INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN GROWTH PORTFOLIO AND
G.T. CAPITAL MANAGEMENT, INC.
Contract made as of October 1, 1995, between Growth Portfolio
("Master Portfolio"), a New York common law trust, and G.T. Capital
Management, Inc. ("G.T. Capital"), a California corporation.
WITNESSETH:
WHEREAS the Master Portfolio, which is registered under the
Investment Company Act of 1940, as amended ("1940 Act") as an open-end
management investment company, has established several subtrusts with each
subtrust having its own assets and investment policies; and
WHEREAS the Master Portfolio desires to retain G.T. Capital as
investment manager and administrator to furnish certain administrative,
investment advisory and portfolio management services to the subtrusts
listed in Schedule A attached hereto, and to such other subtrusts of the
Master Portfolio hereinafter established as may be agreed to from time to
time by the parties, and listed in an addendum to Schedule A (hereinafter
"Portfolios" shall refer to each subtrust that is subject to this
Agreement), and G.T. Capital is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as
follows:
1. Appointment. The Master Portfolio hereby appoints G.T. Capital
as investment manager and administrator of the Portfolios for the period
and on the terms set forth in the Contract. G.T. Capital accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. Duties as Investment Manager.
(a) Subject to the suspension of the Master Portfolio's Board
of Trustees ("Board"), G.T. Capital will provide a continuous investment
program for each Portfolio, including investment research and management
with respect to all securities and investments and cash equivalents of
each Portfolio. G.T. Capital will determine from time to time what
securities and other investments will be purchased, retained or sold by
each Portfolio, and the brokers and dealers through whom trades will be
executed.
(b) G.T. Capital agrees that in placing orders with brokers and
dealers it will attempt to obtain the best net results in terms of price
and execution. Consistent with this obligation, G.T. Capital may, in its
discretion, purchase and sell portfolio securities to and from brokers and
dealers who sell shares of investment companies which invest all of their
investable assets in a Portfolio or provide a Portfolio or G.T. Capital's
other clients with research, analysis, advice and similar services. G.T.
Capital may pay to brokers and dealers, in return for research and
analysis, a higher commission or spread than may be charged by other
brokers and dealers, subject to G.T. Capital's determining in good faith
that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of G.T. Capital to
the Portfolios and its other clients and that the total commissions or
spreads paid by the Portfolios will be reasonable in relation to the
benefits to the Portfolios over the long term. In no instance will
portfolio securities be purchased from or sold to G.T. Capital or any
affiliated person thereof except in accordance with the federal securities
laws and the rules and regulations thereunder. Whenever G.T. Capital
simultaneously places orders to purchase or sell the same security on
behalf of a Portfolio and one or more other accounts advised by G.T.
Capital, such orders will be allocated as to price and amount among all
such accounts in a manner believed to be equitable to each account. The
Portfolios recognize that in some cases this procedure may adversely
affect the results obtained for a Portfolio.
(c) G.T. Capital will oversee the maintenance of all books and
records with respect to the securities transactions of the Portfolios, and
will furnish the Board with such periodic and special reports as the Board
reasonably may request. In compliance with the requirements of Rule 31a-3
under the 1940 Act, G.T. Capital hereby agrees that all records which it
maintains for the Portfolios are the property of the Portfolios, agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any
records which it maintains for the Portfolios and which are required to be
maintained by Rule 31a-1 under the 1940 Act, and further agrees to
surrender promptly to the Portfolios any records which it maintains for
the Portfolios upon request.
(d) G.T. Capital will oversee the computation of the net asset
value and the net income of each Portfolio as described in the
registration statement of the Master Portfolio under the 1940 Act
("Registration Statement") or as more frequently requested by the Board.
3. Duties as Administrator. G.T. Capital will administer the
affairs of the Portfolios subject to the supervision of the Board and the
following understandings:
(a) G.T. Capital will supervise all aspects of the operations
of the Portfolios. including the oversight of custodial, pricing and
accounting services, except as hereinafter set forth; provided, however,
that nothing herein contained shall be deemed to relieve or deprive the
Board of its responsibility for control of the conduct of the affairs of
the Portfolios.
(b) At G.T. Capital's expense, G.T. Capital will provide the
Portfolios with such corporate, administrative and clerical personnel
(including officers of the Master Portfolio) and services as are
reasonably deemed necessary or advisable by the Board.
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(c) G.T. Capital will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the
Portfolios' proxy material, tax returns and required reports with or to
the Portfolios' investors, the Securities and Exchange Commission and
other appropriate federal or state regulatory authorities.
(d) G.T. Capital will provide the Portfolios with, or obtain
for them, adequate office space and all necessary office equipment and
services, including telephone service, heat, utilities, stationery
supplies and similar items.
