EXHIBIT d(2)(I)
PORTFOLIO MANAGEMENT AGREEMENT
AGREEMENT made this 1st day of February, 2000, among The GCG Trust (the
"Trust"), a Massachusetts business trust, Directed Services, Inc. (the
"Manager"), a New York corporation, and Salomon Brothers Asset Management 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 Salomon
Brothers Asset Management Inc. to act as Portfolio Manager to the Series
designated on Schedule A of this Agreement (each a "Series") for the periods and
on the terms set forth in this Agreement. The Portfolio Manager accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
In the event the Trust designates one or more series other than the
Series with respect to which the Trust and the Manager wish to retain the
Portfolio Manager to render investment advisory services hereunder, they shall
promptly notify the Portfolio Manager in writing. If the Portfolio Manager is
willing to render such services, it shall so notify the Trust and Manager in
writing, whereupon such series shall become a Series hereunder, and be subject
to this Agreement.
2. PORTFOLIO MANAGEMENT DUTIES. Subject to the supervision of the
Trust's Board of Trustees and the Manager, the Portfolio Manager will provide a
continuous investment
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program for each Series' portfolio and determine the composition of the assets
of each Series' portfolio, including determination of the purchase, retention,
or sale of the securities, cash, and other investments contained in the
portfolio. The Portfolio Manager will provide investment research and conduct a
continuous program of evaluation, investment, sales, and reinvestment of each
Series' assets by determining the securities and other investments that shall be
purchased, entered into, sold, closed, or exchanged for the Series, when these
transactions should be executed, and what portion of the assets of each Series
should be held in the various securities and other investments in which it may
invest, and the Portfolio Manager is hereby authorized to execute and perform
such services on behalf of each Series. To the extent permitted by the
investment policies of the Series, the Portfolio Manager shall make decisions
for the Series as to foreign currency matters and make determinations as to and
execute and perform foreign currency exchange contracts on behalf of the Series.
The Portfolio Manager will provide the services under this Agreement in
accordance with the Series' investment objective or objectives, policies, and
restrictions as stated in the Trust's Registration Statement filed with the
Securities and Exchange Commission (the "SEC"), as from time to time amended,
copies of which shall be sent to the Portfolio Manager by the Manager upon
filing with the SEC. The Portfolio Manager further agrees as follows:
(a) The Portfolio Manager will (1) manage each Series so that no
action or omission on the part of the Portfolio Manager will cause a Series to
fail to meet the requirements to qualify as a regulated investment company
specified in Section 851 of the Internal Revenue Code (other than the
requirements for the Trust to register under the 1940 Act and to file with its
tax return an election to be a regulated investment company, both of which shall
not be the responsibility of the Portfolio Manager), (2) manage each Series so
that no action or omission on the part of the Portfolio Manager shall cause a
Series to fail to comply with the diversification requirements of Section 817(h)
of the Internal Revenue Code and regulations issued thereunder, and (3) use
reasonable efforts to manage the Series so that no action or omission on the
part of the Portfolio Manager shall cause a Series to fail to comply with any
other rules and regulations pertaining to investment vehicles underlying
variable annuity or variable life insurance policies. The Manager will notify
the Portfolio Manager promptly if the Manager believes that a Series is in
violation of any requirement specified in the first sentence of this paragraph.
The Manager or the Trust will notify the Portfolio Manager of any pertinent
changes, modifications to, or interpretations of Section 817(h) of the Internal
Revenue Code and regulations issued thereunder and of rules or regulations
pertaining to investment vehicles underlying variable annuity or variable life
insurance policies.
(b) The Portfolio Manager will perform its duties hereunder
pursuant to the 1940 Act and all rules and regulations thereunder, all other
applicable federal and state laws and regulations, with any applicable
procedures adopted by the Trust's Board of Trustees of which the Portfolio
Manager has been notified in writing, and the provisions of the Registration
Statement of the Trust under the Securities Act of 1933 (the "1933 Act") and the
1940 Act, as supplemented or amended, of which the Portfolio Manager has
received a copy ("Registration 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).
