PORTFOLIO MANAGEMENT AGREEMENT
For The Institutional International Equity Portfolio
AGREEMENT made this 23rd day of January, 2015, between City of London
Investment Management Company, Ltd., a corporation organized under the
laws of the United Kingdom ('Portfolio Manager'), and HC Capital Trust,
a Delaware statutory trust ('Trust').
WHEREAS, the Trust is registered as an open-end, diversified, management
investment company under the Investment Company Act of 1940, as amended
('Investment Company Act') that offers several series of shares of
beneficial interests ('shares') representing interests in separate
investment portfolios; and
WHEREAS, the Trust desires to retain the Portfolio Manager to provide
a continuous program of investment management to that portion of the
assets of The Institutional International Equity Portfolio of the Trust
('Portfolio') that may, from time to time be allocated to it by, or
under the supervision of, the Trust's Board of Trustees, and Portfolio
Manager is willing, in accordance with the terms and conditions hereof,
to provide such services to the Trust;
NOW THEREFORE, in consideration of the promises and covenants set
forth herein and intending to be legally bound hereby, it is agreed
between the parties as follows:
1. Appointment of Portfolio Manager. The Trust hereby retains
Portfolio Manager to provide the investment services set forth herein
and Portfolio Manager agrees to accept such appointment. In carrying
out its responsibilities under this Agreement, the Portfolio Manager
shall at all times act in accordance with the investment objectives,
policies and restrictions applicable to the Portfolio as set forth in
the then current Registration Statement of the Trust, applicable
provisions of the Investment Company Act and the rules and regulations
promulgated under the Investment Company Act and other applicable
federal securities laws.
2. Duties of Portfolio Manager. (a) Portfolio Manager shall
provide a continuous program of investment management for that portion
of the assets of the Portfolio ('Account') that may, from time to time
be allocated to it by, or under the supervision of, the Trust's Board
of Trustees, as indicated in writing by an authorized officer of the
Trust. It is understood that the Account may consist of all, a portion
of, or none of the assets of the Portfolio, and that the Board of
Trustees and/or HC Capital Solutions (a division of Xxxxxx Xxxxxxxxx &
Co., LLC), the Trust's investment adviser (the 'Adviser'), has the right
to allocate and reallocate such assets to the Account at any time, and
from time to time, upon such notice to the Portfolio Manager as may be
reasonably necessary, in the view of the Trust, to ensure orderly
management of the Account or the Portfolio. The Portfolio Manager's
responsibility for providing portfolio management services to the
Portfolio shall be limited to the Account.
(b) Subject to the general supervision of the Trust's Board of Trustees
and the Adviser, Portfolio Manager shall have sole investment discretion
with respect to the Account, including investment research, selection of
the securities to be purchased and sold and the portion of the Account,
if any, that shall be held uninvested, and the selection of brokers and
dealers through which securities transactions in the Account shall be
executed. The Portfolio Manager shall not consult with any other
portfolio manager of the Portfolio concerning transactions for the
Portfolio in securities or other assets. Specifically, and without
limiting the generality of the foregoing, Portfolio Manager agrees that
it will:
(i) advise the Portfolio's designated custodian bank and administrator
or accounting agent on each business day of each purchase and sale, as
the case may be, made on behalf of the Account, specifying the name and
quantity of the security purchased or sold, the unit and aggregate
purchase or sale price, commission paid, the market on which the
transaction was effected, the trade date, the settlement date, the
identity of the effecting broker or dealer and/or such other information,
and in such manner, as may from time to time be reasonably requested by
the Trust;
(ii) maintain all applicable books and records with respect to the
securities transactions of the Account. Specifically, Portfolio Manager
agrees to maintain with respect to the Account those records required to
be maintained under Rule 31a-1(b)(1), (b)(5) and (b)(6) under the
Investment Company Act with respect to transactions in the Account
including, without limitation, records that reflect securities purchased
or sold in the Account, showing for each such transaction, the name and
quantity of securities, the unit and aggregate purchase or sale price,
commission paid, the market on which the transaction was effected, the
trade date, the settlement date, and the identity of the effecting broker
or dealer. Portfolio Manager will preserve such records in the manner and
for the periods prescribed by Rule 31a-2 under the Investment Company Act.
