Exhibit (d)(2)(O)
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 2nd day of October, 2000, among The GCG Trust (the
"Trust"), a Massachusetts business trust, Directed Services, Inc. (the
"Manager"), a New York corporation, and Fidelity Management & Research Company
("Portfolio Manager"), a Massachusetts corporation.
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, management investment company;
WHEREAS, the Trust is authorized to issue separate series, each of which
will offer a separate class of shares of beneficial interest, each series having
its own investment objective or objectives, policies, and limitations;
WHEREAS, the Trust currently offers shares in multiple series, may offer
shares of additional series in the future, and intends to offer shares of
additional series in the future;
WHEREAS, pursuant to a Management Agreement, effective as of October 24,
1997, a copy of which has been provided to the Portfolio Manager, the Trust has
retained the Manager to render advisory, management, and administrative services
to many of the Trust's series;
WHEREAS, the Trust and the Manager wish to retain the Portfolio Manager to
furnish investment advisory services to one or more of the series of the Trust,
and the Portfolio Manager is willing to furnish such services to the Trust and
the Manager;
NOW THEREFORE, in consideration of the premises and the promises and
mutual covenants herein contained, it is agreed between the Trust, the Manager,
and the Portfolio Manager as follows:
1. APPOINTMENT. The Trust and the Manager hereby appoint Fidelity
Management & Research Company to act as Portfolio Manager to the Series
designated on Schedule A of this Agreement (each a "Series") for the periods and
on the terms set forth in this Agreement. The Portfolio Manager accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
In the event the Trust designates one or more series other than the Series
with respect to which the Trust and the Manager wish to retain the Portfolio
Manager to render investment advisory services hereunder, they shall promptly
notify the Portfolio Manager in writing. If the Portfolio Manager is willing to
render such services, it shall so notify the Trust and Manager in writing,
whereupon such series shall become a Series hereunder, and be subject to this
Agreement.
2. PORTFOLIO MANAGEMENT DUTIES. Subject to the supervision of the Trust's
Board of Trustees and the Manager, the Portfolio Manager will provide A
continuous investment program for each Series' portfolio and determine the
composition of the assets of each Series' portfolio,
including decisions regarding the purchase, retention, or sale of the
securities, cash, and other investments contained in the portfolio of each
Series. The Portfolio Manager will provide investment research and conduct a
continuous program of evaluation, investment, sales, and reinvestment of each
Series' assets by determining the securities and other investments that shall be
purchased, entered into, sold, closed, or exchanged for the Series, when these
transactions should be executed, and what portion of the assets of each Series
should be held in the various securities and other investments in which it may
invest, and the Portfolio Manager is hereby authorized to execute and perform
such services on behalf of each Series. The Portfolio Manager will provide the
services under this Agreement in accordance with the Series' investment
objective or objectives, policies, and restrictions as stated in the Trust's
Registration Statement filed with the Securities and Exchange Commission (the
"SEC"), as from time to time amended, copies of which shall be sent to the
Portfolio Manager by the Manager upon filing with the SEC. The Portfolio Manager
shall not be responsible for administrative affairs of the Series, including but
not limited to accounting for and pricing of the Series. The Portfolio Manager
further agrees as follows:
(a) The Portfolio Manager will use best efforts to (1) manage each
Series so that no action or omission on the part of the Portfolio Manager will
cause a Series to fail to meet the requirements to qualify as a regulated
investment company specified in Section 851 of the Internal Revenue Code (other
than the requirements for the Trust to register under the 1940 Act and to file
with its tax return an election to be a regulated investment company, both of
which shall not be the responsibility of the Portfolio Manager), (2) manage each
Series so that no action or omission on the part of the Portfolio Manager shall
cause a Series to fail to comply with the diversification requirements of
Section 817(h) of the Internal Revenue Code and regulations issued thereunder,
and (3) manage the Series so that no action or omission on the part of the
Portfolio Manager shall cause a Series to fail to comply with applicable federal
and state laws, rules and regulations as the Manager has informed the Portfolio
Manager to be applicable to it as Portfolio Manager of the Series. The Manager
will notify the Portfolio Manager promptly if the Manager believes that a Series
is in violation of any requirement specified in the first sentence of this
paragraph. The Manager or the Trust will notify the Portfolio Manager of any
pertinent changes, modifications to, or interpretations of Section 817(h) of the
Internal Revenue Code and regulations issued thereunder and of other applicable
rules or regulations pertaining to the Series.
(b) The Portfolio Manager will perform its duties hereunder pursuant to
the 1940 Act and all rules and regulations thereunder and the applicable
Internal Revenue Code and regulations issued thereunder, with any applicable
procedures adopted by the Trust's Board of Trustees of which the Portfolio
Manager has been notified in writing, and the provisions of the Registration
Statement of the Trust under the Securities Act of 1933 (the "1933 Act") and the
1940 Act, as supplemented or amended, of which the Portfolio Manager has
received a copy ("Registration Statement").
