Exhibit d
MANAGEMENT AGREEMENT
MANAGEMENT AGREEMENT, dated as of May 31, 2002, by and between
Institutional Portfolio, a Massachusetts trust (the "Trust"), and Citi Fund
Management Inc., a Delaware corporation ("Citi Management" or the "Manager").
W I T N E S S E T H:
WHEREAS, the Trust engages in business as an open-end management
investment company and is registered as such under the Investment Company Act
of 1940, as amended (collectively with the rules and regulations promulgated
thereunder and any exemptive orders thereunder, the "1940 Act"), and
WHEREAS, the Trust wishes to engage Citi Management to provide certain
management services for the series of the Trust designated in Schedule A
annexed hereto (the "Portfolio"), and Citi Management is willing to provide
such management services for the Portfolio on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties hereto as herein set forth, the parties covenant and
agree as follows:
1. Duties of Manager. (a) Citi Management shall act as the Manager for
the Portfolio and as such shall furnish continuously an investment program and
shall determine from time to time what securities shall be purchased, sold or
exchanged and what portion of the assets of the Portfolio shall be held
uninvested, subject always to the restrictions of the Trust's Declaration of
Trust, dated as of April 2, 2001, and By-Laws, as each may be amended and
restated from time to time (respectively, the "Declaration" and the "By-Laws"),
the provisions of the 1940 Act, and the then-current Registration Statement of
the Trust with respect to the Portfolio. The Manager shall also make
recommendations as to the manner in which voting rights, rights to consent to
corporate action and any other rights pertaining to the Portfolio's portfolio
securities shall be exercised. Should the Board of Trustees of the Trust at any
time, however, make any definite determination as to investment policy
applicable to the Portfolio and notify the Manager thereof in writing, the
Manager shall be bound by such determination for the period, if any, specified
in such notice or until similarly notified that such determination has been
revoked. The Manager shall take, on behalf of the Portfolio, all actions which
it deems necessary to implement the investment policies determined as provided
above, and in particular to place all orders for the purchase or sale of
securities for the Portfolio's account with the brokers or dealers selected by
it, and to that end the Manager is authorized as the agent of the Trust to give
instructions to the custodian or any subcustodian of the Portfolio as to
deliveries of securities and payments of cash for the account of the Portfolio.
In connection with the selection of such brokers or dealers and the placing of
such orders, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Portfolio and/or the other accounts
over which the Manager or its affiliates exercise investment discretion. The
Manager is authorized to pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio transaction for the
Portfolio which is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if the Manager
determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the Manager and
its affiliates have with respect to accounts over which they exercise
investment discretion. In making purchases or sales of securities or other
property for the account of the Portfolio, the Manager may deal with itself or
with the Trustees of the Trust or the Trust's underwriter or distributor or
with its or their respective affiliates, or affiliates of affiliates, to the
extent such actions are permitted by the 1940 Act. In providing the services
and assuming the obligations set forth herein, the Manager may employ, at its
own expense, or may request that the Trust employ at the Portfolio's expense,
one or more subadvisers; provided that in each case the Manager shall supervise
the activities of each subadviser. Any agreement between the Manager and a
subadviser shall be subject to the renewal, termination and amendment
provisions applicable to this Agreement. Any agreement between the Trust on
behalf of the Portfolio and a subadviser may be terminated by the Manager at
any time on not more than 60 days' nor less than 30 days' written notice to the
Trust and the subadviser. To the extent authorized by the Board of Trustees and
subject to applicable provisions of the 1940 Act, the investment program to be
provided hereunder may entail the investment of all or a portion of the assets
of the Portfolio in one or more investment companies.
