EXHIBIT (d)(2)(L)
SUBADVISORY AGREEMENT
GCG TRUST
THIS AGREEMENT is made this 26th day of February, 1999, by
and between GCG Trust (the "Trust"), a Massachusetts business
trust, on behalf of the portfolios listed on Schedule A hereto
(the "Portfolios"), Directed Services, Inc. (the "Manager") a New
York corporation and AIM Capital Management, Inc. (the "Sub-
Adviser") a Delaware corporation.
WHEREAS, the Trust represents that it is registered under
the Investment Company Act of 1940, as amended (the A1940 Act")
as an open-end, diversified management investment company,
consisting of multiple series of investment portfolios;
WHEREAS, the Manager represents that it is registered under
the Investment Advisers Act of 1940, as amended (the "Advisers
Act") as an investment adviser and engages in the business of
acting as an investment adviser;
WHEREAS, the Sub-Adviser represents that it is registered
under the Advisers Act as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Trust represents that the Board of Trustees of
the Trust is authorized to classify or reclassify authorized but
unissued shares of the Trust, and as of the date of this
Agreement the Trust's Board of Trustees has authorized the
issuance of series of shares representing interests in investment
portfolios; and
WHEREAS, the Manager represents that it has entered into a
management agreement dated as of October 24, 1997 with the Trust
(the "Management Agreement"), pursuant to which the Manager shall
act as manager with respect to the Portfolios;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained and other good and valuable consideration, the
receipt whereof is hereby acknowledged, the parties hereto agree
as follows:
1. INVESTMENT DESCRIPTION; APPOINTMENT
The Trust desires to employ its capital relating to the
Portfolios by investing and reinvesting in investments of the
kind and in accordance with the investment objective(s), policies
and limitations specified in the prospectuses (the "Prospectus")
and the statements of additional information (the "Statement")
filed with the Securities and Exchange Commission as part of the
Trust's Registration Statement on Form N-1A, as amended or
supplemented from time to time, and in the manner and to the
extent as may from time to time be approved by the Board of
Trustees of the Trust (the "Board"). Copies of the Registration
Statement, Prospectus and the Statement have been or will be
provided to the Sub-Adviser. The Trust agrees promptly to
provide copies of all amendments and supplements to the current
Registration Statement, Prospectus and the Statement to the Sub-
Adviser on or before the effective date thereof on an on-going
basis. Until the Trust delivers any such amendment or supplement
to the Sub-Adviser, the Sub-Adviser shall be fully protected in
relying on the Prospectus and Statement as previously furnished
to the Sub-Adviser. The Trust employs the Manager as the manager
to the Portfolios pursuant to the Management Agreement, and the
Trust and the Manager desire to employ and hereby appoint the
Sub-Adviser to act as the sub-investment adviser to the
Portfolios. The Sub-Adviser accepts the appointment and agrees
to furnish the services for the compensation set forth below.
2. SERVICES AS SUB-ADVISER
Subject to the supervision, direction and approval of the
Board and the Manager, the Sub-Adviser shall conduct a continual
program of investment, evaluation and, if appropriate in the view
of the Sub-Adviser, sale and reinvestment of the Portfolios'
assets. The Sub-Adviser is authorized, in its sole discretion
and without prior consultation with the Manager, to: (a) manage
the Portfolios' assets in accordance with each Portfolio's
investment objective(s) and policies as stated in the
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Prospectus
and the Statement; (b) make investment decisions for the
Portfolios; (c) place purchase and sale orders for portfolio
transactions on behalf of the Portfolios; and (d) employ
professional portfolio managers and securities analysts who
provide research services to the Portfolios.
In addition, (i) the Sub-Adviser shall furnish the Manager
daily information concerning portfolio transactions and quarterly
and annual reports concerning transactions and performance of the
Portfolios in such form as may be mutually agreed by the Manager
and the Sub-Adviser, and the Sub-Adviser agrees to review the
Portfolio and discuss the management thereof with the Manager and
the Board.
