GE FUNDS
GE PREMIER VALUE EQUITY FUND
INVESTMENT ADVISORY AND ADMINISTRATION AGREEMENT
March 16, 2000
GE Asset Management Incorporated
0000 Xxxxxx Xxxxxx
P.O. Box 7900
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
GE Funds, a business trust organized under the laws of The
Commonwealth of Massachusetts (the "Trust"), confirms its agreement with GE
Asset Management Incorporated ("GEAM") with respect to GEAM's serving as the
investment adviser and administrator of GE Premier Value Equity Fund (the
"Fund"), a series of the Trust. Terms not defined herein have the meanings
assigned to such terms as set forth in the Trust's Registration Statement on
Form N-1A, as amended from time to time (the "Registration Statement"). GEAM
agrees to provide services upon the following terms and conditions:
Section 1. Services as Investment Adviser and Administrator.
(a) The Trust anticipates that the Fund will employ its
capital by investing and reinvesting in investments of the type specified in the
Trust's Declaration of Trust dated August 10, 1992, as amended from time to time
(the "Declaration of Trust"), in the Trust's By-Laws, as amended from time to
time (the "By-Laws"), and in the Trust's Registration Statement, and in the
manner and to the extent approved by the Board of Trustees of the Trust. Copies
of the Registration Statement, the Declaration of Trust and the By-Laws have
been submitted to GEAM.
(b) Subject to the supervision and direction of the Trust's
Board of Trustees, GEAM, as the Fund's investment adviser, will manage the
Fund's portfolio in accordance with the investment objective and policies of the
Fund as stated in the Registration Statement, will make investment decisions for
the Fund and will place purchase and sale orders for the Fund's portfolio
transactions.
(c) Subject to the supervision and direction of the Board of
Trustees, GEAM, as administrator will (1) furnish the Trust with statistical and
research data, clerical help and accounting, data processing, bookkeeping,
internal auditing services and certain other services required by the Trust; (2)
prepare reports to the shareholders of the Funds; (3) assist in the preparation
of tax returns and reports to and filings with the Securities and Exchange
Commission (the "Commission") and state securities law authorities.
(d) GEAM will, at its own expense, maintain sufficient staff,
and employ or retain sufficient personnel and consult with any other persons
that it determines may be necessary or useful to the performance of its
obligations under this Agreement.
(e) GEAM will keep the Trust informed of developments
materially affecting the Fund, and will, on its own initiative, furnish the
Trust from time to time with whatever information GEAM believes is appropriate
for this purpose.
(f) GEAM may delegate all or a portion of its duties under
this Agreement.
Section 2. Selection of Investments on Behalf of the Fund.
Unless otherwise set forth in the Registration Statement or
directed by the Trust, GEAM will, in selecting brokers or dealers to effect
transactions on behalf of the Fund select the best overall terms available. In
so doing, GEAM may consider the breadth of the market on the security, the price
of the security, the financial condition and execution capability of the broker
or dealer, and the reasonableness of the commission, if any, for the specific
transaction and on a continuing basis. GEAM may also consider brokerage and
research services provided to the Funds and/or other accounts over which GEAM or
its affiliates exercise investment discretion. The Trust recognizes the
desirability of GEAM's having access to supplemental investment and market
research and security and economic analyses provided by brokers and that those
brokers may execute brokerage transactions at a higher cost to the Fund than
would be the case if the transactions were executed on the basis of the most
favorable price and efficient execution. The Trust, thus, authorizes GEAM, to
the extent permitted by applicable law and regulations, to pay higher brokerage
commissions for the purchase and sale of securities for the Fund to brokers who
provide supplemental investment and market research and security and economic
analyses, subject to review by the Trustees of the Trust and from time to time
with respect to the extent and continuation of this practice. The Trust
understands that the services provided by those brokers may be useful to GEAM in
connection with its services to other clients.
Section 3. Costs and Expenses.
GEAM will bear the cost of rendering the services it is
obligated to provide under this Agreement and will, at its own expense, pay the
salaries of all officers and employees who are employed by both it and the
Trust. GEAM will provide the Fund with investment officers who are authorized by
the Trust's Board of Trustees to execute purchases and sales of securities on
behalf of the Fund and will employ a professional staff of portfolio managers
who draw upon a variety of sources for research information for the Fund. Other
expenses to be incurred in the operation of the Fund and not specifically borne
by GEAM will be borne by the Fund, including: shareholder servicing and
distribution fees under the terms of the shareholder servicing and distribution
plan adopted by the Trust with respect to the Fund pursuant to Rule 12b-1 (the
"Plan") under the Investment Company Act of 1940, as amended (the "1940 Act");
charges and expenses of any registrar, the costs of custody, transfer agency and
recordkeeping services in connection with the Fund; brokerage fees and
commissions; taxes; registration costs of the Fund
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and its shares under Federal and state securities laws; the cost and expense of
printing, including typesetting, and distributing of prospectuses describing the
Fund and supplements to those prospectuses to regulatory authorities and the
Fund's shareholders; all expenses incurred in conducting meetings of the Fund's
shareholders and meetings of the Trust's Board of Trustees relating to the Fund,
including fees paid to members of the Trust's Board of Trustees who are not
affiliated with GEAM or any of its affiliates; all expenses incurred in
preparing, printing and mailing proxy statements and reports to shareholders of
the Fund; fees and travel expenses of members of the Trust's Board of Trustees
or members of any advisory board or committee who are not employees of GEAM, or
any of its affiliates; all expenses incident to any dividend, withdrawal or
redemption options provided to Fund shareholders; charges and expenses of any
outside service used for pricing the Fund's portfolio securities and calculating
the net asset value of the Fund's shares; fees and expenses of legal counsel,
including counsel to the members of the Trust's Board of Trustees who are not
interested persons of the Fund, or GEAM, and independent auditors; membership
dues of industry associations; interest on Fund borrowings; postage; insurance
premiums on property or personnel (including officers and Trustees) of the Trust
that inure to their benefit; extraordinary expenses (including, but not limited
to, legal claims and liabilities and litigation costs and any indemnification
relating thereto); and all other costs of the Fund's operations.
