EXHIBIT 99.5
THE BENCHMARK FUNDS
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 5th day of October, 1990 between THE BENCHMARK FUNDS, a
Massachusetts business trust (the "Trust"), and THE NORTHERN TRUST COMPANY, an
Illinois state bank (the "Adviser").
WITNESSETH:
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 units of beneficial interest ("Units")
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 units of beneficial interest in
four portfolios, known as the Diversified Assets Portfolio, Government
Portfolio, Government Select Portfolio and Tax-Exempt Portfolio (such Portfolios
[the "Current Portfolios"] together with all other portfolios 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 each of its Current Portfolios 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.
(a) The Trust hereby appoints the Adviser to act as investment adviser to
the Trust and each of its Current Portfolios 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 Portfolios
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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 Portfolios 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.
2. Delivery of Documents. The Trust has delivered (or will deliver as soon as
is possible) to the Adviser copies of each of the following documents:
(a) Agreement and Declaration of Trust dated as of July 15, 1982, 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 also on file with
the Secretary of The Commonwealth of Massachusetts;
(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
Portfolios, (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);
(h) Post Effective Amendment No. 11 to the Trust's Registration Statement
on Form N-1A (No. 2-80543)
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under the Securities Act of 1933 (the "1933 Act") and Amendment No. 12
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.
(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;
(ii) shall place orders pursuant to its determinations either directly
with the issuer or with any broker and/or dealer or other persons
who deals 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;
(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 fidu-
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ciary 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
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
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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.
(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 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 transaction costs, if any) of securities purchased or
sold for each of the Portfolios.
5. Compensation.
(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 .25 of 1% of each
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 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
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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.
7. Indemnification.
(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 con- nection with the qualification of the
Trust or Units 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
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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 allocation or other method of allocation which does not take
account of the equitable considerations referred to above in the
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 Unitholders 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.
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8. Duration and Termination. Insofar as the holders of Units representing the
interests in the Current Portfolios are affected by this Agreement, it
shall continue, unless sooner terminated as provided herein, until April
30, 1992, and, insofar as the holders of Units 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 Units of such Portfolio) until April 30 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 Units (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 Units (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 "The Benchmark" may be
used in the name of the Trust and that such name, any related logos and any
service marks containing the words "The Benchmark" 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 "The Benchmark," such logos or service
marks other than those granted in this paragraph and that the Adviser
reserves to itself the right to grant the nonexclusive right to use the
name "The Benchmark," 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 all
purposes herein be deemed to be an independent contractor and shall, unless
otherwise expressly provided
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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 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 Units (as defined with respect
to voting securities by the 1940 Act) representing the interests in each
Portfolio affected by such amendment.
12. Unitholder Liability. This Agreement is executed by or on behalf of the
Trust with respect to each of the Portfolios and the obligations hereunder
are not binding upon any of the Trustees, officers or Unitholders 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 Trust's Declaration of Trust as amended to date is on
file with the Secretary of The Commonwealth of Massachusetts. The captions
in this Agreement are included for 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, statue, 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 Commonwealth of Massachusetts) 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
statue or regulation shall mean such statue 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: THE BENCHMARK FUNDS
/s/ Xxxxxxxx Xxxxxxxxx By: Xxxxxxx Xxxxx
As its: President
ATTEST: THE NORTHERN TRUST COMPANY
/s/ Xxxxxxxx Xxxxxx By: Xxxxxx Xxxxxxx
As its: Senior Vice President
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