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INVESTMENT MANAGEMENT AGREEMENT
FOR TIAA-CREF INSTITUTIONAL MUTUAL FUNDS
THIS AGREEMENT is made this First day of June, 1999, by and between
TIAA-CREF Institutional Mutual Funds (the "Fund"), a Delaware business trust,
and Teachers Advisors, Inc. ("Advisors"), a Delaware corporation.
WHEREAS, the Fund is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act"),
and currently consists of seven series (known as the Institutional Bond Fund,
Institutional Equity Index Fund, Institutional Growth and Income Fund,
Institutional Growth Equity Fund, Institutional International Equity Fund,
Institutional Money Market Fund and Institutional Social Choice Equity Fund
(the "Current Funds")), and may consist of additional series or classes in the
future (collectively, with the Current Funds, the "Funds");
WHEREAS, Advisors is engaged principally in the business of rendering
investment management services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended (the "Advisers Act");
WHEREAS, the Fund desires to retain Advisors to render investment
management services to the Fund, in the manner and on the terms and conditions
set forth in this Agreement;
WHEREAS, Advisors is willing to provide investment management services
to the Fund in the manner and on the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Fund and Advisors hereby agree as follows:
1. Appointment.
The Fund hereby appoints Advisors to act as the Fund's investment
manager for the periods and on the terms set forth herein. Advisors hereby
accepts the appointment as investment manager, and agrees, subject to the
supervision of the board of trustees of the Fund (the "Board"), to furnish the
services and assume the obligations set forth in this Agreement for the
compensation provided for herein.
2. Services as Investment Manager.
(a) Generally.
(i) As the Fund's investment manager, Advisors
shall be subject to: (1) the restrictions of the Declaration of Trust of the
Fund, as amended from time to time; (2) the provisions of the 1940 Act and the
Advisers Act; (3) the statements relating to the Funds' investment objectives,
investment policies and investment restrictions as set forth in the currently
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effective (and as amended from time to time) registration statement of the Fund
(the "registration statement") under the Securities Act of 1933, as amended
(the "1933 Act") and the 1940 Act; and (4) any applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code").
(ii) Advisors shall, for all purposes herein, be
deemed to be an independent contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act for or represent the Fund or a
Fund in any way or otherwise be deemed an agent of the Fund or a Fund.
(iii) Advisors shall, for purposes of this
Agreement, have and exercise full investment discretion and authority to act as
agent for the Fund in buying, selling or otherwise disposing of or managing the
Fund's investments, directly or through sub-advisers, subject to supervision by
the Board.
(b) Investment Advisory Services.
(i) Advisors shall provide the Fund with such
investment research, advice and supervision as the Fund may from time to time
consider necessary for the proper management of the assets of each Fund, shall
furnish continuously an investment program for each Fund, shall determine which
securities or other investments shall be purchased, sold or exchanged and what
portions of each Fund shall be held in the various securities or other
investments or cash, and shall take such steps as are necessary to implement an
overall investment plan for each Fund, including providing or obtaining such
services as may be necessary in managing, acquiring or disposing of securities,
cash or other investments.
(ii) The Fund has furnished or will furnish
Advisors with copies of the Fund's registration statement and Declaration of
Trust, as currently in effect and agrees during the continuance of this
Agreement to furnish Advisors with copies of any amendments or supplements
thereto before or at the time the amendments or supplements become effective.
Advisors will be entitled to rely on all documents furnished by the Fund.
(iii) Advisors shall take, on behalf of each Fund,
all actions which it deems necessary to implement the investment policies of
such Fund, and in particular, to place all orders for the purchase or sale of
portfolio investments for the account of each Fund with brokers, dealers,
futures commission merchants or banks selected by Advisors. Advisors also is
authorized as the agent of the Fund to give instructions to any Service
Provider serving as custodian of the Fund as to deliveries of securities and
payments of cash for the account of each Fund. In selecting brokers or dealers
and placing purchase and sale orders with respect to assets of a Fund, Advisors
is directed at all times to seek to obtain best execution and price within the
policy guidelines determined by the Board and set forth in the current
registration statement. Subject to this requirement and the provisions of the
1940 Act, the Advisers Act, the Securities Exchange Act of 1934, as amended
(the "1934 Act"), and other applicable provisions of law, Advisors may select
brokers or dealers that are affiliated with Advisors or the Fund.
