07-14-2003AGENDA
PENSION
TRUSTEES
AGENDA
Board of Trustees of the Employees' Pension Fund
July 14, 2003 - 9:00 A.M.
1. Call to Order
2. Approval of Minutes: 06/16/03
3. Request for acceptance into membership: Dylan Newell; Joshua Baxter; Brian
Frank; Jennifer Cunningham; Robert Ramos; Justin Nieves; Mike Ward; Scott
Pettay; Daniel Angove; Peter Eichner; Franklyn Golpl; Michael Kirkpatrick; Richard
DeCastro ll; Liberian Miles and Erik Sodedund.
4. Regular Pensions to be granted: John Slack; Robert W. Repp, Jr.; and William
McClure II.
5. Approve the contracts with Atlanta Capital Management Co., LLC and Systematic
Financial Management, Inc., as small cap equity managers for the Employee's
Pension Plan.
6. Other Business
7. Adjourn
3.
Meeting Date:
7-IN-o3
Approved by Trustees:
CITY OF CLEARWATER
EMPLOYEES' PENSION PLAN/
PENSION ADVISORY COMMITTEE
TO:
FROM:
SUBJECT:
DATE:
Pension Trustees
Pension Advisory Committee
Recommendation for Acceptance into Pension Plan
June 3, 2003
As Trustees of the City of Clearwater Employees' Pension Fund, you are hereby notified that the
employee(s) listed below have been duly examined by a local physician and each has been designated as a
"first class risk". The employment of these Individuals brings the number of FTE's as of this date to
1755.76 of 1844.9 budgeted positions (including the City Commission).
These employees are eligible for pension membership as noted in the Pension Eligibility Date column
below, and it is the recommendation of the Pension Advisory Committee that they be accepted into
membership.
Pension Elig.
Name, Job. Class, & DeW./Div. Hire Date Date
Dylan Newell, Customer Service Representative/Gas 9/27/99 4/7/03
Joshua Baxter, Solid Waste Worker/Solid Waste/General Services 4/7/03 4/7/03
Brian Frank, Police Communications Operator/Police 5/5/03 5/5/03
Jennifer Cunningham, Courier/Public Communications 5/5/03 5/5/03
Robert Ramos, Life Hazard Safety Inspector/Fire 5/5/03 5/5/03
Justin Nieves, Life Hazard Safety Inspector/Fire 5/5/03 5/5/03
Mike Ward, Life Hazard Safety Inspector/Fire 5/5/03 5/5/03
Scott Pettay, Life Hazard Safety Inspector/Fire 5/5/03 5/5/03
Daniel Angove, Water Supply Attendant/Public Utilities 5/19/03 5/19/03
Peter Eichner, Public Services Technician I/Public Services 5/19/03 5/19/03
Franklyn Golpl, WWTP Operator Trainee/Public Utilities 5/19/03 5/19/03
Michael Kirkpatrick, Field Service Representative/Customer Service 5/5/03 5/5/03
Richard DeCastro II, Development Review Tech. I/Development Services 3/17/03 5/5/03
Liberian Miles, Public Utilities Technician I/Public Utilities 5/5/03 5/5/03
Erik. Soderlund, Public Utilities Technician I/Public Utilities 5/5/03 5/5/03
Originally hired as temporary on 3/17/03; changed to full-time and pension eligible as of 5/5/03
b%U?A.A
Pension dviso Co itte it
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99?.1TEAE?oQ
Trustees of the
Employees' Pension Plan
Agenda Cover
Memorandum
Final Agenda Item # 4
1vleeting Date: 7/14/03
SUBJECT/RECOMMENDATION:
John Slack, Police Captain, Police Department; Robert W. Repp,
Department, and William McClure III, Firefighter, Fire Department,
under Section(s) 2.393 and 2.397 of the Employees' Pension Plan
Advisory Committee.
Jr., Police Lieutenant; Police
be granted regular pensions
as approved by the Pension
? and that the appropriate officials be authorized to execute some.
SUMMARY:
John Slack, Police Captain, Police Department, was employed by the City on June 12, 1978, and his
pension service credit is effective on that date. His pension will be effective July 1, 2003.
Based on an average salary of approximately $68,552 per year over the past five years, the formula
for computing regular pe,-)sions, and Mr. Slack's selection of the 100% Joint & Survivor Annuity, this
pension will approximate $46,520 annually.
Robert W. Repp, Jr., Police Lieutenant, Police Department, was employed by the City on June 18,
1973, and his pension service credit is effective on that date. His pension will be effective June 1,
2003.
