directors of the
Fund who are not parties to this Agreement or interested persons
of any such party; and (b) the Manager shall not have notified
the Fund, in writing, at least 60 days prior to April 30, 1996 or
prior to April 30th of any year thereafter, that it does not
desire such continuation. The Manager shall furnish to the Fund,
promptly upon its request, such information as may reasonably be
necessary to evaluate the terms of this Agreement or any
extension, renewal or amendment hereof.
12. Amendment and Assignment of Agreement. This Agreement
may not be amended or assigned without the affirmative vote of a
majority of the outstanding voting securities of the Fund, and
this Agreement shall automatically and immediately terminate in
the event of its assignment.
13. Termination of Agreement. This Agreement may be
terminated by either party hereto, without the payment of any
penalty, upon 60 days' prior notice in writing to the other
party; provided, that in the case of termination by the Fund such
action shall have been authorized by resolution of a majority of
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the directors of the Fund who are not parties to this Agreement
or interested persons of any such party, or by vote of a majority
of the outstanding voting securities of the Fund.
14. Miscellaneous.
A. Captions. The captions in this Agreement are included
for convenience of reference only and in no way define or
delineate any of the provisions hereof or otherwise affect their
construction or effect.
B. Interpretation. Nothing herein contained shall be
deemed to require the Fund to take any action contrary to its
Articles of Incorporation or By-Laws, or any applicable statutory
or regulatory requirement to which it is subject or by which it
is bound, or to relieve or deprive the board of directors of the
Fund of its responsibility for and control of the conduct of the
affairs of the Fund.
C. Definitions. Any question of interpretation of any
term or provision of this Agreement having a counterpart in or
otherwise derived from a term or provision of the Act shall be
resolved by reference to such term or provision of the Act and to
interpretations thereof, if any, by the United States courts or,
in the absence of any controlling decision of any such court, by
rules, regulations or orders of the Securities and Exchange
Commission validly issued pursuant to the Act. Specifically, the
terms "vote of a majority of the outstanding voting securities,"
"interested person," "assignment," and "affiliated person," as
used in Paragraphs 2, 8, 10, 11, and 12 hereof, shall have the
meanings assigned to them by Section 2(a) of the Act. In
addition, where the effect of a requirement of the Act reflected
in any provision of this Agreement is relaxed by a rule,
regulation or order of the Securities and Exchange Commission,
whether of special or of general application, such provision
shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers thereunto
duly authorized and their respective seals to be hereunto
affixed, as of the day and year first above written.
Attest: X. XXXX PRICE CORPORATE INCOME
FUND, INC.
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/s/Xxxxxxxx x. Xxxxxxx By:/s/Xxxxx Xxx Xxxx
Xxxxxxxx X. Xxxxxxx Xxxxx Xxx Xxxx
Assistant Secretary President
Attest: X. XXXX PRICE ASSOCIATES, INC.
/s/Xxxxxxx X. Xxx Xxxx By:/s/Xxxxx X. Xxxxxxx
Xxxxxxx X. Xxx Xxxx Xxxxx X. Xxxxxxx
Assistant Secretary Managing Director