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(iv) In addition to seeking the best price and
execution, Advisors may also take into consideration research and statistical
information, wire, quotation and other services provided by brokers and dealers
to Advisors. Advisors is also authorized to effect individual securities
transactions at commission rates in excess of the minimum commission rates
available, if Advisors determines in good faith that such amount of commission
is reasonable in relation to the value of the brokerage, research and other
services provided by such broker or dealer, viewed in terms of either that
particular transaction or Advisors' overall responsibilities with respect to
each Fund. The policies with respect to brokerage allocation, determined from
time to time by the Board are those disclosed in the currently effective
registration statement. The execution of such transactions shall not be deemed
to represent an unlawful act or breach of any duty created by this Agreement or
otherwise. Advisors will periodically evaluate the statistical data, research
and other investment services provided to it by brokers and dealers. Such
services may be used by Advisors in connection with the performance of its
obligations under this Agreement or in connection with other advisory or
investment operations including using such information in managing its own
accounts.
(v) As part of carrying out its obligations to
manage the investment and reinvestment of the assets of each Fund consistent
with the requirements under the 1940 Act, Advisors shall:
(1) Perform research and obtain and analyze
pertinent economic, statistical, and
financial data relevant to the investment
policies of each Fund as set forth in the
Fund's registration statement;
(2) Consult with the Board and furnish to the
Board recommendations with respect to an
overall investment strategy for each Fund for
approval, modification, or rejection by the
Board;
(3) Seek out and implement specific investment
opportunities, consistent with any investment
strategies approved by the Board;
(4) Take such steps as are necessary to implement
any overall investment strategies approved by
the Board for each Fund, including making and
carrying out day-to-day decisions to acquire
or dispose of permissible investments,
managing investments and any other property
of the Fund, and providing or obtaining such
services as may be necessary in managing,
acquiring or disposing of investments;
(5) Regularly report to the Board with respect to
the implementation of any approved overall
investment strategy and any other activities
in connection with management of the assets
of each Fund;
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(6) Maintain all required accounts, records,
memoranda, instructions or authorizations
relating to the acquisition or disposition of
investments for each Fund and the Fund;
(7) Furnish any personnel, office space,
equipment and other facilities necessary for
the operation of each Fund as contemplated in
this Agreement;
(8) Provide the Fund with such accounting or
other data concerning the Fund's investment
activities as shall be necessary or required
to prepare and to file all periodic financial
reports or other documents required to be
filed with the Securities and Exchange
Commission and any other regulatory entity;
(9) Assist in determining each business day the
net asset value of the shares of each Fund in
accordance with applicable law; and
(10) Enter into any written investment advisory or
investment sub-advisory contract with another
affiliated or unaffiliated party, subject to
any approvals required by Section 15 of the
1940 Act, pursuant to which such party will
carry out some or all of Advisors'
responsibilities (as specified in such
investment advisory or investment
sub-advisory contract) listed above.
(c) General Management Services. In connection with its
general management services, Advisors shall assist in managing or supervising
all aspects of the Fund's operations, including those services provided to the
Fund directly by the Fund's custodian, transfer agent and fund administrator.
Advisors' general management services shall include:
(1) Supervising the performance of custodians,
transfer agents, fund administrators, and
other persons in any capacity deemed to be
necessary to the Fund's operations;
(2) Monitoring the calculation of the net asset
value of each Fund at such times and in such
manner as specified in the Fund's current
registration statement and at such other
times upon which the parties hereto may from
time to time agree;
(3) Monitoring the portfolio accounting services
to maintain the portfolio accounting records
for each Fund;
(4) Supervising the preparation of all federal,
state, and local tax returns and reports
relating to each Fund;
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(5) Preparing and making filings of, or
supervising the preparation and filing of,
the Fund's proxy materials, registration
statements and post-effective amendments
thereto, semi-annual and annual reports, Rule
24f-2 notices, and other required documents
with the Securities and Exchange Commission
and other federal and state authorities as
may be required by applicable law;
(6) Preparing and filing or supervising the
preparation and filing of notices to qualify
the Fund's shares to be offered in such
states;
(7) Maintaining such books and records of the
Fund as may be required by applicable law, or
supervising the maintenance by third parties
of such books and records;
(8) Rendering to the Fund's Board such reports
respecting the Fund as the Board may
reasonably request; and
(9) Making available its officers to the Fund's
Board for consultation and discussions
regarding the management of the Fund.
Nothing in this Agreement shall be deemed to diminish the
obligations of any agent of the Fund or other person not a party to this
Agreement which is obligated to provide services to the Fund.
3. Allocation of Charges and Expenses.
(a) Advisors. Advisors assumes the expense of and shall
pay for maintaining the staff and personnel necessary to perform its
obligations under this Agreement, including the fees payable to any investment
adviser or sub-adviser engaged pursuant to Section 2(b)(v)(10) of this
Agreement, and shall at its own expense provide the office space, equipment and
facilities that it is obligated to provide under this Agreement, and shall pay
all compensation of officers of the Fund and all trustees of the Fund who are
affiliated persons of Advisors, except as otherwise specified in this
Agreement.
