INVESTMENT ADVISORY AGREEMENT (7)INVESTMENT ADVISORY AGREEMENT
This Investment Advisory Agreement is between RIVERBRIDGE PARTNERS, LLC., a
Minnesota limited liability company ("Adviser'), and the Board of Trustees of the
Employees' Pension Plan of the City of Clearwater, Florida ,"Client")
This Agreement details the terms and conditions under which the Client is employing the
Adviser as an investment adviser to manage certain of its assets. These assets are
further identified in the attached Exhibit A (the "Account").
Through the execution of this Agreement, the Adviser and the Client agree to the
following:
1. Employment of Adviser. Discretionary Authority; Duties; Investment Objectives
and Restrictions. The Client employs the Adviser as an investment adviser to manage
the Account. The Adviser agrees to supervise and direct the investment of the Account
in accordance with the written investment objectives and restrictions of the Client.
These objectives and restrictions are identified in Exhibit B. Adviser will give the Client
the benefit of continuing study of economic conditions, security markets and other
investment issues. On the basis of these studies, and consistent with the Client's
investment objectives and restrictions, the Adviser may invest the assets in the Account
in securities of any kind, including, but not limited to, common and preferred stocks,
warrants, options, rights, financial futures instruments, corporate, municipal or
government bonds, notes or bills, mortgage-backed securities, mutual funds and unit
investment trusts ("securities"). All or a portion of the Account may be held in cash or
cash equivalents. The Adviser shall have full discretionary authority as agent and
attorney-in-fact with respect to the Account, at any time, (a) to buy, sell, exchange,
convert or otherwise trade the securities and other investments in the Account, (b) to
place orders for the execution of these securities transactions as specified in Section 2
below, and (c) to act on behalf of the Client in all other matters necessary or incidental to
the handling of the Account. The Adviser does not guarantee the investment
performance of any of the investments in the Account.
Adviser acknowledges that it is fully familiar with the laws of the State of Florida
governing public employee retirement systems (Chapter 112, Part VII), and is fully
familiar with the provisions of the Charter and Code of the City of Clearwater relating
specifically to the management of this Pension Plan. Adviser agrees to observe the laws
of the State of Florida and the Charter and Code of the City of Clearwater and the
investment policy and guidelines as set forth by Client in Exhibit B hereto. In the event
that Adviser should purchase any security in violation of the applicable investment policy
and guidelines, and as a result of any sale thereof realizes a loss as measured by the
initial purchase price of the security, Adviser shall make Client whole for any such
losses.
2. Custodial Responsibilities and Brokerage.
a) Custodial Responsibilities. The Adviser will not act as custodian for the
Account. The brokerage firm or custodian bank as stated below, which has been
selected by the Client, shall assume custodial responsibilities. The Client shall cause
the Account's broker or custodian bank (or trustee bank acting as custodian, as the case
may be) to take all steps necessary to settle purchases, sales and trades made by the
Adviser, including delivery of certificates, payment of funds and all such other acts as
may be necessary to fulfill its custodial responsibilities. The Adviser shall give notice
and directions (and copies thereof) with respect to transactions regarding the Account in
a manner mutually agreed upon between the Account's broker or custodian bank, the
Client and the Adviser.
Custodian Northern Trust
b) Brokerage. The Adviser shall enter orders for the Account with the
broker(s) and brokerage firm(s) the Adviser selects unless Client specifies that
brokerage should be directed to Client's broker acting as custodian. If the Client has
chosen such broker, the brokerage commissions the Client shall pay shall be negotiated
between the Client and the broker. As a result, the Adviser will not negotiate brokerage
commissions or discounts on commissions on the Client's behalf. The Client
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understands that the brokerage commissions paid by the Client may be in excess of
commissions that could be obtained from another brokerage firm because of portfolio
services in addition to pure execution provided by the broker. If the Adviser selects the
broker(s), the Adviser may consider the brokerage and research services (as these
terms are used in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Client and/or other clients of the Adviser, and the Adviser may pay such broker(s) an
amount which is in excess of the commission another broker would have charged, if the
Adviser determines in good faith that such commission was reasonable in relation to the
value of the brokerage and research services provided by such broker viewed in terms
of that particular transaction or in terms of all of the accounts of the Adviser. The client
who "restricts" brokerage may be subject to disadvantages regarding allocation and
aggregation of orders. Unrestricted accounts will be aggregated together by the Adviser
for order placement and may receive more favorable execution. The Adviser shall not
be liable to the Client for any act, conduct or omission of any broker.
Please check here if Client selects a broker
Selected Broker
3. Broker Confirmation. The Client authorizes the Adviser, in its discretion, to
request the issuance of average price confirmations by participating brokers.
4. Adviser Reports. On a quarterly and annual basis, the Adviser will provide the
Client with a written portfolio appraisal of the Client's Account. This appraisal will include
the Account's assets, current market value and performance data for the period.