4. Further Duties. In all matters relating to the performance of
this Contract, G.T. Capital will act in conformity with the Declaration of
Trust, By-Laws and Registration Statement of the Master Portfolio and with
the instructions and directions of the Board and will comply with the
requirements of the 1940 Act, the rules thereunder, and all other
applicable federal and state laws and regulations.
5. Delegation of G.T. Capital's Duties as Investment Manager and
Administrator. G.T. Capital may enter into one or more agreements
("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which G.T. Capital delegates to such subadviser or
sub-administrator the performance of any or all of the services specified
in Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-
Advisory or Sub-Administration Contract imposes on the sub-adviser or
sub-administrator bound thereby all the duties and conditions to which
G.T. Capital is subject with respect to the delegated services under
Paragraphs 2, 3 and 4 of this Contract; (ii) each Sub-Advisory or
Sub-Administration Contract meets all requirements of the 1940 Act and
rules thereunder; and (iii) G.T. Capital shall not enter into a
Sub-Advisory or Sub-Administration Contract unless it is approved by the
Board prior to implementation.
6. Services Not Exclusive. The services furnished by G.T. Capital
hereunder are not to be deemed exclusive and G.T. Capital shall be free to
furnish similar services to others so long as its services under this
Contract are not impaired thereby. Nothing in this Contract shall limit or
restrict the right of any director, officer or employee of G.T. Capital,
who may also be a Trustee, officer or employee of the Master Portfolio, to
engage in any other business or to devote his or her time and attention in
part to the management or other aspects of any other business, whether of
a similar nature or a dissimilar nature.
7. Expenses.
(a) During the term of this Contract, the Portfolios will bear
all expenses which are not specifically assumed by G.T. Capital.
(b) Expenses borne by the Portfolios will include but not be
limited to the following: (i) the cost (including brokerage commissions,
if any, of securities purchased or sold by a Portfolio and any losses
incurred in connection therewith; (ii) fees payable to and expenses
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incurred on behalf of the Portfolios by G.T. Capital under this Contract;
(iii) expenses of organizing the Portfolios; (iv) filing fees and expenses
relating to the registration and qualification of the Master Portfolio or
any of the Portfolios under federal and/or state securities laws and
maintaining such registrations and qualifications; (v) fees and salaries
payable to the Master Portfolio's Trustees who are not parties to this
Contract or interested persons of any such party ("Independent Trustees");
(vi) all expenses incurred in connection with the Independent Trustees'
services, including travel expenses; (vii) taxes (including any income or
franchise taxes) and governmental fees; (viii) costs of any liability,
uncollectible items of deposit and other insurance and fidelity bonds;
(ix) any costs, expenses or losses arising out of a liability of or claim
for damages or other relief asserted against the Master Portfolio or any
of the Portfolios for violation of any law; (x) legal, accounting and
auditing expenses, including legal fees of special counsel for the
Independent Trustees; (xi) charges of custodians, pricing agents and other
agents; (xii) expenses of setting in type, printing and mailing reports
and proxy materials for existing investors; (ix) any extraordinary
expenses (including fees and disbursements of counsel, costs of actions,
suits or proceedings to which the Master Portfolio or the Portfolios are a
party and the expenses the Master Portfolio may incur as a result of its
legal obligation to provide indemnification to its Trustees, officers,
employees and agents) incurred by the Master Portfolio or the Portfolios;
(xiv) fees, voluntary assessments and other expenses incurred in
connection with membership in investment company organizations; (xv) costs
of mailing and tabulating proxies and costs of meetings of investors, the
Board and any committees thereof; (xvi) the cost of investment company
literature and other publications provided by the Master Portfolio to its
Trustees and officers; and (xvii) costs of mailing, stationery and
communications equipment.
(c) All general expenses of the Master Portfolio and joint
expenses of the Portfolios shall be allocated among the Portfolios on a
basis deemed fair and equitable by G.T. Capital, subject to the Board's
supervision.
(d) G.T. Capital will assume the cost of any compensation for
services provided to the Master Portfolio received by the officers of the
Master Portfolio and by the Trustees of the Master Portfolio who are not
Independent Trustees.
(e) The payment or assumption by G.T. Capital of any expense of
the Master Portfolio or any Portfolio that G.T. Capital is not required by
this Contract to pay or assume shall not obligate G.T. Capital to pay or
assume the same or any similar expense of the Master Portfolio or any
Portfolio on any subsequent occasion.
8. Compensation.
(a) For the services provided under this Contract, each
Portfolio will pay G.T. Capital a fee, based on the average daily net
assets of each Portfolio, at the annualized rate of .725% on the first
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$500 million, .70% on the next $500 million, .675% on the next $500
million, and .65% on all amounts thereafter.
(b) For the services provided under this Contract, each
Portfolio as hereafter may be established and become subject to this
Contract, will pay to G.T. Capital a fee in an amount to be agreed upon in
a written fee agreement ("Fee Agreement") executed by the Master Portfolio
on behalf of such Portfolio and by G.T. Capital. All such Fee Agreements
shall provide that they are subject to all terms and conditions of this
Agreement.