(b) Subject to the direction and control of the Board of Trustees of
the Trust, Citi Management shall perform such administrative and management
services as may from time to time be reasonably requested by the Trust with
respect to the Portfolio, which shall include without limitation: (i) providing
office space, equipment and clerical personnel necessary for maintaining the
organization of the Trust and the Portfolio and for performing the
administrative and management functions herein set forth; (ii) supervising the
overall administration of the Portfolio, including negotiation of contracts and
fees with and the monitoring of performance and ▇▇▇▇▇▇▇▇ of the Portfolio's
transfer agent, investor servicing agents, custodian and other independent
contractors or agents; and (iii) arranging for maintenance of books and records
of the Trust with respect to the Portfolio. Notwithstanding the foregoing, Citi
Management shall not be deemed to have assumed any duties with respect to, and
shall not be responsible for, the distribution of shares of beneficial interest
in the Portfolio, nor shall the Manager be deemed to have assumed or have any
responsibility with respect to functions specifically assumed by any transfer
agent, fund accounting agent, custodian or investor servicing agent of the
Trust or the Portfolio. In providing administrative and management services as
set forth herein, the Manager may, at its own expense, employ one or more
subadministrators; provided that the Manager shall remain fully responsible for
the performance of all administrative and management duties set forth herein
and shall supervise the activities of each subadministrator.
2. Allocation of Charges and Expenses. Citi Management shall furnish
at its own expense all necessary services, facilities and personnel in
connection with its responsibilities under Section 1 above. Except as provided
in the foregoing sentence, it is understood that the Trust will pay from the
assets of the Portfolio all of its own expenses allocable to the Portfolio
including, without limitation, organization costs of the Portfolio;
compensation of Trustees who are not "affiliated persons" of Citi Management;
governmental fees; interest charges; brokerage fees and commissions; loan
commitment fees; taxes; membership dues in industry associations allocable to
the Trust; fees and expenses of independent auditors, legal counsel and any
transfer agent, placement agent, investor servicing agent, service agent,
registrar or dividend disbursing agent of the Trust; expenses of issuing and
redeeming shares of beneficial interest and servicing investor accounts;
expenses of preparing, typesetting, printing and mailing prospectuses,
statements of additional information, investor reports, notices, proxy
statements and reports to governmental officers and commissions and to existing
investors of the Portfolio; expenses connected with the execution, recording
and settlement of security transactions; insurance premiums; fees and expenses
of the custodian for all services to the Portfolio, including safekeeping of
funds and securities and maintaining required books and accounts; expenses of
calculating the net asset value of the Portfolio (including but not limited to
the fees of independent pricing services); expenses of meetings of the
Portfolio's investors; expenses relating to the registration and qualification
of shares of the Portfolio; and such non-recurring or extraordinary expenses as
may arise, including those relating to actions, suits or proceedings to which
the Trust on behalf of the Portfolio may be a party and the legal obligation
which the Trust may have to indemnify its Trustees and officers with respect
thereto.
3. Compensation of Manager. For the services to be rendered and the
facilities to be provided by the Manager hereunder, the Trust shall pay to the
Manager from the assets of the Portfolio a management fee computed daily and
paid monthly at an annual rate equal to the percentage of the Portfolio's
average daily net assets for the Portfolio's then-current fiscal year set forth
opposite the Portfolio's name on Schedule A annexed hereto (the "Aggregate
Management Fee"), minus the Portfolio's Aggregate Subadviser Fee (as defined
below), if any. To the extent that the Portfolio's Aggregate Subadviser Fee
exceeds the Portfolio's Aggregate Management Fee, the Manager shall pay such
amount to the applicable subadvisers on the Portfolio's behalf. A Portfolio's
Aggregate Subadviser Fee is the aggregate amount payable by the Portfolio to
subadvisers pursuant to agreements between the Trust on behalf of the Portfolio
and the subadvisers. If the Manager provides services hereunder for less than
the whole of any period specified in this Section 3, the compensation to the
Manager shall be accordingly adjusted and prorated.
4. Covenants of Manager. The Manager agrees that it will not deal with
itself, or with the Trustees of the Trust or the Trust's principal underwriter
or placement agent, as principals in making purchases or sales of securities or
other property for the account of the Portfolio, except as permitted by the
1940 Act, and will comply with all other provisions of the Declaration and
By-Laws and the then-current Registration Statement applicable to the Portfolio
relative to the Manager and its directors and officers.
