Exhibit (d3)
COLUMBIA FUNDS INSTITUTIONAL TRUST
CMG HIGH YIELD FUND
FORM OF INVESTMENT ADVISORY CONTRACT
This Agreement is made the __ day of _____________, 2006 between COLUMBIA
FUNDS INSTITUTIONAL TRUST, a Massachusetts business trust (the "Fund"), and
COLUMBIA MANAGEMENT ADVISORS, LLC, a Delaware limited liability company (the
"Adviser"). The Fund is registered as an open-end investment company pursuant to
the Investment Company Act of 1940 (the "Act"). The Adviser is registered as an
investment adviser pursuant to the Investment Advisers Act of 1940. The Fund has
established a third series of shares, referred to as "CMG High Yield Fund" (the
"Series"), and this Agreement relates to services to be performed by the Adviser
with respect to that Series.
The parties agree as follows:
1. Duties of Adviser. With respect to the Series, the Adviser shall
regularly provide the Fund with research, advice, and supervision with respect
to investment matters and shall furnish continuously an investment program,
recommend what securities shall be purchased or sold and what portion of the
Fund's assets shall be held invested or uninvested, subject always to the
provisions of the Act and the Fund's Declaration of Trust and Bylaws, and
amendments thereto, which amendments shall be furnished to the Adviser by the
Fund. The Adviser shall take any steps necessary or appropriate to carry out its
decisions in regard to the foregoing matters and the general conduct of the
business of the Fund. The Adviser may take into consideration receipt of
research and statistical information and other services rendered to the Fund in
the allocation of commissions from portfolio brokerage business.
2. Allocation of Charges and Expenses.
(a) With respect to the Fund, the Adviser shall pay all operating
costs and expenses of the Fund (other than those described in subsection (b)
below, which shall be paid by the Trust) including custodian fees, transfer
agent fees, legal fees for the Fund, accounting expenses (other than auditing
fees), and governmental fees, cost of stock certificates, and any other expenses
(including clerical expenses) of issue, sale, repurchase, or redemption of
shares, expenses of registering or qualifying shares for sale, transfer taxes,
and all expenses of preparing the Trust's registration statement and prospectus,
and the cost of printing and delivering to shareholders prospectuses and
reports, all executive salaries and executive expenses, office rent of the
Trust, ordinary office expenses (other than the expense of clerical services
relating to the administration of the Trust), and for any other expenses that,
if otherwise borne by the Trust, would cause the Trust to "be deemed to be
acting as a distributor of securities of which it is the issuer, other than
through an underwriter" pursuant to Rule 12b-1 under the Act, of each class of
each series. The Adviser shall provide investment advisory, statistical, and
research facilities
and all clerical services relating to research, statistical, and investment work
with respect to the Fund.
(b) The Trust shall not be required to pay any expenses of the Trust
other than the following: disinterested trustees fees and expenses, including
their legal counsel, auditing expenses, interest incurred on borrowing by a
Fund, if any, portfolio transaction expenses, taxes and extraordinary expenses
of the Fund.
3. Compensation of the Adviser.
(a) For services to be rendered, the facilities to be furnished, and
the payments to be made by the Adviser, as provided in Sections 1 and 2 of this
Agreement, for each calendar month each portfolio of the Trust shall pay, on
behalf of each of the Funds, to the Adviser a management fee computed at the
annual rate set forth below based on the Fund's daily net assets:
CMG High Yield Fund 0.40%
If the asset value is not required to be determined on any particular business
day, then for the purposes of this Section 3, the net asset value of a share as
last determined shall be deemed to be the asset value of a share as of the close
of business on that day. If there is no business day in any calendar month, the
fee shall be computed on the basis of the asset value of a share as last
determined, multiplied by the average number of shares outstanding on the last
day of the month.
(b) If the Board of Trustees of the Trust determines to issue any
additional series or any classes of shares of any Fund for which it is proposed
that the Adviser serve as investment manager, the Trust and the Adviser may
enter into an Addendum to this Agreement setting forth the name for the series,
the applicable fee and such other terms and conditions as are applicable to the
management of such series of shares.
4. Covenants of the Adviser. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor any
officer, director, or employee of the Adviser shall act as a principal. The
Adviser covenants that it and its employees will comply with investment
restrictions of the Fund's Bylaws applicable to them. If the Adviser or any of
its affiliates give any advice to clients concerning the shares of the Fund, it
will act solely as investment counsel for the clients and not on behalf of the
Fund.
5. Limitation on Liability of Adviser. The Adviser shall 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, except a loss
resulting from willful malfeasance, bad faith, or gross negligence on the part
of the Adviser in the performance of its duties or from reckless disregard by
the Adviser of its obligations and duties under this Agreement. The federal
securities laws impose liabilities under certain circumstances on persons who
act in good faith, and therefore nothing herein shall in any way constitute a
waiver or limitation of any rights which the Fund may have under any federal
securities laws.
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6. Duration and Termination of this Agreement.
(a) This Agreement shall remain in force for two years from the date
hereof, and it may be continued from year to year thereafter if approved
annually by a vote of a majority of the Fund's shareholders or by its trustees
and in either case a vote of a majority of the trustees 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.
(b) This Agreement may be terminated at any time without the payment
of any penalty by vote of the trustees of the Fund, by vote of a majority of the
outstanding shares of the Fund, or by the Adviser, on 60 days written notice to
the other party.
(c) This Agreement shall automatically terminate if it is assigned.
The Adviser shall notify the Fund of any change in the officers or directors of
the Adviser within a reasonable time after the change. The terms "assignment,"
"vote of a majority of the outstanding voting securities", and "interested
persons" shall have the meanings specified in the Act.
7. Applicable to Specific Series. The Adviser agrees that, with respect to
any obligation of the Fund under this Agreement, the Adviser shall look only to
the assets of the Series to which this Agreement relates.
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IN WITNESS WHEREOF the parties have caused this Agreement to be executed as
of the day and year first written above.
COLUMBIA FUNDS INSTITUTIONAL TRUST
By:
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Title:
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COLUMBIA MANAGEMENT ADVISORS, LLC
By:
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Title:
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A copy of the document establishing the Trust is filed with the Secretary of The
Commonwealth of Massachusetts. This Agreement is executed by officers not as
individuals and is not binding upon any of the Trustees, officers or
shareholders of the Trust individually but only upon the assets of the Fund.
