EXHIBIT (d)(2)(N)
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 26th day of February, 1999, among The
GCG Trust (the "Trust"), a Massachusetts business trust, Directed
Services, Inc. (the "Manager"), a New York corporation, and
Alliance Capital Management L.P. ("Portfolio Manager"), a
Delaware limited partnership.
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
appoints Alliance Capital Management L.P. as Portfolio Manager to
the Series designated on Schedule A of this Agreement (each a
"Series") for the periods and on the terms set forth in this
Agreement. The Portfolio Manager accepts such appointment and
agrees to furnish the services herein set forth for the
compensation herein provided.
In the event the Trust designates one or more series
other than the Series with respect to which the Trust and the
Manager wish to retain the Portfolio Manager to render investment
advisory services hereunder, they shall promptly notify the
Portfolio Manager in writing. If the Portfolio Manager is
willing to render such services, it shall so notify the Trust and
Manager in writing, whereupon such series shall become a Series
hereunder, and be subject to this Agreement.
2. PORTFOLIO MANAGEMENT DUTIES. Subject to the
supervision of the Trust's Board of Trustees and the Manager, the
Portfolio Manager will provide a continuous investment program
for each Series' portfolio and determine the composition of the
assets of each Series' portfolio, including determination of the
purchase, retention, or sale of the securities, cash, and other
investments contained in the portfolio. The Portfolio Manager
will provide investment research and conduct a continuous program
of evaluation, investment, sales, and reinvestment of each
Series' assets by determining the securities and other
investments that shall be purchased, entered into, sold, closed,
or exchanged for the Series, when these transactions should be
executed, and what portion of the assets of each Series should be
held in the various securities and other investments in which it
may invest, and the Portfolio Manager is hereby authorized to
execute and perform such services on behalf of each Series. To
the extent permitted by the investment policies of the Series,
the Portfolio Manager shall make decisions for the Series as to
foreign currency matters and make determinations as to and
execute and perform foreign currency exchange contracts on behalf
of the Series. The Portfolio Manager will provide the services
under this Agreement in accordance with the Series' investment
objective or objectives, policies, and restrictions as stated in
the Trust's Registration Statement filed with the Securities
and Exchange Commission (the "SEC"), as from time to time
amended, copies of which shall be sent to the Portfolio Manager
by the Manager upon filing with the SEC. The Portfolio Manager
further agrees as follows:
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(a) The Portfolio Manager will (1) manage each Series
so that no action or omission on the part of the Portfolio
Manager will cause a Series to fail to meet the requirements to
qualify as a regulated investment company specified in Section
851 of the Internal Revenue Code (other than the requirements for
the Trust to register under the 1940 Act and to file with its tax
return an election to be a regulated investment company, both of
which shall not be the responsibility of the Portfolio Manager),
(2) manage each Series so that no action or omission on the part
of the Portfolio Manager shall cause a Series to fail to comply
with the diversification requirements of Section 817(h) of the
Internal Revenue Code and regulations issued thereunder, and (3)
use reasonable efforts to manage the Series so that no action or
omission on the part of the Portfolio Manager shall cause a
Series to fail to comply with any other rules and regulations
pertaining to investment vehicles underlying variable annuity or
variable life insurance policies. The Manager will notify the
Portfolio Manager promptly if the Manager believes that a Series
is in violation of any requirement specified in the first
sentence of this paragraph. The Manager or the Trust will notify
the Portfolio Manager of any pertinent changes, modifications to,
or interpretations of Section 817(h) of the Internal Revenue Code
and regulations issued thereunder and of rules or regulations
pertaining to investment vehicles underlying variable annuity or
variable life insurance policies.
(b) The Portfolio Manager will perform its duties
hereunder pursuant to the 1940 Act and all rules and regulations
thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the
Trust's Board of Trustees of which the Portfolio Manager has been
notified in writing, and the provisions of the Registration
Statement of the Trust under the Securities Act of 1933 (the
"1933 Act") and the 1940 Act, as supplemented or amended, of
which the Portfolio Manager has received a copy ("Registration
Statement"). 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,
but shall not be obligated to, aggregate the securities to be so
sold or purchased with those of its other clients where such
aggregation is not inconsistent with the policies set forth in
the Registration Statement. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred
in the transaction, will be made by the Portfolio Manager in a
manner that is fair and equitable in the judgment of the
Portfolio Manager in the exercise of its fiduciary obligations to
the Trust and to such other clients, subject to review by the
Manager and the Board of Trustees.