5. Limitation of Liability of Manager. Citi Management shall not be
liable for any error of judgment or mistake of law or for any loss arising out
of any investment or for any act or omission in the execution of securities
transactions for the Portfolio, except for willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder. As used in this Section 5,
the term "Citi Management" shall include directors, officers and employees of
the Manager as well as the Manager itself.
6. Activities of Manager. The services of the Manager to the Portfolio
are not to be deemed to be exclusive, the Manager being free to render
investment advisory, administrative and/or other services to others. It is
understood that Trustees, officers, and investors of the Trust are or may be or
may become interested in the Manager, as directors, officers, employees, or
otherwise and that directors, officers and employees of the Manager are or may
become similarly interested in the Trust and that the Manager may be or may
become interested in the Trust as an investor or otherwise.
7. Duration, Termination and Amendments of this Agreement. This
Agreement shall become effective as of the day and year first above written,
shall govern the relations between the parties hereto thereafter and shall
remain in force for a period of two years from its effectiveness, on which date
it will terminate unless its continuance with respect to the Portfolio after
that date is "specifically approved at least annually" (a) by the vote of a
majority of the Trustees of the Trust who are not "interested persons" of the
Trust or of Citi Management at a meeting specifically called for the purpose of
voting on such approval, and (b) by the Board of Trustees of the Trust or by
"vote of a majority of the outstanding voting securities" of the Portfolio.
This Agreement may be terminated at any time with respect to the
Portfolio without the payment of any penalty by the Trustees or by the "vote of
a majority of the outstanding voting securities" of the Portfolio, or by the
Manager, in each case on not more than 60 days' nor less than 30 days' written
notice to the other party. This Agreement shall automatically terminate in the
event of its "assignment."
This Agreement may be amended with respect to the Portfolio only if
such amendment is approved by the "vote of a majority of the outstanding voting
securities" of the Portfolio (except for any such amendment as may be effected
in the absence of such approval without violating the 1940 Act).
The terms "specifically approved at least annually," "vote of a
majority of the outstanding voting securities," "assignment," "affiliated
person," and "interested persons," when used in this Agreement, shall have the
respective meanings specified in, and shall be construed in a manner consistent
with, the 1940 Act, subject, however, to such exemptions as may be granted by
the Securities and Exchange Commission under said Act.
8. Licenses. The Trust hereby agrees, on behalf of the Portfolio, to
reimburse the Manager for any and all reasonable costs incurred by the Manager
relating to the acquisition and retention of licenses to be used in
connection with the management of the Portfolio.
9. Governing Law. This Agreement shall be construed and the
provisions thereof interpreted under and in accordance with the laws of the
Commonwealth of Massachusetts.
Each party acknowledges and agrees that all obligations of the Trust
under this Agreement are binding only with respect to the Portfolio; that any
liability of the Trust under this Agreement, or in connection with the
transactions contemplated herein, shall be discharged only out of the assets of
the Portfolio; and that no other series of the Trust shall be liable with
respect to this Agreement or in connection with the transactions contemplated
herein.
The undersigned officer of the Trust has executed this Agreement not
individually, but as an officer under the Declaration and the obligations of
this Agreement are not binding upon any of the Trustees, officers or investors
of the Trust individually.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered in their names and on their behalf by the
undersigned, thereunto duly authorized, all as of the day and year first above
written.
INSTITUTIONAL PORTFOLIO CITI FUND MANAGEMENT INC.
on behalf of the series listed
on Schedule A
By: /s/ ▇. ▇. ▇▇▇▇▇▇ By: /s/ ▇. ▇. ▇▇▇▇▇▇
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Title: President Title: Secretary
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SCHEDULE A
PORTFOLIO AGGREGATE MANAGEMENT FEE
(EXPRESSED AS A PERCENTAGE OF
THE PORTFOLIO'S AGGREGATE NET
ASSETS
FOR ITS THEN-CURRENT FISCAL YEAR)
Institutional Reserves Portfolio 0.10%
Institutional Enhanced Portfolio 0.15%