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									                       INVESTMENT MANAGEMENT AGREEMENT

       THIS INVESTMENT MANAGEMENT AGREEMENT (the “Agreement”) is executed and
entered into as of the    day of                      , 19 , by and between
                                    (the “Investment Manager”) and the Client
(the “Health Fund”).

                                       WITNESSETH:

        WHEREAS, the Health Fund has established a plan for investment of a portion of the funds
under its management in an equities portfolio; and

      WHEREAS, the Investment Manager has represented itself to the Health Fund as an expert
manager; and

       WHEREAS, the Health Fund has selected the Investment Manager based on its
representations in a competitive selection process and wishes to appoint the Investment Manager as
investment manager of certain assets of the Health Fund (the “Assets”), and the Investment Manager
wishes to accept this appointment on the terms and conditions set out below.

       NOW THEREFORE, the Investment Manager and the Health Fund agree as follows:

                                            ARTICLE I

                                           DEFINITIONS

       As used herein, the following terms have the following respective meanings:

        Agent: Any Person appointed by the Investment Manager or under the direct or indirect
control of the Investment Manager, which Person shall not include a broker-dealer registered under
the Securities Exchange Act of 1934, or other financial institution through which transactions are
effected on behalf of the Health Fund acting in its capacity as a provider of services for the Health
Fund.

        Assets: The investment assets and cash of the Health Fund initially set forth on Schedule I
attached hereto and incorporated herein, together with all interest and income therefrom, all proceeds
thereof, and such additional investment assets and funds as may be allocated by the Health Fund to
the Investment Manager for management hereunder.

       Compensation: The monetary consideration paid to the Investment Manager as calculated in
accordance with Schedule IV attached hereto and incorporated herein.
        Custodian: Any Person charged with the safekeeping of Assets, and having such powers,
duties, and rights as set forth in a custody agreement between the Health Fund and such Person (on
the date hereof, Frost National Bank).

       Health Fund: Fire and Police Retiree Health Care Fund, San Antonio.

       Investment Manager:                                                             .

       Investment Mandate: Those performance and investment objectives and guidelines set forth
in Schedule II attached hereto and incorporated herein, as may be amended from time to time by the
Health Fund in writing.

         Person: An individual, a corporation, an association, a partnership, an organization, a limited
liability company or partnership, a business, a trust, an estate, or any other legal entity.

       Standards of Conduct: Those Standards of Conduct set forth in Schedule V, attached hereto
and incorporated herein, as may be amended from time to time by the Health Fund in writing.

                                            ARTICLE II

        APPOINTMENT, AUTHORITY AND RESPONSIBILITY OF INVESTMENT MANAGER

        2.01 Appointment. The Health Fund hereby appoints the Investment Manager as the
manager of the Assets, and Investment Manager agrees to serve, on the terms and conditions set forth
herein.

        2.02 Management of Assets. The Investment Manager shall invest and reinvest the Assets
in accordance with the Mandate and, in connection therewith, may purchase, sell, and otherwise deal
with the Assets, on behalf of the Health Fund and in the name of the Health Fund, the Custodian, any
sub-custodian appointed by the Custodian, or any nominee of either, and on terms and conditions
determined by the Investment Manager in a manner consistent with the provisions hereof, and may
directly place orders for purchases and sales of the Assets; provided, however, that the Custodian
shall nevertheless retain custody of all Assets.

        2.03 Investment Mandate. The Investment Manager acknowledges that the Health Fund
has established the Investment Mandate for the Assets, and that failure to consistently meet such
Investment Mandate may result in termination of this Agreement.

        2.04 Withdrawal of Assets from Management. By notice to the Investment Manager, the
Health Fund may withdraw from and decrease the Assets managed by the Investment Manager
hereunder upon five (5) days prior written notice. Any such notice shall set forth the amount of any
such withdrawal or identify the Assets to be withdrawn, the date as of which such withdrawal shall
be effective and such other information that the Health Fund deems necessary or appropriate. On
and after the effective date of such withdrawal, the Investment Manager shall cease to be responsible
for future investment of the Assets withdrawn.

        2.05 Brokerage. The Health Fund may, in writing and from time to time, direct the
Investment Manager to effect orders through one or more brokers or dealers designated by the Health
Fund, provided that the direction is within the brokerage policy of the Investment Manager. The
Investment Manager, in seeking to place such orders, shall effect them with such brokers or dealers
unless the Investment Manager can obtain better net best execution elsewhere. In selecting brokers
or dealers, the Investment Manager shall use reasonable efforts to seek the most favorable
combination of price and execution, and may consider the fact that a broker or dealer has furnished,
or has agreed to furnish in the future, statistical, research or other information or services which
enhance the Investment Manager’s investment research and portfolio management capability for
investing the Assets. The Investment Manager shall also not engage in prohibited transactions, to the
extent set forth in § 406(b) of ERISA, or in transactions that involve a broker acting as a principal
where the broker is also the Investment Manager.

