RETIREMENT PLAN INVESTMENT MANAGEMENT AGREEMENT TRINITY PORTFOLIO ADVISORS LLC

Transcription

1 vs.4 RETIREMENT PLAN INVESTMENT MANAGEMENT AGREEMENT TRINITY PORTFOLIO ADVISORS LLC Name of Plan: Name of Employer: Effective Date: This Retirement Plan Investment Management Agreement ( Agreement ) is entered into between Trinity Portfolio Advisors LLC, a registered investment adviser ( Adviser ), and the employer named above ( Client ) on the effective date set forth above with respect to investment management services to be provided by Adviser for the benefit of the above named plan (the Plan ) in accordance with the terms of this Agreement. Client sponsors and maintains the Plan, which may or may not be qualified under Section 401(a), 403(b), 408, or 457(b) of the Internal Revenue Code of 1986, as amended, and/or subject to the Employee Retirement Income Security Act of 1974, as amended ( ERISA ). The parties agree as follows: 1. Services. (a) Adviser agrees to provide the discretionary fiduciary services ( Fiduciary Services ) as set forth on Appendix A and the non-fiduciary services ( Non-Fiduciary Services ) as set forth on Appendix B (collectively, the Services ) for the Plan. In providing the Services, Client acknowledges that Adviser has no responsibility to provide any Services hereunder with respect to the following types of assets: employer securities, real estate (but excluding real estate funds and publicly traded REITS), participant loans, non-publicly traded securities or assets; (other than Collective Investment Funds or non-publicly traded securities or assets recommended by Adviser), other illiquid investments, or brokerage window programs (collectively, Excluded Assets ) Client further acknowledges that Adviser shall have no authority or responsibility to provide Services with respect to voting proxies for securities held by the Plan or take other action related to the exercise of shareholder rights regarding such securities. (b) In performing the Fiduciary Services under this Agreement, Adviser has agreed to act as a discretionary investment manager of the Plan (as provided for in Section 3(38) of ERISA) but does not act as, nor has Adviser agreed to assume the duties of, a trustee of the Plan or as Plan Administrator (as such term is defined under ERISA), and Adviser has discretion only with respect to investments but no discretion to interpret the Plan documents, to determine eligibility or participation under the Plan, or to take any other action with respect to the management, administration or any other aspect of the Plan. Further, Adviser does not serve as a custodian for the Plan and does not take custody of Plan assets. (c) Adviser shall not, and cannot, provide legal or tax advice to Client or the Plan. Client agrees to seek the advice of its legal counsel as to matters that might arise relating to the operations and administration of the Plan. (d) Client acknowledges that Adviser is entitled to rely upon all information necessary for it to carry out its duties hereunder that is provided by Client, Client s representatives or Client s other service providers without independent verification by Adviser. Client represents that all such information provided to Adviser is and shall be true, correct and complete in all material respects. Client agrees to promptly notify Adviser in writing of any material change in the information provided to Adviser and to Page 1 12/21/11

