Exhibit 99.5(m)
INTERIM INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT, made this 1st day of January, 2002, by, between and
among VAN ECK FUNDS, INC., a Maryland corporation having its principal place of
business at 00 Xxxx Xxxxxx 0xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000, (the "Company"),
XXX XXX ASSOCIATES CORPORATION, a Delaware corporation with offices at 00 Xxxx
Xxxxxx 0xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 ("Van Eck").
W I T N E S S E T H:
WHEREAS, the Company is engaged in business as a diversified open-end
management investment company and is registered as such under the Investment
Company Act of 1940 (the "Investment Company Act");
WHEREAS, the Company is authorized to issue shares of common stock,
$.01 par value, ("Shares") in separate classes or series with each such class
representing an interest in a separate portfolio of securities and other assets;
WHEREAS, the Company is currently comprised of two portfolios and
intends to offer shares in those portfolios (known individually as the Xxx Xxx
Total Return Fund, and the Xxx Xxx Growth and Income Fund) each of which pursues
or will pursue its investment objectives through separate investment policies
and separate investment management;
WHEREAS, the Board of Directors of the Company may add or delete
portfolios from time to time, but such addition or deletion will not affect this
Agreement, which relates only to the Growth and Income Fund and the Total Return
Fund (the "Funds");
WHEREAS, Xxx Xxx is engaged in the business of rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940;
WHEREAS, the Company desires to retain Xxx Xxx to render investment
management services to the Company with respect to the Funds in the manner and
on the terms set forth herein; and
WHEREAS, the Company believes that the expertise and business contacts
of Xxx Xxx are and will be of material benefit to the Company; and
WHEREAS, this Agreement is intended to serve as an "interim contract"
within the meaning of Rule 15a-4(b)(1) of the Investment Company Act.
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the Company, and Xxx Xxx hereby agree as follows:
1. DUTIES OF XXX XXX. Xxx Xxx hereby agrees, subject to the polices
of and supervision by the Directors of the Company, (a) to act as the investment
adviser to the Fund in accordance with the specific provisions of this
Agreement, (b) to manage the investment and reinvestment of the assets of the
Fund for the period and on the terms and conditions set forth in this Agreement,
and (c) during the term hereof, to render the services and to assume the
obligations herein set forth for the compensation provided for herein. In taking
any action hereunder, Xxx Xxx shall always be subject to, and shall follow at
all times (i) any restrictions of the Company's Articles of Incorporation and
By-Laws, as amended from time to time, (ii) the applicable provisions of the
Investment Company Act, and any rules and regulations adopted thereunder, (iii)
the statement relating to the Funds' investment objectives, policies and
restrictions as the same are set
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forth in the Prospectus of the Company and Statement of Additional Information
then currently effective under the Securities Act of 1933 (the "Prospectus"),
and (iv) any other provisions of state and federal law applicable to them in
connection with its duties hereunder.
2. (a) INVESTMENT MANAGEMENT SERVICES. In performing the duties
stated in Paragraph 1 above, Xxx Xxx will regularly provide the Company with
such investment research, advice and management as the Company may from time to
time consider necessary for the proper management of the Fund. Xxx Xxx will
furnish continuously an investment program for the Fund and will conduct a
continuous program of evaluation of assets in the Fund. In this connection, Xxx
Xxx will furnish the Directors and officers of the Company, the Company's
custodian ("Custodian"), the Company's Transfer Agent and any owner of Company
Shares with such daily asset valuations, statistical information with respect to
investments of the Fund and such periodic and special reports and information as
the Company may reasonable request. In addition, Xxx Xxx will determine which
securities or other investments shall be purchased, sold or exchanged and what
portion of the assets of the Fund shall be held in securities or other assets in
which it may invest. Should the Directors of the Company at any time, however,
make any definite determination as to investment policy for the Fund and notify
in writing Xxx Xxx thereof, Xxx Xxx shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. Xxx Xxx shall take, on behalf of the Fund, all
actions which it deems necessary to implement the investment objectives,
policies and restrictions of the Fund,
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determined as provided above, and in particular shall place orders for the
purchase or sale of securities and other investments for the Fund with brokers
or dealers selected by Xxx Xxx.
