Exhibit (5)
MASTER INVESTMENT ADVISORY AGREEMENT
AGREEMENT made as of the 28th day of December, 1992 between CIGNA INVESTMENTS,
INC., a corporation organized under the laws of the State of Delaware and having
its principal place of business in Bloomfield, Connecticut (the "Adviser") and
CIGNA INSTITUTIONAL FUNDS GROUP, a Massachusetts business trust having its
principal place of business in Springfield, Massachusetts (the "Trust").
WHEREAS, the Trust is engaged in business as an open-end management investment
company and is so registered under the Investment Company Act of 1940 (the "1940
Act"); and
WHEREAS, the Adviser is engaged in the business of rendering investment
management services and is so registered under the Investment Advisers Act of
1940; and
WHEREAS, the Trust operates as a "series company" as contemplated by Rule l8f-2
under the 1940 Act and is authorized to issue shares of beneficial interest
("Shares") in separate series with each such series representing interest in a
separate portfolio of securities and other assets; and
WHEREAS, the Trust intends initially to offer a series of Shares known as CIGNA
International Stock Fund (the "International Fund") together with all other
series subsequently established by the Trust with respect to which the Trust
desires to retain the Adviser to render investment advisory services hereunder
and the Adviser is willing so to do being herein collectively referred to as the
"Series");
NOW, THEREFORE, WITNESSETH: That it is hereby agreed between the parties
hereto as follows:
1. The Trust hereby appoints the Adviser to act as manager and
investment adviser to the International Fund for the period and on the terms
herein set forth, subject to the control of the Board of Trustees of the Trust.
The Adviser hereby accepts such appointment and agrees during such period, at
its own expense, to render the services and to assume the obligations herein set
forth for the compensation herein provided.
In the event that the Trust establishes one or more series of
Shares other than the International Fund with respect to which it desires to
retain the Adviser to render management and investment advisory services
hereunder, it shall so notify the Adviser in writing, indicating the advisory
fee which
will be payable with respect to the additional series of Shares. If the Adviser
is willing to render such services, it shall so notify the Trust in writing,
whereupon such series of Shares shall become a Series hereunder.
2. (a) The Adviser, at its expense, will furnish continuously
an investment program for each Series, will determine, subject to the control
and periodic review of the Board of Trustees of the Trust, what investments
shall be purchased, held, sold or exchanged by each Series and what portion,
if any, of the assets of each Series shall be held in cash, cash equivalents or
other temporary investments and shall, on behalf of each Series, make changes in
that Series' investments. Subject always to the provisions of the Master Trust
Agreement and the Bylaws of the Trust, the 1940 Act, and the supervision and
control of the Board of Trustees, the Adviser will also manage, supervise and
conduct the other affairs and business of the Trust and each Series and matters
incidental thereto.
(b) The Adviser, at its own expense, shall place orders for
the purchase and sale of portfolio securities for the account of each Series
with broker/dealers selected by the Adviser. In executing portfolio transactions
for each Series and selecting broker/dealers, the Adviser will use its best
efforts to seek on behalf of the Series the best overall terms available. In
assessing the best overall terms available for any transaction, the Adviser
shall consider all factors it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker/dealer, and the reasonableness of the
commission, if any (for the specific transaction and on a continuing basis). In
evaluating the best overall terms available, and in selecting a broker/dealer to
execute a particular transaction, the Adviser may also consider the brokerage
and research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) provided to the Series and/or other accounts
over which the Adviser or an affiliate of the Adviser exercises investment
discretion. The Adviser is authorized to pay to a broker/dealer who provides
such brokerage and research services a commission for executing a Series
portfolio transaction which is in excess of the amount of commission another
broker/dealer would have charged for effecting that transaction if, but only if,
the Adviser determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker/dealer--viewed in terms of that particular transaction or in terms of all
of the accounts over which investment discretion is so exercised.
3. In addition to performing at its own expense the
obligations set forth in paragraph 2 hereof, the Adviser shall furnish at its
own expense or pay the expenses of the Trust for the following:
(a) office space in the offices of the Adviser or in such
other place as may be agreed upon from time to time, and all necessary office
facilities and equipment;
(b) necessary executive and other personnel for managing
the affairs of the Trust, including personnel to perform clerical, bookkeeping,
accounting and other office functions (exclusive of those related to and to be
performed
- 2 -
under contracts for custodial, transfer, paying and plan agency services
by the bank selected to perform such services); and
(c) all information and services, other than services of
counsel, required in connection with the preparation of registration statements
and prospectuses, including amendments and revisions thereof, all annual,
semiannual and periodic reports, and notices and proxy solicitation material
furnished to shareholders of the Trust, or to regulatory authorities.
4. Nothing in paragraph 3 hereof shall require the Adviser to
bear, or to reimburse the Trust for:
(a) any of the costs of printing and mailing the items
referred to in subparagraph (c) of paragraph 3:
(b) the costs of printing and mailing of sales literature,
prospectuses and offering circulars required by regulatory authorities;
(c) compensation of Trustees of the Trust who are not
directors, officers or employees of the Adviser, CIGNA Corporation or any of its
affiliates;
(d) registration, filing and other fees in connection with
requirements of regulatory authorities;
(e) the charges and expenses of the Custodian appointed by
the Trust for custodial, paying agent, transfer agent and plan agent services;
(f) charges and expenses of independent accountants
retained by the Trust;
(g) charges and expenses of any transfer agents and
registrars appointed by the Trust;
(h) issue and transfer taxes, brokers' commissions and
dealers' concessions chargeable to the Trust in connection with securities
transactions to which the Trust is a party, including any portion of such
commissions attributable to research and brokerage services as defined by
Section 28(e) of the Securities Exchange Act of 1934, as amended from time to
time;
(i) taxes and corporate fees payable by the Trust to
federal, state or other governmental agencies;
(j) the cost of share certificates (if any) representing
shares of a Series;
(k) legal fees and expenses in connection with the affairs
of the Trust, including registering and qualifying its shares with federal and
state regulatory authorities; and
- 3 -
(l) expenses of shareholders' and trustees' meetings.
