“We are not human beings having a spiritual experience. We are spiritual beings having a human experience” Tiehard de Chardin
“When we are alone on a starlight night or see the migrating birds or when we see children when they are really children, we will be able to join in and experience the cosmic dance which is always there. Indeed, we are in the midst of it and it is in the midst of us. We must but open our hearts to see it” Thomas Merton
“Whether you think you can or think you can’t, you’re
right” Henry Ford
(Download Disclosure document in .pdf format)
Table of Contents
I. Introduction
III. A Description of the Program
A. Socially Responsible Managed Accounts
B. Disclaimer Clause on Socially Responsible Investing
IV. The Advisor
V. Methodology
VI. Our Five Point Investment Strategy/The Process
1. Avoidance Screening
2. Quantitative Methodology/Buy and Sell Candidates
3. Technical Methodology/Buy and Sell Candidates
4. Qualitative Stock Analysis/Buy and Sell Candidates
5. Market Strategies
6. Portfolio Strategies – Objectives
A. Active Growth Portfolio
B. Aggressive Growth Portfolio
C. Growth Portfolio
D. Growth and Income Portfolio
E. Income Portfolio
VII. Conditions for Managing Accounts and Review of Accounts
VIII. Fee Schedule
IX. Performance History – Hypothetical
A. Disclaimer on Past Performance of Growth, Aggressive Growth and Active Portfolio Strategies
B. Back Tested Portfolio Returns
1. Model Growth Portfolio Returns
2. Model Aggressive Growth Portfolio Returns
A. Services Offered
B. Managed Account Services
C. Termination/Pro-Ration
D. Withdrawals from Account
E. Drawdown
XI. Types of Investments Offered
XII. Managed Account Investment Discretion
XIII. Participation or Interest in Client Transactions
XV. Education and Business Standards
APPENDIX
1. Form ADV – Part II – Brochure (.pdf; 187kb)
2. Investment Advisory Agreement (Printable pdf)
3. Limited Power of Attorney and Discretionary Trading Authority (Printable pdf)
4. Authorization to Debit Account for Advisory Fees (Printable pdf)
5. Acknowledgement of Receipt of Disclosure Document (Printable pdf)
6. Privacy Policy (Printable pdf)
7. Solicitor’s Disclosure Document and Solicitor’s Solicitation Agreement (Sample) (Printable pdf)
8. Disclosure Pursuant to Rule 206(4)-3 under the Investment Advisors Act of 1940 (Printable pdf)
9. 1, 3 and 5 Year Performance Charts (Back tested)
A. Model Growth Portfolio {December 2000 – December 2005}
B. Model Aggressive Growth Portfolio {August 31st 2000 – June 30th 2005}
I. Introduction
Birkelbach Management Corp., Inc. (“BMC” or “Advisor”) is an Illinois corporation, formed in 1974 with its principal place of business located at 208 South LaSalle Street, Suite 1442, Chicago, Illinois 60604. Telephone number – (312) 853-2820; Fax: (312) 853-3183.
BMC is registered as an investment advisor with the Illinois Securities Department. BMC is affiliated with Birkelbach Investment Securities, Inc. (“BIS”), also an Illinois corporation with its principal place of business located at the above address.
BIS is registered as a securities broker-dealer with the U.S. Securities and Exchange Commission (“SEC”), the state of Illinois, among other states, and is a member of the securities industry self-regulatory organization (“SRO”) now known as NASD Regulation, Inc. (“NASD-R”), (f/k/a the National Association of Securities Dealers, Inc. (“NASD”)).
BIS is a fully disclosed securities broker-dealer and a correspondent of Pershing, L.L.C. a division of the Bank of New York.
Carl M. Birkelbach is the Chairman, Chief Executive Officer, major shareholder and Principal of BMC and BIS.
II. Mission Statement
“To achieve a competitive total return on investments through an actively managed portfolio while offering investors an opportunity to consider both financial as well as social criteria.”
The Advisor believes that a corporate sustainability policy (where products, services and methods of operation consider opportunities and risks associated with economic, social and environmental issues) will benefit organizations and therefore shareholder value.
III. Socially Responsible Managed Accounts
The Advisor follows a philosophy that "corporate sustainability" is a catalyst for enlightened and disciplined management and is crucial to the success of any company and of its stock performance. The Advisor endeavors to avoid companies that manufacture alcohol and tobacco products or are involved in gambling or weapons production and thereby avoid any crises that may develop from having ownership in a company that imposes harmful effects on society ("Social Screen").
Rather, we seek to invest in the majority of companies that reap positive rewards for investors by enhancing human conditions and inspiring the values of initiative, equal opportunity and economic growth. Government regulation is only a part of the response to the crises of scandalous behavior of top corporate management. All of us bear responsibility to influence the corporate culture by putting our investment dollars in corporations that reflect our values.
{If you wish, BMC can customize the holdings of your account to exclude any or all of the above social criteria.}
A. Disclaimer Clause on Socially Responsible Investing ("SRI")
BMC will determine, to the best of our ability, what companies are deemed to be socially responsible. However, the determination of "socially responsible" is subjective. Therefore, the determination of "socially responsible" companies will be at the sole, subjective discretion of BMC and the client will have no recourse to BMC for that determination. In addition, there may be some companies in the portfolio that do have some participation in the sale of: tobacco, alcohol, weapons, gambling, etc. However, BMC can customize the holdings of your Account to exclude or include any specific company. A list of companies that do not meet BMC's "social criteria" can be obtained upon request.
Investing in companies that we determine are socially responsible may or may not outperform the general market and may entail additional risks by excluding certain investment sectors and not diversifying in such industries involved with: tobacco, alcohol, weapons manufacturers and gambling.
IV. The Advisor
Carl M. Birkelbach, CEO, President
D/O/B: 10/30/40
Bradley University, 1962
B.S. Finance/Economics
CEO of BIS/BMC since 1974
Carl M. Birkelbach
Carl M. Birkelbach is founder and chief executive officer of BMC, a registered investment adviser in Illinois since 1974 and BIS, which has provided a full range of brokerage services to investors since 1978. BIS is a SEC and Illinois registered securities broker-dealer, a member of the SRO known as NASD-R and a member of the Securities Investor Protection Corporation "SIPC". BIS has 25 registered representatives. BMC and BIS's offices are housed on LaSalle Street, less than a block from the Chicago Board of Trade. BIS specializes in investment selections and the broker/client relationship.
Before founding BIS, Carl Birkelbach was a registered representative at McCormick & Company, wrote its weekly market letter, and became assistant sales manager and eventually a vice president and director. Prior to joining McCormick, he started his nearly 40-year investment career in the Trust Department of the Continental Illinois National Bank and Trust Company. Birkelbach is the author of "Stock Market Forecasting Through Charting," of which over 10,000 copies have been distributed. He is editor of the "Investment Strategy Letter", which reaches a U.S.-wide audience, in publication since1975.
Carl has appeared frequently as an investment expert and securities market forecaster on television news programs and as a quoted source in journals and periodicals, including Barron's, Crain's Chicago Business, the Wall Street Journal and Business Week Magazine.
Active in Environmental Protection
Birkelbach's Socially Responsible Investing "SRI" strategy marries his experience in investing with his devotion to environmental concerns. Birkelbach is president and founder of RIDE, Inc. (Recreation for Individuals Dedicated to the Environment), a non-profit corporation which encourages "Coalition Partnerships" for the preservation and restoration of the environment. RIDE advocates public access to natural areas for education, recreation, and spiritual enrichment through contact with nature. RIDE is a member of "Partners for Parks & Wildlife," a coalition to save Illinoi sNature and Open Spaces. Birkelbach is spearheading "CARE for You" (Corporate America Respecting the Environment), a coalition of corporations sponsoring care and education for the environment.
Carl is on the Board and one of the original founders of "The Friends of the Forest Preserve". He also served for 10 years on the board of the International Mountain Biking Association ("IMBA") and served for 7 years on the Cook County Forest Preserve Council.
Windy City Sport magazine named Birkelbach "Sportsperson of the Year" in 1995 and he received a Certificate of Commendation from the State of Wisconsin for his efforts in resolving conflicts over trail access in natural settings.
Birkelbach graduated in 1962 from Bradley University, in Peoria, Ill., with a Bachelor of Science Degree in Business Administration and is a member of Beta Gamma Sigma, honor society for business students. His alumni activities and achievements include the university's highest alumni recognition, the Lydia Moss Bradley Award, and he currently serves as a Bradley University trustee.
Birkelbach served for three years as auction chairman for Chicago Public Television station WTTW, auction on the Board of Stewards of Old St. Patrick's Church, Chicago, and is a member of the Union League Club of Chicago and the Olympia Fields (Ill.) Country Club. He and his wife reside in Chicago and Silverthorne, CO. He has two daughters and four grandchildren.
V. Methodology
Methods of Security Analysis for Plans
{Sources of Information}
BMC uses fundamental, technical and cyclical analysis for determining its recommendations and making buy, sell and hold decisions. BMC will, on an ongoing basis, review research material in order to ensure that our recommendations are appropriate and up-to-date. BMC uses sources that include, but are not limited to: Bloomberg Financial Service, Standard and Poors Market Scope, Standard and Poors Stock Reports, Reuters News, Pershing, L.L.C. Investment Research, Pershing, L.L.C. Net Exchange Pro, Thomson Investors Reports, Market Edge Reports, as well as; financial newspapers and magazines, inspections of corporate reports and activities, research material provided by others, corporate rating services, timing services, charting services, annual reports and other pertinent information necessary for making informed investment decisions.
VI. Our Five Point Investment Strategy/The Process
Our strategy for seeking superior performance uses our own proprietary methodology,
while considering financial as well as socially responsible and corporate sustainability
issues. We believe one can “invest in your values” and by listening
to “your heart and your brain”, one can outperform the Standard
& Poor’s 500 Index. Our Five-Point Investment Strategy follows a process
as described below.
1. Avoidance Screening
We start with the stocks of the S&P 500 and perform an avoidance screening by eliminating companies whose main products involve the manufacture of alcohol and tobacco, or are involved with gambling or weapons production. All of these groups in the past have outperformed the S&P 500. However, we believe “the times they are a changing”. The collapse of Enron’s stock in late 2004, and the legal activities of government officials such as Elliott Spitzer, will in our opinion lead to further government intervention, legal complication and public outcry that could damage the financial stability of these companies.
Although the excessive use of tobacco and alcohol causes dramatic health problems
to those with addictive tendencies, these companies continue their aggressive
advertising campaigns and deal with legal costs through price increases. It
is our belief that legal bills will rise to higher levels in the future and
that it will be more difficult to pass legal costs on to the public through
product price increases. Second, we believe there will be substantial curtailment
in the misuse of these products through educational enlightenment.
Gambling is equally devastating to addictive personalities, comprising a segment
of the population that can least afford to lose. Although many state governments
balance their budget through taxation of gambling establishments and lotto activities,
it is just a matter of time before the kind of warning labels that appear on
cigarette packages will appear on slot machines. The labels could say, “For
every $100 deposited, the average gambler only gets $60 back”.
Weapons manufacturing is a more difficult area to address. After all, none of
us want our country to be defenseless. However, the effects of war are devastating
to both sides. Aside from the controversial side of weapons production, there
is the issue of the way contracts are distributed and priced. Over the years,
there have been many news stories about the corruption of the way defense contracts
are awarded and the controversy over such items as the “one thousand dollar
wrench”.
2. Quantitative Methodology/Buy and Sell Candidates
Next, we have our own proprietary methodology. The first methodology determines a list of stocks that exhibit returns highly correlated with the S&P 500 and should help the portfolio attain excellent returns during “up” markets. The second methodology determines a list of stocks which exhibit low correlation returns with respect to the S&P 500 and should outperform the market during “down” markets. Our proprietary software, developed in-house, allows us to instantly either update our portfolio or quantify past performance with the press of a button. This methodology, in addition to giving us “buy candidates”, allows us to monitor our portfolio for “sell candidates”.
3. Technical Methodology/Buy and Sell Strategies
We use technical methodology to determine what phase of a “bell curve” cycle a stock is in, and what short-term, intermediate and long-term trend the stock exhibits. A summary of these methods is available on our brokerage services Website www.my-broker.com under Stock Market Forecasting through Charting. We also have our own proprietary overbought/oversold indicator, which can be viewed at our Website under “The Strategy Index” category. Currently, we favor issues that have ended their old Bear Market trend, and have left their Accumulation Phase, in which they came down from their highs and, after making new lows, resisted going lower. Now they have entered the upward Progression Phase of a new Bull Market. We believe “the trend is your friend” for both buying and for selling strategies.
4. Qualitative Stock Analysis/Buy and Sell Candidates
Next, we use financial criteria, which continue to be important in determining buy and sell candidates. One can still be blind sided by unforeseen corporate news. However, the likelihood of big changes lessens, if one considers “value”. Companies with consistent earnings and dividend announcement are preferred. However, reasonable multiples, or stock price/earnings ratios, for growth possibilities should also be considered. This is also the time to look at companies on a corporate sustainability basis. This can be a difficult process, as companies such as Wal-Mart may be dropped because of their controversial labor practices.
5. Market Strategies
Lastly, we determine through economic criteria and technical indicators the
kind of investment strategy we should employ. During the 1990s Bull Market,
almost everything went up with only minor setbacks. Likewise, in the early 2000s
Bear Market, almost everything went down, with only minor up ticks. We believe
the current market is unlike either the old Bull or Bear Market. Selection and
“buy and sell” strategies have become more important in achieving
double-digit returns. We believe the old Bear Market ended in October 2002.
Our technical methods “let the market tell us what to do”, instead
of “us telling the market what to do”.
6: Portfolio Strategies: Objectives
A. Active Growth Portfolio
Portfolio management strategies emphasis: An aggressive portfolio with primary emphasis on appreciation and minimum emphasis on current income. The equity diversification includes companies expected to have well above average growth potential and price volatility. Some stocks may not be included in the S&P 500 index. Short term trading will occur. At times deemed appropriate by the Advisor, and when “buy candidates” seem limited, there may be cash in the Account that will either be invested in cash equivalents or securities bearing dividends or interests. The Client must be able to willing to accept the risks of an active strategy in the stock market.
2. Aggressive Growth Portfolio
The primary objective is to achieve growth of assets while minimizing risks. Stocks will be in the S&P 500 index. Only quarterly adjustments to the portfolio will be made. However, as in the active Portfolio strategy, at times deemed appropriate by the Advisor, and when “buy candidates” seem limited, there may be cash in the Account that will either be invested in cash equivalents or securities bearing dividends or interest. The Client must be able and willing to assume the risks of the stock market volatility.
3. Growth Portfolio
A diversified portfolio of equity issues emphasizing an objective that exhibits close or better returns as compared to the S&P 500. Stocks will be in the S&P 500 index. This strategy calls for a fully invested position in the market at all times. The Client must still be willing to accept the risk of market volatility.
4. Growth and Income Portfolio
This portfolio is represented by approximately equal issues of equities using ourIndex Tracker's Plus Portfolio Strategy and a portfolio of fixed income securities. This strategy calls for a close to fully invested position in themarket at all times. Whereas a total return is desired to protect against inflation, the Client must be willing to assume the risk of stock market and interest rate volatility.
5. Income Portfolio
The primary objective is to obtain ongoing secure income obtained from fixed income and some equity security sources. Returns can be expected in line with current yields. The Client must be willing to absorb some principal risk associated with changing market and interest rate conditions.
VII. Conditions for Managing Accounts and Review of Accounts
BMC's managed accounts will be reviewed daily by George Langlois.
Mr. Langlois, 49 years of age, is a Series 24 General Securities Principal. Mr. Langlois attended Loyola University in Rome, Italy and graduated from DePaul University in Chicago, Illinois with a degree in Psychology. Mr. Langlois also attended the Harvard Divinity School in Cambridge, Massachusetts from 1991-1992. Mr. Langlois was first employed in the securities business in 1989 and has been with BIS since 1992.
Mr. Langlois will be instructed to review the accounts of conformity with the objectives expressed by the client in BMC's Investment Advisory Agreement ("Agreement') Addendum, conformance with any restrictions or limitations contained in the Agreement and consistency with BMC's Socially Responsible Investing program and any modifications thereto expressed by the Client.
In addition, Mr. Langlois will review the accounts for size of position, frequency of trading and other such factors to assure compliance with all applicable rules and regulations to which BMC is subject.
Confirmations are issued for transactions as they occur and monthly statements are also issued by the designated securities brokerage firm or custodian. Quarterly reports will be issued within 21 days of the calendar quarter's end by BMC and will show the managed portfolio assets, purchases and sales, realized and unrealized profit and loss, current portfolio value, fees and other expenses charged to the managed Account, and other information deemed pertinent by the Advisor.
VIII. Fee Schedule
Fees are charged as a percentage of assets under management accrued at each month end within the calendar quarter, payable at the end of each calendar quarter, in arrears. The fees are shown below but are subject to change by written notice and are negotiable. Management fees are charged to accounts automatically (with the clients' written authorization)on a quarterly basis. (see, Appendix, Exhibit 4 and Signature Packet for Authorization to Debit Account for Advisory Fees form.)
Fee Schedule |
|
| Account Size | Annual Fees |
| Equity Accounts | |
| $100,000 to $350,000 | 2.00% |
| $350,000 to $1,000,000 | 1.75% |
| $1,000,000 to $2,500,000 | 1.00% |
| $2,500,000 to $10,000,000 | 0.85% |
| Over$10,000,000 | Negotiable |
| Income Accounts | |
| $100,000to $350,000 | 2.00% |
| $350,000to $1,000,000 | 1.50% |
| $1,000,000 to $2,500,000 | 1.00% |
| $2,500,000 to $10,000,000 | 0.85% |
| Over$10,000,000 | Negotiable |
IX. Performance History Hypothetical
A. Disclaimers on Past Performance of Growth and Aggressive Growth Portfolios
The performance chart, does not correspond to the results achieved by any actual client account as individual client objectives and instructions are customized and tailored to their individual goals and needs. Actual results would depend upon returns generated by an individual account.
In addition, past performance is no guarantee or indication of future results. Where the hypothetical performance information reflects deduction of brokerage commissions, capital gains taxes and other charges, if any, it is an estimation. The performance information does not include deduction of advisory fees or the addition of dividends (should be offsetting). The client should not assume anything about the Advisor's competence based on model results. The results of the actual model are hypothetical and do not represent actual trading. Also the results may not reflect the impact that material economic and market factors might have had on Advisor's decision-making ability in an actual managed account, as the back tested results are hypothetical and not real. No inferences should be drawn with regard to future results based on these hypothetical returns. The model uses weekly closing prices for constituents of our benchmark (S&P 500 index) for the time period over which it has been tested, i.e., June 2000 - June 2005. The benchmark used throughout for performance comparison of our results is the S&P 500 index. Where the model assumes reinvestment of cash dividends, if any, they are an estimation.
The securities bought in the model portfolio have been solely picked based on our Five Point Investment Strategy Process (See our Five Point Investment Strategy/The Process). They may or may not represent the Advisor's recommendations to already existing clients at Birkelbach Investment Securities and/or Birkelbach Management Corp. The results shown pertain to an account with a starting value of $1 million. Smaller accounts may not offer proper diversification and risk management. The commissions in the projections are calculated at a rate of 5 cents a share or $55.00, whichever is greater and an estimate of commissions is deducted from the cumulative returns every week. The number of holdings in the Growth and Aggressive Growth Portfolios depend on the size of the investment and is subject to change. The performance calculations incorporate a cash strategy for periodic cash of up to 30% in the portfolio, which could improve or worsen returns on an actual basis.
B. Back-Tested Portfolio Returns
1.Model Growth Portfolio Returns
Shown above are portfolio (fully invested) returns achieved by back testing the model on a weekly basis from December 2000 to December 2005.
All S&P 500 Index performance figures below are ex-dividends. Figures are reported on a rolling 1,3,5 period basis.
- 1 Year Cumulative Returns – Growth Portfolio Up 13.68% (post commissions)
S&P 500 Up 3.00%
- 3 Year Cumulative Returns – Growth Portfolio Up 80.29% (post commissions)
S&P 500 Up 41.88% (Annualized 21.71% vs. 12.37%)
- 5 Year Cumulative Returns – Growth Portfolio Up 31.79% (post commissions)
S&P 500 Down 5.45% (Annualized +5.7% vs. -1.1%)
2. Model Aggressive Growth Portfolio Returns
Shown above are portfolio (with up to 30% periodic cash) returns achieved
by back testing the model on a weekly basis from December 2000 to December
2005.
- 1 Year Cumulative Returns – Aggressive Growth Portfolio Up 17.82%
(post commissions) S&P 500 Up 3%
- 3 Year Cumulative Returns – Aggressive Growth Portfolio Up 85.86%
(post commissions) S&P 500 Up 41.88% (Annualized 22.9% vs. 12.4%)
- 5 Year Cumulative Returns – Aggressive Growth Portfolio Up
76.81% (post commissions) S&P 500 Down 5.45% (Annualized +12.1%
vs. -1.1%)
X. Managed Account Services
A. Services Offered
BMC is registered with the Office of the Illinois Secretary of State Securities Department as an investment advisor. BMC:
1. Manages investment advisory accounts on a discretionary basis.
2. Issues periodicals about securities, without charge.
3. Holds financial seminars, without charge.
4. Provides investment advice, (fee negotiated).
5. Issues special reports and has speaking engagements on a fee negotiated basis.
These services are primarily offered to: qualified individuals, banks, thrift institutions, investment companies, pension and profit sharing plans, trusts, estates, charitable organizations, foundations, ERISA accounts, corporations, other organizations, business entities, associations and the like.
B. Managed Account Services
Managed Account Services
BMC offers a high level of attention to the needs of our Clients. Our Clients can choose from a full range of investment objectives. Our trading authorization can be full or limited and dividends can be sent or reinvested monthly depending on our Client's objectives. The Client can choose their own broker and custodian or choose our affiliate BIS. The Client can choose from five different objectives and they can participate or not participate in our "Socially Responsible Investing" program. Investing in socially responsible issues may result in higher or lower returns than investing without this strategy.
C. Termination/Pro-Ration
The term of BMC's Investment Advisory Agreement ("Agreement") is one (1) year and shall be automatically extended each year. The Agreement, however, may be terminated on at least five (5) days written notice by either party, or at such other time as mutually agreed,or upon Client's death, physical or mental incapacity, insolvency or bankruptcy.
Upon notice of termination, the account may be liquidated and the proceeds deposited in a government securities money market fund, or transferred to another broker, or advisor or controlled by the client, or closed, as the Client directs.
Management fees will be pro-rated to the date of termination.
For the first year the Client agrees to pay to the Advisor an early closing fee of one additional quarterly management fee, equal to the previous quarterly fee, or $2,000, whichever is larger in order to defray the administrative costs of establishing an advisory Account.
D. Withdrawals from Account
Client understands that Client may make partial or total withdrawals at quarter's end payable quarterly from the Account by notifying BMC, except in the event of a partial withdrawal which reduces the Account balance below the minimum level at which BMC believes, in its discretion, that the Account can be properly traded. In that event, BMC reserves the right to liquidate positions and will contact the Client as described in paragraph 12, of the Investment Advisor Agreement, Such notice of withdrawal shall not affect any of Client's Accountliabilities, or payment of the Advisor'smanagement fee.
E. Drawdown
Client understands that BMC will seek income and/or capital appreciation over time by trading and/or investing in rapidly changing markets. If Client's Account declines to a net asset value where BMC, in its sole discretion, determines that further trading would not be prudent. BMC will stop trading in the Account, and employ whatever protective measures [i.e., the purchase, sale, or writing of options or other derivative instruments, etc.], that BMC, in its sole discretion, believes is prudent to preserve, as best as possible, the value of the Account. But further diminution of the value of the Account cannot be guaranteed. BMC will, as soon as possible, contact Client for instructions. At that time, Client may elect either to add funds to the Account in order to engage in additional trading, retain another investment advisor, control the Account himself / herself, or terminate Client's participation, and closetheAccount. Client will be responsible for all obligationsin Client's Account, including any debit balance that may occur and payment of Advisor's management fee. No assurance can be given that Client's losses will not exceed the Account's beginning net asset value after liquidation due to adverse market conditions.
XI. Types of Investments Offered
Investment choices are, but not limited to: equities, (listed and O-T-C), mutual funds, money market funds, certificates of deposit, stock options, government securities, municipal bonds, corporate bonds, Unit Investment Trusts, GNMA's (Government National Mortgage Association), CMO (Collateralized Mortgage Obligations), annuities, and other securities.
XII. Managed Account Investment Discretion
Managed accounts sign an Investment Advisory Agreement, a Limited Power of Attorney and Discretionary Trading Authorization and other forms for opening anaccount. See, Appendix andSignature Packet, Exhibits 2-7. BMC will be authorized to buy or sell securities or investment products in an amount that is indicated by the attached Agreements. The managed account Client will indicate at signing the BMC Investment Advisory Agreement, the dollar amount to be invested and whether special conditions or restrictions are to be adhered to and if margin, short sales or option trading is to be authorized (See, Appendix and Signature Packet - Exhibit 2 and Addendum thereto). Clients can determine the securities brokerage firm to be used. Commissions are to be negotiated by the Client and if BIS is chosen as the securities brokerage firm, the Client is hereby notified that other brokerage firms may offer lower commissions. In addition, maintaining the managed Account at BIS involves other conflicts as more fully disclosed herein and in Form ADV-Part II, incorporated herein by this reference. (See, XIII, Participation orInterest in Client Transactions.)
XIII. Participation or Interest in Client Transactions
It is the policy of BMC for the Client to: (i) designate a broker of Client's choice, (ii) negotiate the commission for such transactions and (iii) have the right to change their designation at any time with proper written authorization. If the Client designates BIS, an affiliate of BMC as broker, BIS will execute securities trades with commissions on a negotiated basis with a minimum of .05 cents per share or $55.00 per trade, which ever is greater. BIS may receive additional compensation from securities offered by prospectus. Clients will receive a prospectus in such cases where the securities transaction is offered by prospectus. The prospectus will indicate any mark up, commission or other fees charged to clients or received by BIS. BIS is a fully disclosed broker and a correspondent of Pershing L.L.C., a division of Bank of New York. Pershing L.L.C. will execute orders, issue confirmations and monthly statements, accept payment and hold both cash and securities. Pershing L.L.C. will receive compensation for such services and bill BIS on a transaction and service basis daily. Pershing, L.L.C. is the Custodian of managed Accounts maintained at BIS.
BIS also has a direct relationship with various other issuers of securities and insurance contracts. Compensation is paid to BIS for selling the products of these various entities.
Dual employees of BMC and BIS will also receive commissions for securities transactions in BMC advisory Accounts maintained at BIS.
BIS or BMC, its officers, directors, newsletter editor or employees may from time to time purchase or sell various securities and products also held by our Clients. It is the policy of BIS or BMC that these transactions shall not be in a conflict with the best interests of our clients.
As a general rule, BMC or its affiliates will not place a buy order for a particular security until any buy orders placed for a client in that particular security are executed. Similarly, BMC or its affiliates will not place a sell order for a particular security until any sell orders placed for a client in that particular security areexecuted. Nothing prevents BMC or its affiliates placing a bulk order for a particular security with one or more client orders, but if the orders are executed at different prices BMC or its affiliates will take the highest buy price or the lowest sell price, as the case may be, so as not to disadvantage any client. See also, Form ADV Part II, Schedule F.
Since BMC has received full and complete authority from Client to make all trading decisions on behalf of Client's Account, Client acknowledges a potential conflict of interest exists because BMC will receive such management fee regardless of whether Client's Account is profitable. Moreover, if Client's Account is carried at BIS, BMC will have an incentive to trade actively to generate commissions for its affiliate, BIS. BMC represents and warrants that it will not engage in active trading for the purpose of generating commission income for the benefit of BIS and to the detriment of Client. Notwithstanding these conflicts of interest, which Client acknowledges, Client agrees to the payment of such management fee whether or not Client's Account is profitable, and if applicable, the carrying of Client's Account at BIS from which BIS will derive commission income for executing transactions in Client's Account at the direction of BMC.
XV. Referral Arrangements
BMC employees are agents of BMC. These agents and duly registered and qualified third parties sell BMC financialproducts for a fee ("Solicitors").
Solicitors will be compensated from BMC's share of its management fee according to the following schedule:
| BMC Management Fee |
Percent to Solicitor |
| Equity Accounts |
|
| 2.00% |
0.75% |
| 1.00% |
0.25% |
| 0.85% |
0.125% |
| Negotiable |
Negotiable |
| Income Accounts |
|
| 2.00% |
0.75% |
| 1.50% |
0.50% |
| Negotiable |
Negotiable |
There may be some special conditions where the fee participation may be slightly higher or lower.
In some cases the BMC agent is also a registered broker with BIS. In such cases the agent will also receive commissions generated on the managed accounts as a BIS broker incompensation for introducing the account to BIS. These commissions to the broker range from 35% to 55% of the commission charged by BIS (as negotiated by the client), with a minimum of .05 cents a share of $55 per trade, whichever is greater. A paraplanner may also receive a portion of the fees for assisting us. (See, Appendix, Exhibit 7 for Sample Solicitor's Disclosure Document and Solicitor's Solicitation Agreement.)
XV. Education and Business Standards
BMC requires that its advisory personnel have a minimum of a college education, the required registrations and licenses and experience in the securities brokerage or advisory business, or a higher education degree, Masters or above, in finance, economics and the like, in lieu of actual business experience.