Portfolio Manager acknowledges and agrees that all records it maintains
for the Trust are the property of the Trust, and Portfolio Manager will
surrender promptly to the Trust any such records upon the Trust's request.
The Trust agrees, however, that Portfolio Manager may retain copies of
those records that are required to be maintained by Portfolio Manager under
federal or state regulations to which it may be subject or are reasonably
necessary for purposes of conducting its business;
(iii) provide, in a timely manner, such information as may be reasonably
requested by the Trust or its designated agents in connection with, among
other things, the daily computation of the Portfolio's net asset value and
net income, preparation of proxy statements or amendments to the Trust's
registration statement and monitoring investments made in the Account so
that the Trust can ensure compliance with the various limitations on
investments applicable to the Portfolio and so the Trust's investment
adviser can ensure that the Portfolio will continue to qualify for the
special tax treatment accorded to regulated investment companies under
Subchapter M of the Internal Revenue Code of 1986, as amended ('Code'); and
(iv) render regular reports to the Trust concerning the performance of
Portfolio Manager of its responsibilities under this Agreement. In
particular, Portfolio Manager agrees that it will, at the reasonable request
of the Board of Trustees or Adviser, attend meetings of the Board of Trustees
or its validly constituted committees and will, in addition, make its officers
and employees available to meet with the officers and employees of the Trust
at least quarterly and at other times upon reasonable notice, to review the
investments and investment program of the Account.
3. Portfolio Transaction and Brokerage. In placing orders for
portfolio securities with brokers and dealers, Portfolio Manager shall
seek to execute securities transactions on behalf of the Account in such
a manner that the total cost or proceeds in each transaction is the most
favorable under the circumstances. Portfolio Manager may, however, in
its discretion, direct orders to brokers that provide to Portfolio Manager
research, analysis, advice and similar services, and Portfolio Manager may
cause the Account to pay to those brokers a higher commission than may be
charged by other brokers for similar transactions, provided that Portfolio
Manager determines in good faith that such commission is reasonable in
terms either of the particular transaction or of the overall responsibility
of the Portfolio Manager to the Account and any other accounts with respect
to which Portfolio Manager exercises investment discretion, and provided
further that such practice is subject to review by the Trust's Board of
Trustees. Portfolio Manager shall not execute any portfolio transactions
for the Trust with a broker or dealer which is an 'affiliated person' of the
Trust or Portfolio Manager, including any other investment advisory
organization that may, from time to time act as a portfolio manager for the
Portfolio or any of the Trust's other Portfolios, except as permitted under
the Investment Company Act and rules promulgated thereunder.
4. Expenses and Compensation. (a) Portfolio Manager shall pay all of
its expenses incurred in the performance of its duties under its Agreement
and, except for expenses specifically assumed or agreed to be paid by the
Portfolio Manager under this Agreement, the Portfolio Manager shall not be
liable for any expenses of the Portfolio or the Trust, including, without
limitation: (i) interest and taxes; (ii) brokerage commissions and other
costs in connection with the purchase and sale of securities or other
investment instruments with respect to the Portfolio; and (iii) custodian
fees and expenses.
(b) Subject to the foregoing, for its services under this Agreement,
Portfolio Manager shall be entitled to receive a fee, which fee shall be
calculated daily and payable quarterly in arrears at the annual rate of
0.80% of the first $50 million of the Combined Assets; and 0.40% on
Combined Assets over $50 million.
(c) For purposes of this Agreement:
(i) 'Combined Assets' shall mean the sum of (i) the net assets of the
Account; (ii) the net assets of The International Equity Portfolio of the
Trust for which Portfolio Manager provides day-to-day portfolio management
services (the 'International Account') and (iii) the net assets of each of
those separately managed accounts advised by Xxxxxx Xxxxxxxxx & Co. LLC for
which Portfolio Manager provides day-to-day portfolio management services
(the 'Other Xxxxxx Accounts').