(b) SUB-CONTRACTING. Xxx Xxx, with the approval of the Company, may
contract with one or more Sub-Advisors to perform any of the investment
management services and with one or more Sub-Advisors or other parties to
perform any of the services required of Xxx Xxx hereunder; provided, however,
that the compensation of such parties will be the sole responsibility of Xxx
Xxx, as the case may be, with no right to reimbursement from the Company if such
services are not otherwise the obligation of the Company hereunder, and the
duties and responsibilities of such Sub-Adviser or other parties shall be as set
forth in an agreement or agreements between, Xxx Xxx, the Sub-Adviser and such
other parties and the Company, as appropriate.
Xxx Xxx shall exercise reasonable care in recommending, monitoring, and
supervising the performance of Sub-Advisors and others serving pursuant to the
foregoing paragraph, but, except as provided in Section 6 hereof, Xxx Xxx shall
be liable or legally responsible for the conduct of any Sub-Adviser.
3. (a) PURCHASE AND SALE OF ASSETS. Nothing in this Agreement shall
preclude the combining of orders for the sale or purchase of securities or other
investments with other accounts managed by Xxx Xxx, including other registered
investment companies, provided that Xxx Xxx does not favor any account over any
other account and provided that any purchase or sale orders executed
contemporaneously shall be allocated in a manner Xxx Xxx in so far as feasible
deems equitable with the goal of achieving the same average price for each
account. In this regard the principal factors to
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be considered in making such allocations are the investment objectives of the
account, the relative size of the account's holdings of the same or comparable
securities and the availability in each account of the funds for investment.
Neither the Adviser, nor any of its respective directors, officers or employees,
nor any person, firm or corporation controlling, controlled by or under common
control with either of them shall act as a principal or receive any commission
as agent in connection with the purchase or sale of assets of the Fund, unless
the receipt of such commission is in compliance with Section 17(e) of the
Investment Company Act and the rules thereunder.
(b) BROKERAGE FEES. In placing orders for the purchase or sale of
investments for the Fund, Xxx Xxx shall use its best efforts to obtain for the
Fund the most favorable price and execution available, considering all of the
circumstances, and shall maintain records adequate to demonstrate compliance
with this requirement. Notwithstanding the foregoing, however, subject to prior
authorization by the Company's Directors, Xxx Xxx may, to the extent authorized
by Section 28(e) of the Securities Exchange Act of 1934, cause the Company to
pay a broker or dealer that provides research and other brokerage services to
Xxx Xxx and the Company with respect to the Fund an amount of commission for
effecting a portfolio investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and research
services provided by the broker or dealer to Xxx Xxx, viewed in terms of either
that particular transaction or Xxx Xxx'x overall responsibilities with respect
to the Fund and other accounts, if any, as to which the Xxx Xxx exercises
investment discretion. As defined in Section 28(e) of the
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Securities Exchange Act of 1934, a broker or dealer provides brokerage and
research services to the extent such broker or dealer: (i) furnishes advice,
either directly or through publications or writings, as to the value of
securities, the advisability of investing in purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities; (ii)
furnishes analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and the performance of
accounts; or (iii) effects securities transactions and performs functions
incidental thereto (such as clearance, settlement and custody) or required in
connection therewith by rules of the Securities and Exchange Commission or
self-regulatory organization of which such broker or dealer is a member or a
participant. In the event of such authorization, and to the extent authorized by
said section, Xxx Xxx shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
such action.
(4) COMPENSATION OF XXX XXX. Except as hereinafter provided, for the
services rendered and expenses assumed by Xxx Xxx, the Company shall pay to Xxx
Xxx, monthly fees which shall accrue daily based on a percentage of the average
daily net asset value of the Funds as shown in the following table:
AVERAGE DAILY INVESTMENT
NET ASSET VALUE MANAGER
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First $200 Million 0.20
Next 1.1 Billion 0.19
Over 1.3 Billion 0.18
The average daily closing value of the aggregate net assets of the Funds shall
be determined and computed in accordance with the description of the method of
determination of net asset value contained in the Prospectus.