Based on an average salary of approximately $78,711 per year over the past five years, the formula
for computing regular pensions, and Mr. Repp's selection of the 100% Joint & Survivor Annuity, this
pension will approximate $63,703 annually.
William McClure II, Firefighter, Fire Department, was employed by the City on August 27, 1973, and
his pension service credit is effective on that date. His pension will be effective June 1, 2003.
Based on an average salary of approximately $48,412 per year over the past five years, the formula
for computing regular pensions, and Mr. McClure's selection of the 100% Joint & Survivor Annuity,
this pension will approximate $39,781 annually.
Reviewed by: Originating Dept: Costs
Legal NA Info Tech NA Debbie Ford/Human Total
Resources
Budget NA Public NA User Dept. Funding Source:
Works
Purchasing NA DCM/ captlol Current Fiscal Year
Improvement
ACM
Risk Mgmt NA Other NA Attachments operoting
Other
Appropriation Code:
Submitted by: 0 None
City Manager
Printpd on recvcled winer Rev_
2/98
Regular Pensions
Page 2
July 14, 2003
These pensions were approved by the Pension Advisory Committee on June 3, 2003. Section
2.393 (p) provides for normal retirement eligibility when a participant has completed twenty
years of credited service in a type of employment described as "hazardous duty" and further
specifically defines service as a Police Captain, Police Lieutenant, and Firefighter as meeting
the hazardous duty criteria. Mr. Slack, Mr. Repp, and Mr. McClure qualify under the hazardous
duty criteria.
TE
Employee's Pension Plan
Trustee's
Agenda Cover Memorandum
Worksession Item #:
5
Final Agenda Item #
Meeting Date:
SUBJECT/RECOMMENDATION:
Approve the contracts with Atlanta Capital Management Co., LLC and Systematic Financial
Management, Inc. as small cap equity managers for the Employee's Pension Plan,
Z and that the appropriate officials be authorized to execute same.
SUMMARY:
• The Trustees previously authorized Callan to conduct a search for a small cap value equity manager.
• The following is the list of small cap value equity managers that Callan recommended to the Investment
Committee:
Ark Asset Management Co., Inc.
Atlanta Capital Management Co. LLC
Systematic Financial Management
Boston Partners Asset Management
Chartwell Investment Partners
Northpointe Capital
• After reviewing information provided on the above managers, the Investment Committee ranked the
managers and conducted interviews with the top three. Staff also visited the top three managers.
The Investment Committee recommends to the Trustees that they add two small cap equity managers.
Atlanta Capital and Systematic are firms that are on the opposite ends of the small cap value spectrum.
Atlanta Capital invests in small cap firms that are of high quality and tend to be well known. The annual
turnover rate for Atlanta Capital's portfolio is about 40%. Systematic invests in small cap firms that had
a positive earnings surprise and positive free cash flow. The firms in Systematic's portfolio tend to be
lesser-known firms. The annual turnover rate of Systematic's portfolio is about 170%. Both firms
consistently out perform their benchmark, the Russell 2000 Value Index.
• Atlanta Capital charges a management fee of .7%. Systematic charges a management fee of 1 %.
Both fees are in line with industry standards given their investment styles.
• The Investment Committee recommends that each manger be funded with $15 million. The source of
the funding will be determined at the time of funding. At that time the entire portfolio will be rebalanced
and the funding will come from parts of the portfolio that are over funded.
• Contracts with Atlanta Capital and Systematic's contracts are available for review in the City Clerk's
Office.
Reviewed by: Originating Dept: Costs
Legal N/A Info Srvc N/A Finance ?) Total $255,000
S. Moskun
Budget Public Works N/A User Dept. Funding Source:
Purch /A DCM/ACM N/A Finance Current $21,500 CI
FY
Risk Mgmt N/A Other Attachments OP
Other x
Submitted by: 19 None
City Manager Approp riation Code: 646-07410-530100-585-
Printed on recvcled oaoer Raw
2/98
SyslensUic Financial Rlanagcmeiu. L.P.
GlenPointe East, 7th Floor
300 Frank W. Burr Blvd.
55'STENIATic FINANCIAL. MANAGEMENT, L.P. Teaneck. N1 07666
(8(x)) 258-0497
N ax (201) 925-1984
INVESTMENT ADVISORY AGREEMENT
By signing below, you engage Systematic Financial Management, L.P. ("SFXV) to provide investment advisory
seii,ices for the City of Cleanvater Employees' Retirement Plan (the "Account"), in accordance with the
following terms and conditions:
(1) Authority.
