596-Suntrust Bank
the Manager shall clearly indicate the ownership of any assets in the Investment
Account.
f. To make, execute and deliver any and all mortgages, contracts, waivers, releases
or other instruments in writing necessary Or proper for the accomplishment of any
of the foregoing powers.
g. The term 't~eeurities" used in this Agreement shall be deemed to be restricted to
include only legal investments for the Trustees under the statutes or rules of law
applicable thereto.
h. To obtain payment due for or in relation to any asset held for Trustees' account, to
sell, transfer or take any other action with relation thereto, including dehvery for
Trustees any assignments, stock or bond powers, proxies or other documents or
instruments which Manager deems necessary or prudent.
i. To monitor items requiring action by the Trustees with respect to the assets, such
as stock dividends, rights, offerings, calls or redemptions of bonds or other items.
j. The Manager will provide safekeeping and accounting services for the assets in the
Investment Account.
k. The Trustees hereby authorize the Manager, ff applicable, to maintain the
Retirement Plan assets in a correspondent bank or banks or with a depository
bank, if the Manger so desires. The Trustees also authorize the Manager to hold
all eligible custodial property at a clearing house corporation under the rules and
regulations of such clearing house corporation if the Manager so desires.
1. The Manager will collect the proceeds of securities which are sold, have matured
or have been called for prepayment or redemption and retain such proceeds as part
of the Investment Account.
m. The Manager will collect the proceeds of securities which are sold, have matured
or have been called for prepayment or redemption and retain such proceeds as part
of the Investment Account. Receipts of securities or other property through
3
exchange, contribution, purchase, or otherwise shall also be held as part of the
Investment Account.
n. The Trustees may contribute property to, or purchase property for the account
governed by this Agreement, ff such property is acceptable to the Manager.
o. The Trustees reserve the right to withdraw any part of the Investment Account at
any rune, and the Manager will deliver any part or all of the Investment Account
in accordance with the written instruction of the Trustee.
p. The Manager shall make such payments from the Investment Account at such time
or times to such person or persons and in such mounts as the Trustees shall direct
in writing. The Manager shall be fully protected in acting upon any such written
direction of the Trustees without inquiry or investigation and shall have no duty to
determine the rights or benefits of any person under the Retirement Plan or to
inquire into the right or power of the Trustees to direct any such payment.
q. The Manager is authorized to invest and reinvest all or any portion of the
Investment Account collectively with funds or other trust qualifying under Section
401 of the Internal Revenue Code or with other eligible investors, in units of
participation or invest in any common, collective or cornmingled trust fund
approved by the Trustees. The Manager shall invest assets in the Investment
Account in any such common, collective or commingled trust only if aH
investments made in such common, collective or cornmingled trust must meet all
restrictions for investments set forth in the Retirement Plan and hvestment Pohcy
Statement, as mended from time to time and in accordance with State and federal
laws. Assets may be held in rune deposits in Manager's bank for short periods of
r. The Manager shall maintain a financial institution bond.
The Manager agrees to immediately notify the Trustees, in writing, in the event of
any change in its bond and to immediately notify the Tmstecs if said bond is
4
terminated, cancelled or discontinued, in whole or in part. The Manager agrees to
provide the Trustees with a copy of its annual renewal of its bond on a yearly
basis.
s. The Manager shall maintain at least Twenty Five Million Dollars
($25,000,000.00) of errors and omissions (Trust E&O) insurance for the
Retirement Plan.
The Manager agrees to immediately notify the Trustees, in writing, in the event of
any change in its errors and omissions insurance and to immediately notify the
Trustees if said insurance is terminated, cancelled or discontinued, in whole or in
part. The Manager agrees to provide the Trustees with a copy of its renewal of its
errors and omissions insurance on a yearly basis.
3. Information to Third Parties: SEC Rule 14b-1 provides that unless the Trustees object,
the Manager, as Custodian, must furnish the Trustees' names, addresses and the Trust
share position to companies which issue securities held as custodial property. The intent
of the rule is to facilitate communications between issuers of securities and shareholders.
The Manager is not authorized to disclose Trustees' names, addresses and the Trust share
position.
4. Maintenance of Accounts: The Manager shall maintain accounts showing the fiscal
transactions of the Investment Account. The Manager shall prepare at least quarterly, and
more often as mutually agreed, a report showing in reasonable detail the assets and
liabilities of the Investment Account and giving an account of the operation of the
Investment Account for the past quarter. The Manager shall also provide an annual
transaction and performance report. The Manager shall also provide a report showing
how Manager has voted proxies and a report of brokerage commissions incurred (if the
assets are not in common trust fun&).
5. Discharge of Duties: The Manager shall discharge its duties under this Agreement solely
in the interests of the participants in the Retirement Plan and their beneficiaries and (i)
5
with the care, skill, prudence, and diligence under the circumstances then prevailing that a
prudent investor 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; and (ii) in accordance with
the provisions of this Agreement insofar as they are consistent with the provisions of the
Retirement Plan, Investment Policy Statement and applicable laws, as the same may be
mended from time to time. Trustee shall supply Manager with a copy of the Retirement
Plan and any amendments thereto within a reasonable time after adoption. Manager shall
execute trades on a 'best execution"basis within the meaning of EKISA Technical Kelease
No. 86-1 (i.e. competitive commission cost as well as reliability and quality of the
execution).
6. Compensation of Manager: In consideration for the services rendered by Manager,
Trustee shall pay to Manager an annual fee, per Exhibit A, on the market value of the
assets in the Investment Account. The amount to be paid shall be payable quarterly in
arrears based on the value of assets in the Investment Account on the last day of the
quarter. This shall be the total fee for all administrative custodial services including, but
not limited to, termination fees, transfer fees, fees for checks, statement preparation and
other services rendered. This fee is guaranteed not to increase for a period of five (5) years
from the contract date. The fee includes all expenses and costs incurred by the Manager in
the performance of this Agreement. The Manager shall provide a quarterly statement of
fees and fees may be withdrawn directly from the Investment Account, unless paid directly
by the Trustees or unless the Manager has received, within thirty (30) days after mailing
its quarterly statement of fees, a written objection to the statement from the Trustees.
7. Removal and Resignation: The Manager may resign from its duties hereunder by filing
with the Trustees a written resignation. Such resignation shall take effect within forty-five
(45) days after such notice to the Trustees. The managers may be removed by the
Trustees at any time upon forty-five (45) days notice. Such removal shall be effected by
delivery of written notice of removal executed by the Trustees. Upon resignation or
6
14. Public Entity Crimes Bill: Pursuant to Section 287.133, Florida Statutes, the Manager
must disclose any past, present, or future litigation arising out of violation of this statute
by executing a sworn affidavit herein provided as Exhibit
15. Plan Amendments: The Trustees shall provide the Manager, by verbal notice at a meeting
of the Board or by copies, the amendments to the Retirement Plan that are relevant to the
Manager's duties hereunder and amendments to the Investment Policy Statement on or
before the effective date of the amendment.
IN WITNESS WHEREOF, the Board has signed duplicates hereof, and SunTrust Bank, Central
Florida, N.A. has caused its corporate name to be signed to said duplicates by its proper~offieers
thereunto duly authorized on the day and in the year first above written.
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
By: As Trust O~ A r '
ATTEST: ATTEST:
As Secretary L
8
EXHIBIT A
SUNTRUST BANK, CENTRAL FLORIDA, N.A.
FEE SCHEDULE
FOR
CITY OF SANFORD
GENERAL EMPLOYEES PENSION PLAN
INVESTMENT MANAGEMENT SERVICES
& CUSTODIAL SERVICES
ALL SERVICES INCLUSIVE 50 Basis Points first $10,000,000.00
40 Basis Points next $40,000,000.00
Per Section 6
Fee guaranteed for a period of five (5) years.
