PORTFOLIO MANAGEMENT AGREEMENT
For The Institutional Small Capitalization
Equity Portfolio
AGREEMENT made this 7th day of June, 2011, between
Xxxxx Capital Management,
LLC, a limited liability company organized under
the laws of Illinois
("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 assets of The
Institutional Small Capitalization 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:
I . 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 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., 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;
(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"); 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, 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.
3. Portfolio Transaction and Brokerage. In
placing orders for portfolio
securities with brokers and dealers, Portfolio
Manager shall use its best
efforts 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 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 0.85% 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, 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
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.
(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 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., 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 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
Xxxxx 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
"Xxxxx Capital Management, LLC" and
any portion or derivative thereof, as well
as any logo that is now or shall
later become associated with the name
("Xxxxx Marks"), are valuable property of
the Portfolio Manager and that the use
of the Xxxxx 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 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:
Xxxxxx X. Xxxx, Vice President
The HC Capital Trust
Five Tower Bridge, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxxxxxxx, XX 00000
-5-
If to Portfolio Manager:
-----------------------------
Xxxxx Capital Management, LLC
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 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 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: Xxxxx Capital Management, LLC
By: /s/ Xxxxxx X. Xxxxx
---------------------------
ATTEST: The HC Capital Trust
(on behalf of The Institutional Small
Capitalization Equity Portfolio)
By: /s/
---------------------------
-6-
