Exhibit 5(g)
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
GE INVESTMENTS FUNDS, INC.
S&P 500 INDEX FUND
GE INVESTMENT MANAGEMENT INCORPORATED
Agreement made as of April __, 1997 between GE INVESTMENT MANAGEMENT
INCORPORATED ("GEIM") and GE INVESTMENTS FUNDS, INC. (the "Company") on behalf
of its S&P 500 Index Fund (the "Fund").
RECITALS
The Company is an open-end management investment company incorporated under
the laws of the Commonwealth of Virginia on May 14, 1984 and registered under
the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund,
organized as a series company as defined in Rule 18f-2 under the 1940 Act,
currently has eight classes of Capital Stock outstanding, each representing an
interest in a different investment portfolio of the Company. The Fund is one
such portfolio.
GEIM is a Delaware corporation registered as an investment adviser under
the Investment Advisers Act of 1940 (the "Advisers Act").
The Company wishes to retain GEIM to serve as investment adviser and
administrator to the Fund and GEIM wishes to serve in this capacity.
Section 1. Appointment
The Company hereby appoints GEIM as investment adviser and administrator
with respect to the Fund's assets for the period and on the terms set forth in
this Agreement. GEIM accepts this appointment and hereby agrees to render the
services herein set forth for the compensation herein provided.
Subject to the approval of the Board and to other applicable legal
requirements, GEIM 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 GEIM's responsibilities listed herein.
Section 2. Services as Investment Adviser and Administrator
(a) Subject to the oversight and supervision of the Company's board of
directors (the "Board"), GEIM agrees to provide a continuous investment program
for the Fund's assets, including investment research and management. GEIM will
determine from time to time
what investments will be purchased, retained or sold by the Fund. GEIM will
place purchase and sale orders for the Fund's investments. GEIM will provide
services under this Agreement in accordance with the Fund's investment
objectives, policies and restrictions as stated in the Company's current
Registration Statement on Form N-1A, as amended from time to time (the
"Registration Statement").
(b) The Company has furnished or will furnish GEIM with copies of the
Registration Statement, its articles of incorporation and by-laws as currently
in effect and agrees during the continuance of this agreement to furnish GEIM
with copies of any amendment or supplements thereto before or at the time such
amendments or supplements become effective. GEIM may rely on all documents
furnished to it by the Company.
(c) Subject to the oversight and supervision of the Board, GEIM agrees to
serve as administrator to the Company 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 Company, 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) GEIM 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) GEIM will keep the Company informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Company 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
Company, GEIM will, in selecting brokers or dealers to effect transactions on
behalf of the Fund select the best overall terms available. In so doing, GEIM
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. GEIM may also consider brokerage and
research services provided to the Fund and or other accounts over which GEIM or
its affiliates exercise investment discretion. The Company recognizes the
desirability of GEIM'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 Company than would be the case if
the transactions were executed on the basis of the most favorable price and
efficient execution. The Company, thus, authorizes GEIM, 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 GEIM's determining in good faith that such commissions are
reasonable in terms either of the particular transaction or of the overall
responsibility of GEIM to the Fund and its 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 GEIM, 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.
GEIM will bear the cost of rendering the services it is obligated to
provide under this Agreement and will provide the Company 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. GEIM will furnish the
Company 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.
The Company or the Fund shall be responsible for paying all expenses that
each may incur in its operation and all of the general administrative expenses
allocable to each except those expressly assumed by GEIM above. These include,
by way of description and not of limitation, any share redemption expenses,
shareholder servicing costs (including allocable personnel and telephone
expenses), the expenses of any shareholder servicing plan and/or distribution
plan adopted by the Board pursuant to Rule 12b-1 under the 1940 Act, the costs
of custody, transfer agency and recordkeeping services in connection with the
Fund; brokerage fees and commissions; taxes; 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 a prospectus describing the
Fund and supplements to that prospectus 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, including fees paid
to members of the Board who are not interested persons of the Company; all
expenses incurred in preparing, printing and mailing proxy statements and
reports to shareholders of the Fund; fees and travel expenses of members of the
Board or members of any advisory board or committee who are not interested
persons of the Company; all expenses incident to any dividend, withdrawal or
redemption options provided to Fund 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 Company and independent auditors; membership dues of industry associations;
interest on Fund borrowings; postage; insurance premiums for coverage of
property or personnel (including officers and Directors) of the Company;
extraordinary expenses (including, but not limited to, legal claims and
liabilities and litigation costs and any indemnification relating thereto); and
all other costs of the Fund's operations.
Section 5. Compensation.
In consideration of services rendered and the expenses paid by GEIM
pursuant to this Agreement, the Company will pay GEIM at the beginning of each
calendar month a fee that is accrued daily at the annual rate of .35% of the
value of the Fund's average daily net assets for the previous month. For the
purpose of determining fees payable to GEIM 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 Company understands and acknowledges that GEIM now acts and will
continue to act as investment manager or adviser to various fiduciary or other
managed accounts ("Other Accounts") and the Company has no objection to GEIM's
so acting, so long as that when the Fund and any Other Account served by GEIM
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
GEIM to be equitable to the Fund and the Other Account. In addition, the Trust
understands and acknowledges that GEIM may, to the extent permitted by
applicable laws and regulations, aggregate securities to be sold or purchased
for the Company 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 GEIM to be equitable to the
Company and the Other Accounts. The Company recognizes that, in some cases, the
above procedures may adversely affected 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 GEIM may use any supplemental investment research and
other services provided by brokers or dealer obtained for the benefit of the
Fund or the Company in providing investment advice to Other Accounts.
(c) The Company understands and acknowledges that the persons employed by
GEIM 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 GEIM or any affiliate
of GEIM to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
Section 7. Continuance and Termination of the Agreement.
(a) This Agreement will become effective as of May 1, 1997 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 Directors who are not "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 Company on not
more than 60 nor less than 30 days' written notice to GEIM, by vote of holders
of a majority of the Fund's outstanding voting securities, as defined in the
1940 Act, or by GEIM on not more than 60 nor less than 30 days' notice to the
Company.
(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.
GEIM will exercise its best judgment in rendering the services described in
this Agreement, except that GEIM 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 GEIM 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.
Section 9. Miscellaneous.
The Company recognizes that directors, officers and employees of GEIM and
its affiliates may from time to time serve as directors, 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 XXXX or its affiliates may enter into distribution, investment advisory or
other agreements with such other corporations and trusts. If GEIM ceases to act
as the investment adviser to the Company, the Company agrees that, at GEIM's
request, any license granted to the Company for the use of the initials "GE"
will terminate and that the Company will cease and discontinue completely
further use of such initials.
* * * * *
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 INVESTMENTS FUNDS,
INC.
By:_________________________________
Name:
Title:
GE INVESTMENT MANAGEMENT
INCORPORATED
By:_________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Executive Vice President
