EXHIBIT (d)(2)(Q)
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 1 day of May, 2001, among The GCG Trust (the "Trust"),
a Massachusetts business trust, Directed Services, Inc. (the "Manager"), a New
York corporation, and Xxxxxxx Xxxxx Asset Management ("GSAM"), a unit of the
Investment Management Division of Xxxxxxx, Sachs & Co. ("Portfolio Manager"), a
partnership organized under the laws of New York.
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 between The GCG Trust and
Directed Services, Inc., dated October 24, 1997 AS last amended February
22,2001, 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 among the Trust, the Manager,
and the Portfolio Manager as follows:
1. APPOINTMENT. The Trust and the Manager hereby appoint GSAM 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 and to whatever terms and conditions that apply to any such
Series.
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 determination of
the purchase, retention, or sale of the securities, cash, and other investments
contained in the portfolio. 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. To the extent
permitted by the investment policies of the Series, the Portfolio Manager shall
make decisions for the Series AS to foreign currency matters. 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 (the "Registration
Statement"), copies of which shall be sent to the Portfolio Manager by the
Manager upon filing with the SEC. The Portfolio Manager is authorized to
exercise tender offers, exchange offers and to vote proxies on behalf of the
Series, each AS the Portfolio Manager determines is in the best interest of the
Series. The portfolio Manager and Manager further agree as follows:
(a) The Manager shall perform quarterly and annual tax compliance
tests to ensure that the Series are in compliance with Subchapter M of the
Internal Revenue Code ("IRC") and Section 817(h) of the IRC. The Manager shall
apprise the Portfolio Manager promptly after each quarter end (and in no event
more than 10 business days from the end of the quarter) of any non-compliance
with the diversification requirements in such IRC provisions. If so advised, the
Portfolio Manager shall take prompt action to bring the affected Series back
into compliance with such IRC diversification provisions, as directed by the
Manager. The Portfolio Manager shall manage each Series so that no action or
omission on the part of the Portfolio Manager within the scope of this Agreement
will cause a Series to fail to meet any diversification procedures, policies,
and /or guidelines adopted by the Series, or implemented by the Manager with
respect to the Portfolio Manager.
(b) The Portfolio Manager will perform its duties hereunder
pursuant to (1) the 1940 Act and all rules and regulations thereunder, all other
applicable federal and state securities laws and regulations; (2) any applicable
procedures adopted by the Trust's Board of Trustees (the "Board") of which the
Portfolio Manager has been notified in writing, provided that with respect to
procedures governing transactions involving affiliates (such as those adopted
pursuant to the 1940 Act Rules 17a-7, 17e-1 and 10f-3), such procedures will
identify any affiliate of the Manager and the Trust, other than affiliates of
the Portfolio Manager; and (3) 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, (provided that the Manager on behalf of the Board has
delivered copies of any such supplement or amendments to the Portfolio Manager).
(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 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 review by the Manager and the Board of Trustees.
(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
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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 assist the portfolio accounting
agent for the trust in determining or confirming, consistent with the procedures
and policies stated in the Registration Statement, the value of any portfolio
securities or other assets of the Series for which market quotations are not
readily available, and the parties agree that the Portfolio Manager shall not
bear responsibility or liability for the determination or accuracy of the
valuation of such portfolio securities and assets of the Series except to the
extent that the Portfolio Manager exercises judgment with respect to any such
valuation, and then only in accordance with its standard of care as set forth in
this Agreement.
(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.
(g) The Portfolio Manager will provide 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 periodic and special reports as the Trustees and the Manager may
reasonably request as agreed to by the Portfolio Manager.
(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 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 not permit any employee of the Portfolio
Manager to have any material connection with the handling of the Series if such
employee has:
(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 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.
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3. BROKER-DEALER SELECTION. The Portfolio Manager is hereby
authorized to place orders for the purchase and sale of securities with or
through such persons, brokers or dealers or futures commission merchants
("FCMs") and to negotiate commissions to be paid on such transactions and to
supervise the execution thereof. The Portfolio Manager's primary consideration
in effecting a security transaction will be to obtain the best execution for the
Series, taking into account the factors specified in the prospectus and or
statement of additional information for the Trust, which include price
(including the applicable brokerage commission or dollar spread), the size of
the order, the nature of the market for the security, the timing of the
transaction, the reputation, the experience and financial stability of the
broker-dealer involved, the quality of the service, the difficulty of execution,
and the execution capabilities and operational facilities of the firms involved,
and the firm's risk in positioning a block of securities. 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 may effect a
transaction on behalf of the Series with a broker-dealer who provides brokerage
and research services to the Portfolio to Manager notwithstanding the fact that
the commissions payable with respect to any such transaction may be greater than
the amount of any 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 behalf of the Series to the
Portfolio Manager if it is registered as a broker-dealer with the SEC or AS a
FCM with the Commodities Futures Trading Commission ("CFTC"), 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 or
FCMs 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 fled with the SEC that contains disclosure about the Portfolio Manager,
and represents and warrants that, with respect to the disclosure about or
information concerning 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;
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(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;
(h) Taxes levied against the Trust;
(i) Brokerage fees, commissions, transfer fees, registration fees,
taxes and similar liabilities and costs properly payable or incurred 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;
(l) 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.
