Exhibit (d)(11)
NORTHERN INSTITUTIONAL FUNDS
FORM OF INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this ____ day of ________, 2001 between NORTHERN
INSTITUTIONAL FUNDS, a Delaware business trust (the "Trust"), and NORTHERN TRUST
INVESTMENTS, INC., an Illinois state bank (the "Adviser").
WITNESSETH:
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WHEREAS, the Trust is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust is authorized to issue shares of beneficial
interest ("Shares") in separate series with each such series representing the
interests in a separate portfolio of securities and other assets; and
WHEREAS, the Trust presently intends to offer Shares of beneficial
interest in a portfolio, known as the Core Bond Portfolio (the "Current
Portfolio") together with all other portfolios previously or subsequently
established by the Trust and made subject to this Agreement being herein
collectively referred to as the "Portfolios"); and
WHEREAS, the Trust desires to retain the Adviser to render investment
advisory services to the Trust and its Current Portfolio as indicated below and
the Adviser is willing to so render such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1. Appointment of Adviser.
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(a) The Trust hereby appoints the Adviser to act as investment
adviser to the Trust and its Current Portfolio for the periods
and on the terms herein set forth. The Adviser accepts such
appointment and agrees to render the services herein set forth,
for the compensation herein provided.
(b) In the event that the Trust establishes one or more portfolios
other than the Current Portfolio with respect to which it desires
to retain the Adviser to act as investment adviser hereunder, it
shall notify the Adviser in writing. If the Adviser is willing to
render such services under this Agreement it shall notify the
Trust in writing whereupon such portfolio shall become a
Portfolio hereunder and shall be subject to the provisions of
this Agreement to the same extent as the Current Portfolio except
to the extent that said provisions (including those relating to
the compensation payable by the Trust to the Adviser) are
modified with respect to such Portfolio in writing by the Trust
and the Adviser at the time.
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2. Delivery of Documents. The Trust has delivered (or will deliver as
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soon as is possible) to the Adviser copies of each of the following documents:
(a) Agreement and Declaration of Trust dated as of July 1, 1997,
together with all Amendments thereto (such Agreement and
Declaration of Trust, as presently in effect and as amended from
time to time, is herein called the "Trust Agreement"), copies of
which are on file with the Trust;
(b) By-Laws of the Trust (such By-Laws, as presently in effect and as
amended from time to time, are herein called the "By-Laws");
(c) Administration Agreement between the Trust and its Administrator;
(d) Distribution Agreement between the Trust and its Distributor;
(e) Custodian Agreement between the Trust and its Custodian;
(f) Transfer Agency Agreement between the Trust and its Transfer
Agent;
(g) Prospectus and Statement of Additional Information for the
Current Portfolio (such Prospectus and Statement of Additional
Information, as presently in effect and as amended, supplemented
and/or superseded from time to time, is herein called the
"Prospectus" and "Statement of Additional Information,"
respectively); and
(h) Post-Effective Amendment No. 45 to the Trust's Registration
Statement on Form N-1A (No. 2-80543) under the Securities Act of
1933 (the "1933 Act") and Amendment No. 46 to the Trust's
Registration Statement on such form (No. 811-3605) under the 1940
Act filed as a single document with the Securities and Exchange
Commission (the "Commission") (such Registration Statement, as
presently in effect and as amended from time to time, is herein
called the "Registration Statement").
The Trust agrees to promptly furnish the Adviser from time to time
with copies of all amendments of or supplements to or otherwise current versions
of any of the foregoing documents not heretofore furnished.
3. Duties of Adviser.
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(a) Subject to the general supervision of the Trustees of the Trust,
the Adviser shall manage the investment operations of each of the
Portfolios and the composition of each Portfolio's assets,
including the purchase, retention and disposition thereof. In
this regard, the Adviser:
(i) shall provide supervision of the Portfolios, assets, furnish
a continuous investment program for such Portfolios,
determine from time to time what investments or securities
will be purchased, retained or sold by the Portfolios, and
what portion of the assets will be invested or held
uninvested as cash;
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(ii) shall place orders pursuant to its determinations either
directly with the issuer or with any broker and/or dealer
or other persons who deal in the securities in which the
Portfolio in question is dealing. In placing orders with
brokers, dealers or other persons the Adviser shall
attempt to obtain the best net price and execution of its
orders, provided that to the extent the execution and
price available from more than one broker, dealer or other
such persons are believed to be comparable, the Adviser
may, at its discretion but subject to applicable law,
select the executing broker, dealer or such other persons
on the basis of the Adviser's opinion of the reliability
and quality of such broker, dealer or such other persons;
and
(iii) may, on occasions when it deems the purchase or sale of a
security to be in the best interests of a Portfolio as
well as other fiduciary or agency accounts managed by the
Adviser, aggregate, to the extent permitted by applicable
laws and regulations, the securities to be sold or
purchased in order to obtain the best net price and
execution. In such event, allocation of the securities so
purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Adviser in the manner it
considers to be most equitable and consistent with its
fiduciary obligations to such Portfolio and to such other
accounts.
