Exhibit d(4)
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT ("Agreement") is made this 1st day of December,
2005, by and between CitiFunds Institutional Trust, a Massachusetts Business
Trust (the "Trust") and Citi Fund Management Inc., a Delaware corporation (the
"Manager").
WHEREAS, the Trust is registered as a management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Manager is engaged primarily in rendering investment
advisory, management and administrative services and is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended;
WHEREAS, the Trust wishes to retain the Manager to provide investment
advisory, management, and administrative services to the Trust with respect to
the series of the Trust designated in Schedule A annexed hereto (the "Fund");
and
WHEREAS, the Manager is willing to furnish such services on the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed as follows:
1. The Trust hereby appoints the Manager to act as investment adviser and
administrator of the Fund for the period and on the terms set forth in this
Agreement. The Manager accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. The Fund shall at all times keep the Manager fully informed with regard
to the securities owned by it, its funds available, or to become available, for
investment, and generally as to the condition of its affairs. It shall furnish
the Manager with such other documents and information with regard to its affairs
as the Manager may from time to time reasonably request.
3. (a) Subject to the supervision of the Trust's Board of Trustees (the
"Board"), the Manager shall regularly provide the Fund with investment research,
advice, management and supervision and shall furnish a continuous investment
program for the Fund's portfolio of securities and other investments consistent
with the Fund's investment objectives, policies and restrictions, as stated in
the Fund's current Prospectus and Statement of Additional Information. The
Manager shall determine from time to time what securities and other investments
will be purchased, retained, sold or exchanged by the Fund and what portion of
the assets of the Fund's portfolio will be held in the various securities and
other investments in which the Fund invests, and shall implement those
decisions, all subject to the provisions of the Trust's Declaration of Trust and
By-Laws (collectively, the "Governing Documents"), the 1940 Act, and the
applicable rules and regulations promulgated thereunder by the Securities and
Exchange Commission (the "SEC") and interpretive guidance issued thereunder by
the SEC staff and any other applicable federal and state law, as well as the
investment objectives, policies and restrictions of the Fund
referred to above, and any other specific policies adopted by the Board and
disclosed to the Manager. The Manager is authorized as the agent of the Trust to
give instructions to the custodian of the Fund as to deliveries of securities
and other investments and payments of cash for the account of the Fund. Subject
to applicable provisions of the 1940 Act and direction from the Board, the
investment program to be provided hereunder may entail the investment of all or
substantially all of the assets of a Fund in one or more investment companies.
The Manager will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer, foreign
currency dealer, futures commission merchant or others selected by it. In
connection with the selection of such brokers or dealers and the placing of such
orders, subject to applicable law, brokers or dealers may be selected who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Funds and/or the other
accounts over which the Manager or its affiliates exercise investment
discretion. The Manager is authorized to pay a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for a Fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
Manager determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the Manager and its
affiliates have with respect to accounts over which they exercise investment
discretion. The Board may adopt policies and procedures that modify and restrict
the Manager's authority regarding the execution of the Fund's portfolio
transactions provided herein. The Manager shall also provide advice and
recommendations with respect to other aspects of the business and affairs of the
Fund, shall exercise voting rights, rights to consent to corporate action and
any other rights pertaining to a Fund's portfolio securities subject to such
direction as the Board may provide, and shall perform such other functions of
investment management and supervision as may be directed by the Board.
(b) Subject to the direction and control of the Board, the Manager
shall perform such administrative and management services as may from time to
time be reasonably requested by the Fund as necessary for the operation of the
Fund, such as (i) supervising the overall administration of the Fund, including
negotiation of contracts and fees with and the monitoring of performance and
xxxxxxxx of the Fund's transfer agent, shareholder servicing agents, custodian
and other independent contractors or agents, (ii) providing certain compliance,
fund accounting, regulatory reporting, and tax reporting services, (iii)
preparing or participating in the preparation of Board materials, registration
statements, proxy statements and reports and other communications to
shareholders, (iv) maintaining the Fund's existence, and (v) during such times
as shares are publicly offered, maintaining the registration and qualification
of the Fund's shares under federal and state laws. Notwithstanding the
foregoing, the Manager shall not be deemed to have assumed any duties with
respect to, and shall not be responsible for, the distribution of the shares of
any Fund, nor shall the Manager be deemed to have assumed or have any
responsibility with respect to functions specifically assumed by any transfer
agent, fund accounting agent, custodian, shareholder servicing agent or other
agent, in each case employed by the Fund to perform such functions.
