EXHIBIT (d)(2)(K)
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 24th day of October, 1997, among The
GCG Trust (the "Trust"), a Massachusetts business trust, Directed
Services, Inc. (the "Manager"), a New York corporation, and
Baring International Investment Limited ("Portfolio Manager"), a
limited liability company organized under the laws of the United
Kingdom.
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
Baring International Investment Limited 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 AND AUTHORITY. 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. In
accordance with the forgoing duties, the Portfolio Manager is
hereby authorized to act as agent for the portfolio to order
deposits and the investment of cash and purchases and sales of
securities for the Series account and risk and in the name of the
Trust. This authorization shall be continuing one and shall
remain in full force and effect until this Agreement is
terminated in accordance with the provisions of Section 15
hereof. To the extent permitted by the investment policies of
the Series, the Portfolio Manager
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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 and shall have the authority to act in such
capacity as the Portfolio Manager deems necessary or desirable in
order to carry out its duties hereunder for the protection of the
Series so long as not expressly prohibited by the terms of this
Agreement, the 1940 Act or other securities laws or regulations.
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 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 (the "Board") 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, (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, provided, however that the
Manager and the Board shall have the right to renew and amend,
from time the Portfolio Manager's manner of allocation, provided
further that any requested changes to such manner of allocation
shall be implemented on a prospective basis only.
(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
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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 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.
(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 Xxxxx 00,
Xxxxxx Xxxxxx Code, or involving the purchase or sale
of any security; or
(ii) been found by any state regulatory
authority, within the last ten (10) years, to have
violated or to have acknowledged violation of any
provision of any state insurance law involving fraud,
deceit, or knowing misrepresentation; or
(iii) been found by any federal or state
regulatory authorities, within the last ten (10) years,
to have violated or to have acknowledged violation of
any provision of federal or state securities laws
involving fraud, deceit, or knowing misrepresentation.
(i) In using spot and forward foreign exchange contracts
for the Series as an investment the parties represent the
following:
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(i) That the Manager is properly and lawfully established with
full power and authority to enter into spot and forward foreign
exchange contracts, to perform its obligations under such foreign
exchange contracts and to procure the Portfolio Manager to enter
into such foreign exchange contracts on its behalf.
(ii) That the Manager may not, except for purposes of
redemptions, expenses, and other costs of doing business,
encumber funds which the Portfolio Manager has under the
Portfolio Manager's management or which benefit from the
Portfolio Manager's investment advice. If the Manager requires
funds for any redemptions, expenses, and other costs of doing
business, the Portfolio Manager will make funds available in a
timely manner for Manager to meet such obligations. The Manager
reserves the right to segregate assets upon notice to the
Portfolio Manager and provide different arrangements for
investment management with respect to those assets.
(iii) That the Portfolio Manager has been granted full power
and authority to enter into foreign exchange contracts as agent
on the Manager's behalf and to give instructions for settlement
for the same.
(iv) That the Portfolio Manager has full authority to instruct
Manager's custodian in conformity with its mandate.
(v) That in the event of the termination of this Agreement, the
Portfolio Manager may offer its counterparty the ability to leave
open any existing foreign exchange contracts or to close them out
at prevailing market rates.
3. BROKER-DEALER SELECTION. The Portfolio Manager is
hereby authorized to place orders for the purchase and sale of
securities and other investments for each Series' portfolio, with
or through such persons, brokers or dealers and to negotiate
commissions to be paid on such transactions and to supervise the
execution thereof. The Portfolio Manager's primary consideration
in effecting any such transaction will be to obtain the best
execution for the Series, taking into account the factors
specified in the Registration Statement, 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.
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 may effect a
transaction on behalf of the Series with a broker-dealer who
provides brokerage and research services to the Portfolio 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 might have charged for
effecting that transaction, if the Portfolio 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-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 any of 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 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
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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;
(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, 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 13 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.
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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 of 1986, as amended
(the "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 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 as then in
effect, 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 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 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 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 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.
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, Baring Asset Management, Inc. or any of
its affiliates (other than the Manager), or that use any
derivative of the name Baring Asset Management 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;
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(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. 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.
13. 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 any error
of judgment, mistake of law, any diminution in value of the
investment portfolio of the Series, 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 by the Portfolio Manager of
its duties, or by reason of reckless disregard by the Portfolio
Manager of its obligations and duties under this Agreement.
14. INDEMNIFICATION.
(a) Notwithstanding Section 13 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 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
violations of willful misconduct, malfeasance, bad faith or gross
negligence 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 13 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), 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
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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 any violations of
willful misconduct, malfeasance, bad faith or gross negligence 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) any breach of
any representations or warranties contained in Section 4;
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 14 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 14. 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 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 14 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
14. 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
8
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 14
to indemnify and hold harmless the Portfolio Manager and the
Portfolio Manager shall not be liable under this Section 14 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.
