INVESTMENT MANAGEMENT AGREEMENT
Between
INSTITUTIONAL INTERNATIONAL FUNDS, INC.
and
X. XXXX PRICE INTERNATIONAL, INC.
INVESTMENT MANAGEMENT AGREEMENT, made
as of the 25th day of October, 2000, by and
between INSTITUTIONAL INTERNATIONAL FUNDS,
INC., a Maryland corporation (hereinafter
called 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 proposes to
engage in business as an open-end management
investment company and to register 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 Foreign Equity 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 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
Corporation or Fund, as appropriate, 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.
D. Reports and Other Communications to
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 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 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 of
the Fund's 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 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;
(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
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
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.
3. Management Fee. The Fund
shall pay the Manager a fee computed as
follows, based on the value of the net assets
of the Fund:
A. Fee Rate. The fee shall be
at the annual rate of .70% of the average daily
net assets of the Fund.
B. Method of Computation. The fee
shall be accrued for each calendar day and the
sum of the daily fee accruals shall be paid
monthly to the Manager on the first business
day of the next succeeding calendar month. The
daily fee accruals will be computed by
multiplying the fraction of one over the number
of calendar days in the year by the applicable
annual rate described in subparagraph (a) of
this Paragraph 3, and multiplying this product
by the net assets of the Fund 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 of the Fund,
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. 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: (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,
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.
11. 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.
12. 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.
13. 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, 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: INSTITUTIONAL 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