(ii) 'Average Quarterly Net Assets' shall mean the average of the average
daily net asset values of each of the Account, the International Account
and/or the average of the net asset values of the Other Xxxxxx Accounts, as
the case may be, as of the last business day of each of the three months in
the calendar quarter. It is understood that the average daily net asset value
of the Account and the International Account shall be calculated in accordance
with the policies of the Trust as set forth in the Trust's prospectus as it
may be amended from time to time and that the net asset value of the Other
Accounts shall be calculated by the applicable custodian or valuation agent
and that income accruals and receivables shall be included in making such
calculation.
(iii) The fee payable to Portfolio Manager by the Portfolio shall be paid
and billed in arrears based on the Average Quarterly Net Assets of the Combined
Assets during the preceding calendar quarter. The fee payable shall be
calculated by applying the annual rate, as set forth in the fee schedule
above, to the Average Quarterly Net Assets of the Combined Assets, dividing
by 365, multiplying by the number of days in the preceding calendar quarter,
and multiplying by a factor that is equal to the proportion that the Quarterly
Average Net Assets of the Account bears to the Combined Assets.
(iv) For a calendar quarter in which this Agreement becomes effective or
terminates, the portion of the Portfolio Manager's fee due hereunder with
respect to the Account shall be prorated on the basis of the number of days
that the Agreement is in effect during the calendar quarter.
5. Limitation of Liability and Indemnification. (a) Portfolio Manager
shall not be liable for any error of judgment or mistake of law or for any
loss suffered by the Portfolio or the Trust in connection with the matters
to which this Agreement relates including, without limitation, losses that may
be sustained in connection with the purchase, holding, redemption or sale of
any security or other investment by the Portfolio, except a loss to the
Account resulting from willful misfeasance, bad faith or gross negligence on
the part of Portfolio Manager in the performance of its duties or from
reckless disregard by it of its duties under this Agreement.
(b) Notwithstanding the foregoing, Portfolio Manager expressly agrees that
the Trust may rely upon: (i) the information set forth in the Portfolio
Manager's current Form ADV; and (ii) information provided, in writing, by
Portfolio Manager to the Trust in accordance with Section 9 of this
Agreement or otherwise to the extent such information was provided by
Portfolio Manager for the purpose of inclusion in SEC Filings, as hereinafter
defined, provided that a copy of each SEC Filing is provided to Portfolio
Manager: (i) at least 10 business days prior to the date on which it will
become effective, in the case of a registration statement; (ii) at least 10
business days prior to the date upon which it is filed with the SEC in the
case of any Trust shareholder report or proxy statement; or (iii) at least 10
business days prior to first use, in the case of any other SEC Filing. For
purposes of this Section 5, 'SEC Filings' means the Trust's registration
statement and amendments thereto and any periodic reports relating to the
Trust and its Portfolios that are required by law to be furnished to
shareholders of the Trust and/or filed with the SEC.
(c) Portfolio Manager agrees to indemnify and hold harmless the Trust and
each of its Trustees, officers, employees and control persons from any
claims, liabilities and reasonable expenses, including reasonable attorneys'
fees (collectively, 'Losses'), to the extent that such Losses arise out of
any untrue statement of a material fact contained in an SEC Filing or the
omission to state therein a material fact necessary to make the statements
therein, in light of the circumstances under which they are made, not
materially misleading, if such statement or omission was made in reliance
upon the Portfolio Manager's then current Form ADV or written information
furnished by the Portfolio Manager for the purpose of inclusion in such SEC
Filings or other appropriate SEC Filings, provided that a copy of each SEC
Filing was provided to Portfolio Manager: (i) at least 10 business days
prior to the date on which it will become effective, in the case of a
registration statement; (ii) at least 10 business days prior to the date
upon which it is filed with the SEC in the case of any Trust shareholder
report or proxy statement; or (iii) at least 10 business days prior to first
use, in the case of any other SEC Filing.