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The fees payable to Xxx Xxx by the Company hereunder shall be
reduced by any tender solicitation fees or similar payments received by Xxx Xxx,
respectively, or any affiliated person of Xxx Xxx, in connection with the tender
of investments of the Fund (less any directed expenses incurred by Xxx Xxx, or
any affiliated person of Xxx Xxx, in connection with obtaining such fees or
payments). Xxx Xxx shall use its best efforts to recapture all available tender
offer solicitation fees and similar payments in connection with tenders of the
securities of the Funds, provided, however, that Xxx Xxx shall not be required
to register as a broker-dealer for this purpose. Xxx Xxx shall advise the
Directors of any fees or payments of whatever type, which it may be possible for
Xxx Xxx to receive in connection with the purchase or sale of investment
securities for the Fund.
5. NON-EXCLUSIVITY. The Company agrees that the services of Xxx Xxx
are not to be deemed exclusive and that Xxx Xxx acts as an advisor to various
investment companies and as fiduciary for other manager accounts. Xxx Xxx shall
for all purposes herein be deemed to be an independent contractor and shall,
unless otherwise provided or authorized, have no authority to act for or
represent the Company with respect to the Funds in any way or otherwise be
deemed an agent of the Company with respect to the Funds other than in
furtherance of its duties and responsibilities as set forth in this Agreement.
6. LIABILITY. Xxx Xxx will not be liable for any loss suffered by the
Funds in connection with any investment policy established by the Company or the
purchase, sale or redemption of any securities at the direction of the Company.
Nothing herein contained shall be construed to protect Xxx Xxx against any
liability resulting from
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willful misfeasance, bad faith or negligence in the performance of its duties or
from reckless disregard of its obligations and duties under this agreement or by
virtue of violation of any applicable law.
7. (a) DOCUMENTS. The Company shall file with Xxx Xxx the following
documents: (i) certified copies of the Article of Incorporation of the Company
and all amendments thereto; (ii) a certified copy of the By-Laws of the Company
as amended to date; (iii) a copy of the resolution of the Directors of the
Company authorizing this Agreement; (iv) specimens of all forms of outstanding
and new certificates, if any, with respect to the Funds' class of Shares in the
forms approved by the Directors of the Company with a certificate of the
Secretary of the Company as to such approval; and (v) an opinion of counsel for
the Company with respect to the validity of the Funds' Shares, the number of
such Shares authorized, the number of Shares allocated to the Funds' class, the
status of redeemed or repurchased Shares and the number of Shares with respect
to which a registration statement under the Securities Act of 1933 has been
filed and is in effect.
(b) FURTHER DOCUMENTATION. The Company will also furnish from time to
time the following documents: (i) each resolution of the Directors of the
Company authorizing the original issue of the Funds' Shares; (ii) each
registration statement files with the Securities and Exchange Commission under
the Securities Act of 1933 or under the Investment Company Act and amendments
thereof, orders relating thereto and prospectuses and statements of additional
information in effect with respect to the sale of Shares of the Company; (iii) a
certified copy of each amendment to the Articles of Incorporation and the
By-Laws of the Company; and (iv) specimens of all
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new certificates for the Funds' class of Shares, if any, accompanied by a
certificate of the secretary of the Company as to the Directors' approval of
such forms.
(c) INFORMATION. The Company or its agent will provide timely
information to Xxx Xxx, as the case may be, regarding such matters as purchases
and redemption of Shares in the Funds, the cash requirements, and cash available
for investment in the Funds, and all other information as may be reasonably
necessary or appropriate in order for Xxx Xxx to perform its responsibilities
hereunder.
(d) RELIANCE ON DOCUMENTS AND INFORMATION. Xxx Xxx will be entitled
to rely on all documentation and information furnished by the Company.
