INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN GLOBAL HIGH INCOME PORTFOLIO AND
G.T. MANAGEMENT, INC.
Contract made as of October 22, 1992, between Global High Income
Portfolio ("Portfolio"), a New York Trust, and G.T. Capital Management, Inc.
("G.T. Capital"), a California corporation.
WHEREAS the Portfolio is registered under the Investment Company Act of
1940, as amended ("1940 Act") as an open-end management investment company, and
WHEREAS the Portfolio desires to retain G.T. Capital as investment
manager and administrator to furnish certain administrative, investment advisory
and portfolio management services to the Portfolio and G. T. Capital is willing
to furnish such services.
NOW, THEREFORE in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Portfolio hereby appoints G.T. Capital as
investment manager and administrator of the Portfolio for the period and on the
terms set forth in this Contract. G.T. Capital accepts such appointment and
agrees to render the services herein set forth , for the compensation herein
provided.
2. DUTIES AS INVESTMENT MANAGER.
(a) Subject to the supervision of the Portfolio's Board of Trustees
("Trustees"), G.T. Capital will provide a continuous investment program for the
Portfolio, including investment research and management with respect to all
securities and investments and cash equivalents of the Portfolio. G.T. Capital
will determine from time to time what securities and other investments will be
purchased, retained or sold by the Portfolio, and the brokers and dealers
through whom trades will be executed.
(b) G.T. Capital agrees that in placing orders with brokers and dealers
it will attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation G.T. Capital may, in its discretion, purchase
and sell portfolio securities to and from brokers and dealers who sell shares of
investment companies which invest all of their investable assets in the
Portfolio or provide the Portfolio or G.T. Capital's other clients with
research, analysis, advice and similar services. G.T. Capital may pay to brokers
and dealers, in return for research and analysis, a higher commission or spread
than may be charged by other brokers and dealers, subject to G.T. Capital's
determining in good faith that such commission or spread is reasonable in terms
either of the particular transaction or of the overall responsibility of G.T.
Capital to the Portfolio and its other clients and that the total commissions or
spreads paid by the Portfolio will be reasonable in relation to the benefits to
the Portfolio over the long term. In no instance will portfolio securities be
purchased from or sold to G.T. Capital or any affiliated person thereof except
in accordance with the federal securities laws and the rules and regulations
thereunder. Wherever G.T. Capital simultaneously places orders to purchase or
sell the same security on behalf of the Portfolio and one or more other accounts
advised by G.T. Capital, such orders will be allocated as to price and amount
among all such accounts in a manner believed to be equitable to each account.
The Portfolio recognizes that in some cases this procedure may adversely affect
the results obtained for each Portfolio.
(c) G.T. Capital will oversee the maintenance of all books and records
with respect to the securities transactions of the Portfolio, and will furnish
the Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
G.T. Capital hereby agrees that all records which it maintains for the Portfolio
are the property of the Portfolio, agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act any records which it maintains for the
Portfolio and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Portfolio any records which
it maintains for the Portfolio upon request by the Portfolio.
(d) G.T. Capital will oversee the computation of the net asset value
and the net income of the Portfolio as described in the currently effective
registration statement of the Portfolio under the 1940 Act ("Registration
Statement") or as more frequently requested by the Board.
3. DUTIES AS ADMINISTRATOR. G.T. Capital will administer the affairs of
the Portfolio subject to the supervision of the Board and the following
understandings:
(a) G.T. Capital will supervise all aspects of the operations of the
Portfolio, including the oversight of custodial, pricing and accounting
services, excepts as hereinafter set forth; provided, however, that nothing
herein contained shall be deemed to relieve or deprive the Board of its
responsibility for control of the conduct of the affairs of the Portfolio.
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(b) At G.T. Capital's expense, G.T. Capital will provide the Portfolio
with such corporate, administrative and clerical personnel (including officers
of the Portfolio) and services as are reasonably deemed necessary or advisable
by the Board.
(c) G.T. Capital will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the
Portfolio's proxy material, tax returns and required reports with or to the
Portfolio's investors, the Securities and Exchange Commission and other
appropriate federal or state regulatory authorities.
(d) G.T. Capital will provide the Portfolio with, or obtain for it,
adequate office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, G.T. Capital will act in conformity with the Declaration of Trust,
By-Laws and Registration Statement of the Portfolio and with the instructions
and directions of the Board and will comply with the requirements of the 1940
Act, the rules thereunder and all other applicable federal and state laws and
regulations.