SFM shall have full discretion to supervise, manage and direct the assets now or hereafter in the Account and, as your
agent and attorney-in-fact with full power Ind authority on your behalf, SFNI may, without prior consultation with you
and at such times as SFNI deems appropriate, purchase, sell, invest, reinvest, exchange, convert and otherwise deal with
such assets and place all orders for the purchase or sale of securities for the Account with or through brokers, dealers or
issuers SFIM selects or you designate. This Paragraph I does not create a general power of attorney; it is limited by the
above terms. SFM shall direct that all securities purchased for the Account shall be designated as an asset of the Client
and shall be registered in the name of the Client with the custodian or its nominee. SFM further understands that a
Commission Recapture Program or Soft Dollar Program may be adopted by the Client together with a list of recapture
agents and the names of entities to be used in the Soft Dollar Program. Subject to its continuing duty to secure best
execution on behalf of the Client, SFM agrees to utilize the recapture agents or entities participating in the Soft Dollar
Program in all transactions where it is reasonable to do so.
(2) Investment Ohiectives And Limitations.
SFM manages large, mid and small cap equity portfolios. Given your selection of account management style, SFM will
manage and select investments for the Account to achieve the investment objectives set forth in the Disclosure Statement
(as defined in Paragraph 16 below), as such objectives may be modified by your written instruction agreed to by SFNi.
You acknowledge that you have been informed that there can be no assurance that such objectives will be achieved, and
that you understand and accept the risks associated with Adviser's services hereunder. The parties recognize that as a
public entity, the Client is not governed by ERISA. Nevertheless, SIN shall discharge its duties with respect to the
Client with the care, skill, prudence, and diligence under the circumstances then prevailing which a prudent person acting
in a like capacity and familiar with such matters would use in the conduct of an activity of a like character and purpose.
SFM recognizes that all its actions in discharging its duties under this Agreement must solely be in the interest of the
Client and the Client's participants and beneficiaries above all others, and the Client shall not enter into any agreement or
take any action contrary to that responsibility. SFM shall be governed in all of its activities by Chapter 112, Part VII,
Florida Statutes, including, but not limited to, the provisions applicable to providers of services to retirement plans in
Section 112.656, Florida Statutes.
(3) Fees And Expenses.
SFM shall be paid for its services hereunder fees ("Advisory Fees") according to the fee schedule in Appendix A.
Advisory Fees shall be payable quarterly in arrears based upon the value of the assets in the Account on the last (lay of
the quarter. Payment is due within thirty days of receipt of invoice. A prorated Advisory Fee will be charged for the first
billable quarter based on the inception of this Agreement. You shall pay all additional expenses related to the Account,
including custodian fees, brokerage charges and commissions and taxes.
(4) Custody Of Assets.
The securities and other assets in the Account shall remain in the possession of (i) the brokerage firm identified below, or
(ii) if you require a custodian, the custodian ("Custodian"), acceptable to SFM, which you select. SFM shall not act as
the Custodian for the Account or take or have possession of any of your assets but may issue such instructions to the
Custodian as may be appropriate to complete the transactions described in Paragraph I above.
(5) Deposits And Withdrawals.
SFM shall only be responsible to provide investment advisory services with respect to those assets in the Account of
which it has actual knowledge and it will be the responsibility of the Client or its agent to inform SFM in writing of any
deposits into or withdrawals from the Account. To effect the orderly administration of the Account and permit SFM to
effectively discharge its duties for the Client, notice should be received by SFM within 24 hours after a deposit is made
and three business days before a withdrawal is to be made. Client will indemnify and hold SFM harmless for any
possible losses, lost opportunities or other damages which relate to assets which are not invested by SFM in the event that
such written notice has not been provided.
(6) Reports.
SFM shall provide periodic statements of the Account and such additional reports, including monthly reports, as play
reasonably be requested. SFM shall make itself available to answer questions raised by the Client and/or to present the
reports in person. All written quarterly reports shall outline the overall position of the portfolio with a complete listing of
each security showing the cost, market value and yield at the close of the reporting period. The report shall also include
I n! i
SYSTE' IA"1'IC FINANCIAL MANAGUAIE:NT, I.,.P.
Systematic Financial Management. L.P.
Glenpointe Fast, 7th Floor
300 Frank W. Burr Bled.
Teaneck, NJ 07666
(800) 258-0497
Fax (201) 928-1984
INVESTMENT ADVISORY AGREEMENT
all portfolio transactions during the preceding quarter. Quarterly reports shall also include a listing of those transactions
in which the Commission Recapture Program was utilized and those in which it was not and an explanation therefor. All
quarterly reports shall include a listing of all trades, brokers utilized and the cost of the trade.