(c) On occasions when the Portfolio Manager deems the purchase or sale
of a security to be in the best interest of a Series as well as of other
investment advisory clients of the Portfolio Manager or any of its affiliates,
the Portfolio Manager may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be so
sold or purchased with those of its other clients where such aggregation is not
inconsistent with
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the policies set forth in the Registration Statement. In such event, allocation
of the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Portfolio Manager in a manner that is fair and
equitable in the judgment of the Portfolio Manager in the exercise of its
fiduciary obligations to the Trust and to such other clients, subject to policy
review by the Manager and the Board of Trustees. The Portfolio Manager may give
advice and take action with respect to other funds or clients, or for its own
account, which may differ from the advice or the timing or nature of action
taken with respect to the Series.
(d) In connection with the purchase and sale of securities for a Series,
the Portfolio Manager will arrange for the transmission to the custodian and
portfolio accounting agent for the Series on a daily basis, such confirmation,
trade tickets, and other documents and information, including, but not limited
to, Cusip, Sedol, or other numbers that identify securities to be purchased or
sold on behalf of the Series, as may be reasonably necessary to enable the
custodian and portfolio accounting agent to perform its administrative and
recordkeeping responsibilities with respect to the Series. With respect to
portfolio securities to be purchased or sold through the Depository Trust
Company, the Portfolio Manager will arrange for the automatic transmission of
the confirmation of such trades to the Trust's custodian and portfolio
accounting agent.
(e) The Portfolio Manager will provide reasonable assistance to the
portfolio accounting agent for the Trust in determining or confirming,
consistent with the procedures and policies stated in the Registration Statement
for the Trust, the value of any portfolio securities or other assets of the
Series for which the portfolio accounting agent seeks assistance from or
identifies for review by the Portfolio Manager, and the parties agree that the
Portfolio Manager shall not bear responsibility or liability for the
determination or accuracy of the valuation of any portfolio securities and other
assets of the Series.
(f) The Portfolio Manager will make available to the Trust and the
Manager, promptly upon request, all of the Series' investment records and
ledgers maintained by the Portfolio Manager (which shall not include the records
and ledgers maintained by the custodian and portfolio accounting agent for the
Trust) as are necessary to assist the Trust and the Manager to comply with
requirements of the 1940 Act and the Investment Advisers Act of 1940 (the
"Advisers Act"), as well as other applicable laws. The Portfolio Manager will
promptly supply to the Manager copies of any such records upon request.
(g) The Portfolio Manager will provide quarterly and annual reports to
the Trust's Board of Trustees for consideration at meetings of the Board on the
investment program for the Series and the issuers and securities represented in
the Series' portfolio, and will furnish the Trust's Board of Trustees with
respect to the Series such monthly, quarterly or annual special reports as the
Trustees and the Manager may reasonably request.
(h) In rendering the services required under this Agreement, the
Portfolio Manager may, from time to time, employ or associate with itself such
person or persons as it believes necessary to assist it in carrying out its
obligations under this Agreement. However, the Portfolio Manager may not retain
as subadviser any company that would be an "investment adviser," as that term is
defined in the 1940 Act, to the Series unless the contract with such company is
approved by a majority of the Trust's Board of Trustees and a majority of
Trustees who are not
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parties to any agreement or contract with such company and who are not
"interested persons," as defined in the 1940 Act, of the Trust, the Manager, or
the Portfolio Manager, or any such company that is retained as subadviser, and
is approved by the vote of a majority of the outstanding voting securities of
the applicable Series of the Trust to the extent required by the 1940 Act. The
Portfolio Manager shall be responsible for making reasonable inquiries and for
reasonably ensuring that any employee of the Portfolio Manager, any subadviser
that the Portfolio Manager has employed or with which it has associated with
respect to the Series, or any employee thereof has not, to the best of the
Portfolio Manager's knowledge, in any material connection with the handling of
Trust assets:
(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, involving
violations of Sections 1341, 1342, or 1343 of Xxxxx 00, Xxxxxx Xxxxxx
Code, or involving the purchase or sale of any security; or
(ii) been found by any state regulatory authority, within the last ten
(10) years, to have violated or to have acknowledged violation of any
provision of any state insurance law involving fraud, deceit, or knowing
misrepresentation; or
(iii) been found by any federal or state regulatory authorities, within
the last ten (10) years, to have violated or to have acknowledged
violation of any provision of federal or state securities laws involving
fraud, deceit, or knowing misrepresentation.
