THE TORRAY INSTITUTIONAL FUND
MANAGEMENT CONTRACT
Management Contract executed as of June __, 2001, between THE TORRAY
FUND, a Massachusetts business trust (the "Trust"), on behalf of its separate
investment series THE TORRAY INSTITUTIONAL FUND (the Fund"), and THE TORRAY
CORPORATION, a Maryland corporation (the "Manager").
Witnesseth:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO THE FUND
(a) Subject always to the control of the Trustees of the Trust and to
such policies as the Trustees may determine, the Manager will, entirely at its
own expense, (i) furnish continuously an investment program for the Fund and
will make investment decisions on behalf of the Fund and place all orders for
the purchase and sale of portfolio securities and (ii) manage, supervise and
conduct all of the affairs and business of the Fund and bear the expenses of all
service providers to the Fund, furnish office space and equipment, and pay all
salaries, fees and expenses of officers and Trustees of the Trust who are
affiliated with the Manager. In the performance of its duties, the Manager will
be subject to the control of the Trustees and to the policies determined by the
Trustees, as well as to the provisions of the Trust's Agreement and Declaration
of Trust, its By-laws as in effect from time to time, and the investment
objectives, policies and restrictions stated in the Fund's prospectus.
(b) The Manager agrees to bear each and every expense of the Fund
in exchange for its fee to be paid hereunder.
(c) In the selection of brokers or dealers and the placing of orders
for the purchase and sale of portfolio investments for the Fund, the Manager
shall seek to obtain for the Fund the most favorable price and execution
available, except to the extent it may be permitted to pay higher brokerage
commissions for brokerage and research services as described below. In using its
best efforts to obtain for the Trust the most favorable price and execution
available, the Manager, bearing in mind the Trust's best interests at all times,
shall consider all factors it deems relevant, including by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience and financial stability of
the broker and dealer involved and the quality of service rendered by the broker
or dealer in other transactions. Subject to such policies as the Trustees may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
securities transaction for the Fund in excess of the commission another broker
or dealer would have charged for effecting that transaction, if the Manager
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Fund and to other clients
of the Manager as to which the Manager exercises investment discretion.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and
employees of the Trust may be a shareholder, director, officer, or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and persons controlled by or
under common control with the Manager have and may have advisory, management
service, distribution or other contracts with other organizations and persons,
and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee, computed daily and paid monthly, at
the annual rate of 0.85% of the daily net asset value of the Fund. The fee shall
be paid from the assets of the Fund. Such fee shall be payable within five (5)
business days after the end of each month.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment is approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Trustees of the Trust who are not interested persons of the Trust or of the
Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall
remain in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this Contract by not more
than sixty days' written notice delivered or mailed by registered mail,
postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders of the affirmative
vote of a majority of the outstanding shares of the Trust, and (ii) a
majority of the Trustees of the Trust who are not interested persons of
the Trust or of the Manager, by vote cast in person at a meeting called
for the purpose of voting on such approval, do not specifically
approve - at least annually the continuance of this Contract, then this
Contract shall automatically terminate at the close of business on the
second anniversary of its execution, or upon the expiration of one year
from the effective date of the last such continuance, whichever is
later; provided, however, that if the continuance of this Contract is
submitted to the shareholders of the Trust for their approval and such
shareholders fail to approve such continuance of this Contract as
provided herein, the Manager may continue to serve hereunder in a
manner consistent with the 1940 Act and the rules and regulations
thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of
a majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Trust.
Termination of this Contract pursuant to this Section 5 shall be
without the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority
of the outstanding shares" means the affirmative vote, at a duly called and held
meeting of shareholders, (a) of the holders of 67% or more of the shares of the
Fund present (in person or by proxy) and entitled to vote at such meeting, if
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such
meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person" and "assignment" shall have their respective
meanings defined in the 1940 Act and the rules and regulations thereunder,
subject, however to such exemptions as may be granted by the Securities and
Exchange Commission under said Act; the term "specifically approve at least
annually" shall be construed in a manner consistent with the 1940 Act and the
rules and regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934 and the
rules and regulations thereunder.
7. USE OF NAME.
The word "Torray" to be used in the Fund's name belongs exclusively to
the Manager, and may be used by the Fund only so long as this Contract has not
been terminated.
8. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Fund, or to
any shareholder of the Fund, for any act or omission in the course of, or
connected with, rendering services hereunder.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on
file with the Secretary of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, THE TORRAY FUND, on behalf of its investment series
THE TORRAY INSTITUTIONAL FUND, and THE TORRAY CORPORATION have each caused this
instrument to be signed on its behalf by its duly authorized representative, all
as of the day and year first above written.
THE TORRAY FUND, on behalf of its separate
investment series THE TORRAY INSTITUTIONAL FUND
By: ______________________
Name: ____________________
Title: _____________________
THE TORRAY CORPORATION
By: ______________________
Name: ____________________
Title: _____________________
