INVESTMENT MANAGEMENT AGREEMENT
Between
X. XXXX PRICE INTERNATIONAL FUNDS, INC.
and
X. XXXX PRICE INTERNATIONAL, INC.
INVESTMENT MANAGEMENT AGREEMENT, made as
of the 25th day of October, 2000, by and
between X. XXXX PRICE INTERNATIONAL FUNDS,
INC., a Maryland corporation (the
"Corporation"), and X. XXXX PRICE
INTERNATIONAL, 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 Latin America 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 Corporation 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
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, 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 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, 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. 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 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 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 of the
Corporation or Fund, as appropriate, on any
subsequent occasion.
B. Expenses Paid by Fund. The
Corporation or Fund, as appropriate, 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
Corporation or Fund, as appropriate, shall pay:
(1) Custody and Accounting
Services. All expenses of the transfer,
receipt, safekeeping, servicing and accounting
for the cash, securities, and other property of
the Corporation, for the benefit 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 for
transfer, shareholder recordkeeping, dividend
disbursing, redemption, and other agents for
the benefit of the Fund, 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
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 Corporation or Fund and the
custodian, transfer agent or any other agent
selected by the Corporation;
(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;
(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 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 Filing
Fees. All fees and expenses imposed on the Fund
with respect to the sale of the Fund shares
under securities laws of various states or
jurisdictions, and, 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 the Fund's shares, including the
expense of confirming all share transactions;
(13) Bonding and Insurance.
All expenses of bond, liability, and other
insurance coverage required by law or deemed
advisable by the Corporation'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 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.
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 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% Next $16 billion
0.305% Next $30 billion
0.300% Next $40 billion
0.295% Thereafter
The Price Funds shall include all the
mutual funds distributed by X. Xxxx Price
Investment Services, Inc., (other than
institutional, private label, or index funds,
Spectrum Funds and Reserve Investment 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 prospectus,
on behalf of the Fund, 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 0.75% 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 may agree 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 a certain date ("Certain
Date"), such expenses shall not exceed a
certain level of the average daily net assets
of the Fund ("Expense Limitation"). To
determine the Manager's liability for the
Fund's expenses over the Expense Limitation,
the amount of allowable year-to-date expenses
shall be computed daily by prorating the
Expense Limitation based on the number of days
elapsed within the fiscal year of the Fund, or
limitation period, if shorter ("Prorated
Limitation"). The Prorated 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 the
Certain Date, 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 the Certain Date, these amounts shall
be paid to the Manager in the future provided
that: (1) no such payment shall be made to the
Manager after a two year reimbursement period
following the Certain Date; and (2) such
payment shall only be made to the extent that
it does not result in the Fund's aggregate
expenses exceeding the Expense Limitation. 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 the Certain
Date (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 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.
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, 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 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 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 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 International Funds, Inc." 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, 2001.
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 such continuation shall be specifically
approved at least annually (a) by either the
board of directors of the Corporation, or by
vote of a majority of the outstanding voting
securities of the Fund; (b) in either event 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 (c) the Manager shall not have
notified the Corporation, in writing, at least
60 days prior to April 30, 2001 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.
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 of the Corporation 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, 8, 9, 11, 12, and 13
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 INTERNATIONAL FUNDS,
INC.
By:
______________________________
________________________________________
Xxxxxxxx X. Xxxxxxx, M. Xxxxx Xxxxx,
Secretary Director and Vice President
Attest: X. XXXX PRICE INTERNATIONAL, INC.
By:
_______________________________
________________________________________
Xxxxxxx X. Xxx Xxxx, Xxxxx X. Xxxxxxx,
Secretary Vice President
XxXxxxXXX0.xx