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(c) On occasions when the Portfolio Manager deems the purchase or
sale of a security to be in the best interest of a Series as well as of other
investment advisory clients of the Portfolio Manager or any of its affiliates,
the Portfolio Manager may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities to be so
sold or purchased with those of its other clients where such aggregation is not
inconsistent with the policies set forth in the Registration Statement. In such
event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Portfolio Manager in a
manner that is fair and equitable in the judgment of the Portfolio Manager in
the exercise of its fiduciary obligations to the Trust and to such other
clients, subject to review by the Manager and the Board of Trustees.
(d) In connection with the purchase and sale of securities for a
Series, the Portfolio Manager will arrange for the transmission to the custodian
and portfolio accounting agent for the Series on a daily basis, such
confirmation, trade tickets, and other documents and information, including, but
not limited to, Cusip, Sedol, or other numbers that identify securities to be
purchased or sold on behalf of the Series, as may be reasonably necessary to
enable the custodian and portfolio accounting agent to perform its
administrative and recordkeeping responsibilities with respect to the Series.
With respect to portfolio securities to be purchased or sold through the
Depository Trust Company, the Portfolio Manager will arrange for the automatic
transmission of the confirmation of such trades to the Trust's custodian and
portfolio accounting agent.
(e) The Portfolio Manager will assist the portfolio accounting
agent for the Trust in determining or confirming, consistent with the procedures
and policies stated in the Registration Statement for the Trust, the value of
any portfolio securities or other assets of the Series for which the portfolio
accounting agent seeks assistance from or identifies for review by the Portfolio
Manager, and the parties agree that the Portfolio Manager shall not bear
responsibility or liability for the determination or accuracy of the valuation
of any portfolio securities and other assets of the Series except to the extent
that the Portfolio Manager exercises judgment with respect to any such
valuation.
(f) The Portfolio Manager will make available to the Trust and the
Manager, promptly upon request, all of the Series' investment records and
ledgers maintained by the Portfolio Manager (which shall not include the records
and ledgers maintained by the custodian and portfolio accounting agent for the
Trust) as are necessary to assist the Trust and the Manager to comply with
requirements of the 1940 Act and the Investment Advisers Act of 1940 (the
"Advisers Act"), as well as other applicable laws. The Portfolio Manager will
furnish to regulatory authorities having the requisite authority any information
or reports in connection with such services which may be requested in order to
ascertain whether the operations of the Trust are being conducted in a manner
consistent with applicable laws and regulations.
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(g) The Portfolio Manager will provide reports to the Trust's
Board of Trustees for consideration at meetings of the Board on the investment
program for the Series and the issuers and securities represented in the Series'
portfolio, and will furnish the Trust's Board of Trustees with respect to the
Series such periodic and special reports as the Trustees and the Manager may
reasonably request.
(h) In rendering the services required under this Agreement, the
Portfolio Manager may, from time to time, employ or associate with itself such
person or persons as it believes necessary to assist it in carrying out its
obligations under this Agreement. However, the Portfolio Manager may not retain
as subadviser any company that would be an "investment adviser," as that term is
defined in the 1940 Act, to the Series unless the contract with such company is
approved by a majority of the Trust's Board of Trustees and a majority of
Trustees who are not parties to any agreement or contract with such company and
who are not "interested persons," as defined in the 1940 Act, of the Trust, the
Manager, or the Portfolio Manager, or any such company that is retained as
subadviser, and is approved by the vote of a majority of the outstanding voting
securities of the applicable Series of the Trust to the extent required by the
1940 Act. The Portfolio Manager shall be responsible for making reasonable
inquiries and for reasonably ensuring that any employee of the Portfolio
Manager, any subadviser that the Portfolio Manager has employed or with which it
has associated with respect to the Series, or any employee thereof has not, to
the best of the Portfolio Manager's knowledge, in any material connection with
the handling of Trust assets:
(i) been convicted, in the last ten (10) years, of any felony or
misdemeanor arising out of conduct involving embezzlement, fraudulent
conversion, or misappropriation of funds or securities, involving
violations of Sections 1341, 1342, or 1343 of ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Code, or involving the purchase or sale of any security; or
(ii) been found by any state regulatory authority, within the last ten
(10) years, to have violated or to have acknowledged violation of any
provision of any state insurance law involving fraud, deceit, or
knowing misrepresentation; or
(iii) been found by any federal or state regulatory authorities, within
the last ten (10) years, to have violated or to have acknowledged
violation of any provision of federal or state securities laws
involving fraud, deceit, or knowing misrepresentation.