(7) Documentation To Be Furnished.
You agree to furnish SFM with such authorizations and documentation as SFM may from time to time require to enable it
to carry out its obligations under this Agreement.
(8) Voting Of Proxies.
SFM shall vote proxies solicited by or with respect to the issuers of securities in which assets of the Account may be
invested, unless specifically directed not to vote proxies by the client.
(9) Confidential Relationship.
All information and advice furnished by either party to the other in connection with this Agreement shall be treated as
confidential and shall not be disclosed to third parties (other than either party's agents and employees who have agreed in
writing to treat such information and advice as confidential) except as required by law or in furtherance of this
Agreement.
(10) Non-Exclusive Agreement.
You acknowledge that SFNI acts as adviser to other clients and may give advice and take action with respect to the assets
of such clients which may differ from the advice given, or the timing or nature of action taken, with respect to the
Account. Nothing herein shall restrict SFM, its principals, affiliates or employees from purchasing or selling any
securities for its or their own account. Furthermore, SFM shall have no obligation to purchase or sell for the Account or
to recommend for purchase or sale by the Account, any security which SFM, its principals, affiliates or emptoyees may
purchase or sell for themselves or for any other clients.
(11) Investment Policy and Diversification, Limit Of Liability.
The Client's investment policy, attached hereto as Appendix 13, is incorporated by reference into this Agreement. SFM
shall review the Client's written investment policies and guidelines, as they are amended from time to time, to insure
compliance by SFM. SFM acknowledges that is has read and fully understands the provisions of Chapters 112, Florida
Statutes, and the limitations and prohibitions regarding investments therein contained. SFNI agrees to observe those
statutory provisions together with the investment policy and guidelines as set forth by the Client. In the event that SFM
should purchase any security in violation of those statutes and/or the policy of the Client, and as a result of any sale
thereof realizes a loss as measured by the initial purchase price of the security, SFM shall make the Client whole for any
such losses. Said losses may be offset by any gains on unauthorized purchases. For the avoidance of doubt, SFM is not
responsible to advise or act for the Account in legal proceedings, including but not limited to class actions or
bankruptcies, involving securities purchased or field in the Account. SFM agrees to indemnify and hold harmless,
assume legal liability for and defend the Client and its officers, employees, and servants, from and against any and all
actions, claims, liabilities, assertions of liability, losses, costs and expenses, in law or in equity, including but not limited
to attorneys' fees at trial and appellate levels, reasonable investigative and discovery costs, court costs or claims for
bodily injury or death of persons and for loss of damage to property, of every kind and nature whatsoever, which may
arise or be alleged to have arisen, or resulted or alleged to have resulted from the negligent acts or omissions or other
wrongful conduct of SFM, its employees and its agents in connection with SFM's performance pursuant to this
Agreement. The parties each agree to give the other party prompt notice of any claim coming to its knowledge that in
any way directly or indirectly affects the other party. To the extent permitted by law, the Client shall defend, indemnify
and hold harmless SFM from and against any and all claims alleged or claimed by any person or entity to be arising from
or relating to any act or omission of the Client or any of its employees, or officers in connection with the performance of
this Agreement. All of the indemnification obligations of the Client shall be limited to the extent permitted by law.
Nothing in this Agreement shall alter or waive sovereign immunity or extend the Client's liability beyond the limits
established in Section 768.28, Florida Statutes. Nothing herein shall be construed as consent by the Client to be sued by
third parties in any matter arising out of this Agreement.
(12) A&Aenmenl.
This Agreement may not be assigned without your and SHM's prior consent. SFM will notify you of any change in the
membership of the partnership within a reasonable time.
2 of 5
SE'S,rEIIIATic FINANCIAL MANAGEMENT, L.P.
Systematic Hinancial Management. L.N.
Glenpointe Gast. 7th Floor
300 Frank W. Burr Bled.
Teaneck, NJ 07666
(800) 258-0497
INVESTMENT ADVISORY AGREEMENT
Fax (201) 928-1984
(13) Effective Date; Termination.
This Agreement shall become effective and binding upon the parties on the date it is countersigned by SFM. This Agreement
may be terminated by the Client at any time upon giving written notice of the termination as provided in Section 17. This
agreement may be terminated by SFM by giving thirty (30) days written notice to the Client as provided in Section 17. This
Agreement shall automatically terminate in the event SFM's registration as an investment advisor under the investment
Advisors Act of 1940 (the "Advisors Act") is suspended or revoked, said termination to be effective with the date of such
suspension or revocation. Upon termination, (i) Advisory Fees paid in advance will be prorated to the date of termination,
and any unearned portion thereof will be refunded to you and (ii) you shall pay any Advisory Fees which have accrued and
remain unpaid.