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8. COMPLIANCE.
(a) The Trust and the Manager acknowledge that the Portfolio Manager
is not the compliance agent for any Series or for the Trust or the Manager, and
does not have access to all of each Series' books and records necessary to
perform certain compliance testing. To the extent that the Portfolio Manager has
agreed to perform the services specified in Section 2 in accordance with the
Trust's registration statement, the Trust's Agreement and Declaration of Trust
and By-Laws, the Trust's Prospectus and any policies adopted by the Trust's
Board of Trustees applicable to the Series (collectively, the "Charter
Requirements"), and in accordance with applicable law (including Subchapters M
and L of the Code, the 1940 Act and the Advisers Act ("Applicable Law")), the
Portfolio Manager shall perform such services based upon its books and records
with respect to each Series, which comprise a portion of each Series' books and
records, and upon information and written instructions received from the Trust,
the Manager or the Trust's administrator, and shall not be held responsible
under this Agreement so long as it performs such services in accordance with
this Agreement, the Charter Requirements and Applicable Law based upon such
books and records and such information and instructions provided by the Trust,
the Manager, or the Trust's administrator. The Manager shall promptly provide
the Portfolio Manager with copies of the Trust's registration statement, the
Trust's Agreement and Declaration of Trust and By-Laws, the Trust's currently
effective Prospectus and any written policies and procedures adopted by the
Trust's Board of Trustees applicable to the Portfolio and any amendments or
revisions thereto.
(b) The Portfolio Manager agrees that it shall immediately notify
the Manager and the Trust in the event (i) that the U.S. Securities and Exchange
Commission has censured the Portfolio Manager; placed material limitations upon
its activities, functions or operations; suspended or revoked its registration
as an investment adviser; or has commenced proceedings or an investigation that
can reasonably be expected to result in any of these actions, or (ii) the
Portfolio Manager has a reasonable basis for believing that the Portfolio
Manager or the Series has ceased to comply with any procedures, policies, and or
guidelines adopted by the Trust or implemented by the Manager; or (iii) the
Portfolio Manager knows of any material fact respecting or relating to the
Portfolio Manager that is not contained in the Trust's registration statement or
prospectus, or any amendment or supplement thereto, or of any statement
contained therein that becomes untrue in any material respect.
(c) The Manager agrees that it shall immediately notify the
Portfolio Manager (i) in the event that the U.S. Securities and Exchange
Commission has censured the Manager; placed material limitations upon its
activities, functions or operations; suspended or revoked its registration as an
investment adviser, or has commenced proceedings or an investigation that can
reasonably be expected to result in any of these actions; or (ii) upon having a
reasonable basis for believing that the Series has ceased to qualify or might
not qualify as a regulated investment company under Subchapter M of the Code, or
upon having a reasonable basis for believing that the Series has ceased to
comply with the diversification provisions of Section 817(h) of the 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 that all records
which it maintains for the Series are the property of the Trust 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
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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 such rules.
10. COOPERATION. Each party to this Agreement agrees to cooperate
with each other party and with all appropriate governmental authorities having
the requisite jurisdiction (including, but not limited to, the SEC and state
insurance regulators) in connection with any investigation or inquiry relating
to this Agreement or the Trust; provided however that this agreement to
cooperate does not apply where the party does not reasonably believe the
government authority has authority to request the information or the information
is privileged or confidential.
11. REPRESENTATIONS RESPECTING PORTFOLIO MANAGER.
(a) During the term of this Agreement, 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 any
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, Xxxxxxx, Xxxxx & Co. or any of its affiliates (other than the Manager),
or that use any derivative of the name, Xxxxxxx, Sachs & Co. 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. 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 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
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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 willful misfeasance, bad faith, or gross negligence in the
performance by Portfolio Manager`s duties, or by reason of reckless disregard by
Portfolio Manager of its obligations and duties under THIS Agreement.