5. DELEGATION OF G.T. CAPITAL'S DUTIES AS INVESTMENT MANAGER AND
ADMINISTRATOR. G.T. Capital may enter into one or more agreements ("Sub-Advisory
or Sub-Administration Contract") with a sub-adviser or sub-administrator in
which G.T. Capital delegates to such sub-advisor or sub-administrator the
performance of any or all of the services specified in Paragraph 2 and 3 of this
Contract, provided that: (i) each Sub-Advisory and Sub-Administration Contract
imposes on the sub-adviser or sub-administrator bound thereby all the duties and
conditions to which G. T. Capital is subject with respect to the delegated
services under Paragraphs 2, 3, and 4 of this Contract; (ii) each Sub-Advisory
or Sub-Administration Contract meets all requirements of the 1940 Act and rules
thereunder; and (iii) G.T. Capital shall not enter into a Sub-Advisory or
Sub-Administration Contract unless it is approved by the Board prior to
implementation.
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6. SERVICES NOT EXCLUSIVE. The services furnished by G.T. Capital
hereunder are not to be deemed exclusive and G. T. Capital shall be free to
furnish similar services to others so long as its services under this Contract
are not impaired thereby. Nothing in this Contract shall limit or restrict the
right of any director, officer or employee of G.T. Capital, who may also be a
Trustee, officer or employee of the Portfolio, to engage in any other business
or to devote his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a dissimilar
nature.
7. EXPENSES.
(a) During the term of this Contract, the Portfolio will bear all
expenses, not specifically assumed by G.T. Capital, incurred in its operations.
(b) Expenses borne by the Portfolio will include but not be limited to
the following: (i) the cost (including brokerage commissions, if any) of
securities purchased or sold by the Portfolio and any losses incurred in
connection therewith; (ii) fees payable to and expenses incurred on behalf of
the Portfolio by G.T. Capital under this Contract; (iii) expenses of organizing
the Portfolio; (iv) filing fees and expenses relating to the registration and
qualification of the Portfolio under federal and/or state securities laws and
maintaining such registrations and qualifications; (v) fees and salaries payable
to the Portfolio's Trustees who are not parties to this Contract or interested
persons of any such party ("Independent Trustees"); (vi) all expenses incurred
in connection with the Independent Trustees' services, including travel
expenses; (vii) taxes (including any income or franchise taxes) and governmental
fees; (viii) costs of any liability, uncollectible items of deposit and other
insurance and fidelity bonds; (ix) any costs, expenses or losses arising out of
a liability or claim for damages or other relief asserted against the Portfolio
or the Portfolio for violation of any law; (x) legal, accounting and auditing
expenses, including legal fees of special counsel for the Independent Trustees;
(xi) charges of custodians, pricing agents and other agents; (xii) expenses of
setting in type, printing and mailing reports and proxy materials for existing
investors; (xiii) any extraordinary expenses (including fees and disbursements
of counsel, costs of actions, suits or proceedings to which the Portfolio is a
party and the expenses the Portfolio may incur as a result of its legal
obligations to provide indemnification to its officers, Trustees, employees and
agents) incurred by the Portfolio; (xiv) fees, voluntary assessments and other
expenses incurred in connection with membership in investment company
organizations; (xv) costs of mailing and tabulating proxies and costs of
meetings of investors, the Board and any committees thereof; (xvi) the cost of
investment company literature and other publications provided by the Portfolio
to its Trustees and officers; and (xvii) costs of mailing, stationery and
communications equipment.
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(c) G.T. Capital will assume the cost of any compensation for services
provided to the Portfolio received by the officers of the Portfolio and by the
Trustees of the Portfolio who are not Independent Trustees.
(d) The payment or assumption by G.T. Capital of any expense of the
Portfolio that G.T. Capital is not required by this Contact to pay or assume
shall not obligate G.T. Capital to pay or assume the same or any similar expense
of the Portfolio on any subsequent occasion.
8. COMPENSATION.
(a) For the services provided under this Agreement, the Portfolio will
pay G.T. Capital a fee, computed daily and paid monthly, at the annualized rate
of .50% of the Portfolio's average daily net assets plus 2% of the Portfolio's
total investment income calculated in accordance with generally accepted
accounting principles, adjusted daily for currency revaluations, on a marked to
market basis, of the Portfolio's assets; provided, however, that during any
fiscal year this amount shall not exceed 2% of the Portfolio's total investment
income calculated in accordance with generally accepted accounting principles.
