INVESTMENT ADVISOR AGREEMENT
This INVESTMENT ADVISOR AGREEMENT (the "Agreement") is effective as
of June 30, 1997 (or such other date as is agreed in writing) by and between
STATE STREET BANK AND TRUST COMPANY, a trust company organized under the laws of
the Commonwealth of Massachusetts ("State Street") and CAPITAL GUARDIAN TRUST
COMPANY, a California-chartered trust company (the "Advisor").
WHEREAS the American Bar Association Members Retirement Trust and
the American Bar Association Members Pooled Trust for Retirement Plans
(collectively referred to as the "Trusts"), for which State Street acts as
trustee, are maintained pursuant to agreements between the American Bar
Retirement Association ("ABRA") and State Street for the purpose of funding the
American Bar Association Members Retirement Plan, the American Bar Association
Members Defined Benefit Pension Plan (the "ABA Members Plans") and other
employee benefit plans, as adopted by eligible individuals, organizations,
partnerships, corporations or associations (each such individual employee
benefit plan being referred to as a "Plan" and collectively as the "Plans"),
which Plans must meet the requirements for qualification under Section 401 of
the Internal Revenue Code of 1986, as amended and in effect from time to time
(the "Code");
WHEREAS, assets are held in a collective investment fund, known as
the BALANCED FUND (the "Fund"), established under the American Bar Association
Members/State Street Collective Trust (the "ABA Members Collective Trust")
established by State Street, as trustee (the "Trustee"), pursuant to the
Declaration of Trust dated August 8, 1991, as amended and in effect from time to
time (the "Declaration of Trust");
WHEREAS, the Fund is established under a group trust maintained by
the Trustee and is exempt from tax pursuant to Revenue Ruling 81-100;
WHEREAS, the Trustee desires to retain the Advisor to act as its
investment advisor to assist the Trustee in managing such assets of the Fund as
the Trustee may designate from time to time in writing to the Advisor (the
"Subaccount") by making recommendations to the Trustee with respect to the
investment and reinvestment of the assets in the Subaccount; and
WHEREAS the parties desire to set forth, among other things, the
duties, terms and conditions under which the Advisor will carry out such
advisory functions and the Trustee will perform certain of its functions with
respect to managing and administering the Subaccount and the Fund;
NOW THEREFORE, in consideration of the promises and mutual covenants
contained in this Agreement, it is agreed as follows:
1. Appointment of the Advisor. The Advisor is hereby appointed and
employed as investment advisor to the Trustee to assist the Trustee in its
management of such assets of the Fund as are held in the Subaccount from time to
time. The Advisor shall provide investment advice and recommendations and shall
render certain other related services to or on behalf of the Trustee, all in
accordance with the terms and conditions of this Agreement.
2. Acceptance by the Advisor. The Advisor hereby accepts such
appointment and employment and acknowledges that, (a) with respect to the assets
in the Subaccount, it is a fiduciary, as defined in the Employee Retirement
Income Security Act of 1974, as amended and in effect from time to time
("ERISA"), with respect to the Trusts and the Plans and (b) no person associated
with the Advisor is a trustee or administrator of, or an employer of anyone
covered by, any Plan. The Advisor represents that it is registered, or exempt
from registration, under the Investment Advisers Act of 1940, as amended (the
"Advisers Act"), and that it is in the business of acting as a fiduciary with
respect to assets of various retirement plans and trusts. The Advisor agrees and
covenants that it will notify the Trustee within ten (10) business days of (v)
any change of its status under the Advisers Act, (w) the receipt of formal
notice of the commencement of any proceeding by any governmental agency to take
any action which would change its status under the Advisers Act, (x) notice by
any governmental agency of the intent to place material limitations on the
activities of the Advisor, (y) notice by any governmental agency that it intends
to begin an investigation of the Advisor that is outside of the scope of routine
investigations that such agency conducts from time to time of businesses engaged
in the same or similar activities as the Advisor, or (z) notice by any
governmental agency that it has identified an area of non-compliance or other
concern in the course of any investigation of the Advisor. Throughout this
Agreement, the term "business day" shall mean any day in which the New York
Stock Exchange is open for trading and on which the Trustee's principal office
is open for business.
