Exhibit 5(m)
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SSGA FUNDS MANAGEMENT, INC.
AND
THE SSGA FUNDS
This Agreement is made as of this 1st day of May, 2001, between The SSgA Funds,
a Massachusetts business trust (the "Investment Company"), and SSgA Funds
Management, Inc., a Massachusetts corporation (the "Adviser").
WHEREAS, the Investment Company is an open-end, diversified management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), currently consisting of one portfolio series, having
its own investment policies; and
WHEREAS, the Adviser is in the business of providing investment advisory
services; and
WHEREAS, the Investment Company desires to retain the Adviser to render
investment advisory services to the Investment Company with respect to the funds
listed on Exhibit A hereto (the "Funds") and possibly such other funds as the
Investment Company and the Adviser may agree upon, and the Adviser is willing to
render such services;
NOW, THEREFORE, in consideration of the mutual agreements contained herein, the
Investment Company and Adviser agree as follows:
1. APPOINTMENT OF ADVISER.
(a) Existing Funds: The Investment Company hereby appoints the Adviser
to act as investment adviser to the Funds for the period and on the terms set
forth in this Agreement. The Adviser accepts such appointment and agrees to
render the services herein set forth, for the compensation herein provided. The
Investment Company warrants that the Adviser has been duly appointed to act
hereunder.
(b) Additional Funds: In the event that the Investment Company
establishes one or more funds other than the Funds with respect to which it
desires to retain the Adviser to render investment advisory services hereunder,
it shall so notify the Adviser in writing, indicating the advisory fee to be
payable with respect to the additional fund. If the Adviser is willing to render
such services, it shall so notify the Investment Company in writing, whereupon
such fund shall become a Fund hereunder. In such event a writing signed by both
the Investment Company and the Adviser shall be annexed hereto as a part hereof
indicating that such additional fund has become a Fund hereunder and reflecting
the agreed-upon fee schedule for such Fund.
2. ADVISORY DUTIES. Subject to the supervision of the Board of Trustees of the
Investment Company, the Adviser shall manage the investment operations and the
composition of each Fund, including the purchase, retention and disposition
thereof, in accordance with such Fund's investment objective and policies as
stated in the Investment Company's Registration Statement. The Adviser is
authorized to engage one or more sub-advisers in connection with the Adviser's
duties under this Agreement, which sub-advisers may be affiliates of the
Manager. The Adviser's duties hereunder are subject to the following
understandings:
(a) The Adviser shall provide supervision of investments, furnish a
continuous investment program for the Fund, determine from time to time what
investments or securities will be purchased, retained or sold by the Fund, and
what portion of the assets will be invested or held uninvested as cash;
(b) The Adviser, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Master Trust Agreement, By-Laws
and Registration Statement of the Investment Company and with the instructions
and directions of the Board of Trustees of the Investment Company, provided,
however, the Adviser shall not be responsible for acting contrary to any of the
foregoing that are changed without notice of such change to the Adviser; and the
Adviser shall conform to and comply with the applicable requirements of the 1940
Act and all other applicable federal or state laws and regulations;
(c) The Adviser shall promptly communicate to the officers and Trustees
of the Investment Company such information relating to Fund transactions as they
may reasonably request. On occasions when the Adviser deems the purchase or sale
of a security to be in the best interest of a Fund as well as other clients, the
Adviser, to the extent permitted by applicable laws and regulations, may
aggregate the securities to be sold or purchased, provided that in the opinion
of the Adviser, all accounts are treated equitably and fairly. In such event,
allocation of the securities so purchased or sold, as well as the expenses
incurred in the transactions, shall be made by the Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary obligations
to the Investment Company and to such other clients;
(d) The Adviser shall maintain books and records with respect to the
Investment Company's securities transactions and shall render to the Investment
Company's Board of Trustees such periodic and special reports as the Board may
reasonably request;
(e) The Adviser shall provide the Investment Company with a list of all
securities transactions as reasonably requested by the Investment Company;
(f) the investment advisory services of the Adviser to the Investment
Company under this Agreement are not to be deemed exclusive, and the Adviser
shall be free to render similar services to others.
(g) With respect to the SSgA S&P 500 Index Fund, for so long as all
investable assets of the Fund are invested in another investment company with
substantially the same investment objectives and policies ("Master Fund"), the
Adviser's duties shall be to
monitor the services of the Master Fund to determine if an investment in the
Master Fund remains appropriate. In the event assets are no longer invested in
the Master Fund, the Adviser's duties shall revert to those contained in this
Section 2.
