SUB-ITEM 77Q1(e): New Investment Advisory Contract
INVESTMENT ADVISORY AGREEMENT
This Investment Advisory and Administration Agreement (the "Agreement") is
made as of this 1st day of July, 2016, between each of Elfun Government Money
Market Fund, Elfun Tax-Exempt Income Fund, Elfun Income Fund, Elfun Diversified
Fund, Elfun International Equity Fund and Elfun Trusts (each, a "Fund"),
severally and not jointly, and SSGA Funds Management, Inc., a Massachusetts
corporation ("SSGA FM").
WITNESSETH:
WHEREAS, each Fund is an open-end management investment company organized
under the laws of the State of Connecticut and registered under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, SSGA FM is in the business of providing investment advisory and
administrative services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, each Fund desires to retain SSGA FM to render investment advisory
and administrative services to the Fund, and SSGA FM is willing to render such
services;
NOW, THEREFORE, in consideration of the mutual covenants herein set forth, the
parties hereto agree as follows:
1. Appointment as Investment Adviser and Administrator
The Trustees hereby appoint SSGA FM, subject to approval by the Unitholders
of a Fund, to act as the Investment Adviser and Administrator to each such
Fund on the terms set forth in this Agreement. SSGA FM hereby accepts such
appointment and agrees to render the services herein set forth on the terms
herein contained.
2. Services to be Performed
a. SSGA FM will recommend to the Trustees of each Fund (the "Trustees")
certain individuals to fill the positions of Manager, Secretary and, if
the Trustees so desire, Assistant Secretary and other officers of the
Fund. Upon receipt of such recommendations the Trustees will vote upon
the appointment of such individuals to the positions for which they
were recommended; and will advise SSGA FM as to whether or not they
have been so appointed.
b. Subject to the oversight and supervision of the Trustees, and subject
to Section 2(j) of this Agreement with respect to any Fund advised by a
sub-adviser, SSGA FM agrees to provide a continuous investment program
for each Fund's assets, and will manage the investment and reinvestment
of all the assets in the Fund from time to time (including any income
earned thereon and increments in the value thereof). Among other
things, SSGA FM shall be responsible for all
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investment decisions regarding purchases and sales of securities and
other property, the retention of securities, and the retention of
uninvested cash. In performing the aforesaid services to a Fund, SSGA
FM shall comply with all investment policies of the Fund in effect from
time to time and such general guidance, policies and instructions as
the Trustees may additionally establish. SSGA FM shall, in addition,
make recommendations as and when requested by the Trustees with respect
to the adoption or modification of investment policies and each Fund's
objective.
c. Unless a Fund gives written instructions to the contrary, SSGA FM shall
vote or not vote all proxies solicited by or with respect to the
issuers of securities in which assets of the Fund may be invested. SSGA
FM shall use its best good faith judgment to vote or not vote such
proxies in a manner which best serves the interests of a Fund's
shareholders. Each Fund has received and reviewed the proxy guidelines
of SSGA FM, which indicate how SSGA FM will vote.
d. Subject to the supervision and direction of the Trustees, SSGA FM, as
administrator, will furnish each Fund with, or cause it to be furnished
with, statistical and research data, clerical help and accounting, data
processing, bookkeeping, internal auditing services and certain other
services required by the Fund. Without limiting the generality of the
foregoing, SSGA FM will, for each Fund:
i. prepare and distribute, or cause the Fund to prepare and
distribute, all reports including reports to the Unitholders which
are required by Federal and state regulatory authorities, as well
as any other reports specifically requested by the Trustees from
time to time;
ii. maintain, or cause the Fund to maintain, the records of all
security transactions of the Fund required to be maintained by
applicable law or as requested by the Trustees;
iii. cooperate with the independent public accountants retained by the
Trustees in their examination of the Fund and will cooperate in
any inspection of the accounts and records by the Trustees;
iv. compute, or cause the Fund to compute, the net asset value for the
Fund in accordance with the Fund's organizational documents
(referred to herein as the "Trust Agreement") and the Fund's
prospectus and statement of additional information (the
"Registration Statement");
v. prepare, or cause the Fund to prepare, such reports to, and
filings with Federal, state or local governmental authorities,
including tax returns, as may be required by applicable law or as
requested by the Trustees;
vi. submit periodically to the Trustees, or cause the Fund to submit
periodically to the Trustees, written reports covering fund
transactions, the results of the Fund's operations, the assets and
financial condition of the
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Fund, and such other information in such form and at such times as
the Trustees may reasonably request; and
vii. be responsible for causing the Fund to effect adequate routines to
collect, receive and deposit all income of the Fund and other
payments to the Fund, including stock dividends, rights, warrants
and similar items, but excluding payments associated with
subscriptions and redemptions.