15. INDEMNIFICATION.
(a) Notwithstanding Section 14 of this Agreement, the Manager
agrees to indemnify and hold harmless the Portfolio Manager, any affiliated
person of the Portfolio Manager (other than the Manager) within the meaning of
Section 2(a)(3) of the 1940 Act, and each person, if any, who, within the
meaning of Section 15 of the 1933 Act controls ("controlling person") the
Portfolio Manager (all of such persons being referred to as "Portfolio Manager
Indemnified Persons") against any and all losses, claims, damages, liabilities,
or litigation (including reasonable legal and other expenses) to which a
Portfolio Manager Indemnified Person may become subject under the 1933 Act, the
1940 Act, the Advisers Act, the Code, under any other statute, at common law or
otherwise, arising out of the Manager's responsibilities to the Trust which (1)
may be based upon the willful misfeasance, bad faith, gross negligence of, or
reckless disregard of, the Manager, any of its employees or representatives or
any affiliate of or any person acting on behalf of the Manager or (2) 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 Indemnified Person;
provided however, that in no case shall the indemnity in favor of the Portfolio
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, or gross negligence in the performance of its
duties, or by reason of its reckless disregard of obligations and duties under
THIS Agreement.
(b) Notwithstanding Section 14 of this Agreement, the Portfolio
Manager agrees to indemnify and hold harmless the Manager, any affiliated person
of the Manager (other than the Portfolio Manager) within the meaning of Section
2(a)(3) of the 1940 Act, and each person, if any, who, within the meaning of
Section 15 of the 1933 Act, controls ("controlling person") the Manager (all of
such persons being referred to as "Manager Indemnified Persons") against any and
all losses, claims, damages, liabilities, or litigation (including legal and
other expenses) to which a Manager Indemnified Person may become subject under
the 1933 Act, 1940 Act, the Advisers Act, the Code, under any other statute, at
common law or otherwise, arising out of the Portfolio Manager's responsibilities
as Portfolio Manager of the Series which (1) may be based upon the willful
misfeasance, bad faith, gross negligence of, or reckless disregard of, the
Portfolio Manager, any of its employees or representatives, or any affiliate of
or any person acting on behalf of the Portfolio Manager, (2) 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
relate to the description of the
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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.
(c) The Manager shall not be liable under Paragraph (a) of this
Section 15 with respect to any claim made against a Portfolio Manager
Indemnified Person unless such Portfolio Manager Indemnified Person shall have
notified the Manager in writing within a reasonable time (no more than 60
calendar days) after the summons, notice, or other first legal process or notice
giving information of the nature of the claim shall have been served upon such
Portfolio Manager Indemnified Person (or after such Portfolio Manager
Indemnified Person shall have received notice of such service on any designated
agent), but failure to notify the Manager of any such claim shall not relieve
the Manager from any liability which it may have to the Portfolio Manager
Indemnified Person against whom such action is brought otherwise. than on
account of this Section 15. In case any such action is brought against the
Portfolio Manager Indemnified Person, the Manager will be entitled to
participate, at its own expense, in the defense thereof or, after notice to the
Portfolio Manager Indemnified Person, to assume the defense thereof, with
counsel of Manager's choice. If the Manager assumes the defense of any such
action and the selection of counsel by the Manager to represent both the Manager
and the Portfolio Manager Indemnified Person would result in a conflict of
interests and therefore, would not, in the reasonable judgment of the Portfolio
Manager Indemnified Person, adequately represent the interests of the Portfolio
Manager Indemnified Person, the Manager will, at its own expense, assume the
defense with counsel to the Manager and, also at its own expense, with separate
counsel to the Portfolio Manager Indemnified Person, with counsel of Manager's
choice. The Portfolio Manager Indemnified Person shall bear the fees and
expenses of any additional counsel retained by it, and the Manager shall not be
liable to the Portfolio Manager Indemnified Person under this Agreement for any
legal or other expenses subsequently incurred by the Portfolio Manager
Indemnified Person independently in connection with the defense thereof other
THAN reasonable costs of investigation. The Manager shall not have the right to
compromise on or settle the litigation without the prior written consent of the
Portfolio Manager Indemnified Person if the compromise or settlement results, or
may result in a finding of wrongdoing on the part of the Portfolio Manager
Indemnified Person.