         2.06 Fiduciary Duties. The Investment Manager acknowledges that it is a fiduciary of the
Health Fund with respect to the investment and management of the Assets. The Investment Manager
shall discharge all of its duties and exercise all of its powers hereunder (i) solely in the interest of the
Health Fund, (ii) with the care, skill, prudence, and diligence under the circumstances prevailing that
a prudent expert who is familiar with such matters would use in discharging such duties and
exercising such powers, and (iii) in a manner that avoids conflicts of interest and self-dealing, and
(iv) in compliance with federal and state securities laws and regulations.

         The Investment Manager and its affiliates perform investment advisory and management
services for various clients. The Health Fund agrees that the Investment Manager may give advice
and take action in the performance of its duties with respect to any of its other clients or with respect
to its officers or employees which may differ from advice given or the timing or nature of action
taken with respect to the Assets.

        2.07 Administration and Reports. The Investment Manager shall keep accurate and
detailed accounts and records of its services hereunder, the Assets and all transactions involving the
Assets, including such records as are customary or required under the Investment Advisers Act of
1940, any other applicable law, regulation, or requirement. The Investment Manager agrees that all
accounts and records relating to said services and Assets shall be open to inspection, copying, and
audit at all reasonable times by any Person designated by the Health Fund. Upon termination, the
Health Fund may request all books and records be transferred to it, except for those books and
records that are required to be, or are customarily, retained by the Investment Manager.

       The Investment Manager agrees that, except for accounts and records routinely or customarily
destroyed in the ordinary course of business in compliance with existing laws governing the retention
of such documents, no such accounts and records may be destroyed by it unless the Investment
Manager first notifies the Health Fund in writing of its intention to do so and then provides the
Health Fund with the opportunity to take possession of such accounts and records as the Health Fund
and the Investment Manager shall mutually agree.

        2.08 Reporting. The Investment Manager shall provide the Health Fund and the Health
Fund’s staff, auditors, accountants, and other professional advisers, with such documents, reports,
data, and other information at such times as the Health Fund may reasonably required. Such
information shall be in a form satisfactory to, and approved by, the Health Fund and agreed to by the
Investment Manager in its reasonable discretion. The required reports may include reports of the fair
market value of the Assets; use of soft dollars; performance reports; and statements to the Health
Fund and the Custodian confirming all transactions relating to the Assets. The Investment Manager
shall also provide the Custodian with such documents, reports, data, and other information at such
times as the Custodian or the Health Fund may reasonably require. The current list of reporting is set
forth in Schedule III.

        The Investment Manager shall meet with the Health Fund at such times and places as the
Health Fund may reasonably request. The Investment Manager shall regularly consult with the
Health Fund and its staff to provide full information regarding portfolio management strategy and
analysis, in order to assist the Health Fund’s development of a diversified, skilled, and balanced team
approach to quantitative investment of its funds. This interface shall include regular telephone
communication, exchange of written data and analysis, extended working periods at the offices of
both the Investment Manager and the Health Fund and other interaction as requested by the Health
Fund. The Investment Manager shall consult with and inform the Health Fund’s staff as requested in
development of portfolio investment ideas, strategy and execution, as well as ongoing evaluation of
strategy and performance. The Investment Manager shall attend performance reviews at the offices
of the Health Fund at least annually.

       The Investment Manager shall use best efforts to review all performance and other reports
provided to it by the Custodian with respect to the Assets and notify the Health Fund monthly in
writing of any material errors or discrepancies that have an adverse effect on the Assets. The
Investment Manager shall also regularly review data provided by the Health Fund or its Custodian on
the Health Fund’s aggregate holdings when making investments with the Assets and promptly notify
the Health Fund if any transaction triggers a legal filing or reporting obligation under applicable law.

       2.09 Proxies. Unless it receives notice from the Health Fund, the Investment Manager is
authorized to vote proxies relating to any securities of the Assets on behalf of the Health Fund. The
Health Fund represents that proxy voting is not reserved to any other party.

                                           ARTICLE III

                                           COMPENSATION

      For each calendar quarter hereafter during which this Agreement is in effect, the Investment
Manager shall be paid Compensation in arrears for its services hereunder.
                                           ARTICLE IV

               REPRESENTATIONS AND WARRANTIES OF INVESTMENT MANAGER

       The Investment Manager hereby represents and warrants to the Health Fund as follows:

        (a)      The Investment Manager is duly organized, validly existing, and in good standing
under the laws of the state of its organization and has full corporate power and authority to carry on
its business as it has been and is conducted. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby are within the power of the Investment
Manager and have been duly authorized by all necessary corporate and other action.