(d) In connection with the purchase and sale of
securities for a Series, the Portfolio Manager will arrange for
the transmission to the custodian and portfolio accounting agent
for the Series on a daily basis, such confirmation, trade
tickets, and other documents and information, including, but not
limited to, Cusip, Sedol, or other numbers that identify
securities to be purchased or sold on behalf of the Series, as
may be reasonably necessary to enable the custodian and portfolio
accounting agent to perform its administrative and recordkeeping
responsibilities with respect to the Series. With respect to
portfolio securities to be purchased or sold through the
Depository Trust Company, the Portfolio Manager will arrange for
the automatic transmission of the confirmation of such trades to
the Trust's custodian and portfolio accounting agent.
(e) The Portfolio Manager will assist the portfolio
accounting agent for the Trust in determining or confirming,
consistent with the procedures and policies stated in the
Registration Statement for the Trust, the value of any portfolio
securities or other assets of the Series for which the portfolio
accounting agent seeks assistance from or identifies for review
by the Portfolio Manager, and the parties agree that the
Portfolio Manager shall not bear responsibility or liability for
the determination or accuracy of the valuation of any portfolio
securities and other assets of the Series except to the extent
that the Portfolio Manager exercises judgment with respect to any
such valuation.
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(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.
3. BROKER-DEALER SELECTION. The Portfolio Manager is
responsible for decisions to buy and sell securities and other
investments for each Series' portfolio, broker-dealer selection,
and negotiation of brokerage commission rates. The Portfolio
Manager's primary consideration in effecting a security
transaction will be to obtain the best execution for the Series,
taking into account the factors specified in the prospectus
and/or statement of additional information for the Trust, which
include price (including the applicable brokerage commission
or dollar spread), the size of the order, the nature of the
market for the security, the timing of the transaction, the
reputation, the experience and financial stability of the
broker-dealer involved, the quality of the service, the
difficulty of execution, and the execution capabilities
and operational facilities of the firms involved, and the
firm's risk in positioning a block of securities.
Accordingly, the price to the Series in any transaction may
be less favorable than that available from another broker-
dealer if the difference is reasonably justified, in the
judgment of the Portfolio Manager in the exercise of its
fiduciary obligations to the Trust, by other aspects of the
portfolio execution services offered. Subject to such policies
as the Board of Trustees may determine and consistent with
Section 28(e) of the Securities Exchange Act of 1934, the
Portfolio Manager shall not be deemed to have acted
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unlawfully
or to have breached any duty created by this Agreement
or otherwise solely by reason of its having caused the Series to
pay a broker-dealer for effecting a portfolio investment
transaction in excess of the amount of commission another broker-
dealer would have charged for effecting that transaction, if the
Portfolio Manager or its affiliate determines in good faith that
such amount of commission was reasonable in relation to the value
of the brokerage and research services provided by such broker-
dealer, viewed in terms of either that particular transaction or
the Portfolio Manager's or its affiliate's overall
responsibilities with respect to the Series and to their other
clients as to which they exercise investment discretion. To the
extent consistent with these standards, the Portfolio Manager is
further authorized to allocate the orders placed by it on behalf
of the Series to the Portfolio Manager if it is registered as a
broker-dealer with the SEC, to its affiliated broker-dealer, or
to such brokers and dealers who also provide research or
statistical material, or other services to the Series, the
Portfolio Manager, or an affiliate of the Portfolio Manager.
Such allocation shall be in such amounts and proportions as the
Portfolio Manager shall determine consistent with the above
standards, and the Portfolio Manager will report on said
allocation regularly to the Board of Trustees of the Trust
indicating the broker-dealers to which such allocations have been
made and the basis therefor.
4. DISCLOSURE ABOUT PORTFOLIO MANAGER. The Portfolio
Manager has reviewed the post-effective amendment to the
Registration Statement for the Trust filed with the SEC that
contains disclosure about the Portfolio Manager, and represents
and warrants that, with respect to the disclosure about or
information relating, directly or indirectly, to the Portfolio
Manager, to the Portfolio Manager's knowledge, such Registration
Statement contains, as of the date hereof, no untrue statement of
any material fact and does not omit any statement of a material
fact which was required to be stated therein or necessary to make
the statements contained therein not misleading. The Portfolio
Manager further represents and warrants that it is a duly
registered investment adviser under the Advisers Act, or
alternatively that it is not required to be a registered
investment adviser under the Advisers Act to perform the duties
described in this Agreement, and that it is a duly registered
investment adviser in all states in which the Portfolio Manager
is required to be registered.
