EXHIBIT 99 (d)(1)
FORM OF INVESTMENT MANAGEMENT AGREEMENT AND SERVICE AGREEMENT
THIS AGREEMENT is entered into this ___ day of January 2005, by and
between Aster Investment Management, Inc. (the "Investment Manager") and
Meridian Fund, Inc. a series investment company (the "Company").
1. APPOINTMENT AND ACCEPTANCE OF APPOINTMENT OF THE INVESTMENT MANAGER
Subject to the express provision and limitations set forth in the
Company's Articles of Incorporation, Bylaws, Form N-1A Registration
Statement under the Investment Company Act of 1940, as amended (the
"1940 Act") under the Securities Act of 1933, as amended (the "1933
Act"), and prospectus as in use from time to time, as well as to the
factors affecting the Company's status as a "regulated investment
company" under the Internal Revenue Code of 1954, as amended, the
Company hereby grants to the Investment Manager and the Investment
Manager hereby accepts full discretionary authority to manage the
investment and reinvestment of the cash and securities in the account
of the Company for the Meridian Equity Income Fund series. For all
purposes hereunder, unless the context shall otherwise require, the
references to "Portfolio" in the Agreement shall refer to the Meridian
Equity Income Fund, the assets of which are presently held by the PFPC
Trust Inc. (the "Custodian"), the proceeds thereof, and any additions
thereto, in the Investment Manager's discretion. In its duties
hereunder, the Investment Manager shall further be bound by any and all
determinations by the Board of Directors of the Company relating to
investment policy, which determinations shall in writing be
communicated to the Investment Manager. The Investment Manager shall,
for all purposes herein, be deemed an independent contractor of the
Company.
2. POWERS OF THE INVESTMENT MANAGER
The Investment Manager is empowered, through any of its
officers or employees:
(a) to invest and reinvest in equity securities, debt
securities and other obligations of every description issued
or incurred by governmental bodies, corporations, mutual
funds, trusts, associations or firms, in money market
instruments, and in loans and deposits at interest on call or
on time, whether or not secured by collateral;
(b) to buy, sell, and exercise warrants and other
rights to subscribe for or sell stock or other securities; and
(c) to take such other action, or direct the
Custodian to take such other action, as may be necessary or
desirable to carry out the purpose and intent of the
foregoing.
The Investment Manager is not empowered to have
custody or possession of, or have authority to obtain custody or
possession of securities or funds of the Company.
3. EXECUTION OF PORTFOLIO TRANSACTIONS
(a) The Investment Manager shall provide adequate facilities
and qualified personnel for the placement of, and shall place, orders
for the purchase, or other acquisition, and sale, or other disposition,
of portfolio securities and other assets for the Company;
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(b) Unless otherwise specified in writing to the Investment
Manager by the Company, all orders for the purchase and sale of
securities for the Portfolio shall be placed in such markets and
through such brokers as in the Investment Manager's best judgment shall
offer the most favorable price and market for the execution of each
transaction; provided, however, that, subject to the above, the
Investment Manager may place orders with brokerage firms which have
sold shares of the Company or which furnish statistical and other
information to the Investment Manager, taking into account the value
and quality of the brokerage services of such firms, including the
availability and quality of such statistical and other information.
Receipt by the Investment Manager of any such statistical and other
information and service shall not be deemed to give rise to any
requirement for abatement of the advisory fee payable to the Investment
Manager pursuant to Section 5 hereof and Appendix A hereto;
(c) The Company understands and agrees that the Investment
Manager may effect securities transactions which cause the Company to
pay an amount of commission in excess of the amount of commission
another broker or dealer would have charged; provided, however, that
the Investment Manager determines in good faith that such amount of
commission is reasonable in relation to the value of the Company share
sales, statistical, brokerage and other services provided by such
broker or dealer, viewed in terms of either the specific transaction of
the Investment Manager's overall responsibilities to the Company and
other non-investment company clients for which the Investment Manager
exercises investment discretion. The Company also understands that the
receipt and use of such services will not reduce the Investment
Manager's customary and normal research activities;
(d) The Company understands and agrees:
(i) that the Investment Manager performs investment
management services for various clients and the Investment
Manager may take action with respect to any of its other
clients which may differ from action taken or from the timing
or nature of action taken with respect to the Portfolio, so
long as it is the Investment Manager's policy, to the extent
practical, to allocate investment opportunities to the
Portfolio over a period of time on a fair and equitable basis
relative to other clients;
(ii) that the Investment Manager shall have no
obligation to purchase or sell for the Portfolio any security
or other assets which the Investment Manager or its officers
or employees, may purchase or sell for its or their own
accounts or the account of any other client, if in the opinion
of the Investment Manager such transaction or investment
appears unsuitable, impractical or undesirable for the
Portfolio; and
(iii) that on occasions when the Investment Manager
deems the purchase or sale of a security or other asset to be
in the best interests of the Company as well as other clients
of the Investment Manager, the Investment Manager, to the
extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased when the
Investment Manager believes that to do so will be in the best
interests of the Company. Allocation, in such event, of the
securities or other assets so purchased or sold, as well as
the expenses incurred in the transaction, shall be made by the
Investment Manager in the manner the Investment Manager
considers to be the most equitable and consistent with its
fiduciary obligations to the Company and to such other
clients.