        (b)     Neither the execution and delivery of this Agreement nor the consummation of the
transactions provided herein will violate any agreement to which the Investment Manager is a party
or by which it is bound, any law, regulation, order, or any provision of the charter documents to the
Investment Manager.

         (c)    The Investment Manager has completed, obtained, and performed all registrations,
filings, approvals, licenses, authorizations, consents, or examinations required by any government or
governmental authority for entry into this Agreement and performance of its acts contemplated by
this Agreement, and the Investment Manager shall maintain such proper authorizations during the
term hereof. The Investment Manager is and shall remain registered with the Securities and
Exchange Commission pursuant to the Investment Advisers Act of 1940.

        (d)   The personnel of the Investment Manager responsible for discharging the Investment
Manager’s duties and obligations under this Agreement are and will be individuals experienced in
the performance of the various functions contemplated by this Agreement. None of such individuals
has been found guilty of any violation of any federal or state securities law or the NASD Code of
Conduct.

        (e)     Neither any representation or warranty contained in this Agreement nor any written
statement, certificate, or document furnished or to be furnished to the Health Fund by or on behalf of
the Investment Manager pursuant to this Agreement contains or will contain any misstatement of a
material fact or omits or will omit to state a material fact necessary to make the statements contained
herein or therein not misleading.

                                            ARTICLE V

                             COVENANTS OF INVESTMENT MANAGER

       The Investment Manager covenants with the Health Fund as follows:
       (a)    The Investment Manager covenants that it will comply with all requirements which
any federal or state law or regulation may impose with respect to the subject matter of or transactions
contemplated by this Agreement, including, without limitation, all transactions involving the Assets,
and will promptly cooperate with and furnish information to the Health Fund regarding such
requirements.

        (b)    The Investment Manager covenants that it shall fully and faithfully discharge all its
obligations, duties, and responsibilities pursuant to this Agreement, and refrain from transactions in
which it may have a conflicting material interest (direct or indirect) without prior written consent.

        (c)     The Investment Manager shall promptly, and in any case within five (5) calendar
days, notify the Health Fund in writing if any of the representations and warranties of the Investment
Manager set forth in this Agreement shall cease to be true at any time during the term of this
Agreement, or if there is any material change in the management personnel of the Investment
Manager or the professional personnel actively involved in rendering services hereunder, or any
change in control of the Investment Manager.

        (d)     The Investment Manager shall annually provide the Health Fund with copies of its
financial statements (for publicly-owned Managers, audited) as soon as they are available.

        (e)      If such information is readily accessible to the Investment Manager, the Investment
Manager shall assist the Health Fund and the Custodian as necessary to prepare required reporting or
regulatory forms and filings regarding the Assets; to take action necessary to recover any taxes
improperly paid or withheld; and to pursue any legal claims relating to any of the Assets. If such
assistance requires addition of personnel, substantial reprogramming or addition of data processing
capabilities, it shall be at the Health Fund’s expense.

        (f)     The Investment Manager shall disclose to the Health Fund (i) any non-routine SEC
inquiry or investigation (or similar federal or state investigation), (ii) any litigation alleging breach of
fiduciary relationship; and (iii) any claims submitted to “errors and omissions” or fiduciary liability
insurance carriers.

        (g)    The Investment Manager, in writing, shall disclose any “soft dollar” arrangements or
practices with any broker and shall also disclose any affiliate brokerage relationship relating to the
Assets.

                                             ARTICLE VI

                                           INDEMNIFICATION

        6.01    Indemnity from Investment Manager.

       (a)     The Investment Manager agrees to indemnify and hold harmless the Health Fund and
its employees, trustees, and agents (any and all of whom is/are referred to as “Indemnified Party”),
jointly and severally, from and against any and all losses, claims, damages, judgments, or liabilities
(any and all of which is/are referred to as “Damages”), joint or several, of every kind and description,
excluding consequential, incidental and special damages, to which the Indemnified Party may
become subject, insofar as such Damages are caused by or arise directly out of:

       (1)   the negligence, willful misconduct or breach of fiduciary duty on the part of
Investment Manager and its Agents; or

       (2)     a breach of this Investment Manager Agreement.

         For purpose of this Agreement, the term “negligence” shall mean failure to exercise the care,
skill, prudence and diligence under the circumstances then prevailing which a prudent person acting
in a similar capacity, with the same resources, and familiar with like matters would exercise in the
conduct of an enterprise of a like character with like aims.

