EXHIBIT E
FORM OF
RSI RETIREMENT TRUST
RETIREMENT SYSTEM INVESTORS INC.
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT effective as of _________, 2004, between RSI
Retirement Trust (the "Trust"), a retirement fund organized and existing as a
trust pursuant to a certain Agreement and Declaration of Trust, as amended and
restated August 1, 1990 and as further amended from time to time (the "Agreement
and Declaration of Trust"), and Retirement System Investors Inc., a Delaware
corporation (the "Manager").
W I T N E S S E T H:
WHEREAS, the Trust is an investment trust exempt from taxation
under Section 501(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), which has been designed to effectuate pension or profit-sharing plans
("Plans") which are qualified under Section 401(a) of the Code and individual
retirement accounts under Section 408(a) of the Code; and
WHEREAS, such Plans are eligible to invest their assets in the
Trust, and to become unitholders of the Trust (the "Unitholders"); and
WHEREAS, the Trust is an investment company registered under
the Investment Company Act of 1940, as amended (the "Act"); and
WHEREAS, pursuant to Investment Management Agreements dated
October 2, 2002 and October 20, 2003, the Manager has served as the investment
manager for all of the investment funds of the Trust (the "Investment Funds");
and
WHEREAS, the Trust wishes to continue the Manager as the
investment manager of the assets of each of the Investment Funds (the
"Account"), (with modifications to permit the Manager to provide, or arrange for
the provision of, a continuous investment program and overall investment
strategies for each Investment Fund as permitted under the terms of any
exemptive relief obtained by the Manager or the Trust from the Securities and
Exchange Commission) to act in such capacity in the manner set forth in this
Agreement, and the Manager is willing to act in such capacity in accordance with
the provisions of this Agreement;
NOW, THEREFORE, the Trust hereby agrees with the Manager as
follows:
1. Appointment of the Manager
A. The Trust hereby designates, appoints, engages and retains
the Manager as
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investment manager of the Account.
B. The Manager hereby accepts appointment as investment
manager to manage the Account. The Manager hereby represents and warrants that
it is a qualified investment advisor under the Investment Advisors Act of 1940,
as amended. The Manager agrees that, although it may not be subject to the
provisions of Title 1 of the Employee Retirement Income Security Act of 1974,
and amended ("ERISA"), in carrying out its duties and responsibilities under
this Agreement, it will conduct itself as an investment manager (as defined in
Section 3(38) of ERISA), and it will act in accordance with the requirements of
Part 4 of ERISA as applicable to fiduciaries (as defined in Section 3(21) of
ERISA). Notwithstanding anything contained herein to the contrary, references to
ERISA in this Agreement will be deemed to contemplate all judicial or
administrative interpretations and all statutory and administrative exemptions
which would be applicable in the circumstances and to the parties in question
were this Agreement and the Manager subject to ERISA.
C. The Manager will also perform such services as may be
requested from time to time by the Trust relating to the allocation of a Plan's
assets between equities and fixed income obligations and within specified
investment funds of the Trust, at no additional charge to the Trust.
D. Notwithstanding the foregoing, the Manager may, from time
to time subject to the approval of the Trust's Board of Trustees (the
"Trustees"), the provisions of this Agreement and the Act and any exemptions
thereto, retain a person or persons (a "Sub-Advisor") to provide investment
management services to one or more of the Investment Funds. The Sub-Advisor
shall agree to comply with all provisions applicable to the Manager hereunder.
If the Manager retains a Sub-Advisor, the Trust will have no responsibility to
compensate the Sub-Advisor, any such compensation to be paid by the Manager from
the amount paid to it pursuant to Section 5 of the Agreement.
E. This Agreement is effective on the date hereof. This
Agreement will remain in full force and effect with respect to an Investment
Fund for a period of more than two years from its initial effective date and
thereafter only so long as its continuance is specifically approved in the
manner required by the Act.
2. Assets of the Account
The Trust will certify or cause to be certified to the Manager
the assets comprising the Account as of the commencement of the term of this
Agreement. The Trust may add to the Account assets acceptable to the Manager or
withdraw assets from the Account at any time or from time to time by written
notification to the Manager. The Account will consist of the assets certified to
the Manager as aforesaid, or any assets into which the same may be converted
from time to time, together with any income therefrom or any other increment
thereon, and assets added as aforesaid, less assets withdrawn as aforesaid.