e. SSGA FM will keep each Fund informed of developments materially
affecting the Fund, and will, on its own initiative, furnish the Fund
from time to time with whatever information SSGA FM believes is
appropriate for this purpose.
f. SSGA FM, in the performance of its duties and obligations under this
Agreement, shall act in conformity with the certain documents relating
to the Funds, as amended and including but not limited to: the Trust
Agreement, the Registration Statement, any exemptive applications,
notices and orders on which a Fund relies at the time, and with any
instructions and directions of the Trustees.
g. SSGA FM may from time to time, in its discretion and with the approval
of the Trustees, delegate certain of its investment advisory
responsibilities under this Agreement in respect of any Fund to one or
more qualified companies (each, a "sub-adviser"), each of which is
registered under the Investment Advisers Act of 1940, as amended,
provided that the separate costs of employing such sub-advisers and of
the sub-advisers themselves are borne by SSGA FM or the sub-adviser and
not by the Fund in question. Unless the Board specifies otherwise in
connection with its approval of any such delegation or unless any
agreement pursuant to which such delegation is effected specifies
otherwise, (i) the obligation of SSGA FM in respect of the activities of
any such sub-adviser shall be to provide to the Trustees its
recommendation as to the selection of the sub-adviser and as to the
periodic renewal of the sub-advisory agreement with the sub-adviser, and
to oversee generally the performance by such sub-adviser of its
obligations to the Fund in question over time (which oversight may
include periodic review of policies and procedures of the sub-adviser
but will not include approval of or responsibility for specific
investment decisions by the sub-adviser) and to report to the Trustees
periodically as to its evaluation of the performance of such sub-adviser
and as to the nature and scope of such general oversight, in accordance
with the standard of care set out in Section 7 below, and (ii) assuming
compliance by SSGA FM with its obligations under clause (i), SSGA FM
shall not be responsible or have any liability for any investment
decision or any other act or omission on the part of any sub-adviser,
including without limitation any error or mistake of judgment on the
part of the sub-adviser or failure by the sub-adviser to comply with any
policies, procedures, guidelines, or objectives of any Fund.
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3. Selection of Investments on Behalf of the Fund
Unless otherwise set forth in the Registration Statement or directed by a
Fund, SSGA FM will, in selecting brokers or dealers to effect transactions
on behalf of a Fund, seek the best overall terms available. In so doing,
SSGA FM may consider the breadth of the market for 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. SSGA FM may also
consider brokerage and research services provided to the Fund and/or other
accounts over which SSGA FM or its affiliates exercise investment
discretion. The Funds recognize the desirability of SSGA FM'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 a Fund than would be the case if the
transactions were executed on the basis of the most favorable price and
efficient execution. To the extent permitted by applicable law and
regulations, SSGA FM shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of
its having caused a Fund to pay a broker or dealer that provides brokerage
and research services to SSGA FM an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission that
another broker or dealer would have charged for effecting that transaction,
if SSGA FM determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or SSGA FM's overall responsibilities with respect to the Fund
and to other clients of SSGA FM as to which SSGA FM exercises investment
discretion. Each Fund hereby agrees that any entity or person associated
with SSGA FM which is a member of a national securities exchange is
authorized to effect any transaction on such exchange for the account of the
Fund which is permitted by Section 11(a) of the Securities Exchange Act of
1934, as amended.