3. Definition of Subaccount. The Subaccount for which the Advisor
has been appointed to render investment advice and certain other services is
designated as Subaccount A and consists of the assets set forth in Appendix A.
The Trustee may change the composition of or the amount of assets included
within the Subaccount, by amending Appendix A, after written notice to the
Advisor and ABRA.
4. The Advisor's Services.
(a) Investment Process. The Advisor shall make timely
recommendations to the Trustee as to how the Trustee should invest and reinvest
the assets of the Subaccount and, in that connection, may recommend that the
Trustee purchase, sell or otherwise invest the assets of the Subaccount on the
terms and conditions recommended by the Advisor in a manner consistent with the
provisions of this Agreement. The manner and procedures for effecting any such
purchases, sales or investments are set forth in Subsection 4(c) below. From
time to time at the request of the Trustee, the Advisor shall consult with the
Trustee on a timely basis with respect to any recommendation made by the Advisor
or otherwise with respect to the investment of the assets of the Subaccount.
(b) Compliance With Policies and Other Requirements. In
providing its investment advice and other related services, the Advisor shall
act in accordance with the investment objectives and policies for the Fund as
set forth in the Fund Declaration pursuant to
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which the Fund is established and maintained, as the same may be amended from
time to time by the Trustee (the "Fund Declaration"), a copy of which is
attached hereto as Appendix B, and in accordance with any additional investment
objectives and policies that have been established by the Trustee for the
Subaccount as set forth in Appendix C, as the same may be amended from time to
time by the Trustee. In providing its investment advice and other related
services under this Agreement, the Advisor shall comply with all of the
Trustee's reasonable operating requirements as the same may be communicated in
writing by the Trustee to the Advisor from time to time. The Advisor shall
comply with any changes to such operating requirements that the Trustee may make
from time to time within a period of time reasonably specified by the Trustee
(or if none is specified, within a reasonable time period) after notice of such
changes is communicated in writing by the Trustee to the Advisor.
(c) Recommendation Procedures. The Advisor shall place orders
or otherwise give instructions with respect to the investment of the assets in
the Subaccount only after prior notification to and approval by the Trustee in
accordance with the provisions of this Subsection 4(c). Except in accordance
with the following provisions, the Advisor shall have no authority to place
orders for the execution of transactions involving assets of the Subaccount or
to give instructions to the Trustee with respect thereto:
(i) Broker List. On or prior to the first business day
of each month, the Trustee shall consider brokers recommended by the
Advisor and shall approve, to the extent deemed appropriate by the
Trustee, a list of not more than one hundred (100) brokers through whom
transactions with respect to the assets in the Subaccount may be effected
during the following month (the "Broker List"). From time to time by means
of Valid Notice (as defined below), the Advisor may request an amendment
(the "Advisor's Amendment") to the Broker List. The Trustee shall exercise
reasonable efforts to notify the Advisor whether or not the Trustee
authorizes the Advisor's Amendment to the Broker List by means of Valid
Notice within one (1) complete business day (i.e., not later than the same
time of day on the next business day) following its receipt of the
Advisor's Amendment and if the Trustee does not so notify the Advisor,
then the Advisor's Amendment shall be deemed to be approved at the
conclusion of such one business day period. The Trustee may effect an
amendment to the Broker List at any time upon Valid Notice to the Advisor.
