INVESTMENT MANAGEMENT AGREEMENT
BETWEEN
X. XXXX PRICE RETIREMENT FUNDS, INC.
AND
X. XXXX PRICE ASSOCIATES, INC.
INVESTMENT MANAGEMENT AGREEMENT, made as of the __th day of July,
2002, by and between X. XXXX PRICE RETIREMENT FUNDS, INC., a Maryland
corporation (the "CORPORATION"), 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 Corporation 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 Corporation is authorized to issue shares of capital
stock ("SHARES") in the X. Xxxx Price Retirement 2010 Fund (the "FUND"), a
separate series of the Corporation whose Shares represent interests in a
separate portfolio of securities and other assets ("FUND SHARES"); 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 objective, program, and restrictions as provided in the
Corporation's prospectus, on behalf of the Fund, 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
1
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 objective. In furtherance of this duty, the Manager, as
agent and attorney-in-fact with respect to the Corporation, is authorized, in
its discretion and without prior consultation with the Corporation, to:
(i)
buy, sell, exchange, convert, 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 existence and records of the Corporation; 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 for the benefit of the Fund by the
Corporation (including the Corporation'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
Corporation or Fund, as appropriate, such information, reports, evaluations,
analyses, and opinions as they 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
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 (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 Corporation or Fund, without
remuneration or other cost to the Fund or the Corporation.
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
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 Corporation or Fund who are affiliated
with the Manager.
(2)
ASSUMPTION OF EXPENSES BY MANAGER. The payment or assumption by the Manager of
any expense of the Corporation or Fund, as appropriate, 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 on any subsequent occasion.
B.
EXPENSES OF FUND. All expenses of the organization, operations, and business of
the Corporation or Fund, as appropriate, not specifically assumed or agreed to
be paid by the Manager as provided in paragraph 2.A. above, will be paid in
accordance with paragraph 2.C. of this Agreement. Such expenses include the
following:
(1)
CUSTODY AND ACCOUNTING SERVICES. All expenses of the transfer, receipt,
safekeeping, servicing, and accounting for the cash, securities, and other
property of the Fund, 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 preparing, setting in type,
printing, and distributing reports and other communications to shareholders;
(4)
SHAREHOLDER MEETINGS. All expenses incidental to holding meetings of
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 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 Corporation or the Fund and the
custodian, transfer agent, or any other agent selected by the Corporation or
Fund;
(8)
LEGAL AND ACCOUNTING FEES AND EXPENSES. All charges for services and expenses of
the Corporation's legal counsel and independent auditors, for the benefit of the
Fund;
3
(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 Corporation under the Act and the registration of Fund
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 FILING FEES. All fees and expenses of qualifying and maintaining
qualification of the Corporation or Fund, as appropriate, and of Fund Shares for
sale under securities laws of various states or jurisdictions, and of
registration and qualification of the Corporation or Fund, as appropriate, under
all other laws applicable to the Corporation or Fund, as appropriate, or its
business activities (including registering the Corporation as a broker-dealer,
or any officer of the Corporation or any person as agent or salesman of the
Corporation 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 Fund 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 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
Corporation or Fund, as appropriate, 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 Corporation's or Fund's, as appropriate, 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
Corporation or Fund, as appropriate, is a party and the expenses the Corporation
or Fund, as appropriate, may incur as a result of its legal obligation to
provide indemnification to its officers, directors, and agents.
C.
PAYMENT OF FUND EXPENSES. The parties hereto acknowledge that, pursuant to a
Special Servicing Agreement entered into between and among the Corporation, the
Manager, various funds in which the Corporation may invest (the "UNDERLYING
PRICE FUNDS") and X. Xxxx Price Services, Inc., if the Board of
Directors/Trustees of any Underlying Price Fund determines that the aggregate
expenses of the Corporation are less than the estimated savings to the
Underlying
4
Price Fund from the operation of the Corporation, the Underlying Price Fund will
bear those expenses in proportion to the average daily value of its shares owned
by the Corporation, provided further that no Underlying Price Fund will bear
such expenses in excess of the estimated savings to it ("EXCESS EXPENSES").
However, as part of the consideration for the Fund entering into this Agreement,
the Manager hereby agrees that it will bear any such Excess Expense.
3.
MANAGEMENT FEE. The Fund shall not pay the Manager a fee for the services
rendered hereunder.
4.
BROKERAGE. Subject to the approval of the board of directors, the Manager, in
carrying out its duties under Paragraph 1.A., may cause the Corporation, with
respect to 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 l934, 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 Corporation or Fund, as appropriate,
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, appropriate or convenient for the discharge of its
obligations hereunder or otherwise helpful to the Corporation or Fund, as
appropriate, 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
Corporation or 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 Corporation or Fund, as
appropriate, are the property of the Corporation or Fund, as appropriate, and
will be surrendered by the Manager promptly on request by the Corporation or
Fund, as appropriate.
7.
REPORTS TO MANAGER. The Corporation or Fund, as appropriate, 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 Corporation or Fund, as appropriate, 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
5
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 Corporation or 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 Corporation or 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 Corporation or 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 Corporation or Fund may use the name "X. XXXX PRICE
RETIREMENT FUNDS, INC. AND X. XXXX PRICE RETIREMENT 2010 FUND" or any other name
derived 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 Corporation or 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, 2003. Thereafter, this
Agreement shall continue in effect from year to year, with respect to the Fund,
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 Corporation 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 Corporation, with respect to 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 Corporation, in writing, at least 60
days prior to April 30, 2003 or prior to April 30th of any year thereafter, that
it does not desire such continuation. The Manager shall furnish to the
Corporation, 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.
6
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
Corporation, with respect to the Fund, such action shall have been authorized by
resolution of a majority of the directors 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
Corporation 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 Corporation 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, 7, 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 RETIREMENT 2010 FUND
___________________________ By: _________________________________
Xxxxxxxx X. Xxxxxxx, Xxxxx X. Xxxxx
Secretary President
7
Attest: X. XXXX PRICE ASSOCIATES, INC.
___________________________ By: _________________________________
Xxxxxxx X. XxxXxxx, Xxxxx X. Xxxxxxx,
Secretary Vice President
EDG\Agreements\Investment Magmt Agreements\XxXxxxXX0000.xx
8