(b) Fund. The Fund shall bear all of the Fund's expenses
including, but not limited to: compensation of Advisors under this Agreement,
custodian fees; transfer agent fees; pricing costs (including the daily
calculation of net asset value); fund accounting fees; outside counsel legal
fees; expenses of shareholders' and/or trustees' meetings; cost of printing and
mailing shareholder reports and proxy statements; costs of printing and mailing
registration statements and updated prospectuses to current shareholders; costs
in connection with the registration or qualification of the Fund's shares with
federal and state securities authorities and the continued qualification of the
Fund's shares for sale; expenses of all audits by the Fund's independent
accountants, costs of filing reports with regulatory bodies; costs of the
maintenance
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of the Fund's fidelity bond required by Section 17(g) of the 1940 Act, or other
insurance premiums; the fees of any trade association of which the Fund is a
member; fees and expenses of trustees who are not "interested persons" (as such
term is defined in the 0000 Xxx) of the Fund (the "disinterested trustees");
brokerage commissions, dealer markups and other expenses incurred in the
acquisition or disposition of any securities or other investments; costs,
including the interest expense, of borrowing money; taxes; and extraordinary
expenses (including extraordinary litigation expenses and extraordinary
consulting expenses).
4. Compensation of Advisors.
(a) For the services rendered, the facilities furnished
and expenses assumed by Advisors, the Fund shall pay to Advisors at the end of
each calendar month a fee calculated as a percentage of the average value of
the net assets each day for each Fund during that month at the following annual
rates:
Institutional Bond Fund . . . . . . . . . . . . . . . . . . . . . . . . . 0.18%
Institutional Equity Index Fund . . . . . . . . . . . . . . . . . . . . . 0.18%
Institutional Growth and Income Fund . . . . . . . . . . . . . . . . . . . 0.23%
Institutional Growth Equity Fund . . . . . . . . . . . . . . . . . . . . . 0.23%
Institutional International Equity Fund . . . . . . . . . . . . . . . . . 0.27%
Institutional Money Market Fund . . . . . . . . . . . . . . . . . . . . . 0.15%
Institutional Social Choice Equity Fund . . . . . . . . . . . . . . . . . 0.19%
(b) Advisors's fee shall be accrued daily proportionately
at 1/365th (1/366th for a leap year) of the applicable annual rate set forth
above. For the purpose of accruing compensation, the net assets of each Fund
shall be determined in the manner and on the dates set forth in the Declaration
of Trust or the current registration statement of the Fund and, on days on
which the net assets are not so determined, the net asset value computation to
be used shall be as determined on the immediately preceding day on which the
net assets were determined.
(c) In the event of termination of this Agreement, all
compensation due through the date of termination will be calculated on a
pro-rated basis through the date of termination and paid within fifteen
business days of the date of termination.
(d) During any period when the determination of net asset
value is suspended, the net asset value of a Fund as of the last business day
prior to such suspension shall for this
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purpose be deemed to be the net asset value at the close of each succeeding
business day until it is again determined.
5. Limitation of Liability of Advisors. Advisors shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the management of the Fund,
except for (i) willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations
and duties hereunder, and (ii) 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.
6. Activities of Advisors.
(a) The services of Advisors are not deemed to be
exclusive, and Advisors is free to render services to others, so long as
Advisors's services under this Agreement are not impaired. It is understood
that trustees, officers, employees and shareholders of the Fund are or may
become interested persons of Advisors, as directors, officers, employees and
shareholders or otherwise, and that directors, officers, employees and
shareholders of Advisors are or may become similarly interested persons of the
Fund, and that Advisors may become interested in the Fund as a shareholder or
otherwise.
(b) It is agreed that Advisors may use any supplemental
investment research obtained for the benefit of the Fund in providing
investment advice to its other investment advisory accounts. Advisors or its
affiliates may use such information in managing their own accounts.
Conversely, such supplemental information obtained by the placement of business
for Advisors or other entities advised by Advisors will be considered by and
may be useful to Advisors in carrying out its obligations to the Fund.
(c) Nothing in this Agreement shall preclude the
aggregation of orders for the sale or purchase of securities or other
investments by two or more Funds of the Fund or by the Fund and other mutual
funds, separate accounts, or other accounts (collectively, "Advisory Clients")
managed by Advisors, provided that:
(i) Advisors' actions with respect to the
aggregation of orders for multiple Advisory Clients, including the Fund, are
consistent with the then-current positions in this regard taken by the
Securities and Exchange Commission or its staff through releases, "no-action"
letters, or otherwise; and
(ii) Advisors' policies with respect to the
aggregation of orders for multiple Advisory Clients have been previously
submitted and approved by the Board of Trustees of the Fund.
