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INVESTMENT MANAGEMENT AGREEMENT -, I I INVESTMENT MANAGEMENT AGREEMENT AGREEMENT made as of the First day of July, 1982, by and between CITY OF CLEARWATER EMPLOYEES PENSION PLAN (hereinafter referred to as the "Client") and The First National Bank of Denver (hereinafter referred to as the "Investment Manager"). WITNESSETH: WHEREAS the Client desires to grant the Investment Manager the authority to manage Client's investment portfolio (hereinafter referred to as the "Fund") upon the terms and conditions set forth below. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements, the parties agree as follows: Section I MANAGEMENT SERVICES The Client appoints the Investment Manager as the Client's agent and attorney-in-fact with full authority to buy, sell, and trade in stocks, bonds and any other securities, for the Client's account and in the Client's name; but the Investment Manager's discretion shall be limited by the investment objectives and restrictions attached hereto as Exhibit B. Section 2 PROCEDURE All transactions authorized by this agreement shall be carried out through such Custodian(s) of the Fund as the Client shall appoint in writing for such purpose, but the Investment Manager shall not act as Custodian of the Fund. The Client will instruct the Custodian, to provide the Investment Manager with such periodic reports concerning the status of the account as the Investment Manager may reasonably request. I I Section 3 APPRAISAL OF ACCOUNT The Investment Manager will provide the Client with an appraisal of the Account from time to time as the parties shall agree upon. Such appraisal shall be in the form of a written summary of assets of the Account on the Appraisal Date. Securities traded on national securities exchange shall be valued at the last reported closing prices on such exchange. Securities traded over-the-counter will be valued at the last known bid price. Other securities and all other assets will be valued at fair market value. Section 4 FEES The Investment Manager shall be paid in accordance with the fee schedule attached hereto as Exhibit "A" and made a part hereof by this reference. Section 5 AMENDMENT AND TERMINATION At any time and from time to time, this Agreement may be amended in whole or in part by written instrument executed by the parties hereto, Either party to this Agreement may terminate the Agreement upon gIVing the other party written notice of such termination at least ten (10) days prior to the effective date. In the event of termination, the Investment Manager shall render to the Client a final accounting of its transactions after the effective date of the termination. The termination of this Agreement shall not affect or preclude the consummation of any transactions which were initiated by the Investment Manager prior to such termination. Section 6 FIDUCIARY AND OTHER RESPONSIBILITIES The Investment Manager shall carry out its duties with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of I I is a bank as defined under the Investment Advisors Act of 1940 and that it will maintain such status during the terms of the Agreement. The Investment Manager shall notify the Company at the first instance of any events that may affect or that have affected such status. Section 7 REPRESENTATIONS BY CLIENT By execution of this Agreement, the Client represents that these terms do not violate any obligation by which the Client in bound, whether arising by contract, operation of law or otherwise, and, if the CI ient is a corporation or trust, that this Agreement has been duly authorized by appropriate action and when so executed and delivered will be binding upon the Client in accordance with its terms, and the Client will deliver to the Investment Manager such evidence of such authority as the Investment Manager may reasonably require, whether by way of a certified resolution or otherwise. Section 8 MISCELLANEOUS This agreement shall be governed by the laws of the State of Florida. All notices or deliveries required or desired to be given hereunder shall be delivered or mailed: - To The First National Bank of Denver, at: 633 17th Street P.O. Box 5825 Denver, Colorado 80217 - To The Client, at: Jeffrey E. Butler, City Treasurer I 1 IN WITNESS WHEREOF, the Client and the Investment Manager have caused this Agreement to be executed by their duly authorized officers and their corporate seals to be hereunto affixed as of the date first above written, s: I , ~ 1t~ ,-- Commissioner ~\:~~~~' , ". .'.. ~~.~~ Ci'ty Clerk - '-. --~ . As to the Trustees \ Witnesses: THE F1RST:;l-JATlONAL BAZ 9ENVER, /. By /izu>vr<-<-u.. L U"". (.u,~ i t':.-' " I , SCHEDULE OF FEES City of Clearwater Employees' Pension Plan Effective Date: July I, 1982 The fee of Adviser shall be calculated on the basis of the total market value of the assets placed under its supervision as determined as of the close of business on the date preceding the commencement of each successive calendar quarter. Such fee shall be due quarterly in arrears and shall be calculated at the following annual rates: One half of one percent for funds up to $25 mi II ion, and three-eights of one percent for funds in excess of $25 million. ...:,.. ~.. I I CITY OF CLEARWATER EMPLOYEES' PENSION PLAN First of Denver Investment Management Group Common Stock Investment Goal, Strategy, Performance Objectives and Securities Selection Criteria Goal: Achieve the highest long-term rate of return consistent with the following investment guidelines. Strategy: The fund will be substantially fully invested, with cash levels usually not exceeding 20%. The target average weighting of cash over each year is 5% to 10%. The investment strategy will emphasize growth companies with high rates of earnings reinvestment, return on equity, and projected growth in earnings per share, and whose common stock is selling at undervalued prices in comparison to the forecasted company earnings potential. (While the long-term objective will emphasize companies with strong growth characteristics, a limited use of income, cyclical and/or defensive stocks as special strategies is authorized as deemed appropriate by the investment manager.) In general, stocks wi II be purchased for a multi-year holding period, and the target portfolio turnover rate (a sale and a purchase is one transaction) will be 30% to 40% per year. It is expected that the fund will be invested in "middle-sized" companies, i.e., those companies meeting the investment selection criterial listed below, but excluding the largest 20% (as measured by gross revenues) of all listed corporations. Performance Objectives: I. Rate of Return wi II exceed: a. Top 25% of accepted measurement service for all cumulative periods exceeding three years. b. The S & P 500 Stock Index by 300 basis points for all three year periods. c. The S & P Stock Index on a "risk-adjusted" basis net of fee (i.e., have a positive "alpha"). 2. Risk, as measured by the annualized standard deviation of quarterly returns wi II not exceed 1.25 X the S & P 500 Stock Index. Securities Section Criteria: The portfolio will consist of cash equivalent investment (with maturities of less than one year and with risk characteristics consistent with the fiduciary standards imposed by ERISA requirements) and of common stock of either domestic (i.e., organized under the laws of the United States and any state, territory, or the District of Columbia) or international (i.e., engaged in international business and trade) corporations, provided: a. The corporation is listed on anyone or more of the recognized national exchanges (this criterion is satisfied by OTC stocks listed by NASDAQ); b. Not more than 3% of portfolio market value invested in stock of any one company (valued at cost) without authorization from the City Treasurer; c. Not more than 6% of portfolio market value invested in the stock of anyone company valued at cost; d. Holdings shall not exceed .5% of any company's stock.