3. BROKER-DEALER SELECTION. The Portfolio Manager is responsible for
decisions to buy and sell securities and other investments for each Series'
portfolio, broker-dealer selection, and negotiation of brokerage commission
rates. The Portfolio Manager's primary consideration in effecting a security
transaction will be to obtain the best overall terms for the Series, taking into
account the factors that include the factors it deems relevant including, but
not limited to, price (including the applicable brokerage commission or dollar
spread), the size and character of the order, the nature of the market for the
security, the financial condition of the broker-dealer involved, the execution
and settlement capabilities of the broker-dealer involved, and the execution
services on a continuing basis. Accordingly, the price to the Series in any
transaction may be less favorable than that available from another broker-dealer
if the difference is reasonably justified, in the judgment of the Portfolio
Manager in the exercise of its fiduciary obligations to the Trust, by other
aspects of the portfolio execution services offered. Subject to such policies as
the Board of Trustees may determine and consistent with Section 28(e) of the
Securities Exchange Act of 1934, the Portfolio Manager 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 the Series to pay a
broker-dealer for effecting a portfolio investment transaction in excess of the
amount of commission another broker-dealer would have charged for effecting that
transaction, if the Portfolio Manager or its affiliate 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-dealer, viewed in terms
of either that particular transaction or the Portfolio Manager's or its
affiliate's overall responsibilities with respect to the Series and to their
other clients as to which they exercise investment discretion. To the extent
consistent with these standards, the Portfolio Manager is further authorized to
allocate the orders placed by it on
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behalf of the Series to the Portfolio Manager if it is registered as a
broker-dealer with the SEC, to its affiliated broker-dealer, or to such brokers
and dealers who also provide research or statistical material, or other services
to the Series, the Portfolio Manager, or an affiliate of the Portfolio Manager.
Such allocation shall be in such amounts and proportions as the Portfolio
Manager shall determine consistent with the above standards, and the Portfolio
Manager will report on said allocation regularly to the Board of Trustees of the
Trust indicating the broker-dealers to which such allocations have been made and
the basis therefor.
4. DISCLOSURE ABOUT PORTFOLIO MANAGER. The Portfolio Manager has reviewed
the post-effective amendment to the Registration Statement for the Trust filed
with the SEC that contains disclosure about the Portfolio Manager, and
represents and warrants that, with respect to the disclosure about or
information relating, directly or indirectly, to the Portfolio Manager, to the
Portfolio Manager's knowledge, such Registration Statement contains, as of the
date hereof, no untrue statement of any material fact and does not omit any
statement of a material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading. The Portfolio
Manager further represents and warrants that it is a duly registered investment
adviser under the Advisers Act, or alternatively that it is not required to be a
registered investment adviser under the Advisers Act to perform the duties
described in this Agreement, and that it is a duly registered investment adviser
in all states in which the Portfolio Manager is required to be registered.
5. EXPENSES. During the term of this Agreement, the Portfolio Manager will
pay all expenses incurred by it and its staff and for their activities in
connection with its portfolio management duties under this Agreement. The
Manager or the Trust shall be responsible for all the expenses of the Trust's
operations including, but not limited to:
(a) Expenses of all audits by the Trust's independent public
accountants;
(b) Expenses of the Series' transfer agent, registrar, dividend
disbursing agent, and shareholder recordkeeping services;
(c) Expenses of the Series' custodial services including recordkeeping
services provided by the custodian;
(d) Expenses of obtaining quotations for calculating the value of each
Series' net assets;
(e) Expenses of obtaining Portfolio Activity Reports and Analyses OF
International Management Reports (as appropriate) for each Series;
(f) Expenses of maintaining the Trust's tax records;
(g) Salaries and other compensation of any of the Trust's executive
officers and employees, if any, who are not officers, directors, stockholders,
or employees of the Portfolio Manager or an affiliate of the Portfolio Manager;
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(h) Taxes levied against the Trust;
(i) Brokerage fees and commissions in connection with the purchase and
sale of portfolio securities for the Series;
(j) Costs, including the interest expense, of borrowing money;
(k) Costs and/or fees incident to meetings of the Trust's shareholders,
the preparation and mailings of prospectuses and reports of the Trust to its
shareholders, the filing of reports with regulatory bodies, the maintenance of
the Trust's existence, and the regulation of shares with federal and state
securities or insurance authorities;
(1) The Trust's legal fees, including the legal fees related to the
registration and continued qualification of the Trust's shares for sale;
(m) Costs of printing stock certificates representing shares of the
Trust;
(n) Trustees' fees and expenses to trustees who are not officers,
employees, or stockholders of the Portfolio Manager or any affiliate thereof;
(o) The Trust's pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or other insurance premiums;
(p) Association membership dues;
(q) Extraordinary expenses of the Trust as may arise including expenses
incurred in connection with litigation, proceedings, and other claims (unless
the Portfolio Manager is responsible for such expenses under Section 14 of this
Agreement), and the legal obligations of the Trust to indemnify its Trustees,
officers, employees, shareholders, distributors, and agents with respect
thereto; and
(r) Organizational and offering expenses.