5. EXPENSES. During the term of this Agreement, the
Portfolio Manager will pay all expenses incurred by it and its
staff and for their activities in connection with its portfolio
management duties under this Agreement. The Manager or the Trust
shall be responsible for all the expenses of the Trust's
operations including, but not limited to:
(a) Expenses of all audits by the Trust's independent
public accountants;
(b) Expenses of the Series' transfer agent, registrar,
dividend disbursing agent, and shareholder recordkeeping
services;
(c) Expenses of the Series' custodial services
including recordkeeping services provided by the custodian;
(d) Expenses of obtaining quotations for calculating
the value of each Series' net assets;
(e) Expenses of obtaining Portfolio Activity Reports
and Analyses of International Management Reports (as appropriate)
for each Series;
(f) Expenses of maintaining the Trust's tax records;
(g) Salaries and other compensation of any of the
Trust's executive officers and employees, if any, who are not
officers, directors, stockholders, or employees of the Portfolio
Manager or an affiliate of the Portfolio Manager;
(h) Taxes levied against the Trust;
(i) Brokerage fees and commissions in connection with
the purchase and sale of portfolio securities for the Series;
(j) Costs, including the interest expense, of
borrowing money;
(k) Costs and/or fees incident to meetings of the
Trust's shareholders, the preparation and mailings of
prospectuses and reports of the Trust to its shareholders, the
filing of reports
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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 14 of this
Agreement), and the legal obligations of the Trust to indemnify
its Trustees, officers, employees, shareholders, distributors,
and agents with respect thereto; and
(r) Organizational and offering expenses.
6. COMPENSATION. For the services provided, the
Manager will pay the Portfolio Manager a fee, payable as
described in Schedule B.
7. SEED MONEY. The Manager agrees that the Portfolio
Manager shall not be responsible for providing money for the
initial capitalization of the Series.
8. COMPLIANCE.
(a) The Portfolio Manager agrees that it shall
promptly notify the Manager and the Trust (1) in the event that
the SEC or other governmental authority has censured the
Portfolio Manager; placed limitations upon its activities,
functions or operations; suspended or revoked its registration,
if any, as an investment adviser; or has commenced proceedings or
an investigation that may result in any of these actions, (2)
upon having a reasonable basis for believing that the Series has
ceased to qualify or might not qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code, or (3)
upon having a reasonable basis for believing that the Series has
ceased to comply with the diversification provisions of Section
817(h) of the Internal Revenue Code or the regulations
thereunder. The Portfolio Manager further agrees to notify the
Manager and the Trust promptly of any material fact known to the
Portfolio Manager respecting or relating to the Portfolio Manager
that is not contained in the Registration Statement or prospectus
for the Trust, or any amendment or supplement thereto, and is
required to be stated therein or necessary to make the statements
therein not misleading, or of any statement contained therein
that becomes untrue in any material respect.
(b) The Manager agrees that it shall immediately
notify the Portfolio Manager (1) in the event that the SEC has
censured the Manager or the Trust; placed limitations upon either
of their activities, functions, or operations; suspended or
revoked the Manager's registration as an investment adviser; or
has commenced proceedings or an investigation that may result in
any of these actions, (2) upon having a reasonable basis for
believing that the Series has ceased to qualify or might not
qualify as a regulated investment company under Subchapter M of
the Internal Revenue Code, or (3) upon having a reasonable basis
for believing that the Series has ceased to comply with the
diversification provisions of Section 817(h) of the Internal
Revenue Code or the Regulations thereunder.
9. BOOKS AND RECORDS. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Portfolio
Manager hereby agrees that all records which it maintains for the
Series are the property of the Trust and further agrees to
surrender promptly to the Trust any of 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
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Rule 31a-l(b)(2)(iii), (5), (6), (7), (9) and
(10) under the 1940 Act and to preserve the records required by
Rule 204-2 under the Advisers Act for the period specified in the
Rule.
10. COOPERATION. Each party to this Agreement agrees
to cooperate with each other party and with all appropriate
governmental authorities having the requisite jurisdiction
(including, but not limited to, the SEC and state insurance
regulators) in connection with any investigation or inquiry
relating to this Agreement or the Trust.
