EXHIBIT (d)(1)
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 12 day of October, 1999, by and between Commonfund
Institutional Funds, a Delaware business trust (the "Company"), and Commonfund
Asset Management Company (the "Investment Manager").
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended, which may
consist of several series, each having its own investment objective and policies
(each, a "Fund"); and
WHEREAS, the Company desires to retain the Investment Manager to render
investment management services with respect to each Fund as the Company and the
Investment Manager may agree upon and as are set forth in the attached Schedule
A, and the Investment Manager is willing to render such services.
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF INVESTMENT MANAGER. The Company employs the Investment
Manager to manage the investment and reinvestment of the assets of each
Fund, and, to that end, to retain (subject to the approval of the
Company's Board of Directors and, except as otherwise permitted under
rule or regulation or the terms of any exemptive relief obtained in the
future from the Securities and Exchange Commission, a majority of the
outstanding voting securities of such Fund) one or more sub-advisers
for each Fund, to supervise the investment activities of such
sub-advisers, to allocate assets among such sub-advisers, to monitor
the performance of such sub-advisers and of each Fund, to determine in
its discretion, when appropriate, securities to be purchased and sold
for each Fund, and to render regular reports to the Company's officers
and Directors concerning its discharge of the foregoing
responsibilities.
The Investment Manager shall discharge the foregoing responsibilities
subject to the control of the Board of Directors of the Company and in
compliance with (i) such standing instructions and other policies as
the Directors may from time to time establish, (ii) the objectives,
policies, and limitations for each such Fund set forth in the
prospectus and statement of additional information pertaining to such
Fund as amended from time to time, and (iii) applicable laws and
regulations.
The Investment Manager accepts such employment and agrees, at its own
expense, to render the services and to provide the office space,
furnishings and equipment and the personnel required by it to perform
the services on the terms and for the compensation provided herein. The
Investment Manager will not, however, pay for the cost of securities,
commodities, and other investments
(including brokerage commissions and other transaction charges, if any)
purchased or sold for the Company.
2. FUND TRANSACTIONS. The Investment Manager, and each sub-adviser
retained by the Investment Manager, is authorized to select the brokers
or dealers that will execute the purchases and sales of portfolio
securities for each Fund and is directed to use its best efforts to
obtain the best net results as described from time to time in the
Fund's prospectuses and statement of additional information. The
Investment Manager will promptly communicate, or cause sub-advisers
retained by it to promptly communicate, to the officers and the Board
of Directors of the Company such information relating to portfolio
transactions as they may reasonably request.
It is understood that neither the Investment Manager nor any
sub-adviser retained by the Investment Manager, will be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the Company
or be in breach of any obligation owing to the Company under this
Agreement, or otherwise, by reason of its having directed a securities
transaction on behalf of a Fund to a broker-dealer in compliance with
the provisions of Section 28(e) of the Securities Exchange Act of 1934
or as described from time to time by the Fund's prospectuses and
statement of additional information.
3. COMPENSATION OF THE INVESTMENT MANAGER. For the services to be rendered
by the Investment Manager as provided in Sections 1 and 2 of this
Agreement, the Company shall pay to the Investment Manager compensation
at the rate specified in the Schedule A which is attached hereto and
made a part of this Agreement. Such compensation shall be paid to the
Investment Manager at the end of each month, and shall be accrued daily
(using a 365 day year) at the annual percentage rate as specified in
the attached Schedule A. The fee shall be based on the average daily
net assets (less any assets held in non-interest bearing special
deposits with a Federal Reserve Bank). The Investment Manager may, in
its discretion and from time to time, waive a portion of its fee.
All rights of compensation under this Agreement for services performed
as of the termination date shall survive the termination of this
Agreement.
4. OTHER EXPENSES. The Company shall pay all expenses relating to mailing
to existing shareholders prospectuses, statements of additional
information, proxy solicitation material and shareholder reports.
5. EXCESS EXPENSES. If the expenses for any Fund for any fiscal year
(including fees and other amounts payable to the Investment Manager,
but excluding interest, taxes, brokerage costs, litigation, and other
extraordinary costs) as calculated every business day would exceed the
expense limitations imposed on investment companies by any applicable
statute or regulatory authority of any jurisdiction in
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which shares of a Fund are qualified for offer and sale, the Investment
Manager shall bear such excess cost.
However, the Investment Manager will not bear expenses of any Fund that
would result in the Fund's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code.