6. COMPENSATION. For the services provided, the Manager will pay the
Portfolio Manager a fee, payable as described in Schedule B.
7. SEED MONEY. The Manager agrees that the Portfolio Manager shall not be
responsible for providing money for the initial capitalization of the Series.
8. COMPLIANCE.
(a) The Portfolio Manager shall promptly notify the Manager and the
Trust if (1) the SEC or other governmental authority has censured the Portfolio
Manager for mutual fund advisory activities; (2) it has reason to believe that a
Series may fail to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code; (3) it has reason to believe that a Series may
cease to comply with the diversification provisions OF Section 817(h) of
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the Internal Revenue Code or the regulations thereunder; or (4) there is an
untrue or a required omitted statement of fact relating to the Portfolio Manager
in material in the Prospectus or Statement of Additional Information for the
Trust previously supplied by the Portfolio Manager.
(b) The Manager shall promptly notify the Portfolio Manager and the
Trust if (1) the SEC or other governmental authority has censured the Manager
for mutual fund advisory activities; (2) it has reason to believe that a Series
may fail to qualify as a regulated investment company under Subchapter M of the
Internal Revenue Code; or (3) it has reason to believe that a Series may cease
to comply with the diversification provisions of Section 817(h) of the Internal
Revenue Code or the regulations thereunder.
9. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Portfolio Manager hereby agrees to maintain and preserve
all records related to each Series' portfolio transactions as are required of a
sub-adviser under the Advisers Act and further agrees to surrender promptly to
the Trust any of such records upon the Trust's or the Manager's request,
although the Portfolio Manager may, at its own expense, make and retain a copy
of such records. The Portfolio Manager further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 3la-1 under the 1940 Act and to preserve the records required
by Rule 204-2 under the Advisers Act for the period specified in the Rule.
10. COOPERATION. Each party to this Agreement agrees to cooperate with
each other party in connection with any investigation or inquiry relating to
this Agreement or the Trust.
11. REPRESENTATIONS RESPECTING PORTFOLIO MANAGER. During the term of this
Agreement,
(a) the Trust and the Manager agree to furnish to the Portfolio Manager
at its principal offices prior to use thereof copies of all Registration
Statements and amendments thereto, prospectuses, proxy statements, reports to
shareholders, sales literature or other material prepared for distribution to
shareholders of the Trust or any Series or to the public that refer or relate in
any way to the Portfolio Manager or any of its affiliates (other than the
Manager), or that use any derivative of the name of the Portfolio Manager or any
of its affiliates or any logo associated therewith. The Trust and the Manager
agree that they will not use any such material without the prior consent of the
Portfolio Manager, which consent shall not be unreasonably withheld. In the
event of the termination of this Agreement, the Trust and the Manager will
furnish to the Portfolio Manager copies of any of the above-mentioned materials
that refer or relate in any way to the Portfolio Manager;
(b) the Trust and the Manager will furnish to the Portfolio Manager such
information relating to either of them or the business affairs of the Trust as
the Portfolio Manager shall from time to time reasonably request in order to
discharge its obligations hereunder;
(c) the Manager and the Trust agree that neither the Trust, the Manager,
nor affiliated persons of the Trust or the Manager shall give any information or
make any representations or statements in connection with the sale of shares OF
the Series concerning the Portfolio Manager
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or the Series other than the information or representations contained in the
Registration Statement, prospectus, or statement of additional information for
the Trust, as they may be amended or supplemented from time to time, or in
reports or proxy statements for the Trust, or in sales literature or other
promotional material approved in advance by the Portfolio Manager, except with
the prior permission of the Portfolio Manager.
12. CONTROL. Notwithstanding any other provision of the Agreement, it is
understood and agreed that the Trust shall at all times retain the ultimate
responsibility for and control of all functions performed pursuant to this
Agreement and reserve the right to direct, approve, or disapprove any action
hereunder taken on its behalf by the Portfolio Manager.
13. SERVICES NOT EXCLUSIVE. It is understood that the services of the
Portfolio Manager are not exclusive, and nothing in this Agreement shall prevent
the Portfolio Manager (or its affiliates) from providing similar services to
other clients, including investment companies (whether or not their investment
objectives and policies are similar to those of the Series) or from engaging in
other activities.
14. LIABILITY. Except as may otherwise be required by the 1940 Act or the
rules thereunder or other applicable law, the Trust and the Manager agree that
the Portfolio Manager, any affiliated person of the Portfolio Manager, and each
person, if any, who, within the meaning of Section 15 of the 1933 Act, controls
the Portfolio Manager shall not be liable for, or subject to any damages,
expenses, or losses in connection with, any act or omission connected with or
arising out of any services rendered under this Agreement, except by reason of
willfull misfeasance, bad faith, or gross negligence in the performance of the
Portfolio Manager's duties, or by reason of reckless disregard of the Portfolio
Manager's obligations and duties under this Agreement ("Disabling Conduct").