(14) Representations You Make.
You represent that (i) the engagement of SFhi pursuant to this authorized by any governing documents relating to the Account
and that the terms hereof do not violate any obligation by which you are bound, whether arising by contract, operation of law
or otherwise; (ii) this Agreement has been duly authorized by appropriate action and when so executed and delivered will be
binding upon you in accordance with its terms; (iii) you will deliver to SFM such evidence of your authority as SFM may
reasonably require, whether by way of a certified corporate resolution or otherwise; and (iv) you are not subject to the
provisions of the Employee Retirement Income Security Act of 1974. You shall indemnify and hold SFM harmless against
any and all loss or liability arising out of any misrepresentation contained herein or arising hereunder.
(15) Registered Adviser, Representations by SFINi.
By execution of this Agreement, SFM represents and confirms (i) that it is registered as an investment adviser under the
Advisers Act, (ii) that, with respect to the performance of its duties hereunder in connection with the Account, SFM is a
"fiduciary" as that term is defined in ERISA and (iii) that SFM accepts sole responsibility to manage, and to direct the
acquisition and disposition of the assets of the Account as of the effective date of this Agreement. SFM accepts the
responsibility to diversify Account investments only within the limitations of the investment policy established by the Client.
(16) Disclosure Statement.
You hereby acknowledge that you have received a copy of SFM's Form ADV, Part 11, which constitutes SFM's written
disclosure statement, as required by Rule 204-3 under the Act (the "Disclosure Statement"). The Disclosure Statement
must be provided at least 48 hours prior to the date of execution of this Agreement shown below. If not, you shall have
the option to terminate this Agreement without penalty within 5 business days after that date of execution whereupon any
Advisory Fees theretofore paid shall be refunded. However, any investment action taken by SFNI with respect to the Account
prior to the effective date of such termination shall be at your risk.
(17) Notices.
Unless otherwise specified herein, all notices contemplated by this Agreement shall be deemed duly given when received in
writing by SFN1 at the address below or when received in writing by the Client at the address appearing below.
(18) Notice To Residents Of Certain States.
SFM shall not be compensated on the basis of a share of capital gains upon, or capital appreciation of, the Account or any
portion of the Account, except as may be authorized or permitted under appropriate State regulations.
(19) Governine Law.
This Agreement shall be governed by the laws of the State of Florida. Venue for resolution of any dispute under the terms of
this Agreement shall be in Pinellas County, Florida. In the event of any legal action arising out of the enforcement or
interpretation. of this Agreement, the prevailing party shall be entitled to recover its costs and attorneys' fees.
(20) Entire Agreement.
This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof, anti may be amended
only by a writing signed by the parties.
(21) Partial Invalidity.
If any provision hereof is, or at any time should become, inconsistent with any law, rule or regulation, such provision shall be
deemed modified to conform to such law, rule or regulation, but in all other respects this Agreement shall continue and
remain in full force and effect.
3 of 5
SYSTEMA'ric FINANCIAL. MANAGENIENT, LP,
Systematic Financial Management, L.P.
Glenpointe fast, 7th Floor
300 Frank W. Burr Blvd.
Teaneck, N1 07666
(800)258.0497
Fax (201) 928-1984
INVESTMENT ADVISORY AGREEMENT
Appendix A
Fee Schedule
First $25 Million 1.00%
Next $50 Million 0.75%
Over $75 Million 0.60%
Account Management Style Billing Option (Check One Box)
Small Cap Value - Earnings Surprise ? Debit Account ® Bill Directly
0
4 of5
Signed:
Date: 0j
e
Frank McG e, Chief Operating Officer
Systematic Financial Management, L.P.
300 Frank W. Burr Blvd., Th Floor,
Teaneck, New Jersey 07628
Countersigned:
Date:
CITY OF CLEARWATER, FLORIDA
Address:
Brian August
Mayor-Commissioner
By:
William B. Horn, II
City Manager
Attest:
Cynthia E. Goudeau
City Clerk
5of5
INVESTMENT MANAGENI ENT AGREEMENT
Atlanta Capital Management Company, L.L.C.
Two Midtown Plaza, Suite 1600
1349 West Peachtree Street
Atlanta, Georgia 30309
Re: City of Clearwater Employees' Retirement Plan
Gentlemen:
The Board of Trustees (the "Trustees") of the above-referenced plan, duly authorized by the
provisions of said Plan, hereby employs and appoints Atlanta Capital Management Company, L.L.C.
