THIS AGREEMENT, dated as of this ____ day of , 20__ is made by and between [NAME OF INVESTMENT MANAGER] ("Manager") and The Northern Trust Company, as trustee of the Chicago Transit Authority Retirement Trust (the "Trustee"), acting under the trust created pursuant to the provisions of the Retirement Plan for Chicago Transit Authority Employees (the "Plan"), to govern the investment management of a portion of the assets of the Chicago Transit Authority Retirement Trust (the "Fund").
The Manager, nominated by the Retirement Allowance Committee ("Committee") pursuant to its authority under Section 2.2 of the Second Restatement of Master Custody Trust Agreement, dated July 1, 1996, as amended, between the Committee and the Trustee (the "Trust"), and pursuant to the Trustee's determination of the Manager's qualifications in accordance with the provisions of the Trust, is appointed by the Trustee as an "Investment Manager", as defined in the Trust, for an investment of Fund assets in [description of the investment class and/or fund name or other appropriate description of the investments] as determined by the Committee, and pursuant to such appointment, the Trustee shall establish and maintain an Investment Manager Account (the "Account") consisting of such cash and securities designated by the Committee to be allocated thereto by the Trustee from time to time. Manager's appointment hereunder is made in reliance upon factual materials submitted by the Manager to the Committee and the Trustee; and such appointment shall be subject to the provisions of Section 2.2 of the Trust, and shall be effectuated and maintained by the Trustee in a manner consistent with said provisions. The Trustee is making the appointment of Manager as an Investment Manager at the nomination of the Committee and based on Trustee's determination, in its sole discretion, that the Manager has a history of proven successful performance in the handling of significant sums of invested assets in the investment class suggested by the Committee, pursuant to the provisions of Section 2.2 (a) of the Trust. The initial assets available for management in the Account shall be determined by the Committee and shall be subject to increase or decrease at any time in the Committee's discretion. A copy of the Trust is attached hereto and is hereby incorporated herein for purposes of reference as Exhibit A; and the Manager by execution of this Agreement acknowledges receipt of a copy of the Trust. The Trustee shall deliver to the Manager a copy of any amendment to the Trust and, upon such delivery, the amendment shall be incorporated herein and be considered as part of Exhibit A.
The Manager shall invest the assets of the Account in accordance with the Committee's investment guidelines attached hereto as Exhibit C, and specifically in accordance with the investment guidelines as they relate to the investment class of [class description as provided in I above]. Manager acknowledges that the investment guidelines attached hereto as Exhibit C may be modified by the Committee. The Committee will provide Manager with written notification of any changes to the investment guidelines.
Both parties to this Agreement acknowledge that the Committee is charged under the provisions of the Trust with the responsibility for formulating the funding policy of the Plan and, as part of its formulation and direction for the implementation of same, that the Committee is solely responsible for the diversification of the investments of the Fund as a whole as is required under the Trust and applicable fiduciary standards and for the allocation of investment responsibility between or among investment managers from time to time. With respect to the range of investments made in accordance with Exhibit C, the Manager shall diversify the assets of the Fund so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so.
Subject to the investment guidelines established in writing by the Committee and attached hereto as Exhibit C, as such guidelines may be amended by the Committee from time to time and forwarded to the Trustee, and the delivery of such written guidelines by the Committee to the Manager, the Manager shall have full authority to act in regard to the investment, reinvestment and management of Fund assets allocated to the Account, including the voting of shares or proxies, if any, and to direct the Trustee with respect to the settlement of exchanges, purchases and sales associated therewith. In the event that the Manager's investment authority with respect to the Account is terminated by the Committee pursuant to Section 2.2 of the Trust, the assets of the Account shall be managed by the Committee in a Committee Directed Account pursuant to Section 2.5 of the Trust, or the Committee may direct the Trustee to transfer the assets of the Account to another account of the Trust for management by an investment manager which has been nominated by the Committee and appointed by the Trustee pursuant to Section 2.2 of the Trust, or the Committee may direct the Trustee (or an investment manager of the Trust) to liquidate such assets. The Manager shall have the power to direct the Trustee, in writing or orally if confirmed in writing, as to the acquisition, retention, disposition (other than in connection with a termination of the Manager, in which case the sale, exchange or liquidation of assets shall be as provided above), voting of shares and proxies or management of assets in the Account, and the Trustee shall have no obligation with respect to such assets in the absence of such instructions except as is specifically provided elsewhere herein. Pending receipt of directions from the Manager for the Account, any cash received by the Trustee from time to time for the Account shall be invested for short term purposes by the Trustee pursuant to the provisions of the Trust. Such investment by the Trustee may include, but shall not be limited to, the use of interest-bearing deposits in the Trustee's banking department.
As agreed upon between the Manager and the Committee, the Manager shall be compensated for services hereunder in accordance with the fee schedule attached hereto as Exhibit B and incorporated herein by reference. Exhibit B reflects all direct and indirect fees, commissions, penalties, and other compensation payable to Manager, including reimbursement for expense, that may be paid by or on behalf of Manager in connection with the provision of services under this Agreement.
No individuals or entities, aside from the Manager, shall receive as a result of the Plan’s investments by the Manager any compensation or benefits unless in advance of such investments, the Manager in writing has notified the Committee of the name, address, amount of compensation or benefits, and services of any such individual or entity. Manager shall complete the Compensation Certification attached hereto as Exhibit D and the Prohibit Transaction Certification attached hereto as Exhibit E.