3. Investment Powers
A. Subject to the provisions of paragraphs B and C of this
Section 3, the Manager will have sole and complete authority and discretion,
subject to and consistent with the
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investment objectives and policies of the Investment Funds as set forth in the
prospectus of the Trust (the "Prospectus"), the Agreement and Declaration of
Trust, the Rules and Procedures of the Trust and the Trust's Statement of
Investment Objectives and Guidelines, as the same may be amended from time to
time, all as delivered to the Manager (collectively, the "Controlling
Documents"), or as specified in writing form time to time by the Trust or
otherwise accepted by the Manager, to manage (including the power to acquire and
dispose of ) the assets of the Account and, without limiting the generality of
the foregoing, to direct the Trustees in the exercise of the powers relating to
the Account which are specified in the Controlling Documents, and, subject to
such direction.
B. The Manager will also perform supervisory services
pertaining to the ongoing oversight and management of each Sub-Advisor retained
by the Manager. Such services include, but shall not be limited to, supervising
the compliance by such Sub-Advisor with the Act, reviewing such Sub-Advisor's
performance, analysis of the composition of such Sub-Advisor's portfolio, and
preparing reports relating to such supervisory activities for the Trustees. In
addition, the Manager will, at the request of the Trustees, conduct a search to
find a recommended replacement for any Sub-Advisor.
C. The Manager will consult with the Trustees and their
representatives at such times as the Trustees may reasonably request with
respect to the overall investment policy of the Account, and the Manager will
cause one or more of its officers to attend such meetings with the Trustees and
their representatives and to furnish such oral or written reports to the
Trustees and their representatives, as the Trustees may reasonably request, with
respect to, among other matters, the decisions it has made with respect to the
Account and the purchase and sale of its portfolio securities (including the
reasons therefor) and the extent to which such decisions have been implemented.
In addition, the Manager also specifically agrees to (i) give advance notice in
writing to the Trustees of the taking on by the Manager of new clients or
ventures of material significance, including any related information required in
order to enable the Trustees to determine whether the taking on of new business
by the Manager will impair the Manager's ability to carry out its obligations
under this Agreement, and (ii) provide to the Trustees such reports and other
information as the Trustees may reasonably request in order to enable the
Trustees to perform a review of the Manager's performance under this Agreement
no less frequently than quarterly.
4. Standard of Care
A. The Manager will invest the Account in the manner provided
herein and will have no duty or responsibility with respect to the
diversification of the assets of the Trust, except with respect to the
diversification of the Account as contemplated by the Prospectus.
B. Except as provided in ERISA, the Manager will be under no
liability or obligation to anyone with respect to any failure on the part of the
Trustees or any other investment manager to perform any of their obligations
under the Controlling Documents or any agreement affecting the Account, or under
the terms of this Agreement, or for any error or omission whatsoever on the part
of the Trustees or any other investment manager.
C. The Manager will not be liable for the making, retention or
sale of any investment or reinvestment by it as herein provided, nor for any
loss to or diminution of the value
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of the Account; provided, however, that the Manager has acted in the premises
with the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in like capacity and familiar with such
matters would use in the conduct of any enterprise of a like character and with
like aims, and in accordance with such other requirements of ERISA as are
applicable generally to fiduciaries under ERISA; provided further, however that
nothing in this Agreement will protect the Manager against any liability to the
Trust or the Unitholders to which the Manager would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties hereunder or by reason of its reckless disregard of its
obligations and duties hereunder.
5. Compensation
A. The Trust agrees to pay to the Manager, as full
compensation and reimbursement for the services to be rendered by the Manager
pursuant to this Agreement and any expenses incurred by the Manager in
connection therewith, a fee on the last day of each month in which this
Agreement is in effect, at the rates set forth on Schedule I attached hereto.
B. In the event that this Agreement commences on a date other
than on the beginning of any calendar month, or if this Agreement terminates on
a date other than the end of any calendar month, the fee payable hereunder by
the Trust shall be proportionately reduced according to the number of days
during such month that services were not rendered hereunder by the Manager.
6. General Provisions
A. With respect to securities in the Account, the Manager will
purchase such securities from or through and sell such securities to or through
such persons, brokers or dealers as the Manager shall deem appropriate to carry
out the policy with respect to brokerage as set forth in the Prospectus, or as
the Trust may direct in writing from time to time. It is understood that it is
desirable for the Trust that the Manager have access to supplemental research
and securities and economic analysis and statistical services and information
with respect to the availability of securities or purchasers or sellers of
securities provided by brokers and of use to the Trust although such access may
require the allocation of brokerage business to brokers who execute transactions
at a higher cost to the Trust that other brokers which provide only execution of
portfolio transactions. Therefore, the Manager is authorized to place orders for
the purchase and sale of securities with such brokers, subject to review by the
Trustees from time to time with respect to the extent and continuation of this
practice. It is understood that the services provided by such brokers may be
useful to the Manager in connection with its services to clients other than the
Trust and the Unitholders.