Neither Advisors, nor any of its directors, officers, or personnel, nor any
person, firm, or corporation controlling, controlled by, or under common
control with it shall act as a principal
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or receive any commission as agent in connection with the purchase or sale of
assets for a Fund, except as may be permitted under applicable law.
7. Books and Records.
(a) Advisors hereby undertakes and agrees to maintain, in
the form and for the period required by Rule 31a-2 and Rule 2a-7 under the 1940
Act, all records relating to the Fund's investments that are required to be
maintained by the Fund pursuant to the requirements of Rule 31a-1 and Rule 2a-7
of the 1940 Act.
(b) Advisors agrees that all books and records which it
maintains for the Fund are the property of the Fund and further agrees to
surrender promptly to the Fund any such books, records or information upon the
Fund's request. All such books and records shall be made available, within
five business days of a written request, to the Fund's accountants or auditors
during regular business hours at Advisors's offices. The Fund or its
authorized representative shall have the right to copy any records in the
possession of Advisors that pertain to the Fund. Such books, records,
information or reports shall be made available to properly authorized
government representatives consistent with state and federal law and/or
regulations. In the event of the termination of this Agreement, all such
books, records or other information shall be returned to the Fund free from any
claim or assertion of rights by Advisors.
(c) Advisors further agrees that it will not disclose or
use any records or information obtained pursuant to this Agreement in any
manner whatsoever except as authorized in this Agreement and that it will keep
confidential any information obtained pursuant to this Agreement and disclose
such information only if the Fund has authorized such disclosure, or if such
disclosure is required by federal or state regulatory authorities.
8. Duration and Termination of this Agreement.
(a) This Agreement shall not become effective unless and
until it is approved by the Board, including a majority of trustees who are not
parties to this Agreement or interested persons of any such party, and by the
vote of a majority of the outstanding voting shares of each Fund. This
Agreement shall come into full force and effect on the date which it is so
approved, provided that it shall not become effective as to any subsequently
created Fund until it has been approved by the Board specifically for such
Fund. As to each Fund, the Agreement shall continue in effect for two years
from the date on which it becomes effective and shall thereafter continue in
effect from year to year so long as such continuance is specifically approved
for such Fund at least annually by: (i) the Board, or by the vote of a majority
of the outstanding voting shares of such Fund; and (ii) a majority of those
trustees who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on
such approval.
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(b) This Agreement may be terminated at any time as to
any Fund or to all Funds, without the payment of any penalty, by the Board or
by vote of a majority of the outstanding voting shares of the applicable Fund,
or by Advisors, on 60 days written notice to the other party. If this
Agreement is terminated only with respect to one or more, but less than all, of
the Funds, or if a different adviser is appointed with respect to a new Fund,
the Agreement shall remain in effect with respect to the remaining Fund(s).
(c) This Agreement shall automatically terminate in the
event of its assignment.
9. Amendments of this Agreement. This Agreement may be amended
as to each Fund by the parties only if such amendment is specifically approved
by (i) the vote of a majority of outstanding voting shares of such Fund, and
(ii) a majority of those trustees who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for
the purpose of voting on such approval.
10. Definitions of Certain Terms. The terms "assignment,"
"affiliated person," "interested person," and "majority of the outstanding
voting shares" when used in this Agreement, shall have the respective meanings
specified in the 1940 Act.
11. Governing Law. This Agreement shall be construed in
accordance with laws of the State of New York, and applicable provisions of the
1940 Act, the Advisers Act, and the 1934 Act.
12. Severability. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
be deemed one instrument.
14. Notices. All notices and other communications provided for
hereunder shall be in writing and shall be delivered by hand or mailed first
class, postage prepaid, addressed as follows:
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(a) If to the Fund -
TIAA-CREF Institutional Mutual Funds
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. XxXxxxxxx, Xx.
(b) If to Advisors -
Teachers Advisors, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxx
or to such other address as the Fund or Advisors shall designate by written
notice to the other.
15. Miscellaneous. Captions in this Agreement are included for
convenience or reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.
IN WITNESS WHEREOF, the Fund and Advisors have caused this Agreement
to be executed in their names and on their behalf by and through their duly
authorized officers on the day and year first above written.
TIAA-CREF INSTITUTIONAL MUTUAL FUNDS
By: /s/ Xxxx X. XxXxxxxxx, Xx. Attest: /s/ Xxxxx X. Xxxxxx
Title: President Title: Assistant Secretary
TEACHERS ADVISORS, INC.
By: /s/ Xxxxx X. Xxxxx Attest: /s/ Xxxxx X. Xxxxxx
Title: Executive Vice President Title: Senior Counsel
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