SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________
SCHEDULE 13D/A
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Duckwall-Alco Stores, Inc.
- ----------------------------------
(NAME OF ISSUER)
Common Stock, par value $.01 per share
- ----------------------------------
(TITLE OF CLASS OF SECURITIES)
264142100
- ----------------------------------
(CUSIP NUMBER)
Mr. Robert L. Woodard
Kansas Public Employees
Retirement System
400 SW 8th, Suite 200
Topeka, KS 66603-3925
(913) 296-6666
Mr. William J. Morgan
Pacholder Associates, Inc.
8044 Montgomery Road,
Suite 382
Cincinnati, OH 45236
(513) 985-3200
Mr. Brian P. Murphy
Portfolio Advisors, Inc.
2701 Summer Street,
Suite 200
Stamford, CT 06905
(203) 363-2270
- ----------------------------------
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS)
August 7, 1996; September 16, 1996
(DATE OF EVENT WHICH REQUIRES FILING OF THIS STATEMENT)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ] .
Check the following box if a fee is being paid with this statement [ ] .
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Kansas Public Employees Retirement System; IRS Tax ID #48-0944170
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
Not Applicable
6. CITIZENSHIP OR PLACE OF ORGANIZATION
State of Kansas
7. SOLE VOTING POWER
None
8. SHARED VOTING POWER
1,171,337
9. SOLE DISPOSITIVE POWER
None
10. SHARED DISPOSITIVE POWER
1,171,337
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,171,337
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
Not Applicable
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.3% (27.9% on a fully-diluted basis)
14. TYPE OF REPORTING PERSON*
EP
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
K.D.F. a Massachusetts Nominee Partnership; IRS Tax ID #48-0930440
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
Not Applicable
6. CITIZENSHIP OR PLACE OF ORGANIZATION
State of Massachusetts
7. SOLE VOTING POWER
None
8. SHARED VOTING POWER
None
9. SOLE DISPOSITIVE POWER
None
10. SHARED DISPOSITIVE POWER
None
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
Not Applicable
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
14. TYPE OF REPORTING PERSON*
PN
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Pacholder Associates, Inc.; IRS Tax ID #31-1089398
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
Not Applicable
6. CITIZENSHIP OR PLACE OF ORGANIZATION
State of Ohio
7. SOLE VOTING POWER
None
8. SHARED VOTING POWER
1,171,337
9. SOLE DISPOSITIVE POWER
None
10. SHARED DISPOSITIVE POWER
1,171,337
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,171,337
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
Not Applicable
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.3% (27.9% on a fully-diluted basis)
14. TYPE OF REPORTING PERSON*
IA, CO
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
Portfolio Advisors, Inc.; IRS Tax ID #06-1393720
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(d) OR 2(e) [ ]
Not Applicable
6. CITIZENSHIP OR PLACE OF ORGANIZATION
State of Delaware
7. SOLE VOTING POWER
None
8. SHARED VOTING POWER
1,171,337
9. SOLE DISPOSITIVE POWER
None
10. SHARED DISPOSITIVE POWER
1,171,337
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,171,337
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
Not Applicable
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.3% (27.9% on a fully-diluted basis)
14. TYPE OF REPORTING PERSON*
IA, CO
This Statement on Schedule 13D is a joint filing by the
Kansas Public Employees Retirement System ("KPERS"), K.D.F, a
Massachusetts Nominee Partnership ("KDF"), Pacholder Associates,
Inc. ("PAI") and Portfolio Advisors, Inc. ("Portfolio"). This
filing is an amendment to an original joint filing dated August
1, 1992 by KPERS, K.D.F., a Kansas General Partnership ("Former
KDF"), PAI and Morris Anderson Investment Advisors, Inc.
("MAIA").
Item 1. Security and Issuer
This Schedule 13D relates to the common stock of Duckwall-
Alco Stores, Inc. (the "Company"), par value $.01 per share. The
address of the Company's principal office is 401 Cottage Street,
Abilene, Kansas 67410.
Item 2. Identity and Background
(a-c,f) This Schedule 13D is filed by KPERS, KDF, PAI and
Portfolio. KPERS is an instrumentality of the State of Kansas
with a business address of 400 Southwest Eighth Avenue, Suite
200, Topeka, KS 66603-3925. KPERS is an umbrella organization
which administers funds for members of participating public
employers to provide for their retirement, death or termination
of employment.
KDF is a nominee partnership, acting by and on behalf of
KPERS as its nominee. KDF's address is c/o Boston Safe Deposit &
Trust Co., One Cabot Road, Medford, MA 02155. The business
address of KDF's partners is the same as that of KDF.
PAI is a corporation organized under the laws of the State
of Ohio and its business address is Bank One Towers, 8044
Montgomery Road, Suite 382, Cincinnati, OH 45236. PAI is
engaged in business as a registered investment advisor.
Portfolio is a corporation organized under the laws of the
State of Delaware and its business address is 760 Hopmeadow
Street, P.O. Box 689, Simsbury CT 06070-0689. Portfolio is
engaged in business to render investment advisory services.
Pursuant to an Investment Advisory Agreement (the
"Agreement") dated August 7, 1996 between KPERS, PAI, and
Portfolio (attached as Schedule A), PAI and Portfolio are
responsible for managing KPERS' investment in the Company. Under
the terms of the Agreement, KPERS, PAI and Portfolio have shared
voting and dispositive power over securities beneficially owned
by KPERS and held of record by KDF, a nominee without dispositive
powers.
(d) During the last five years neither KPERS, KDF, PAI and
Portfolio, nor any of their officers, partners, directors or
trustees have been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) During the last five years neither KPERS, KDF, PAI nor
Portfolio, nor any of their officers, partners, directors or
trustees were a party to a civil proceeding as a result of which
a judgment or final order was entered enjoining future violations
of, or prohibiting or mandating activities subject to, federal or
state securities laws.
Item 3. Source and Amounts of Funds and Other Consideration
No funds have been used in the acquisition of beneficial
ownership by the parties since the reorganization on May 29, 1991
(see Item 4 below).
Item 4. Purpose of Transaction
PAI acts as an advisor to KPERS in its voting, acquisition,
or sale of securities of the Company. Pursuant to a five-for-
two stock split effected on June 9, 1994, KPERS' ownership
position was increased to 1,171,337 shares. Pursuant to an
initial public offering of the Company's common stock on November
4, 1994, KPERS ownership percentage was reduced to 29.3% (27.9%
on a fully-diluted basis). As a result of its significant
ownership position, KPERS holds two seats on the Company's Board
of Directors.
PAI, Portfolio and KPERS are presently contemplating the
sale of 171,337 common shares of the Company owned by KPERS in
connection with a planned public offering by the Company. Final
determination to sell such common shares is subject to general
economic and stock market conditions and certain minimum offering
price requirements for the Company's common stock. Except as
mentioned above, PAI, Portfolio and KPERS have no plans or
proposals which relate to or would result in any of the
following.
(a) The acquisition or disposition of the securities of the
Company;
(b) An extraordinary corporate transaction, such as a
merger, reorganization or liquidation, involving the Company or
any of its subsidiaries;
(c) A sale or transfer of a material amount of assets of
the Company or any of its subsidiaries;
(d) Any change in the present board of directors or
management of the Company, including any plans or proposals to
change the number or term of directors or to fill any existing
vacancies on the board;
(e) Any material change in the present capitalization or
dividend policy of the Company;
(f) Any other material change in the Company's business or
corporate structure;
(g) Changes in the Company's charter, bylaws or instruments
corresponding thereto or other actions which may impede the
acquisition or control of the issues by any person;
(h) Causing a class of securities of the Company to be
delisted from a national securities exchange or to cease to be
authorized to be quoted in an inter-dealer quotation system of a
registered national securities association;
(i) A class of equity securities of the Company becoming
eligible for termination of registration pursuant to Section
12(g)(4) of the Act; or
(j) any action similar to any of those enumerated above.
Item 5. Interest in Securities of the Company
(a) Pursuant to the Agreement, KPERS, PAI and Portfolio
must jointly agree on any voting or dispositive action on
securities beneficially owned by KPERS. Currently, KPERS, PAI
and Portfolio beneficially own 1,171,337 common shares, or 29.3%
of all issued and outstanding common shares. This represents
27.9% ownership on a fully-diluted basis.
(b) KPERS, PAI and Portfolio share the power pursuant to
the Agreement (i) to cause KDF to dispose of the 1,171,337 common
shares; and (ii) to vote any common shares currently owned.
(c) None.
(d) None.
(e) None.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer
Information respective to Item 6 is set forth in Item 2
above.
Item 7. Material to be Filed as Schedules
Schedule Number Title of Document
A. Investment Advisory Agreement
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this
Statement is true, complete and correct.
KANSAS PUBLIC EMPLOYEES
RETIREMENT SYSTEM
September 17, 1996
Date
/s/Robert L. Woodard
Signature
Chief Investment Officer
Title
KDF, A MASSACHUSETTS NOMINEE
PARTNERSHIP
September 17, 1996
Date
/s/Maria Serra
Signature
General Partner
Title
PACHOLDER ASSOCIATES, INC.
September 17, 1996
Date
/s/William J. Morgan
Signature
President
Title
PORTFOLIO ADVISORS, INC.
September 17, 1996
Date
/s/Brian P. Murphy
Signature
Director
Title
SCHEDULE A
Kansas Public Employees Retirement System
Capitol Tower . Suite 2OO . 400 S.W. Eighth Ave. Topeka,
Kansas 66603-3925 . Phone (913) 296-6666
KPERS Telephone Facsimile (913) 296-2422
Call Toll Free 1-800-228-0366
August 7,1996
INVESTMENT ADVISORY AGREEMENT
Pacholder Associates, Inc. Portfolio Advisors, Inc.
Towers of Kenwood 760 Hopmeadow Street
8044 Montgomery Road,Ste 382 Post Office Box 689
Cincinnati, Ohio 45236 Simsbury, Connecticut
06070-0689
Gentlemen:
This confirms our agreement, effective August 7, 1996,
pursuant to which the Kansas Public Employees Retirement
System, an instrumentality of the State of Kansas
("Client"), will retain Pacholder Associates, Inc., an Ohio
Corporation, and Portfolio Advisors, Inc., a Delaware
Corporation (collectively "Advisors"), to provide an
investment advisory service.
1. Retention. On the terms and conditions hereinafter set
forth, Client hereby retains Advisors to act as investment
advisors for any assets held in Client's account with
Advisors and all additions, earnings, proceeds and
substitutions credited thereto and not withdrawn
(collectively, such assets are hereinafter referred to as
"the Portfolio"). These assets exclude all investments in
limited partnerships, with the exceptions of Northrac
Partners, L.P., Research Capital Management Group I and II,
Forbes Industrial Park, L.P., Fountain C.B.O. Partners,
L.P., CommTech Technology Partners IV, CommTech
International Partners, and CTP-lV Annex Partners. Each
Advisor hereby accepts such appointment and agrees to
provide such services on the terms and conditions
hereinafter set forth.
2. Authority. It is agreed by the parties that all
substantive actions involving an investment in the portfolio
including, without limitation, follow-on or add-on
investments, sales, restructuring, U.C.C. filings or
releases, exchange, and proxy voting must be approved in
writing by an authorized representative of the Client and
each Advisor (the "Three Party Approval Process"). Advisors'
actions in managing the portfolio shall be governed, where
applicable, by the guidelines contained in Client's current
Statement of Investment Policy, Objectives and Guidelines
which by this reference is incorporated herein and made a
part hereof. Advisors are authorized to issue instructions
to Client's Custodian and other parties relating to the
Portfolio and to execute any documents which they deem
appropriate in the management of the Portfolio. Advisors are
authorized to retain attorneys, accountants, consultants,
brokers, dealers and other persons ("Professionals") as they
deem appropriate in the management of the Portfolio;
provided, however, that Advisor receives prior written
approval from Client for the terms of such retention,
including the specific professionals involved in the
project, the nature and extent of services to be provided
and the compensation arrangements. In addition, at any time
and from time to time, Client may direct Advisors to
purchase or sell specific assets in the Portfolio. The
Advisors are authorized to meet with officers and
representatives of the companies in which the Portfolio
holds investments and to accept appointment to the board of
directors (or other governing body) of such companies, it
being Client's intention that the Advisors will actively
manage the assets in the Portfolio.
3. Brokerage Services. Advisors may place orders for the
execution of transactions with or through such brokers,
dealers, banks or other agents as Advisors may select and,
complying with Section 28(e) of the Securities Exchange Act
of 1934, may pay a commission on transactions in excess of
the amount of commission another broker or dealer would have
charged. However, in all cases, Advisors will make a
reasonable attempt to execute each transaction at the best
available price and execution in consideration of services
made available for the benefit of the Client.
4. Representations.
By Advisors. Each Advisor represents that it has
complied with all requirements under state and federal laws
to enable it to undertake the responsibilities described in
this Agreement. Advisors will furnish, at Client's request,
true copies of all governing documents.
By Client. Client represents and warrants that the
employment of Advisors pursuant to this Agreement is
authorized, that the terms hereof do not violate any
instrument or obligation by which Client is bound, that this
Agreement has been duly authorized by appropriate action,
and that when executed and delivered this Agreement will be
binding upon Client in accordance with its terms.
5. Transaction Procedures. All transactions will be
consummated by payment to, or delivery to, Client or such
other party as Client may designate in writing (the
"Custodian"). of all cash and/or securities due to or from
the Portfolio. Advisors will not act as Custodian for the
Portfolio, but will issue such instructions to Client and/or
the Custodian as may be appropriate in connection with the
settlement of transactions initiated by Advisors pursuant to
Section 1 hereof. Instructions of Advisors to Client and/or
the Custodian shall be made in writing sent by first-class
mail, or, at the option of Advisors, orally and confirmed in
writing as soon as practical thereafter, and Advisors will
instruct all brokers, dealers and issuers executing orders
on behalf of the Portfolio to forward to Client and/or the
Custodian copies of all confirmations. Advisors will not be
responsible for any loss incurred by reason of any act or
omission of any broker, dealer or issuer or the Custodian;
provided, however, that Advisors will make reasonable
efforts to require that brokers, dealers and issuers
selected by Advisors perform their obligations with respect
to the Portfolio. In addition, Client will be responsible
for brokerage commissions, taxes and any other normal and
customary transaction related fees.
6. Reports. Advisors shall provide to Client at least
monthly a written inventory of the Portfolio, based on
information provided to Advisors by the Custodian, and a
summary of all transactions in the portfolio, and shall
provide such other reports and data and shall attend such
meetings as Client reasonably may request. Advisors shall
provide Client with timely notice of changes in professional
staff involved in the management of the Portfolio. In the
event of the resignation or other departure of a
professional staff member, Advisors shall provide Client
with a proposed reassignment of staff portfolio
responsibilities. Client will provide, or instruct the
Custodian to provide, Advisors with such information
concerning security transactions and the status of the
Portfolio as Advisors reasonably may request.
7. Inside Information. Advisors will have no obligation to
seek or obtain any material non-public ("inside")
information about any issuer of securities, or to purchase
or sell, or to recommend for purchase or sale, for the
Portfolio, the securities of any issuer on the basis of any
such information as may come into its possession.
8. Fees. Client shall pay each Advisor a monthly fee of
$56.000.00. Client shall pay such fee to each Advisor
monthly in arrears by the fifth tenth business day after the
receipt of an invoice from the Advisor. The parties
understand and agree that the fees provided in this
paragraph are subject to appropriation limits as enacted by
the Kansas legislature.
9. Out-of-Pocket Expenses. Client shall have no obligation
to reimburse Advisors for expenses incurred in connection
with this Agreement other than the fees and expenses of
Professionals and Litigation Counsel retained by Advisors
pursuant to Sections 2 and 18 of this Agreement. Upon
receipt of a detailed invoice from Advisors, Client shall
reimburse Advisors promptly for such fees and expenses which
have received prior approval and have been paid by Advisors
or shall pay directly to such Professionals or Litigation
Counsel such fees and expenses which have not been paid by
Advisors.
10. Conflicts of Interest. Neither the Advisors nor any of
its affiliates shall acquire any direct or indirect interest
in or receive any compensation from any of the entities
whose nonpublicly traded securities are held in the
Portfolio. In addition, each Advisor has agreed that it will
provide Client with written disclosure of contacts it may
have or have had with the companies represented in the
Portfolio or with other parties affiliated with or involved
with such issuers, as and to the extent that the officers of
the Advisors who are directly involved with managing the
Portfolio become aware of such contacts.
11. Liability of Advisor. Advisors acknowledge that they
act in a Fiduciary capacity toward the Client in performing
their duties under this Agreement. Neither Advisor shall be
subject to liability for any act, omission, or mistake of
judgment in connection with providing the investment
advisory services described in this Agreement unless such
act, omission, or mistake of judgment is the result of
Advisor's failure to act with the judgment, care, skill,
prudence and diligence under the circumstances then
prevailing which persons of prudence, discretion and
intelligence acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of
like character and with like aims (the "Prudent Expert
Standard"). An Advisor will be deemed to have acted in
accordance with the Prudent Expert Standard if, in acting or
omitting to act, it is following specific written
instructions from the Client. The duties and obligations of
each Advisor hereunder are several and not joint, and
neither Advisor shall have any responsibility for or be
subject to liability as the result of any act or omission of
the other Advisor. Each Advisor also will obtain such
insurance and fidelity coverage as may be required by Kansas
law or as Client reasonably may designate.
12. Nonexclusivity of Services. Except as expressly
provided in Section 10 hereof, nothing in this Agreement
shall be construed to prohibit or restrict either or both
the Advisors and their affiliates from engaging in other
business activities related to other investments or from
providing to others or for their own account services of the
type contemplated under this Agreement.
13. Amendments. This Agreement may be amended only by
written agreement executed by Client and both Advisors.
14. Severability. If any one or more of the provisions of
this Agreement shall be illegal or unenforceable in any
respect, all other provisions shall continue in full force
and effect, and the parties hereto shall endeavor in good
faith negotiations to replace the illegal or unenforceable
provisions with enforceable provisions the economic effect
of which comes as close as possible to that of the illegal
or unenforceable provisions.
15. Term and Assignment. This Agreement shall run from
August 7, 1996 through June 30, 1997. This Agreement may be
terminated by any party to this Agreement by providing
the other parties written notice of the termination, which
shall become effective 30 days after such notification is
received. On July 1 each year, provided there has been no
written notification of termination, the Agreement shall
automatically be renewed for an additional one year term.
Client guarantees Advisors that during the initial term of
this agreement (that is, through June 30,1997) Client shall
not provide notice of termination for the purpose of
renegotiating fees. Neither Advisor shall assign this
Agreement, in whole or in part, without the Client's prior
written consent; any such assignment, whether voluntary,
involuntary, or by operation of law, without Client's prior
consent shall terminate this Agreement on the day before the
date of such assignment. In the event that this Agreement
shall be in effect for any period which is less than a
calendar month, the monthly fee shall be prorated on the
basis of the number of days the Agreement was effective for
such period and shall be paid within ten business days of
the effective date of the termination of this Agreement.
16. Valuation. From time to time Client may request that
Advisors provide valuations of securities held in the
Portfolio. In computing the market value of any security
held in the Portfolio which is listed on a national
securities exchange, such security shall be valued at the
closing bid price on the valuation date on the principal
exchange on which such security is traded subject to
appropriate discounts applied in some instances to properly
reflect value if not freely transferable. Any other
security or asset shall be valued in a manner determined in
good faith by Advisors to reflect its fair market value, and
in the case of securities for which bid and asked quotes are
available, the bid quote shall be used.
17. Notices. Unless otherwise specified herein, all notices
and instructions with respect to transactions or any other
matters contemplated by this Agreement shall be deemed duly
given to a party to this Agreement when received in writing
by that party, whether via telephone facsimile, United
States mail or other form of delivery, at the address of its
principal place of business or at such other address or
addresses as shall be specified in writing. Advisors may
rely upon any notice (written or oral) from any person whom
Client has authorized to provide such notice. Client shall
notify Advisors from time to time of the persons who are
authorized to provide such notice.
18. Indemnification. The Advisors will indemnify and agree
to hold harmless the Client from and against any loss, cost,
claim, action, cause of action, liability or expense arising
out of or relating to any (a) breach of Section 11 of this
agreement, (b) bad faith, fraud, willful misconduct or gross
negligence of Advisors or their agents or employees, (c)
selfdealing with the assets of the Client, or (d) violation
of any applicable law or regulation by Advisors or their
agents and employees. Advisors shall not become obligated to
indemnify the Client until such time as the Client's losses
are either determined in a final judgment entered by a court
or admitted in a settlement document to have resulted
primarily from acts or omissions as set forth in subparts
(a) through (d) above.
The Client will indemnify and agree to hold harmless
Advisors, any affiliate of either of them, their officers,
directors, employees and controlling persons (each of the
foregoing is an "Indemnified Person") from and against any
loss, cost, claim, action, cause of action, liability and
reasonable expense, joint or several (including all
reasonable fees of counsel pursuant to contract; expenses in
connection with the defense of any claim, action or
proceeding; and reasonable compensation for any Indemnified
Person's time and expenses while involved in discovery
proceedings or testimony) caused by or arising out of an
Indemnified Person's actions pursuant to the Agreement,
except such losses, claims, damages, liabilities or expenses
as are found in a final judgment of a court or admitted in a
settlement document to have resulted primarily from acts or
omissions of an Indemnified Person as set forth in (a)
through (d) above.
An Indemnified Person shall promptly notify the Client of
the assertion against said Indemnified Person or any other
person of any claim, or the commencement of any action or
proceeding, relating to transactions contemplated by this
Agreement. Advisors are authorized to retain attorneys
("Litigation Counsel") to represent Advisors, either
together or singly, or any Indemnified Person, in any
litigation (other than any litigation brought against
Advisors by Client) relating to Advisors' provision of
services under the Agreement. All fees of the Litigation
Counsel shall be paid as incurred within a reasonable time
after receipt of a detailed invoice for such fees. Provided,
however, that Advisor shall receive prior written approval
from Client for the terms of such retention, including
approval of specific attorneys involved and the compensation
arrangements, which approval the Client shall not
unreasonably withhold.
The parties understand and agree that the Client's
expenditures for indemnification hereunder shall be subject
to the appropriation limits imposed by the Kansas
legislature as provided and set forth in L. 1996, ch. 191,
sec.75, effective July 1,1996, and, in succeeding years in
which this agreement may be in effect, to such appropriation
limits as may be imposed by the Kansas legislature in the
session laws of such years. The "total value of the assets
being managed" discussed in L. 1996, ch. 191, sec.75 shall
be defined as the cost basis of the assets held in KPERS'
Direct Placement Portfolio as of June 30, 1991. The limit on
expenditures for indemnification provided by this paragraph
is deemed to be an annual limitation, not cumulative for the
life of the portfolio.
This indemnification shall not be affected by any
termination of the Agreement, may not be modified, amended
or waived without the written consent of all parties hereto
and shall be governed by and construed with the laws of the
State of Kansas without regard to principles of conflicts of
laws.
19. Professionals. Each investment advisor agrees to the
following commitment of professional staff:
Pacholder Associates. Inc.:
Name Title
William J. Morgan President/ Managing Director
James P. Shanahan, Jr. Managing Director and
General Counsel
Thomas M. Barnhart II Senior Vice President &
Associate General Counsel
Robert C. Amenta Senior Vice President
Melissa L. Donovan Operations Analyst
Portfolio Advisors. Inc.:
Name Title
Jonathan F. Murphy Managing Director
Brian P. Murphy Director
William J. Indelicato Director
Jill A. Albrechta Associate
New Hire Associate
20. Access to Records and Documents - Confidentiality and
Retention. Advisors shall maintain the strictest confidence
regarding the business affairs of the Portfolio. All
information furnished by Advisors to Client or Client to
Advisors shall be treated by Advisors and Client as
confidential and for the exclusive use and benefit of
Client, except:
A. As disclosure may be required by applicable law;
B. As disclosure may be required to perform the services
described in this Agreement; or
C. Advisors may from time to time, in the normal course of
their business activities, request permission from the
Client to disclose certain information with respect to the
Advisors' performance managing the Portfolio.
Notwithstanding the foregoing, all records and documents
relating to the Portfolio shall be made available for
inspection or audit by Client or by a qualified public
accountant authorized in writing to act on Client's behalf,
at Advisors' business offices at any time during normal
business hours. Provided further that all records and
documents relating to the Portfolio shall be retained by
Advisors and, subsequent to the end of the contractual
relationship, should Advisors or either of them wish to
dispose of all or any part of such records and documents,
they shall first make them available to Client, who, in such
event, shall have the right to claim such records and
documents.
21. Form DA-146a Incorporated. The provisions found in the
Contractual Provisions Attachment (Form DA-146a, rev. 9/93),
which is attached hereto, are hereby incorporated and made a
part of this Agreement.
22. Multiple Counterparts. This agreement shall be
executed in three or more counterparts, any one of which
shall be an original without reference to the others.
23. Integration. The Agreement between the parties
consists of this document, the Contractual Provisions
Attachment, and the Statement of Investment Policy,
Objectives and Guidelines, which together constitute the
entire agreement and supersede in their entirety all prior
agreements between the parties relating to the subject
matter hereof.
Very truly yours.
Kansas Public Employees Retirement System
(client)
By: /s/Meredith Williams Date: August 9, 1996
Meredith Williams
Executive Secretary
Date:
Pacholder Associates, Inc.
By: /s/William J. Morgan Date: August 7, 1996
William J. Morgan
President / Managing Director
Portfolio Advisors, Inc.
By: /s/Jonathan F. Murphy Date: August 5, 1996
Jonathan F. Murphy
Managing Director
CONTRACTUAL PROVISIONS ATTACHMENT
Important: This form contains mandatory contract
provisions and must be attached to or incorporated in all
copies of any contractual agreement. If it is attached to
the vendor/contractor's standard contract form, then that
form must be altered to contain the following provision;
"The provisions found in Contractual Provisions Attachment
(form DA-146a), which it attached hereto, are hereby
incorporated in this contract and made a part hereof".
The parties agree that the following provisions are hereby
incorporated into the contract to which it is attached and
made a part thereof, said contract being the day of
1996.
1. TERMS HEREIN CONTROLLING PROVISIONS
It is expressly agreed that the terms of each and every
provision in this attachment shall prevail and control over
the terms of any other conflicting provision in any other
document relating to and a part of the contract in which
this attachment is incorporated.
2. AGREEMENT WITH KANSAS LAW
All contractual agreements shall be subject to, governed by,
and construed according to the laws of the State of Kansas.
3. TERMINATION DUE TO LACK OF FUNDING APPROPRIATION
If, in the judgment of the Director of Accounts and Reports,
Department of Administration, sufficient funds are not
appropriated to continue the function performed in this
agreement and for the payment of the charges hereunder,
State may terminate this agreement at the end of its current
fiscal year. State agrees to give written notice of
termination to contractor at least 30 days prior to the end
of its current fiscal year, and shall give such notice for a
greater period prior to the end of such fiscal year as may
be provided in this contract, except that such notice shall
not be required prior to 90 days before the end of such
fiscal year. Contractor shall have the right, at the end of
such fiscal year, to take possession of any equipment
provided State under the contract. State will pay to the
contractor all regular contractual payments incurred through
the end of such fiscal year, plus contractual charges
incidental to the return of any such equipment. Upon
termination of the agreement by State, title to any such
equipment shall revert to contractor at the end of State's
current fiscal year. The termination of the contract
pursuant to this paragraph shall not cause any penalty to be
charged to the agency or the contractor.