("Manager") as an investment manager [within the meaning of Section 3(38) of the Employee
Retirement Income Security Act of 1974 ("ERISA")] for the account described below (the
"Account") on the following terms and conditions.
1. Definition of Account and Custody of Account Assets. The Account shall consist of
cash, securities and other assets of the Plan which are identified as.Schedule B, plus any proceeds
therefrom or additions thereto, and less any losses thereon or withdrawals therefrom. Manager shall
not act as Custodian for the Account or any portion thereof. All transactions will be consummated
by payment to, or delivery by, the Custodian of all cash, securities and other assets due to or from the
Account. Manager may issue such instructions to the Custodian as may be appropriate in connection
with the settlement of the transactions initiated by Manager pursuant to Paragraph 2 hereof. The
Manager shall direct that all securities purchased for the Client shall be designated as an asset of
Client and shall be registered in the name of Client with the Custodian or its nominee.
2. Authority. From the effective date referred to in Paragraph 18 hereof, Manager shall
have and exercise the power and authority set forth in this Paragraph to manage and to direct the
acquisition or disposition of assets in the Account, except for any such assets which the Trustees may
from time to time designate as not being subject to the supervision of the Manager, subject only to
the investment policy established from time to time by the Trustees and communicated in writing to
the Manager. When it deems appropriate and without prior consultation with the Trustees, Manager
as agent and attorney-in-fact with respect to the Account may (a) buy, sell, exchange, convert and
otherwise trade in, retain, or reinvest in stocks, bonds, and other securities, (b) place orders for the
execution of such securities transactions with or through such brokers or dealers as Manager may
select, and may (c) take such other action or nonaction that Manager reasonably and in good faith
deems appropriate.
Atlanta Capital Nlanagenlent Company, L.L.C.
Page 2
The NNIanager further understands that a Commission Recapture Program or Soft Dollar
Program may be adopted by the Trustees together with a list of recapture agents and the names of
entities to be used in the Soft Dollar Program. Subject to its continuing duty to secure best execution
on behalf of the Trustees, the Nlanager agrees to utilize the recapture agents or entities participating
in the Soft Dollar Program in all transactions where it is reasonable to do so.
3. Services of Manager. By the execution of this Agreement, Manager accepts its
appointment as an investment manager for the Plan and agrees to manage, and to direct the
acquisition and disposition of, the Account investments in accordance with the Trustees' investment
policy as communicated to Manager in writing from time to time. Manager shall provide periodic
statements of the Account and such additional reports, including monthly reports, as may reasonably
be requested. The Manager shall make itself available to answer questions raised by Client and/or to
present the reports in person. All written quarterly reports shall outline the overall position of the
portfolio with a complete listing of each security showing the cost, market value and yield at the
close of the reporting period. The report shall also include all portfolio transactions during the
preceding quarter. Quarterly reports shall also include a listing of those transactions in which the
Commission Recapture Program was utilized and those in which it was not and an explanation
therefore. All quarterly reports shall include a listing of all trades, broker utilized and the cost of the
trade. The parties recognize that as a public entity, the Client is not governed by ERISA.
Nevertheless, the Manager shall discharge its duties with respect to the Client with the care, skill,
prudence, and diligence under the circumstances then prevailing which a prudent person acting in a.
like capacity and familiar with such matters would use in the conduct of an activity of a like
character and purpose. The Manager recognizes that all its actions in discharging its duties under
this Agreement must solely be in the interest of the client and the Client's participants and
beneficiaries above all others, and Client shall not enter into any agreement or take any action
contrary to that responsibility. Tile Manager shall be governed in all of its activities by Chapter 112,
Part V.II, Florida Statutes, including, but not limited to, the Provisions applicable to providers of
services to retirement plans in Section 112.656, Florida Statutes. It is further agreed that Manager, in
the maintenance of its records, does not assume responsibility for the accuracy of information
furnished by the Custodian or the Trustees.
