PORTFOLIO MANAGEMENT AGREEMENT
For The International Equity Portfolio
AGREEMENT made this 23th 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 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, xxxxxx.xx 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 Managerunder 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,
PortfolioManager shall be entitled to receive a fee, which fee shall be
calculated dailyand payable quarterly in arrears at the annual rate of
0.80% of the first $50million 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 Institutional International
Equity Portfolio of the Trust for which Portfolio Manager provides
day-to-day portfolio management services (the 'Institutional 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 Institutional
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 Institutional
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 valueof 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 Assetsduring the preceding calendar quarter. The fee
payable shall be calculated byapplying the annual rate, as set forth in
the fee schedule above, to the AverageQuarterly Net Assets of the Combined
Assets, dividing by 365, multiplying by thenumber of days in the preceding
calendar quarter, and multiplying by a factor thatis 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 theAgreement is in effect during the calendar quarter.
5. Limitation of Liability and Indemnification. (a) Portfolio Manager
shall notbe 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 ule 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 ffiliates 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 International Equity Portfolio)
By: _/s/_Colette Bergman__
