Exhibit 10.34
INVESTMENT ADVISORY AGREEMENT
Between
X. XXXX PRICE ASSOCIATES, INC.
and
INTERSIL CORPORATION RETIREMENT COMMITTEE
INVESTMENT ADVISORY AGREEMENT (hereinafter called the "Agreement") made as
of the 3rd day of September, 1999 by and between X. Xxxx Price Associates, Inc.,
a corporation organized and existing under the laws of the State of Maryland
(hereinafter called the "Adviser") and the Intersil Corporation Retirement
Committee, a fiduciary of the Intersil Retirement Plan (Nonunion) and the
Intersil Retirement Plan (Union) (hereinafter called the "Client") regarding
designated assets of the Intersil Corporation Master Trust (such designated
assets hereinafter called the "BCG Account").
WHEREAS, the Client wishes to engage the Adviser to render investment
advice with respect to the BCG Account;
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the parties hereto agree as follows:
1. Appointment. The Client hereby appoints the Adviser as investment
adviser with respect to the BCG Account, which BCG Account shall consist of such
sums of money and other property, or part interests therein as shall be agreed
upon by the Adviser and the Client and such earnings, profits, increments and
accruals thereon (less losses, deductions and withdrawals) as may occur from
time to time. The BCG Account shall at all times remain in the name of, and be
the property of, the Intersil Corporation Master Trust.
2. Authority. Adviser will supervise and direct investments for the BCG
Account, subject to such limitations as Client may impose. Without prior
consultation with Client, Adviser will make investment decisions with respect to
stocks, bonds and other securities (including money market instruments), and
place transaction orders with brokers, dealers and issuers selected by Athiser
3. Investment Objectives and Restrictions. Client has provided Adviser
with the investment objectives of the BCG Account, attached as Exhibit A,
including any applicable restrictions and cash flow requirements. Client will
notify Adviser in writing of any modifications to Exhibit A and will give
Adviser prompt notice if the Client considers any investment listed on a
quarterly inventory provided by Adviser pursuant to paragraph 6 hereof to be in
violation of such objectives or restrictions. Unless Client notifies Adviser to
the contrary in writing, investments for the BCG Account shall be deemed not
restricted by any instrument affecting the BCG Account to which Client is a
party. The Adviser shall at all times conform to
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the restrictions contained in the investment objectives set forth in Exhibit A,
as may be amended in writing from time to time by the parties.
4. Investment Powers. Except to the extent inconsistent with any provision
of this Agreement or the Trust, the Adviser shall have the following express
powers with respect to the BCG Account:
(a) To invest and reinvest the BCG Account in whatever form of
investment, consistent with the investment objectives set forth in
Exhibit A then in effect, as the Adviser may determine, including
investments which yield little or no current income.
(b) To exercise subscription, conversion and other rights and
options, and to direct payments from the BCG Account in connection
therewith.
(c) To take any action and to abstain from taking any action
with respect to any reorganization, consolidation, merger,
dissolution, recapitalization, refinancing, and any other plan or
change affecting any property, and in connection therewith, to
delegate its discretionary powers and to direct the payment of
assessments, subscriptions and other charges from the BCG Account.
(d) The Adviser further shall have authority to instruct the
Custodian (i) to pay cash for securities and other property
delivered to the Custodian for the BCG Account, (ii) to deliver
securities and other property against payment for such BCG Account,
and (iii) transfer assets and funds to such brokerage accounts as
the Adviser may designate. The Adviser shall not have the authority
to cause the Custodian to deliver securities and other property, or
to pay cash, to the Adviser.
The investment authority granted to the Adviser shall
include the authority to exercise whatever powers the Custodian or
Trustee may possess with respect to any of its assets held in the
BCG Account, including, but not limited to, the power to exercise
rights, options, warrants, conversion privileges, and redemption
privileges, and to tender securities pursuant to a tender offer.
(e) The Client agrees that the Adviser shall be solely
responsible for voting all proxies related to assets in the BCG
Account. The Adviser shall maintain a record of how the Adviser
voted and such record shall be available to the Client upon its
request. It is further understood that the Adviser need not and is
not required to accept any direction concerning the voting of
proxies from the Client. The right of the Adviser to vote proxies
shall continue until the earlier of the termination of the Agreement
or such time as the Client specifically revokes the Adviser's
authority to vote proxies and specifically reserves such right to
the named fiduciary or to another. Client represents that such
delegation of voting rights is consistent with the plan documents
relating to the plans whose assets are held in the Intersil
Corporation Master Trust. The plans' trustee shall instruct the
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Custodian (as hereinafter defined) to forward all proxy materials to
the Adviser upon receipt. Adviser shall not be liable with regard to
voting of proxies in the event proxy materials are not received by
the Adviser in a timely manner.
5. Custodian. Adviser will not take custody of any assets of the BCG
Account, but will issue settlement instructions to the custodian designated by
Client, or by the trustee as directed by the Client ("Custodian"). All
directions given by the Adviser to the Custodian in connection with the
investment and reinvestment of the BCG Account shall either be in writing, or
made orally and then promptly confirmed in writing, by an authorized
representative of the Adviser, or be transmitted by such other means of
communication as the Adviser and Custodian may deem appropriate.