(d) In the event that a legal proceeding is commenced against the Trust on
the basis of claims for which the Portfolio Manager would, if such claims
were to prevail, be required to indemnify the Trust pursuant to Section 5(c)
above, Portfolio Manager will, at its expense, provide such assistance as
the Trust may reasonably request in preparing the defense of the such claims
(including by way of example making Portfolio Manager's personnel available
for interview by counsel for the Trust, but specifically not including
retention or payment of counsel to defend such claims on behalf of the
Trust); provided that the Portfolio Manager will not be required to pay any
Losses of the Trust except to the extent it may be required to do so under
Section 5(c) above.
(e) The indemnification obligations set forth in Section 5 (c) shall not
apply unless: (i) the statement or omission in question accurately reflects
information provided to the Trust in writing by the Portfolio Manager; (ii)
the statement or omission in question was made in an SEC Filing in reliance
upon written information provided to the Trust by the Portfolio Manager
specifically for use in such SEC Filing; (iii) the Portfolio Manager was
afforded the opportunity to review the statement in connection with the 10
business day review requirement set forth in Section 5(b) above; and (iv)
upon receipt by the Trust of any notice of the commencement of any action or
the assertion of any claim to which the indemnification obligations set forth
in Section 5(c) may apply, the Trust notifies the Portfolio Manager, within
30 days and in writing, of such receipt and provides to Portfolio Manager
the opportunity to participate in the defense and/or settlement of any such
action or claim. Further, Portfolio Manager will not be required to indemnify
any person under this Section 5 to the extent that Portfolio Manager relied
upon statements or information furnished to the Portfolio Manager, in
writing, by any officer, employee or Trustee of the Trust, or by the
Trust's custodian, administrator or accounting agent or any other agent
of the Trust, in preparing written information provided to the Trust and
upon which the Trust relied in preparing the SEC Filing(s) in question.
(f) The Portfolio Manager shall not be liable for: (i) any acts of any
other portfolio manager to the Portfolio or the Trust with respect to the
portion of the assets of the Portfolio or the Trust not managed by the
Portfolio Manager; and (ii) acts of the Portfolio Manager which result
from acts of the Trust, including, but not limited to, a failure of the
Trust to provide accurate and current information with respect to the
investment objectives, policies, or restrictions applicable to the Portfolio,
actions of the Board of Trustees, or any records maintained by Trust or any
other portfolio manager to the Portfolio. The Trust agrees that, to the
extent the Portfolio Manager complies with the investment objectives,
policies, and restrictions applicable to the Portfolio as provided to the
Portfolio Manager by the Trust, and with laws, rules, and regulations
applicable to the Portfolio (including, without limitation, any requirement
to manage the Portfolio in a manner designed to comply with Subchapter M of
the Code) in the management of the assets of the Portfolio specifically
committed to management by the Portfolio Manager, without regard to any
other assets or investments of the Portfolio, Portfolio Manager will be
conclusively presumed for all purposes to have met its obligations under
this Agreement to act in accordance with the investment objectives, polices,
and restrictions applicable to the Portfolio and with laws, rules, and
regulations applicable to the Portfolio, it being the intention that for
this purpose the assets committed to management by the Portfolio Manager
shall be considered a separate and discrete investment portfolio from any
other assets of the Portfolio. Without limiting the generality of the
foregoing, the Portfolio Manager will have no obligation to inquire into,
or to take into account, any other investments of the Portfolio in making
investment decisions under this Agreement. In no event shall the Portfolio
Manager or any officer, director, employee, or agent of the Portfolio Manager
have any liability arising from the conduct of the Trust and any other
portfolio manager with respect to the portion of the Portfolio's assets
not allocated to the Portfolio Manager.
6. Permissible Interest. Subject to and in accordance with the
Trust's Declaration of Trust and Bylaws and corresponding governing
documents of Portfolio Manager, Trustees, officers, agents and shareholders
of the Trust may have an interest in the Portfolio Manager as officers,
directors, agents and/or shareholders or otherwise. Portfolio Manager
may have similar interests in the Trust. The effect of any such
interrelationships shall be governed by said governing documents and
the provisions of the Investment Company Act.
