INVESTMENT MANAGEMENT AGREEMENT
Between
RESERVE INVESTMENT FUNDS, INC.
and
X. XXXX PRICE ASSOCIATES, INC.
INVESTMENT MANAGEMENT AGREEMENT, made as of the 4th day of February,
1997, by and between RESERVE INVESTMENT FUNDS, 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 E T H:
WHEREAS, the Corporation proposes to engage in business as an open-end
management investment company and to register 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 Reserve Investment 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:
(i) buy, sell, exchange, convert, lend, and otherwise trade in any
stocks, bonds, and other securities or assets; and
(ii) 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 Fund'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.
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 of the
Fund'S 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 the 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
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
Corporation or Fund, as appropriate, with respect to the
sale of Fund Shares under securities laws of various states
or jurisdictions, and under all other laws applicable to the
Corporation or Fund, as appropriate, or its business
activities (including registering the Corporation as a
broker-dealer, or any officer of the Corporation or any
person as agent or salesman of the Corporation 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 not pay the Manager a management fee.
4. Brokerage. Subject to the approval of the board of directors of the
Fund, 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. 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, 1998. 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: (a) such continuation shall be specifically approved at
least annually by the board of directors of the Corporation, or 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, 1998 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.
11. 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.
12. 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.
13. 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, 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: RESERVE INVESTMENT FUNDS, INC.
/S/Xxxxxxxx X. Xxxxxxx /S/Xxxxxx X. Xxxxx
By:
_________________________ ________________________________
Xxxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxx
Assistant Secretary President
Attest: X. XXXX PRICE ASSOCIATES, INC.
/S/Xxxxxxx X. Xxx Xxxx /S/Xxxxx X. Xxxxxxx
By:
_________________________ _________________________________
Xxxxxxx X. Xxx Xxxx Xxxxx X. Xxxxxxx
Assistant Secretary Managing Director