         (b)    The Investment Manager shall indemnify and hold harmless an Indemnified Party,
jointly and severally, for all costs and expenses (including attorney’s fees), excluding consequential,
incidental and special damages, incurred by and Indemnified Party, in connection with any
investigation, claim, action, suit, proceeding, demand, or judgment, which results in any Damages,
which are subject to the above indemnities to the Indemnified Party only as a result of a final
judgment by a court of competent jurisdiction or as a result of a settlement or by other final
determination as mutually agreed upon by the parties.

         (c)    Investment Manager shall not be liable for any default or delay in the performance of
its obligations under this Agreement if and to the extent such default or delay is caused, directly or
indirectly, by: flood, earthquake, elements of nature or acts of God, riots, civil disorders, rebellions
or revolutions in any country; or any other cause beyond the reasonable control of such party.

        6.02 Control of Settlement and Disputes. The Investment Manager shall, at its sole cost,
have control over the defense, payment, settlement, or other disposition of, or any action, claim, suit,
dispute, or proceedings (any and all of which is/are referred to in this Section 6.02 as “action”)
involving, any obligation or liability assumed by or imposed upon the Investment Manager pursuant
to this Article VI, with counsel selected by Investment Manager and which counsel is reasonably
acceptable to the Indemnified Parties, and the Investment Manager shall have the right to conduct
and control all negotiations and proceedings with respect thereto; provided, however, that (1) the
Investment Manager shall fully and promptly keep all Indemnified Parties informed of the status of
such actions, and (2) no such payment, settlement, or disposition shall be made without the prior
express written approval of the Health Fund, which approval shall not be unreasonably withheld.
The Indemnified Party or Indemnified Parties (if more than one) may select one counsel separate
from counsel to the Investment Manager and participate directly in the action if in the reasonable
written opinion of the separate counsel selected by the Indemnified Party or Indemnified Parties a
potential conflict of interest exists between such Indemnified Party or Indemnified Parties and the
Investment Manager. Indemnified Party(ies) shall cooperate with Investment Manager in all actions
covered by this Article VI.

         6.03 Insurance. The Investment Manager shall certify to the Health Fund upon execution
of this Agreement and at least annually thereafter the nature, amount of and carrier of insurance
insuring the Investment Manager against the indemnification liabilities of the Investment Manager
under this Agreement. The Investment Manager shall not cancel or modify such coverage, except
upon forty-five (45) days prior written notice to the Health Fund, and in any event shall maintain
insurance which meets the following minimum standards: directors and officers liability insurance
coverage of $_____ million, brokers blanket bond coverage of $___ million and errors and omissions
liability coverage of $_____ million, as applicable.

       6.04 Subrogation. In case of any payment by the Investment Manager to an Indemnified
Party pursuant to this Article VI, the Investment Manager shall be subrogated to the amount of such
payment to all rights of the Indemnified Party against any Person as respects the loss or expense
which has caused such payment to be made.

                                          ARTICLE VII

                                         MISCELLANEOUS

       7.01 The Health Fund’s Authority. The Health Fund represents and warrants that the
Health Fund is duly authorized and has full legal power and authority to employ and pay the
Investment Manager for the services contemplated in this Agreement.

      7.02 Violation of Law. Neither the execution and delivery of this Agreement nor the
consummation of the transactions provided herein will cause the Health Fund to violate any
agreement to which the Health Fund is a party or by which it is bound or any law, order, or decree.

       7.03 Headings. The headings in the Agreement have been inserted for convenience of
reference only and shall in no way restrict or otherwise modify any of the terms or provisions hereof.

        7.04 Further Acts and Assurances. In addition to the acts and deeds recited herein and
contemplated to be performed, executed and/or delivered by or on behalf of the parties hereto, the
parties hereby agree to perform, execute and/or deliver or cause to be performed, executed and/or
delivered any and all such further acts, deeds, and assurances as the other party may reasonably
require to consummate the transactions contemplated hereby.

       7.05 Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which counterparts shall together constitute but one and the
same instrument.

       7.06 Confidentiality. The Investment Manager shall retain as strictly confidential all
information about the Health Fund, the Assets, and financial transactions regarding the Assets
received in performing services contemplated by this Agreement; provided, however, that such
restrictions shall not apply to any disclosure required by regulatory authorities, applicable law or the
rules of any securities exchange which may be applicable.

       7.07 Assignment. The Investment Manager may not assign this agreement or any rights
and responsibilities hereby created without the prior written consent of the Health Fund.

       7.08 Publicity. No publicity release or announcement concerning this Agreement shall be
issued without advance written approval of the Health Fund.

        7.09 Severability. Should one or more provisions of this Agreement be held by any court
to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full
force and effect.