6. REPORTS. The Company and the Investment Manager agree to furnish to
each other, to the extent such documents are otherwise prepared,
current prospectuses, proxy statements, reports to shareholders,
certified copies of their financial statements, and such other
information with regard to their affairs as each may reasonably
request.
7. STATUS OF INVESTMENT MANAGER. The services of the Investment Manager to
the Company are not to be deemed exclusive, and the Investment Manager
shall be free to render similar services to others so long as its
services to the Company are not impaired thereby. The Investment
Manager shall be deemed to be an independent contractor and, unless
otherwise expressly provided or authorized, shall have no authority to
act for or represent the Company in any way or otherwise be deemed an
agent of the Company.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 3la-i and Rule 3la-2 promulgated
under the Investment Company Act of 1940 which are prepared or
maintained by the Investment Manager on behalf of the Company are the
property of the Company and will be surrendered promptly to the Company
on request.
9. LIMITATION OF LIABILITY OF INVESTMENT MANAGER. The duties of the
Investment Manager shall be confined to those expressly set forth
herein, and no implied duties are assumed by or may be asserted against
the Investment Manager hereunder. The Investment Manager 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 carrying
out its duties hereunder, except a loss resulting from 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, except as may otherwise be provided under provisions
of applicable state law or Federal securities law which cannot be
waived or modified hereby. (As used in this Paragraph 9, the term
"Investment Manager" shall include directors, officers, employees and
other corporate agents of the Investment Manager, including any
sub-adviser retained by the Investment Manager to provide services to
the Company and its directors, officers, employees and agents, as well
as that entity itself).
10. PERMISSIBLE INTERESTS. Directors, partners, officers, agents, and
shareholders of the Company are or may be interested in the Investment
Manager (or any
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successor thereof) as directors, partners, officers, or shareholders,
or otherwise; directors, partners, officers, agents, and shareholders
of the Investment Manager are or may be interested in the Company as
Directors, officers, shareholders or otherwise; and the Investment
Manager (or any successor) is or may be interested in the Company as a
shareholder or otherwise. In addition, brokerage transactions for the
Company may be effected through affiliates of the Investment Manager if
approved by the Board of Directors, subject to the rules and
regulations of the Securities and Exchange Commission.
11. LICENSE OF INVESTMENT MANAGER'S NAME AND GOODWILL. The Company has
granted to the Investment Manager a license to use the trade names
"Commonfund" and "Common Fund" (together, the "Trade Name") together
with the business reputation and goodwill associated with the Trade
Name for a period ending on August 1, 2009. The Investment Manager
hereby grants a license to the Company to use the Trade name and the
name of the Investment Manager in the name of the Company, in the names
of the Funds, and in advertising and other promotional literature
relating to the Funds, for the term of this Agreement, as it may be
renewed, up to August 1, 2009. The Company acknowledges that, in the
absence of such license, it has no right to use or promote its products
using the Trade Name or the name of the Investment Manager. The license
granted herein may be revoked at any time and for any reason upon 90
days notice from the Investment Manager to the Company. In the event of
such revocation, the Company shall, as soon as reasonably practicable,
cease using the Trade Name and the name of the Investment Manager and
the business reputation and goodwill associated with the Trade Name in
connection with the business of the Company and acknowledges that
failure to comply with this requirement would be a breach of contract
for which there is no adequate remedy at law.
12. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect with respect to a Fund until
two years from date of execution, and thereafter, for periods of one
year so long as such continuance thereafter is specifically approved at
least annually (a) by the vote of a majority of those Directors of the
Company 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, and (b) by the Directors of the Company, or by
vote of a majority of the outstanding voting securities of such Fund;
provided, however, that if the shareholders of any Fund fail to approve
the Agreement as provided herein, the Investment Manager may continue
to serve hereunder in the manner and to the extent permitted by the
Investment Company Act of 1940 and rules and regulations thereunder.
The foregoing requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a
manner consistent with the Investment Company Act of 1940 and the rules
and regulations thereunder.
This Agreement may be terminated as to any Fund at any time, without
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the payment of any penalty by vote of a majority of the Directors of
the Company or by vote of a majority of the outstanding voting
securities of such Fund on not less than 30 days nor more than 60 days
written notice to the Investment Manager, or by the Investment Manager
at any time without the payment of any penalty, on 90 days written
notice to the Company. This Agreement will automatically and
immediately terminate in the event of its assignment. Any notice under
this Agreement shall be given in writing, addressed and delivered, or
mailed postpaid, to the other party at any office of such party.