(ii) Real-Time Recommendations. From time to time by
means of Valid Notice (as defined below), the Advisor may make
recommendations as to proposed transactions with respect to the assets of
the Subaccount (the "Advisor's Recommendation"). The Advisor's
Recommendation shall (A) be directed to the employee or employees of the
Trustee designated for such purpose by the Trustee from time to time by
Valid Notice and (B) describe the transaction being recommended by the
Advisor in such detail and specificity as the Trustee may reasonably
require. For this purpose, if the transaction is to be effected at the
market price on the applicable exchange or trading system, a statement to
such effect shall be sufficient to describe the proposed sale or purchase
price. The Trustee shall exercise reasonable efforts to notify the Advisor
by means of Valid Notice whether or not the Trustee authorizes the
transaction recommended in the Advisor's Recommendation (the "Trustee's
Response"). The Trustee shall exercise reasonable efforts to deliver the
Trustee's Response within one (1) hour following its receipt of the
Advisor's Recommendation and if the Trustee does not deliver the Trustee's
Response to the Advisor within such one-hour period, then the
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transaction or transactions recommended in the Advisor's Recommendation
shall be deemed to be approved; provided, however, that if the Advisor's
Recommendation is received by the Trustee after 5:00 p.m. Eastern time on
any business day, then the one-hour period described in this Subsection
4(c) (ii) shall be extended so that it expires at 9:00 a.m. Eastern time
on the next succeeding business day.
(iii) Authorized Transactions. A transaction shall
become an "Authorized Transaction" when it is (A) approved pursuant to the
Trustee's Response or (B) deemed approved pursuant to section 4(c) (ii).
The designation of a transaction as an Authorized Transaction hereunder
shall be binding against the Trustee and the Authorized Transaction shall
remain validly approved and authorized until the earlier of (Y) the time
that it is expressly countermanded by Valid Notice from the Trustee to the
Advisor or (Z) at the end of the twentieth (20th) business day following
its designation as an Authorized Transaction.
(iv) Investment Authority. With respect to any
Authorized Transaction, the Advisor may take any and all action necessary
or desirable to effect such Authorized Transaction, including but not
limited to (A) placing an order with a broker named in the Broker List for
the execution of the Authorized Transaction and (B) issuing to the Trustee
such instructions as may be appropriate in connection with the settlement
of such Authorized Transaction.
(v) Valid Notice. "Valid Notice" shall mean (A) written
notice or communication, which may be made by facsimile or by electronic
transmission in a format and method reasonably acceptable to the Trustee,
or (B) oral notice or communication that is recorded by the Trustee or the
Advisor and is available for subsequent verification.
(d) Custody of Assets and Confirmation of Transactions. To the
extent required by applicable law, the Advisor shall direct that all securities
purchased and the proceeds from the sale of securities for the Subaccount be
delivered to the Trustee, unless otherwise directed by the Trustee. The Advisor
shall direct any broker effecting a transaction with respect to the assets of
the Subaccount to send the Trustee a duplicate copy of any confirmation of any
such transaction, except that the Advisor may make other arrangements (which are
reasonably satisfactory to the Trustee) for the Trustee to receive such
duplicate confirmations or comparable information acceptable to the Trustee.
(e) Communications Regarding Investment Securities. The
Trustee shall send, or cause to be sent, on a timely basis, copies of all
communications (including but not limited to proxy statements, tender offers and
class action communications) from or relating to companies, the securities or
other instruments of which are held in the Subaccount, to the Advisor. The
Advisor shall be responsible for making a recommendation to the Trustee, in such
detail and specificity as the Trustee may reasonably require, as to the
appropriate response to such communications (the "Suggested Response"). Such
Suggested Response shall be made by the Advisor by Valid Notice, at least one
(1) complete business day (i.e., not later than the same time of day or the next
business day) prior to the deadline for such response. Such Suggested Response
shall be directed to the employee or employees of the Trustee designated for
such purpose by the Trustee from time to time
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by Valid Notice. If the Trustee decides not to follow the Suggested Response, it
shall so notify the Advisor by Valid Notice ("the Trustee's Rejection") not
later than the earlier of one (1) complete business day (i.e., not later than
the same time of day or the next business day) following its receipt of the
Suggested Response or two (2) hours before the response deadline. Failure by the
Trustee to give the Trustee's Rejection to the Advisor within such period shall
constitute the Trustee's approval of the Suggested Response, and shall
constitute authorization to the Advisor to (i) take such action as is
appropriate to effect the Suggested Response and (ii) issue to the Trustee such
instructions as may be appropriate in connection with effecting the Suggested
Response.