        7.10 Modifications-Waiver. No termination, cancellation, modification, amendment,
deletion, addition, or other change in this Agreement, or any provision hereof, or waiver of any right
or remedy herein provided, shall be effective for any purpose unless specifically set forth in writing
and signed by the party or parties to be bound thereby. The waiver of any right or remedy in respect
to any occurrence or event on one occasion shall not be deemed a waiver of such right or remedy in
respect to such occurrence or event on any other occasion.

        7.11 Governing Law; Jurisdiction. This Agreement shall be construed and enforced
according to the laws of the State of Texas, without regard to choice of law rules. The parties hereto
hereby submit to the jurisdiction of the courts of the State of Texas, or of the United States of
America sitting in the State of Texas, over any action, suit, or proceedings arising out of or relating
to this Agreement. Nothing herein shall affect the right of the Health Fund to serve process in any
manner permitted by law or limit the right of the Health Fund to bring proceedings against the
Investment Manager in the competent courts of any other jurisdiction or jurisdictions.

        7.12 Notices. All notices, reports, and other communications required hereunder shall be
in writing and shall be deemed properly delivered if delivered by hand, certified mail, overnight
courier, or telecopy (receipt confirmed), addressed as set forth below or to such other address or
marked for such other attention as the addressed party shall have designated in writing to the party:
        Health Fund:                                 Investment Manager:

       Fund Name:                              _________________________________
       Attn: Chair                             __________________________________
       Address:                                _____________________________

       Notice shall be deemed given upon receipt.

      7.13 Nondiscrimination. In connection with the performance of services under this
Agreement, the Investment Manager agrees not to discriminate against any employee or applicant for
employment because of age, race, religion, color, handicap, sex, physical condition, developmental
disability, sexual orientation, or national origin. This provision shall include, but not be limited to,
the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising;
layoff or termination; rates of pay or other forms of compensation; and selection for training,
including apprenticeship.

        7.14 Standard of Conduct. The Investment Manager shall not engage directly or indirectly
in any financial or other transaction with any trustee, staff member, or employee of the Health Fund
which would violate the Standards of Conduct.

      7.15 Integration. This Agreement supersedes all prior understandings and agreements
among the parties hereto.

        7.16 No Agency. Nothing in this Agreement or in any other document referred to herein
and no action taken pursuant hereto shall cause the Investment Manager to be treated as an agent of
the Health Fund except as expressly provided in and limited by the terms of this Agreement; shall be
deemed to constitute the Investment Manager and the Health Fund a partnership, association, joint
venture, or other entity; or, except as otherwise contemplated herein, shall otherwise cause the
Health Fund to be responsible for any action or inaction of the Investment Manager or any of its
officers, directors, employees, or agents.

       7.17. Attorneys’ Fees. The prevailing party in any action or proceeding to enforce this
Agreement or for a declaration of rights, or action for damages for breach of this Agreement, or any
provision hereof, shall be entitled to receive from the other party all costs and expenses, including
reasonable attorneys’ fees, incurred by the prevailing party in connection with such action or
proceeding.

                                           ARTICLE VIII

                       EFFECTIVE DATE, TERMINATION AND RESIGNATION

        8.01   Effective Date. This Agreement shall be effective as of the day and year first above
written.

        8.02 Termination. The status of the Investment Manager as investment manager hereunder
may by terminated upon written notice given by the Health Fund to the Investment Manager,
regardless of whether the Investment Manager has met the performance standards established by the
Health Fund. A decision by the Health Fund to terminate shall be within the sole discretion of the
Health Fund. Such termination shall take effect twenty (20) days following the receipt of such
notice, or on another date selected by the Health Fund. Upon the effective date of such termination,
the Investment Manager shall cease to perform any and all of its duties and obligations under this
Agreement.
       8.03 Resignation. The Investment Manager may resign as investment manager hereunder
upon thirty (30) days prior written notice to the Health Fund.

        IN WITNESS WHEREOF, the parties hereunto executed this Agreement as of the day and
year first above written.

                                  HEALTH FUND,
                                    CITY

                                  By: __________________________________________
                                        Chair

                                  ______________________________________________

                                  By: __________________________________________

                                  Title: _________________________________________

Schedules
I - Assets
II - Investment Mandate
III - Reporting
IV - Compensation
V - Standards of Conduct
                                 SCHEDULE I

                                     ASSETS

Initial Allocation of                     million U.S. dollars ($              ) in
cash and securities from the Health Fund’s holdings identified by the Health Fund.
                                          SCHEDULE II

                                   INVESTMENT MANDATE

Investment Manager:

Investment Objectives:

The Investment Manager will seek to provide the Fund with outstanding investment management.
Performance will be compared to the relevant manager peer group and the appropriate investment
benchmark.