As used in this Section 12, the terms "assignment," "interested
persons," and a "vote of a majority of the outstanding voting
securities" shall have the respective meanings set forth in the
Investment Company Act of 1940 and the rules and regulations
thereunder; subject to such exemptions as may be granted by the
Securities and Exchange Commission under said Act.
13. NOTICE. Any notice required or permitted to be given by either party to
the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the
other party at the last address furnished by the other party to the
party giving notice. At the commencement of this Agreement, addresses
for notice shall be as follows: if to the Company, at Commonfund
Institutional Funds, 000 Xxxx Xxxx Xxxx, Xxxxxxxx, XX, 00000, and if to
the Investment Manager at Commonfund Asset Management Company, 000 Xxxx
Xxxx Xxxx, Xxxxxxxx, XX 00000.
14. 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.
15. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of New York and the applicable provisions of the 1940
Act. To the extent that the applicable laws of the State of New York,
or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
[This blank space intentional]
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16. NO INDIVIDUAL LIABILITY. A copy of the Certificate of Trust of the
Company is on file with the Secretary of State of the State of Delaware
and notice is hereby given that the obligations of this instrument are
not binding on any of the Directors, officers or shareholders of the
Company or any Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.
COMMONFUND INSTITUTIONAL FUNDS
By: /s/ Xxxxxx X. Xxxx
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Attest: /s/ Xxxx Xxxxxxxxxxx
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COMMONFUND ASSET MANAGEMENT COMPANY
By: /s/ Xxxx X. Xxxxxx
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Attest: /s/ Xxxx Xxxxxxxxxxx
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AMENDED SCHEDULE A DATED DECEMBER 11, 2000
TO THE
INVESTMENT ADVISORY AGREEMENT
DATED OCTOBER 12, 0000
XXXXXXX
XXXXXXXXXX INSTITUTIONAL FUNDS
AND
COMMONFUND ASSET MANAGEMENT COMPANY, INC.
Pursuant to Article 3, the Fund shall pay the Adviser compensation at an annual
rate as follows:
Portfolio Annual Fee
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CIF Short Duration Fund 0.19%
CIF Inflation-Indexed Bond Fund 0.15-0.35%*
CIF Low Duration Bond Fund 0.30%
CIF Core Plus Bond Fund 0.35%
CIF Core Equity Fund 0.45%
CIF Small Cap Growth Fund 0.90%
CIF Small Cap Value Fund 0.90%
CIF International Equity Fund 0.70%
* Performance Formula. The investment advisory fee will be 0.25% of average
daily net assets of the CIF Inflation-Indexed Bond Fund if the total return of
the CIF Inflation-Indexed Bond Fund is 0.50% above the return on the Xxxxxx U.S.
Tips Index (the "Fulcrum Point"). The fee payable will increase or decrease, as
applicable, by an amount equal to 20% of the amount by which the total return of
the CIF Inflation-Indexed Bond Fund exceeds or lags the Fulcrum Point (the
"Performance Adjustment"), provided, however, that the Performance Adjustment
shall not cause the annual fee to exceed 0.35% or be less than 0.15%. Total
return of the CIF Inflation-Indexed Bond Fund and return on the Xxxxxx U.S. Tips
Index shall be calculated as prescribed in Rule 205-1 under the Investment
Advisers Act of 1940.
Fee Accrual. Until the first anniversary of commencement of operations (the
"First Anniversary"), the fee shall be calculated and charged daily by reference
to the period beginning with the commencement of operations. Thereafter, total
return of the CIF Inflation-Indexed Bond Fund and the return on the Xxxxxx U.S.
Tips Index shall be calculated by reference to trailing 12 month returns.
Fee Payment. Until the First Anniversary, the fee shall be paid monthly in
arrears at a rate equal to 0.15% of average net assets per annum. On the First
Anniversary, a fee shall be paid equal to the difference between the fee
actually paid to date and the fee payable under the performance formula
calculated by reference to trailing 12 month performance. Thereafter, the fee
shall be paid monthly in arrears.
IN WITNESS WHEREOF, the parties hereto have caused this Amended Schedule A to be
executed as of December 11, 2000.
Commonfund Institutional Funds Commonfund Asset Management Company, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx
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Xxxxxx X. Xxxxxxxxx Xxxx X. Xxxxxx
President President and Chief Investment Officer
Attest: /s/Xxxxxxx X. Xxxxxxx Attest: /s/ Xxxxxxx X. Xxxxxxx
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