Account Agreement Acceptance – PCS
December 2021 | Created on: 04/05/2022 1:21 PM
The attached agreements, disclosures and account setup documentation (“Account Documentation”) contain information specific to the services that City of Salinas (the “Owner”) has selected Delaware Charter Guarantee & Trust Company, conducting business as Principal Trust Company, or Principal Bank, as the case may be (collectively referred to herein as “Principal® Custody Solutions”) to provide services as Trustee/Custodian under the governing Trust/Custody Agreement, executed by Principal Custody Solutions and the Owner for the Post-Employment Benefits Trust Agreement (the “Account”).
Principal Custody Solutions
Account Acceptance Agreement
Account Agreement Acceptance – PCS
December 2021 | Created on: 04/05/2022 1:21 PM
Acceptance
Owner Name (“Owner”): City of Salinas
Account Name (the “Account”): Post-Employment Benefits Trust Agreement Account Number(s): 10001500 and all related sub accounts The undersigned individuals represent that they are duly authorized to take action on behalf of the Owner and Principal Custody Solutions, respectively. The parties certify that they are executing this Acceptance to signify receipt of, and agreement to the terms and conditions specified in the Account Documentation listed below, as of the effective date specified on each document.
ACCOUNT DOCUMENTATION (only checked items apply):
[X] Definitions and Disclosure Statement
[X] Fee Schedule (consisting of):
- Fee Acknowledgement
- Fee Proposal
[X] Sweep Investment Direction for Cash Balances
Accepted:
City of Salinas Principal Bank
Owner name
Name (please print) Name (please print)
Title (please print) Title (please print)
X
X
Signed Signed
Date
City of Salinas
Owner name
Name (please print)
Title (please print)
X
Signed
Date
Definitions and Disclosure Statement – Non-ERISA-Non-Retirement January 2022 | Created on: 04/05/2022 2:23 PM
Definitions and Disclosure Statement
Definitions
“Revenue from Fund Asset-Based Fees” are fees paid to Principal Bank® or Principal Trust Company® (collectively, “Principal® Custody Solutions”) by the institution providing the investment option (“Fund Company”) for Investment Alternative Options (“Investment Alternatives”) listed on the most current Investment Alternative Options Direction, Disclosure, and Acknowledgement (“IAO”). The revenue being disclosed represents only those fees received by Principal Custody Solutions from the Fund Company for certain shareholder services performed by Principal Custody Solutions either directly or through a supplier. Changes to such fees will be disclosed on the account statements and periodically updated fee disclosure documents. Any such fees are part of the Investment Alternative’s expense ratio and do not result in an increased payment by the Account. Ongoing Revenue from Fund Asset-Based Fees are stated as annual rates and are calculated by the Fund Company's manager pursuant to its established practice and procedure. Certain Investment Alternatives may also pay one-time Revenue from Fund Asset-Based Fees to Principal Custody Solutions which are calculated based on the value of funds invested by an individual who was not previously an investor in the Investment Alternative and are calculated in accordance with the Fund Company's procedures. Revenue from Fund Asset-Based Fees may be paid by the fund company from one or more sources and under one or more programs (including, but not limited to, sub-transfer agency fees, 12b-1 fees, shareholder and administrative services fees, and distribution related fees) provided for in the prospectuses or other governing documents of the Investment Alternative. “Allocation of Asset-Based Fees”
Principal Custody Solutions may hire external third parties whose responsibilities may include collecting Revenue from Fund Asset Based Fees on its behalf. As disclosed in the IAO, Principal Custody Solutions may either retain these fees as revenue or may allocate these fees to the affected accounts. However, when Principal Custody Solutions uses an external third party to collect these fees, Principal Custody Solutions covers the cost of the third party’s services through a portion of the fees so collected, and the amount allocated to affected accounts will be net of the amount payable to the external third party.
General Disclosures
Investments such as mutual funds, common or group trust funds (i) are not endorsed or guaranteed by Principal Custody Solutions or any affiliates thereof; (ii) are not deposits or other obligations of Principal Custody Solutions or any affiliates thereof; (iii) are not insured by the FDIC, the Federal Reserve Board or any other government agency; and (iv) involve investment risks, including possible loss of principal.
Neither Principal Custody Solutions nor any affiliates thereof can assure that the investment objectives of any Investment Alternative will be achieved. Past performance is no guarantee of future results. Investment return and principal value may fluctuate so that upon redemption, an investment in an Investment Alternative may be worth more or less than its original cost.
