INVESTMENT MANAGEMENT AGREEMENT
BETWEEN
X. XXXX PRICE INTERNATIONAL FUNDS, INC.
AND
XXXX XXXXX-XXXXXXX INTERNATIONAL, INC.
INVESTMENT MANAGEMENT AGREEMENT, made as of the 4th day of November, 1998,
by and between X. XXXX PRICE INTERNATIONAL FUNDS, INC., a Maryland corporation
(the "Corporation"), and XXXX XXXXX-XXXXXXX 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 International Growth & Income 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:
(1)
buy, sell, exchange, convert, lend, and otherwise trade in any stocks, bonds,
and other securities or assets; and
(2)
directly or through the trading desks of X. Xxxx Price Associates, Inc. ("Price
Associates"), Xxxxxx Xxxxxxx Holdings Limited ("Holdings") and their affiliates
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% Thereafter
The Price Funds shall include all the mutual funds distributed by X. Xxxx
Price Investment Services, Inc., (other than institutional or "private label"
funds, Index Trust, Spectrum Funds and Reserve Investment Funds). For the
purposes 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 Fund's prospectus, 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 0.35% 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 agrees 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 October 31, 2000, such
expenses shall not exceed 1.25% of the average daily net assets of the Fund
("1.25% Expense Limitation"). To determine the Manager's liability for the
Fund's expenses over the 1.25% Expense Limitation, the
amount of allowable year-to-date expenses shall be computed daily by pro rating
the 1.25% Expense Limitation based on the number of days elapsed within the
fiscal year of the Fund, or limitation period, if shorter ("Pro Rated
Limitation"). The Pro Rated 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 October 31, 2000, 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 October 31, 2000,
these amounts shall be paid to the Manager in the future provided that: (1) no
such payment shall be made to the Manager after October 31, 2002; and (2) such
payment shall only be made to the extent that it does not result in the Fund's
aggregate expenses exceeding an expense limit of 1.25% of average daily net
assets. 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 October 31, 2000 (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, 1999. 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, 1999 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.
/s/Xxxxxxxx X. Xxxxxxx /s/M. Xxxxx Xxxxx
___________________________ By: _________________________________
Xxxxxxxx X. Xxxxxxx, M. Xxxxx Xxxxx,
Secretary Chairman of the Board
Attest: XXXX
XXXXX-XXXXXXX INTERNATIONAL, INC.
/s/Xxxxxxx X. Xxx Xxxx /s/Xxxxx X. Xxxxxxx
___________________________ By: _________________________________
Xxxxxxx X. Xxx Xxxx, Xxxxx X. Xxxxxxx,
Assistant Secretary Vice President