3. EXECUTION AND ALLOCATION OF PORTFOLIO BROKERAGE COMMISSION. The Adviser,
subject to and in accordance with any directions which the Investment Company's
Board of Trustees may issue from time to time, shall place, in the name of the
Investment Company, orders for the execution of the securities transactions in
which any Fund is authorized to invest. When placing such orders, the primary
objective of the Adviser shall be to obtain the best net price and execution for
the Investment Company but this requirement shall not be deemed to obligate the
Adviser to place any order solely on the basis of obtaining the lowest
commission rate if the other standards set forth in this section have been
satisfied. The Investment Company recognizes that there are likely to be many
cases in which different brokers are equally able to provide such best price and
execution and that, in selection among such brokers with respect to particular
trades, it is desirable to choose those brokers who furnish "brokerage and
research services" (as defined in Section 29(e)(3) of the Securities and
Exchange Act of 1934) or statistical quotations and other information to the
Investment Company and/or the Adviser in accordance with the standards set forth
below. Moreover, to the extent that it continues to be lawful to do so and so
long as the Board determines as a matter of general policy that the Investment
Company will benefit, directly or indirectly, by doing so, the Adviser may place
orders with a broker who charges a commission that another broker would have
charged for effecting that transaction, provided that the excess commission is
reasonable in relation to the value of brokerage and research services provided
by that broker. Accordingly, the Investment Company and the Adviser agree that
the Adviser shall select brokers for the execution of any Fund's securities
transactions from among:
a. Those brokers and dealers who provide brokerage and research
services, or statistical quotations and other information to the Investment
Company, specifically including the quotations necessary to determine the
Investment Company's net assets, in such amount of total brokerage as may
reasonably be required in light of such services.
b. Those brokers and dealers who provide brokerage and research
services to the Adviser and/or its affiliated corporations which relate directly
to portfolio securities, actual or potential, of the Investment Company, or
which place the Adviser in a better position to make decisions in connection
with the management of the Investment Company's assets, whether or not such data
may also be useful to the Adviser and its affiliates in managing other
portfolios or advising other clients, in such amount of total brokerage as may
reasonably be required.
x. Xxxxxxx Fund Distributors, Inc., the Investment Company's
distributor, when the Adviser has determined that the Fund will receive
competitive execution, price and commissions. The Adviser shall render regular
reports to the Investment Company, not more frequently than quarterly, of how
much total brokerage business has been placed
with Xxxxxxx Fund Distributors, Inc., and the manner in which the allocation has
been accomplished.
The Adviser agrees that no investment decision will be made or influenced by a
desire to provide brokerage for allocation in accordance with the foregoing, and
that the right to make such allocation of brokerage shall not interfere with the
Adviser's primary duty to obtain the best net price and execution for the
Investment Company.
4. BOOKS AND RECORDS. The Adviser shall keep the Investment Company's books and
records required to be maintained by it pursuant to paragraph 2(d) hereof. The
Adviser agrees that all records which it maintains for the Investment Company
are the property of the Investment Company and it shall surrender promptly to
the Investment Company any of such records upon the Investment Company's
request. The Adviser further agrees to preserve for the periods prescribed by
Rule 31a-2 of the Commission under the 1940 Act any such records as are required
to be maintained by Rule 31a-1(f) of the Commission under the 1940 Act. Nothing
herein shall prevent the Adviser from maintaining its own records as required by
law, which may be a duplication of the Investment Company's records.
5. REPORTS TO ADVISER. The Investment Company agrees to furnish the Adviser at
its principal office all prospectuses, proxy statements, reports to
stockholders, sales literature or other material prepared for distribution to
shareholders of the Investment Company or the public, which refer in any way to
the Adviser, ten (10) days prior to use thereof and not to use such material if
the Adviser should object thereto in writing within seven (7) days after receipt
of such material; provided, however, that the Adviser hereby approves all uses
of its name which merely refer in accurate terms to its appointment as
investment adviser hereunder, which merely identifies the Investment Company, or
which are required by the Securities and Exchange Commission or a state
securities commission. In the event of termination of this Agreement, the
Investment Company shall, on written request of the Adviser, forthwith delete
any reference to the Adviser from any materials described in the preceding
sentence. The Investment Company shall furnish or otherwise make available to
the Adviser such other information relating to the business affairs of the
Investment Company as the Adviser at any time, or from time to time, reasonably
requests in order to discharge its obligations hereunder.
6. PROXIES. Unless the Investment Company gives written instructions to the
contrary, the Adviser shall vote or not vote all proxies solicited by or with
respect to the issuers of securities in which assets of any Fund may be
invested. The Adviser shall use its best good faith judgment to vote or not vote
such proxies in a manner which best serves the interests of the Investment
Company's shareholders.
7. EXPENSES. During the term of this Agreement, the Adviser shall pay all of its
own expenses incurred by it in connection with its activities under this
Agreement and the Fund of the Investment Company shall bear all expenses that
are incurred in its operations not specifically assumed by the Adviser.