3. BROKER-DEALER SELECTION. The Portfolio Manager is responsible for
decisions to buy and sell securities and other investments for each Series'
portfolio, broker-dealer selection, and negotiation of brokerage commission
rates. The Portfolio Manager's primary consideration in effecting a security
transaction will be to obtain the best execution for the Series, taking into
account the factors specified in the prospectus and/or statement of additional
information for the Trust, which include price (including the applicable
brokerage commission or dollar spread), the size of the order, the nature of the
market for the security, the timing of the transaction, the reputation, the
experience and financial stability of the broker-dealer involved, the quality of
the service, the difficulty of execution, and the execution capabilities and
operational facilities of the firms involved, and the firm's risk in positioning
a block of securities.
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Accordingly, the price to the Series in any transaction may be less favorable
than that available from another broker-dealer if the difference is reasonably
justified, in the judgment of the Portfolio Manager in the exercise of its
fiduciary obligations to the Trust, by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of Trustees may
determine and consistent with Section 28(e) of the Securities Exchange Act of
1934, the Portfolio Manager shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of its having caused the Series to pay a broker-dealer for effecting a portfolio
investment transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the
Portfolio Manager or its affiliate determines in good faith that such amount of
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker-dealer, viewed in terms of either that
particular transaction or the Portfolio Manager's or its affiliate's overall
responsibilities with respect to the Series and to their other clients as to
which they exercise investment discretion. To the extent consistent with these
standards, the Portfolio Manager is further authorized to allocate the orders
placed by it on behalf of the Series to the Portfolio Manager if it is
registered as a broker-dealer with the SEC, to its affiliated broker-dealer, or
to such brokers and dealers who also provide research or statistical material,
or other services to the Series, the Portfolio Manager, or an affiliate of the
Portfolio Manager. Such allocation shall be in such amounts and proportions as
the Portfolio Manager shall determine consistent with the above standards, and
the Portfolio Manager will report on said allocation regularly to the Board of
Trustees of the Trust indicating the broker-dealers to which such allocations
have been made and the basis therefor.
4. DISCLOSURE ABOUT PORTFOLIO MANAGER. The Portfolio Manager has
reviewed the post-effective amendment to the Registration Statement for the
Trust filed with the SEC that contains disclosure about the Portfolio Manager,
and represents and warrants that, with respect to the disclosure about or
information relating, directly or indirectly, to the Portfolio Manager, to the
Portfolio Manager's knowledge, such Registration Statement contains, as of the
date hereof, no untrue statement of any material fact and does not omit any
statement of a material fact which was required to be stated therein or
necessary to make the statements contained therein not misleading. The Portfolio
Manager further represents and warrants that it is a duly registered investment
adviser under the Advisers Act, or alternatively that it is not required to be a
registered investment adviser under the Advisers Act to perform the duties
described in this Agreement, and that it is a duly registered investment adviser
in all states in which the Portfolio Manager is required to be registered.
5. EXPENSES. During the term of this Agreement, the Portfolio Manager
will pay all expenses incurred by it and its staff and for their activities in
connection with its portfolio management duties under this Agreement. The
Manager or the Trust shall be responsible for all the expenses of the Trust's
operations including, but not limited to:
(a) Expenses of all audits by the Trust's independent public
accountants;
(b) Expenses of the Series' transfer agent, registrar, dividend
disbursing agent, and shareholder recordkeeping services;
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(c) Expenses of the Series' custodial services including
recordkeeping services provided by the custodian;
(d) Expenses of obtaining quotations for calculating the value of
each Series' net assets;
(e) Expenses of obtaining Portfolio Activity Reports and Analyses
of International Management Reports (as appropriate) for each Series;
(f) Expenses of maintaining the Trust's tax records;
(g) Salaries and other compensation of any of the Trust's
executive officers and employees, if any, who are not officers, directors,
stockholders, or employees of the Portfolio Manager or an affiliate of the
Portfolio Manager;
(h) Taxes levied against the Trust;
(i) Brokerage fees and commissions in connection with the purchase
and sale of portfolio securities for the Series;
(j) Costs, including the interest expense, of borrowing money;
(k) Costs and/or fees incident to meetings of the Trust's
shareholders, the preparation and mailings of prospectuses and reports of the
Trust to its shareholders, the filing of reports with regulatory bodies, the
maintenance of the Trust's existence, and the regulation of shares with federal
and state securities or insurance authorities;
(l) The Trust's legal fees, including the legal fees related to
the registration and continued qualification of the Trust's shares for sale;
(m) Costs of printing stock certificates representing shares of
the Trust;
(n) Trustees' fees and expenses to trustees who are not officers,
employees, or stockholders of the Portfolio Manager or any affiliate thereof;
(o) The Trust's pro rata portion of the fidelity bond required by
Section 17(g) of the 1940 Act, or other insurance premiums;
(p) Association membership dues;
(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
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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
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be maintained by Rule 31a-l under the 1940 Act and to preserve the records
required by Rule 204-2 under the Advisers Act for the period specified in the
Rule.
