MANAGEMENT CONTRACT
Exhibit d (48)
Management Contract executed as of June 16, 2008 between GMO TRUST, a Massachusetts business
trust (the “Trust”) on behalf of its GMO Flexible Equities Fund (the “Fund”), and GRANTHAM, MAYO,
VAN OTTERLOO & CO. LLC, a Massachusetts limited liability company (the “Manager”).
W I T N E S S E T H:
That in consideration of the mutual covenants herein contained, it is agreed as follows:
1. SERVICES TO BE RENDERED BY MANAGER TO THE TRUST.
(a) Subject always to the control of the Trustees of the Trust and to such policies as the
Trustees may determine, the Manager will, at its expense, (i) furnish continuously an investment
program for the Fund and will make investment decisions on behalf of the Fund and place all orders
for the purchase and sale of its portfolio securities and (ii) furnish office space and equipment,
provide bookkeeping and clerical services (excluding determination of net asset value, shareholder
accounting services and the fund accounting services for the Fund being supplied by State Street
Bank and Trust Company or such other administrator as the Fund may engage from time to time) and
pay all salaries, fees and expenses of officers and Trustees of the Trust who are affiliated with
the Manager. In the performance of its duties, the Manager will comply with the provisions of the
Agreement and Declaration of Trust and By-laws of the Trust and the Fund’s stated investment
objective, policies and restrictions.
(b) In placing orders for the portfolio transactions of the Fund, the Manager will seek the
best price and execution available, except to the extent it may be permitted to pay higher
brokerage commissions for brokerage and research services as described below. In using its best
efforts to obtain for the Fund the most favorable price and execution available, the Manager shall
consider all factors it deems relevant, including, without limitation, the overall net economic
result to the Fund (involving price paid or received and any commissions and other costs paid), the
efficiency with which the transaction is effected, the ability to effect the transaction at all
where a large block is involved, availability of the broker to stand ready to execute possibly
difficult transactions in the future and financial strength and stability of the broker. Subject
to such policies as the Trustees may determine, the Manager shall not be deemed to have acted
unlawfully or to have breached any duty created by this Contract or otherwise solely by reason of
its having caused a Fund to pay a broker or dealer that provides brokerage and research services to
the Manager an amount of commission for effecting a portfolio investment transaction in excess of
the amount of commission another broker or dealer would have charged for effecting that
transaction, if the Manager determines in good faith that such amount of commission was reasonable
in relation to the value of the brokerage and research services provided by such broker or dealer,
viewed in terms of either that particular transaction or the Manager’s overall responsibilities
with respect to the Trust and to other clients of the Manager as to which the Manager exercises
investment discretion.
(c) The Manager shall not be obligated under this agreement to pay any expenses of or for the
Trust or of or for the Fund not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers and employees of the Trust
may be a partner, shareholder, director, officer or employee of, or be otherwise interested in, the
Manager, and in any person controlled by or under common control with the Manager, and that the
Manager and any person controlled by or under common control with the Manager may have an interest
in the Trust. It is also understood that the Manager and persons controlled by or under common
control with the Manager have and may have advisory, management service, distribution or other
contracts with other organizations and persons, and may have other interests and businesses.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Fund will pay to the Manager as compensation for the Manager’s services rendered, for the
facilities furnished and for the expenses borne by the Manager pursuant to Section 1, a fee,
computed and paid monthly at the annual rate of 0.55% of the Fund’s average daily net asset value.
Such average daily net asset value of the Fund shall be determined by taking an average of all of
the determinations of such net asset value during such month at the close of business on each
business day during such month while this Contract is in effect. Such fee shall be payable for
each month within five (5) business days after the end of such month.
In the event that expenses of the Fund for any fiscal year should exceed the expense
limitation on investment company expenses imposed by any statute or regulatory authority of any
jurisdiction in which shares of the Trust are qualified for offer and sale, the compensation due
the Manager for such fiscal year shall be reduced by the amount of such excess by a reduction or
refund thereof. In the event that the expenses of the Fund exceed any expense limitation which the
Manager may, by written notice to the Trust, voluntarily declare to be effective with respect to
the Fund, subject to such terms and conditions as the Manager may prescribe in such notice, the
compensation due the Manager shall be reduced, and, if necessary, the Manager shall bear the Fund’s
expenses to the extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the foregoing compensation
shall be prorated.
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any penalty, in the event
of its assignment; and this Contract shall not be amended unless such amendment is approved at a
meeting by the affirmative vote of a majority of the outstanding shares of the Fund, and by the
vote, cast in person at a meeting called for the purpose of voting on such approval, of a majority
of the Trustees of the Trust who are not interested persons of the Trust or of the Manager.