Advisory personnel of BIS must have the highest integrity and a devotion to the needs of its clients.
XII. How to Become a Client
1. Read carefully BIS's Disclosure Document and Brochure, including of Form ADV Part II contained in the Appendix as Exhibit 1, and the remaining documents in the Appendix.
2. Ask and receive satisfactory answers to all your questions from Mr. Carl M.Birkelbach or staff.
3. Sign and date each document in the Signature Packet.
4. Identify the securities broker-dealer with which you will maintain your account, to bemanaged by BMC. If you select BIS as your securities broker-dealer, note the conflicts of interest and other pertinent disclosures contained in this Disclosure Document and Brochure and Form ADV Part II. Note also that you will need to complete BIS's account opening forms.
5. Select your account Objectives and list any restrictions, conditions, etc., that BIS is to observe on the Investment Advisory Agreement, Tab 1 in the Signature Packet, Addendum A.
6. Issue a check, transfer of securities, etc. to the Custodian, who may be the broker-dealer carrying your managed account, for the amount of your agreed upon investment in the managed account. Note, if BIS will be the broker-dealer, the Custodian is Pershing, L.L.C.
APPENDIX
Form ADV Part II Brochure (.pdf; 187kb)
Investment Advisory Agreement
THIS INVESTMENT ADVISOR AGREEMENT, hereinafter referred to as the “Agreement”,
made and entered into as of this _____ day of _______________, 20___, is by
and between BIRKELBACH MANAGEMENT CORP., INC., an Illinois corporation with
its principal place of business located at: 208 South LaSalle Street, Suite
1442, Chicago, Illinois 60604(“BMC” or Advisor”) and __________________________________________________,
hereinafter referred to as “Client”, {whose name, address and related
information appear below} both of whom are collectively referred to herein as
the “Parties”:
WHEREAS, Client desires to engage the services of BMC to manage investment account(s)
(“Account”) for trading and investing in stocks, corporate and government
bonds, stock option contracts, mutual funds, and any other securities derived
from or related thereto, (“Securities”), as well as and other types
of investment instruments, collectively, “Investments”, and
WHEREAS, BMC desires to manage the Account of Client,
NOW THEREFORE, in consideration of the premises, the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Parties hereto agree:
1. Account Opening
Client shall open a discretionary securities brokerage account with BMC, an
Illinois registered securities investment advisor (“I.A.”) identifying
BMC and BMC’s principal, Carl M. Birkelbach or his authorized and Illinois
Investment Advisor (“I.A.”) registered designee(s) as Client’s
agent and attorney-in-fact. (See, Appendix, Exhibit 3 and Signature Packet.)
2. Authority
As Client’s agent and attorney-in-fact, BMC and/or Carl Birkelbach or
his authorized I.A. registered designee(s) shall have full power and authority,
to buy, sell (including short sales) trade and invest in, Securities, and other
Investments, on margin or otherwise, for Client’s Account and risk. Such
transactions may be of any nature and shall relate to all such Securities which
are now traded, or which may be traded in the future, on world-wide securities
exchanges, the U.S. over-the-counter (OTC) market and/or in domestic or international
dealer markets. The Broker, as defined below, is, accordingly, authorized and
empowered to follow the instructions of BMC, as agent and attorney-in-fact for
Client, in every respect with regard to any such transactions, trades, purchases
or sales, on margin or otherwise, and Client hereby ratifies and confirms any
and all transactions, trades, purchases, sales or dealings placed with Broker
for Client by BMC.
3. Brokerage Firm (“Broker”)
a) Client may open a securities brokerage account with any U.S. Securities and
Exchange Commission (“SEC”) registered broker-dealer that is a member
of any securities industry self-regulatory organization, (“SRO”),
including, but not limited to the: New York Stock Exchange, Inc. (“NYSE”),
NASD-Regulation, Inc. (“NASD-R”), (f/k/a the National Association
of Securities Dealers, Inc. (“NASD”)) or any other national securities
exchange and registered to do business in Client’s state of domicile/residence,
(“Broker”).
In this event, Client will provide Broker with the executed Limited Power of
Attorney and Discretionary Trading Authorization form attached as Tab 3 in the
Appendix to BMC’s Disclosure Document and Brochure (“Appendix”)
and Tab 2 in the accompanying Signature Packet. In addition, Client will execute
and provide to Broker the Authorization to Debit Account for Advisory Fees form.
(See, Appendix, Exhibit 4, and Signature Packet, Tab 3.)
b) Client may open a securities brokerage account with Birkelbach Investment
Securities, Inc. (“BIS”), an Illinois corporation with its principal
place of business located at 208 South LaSalle Street, Suite 1442, Chicago,
Illinois 60604. BIS is a broker-dealer in securities, registered as such with
the SEC, the state of Illinois, among other states, and is a member of NASD-R.
However, Client is not obligated to maintain a securities brokerage account
at BIS, in order to maintain a securities advisory account at BMC. BMC advisory
Accounts carried at BIS are on a negotiated fee basis with a minimum commission
charge of .05 per share, or $25.00 per transaction, whichever is greater.
BIS is a fully disclosed securities broker-dealer and a correspondent of Pershing,
L.L.C., a division of the Bank of New York, and a member of the Securities Investor
Protection Corporation (“SIPC”).
Carl M. Birkelbach is the principal of BIS and BMR. Accordingly, BIS and BMR
are affiliates. (See also, Appendix, Tab 1.)
c) Client may also direct BMC to seek to obtain for Client in such transactions
the best execution price but may, consistent with the foregoing, allow BMC to
select brokers and dealers on the basis of their having furnished statistical,
research and other services to BMC.
d) Client acknowledges that potential conflicts of interests and related issues
exist if Client maintains an Advisory Account at BMC and a brokerage account
at BIS. The disclosures related thereto are contained in BMC’s Disclosure
Document and Brochure and Form ADV – Part II, incorporated herein by this
reference, which Client acknowledges reading. (See, Appendix, Tab 1 and accompanying
Disclosure Document and Brochure.) (See also, paragraph 6, below.)
4. Duties of Advisor.
a) Advisor will assume all investment duties with respect to assets held in
the Account and shall have all investment powers, including sole investment
authority. Advisor shall invest and reinvest in principal and income, including
the proceeds thereof and additions to said Account, in such Securities or other
property of any kind as it deems in the best interest of Client, consistent
with BMC’s Socially Responsible Investment (“SRI”) program,
Client’s modifications to the SRI, if any, the investment objectives of
Client and Client’s profile, subject to such specific limitations, restrictions
or specifications, if any, which Client discloses in Addendum A, to this Agreement.
However, Client shall retain all indicia of ownership, and will not give up
ownership of the cash or securities in the Client’s Account. Advisor may
take any action or non-action as it deems appropriate, with or without other
consent or authority from the Client, and may exercise its discretion and deal
in and with such assets exactly as fully and freely as the Client might do as
owner thereof, except that Advisor is not authorized to withdraw any money,
securities, or other property either in the name of the Client or otherwise,
other than in conjunction with payment of fees owed to the Advisor, which may
be debited from the Client’s Account upon receipt of the Advisor’s
invoice, (quarterly, in arrears). (See, Authorization to Debit Account for Advisory
Fees form, Appendix, Tab 4 and Signature Packet and Tab 3.) Advisor shall be
free to sell securities in the Account regardless of the length of time they
have been held. Advisor shall further be free to make investment changes regardless
of the resulting rate of portfolio turnover, when in Advisor’s discretion,
it shall determine that such changes will promote the investment objectives
of the Account.
b) The orders and transactions Advisor places or recommends for Client’s
Account shall be for the account and risk of Client. The Advisor makes no guarantee
that any of its services will result in a profit to Client. The Client understands
the risks of trading in Securities and other Investments. The Client assumes
the responsibility for losses that may be incurred and the expenses related
to the activities in Client’s Account, including the Advisor’s management
fee.
c) In the performance of services under this Agreement, BMC shall not be liable
for any failure to purchase or sell any Securities on behalf of Client on the
basis of any information known by it, or by any of its officers, directors,
employees or agents if the use of such information might, in BMC’s opinion,
constitute a violation of any federal or state law, rule or regulation or a
breach of any fiduciary or confidential relationship between BMC or any of its
officers, directors, employees, or agents, and any other person or entity.
d) Within twenty-one calendar (21) days following the end of each calendar quarter,
Advisor will provide Client with a written report on the activity in the Account.
Such report shall be in the form of a written summary of assets of the account
as of the date of the review, Securities/Investments purchased, sold and held,
realized and unrealized gains and losses, and fees charged to the Account and
any other information BMC deems pertinent.
5. Minimum Account Size
a) The suggested minimum deposit for opening the Account with BMC is $100,000
in cash and/or securities. However, Accounts can be opened for lesser sums,
for different management fee schedules, and for different trading strategies,
and other considerations, following successful negotiations with the Advisor.
b) Said deposit shall be made with Client’s Broker or Custodian, as herein
defined. By making such deposit, Client acknowledges and accepts the propriety
of Advisor’s trading program and methodology as disclosed in the Disclosure
Document and Brochure and Form ADV – Part II, which is incorporated herein
by this reference. (See, Appendix, Tab 1.) The deposit by Client also signifies
Client’s suitability for the economic risk of loss in trading in the Securities
and Investments and Client acknowledges BMC’s right to rely on such representations.
6. Fees
a) Fees are charged as a percentage of assets under management, averaged at
each month end within the calendar quarter, payable at the end of each calendar
quarter, in arrears. Fees are pro-rated for accounts open within any calendar
quarter. The fees are shown below but are subject to change by written notice
and are negotiable. Management fees are charged to the Account automatically
(with the clients’ written authorization). See, Appendix, Tab 4 and Signature
Packet, Tab 3.
Fee Schedule
Equity Accounts
Account Size Annual Fees
• $100,000 to $350,000 - 2.00%
• $350,000 to $1,000,000 - 1.75%
• $1,000,000 to $2,500,000 - 1.00%
• $2,500,000 to $10,000,000 - 0.85%
• Over $10,000,000 - Negotiable
Income Accounts
Account Size Annual Fees
• $100,000 to $350,000 - 2.00%
• $350,000 to $1,000,000 - 1.50%
• $1,000,000 to $2,500,000 - 1.00%
• $2,500,000 to $10,000,000 - 0.85%
• Over $10,000,000 - Negotiable
b) Client agrees to execute the Fee Payment Authorization form, enabling Broker
to make payments from the Client’s Account to the Advisor in compensation
for the services Advisor provides as set forth in this Agreement. Client also
agrees to execute any similar document provided by the Broker to allow such
payments to the Advisor to be made. (See, Appendix, Tab 4, Signature Packet,
Tab 3.)
c) Since BMC has received full and complete authority from Client to make all
trading decisions on behalf of Client’s Account, Client acknowledges a
potential conflict of interest exists because BMC will receive such management
fee regardless of whether Client’s Account is profitable. Moreover, if
Client’s Account is carried at BIS, BMC will have an incentive to trade
actively to generate commissions for its affiliate, BIS. BMC represents and
warrants that it will not engage in active trading for the purpose of generating
commission income for the benefit of BIS and to the detriment of Client. Notwithstanding
these conflicts of interest, which Client acknowledges, Client agrees to the
payment of such management fee whether or not Client’s Account is profitable,
and if applicable, the carrying of Client’s Account at BIS from which
BIS will derive commission income for executing transactions in Client’s
Account at the direction of BMC.
d) All expenses related to the Account, including, but not limited to, any costs
of safekeeping, mutual fund expenses, transport and acquisition and disposition,
such as brokerage and other execution costs, custody fees and margin cost, shall
be paid by the Client.
e) BMC will pay its expenses in connection with its performance of the investment
advisory services (“Services”) it performs on behalf of Client.
f) For the first year the Client agrees to pay to the Advisor an early closing
fee of one additional quarterly management fee, equal to the previous quarterly
fee, or $2,000, whichever is larger in order to defray the administrative costs
of establishing an advisory Account.
7. Custody of Assets
a) The Advisor shall at no time have custody or physical control of account
assets. Client shall appoint a custodian (“Custodian”) to hold the
securities and other assets in the account. The Custodian may be another Broker,
as defined above, but referred to herein as “Custodian”. Client
authorizes the Advisor to issue instructions to Custodian as may be appropriate
in connection with the settlement of transactions initiated by the Advisor pursuant
to paragraph 2 of this Agreement. Client agrees to accept responsibility for
the prompt delivery of cash or securities to settle securities transactions
effected on behalf of Client by the Advisor.
b) The Custodian/Broker shall provide Client with copies of trade confirmations
and monthly statements detailing the current value of assets, transactions in
the account, any changes in value in the account for that month versus the preceding
month, and related information.
8. Margin
Client agrees to fulfill his/her margin requirements, as required by Broker,
by depositing cash, Treasury bills or other securities and collateral with the
Broker. Client acknowledges and understands that Broker may require Client to
deposit greater margin amounts in Client’s Account than the minimum margin
requirements established by the Federal Reserve Board.
9. Reinvestment in Account
Client recognizes that the profitability of Client’s Account depends upon
long-term, uninterrupted investment of capital. Therefore, all profits will
be automatically reinvested, and distributions of capital and profits, if any,
will be on a limited basis and only on the express request of the Client. Client
should consult with Client’s accountants and/or financial advisors to
determine the tax effects of such profits, losses, distributions or withdrawals.
10. Additions to Account
Client may make additions to the Account from time to time, in any amount, at
which time or times all of the representations herein will be deemed to be expressly
confirmed by Client, including the representation that, after giving effect
to the addition, Client can assume any additional trading risk.
11. Withdrawals from Account
Client understands that Client may make partial or total withdrawals at quarter’s
end payable quarterly from the Account by notifying BMC, except in the event
of a partial withdrawal which reduces the Account balance below the minimum
level at which BMC believes, in its discretion, that the Account can be properly
traded. In that event, BMC reserves the right to stop trading and implement
protective measures (e.g., the purchase, sale or writing of option contracts
or other derivative instruments, etc.) in an effort to preserve the Account’s
value, as best as possible, or to liquidate positions in the Account and deposit
the proceeds in a government securities money market fund. But further diminution
in the value of the Account cannot be guaranteed. BMC will also contact the
Client as described in paragraph 12, below. Such notice of withdrawal shall
not affect any of Client’s Account liabilities, or payment of the Advisor’s
management fee.
12. Drawdown
Client understands that BMC will seek income and/or capital appreciation over
time by trading and/or investing in rapidly changing markets. If Client’s
Account declines to a level that BMC, in its sole discretion, determines that
additional trading would not be prudent, BMC may stop trading the account, implement
protective measures (e.g. the purchase, sale or writing of option contracts
or other derivative instruments, etc.) in an effort to preserve the Account’s
value, as best as possible, or to liquidate positions in the Account and deposit
the proceeds in a government securities money market fund. BMC will also contact
the Client for instructions. At that time, Client may elect either to: add funds
to the Account in order to engage in additional trading, control the account,
retain another investment advisor, transfer the Account, or to terminate Client’s
participation and close the Account. Client will be responsible for all obligations
in Client’s Account, including any debit balance that may occur, as well
as payment of the pro-rata portion of Advisor’s management fee. No assurance
can be given that Client’s losses will not exceed the Account’s
beginning net asset value after liquidation, due to adverse market conditions.
13. Trading Methodology
Client acknowledges and understands that BMC uses a proprietary trading methodology
developed by BMC, as described in Form ADV – Part II, and as amended from
time to time, in the Disclosure Document and Brochure, the Appendix, of which
this Agreement is a part, as the basis of all buying and selling initiated in
Client’s Account. See, Disclosure Document and Brochure, Form ADV, Part
II, Appendix, Tab 1.
14. Indemnification and Hold Harmless
Client hereby agrees to indemnify and hold BMC, its officers, directors, employees,
and agents harmless from any and all investment or trading losses, costs, expenses
(including reasonable attorney’s fees), indebtedness and liabilities arising
from the relationship created hereby, including any acts, omissions or errors
of Broker in executing orders in Client’s Account, unless a court of competent
jurisdiction, or duly constituted arbitration panel, has found that BMC has
committed gross negligence, willful misconduct or wanton recklessness in connection
with the activities related to Client’s Account.
15. Limit of Liability
It is understood that the Advisor shall act in good faith and shall not be liable
for any loss in connection with recommendations or investments made or other
action taken on behalf of the Client’s Account due to: errors of judgment,
or by reason of its advice, including action taken or omitted prior to the written
notice of termination. Advisor shall not be excluded from liability for losses
occasioned by reason of its willful malfeasance, bad faith, or negligence in
the performance of its duties, or by reason of its reckless disregard of its
obligations and duties hereunder; provided however, that nothing in this Agreement
shall constitute a waiver or limitation of any rights that Client may have under
applicable federal or state law. Advisor shall not be responsible for any loss
incurred by reason of any act or omission of Client, a Custodian, or any Broker.
16. Regulatory Authority
All transactions executed for Client’s Account shall be subject to the
constitution, laws, rules, regulations and customs, as they may be amended,
of those securities industry Self-Regulatory Organizations (“SRO’s”),
including, but not limited to: the exchanges or markets, or their clearing houses
where such transactions are effected, and the provisions of the Securities Exchange
Act of 1934 (“Exchange Act”), and the regulations promulgated thereunder
by the SEC, or any state securities “Blue Sky” law.
17. Proprietary Trading and Trading for Other Client Accounts
a) Client acknowledges that BMC, its affiliate BIS, its principal, Carl M. Birkelbach
and other officers, employees and family members of BMC and BIS may trade Securities
and other Investments for their own account as well as trade Securities and
Investments for other client accounts.
BMC’s authority under this Agreement shall not be impaired because BMC
may or may not effect transactions with respect to Securities and other Investments
for its own account or for the account of others which BMC manages, which are
not identical or similar to Securities and other Investments as to which BMC
may effect transactions for Client’s Account, at the same or different
times. BMC will not be required to, and may not take any action or render any
advice with respect to the voting of proxies solicited by or with respect to
the issuers of securities in which assets of the Client’s Account may
be invested from time to time.
b) Advisor agrees to act in a manner consistent with its fiduciary obligation
to deal fairly with all clients when making investment decisions and effecting
transactions. Client agrees that Advisor may give advice and take action in
the performance of its duties with respect to any of its other clients that
may differ from the timing or nature of action taken with respect to the Client’s
Account. Advisor shall not be under any obligation to purchase or sell for the
Client’s Account any Securities or Investment that Advisor may purchase
or sell for its own or an affiliated account, or purchase or sell or recommend
for purchase or sale for the account of another client, if in the sole discretion
of Advisor, such action is not practical or desirable for the Client’s
Account.
c) As a general rule, BMC or its affiliates will not place a buy order for a
particular security until any buy orders placed for a client in that particular
security are executed. Similarly, BMC or its affiliates will not place a sell
order for a particular security until any sell orders placed for a client in
that particular security are executed. Nothing in this sub-paragraph prevents
BMC or its affiliates placing a bulk order for a particular security with one
or more client orders, but if the orders are executed at different prices, BMC
or its affiliates, will take the highest buy price or the lowest sell price,
as the case may be, so as not to disadvantage any client.
18. Proxies
The Advisor may receive proxies for Securities held in Client Accounts in the
normal course of its advisory business. The Advisor is not responsible for voting
proxies. The Advisor is not responsible for forwarding proxies received in error.
The Client is responsible for properly directing the Custodian/Broker as to
whom the proxies should be forwarded and/or voted.
19. ERISA Accounts
a) Advisor acknowledges that within the scope of its appointment under this
Agreement for Employee Retirement Income Security Act of 1974, (“ERISA”)
Accounts, (i) it is a fiduciary with respect to such ERISA accounts within the
meaning of Section 3(21) of ERISA and Section 4975 of the Internal Revenue Code
of 1954, as amended, (ii) it is registered as an investment advisor in the state
of Illinois under the Illinois Securities Act of 1953, as amended (“Illinois
Securities Act”) and (iii) it shall act 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 a like character and with like aims. The trustee(s) of the
ERISA Account reserve to themselves (or to a named fiduciary other than BMC)
the right to vote proxies solicited by or with respect to the issuers of securities
in which the assets of the ERISA Account may be invested under this Agreement.
BMC shall not be required to, and will not, take any action with respect to
the voting of such proxies.
b) BMC will furnish ERISA Clients such information and reports as are required
to comply with Prohibited Transaction Class Exemption 79-1(as amended, PTE 86-128,
October 17, 2002) of the Department of Labor. BMC will treat as confidential
any information disclosed to it by Client or any other person connected with
the ERISA Account and Client will treat any information furnished by BMC as
confidential and for use only with respect to such ERISA Account.
c) Notwithstanding this separate provision for ERISA accounts, all other provisions
of this Agreement apply to ERISA Accounts with the same force and effect as
to any other Client Account.
20. Disclaimer on Socially Responsible Investment (“SRI”)
BMC will determine, to the best of its ability, what companies are deem to be
socially responsible. However, the determination of “socially responsible”
is subjective. Therefore, the determination of “socially responsible”
companies will be at the sole, subjective discretion of BMC and the Client will
have no recourse to BMC for that determination. In addition, there may be some
companies in the portfolio that do have some participation in the sale of: tobacco,
alcohol, weapons, gambling, etc. However, BMC can customize the holdings of
a Client’s Account to exclude or include any specific company. A list
of companies that do not meet BMC’s “social criteria” can
be obtained upon request.
Investing in companies that BMC determines are socially responsible may or may
not outperform the general market and may entail additional risks by excluding
certain investment sectors and not diversifying in such industries involved
with: tobacco, alcohol, weapons manufacturers and gambling.
21. Representations and Warranties of Client
a) Client represents that Client has reached the age of majority; that the information
given to BMC in connection with the opening of the Account (including, but not
limited to, the information set forth herein) is full, complete and accurate;
that Client received, read and understands BMC’s Disclosure Document and
Brochure, Form ADV – Part II, and related documents; that Client understands
that investing, speculating and trading in Securities and other Investments
involves a high degree of risk of loss and is suitable only for persons who
can assume the risk of substantial loss; that Client’s Account may not
be widely diversified at any given point in time due to the nature of the trading
in Client’s Account; that no “safe” trading system has ever
been devised and that no one can ever guarantee profits or freedom from losses;
that Client understands that because of margin requirements for Securities trading,
losses could exceed the amount of funds in Client’s Account; that Client
has a large liquid net worth and thus can assume the risks associated with this
trading Account; and that BMC may rely on such information until BMC receives
written notice from the Client of any changes.
b) Client represents and warrants that the terms hereof do not violate any obligation
by which Client is bound, whether arising by contract, operation of law, or
otherwise, and that if required, (i) this contract has been duly authorized
by appropriate action and is binding upon the Client in accordance with its
terms, and (ii) the Client will deliver to Advisor such evidence of such authority
as it may reasonably require, whether by way of certified resolution, trust
agreement, or otherwise, if Client is a corporation, partnership or other type
of business entity, association or entity.
c) The Client represents that Client has sufficient capital for the principal
purpose of investing in Securities and other Investments and has been informed
and is fully cognizant of the risks associated with such Securities/Investments.
d) The Client further represents, warrants and agrees that: (i) all of the information
contained in this Agreement is true, correct and complete as of the date hereof
and since Advisor is relying thereon, Client will promptly notify the Advisor
of any changes herein; (ii) the trading in the Securities and other Investments
is within the power of the Client and such activity will in no way contravene
the provisions of any statutes, rules or regulations, judgments, orders, decrees
or agreements to which the Client is bound or subject; (iii) if Client is a
corporation or other association or entity, it is duly organized and in good
standing under the laws of the state of its incorporation or formation and in
every state in which it does business; (iv) the actions of the authorized person
designated on the Agreement to act for the Client has been authorized by all
necessary or appropriate corporate/entity/organization actions if applicable,
such person has full authority to execute this Agreement and all related documents
on behalf of the Client and to act for Client in all matters regarding Client’s
account(s) and Advisor may at all times rely on the fact of such authority without
any duty to investigate into either the authenticity or extent thereof; (v)
if applicable, Client will confirm the matters contained in part (iv) of this
paragraph by supplying the Advisor, within a reasonable time, prior to the commencement
of trading, with an executed copy of resolutions of the Board of Directors,
or similar governing authority, of Client in a form prescribed by the Advisor;
(vi) if Client is a partnership, association, or similar organization, the partnership,
association, organization, etc., has express authority to make Investments as
contemplated herein; and (vii) Client has never been suspended or barred from
trading by the SEC, CFTC or any predecessor agency or any other federal or state
regulatory agency or any exchange or trade association (“SRO”),
and Client undertakes to notify the Advisor of any change in such status within
two (2) business days of any such change.
e) Client agrees to inform BMC or any of its principal(s) immediately, and in
no event later than five (5) business days after receipt of any written record
or confirmation, if Client is dissatisfied with BMC’s investment or trading
decisions, performance record or actions, or if Client is dissatisfied with
the Broker’s handling of the Account. Failure to do so shall constitute
a ratification of the transaction(s) in question.
22. Mutual Funds
The Advisor may also trade in closed-end, exchange traded mutual funds. An exchange
within any family of funds or sale of a fund constitutes the sale or purchase
of securities and as such, any gain or loss resulting may have inherent tax
consequences (as does the purchase or sale of any Securities/Investments contemplated
herein), and Client should discuss such consequences with Client’s tax
advisors. It is not the responsibility of Advisor to determine tax liabilities
for Client’s Account.
23. Term – Duration
a) This Agreement shall be for a period of one year and shall automatically
be extended each year, but may be terminated by either party giving written
notice at least five (5) days prior to the effective date of such termination
or at such other time as mutually agreed. This Agreement shall be terminated
automatically as soon as BMC receives actual notice of Client’s death,
physical or mental incapacity, insolvency or bankruptcy. In which case BMC will
follow the procedures set forth in paragraph 12 hereof.
b) Illinois Clients have the right to cancel this Agreement, without penalty,
within five (5) business days of signing it. All other Clients shall have such
cancellation rights, if any, as provided by Client’s state law of domicile.
However, any investment activity in the Client’s account prior to receipt
of the cancellation notice will be at the sole risk of the Client.
c) Upon notice of termination, Advisor shall notify the Custodian, or Broker,
who may be one in the same, of the termination of the advisory relationship
between BMC and Client. Upon written request from the Client, BMC will liquidate
the Account and invest all Client’s assets in a government securities
money market fund and then deliver such assets held pursuant to this Agreement,
according to Client’s written instructions, or transfer the Account to
another investment advisor, or client may take control of Client’s own
account, as Client directs. Termination of this Agreement shall not affect any
liability resulting from sales or exchanges initiated prior to receipt of written
notice of such revocation, payment of margin obligations, other expenses related
to the Account or the Advisor’s pro-rata portion of the management fee
calculated as of the date of termination rather than as of the close of the
succeeding calendar quarter.
d) As noted above, for the first year the Client agrees to pay to the Advisor
an early closing fee of one additional quarterly management fee, equal to the
previous quarterly fee, or $2,000, whichever is larger in order to defray the
administrative costs of establishing an advisory Account.
24. Arbitration
Any dispute regarding this Agreement, its interpretation or enforcement, the
Account itself, the trading or other activity therein, fees assessed, management
fees, etc., shall be submitted exclusively to binding arbitration at the arbitration
facilities of the American Arbitration Association (“AAA”) in Chicago,
Cook County, Illinois by the written demand of either party hereto, under the
AAA’s commercial arbitration rules then in effect. In any such arbitration
proceeding between Client and the Advisor, the prevailing party shall be entitled
to reimbursement of the party’s costs, filing fees, expenses and reasonable
attorney’s fees incurred in connection with the proceeding from its initiation
through conclusion of the hearing to judgment or a final determination on an
Application to Confirm or Vacate Arbitration Award as the case may be.
25. Notices
Communications may be sent to Client at the address given below, or at such
other address as Client may hereafter give BMC in writing, and all communications
so sent, whether by mail, telegraph, e-mail, fax, messenger, or otherwise, shall
be deemed given to Client personally, whether or not actually received. The
Client agrees to advise BMC promptly, in writing, of any change in address,
or adverse change in Client’s financial condition, at BMC’s offices:
208 South LaSalle Street
Suite 1442
Chicago, Illinois 60604
(312) 853-2820
(312) 853-3183 (FAX)
E-mail: carlbis@aol.com
Each party shall be entitled to presume the correctness of such address unless informed in writing to the contrary.
26. Waiver
No waiver of any provision of this Agreement shall be deemed a waiver of any
other provision, nor a continuing waiver of the provision or provisions so waived.
27. Governing Law
This Agreement, its validity and construction shall be governed by the laws
of the State of Illinois and its provisions shall be continuous, shall cover
individually and collectively all Account(s) which Client may open or re-open
with BMC and shall inure to the benefit of BMC, its successors, and assigns,
by merger, consolidation or otherwise.
28. Invalidity
If any provision hereof is or at any time should become inconsistent with any
present or future law, court decision, statute, rule or regulation of any Securities
SRO, the SEC, or of any other sovereign government agency, and if any of these
bodies have jurisdiction over the subject matter of this Agreement, said provision
shall be deemed, or be superseded or modified, to conform to such law, rule,
or regulation, but in all other respects this Agreement shall continue and remain
in full force and effect.
29. Assignment
No assignment of this Agreement may be made except with the written consent
of Client.
30. Amendment
This Agreement may not be amended unless such Amendment is in writing and signed
by both Parties.
31. Captions
The captions in the Agreement are included for the convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
effect their construction or effect.
32. Continuity
This Agreement, authorization and indemnity is a continuing one and shall remain
in full force and effect until revoked by Client by a written notice addressed
to BMC at the address set forth above.
33. Acknowledgement of Receipt of Disclosure Document and Brochure
and Privacy Policy
As required by Rule 204-3 of the Investment Advisers Act of 1940 and Rule 130.846
of the Illinois Securities Act, Client hereby acknowledges that Client has received
and has had an opportunity to read BMC’s Disclosure Document and Brochure,
its Form ADV – Part II and related documents provided to Client. See,
Appendix, Tab 5 and Signature Packet, Tab 4. Client also acknowledges receiving
and reading the sample Solicitor’s Disclosure Document and Solicitor’s
Solicitation Agreement, if applicable. See, Appendix, Tab 7. In that connection
Client also acknowledges receipt of the Disclosure Pursuant to Rule 206(4)-3
under the Investment Advisors Act of 1940. See, Appendix, Tab 8 and Signature
Packet, Tab 6. In addition, Client acknowledges receipt of the Advisor’s
Privacy Policy. See, Appendix, Tab 6 and Signature Packet, Tab 5.
34. Complete Agreement
This Agreement contains the final and complete Agreement between the Parties
hereto and may not be altered or modified without the signed written consent
of both Parties.
IN WITNESS HEREOF, the Parties hereto, intending to be legally bound, have executed
this Agreement as of the day and year written above.
Client: Birkelbach Management Corporation, Inc.
__________________________ By: ______________________________
Carl M. Birkelbach, authorized
corporate signatory
ADDENDUM
A
CLIENT INFORMATION FORM
CLIENT NAME: _____________________________________________________
CLIENT HOME ADDRESS: _______________________________________________
_____________________________________________________
TELEPHONE NO.’s: Day __________________________________________________
Evening _______________________________________________
Cell __________________________________________________
Fax __________________________________________________
E-MAIL: ______________________________________________________
SOCIAL SECURITY OR
TAX IDENTIFICATION NO.: ______________________________________________
CLIENT EMPLOYER: _______________________________________________
BUSINESS ADDRESS: _______________________________________________
________________________________________________
TELEPHONE NO.’s: __________________________________________________
Fax __________________________________________________
OBJECTIVES
The primary objective is to obtain ongoing secure income obtained from fixed
income and some equity sources. The client must be willing to absorb some principal
risk associated with changing market and interest rate conditions.
I (we) wish Birkelbach Management Corporation to manage the account with the
following objectives: ( ) I wish to invest in a socially responsible basis.
( ) I do not wish to invest in a socially responsible basis.
[ ] 1. Active Growth Portfolio
Portfolio management strategies emphasis: An actively managed portfolio with
primary emphasis on appreciation and minimum emphasis on current income. The
equity diversification includes companies expected to have well above average
growth potential and price volatility. Some stocks may not be included in the
S&P 500 index. Short term trading will occur. At times deemed appropriate
by the Advisor, and when “buy candidates” seem limited, there may
be cash in the Account that will either be invested in cash equivalents or securities
bearing dividends or interests. The Client must be able to willing to accept
the risks of an active strategy in the stock market.
[ ] 2. Aggressive Growth Portfolio
The primary objective is to achieve growth of assets while minimizing risks.
Stocks will be in the S&P 500 index. Only quarterly adjustments to the portfolio
will be made. However, as in the active Portfolio strategy, at times deemed
appropriate by the Advisor, and when “buy candidates” seem limited,
there may be cash in the Account that will either be invested in cash equivalents
or securities bearing dividends or interest. The Client must be able and willing
to assume the risks of the stock market volatility.
[ ] 3. Growth Portfolio
A diversified portfolio of equity issues emphasizing an objective that exhibits
close or better returns as compared to the S&P 500. Stocks will be in the
S&P 500 index. This strategy calls for a fully invested position in the
market at all times. The Client must still be willing to accept the risk of
market volatility.
[ ] 4. Growth and Income Portfolio
This portfolio is represented by approximately equal issues of equities using
our Five Point Investment Strategy and a portfolio of fixed income securities.
This strategy calls for a close to fully invested position in the market at
all times. Whereas a total return is desired to protect against inflation, the
Client must be willing to assume the risk of stock market and interest rate
volatility.
[ ] 5. Income Portfolio
The primary objective is to obtain ongoing secure income obtained from fixed
income and some equity security sources. Returns can be expected in line with
current yields. The Client must be willing to absorb some principal risk associated
with changing market and interest rate conditions..
Any special conditions of which we should be aware?
________________________________________________________________________
________________________________________________________________________
Client’s other special provisions, limitations, restrictions or specifications
with respect to the Account: _________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
If none, check here ____________ and affix signature:
CLIENT:
______________________________________
Limited Power of Attorney and Discretionary Trading Authority
The undersigned (“Client”) hereby authorizes Birkelbach Management Corp., Inc. (“BMC”), Carl M. Birkelbach, its principal or his authorized and Illinois investment advisor registered designee(s), collectively “Advisor” as the undersigned’s agent and attorney-in-fact, and in the undersigned’s name, place and stead, to buy and sell (including short sales) for trading and investing in: stocks, bonds, option contracts, mutual funds and any other securities relative to same (“Securities”), and other types of investment instruments, collectively “Investments”, on margin or otherwise for the undersigned’s account and risk. The undersigned hereby agrees to indemnify and hold the brokerage firm harmless from all loss, cost, indebtedness and liabilities arising therefrom.
In all such purchases and sales you are authorized to follow the instructions of the aforesaid Advisor in every respect concerning the undersigned’s account with you; and except as herein otherwise provided, the Advisor is authorized to act for the undersigned in the same manner and with the same force and effect as the undersigned might or could do with respect to such purchases and sales as well as with respect to all other things necessary or incidental thereto, except that the Advisor is not authorized to withdraw any money, securities, or other property either in the name of the undersigned or otherwise, other than in conjunction with payment of fees owed to the Advisor, which may be debited from the undersigned’s account upon receipt of Advisor’s invoice (quarterly, in arrears). (See, Authorization to Debit Account for Advisory Fees form).
The undersigned hereby ratifies and confirms any and all transactions with you heretofore or hereafter made by the aforesaid agent on behalf of, or for the account of, the undersigned.
This authorization and indemnity is in addition to (and in no way limits or restricts) any rights which you may have under any other agreement or agreements between you and the undersigned.
This authorization and indemnity is a continuing one and shall remain in full force and effect until revoked by the undersigned by a written notice addressed to you and delivered to you at the above address, but such revocation shall not affect any liability in any way resulting from transactions initiated prior to such revocation. This authorization and indemnity shall inure to your benefit and that of your successors and assigns.
______________________________________________________________________________
Account Name
___________________________ ___________________________ __________________
Client’s Signature Print Name and Title Date
___________________________ ___________________________ __________________
Client’s Signature Print Name and Title Date
NOTE: If a joint account all persons must sign.
If this is a corporate, general partnership, limited liability company or other
form of business entity, organization or association, the authorized representative(s)
must sign.
Accepted:
Birkelbach Management Corp., Inc.
By: ____________________________ ______________________
Carl M. Birkelbach Date
Authorization to Debit Account for Advisory Fees
TO BROKERAGE FIRM: ______________________________________________________
ADDRESS: ______________________________________________________
CITY AND STATE: ______________________________________________________
The undersigned Client agrees to the following:
1. As compensation for its advisory services, Birkelbach Management Corp., Inc. (“BMC” or “Advisor”), will charge management fees which will be debited directly from Client’s Account.
2. Client authorizes the above named carrying broker to debit Client’s account and pay to the Advisor the management fees referred to above upon receipt of BMC’s invoice (quarterly, in arrears).
3. Client holds the carrying Broker harmless and indemnifies the Clearing Broker from any losses arising out of payment of such fees to the Advisor.
4. Broker will reflect payment of BMC’s management fee on Client’s monthly statement of account.
______________________________________________________________________________
Account Name
___________________________ ___________________________ __________________
Client’s Signature Print Name and Title Date
___________________________ ___________________________ __________________
Client’s Signature Print Name and Title Date
NOTE: If a joint account or general partnership, all persons must sign.
If this is a corporate, general partnership, limited liability company or other
form of business entity, organization or association, the authorized representative(s)
must sign.
Accepted:
Birkelbach Management Corporation, Inc.
By: ____________________________ ______________________
Carl M. Birkelbach Date
Acknowledgement of Receipt of Disclosure Document
Carl M. Birkelbach
Birkelbach Management Corp., Inc.
208 South LaSalle Street
Suite 1442
Chicago, Illinois 60604
Dear Mr. Birkelbach:
This is to confirm that I have received, read and had the opportunity to ask questions about Birkelbach Management Corp., Inc.’s Investment Advisor Disclosure Document and Part II of Form ADV Brochure and related documents, provided to me in connection with my consideration of opening an investment advisory account with Birkelbach Management Corp., Inc.
Thank you.
Sincerely,
__________________ ______________________
Date
Privacy Policy
Birkelbach Management Corp., Inc. and its affiliates (“BMC”) collects nonpublic, personal information about you from the following sources:
- Information we receive from you on application or other forms;
- Information about your transactions with us or others; and
- Information we receive from a consumer-reporting agency.
We do not disclose any nonpublic, personal information about you to anyone, except as permitted by law, or as authorized in writing by you.
If you decide to close your account(s), or if you should become an inactive customer, we will adhere to the privacy policies and practices as described in this notice.
BMC restricts access to your personal and account information to those employees who need to know that information to provide products or services to you. BMC maintains physical, electronic, and procedural safeguards to guard your nonpublic personal information.
______________________________________________________________________________
Account Name
___________________________ ___________________________ __________________
Client’s Signature Print Name and Title Date
___________________________ ___________________________ __________________
Client’s Signature Print Name and Title Date
NOTE: If a joint account all persons must sign.
If this is a corporate, general partnership, limited liability company or other
form of business entity, organization or association, the authorized representative(s)
must sign.
Accepted:
Birkelbach Management Corporation, Inc.
By: ____________________________ ______________________
Carl M. Birkelbach Date
Solicitor’s Disclosure Document and Solicitor’s Solicitation Agreement
MEMORANDUM
To: Prospective Client of Birkelbach Management Corp., Inc.
From: _______________________, Solicitor
Re: Disclosure Document
Date: ________________ ______, 200_____
Securities and Exchange Commission (“SEC”) Rule 206(4)-3 promulgated
under the Investment Advisers Act of 1940 (“I.A. Act”) requires
me, as the solicitor (“Solicitor”) of your potential investment
advisory account with Birkelbach Management Corp., Inc. (“BMC”)
to make the following disclosures to you as part of the solicitation process:
Name of Solicitor: ________________________________________ (“Solicitor”)
Name of Investment Adviser: Birkelbach Management Corp., Inc. (“BMC”)
Address: 208 S. LaSalle Street
Suite 1442
Chicago, Illinois 60604
Attn: Carl M. Birkelbach
Telephone and 312-853-2820
Fax: 312-853-3183 (fax)
The Nature of the Relationship and Affiliation between Solicitor and Investment
Adviser:
Solicitor is either an officer, director, employee, registered representative
or agent of BMC, its securities broker-dealer affiliate, Birkelbach Investment
Securities, Inc. (“BIS”), or is a qualified, by registration and
license, third-party independent contractor to BMC.
Statement Regarding
Compensation: I, as Solicitor will be compensated by BMC from its management
fee for the investment advisory account solicitation services I render to BMC.
No client funds will be used to compensate Solicitor.
Terms of Compensation: BMC will compensate me, as the solicitor of your investment advisory account with BMC on the following basis:
Solicitors will be compensated from BMC’s share of its management fee according to the following schedule:
| BMC Management Fee | Percent to Solicitor |
| Equity Accounts | |
| 2.00% 1.00% 0.85% Negotiable |
0.75% |
| Income Accounts | |
| 2.00% 1.50% Negotiable |
0.75% 0.50% Negotiable |
BIS Solicitors will also be compensated for securities transactions effected in the Client’s managed Account.
Impact on Client: Because BMC will pay Solicitor his/her commission from BMC’s quarterly management fee, (payable in arrears) in the percentage amounts set forth above, there will be no impact on Client.
If you have any questions, please do not hesitate to contact me or BMC’s principal, Mr. Carl M. Birkelbach.
Please see attached Solicitation Agreement.
Respectfully submitted,
____________________________________, Solicitor
cc: Carl M. Birkelbach
[SAMPLE]
SOLICITOR’S
SOLICITATION AGREEMENT
AGREEMENT, made and entered into as of this ________ day of ____________,
200____, is by and between Birkelbach Management Corp., Inc. (“BMC”
or “Advisor”) and _______________________________________ (“Solicitor”),
both Advisor and Solicitor being collectively referred to herein as the “Parties”.
WHEREAS, BMC is an investment advisor in securities, registered as such with
the Illinois Securities Department; and
WHEREAS, Solicitor desires to solicit or refer prospective investment advisory
clients (“Client”) to BMC for a fee; and
WHEREAS, BMC desires to obtain the solicitation and referral services of Solicitor
and fairly compensate Solicitor therefor;
NOW THEREFORE, in consideration of the premises, the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto, intending to be
mutually bound, hereby agree:
1. Term
The term of this Agreement shall be for one (1) year, subject to annual renewals,
and may be cancelable by either party, with our without cause and without penalty,
on five (5) days written notice from one party to the other party.
2. Compensation
Solicitors will be compensated from BMC’s share of its management fee
according to the following schedule:
BMC Management Fee Percent to Solicitor
| BMC Management Fee | Percent to Solicitor |
| Equity Accounts | |
| 2.00% 1.00% 0.85% Negotiable |
0.75% |
| Income Accounts | |
| 2.00% 1.50% Negotiable |
0.75% 0.50% Negotiable |
BIS Solicitors will also be compensated for securities transactions effected
in the Client’s managed Account.
3. Representations by Solicitor
a) Solicitor is not subject to a “Statutory Disqualification” as
that term is defined in section 3(a)(39) of the Securities Exchange Act of 1934.
b) Solicitor will undertake to perform his duties under this Agreement in a
manner consistent with the instructions of BMC and the provisions of the Illinois
Securities Act of 1953, as amended and the federal, Investment Adviser’s
Act of 1940 and the rules and regulations promulgated under such Acts.
c) Solicitor will, at the time of solicitation of a prospective client, provide
the client with a copy of BMC’s Disclosure Document and Brochure and,
Form ADV – Part II and related documents, as well as a copy of Solicitor’s
Disclosure Document and Agreement, incorporated herein by this reference, and
BMC’s Signature Packet.
d) Solicitor agrees to cooperate with BMC in its obligation to make a bona fide
effort to ascertain that Solicitor has complied with this Agreement, so as to
enable BMC to form a reasonable basis belief that Solicitor has so complied.
4. Solicitor’s Duties
To solicit, on behalf of BMC, by personal contact, telephone, mail, electronic
means and otherwise: qualified individuals, banks, thrift institutions, investment
companies, pension and profit sharing plans, trusts, estates, charitable organizations,
foundations, ERISA accounts, corporations, other organizations, business entities,
associations and the like, to open discretionary, managed investment advisory
accounts, within or outside BMC’s “Socially Responsible Investing”
program, as described in BMC’s Disclosure Document and Brochure.
5. Arbitration
Any dispute regarding this Agreement, its interpretation or enforcement, fees
due, etc., shall be submitted exclusively to binding arbitration at the arbitration
facilities of NASD Dispute Resolution, Inc. (“NASD-DR”) in Chicago,
Cook County, Illinois by the written demand of either party hereto, under NASD-DR’s
Code of Arbitration Procedure then in effect. In any such arbitration proceeding
between Solicitor and the Advisor, the prevailing party shall be entitled to
reimbursement of the party’s costs, filing fees, expenses and reasonable
attorney’s fees incurred in connection with the proceeding from the initiation
of the case through conclusion of the hearing to judgment or a final determination
on an Application to Confirm or Vacate Arbitration Award, as the case may be.
[Carl this should probably be AAA. Let’s discuss.]
6. Notices
Communications may be sent to Solicitor at: _____________________, _______________
or at such other address as Solicitor may hereafter give BMC in writing, and
all communications so sent, whether by mail, fax, e-mail, telephone, messenger,
or otherwise, shall be deemed given to Solicitor personally, whether or not
actually received, or to BMC at:
208 South LaSalle Street
Suite 1442
Chicago, Illinois 60604
Attn: Carl M. Birkelbach
(312) 853-2820
(312) 853-3183 (FAX)
E-mail: carlbis@aol.com
Each party shall be entitled to presume the correctness of such address unless
informed in writing to the contrary.
7. Waiver
No waiver of any provision of this Agreement shall be deemed a waiver of any
other provision, nor a continuing waiver of the provision or provisions so waived.
8. Governing Law
This Agreement, its validity and construction shall be governed by the laws
of the State of Illinois and its provisions shall be continuous.
9. Invalidity
If any provision hereof is or at any time should become inconsistent with any
present or future law, court decision, statute, rule or regulation of any securities
industry SRO, the SEC, or of any other sovereign government agency, and if any
of these bodies have jurisdiction over the subject matter of this Agreement,
said provision shall be deemed, or be superseded or modified, to conform to
such law, rule, or regulation, but in all other respects this Agreement shall
continue and remain in full force and effect.
10. Assignment
No assignment of this Agreement may be made except with the written consent
of the Parties.
11. Amendment
This Agreement may not be amended unless such Amendment is in writing and signed
by both Parties.
12. Captions
The captions in the Agreement are included for the convenience of reference
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
13. Complete Agreement
This Agreement contains the final and complete Agreement between the Parties
hereto and may not be altered or modified without the signed written consent
of both Parties.
IN WITNESS HEREOF, the Parties hereto, intending to be legally bound, have executed
this Agreement as of the day and year written above.
Solicitor: Birkelbach Management Corp., Inc.
__________________________ By: ______________________________
Carl M. Birkelbach, authorized
Corporate signatory
Disclosure Pursuant to Rule 206(4)-3 under the Investment Advisors Act of 1940
The undersigned hereby acknowledges receipt of disclosure of the following information in connection with the entry into an agreement with Birkelbach Management Corp., Inc.
Name & Address of Advisor: Birkelbach Management Corp., Inc.
208 S. LaSalle Street
Suite 1442
Chicago, IL 60604
Telephone: (312) 853-2820
Name of Principal Representative (solicitor): ___________________________________
Name of Broker/Dealer Birkelbach Investment Securities, Inc.
The above named Principal Representatives (including the Broker/Dealer with whom he/she is affiliated) act as solicitors for Birkelbach Management Corp., Inc. investment advisory services. The solicitor has no advisory capacity with the investment advisor. The solicitors have a financial interest in the selection of the investment advisor in that they will receive an aggregate from 0.125% to 0.75%, for accounts below $2,500,000 of BMC’s quarterly management fee for the introduced Client’s Account calculated basis upon which BMC’s quarterly management fee will be based, in arrears, payable by BMC to Solicitor on a continuing basis.
The fee for the Solicitor’s services for Birkelbach Management Corp., Inc. will be identical to that paid for other clients by Birkelbach Management Corp., Inc.
The undersigned hereby acknowledges receipt of the BMC’s Disclosure Document and Brochure and Part III – Form ADV
Date: _______________________
__________________________________
Name of Client
X_________________________________
Signature
__________________________________
Name of Client
X_________________________________
Signature
Charts:
A: 1, 3 and 5 Year charts for Model Growth Portfolio
B. 1, 3 and 5 Year charts for Model Aggressive Growth Portfolio