10. COOPERATION. Each party to this Agreement agrees to cooperate with
each other party and with all appropriate governmental authorities having the
requisite jurisdiction (including, but not limited to, the SEC and state
insurance regulators) in connection with any investigation or inquiry relating
to this Agreement or the Trust.
11. REPRESENTATIONS RESPECTING PORTFOLIO MANAGER.
(a) During the term of this Agreement, the Trust and the Manager
agree to furnish to the Portfolio Manager at its principal offices prior to use
thereof copies of all Registration Statements and amendments thereto,
prospectuses, proxy statements, reports to shareholders, sales literature or
other material prepared for distribution to shareholders of the Trust or any
Series or to the public that refer or relate in any way to the Portfolio Manager
or any of its affiliates (other than the Manager), or that use any derivative of
the name of the Portfolio Manager any of its affiliates or any logo associated
therewith. The Trust and the Manager agree that they will not use any such
material without the prior consent of the Portfolio Manager, which consent shall
not be unreasonably withheld. In the event of the termination of this Agreement,
the Trust and the Manager will furnish to the Portfolio Manager copies of any of
the above-mentioned materials that refer or relate in any way to the Portfolio
Manager;
(b) the Trust and the Manager will furnish to the Portfolio
Manager such information relating to either of them or the business affairs of
the Trust as the Portfolio Manager shall from time to time reasonably request in
order to discharge its obligations hereunder;
(c) the Manager and the Trust agree that neither the Trust, the
Manager, nor affiliated persons of the Trust or the Manager shall give any
information or make any representations or statements in connection with the
sale of shares of the Series concerning the Portfolio Manager or the Series
other than the information or representations contained in the Registration
Statement, prospectus, or statement of additional information for the Trust, as
they may be amended or supplemented from tune 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.
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14. LIABILITY. Except as may otherwise be required by the 1940 Act or
the rules thereunder or other applicable law, the Trust and the Manager agree
that the Portfolio Manager, any affiliated person of the Portfolio Manager, and
each person, if any, who, within the meaning of Section 15 of the 1933 Act,
controls the Portfolio Manager shall not be liable for, or subject to any
damages, expenses, or losses in connection with, any act or omission connected
with or arising out of any services rendered under this Agreement, except by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of the Portfolio Manager's duties, or by reason of reckless disregard of the
Portfolio Manager's obligations and duties under this Agreement.
15. INDEMNIFICATION.
(a) Notwithstanding Section 14 of this Agreement, the Manager
agrees to indemnify and hold harmless the Portfolio Manager, any affiliated
person of the Portfolio Manager (other than the Manager), and each person, if
any, who, within the meaning of Section 15 of the 1933 Act controls
("controlling person") the Portfolio Manager (all of such persons being referred
to as "Portfolio Manager Indemnified Persons") against any and all losses,
claims, damages, liabilities, or litigation (including legal and other expenses)
to which a Portfolio Manager Indemnified Person may become subject under the
1933 Act, the 1940 Act, the Advisers Act, the Internal Revenue Code, under any
other statute, at common law or otherwise, arising out of the Manager's
responsibilities to the Trust which (1) may be based upon any misfeasance,
malfeasance, or nonfeasance by the Manager, any of its employees or
representatives or any affiliate of or any person acting on behalf of the
Manager or (2) may be based upon any untrue statement or alleged untrue
statement of a material fact supplied by, or which is the responsibility of, the
Manager and contained in the Registration Statement or prospectus covering
shares of the Trust or a Series, or any amendment thereof or any supplement
thereto, or the omission or alleged omission to state therein a material fact
known or which should have been known to the Manager and was required to be
stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon information
furnished to the Manager or the Trust or to any affiliated person of the Manager
by a Portfolio Manager Indemnified Person; provided however, that in no case
shall the indemnity in favor of the Portfolio Manager Indemnified Person be
deemed to protect such person against any liability to which any such person
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of its duties, or by reason of its reckless
disregard of obligations and duties under this Agreement.