(f) Advisor's Duty of Care. The Advisor shall discharge its
duties with respect to the Subaccount solely in the interests of the
participants in the Plans and their beneficiaries with the care, skill, prudence
and diligence under the circumstances then prevailing that a prudent person
acting in like capacity and familiar with such matters would use in the conduct
of an enterprise of like character and with like aims. The Advisor shall not be
responsible for the operation or administration of the Trusts or the Plans. The
Advisor shall have no investment advisory responsibilities other than those
expressly provided in this Agreement. The Advisor shall discharge its duties in
accordance with the requirements of ERISA, other applicable law and this
Agreement.
(g) Fidelity Bond and Insurance. The Advisor shall maintain
for the period of the Agreement a fidelity bond meeting the requirements of
section 412 of ERISA (unless the Trustee acknowledges that the Advisor is exempt
from such requirements) and including its officers, directors and employees to
the extent so required. The Advisor will provide to ABRA and the Trustee within
twenty (20) business days of the effective date of this Agreement copies of all
insurance policies (including fiduciary, errors and omissions, and fidelity
bonds) that could cover or relate to the Subaccount, the Fund, the Trusts or the
Plans, and, upon request by the Trustee or ABRA, a certificate of coverage with
respect to any such policies. The Advisor will notify ABRA and the Trustee of
any material changes in such policies, which change affects the coverage of the
Advisor, within twenty (20) business days after the earlier of when such changes
are made or are effective.
(h) Brokerage Practices. In placing orders for the purchase
and sale of assets of the Subaccount in accordance with Subsection 4(c), the
Advisor shall act in accordance with the procedures with regard to brokerage
practices for the Subaccount, as described in Appendix D. The Advisor will make
its recommendations of brokers or dealers in accordance with its best judgment
and in a manner consistent with ERISA and other applicable law. The Advisor
shall recommend those brokers or dealers for inclusion on the Broker List using
its best judgment to choose the broker or dealer most capable of providing the
brokerage services necessary to obtain the "best available price and most
favorable execution." The Trustee recognizes that the Advisor may, in accordance
with Section 28(e) of the Securities Exchange Act of 1934, as amended, recommend
a broker or dealer who will charge a commission for effecting a securities
transaction that will exceed the amount of commission another broker or dealer
would have charged for effecting such transaction, where the Advisor has
determined in good faith that the amount of such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer to, or for the benefit of, the Subaccount, viewed in terms of
either that particular transaction or such broker or dealer's overall
responsibilities with respect to the Subaccount.
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(i) Nondisclosure of Information. To the extent necessary for
the execution of this Agreement or to satisfy the requirements for disclosure to
participants or to meet the requirements of Sections 8 and 9, the Advisor shall
keep in strict confidence all information about the financial affairs of the
Subaccount. The Advisor may include information about the Subaccount in
aggregate information provided by the Advisor as long as the information is not
set out separately or in any other manner which would enable a third party to
determine the financial affairs of the Subaccount.
(j) Advisor's Potential Conflicts of Interest. The Advisor
(and any affiliate thereof) may engage in any other business or act as advisor
to or investment manager for any other person, even though it (or any affiliate
thereof) or such other person has, or may have, investment policies similar to
those followed by the Advisor with regard to the Subaccount. Nothing in this
Agreement shall prevent the Advisor (or any affiliate thereof) from buying or
selling, or from recommending or directing such other person to buy or sell, at
any time, securities of the same kind or class recommended by the Advisor to be
purchased or sold for the Subaccount. The Advisor shall be free from any
obligation to the Subaccount to recommend any particular investment opportunity
which comes to it. However, if the Advisor effects the purchase or sale of the
same securities for the Subaccount and other accounts at the same time that
orders are open for the Subaccount and the other accounts, the pricing of or
proceeds from such securities shall be allocated among the other accounts and
the Subaccount in a just and equitable manner.