5. Com ensation. The Adviser agrees to accept as full payment for its services an
annual fee of .9% of assets under management. This annual fee shall be determined
on a quarterly basis and shall be based on the fair market value of all assets of the
Account (including cash and cash equivalents) as of the end of each calendar quarter of
each year during which this Agreement is in effect. Securities listed on a national
exchange or on NASDAQ will be valued at the price as established by nationally
recognized pricing services. Other securities and all other assets will be valued at fair
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value as determined in good faith by the Adviser. The Adviser will send to the Client a
quarterly statement showing the amount of the management fee due, the Account value
on which the fee is based and how the fee was calculated. Unless directed otherwise by
the Client, the fees shall be paid from the Account. If this Agreement is not in effect for a
full calendar quarter, the fee for a partial calendar quarter shall be based on the fair
market value of all assets of the Account on the last day that this Agreement is in effect
and shall be equal to the amount determined by multiplying the full quarterly fee by the
fraction of which the numerator is the number of days in that quarter during which this
Agreement is in effect and the denominator is of the total number of days in the calendar
quarter.
6. Investment Advisers Act. The Adviser is duly registered with the Securities and
Exchange Commission as an investment adviser pursuant to the Investment Advisers
Act of 1940, as amended (the "Investment Advisers Act").
7. The Client's Responsibility. The Client will furnish the Adviser with complete and
accurate information concerning the Client's financial and economic situation, the
Client's investment objectives, and any restrictions the Client wishes to impose. The
Client represents that all financial and other data that it furnishes to the Adviser relating
to the Client's assets, liabilities, present and future income and obligations are true and
correct and may be relied upon by Adviser for the purposes of providing the services
described in this Agreement. The Adviser and its directors, officers, employees and
agents shall be entitled to rely, and shall be protected from liability in relying, upon any
information furnished to it (or any of them as individuals) which is believed in good faith
to be accurate and reliable. Client agrees to inform Adviser of any material change in
Client's circumstances, which might affect the manner in which Client's assets should be
invested.
8. Representations by Client. The Client acknowledges that Client received the
written disclosure statement (Part 2 of Form ADV) required by Rule 204-3 of the
Investment Advisers Act at least 48 hours prior to the execution of this Agreement or, in
the alternative, that Client received a written disclosure not less than five days prior to
the delivery of any assets to the Adviser or the communication to it of any instructions
regarding investment of the Account, and the Adviser has not, during this five-day
interval, effected any disposition of the Account, and has allowed the Client full freedom
to withdraw all or any part of the Account without incurring any penalty or liability
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whatever. The Client represents that all corporate or other action required for the Client
to enter into this agreement has been taken.
9. Limitations on Liability. Adviser agrees to reimburse Client for, and to hold
Client and each entity having an interest in the Portfolio Assets harmless from, all
liabilities, claims, losses, costs, and expenses arising from, or in connection with,
Adviser's performance of its duties under this Agreement (including reasonable
attorneys' fees and expenses) which are judicially determined to result from the
Adviser's willful misconduct, lack of good faith, or negligence, or, from the actions or
inactions of, or by, Adviser in violation of its duties hereunder or for which it would
otherwise be legally liable under applicable law. The agreement and obligation of
Adviser under this provision shall survive the termination of this Agreement.
10. Other Clients. Client understands that the Adviser and certain of its directors,
officers, employees and agents render investment management, advisory and other
services to others who may or may not have investment policies, objectives and
investments similar to those of the Client, and that the Adviser and its directors, officers,
employees and agents may, from time to time, give advice and take actions on behalf of
such other clients which may differ from the advice given or actions taken with respect to
the Account. If the purchase or sale of securities for the Client and one or more other
clients is considered at or about the same time, transactions in such securities will be
allocated among the several clients in a manner determined by the Adviser. Client
recognizes that transactions in a specific security may not be accomplished for all clients
at the same time or at the same price.
11. Termination Amendment. This Agreement shall continue in full effect until
terminated by either party, at any time, by giving written notice to the other party at least
thirty days prior to the date on which such termination is to take effect. This Agreement
may be amended at any time in writing by the mutual consent of the parties.
12. Notices. Any notice, advice or report to be given under this Agreement will be
delivered in person, by U.S. Mail or overnight courier. It may also be transmitted by e-
mail or by facsimile transmission (with a hard copy sent by U.S. Mail). It shall be
deemed duly given (a) if to the Adviser, when received at Riverbridge Partners, LLC,
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Midwest Plaza West, 801 Nicollet Mall, Suite 600, Minneapolis, MN 55402 and (b) if to
the Client at the address set forth below:
Ci of Clearwater
PO Box 4748
Clearwater, F133758-4748
Attention: Finance Director
13. Governing Law and Severability. This Agreement shall be construed and
enforced in accordance with the laws of the United States of America and, to the extent
not inconsistent therewith, the laws of the State of Florida. Adviser consents to the
exclusive jurisdiction of Florida courts with respect to all legal proceedings instituted by
Adviser or Client hereunder. Venue shall be exclusively in Pinellas County, Florida. If
any provisions of this Agreement shall be held invalid by a statute, rule, regulation,
decision of a tribunal or otherwise, the remainder of this Agreement shall not be affected,
and, to such extent, the provisions of this Agreement shall be severable.