Expenses borne by the Fund will include but not be limited to the following (or
the Fund's proportionate share of the following): (a) brokerage commissions
relating to securities purchased or sold by the Fund or any losses incurred in
connection therewith; (b) fees payable to and expenses incurred on behalf of the
Fund by the Investment Company's administrator; (c) expenses of organizing the
Investment Company and the Fund; (d) filing fees and expenses relating to the
registration and qualification of the Fund's shares and the Investment Company
under federal or state securities laws and maintaining such registrations and
qualifications; (e) fees and salaries payable to the Investment Company's
Trustees and officers who are not officers or employees of the Investment
Company's administrator, any investment adviser or underwriter of the Investment
Company; (f) taxes (including any income or franchise taxes) and governmental
fees; (g) costs of any liability, uncollectible items of deposit and other
insurance or fidelity bonds; (h) any costs, expenses or losses arising out of
any liability of or claim for damage or other relief asserted against the
Investment Company or the Fund for violation of any law; (i) legal, accounting
and auditing expenses, including legal fees of special counsel for the
independent Trustees; (j) charges of custodians, transfer agents and other
agents; (k) costs of preparing share certificates (if any); (l) expenses of
setting in type and printing Prospectuses and Statements of Additional
Information and supplements thereto for existing shareholders, reports and
statements to shareholders and proxy material; (m) any extraordinary expenses
(including fees and disbursements of counsel) incurred by the Investment Company
or the Fund; and (n) fees and other expenses incurred in connection with
membership in investment company organizations.
8. COMPENSATION OF THE ADVISER. For the services to be rendered by the Adviser
as provided in this Agreement to all Funds other than the SSgA S&P 500 Index
Fund, the Investment Company shall pay to the Adviser such compensation as is
designated in Exhibit A to this Agreement, so long as the Adviser has not waived
all or a portion of such compensation. For the services to be rendered by the
Adviser to the SSgA S&P 500 Index Fund as provided in this Agreement, the
Investment Company shall pay to the Adviser no compensation, provided that the
assets remain invested in the Master Fund as described in Section 2(g). In the
event the assets of the S&P 500 Index Fund are no longer invested in the Master
Fund, the Investment Company shall pay to the Adviser such compensation as is
designated in Exhibit A to this Agreement, so long as the Adviser has not waived
all or a portion of such compensation.
9. LIMITATION OF ADVISER'S LIABILITY. In the absence of (a) willful misfeasance,
bad faith or gross negligence on the part of the Adviser in performance of its
obligations and duties hereunder, (b) reckless disregard by the Adviser of its
obligations and duties hereunder, or (c) a loss resulting from a beach of
fiduciary duty with respect to the receipt of compensation for services (in
which case, any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act), the Adviser shall not be subject
to any liability whatsoever to the Investment Company, or to any shareholder of
the Investment Company, for any error of judgment, mistake of law or any other
act or omission in the course of, or connected with, rendering services
hereunder including, without limitation, for any losses that may be sustained in
connection with the purchase, holding, redemption or sale of any security on
behalf of the Investment Company.
10. DURATION AND TERMINATION.
(a) This Agreement shall become effective with respect to each Fund on
the date on which the Fund commences offering its shares to the public, so long
as, with respect to any additional Funds, the provisions of Section 1(b) have
been complied with. This Agreement, unless sooner terminated as provided herein,
shall continue for each Fund for two years following the effective date of this
Agreement with respect to the Fund, or the date of the first annual or special
meeting of the shareholders of the Fund following such effective date, if
approved by a majority of the outstanding voting securities of the Fund (as
defined in the 1940 Act), and thereafter shall continue automatically for
periods of one year so long as such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Board of
Trustees of the Investment Company 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 such approval, and (b) by
the Board of Trustees of the Investment Company or by vote of a majority of the
outstanding voting securities of the Fund.
(b) This Agreement may be terminated by the Investment Company at any
time, without the payment of any penalty, vote of a majority of those members of
the Board of Trustees who are not "interested persons" (as defined in the 0000
Xxx) of the Adviser or the Investment Company or by the majority vote of either
the entire Board of Trustees of the Investment Company or by vote of a majority
of the outstanding voting securities of the Fund on 60 days' written notice to
the Adviser. This Agreement may also be terminated by the Adviser on 90 days'
written notice to the Investment Company. This Agreement will automatically and
immediately terminate in the event of its assignment (as defined in the 1940
Act).
11. CHOICE OF LAW. This Agreement shall be construed in accordance with the laws
of the State of Washington and any applicable federal law.