(k) Valuation. At the request of the Trustee from time to
time, the Advisor shall provide pricing and valuation information with respect
to particular securities it has recommended for the Subaccount if the Trustee
has determined that such pricing and valuation information is not otherwise
reasonably available to the Trustee through standard pricing services.
5. Representations by the Trustee.
The Trustee represents and warrants that (a) there are no
restrictions or limitations on the Subaccount's investments imposed by
applicable law other than (i) those set forth in the Declaration of Trust, the
Fund Declaration, this Agreement, and Appendix C, as any of the same may be
amended from time to time and communicated to the Advisor, (ii) those provided
in ERISA, and (iii) any other investment restriction or limitation imposed by
law or regulation which in the Trustee's judgment is applicable to the
Subaccount and which is communicated by the Trustee to the Advisor; and (b)
disclosure to Plan participants contained in the Registration Statement
describing the Subaccount is accurate and prepared in accordance with the
requirements of Form S-1 under the Securities Act of 1933, as amended, except
that the Trustee makes no representation or warranty with respect to any
disclosure relating to the Advisor or its services with respect to the
Subaccount which the Advisor has prepared, approved in writing or has not
disapproved within five (5) business days following confirmed transmission by
facsimile, acceptable electronic transmission or overnight mail to a person
designated by the Advisor to review such disclosure.
6. Liability of the Advisor; Indemnification.
(a) Limitation of Liability of the Advisor. The Advisor shall
not be liable for any act or omission of any other person or entity exercising a
fiduciary responsibility, if such
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fiduciary responsibility has been allocated to such other person or entity in
accordance with this Agreement, the Declaration of Trust, the Fund Declaration,
the Plans or the Trusts, except to the extent that the Advisor has itself
violated its fiduciary responsibility or its obligations under this Agreement,
or except to the extent that applicable law (including ERISA) may expressly
provide otherwise.
(b) Indemnification.
(i) Indemnification of Advisor. To the extent permitted
by applicable law, the Trustee agrees to indemnify and hold harmless the
Advisor for losses, damages or expenses resulting from (A) actions taken
by the Advisor in reliance on information provided by the Trustee to the
Advisor in accordance with this Agreement, including but not limited to
the Trustee's operating requirements and cash availability information,
(B) actions omitted to be taken by the Advisor pursuant to instructions or
directions provided by the Trustee, and/or (C) valuation of the assets
held in the Subaccount, computation of unit values for the Subaccount by
the Trustee, or performance data and other financial information provided
by the Trustee to Subaccount participants except to the extent that the
Advisor has incorrectly reported or failed to report securities
transactions in the Subaccount to the Trustee as provided in this
Agreement and to the extent that any error in such valuation or
computation is due to prices or other information provided by the Advisor.
(ii) Indemnification of the Trustee. To the extent
permitted by applicable law, the Advisor agrees to indemnify and hold
harmless the Trustee for any losses, damages or expenses resulting from
(A) any recommendation of the Advisor or based on information provided by
the Advisor, (B) the Advisor's failure to provide correct and timely
information or to make recommendations on a timely basis as provided in
the Agreement, and (C) any disclosure relating to the Advisor or the
services provided by the Advisor with respect to the Subaccount which the
Advisor has prepared, approved in writing or has not disapproved within
five (5) business days following transmission by facsimile, acceptable
electronic transmission or overnight mail to a person designated by the
Advisor to review such disclosure; provided, however, that the Advisor
shall not be required to indemnify and hold harmless the Trustee to the
extent that such losses, damages or expenses result from an act or
omission of the Advisor with respect to which the Advisor not only has
used such care, skill, prudence and diligence as a reasonably prudent
person acting in like capacity and familiar with such matters would use in
the conduct of an enterprise of like character and with like aims, but
also has otherwise acted in accordance with this Agreement.