Investment Guidelines:

The Manager must comply with all restrictions and guidelines set out in this document as well as any
applicable ones set out in the Investment Policy handbook.

This Investment Manager has been retained to invest in the following style:


Performance for this Manager will be benchmarked against the following index:


Performance will be compared to the following peer group:


Guidelines:

The Investment Manager shall provide portfolio valuation reports on a quarterly basis. They should
include a review of past investment performance, provide information concerning any major changes
in the investment policy, and review any significant changes in management or ownership of the
firm.

The Investment Manager is prohibited from taking instructions from anyone except in writing either
from the full Board of Trustees or the Investment Committee acting on the Board’s behalf.

Whenever the Investment Manager believes there is a valid reason to deviate or change from any
particular guideline, it is the responsibility of the manager to initiate communication with the Board.

If the Investment Manager has a question about anything set out in this document, any restrictions in
the Investment Policy statement, or about any other aspect of its work for the Fund, it is the
responsibility of that Manager to initiate communication with the Board.
                                      SCHEDULE III

                                         REPORTING

A.   Monthly--Asset valuation statement, and performance (net and gross of fees) for the portfolio
     and benchmark for the month, including calendar year to date, one year, three years, five
     years, and since inception will be sent to the Health Fund by the 15th day of the following
     month.

B.   Quarterly--Same as monthly plus discussion of portfolio’s recent strategy and expected future
     strategy, performance on the portfolio and benchmark for the quarter, year-to-date, one year,
     three years, five years, since inception, and calendar year returns.

C.   The Investment Manager will meet with staff and the Health Fund Board as often as is
     determined necessary, but should expect to meet with the Board at least annually.

D.   Ensure that all documents, exhibits, and written materials that will be used during the
     meetings between the Health Fund and the Investment Manager be submitted to and received
     by the Health Fund at least seven (7) business days in advance of these meetings.

E.   Provide the Health Fund with proof of liability and fiduciary insurance coverage and
     certification of compliance with guidelines, in writing, on an annual basis.

F.   The Investment Manager will keep the Health Fund apprised of relevant information
     regarding its organization, personnel and investment strategy. Investment Manager will
     notify the Health Fund (i) on a best efforts basis within three (3) business days of the
     departure, death or incapacity of any senior investment/business personnel that may have a
     material adverse effect on management of the Assets, and (ii) as soon as practicable, any
     other material organizational changes or events that could adversely affect Investment
     Manager’s ability to provide the services set forth in the Agreement between Investment
     Manager and the Health Fund.
                                       SCHEDULE IV

                                       COMPENSATION


For investment management services rendered, the Health Fund shall pay the Investment Manager a
fee to be computed as follows.

The components of this fee are defined below:

 1.      Fee (annual,        0.___%
         applied to total
         Assets):            The fee is paid each quarter based on the average market value of
                             the portfolio during the quarter (as herein defined), multiplied by
                             the fee amount and divided by 4, and prorated for period of less
                             than a full calendar year.
 2.      Average Market      An average of the market values at the beginning of the
         Value:              measurement period and at the end of each quarter included in the
                             measurement period. The market values will be provided by the
                             Custodian and will include any accruals calculated.
 3.      Calculation:        The fee shall be calculated by the Investment Manager using the
                             Custodian’s market value. The Investment Manager’s fee
                             calculation shall be submitted to the Health Fund for verification.
                              Discrepancies in the elements of calculation will be reconciled
                             between the Health Fund, the Manager and the Consultant, as
                             required.
 4.      Termination:        In the event of a termination of the Investment Management
                             Agreement, the fee for any period less than a normal billing cycle
                             shall be the Fee, prorated to the date of termination.
                                          SCHEDULE V

              STANDARDS OF CONDUCT AND FINANCIAL DISCLOSURE
                             HEALTH FUND, CITY
                            (THE “HEALTH FUND”)



       The Board of Trustees of the Health Fund is obligated to administer its health care fund for

the exclusive benefit of retired firefighters and police officers of the City of San Antonio, Texas,

their qualified survivors and dependents. In performance of this obligation, the Board of Trustees is

required to administer the Health Fund in accordance with Article 6243q, Vernon’s Texas Civil

Statutes, and other applicable state and federal laws and regulations. In furtherance of these

obligations, the Board of Trustees hereby adopts the following Standards of Conduct and Financial

Disclosure (“Standards”):

                                            I. Overview

       Under Texas statutes and applicable federal law and regulations, the Health Fund is a trust

fund to be administered solely in the interests of the participants and beneficiaries thereof, for the

exclusive purpose of providing retirement health care benefits to participants and beneficiaries and to

defray reasonable expenses of the trust. In performance of these duties, all Fiduciaries (as herein

defined) shall exercise their duties with the care, skill, prudence, and diligence under the prevailing

circumstances that a prudent investor acting in a like capacity and familiar with matters of the type

would use in the conduct of an enterprise with a like character and like aims. Further, all Fiduciaries

of the Health Fund shall maintain high ethical and moral character, both professionally and

personally, such that the conduct of all Fiduciaries shall not reflect negatively upon the Health Fund.