2 promptly provide any such additional information as may be reasonably requested by Adviser. 2. Fees. (a) In consideration for the Services provided under this Agreement, Plan shall pay to Adviser the Fees shown for the Services on the Fee Schedule attached as Appendix C (the Fee Schedule ). The Fees shall be a percentage of the market value of the assets under management and shall be prorated and paid quarterly, in arrears, based upon the average daily balance of the assets in the previous quarter as valued by the custodian or recordkeeper. The Fees for the initial quarter shall be calculated on a pro rata basis commencing on the day the assets are initially designated to Adviser under this Agreement. If this Agreement is terminated prior to the end of a quarter, Client shall pay Adviser on a prorated basis based upon the market value of the assets on the last day assets are designated to the Adviser. No increase in the Fees shall be effective without prior written notification to Client in accordance with Section 11.3 of this Agreement. Fees shall be calculated net of Excluded Assets, unless otherwise agreed in writing. (b) Client hereby authorizes the Plan s recordkeeper (or other custodian of the Plan s assets) to calculate and remit the Fees directly to the Adviser from Plan assets in accordance with the agreement with the recordkeeper or custodian, as the case may be. Notwithstanding the Plan s obligation to pay Fees, Client may elect within its sole discretion to pay any or all Fees to Adviser in lieu of payment by the Plan; provided that any Fees remaining unpaid after thirty (30) days from the date of invoice shall be due and payable immediately by the Plan. Client acknowledges that it is responsible for verifying the accuracy of the calculation of the Fees. (c) Unless agreed to in writing by the parties, Adviser will not receive any other compensation, direct or indirect, for its services under this Agreement. If Adviser receives any other compensation for the Fiduciary Services, Adviser will disclose the amount of such compensation, the services provided for such compensation and the payer of such compensation to Client in accordance with Section 7 and will offset that compensation against its stated fees. 3. Fiduciary Status; Limitations on Functions. (a) Client acknowledges that (i) in performing any of the Fiduciary Services specified in Appendix A, Adviser is acting as a fiduciary of the Plan under Sections 3(21)(A)(ii) and 3(38) of ERISA and DOL Regulation Sections (c)(1)(i) and (ii)(a) and under the Investment Advisers Act of 1940 (the Act ) and (ii) in performing the Non-Fiduciary Services specified in Appendix B, Adviser acts solely as an agent of Client (whether or not Client is acting in the capacity as Plan Administrator) and as such acts solely at the direction of Client and is not acting as a Fiduciary of the Plan. Notwithstanding the above, to the extent Adviser has been granted discretionary power and authority to act as an investment manager for the Plan, Adviser shall be a fiduciary subject to Section 4. (b) Custody of all Plan assets will be maintained with an independent custodian selected by Client. Adviser will not have custody of any Plan assets. Client will be solely responsible for paying all fees or charges of the custodian. Adviser shall have no liability with respect to custodial arrangements or the acts, conduct, or omissions of the custodian. Client authorizes Adviser to instruct the custodian on Client s behalf to provide Adviser with copies of all periodic statements and other reports that the custodian sends to Client. (c) The sole standard of care imposed on Adviser in performing the Fiduciary Services hereunder is to act with the care, prudence, and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims, provided, however, that nothing in this Agreement shall be deemed to limit any responsibility that Adviser may have to Client to the extent such limitation would be inconsistent with applicable laws, including securities laws. Page 2