Section 4. Compensation.
In consideration of services rendered pursuant to this
Agreement, the Trust will pay GEAM on the Trust's first business day of each
month a fee that is accrued daily at the annual rate of 0.60% of the value of
the Fund's average daily net assets for the previous month. For the purpose of
determining fees payable to GEAM under this Agreement, the value of the Fund's
net assets will be computed in the manner described in the Registration
Statement.
Section 5. Services to Other Companies or Accounts.
(a) The Trust understands and acknowledges that GEAM now acts
and will continue to act as investment manager or adviser to various fiduciary
or other managed accounts and the Trust has no objection to GEAM's so acting, so
long as that when the Fund and any account served by GEAM are prepared to invest
in, or desire to dispose of, the same security, available investments or
opportunities for sales will be allocated in a manner believed by GEAM to be
equitable to the Fund and the account. The Trust recognizes that, in some cases,
this procedure may adversely affect the price paid or received by the Fund or
the size of the position obtained or disposed of by the Fund.
(b) The Trust understands and acknowledges that the persons
employed by GEAM to assist in the performance of its duties under this Agreement
will not devote their full time to that service and agrees that nothing
contained in this Agreement will be deemed to limit or restrict the right of
GEAM or any affiliate of GEAM to engage in and devote time and attention to
other businesses or to render services of whatever kind or nature.
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Section 6. Continuance and Termination of the Agreement.
(a) This Agreement will become effective as of the date the
Fund commences its investment operations and will continue for an initial
two-year term and will continue thereafter so long as the continuance is
specifically approved at least annually (a) by the Trustees of the Trust or (b)
by a vote of a majority of the Fund's outstanding voting securities, as defined
in the 1940 Act, provided that in either event the continuance is also approved
by a majority of the Trustees who are not "interested persons" (as defined in
the 0000 Xxx) of any party to this Agreement, by vote cast in person at a
meeting called for the purpose of voting on the approval.
(b) This Agreement is terminable without penalty, by the Trust
on not more than 60 nor less than 30 days' written notice to GEAM, by vote of
holders of a majority of the Fund's outstanding voting securities, as defined in
the 1940 Act, or by GEAM on not more than 60 nor less than 30 days' notice to
the Trust.
(c) This Agreement will terminate automatically in the event
of its assignment (as defined in the 1940 Act or in rules adopted under the 1940
Act).
Section 7. Filing of Declaration of Trust.
The Trust represents that a copy of the Declaration of Trust
is on file with the Secretary of the Commonwealth of Massachusetts and with the
Boston City Clerk.
Section 8. Limitation of Liability.
(a) GEAM will exercise its best judgment in rendering the
services described in this Agreement, except that GEAM will not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, other than a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
GEAM in the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even though also an
officer, director, employee or agent of GEAM, who may be or become an officer,
Trustee, employee or agent of the Trust, will be deemed, when rendering services
to the Trust or acting on any business of the Trust, to be rendering services
to, or acting solely for, the Trust and not as an officer, director, employee or
agent, or one under the control or direction of, GEAM even though paid by GEAM.
(b) The Trust and GEAM agree that the obligations of the Trust
under this Agreement will not be binding upon any of the Trustees, shareholders,
nominees, officers, employees or agents, whether past, present or future, of the
Trust, individually, but are binding only upon the assets and property of the
Fund, as provided in the Declaration of Trust. The execution and delivery of
this Agreement have been authorized by the Trustees of the Trust, and signed by
an authorized officer of the Trust, acting as such, and neither the
authorization by the Trustees nor the execution and delivery by the officer will
be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but will bind only the trust property of
the Trust as provided in the Declaration of Trust. No series of the Trust,
including the Fund, will be liable for any claims against any other series.
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Section 9. Dates.
This Agreement has been executed by the Trust and GEAM as of
March 16, 2000 and will become effective as of the date the Fund first commences
its investment operations.
Section 10. Miscellaneous.
The Trust recognizes that directors, officers and employees of
GEAM and its affiliates may from time to time serve as directors, trustees,
officers and employees of corporations, partnerships, group trusts and business
trusts (including other investment companies) and that such other entities may
include the initials "GE" or the words "General Electric" as part of their name,
and that GEAM or its affiliates may enter into distribution, investment advisory
or other agreements with such other corporations and trusts. If GEAM ceases to
act as the investment adviser to the Trust, the Trust agrees that, at GEAM's
request, the Trust's license to use the initials "GE" will terminate and that
the Trust will cease and discontinue completely further use of such initials and
will take all necessary action to change the name of the Trust and the Fund to a
name not including the initials "GE."
* * * * *
If the terms and conditions described above are in accordance
with your understanding, kindly indicate your acceptance of this Agreement by
signing and returning to us the enclosed copy this Agreement.
GE FUNDS
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board
and President
Accepted:
GE ASSET MANAGEMENT INCORPORATED
By: /s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
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