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INVESTMENT MANAGEMENT AGREEMENT
Between
X. XXXX PRICE INTERNATIONAL FUNDS, INC.
and
XXXX XXXXX-XXXXXXX INTERNATIONAL, INC.
INVESTMENT MANAGEMENT AGREEMENT, made as of the 1st day of
November, 1995, 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 Global Stock 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;
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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 Corporation's transfer
agent, custodian, independent accountants and legal counsel) and
assist in the coordination of their activities on behalf of the
Fund.
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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
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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;
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(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 Registration Fees. All fees and expenses
of qualifying and maintaining qualification of the
Corporation or Fund, as appropriate, and of the Fund
shares for sale under securities laws of various
states or jurisdictions, and of registration and
qualification of the Corporation or Fund, as
appropriate, 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 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;
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(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:
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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% Thereafter
The Price Funds shall include all the mutual funds
distributed by X. Xxxx Price Investment Services, Inc., excluding
any institutional or private label mutual funds. For the purpose
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 prospectus, on behalf of the
Fund, 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,
1997, such expenses shall not exceed 1.30% of the average daily
net assets of the Fund ("1.30% Expense Limitation"). To
determine the Manager's liability for the Fund's expenses over
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the 1.30% Expense Limitation, the amount of allowable year-to-
date expenses shall be computed daily by pro rating the 1.30%
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, 1997, 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, 1997, 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, 1999; 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
1.30% 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, 1997
(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.
In addition to the Manager Limitation, it is understood
that the expenses of the Fund will not exceed any expense
limitation prescribed by any state in which the Fund's shares are
qualified for sale ("State Expense Limit"). Any Management Fees
not paid or expenses assumed by the Manager pursuant to a State
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Expense Limit shall be subject to reimbursement provided that no
such reimbursement shall be made more than two years after the
fiscal year in which such fees were not paid or expenses assumed.
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
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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
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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, 1996. 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, 1996 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.
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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/Xxxxxx X. Xxxxxxx /s/M. Xxxxx Xxxxx
______________________ By:_________________________________
Xxxxxx X. Xxxxxxx, M. Xxxxx Xxxxx,
Secretary Chairman of the Board
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Attest: XXXX XXXXX-XXXXXXX INTERNATIONAL,
INC.
/s/Xxxxxxx X. XxxXxxx /s/Xxxxx X. Xxxxxxx
_______________________ By:_________________________________
Xxxxxxx X. XxxXxxx, Xxxxx X. Xxxxxxx,
Assistant Secretary Vice President