.4. Transaction Procedures. Instructions of Manager to the Custodian shall be made in
writing sent by first class mail or, at the option of the Manager, shall be made orally and confirmed
in writing as soon as practical thereafter; provided, that all such instructions, written or oral, shall be
issued only by persons designated from time to time by Manager in a written instrument delivered to
the Custodian. Alternatively, the Custodian is authorized to act in accordance with, and shall be
entitled to rely on those deliver and/or receive instructions from the Eligible Trade Report through
the DTC ID system that contain the client bank account number in the defined "custodian/clicnt
account number" field, to the same extent, as if the information contained in such instructions was
given in written form, signed by the Manager. Manager shall instruct all brokers and dealers
executing orders on behalf of the Account to forward to the Custodian copies of all confinnations
promptly after execution of transactions. Manager shall not be responsible for any loss incurred by
reason of any act or omission of any broker or dealer or the Custodian; provided, that Manager will
make reasonable efforts to require that brokers and dealers selected by Manager perform their
obligations with respect to the Account; and further provided, that the foregoing shall not operate as
a limitation on or as an exception to the standard of care articulated in Paragraph 3 above.
Atlanta Capital Management Company, L.L.C.
Page 3
5. Reports to Manager. The Trustees will provide, or instruct the Custodian to provide,
Manager with such periodic reports concerning the status of the Account as Manager may reasonably
request.
6. Service to Other Clients. It is understood that Manager performs investment advisory
services for various clients. The Trustees agree that Manager may give advice and take action with
respect to any of its other clients which may differ from advice given or the timing or nature of
action taken with respect to the Account so long as it is %Manager's policy, to the extent practical, to
allocate investment opportunities to the Account over a reasonable period of time on a fair and
equitable basis relative to other clients. It is understood that Manager shall not have any obligations
to purchase or sell for the Account any security which Manager, their principals, affiliates or
employees may purchase or sell for its or their own account or for the account of any other client, if
in Manager's good faith opinion such transaction or investment appears unsuitable, impractical or
undesirable for the Account.
7. Allocation of Brokerage. Where Manager places orders for the execution of portfolio
transactions for the Account, Manager may allocate such transactions to such brokers and dealers for
execution on such markets, at such prices and at such commission rates as in the good faith judgment
of Manager will be in the best interest of the Account. Manager may take into consideration in the
selection of brokers and dealers not only the available prices and rates of brokerage, but also research
services which are provided by such brokers or dealers and which are expected to enhance the
general portfolio management capabilities of Manager, without Manager's having to demonstrate that
such factors are of a direct benefit to the Account.
8. Fees. The compensation of Manager shall be calculated and paid in accordance with
Schedule A attached.
9. Valuation. In computing the market value of the investments for the Account,
securities traded on a national securities exchange will be valued, where available, at the closing
price listed in the New York Stock Exchange composite trading tape, the NASDAQ quotation
system or the American Stock Exchange tape for the valuation date. Any other security or asset shall
be valued in a manner determined in good faith by Manager to reflect its market value,
10. Investment Policy and Diversification. The Client's investment policy, attached
hereto as Schedule C, is incorporated by reference into this Agreement. The Manager shall review
the Client's written investment policies and guidelines, as they are amended from time to time, to
insure compliance by the Manager.
The Manager acknowledges that it has read and fully understands the provisions of
Chapters 112, Florida Statutes, and the limitations and prohibitions regarding investments therein
contained. The Manager agrees to obsei-ve those statutory provisions together with the investment
policy and guidelines as set forth by the Client. In the event that the Manager should purchase any
security in violation of those statutes and/or the policy of the Client, and as a result of any sale
thereof realizes a loss as measured by the initial purchase price of the security, the Manager shall
make the Client whole for any such losses. Said losses may be offset by an gains on unauthorized
Atlanta Capital i\,lanagemcnt Company. L.L.C.
Page 4
purchases. It will be the responsibility of the Trustees to advise Manager of its investment policy,
and of any changes in the event that more than one investment manager has been appointed with
regard to the Plan, for the diversification of Account investment, and ofanychanges or modifications
therein and to give ;`-tanager prompt written notice if the Trustees deem any investment made for the
:account to be inconsistent with such policy; provided unless the Trustees deliver written notice as to
a securities purchase or position that the securities purchase or position shall be deemed to be in
accord with the Trustees' stated investment policy.
11. Termination. This Agreement may be terminated by the Trustees at any time upon
giving written notice of the teneination. This Agreement may be terminated by Manager by giving
thirty (30) days written notice to the Trustees. This Agreement shall automatically tereinate in the
event the Manager's registration as an investment advisor under the Investment Advisors Act of
1940 (the "Advisors Act") is suspended or revoked, said tennination to be effective with the date of
such suspension or revocation.
12. Assignment. No assignment, as that tern is defined in the Advisers Act, of this
Agreement shall be made by Manager without the prior written consent of the Trustees.
