PORTFOLIO MANAGEMENT AGREEMENT
For The U.S. Mortgage/Asset Backed Fixed Income Securities Portfolio
AGREEMENT made this 8th day of January, 2013, between Mellon Capital Management
Corporation, a corporation organized under the laws of California ("Portfolio
Manager"), and The Xxxxxx Xxxxxxxxx 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") which 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 U.S.
Mortgage/Asset Backed Fixed Income Securities 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 Prospectus and Statement of Additional Information
("Registration Statement") of the Trust delivered by the Trust to the Portfolio
Manager, 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 Xxxxxx Xxxxxxxxx & Co., Inc., the Trust's investment 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,
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 which 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 or comply with its internal recordkeeping
policies;
(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 to
ensure compliance with the various limitations on investments applicable to
the Portfolio and to 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");
(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, attend meetings of the Board 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; and
(v) vote proxies relating to investments held in the Account in accordance
with The Bank of New York Mellon's Proxy Voting policy.
3. Portfolio Transaction and Brokerage. In placing orders for portfolio
securities with brokers and dealers, Portfolio Manager shall eek best
execution with respect to securities transactions on behalf of the Account.
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 the extent and continuation
of any 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. The Trust shall provide a list of such
affiliated brokers and dealers to Portfolio Manager and will promptly advise
Portfolio Manager of any changes in such list.
4. Expenses and Compensation. 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. For its services under
this Agreement, Portfolio Manager shall be entitled to receive a fee, which
fee shall be payable monthly in arrears at the annual rate of 0.06% of the
average daily net assets of the Account.
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 Trust on behalf of the Portfolio,
except a loss 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 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 the Trust's semi-annual-report on Form
N-SAR or any 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 Securities and Exchange
Commission.
(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
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 the
Trust's semi-annual-report on Form N-SAR or any 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 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 inducing 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 and provided that the parties
will seek to mutually agree as to the manner in which expenses associated with
the provision of such assistance shall be satisfied.
(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 (or the omission was identified
to it) 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, investment adviser 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 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
requirements relating to the qualification of the Account as a regulated
investment company under 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
or 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, 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., Inc. ("HCCI")), and any derivative of either, as well
as any logo that is now or shall later become associated with either name
("Marks") are valuable property of HCCI 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 HCCI. Portfolio Manager agrees that 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 Mellon 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 "Mellon Capital Management
Corporation" and any portion or derivative thereof, as well as any logo that
is now or shall later become associated with the name ("Mellon Marks"), are
valuable property of the Portfolio Manager and that the use of the Mellon
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 formal 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
review and approve various procedures adopted by portfolio managers and may
also require disclosure regarding the Board's 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 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 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 and that is
within the control of the Portfolio Manager 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:
Xx. Xxxxxx X. Xxxx, Vice President & Treasurer
HC Capital Trust
Five Tower Bridge, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxxxxxxx, XX 00000
If to Portfolio Manager:
Mellon Capital Management Corporation
00 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Client Service Manager
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 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: Mellon Capital Management Corporation
By: \s\ Xxxxx Xxx
Director
ATTEST: The Xxxxxx Xxxxxxxxx Trust
(on behalf of The U.S. Mortgage/Asset Backed Fixed income Securities Portfolio)
By: \s\ Xxxxxxx Xxxx
Vice President and Treasurer