12. LIMITATION OF LIABILITY. The Master Trust Agreement dated October 3, 1987,
as amended from time to time, establishing the Investment Company, which is
hereby referred to and a copy of which is on file with the Secretary of The
Commonwealth of Massachusetts, provides that the name The Seven Seas Series Fund
means the Trustees from time to time serving (as Trustees but not personally)
under said Master Trust Agreement. It is expressly acknowledged and agreed that
the obligations of the Investment Company hereunder shall not be binding upon
any of the Shareholders, Trustees, officers, employees or agents of the
Investment Company, personally, but shall bind only the trust property of the
Investment Company, as provided in its Master Trust Agreement. The execution and
delivery of this Agreement have been authorized by the Trustees of the
Investment Company and signed by an officer of the Investment Company, acting as
such, and neither such authorization by such Trustees nor such execution and
delivery by such officer shall be deemed to have been made by any of
them individually or to impose any liability on any of them personally, but
shall bind only the trust property of the Investment Company as provided in its
Master Trust Agreement.
IN WITNESS WHEREOF, the due execution hereof as of the date first above
written.
Attest: THE SSGA FUNDS
By: /s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
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Attest: SSGA FUNDS MANAGEMENT, INC.
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxx, Xx.
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Xxxxxxx X. Xxxx, Xx.
EXHIBIT "A"
As consideration for the Advisor's services to the following Funds, the Advisor
shall receive from each of these Funds an annual advisory fee, accrued daily at
the rate of 1/365th of the applicable advisory fee rate and payable monthly on
the first business day of each month, of the following annual percentages of
each Portfolio's average daily net assets during the month:
SSgA Money Market Fund 0.25%
SSgA US Government Money Market Fund 0.25%
SSgA S&P 500 Index Fund 0.03%*
SSgA Matrix Equity Fund 0.75%
SSgA International Pacific Index Fund 0.50%
SSgA Bond Market Fund 0.30%
SSgA Yield Plus Fund 0.25%
SSgA US Treasury Money Market Fund 0.10%**
SSgA US Treasury Obligations Fund 0.25%
SSgA Growth and Income Fund 0.85%
SSgA Intermediate Fund 0.30%***
SSgA Prime Money Market Portfolio 0.10%**
SSgA Emerging Markets Fund 0.75%
SSgA Tax Free Money Market Fund 0.25%
SSgA Tuckerman Active REIT Fund 0.65%
SSgA Small Cap Fund 0.75%
SSgA Active International Fund 0.75%
SSgA Life Solutions Income and Growth Fund 0.00%
SSgA Life Solutions Balanced Fund 0.00%
SSgA Life Solutions Growth Fund 0.00%
SSgA Special Equity Fund 0.75%
SSgA International Growth Opportunities Fund 0.75%
SSgA High Yield Bond Fund 0.30%
SSgA Aggressive Equity Fund 0.75%
SSgA IAM SHARES Fund 0.25%
SSgA Intermediate Municipal Bond Fund 0.30%
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* Only in the event the assets of the Fund are no longer invested in the Master
Fund.
** Pursuant to a contractual waiver until 12/31/10.
*** Pursuant to a contractual waiver until 12/31/02.
LETTER OF UNDERTAKING
FROM
SSgA FUNDS MANAGEMENT, INC.
REGARDING FOREIGN SECURITIES DEPOSITORIES
May 1, 2001
To: Board of Trustees of the
SSgA Funds set forth on Schedule A with
respect to the portfolio series identified therein (each, a "Fund")
SSgA Funds Management, Inc, (the "Adviser") agrees as follows:
a) The Adviser will make the determination contemplated by Rule 17f-7 under
the Investment Company Act of 1940, as amended ("Rule 17f-7"), with respect
to custody arrangements for Fund assets made with any non-U.S. securities
depository. This determination may be made in the context of the overall
decision by the Adviser to make an investment that will be held by such
securities depository.
b) The Adviser will not place a Fund's assets in the custody of a non-U.S.
securities depository unless (a) the Adviser has received the analysis of
custody risks associated with such depository contemplated by Rule 17f-7
from State Street Bank and Trust Company, the Fund's Primary Custodian (as
defined in Rule 17f-7) or its agent and (b) the Adviser has determined,
based on information provided by State Street Bank and Trust Company, that
the depository is an Eligible Securities Depository as defined in Rule
17f-7.
c) The Adviser will direct State Street Bank and Trust Company to withdraw a
Fund's assets from a non-U.S. securities depository as soon as reasonably
practicable if, based on information provided by State Street Bank and
Trust Company or its agent, the Adviser determines that (i) the depository
is not an Eligible Securities Depository or (ii) the custody arrangement
with the depository otherwise no longer meets the requirements of Rule
17f-7.
SSgA Funds Management, Inc.
By: /s/ Xxxxxxx X. Xxxx, Xx.
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Name: Xxxxxxx X. Xxxx, Xx.
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Title: President
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