(c) The Fund hereby authorizes any entity or person associated with the
Manager which is a member of a national securities exchange to effect any
transaction on the exchange for
2
the account of the Fund which is permitted by Section 11(a) of the Securities
Exchange Act of 1934, as amended, and Rule 11a2-2(T) thereunder, and the Fund
hereby consents to the retention of compensation for such transactions in
accordance with Rule 11a2-2(T)(a)(2)(iv). Notwithstanding the foregoing, the
Manager agrees that it will not deal with itself, or with members of the Board
or any principal underwriter of the Fund, as principals or agents in making
purchases or sales of securities or other property for the account of the Fund,
nor will it purchase any securities from an underwriting or selling group in
which the Manager or its affiliates is participating, or arrange for purchases
and sales of securities between a Fund and another account advised by the
Manager or its affiliates, except in each case as permitted by the 1940 Act and
in accordance with such policies and procedures as may be adopted by a Fund from
time to time, and will comply with all other provisions of the Governing
Documents and the Fund's then-current Prospectus and Statement of Additional
Information relative to the Manager and its directors and officers.
4. Subject to the Board's approval, the Manager or the Fund may enter into
contracts with one or more investment subadvisers or subadministrators,
including without limitation, affiliates of the Manager, in which the Manager
delegates to such investment subadvisers or subadministrators any or all its
duties specified hereunder, on such terms as the Manager will determine to be
necessary, desirable or appropriate, provided that in each case the Manager
shall supervise the activities of each such subadviser or subadministrator and
further provided that such contracts impose on any investment subadviser or
subadministrator bound thereby all the conditions to which the Manager is
subject hereunder and that such contracts are entered into in accordance with
and meet all applicable requirements of the 1940 Act.
5. (a) The Manager, at its expense, shall supply the Board and officers of
the Trust with all information and reports reasonably required by them and
reasonably available to the Manager and shall furnish the Fund with office
facilities, including space, furniture and equipment and all personnel
reasonably necessary for the operation of the Fund. The Manager shall oversee
the maintenance of all books and records with respect to the Fund's securities
transactions and the keeping of the Fund's books of account in accordance with
all applicable federal and state laws and regulations. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Manager hereby agrees that
any records that it maintains for the Fund are the property of the Fund, and
further agrees to surrender promptly to the Fund any of such records upon the
Fund's request. The Manager further agrees to arrange for the preservation of
the records required to be maintained by Rule 31a-1 under the 1940 Act for the
periods prescribed by Rule 31a-2 under the 1940 Act. The Manager shall authorize
and permit any of its directors, officers and employees, who may be elected as
Board members or officers of the Fund, to serve in the capacities in which they
are elected.
(b) The Manager shall bear all expenses, and shall furnish all
necessary services, facilities and personnel, in connection with its
responsibilities under this Agreement. Other than as herein specifically
indicated, the Manager shall not be responsible for the Fund's expenses,
including, without limitation, advisory fees; distribution fees; interest;
taxes; governmental fees; voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; organization
costs of the Fund; the cost (including brokerage commissions, transaction fees
or charges, if any) in connection with the purchase or sale of the Fund's
securities and other investments and any losses in connection therewith; fees
and
3
expenses of custodians, transfer agents, registrars, independent pricing vendors
or other agents; legal expenses; loan commitment fees; expenses relating to
share certificates; expenses relating to the issuing and redemption or
repurchase of the Fund's shares and servicing shareholder accounts; expenses of
registering and qualifying the Fund's shares for sale under applicable federal
and state law; expenses of preparing, setting in print, printing and
distributing prospectuses and statements of additional information and any
supplements thereto, reports, proxy statements, notices and dividends to the
Fund's shareholders; costs of stationery; website costs; costs of meetings of
the Board or any committee thereof, meetings of shareholders and other meetings
of the Fund; Board fees; audit fees; travel expenses of officers, members of the
Board and employees of the Fund, if any; and the Fund's pro rata portion of
premiums on any fidelity bond and other insurance covering the Fund and its
officers, Board members and employees; litigation expenses and any non-recurring
or extraordinary expenses as may arise, including, without limitation, those
relating to actions, suits or proceedings to which the Fund is a party and the
legal obligation which the Fund may have to indemnify the Fund's Board members
and officers with respect thereto.
6. No member of the Board, officer or employee of the Trust or Fund shall
receive from the Trust or Fund any salary or other compensation as such member
of the Board, officer or employee while he is at the same time a director,
officer, or employee of the Manager or any affiliated company of the Manager,
except as the Board may decide. This paragraph shall not apply to Board members,
executive committee members, consultants and other persons who are not regular
members of the Manager's or any affiliated company's staff.
7. As compensation for the services performed and the facilities furnished
and expenses assumed by the Manager, including the services of any consultants
retained by the Manager, the Fund shall pay the Manager, as promptly as possible
after the last day of each month, a fee, computed daily at an annual rate set
forth opposite the Fund's name on Schedule A annexed hereto, provided however,
that if the Fund invests all or substantially all of its assets in another
registered investment company for which the Manager or an affiliate of the
Manager serves as investment adviser or investment manager, the annual fee
computed as set forth on such Schedule A shall be reduced by the aggregate
management fees allocated to that Fund for the Fund's then-current fiscal year
from such other registered investment company. The first payment of the fee
shall be made as promptly as possible at the end of the month succeeding the
effective date of this Agreement, and shall constitute a full payment of the fee
due the Manager for all services prior to that date. If this Agreement is
terminated as of any date not the last day of a month, such fee shall be paid as
promptly as possible after such date of termination, shall be based on the
average daily net assets of the Fund in that period from the beginning of such
month to such date of termination, and shall be that proportion of such average
daily net assets as the number of business days in such period bears to the
number of business days in such month. The average daily net assets of the Fund
shall in all cases be based only on business days and be computed as of the time
of the regular close of business of the New York Stock Exchange, or such other
time as may be determined by the Board.
8. The Manager assumes no responsibility under this Agreement other than
to render the services called for hereunder, in good faith, and 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 execution of securities
transactions for a Fund, provided that nothing in this Agreement shall
4
protect the Manager against any liability to the Fund to which the Manager would
otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties hereunder. As used in this Section 8,
the term "Manager" shall include any affiliates of the Manager performing
services for the Trust or the Fund contemplated hereby and the partners,
shareholders, directors, officers and employees of the Manager and such
affiliates.
9. Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of the Manager who may also be a Board member,
officer, or employee of the Trust or the Fund, to engage in any other business
or to devote his time and attention in part to the management or other aspects
of any other business, whether of a similar nature or a dissimilar nature, nor
to limit or restrict the right of the Manager to engage in any other business or
to render services of any kind, including investment advisory and management
services, to any other fund, firm, individual or association. If the purchase or
sale of securities consistent with the investment policies of a Fund or one or
more other accounts of the Manager is considered at or about the same time,
transactions in such securities will be allocated among the accounts in a manner
deemed equitable by the Manager. Such transactions may be combined, in
accordance with applicable laws and regulations, and consistent with the
Manager's policies and procedures as presented to the Board from time to time.
10. For the purposes of this Agreement, the Fund's "net assets" shall be
determined as provided in the Fund's then-current Prospectus and Statement of
Additional Information and the terms "assignment," "interested person," and
"majority of the outstanding voting securities" shall have the meanings given to
them by Section 2(a) of the 1940 Act, subject to such exemptions as may be
granted by the SEC by any rule, regulation or order.
11. This Agreement will become effective with respect to the Fund on the
date set forth opposite the Fund's name on Schedule A annexed hereto, provided
that it shall have been approved by the Trust's Board and by the shareholders of
the Fund in accordance with the requirements of the 1940 Act and, unless sooner
terminated as provided herein, will continue in effect for two years from the
above written date. Thereafter, if not terminated, this Agreement shall continue
in effect with respect to the Fund, so long as such continuance is specifically
approved at least annually (i) by the Board or (ii) by a vote of a majority of
the outstanding voting securities of the Fund, provided that in either event the
continuance is also approved by a majority of the Board members who are not
interested persons of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on such approval.
12. This Agreement is terminable with respect to the Fund without penalty
by the Board or by vote of a majority of the outstanding voting securities of
the Fund, in each case on not more than 60 days' nor less than 30 days' written
notice to the Manager, or by the Manager upon not less than 90 days' written
notice to the Fund, and will be terminated upon the mutual written consent of
the Manager and the Trust. This Agreement shall terminate automatically in the
event of its assignment by the Manager and shall not be assignable by the Trust
without the consent of the Manager.
13. The Manager agrees that for services rendered to the Fund, or for any
claim by it in connection with services rendered to the Fund, it shall look only
to assets of the Fund for
5
satisfaction and that it shall have no claim against the assets of any other
portfolios of the Trust. The undersigned officer of the Trust has executed this
Agreement not individually, but as an officer under the Trust's Declaration of
Trust and the obligations of this Agreement are not binding upon any of the
Trustees, officers or shareholders of the Trust individually
14. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, and no material amendment of the Agreement shall be effective until
approved, if so required by the 1940 Act, by vote of the holders of a majority
of the Fund's outstanding voting securities.
15. This Agreement embodies the entire agreement and understanding between
the parties hereto, and supersedes all prior agreements and understandings
relating to the subject matter hereof. Should any part of this Agreement 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 binding
on and shall inure to the benefit of the parties hereto and their respective
successors.
16. This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of the State of New York.
[signature page to follow]
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
CITIFUNDS INSTITUTIONAL TRUST
By: /s/ R. Xxx Xxxxxx
------------------
Name: R. Xxx Xxxxxx
Title: Chairman
CITI FUND MANAGEMENT INC.
By: /s/ Xxxxxx Xxxxxxx
-------------------
Name: Xxxxxx Xxxxxxx
Title: Director
7
SCHEDULE A
CITI INSTITUTIONAL LIQUID RESERVES
FEE:
The following percentage of the Fund's average daily net assets:
First $1 billion 0.25; Next $1 billion 0.225; Next $3 billion 0.20; Next
$5 billion 0.175; Over $10 billion 0.15
8