(d) The Portfolio Manager shall not be liable under Paragraph (b) of
this Section 15 with respect to any claim made against a Manager Indemnified
Person unless such Manager Indemnified Person shall have notified the Portfolio
Manager in writing within a reasonable time (no more than 60 calendar days)
after the summons, notice, or other first legal process or notice giving
information of the nature of the claim shall have been served upon such Manager
Indemnified Person (or after such Manager Indemnified Person shall have received
notice of such service on any designated agent), but failure to notify the
Portfolio Manager of any such claim shall not relieve the Portfolio Manager from
any liability which it may have to the Manager Indemnified Person against whom
such action is brought otherwise than on account of this Section 15. In case any
such action is brought against the Manager Indemnified Person, the Portfolio
Manager will be entitled to participate, at its own expense, in the defense
thereof or, after notice to the Manager Indemnified Person, to assume the
defense thereof, with counsel of Portfolio Manager's choice. If the Portfolio
Manager assumes the defense of any such action and the selection of counsel by
the Portfolio Manager to represent both the Portfolio Manager and the Manager
Indemnified Person would result in a conflict of interests and therefore, would
not, in the reasonable judgment of the Manager Indemnified Person, adequately
represent the interests
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of the Manager Indemnified Person, the Portfolio Manager will, at its own
expense, assume the defense with counsel to the Portfolio Manager and, also at
its own expense, with separate counsel to the Manager Indemnified Person with
counsel of Portfolio Manager's choice. The Manager Indemnified Person shall beg,
the fees and expenses of any additional counsel retained by it, and the
Portfolio Manager shall not be liable to the Manager Indemnified Person under
this Agreement for any legal or other expenses subsequently incurred by the
Manager Indemnified Person independently in connection with the defense thereof
other THAN reasonable costs of investigation. The Portfolio Manager shall not
have the right to compromise on or settle the litigation without the prior
written consent of the Manager Indemnified Person if the compromise or
settlement results, or may result in a finding of wrongdoing on the part of the
Manager Indemnified Person.
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 (6) 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. 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 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 Folio 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), but shall not terminate in connection with
any transaction not deemed an assignment within the meaning of Rule 2a-6 under
the 1940 Act, or any other rule adopted (or position issued) by the U.S.
Securities and Exchange Commission regarding transaction not deemed to be
assignments. 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
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which enforcement of the change, waiver, discharge or termination is sought, and
no material amendment of this Agreement shall be effective until approved by an
affirmative vote of (i) 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, and (ii) the holders of a majority OF the outstanding voting
securities of the Series, 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 Xxxxxxx Xxxxx Asset Management
and Xxxxxxx, Sachs & Co. or any deriving thereof or logo associated with those
names are the valuable property of the Portfolio Manager and its affiliates and
that the Trust and or the Series only have the right to use such names (or
derivative or logo) in offering materials of the Trust with the prior approval
of the Portfolio Manager and for so long as the Portfolio Manager is a portfolio
manager to the Trust and or the 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. 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.
20. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of the Commonwealth
of Massachusetts, 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.
(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.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed as of the day and year first above written.
Attest /s/ Xxxxxxx X. Xxxx
--------------------------------------
Title: Assistant Secretary
--------------------------------------
Attest [ILLEGIBLE SIGNATURE]
--------------------------------------
Title: Vice President & Assistant Secretary
--------------------------------------
Attest [ILLEGIBLE SIGNATURE]
--------------------------------------
Title: Vice President & Asst. General Counsel
--------------------------------------
THE GCG TRUST
By: [ILLEGIBLE SIGNATURE]
-----------------------------------------
Title: President & Chairman of Board
--------------------------------------
DIRECTED SERVICES, INC.
By: [ILLEGIBLE SIGNATURE]
-----------------------------------------
Title: Senior Vice President
--------------------------------------
XXXXXXX SACHS ASSET MANAGEMENT, A
UNIT OF THE INVESTMENT DIVISION OF
XXXXXXX, XXXXX & CO.
By: [ILLEGIBLE SIGNATURE]
-----------------------------------------
Title: Managing Director
--------------------------------------
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SCHEDULE A
The Series of The GCG Trust, as described in Section 1 of the attached
Portfolio Management Agreement, to which Xxxxxxx Sachs & Co. shall act as
Portfolio Manager are as follows:
Internet Tollkeeper Series(SM)
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SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by Xxxxxxx Xxxxx Asset Management to the
following Series of The GCG Trust, pursuant to the attached Portfolio Management
Agreement, the Manager will pay the Portfolio Manager a fee for each Series,
computed daily and payable monthly, based on the average daily net assets of the
Series at the following annual rates of the average daily net assets of the
Series:
Internet Tollkeeper Series (SM) 0.95% on the first $1 billion; and
0.90% of amount in excess of $1 billion
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