INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
GE INSTITUTIONAL FUNDS
PREMIER INTERNATIONAL EQUITY FUND
GE ASSET MANAGEMENT INCORPORATED
Agreement made as of March 16, 2000 between GE ASSET
MANAGEMENT INCORPORATED ("GEAM") and GE INSTITUTIONAL FUNDS (the "Trust") on
behalf of its Premier International Equity Fund (the "Fund").
RECITALS
The Trust is a business trust organized under the laws of the
State of Delaware on May 23, 1997 and registered under the Investment Company
Act of 1940, as amended (the "1940 Act"). The Trust is authorized to divide
shares of beneficial interests in the Trust into two or more separate series and
to divide each such series into two or more classes of Shares. The Fund is a
series of the Trust.
GEAM is a Delaware corporation registered as an investment
adviser under the Investment Advisers Act of 1940 (the "Advisers Act").
The Trust wishes to retain GEAM to serve as investment adviser
and administrator to the Fund and GEAM wishes to serve in this capacity.
Section 1. Appointment
The Trust hereby appoints GEAM as investment adviser and
administrator with respect to the Fund's assets for the period and on the terms
set forth in this Agreement. GEAM accepts this appointment and hereby agrees to
render the services herein set forth for the compensation herein provided.
Subject to the approval of the Trust's board of trustees (the
"Board") and to other applicable legal requirements, GEAM may enter into any
advisory or sub-advisory agreement or contract with another affiliated or
unaffiliated entity pursuant to which such entity will carry out some or all of
GEAM's responsibilities listed herein.
Section 2. Services as Investment Adviser and Administrator
(a) Subject to the oversight and supervision of the Board,
GEAM agrees to provide a continuous investment program for the Fund's assets,
including investment research and management. GEAM will determine from time to
time what investments will be purchased, retained or sold by the Fund. GEAM will
place purchase and sale orders for the Fund's investments. GEAM will provide
services under this Agreement in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Trust's current
Registration Statement on Form N-1A, as amended from time to time (the
"Registration Statement").
(b) The Trust has furnished or will furnish GEAM with copies
of the Registration Statement, its articles of incorporation and by-laws, if
any, as currently in effect and agrees during the continuance of this agreement
to furnish GEAM with copies of any amendment or supplements thereto before or at
the time such amendments or supplements become effective. GEAM may rely on all
documents furnished to it by the Trust.
(c) Subject to the oversight and supervision of the Board,
GEAM agrees to serve as administrator to the Trust and the Fund and, in this
capacity, will: (i) insure the maintenance of the books and records of the Fund
(including those required to be maintained or preserved by Rules 31a-1 and 31a-2
under the 1940 Act); (ii) prepare reports to shareholders of the Fund, (iii)
prepare and file tax returns for the Fund, (iv) assist with the preparation and
filing of reports and the Registration Statement with the Securities and
Exchange Commission (the "Commission"), (v) provide appropriate officers for the
Trust, including a Secretary or Assistant Secretary, (vi) provide administrative
support necessary for the Board to conduct meetings, and (vii) supervise and
coordinate the activities of other service providers, including independent
auditors, legal counsel, custodians, accounting service agents, and transfer
agents.
(d) GEAM will, at its own expense, maintain sufficient staff,
and employ or retain sufficient personnel and consult with any other persons
that it determines may be necessary or useful to the performance of its
obligations under this agreement.
(e) GEAM will keep the Trust informed of developments
materially affecting the Fund, and will, on its own initiative, furnish the
Trust from time to time with whatever information and reports that the Board
reasonably requests as appropriate for this purpose.
Section 3. Selection of Investments on Behalf of the Fund.