(ii) Unless the Manager gives the Sub-Adviser written
instructions to the contrary, the Sub-Adviser shall use its good
faith judgment in a manner which it reasonably believes best
serves the interests of the Portfolios' shareholders to vote or
abstain from voting all proxies solicited by or with respect to
the issuers of securities in which assets of the Portfolios may
be invested.
(iii) The Sub-Adviser shall maintain and preserve such
records related to the Portfolios' transactions as required under
the 1940 Act. The Manager shall maintain and preserve all books
and other records not related to the Portfolios= transactions as
required under the 1940 Act. The Sub-Adviser shall timely
furnish to the Manager all information relating to the Sub-
Adviser's services hereunder reasonably requested by the Manager
to keep and preserve the books and records of the Portfolios.
The Sub-Adviser agrees that all records which it maintains for
the Portfolios are the property of the Trust and the Sub-Adviser
will surrender promptly to the Trust copies of any of such
records.
(iv) The Sub-Adviser shall maintain compliance procedures
for the Portfolios that it reasonably believes are adequate to
ensure the Portfolios' compliance with (A) the 1940 Act and the
rules and regulations promulgated thereunder and (B) each
Portfolio's investment objective(s) and policies as stated in the
Prospectus and Statement. The Sub-Adviser shall maintain
compliance procedures that it reasonably believes are adequate to
ensure its compliance with the Advisers Act.
(v) The Sub-Adviser has adopted a written code of ethics
that it reasonably believes complies with the requirements of
Rule 17j-1 under the 1940 Act, which it will provide to the
Trust. The Sub-Adviser has policies and procedures regarding the
detection and prevention and the misuse of material, nonpublic
information by the Sub-Adviser and its employees as required by
the Xxxxxxx Xxxxxxx and Securities Fraud Enforcement Act of 1988.
3. BROKERAGE
The Sub-Adviser is responsible for decisions to buy and sell
securities for the Portfolios, broker-dealer selection, and
negotiation of brokerage commission rates. The Sub-Adviser's
primary consideration in effecting a security transaction will be
executed at the most favorable price. In selecting a broker-
dealer to execute each particular transaction, the Sub-Adviser
will take the following into consideration: the best net price
available; the reliability, integrity and financial condition of
the broker-dealer, the size of and difficulty in executing the
order; and the value of the expected contribution of the broker-
dealer to the investment performance of the Portfolio on a
continuing basis. Accordingly, the price to a Portfolio in any
transaction may be less favorable than that available from
another broker-dealer if the difference is reasonably justified
by other aspects of the portfolio execution services offered.
Subject to such policies as the Board may from time to time
determine, the Sub-Adviser shall not be deemed to have acted
unlawfully or to have breached any duty created by this Agreement
or otherwise solely by reason of its having caused a Portfolio to
pay a broker or dealer that provides brokerage and research
services to the Sub-Adviser an amount of commission for effecting
a portfolio investment transaction in excess of the amount of
commission another broker or dealer would have charged for
effecting that transaction, if the Sub-Adviser determines in good
faith that such amount of commission was reasonable in relation
to the value of the brokerage and research services provided by
such broker or dealer, viewed in terms of either that particular
transaction of the Sub-Adviser's overall responsibilities with
respect to a particular Portfolio, and to the other clients of
the Sub-Adviser as to which the Sub-Adviser exercises investment
discretion. The Sub-Adviser is further authorized to allocate
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the orders placed by it on behalf of the Portfolios to such
brokers and dealers who also provide research or statistical
material, or other services to the Portfolios or to the
Sub-Adviser. Such allocation shall be in such amounts and
proportions as the Sub-Adviser shall determine and the Sub-
Adviser will report on said allocations regularly to the Board
indicating the brokers to whom such allocations have been made
and the basis therefor.
4. INFORMATION PROVIDED TO THE COMPANY AND THE MANAGER
The Sub-Adviser shall keep the Trust and the Manager
informed of developments materially affecting the Portfolios'
holdings, and shall, on its own initiative, furnish the Trust and
the Manager from time to time with whatever information the Sub-
Adviser believes is appropriate for this purpose.