As a result of different and varied transaction rounding policies employed by providers of Investment Alternatives, there may be minor valuation differences in Principal Custody Solutions’ records and the records of an Investment Alternative provider for transactions between and among various Investment Alternatives.
Where Principal Custody Solutions receives Revenue from Fund Asset-Based Fees, the dollar amount of the compensation is calculated under the Fund Company’s procedures for such payments, which procedures may vary from provider to provider. As a result, certain minor differentials may exist between the fees payable by the Investment Alternatives and the fees otherwise payable by the Account. Principal Custody Solutions reserves the right to disposition any differentials.
In accordance with agreements with Fund Companies, Principal Custody Solutions receives next day settlement privileges with respect to purchases and redemptions of shares. Notwithstanding the foregoing, the funds may delay settlement of any trade in accordance with the terms of the prospectus or other governing documents, and any such delay would delay Principal Custody Solutions’ ability to affect trades involving a Non-Proprietary Investment Option (as defined in the Non-Proprietary Investment Options section of this Statement).
Principal Custody Solutions and any affiliates thereof do not exercise investment discretion or render investment advice with respect to the Account unless a written agreement is in place to provide discretionary investment management with a separate fee arrangement and disclosures.
General Disclosures continued
For the fees and expenses charged by mutual funds, common or group trust funds, exchange-traded funds (ETFs), and other electronically traded Investment Alternatives, please review the prospectus or common investment fund agreement
Definitions and Disclosure Statement – Non-ERISA-Non-Retirement January 2022 | Created on: 04/05/2022 2:23 PM
for that investment and appropriate share class/rate level. For information regarding fees applicable to any investments included in the Account other than those listed in the IAO or fees from other sources, please see the Account agreements.
Certain mutual funds may impose redemption fees or other trading restrictions on shares of the funds that are transferred or exchanged out of the funds before the applicable minimum holding period. Please read each fund’s prospectus for more information about the fund and any applicable redemption fees. In addition, certain common or group trust funds may impose withdrawal restrictions with respect to Owner-initiated transactions involving the fund which Principal Custody Solutions is obligated to honor. Please read each Investment Alternative’s governing documents for more information about the investment and any applicable withdrawal restrictions.
Principal Funds (“Proprietary Mutual Funds”)
The compensation the affiliates of Principal Custody Solutions receive is based on the Investment Alternatives the Owner has chosen. Affiliates of Principal Custody Solutions receive compensation from the products and Investment Alternatives they manufacture, including Proprietary Mutual Funds.
The Proprietary Mutual Funds can pay fees for various services provided to the Proprietary Mutual Fund, including fees payable to Principal Custody Solutions or any of its affiliates for investment advisory services, which are set forth in the prospectuses for such Investment Alternatives. Proprietary Mutual Fund fees and expenses are stated in the Annual Funds Operating Expenses sections of the Summary Prospectus and in the Management Agreement section of the Statement of Additional Information. However, Principal Custody Solutions will receive no fees for investment management, investment advisory or similar services rendered to the Account with respect to Account assets invested in such Proprietary Mutual Funds, except as permitted by applicable law. The entity providing investment advisory services may voluntarily waive its fee and/or reimburse the Proprietary Mutual Fund for certain of its expenses in order to reduce expense ratios, which may affect the amount shared with or credited to Principal Custody Solutions or its affiliates thereof.
The Proprietary Mutual Funds incur transaction costs and expenses in their operations and in trading securities, and include these costs into the expense ratios of the Proprietary Mutual Funds. To the extent that Principal Custody Solutions assists with any activities contemplated by these transaction costs and expenses, including securities transactions effected through a registered broker/dealer affiliate, the Proprietary Mutual Funds may pay Principal Custody Solutions for these activities.
The Owner understands that in order to invest in a Proprietary Mutual Fund: (a) it cannot directly or indirectly control and it cannot directly or indirectly be controlled by Principal Custody Solutions or an affiliate thereof; (b) it cannot be an officer, director, partner, or employee (or relative thereof) of Principal Custody Solutions or an affiliate thereof; and (c) it cannot directly or indirectly receive any compensation or other consideration for a personal account in connection with the investment of assets in any Proprietary Mutual Fund.
The Owner acknowledges that it has received a copy of the current prospectus for each of the Proprietary Mutual Funds which contains a disclosure of all services provided by an affiliate of Principal Custody Solutions to the Proprietary Mutual Funds and of all applicable fees paid to Principal Custody Solutions or affiliates thereof as compensation for providing such services to the Proprietary Mutual Funds. The Owner received a copy of the current fee schedule applicable to the Account. A current prospectus for any Principal Funds Distributor, Inc. funds is available at www.principalfunds.com/funds or by calling Principal Funds Investor Services at 1-800-222-5852.