Unless otherwise set forth in the Registration Statement or
directed by the Trust, GEAM will, in selecting brokers or dealers to effect
transactions on behalf of the Fund select the best overall terms available. In
so doing, GEAM may consider the breadth of the market on the investment, the
price of the security, the size and difficulty of the order , the willingness of
the broker or dealer to position, the reliability, financial condition and
execution and operational capabilities of the broker or dealer, and the
reasonableness of the commission or size of the dealer's "spread", if any, for
the specific transaction and on a continuing basis. GEAM may also consider
brokerage and research services provided to the Fund and /or other accounts over
which GEAM or its affiliates exercise investment discretion. The Trust
recognizes the desirability of GEAM's having access to supplemental investment
and market research and security and economic analyses provided by brokers and
that those brokers may execute brokerage transactions at a higher cost to the
Trust than would be the case if the transactions were executed on the basis of
the most favorable price and efficient execution. The Trust, thus, authorizes
GEAM, to the extent permitted by applicable law and regulations, to pay higher
brokerage commissions or dealer spreads for the purchase and sale of securities
for the Fund to brokers who provide supplemental investment and market research
and security and economic analyses, subject to GEAM's determining in good faith
that such commissions are reasonable in terms either of the particular
transaction or of the overall responsibility of GEAM to the Fund and its
-2-
other clients and that the total commissions paid by the Fund will be reasonable
in relation to the benefits to the Fund over the long term. In no instance will
portfolio securities be purchased from or sold to GEAM, or any affiliated person
thereof or any investment advisory client thereof, except in accordance with the
federal securities laws and the rules and regulations thereunder.
Section 4. Costs and Expenses.
GEAM will bear the cost of rendering the services it is
obligated to provide under this Agreement and will provide the Trust with all
executive, administrative, clerical and other personnel necessary for the
investment and administrative operations of the Fund and will pay salaries and
other employment-related costs of employing these persons. GEAM will furnish the
Trust and the Fund with office space, facilities, and equipment and will pay the
day-to-day expenses related to the operation of such space, facilities and
equipment.
Except for those expenses assumed by the Fund as provided
below, GEAM shall bear all of the Fund's expenses, including, but not limited
to: charges and expenses of any registrar, the costs of custody, transfer agency
and recordkeeping services in connection with the Fund; registration costs of
the Fund and its shares under Federal and state securities laws; the cost and
expense of printing, including typesetting, and distributing of prospectuses
describing the Fund and supplements to those prospectuses to regulatory
authorities and the Fund's shareholders; all expenses incurred in conducting
meetings of the Fund's shareholders and meetings of the Board relating to the
Fund, excluding fees paid to members of the Board who are not affiliated with
GEAM or any of its affiliates; all expenses incurred in preparing, printing and
mailing proxy statements and reports to shareholders of the Fund; all expenses
incident to any dividend, withdrawal or redemption options provided to Fund
shareholders (except for purchase premiums and redemption fees, if any, charged
directly to shareholders); charges and expenses of any outside service used for
pricing the Fund's portfolio securities and calculating the net asset value of
the Fund's shares; fees and expenses of legal counsel, including counsel to the
members of the Board who are not interested persons of the Fund, or GEAM, and
independent auditors; membership dues of industry associations; postage;
insurance premiums on property or personnel (including officers and Trustees) of
the Trust that inure to their benefit; and all other costs of the Fund's
operations.
The Fund will bear the following expenses: advisory and
administration fees as described in Section 5 of this Agreement; shareholder
servicing and distribution fees under the terms of the shareholder servicing and
distribution plan adopted by the Trust with respect to the Fund pursuant to Rule
12b-1 (the "Plan") under the 1940 Act; brokerage fees and commissions and other
expenses incurred in the acquisition or disposition of any securities or other
invest-ments; fees and travel expenses of members of the Board or members of any
advisory board or committee who are not affiliated with GEAM, or any of its
affiliates; and expenses that are not normal operating expenses of the Fund
(such as extraordinary expenses, interest and taxes).
-3-
Section 5. Compensation.
In consideration of services rendered and the expenses paid by
GEAM pursuant to this Agreement, the Trust will pay GEAM on the first business
day of each month a fee calculated as a percentage of the average daily net
assets of the Fund during the previous month at the following annual rates:
Average Daily Net Assets Annual Rate Percentage of Fund (%)
------------------------ ----------------------------------
First $25 million .75
Next $25 million .65
Over $50 million .55
For the purpose of determining fees payable to GEAM under this Agreement, the
value of the Fund's net assets will be computed in the manner described in the
Registration Statement.
Section 6. Services to Other Companies or Accounts.