11. REPRESENTATIONS RESPECTING PORTFOLIO MANAGER.
(a) During the term of this Agreement, the Trust and
the Manager agree to furnish to the Portfolio Manager at its
principal offices prior to use thereof copies of all Registration
Statements and amendments thereto, prospectuses, proxy
statements, reports to shareholders, sales literature or other
material prepared for distribution to shareholders of the Trust
or any Series or to the public that refer or relate in any way to
the Portfolio Manager, Alliance Capital Management L.P. or any of
its affiliates (other than the Manager), or that use any
derivative of the name Alliance Capital Management L.P. or any
logo associated therewith. The Trust and the Manager agree that
they will not use any such material without the prior consent of
the Portfolio Manager, which consent shall not be unreasonably
withheld. In the event of the termination of this Agreement, the
Trust and the Manager will furnish to the Portfolio Manager
copies of any of the above-mentioned materials that refer or
relate in any way to the Portfolio Manager;
(b) the Trust and the Manager will furnish to the
Portfolio Manager such information relating to either of them or
the business affairs of the Trust as the Portfolio Manager shall
from time to time reasonably request in order to discharge its
obligations hereunder;
(c) the Manager and the Trust agree that neither the
Trust, the Manager, nor affiliated persons of the Trust or the
Manager shall give any information or make any representations or
statements in connection with the sale of shares of the Series
concerning the Portfolio Manager or the Series other than the
information or representations contained in the Registration
Statement, prospectus, or statement of additional information for
the Trust, as they may be amended or supplemented from time to
time, or in reports or proxy statements for the Trust, or in
sales literature or other promotional material approved in
advance by the Portfolio Manager, except with the prior
permission of the Portfolio Manager.
12. CONTROL. Notwithstanding any other provision of
the Agreement, it is understood and agreed that the Trust shall
at all times retain the ultimate responsibility for and control
of all functions performed pursuant to this Agreement and reserve
the right to direct, approve, or disapprove any action hereunder
taken on its behalf by the Portfolio Manager.
13. SERVICES NOT EXCLUSIVE. It is understood that the
services of the Portfolio Manager are not exclusive, and nothing
in this Agreement shall prevent the Portfolio Manager (or its
affiliates) from providing similar services to other clients,
including investment companies (whether or not their investment
objectives and policies are similar to those of the Series) or
from engaging in other activities.
14. LIABILITY. Except as may otherwise be required by
the 1940 Act or the rules thereunder or other applicable law, the
Trust and the Manager agree that the Portfolio Manager, any
affiliated person of the Portfolio Manager, and each person, if
any, who, within the meaning of Section 15 of the 1933 Act,
controls the Portfolio Manager shall not be liable for, or
subject to any damages, expenses, or losses in connection with,
any act or omission connected with or arising out of any services
rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or gross negligence in the performance of
the Portfolio Manager's duties, or by reason of reckless
disregard of the Portfolio Manager's obligations and duties under
this Agreement.
15. INDEMNIFICATION.
(a) Notwithstanding Section 14 of this Agreement, the
Manager agrees to indemnify and hold harmless the Portfolio
Manager, any affiliated person of the Portfolio Manager (other
than the Manager), and each person, if any, who, within the
meaning of Section 15 of the 1933 Act controls ("controlling
person") the Portfolio Manager (all of such persons being
referred to as
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"Portfolio Manager Indemnified Persons") against
any and all losses, claims, damages, liabilities, or litigation
(including legal and other expenses) to which a Portfolio Manager
Indemnified Person may become subject under the 1933 Act, the
1940 Act, the Advisers Act, the Internal Revenue Code, under any
other statute, at common law or otherwise, arising out of the
Manager's responsibilities to the Trust which (1) may be based
upon any misfeasance, malfeasance, or nonfeasance by the Manager,
any of its employees or representatives or any affiliate of or
any person acting on behalf of the Manager or (2) may be based
upon any untrue statement or alleged untrue statement of a
material fact supplied by, or which is the responsibility of, the
Manager and contained in the Registration Statement or prospectus
covering shares of the Trust or a Series, or any amendment
thereof or any supplement thereto, or the omission or alleged
omission to state therein a material fact known or which should
have been known to the Manager and was required to be stated
therein or necessary to make the statements therein not
misleading, unless such statement or omission was made in
reliance upon information furnished to the Manager or the
Trust or to any affiliated person of the Manager by a Portfolio
Manager Indemnified Person; provided however, that in no case shall
the indemnity in favor of the Portfolio Manager Indemnified Person
be deemed to protect such person against any liability to which any
such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of
its duties, or by reason of its reckless disregard of obligations
and duties under this Agreement.