3 4. Discretionary Authority. The provisions of this Section 4 shall apply to the discretionary power and authority granted to Adviser under this Agreement to supervise and direct the investment of Plan assets. (a) Authority. Adviser shall have full power and authority to select, remove and replace the investment options offered under the Plan; provided, however, Adviser shall not have any power or authority to direct the investment of Plan assets to any investment medium not otherwise authorized by the Plan s written investment policy. Adviser shall exercise this authority in accordance with objectives, written guidelines and/or investment objectives set forth in the written investment policy, as may be amended from time to time by Adviser. Client hereby appoints Adviser as Client s attorney-in-fact for purposes of exercising the foregoing power and authority and discharging Adviser s other obligations under this Agreement. (b) Trade Execution. Adviser is not responsible for placing trades or entering orders for securities transactions with respect to Plan assets or for the execution of any such orders. The placing and execution of trades in Plan assets will be the responsibility of the Plan s recordkeeper and/or custodian; provided that Adviser may direct the recordkeeper and/or custodian to replace an investment option offered under the Plan and to change the asset allocation for any Model Portfolio. (c) Reports. Client will provide, or instruct the custodian to provide, Adviser with such reports as to the status of the Plan assets as Adviser may reasonably request. Client acknowledges that Adviser will not be responsible for the accuracy of any information disclosed in any such report or any report provided to Adviser by any third party, and that Adviser may rely on such reports without independent verification.. (d) Confidential Relationship. All information and advice furnished by either of the Parties to the other will be treated as confidential and will not be disclosed to third parties except as required by law, as required to perform the Services, as described in Adviser s Privacy Notice, or as otherwise mutually agreed upon in writing by the Adviser and Client. Client acknowledges receipt of Adviser s Privacy Notice. 5. Non-Exclusivity. Client understands that Adviser performs among other things, retirement plan investment consulting, retirement plan fiduciary consulting, retirement plan design consulting, and portfolio management services for other clients. Client recognizes that Adviser may give advice and take action in the performance of its duties for such other clients (including those who may have similar retirement plan arrangements as Client), or for the personal accounts of Adviser and its advisory affiliates, that may differ from advice given, or in the timing and nature of action taken, with respect to Client. Nothing in this Agreement shall be deemed to impose on Adviser any obligation to advise Client with respect to the Plan, including the Services provided by Adviser under this Agreement in the same manner as it may advise any of its other clients. Client also acknowledges that Adviser may, by reason of its other such activities as described above, from time to time acquire confidential information. Client acknowledges and agrees that Adviser is unable to divulge to the Client or any other party, or to act upon, any such confidential information with respect to its performance of this Agreement. 6. Valuation. Adviser may rely, without independent verification, upon valuation of assets as provided by Client or the custodian or record keeper of the Plan s assets. Further, Adviser may rely without independent verification on third party financial data reporting services to determine values for securities held by the Plan. In all events, Client acknowledges that any such valuation shall be no guarantee of any type with respect to the market value of the assets, or any portion thereof, in the Plan. 7. Representations of Client. Client represents and warrants as follows: Page 3

4 (a) It is the Named Fiduciary with respect to the control or management of the assets of the Plan in accordance with the requirements of ERISA. As such, Client has the power and authority to appoint an investment adviser or investment manager under the terms of the Plan, and to enter into contractual arrangements with third parties to assist in the discharge of these and related duties. (b) Client is the fiduciary of the Plan with the authority to cause the Plan to enter into this contract, unless another party is identified on the signature page. In this capacity, Client (or such other person or group) is referred to as the Responsible Plan Fiduciary. (c) The person signing the Agreement on behalf of Client has been delegated all necessary authority to do so by Client and the trustees (or Named Fiduciary) of the Plan, and that he or she (including Client, the trustee and the Named Fiduciary) is independent of and unrelated to Adviser. (d) The execution of this Agreement and the performance thereof is within the scope of the investment authority authorized by the governing instrument and/or applicable laws. If Client is a corporation, the signatory on behalf of such Client represents that the execution of the Agreement has been duly authorized by appropriate corporate action and agrees to provide such supporting documentation as may be reasonably required by Adviser. (e) Client and the Responsible Plan Fiduciary acknowledge that before this Agreement was entered into, Adviser provided to the Responsible Plan Fiduciary information regarding services, compensation, fiduciary obligations and conflicts of interest, and the Responsible Plan Fiduciary acknowledges that it received such information sufficiently in advance of entering into this Agreement to make an informed decision to engage Adviser. All such information is included in this Agreement, in the Appendices hereto which are part of this Agreement and in Adviser s Form ADV Part II, a copy of which has been delivered to Client and Responsible Plan Fiduciary and are incorporated by reference herein. Client has reviewed and considered the contents of the disclosure documents, in particular, the provisions relating to compensation, interests in transactions and potential conflicts of interest, as well as the remainder of the disclosure documents which contain information concerning, among other matters, background information such as educational and business history, business practices such as the types of advisory services provided, the methods of securities analysis used, and the like. Client and the Responsible Plan Fiduciary have determined this Agreement (i) to be in the best interests of the Plan and its participants, (ii) to be necessary for the operation of the Plan, and (iii) to be reasonable based upon the compensation to be paid for Services rendered hereunder. (f) Client acknowledges that investments fluctuate in value and the value of investments when sold may be more or less than when purchased, and that past investment performance does not necessarily guarantee any level of future investment performance. (g) The Plan does not prohibit payment of the Fees out of Plan assets, and Client has determined that payment of the Fees by the Plan is prudent and that the Fees are reasonable. 8. Representations of Adviser. Adviser represents as follows: (a) It is registered as an investment adviser under the Act, and in performing the ERISA Fiduciary Services set forth in Appendix A it is acting as a Fiduciary of the Plan under ERISA. (b) It has the power and authority to enter into and perform this Agreement and will obtain any authorizations, permits, certifications, licenses, filings, registrations, approvals or consents which must be Page 4

