PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 24th day of October, 1997 among The GCG Trust
(the "Trust"), a Massachusetts business trust, Directed Services, Inc.
("Manager"), a New York corporation, and Xxxxx Advisors Inc. ("Portfolio
Manager"), a Delaware 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 Xxxxx
Advisors 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
notify the Portfolio Manager in writing. If the Portfolio Manager is willing
to render such services, it shall 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
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each 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 each 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 each Series' investment
objective or objectives, policies, and restrictions as stated in the Trust's
Registration Statement filed with the Securities and Exchange Commission
("SEC"), as amended, copies of which shall be sent to the Portfolio Manager by
the Manager. The Portfolio Manager further agrees as follows:
(a) The Portfolio Manager will (1) use reasonable efforts to manage
each Series so that it will qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code, (2) manage each Series so as to
ensure compliance by the Series with the diversification requirements of
Section 817(h) of the Internal Revenue Code and regulations issued thereunder,
and (3) use reasonable efforts to manage each Series so as to ensure
compliance by each Series with any other rules and regulations pertaining to
investment vehicles underlying variable annuity or variable life insurance
policies. 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. In managing each
Series in accordance with these requirements, the Portfolio Manager shall be
entitled to receive and act upon advice of counsel to the Trust, counsel to
the Manager, or counsel to the Portfolio Manager that is also acceptable to
the Manager.
(b) The Portfolio Manager will conform with 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 sent a copy, 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. The Manager or the Trust
will notify the Portfolio Manager of pertinent provisions of applicable state
insurance 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, including but not limited to Section 17(d) of the 1940 Act, 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.
(d) In connection with the purchase and sale of securities for the
Series, the Portfolio Manager will arrange for the transmission to the
custodian and portfolio accounting agent for the Trust on a daily basis, such
confirmation, trade tickets, and other documents and information, including,
but not limited
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to, Cusip, Sedol, or other numbers that identify securities to be purchased or
sold on behalf of each Series, as may be reasonably necessary to enable the
custodian and portfolio accounting agent to perform its administrative and
record keeping 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 monitor on a daily basis the
determination by the custodian and portfolio accounting agent for the Trust of
the valuation of portfolio securities and other investments of the Series.
The Portfolio Manager will assist the custodian and 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 custodian and
portfolio accounting agent seeks assistance from or identifies for review by
the Portfolio Manager.
(f) The Portfolio Manager will make available to the Trust and the
Manager, promptly upon request, all of each Series' investment records and
ledgers maintained by the Portfolio Manager (which shall not include the
records and ledgers maintained by the custodian or 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
"Adviser 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 each Series and the issuers and securities represented in each
Series' portfolio, and will furnish the Trust's Board of Trustees with respect
to each Series such periodic and special reports as the Trustees and the
Manager may reasonably request.
(h) The Portfolio Manager will not disclose or use any records or
information obtained pursuant to this Agreement (excluding investment research
and investment advice) in any manner whatsoever except as expressly authorized
in this Agreement or in the ordinary course of business in connection with
placing orders for the purchase and sale of securities, and will keep
confidential any information obtained pursuant to this Agreement, and disclose
such information only if the Board of Trustees of the Trust has authorized
such disclosure, or if such disclosure is required by applicable federal or
state law or regulations or regulatory authorities having the requisite
authority. The Trust and the Manager will not disclose or use any records or
information respecting the Portfolio Manager obtained pursuant to this
Agreement in any manner whatsoever except as expressly authorized in this
Agreement, and will keep confidential any information obtained pursuant to
this Agreement, and disclose such information only as expressly authorized in
this Agreement, if the Board of Trustees of the Trust has authorized such
disclosure, or if such disclosure is required by applicable federal or state
law or regulations or regulatory authorities having the requisite authority.
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(i) 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.
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 a Series, taking into
account the factors specified in the prospectus and/or statement of additional
information for the Trust, which include price (including the applicable
brokerage commission or dollar spread), the size of the order, the nature of
the market for the security, the timing of the transaction, the reputation,
the experience and financial stability of the broker-dealer involved, the
quality of the service, the difficulty of execution, and the execution
capabilities and operational facilities of the firm involved, and the firm's
risk in positioning a block of securities. Accordingly, the price to a 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 a Series to pay a broker-dealer for
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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 initial Registration Statement for the Trust filed with the
Securities and Exchange Commission and represents and warrants that, with
respect to the disclosure about the Portfolio Manager or information relating,
directly or indirectly, to the Portfolio Manager, 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 Investment Advisers Act of 1940, as
amended ("Advisers Act") and 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 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 Trust's transfer agent, registrar, dividend
disbursing agent, and shareholder record keeping services;
(c) Expenses of the Trust's custodial services including record
keeping services provided by the custodian;
(d) Expenses of maintaining the Trust's tax records;
(e) 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;
(f) Taxes levied against the Trust;
(g) Brokerage fees and commissions in connection with the purchase
and sale of portfolio securities for the Series;
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(h) Costs, including the interest expense, of borrowing money;
(i) 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;
(j) The Trust's legal fees, including the legal fees related to the
registration and continued qualification of the Trust's shares for sale;
(k) Costs of printing stock certificates representing shares of the
Trust;
(l) Trustees' fees and expenses to Trustees who are not officers,
employees, or stockholders of the Portfolio Manager or any affiliate thereof;
(m) The Trust's pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or other insurance premiums;
(n) Association membership dues;
(o) 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
15 of this Agreement), and the legal obligations of the Trust to indemnify its
Trustees, officers, employees, shareholders, distributors, and agents with
respect thereto; and
(p) Organizational and offering expenses.