EXI-BBIT B
CITY OF SANFORD GENERAL EMPLOYEES PENSION PLAN
PROXY VOTING POLICIES AND GUIDELINES
BACKGROUND AND GENERAL T!:!F~ORY
The Board of Trustees of the City of Sanford General Employees' Pension Plan recognizes that proxy
voting powers are an asset of the Plan and must be exercised for the exclusive benefit of the participants in
the Plan. These guidelines are general in nature and represent the Board' s current attitude toward issues
which may be presented by proxies. In accordance with this recognition, the Board will:
a) Prepare, maintain and follow written policies on voting, shareholder resolution, collective
action and other fights and responsibility of ownership of securities;
b) Analyze the economic aspects of the options presented to them as shareholders and select the
option most likely to protect and enhance the value of the Plan, and
c) Document the votes and other actions and decisions taken, along with the reasons for taking the
action chosen.
GENERAL PROXY VOTING INTERNAL POLICIES AND GUIDELINES
The following represent the general internal policies and guidelines relevant to proxy voting. The relate to
the two basic categories of proxy proposals: those sponsored by management and those sponsored by
shareholders.
Management Proposals:
a) Routine: This category covers the election of directors, approval of auditors and CPAs, board
size, director liability and indemnification and other items that are generally routine in nature.
The Board supports these items except in instances where adveme investment implications may
occur. Exceptions may include the proposed election of directors who own no stock, motions
to allow the corporation to establish it' s own parameters for board size; the granting of overly
broad liability or indemnity clauses, or for proposals where shareholders would grant the
corporation discretion to act on "any other business which comes before it."
b) Capitalization Related: Capitalization issuers include authorization ofnew classes ofissues
of stock, stock splits, change in voting rights per share, cumulative voting, share repurchases,
and other capitalization-related considerations. The Board will generally support non-dilutive
reeapitalization activities and will support value-added capitalization issues. Any strategies
enhancing corporate entrenchment or resulting in dilution of the Pension Fund ownership
positions would not be supported.
c) Reorganization or Mergers: This category covers all reorganization and merger issues.
Economically and soundly based mergers and reorganizations will be voted favorably.
Reincorporation in other states and other specific reorganization proposals of corporations will
generally be viewed on a case-by-case basis to determine if an economically induced strategy
will add value.
d) Employee Compensation: Employee compensation issues are varied and oRen complex in
nature. Proposals of a relatively routine naturo will be favorably supported. Compensation
strategies made to the detriment of shareholder interest will be rejected. Such detrLmental
activities may include below market price issuance, or downv~rd adjustments in the price of
executive or employee options, stock awards for non-employee directors, and abusive equity
based compensation programs. Most complex issues will be addressed on a ease-by-case
basis.
e) Anti-Takeover and Takeover Related: Proposals designed to protect the status quo
incumbent management and existing structure which are deemed detrimental to the best interest
of shareholders in limiting activity which occurs in a free and open market environment would
be rejected. Shareholder rights plans, poison pills, golden parachutes, re-incorporation in
market restrictive states, fair price or super-majority vofmg requirements and greenmail are
generally categories of proposals which would not be supported. Long-term, strategic takeover
related proposals which would be judged beneficial would be supported on a case-by-case
basis.
Shareholder Proposals:
Shareholder proposals enhancing the value of sleek or supporting shareholder rights on a broad basis
would be generally supported. Categories of shareholder proposals are as follows:
a) Social Related: Proposals to change lawful corporate activities in order to meet the goals of
certain groups or private interests the represent are generally viewed unfavorably. Social
issues must be reviewed to determine the business benefits of corporate actions as well as
social costs. The Pension Fund can expect a reasonable person to be a good citizen and is
supportive of an equal level of citizenship from a corporation. In matters that are purely social
in nature and have no economic impact, it will be the Boards' policy to abstain on such issues.
b) Corporate Governance: Corporate gnvemanec proposals are generally filed by individual
shareholders, churches, and other public pension funds and are directed at roversing anti-
takeover provisions adopted by management, regaining or protecting shareholder fights and
making corporate management more accountable to shareholders. These issues are generally
supported and include banning greenmad, reducing super-majority vote requirements,
submitting shareholder rights plans to a shareholder vote, equal access to proxy statements,
confidential balloting and eliminating classified boards of directors.
c) Other: A large number of miscellaneous issues, mos~y filed by activists groups, are usually
issue specific. Our policy will be to generally absta'm from participating in these issues unless
compelling cause can be shown to enhance investment value.