For all purposes of this Agreement, including without limitation the computation of the Manager’s compensation hereunder and any accounting as hereinabove provided, the fair market value of the assets of the Account on any date shall be computed as follows (provided, however, that notwithstanding anything herein to the contrary, the Trustee shall have no obligation to verify the accuracy of or methodology used in determining such fair market value, and, the Trustee may rely conclusively upon such valuations as are provided in the reports required of the Manager under Section III(a) above):
Any Account asset that cannot be valued in accordance with the foregoing principles shall be valued in such commercially reasonable manner as determined in good faith by the Manager to reflect its fair market value, based upon values supplied by a nationally-recognized pricing or quotation service, or quotations furnished by one or more reputable and generally recognized sources, such as securities brokers, dealers or investment bankers, values of comparable property, appraisals and similar commercially acceptable sources.
The Manager shall attend meetings with representatives of the Committee, or the Committee and the Trustee, to discuss the position of the Account and the immediate investment outlook, or shall submit its views concerning same in writing, as and at such times as the Committee may reasonably request from time to time. The Manager shall, in its discretion, select broker – dealers with whom to place orders for the purchase and sale of securities for the Fund. The primary objective of the Manager shall be to obtain best price and execution of brokerage transactions and, to the extent consistent with that objective, the Manager shall take into account any Brokerage Policy provided to it by the Committee.
The Manager expressly acknowledges, represents, warrants and agrees that:
Unless the Manager has failed to act prudently or has otherwise failed to discharge its duties as and in the manner provided for hereunder, the Manager shall not be subject to any liability to the Plan, the Trustee, or to any other person, firm or organization, for any act or omission of itself or of any other person, firm or organization in the course of, or in connection with, its obligations under this Agreement, provided that nothing contained herein shall in any way constitute a waiver or limitation of any right of any person under federal securities laws.
The Trustee shall have custody of all assets allocated to and purchased for the Account, including all evidence of ownership and interest in such investments.
This Agreement shall become effective on the date hereof. Any amendment to this Agreement shall be in writing and signed by both parties to this Agreement. The Manager's appointment hereunder may be terminated at any time by written notice from the Trustee to the Manager; and the Manager may terminate this Agreement upon thirty (30) days written notice from the Manager to the Trustee. There shall be no penalty for such termination.
Any notices or communications which either party hereto may be required or permitted to make to the other shall be in writing and shall be effective upon the delivery by hand or by overnight carrier or by mailing of same by registered or certified United States mail, addressed as follows:
The Northern Trust Company
The Northern Trust Company
Attention: CTA Retirement Plan Account Administrator
50 South LaSalle Street
Chicago, Illinois 60675
[NAME AND ADDRESS OF INVESTMENT MANAGER]
Either party may change the address to which notices or communications are to be sent by giving written notice of such change of address to the other party in the manner above provided for giving notice.
Copies of all notices or communications by either party shall be provided to the Executive Director acting for the Committee at the following address:
Retirement Plan for CTA Employees
55 W. Monroe Street,
Chicago, IL 60603
Copies of all notices or communications by either party shall also be provided to the Committee’s investment consultant at the following address:
[NAME AND ADDRESS OF INVESTMENT CONSULTANT]
This Agreement shall not in any manner or form be assigned by the Manager without the prior written approval of the Trustee.
Manager agrees that it will not divulge, furnish or make accessible to anyone, other than in the performance of its duties hereunder, any knowledge or information which it has acquired relating to confidential or proprietary information about the Plan, the Committee or the Trustee obtained during the performance by the Manager of its services hereunder, except as may be required by law or a governmental agency having jurisdiction over the Manager.
Manager agrees that the services to be performed by it hereunder are those of an independent contractor and are not those of an employee of the Plan, the Committee, any Plan sponsor, the Chicago Transit Authority or the Trustee. Manager for itself, its officers, directors, stockholders, employees, agents, successors and assigns, hereby waives any and all rights and interests in and under any medical, insurance, retirement, profit-sharing, bonus, benefit or other similar plan maintained or sponsored by the Chicago Transit Authority existing at the date of this Agreement or which may come into existence during the term of this Agreement.
The performance of investment management or other services for any other person or entity by the Manager or any of its affiliates, or the officers or employees thereof, shall not be restricted in any way by this Agreement nor be deemed to violate, or give rise to, any duty or obligation to the Trustee or the Plan. Moreover, the services provided under this Agreement are not exclusive and nothing in this Agreement shall limit or restrict the Manager or any of its affiliates, or the officers or employees thereof, from buying, selling, or trading in any securities for its or their own account or accounts as is otherwise permitted by law.
Each of the parties to this Agreement hereby represents that it is duly authorized and empowered to execute, deliver and perform this Agreement and that such action does not conflict with or violate any provision of law, rule, regulation, contract, deed of trust, or other instrument to which it is a party or to which any of its property is subject, and that this Agreement is a valid and binding obligation enforceable in accordance with its terms.
The Trustee hereby agrees to furnish the Manager with such information and documentation as the Trustee has in its possession or may reasonably be requested to obtain, and such authorizations from the Trustee or the Committee as the Manager may from time to time reasonably require to enable it to carry out its obligations under this Agreement.
This Agreement shall be construed and enforced according to the laws of the State of Illinois, except to the extent superseded by federal law, and all provisions hereof shall be administered according to the laws of the State of Illinois.
This Agreement may be signed in multiple counterparts, each of which shall be deemed to be an original, and all of which together shall constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
By: The Northern Trust Company, solely in its capacity as Trustee
[NAME AND ADDRESS OF INVESTMENT MANAGER]
Second Restatement of Master Custody Trust Agreement
[NAME OF INVESTMENT MANAGER]
Prohibited Transaction Certification