(b) Notwithstanding Section 14 of this Agreement, the Portfolio
Manager agrees to indemnify and hold harmless the Manager, any affiliated person
of the Manager (other than the 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
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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, (2) may be based upon a failure to comply with
Section 2, Paragraph (a) of this Agreement, or (3) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or prospectus covering the shares of the Trust or a
Series, or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact known or which should have been known
to the Portfolio Manager and was required to be stated therein or necessary to
make the statements therein not misleading, if such a statement or omission was
made in reliance upon information furnished to the Manager, the Trust, or any
affiliated person of the Manager or Trust by the Portfolio Manager or any
affiliated person of the Portfolio Manager; provided, however, that in no case
shall the indemnity in favor of a Manager Indemnified Person be deemed to
protect such person against any liability to which any such person would
otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations and duties under this Agreement.
(c) The Manager shall not be liable under Paragraph (a) of this
Section 15 with respect to any claim made against a Portfolio Manager
Indemnified Person unless such Portfolio Manager Indemnified Person shall have
notified the Manager in writing within a reasonable time after the summons,
notice, or other first legal process or notice giving information of the nature
of the claim shall have been served upon such Portfolio Manager Indemnified
Person (or after such Portfolio Manager Indemnified Person shall have received
notice of such service on any designated agent), but failure to notify the
Manager of any such claim shall not relieve the Manager from any liability which
it may have to the Portfolio Manager Indemnified Person against whom such action
is brought otherwise than on account of this Section 15. In case any such action
is brought against the Portfolio Manager Indemnified Person, the Manager will be
entitled to participate, at its own expense, in the defense thereof or, after
notice to the Portfolio Manager Indemnified Person, to assume the defense
thereof, with counsel satisfactory to the Portfolio Manager Indemnified Person.
If the Manager assumes the defense of any such action and the selection of
counsel by the Manager to represent both the Manager and the Portfolio Manager
Indemnified Person would result in a conflict of interests and therefore, would
not, in the reasonable judgment of the Portfolio Manager Indemnified Person,
adequately represent the interests of the Portfolio Manager Indemnified Person,
the Manager will, at its own expense, assume the defense with counsel to the
Manager and, also at its own expense, with separate counsel to the Portfolio
Manager Indemnified Person, which counsel shall be satisfactory to the Manager
and to the Portfolio Manager Indemnified Person. The Portfolio Manager
Indemnified Person shall bear the fees and expenses of any additional counsel
retained by it, and the Manager 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 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 Series; provided
that such annual continuance is specifically approved each year by (a) the vote
of a majority of the entire Board of Trustees of the Trust, or by the vote of a
majority of the outstanding voting securities (as defined in the ▇▇▇▇ ▇▇▇) of
each Series, and (b) the vote of a majority of those Trustees who are not
parties to this Agreement or interested persons (as such term is defined in the
▇▇▇▇ ▇▇▇) of any such party to this Agreement cast in person at a meeting called
for the purpose of voting on such approval. The Portfolio Manager
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shall not provide any services for such Series or receive any fees on account of
such Series with respect to which this Agreement is not approved as described in
the preceding sentence. However, any approval of this Agreement by the holders
of a majority of the outstanding shares (as defined in the ▇▇▇▇ ▇▇▇) of a Series
shall be effective to continue this Agreement with respect to such Series
notwithstanding (i) that this Agreement has not been approved by the holders of
a majority of the outstanding shares of any other Series or (ii) that this
agreement has not been approved by the vote of a majority of the outstanding
shares of the Trust, unless such approval shall be required by any other
applicable law or otherwise. Notwithstanding the foregoing, this Agreement may
be terminated for each or any Series hereunder: (a) by the Manager at any time
without penalty, upon sixty (60) days' written notice to the Portfolio Manager
and the Trust, (b) at any time without payment of any penalty by the Trust, upon
the vote of a majority of the Trust's Board of Trustees or a majority of the
outstanding voting securities of each Series, upon sixty (60) day's written
notice to the Manager and the Portfolio Manager, or (c) by the Portfolio Manager
at any time without penalty, upon sixty (60) days written notice to the Manager
and the Trust. In addition, this Agreement shall terminate with respect to a
Series in the event that it is not initially approved by the vote of a majority
of the outstanding voting securities of that Series at a meeting of shareholders
at which approval of the Agreement shall be considered by shareholders of the
Series. In the event of termination for any reason, all records of each Series
for which the Agreement is terminated shall promptly be returned to the Manager
or the Trust, free from any claim or retention of rights in such records by the
Portfolio Manager, although the Portfolio Manager may, at its own expense, make
and retain a copy of such records. The Agreement shall automatically terminate
in the event of its assignment (as such term is described in the 1940 Act). In
the event this Agreement is terminated or is not approved in the manner
described above, the Sections or Paragraphs numbered 2(f), 9, 10, 11, 14, 15,
and 18 of this Agreement shall remain in effect, as well as any applicable
provision of this Paragraph numbered 16.