Definitions and Disclosure Statement – Non-ERISA-Non-Retirement January 2022 | Created on: 04/05/2022 2:23 PM
Non-Proprietary Investment Options
The principal distributors of certain mutual funds, common or group trust funds, exchange-traded funds (ETFs), and other electronically traded Investment Alternatives unaffiliated with Principal Custody Solutions or any affiliates thereof (“Non- Proprietary Investment Options”) have made certain of their funds available to the Owner as Investment Alternatives under the Account. These Non-Proprietary Investment Options incur transaction costs and expenses in their operations and in trading securities and include these costs into the expense ratios of their respective Non-Proprietary Investment Options. To the extent that Principal Custody Solutions assists with any activities contemplated by these transaction costs and expenses, the Non-Proprietary Investment Options may pay Principal Custody Solutions for these activities.
Alternative Notification of Securities Transactions under 12 CFR §151.100 Whenever securities transactions (commonly known as trades) are initiated, and Principal Custody Solutions places those securities transactions in the Owner’s account, 12 CFR §151.70 requires Principal Custody Solutions to inform the Owner of its right to receive a separate notification containing details of those security transactions.
Principal Custody Solutions can comply by forwarding to the Owner, at no charge, copies of each trade confirmation or, in the absence thereof, written notification of the details that would have been contained therein. Alternatively, the Owner may determine that in lieu of receiving separate trade confirmations, the periodic account statements provided to the Owner by Principal Custody Solutions adequately informs the Owner of the account trade activity. This alternative reporting is allowed pursuant to 12 CFR §151.100.
By signing the Acceptance Page, the Owner agrees that the periodic statements provided by Principal Custody Solutions are adequate notification and that the Owner does not wish to receive separate trade confirmations. If the Owner wishes to receive separate trade confirmations, it should provide such request in writing to Principal Custody Solutions.
Class Actions
Principal Custody Solutions or its agent(s) shall automatically opt-in to class action lawsuits related to securities held in an open account for which it acts as custodian of which it receives timely electronic notification through its normal electronic system dedicated for such action and can respond therein.
Such action shall not be deemed to constitute the exercise of investment discretion or other authority over such securities and is undertaken at the direction of the Owner (either express or implied by continued utilization of Principal Custody Solutions’ services) for the timely servicing of the account. Principal Custody Solutions shall not be liable for its failure to opt-in to any action because of untimely/unreasonable notice or non-standard response procedures. Caution: This service might not be available for certain non-US class action lawsuits. Principal Custody Solutions reserves the right to revise its policy/procedures on class actions from time to time without notice.
Global Investments
Purchases, sales, and holding of securities traded on a non-US or foreign exchange (“Global Investing”), whether at the account owner’s direction or through an investment manager, are handled through a sub-custodial arrangement with The Bank of New York Mellon. Tax servicing related to Global Investing is performed by The Bank of New York Mellon and Principal Custody Solutions’ agent, GlobeTax, under separate written agreements. Initiation of Global Investing constitutes consent to release relevant account information to The Bank of New York Mellon and GlobeTax. Global Investing requires additional information/forms/agreements and Principal Custody Solutions will have no liability for losses caused by delays in account set-up or transaction processing in the absence of all required information/forms/agreements.
Shareholder Meeting/Rights/Actions/Notices and Votes
As directed trustee/custodian, Principal Custody Solutions will direct matters requiring shareholder action to the party named by the Owner. Principal Custody Solutions or its agent(s) will act in accordance with commercially reasonable standards in distributing notices and soliciting/casting votes and will have no liability for failure to vote/act without direction. Principal Custody Solutions will have no liability for the applicable party’s failure to timely vote/act. Principal Custody Solutions will not forward notices for irregular/predatory/non-traditional shareholder matters routinely ignored by commercial custodians or their agents in the normal course of business. Such inaction will not be deemed to constitute the exercise of investment discretion or other authority over such securities and is undertaken at the direction of the Owner for the timely servicing of the account. Principal Custody Solutions reserves the right to revise its policy/procedures on shareholder actions from time to time without notice.
Definitions and Disclosure Statement – Non-ERISA-Non-Retirement January 2022 | Created on: 04/05/2022 2:23 PM
Shareholder Communications Act Disclosure
The Securities and Exchange Commission adopted the Beneficial Owner Information Disclosure Rule #14b-2 (the “Rule”) in 1986 as part of its effort to improve communications between publicly held companies and beneficial owners of the securities registered in the name of certain nominees.