(iii) Advisor and Trustee Indemnification Procedures. If
the party seeking indemnification is either the Advisor or the Trustee,
such party shall promptly notify the indemnifying party of any claim,
action, suit or proceeding, or threat thereof, which may result in a claim
for indemnification. Upon such notification, the indemnifying party may,
at its option, undertake the conduct and cost of defending any such claim,
action, suit or proceeding and in such case shall have full control of
such defense, including but not limited to selection of counsel (provided
that such counsel must be reasonably acceptable to the party being
indemnified) and entry into settlement agreements (provided that any such
settlement agreement shall require the consent of the party being
indemnified, which consent
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shall not be unreasonably delayed or withheld). The Trustee or the
Advisor, as the indemnifying party, shall not be liable for any legal or
other expenses incurred in connection with any such defense that were not
specifically authorized by it; provided, however, if such indemnifying
party fails to undertake and prosecute vigorously the defense of any such
claim, action, suit or proceeding, it shall be liable for reasonable legal
and other expenses incurred by the party being indemnified.
(c) Indemnification of ABRA.
(i) Indemnification. To the extent permitted by
applicable law, the Advisor agrees to defend, indemnify and hold harmless
ABRA, its then present and former officers, directors and advisory
directors, the ABA, and its then present and former officers and Board of
Governors (the "Indemnified Persons") against any and all expenses
(including attorney's fees, judgments, fines, penalties, including any
civil penalties assessed under Section 502(l) of ERISA) and amounts paid
in settlement actually or reasonably incurred in connection with any
threatened, pending or current action, suit, proceeding or claim, whether
civil, criminal, administrative or otherwise, and the amount of any
adverse judgment entered against any of them and any reasonable expenses
attendant thereto by reason of any of the Advisor's acts or omissions in
connection with this Agreement. For the above defense, indemnity and hold
harmless provision to apply (i) the Indemnified Persons (or ABRA) shall
inform the Advisor promptly of any claims threatened or made against any
Indemnified Person, (ii) the Indemnified Persons shall cooperate fully
with the Advisor in responding to such threatened or actual claims and
(iii) any settlement agreement entered into by the Indemnified Persons
shall require the written approval of the Advisor, which approval shall
not be unreasonably withheld or delayed, and any settlement agreement
entered into by the Advisor shall require written approval, within the
time frame established by the Advisor, of the Indemnified Persons, which
approval shall not be unreasonably withheld.
(ii) Right to Counsel. The Indemnified Persons shall
have the right to employ counsel in their, its, his or her sole
discretion. Such Indemnified Persons shall be responsible for the expenses
of such separate counsel except as provided in Subsection 6(c) (iii). The
Advisor agrees to cooperate fully with the Indemnified Persons and their
separate counsel in responding to such threatened or actual claims.
(iii) Separate Counsel. The Indemnified Persons shall
have the right to reasonable expenses of separate counsel paid by the
Advisor provided that the Advisor shall not be liable for any legal or
other expenses incurred in connection with any such threatened claim or
defense that were not specially authorized by the Advisor in writing and
provided that the Advisor shall have received a written opinion reasonably
acceptable in form and substance to the Advisor of counsel reasonably
acceptable to the Advisor (and which counsel shall not represent or
otherwise be affiliated with any of the Indemnified Persons) that there
exists a material conflict of interest between one or more of the
Indemnified Persons and the Advisor in the conduct of the response to a
threatened claim or in the conduct of the defense of an actual claim, in
which event the Advisor shall be liable for the reasonable legal expenses
of each counsel whose appointment is necessary to resolve such conflict;
provided, however, the Advisor shall not be responsible for more than one
(1)
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counsel for all Indemnified Persons and selection of such counsel shall be
reasonably acceptable to the Advisor.
(iv) Payment of Expenses. Expenses (including counsel
fees) specifically authorized by the Advisor and actually and reasonably
incurred by the Indemnified Persons in defending against or responding to
such threatened or actual claims as provided in (i) and (iii) of this
Subsection shall be paid as they are incurred. If an Indemnified Person is
reasonably required to bring any action to enforce rights or collect
monies due under Subsection 6(c) and is successful in such action, the
Advisor shall reimburse such Indemnified Person or its subrogee for
reasonable fees and expenses incurred in bringing and pursuing such
action.