(c) The fee shall be computed daily and paid monthly to G.T.
Capital on or before the last business day of the next succeeding calendar
month.
(d) G.T. Capital agrees to reduce the fee payable to it under
this Contract by the amount by which the ordinary operating expenses
(exclusive of brokerage commissions, organization expenses, interest,
taxes, certain expenses attributable to investing outside the United
States and extraordinary expenses) of a Portfolio for any fiscal year
borne by an investor in that Portfolio, together with the direct ordinary
operating expenses (exclusive of organization expenses, taxes, interest,
distribution-related expenses and extraordinary expenses) of that investor
(collectively, "Expenses"), shall exceed the most stringent limits
prescribed by any state in which shares of any investor in the Portfolio
are offered for sale. Proper accruals shall be made for the Portfolio for
any projected reduction hereunder and corresponding amounts shall be
withheld from the fees paid by such Portfolio to G.T. Capital. Any
additional reduction computed as being necessary at the end of the fiscal
year shall be deducted from the fee for the last month of such fiscal
year. If the amount of the fee payable by a Portfolio to G.T. Capital is
less than the amount by which such Portfolio's Expenses exceed an
applicable expense limitation, G.T. Capital shall reimburse that Portfolio
in an amount sufficient to enable that Portfolio to meet such limitation.
(e) If this Contract becomes effective or terminates before the
end of any month, the fee for the period from the effective date to the
end of the month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the
proportion which such period bears to the full month in which such
effectiveness or termination occurs.
9. Limitation of Liability of G.T. Capital and Indemnification.
G.T. Capital shall not be liable, and the Master Portfolio and the
Portfolios shall indemnify G.T. Capital and its directors, officers and
employees, for any costs or liabilities arising from any error of judgment
or mistake of law or any loss suffered by the Master Portfolio or the
Portfolios in connection with the matters to which this Contract relates,
except a loss resulting from willful misfeasance. bad faith or gross
negligence on the part of G.T. Capital in the performance by G.T. Capital
of its duties or from reckless disregard by G.T. Capital of its
obligations and duties under this Contract. Any person, even though also
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an officer, partner, employee, or agent of G.T. Capital, who may be or
become a Trustee, officer, employee or agent of the Master Portfolio shall
be deemed, when rendering services to the Portfolios or acting with
respect to any business of the Portfolios to be rendering such service to
or acting solely for the Portfolios and not as an officer, partner,
employee, or agent or one under the control or direction of G.T. Capital
even though paid by it.
10. Duration and Termination.
(a) This Contract shall become effective with respect to a
Portfolio upon the date written above, provided that this Contract shall
not take effect unless it has first been approved (i) by a vote of a
majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by vote of a majority
of such Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract
shall continue in effect for two years from the above written date or
until June 30, 1997, whichever is earlier. Thereafter, if not terminated,
with respect to each Portfolio, this Contract shall continue automatically
for successive periods ending on June 30, provided that such continuance
is specifically approved at least annually (i) by a vote of a majority of
the Independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval, and (ii)by the Board or by vote of a
majority of the outstanding voting securities of that Portfolio.
(c) Notwithstanding the foregoing, this Contract may be
terminated at any time, without the payment of any penalty, by vote of the
Board or by a vote of a majority of the outstanding voting securities of a
Portfolio on sixty days' written notice to G.T. Capital or by G.T. Capital
at any time, without the payment of any penalty, on sixty days' written
notice to the Master Portfolio. Termination of this Contract with respect
to one Portfolio shall not effect the continued effectiveness of this
Contract with respect to any other Portfolio. This Contract will
automatically terminate in the event of its assignment.
11. Amendment. No provision of this Contract 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 Contract
shall be effective until approved by vote of a majority of the respective
Portfolio's outstanding voting securities.
12. Governing Law. This Contract shall be construed in accordance
with the laws of the State of California and the 1940 Act. To the extent
that the applicable laws of the State of California conflict with the
applicable provisions of the 1940 Act, the latter shall control.
13. Miscellaneous. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
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provision of this Contract shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Contract shall
not be affected thereby. This Contract shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors. As used in this Contract, the terms "majority of the
outstanding voting securities," "interested person," "assignment,"
"broker," "dealer," "investment adviser," "national securities exchange,"
"net assets," "prospectus," "sale," "sell" and "security" shall have the
same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Contract is made less restrictive by a
rule, regulation or order of the Securities and Exchange Commission,
whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated as of the day and year first
above written.
Attest: GROWTH PORTFOLIO
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxx
______________________________ _____________________________
By: Xxxxx X. Xxxxx
Vice President
Attest: G.T. CAPITAL MANAGEMENT INC.
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Xxxxx
______________________________ _____________________________
By: Xxxxx X. Xxxxx
President
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SCHEDULE A
Small Cap Portfolio
Value Portfolio