Under the Rule, Principal Custody Solutions is required to contact each customer for whom Principal Custody Solutions holds securities and determine whether the Owner authorizes Principal Custody Solutions to provide the Owner’s name, address and share position to the issuer of the securities the Owner owns. For the Owner’s protection, the Rule prohibits the requesting company from using the Owner’s name and address for any purpose other than corporate communications.
Please complete the authorization below by checking one of the alternatives. [_] Principal Custody Solutions is authorized to release the Owner’s name, address and share position (Consents to disclosure).
[_] Principal Custody Solutions is NOT authorized to release the Owner’s name, address and share position (Objects to disclosure).
Note: Under the Rule, Principal Custody Solutions is required to treat a non-response as a “Consents to disclosure” response.
Note: Notwithstanding the Owner’s above election under the Shareholder Communications Act, if the Account holds securities of a foreign company domiciled in a European Union country, then pursuant to the European Union’s Shareholder Rights Directive II regulation, the Owner’s name, address, and the share position the Account holds must be disclosed if requested by the issuer of the securities.
Regulation R Limitations (Non-ERISA Custody accounts only) Regulation R restricts Principal Custody Solutions from executing certain customer-initiated trades in non-employee benefit plan custody accounts (“Restricted Trades”).
Regulation R includes a list of exemptions that allow a bank to conduct specified security transactions without being registered as a broker/dealer. Transactions that fall outside of the exemptions must be performed by a registered broker/dealer.
Principal Custody Solutions is permitted to execute Restricted Trades involving Exempt Investments. “Exempt Investments” are defined as any trades involving registered mutual funds and government issued securities.
Principal Custody Solutions is permitted to execute Restricted Trades not involving Exempt Investments on an accommodation basis. With respect to the custody accounts it services, Principal Custody Solutions, defines accommodation trading as follows:
1). Trades that involve investing cash deposits/income
Purchase - invest a cash deposit (new business initial funding activity) Purchase - invest additional cash deposits in an existing account 2). Trades that involve raising cash for obligations
Sale - to raise cash for expenses (e.g., to pay a debt obligation, to cover an overdraft) Sale - to raise cash for account transition to another custodian 3). Trades that involve charitable gifts
Sale - to liquidate asset gifts received in-kind from donors Buy - to invest cash gifts received directly from donors (similar to #1 above) 4). Trades that involve special account circumstances
Trades to rebalance a portfolio on a periodic basis based on an established allocation Purchase – to invest funds from a pledged asset maturity in a statutory account Sale – to liquidate assets after an external investment manager has been terminated Customers will be notified by their Relationship Manager when the trading practices of a non-employee benefit plan custody account falls outside of the exemptions under Regulation R.
Capitalized terms not defined herein will have the meanings ascribed to them in the governing documents.
Fee Acknowledgement
December 2021 | Created on: 04/05/2022 2:23 PM
Fee Acknowledgement
Effective Date: April 15, 2022
Owner name (“Owner”): City of Salinas
Account name (“Account”): Post-Employment Benefits Trust Agreement Principal account numbers: 10001500 and all related sub accounts Billing Frequency: Monthly
Method of Payment: Charge Trust/Custody Account
Throughout this Fee Acknowledgement references to Principal® Custody Solutionsi shall include Principal® Bank and/or Principal® Trust Company, as applicable. This Fee Acknowledgement and the Fee Summary incorporated herein together constitute the Fee Agreement.
The Proposal Number 446527.33 dated April 1, 2022 describes fees and payment to Principal Custody Solutions with regard to each Account. Subsequent Fee Summaries provided to you will constitute an amendment to this Fee Agreement and will supersede previous Fee Summaries.
With direction from you, we will change the method of payment and/or billing frequency. A method of payment or billing frequency will be effective with the next billing cycle occurring after our receipt of your direction.
Owner Acknowledgement
Fees and expenses described in this Fee Agreement, together with any fees described in other agreements and/or disclosures, constitute amounts payable to Principal Custody Solutions for services provided to the Owner on the Account. Principal Custody Solutions shall be paid the fees as described in the Fee Summary at the time such services are rendered. If such fees are not paid by the Account, such payment shall be made by the Owner. Principal Custody Solutions may deduct fees due for services rendered directly from the Account assets. Fees for services rendered shall be payable upon presentation of invoices by Principal Custody Solutions and may be subject to late payment penalties. Past due fees may be deducted from the Account assets. Principal, in its sole discretion, may suspend services during any period in which any unpaid amounts are 60 days overdue or may deduct such amounts from the account(s).