4. DISCLAIMER OF LIABILITY
See Sec. 18 of the Investment Advisory Agreement.
5. ANTI-DISCRIMINATION CLAUSE
The contractor agrees; (a) to comply with the Kansas Act
Against Discrimination (K.S.A. 44-1001 et seq.) and the
Kansas Age Discrimination in Employment Act (K.S.A. 44-1111
et seq.) and the applicable provisions of the Americans With
Disabilities Act (42 U.S.C. 12101 fl seq.) (ADA) and
to not discriminate against any person because of race,
religion, color, sex, disability, national origin or
ancestry, or age in the admission or access to, or treatment
or employment in. its programs or activities; (0) to include
in all solicitations or advertisements for employees. the
phrase "equal opportunity employer"; (c) to comply with the
reporting requirements set out at K.S.A. 44-1031 and K.S.A.
44-1116; (d) to include those provisions
in every subcontract or purchase order so that they are
binding upon such subcontractor or vendor; (e) that a
failure to comply with the reporting requirements of (c)
above or if the contractor is found guilty of any violation
of such acts by the Kansas Human Rights Commission such
violation shall constitute a breach of contract and the
contract may be canceled, terminated or suspended, in whole
or in part, by the contracting state agency or the Kansas
Department of Administration; (f) if it is determined that
the contractor has violated applicable provisions of the
ADA, such violation shall constitute a breach of contract
and the contract may be canceled, terminated or suspended,
in whole or in part, by the contracting state agency or the
Kansas Department of Administration.
Parties to this contract understand that the provisions of
this paragraph number 5 (with the exception of those
provisions relating to the ADA) are not applicable to a
contractor who employs fewer than four employees during the
term of such contract or whose contracts with the
contracting state agency cumulatively total $5,000 or less
during the fiscal year of such agency.
6. ACCEPTANCE OF CONTRACT
This contract shall not be considered accepted, approved or
otherwise effective until the statutorily required approvals
and certifications have been given.
7. ARBITRATION. DAMAGES. WARRANTIES
Notwithstanding any language to the contrary, no
interpretation shall be allowed to find the State or any
agency thereof has agreed to binding arbitration, or the
payment of damages or penalties upon the occurrence of a
contingency. Further, the State of Kansas shall not agree to
pay attorney fees and late payment charges beyond those
available under the Kansas Prompt Payment Act (K.S.A. 75-
6403), and no provision will be given effect which attempts
to exclude, modify, disclaim or otherwise attempt to limit
implied warranties of merchantability and fitness for a
particular purpose.
8. REPRESENTATIVE'S AUTHORITY TO CONTRACT
By signing this document, the representative of the
contractor thereby represents that such person is duly
authorized by the contractor to execute this document on
behalf of the contractor and that the contractor agrees to
be bound by the provisions thereof.
9. RESPONSIBILITY FOR TAXES
The State of Kansas shall not be responsible for, nor
indemnify a contractor for, any federal, state or local
taxes which may be imposed or levied upon the subject matter
of this contract.
10. INSURANCE
The State of Kansas shall not be required to purchase, any
insurance against loss or damage to any personal property to
which this contract relates, nor shall this contract require
the State to establish a "self-insurance" fund to protect
against any such loss or damage. Subject to the provisions
of the Kansas Tort Claims Act (K.S.A. 75-6101 et seq.), the
vendor or lessor shall bear the risk of any loss or damage
to any personal property in which vendor or lessor holds
title.
11. INFORMATION
No provisions of this contract shall be construed as
limiting the Legislative Division of Post Audit from having
access to information pursuant to K.S.A. 46-1101 et seq.