(b) Notwithstanding Section 14 of this Agreement, the
Portfolio Manager agrees to indemnify and hold harmless the
Manager, any affiliated person of the Manager (other than the
Portfolio Manager), and each person, if any, who, within the
meaning of Section 15 of the 1933 Act, controls ("controlling
person") the Manager (all of such persons being referred to as
"Manager Indemnified Persons") against any and all losses,
claims, damages, liabilities, or litigation (including legal and
other expenses) to which a Manager Indemnified Person may become
subject under the 1933 Act, 1940 Act, the Advisers Act, the
Internal Revenue Code, under any other statute, at common law or
otherwise, arising out of the Portfolio Manager's responsibili
ties as Portfolio Manager of the Series which (1) may be based
upon any misfeasance, malfeasance, or nonfeasance by the
Portfolio Manager, any of its employees or representatives, or
any affiliate of or any person acting on behalf of the Portfolio
Manager, (2) may be based upon a failure to comply with Section
2, Paragraph (a) of this Agreement, or (3) may be based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or prospectus covering
the shares of the Trust or a Series, or any amendment or
supplement thereto, or the omission or alleged omission to state
therein a material fact known or which should have been known to
the Portfolio Manager and was required to be stated therein or
necessary to make the statements therein not misleading, if such
a statement or omission was made in reliance upon information
furnished to the Manager, the Trust, or any affiliated person of
the Manager or Trust by the Portfolio Manager or any affiliated
person of the Portfolio Manager; provided, however, that in no
case shall the indemnity in favor of a Manager Indemnified Person
be deemed to protect such person against any liability to which
any such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence in the performance of
its duties, or by reason of its reckless disregard of its
obligations and duties under this Agreement.
(c) The Manager shall not be liable under Paragraph
(a) of this Section 15 with respect to any claim made against a
Portfolio Manager Indemnified Person unless such Portfolio
Manager Indemnified Person shall have notified the Manager in
writing within a reasonable time after the summons, notice, or
other first legal process or notice giving information of the
nature of the claim shall have been served upon such Portfolio
Manager Indemnified Person (or after such Portfolio Manager
Indemnified Person shall have received notice of such service on
any designated agent), but failure to notify the Manager of any
such claim shall not relieve the Manager from any liability which
it may have to the Portfolio Manager Indemnified Person against
whom such action is brought otherwise than on account of this
Section 15. In case any such action is brought against the
Portfolio Manager Indemnified Person, the Manager will be
entitled to participate, at its own expense, in the defense
thereof or, after
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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 15 with respect to any claim made
against a Manager Indemnified Person unless such Manager
Indemnified Person shall have notified the Portfolio Manager in
writing within a reasonable time after the summons, notice, or
other first legal process or notice giving information of the
nature of the claim shall have been served upon such Manager
Indemnified Person (or after such Manager Indemnified Person
shall have received notice of such service on any designated
agent), but failure to notify the Portfolio Manager of any such
claim shall not relieve the Portfolio Manager from any liability
which it may have to the Manager Indemnified Person against whom
such action is brought otherwise than on account of this Section
15. In case any such action is brought against the Manager
Indemnified Person, the Portfolio Manager will be entitled to
participate, at its own expense, in the defense thereof or, after
notice to the Manager Indemnified Person, to assume the defense
thereof, with counsel satisfactory to the Manager Indemnified
Person. If the Portfolio Manager assumes the defense of any such
action and the selection of counsel by the Portfolio Manager to
represent both the Portfolio Manager and the Manager Indemnified
Person would result in a conflict of interests and therefore,
would not, in the reasonable judgment of the Manager Indemnified
Person, adequately represent the interests of the Manager
Indemnified Person, the Portfolio Manager will, at its own
expense, assume the defense with counsel to the Portfolio Manager
and, also at its own expense, with separate counsel to the
Manager Indemnified Person which counsel shall be satisfactory to
the Portfolio Manager and to the Manager Indemnified Person. The
Manager Indemnified Person shall bear the fees and expenses of
any additional counsel retained by it, and the Portfolio Manager
shall not be liable to the Manager Indemnified Person under this
Agreement for any legal or other expenses subsequently incurred
by the Manager Indemnified Person independently in connection
with the defense thereof other than reasonable costs of
investigation. The Portfolio Manager shall not have the right to
compromise on or settle the litigation without the prior written
consent of the Manager Indemnified Person if the compromise or
settlement results, or may result in a finding of wrongdoing on
the part of the Manager Indemnified Person.