Notwithstanding the foregoing, the Portfolio Manager, its directors, officers
and/or employees shall not be liable to the Manager or the Trust for any loss
suffered as a consequence of any action or inaction of the custodian or any
other service provider of any Series in failing to observe the instructions of
the Portfolio Manager.
15. INDEMNIFICATION.
(a) Except for Disabling Conduct, the Manager shall indemnify and hold
the Portfolio Manager (and its officers, directors, employees, controlling
persons, shareholders and affiliates ("Indemnified Persons") harmless from any
liability arising from the Portfolio Manager's conduct under this Agreement. The
Portfolio Manager shall indemnify and hold the Manager (and the Manager's
Indemnified Persons) harmless from any liability arising from the Portfolio
Manager's Disabling Conduct or breach of the terms of this Agreement. The
Manager shall not be liable under this paragraph (a) with respect to any claim
made against the Portfolio Manager (and the Portfolio Manager's Indemnified
Persons) unless it received notice within a reasonable period of time after the
Portfolio Manager first received notice of the claim. THE Portfolio Manager
shall not be liable under this paragraph (a) with respect to any claim made
against the Manager (and the Manager's Indemnified Persons) unless it received
notice within a reasonable period of time after the Manager first received
notice of the claim.
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(b) Notwithstanding Section 14 of this Agreement, the Manager shall
indemnify and hold the Portfolio Manager (and the Portfolio Manager's
Indemnified Persons) harmless from any liability arising out of the Manager's
responsibilities to the Trust which may be based upon any untrue statement or
alleged untrue statement of a material fact supplied by, or which is the
responsibility of, the Manager and contained in the Registration Statement or
prospectus covering shares of the Trust or a Series, or any amendment thereof or
any supplement thereto, or the omission or alleged omission to state therein a
material fact known or which should have been known to the Manager and was
required to be stated therein or necessary to make the statements therein not
misleading, unless such statement or omission was made in reliance upon
information furnished to the Manager or the Trust or to any affiliated person of
the Manager by a Portfolio Manager's Indemnified Person; provided however, that
in no case shall the indemnity in favor of the Portfolio Manager's Indemnified
Person be deemed to protect such person against any liability to which any such
person would otherwise be subject by reason of willful misfeasance, bad faith,
or gross negligence in the performance of its duties, or by reason of its
reckless disregard of obligations and duties under this Agreement.
(c) Notwithstanding Section 14 of this Agreement, the Portfolio Manager
shall indemnify and hold the Manager (and the Manager's Indemnified Persons)
harmless from any liability arising out of the Portfolio Manager's
responsibilities as Portfolio Manager of a Series which may be based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or prospectus covering the shares of the Trust or a
Series, or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact known or which should have been known
to the Portfolio Manager and was required to be stated therein or necessary to
make the statements therein not misleading, if such a statement or omission was
made in reliance upon information furnished to the Manager, the Trust, or any
affiliated person of the Manager or Trust by the Portfolio Manager or any
affiliated person of the Portfolio Manager; provided, however, that in no case
shall the indemnity in favor of a Manager Indemnified Person be deemed to
protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
16. DURATION AND TERMINATION. This Agreement shall become effective on the
date first indicated above. Unless terminated as provided herein, the Agreement
shall remain in full force and effect for two (2) years from such date and
continue on an annual basis thereafter with respect to each Series; provided
that such annual continuance is specifically approved each year by (a) the vote
of a majority of the entire Board of Trustees of the Trust, or by the vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
each Series, and (b) the vote of a majority of those Trustees who are not
parties to this Agreement or interested persons (as such term is defined in the
0000 Xxx) of any such party to this Agreement cast in person at a meeting called
for the purpose of voting on such approval. The Portfolio Manager shall not
provide any services for such Series or receive any fees on account of such
Series with respect to which this Agreement is not approved as described in the
preceding sentence. However, any approval of this Agreement by the holders of a
majority of the outstanding shares (as defined in the 0000 Xxx) of a Series
shall be effective to continue this Agreement with respect to such Series
notwithstanding (i) that this Agreement has not been approved by the holders of
a
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majority of the outstanding shares of any other Series or (ii) that this
agreement has not been approved by the vote of a majority of the outstanding
shares of the Trust, unless such approval shall be required by any other
applicable law or otherwise. Notwithstanding the foregoing, this Agreement may
be terminated for each or any Series hereunder: (a) by the Manager at any time
without penalty, upon sixty (60) days' written notice to the Portfolio Manager
and the Trust, (b) at any time without payment of any penalty by the Trust, upon
the vote of a majority of the Trust's Board of Trustees or a majority of the
outstanding voting securities of each Series, upon sixty (60) day's written
notice to the Manager and the Portfolio Manager, or (c) by the Portfolio Manager
at any time without penalty, upon sixty (60) days written notice to the Manager
and the Trust. In addition, this Agreement shall terminate with respect to a
Series in the event that it is not initially approved by the vote of a majority
of the outstanding voting securities of that Series at a meeting of shareholders
at which approval of the Agreement shall be considered by shareholders of the
Series. In the event of termination for any reason, all records of each Series
for which the Agreement is terminated shall promptly be returned to the Manager
or the Trust, free from any claim or retention of rights in such records by the
Portfolio Manager, although the Portfolio Manager may, at its own expense, make
and retain a copy of such records. The Agreement shall automatically terminate
in the event of its assignment (as such term is described in the 1940 Act). In
the event this Agreement is terminated or is not approved in the manner
described above, the Sections or Paragraphs numbered 2(f), 9, 10, 11, 14, 15,
and 18 of this Agreement shall remain in effect, as well as any applicable
provision of this Paragraph numbered 16.
17. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a majority of the
outstanding voting securities of the Series, and (ii) the Trustees of the Trust,
including a majority of the Trustees of the Trust who are not interested persons
of any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, if such approval is required by applicable
law.
18. USE OF NAME.
(a) It is understood that the name "Directed Services, Inc." or any
derivative thereof or logo associated with that name is the valuable property of
the Manager and/or its affiliates, and that the Portfolio Manager has the right
to use such name (or derivative or logo) only with the approval of the Manager
and only so long as the Manager is Manager to the Trust and/or the Series. Upon
termination of the Management Agreement between the Trust and the Manager, the
Portfolio Manager shall as soon as is reasonably possible cease to use such name
(or derivative or logo).
(b) It is understood that the names of the Portfolio Manager and its
affiliates and any of their intellectual property, including trademarks and
logos, are the valuable property of the Portfolio Manager and its affiliates and
that the Trust and/or the Series have the right to use such name (or derivative
or logo) in offering materials of the Trust with the approval of the Portfolio
Manager and for so long as the Portfolio Manager is a portfolio manager to the
Trust and/or the
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Series. Upon termination of this Agreement between the Trust, the Manager, and
the Portfolio Manager, the Trust shall as soon as is reasonably possible cease
to use such name (or derivative or logo).
19. CONFIDENTIALITY. The Manager acknowledges that the securities holdings
of the Series constitutes information of value to the Portfolio Manager, and
agrees: (1) not to use for any purpose, other than for the Manager or the Trust,
or their agents, to supervise or monitor the Portfolio Manager, the holdings or
other trading-related information of the Series, or for other uses by the
Manager as agreed to by the parties in writing; and (2) not to disclose the
Series' holdings other than as agreed to by the parties in writing, except if
required by applicable law. Further, the Manager agrees that information
supplied by the Portfolio Manager, including approved lists, internal
procedures, compliance procedures and any board materials, is valuable to the
Portfolio Manager, and the Manager agrees not to disclose any of the information
contained in such materials, except to the Board of Trustees and to a limited
number of employees of the Manager or its agents on a need to know basis, or as
required by law, or as expressly permitted by the Portfolio Manager, in writing,
addressed to the Manager.
20. VOTING RIGHTS. The Manager will be responsible for exercising any
voting rights of any securities of the Series.
21. AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST. A copy of the
Amended and Restated Agreement and Declaration of Trust for the Trust is on file
with the Secretary of the Commonwealth of Massachusetts. The Amended and
Restated Agreement and Declaration of Trust has been executed on behalf of the
Trust by Trustees of the Trust in their capacity as Trustees of the Trust and
not individually. The obligations of this Agreement shall be binding upon the
assets and property of the Trust and shall not be binding upon any Trustee,
officer, or shareholder of the Trust individually.
22. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of the SEC
thereunder. The term "affiliate" or "affiliated person" as used in this
Agreement shall mean "affiliated person" as defined in Section 2(a)(3) of the
0000 Xxx.
(b) The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect their
construction or effect.
(c) To the extent permitted under Section 16 of this Agreement, this
Agreement may only be assigned by any party with the prior written consent of
the other parties.
(d) If any provision of this Agreement shall be held or made invalid by
a court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby, and to this extent, the provisions of this
Agreement shall be deemed to be severable.
11
(e) Nothing herein shall be construed as constituting the Portfolio
Manager as an agent of the Manager, or constituting the Manager as an agent of
the Portfolio Manager.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
THE GCG TRUST
Attest Xxxxxxx X. Xxxx By: (Illegible)
--------------------------------- --------------------------------
Title: Assistant Secretary Title: Secretary
--------------------------------- -----------------------------
DIRECTED SERVICES, INC.
Attest (Illegible) By: (Illegible)
--------------------------------- --------------------------------
Title: SVP Title: Executive Vice President
--------------------------------- -----------------------------
FIDELITY MANAGEMENT & RESEARCH
COMPANY
Attest (Illegible) By: (Illegible)
--------------------------------- --------------------------------
Title: Senior Legal Counsel Title: President
--------------------------------- -----------------------------
12
SCHEDULE A
The Series of The GCG Trust, as described in Section 1 of the attached
Portfolio Management Agreement, to which Fidelity Management & Research Company
shall act as Portfolio Manager are as follows:
Diversified Mid-Cap Series
Asset Allocation Growth Series
13
SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by Fidelity Management & Research Company
("Portfolio Manager") to the following Series of The GCG Trust, pursuant to the
attached Portfolio Management Agreement, the Manager will pay the Portfolio
Manager a fee, computed daily and payable monthly, based on the combined average
daily net assets of the Series at the following annual rates of the average
daily net assets of the Series:
SERIES RATE
Diversified Mid-Cap Growth and
Asset Allocation Growth Series: 0.50% of first $250 million in assets;
0.40% of next $500 million in assets; and
0.35% of amount in excess of $750 million
14
SUB-ADVISORY AGREEMENT
between
FIDELITY INVESTMENTS MONEY MANAGEMENT, INC.
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this 2nd of October, 2000, by and between Fidelity
Investments Money Management, Inc., a New Hampshire corporation with principal
offices at 0 Xxxxxxx Xxx, Xxxxxxxxx, Xxx Xxxxxxxxx (hereinafter called the
"Sub-Adviser") and Fidelity Management & Research Company, a Massachusetts
corporation with principal offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx (hereinafter called the "Adviser").
WHEREAS the Adviser has entered into a Portfolio Management Agreement with
The GCG Trust, a Massachusetts business trust which may issue one or more series
of shares of beneficial interest (hereinafter called the "Fund"), on behalf of
Asset Allocation Growth Portfolio (hereinafter called the "Portfolio"), and
Directed Services, Inc. (the "Manager"), pursuant to which the Adviser is to act
as investment manager and adviser to the Portfolio, and
WHEREAS the Sub-Adviser was formed for the purpose of providing investment
management of money market and fixed-income mutual funds, both taxable and
tax-exempt, advising generally with respect to money market and fixed-income
instruments, and managing or providing advice with respect to cash management.
NOW, THEREFORE, in consideration of the premises and the mutual promises
hereinafter set forth, the Adviser and the Sub-Adviser agree as follows:
1. (a) The Sub-Adviser shall, subject to the supervision of the
Adviser, direct the investments of all or such portion of the Portfolio's assets
as the Adviser shall designate in accordance with the investment objective,
policies and limitations as provided in the Portfolio's Prospectus or other
governing instruments, as amended from time to time, the Investment Company Act
of 1940 and rules thereunder, as amended from time to time (the "1940 Act"), and
such other limitations as the Portfolio may impose by notice in writing to the
Adviser or Sub-Adviser. The Sub-Adviser shall also furnish for the use of the
Portfolio office space and all necessary office facilities, equipment and
personnel for servicing the investments of the Portfolio; and shall pay the
salaries and fees of all personnel of the Sub-Adviser performing services for
the Portfolio relating to research, statistical and investment activities. The
Sub- Adviser is authorized, in its discretion and without prior consultation
with the Portfolio or the Adviser, to buy, sell, lend and otherwise trade in any
stocks, bonds and other securities and investment instruments on behalf of the
Portfolio. The investment policies and all other actions of the Portfolio are
and shall at all times be subject to the control and direction of the Fund's
Board of Trustees.
(b) The Sub-Adviser shall also furnish such reports, evaluations,
information or analyses to the Fund and the Adviser as the Fund's Board of
Trustees or the Adviser may request from time to time or as the Sub-Adviser may
deem to be desirable. The Sub-Adviser shall make recommendations to the Fund's
Board of Trustees with respect to Portfolio policies, and shall carry out such
policies as are adopted by the Trustees. The Sub-Adviser shall, subject to
review by the Board of Trustees, furnish such other services as the Sub-Adviser
shall from time to time determine to be necessary or useful to perform its
obligations under this Agreement and which are not otherwise furnished by the
Adviser.
(c) The Sub-Adviser shall place all orders for the purchase and sale
of portfolio securities for the Portfolio's account with brokers or dealers
selected by the Sub-Adviser, which may include brokers or dealers affiliated
with the Adviser or Sub-Adviser. The Sub-Adviser shall use its best efforts to
seek to execute portfolio transactions at prices which are advantageous to the
Portfolio and at
commission rates which are reasonable in relation to the benefits received. In
selecting brokers or dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934) to the Portfolio and/or the other accounts over which the
Sub-Adviser, Adviser or their affiliates exercise investment discretion. The
Sub-Adviser is authorized to pay a broker or dealer who provides such brokerage
and research services a commission for executing a portfolio transaction for the
Portfolio which is 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 is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the Sub-Adviser and
its affiliates have with respect to accounts over which they exercise investment
discretion. The Trustees of the Fund shall periodically review the commissions
paid by the Portfolio to determine if the commissions paid over representative
periods of time were reasonable in relation to the benefits to the Portfolio.