7. Duration, Termination and Amendments. This Agreement shall
become effective as of the date first written above and shall continue
in effect thereafter for two years. This Agreement shall continue in
effect from year to year thereafter for so long as its continuance is
specifically approved, at least annually, by: (i) a majority of the
Board of Trustees or the vote of the holders of a majority of the
Portfolio's outstanding voting securities; and (ii) the affirmative
vote, cast in person at a meeting called for the purpose of voting on
such continuance, of a majority of those members of the Board of Trustees
('Independent Trustees') who are not 'interested persons' of the Trust or
any investment adviser to the Trust.
This Agreement may be terminated by the Trust or by Portfolio Manager at
any time and without penalty upon sixty days written notice to the other
party, which notice may be waived by the party entitled to it. This
Agreement may not be amended except by an instrument in writing and signed
by the party to be bound thereby provided that if the Investment Company
Act requires that such amendment be approved by the vote of the Board of
Trustees, the Independent Trustees and/or the holders of the Trust's or
the Portfolio's outstanding shareholders, such approval must be obtained
before any such amendment may become effective. This Agreement shall
terminate upon its assignment. For purposes of this Agreement, the terms
'majority of the outstanding voting securities,' 'assignment' and
'interested person' shall have the meanings set forth in the Investment
Company Act.
8. Confidentiality; Use of Name. Portfolio Manager and the Trust
acknowledge and agree that during the term of this Agreement the parties
may have access to certain information that is proprietary to the Trust
or Portfolio Manager, respectively (or to their affiliates and/or service
providers). The parties agree that their respective officers and employees
shall treat all such proprietary information as confidential and will not
use or disclose information contained in, or derived from such material for
any purpose other than in connection with the carrying out of their
responsibilities under this Agreement and the management of the Trust's
assets, provided, however, that this shall not apply in the case of:
(i) information that is publicly available; and (ii) disclosures required
by law or requested by any regulatory authority that may have jurisdiction
over Portfolio Manager or the Trust, as the case may be, in which case such
party shall request such confidential treatment of such information as may
be reasonably available. In addition, each party shall use its reasonable
efforts to ensure that its agents or affiliates who may gain access to such
proprietary information shall be made aware of the proprietary nature and
shall likewise treat such materials as confidential.
It is acknowledged and agreed that the names 'Xxxxxx Xxxxxxxxx,' 'Xxxxxx
Xxxxxxxxx Chief Investment Officers' (which is a registered trademark of
Xxxxxx Xxxxxxxxx & Co., LLC ('HCC')), 'HC Capital' and any derivative of
any of them, as well as any logo that is now or shall later become
associated with such names ('Marks') are valuable property of HCC and that
the use of the Marks, or any one of them, by the Trust or its agents is
subject to the license granted to the Trust by HCC. Portfolio Manager
agrees that, other than for the purpose of complying with regulatory
requirements, it will not use any Xxxx without the prior written consent
of the Trust. Portfolio Manager consents to use of its name, performance
data, biographical data and other pertinent data, and the City of London
Marks (as defined below), by the Trust for use in marketing and sales
literature, provided that any such marketing and sales literature shall
not be used by the Trust without the prior written consent of Portfolio
Manager, which consent shall not be unreasonably withheld. The Trust shall
have full responsibility for the compliance by any such marketing and sales
literature with all applicable laws, rules, and regulations, and Portfolio
Manager will have no responsibility or liability therefor.
It is acknowledged and agreed that the name 'City of London Investment
Management Company' and any portion or derivative thereof, as well as any
logo that is now or shall later become associated with the names ('City of
London Marks'), are valuable property of the Portfolio Manager and that the
use of the City of London Marks by the Trust or its agents is permitted
only so long as this Agreement is in place.
The provisions of this Section 8 shall survive termination of this
Agreement.
9. Representation, Warranties and Agreements of Portfolio Manager.
Portfolio Manager represents and warrants that:
(a) It is registered as an investment adviser under the Investment Advisers
Act of 1940, as amended ('Investment Advisers Act'), it will maintain such
registration in full force and effect and will promptly report to the Trust
the commencement of any proceeding that could render the Portfolio Manager
ineligible to serve as an investment adviser to a registered investment
company under Section 9 of the Investment Company Act.