4. Services to Other Companies or Accounts
a. Each Fund understands and acknowledges that SSGA FM now acts and will
continue to act as investment manager or adviser to various fiduciary or
other managed accounts and no Fund has any objection to SSGA FM's so
acting, so long as when a Fund and any account served by SSGA FM are
prepared to invest in, or desire to dispose of, the same security,
available investments or opportunities for sales, as well as the expenses
incurred in such transactions, will be allocated in a manner believed by
SSGA FM to be equitable to the Fund and the account. Each Fund recognizes
that, in some cases, this procedure may adversely affect the price paid
or received by a Fund or the size of the position obtained or disposed of
by a Fund.
b. Each Fund understands and acknowledges that the persons employed by SSGA
FM 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 SSGA FM or any affiliate of XXXX
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FM to engage in and devote time and attention to other businesses or to
render services of whatever kind or nature.
5. Compensation
In consideration of the services rendered by SSGA FM pursuant to this
Agreement, each Fund will, within thirty (30) days after receipt of an
invoice therefor, pay SSGA FM a monthly fee calculated as a percentage of
the average daily net assets of each Fund during the month in question at
the annual rate set forth on Appendix A. Each Fund shall be responsible for
paying all expenses that it may incur in its operation. The costs to be
borne by each Fund include, but are not limited to: the direct and indirect
costs of SSGA FM personnel providing investment advisory and other services
to the Fund (but no compensation related strictly to their services as
officers and trustees of the Fund); the costs of external accounting, audit,
legal and compliance services; the costs of maintaining the Fund's
existence; the costs attributable to Unitholder services (including without
limitation, telephone and personnel expenses); charges and expenses of any
registrar; the costs of custody, transfer agency and recordkeeping services
in connection with the Fund; brokerage fees and expenses; taxes; interest on
borrowings; registration costs of the Fund and its shares under Federal and
state securities laws; the cost and expense of printing, including
typesetting and distributing to regulatory authorities and the Fund's
Unitholders, prospectuses and statements of additional information
describing the Fund and any supplements to those documents; all expenses
incurred in conducting meetings of the Fund's Unitholders and meetings of
the Fund's Board of Trustees relating to the Fund; all expenses incurred in
preparing, printing and mailing proxy statements and reports to Unitholders
of the Fund; all expenses incident to any dividend, withdrawal or redemption
options provided to Fund Unitholders; 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 Units; membership dues of industry
associations; postage; insurance premiums on property or personnel
(including Fund officers and Trustees) of the Fund that inure to their
benefit; 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.
6. Records
SSGA FM shall maintain such books and records with respect to its activities
hereunder as may be required from time to time by applicable law and as the
Trustees may, in addition, reasonably request. SSGA FM shall make available
its books and records to the Trustees and their agents, counsel and
accountants as and when requested by the Trustees for purposes of audit or
otherwise.
7. Limitation of Liability
a. SSGA FM will exercise its best judgment in rendering the services
described in this Agreement, except that SSGA FM shall not be liable,
subject to any contrary mandatory requirements of applicable law, for
any error of judgment or mistake of law or for any loss suffered by any
Fund in connection with the matters to
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which this Agreement relates, other than a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of
SSGA FM in the performance of its duties under this Agreement or from
SSGA FM's reckless disregard of its obligations and duties under this
Agreement.
b. Each Fund and SSGA FM agree that the obligations of such Fund under
this Agreement will not be binding upon any of the Trustees,
shareholders, nominees, officers, employees or agents, whether past,
present or future, of any Fund, individually, but are binding only
upon the assets and property of the Fund in question. The execution
and delivery of this Agreement have been authorized by the Trustees
of the Funds, and signed by an authorized officer of the Funds,
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 each Fund.
8. Communications
All communications between SSGA FM and the Trustees may be made orally or
in writing and SSGA FM may rely on any such communications with respect to
a Fund if it believes in good faith that the same have been given to it by
a person reasonably believed by SSGA FM to have the authority to act for
or on behalf of the Fund.
9. No Third Party Beneficiaries
No person other than the Funds and SSGA FM is a party to this Agreement or
shall be entitled to any right or benefit arising under or in respect of
this Agreement; there are no third party beneficiaries of this Agreement.
Without limiting the generality of the foregoing, nothing in this
Agreement is intended to, or shall be read to, (i) create in any person
other than the Funds (including without limitation any shareholder in a
Fund) any direct, indirect, derivative, or other rights against SSGA FM,
or (ii) create or give rise to any duty or obligation on the part of SSGA
FM (including without limitation any fiduciary duty) to any person other
than the Funds, all of which rights, benefits, duties, and obligations are
hereby expressly excluded.