-2-
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution, and shall remain in full force and
effect continuously thereafter (unless terminated automatically as set forth in Section 4) until
terminated as follows:
(a) Either party hereto may at any time terminate this Contract by not more than sixty days’
written notice delivered or mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by the affirmative vote of a
majority of the outstanding shares of the Fund, and (ii) a majority of the Trustees of the Trust
who are not interested persons of the Trust or of the Manager, by vote cast in person at a meeting
called for the purpose of voting on such approval, do not specifically approve at least annually
the continuance of this Contract, then this Contract shall automatically terminate at the close of
business on the second anniversary of its execution, or upon the expiration of one year from the
effective date of the last such continuance, whichever is later; provided, however, that if the
continuance of this Contract is submitted to the shareholders of the Fund for their approval and
such shareholders fail to approve such continuance of this Contract as provided herein, the Manager
may continue to serve hereunder in a manner consistent with the Investment Company Act of 1940 and
the rules and regulations thereunder.
Action by the Trust under (a) above may be taken either (i) by vote of a majority of its
Trustees, or (ii) by the affirmative vote of a majority of the outstanding shares of the Fund.
Termination of this Contract pursuant to this Section 5 shall be without the payment of any
penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the “affirmative vote of a majority of the outstanding
shares” of the Fund means the affirmative vote, at a duly called and held meeting of shareholders,
(a) of the holders of 67% or more of the shares of the Fund present (in person or by proxy) and
entitled to vote at such meeting, if the holders of more than 50% of the outstanding shares of the
Fund entitled to vote at such meeting are present in person or by proxy, or (b) of the holders of
more than 50% of the outstanding shares of the Fund entitled to vote at such meeting, whichever is
less.
For the purposes of this Contract, the terms “affiliated person”, “control”, “interested
person” and “assignment” shall have their respective meanings defined in the Investment Company Act
of 1940 and the rules and regulations thereunder, subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission under said Act; and the phrase “specifically
approve at least annually” shall be construed in a manner consistent with the Investment Company
Act of 1940 and the rules and regulations thereunder.
7. NONLIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith or gross negligence on the part of the
Manager, or reckless disregard of its obligations and duties hereunder, the Manager shall not be
-3-
subject to any liability to the Trust, or to any shareholder of the Trust, for any act or
omission in the course of, or connected with, rendering services hereunder.
8. INITIALS “GMO”.
The Manager owns the initials “GMO” which may be used by the Trust only with the consent of
the Manager. The Manager consents to the use by the Trust of the name “GMO Trust” or any other
name embodying the initials “GMO”, in such forms as the Manager shall in writing approve, but only
on condition and so long as (i) this Contract shall remain in full force and (ii) the Trust shall
fully perform, fulfill and comply with all provisions of this Contract expressed herein to be
performed, fulfilled or complied with by it. No such name shall be used by the Trust at any time
or in any place or for any purposes or under any conditions except as in this section provided.
The foregoing authorization by the Manager to the Trust to use said initials as part of a business
or name is not exclusive of the right of the Manager itself to use, or to authorize others to use,
the same; the Trust acknowledges and agrees that as between the Manager and the Trust, the Manager
has the exclusive right so to authorize others to use the same; the Trust acknowledges and agrees
that as between the Manager and the Trust, the Manager has the exclusive right so to use, or
authorize others to use, said initials and the Trust agrees to take such action as may reasonably
be requested by the Manager to give full effect to the provisions of this section (including,
without limitation, consenting to such use of said initials). Without limiting the generality of
the foregoing, the Trust agrees that, upon any termination of this Contract by either party or upon
the violation of any of its provisions by the Trust, the Trust will, at the request of the Manager
made within six months after the Manager has knowledge of such termination or violation, use its
best efforts to change the name of the Trust so as to eliminate all reference, if any, to the
initials “GMO” and will not thereafter transact any business in a name containing the initials
“GMO” in any form or combination whatsoever, or designate itself as the same entity as or successor
to an entity of such name, or otherwise use the initials “GMO” or any other reference to the
Manager. Such covenants on the part of the Trust shall be binding upon it, its trustees, officers,
stockholders, creditors and all other persons claiming under or through it.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on file with the Secretary of
The Commonwealth of Massachusetts, and notice is hereby given that this instrument is executed on
behalf of the Trustees of the Trust as Trustees and not individually and that the obligations of
this instrument are not binding upon any of the Trustees or shareholders individually but are
binding only upon the assets and property of the Fund.
-4-
IN WITNESS WHEREOF, GMO TRUST and GRANTHAM, MAYO, VAN OTTERLOO & CO. LLC have each caused this
instrument to be signed in duplicate on its behalf by its duly authorized representative, all as of
the day and year first above written.
| GMO TRUST |
||||
| By: | /s/ XXXXX XXXXXXXX | |||
| Name: | Xxxxx Xxxxxxxx | |||
| Title: | Clerk | |||
| GRANTHAM, MAYO, VAN OTTERLOO & CO. LLC |
||||
| By: | /s/ XXXXX X. XXXXX | |||
| Name: | Xxxxx X. Xxxxx | |||
| Title: | President; Chief Executive Officer; | |||
| Principal Executive Officer | ||||
-5-