VOTING PROCEDURE
The Investment Manager(s) is directed to exercise all proxy voting powers in accordance with these stated
policies and guidelines. Proxies shall be voted timely and records shall be maintained attribufmg voting
positions in relation to these guidelines. The Investment Manager shall provide an accounfmg of votes cast
to the Board at least annually.
The Board of Trustees of the City of Sanford General Employees Pension Plan has adopted this statement
Proxy Voting Policies and Guidelines this ,-~/~ day of March 1996.
CITY OF SANFORD
GENERAL FUND EMPLOYEES' RETIREMENT SYSTEM
STATEMENT OF INVESTMENT
POLICY GUIDELINES AND OBJECTIVES
The guidelines and objectives provided below are designed to complement those provided by
Chapter 280, Florida Statutes and Ordinances of the City of Sanford. While these funds are co-
mingled with the City of Sanford Police Officers' and City of Sanford Firefighters' Retirement
Systems, the funds shall be subject to the limitations of Chapter 175 and Chapter 185 of Florida
Statutes. The objective of these guidelines is to 1) provide the investment manager a more
accurate understanding of the Trustees' investment objectives and 2) indicate the criteria by
which the Investment Manager's performance will be evaluated.
The primary objective of the Investment Manager of the City of Sanford General Fund
Employees' Retirement System shall be the protection and preservation of the assets. In
addition, the Investment Manager shall seek the highest possible return while maintaining a
prudent regard for legal considerations, fiduciary responsibility, safety of capital and minimum
volatility of returns.
GUIDELINES
Cash:
There is a positive cash flow from contributions into the Fund. With respect to cash-equivalent
short-term investments, over-all quality and minimal risk guidelines apply. Instruments which
may be used are: U.S. Government Obligations, Certificates of Deposit and Repurchase
Agreements with major money center banks, Commercial Paper rated A-1 by Standard & Poor's
or Moody's P-1 rating of better.
Equity Portfolio (including preferred stocks and convertible bonds):
The equity portion of the portfolio shall consist of stocks issued by U.S. corporations and listed
on any one of the recognized national stock exchanges. Any stock purchased for the portfolio
must hold a rating in one of the three highest classifications by a major rating service (i.e.
Standard & Poor's, Value Line, or Moody's). Investment in any single corporation's stock shall
not exceed 5% of the equity portfolio's total value nor shall the equity portfolio's total value at
cost exceed 50% of the fund's assets.
Fixed Income Portfolio:
The Fund's fLxed income portfolio shall consist of U.S. Government and U.S. Government
Agency bonds and/or bonds issued by United States corporations that are rated "A" or better by
Moody's or Standard & Poors' rating services. The value of bonds issued by any single
corporation shall not exceed 10% of the total bond portfolio.
Absolute Restrictions (Prohibited Investments):
There shall be no investment activity in the following:
1. Short sales, margin purchases, or borrowing.
2. Private placements or other restricted securities (not freely marketable).
3. Commodities.
4. Puts, calls, straddles or hedging.
5. Foreign securities.
6. Warrants or other options, except as part of purchase of another security.
7. Tax-exempt bonds.
8. Venture capital.
9. Real estate.
10. Any investment prohibited by State or Federal Law.
OBJECTIVES
Total Portfolio:
The total portfolio shall achieve returns over any rolling 3 year period in excess of a custom
index. The custom index is defined as a 50% investment in the Standard & Poors' 500 Index
and 45 % investment in the Lehman Brothers Government/Corporate Bond Index, and a 5 %
investment in U.S. Treasury Bills.
Equity Portfolio:
The equity portion of the portfolio shall achieve a return over any rolling 3 year period in excess
of the return of the Standard & Poors 500 Index. In addition, it should be a goal of the
Investment Manager that the equity portfolio returns in any 12 month period rank in the Top
33 % of a representative universe of managers managing similar portfolios.
Fixed Income Portfolio:
The overall objective of the fixed income portion of the portfolios is to add stability,
consistency, and safety to the total fund portfolios. As a result, the Investment Manager shall
produce a positive rate of return during any 12 month period while meeting or exceeding the
return of the Lehman Brothers Government/Corporate Bond Index.
