Exhibit(5e)
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT dated as of October 30, 1997, between the
Alameda-Contra Costa Medical Association Collective
Investment Trust for Retirement Plans (the "Trust") and
Lazard Asset Management Division of Lazard Freres & Co. LLC
as an investment manager ("Investment Manager") to manage the
International Value Equity Portfolio (the "Portfolio").
RECITALS
The Trust has been established to provide a satis-
factory 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 part of stock
bonus, pension or profit sharing plans;
The Trust is registered with the Securities and
Exchange Commission (the "Commission") as an open-end
diversified management investment company under the
Investment Company Act of 1940, as amended (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 this
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 Advisers Act of 1940, as amended, 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;
(iii) any policies and determinations of the Supervisory
Committee of the Trust as in effect from time to time; 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 by the Supervisory
Committee. 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 obligation 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
or 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 and special reports as the
Supervisory Committee may reasonably request. The Investment
Manager shall assist in the preparation of reports to
Participating Trusts, to the Commission, and in all audits of
the Trust.
(g) The Supervisory Committee shall direct
the Custodial Trustee to keep safely in one or more separate
accounts in the name of the Trust all cash and securities of
the Trust delivered to the Custodial Trustee by the
Investment Manager. All securities held for the Trust that
are issued in bearer form may be held by the Custodial
Trustee or its agent in that form or in registered form. All
securities held for the Trust other than in bearer form shall
be registered in the name of any duly appointed and
registered nominee of the Custodial Trustee. The Custodial
Trustee shall pay for and receive all securities purchased
for the Trust. The Custodial Trustee shall make delivery of
securities sold by the Trust only upon payment. In
connection with any conversion of securities pursuant to
their terms, reorganization, recapitalization, redemption in
kind, consolidation, merger, change of par value or similar
conversion or upon the exercise of the subscription, purchase
or other similar rights represented by securities, the
Custodial Trustee shall exchange securities for other
securities or for other securities and cash. The Custodial
Trustee shall also collect all income and other payments due
with respect to all securities of the Trust and shall present
for payment when due all such securities.
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 first $1 million of the aggregate
fair market value of the assets of such Portfolio as
determined on each Valuation Date, and 75 basis points on the
balance. Payments of the Investment Manager's fee shall be
made quarterly on the relevant Valuation Date.
Section 4. Duration, Termination and Amendment.
(a) This Agreement shall become effective as
to the Portfolio as of the date first set forth above. This
Agreement shall remain in effect until April 1, 1999, and
from year to year thereafter, but only so long as such
continuance is approved at least annually (i) 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 and (ii) by the Supervisory Committee or by the vote of a
"majority" of the outstanding Units of the Portfolio as that
term is used in the Investment Company Act. This Agreement
may be terminated, on 60 days prior written notice, as to any
Portfolio at any time without the payment of any penalty by
the vote of a majority of the members of the Supervisory
Committee, 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 the 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, written reports evaluating,
analyzing, and approving the Portfolio.
Section 6. Change In Membership. The Investment
Manager shall notify the Supervisory Committee of any change
in its membership within a reasonable time after such change.
Section 7. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of
the State of California.
Section 8. Non-Exclusive Management. The Trust
understands that the Investment Manager and its affiliates
may furnish and may continue to furnish investment management
and advisory services to others, and that the Investment
Manager and its affiliates shall be at all times free, in
their discretion, to make recommendations to, and investments
for, others which may or may not have an interest in the
securities whose purchase and sale the Investment Manager
effects for the Portfolio. Actions taken by the Investment
Manager on behalf of the Portfolio may be the same as, or
different from, actions taken by the Investment Manager on
its own behalf or for others and actions taken by the
Investment Manager's affiliates, officers, directors,
partners, employees of the Investment Manager or its
affiliates, the family members of such persons or other
investors.
Section 9. Conflict of Interest. The Trust agrees
that the Investment Manager may refrain from providing any
advice or services concerning securities of companies of
which any officers, directors, partners or employees of the
Investment Manager or any of the Investment Manager's
affiliates are officers or directors, or of companies for
which the Investment Manager or any of the Investment
Manager's affiliates act as financial adviser, investment
manager or in any capacity that the Investment Manager deems
confidential, unless the Investment Manager determines in its
sole discretion that it may appropriately do so. The Trust
appreciates that, for good commercial and legal reasons,
material nonpublic information which becomes available to
affiliates of the Investment Manager through these
relationships cannot be passed on to the Investment Manager
or the Trust.
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) Xxxxxx Xxxxx, M.D.
Chairman, Supervisory Committee
LAZARD FRERES & CO. LLC
By (Signature) Xxxxxx X. Xxxxxxxxxx
Its Managing Director