(b) The Adviser, in connection with its rights and duties with
respect to the Trust,
(i) shall use the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like
character and with like aims; and
(ii) shall act in conformity with the Trust Agreement, By-Laws,
Registration Statement, Prospectus and Statement of
Additional Information, the instructions and directions of
the Trustees of the Trust, and will use its best efforts
to comply with and conform to the requirements of the 1940
Act and all other applicable federal and state laws,
regulations and rulings.
(c) The Adviser shall:
(i) comply with all applicable Rules and Regulations of the
Securities and Exchange Commission and will in addition
conduct its activities under this Agreement in accordance
with other applicable law; and
(ii) maintain a policy and practice of conducting its
investment advisory services hereunder independently of
its commercial
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banking operations and those of any affiliated bank of the
Adviser. When the Adviser makes investment recommendations
for a Portfolio, its investment advisory personnel will
not inquire or take into consideration whether the issuer
of securities proposed for purchase or sale for the
Portfolio's account are customers of its commercial
banking department or the commercial banking department of
any affiliated bank of the Adviser.
(d) The Adviser shall not, unless permitted by the Securities and
Exchange Commission:
(i) permit the Portfolios to execute transactions with the
Adviser's Bond Department; or
(ii) permit the Portfolios to purchase certificates of deposit
of the Adviser or its affiliate banks, commercial paper
issued by the Adviser's parent holding company or other
securities issued or guaranteed by the Adviser, its parent
holding company or their subsidiaries or affiliates.
(e) The Adviser shall render to the Trustees of the Trust such
periodic and special reports as the Trustees may reasonably
request.
(f) The services of the Adviser hereunder are not deemed exclusive
and the Adviser shall be free to render similar services to
others (including other investment companies) so long as its
services under this agreement are not impaired thereby.
4. Expenses. During the term of this Agreement, the Adviser will pay all
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costs incurred by it in connection with the performance of its duties under
paragraph 3 hereof, other than the cost (including taxes, brokerage commissions
and other transactions costs, if any) of securities purchased or sold for the
Portfolio.
5. Compensation.
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(a) For the services provided and the expenses assumed by the
Adviser pursuant to this Agreement, the Trust will pay to the
Adviser as full compensation therefor a fee at an annual rate
of .60 of 1% of the Portfolio's average net assets.
(b) the fee will be computed based on net assets on each day and
will be paid to the Adviser monthly.
6. Books and Records. The Adviser agrees to maintain, and preserve for
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the periods prescribed by Rule 31a-2 of the Commission under the 1940 Act, such
records as are required to be maintained by Rule 31a-1 of the Commission under
the 1940 Act [other than clause (b)(4) and paragraphs (c), (d) and (e) thereof].
The Adviser further agrees that all records which it maintains for the Trust are
the property of the Trust and it will surrender promptly to the Trust any of
such records upon the Trust's request.
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7. Indemnification.
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(a) The Trust hereby agrees to indemnify and hold harmless the
Adviser, its directors, officers, and employees and each
person, if any, who controls the Adviser (collectively, the
"Indemnified Parties") against any and all losses, claims,
damages or liabilities, joint or several, to which they or
any of them may become subject under the 1933 Act, the
Securities Exchange Act of 1934, the 1940 Act or other
federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or
are based upon:
(i) any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission to
state a material fact required to be stated or
necessary to make the statements made not misleading in
the Registration Statement, the Prospectus, the
Statement of Additional Information, or any application
or other document filed in connection with the
qualification of the Trust or Shares of the Trust under
the Blue Sky or securities laws of any jurisdiction
("Application"), except insofar as such losses, claims,
damages or liabilities (or actions in respect thereof)
arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or
omission either pertaining to a breach of the Adviser's
duties in connection with this Agreement or made in
reliance upon and in conformity with information
furnished by, through or on behalf of the Adviser for
use in connection with the Registration Statement, any
Application, the Prospectus or the Statement of
Additional Information; or
(ii) subject to clause (i) above, the Adviser acting in
accordance with the terms hereof;
and the Trust will reimburse each Indemnified Party for
any legal or other expense incurred by such Indemnified
Party in connection with investigating or defending any
such loss, claim, damages, liability or action.
(b) If the indemnification provided for in paragraph 7(a) is due
in accordance with the terms of such paragraph but is for
any reason held by a court to be unavailable from the Trust,
then the Trust shall contribute to the aggregate amount paid
or payable by the Trust and the Indemnified Parties as a
result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is
appropriate to reflect (i) the relative benefits received by
the Trust and such Indemnified Parties in connection with
the operation of the Trust, (ii) the relative fault of the
Trust and such Indemnified Parties, and (iii) any other
relevant equitable considerations. The Trust and the Adviser
agree that it would not be just and equitable if
contribution pursuant to this subparagraph (b) were
determined by pro rata
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allocation or other method of allocation which does not take
account of the equitable considerations referred to above in
this subparagraph (b). The amount paid or payable as a
result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this
subparagraph (b) shall be deemed to include any legal or
other expense incurred by the Trust and the Indemnified
Parties in connection with investigating or defending any
such loss, claim, damage, liability or action. No person
guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to
contribution from any person who was not guilty of such
fraudulent misrepresentation.