A Fiduciary shall not knowingly and willingly breach a duty imposed by these standards.
                                  II. Definitions

For the purposes of these Standards, the following words have specific definitions:

A.     “Benefit” means any gift, favor or service reasonably regarded as pecuniary gain or

       pecuniary advantage (including a Benefit to any other person in whose welfare the

       Fiduciary has a direct or substantial interest) with a value in excess of $200.00 that

       could reasonably be expected to impair or influence the Fiduciary’s independence of

       judgment in the performance of the Fiduciary’s official duties. Benefit excludes (i)

       ordinary social hospitality; (ii) a gift relating to a special occasion (wedding,

       anniversary, birth, holiday, etc.); (iii) reimbursement of reasonable expenses for

       travel, entertainment, lodging, and incidentals in connection with educational

       opportunities or client conferences approved by the Board; or (iv) participation in

       charitable activities and events.

B.     “Board” refers to the Board of Trustees of the Health Fund.

C.     “Business Entity” means an entity through which business for profit is conducted or

       which provides financial management, legal actuarial, custodial, investment or

       consulting service on financial matters, including, among others, a sole

       proprietorship, partnership, firm, corporation, holding company, unincorporated

       association, joint stock company, receivership, trust, or any other entity recognized

       by law.

D.     “Executive Officer” refers to the executive director, executive administrator, chief

       financial officer, chief executive officer, and the chief investment officer of the

       Health Fund.
E.   “Family Member” means spouse and dependent child(ren) of a Fiduciary. Dependent

     child is defined as a Fiduciary’s child, including adopted child or stepchild, who is

     the Fiduciary’s dependent during the calendar year in which the Fiduciary provides

     more than fifty percent (50%) of the child’s support.

F.   “Fiduciary” refers to any “Trustee” and “Executive Officer” of the Health Fund .

G.   “Person” means an individual or a Business Entity.

H.   “Trustee” means:

     1.     The Mayor of the (Name of City) of or a City Council person appointed by

            the City Council of (Name of City) to the Board of Trustees of the Health

            Fund; and

     2.     An individual who is elected to the Board of Trustees of the Health Fund

            pursuant to the provisions of Article 6243q, Section 2.01, V.T.C.S.

                              III. Prohibitions

A.   No Fiduciary of the Health Fund, either directly or indirectly through a Business

     Entity, shall receive any Benefit from any Person in connection with any action

     involving assets of the Health Fund.

B.   No Fiduciary of the Health Fund shall participate in a decision or action involving

     any asset of the Health Fund or Benefit for his or her own interest.

C.   No Fiduciary of the Health Fund, either directly or indirectly through a Business

     Entity, shall engage in the purchase, sale, exchange, or leasing of property with the

     Health Fund if that Fiduciary holds an interest in the property.

D.   No Fiduciary of the Health Fund, either directly or indirectly through a Business
     Entity, shall engage in the purchase, sale, or exchange of any investment with the

     Health Fund if that Fiduciary holds an interest in the investment.

E.   No Fiduciary of the Health Fund shall participate in the lending of money or

     furnishing of other credit by the Health Fund if the Fiduciary has a direct or indirect

     interest in the loan or credit.

F.   Any goods, services, or facilities furnished by the Health Fund to any Person shall be

     used for the exclusive benefit of the Health Fund unless reasonable consideration is

     received by the Health Fund for the use of the goods, services, or facilities.

G.   No Fiduciary shall make personal investments that could reasonably be expected to

     create a substantial conflict between the Fiduciary’s private investments and the

     investments of the Health Fund.

H.   No Fiduciary shall disclose confidential information which he has gained by reason

     of his service to the Health Fund to further his or her personal interests.

I.   Once a request for proposal or search for a service provider to the Health Fund is

     solicited from any Person, all contacts between prospective service providers and

     Fiduciaries shall be limited.

J.   No Fiduciary of the Health Fund shall cause the Health Fund to engage in any of the

     prohibited transactions listed above with (1) any Family Member or business

     associate of the Fiduciary; (2) any other custodian or counsel to the Health Fund; (3)

     any other Fiduciary of the Health Fund; (4) any Person providing services to the

     Health Fund; (5) any employee organization whose members are covered by the

     Health Fund; or (6) the City of San Antonio or any of its officers, elected officials
     and employees.