13. Notices. Unless otherwise specified herein, all notices, instructions and advice with
respect to security transactions or any other matters contemplated by this Agreement shall be deemed
duly given when deposited in the mail postage prepaid and addressed (a) to Manager at the address
first above-written, (b) to the Trustees at the address appearing below, or (c) to the Custodian at such
address as the Custodian may specify to Manager in writing, which notice may serve to confirm a
prior oral notice as provided in Paragraph 4 hereof, or at such other address or addresses as shall be
specified, in each case, in a notice similarly given.
14. Representations by the Trustees. The Trustees represent and confine that they are a
Named Fiduciary as defined in ERISA with respect to the control or management of the assets of the
Plan and that the employment and appointment of Manager is authorized by the governing
documents relating to the Plan and that the terns hereof do not violate any obligation by which the
Trustees are bound, or by which Manager, as an investment manager for the Plan, is intended to be
bound, whether arising by contract, operation of law or otherwise. The Trustees further represent
that (a) this Agreement has been duly authorized by. appropriate action and when executed and
delivered will be binding upon the Trustees in accordance with its terms, and (b) the Trustees will
deliver to Manager such evidence of such authority as Manager may reasonably require, whether by
way of certified resolution or otherwise.
15. Representations by Manager. By execution of the Agreement, Manager represents
and confirms (a) that it is registered as an investment adviser under the Advisers Act, (b) that, with
respect to the performance of its duties hereunder in connection with the Account, Manager is a
"fiduciary" as that term is defined in ERISA and (c) that, subject to Paragraph 10 hereof, Manager
accepts sole responsibility to manage, and to direct the acquisition and disposition ofthe assets of the
Account as of the effective date of this Agreement. Manager accepts the responsibility to diversi fy
Account investments only within the limitations ofthe investment policy establ?sllcd by the Trustees
pursuant to Paragraph 10 hereofand, if the :account represents less than the entire Plan, speci fically
does not accept the responsibility for the diversification ofthe Plan as a whole or the investment of
Atlanta Capital Management Company, L.L.C.
Page 5
the assets which are not a part of the Account.
16. Construction. This Agreement shall be governed by the laws of the State of Florida.
Venue for resolution of any dispute under the terms of this Agreement shall be in Pinellas County,
Florida. In the event of any legal action arising out of the enforcement or interpretation of this
Agreement, the prevailing party shall be entitled to recover its costs and attorneys' fees. The
provisions of this Agreement are severable. Ill the event that any provision of this agreement is void
and unlawful, it shall no longer be a part hereof, but the remainder of this Agreement shall be of full
force and effect.
17. Effective Date. The effective date of this Agreement is , 20
18. Inception Date for Performance. The inception date for performance calculations for
the account will be the calendar montll-end date following a minimum period of 30 days alter funds
are made available for investment, or such earlier date as may be mutually agreed to by the parties
thereto.
20. Rescission. The Trustees acknowledge receipt of Form ADV Pail II which accompanies
this Agreement. Manager acknowledges that, notwithstanding the foregoing Paragraphs hereof, the
Trustees shall have a unilateral right to rescind this Agreement without penalty by giving written
notice of rescission to Manager in accordance with Paragraph 14 hereof in such a manner that the
notice shall have been received by Manager within the 5 business days next following the effective
date. For purposes of this Paragraph, the team "business days" shall mean Monday through Friday,
excluding holidays. In the event the Trustees rescind this Agreement in accordance with this
Paragraph neither party shall have any obligation or liability to the other.
Countersigned: CITY OF CLEARWATER, FLORIDA
By:
William B. Horn, 11
City Manager
Attest:
Cynthia E. Goudeau
City Clerk
Brian Aungst
Mayor-Commissioner
Atlanta Capital Management Company, L.L.C.
Page G
Accepted and agreed to as of the above date.
Atlanta Capital Management Company, L.L.C.
By: G
Date
Atlanta Capital Management Company, L.L.C.
Page 7
SCHEDULE A
Atlanta Capital Management Company, L.L.C.
Two Midtown Plaza, Suite 1600
1349 West Peachtree Street
Atlanta, Georgia 30309
Gentlemen:
We agreed to pay for your services an annual fee based upon the total market value of the assets of
the Account under management (include cash or its equivalent held for investment), according to the
following schedule:
Value of Assets Fees
First $50 million .30%
Above $50 million .70%
We understand that we shall be billed quarterly in arrears as of the last valuation date at one-fourth of
the above annual rate. The fee will be prorated if the assets are under supervision or management for
less than a full quarter.
Inception portfolio $
This day of , 20_
ay:
Name of Account:
Tax Identification Number:
Accepted and agreed to as of the above date.
Atlanta Capital Management Company, L.L.C.
By: