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EMPLOYEES PENSION PLAN INVESTMENT ADVISORY AGREEMENT Systematic Financial Management, L.P. Glenpointe East, 7th Floor 300 Frank W. Burr Blvd. Teaneck, NJ 07666 (800) 258-0497 Fax (201) 928-1984 I SYSTEMATIC FINANCIAL MANAGEMENT, L.P. INVESTMENT ADVISORY AGREEMENT By signing below, you engage Systematic Financial Management, L.P. ("SFM") to provide investment advisory services for the City of Clearwater Employees' Retirement Plan (the "Account"), in accordance with the following terms and conditions: (1) Authoritv. 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 and authority on your behalf, SFM may, without prior consultation with you and at such times as SFM 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 SFM selects or you designate. This Paragraph 1 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 designaled 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 Obiectives 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 SFM. 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, SFM 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 day 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) Custodv 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 may 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 10f5 SYSTEMATIC FINANCIAL MANAGEMENT, L.P. Systematic Financial Management, L.P. Glenpointe East, 7th Floor 300 Frank W. Burr Blvd. 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) V otin!! 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 A!!reement. You acknowledge that SFM 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 employees may purchase or sell for themselves or for any other clients. (11) Investment Policv and Diversification, Limit Of Liabilitv. The Client's investment policy, attached hereto as Appendix B, 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. SFM 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 held 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 Ihe 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 ils 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) Assi!!nment. This Agreement may not be assigned without your and SFM's prior consent SFM will notify you of any change in the membership of the partnership within a reasonable time. 20f5 Systematic Financial Management, L.P. Glenpointe East, 7th Floor 300 Frank W. Burr Blvd. Teaneck,NJ 07666 (800) 258-0497 Fax (201) 928-1984 ~ SYSTEMATIC FINANCIAL MANAGEMENT, L.P. INVESTMENT ADVISORY AGREEMENT (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 Ihe 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 Y 00 Make. You represent that (i) Ihe engagement of SFM 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) Rel!istered Adviser. Representations bv SFM. 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 10 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 II, 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 SFM 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 SFM 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) Governinl! 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 Al!reement. This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof, and may be amended only by a writing signed by the parties. (21) Partial Invaliditv. 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. 30f5 Systematic Financial Management, LP. Glenpointe East. 7th Floor SYSTEMATIC FINANCIAL MANAGEMENT, L.P. 300 Frank W. Burr Blvd. Teaneck,NJ 07666 (800) 258-0497 Fax (201) 928-1984 I INVESTMENT ADVISORY AGREEMENT ~ Appendix A Fee Schedule First $25 Million 1.00% I Next $50 Million 0.75% I I Over $75 Million 0.60% I Account Management Style Billing Option (Check One Box) . Small Cap Value - Earnings Surprise 0 Debit Account ~ Bill Directly 40f5 Signed: ~ /i.-OJ fIIcd-- Frank McGee, Chief Operating Officer Date: Countersigned: Date: CITY OF CLEARWATER, FLORIDA Mayor-Commissioner Systematic Financial Management, L.P. 300 Frank W. Burr Blvd., 7th Floor, Teaneck, New Jersey 07628 Address: B~" _13. t4..w..-:J! William B. Horne II City Manager Attest: - -~. ,~~ ~j~/ ~ Cynlliia E:t!u_- City Clerk 5015