INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN G.T. INVESTMENT PORTFOLIOS, INC. AND
G.T. CAPITAL MANAGEMENT, INC.
Contract made as of May 1, 1989, between G. T. Investment Portfolios, Inc.
a Maryland corporation ("Company") and G.T. Capital Management, Inc. ("G.T."), a
California corporation.
WHEREAS the Company is registered under the Investment Company Act of 1940,
as amended ("1940 Act") as an open-end management investment company, and
intends to offer for public sale shares of G.T. Money Market Fund, a series of
the Company's common stock; and
WHEREAS the Company hereafter may establish additional series of its common
stock (any such additional series, together with the G. T. Money Market Fund,
are collectively referred to herein as the "Funds", and singly may be referred
to as a "Fund"); and
WHEREAS the Company desires to retain G.T. as invesment manager and
administrator to furnish certian administrative, investment advisory and
portfolio management services to the Company and the Funds, and G. T. 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 Company hereby appoints G.T. as investment
manager and administrator of each Fund for the period and on the terms set forth
in this Contract. G.T. 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 supervision of the Company's Board of Directors
("Board"), G.T. will provide a continuous investment program for each Fund,
including investment research and management with respect to all securities and
investments and cash equivalents of the Fund G.T. will determine from time to
time what securities and other investments will be purchased, retained or sold
by each Fund, and the brokers and dealers through whom trades will be executed.
(b) G.T. 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. may, in its discretion purchase and sell
portfolio securities to and from brokers and dealers who sell shares of the
Funds or provide the Funds of G.T.'s other clients with research analysis,
advice and similar services. G.T. may pay to brokers and dealers in
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return for research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, subject to G.T.'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. to the Funds and
its other clients and that the total commissions or spreads paid by each Fund
will be reasonable in relation to the benefits to the Fund over the long term,
in no instance will portfolio securities be purchased from or sold to G.T. or
any affiliated person thereof except in accordance with the federal securities
law and the rules and regulations thereunder. Wherever G.T. simultaneously
places orders to purchase or sell the same security on behalf of a Fund and one
or more other accounts advised by G.T., 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 Company recognizes that in some cases this procedure may
adversely affect the results obtained for each Fund.
(c) G.T. will oversee the maintenance of all books and records with
respect to the securities transactions of the Funds, 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. hereby
agrees that all records which it maintains for the Company are the property of
the Company, agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records which it maintains for the Company and which are
required to be maintained by Rule 31a-1 under the 1940 Act, and further agrees
to surrender promptly to the Company any records which it maintains for the
Company upon request by the Company.
(d) G.T. will oversee the computation of the net asset value and the net
income of each Fund as described in the currently effective registration
statement of the Company under the Securities Act of 1933, as amended, and 1940
Act and any supplements thereto ("Registration Statement") or as more frequently
requested by the Board.
3. DUTIES AS ADMINISTRATOR. G.T. will administer the affairs of each
Fund subject to the supervision of the Board and the following understandings:
(a) G.T. will supervise all aspects of the operations of each Fund,
including the oversight of transfer agency, custodial, pricing and accounting
services, excepts 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 Funds.
(b) At G.T.'s expense, G.T. will provide the Company and the Funds with
such corporate, administrative and clerical personnel (including officers of the
Company) and services as are reasonably deemed necessary or advisable by the
Board.
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(c) G.T. will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of each Fund's prospectus,
statement of additional information, proxy material, tax returns and required
reports with or to the Fund's shareholders, the Securities and Exchange
Commission and other appropriate federal or state regulatory authorities.
(d) G.T. will provide the Company and the Funds 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. will act in conformity with the Articles of Incorporation,
By-Laws and Registration Statement of the Company 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.'S DUTIES AS INVESTMENT MANAGER AND ADMINISTRATOR.
With respect to one or more of the Funds, G.T. may enter into one or more
agreements ("Sub-Advisory or Sub-Administration Contract") with a sub-adviser or
sub-administrator in which G.T. delegates to such sub-advisor or
sub-administrator the performance of any or all of the services specified in
Paragraph 2 and 3 of this Contract provided that (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which G. T. 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. 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. hereunder
are not to be deemed exclusive and G. T. 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. who may also be a Director, officer or
employee of the Company, 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, each Fund will bear all expenses
not specifically assumed by G.T., incurred in its operations and the offering of
its shares.
