Exhibit Number (5) (a)
The Value Equity Portfolio
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT dated as of July 24, 1990, between the Alameda-Contra
Costa Medical Association Collective Investment Trust for
Retirement Plans (the "Trust") and Towneley Capital Management,
Inc. as an investment manager ("Investment Manager") to manage
the Equity Portfolio (the "Portfolio").
RECITALS
The Trust has been established to provide a satisfactory
diversification of investments for various Participating Trusts
which are IRAs that are exempt under Section 408(e) of the
Internal Revenue Code of 1986, as amended (the "Code"), and that
are maintained in conformity with Section 408(a) of the Code, or
trusts described in Section 401(a) of the Code that are exempt
from taxation under Section 501(a) of the Code and form parts of
stock bonus, pension or profit sharing plans, both of which are
subject to the provisions of the Employee Retirement and Income
Security Act of 1974 and the rules and regulations in force
thereunder;
The Trust is or will be registered with the Securities and
Exchange Commission (the "Commission") as an open-end diversified
management investment company under the Investment Company Act;
The Supervisory Committee of the Trust appointed Xxxxx Fargo
Bank, N.A. as Custodial Trustee of the Trust, to have custody of
the assets of each Portfolio; and
The Supervisory Committee desires Investment Manager, as an
investment manager of the Trust, to manage the investment of the
assets of the Portfolio, and the Investment Manager is willing to
render such services;
NOW THEREFORE, in consideration of the mutual covenants and
agreements herein, the parties hereto hereby agree as follows:
Section 1. Defined Terms. Unless otherwise defined in this
Agreement, capitalized terms used in the Agreement have the
meanings defined in the Declaration of Trust, dated February 9,
1990, establishing the Trust (the "Declaration of Trust").
Section 2. Agreement to Act as Investment Manager, Etc.
(a) Subject to the direction and control of the Supervisory
Committee of the Trust, the Investment Manager will manage the
investment and reinvestment of the assets of the Portfolio as
follows:
(i) The Investment Manager will maintain a
continuous investment program for the
Portfolio;
(ii) The Investment Manager will determine what
securities shall be purchased or sold by the
Portfolio;
(iii) The Investment Manager will arrange for the
purchase and sale of securities held in the
Portfolio by placing orders pursuant to its
determinations either directly with the
issuer or with any broker or dealer who deals
in the securities in which the Trust is
active;
(iv) The Investment Manager will determine what
portion, if any, of the Portfolio shall be
held uninvested; and
(v) In connection with the foregoing, the
Investment Manager shall be entitled to
exercise each and every of the powers with
respect to the Portfolio set forth herein and
in the Trust's Registration Statement filed
with the Commission.
(b) Any investment program maintained by the Investment Manager
under this Agreement shall at all times conform to, and be in
accordance with any requirements imposed by: (i) the provisions
of the Investment Company Act, Investment Advisors Act, any rules
or regulations in force thereunder, and all other applicable
federal and state laws; (ii) the provisions of the Declaration of
Trust and the Rules and Procedures of the Supervisory Committee
as in effect from time to time and as communicated to the
Investment Manager by the Trust in writing; Any policies and
determinations of the Supervisory Committee of the Trust as in
effect from time to time and as communicated to the Investment
Manager by the Trust in writing; and (iv) the investment
objectives and policies of the Trust and the Portfolio, as
reflected in the Trust's Registration Statement that is filed
with the Commission. The Investment Manager shall invest the
assets of the Portfolio in the manner provided above and shall
diversify the Portfolio as contemplated by the Registration
Statement.
(c) The Investment Manager shall give the Trust the benefit of
its best judgment and effort in rendering services hereunder, but
the Investment Manager shall not be liable for any loss sustained
by reason of the adoption of any investment policy or decision by
the Supervisory Committee or in any event whatsoever, in the
absence of negligence, recklessness, willful misfeasance or bad
faith. Nothing herein contained shall, however, be construed to
protect the Investment Manager against any liability to the Trust
or the holders of Units issued by the Trust by reason of willful
misfeasance, bad faith or negligence in the performance of its
duties, or by reason of its reckless disregard of its obligations
and duties under this Agreement.
(d) On occasions when the Investment Manager deems the
purchase, sale, or loan of a security to be in the best interest
of the Trust as well as other customers, the Investment Manager,
to the extent permitted by applicable law, may aggregate the
securities to be so purchased, sold or loaned in order to obtain
the best execution or lower brokerage commissions, if any. In
such event, allocation of the securities so purchased or sold, as
well as the expenses incurred in the transaction, will be made by
the Investment Manager in the manner it considers to be the most
equitable and consistent with its obligations to the Trust and to
such other customers.
(e) The Investment Manager may cause the Portfolio to pay a
broker which provides brokerage and research services to the
Investment Manager a commission for effecting a securities
transaction in excess of the amount another broker might have
charged. Such higher commissions may not be paid unless the
Investment Manager determines in good faith that the amount paid
is reasonable in relation to the services received in terms of
the particular transaction of the Investment Manager's overall
responsibilities to the Portfolio.