5. Notwithstanding the provisions of Paragraphs 3 and 4:
(a) The Trust shall reimburse the Adviser for its costs of
maintaining the Office of the Treasurer of the Trust and the Office of the
Secretary of the Trust, determined in such manner as may be approved by the
Board of Trustees of the Trust. Such reimbursement shall be made by the 15th of
each month with respect to such costs accrued during the previous month.
(b) Except for printing expenses (including design,
layout, and coordination) and except as provided in paragraph 5(a) above, the
Adviser shall indemnify the Trust against any expense of personnel of the
Adviser, or any affiliate of the Adviser, which might otherwise have been
charged to the Trust under any provision of this Agreement or of the
Distribution Agreement between the Trust and its principal underwriter.
6. The Adviser agrees to hold the Trust harmless with respect to
any and all damages the Trust may sustain resulting from any dishonest act of
any employee or agent of the Adviser. This Paragraph 6 is in addition to, and
not by way of limitation of, any other rights of indemnification which the Trust
may have hereunder or otherwise.
7. The services of the Adviser to the Trust hereunder are not to
be deemed exclusive and the Adviser shall be free to render similar service
to others so long as its services hereunder are not impaired or interfered with
thereby.
8. The Trust shall pay the Adviser as full compensation for all
services rendered and all facilities furnished hereunder as to a Series a
management fee for that Series determined in accordance with the appropriate
portion of Schedule A attached hereto.
9. It is understood that trustees, officers, agents and
shareholders of the Trust are or may be interested in the Adviser as directors,
officers, shareholders or otherwise, that directors, officers, agents and
shareholders of the Adviser are or may be interested in the Trust as trustees,
officers, shareholders or otherwise, that the Adviser may be interested in the
Trust as a shareholder or otherwise, and that the existence of any such dual
interest shall not affect the validity hereof or of any transactions hereunder
except as otherwise provided in the Master Trust Agreement and the Certificate
of Incorporation of the Adviser, respectively, or by specific provision of
applicable law.
10. (a) This Agreement will take effect as of December 28, 1992. This
Agreement shall thereafter continue in full force and effect from year to year
as to a Series, if its continuance is specifically approved before May 1, 1993
and before May 1 of each subsequent year by vote of a majority of the
outstanding shares (as defined in the 0000 Xxx) of the Series of the Trust in
question or by the Board of Trustees of the Trust, and in either event by a
majority of the Trustees of the Trust who are not parties to the Agreement or
- 4 -
interested persons (within the meaning of the 0000 Xxx) of the Trust or the
Adviser, such Trustees voting in person at a meeting called for such purpose;
provided, however, that:
(b) This Agreement may at any time be terminated as to any
Series without the payment of any penalty on 60 days' written notice to the
Adviser either by vote of the Board of Trustees of the Trust or by vote of a
majority of the outstanding voting securities of a Series.
(c) This Agreement shall immediately terminate in event of its
assignment (as that term is defined in the 1940 Act).
(d) This Agreement may be terminated by the Adviser in its
entirety or with respect to one or more than one of the Series on 90 days'
written notice to the Trust.
11. Any notice under this Agreement shall be in writing, addressed
and delivered or mailed postage prepaid to the other party at such address as
such other party may designate for the receipt of such notices. Until further
notice to the other party, it is agreed for this purpose that the address of the
Adviser shall be 000 Xxxxxxx Xxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000 and that
the address of the Trust shall be Xxx Xxxxxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxxx 00000.
12. Copies of the Master Trust Agreement, as amended, establishing
CIGNA Institutional Funds Group (the "Trust") are on file with the Secretary of
the Commonwealth of Massachusetts, and notice is hereby given that this Master
Investment Advisory Agreement is executed on behalf of the Trust by an officer
of the Trust as an officer and not individually and that the obligations of or
arising out of this Master Investment Advisory Agreement are not binding upon
any of the Trustees, officers, shareholders, employees or agents of the Trust
individually but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate as of the day and year first above written.
CIGNA INSTITUTIONAL FUNDS GROUP CIGNA INVESTMENTS, INC.
By: /s/ R. Xxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxx, III
------------------------------ -----------------------------
R. Xxxxx Xxxxx Xxxxxx X. Xxxxx, III
President President
- 5 -
Schedule A-1
------------
Compensation Schedule for CIGNA International Stock Fund
the following Series:
The Trust shall pay the Adviser as full compensation for all services
rendered and all facilities furnished hereunder, a management fee for such
Series by applying the annual rate of .80% to the average daily net asset value
of such Series for the calendar year, computed in the manner used for the
determination of the offering price of Shares of the Series. The fee accrued as
of the end of each month shall be paid no later than the 15th of the following
month.
The fees set forth above shall be reduced by, and/or the Adviser shall
reimburse such Series, the amount necessary to comply with the most restrictive
expense limitation provision imposed from time to time by any state in which the
shares of such Series are then qualified for sale.
- 6 -