(a) The Trust understands and acknowledges that GEAM now acts
and will continue to act as investment manager or adviser to various fiduciary
or other managed accounts ("Other Accounts") and the Trust has no objection to
GEAM's so acting, so long as that when the Fund and any Other Account served by
GEAM are prepared to invest in, or desire to dispose of the same security,
available investments or opportunities for sales will be allocated in a manner
believed by GEAM to be equitable to the Fund and the Other Account. In addition,
the Trust understands and acknowledges that GEAM may, to the extent permitted by
applicable laws and regulations, aggregate securities to be sold or purchased
for the Trust with those to be sold or purchased for Other Accounts so long as
the securities purchased or sold, as well as the expenses incurred in the
transaction, are allocated in a manner believed by GEAM to be equitable to the
Trust and the Other Accounts. The Trust recognizes that, in some cases, the
above procedures may adversely affect the price paid or received by the Fund or
the size of the position obtained or disposed of by the Fund.
(b) It is agreed that GEAM may use any supplemental investment
research and other services provided by brokers or dealer obtained for the
benefit of the Fund or the Trust in providing investment advice to Other
Accounts.
(c) The Trust understands and acknowledges that the persons
employed by GEAM to assist in the performance of its duties under this Agreement
will not devote their full time to that service and agrees that nothing
contained in this Agreement will be deemed to limit or restrict the right of
GEAM or any affiliate of GEAM to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
-4-
Section 7. Continuance and Termination of the Agreement.
(a) This Agreement will become effective as of the date hereof
and will continue for an initial two-year term and will continue thereafter so
long as the continuance is specifically approved at least annually (a) by the
Board or (b) by a vote of a majority of the Fund's outstanding voting
securities, as defined in the 1940 Act, provided that in either event the
continuance is also approved by a majority of the Trustees who are not parties
to this Agreement or "interested persons" (as defined in the 0000 Xxx) of any
party to this Agreement, by vote cast in person at a meeting called for the
purpose of voting on the approval.
(b) This Agreement is terminable without penalty, by the Trust
on not more than 60 nor less than 30 days' written notice to GEAM, by vote of
holders of a majority of the Fund's outstanding voting securities, as defined in
the 1940 Act, or by GEAM on not more than 60 nor less than 30 days' notice to
the Trust.
(c) This Agreement will terminate automatically in the event
of its assignment (as defined in the 1940 Act or in rules adopted under the 1940
Act).
Section 8. Limitation of Liability.
(a) GEAM will exercise its best judgment in rendering the
services described in this Agreement, except that GEAM will not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, other than a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
GEAM in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement or to the extent specified in
Section 36(b) of the 1940 Act concerning loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services. Any
person, even though also an officer, director, employee or agent of GEAM, who
may be or become an officer, Trustee, employee or agent of the Trust, will be
deemed, when rendering services to the Trust or acting on any business of the
Trust, to be rendering services to, or acting solely for, the Trust and not as
an officer, director, employee or agent, or one under the control or direction
of, GEAM even though paid by GEAM.
(b) The Trust and GEAM agree that the obligations of the Trust
under this Agreement will not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future, of the
Trust, individually, but are binding only upon the assets and property of the
Fund, as provided in the Declaration of Trust. The execution and delivery of
this Agreement have been authorized by the Trustees of the Trust, and signed by
an authorized officer of the Trust, acting as such, and neither the
authorization by the Trustees nor the execution and delivery by the officer will
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but will bind only the trust property of
the Trust as provided in the Declaration of Trust. No series of the Trust,
including the Fund, will be liable for any claims against any other series.
-5-
Section 9. Miscellaneous.
The Trust recognizes that trustees, officers and employees of GEAM and
its affiliates may from time to time serve as trustees, trustees, officers and
employees of corporations, partnerships, group trusts and business trusts
(including other investment companies) and that such other entities may include
the initials "GE" or the words "General Electric" as part of their name, and
that GEAM or its affiliates may enter into distribution, investment advisory or
other agreements with such other corporations and trusts. If GEAM ceases to act
as the investment adviser to the Trust, the Trust agrees that, at GEAM's
request, any license granted to the Trust for the use of the initials "GE" will
terminate and that the Trust will cease and discontinue completely further use
of such initials and will take all necessary action to change the name of the
Trust and the Fund to a name not including the initials of "GE."
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their duly authorized signatories as of the date
and year first above written.
GE INSTITUTIONAL FUNDS
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board and President
GE ASSET MANAGEMENT INCORPORATED
By: /s/ Xxxx X. Xxxxx
-----------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
-6-