(f) The Investment Manager shall maintain books and records
with respect to the securities transactions of the Portfolio and
shall render to the Supervisory Committee such periodic reports.
The Investment Manager shall assist in the preparation of reports
to Participating Trusts, to the Commission, and in all audits of
the Trust.
Section 3. Allocation of Expenses and Compensation of the
Investment Manager.
(a) The Investment Manager shall pay all expenses incurred by
it in connection with acting as investment adviser, other than
costs (including taxes and brokerage commissions) of securities
purchased for the Trust. Expenses incurred by the Investment
Manager include the costs of statistical and research data, other
accounting services, rendering periodic and special reports to
the Supervisory Committee and other costs associated with
providing investment research and portfolio management.
(b) The Trust agrees to pay the Investment Manager and the
Investment Manager agrees to accept as full compensation for all
services rendered by the Investment Manager as such, a fee for
its services for the Portfolio established under Section 4.1 of
the Declaration of Trust at an annual rate of 1% of the aggregate
fair market value of the assets of such Portfolio. The fee shall
be payable in advance, quarterly, as billed by the Investment
manager. The quarterly fee shall be determined by the average of
the month-end net fair market value of the Portfolio's assets
during the calendar quarter immediately preceding the quarter
with respect to which such fee is paid.
Section 4. Duration, Termination and Amendment.
(a) This Agreement shall become effective as to the Portfolio
immediately upon approval by a majority of the outstanding Units
of the Portfolio and by a majority of the members of the
Supervisory Committee who are not parties to this Agreement or
"interested persons" of any such party as that term is used in
the Investment Company Act, cast in person at a meeting of the
Supervisory Committee called for the purpose of voting on this
Agreement. This Agreement shall remain in effect for one year
after the date it becomes effective and from year to year
thereafter, but only so long as such continuance is approved at
least annually either by the vote of a majority of the members of
the Supervisory Committee, including specific approval by a
majority of such persons who are not parties to this Agreement or
"interested persons" of any such party as that term is used in
the Investment Company Act, or by the vote of a majority of the
outstanding Units of such Portfolio, or by the Investment
Manager. This Agreement shall automatically and immediately
terminate in its entirety in the event of the assignment of this
Agreement within the meaning of Section 15(a)(4) of the
Investment Company Act.
(b) No provision of this Agreement may be changed, waived,
discharged or terminated as to any Portfolio orally, but only by
an instrument in writing signed by the Trust and the Investment
Manager and no amendment of this Agreement shall be effective
until approved by the vote of a majority of the members of the
Supervisory Committee who are not parties to this Agreement or
"interested persons" of any such party as that term is used in
the Investment Company Act, cast in person at a meeting called
for the purpose of voting on such amendment, and, if required by
the Investment Company Act, the vote of a majority of the
outstanding Units of the Portfolio.
Section 5. Quarterly Reports. The Investment Manager will
prepare and furnish to the Supervisory Committee, at least
quarterly, an account appraisal, transaction summary, transaction
ledger and brokerage commission reports.
Section 6. Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of
California.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers, all
as of the day and year first above written.
ALAMEDA CONTRA COSTA MEDICAL
ASSOCIATION COLLECTIVE INVESTMENT
TRUST FOR RETIREMENT PLANS
By: (Signature) Xxxx Xxxxxxx
Chairman, Supervisory Committee
TOWNELEY CAPITAL MANAGEMENT, INC.
By: (Signature) Xxxxxx XxXxxx
Chairman
This fee schedule is an integral part of the Investment Advisory
Agreement dated July 24, 1990.
INVESTMENT ADVISORY FEES
1. Payable in advance on the first of each calendar quarter.
2. Quarterly fee calculated as follows on the basis of the
average of the fair market value, including accrued income, of
the cash and securities in the fund on the last days of each of
the preceding three months. The initial quarter's advisory fee
shall be calculated on the basis of the starting value of the
Fund.
a) 0.2500 per cent of the first ten million dollars of assets
consisting of the aggregate of all cash and the fair market value
of all securities.
b) 0.1875 per cent of the second ten million dollars of assets
calculated as in (a) above.
c) 0.1375 per cent of the next thirty million dollars of
assets calculated as in (a) above.
d) 0.1125 per cent of the next fifty million dollars of assets
calculated as in (a) above.
e) 0.1000 per cent on excess above one hundred million dollars
of assets calculated as in (a) above.
f) Minimum quarterly fee is $25,000.00
3. If this Agreement shall commence on a day which is not the
first day of a calendar quarter, the fee for the quarter in
question will be appropriately prorated.
4. If this Agreement shall terminate prior to the last day of a
calendar quarter, the fee paid for such quarter following the
date of termination will be prorated.
5. This Agreement assumes an Equity Portfolio where client
negotiates and directs brokerage commission.
APPROVED
(Signature) Xxxxxxx X. Xxxxxxx Date: 7-11-96
Alameda Contra Costa Medical Association
APPROVED
(Signature) Xxxxxx XxXxxx Date: 0-0-00
Xxxxxxxx Xxxxxxx Xxxxxxxxxx, Inc.
