EXHIBIT 99 (d)(1)
FORM OF INVESTMENT MANAGEMENT AGREEMENT AND SERVICE AGREEMENT
THIS AGREEMENT is entered into this 8th day of December 2004, 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
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clients.
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 December 8, 2004,
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: /s/Xxxxxxx X. Xxxxx, Xx. BY: /s/Xxxxxxx X. Xxxxx, Xx.
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Xxxxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxx, Xx.
President President
ATTEST: /s/Xxxxx X. Xxxxxxx ATTEST: /s/Xxxxx X. Xxxxxxx
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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: December 8, 2004
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: December 8, 2004
ASTER INVESTMENT MANAGEMENT, INC. MERIDIAN FUND, INC.
BY: /s/Xxxxxxx X. Xxxxx, Xx. BY: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------ -------------------------
Xxxxxxx X. Xxxxx, Xx. Xxxxxxx X. Xxxxx, Xx.
President President
ATTEST: /s/Xxxxx X. Xxxxxxx ATTEST: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
Vice President of Operations Treasurer/Secretary
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