5 obtained by it from any third party, including any governmental authority, in connection with this Agreement. (c) It will disclose to the Responsible Plan Fiduciary any change to the information in this Agreement required to be disclosed by ERISA Section 408(b)(2) within 60 days from the date on which Adviser acquires knowledge of the change (unless such disclosure is precluded due to extraordinary circumstances beyond Adviser s control, in which case the information will be disclosed as soon as practicable. (d) It will disclose all information related to this Agreement and any compensation or fees received under the Agreement that is requested by Responsible Plan Fiduciary or the Plan administrator in writing in order to enable Client to comply with the reporting and disclosure requirements of Title I of ERISA and the regulations, forms and schedules issued thereunder. (e) Adviser will receive the compensation shown in Appendix C only, and does not receive any compensation from any third party in connection with the Services hereunder. (f) If Adviser discovers that it has made an error or omission within this Agreement regarding any disclosure required under ERISA Section 408(b)(2), it will disclose to Client the corrected information within 30 days following discovery of the error or omission 9. Termination. Client may terminate this Agreement within five business days of the execution of this Agreement without incurring a penalty or charge. Otherwise, this Agreement shall remain in effect from the effective date set forth above until terminated by either party upon written notice to the other. Such notice may be given at any time and will be effective upon receipt by the non-terminating party so long as the notice has been manually signed by the terminating party. Such termination will not, however, affect the liabilities or obligations of the parties arising from transactions initiated prior to such termination, and such liabilities and obligations (together with the provisions of Sections 11) shall survive any expiration or termination of this Agreement. Upon termination, Adviser will have no further obligation under this Agreement to act or advise Client with respect to Services except as agreed to by the parties at the time of termination 10. General Provisions Assignability. This Agreement is not assignable by either party without the prior written consent of the other party Effect. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, successors, survivors, administrators and permitted assigns Modification. The Agreement may be modified, including without limitation the Services to be provided by Adviser or the Fees charged by Adviser (i) by mutual written agreement or (ii) in the manner set forth herein and consistent with the procedure described in Department of Labor Advisory Opinion 97-16A (which is set forth in the next paragraph). Adviser may propose to increase or otherwise change the Fees charged, to change the Services provided or otherwise modify this Agreement by giving Client at least sixty (60) days advance notice of the proposed change. The notice shall be given in the manner described in Section 10.5 below. The notice will (1) explain the proposed modification of the Fees, Services or other provisions; (2) fully disclose any resulting changes in the Fees to be charged as a result of any proposed change in the Services or other changes to this Agreement; (3) identify the effective date of the change; (4) explain Client s right Page 5