(b) The fee shall be computed daily and paid monthly to G.T. Capital on
or before the last business day of the next succeeding calendar month.
(c) G.T. Capital agrees to reduce the fee payable to it under this
Contract by the amount by which the ordinary operating expenses (exclusive of
organization expenses, interest, taxes, distribution-related expenses and
extraordinary expenses) of the Portfolio for any fiscal year borne by an
investor in the Portfolio together with the direct ordinary operating expenses
(exclusive of brokerage commissions, organization expenses, taxes, interest,
distribution-related expenses and extraordinary expenses) of the investor shall
exceed the most stringent limits prescribed by any state in which shares of any
investor in the Portfolio are offered for sale. Costs incurred in connection
with the purchase or sale of portfolio securities, including brokerage fees and
commissions, which are capitalized in accordance with generally accepted
accounting principles applicable to investment companies, shall be accounted for
as items and not expenses. Property accruals shall be made for the Portfolio for
any projected reduction hereunder and corresponding amounts shall be withheld
from the fees paid by that Portfolio to G.T. Capital. Any additional reduction
computed as being necessary at the end of the fiscal year shall be deducted from
the fee for the last month of such fiscal year. If the amount of the fee payable
by the Portfolio to G.T. Capital is less than the amount by which the
Portfolio's expenses exceed an applicable expense limitation, G.T. Capital shall
reimburse the Portfolio's expenses in an amount sufficient to enable the
Portfolio to meet such limitation.
(d) If this Contract becomes effective or terminates before the end of
any month, the fee for the period from the effective date to the end of the
month or from the beginning of such month to the date of termination, as the
case may be, shall be prorated according to the proportion which such period
bears to the full month in which such effectiveness or termination occurs.
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9. LIMITATION OF LIABILITY OF G. T. CAPITAL AND INDEMNIFICATION. G.T.
Capital shall not be liable, and the Portfolio shall indemnify G.T. Capital and
its directors, officers and employees, for any costs or liabilities arising from
any error of judgment or mistake of law or any loss suffered by the Portfolio in
connection with the matters to which this Contract relates except a loss
resulting from willful misfeasance, bad faith or gross negligence or the part of
G.T. Capital in the performance by G.T. Capital of its duties or from reckless
disregard by G.T. Capital of its obligations and duties under this Contract. Any
person, even though also an officer, partner, employee or agent of G.T. Capital,
who may be or become an officer, Trustee, employee or agent of the Portfolio
shall be deemed, when rendering services to the Portfolio or acting with respect
to any business of the Portfolio to be rendering such service to or acting
solely for the Portfolio and not as an officer, partner, employee, or agent or
one under the control or direction of G.T. Capital even though paid by it.
10. DURATION AND TERMINATION.
(a) This Contract shall become effective on the date hereabove written,
provided that this Contract shall not take effect unless it has first been
approved (i) by a vote of a majority of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval, and (ii) by vote
of a majority of that Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods
not to exceed twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval and (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) Notwithstanding the foregoing, this Contract may be terminated at
any time, without the payment of any penalty, by vote of the Board or by a vote
of a majority of the outstanding voting securities of the Portfolio on sixty
days' written notice to G.T. Capital or by G.T. Capital at any time, without the
payment of any penalty, on sixty days' written notice to the Portfolio. This
Contract will automatically terminate in the event of its assignment.
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11. AMENDMENT OF THIS CONTRACT. No provision of this Contract 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 Contract shall be
effective until approved by vote of a majority of the Portfolio's outstanding
voting securities.
12. GOVERNING LAW. This Contract shall be construed in accordance with
the laws of the state of California and the 1940 Act. To the extent that the
applicable laws of the state of California conflict with the applicable
provisions of the 1940 Act, the latter shall control.
13. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell," and "security" shall have
the same meaning as such terms have in the 1940 Act subject to such exemption as
may be granted by the Securities and Exchange Commission by any rule, regulation
or order. Where the effect of a requirement of the 1940 Act reflected in any
provision of this Contract is made less restrictive by a rule, regulation or
order of the Securities and Exchange Commission, whether of special or general
application such provision shall be deemed to incorporate the effect of such
rule, regulation or order.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: GLOBAL HIGH INCOME PORTFOLIO
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxxxx Xxxxx X. Xxxxx
Attest: G.T. CAPITAL MANAGEMENT, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxxxx Xxxxx X. Xxxxx
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