5. COMPENSATION
In consideration of the services rendered pursuant to this
Agreement, the Manager will pay the Sub-Adviser an annual fee
calculated at the rate specified in Schedule B hereto. The fee
is calculated daily and paid monthly. The fee for the period
from the Effective Date (defined below) of the Agreement to the
end of the month during which the Effective Date occurs shall be
prorated according to the proportion that such period bears to the
full monthly period. Upon any termination of this Agreement before
the end of a month, the fee for such part of that month shall be
prorated according to the proportion that such period bears to the
full monthly period and shall be payable upon the date of
termination of this Agreement. For the purpose of determining fees
payable to the Sub-Adviser, the value of each Portfolio's net assets
shall be computed at the times and in the manner specified in the
Prospectus and/or the Statement.
6. EXPENSES
The Sub-Adviser shall bear all expenses incurred by it in
connection with the performance of its services under this
Agreement. Each Portfolio will bear certain other expenses to be
incurred in its operation, including, but not limited to,
investment advisory fees, sub-advisory fees (other than sub-
advisory fees paid pursuant to this Agreement) and administration
fees; fees for necessary professional and brokerage services;
costs relating to local administration of securities; fees for
any pricing service; the costs of regulatory compliance; and pro
rata costs associated with maintaining the Trust's legal
existence and shareholder relations. All other expenses not
specifically assumed by the Sub-Adviser hereunder or by the
Manager under the Management Agreement are borne by the
Portfolios or the Trust.
7. STANDARD OF CARE
The Sub-Adviser shall exercise its best judgment and shall
act in good faith in rendering the services listed in paragraphs
2 and 3 above. The Sub-Adviser, its officers, directors and
employees shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Portfolios, any
shareholder of the Portfolios or the Manager in connection with
the matters to which this Agreement relates, provided that
nothing in this Agreement shall be deemed to protect or purport
to protect the Sub-Adviser against any liability to the Manager,
the Trust or to the shareholders of the Portfolios to which the
Sub-Adviser would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence on its part in the
performance of its duties or by reason of the Sub-Adviser's
reckless disregard of its obligations and duties under this
Agreement.
8. TERM OF AGREEMENT
This Agreement shall become effective with respect to each
Portfolio as of March 1, 1999 (the "Effective Date") and shall
continue for an initial two-year term and shall continue
thereafter so long as such continuance is specifically approved
at least annually as required by the 1940 Act. This Agreement is
terminable with respect to any Portfolio, without penalty, on 60
days' written notice, by the Board or by vote of holders of a
majority (as defined in the 1940 Act and the rules thereunder) of
the outstanding voting securities of the Portfolio, or upon 60
days' written notice, by the Sub-Adviser. This Agreement will
also terminate automatically in the event of its assignment (the
term Aassignment@ having the meaning defined in Section 2(a)(4)
of the 1940 Act and the rules thereunder).
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9. SERVICES TO OTHER COMPANIES OR ACCOUNTS
The Trust understands that the Sub-Adviser now acts, will
continue to act and may act in the future as investment manager
or adviser to fiduciary and other managed accounts, and as
investment manager or adviser to other investment companies,
including any offshore entities, or accounts, and the Trust has
no objection to the Sub-Adviser's so acting, provided that
whenever the Portfolios and one or more other investment
companies or accounts managed or advised by the Sub-Adviser have
available funds for investment, investments suitable and
appropriate for each will be allocated in accordance with a
formula believed to be equitable to each company and account.
The Trust recognizes that in some cases this procedure may
adversely affect the size of the position obtainable for the
Portfolios. In addition, the Trust understands that the persons
employed by the Sub-Adviser to assist in the performance of the
Sub-Adviser's duties under this Agreement will not devote their
full time to such service and nothing contained in this Agreement
shall be deemed to limit or restrict the right of the Sub-Adviser
or any affiliate of the Sub-Adviser to engage in and devote time
and attention to other businesses or to render services of
whatever kind or nature.