(v) Supplemental Rights. Indemnification pursuant to
Subsection 6(c) is intended to be supplemental to any other rights to
indemnification available to the Indemnified Persons. Nothing herein shall
be deemed to diminish or otherwise restrict the Indemnified Persons'
rights to indemnification under law.
(vi) Third Party Beneficiaries. The Advisor
acknowledges that the Indemnified Persons are intended to be third-party
beneficiaries of Subsection 6(c).
7. Transactions Prohibited with Respect to the Advisor. The Advisor,
its officers, partners, directors, and affiliates, and each of them, shall not,
with respect to the Subaccount, (a) as a principal, purchase assets from or sell
assets to the Fund, (b) receive any compensation or fees with respect to the
Fund, other than the fees provided for in Appendix E, (c) engage in or recommend
any transaction involving or affecting the Fund that such person knows or should
know is a prohibited transaction under ERISA unless such transaction is exempt
under the applicable provisions of ERISA, or (d) direct delivery of securities
or payment to itself or direct any disposition of securities or cash from the
Subaccount except to the Trusts.
8. Reports and Meetings.
(a) Monthly Reports. At least monthly the Advisor shall render
to the Trustee and ABRA, or their designee, reports concerning its services
under this Agreement and the status of the Subaccount, based on the reporting
procedures set forth in Appendix F, including statements of investments in the
Subaccount.
(b) Meetings. The Advisor will meet with the Trustee and ABRA
and with such other persons as the Trustee or ABRA may designate on reasonable
notice and at reasonable times and locations, to discuss general economic
conditions, Subaccount performance, investment strategy and other matters
relating to the Subaccount.
(c) Reports Prior to Termination. On each day during the
period ten (10) business days prior to the effective date of the Advisor's
resignation or its removal under this Agreement by the Trustee (the "Termination
Date"), or on each day of such shorter period after which the Advisor has
received notice of its removal, the Advisor shall render to the Trustee and
ABRA, or their designee, a report of the current status of the Subaccount based
on the procedures set forth in Appendix F, including a statement of investments
in the Subaccount and on the day
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immediately following the Termination Date, such report shall be rendered in
final form with respect to the status of the Subaccount, including a statement
of investments therein, as of the close of business on the Termination Date.
(d) Additional Reports. The Advisor shall furnish to the
Trustee and ABRA such additional reports and information as may be reasonably
requested by the Trustee or ABRA.
9. Accounting. The Advisor shall keep accurate and detailed records
concerning its services under this Agreement, including records of all
transactions effected and recommendations made during its performance of this
Agreement, and all such records shall be open to inspection at all reasonable
times by the Trustee and ABRA, or their designee, and by duly authorized
representatives of the Secretary of Labor and the Secretary of the Treasury
acting pursuant to their authority under ERISA and the Code, respectively, and
other appropriate regulatory authorities.
10. Advisor's Compensation. The amount and manner of payment of fees
payable by the Trustee to the Advisor for the Advisor's services under this
Agreement are set forth in Appendix E. The Advisor agrees that if it enters into
a fee schedule with any new non-eleemosynary client whose portfolio is advised
or managed under the same investment policies and objectives as the Subaccount,
and is similarly or smaller sized, for services which are similar to the
services provided under this Agreement and such fee schedule contains fees that
are less than the fees set forth in Appendix E, it will offer the same fee
schedule to the Trustee which shall have the right to require the amendment to
Appendix E to reflect that lower fee schedule.
11. Removal and Resignation.
(a) Removal of the Advisor. Upon written notice to the
Advisor, the Advisor may be removed by the Trustee. Any transaction for the
Subaccount authorized by the Trustee prior to the receipt by the Advisor of the
notice shall be consummated and the Advisor shall not recommend any transaction
for the Subaccount subsequent to the receipt of the notice.
(b) Resignation of the Advisor. The Advisor may resign under
this Agreement upon sixty (60) days' prior written notice to the Trustee. The
Advisor shall concurrently advise ABRA in writing of such resignation and the
effective date thereof.
(c) Termination of Obligations. The respective obligations of
the Advisor and the Trustee under Section 6 of the Agreement shall survive any
such removal or resignation.