(e) The Manager shall not be liable under this Section
15 to indemnify and hold harmless the Portfolio Manager and the
Portfolio Manager shall not be liable under this Section 15 to
indemnify and hold harmless the Manager with respect to any
losses, claims, damages, liabilities, or litigation that first
become known to the party seeking indemnification during any
period that the Portfolio Manager is, within the meaning of
Section 15 of the 1933 Act, a controlling person of the Manager.
16. DURATION AND TERMINATION. This Agreement shall
become effective on the date first indicated above. Unless
terminated as provided herein, the Agreement shall remain in full
force and effect for two (2) years from such date and continue on
an annual basis thereafter with respect to each
8
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 above, the Sections or
Paragraphs numbered 2(f), 9, 10, 11, 14, 15, and 18 of this
Agreement shall remain in effect, as well as any applicable
provision of this Paragraph numbered 16.
17. AMENDMENTS. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a
majority of the outstanding voting securities of the Series, and
(ii) the Trustees of the Trust, including a majority of the
Trustees of the Trust who are not interested persons of any party
to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, if such approval is required
by applicable law.
18. USE OF NAME.
(a) It is understood that the name "Directed Services,
Inc." or any derivative thereof or logo associated with that name
is the valuable property of the Manager and/or its affiliates,
and that the Portfolio Manager has the right to use such name (or
derivative or logo) only with the approval of the Manager and
only so long as the Manager is Manager to the Trust and/or the
Series. Upon termination of the Management Agreement between the
Trust and the Manager, the Portfolio Manager shall as soon as is
reasonably possible cease to use such name (or derivative or
logo).
(b) It is understood that the name "Alliance Capital
Management L.P." 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,
9
the Trust shall as soon as is reasonably possible cease
to use such name (or derivative or logo).
19. AMENDED AND RESTATED AGREEMENT AND DECLARATION OF
TRUST. A copy of the Amended and Restated Agreement and
Declaration of Trust for the Trust is on file with the Secretary
of the Commonwealth of Massachusetts. The Amended and Restated
Agreement and Declaration of Trust has been executed on behalf of
the Trust by Trustees of the Trust in their capacity as Trustees
of the Trust and not individually. The obligations of this
Agreement shall be binding upon the assets and property of the
Trust and shall not be binding upon any Trustee, officer, or
shareholder of the Trust individually.
20. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of
the 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 0000 Xxx.
(b) The captions of this Agreement are included for
convenience only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect.
(c) To the extent permitted under Section 16 of this
Agreement, this Agreement may only be assigned, as that term is
defined in the 1940 Act, by any party with the prior written
consent of the other parties. The Portfolio Manager hereby agrees
to notify the Manager and the Trust of any change in the
membership of its general partners within a reasonable time after
such change.
(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.
10
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: /s/ Xxxxx X. Xxxxxxx
------------------- ---------------------
Title: Assistant Secretary Title: Secretary
------------------- ---------
DIRECTED SERVICES, INC.
Attest /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------- ---------------------
Title: President and Assistant Title: Executive Vice
----------------------- -------------------
Secretary President
ALLIANCE CAPITAL MANAGEMENT L.P.
By: Alliance Capital Management
Corporation,
General Partner
Attest /s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxx
-------------------- --------------------
Title: Admistrative Officer Title: Assistant Secretary
--------------------- --------------------
11
SCHEDULE A
The Series of The GCG Trust, as described in Section 1 of the
attached Portfolio Management Agreement, to which Alliance Capital
Management L.P. shall act as Portfolio Manager are as follows:
Growth & Income Series
SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by Alliance Capital Management
L.P. 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:
Growth & Income Series 0.75% on first $10 million in assets;
0.625% on next $10 million;
0.50% on next $20 million;
0.375% on next $20 million; and
0.25% on amounts in excess of $60 million.
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