2. As compensation for the services to be furnished by the Sub-Adviser
hereunder, the Adviser agrees to pay the Sub-Adviser a monthly fee equal to 50%
of the management fee which the Portfolio is obligated to pay the Adviser under
the Portfolio Management Agreement with the Adviser in respect of that portion
of the Portfolio's assets managed by the Sub-Adviser during such month. Such fee
shall not be reduced to reflect expense reimbursements or fee waivers by the
Adviser, if any, in effect from time to time.
3. It is understood that Trustees, officers, and shareholders of the
Fund are or may be or become interested in the Adviser or the Sub-Adviser as
directors, officers or otherwise and that directors, officers and stockholders
of the Adviser or the Sub-Adviser are or may be or become similarly interested
in the Fund, and that the Adviser or the Sub-Adviser may be or become interested
in the Fund as a shareholder or otherwise.
4. It is understood that the Portfolio will pay all its expenses other
than those expressly stated to be payable by the Sub-Adviser hereunder or by the
Adviser under the Portfolio Management Agreement with the Portfolio.
5. The Services of the Sub-Adviser to the Adviser are not to be deemed
to be exclusive, the Sub-Adviser being free to render services to others and
engage in other activities, provided, however, that such other services and
activities do not, during the term of this Agreement, interfere, in a material
manner, with the Sub-Adviser's ability to meet all of its obligations with
respect to rendering investment advice hereunder. The Sub-Adviser shall for all
purposes be an independent contractor and not an agent or employee of the
Adviser or the Fund.
6. In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part of the
Sub-Adviser, the Sub-Adviser shall not be subject to liability to the Advisor,
the Fund or to any shareholder of the Portfolio for any act or omission in the
course of, or connected with, rendering services hereunder or for any losses
that may be sustained in the purchase, holding or sale of any security.
7. (a) Subject to prior termination as provided in sub-paragraph (d)
of this paragraph 7, this Agreement shall continue in full force for two years
from the date first indicated above, and indefinitely thereafter, but only so
long as the continuance after such period shall be specifically approved at
least annually by vote of the Fund's Board of Trustees or by vote of a majority
of the outstanding voting securities of the Portfolio.
(b) This Agreement may be modified by mutual consent subject to
the provisions of Section 15 of the 1940 Act, as modified by or interpreted by
any applicable order or orders of the Securities and Exchange Commission (the
"Commission") or any rules or regulations adopted by, or interpretive releases
of, the Commission.
(c) In addition to the requirements of sub-paragraphs (a) and (b)
of this paragraph 7, the terms of any continuance or modification of the
Agreement must have been approved by the vote of a majority of those Trustees of
the Fund who are not parties to such Agreement or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either the Adviser, the Sub-Adviser or the Portfolio may, at
any time on sixty (60) days' prior written notice to the other parties,
terminate this Agreement, without payment of any penalty, by action of its Board
of Trustees or Directors, or by vote of a majority of its outstanding voting
securities. This Agreement shall terminate automatically upon the termination of
the Portfolio Management Agreement between the Fund on behalf of the Portfolio,
the Manager and the Adviser. This Agreement shall terminate automatically in the
event of its assignment.
8. The Sub-Adviser is hereby expressly put on notice of the limitation
of shareholder liability as set forth in the Declaration of Trust or other
organizational document of the Fund and agrees that any obligations of the Fund
or the Portfolio arising in connection with this Agreement shall be limited in
all cases to the Portfolio and its assets, and the Sub-Adviser shall not seek
satisfaction of any such obligation from the shareholders or any shareholder of
the Portfolio. Nor shall the Sub-Adviser seek satisfaction of any such
obligation from the Trustees or any individual Trustee.
9. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT GIVING EFFECT TO
THE CHOICE OF LAWS PROVISIONS THEREOF.
The terms "registered investment company," "vote of a majority of the
outstanding voting securities," "assignment," and "interested persons," when
used herein, shall have the respective meanings specified in the 1940 Act as now
in effect or as hereafter amended.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
signed in their behalf by their respective officers thereunto duly authorized,
and their respective seals to be hereunto affixed, all as of the date written
above.
FIDELITY INVESTMENTS MONEY MANAGEMENT, INC.
By /s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx
Treasurer
FIDELITY MANAGEMENT & RESEARCH COMPANY
By /s/ Xxxxxx X. Xxxxx
------------------------------------
Xxxxxx X. Xxxxx
President