6. COMPENSATION. For the services provided, the Manager will pay the
Portfolio Manager a fee, payable monthly, 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 Trust
or the Series.
8. COMPLIANCE.
(a) The Portfolio Manager agrees that it shall immediately notify
the Manager and the Trust (1) in the event that the Securities and Exchange
Commission has censured the Portfolio Manager; placed limitations upon its
activities, functions or operations; suspended or revoked its 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 a 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 a 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 immediately 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, or of any statement
contained therein that becomes untrue in any material respect.
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(b) The Manager agrees that it shall immediately notify the
Portfolio Manager (1) in the event that the Securities and Exchange Commission
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 a 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 a Series has ceased to comply with the diversification provisions of
Section 817(h) of the Internal Revenue Code or the Regulations thereunder.
9. INSURANCE COMPANY OFFEREES. All parties acknowledge that the Trust
will offer its shares so that it may serve as an investment vehicle for
variable annuity contracts and variable life insurance policies issued by
insurance companies. The Trust and the Manager agree that shares of the Series
may be offered only to the separate accounts and general account of insurance
companies that are approved in writing by the Portfolio Manager. The
Portfolio Manager agrees that shares of the Series may be offered to separate
accounts and the general account of Golden American Life Insurance Company and
to separate accounts and the general accounts of any insurance companies that
are affiliated with Golden American Life Insurance Company. The Manager and
Trust agree that the Portfolio Manager shall be under no obligation to
investigate insurance companies to which the Trust offers or proposes to offer
its shares.
10. 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 the Rule.
11. 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 Securities and
Exchange Commission and state insurance regulators) in connection with any
investigation or inquiry relating to this Agreement or the Trust.
12. REPRESENTATIONS RESPECTING PORTFOLIO MANAGER. 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 shares, 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
writing in advance by the Portfolio Manager, except with the prior written
permission of the Portfolio Manager. The parties agree that in the event that
the Manager or an affiliated person of the Manager sends sales literature or
other promotional material to the Portfolio Manager for its written approval
and the Portfolio Manager has not commented within 30 days, the Manager and
its affiliated persons may use and distribute such sales literature or other
promotional material, although, in such event, the Portfolio Manager shall not
be deemed to have consented to such use and distribution.
G-7
13. 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.
14. 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 a Series) or
from engaging in other activities.
15. 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.
16. INDEMNIFICATION.
(a) The Manager agrees to indemnify and hold harmless 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
("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, 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 the Manager, any portfolio manager of any other series of the
Trust, or 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 any
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.
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(b) Notwithstanding Section 15 of this Agreement, the Portfolio
Manager agrees to indemnify and hold harmless the Manager, any affiliated
person of the 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, 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 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, or (2) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or prospectus covering the shares of the Trust or any
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 16 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 or
other first legal process 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 16. 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 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.
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(d) The Portfolio Manager shall not be liable under Paragraph (b)
of this Section 16 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 or
other first legal process 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 16. 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 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.
17. 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 with respect to each Series unless
terminated as provided in this Section; 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. Notwithstanding the foregoing, this Agreement may be
terminated: (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) days' 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 the event of termination for any reason, all records of each Series for
which the
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Agreement is terminated shall promptly be returned to the Manager or the
Trust, free from any claim or retention of rights in such record 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 defined 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), 2(h), 10,
11, 12, 15, 16, and 19 of this Agreement as well as any applicable provision
of this Paragraph numbered 17 shall remain in effect.
18. 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.
19. 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 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 forthwith cease to use such name (or
derivative or logo).
(b) It is understood that the word Xxxxx or any derivative thereof
or logo associated with that word is the property right of Xxxxxx X. Xxxxx,
and that the Trust and/or the Series have the right to use such word (or
derivative or logo) in offering materials of the Trust only with the approval
of the Portfolio Manager and only 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 forthwith cease to use such word (or derivative or logo).
20. 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.
21. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of the State of
Delaware, 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.
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(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 17 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
/s/Xxxxxxx Xxxxxx By:/s/Xxxxx Xxxxxxx
--------------------------------- ----------------------------------
Attest
Assistant Secretary President
---------------------------------- -------------------------------------
Title Title
DIRECTED SERVICES, INC.
/s/Xxxxxxx Xxxxxx By:/s/Xxxxx X. Xxxxxxxx
---------------------------------- -------------------------------------
Attest Title
Vice President Senior Vice President
---------------------------------- -------------------------------------
Title Title
XXXXX ADVISORS INC.
/s/Xxxxxx Xxxxx By:/s/Xxxxxx X. Xxxxx
---------------------------------- -------------------------------------
Attest
Secretary Senior Vice President
---------------------------------- -------------------------------------
Title Title
Xxxxxx X. Xxxxx hereby consents and agrees to the use of the word "Xxxxx"
upon the terms and conditions set forth in Section 19 of the foregoing
Agreement.
/s/Xxxxxx X. Xxxxx
-----------------------------
Xxxxxx X. Xxxxx
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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 Xxxxx Advisors Inc. shall act as
Portfolio Manager are as follows:
Multiple Allocation Series
Strategic Equity Series
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SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by Xxxxx Advisors Inc. ("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,
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
------ ----
Multiple Allocation Series 0.50%
Strategic Equity Series 0.50%
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