17. AMENDMENTS. No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a majority of the
outstanding voting securities of the Series, and (ii) the Trustees of the Trust,
including a majority of the Trustees of the Trust who are not interested persons
of any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, if such approval is required by applicable
law.
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).
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(b) It is understood that the name "Salomon Brothers Asset
Management Inc." or any derivative thereof or logo associated with that name is
the valuable property of the Portfolio Manager and its affiliates and that the
Trust and/or the Series have the right to use such name (or derivative or logo)
in offering materials of the Trust with the approval of the Portfolio Manager
and for so long as the Portfolio Manager is a portfolio manager to the Trust
and/or the Series. Upon termination of this Agreement between the Trust, the
Manager, and the Portfolio Manager, the Trust shall as soon as is reasonably
possible cease to use such name (or derivative or logo).
19. AMENDED AND RESTATED AGREEMENT AND DECLARATION OF TRUST. A copy of
the Amended and Restated Agreement and Declaration of Trust for the Trust is on
file with the Secretary of the Commonwealth of Massachusetts. The Amended and
Restated Agreement and Declaration of Trust has been executed on behalf of the
Trust by Trustees of the Trust in their capacity as Trustees of the Trust and
not individually. The obligations of this Agreement shall be binding upon the
assets and property of the Trust and shall not be binding upon any Trustee,
officer, or shareholder of the Trust individually.
20. MISCELLANEOUS.
(a) This Agreement shall be governed by the laws of the
Commonwealth of Pennsylvania, provided that nothing herein shall be construed in
a manner inconsistent with the 1940 Act, the Advisers Act or rules or orders of
the SEC thereunder. The term "affiliate" or "affiliated person" as used in this
Agreement shall mean "affiliated person" as defined in Section
2(a)(3) of the ▇▇▇▇ ▇▇▇.
(b) The captions of this Agreement are included for convenience
only and in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
(c) 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.
(d) 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.
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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: [ILLEGIBLE] By: [ILLEGIBLE]
------------------------- ---------------------------
Title: Assistant Vice President Title: ------------------------
DIRECTED SERVICES, INC.
Attest: [ILLEGIBLE] By: [ILLEGIBLE]
------------------------- ---------------------------
Title: Assistant Vice President Title: [ILLEGIBLE]
SALOMON BROTHERS ASSET
MANAGEMENT INC.
Attest: [ILLEGIBLE] By: [ILLEGIBLE]
------------------------- ---------------------------
Title: [ILLEGIBLE] Title: [ILLEGIBLE]
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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 Salomon Brothers Asset Management Inc.
shall act as Portfolio Manager are as follows:
Investor Series
AllCap Series
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SCHEDULE B
COMPENSATION FOR SERVICES TO SERIES
For the services provided by Salomon Brothers Asset Management 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, 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
Investor Series 0.45% on first $100 million;
0.40% on first $100 million;
0.35% on next $200 million;
0.30% on next $350 million; and
0.25% on assets in excess of $750 million.
AllCap Series 0.50% on first $100 million;
0.45% of first $100 million;
0.40% on next $200 million: and
0.35% on assets in excess of $400 million.
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