REPORTING AND PERFORMANCE MEASUREMENT
Valuations of current holdings at cost and market value and a summary of trade transactions
shall be sent to the Trustees on a monthly basis.
The Investment Manager for the City of Sanford General Fund Employees' Retirement System
shall generate quarterly reports for management purposes. The reports shall include data on
investments held, returns earned, and any other information necessary for clarification of the
results.
Upon reasonable notice, the Investment Manager shall provide any information relevant to each
Fund as requested by the Board of Trustees.
The Investment Manager's performance shall be evaluated at minimum on a annual basis in
terms of achieving the goals as outlined in this statement. In addition, the equity investments
selected by the Investment Manager will be evaluated for risk.
In the equity portfolio, risk evaluation will include variability and volatility of returns, security
diversification, portfolio price earnings ratio, portfolio dividend yield, average market
capitalization and average debt to capital.
In the fixed income portfolio, consideration will be given to average quality and maturity.
POLICY REVIEW
It is the intention of this Board to review all goals, guidelines and objectives at least annually.
As the above are changed or expanded, this document will be amended. No amendment to this
document shall be made except by the consent of the Board of Trustees.
Mayor, Board of Trustees:
SunBank Capital Management, N.A.:
SunTrust Banks of Florida, Inc. Trust and Investment Services Group
P.O. Box 3808, Mail Code 0-1081
Orlando, Florida 32802
Tel (407) 237-4254
Fax (407) 237-4554
(800) 432-4760 Ext. 4254
S UST
March 18, 1996
IN~:4CE DEPT.
O ,v~5 9: ~Is. Carolyn Small
City of Sanford
Post Office Box 1788
Sanford, Florida 32772-1788
Re: City of Sanford General Employees Retirement System
Account Number: 56891224
Dear Carolyn:
The City of Sanford General Employees Retirement Plan has been set up in our system and
we will be able to deposit any contribution check intO this fund from this point forward. I
have included with this letter, the Investment Management Agreements for the appropriate
signatures. For your convenience, I have also included an Authorized Signers List. This list
will indicate to SunTrust who can give direction to us regarding the Retirement Plan. If the
signers on this account are the same as those on the Police and Fire Retirement Plans, please
let me know that in writing and you will not have to execute the Authorized Signers List.
I have included two originals of each document: Proxy Vofmg Policies and Guidelines;
Investment Management Agreement with exhibit A; and the Investment Policy Guidelines and
Objectives for execution. We have saved the Investment Agreement, Exhibit A and Exhibit B
in our data base, so please let me know fithere are any changes to be made to these
documents. Please also have the documents executed in the appropriate areas and keep one
original for your files returning one original for mine.
This Plan' s market value will be combines with that of the Police and Fire accounts for fee
purposes. The fee schedule we will use for all three plans is 50 basis points on the first $10
million and 40 basis points on the next $40 million. As you know, we bill quarterly in arrears.
Currently the Police and Fire accounts have the fees charged directly to the Trust and we w'~l
set the General account up the same way. If you would prefer that we bill the City of Sanford
for the fees, please let me know and we will adjust our system accordingly.
We have mirrored the statement distribution mailing list with that of the Police and Fire.
Again, if this is incorrect, please let me know and we will make any changes necessary. You
will receive monthly statements as well as an annual statement to coincide with the Plan's
September 30 year-end.
Page Two
Ms. Carolyn Small
March 18, 1996
I am looking fortyard to working with your new Plan. Please call me if you have any
questions regarding the information contained in this letter.
Sincerely,
and Trust Officer
Enclosures
co: Kurt Wood - STI Capital Management
Sm Van Arsdale - STI Capital Management
~<~I.~>~=~*~`~*~*~i~`~.~RE~ATED~`~UST~MER~/~CC~UNT.~D~SP~`AY~'~ ******* NO MORE DATA
SELECT FUNCTION ===>
ACCOUNT NUMBER: 56891222 TITLE: SANFORD, CITY POL p/P IM
OPEN DATE: 04/03/95 ADM: 095 INV: 839 TAX: ORL
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RELS: MSL
MAIL:
CITY OF SANFORD POLICE P/P~ CITYSAPPP001'
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