PORTFOLIO MANAGEMENT AGREEMENT
For The Inflation Protected Securities Portfolio
AGREEMENT made this 1st day of March, 2014, between Mellon Capital
Management Corporation, a corporation organized under the laws of California
("Portfolio Manager"), and The 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") 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 Inflation
Protected 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 to be invested in U.S. Corporate Fixed Income Securities
("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, 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 seek 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 within 30 days after each month end
at the annual rate of: 0.04% of the average daily net assets of that
portion of the Account invested according to a domestic inflation-protected
securities strategy; 0.07% of the average daily net assets of that portion
of the Account invested according to a global inflation-protected securities
strategy; and 0.13% of the average daily net assets of that portion of the
Account invested according to an emerging markets inflation-protected
securities strategy.
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 Xxxxx
Name: Xxxxx Xxxxx
Title: Managing Director
ATTEST: The HC Capital Trust
(on behalf of The Inflation Protected Securities Portfolio)
By: /s/ Xxxxxxx Xxxxxxx
Name: Xxxxxxx Xxxxxxx
Title: VP and Treasurer
