PORTFOLIO MANAGEMENT AGREEMENT
For The Emerging Markets 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 Emerging Markets 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 and 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 Xxxxxxxxx.Xx
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; and (ii) the net assets of each of those separately managed
accounts advised by Xxxxxx Xxxxxxxxx and 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 the 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
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 and 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 Markwithout 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 Emerging Markets Portfolio)
By: _/s/_Colette Bergman__