(b) Portfolio Manager understands that the Trust is subject to various
regulations under the Investment Company Act which require that the Board
of Trustees review and approve various procedures adopted by portfolio
managers and may also require disclosure regarding the Board of Trustees'
consideration of these matters in various documents required to be filed
with the SEC. Portfolio Manager represents that it will, upon reasonable
request of the Trust, provide to the Trust information regarding all such
matters including, but not limited to, codes of ethics required by Rule
17j-1 under the Investment Company Act and compliance procedures required
by Rule 206(4)-7 under the Investment Advisers Act, as well as certifications
that, as contemplated under Rule 38a-1 under the Investment Company Act,
Portfolio Manager has implemented a compliance program that is reasonably
designed to prevent violations of the federal securities laws by the Portfolio
Manager with respect to those services provided pursuant to this Agreement.
Portfolio Manager acknowledges that the Trust may, in response to regulations
or recommendations issued by the SEC or other regulatory agencies, from time
to time, request additional information regarding the personal securities
trading of its directors, partners, officers and employees and the policies
of Portfolio Manager with regard to such trading. Portfolio Manager agrees
that it will make reasonable efforts to respond to the Trust's reasonable
requests in this area.
(c) Upon request of the Trust, Portfolio Manager shall promptly supply
the Trust with any information concerning Portfolio Manager and its
stockholders, employees and affiliates that the Trust may reasonably
require in connection with the preparation of its registration
statements, proxy materials, reports and other documents required,
under applicable state or Federal laws, to be filed with state or
Federal agencies and/or provided to shareholders of the Trust.
10. Status of Portfolio Manager. The Trust and Portfolio Manager
acknowledge and agree that the relationship between Portfolio Manager
and the Trust is that of an independent contractor and under no
circumstances shall any employee of Portfolio Manager be deemed an
employee of the Trust or any other organization that the Trust may, from
time to time, engage to provide services to the Trust, its Portfolios or
its shareholders. The parties also acknowledge and agree that nothing in
this Agreement shall be construed to restrict the right of Portfolio Manager
or its affiliates to perform investment management or other services to
any person or entity, including without limitation, other investment companies
and persons who may retain Portfolio Manager to provide investment management
services and the performance of such services shall not be deemed to violate
or give rise to any duty or obligations to the Trust.
11. Counterparts and Notice. This Agreement may be executed in
one or more counterparts, each of which shall be deemed to be an original.
Any notice required to be given under this Agreement shall be deemed given
when received, in writing addressed and delivered, by certified mail, by
hand or via overnight delivery service as follows:
If to the Trust:
Xxxxxxx Xxxxxxx, Vice President
HC Capital Trust
Five Tower Bridge, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxxxxxxx, XX 00000
If to Portfolio Manager:
City of London Investment Management
c/o Xxxxx Xxxxxx, CEO
The Barn
0000 Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
12. Miscellaneous. The captions in this Agreement 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 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. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors
and shall be governed by the law of the State of Delaware provided that
nothing herein shall be construed as inconsistent with the Investment Company
Act or the Investment Advisers Act.
The Trust acknowledges receipt of Part II of Portfolio Manager's Form ADV,
copies of which have been provided to the Trust's Board of Trustees.
Portfolio Manager is hereby expressly put on notice of the limitations of
shareholder and Trustee liability set forth in the Declaration of Trust of
the Trust and agrees that obligations assumed by the Trust pursuant to this
Agreement shall be limited in all cases to the assets of the Portfolio.
Portfolio Manager further agrees that it will not seek satisfaction of any
such obligations from the shareholders or any individual shareholder of the
Trust, or from the Board of Trustees of the Trust or any individual Trustee
of the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized as of the day and year
first written above.
ATTEST: City of London Investment Management Company.
By: _/s/_Barry Olliff__
ATTEST: HC Capital Trust
(on behalf of The Institutional International Equity Portfolio)
By: _/s/_Colette Bergman__