B. The Manager will pay all of its expenses incurred in the
performance of this Agreement, including but not limited to fees, if any, of
Sub-Advisors retained by the Manager, salaries and other compensation of its
officers and employees and all other costs of providing such advice, portfolio
management and information and reports to the Trustees as are required
hereunder.
C. Subject to the provision of paragraph B of Section 6 of
this Agreement with respect to advance notice of the Manager's taking on of new
clients or ventures of material
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significance, nothing herein contained shall limit or restrict the right of the
Manager to engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
D. This Agreement may be terminated, without the payment of
any penalty, by either party hereto on not more than sixty (60) days' nor less
than thirty (30) days' written notice to the other party. Any termination by the
Trust shall be pursuant to a vote of a majority of the Trustees or by vote of a
majority of outstanding voting securities (as defined in the Act) of the Trust.
E. This Agreement will automatically terminate in the event of
its "assignment" (as such term is defined in the Act).
F. The Manager may rely on the authenticity, truth and
accuracy of, and will be fully protected in acting upon:
(i) any notice, direction, certification, approval or other
writing of the Trust, if evidenced by an instrument
signed by the Chairman of the Board or any other
Trustee of the Trust or the President, any Executive
Vice President, Senior Vice President, any Vice
President or the Treasurer of the Trust;
(ii) any copy of a resolution of the Trustees, if certified
by the Chairman of the Board or any other Trustee of
the Trust, or the Secretary or any Assistant Secretary
of the Trust; and
(iii) any notification or information provided by the
custodian of the assets in the Account, if evidenced by
an instrument signed by an officer of the custodian.
G. The Manager may rely on, and will be fully protected with
respect to any action taken or omitted in reliance on, any information,
statement or certificate provided or delivered to the Manager by or on behalf of
the Trust with respect to any matter concerning the Trust and the operation and
administration of the Account. The Manager is expressly authorized to consult
with the Trust with respect to any matters arising in the administration of the
Account and to act on the advice of the Trust; provided, however, that nothing
herein shall limit the full responsibility of the Manager for the management of
the Account as provided herein.
H. Communications from the Manager to the Trust or Trustees
will be addressed to:
RSI Retirement Trust
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, President and Trustee
Communications to the Manager from the Trust or the
Trustees will be addressed to:
Retirement System Investors Inc.
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000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Vice President,
Counsel and Secretary
In the event of a change of address, communications will be
addressed to such new address as designated in a written notice from the Trust,
the Trustees or the Manager, as the case may be. All communications addressed in
the above manner and by registered mail or delivered by hand shall be sufficient
under this Agreement.
I. This Agreement is governed by the laws of the State of New
York (without reference to such State's conflict of law rules).
J. No term or provision of this Agreement may be amended,
modified or waived without the affirmative vote or action by written consent of
the Manager and the Trust and in accordance with the Act.
IN WITNESS WHEREOF, the Manager and the Trust have executed this
Agreement as of the date first written above.
RSI RETIREMENT TRUST
By:
------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President and Trustee
RETIREMENT SYSTEM INVESTORS INC.
By:
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President, Counsel
and Secretary
NOTE: ANY AGREEMENT, OBLIGATION OR LIABILITY MADE, ENTERED INTO OR
INCURRED BY OR ON BEHALF OF RSI RETIREMENT TRUST BINDS ONLY
THE TRUST ESTATE, AND NO TRUST PARTICIPANT, TRUSTEE, OFFICER
OR AGENT THEREOF ASSUMES OR SHALL BE HELD TO ANY LIABILITY
THEREOF.
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SCHEDULE I
Retirement System Investors Inc. shall act as the Manager for each of
the Investment Funds of the Trust. For its services, the Manager is entitled to
receive a fee, calculated daily and paid monthly, based on a percentage of the
average net assets of the respective Investment Funds. The specific percentage
for each Investment Fund is set forth in the following table:
Fee (% of Average Daily Net Assets)
Actively Managed Bond Fund
First $250 Million 0.34%
Over $250 Million 0.30%
Intermediate-Term Bond Fund
First $100 Million 0.40%
Over $100 Million 0.35%
Short-Term Investment Fund 0.25%
Core Equity Fund
First $250 Million 0.52%
Over $250 Million 0.48
Value Equity Fund
First $150 Million 0.54%
Over $150 Million 0.48%
International Equity Fund 0.80%
Emerging Growth Equity Fund
First $150 Million 1.04%
Over $150 Million 0.94%
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