6. Brokerage. So long as the provisions of Section 28(e) of the Securities
Exchange Act of 1934 and Title I of ERISA are met, Adviser may cause a broker or
dealer to be paid commissions in excess of those another broker or dealer would
charge provided that, in the best judgment of Adviser, the execution of
transactions for the BCG Account will result in the best execution, taking into
consideration all relevant factors, including the selection of such brokers and
dealers, the available prices and rates of brokerage commissions, as well as
execution capabilities, research and other services provided by such brokers.
The Adviser shall maintain a log of all transactions placed through all
securities brokerage firms, including the name of the firm, a description of
each transaction, the date of the transaction and the amount of fees or
commissions paid.
7. Account Information. Adviser will furnish Client at least quarterly a
written inventory of the BCG Account and, upon request, information regarding
the valuation method used by the Adviser to value any asset of the BCG Account
pursuant to paragraph 8 hereof. Client will provide, or instruct Custodian to
provide, Adviser with information Adviser may reasonably request.
8. Valuation. In computing the market value of any equity security held in
the BCG Account which is listed on a national securities exchange, such security
will be valued at the last quoted sale price on the valuation date on the
principal exchange on which the security is traded. Equity securities listed on
a national exchange but not traded on a valuation date and all other securities
and assets will be valued in a manner determined in good faith by the Adviser to
reflect fair market value.
9. Compensation. The compensation of Adviser shall be calculated and paid
in accordance with the Schedule of Fees attached as Exhibit B.
10. Investment in Adviser-Sponsored Investment Companies. It is understood
that, on a temporary basis, Adviser will invest assets of the BCG Account in the
X. Xxxx Price Blue Chip Growth Fund, Inc. (the "BCG Fund"), for which Adviser
acts as adviser. The purchase or sale of shares of the BCG Fund is subject to
the terms of the BCG Fund's current prospectus. Adviser is authorized to open an
account with the BCG Fund in the Client's name and to establish telephone
services for such BCG Fund account. The person signing this Agreement on behalf
of Client (a) acknowledges that he is (or is authorized to act for) a fiduciary
for the BCG Account;
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(b) acknowledges receipt of a copy of the current prospectus for the BCG Fund
which includes the reasons Adviser considers the BCG Fund investment appropriate
for the BCG Account; and describes the advisory fee (and other expenses) payable
indirectly through the BCG Fund investment. Client acknowledges that such
advisory fee may be higher or lower than the rate otherwise payable under this
Agreement.
In accordance with Exhibit A, and unless advised in writing to the
contrary, Adviser may invest the cash reserves of the BCG Account in the Reserve
Investment Fund (the "Reserve Fund") for which Adviser provides advisory
services. Adviser is authorized to open an account with the Reserve Fund in the
Client's name and to establish telephone services for such account. The person
signing this Agreement on behalf of Client (a) acknowledges that he is (or is
authorized to act for) a fiduciary for the BCG Account; and (b) acknowledges
receipt of a copy of the current prospectus for the Reserve Fund which includes
the reasons Adviser considers Reserve Fund investments appropriate for the BCG
Account and describes the non-advisory fees and expenses disclosed in the
Reserve Fund's prospectus, which non-advisory fees and expenses include fees
paid indirectly to affiliates of Adviser.
11. Service to Other Clients. It is understood that Adviser and its
affiliates may give advice and take action for other clients, including
investment companies, which differs from advice given or the timing or nature of
action taken for the BCG Account. Adviser is not obligated to initiate
transactions for the BCG Account in any security which Adviser, its principals,
affiliates or employees may purchase or sell for their own accounts or for other
clients.
12. Confidential Relationship. Information furnished by either party to
the other, including their respective agents and employees, is confidential and
shall not be disclosed to third parties unless requested by a regulatory
authority or otherwise required by law. If the Adviser is requested by
Department of Labor to disclose any information regarding the Client, the
Adviser shall notify the Client before responding to the request to the extent
permitted by law.
13. Bond. Client agrees to include Adviser under Client's bond obtained
pursuant to Section 412 of ERISA.
14. Termination; Assignment. This Agreement may be terminated by either
party at any time upon written notice to the other. Fees will be prorated to the
date of termination. No assignment (as defined in the Investment Advisers Act of
1940) of this Agreement by Adviser shall be effective without the consent of
Client.
15. Notices. Notices under this Agreement shall be in writing, or
facsimile thereof and confirmed in writing within seven (7) business days, and
shall be delivered at the addresses specified herein, or at such other address
as either party may specify by notice given in accordance herewith. Adviser may
rely upon any notice reasonably believed to be genuine and authorized.