15. DURATION AND TERMINATION. This Agreement shall become
effective on the date first indicated above. Unless terminated
as provided herein, the Agreement shall remain in full force and
effect for two (2) years from such date and continue on an annual
basis thereafter with respect to each Series; provided that such
annual continuance is specifically approved each year by (a) the
vote of a majority of the entire Board of Trustees of the Trust,
or by the vote of a majority of the outstanding voting securities
(as defined in the 0000 Xxx) of each Series, and (b) the vote of
a majority of those Trustees who are not parties to this
Agreement or interested persons (as such term is defined in the
0000 Xxx) of any such party to this Agreement cast in person at a
meeting called for the purpose of voting on such approval. The
Portfolio Manager shall not provide any services for such Series
or receive any fees on account of such Series with respect to
which this Agreement is not approved as described in the
preceding sentence. However, any approval of this Agreement by
the holders of a majority of the outstanding shares (as defined
in the 0000 Xxx) of a Series shall be effective to continue this
Agreement with respect to such Series notwithstanding (i) that
this Agreement has not been approved by the holders of a 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
9
above, the Sections or
Paragraphs numbered 2(f), 9, 10, 11, 13, 14, and 17 of this
Agreement shall remain in effect, as well as any applicable
provision of this Paragraph numbered 15.
16. 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 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.
17. 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 "Baring International
Investment Limited" 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).
18. 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.
19. INVESTMENT MANAGEMENT REGULATORY ORGANIZATION.
(a) Under the rules of the Investment Management Regulatory
Organization ("IMRO"), clients must be placed in specific
categories which are dictated by different considerations
including the nature and financial description of the client, the
experience of the client in certain investments and other
factors. On the basis of the information given by the Manager,
it is categorized as a Non-Private Customer in relation to the
services to be provided in accordance with the Agreement.
(b) The Portfolio Manager has written procedures in
operation in accordance with IMRO rules for the effective
consideration and proper handling of client complaints. Any
complaint by the Manager should be sent in writing to the
Compliance Officer of the Portfolio Manager. The Manager and the
Trust may make any complaint about the Portfolio Manager to IMRO.
20. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of the
State of Delaware, without giving effect to the provisions,
policies or principals thereof relating to choice or conflict of
laws, 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 1940
Act.
10
(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 15 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.
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 /s/Xxxxxxx Xxxxxx By: Xxxxx X. Xxxxxxx
----------------- ----------------
Title: Assistant Secretary Title: Secretary
------------------- --------------
DIRECTED SERVICES, INC.
Attest /s/Xxxxxxx Xxxxxx By: Xxxxx X. Xxxxxxxx
------------------ ------------------
Title: Vice President Title: Senior Vice President
--------------- ---------------------
BARING INTERNATIONAL INVESTMENT
LIMITED
Attest /s/ A.H. Routledge By: /s/ Xxxx X. Xxxxxxx
------------------- --------------------
Title: Company Solicitor Title: Director
------------------- ---------
11
AMENDED SCHEDULE A
The Series of The GCG Trust, as described in Section 1 of
the attached Portfolio Management Agreement, to which Baring
International Investment Limited shall act as Portfolio Manager
are as follows:
Global Fixed Income Series
Developing World Series
Hard Asset Series
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed as of the 26th day February, 1999.
THE GCG TRUST
Attest /s/Xxxxxxx Xxxxxx By: /s/Xxxxx X. Xxxxxxx
----------------- -------------------
Title: Vice President Title: Secretary
----------------- ---------
DIRECTED SERVICES, INC.
Attest /s/Xxxxxxx Xxxxxx By: /s/Xxxxx X. Xxxxxxx
----------------- -------------------
Title: Vice President Title: Executive Vice President
----------------- ------------------------
and Assistant Secretary
BARING INTERNATIONAL
INVESTMENT LIMITED
Attest Xxxxxxx X. Xxxxx By: /s/Xxxx X. Xxxxxxx
---------------- ------------------
Title: Vice President Title: Director
-------------- --------
12
AMENDED SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by Baring International Investment Limited
("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:
SERIES RATE
Global Fixed Income Series 0.45% of first $200 million,
0.30% of next $500 million,
0.25% of next $1 billion,
0.10% in excess of $2 billion
Developing World Series 0.90%
Hard Asset Series 0.40%
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed as of the 26th day February, 1999.
THE GCG TRUST
Attest /s/Xxxxxxx Xxxxxx By: /s/Xxxxx X. Xxxxxxx
----------------- -------------------
Title: Assistant Secretary Title: Secretary
------------------- ---------
DIRECTED SERVICES, INC.
Attest /s/Xxxxxxx Xxxxxx By: /s/Xxxxx X. Xxxxxxx
------------------ -------------------
Title: Vice President Title: Executive Vice President
----------------------- ------------------------
and Assistant Secretary
BARING INTERNATIONAL
INVESTMENT LIMITED
Attest Xxxxxxx X. Xxxxx By: /s/Xxxx X. Xxxxxxx
---------------- ------------------
Title: Vice President Title: Director
-------------- --------
13
