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 New Asia 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 Advisory 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.
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 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 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 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 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 ("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 .50% and multiplying this product
by the net assets of the Fund for that day, as
determined in accordance with the Corporation'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 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
NASMgAgt/edg