6 to reject the change or terminate this Agreement; and (5) state that pursuant to the provisions of this Agreement, if Client fails to object to the proposed change(s) before the date on which the change(s) become effective Client will be deemed to have consented to the proposed change(s). If Client rejects any change to this Agreement proposed by Adviser, Adviser shall not be authorized to make the proposed change. In that event Client shall have an additional sixty (60) days from the proposed effective date (or such additional time beyond 60 days as may be agreed by Adviser) to locate a service provider in place and instead of Adviser. If at the end of such additional sixty (60) day period (or such additional time period as agreed by Adviser), the parties have not reached agreement on the proposed changes, this Agreement shall automatically terminate Severability. If any one or more of the provisions of this Agreement shall, for any reason, be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Agreement and this Agreement shall be enforced as if such illegal or invalid provision had not been contained herein Notices. Any and all notices required or permitted under this Agreement shall be in writing and shall be sufficient in all respects if (i) delivered personally, (ii) mailed by registered or certified mail, return receipt requested and postage prepaid, (iii) sent via a nationally recognized overnight courier service, (iv) sent via facsimile or (v) sent by to: If to Adviser: Trinity Portfolio Advisors LLC Facsimile: (817) ATTN: Dee Wayne Cullum dwcullum@trinityportfolio.com If to Client: to the address set out on the signature page or such other address or facsimile as any party shall have designated by notice in writing to the other party. All notices shall be deemed to have been given or made when delivered by hand or courier, or when sent by facsimile, or if mailed, on the third business day after being so mailed Headings. All headings used herein are for ease of reference only and in no way shall be construed as interpreting, decreasing or enlarging the provisions of this Agreement Entire Understanding. This Agreement constitutes and contains the entire understanding between the parties and supersedes all prior oral or written statements dealing with the subject matter herein 10.8 Applicable Law; Forum. This Agreement shall be governed by, and construed in accordance with the laws of the state of Texas, without reference to conflict of law principles, unless preempted by federal law. The parties agree that any arbitration under section 11 below must be conducted in (or when applicable, legal suit, action or proceeding arising out of or relating to this Agreement must be instituted and resolved in a State or Federal court in) the City of Forth Worth, Texas, and they hereby irrevocably submit to the jurisdiction and venue in such City (and if applicable, of any such court) Waiver or Limitation. Nothing in this Agreement shall in any way constitute a waiver or limitation of any rights which the Client or the Plan or any other party may have under ERISA or federal or state securities laws. Page 6

7 11. Dispute Resolution; Arbitration. All disputes, actions or controversies between Client and Adviser including any of Adviser s present or former officers, directors, agents or employees, which may arise out of or relate to any of the Services provided by Adviser under this Agreement, or the construction, performance or breach of this or any other agreement between Adviser and Client, whether entered into prior to, on or subsequent to the date hereof, shall be resolved by negotiation of the parties acting in good faith. If the parties are unable to resolve their differences through negotiation, the parties shall engage in non-binding mediation, using the services of an impartial, neutral mediator selected by mutual agreement of the parties. Mediation is voluntary once commenced, and either party may withdraw from the mediation process at its sole discretion at any time. The fees of the mediator shall be borne equally by the parties. If the parties are unable to agree on a single mediator or to resolve the issues through mediation, to the extent permitted by law, then the matter shall be settled by binding arbitration under the Commercial Arbitration Rules of the American Arbitration Association. Unless the parties can agree on a single arbitrator, the matter shall be heard by a panel of three arbitrators, one selected by each party and the third selected by the two arbitrators so appointed. Judgment upon any award rendered by the arbitrator(s) shall final, and may be entered into any court having jurisdiction. In agreeing to binding arbitration, Client is aware that: (a) (b) (c) (d) (e) Arbitration is final and binding on the parties. The parties are waiving their right to seek remedies in court, including the right to jury trial, except to the extent such a waiver would violate applicable law. Pre-arbitration discovery is generally more limited than and potentially different in form and scope from court proceedings. The arbitration award is not required to include factual findings or legal reasoning and any Party s right to appeal or to seek modification of rulings by the arbitrators is strictly limited. The panel of arbitrators will typically include a minority of arbitrators who were or are affiliated with the securities industry. Client understands that this Agreement to arbitrate does not constitute a waiver of its right to seek a judicial forum where such waiver would be void under federal or applicable state securities laws. [signatures appear on next page] Page 7