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(b) Expenses borne by each Fund will include but not be limited to the
following (i) the cost (including brokerage commissions, if any) of securities
purchased or sold by the Fund and any losses incurred in connection therewith;
(ii) fees payable to and expenses incurred on behalf of the Fund by G.T. under
this Contract; (iii) expenses of organizing the Company and the Fund; (iv)
filing fees and expenses relating to the registration and qualification of the
Fund's shares and the Company under federal and/or state securities laws and
maintaining such registrations and qualifications; (v) fees and salaries payable
to the Company's Directors who are not parties to this Contract or interested
persons of any such party ("Independent Directors"); (vi) all expenses incurred
in connection with the Independent Directors' 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 or claim for damages or other relief asserted against the Company of
the Fund for violation of any law; (x) legal, accounting and auditing expenses,
including legal fees of special counsel for the Independent Directors; (xi)
charges of custodians, transfer agents, pricing agents and other agents; (xii)
costs of preparing share certificates; (xiii) with respect to existing
shareholders, expenses of setting in type, printing and mailing prospectuses and
supplements thereto, statements of additional information and supplements
thereto, reports and proxy materials for existing shareholders; (xiv) any
extraordinary expenses (including fees and disbursements of counsel, costs of
actions, suits or proceedings to which the Company is a party and the expenses
the Company may incur as a result of its legal obligations to provide
indemnification to its officer, Directors, employees and agents) incurred by the
Company or the Fund; (xv) fees, voluntary assessments and other expenses
incurred in connection with membership in investment company organizations;
(xvi) costs of mailing and tabulating proxies and costs of meetings of
shareholders, the Board and any committees thereof; (xvii) the costs of
investment company literature and other publications provided by the Company to
its Directors and officers; and (xviii) costs of mailing, stationery and
communications equipment.
(c) All general expenses of the Company and joint expenses of the Funds
shall be allocated among each Fund on a basis deemed fair and equitable by G.T.,
subject to the Board's supervision.
(d) G.T. will assume the cost of any compensation for services provided
to the Company received by the officers of the Company and by the Directors of
the Company who are not independent Directors.
(e) The payment or assumption by G. T. of any expense of the Company or
any Fund that G.T. is not required by this Contact to pay or assume shall not
obligate G.T. to pay or assume the same or any similar expense of the Company or
any Fund on any subsequent occasion.
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8. COMPENSATION.
(a) For the services provided under this Contract, G.T. Money Market
Fund will pay G.T. a fee, computed daily and paid monthly at the annualized rate
of 0.50% of the Fund's average daily net assets.
(b) For the services provided under this Contract, each Fund as
hereafter may be established will pay to G. T. a fee in an amount to be agreed
upon in a written fee agreement ("Fee Contract") executed by the Company on
behalf of such Fund and by G. T. All such Fee Contracts shall provide that
they are subject to all terms and conditions of this Contract.
(c) The fee shall be computed daily and paid monthly to G.T. on or
before the last business day of the next succeeding calendar month.
(d) G.T. agrees to reduce the fee payable to it under this Contract by
the amount by which the ordinary operating expenses of a Fund for any fiscal
year, excluding interest, taxes, distribution and extraordinary expenses, shall
exceed the most stringent limits prescribed by any state in which Fund shares
are offered for sale. Costs incurred in connection with the purchase or sale of
portfolio securities, including brokerage fees and commissions which are
capitalized in accordance with generally accepted accounting principles
applicable to investment companies, shall be accounted for as capital items and
not expenses. Property accruals shall be made for a Fund for any projected
reduction hereunder and corresponding amounts shall be withheld from the fees
paid by that Fund to G.T. 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 Fund to G.T. is less
than the amount by which the Fund's expenses exceeds an applicable expense
limitation, G.T. shall reimburse the Fund's expenses in an amount sufficient to
enable the Fund 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. AND INDEMNIFICATION. G.T. shall
not be liable, and each Fund shall indemnify G.T. 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 Fund or the Company in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence or the part of G.T. in the
performance by G.T. of its duties or from reckless disregard by G.T. of its
obligations and duties under this Contract. Any person even though also an
officer, partner, employee or agent of G.T., who may be or become an officer,
Director, employee or agent of the Company shall be deemed when rendering
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services to a Fund or the Company or acting with respect to any business of a
Fund or the Company, to be rendering such service to or acting solely for the
Fund or the Company and not as an officer, partner, employee, or agent or one
under the control or direction of G.T. even though paid by it.
10. DURATION AND TERMINATION.
(a) This Contract shall become effective on the date hereabove written,
provided that this Contract shall not take effect with respect to any Fund
unless it has first been approved (i) by a vote of a majority of the Independent
Directors, cast in person at a meeting called for the purpose of voting or such
approval, and (ii) by vote of a majority of that Fund'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. Thereafter, if
not terminated, with respect to each Fund, this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Directors, 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 Fund.
(c) Notwithstanding the foregoing, with respect to any Fund 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 the Fund on sixty days' written notice to G.T. or by G.T. at any
time, without the payment of any penalty, on sixty days' written notice to the
Company. Termination of this Contract with respect to one Fund shall not affect
the continued effectiveness of this Contract with respect to any other Fund.
This Contract will automatically terminate in the event of its assignment.
11. AMENDMENT OF THIS CONTRACT. 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 Fund'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.
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13. MISCELLANEOUS. The captions in this Contract are included for
convenience or reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
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: G.T. INVESTMENT PORTFOLIOS, INC.
/s/ Xxxxxx Licean /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Vice President
Attest: G.T. CAPITAL MANAGEMENT, INC.
/s/ Xxxxxx Licean By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Vice President - Finance
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