Exhibit 4(a)
RSI RETIREMENT TRUST
RETIREMENT SYSTEM INVESTORS INC.
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT effective as of October 2, 2002, 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 which are
qualified under Section 401(a) of the Code and individual retirement accounts
under Section 408(a) of the Code; and
WHEREAS, such pension and profit-sharing 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 an Investment Management Agreement dated May 1,
2000, 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 a
modification to the Emerging Growth Equity Fund Fee Schedule under Schedule I of
this Agreement) 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
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A. The Trust hereby designates, appoints, engages and retains the
Manager as 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
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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") and
the Unitholders, 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 at least annually 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
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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 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
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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. The Manager will prepare
presentations to Unitholders analyzing the Trust's overall performance based on
analysis of each Sub-Advisor's performance.
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
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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 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
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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
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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
(including the fees of a Sub-Advisor, if any), 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
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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 significance, nothing herein contained shall
limit or restrict the right of the Manager to engage in
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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
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Communications to the Manager from the Trust or the Trustees will be
addressed to :
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Retirement System Investors Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Vice President, Counsel and Secretary
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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: /s/ Xxxxxxx Xxxxxxxxx
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Name: Xxxxxxx Xxxxxxxxx
Title: President and Trustee
RETIREMENT SYSTEM INVESTORS INC.
By: /s/ Xxxxxxx X. Xxxxxx
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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)
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Actively Managed Bond Fund
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First $50 Million .40%
Next $100 Million .30
Over $150 Million .20
Intermediate-Term Bond Fund
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First $50 Million .40%
Next $150 Million .30
Over $200 Million .20
Short-Term Investment Fund
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First $50 Million .25%
Over $50 Million .20
Core Equity Fund and Value Equity Fund
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First $50 Million .60%
Next $150 Million .50
Over $200 Million .40
Emerging Growth Equity Fund
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Assets Where No Sub-Advisor 1.0%
is Employed (See following paragraph for
fees when one or more Sub-Advisors are
employed.)
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International Equity Fund
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First $20 Million .95%
Next $30 Million .70
Over $50 Million .55
For the portion of the Emerging Growth Equity Fund for which
Batterymarch Financial Management, Inc. serves as Sub-Advisor, the fee is 1.05%
of the average daily net assets under their management up to and including $25
million, 0.90% of average daily net assets for the next $75 million of average
daily net assets, and 0.80% of average daily net assets under their management
for amounts in excess of $100 million. For the portion of the Emerging Growth
Equity Fund for which Xxxxxxxxx Xxxxxx Management Inc. serves as Sub-Advisor,
the fee is 1.00% of the average daily net assets under their management.
For any Investment Fund, or portion thereof, which currently employs a
Sub-Advisor (the International Equity Fund and Emerging Growth Equity Fund) the
fee set forth above shall be reduced by 0.20% of average daily net assets if and
when such sub-advisory relationship is terminated without the retention of a
successor Sub-Advisor.