8 The Parties have executed this Agreement as of the Effective Date. Trinity Portfolio Advisors LLC Client By: By: Print Name: Title: ACCEPTED BY THE RESPONSIBLE PLAN FIDUCIARY By: Print Name: Address: Page 8

9 APPENDIX A FIDUCIARY SERVICES Adviser acknowledges that in performing Fiduciary Services, it is a fiduciary and an Investment Manager under ERISA and a fiduciary under the Act as set forth in Section 3(a) of this Agreement. Adviser shall perform the following Fiduciary Services for the Plan, as mutually agreed by Adviser and the Client. Services to be performed shall be checked and initialed by each party. I. ERISA Fiduciary Services Plan Investment Selection and Monitoring: Adviser will review the investment options available through the Plan and will select the core investments to be offered to Plan participants that meet the criteria set forth in the Plan s IPS. Adviser will provide reports on a regular basis that are designed to assist the Client in monitoring the core investment options and the performance of the Adviser. Model Portfolio: Adviser will design and maintain seven (7) risk based Model Portfolios. Adviser will monitor the performance of the Model Portfolio and underlying investments, and replace any investment option as appropriate. These risk-based Model Portfolios are not managed securities but rather asset allocation portfolios utilizing the underlying investment options made available to Plan participants. The allocation of asset classes within each Model Portfolio to achieve each strategy shall be based on generally accepted investment theories, and subject to the terms of the Investment Policy Statement. Adviser shall establish the initial allocation and any re-allocation of asset classes for each Model Portfolio The rebalancing of any Participant account which has invested assets in a Model Portfolio shall occur automatically within certain investment bands incorporated in the IPS, and such rebalancing shall be preauthorized by any Participant who selects a Model Portfolio for investment of his or her Plan account. Third Party Management: Adviser shall select a third party investment provider. Adviser shall monitor the performance of the third party provider and replace such provider as appropriate. Adviser fees shall be independent and separate from any fees or charges imposed by the third party investment provider. Other: Page 9

10 APPENDIX B NON-FIDUCIARY SERVICES Adviser shall perform the following Non-Fiduciary Services for the Plan. Participant Education and Enrollment Services: Adviser will conduct periodic group enrollment and education meetings with Plan participants. The purpose of the meetings is to increase retirement plan participation among employees and to assist Plan participants in making informed decisions about contribution amounts, investment allocations and distributions. Only standardized investment education materials, which are consistent with investment education as that term is defined in Department of Labor Interpretative Bulletin 96-1, will be used in connection with providing Participant Education and Enrollment Services. Such information may include information about the benefits of Plan participation, investment objectives of Plan investment options, general financial and investment information, asset allocation portfolios of hypothetical individuals with different time horizons and risk profiles and interactive investment materials such as questionnaires to assess the impact of different allocations on retirement income. Adviser may also provide interactive investment materials to assist participants in assessing their future retirement income needs. In providing Participant Education and Enrollment services, Adviser will not provide advice concerning the appropriateness of any individual investment option for a particular participant or beneficiary under the plan and will not be acting as an ERISA fiduciary. Plan Sponsor Trinity Portfolio Advisors LLC Initial Initial Responsible Plan Fiduciary Initial Page 10

11 APPENDIX C FEE SCHEDULE Trinity Portfolio Advisors LLC Fee Schedule Contribution Annual Rate All Assets % The fees are subject to negotiation; provided, that the maximum annual rate shall not exceed 2% (200 bps). The Fees discussed above may be offset by revenue collected by the Custodian and/or Recordkeeper, which may be credited to an ERISA account or otherwise allocated pursuant to the terms of the agreement with the Custodian or Recordkeeper. The Fee for the initial quarter or for any partial quarter shall be calculated on a pro rata basis commencing on the day the assets are initially designated for management under this Agreement. The Fee shall be paid from Plan Assets The Fee shall be paid by Client. Plan Sponsor Trinity Portfolio Advisors LLC Initial Initial Responsible Plan Fiduciary Page 11