Owner understands that if Principal Custody Solutions fees are based on the market value of the Account, those fees will be affected by asset pricing. When Principal Custody Solutions is unable to price an asset using its usual pricing sources, Principal Custody Solutions will rely on the Owner to supply a price. If the Owner is unable to supply a price for the asset, Principal Custody Solutions will continue to reflect the last known price (and fees will be based on that price) for the asset until the Owner provides an alternative price and fees will be based on that market value.
Should there be any material change to the Account's structure or asset base, or should the Owner fail to transfer any assets scheduled for receipt to Principal Custody Solutions within 60 days of the Effective Date of this Fee Agreement, Principal Custody Solutions reserves the right to redefine fees and/or service conditions.
Principal Custody Solutions shall be entitled to charge additional fees for any additional services requested by the Owner or any revisions to reports, forms, and documents resulting from (i) inaccurate or incomplete information supplied by the Owner, (ii) untimely payments of contributions or reimbursement of fees and expenses, (iii) retroactive amendment of the Trust, (if applicable) (iv) failure of the Owner to timely notify Principal Custody Solutions of any error in reports, forms and documents prepared by Principal Custody Solutions. If the Owner requests a rerun of an allocation or report due to incorrect or untimely information being furnished, the Owner shall bear the extra costs attributable to such reallocations or new reports.
Principal Custody Solutions is entitled to prompt reimbursement of all extraordinary out-of-pocket expenses incurred in the performance of its services on behalf of the Account including, but not limited to, fees for legal process, outside legal fees, and courier services.
On a Monthly basis, Principal Custody Solutions will send an invoice to the Owner for fees and expenses due with respect to the Account. The invoice will denote Account fees to be "billed" that are payable by the Owner and/or Account fees to be "deducted" that have been deducted from Account assets held in the Account. Such amounts, if billed, shall be due not later than 30 days following the billing date. Additional services not detailed in this Fee Agreement may be negotiated by
Fee Acknowledgement
December 2021 | Created on: 04/05/2022 2:23 PM
and between Principal Custody Solutions and the Owner at normal prevailing rates. Principal Custody Solutions retains the right to revise its Fee Summary from time to time.
If the Owner wishes to have the Account pay any fees or expenses, or wishes to be reimbursed by the Account for any fees or expenses previously paid by the Owner, the Owner shall be responsible for determining which fees and expenses may properly be paid or reimbursed by the Account and provide appropriate written direction certifying this to Principal Custody Solutions.
iCustody and trust services are provided by Principal Bank®, Member FDIC, and/or Principal Trust Company®. These services are provided under the trade name Principal® Custody Solutions. Principal Trust Company is a trade name of Delaware Charter Guarantee & Trust Company. Principal Bank and Principal Trust Company are members of the Principal Financial Group®, Des Moines, IA 50392. #
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Sweep Investment Direction – Non-Proprietary MF – Unbundled ERISA/NQ November 2021 | Created on: 04/05/2022 2:23 PM
Sweep Investment Direction
for Cash Balances
(Non-Proprietary Mutual Fund)
Effective Date: April 15, 2022
Owner name (“Owner”): City of Salinas
Account name (“Account”): Post-Employment Benefits Trust Agreement Account number(s): 10001500 and all related sub accounts This Direction to Trustee or Custodian (this “Direction”) constitutes a direction to Delaware Charter Guarantee & Trust Company, conducting business as Principal® Trust Company, or Principal® Bank, as the case may be (collectively referred to herein as “Principal® Custody Solutions”), each in its capacity as either trustee or custodian of account or accounts established under various trust or custody agreements, to take the actions specified below.
The Owner directs Principal Custody Solutions to systematically invest cash received by or held in the account(s) indicated above (including all related accounts) in the following short-term investment vehicle:
Sweep Investment Vehicle Name Asset-Based Fees Paid by Fund* (basis points)
CUSIP-Ticker
Allspring Government MMkt Inst 3.0 94975P405-VP4560000-GVIXX *Please review the Definitions and Disclosure Statement provided in your document package for a more complete explanation of the revenue Principal Custody Solutions may be entitled to receive.
The Owner hereby acknowledges receipt of the current prospectus for the investment vehicle listed above, which includes the investment advisory and other fees charged to or paid by the mutual fund, as well as Principal Custody Solutions’ Notice of Fee Arrangements documents and attachments thereto.
The Owner understands that it may change this direction at any time and that it shall continue in effect until revoked or modified by an authorized representative of the Owner by written notice to Principal Custody Solutions.