10. Choice of Law
This Agreement shall be construed in accordance with the laws of The
Commonwealth of Massachusetts and any applicable federal law.
11. Exclusive Forum
Exclusive jurisdiction over any action, suit, or proceeding under, arising
out of, or relating to this Agreement shall lie in the federal and state
courts within the Commonwealth of Massachusetts, and each party hereby
waives any objection it may have at any time to the laying of venue of any
such proceedings brought in any such courts, waives any claim that such
proceedings have been brought in an inconvenient
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forum, and further waives the right to object, with respect to such
proceedings, that such court does not have jurisdiction over that party.
12. Entire Agreement; Amendments; Severability
This Agreement embodies the entire understanding of the parties hereto
with respect to its subject matter, supersedes any prior or
contemporaneous agreements or understandings between the parties with
respect to such subject matter and may only be modified or amended or the
terms hereof waived by an instrument in writing signed by one person or
entity against whom such amendment, modification or waiver is sought to be
enforced. If, for any reason, any provision of this Agreement is held to
be invalid or unenforceable, the validity and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
13. Continuance and Termination
This Agreement will become effective as of the day and year first above
written and will continue for an initial two-year term and will continue
thereafter with respect to a Fund so long as such continuance is approved
at least annually (a) by the Trustees 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 "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. This Agreement
may be terminated by either party hereto at any time on not more than
sixty (60) nor less than thirty (30) days' prior notice thereof to the
other party hereto. This Agreement may not be assigned or transferred by
either party hereto to any third party and any such attempted assignment
or transfer shall automatically act to terminate this Agreement. In the
event of expiration or termination of this Agreement, SSGA FM shall
transfer, or cause to be transferred, the assets allocated to SSGA FM, and
such accounting and investment records as the Trustees may request for
continued operation of the Fund, to the person or persons designated by
the Trustees.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement as of the
day and year first above written.
Attest: ELFUN DIVERSIFIED FUND
By: /s/ XxxxXxx Xxxx By: /s/ Xxxxxxx Xxxxxxx
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XxxxXxx Xxxx Name: Xxxxxxx Xxxxxxx
Assistant Secretary Title: Trustee and Secretary
Attest: ELFUN GOVERNMENT MONEY MARKET FUND
By: /s/ XxxxXxx Xxxx By: /s/ Xxxxxxx Xxxxxxx
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XxxxXxx Xxxx Name: Xxxxxxx Xxxxxxx
Assistant Secretary Title: Trustee and Secretary
Attest: ELFUN TAX-EXEMPT INCOME FUND
By: /s/ XxxxXxx Xxxx By: /s/ Xxxxxxx Xxxxxxx
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XxxxXxx Xxxx Name: Xxxxxxx Xxxxxxx
Assistant Secretary Title: Trustee and Secretary
Attest: ELFUN INCOME FUND
By: /s/ XxxxXxx Xxxx By: /s/ Xxxxxxx Xxxxxxx
---------------------------------- ---------------------------------
XxxxXxx Xxxx Name: Xxxxxxx Xxxxxxx
Assistant Secretary Title: Trustee and Secretary
Attest: ELFUN INTERNATIONAL EQUITY FUND
By: /s/ XxxxXxx Xxxx By: /s/ Xxxxxxx Xxxxxxx
---------------------------------- ---------------------------------
XxxxXxx Xxxx Name: Xxxxxxx Xxxxxxx
Assistant Secretary Title: Trustee and Secretary
Attest: ELFUN TRUSTS
By: /s/ XxxxXxx Xxxx By: /s/ Xxxxxxx Xxxxxxx
---------------------------------- ---------------------------------
XxxxXxx Xxxx Name: Xxxxxxx Xxxxxxx
Assistant Secretary Title: Trustee and Secretary
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Attest: SSGA FUNDS MANAGEMENT, INC.
By: By: /s/ Xxxxx X. Xxxxxxx
---------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
APPENDIX A
Fund Annual Percentage Rate
---- ----------------------
Elfun Trusts 0.14%
Elfun International Equity Fund 0.21%
Elfun Diversified Fund 0.17%
Elfun Government Money Market Fund 0.10%
Elfun Income Fund 0.17%
Elfun Tax-Exempt Income Fund 0.16%
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