EXHIBIT (d)(2)(N)
DRAFT
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this ____ day of _________, 2000, among The GCG
Trust (the "Trust"), a Massachusetts business trust, Directed
Services, Inc. (the "Manager"), a New York corporation, and
[_______________________________]. ("Portfolio Manager"), a
[__________] 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
Solomon Brothers Asset management Inc. 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 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 and make determinations as to and execute and perform foreign
currency exchange contracts on behalf of the 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 further agrees as follows:
(a) The Portfolio Manager will (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) use reasonable efforts to
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 any
other rules and regulations pertaining to investment vehicles
underlying variable annuity or variable life insurance policies. 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 rules
or regulations pertaining to investment vehicles underlying variable
annuity or variable life insurance policies.
(b) The Portfolio Manager will perform its duties hereunder
pursuant to the 1940 Act and all rules and regulations thereunder,
all other applicable federal and state laws and regulations, 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
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Statement"). The Manager or the Trust will
notify the Portfolio Manager of pertinent provisions of applicable
state law with which the Portfolio Manager must comply under this
Paragraph 2(b).
(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
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 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 except to the
extent that the Portfolio Manager exercises judgment with respect to
any such valuation.
(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 furnish to
regulatory authorities having the requisite authority any information
or reports in connection with such services which may be requested in
order to ascertain whether the operations of the Trust are being
conducted in a manner consistent with applicable laws and
regulations.
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(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.
(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 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 ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 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\
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operational facilities of the firms involved, and the firm's risk in
positioning a block of securities. 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 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;
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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 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;
(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;
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(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 agrees that it shall promptly notify
the Manager and the Trust (1) in the event that the SEC or other
governmental authority has censured the Portfolio Manager; placed
limitations upon its activities, functions or operations; suspended
or revoked its registration, if any, as an investment adviser; or has
commenced proceedings or an investigation that may result in any of
these actions, (2) 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 Internal Revenue Code,
or (3) upon having a reasonable basis for believing that the Series
has ceased to comply with the diversification provisions of Section
817(h) of the Internal Revenue Code or the regulations thereunder.
The Portfolio Manager further agrees to notify the Manager and the
Trust promptly of any material fact known to the Portfolio Manager
respecting or relating to the Portfolio Manager that is not contained
in the Registration Statement or prospectus for the Trust, or any
amendment or supplement thereto, and is required to be stated therein
or necessary to make the statements therein not misleading, or of any
statement contained therein that becomes untrue in any material
respect.
(b) The Manager agrees that it shall immediately notify the
Portfolio Manager (1) in the event that the SEC has censured the
Manager or the Trust; placed limitations upon either of their
activities, functions, or operations; suspended or revoked the
Manager's registration as an investment adviser; or has commenced
proceedings or an investigation that may result in any of these
actions, (2) 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 Internal Revenue Code,
or (3) upon having a reasonable basis for believing that the Series
has ceased 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
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
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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 31a-l 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 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.
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 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 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.
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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 willful 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.
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),
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 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 Internal Revenue 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 any misfeasance, malfeasance, or nonfeasance by 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
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Portfolio Manager),
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 Internal Revenue Code, under any other statute, at common
law or otherwise, arising out of the Portfolio Manager's responsibili
ties as Portfolio Manager of the Series which (1) may be based upon
any misfeasance, malfeasance, or nonfeasance by 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 a failure to comply with Section 2, Paragraph (a) of this
Agreement, or (3) 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.
(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
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 satisfactory to the Portfolio Manager
Indemnified Person. 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,
which counsel shall be satisfactory to the Manager and to the
Portfolio Manager Indemnified Person. The Portfolio Manager
Indemnified Person shall bear the fees and expenses of any additional
counsel retained by it, and the Manager
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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 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 satisfactory to the Manager Indemnified Person.
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 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 which counsel
shall be satisfactory to the Portfolio Manager and to the Manager
Indemnified Person. The Manager Indemnified Person shall bear 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.
(e) The Manager shall not be liable under this Section 15 to
indemnify and hold harmless the Portfolio Manager and the Portfolio
Manager shall not be liable under this Section 15 to indemnify and
hold harmless the Manager with respect to any losses, claims,
damages, liabilities, or litigation that first become known to the
party seeking indemnification during any period that the Portfolio
Manager is, within the meaning of Section 15 of the 1933 Act, a
controlling person of the Manager.
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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
▇▇▇▇ ▇▇▇) 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 ▇▇▇▇ ▇▇▇) 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 ▇▇▇▇ ▇▇▇) 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
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.
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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 name "Prudential Investment
Corporation" or any derivative thereof or logo associated with
that name is 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
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 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 ▇▇▇▇ ▇▇▇.
(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.
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(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 By:
Title: Title:
DIRECTED SERVICES, INC.
Attest By:
Title: Title:
[_____________________________________]
Attest By:
Title: Title:
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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 [ADVISER]. shall act
as Portfolio Manager are as follows:
[_________] Series
[_________] Series
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SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by [ADVISER] ("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
average daily net assets of the Series at the following annual rates
of the average daily net assets of the Series:
16