14. Assignment. This Agreement may not be assigned by the Adviser without the
consent of the Client. For purposes of determining client consent in the event of an
assignment, Adviser will send the Client written notice of the assignment. If Client does
not object in writing within sixty (60) days of sending of such notice, the Client will be
deemed to have consented to the assignment. The Agreement and all subsequent
amendments shall inure to the benefit of the successor and assignees of the parties
hereto.
15. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but all of which, together, shall constitute one and the
same instrument.
16. Confidentiality. Except as otherwise agreed in writing or as required by law, the
Adviser will keep confidential all information concerning the Client's identity, financial
affairs or investments.
17. Fiduciary Status. Adviser represents that it is an "investment manager" as such
term is defined in the Employee Retirement Income Security Act of 1974 ("ERISA") with
respect to the Portfolio Assets and, by reason thereof, a fiduciary as such term is defined
in ERISA with respect thereto, notwithstanding the fact that the terms and provisions of
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ERISA may not be applicable to this Agreement. Adviser agrees to discharge its duties,
as investment manager and fiduciary, with respect to the Portfolio Assets solely in the
interest of Client and the beneficiaries thereunder and with the judgment, care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent man
acting in the like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. Adviser further agrees that it will
continue at all times during the term of this Agreement to be an investment manager and
a fiduciary as above described, and that it will comply with all laws, rules, and
regulations of any governmental authority or agency having applicability to the
transactions contemplated by this Agreement, and that it will perform in accordance with
the standards of care set forth in this section and this Agreement.
18. Proxy Voting. The Adviser votes Client proxies unless otherwise directed by
Client.
19. Proxy Voting for ERISA Accounts. If the Account is for a pension or other
employee benefit plan governed by ERISA and Client directs Adviser not to vote proxies
for securities held in the Account, the right to vote such proxies has been expressly
reserved for (please choose one of the following):
The plan's trustees:
The plan's fiduciary:
20. Class Action Lawsuits. The Adviser will not respond to any class action related
notifications or inquiries on the Client's behalf. At the request of Client, the Adviser will
provide copies of confirmations, custodial statements or other information to Client to
assist Client in responding to such notifications or inquiries. Client shall be solely
responsible for responding to any class action related notifications or inquiries.
21. Investigations and Complaints. To the extent permitted by applicable law, Adviser
shall promptly disclose to Client in writing any extraordinary investigation, examination,
complaint, disciplinary action or other proceeding reasonably related to or materially
affecting Adviser's ability to perform its duties under this Agreement or involving any
investment professional employed by Adviser who has performed any service with
respect to Client's account in the twenty-four (24) preceding months, which is
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commenced by any of the following: (A) the Securities and Exchange Commission of the
United States (ASEC@), (B) the New York Stock Exchange, (C) the American Stock
Exchange, (D) the National Association of Securities Dealers, (E) any Attorney General
or any regulatory agency of any state of the United States, (F) any U.S. Government
department or agency, or (G) any governmental agency regulating securities of any
country in which Adviser is doing business. Except as otherwise required by law, Client
shall maintain the confidentiality of all such information (including refraining from trading
in any security based on such information) until the investigating entity makes the
information public.
22. Insurance. Adviser represents and warrants that it presently has in effect
insurance coverage which complies with the bonding requirements of Section 412 of
ERISA, and Adviser covenants that it shall keep such insurance coverage as required by
said section (as the same may from time to time be supplemented or amended) in effect
during the term of this Agreement, notwithstanding the fact that the terms and provisions
of ERISA may not be applicable to this Agreement. Upon request of Client, Adviser shall
provide to the Client evidence that the premium therefor has been paid. Adviser's
insurance shall be primary and Client's insurance, if any, and responsibility shall be
secondary.
Adviser presently has in effect, and will maintain during the term of this Agreement,
fiduciary liability insurance (Errors & Omissions) in an amount at least equal to the
greater of $2,000,000 or the maximum currently provided by Adviser to any other client,
which provides coverage with respect to any loss resulting from a breach of its fiduciary
duties and including coverage in the event of recourse against it by, or on behalf of, its
clients. Adviser, at the time of execution of this agreement and annually thereafter and,
in addition thereto, upon written request of Client, shall deliver to Client certificates of
insurance evidencing the foregoing coverages. Adviser shall-notify Client in writing of
any reduction, cancellation or substantial change of policy or policies as soon as
possible, but no later than at least fifteen (15) days prior to the effective date of said
action. Adviser shall name Client as a certificate holder on the aforesaid professional
liability insurance policy and furnish Client evidence of such designation of Client as a
certificate holder. Adviser's insurance shall be primary and Client's insurance, if any,
and responsibility shall be secondary.
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The Client and the Adviser have executed this Agreement on this , 7* day of
September, 2010. All signatures represent review of this document and acceptance of
its contents.
RIVERBRIDGE PARTNERS, LLC
By
Riverbridge Partners, LLC Principal
THE CLIENT
BOARD OF TRUSTEES OF THE EMPLOYEES'
PENSION PLAN OF THE CITY OF
CLEARWATER, FLORIDA
By: ,-
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Frank V. Hibbard
Chairperson
kttest:
Rosemarie Call
City Clerk
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