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4. ALLOCATION OF EXPENSES OF THE COMPANY
(a) The Company is responsible for payment of ordinary
operating expenses, including but not limited to: (i) brokerage and
commission expenses; (ii) Federal, state or local taxes, incurred by,
or levied on, the Company; (iii) interest charges on borrowings, (iv)
charges and expenses of the Company's custodian, stock transfer and
dividend disbursing agents; (v) cost of the designing, printing and
mailing of reports, proxy statements and notices to stockholders; (vi)
cost of the printing and distributing of the prospectuses of the
Company and supplements thereto to the Company's stockholders; (vii)
expenses of the issuance and redemption of the shares of the Company
(including stock certificates, securities registration and
qualification fees and expenses); (viii) legal, auditing and regulatory
compliance expenses; (ix) compensation, fees and expenses paid to
Company directors unaffiliated with the Investment Manager; (x)
association dues; (xi) cost of stationery and forms prepared
exclusively for the Company; and (xii) payment of all investment
management or advisory fees, including fees and expenses payable under
Section 5 hereof and Appendix A hereto.
(b) The Investment Manager shall pay for all costs of
organizing the Company.
(c) The Investment Manager shall provide persons to perform
executive, administrative, clerical and bookkeeping functions of the
Company, as specified by the Board of Directors of the Company.
(d) The Company is responsible for payment of any
extraordinary expenses incurred. A good faith determination of what
constitutes an extraordinary expense shall be made by the Board of
Directors of the Company, which good faith determination shall include
the affirmative vote of all non-interested directors of the Company.
5. COMPENSATION OF THE INVESTMENT MANAGER
(a) In consideration of the services performed by the
Investment Manager hereunder, the Company will pay or cause to be paid
to the Investment Manager, as they become due and payable, management
fees determined in accordance with the attached schedule of fees
(Appendix A) for the Portfolio. In the event of termination any
management fees paid in advance pursuant to such fee schedule will be
prorated as of the date of termination and the unearned portion thereof
will be returned to the Company.
(b) The net asset value of the Company used in fee
calculations shall be determined in the manner set forth in the
Articles of Incorporation, By-laws and Prospectus of the Company after
the close of the New York Stock Exchange on each business day on which
the New York Stock Exchange is open.
(c) The Company hereby authorizes the Investment Manager to
charge the Portfolio for the full amount of fees as they become due and
payable pursuant to the attached schedule of fees; provided, however,
that a copy of a fee statement covering said payment shall be sent to
the Custodian and to the Company.
6. SERVICE TO OTHER CLIENTS
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Nothing contained in this Agreement shall be construed to
prohibit the Investment Manager from performing investment advisory,
management, distribution or other services for other investment
companies and other persons, trusts or companies, or to prohibit
affiliates of the Investment Manager from engaging in such business or
in other related or unrelated businesses.
7. INDEMNIFICATION
The Investment Manager shall have no liability to the Company,
or its stockholders, for any error of judgment, mistake of law, or for
any loss arising out of its obligations to the Company not involving
willful misfeasance, bad faith, gross negligence or reckless disregard
of its obligations and duties hereunder.
8. DURATION OF AGREEMENT
This Agreement shall be effective on January___, 2005, and
shall, unless terminated as hereinafter provided, continue in effect
until the close of business on October 31, 2005. This Agreement may be
renewed thereafter from year to year by mutual consent, provided that
such renewal shall be specifically approved at least annually by (i)
the Board of Directors of the Company, or by the vote of a majority (as
defined in the 0000 Xxx) of the outstanding voting securities of the
Company, and (ii) a majority of those directors who are not parties to
this Agreement or interested persons (as defined in the 0000 Xxx) of
any such approval. Such mutual consent to renewal shall not be deemed
to have been given unless evidenced by a writing signed by both parties
hereto.
9. TERMINATION
This Agreement may be terminated at any time, without payment
of any penalty, by the Board of Directors of the Company or by the vote
of a majority (as defined in the 0000 Xxx) of the outstanding voting
securities of the Company on sixty (60) day's written notice to the
Investment Manager, or by the Investment Manager on like notice to the
Company. This Agreement shall terminate automatically in the event of
its assignment (as defined in the 1940 Act).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate originals by their officers thereunto duly authorized as
of the date first above written.
ASTER INVESTMENT MANAGEMENT, INC. MERIDIAN FUND, INC.
BY: _____________________________ BY:
Xxxxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxx, Xx.
President President
ATTEST: ATTEST:
_____________________________
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
Vice President of Operations Treasurer/Secretary
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APPENDIX A
INVESTMENT MANAGEMENT AGREEMENT, POWER OF ATTORNEY,
AND SERVICE AGREEMENT
BETWEEN ASTER INVESTMENT MANAGEMENT, INC. AND MERIDIAN FUND, INC.
SCHEDULE OF FEES
MERIDIAN EQUITY INCOME FUND
Effective Date: January 1, 2005
The fee for each one-month period from the effective date referred to
above shall be the amount obtained by computing the Net Asset Value of the
Portfolio as of the close of business on each business day, computing the total
of such figures on the last day of each month and multiplying the resultant
total Net Asset Value by 1/365 of the applicable annual fee rate indicated
below. This fee shall be payable upon receipt of the Fee Statement.
On all sums from $0 through $10 million: ___% per Annum
On all sums over $10 through $30 million: ___% per Annum
On all sums over $30 through $50 million: ___% per Annum
On all sums in excess of $50 million: ___% per Annum
Dated: January 1, 2005
ASTER INVESTMENT MANAGEMENT, INC. MERIDIAN FUND, INC.
BY: __________________________ BY: __________________________
Xxxxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxx, Xx.
President President
ATTEST: ATTEST:
__________________________
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
Vice President of Operations Treasurer/Secretary
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