HomeMy WebLinkAboutGalliard Captial Management, Inc. Investment Advisory Agreement -2007 08 24
Galliard Capital Management, Inc.
Investment Advisory Agreement
This Agreement is made as of the 2"1 7~ay of AvGvS-' , 2007, by and between Galliard Capital
Management, Inc., the Investment Advisor (herein "Advisor") and the City of Winter Springs
(herein "Principal") in regard to the management of certain assets of the Defined Benefit Plan
and Trust for employees of City of Winter Springs(herein "Account").
Principal wishes to appoint Advisor to manage certain assets. Therefore, the parties hereto
agree as follows:
1. Appointment and Acceptance. Principal hereby appoints, and Advisor hereby
accepts its appointment, as the investment manager with respect to the
Account. Advisor will act as the investment manager for Principal for the
purposes, to the extent, and in the manner and within the limitations set forth in
this Agreement.
2. Advisory Services and Authority. Advisor shall have full discretionary
authority with respect to the Account, subject to written investment objectives
and guidelines established for the Account from time to time (attached as
Exhibit 1) and any other restrictions Principal may impose by notice in writing to
Advisor. The sole standard of care imposed upon Advisor by this Agreement is
to act with the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and with
like aims.
Advisor, as agent and attorney-in-fact with respect to the assets, may buy, sell,
exchange, convert or otherwise trade in securities or other investments,
including money market instruments and place orders for the execution of such
transactions with and through such brokers, dealers, or issuers as Advisor
selects, or which Principal directs Advisor to use. Advisor may purchase
securities of an investment company for which the Advisor or any other affiliate
of Wells Fargo acts as investment advisor or similarly invest in collective funds
trusteed by Wells Fargo Bank, N.A. and advised by Advisor, only following prior
written direction by the Principal.
3. Custodial Services. Advisor will not be custodian for the assets of the
account. Advisor will work with Principal's appointed custodian and will provide
necessary and customary information to the custodian. Advisor is not
authorized to direct delivery or payment to itself or to direct any disposition of
any of the assets under management except to Principal or its duly appointed
custodian.
4. Income Reinvestment. All contributions, and interest, dividend, or other income
added to the Account, including capital gains from sale of assets, shall be
managed by Advisor under this Agreement. Daily investment of principal and
income shall be effectuated by Advisor.
5. Asset Withdrawal. Principal may at any time, upon written notice or verbal
notice if written authorization is on file with Advisor, withdraw all or part of the
property or assets in the Account, or the liquidated value thereof.
6. Valuation and Reporting. Advisor will provide the Principal or its designated
agent with an appraisal of the Account as of the last day of each calendar
quarter (or more frequently if desired). Such appraisal shall consist of a written
summary of the Account's transactions and assets on the appraisal date and a
report of the investment performance of the funds and securities held in the
Account compared to a mutually agreed upon benchmark.
7. Fiduciary Responsibility. Advisor hereby represents and warrants that it is a
registered investment adviser under the Investment Advisers Act of 1940. With
respect to the performance of its duties under this Agreement with regard to the
Account, Advisor is a "fiduciary" as that term is defined in Section 3(21) of
ERISA and section 112.656, Florida Statutes.
8. Liability of Advisor. Advisor will furnish investment advice in good faith in a
prudent manner and shall be liable for, and agrees to promptly indemnify and
hold harmless the Principal for any cost or expense, including attorneys' fees
and costs and taxes imposed on the Account, by reason of its own negligence,
malfeasance, failure to act in accordance with the Fiduciary provisions of
ERISA, or breach of its representations and warranties, covenants or
agreements under this Agreement, or violation of applicable law. Advisor shall
otherwise have no liability for any error in judgment, any loss suffered by the
Account due to asset value depreciation or the claims of a third party not within
Advisor's control.
9. Use of Security BrokerlDealers and Aggregation of Orders. Advisor will
select and utilize whatever independent broker/dealer organizations to effect
transactions that Advisor, in its best judgment, believes to be competitive with
respect to execution and price of services. Advisor will not utilize an affiliated
broker/dealer without written direction from Principal. Advisor shall not be liable
for any act or omission of any securities broker/dealer chosen with reasonable
care. Principal agrees that Advisor may, to the extent permitted by law,
aggregate sales and purchase orders of securities held in the Account with
similar orders being made simultaneously for other accounts managed by
Advisor if in Advisors judgment, such aggregation will result in an overall
economic benefit to the Account. Principal agrees that Advisor may purchase
or sell securities to or from other accounts managed by Advisor if such
transactions are, in the judgment of the Advisor, consistent with the Account
investment goals and guidelines and deemed to be fair and equitable to both
accounts involved. Any such transactions shall be at fair market and there shall
be no transaction fees of any kind charged by Advisor in such transactions.