16. Representations. Adviser represents that it is registered as an
investment adviser under the Investment Advisers Act of 1940 and that it is a
fiduciary as defined in Section 3(2 1)
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of ERISA with respect to the BCG Account. Adviser shall promptly notify Client
if Adviser shall cease to be registered as an investment adviser under the
Investment Advisers Act of 1940. Adviser represents and warrants that its
investment of cash reserves of the BCG Account in the Reserve Fund will not
constitute a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended. Client represents
that this Agreement has been duly authorized and will be binding upon Client in
accordance with its terms.
17. Disclosure Statement. Client acknowledges receipt of Adviser's SEC
Form ADV, Part II dated April 16, 1999, which includes a description of the
Adviser's brokerage practices in Item 12 of Schedule F, more than 48 hours prior
to the execution of this Agreement. Client has received a copy of Form ADV, Part
II dated August 10, 1999 prior to execution of this Agreement.
18. Covenants. By execution of this Agreement, each of the parties hereto
represents and warrants that the terms hereof do not violate any obligation by
which such party is bound, whether arising by contract, operation of law or
otherwise, and that (a) this Agreement has been duly authorized by appropriate
action and when so executed and delivered will be binding upon such party, in
accordance with its terms, and (b) such party will deliver to the other party
such evidence as such other party may reasonably require, whether by way of a
certified resolution or otherwise.
19. Other Documents. This Agreement constitutes the entire agreement
between the parties. The Adviser and the Client agree that from time to time, at
each other's request, they may agree to execute and deliver to each other
further documents as may be reasonably required to carry out the purposes
hereof.
20. Binding Upon Successors. This Agreement shall be binding upon and
enforceable by the successor to the parties hereto.
21. Applicable Law. To the extent that State law shall not have been
preempted by the provisions of ERISA or any other laws of the United States
heretofore or hereinafter enacted, as the same may be amended from time to time,
this Agreement shall be administered, construed and enforced according to the
laws of the State of Maryland.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective signatories hereunto duly authorized as of the day
and year first above written.
INTERSIL CORPORATION
RETIREMENT COMMITTEE
0000 Xxxx Xxx Xxxx, X.X.
Xxxx Xxx, Xxxxxxx 00000
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Xxxxxx X. Xxxxxxxx
(Name)
Title: Vice President, Secretary
and Treasurer
Date: 9/3/99
X. XXXX PRICE ASSOCIATES, INC.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
By: /s/ Xxxx X. Xxxxxx
---------------------
Vice President
Date: 9/3/99
EXHIBIT A
INVESTMENT OBJECTIVE AND GUIDELINES
FOR THE BCG ACCOUNT OF THE
INTERSIL CORPORATION MASTER TRUST
OBJECTIVES:
The Adviser will seek long-term capital growth with income as a secondary
objective. The BCG Account will be invested primarily in common stocks of large-
and medium-sized blue chip companies that have the potential for above-average
growth in earnings and are well established in their respective industries.
PERMITTED INVESTMENTS:
o Permitted investments include all equity securities traded on major
U.S. exchanges or in the over-the-counter market (Nasdaq). Equity
securities include common stock, common stock equivalents,
convertible securities, American Depository Receipts (ADRs) and
foreign securities.
In addition, foreign securities traded on major foreign markets may
be utilized. Currency contracts may be purchased for settlement
purposes only.
o Adviser may invest cash reserves of the BCG Account in the X. Xxxx
Price Reserve Investment Fund.
o 144A securities up to 5%.
o Adviser will temporarily invest assets in the X. Xxxx Price Blue
Chip Growth Fund, Inc. pending full funding of the BCG Account.
RESTRICTIONS; DIVERSIFICATION:
o Foreign securities and ADRs will not comprise more than 20% of the
BCG Account.
o No one issuer shall represent more than 5% of the BCG Account at the
time of purchase.
o No one industrial sector shall represent more than 25% of the BCG
Account at the time of purchase.
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o Issuer positions shall not represent more than 5% of the outstanding
shares of the issuer at the time of purchase.
o Cash reserves will not represent more than 10% of the BCG Account.
PROHIBITED INVESTMENTS:
o The BCG Account is not expected to invest in, or otherwise engage
in:
o direct investment in real estate
o direct investment in commodities (except as authorized above
regarding foreign currency contracts)
o short sales
o margin purchases
o derivatives
EXHIBIT B
X. XXXX PRICE ASSOCIATES, INC.
SCHEDULE OF FEES
For: The BCG Account of the Intersil Corporation Master Trust
Effective Date: For purposes of Exhibit B, the Effective Date will
be the date the BCG Account is fully* funded.
Billing Dates: January 1, April 1, July 1, October 1
Advisory fees will be calculated and accrued daily by Custodian on the
basis of the total market value of BCG Account assets. Fees will be calculated
at the following annual rate, and the appropriate portion thereof will be
payable to the Adviser from the Account as of each Billing Date:
Market Value of Assets Annual Fee
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All Assets 50/100 of 1%
*While assets are temporarily invested in the X. Xxxx Price Blue Chip Growth
Fund, Inc., no direct fees will be charged thereunder. However, fees will be
indirectly paid to Adviser through investment in the Blue Chip Growth Fund
pursuant to the terms of the prospectus.
