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INVESTMENT MANAGEMENT AGREEMENT
Between
X. XXXX PRICE EQUITY SERIES, INC.
and
X. XXXX PRICE ASSOCIATES, INC.
INVESTMENT MANAGEMENT AGREEMENT, made as of the 31st day of
July, 1996, by and between X. XXXX PRICE EQUITY SERIES, INC., a
Maryland corporation (hereinafter called the "Corporation"), and
X. XXXX PRICE ASSOCIATES, INC., a corporation organized and
existing under the laws of the State of Maryland (hereinafter
called the "Manager").
W I T N E S S E T H:
WHEREAS, the Corporation is engaged in business as an open-
end management investment company and is registered as such under
the federal Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, the Corporation is authorized to issue shares of
capital stock ("Shares") in the X. Xxxx Price Mid-Cap Growth
Portfolio (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:
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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
objectives, 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 objectives. 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 corporate existence and corporate
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
the Fund may, at any time or from time to time, reasonably
request or as the Manager may deem helpful.
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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 from 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.
The Manager shall pay all of the Corporation expenses, on
behalf of the Fund, with the following exceptions:
(1) Interest. Interest;
(2) Taxes. All taxes or governmental fees payable by
or with respect of the Fund to federal, state, or other
governmental agencies, domestic or foreign, including
stamp or other transfer taxes;
(3) Brokerage Commissions. All brokers' commissions
and other charges incident to the purchase, sale, or
lending of the Fund's portfolio securities;
(4) Directors' Fees and Expenses. All compensation
of directors, other than those affiliated with the
Manager, and all expenses (including counsel fees and
expenses) incurred in connection with their service; and
(5) Nonrecurring and Extraordinary Expenses. Such
nonrecurring expenses as may arise, including the costs
of actions, suits, or proceedings to which the Fund is a
party and the expenses the Fund may incur as a result of
its legal obligation to provide indemnification to its
officers, directors, and agents.
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3. Management Fee. The Fund shall pay the Manager a fee
("Fee") at the annual rate of 0.85% of the Fund's net assets.
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: The monthly fee is equal to the sum of
the daily fee accruals which shall be computed by multiplying the
fraction of one (1) over the number of calendar days in the year
by the fee rate of 0.85%, and multiplying this product by the net
assets of Fund for that day as determined in accordance with the
Fund's prospectus as of the close of business from the previous
business day on which the Fund was open for business.
It is understood that the expenses of the Fund will not
exceed any expense limitation prescribed by any state in which
the Fund's shares are qualified for sale ("State Expense Limit").
Any Management Fees not paid or expenses assumed by the Manager
pursuant to a State Expense Limit shall be subject to
reimbursement provided that no such reimbursement shall be made
more than two years after the fiscal year in which such fees were
not paid or expenses assumed.
A. 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. Shareholder Account Fee. The Corporation, on behalf
of the Fund, by resolution of the board of directors, including a
majority of the independent directors, may from time to time
authorize the imposition of a fee as a direct charge against
shareholder accounts to be retained by the Fund or to be paid to
the Manager to defray expenses which would otherwise be paid by
the Manager in accordance with the provisions of Paragraph 2 of
this Agreement. At least 60 days' prior written notice of the
intent to impose such fee must be given to the Fund's
shareholders.
5. 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
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"'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).
6. 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.
7. 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.
8. 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.
9. 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
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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.
10. 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.
11. Use of Manager's Name. The Corporation or Fund may
use the name "X. Xxxx Price Equity Series, 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.
12. 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, 1997. Thereafter, this Agreement
shall continue in effect from year to year, 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
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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, 1997 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.
13. 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.
14. 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 Fund 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.
15. 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.
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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, 10, 11, and 12 hereof, shall have the
meanings assigned to them by Section 2(a) of the Act. In
addition, where the effect of a requirement of the Act reflected
in any provision of this Agreement is relaxed by a rule,
regulation or order of the Securities and Exchange Commission,
whether of special or of general application, such provision
shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective officers thereunto
duly authorized and their respective seals to be hereunto
affixed, as of the day and year first above written.
Attest: X. XXXX PRICE EQUITY SERIES, INC.
/s/Xxxxxxxx X. Xxxxxxx /s/M. Xxxxx Xxxxx
__________________________ By: ____________________________
Xxxxxxxx X. Xxxxxxx M. Xxxxx Xxxxx
Assistant Secretary President
Attest: X. XXXX PRICE ASSOCIATES, INC.
/s/Xxxxxxx X. XxxXxxx /s/Xxxxx X. Xxxxxxx
__________________________ By: ______________________________
Xxxxxxx X. XxxXxxx Xxxxx X. Xxxxxxx
Assistant Secretary Managing Director