12. Termination, Amendment or Modification. The provisions of this
Agreement may not be terminated, changed, modified, altered, or amended in any
respect except in a writing signed by the parties.
13. Definitions. As used herein, the following terms shall have the
meanings ascribed to them in the following sections of this Agreement:
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Term Defined Section
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ABA Members Collective Trust Introduction
ABA Members Plans Introduction
ABRA Introduction
Advisers Act 2
Advisor Introduction
Advisor's Amendment 4 (c) (i)
Advisor's Recommendation 4 (c) (ii)
Agreement Introduction
Authorized Transaction 4 (c) (iii)
Broker List 4 (c) (i)
business day 2
Code Introduction
Declaration of Trust Introduction
ERISA 2
Fund Introduction
Fund Declaration 4 (b)
Indemnified Persons 6 (c) (i)
Plans Introduction
State Street Introduction
Subaccount Introduction
Suggested Response 4 (e)
Termination Date 8 (c)
Trustee Introduction
Trustee's Response 4 (c) (ii)
Trustee's Rejection 4 (e)
Trusts Introduction
Valid Notice 4 (c) (v)
14. Governing Law. This Agreement shall be construed and enforced
according to the laws of The Commonwealth of Massachusetts and, to the extent of
any federal preemption, the laws of the United States of America.
15. Binding upon Successors. This Agreement shall be binding upon
and enforceable by the successors to the parties hereto.
16. Assignment. The Advisor may not assign this Agreement (including
for this purpose any assignment within the meaning of the Advisers Act), or any
rights or responsibilities hereby created, without the prior written consent of
the Trustee, which consent may be withheld by the Trustee in its sole
discretion; however, the parties may amend this Agreement from time to time in
accordance with Section 12.
17. Notices. Written notices shall be deemed effective with respect
to a party upon delivery to such party at the address set forth below or to such
other address as may be provided in writing from time to time by such party.
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To the Advisor: Capital Guardian Trust Company
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Attention: Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
To the Trustee: State Street Bank and Trust Company
Batterymarch Park III
Three ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Attention: ABRA Division Head
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇ or 985-7148
If by mail, to: State Street Bank and Trust Company
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Attention: ABRA Division Head
18. Oral Communications. Oral communications between the parties to
this Agreement shall be effective hereunder only to the extent specifically
authorized herein. By its execution of this Agreement, each of the parties
hereto acknowledges that the other party may record any such oral communications
and consents to any such recording. All oral communications shall be confirmed
in writing, except that if an oral communication is recorded such recording
shall be controlling and no written confirmation shall be required.
19. Authority. The parties to this Agreement represent,
respectively, that they have duly authorized the execution, delivery and
performance of this Agreement and that neither such execution and delivery nor
the performance of their obligations hereunder conflict with or violate any
provision of law, rule or regulation, or any instrument to which either is a
party or to which any of their respective properties are subject and that this
Agreement is a valid and binding obligation.
20. Authorized Representative of the AdvThe Advisor from time to
time shall by written notice certify to the Trustee the name of the person or
persons authorized to act on behalf of the Advisor. Any person so certified
shall be deemed to be the authorized representative of the Advisor. The Advisor
shall give written notice to the Trustee when any person so certified ceases to
have the authority to act on behalf of the Advisor, but such revocation of
authority shall not be valid until the notice is received by the Trustee. The
Advisor will notify the Trustee in writing of any significant changes in the
officers of the Advisor and any changes in the personnel of the Advisor
responsible for providing investment advice with respect to the assets of the
Subaccount within twenty (20) business days after such change.
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IN WITNESS WHEREOF, the parties have executed this Agreement on June __,
1997 with an effective date of June 30, 1997 (unless otherwise agreed).
STATE STREET BANK AND TRUST
COMPANY
Attest: By:
------------------------ --------------------------------
Name: Name:
Title: Title:
CAPITAL GUARDIAN TRUST COMPANY
Attest: By:
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Name: Name:
Title: Title:
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