10. NOTICES
Any notices under this Agreement shall be in writing,
addressed and delivered or mailed postage paid to the other
parties at such address as such other parties may designate for
the receipt of such notice. Until further notice to the other
parties, it is agreed that the address of each party is as
follows:
(a) To the Trust:
Prior to March 19, 1999 After March 19, 1999
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
GCG Trust
The GCG Trust The GCG Trust
0000 Xxxxxxxxx Xxxxxx 0000 Xxxxxxxx Xxxx
Xxxxx 000 Xxxx Xxxxxxx, XX 00000
Xxxxxxxxxx, XX 00000
(b) To the Manager:
Prior to March 19, 1999 After March 19, 1999
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
Directed Services, Inc.
The GCG Trust The GCG Trust
0000 Xxxxxxxxx Xxxxxx 0000 Xxxxxxxx Xxxx
Xxxxx 000 Xxxx Xxxxxxx, XX 00000
Xxxxxxxxxx, XX 00000
(c) To the Sub-Adviser:
AIM Capital Management, Inc.
President
00 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
cc: General Counsel
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11. REPRESENTATIONS
The Trust represents that a copy of the Agreement and
Declaration of Trust together with all amendments thereto, is on
file with the Secretary of the Commonwealth of Massachusetts.
Each of the parties hereto represents that the Agreement has
been duly authorized, executed and delivered by all required
action.
12. USE OF NAME
The Trust may use the names "AIM Capital Management,
Inc.", "AIM Capital Management", or "AIM Capital" (collectively
the AIM Names) only for so long as this Agreement or any
extension, renewal, or amendment hereof remains in effect. At
such times as this Agreement shall no longer be in effect, the
Trust shall cease to use such names or any other name indicating
that it is advised by or otherwise connected with the Sub-Adviser
and shall promptly change its name accordingly. The Trust
acknowledges that it has authority to use the AIM Names through
permission of the Sub-Adviser, and agrees that the Sub-Adviser
reserves to itself and any successor to its business the right to
grant the non-exclusive right to use the aformentioned names or
any similar names to any other corporation or entity, including
but not limited to any investment company of which the Sub-
Adviser or any subsidiary or affiliate thereof or any successor
to the business of any thereof shall be the investment adviser.
13. SEVERABILITY
If any provision of this Agreement is found to be
unenforceable, then this Agreement shall be deemed to be amended
by modifying such provision to the extent necessary to make it
legal and enforceable while preserving its intent. The remainder
of this Agreement shall not be affected by such modification.
14. QUESTIONS OF INTERPRETATION
Any question of interpretation of any term or provision of
this Agreement having a counterpart in or otherwise derived from
a term or provision of the 1940 Act or the Advisers Act shall be
resolved by reference to such term or provision of the 1940 Act
or the Advisers Act and to interpretations thereof, if any, by
the United States Courts or in the absence of any controlling
decision of any such court, by rules, regulations or orders of
the Securities and Exchange Commission issued pursuant to said
Acts. In addition, where the effect of a requirement of the 1940
Act or the Advisers Act reflected in any provision of this
Agreement is revised by rule, regulation or order of the
Securities and Exchange Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or
order.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed in triplicated by their respective officers
on the day and year first written above.
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GCG TRUST
Attest: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------ --------------------
Name: Xxxxx X. Xxxxxxx
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Title: Secretary
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DIRECTED SERVICES, INC.
Attest: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------ --------------------
Name: Xxxxx X. Xxxxxxx
----------------
Title: Secretary
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AIM CAPITAL MANAGEMENT, INC.
Attest: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxx
------------------- ----------------
Name: Xxxx X. Xxxx
------------
Title: President
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SCHEDULE A
Portfolios
Capital Appreciation Portfolio
Strategic Equity Portfolio
SCHEDULE B
Fee Schedule
Pursuant to Section 5 of the Sub-Advisory Agreement among GCG
Trust, Directed Services, Inc. and AIM Capital Management,
Inc. (the ASub-Adviser@), the fees payable to the Sub-Adviser
shall be calculated by applying the following rates to the
average daily net assets of the Portfolios as indicated
below:
Portfolio Net Assets Annual Rate
Capital Appreciation Portofolio First $250 million 0.50%
Next $250 million 0.45%
Over $500 million 0.40%
Strategic Equity Portfolio First $250 million 0.50%
Next $250 million 0.45%
Over $500 million 0.40%
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