                      IV. Exercise of Fiduciary Duties

A.   In making or participating in decisions, the Fiduciaries of the Health Fund shall give

     appropriate consideration to those facts and circumstances that the Fiduciary knows

     or should know, are relevant to the particular decision, and shall refrain from using

     facts or circumstances which are not relevant to the decision.

B.   In making decisions, the Fiduciaries shall make a determination that the particular

     investment or course of action is reasonably designed, as part of the portfolio, to

     further the purposes of the Health Fund, taking into consideration the risk of loss and

     the opportunity for gain or other return.

C.   The Fiduciaries of the Health Fund shall keep adequate records of all investment

     decisions sufficient to provide documentation for those decisions for future reference.

D.   If a Fiduciary is present at any time a decision is being made concerning any

     investment or other action in which the Fiduciary has an interest, the Fiduciary shall

     disclose the interest and refrain from participating in the decision or discussion

     concerning the action, including abstention from voting regarding such action.

E.   Conflict of interest affidavits shall be completed annually and a record of voting

     abstentions shall be maintained outlining the basis for such abstention.

F.   No Fiduciary of the Health Fund shall participate in the breach of fiduciary duty of

     another Fiduciary of the Health Fund, participate in concealing such breach, or

     knowingly or negligently permit such breach to occur.

G.   In the conduct of all decision-making regarding the Health Fund, it is understood that
               at times Persons will consult with Trustees in order to impact decisions of the Board.

                However, communications between Trustees and Persons seeking to influence the

               decisions of the Board shall be minimized to the extent reasonably possible.

                                             V. Benefits

       All Fiduciaries of the Health Fund shall report on the annual Financial Disclosure Statement

the receipt of any Benefit. The form shall note the source of the Benefit, the date received, and the

estimated market value of the Benefit. Benefit reports shall be filed annually. All reports shall be

retained by the Health Fund.

       All Fiduciaries of the Health Fund are prohibited from participation in any action or decision

affecting the financial interest of any source of a Benefit if the Fiduciary has in the calendar year

received a Benefit with an aggregate total market value of more than $500. If such action or decision

is discussed or acted upon during a meeting of the Board or any of its committees, the Fiduciary shall

make a public disclosure of the conflict, which shall be noted in the minutes of the meeting, and shall

refrain from any further participation in that action or decision.

                                VI. Travel and Related Expenses

       It shall be the policy of the Health Fund that wherever possible, the Health Fund shall pay the

expenses of travel, lodging, meals, and incidentals for its Fiduciaries and employees traveling on

official business or educational activities on behalf of the Health Fund. This policy shall apply to all

travel related to any business meeting, educational seminar, conference, or convention attended by

any Fiduciary of the Board.

       If the interests of the Health Fund are served by accepting travel and related expenses from

another source to attend any conference, convention, seminar, or other business meeting, the Board
may authorize the acceptance of the expenses by any Fiduciary. Acceptance of such expenses shall

be made if the Health Fund specifically authorizes attendance at such event.

               VII. Responsibilities Of Investment Managers and Consultants

       Each investment advisor and consultant retained by the Health Fund for investments shall be

notified in writing of this Standards of Conduct and Financial Disclosure. All investment

professionals shall strictly conform to this Standards of Conduct and Financial Disclosure. Any

suggestions or offer to deviate from these provisions made by a Fiduciary shall be reported by the

advisor or consultant, in writing, to legal counsel for the Health Fund.

                                         VIII. Other Laws

       Nothing in this policy shall excuse any Fiduciary from complying with any other restrictions

of state or federal law concerning conflicts of interest and fiduciary duties.

                                    IX. Disclosure Statements

       To further the objectives of these Standards, all Fiduciaries of the Health Fund shall annually

complete and submit to the Health Fund the Financial Disclosure Statement and Conflict Disclosure

Statement to the Health Fund, which shall be independently reviewed by legal counsel to the Health

Fund. Such statements shall be kept by the Executive Director of the Health Fund.

                                      X. Review Committee

       In the event there is an allegation of a violation of these Standards, then a majority of the

Board of Trustees not affiliated with the alleged violation shall conduct a review of such violation.

The Fiduciary who is alleged to have participated in such violation shall not participate in such

review. The majority of the Board of Trustees shall decide appropriate sanctions for the Fiduciary if

a violation is found to have occurred.
                                 * * * * * * * *

       The foregoing Standards of Conduct and Financial Disclosure was adopted by the Board of

Trustees of the Fire and Police Retiree Health Care Fund, San Antonio at its meeting of

______________.

Exhibits:
       - Financial Disclosure Statement
       - Conflict Disclosure Statement

								
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