(c) It is understood, however, that nothing in this paragraph 7
shall protect any Indemnified Party against, or entitle any
Indemnified Party to indemnification against, or
contribution with respect to, any liability to the Trust or
its Shareholders to which such Indemnified Party is subject,
by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
a reckless disregard to its obligations and duties, under
this Agreement or otherwise, to an extent or in a manner
inconsistent with Section 17 of the 1940 Act.
8. Duration and Termination. Insofar as the holders of Shares
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representing the interests in the Current Portfolio are affected by this
Agreement, it shall continue, unless sooner terminated as provided herein, until
March 31, 2002, and, insofar as the holders of Shares representing the interests
in each of the other Portfolios are affected by this Agreement, it (as
supplemented by the terms specified in any notice and agreement pursuant to
paragraph 1(b) hereof) shall continue (assuming approval by the initial
holder(s) of Shares of such Portfolio) until March 31 of the year following the
year in which the Portfolio becomes a Portfolio hereunder, and with respect to
each Portfolio thereafter shall continue automatically for periods of one year
so long as each such latter continuance is approved at least annually (a) by the
vote of a majority of the Trustees of the Trust who are not parties to this
Agreement or interested persons (as defined by the 0000 Xxx) of any such party,
cast in person at a meeting called for the purpose of voting on such approval,
and (b) by the Trustees of the Trust or by vote of a majority of the outstanding
Shares (as defined with respect to voting securities in the 1940 Act)
representing the interests in such Portfolio; provided, however, that this
Agreement may be terminated by the Trust as to any Portfolio at any time,
without the payment of any penalty, by vote of a majority of the Trustees of the
Trust or by vote of a majority of the outstanding Shares (as so defined)
representing the interests in the Portfolio affected thereby on 60 days' written
notice to the Adviser, or by the Adviser at any time, without the payment of any
penalty, on 60 days' written notice to the Trust. This Agreement will
automatically and immediately terminate in the event of its assignment (as
defined by the 1940 Act).
9. Name of the Trust. The Adviser agrees that the name "Northern" may
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be used in the name of the Trust and that such name, any related logos and any
service marks containing the words "Northern" may be used in connection with the
Trust's business only for so long as this Agreement (including any continuance
or amendment hereof) remains in effect and that such use shall be royalty free.
At such time as this Agreement shall no longer be in effect, the Trust will
cease such use. The Trust acknowledges that it has no rights to the name
"Northern," such logos or service marks other than those granted in this
paragraph and that the Adviser reserves to itself
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the right to grant the nonexclusive right to use the name "Northern," such logos
or service marks to any other person, including, but not limited to, another
investment company.
10. Status of Adviser as Independent Contractor. The Adviser shall for
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all purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided herein or authorized by the Trustees of the Trust
from time to time, have no authority to act for or represent the Trust in any
way or otherwise be deemed an agent of the Trust.
11. Amendment of Agreement. This Agreement may be amended by mutual
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consent, but the consent of the Trust must be approved (a) by vote of a majority
of those Trustees of the Trust who are not parties to this Agreement or
interested persons (as defined in the 0000 Xxx) of any such party, cast in
person at a meeting called for the purpose of voting on such amendment, and (b)
by vote of a majority of the outstanding Shares (as defined with respect to
voting securities by the 1940 Act) representing the interests in any Portfolio
affected by such amendment.
12. Shareholder Liability. This Agreement is executed by or on behalf of
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the Trust with respect to each of the Portfolios and the obligations hereunder
are not binding upon any of the Trustees, officers or Shareholders of the Trust
individually but are binding only upon the Trust and its assets and property.
All obligations of the Trust under this Agreement shall apply only on a
Portfolio-by-Portfolio basis, and the assets of one Portfolio shall not be
liable for the obligations of another Portfolio.
13. Miscellaneous. The captions in this Agreement are included for
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convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. 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. This Agreement shall be construed in accordance with
applicable federal law and (except as to paragraph 12 hereof which shall be
construed in accordance with the laws of the State of Delaware) the laws of the
State of Illinois and shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors (subject to the last sentence
of paragraph 8) and, to the extent provided in paragraph 7 hereof, each
Indemnified Party. Anything herein to the contrary notwithstanding, this
Agreement shall not be construed to require, or to impose any duty upon, either
of the parties to do anything in violation of any applicable laws or
regulations. Any provision in this Agreement requiring compliance with any
statute or regulation shall mean such statute or regulation as amended and in
effect from time to time.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the day and year first above written.
ATTEST: NORTHERN INSTITUTIONAL FUNDS
By:____________________________
Name:__________________________
Title:_________________________
ATTEST: NORTHERN TRUST INVESTMENTS, INC.
By:____________________________
Name:__________________________
Title:_________________________
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