10. Fees. Advisor shall be paid fees for its services under this Agreement as
agreed according to the Fee Schedule presented in the attached Exhibit 2.
11. Amendment and Termination. This Agreement may be amended at any time
in writing in such manner as may be mutually agreed upon by Advisor and
Principal. It may be terminated at any time by either Advisor or Principal upon
thirty days written notice to the other. Any fees remaining outstanding and
balances owing to Advisor are due at the time of termination.
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12. Notices. Notice to Advisor shall be directed and mailed as follows:
Galliard Capital Management, Inc.
Attention: John R. Caswell
LaSalle Plaza - Suite 2060
800 LaSalle Avenue
Minneapolis, MN 55402-2033
Notice to Principal shall be directed and mailed as follows:
13. Confidential Information. All information provided to Advisor by Principal
shall be regarded as confidential by Advisor. Advisor may provide clients or
prospective clients from time to time a representative list of Advisor's current
clients. Advisor is authorized to include Principal's name on such a list unless
specifically directed by Principal in writing to exclude it from such a list.
Inclusion on such a list does not constitute an endorsement of Advisor or any
services provided by Advisor or its affiliates.
14. Services to other Clients. The parties hereto understand and agree that
Advisor and its affiliates render investment management advice to others who
mayor may not have investment policies, objectives, and investments similar to
those in this Account. Advisor may continue to give advice and take actions on
behalf of such other clients which differ from the advice and actions taken in
regard to this Account.
15. Written Disclosure Statement. Principal acknowledges receipt as of the date
of execution of this Agreement of Advisor's completed ADV Form, Part II and
expressly reserves the right in connection therewith to terminate this Agreement
without penalty within five business days following the date of execution.
16. Assignment. No assignment of this Agreement shall be made by Advisor
without the prior written consent of Principal.
17. Section Headings. The headings of sections in this Agreement are inserted
for convenience and reference and shall not be deemed to be a part of or used
in the construction of this Agreement.
18. Governing Law. This Agreement and all transactions hereunder shall be
governed by, interpreted, construed, and enforced in accordance with the laws
of the State of Florida with venue in Seminole County, Florida.
19. Successors and Assigns. This Agreement shall bind the successors and
assigns of Principal and shall bind the successors and assigns of Advisor.
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20. Effective Date. This Agreement shall be effective on the ~ day of tW6~J"
2007.
21. Severability. If any provision of this Agreement is held to be illegal or invalid,
such illegality or invalidity shall not affect the remaining provisions of this
Agreement, and such remaining provisions shall be construed and enforced as
if such illegal or invalid provision had never been inserted therein.
22. Entire Agreement. This Agreement contains the entire understanding of the
parties and supersedes all prior agreements and understanding between the
parties with respect to its subject matter. All Exhibits are hereby incorporated
into and made part of this Agreement.
23. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be an original, but all of which together shall constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year
first written above.
Principal
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Advisor
Galliard Capital Management, Inc.
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EXHIBIT 1
Investment Objectives & Guidelines
Principal will direct allocations to separate portfolios established pursuant to two
distinct fixed income mandates:
1. Intermediate Fixed Income mandate. The primary investment objective for the
intermediate fixed income mandate will be to provide for the safety of principal, while
generating a total rate of return above the Lehman Intermediate Aggregate Index.
To meet this mandate's investment objective, the portfolio will be invested 100% in the
Wells Fargo Fixed Income Fund A. The investment guidelines of this Fund are hereby
incorporated by reference into this agreement and Advisor will notify Plan Sponsor
immediately of any substantive changes to the guidelines.
2. Intermediate TIPS mandate. The primary objective of the TIPS mandate is to
generate a rate of return similar to the Lehman 1-10 year TIPS index. Advisor will invest
assets of this mandate's portfolio exclusively in TIPS and/or cash equivalents.
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EXHIBIT 2
Fee Schedule
Advisor will charge an annualized fee using the fee schedule below. The fee
will be calculated and paid quarterly based on the quarter end market value of
the Accounts.
Fees for Galliard investment management services:
Intermediate Mandate
0.25% on assets under management
TIPS Mandate
0.15% on assets under management
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Certification of Qualified Institutional Buyer ("QIB")
In order to utilize securities issued under Rule 144A each client of Adviser who is a QIB must
also qualify as a QIB. Please read the definition below and indicate whether you qualify by
checking the appropriate box below.
"Qualified Institutional Buyer" or "QIB" are Institutions or pension plans that own or invest at least
$100 million of securities in the aggregate on a discretionary basis.
We: D Meet the definition of QIB
~ DO NOT meet the definition of QIB
o Investment guidelines do not allow 144A securities
Client: C-f7'1 of ~/NTC"'^ .s~,(.11V6!
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Authorized Signature I
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Date
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