8. (a) EXPENSES OF THE COMPANY. As between the Company and Xxx Xxx,
the following expenses shall be borne exclusively by the Company.
(i) Brokerage commissions and transfer and transfer taxes in
connection with the Funds' transactions and similar fees and charges for the
acquisition, disposition, lending or borrowing of the Funds' investments;
(ii) All other state, federal or local taxes (including any
insurance, transfer, franchise or income taxes) payable by the Company and all
corporate or filing fees payable by the Company and all corporate or filing fees
payable by the Company to any governmental entity or agency;
(iii) Fees and expenses incurred in the registration or
qualification (and maintaining said registration or qualification) of the
Company and its Shares under federal or state securities laws subsequent to the
effective date of the registration statement;
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(iv) Compensation paid to directors who are not "interested
persons" of the Company within the meaning of the Investment Company Act and
travel expenses paid to all directors;
(v) Interest and any other cost related to borrowing by
the Company;
(vi) Any extraordinary or non-recurring expenses (such as
legal claims and liabilities, and litigation cost and any indemnification
related thereto);
(vii) Costs of printing and the postage costs of
distributing to current stockholders, stockholder reports, proxy statements,
Prospectuses, Statement of Additional Information, advertising and sales
material;
(viii) The cost of the fidelity bond required by Investment
Company Act Rule 17g-1 and any errors and omissions insurance or other liability
insurance covering the Company and/or its officers, directors and employees;
(ix) Fees of auditors and legal counsel for the Company,
membership dues for the Investment Company Institute and the cost of providing
any statistical information otherwise supplied by Xxx Xxx; (x) All other
expenses not specifically assumed hereunder by Xxx Xxx.
(b) EXPENSES OF XXX XXX. As between the Company and Xxx Xxx, the
costs and expenses of providing the necessary facilities, personnel, office
equipment and supplies, office space, telephone service, and other utility
services necessary to carry out its obligations hereunder shall be borne
exclusively by Xxx Xxx, except as otherwise herein expressly provided.
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9. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall
become effective as of January 1, 2002 and shall unless terminated as herein
provided, remain in force until the earlier of (i) the effective date of an
advisory agreement between the Company and Xxx Xxx that has been approved by a
vote of a majority of the outstanding voting securities of the Fund. and the
vote is 150 days after the date of this Agreement. This Agreement may be
terminated without the payment of any penalty, by the Directors of the Company
or, by vote of a majority of the outstanding securities of the Fund on sixty
days' written notice to Xxx Xxx on sixty days' written notice to the Company and
the other party. This Agreement shall automatically terminate in the event of
its assignment.
10. AMENDMENT OF THIS AGREEMENT. This Agreement may be amended with
respect to the Fund only if, to the extent required by law, such amendment is
specifically approved by (a) the Directors of the Company, or by the vote of a
majority of the outstanding voting securities of the Fund, and (b) by the vote
of a majority of those Directors of the Company who are not interested persons
of any party to this Agreement cast in person at a meeting called for the
purpose of voting on such approval.
11. DEFINITIONS. The terms "assignment" "interested person," and
"majority of the outstanding voting securities," when used in this Agreement,
shall have the respective meanings specified under the Investment Company Act
and rules thereunder.
12. FURTHER ACTIONS. Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purposes
hereof.
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13. NAME. This Agreement is entered into in conjunction with Xxx Xxx
Associates Corporation granting the Company a license to use the word "Xxx Xxx"
in its corporate name and to use such words in connection with its business.
14. GOVERNING LAW. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New
Hampshire as at the time in effect and the applicable provisions of the
Investment Company Act and rules thereunder. To the extent that the applicable
law of the State of New Hampshire or any of the provisions herein, conflict with
the applicable provisions of the Investment Company Act and rules thereunder,
the latter shall control.
ATTEST: XXX XXX FUNDS, INC.
ON BEHALF OF GROWTH AND INCOME FUND
AND TOTAL RETURN FUND
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Title: Title:
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ATTEST: XXX XXX ASSOCIATES CORPORATION
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Title: Title:
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