PORTFOLIO MANAGEMENT AGREEMENTAGREEMENT made this
__________day of August, 1995 between Institutional Capital Corporation,a
corporation organized under the laws of Delaware ("Portfolio Manager") and THE
HIRTLECALLAGHAN TRUST, a Delaware business trust ("Trust").
WHEREAS, the Trust is registered as an open-end, diversified, management
series investment companyunder the Investment Company Act of 1940, as amended
("Investment Company Act") which currentlyoffers five series of beneficial
interests ("shares") representing interests in separate investmentportfolios,
and may offer additional portfolios in the future; and WHEREAS, the Trust
desires to retain the Portfolio Manager to provide a continuous program
ofinvestment management for The Value Equity Portfolio of the Trust
("Portfolio") and Portfolio Manageris 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 tobe 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 andPortfolio
Manager agrees to accept such appointment. In carrying out its
responsibilities under thisAgreement, 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 Statementof the Trust, applicable provisions of the Investment
Company Act and the rules and regulationspromulgated under that 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 portionof the assets of
the Portfolio ("Account") that may, from time to time be allocated to it by
the Trust'sBoard of Trustees, in writing, by an authorized officer of the
Trust. It is understood that the Accountmay consist of all, a portion of or
none of the assets of the Portfolio, and that the Board of Trustees hasthe
right to allocate and reallocate such assets to the Account at any time, and
from time to time, uponsuch notice to the Portfolio Manager as may be
reasonably necessary, in the view of the Trust, to ensureorderly management of
the Account or the Portfolio.
(b) Subject to the general supervision of the Trust's Board of Trustees,
Portfolio Manager shall have soleinvestment discretion with respect to the
Account, including investment research, selection of thesecurities 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 beexecuted. Specifically, and without
limiting the generality of the foregoing, Portfolio Manager agreesthat it
will:
(i) promptly advise the Portfolio's designated custodian bank and
administrator or accountingagent of each purchase and sale, as the case may
be, made on behalf of the Account, specifying thename 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 mayfrom time to time be
reasonably requested by the Trust;
(ii) maintain all applicable books and records with respect to the
securities transactions of theAccount. Specifically, Portfolio Manager agrees
to maintain with respect to the Account those recordsrequired to be maintained
under Rule 31a-1(b)(1), (b)(5) and (b)(6) under the Investment Company Actwith
respect to transactions in the Account including, without limitation, records
which reflect securitiespurchased or sold in the Account, showing for each
such transaction, the name and quantity ofsecurities, the unit and aggregate
purchase or sale price, commission paid, the market on which thetransaction
was effected, the trade date, the settlement date, and the identity of the
effecting broker ordealer. Portfolio Manager will preserve such records in
the manner and for the periods prescribed byRule 31a-2 under the Investment
Company Act. Portfolio Manager acknowledges and agrees that allrecords it
maintains for the Trust are the property of the Trust and Portfolio Manager
will surrenderpromptly to the Trust any such records upon the Trust's
request. The Trust agrees, however, thatPortfolio Manager may retain copies
of those records that are required to be maintained by PortfolioManager under
federal or state regulations to which it may be subject or are reasonably
necessary forpurposes of conducting its business;
(iii) provide, in a timely manner, such information as may be
reasonably requested by the Trustor its designated agents in connection with,
among other things, the daily computation of the Portfolio'snet asset value
and net income, preparation of proxy statements or amendments to the
Trust'sregistration statement and monitoring investments made in the Account
to ensure compliance with thevarious limitations on investments applicable to
the Portfolio and to ensure that the Portfolio willcontinue to qualify for the
special tax treatment accorded to regulated investment companies
underSubchapter M of the Internal Revenue Code of 1986, as amended; and
(iv) render regular reports to the Trust concerning the performance of
Portfolio Manager of itsresponsibilities under this Agreement. In particular,
Portfolio Manager agrees that it will, at thereasonable request of the Board
of Trustees, attend meetings of the Board or its validly constitutedcommittees
and will, in addition, make its officers and employees available to meet with
the officersand employees of the Trust at least quarterly and at other times
upon reasonable notice, to review theinvestments and investment program of the
Account.
3. Portfolio Transaction and Brokerage. In placing orders for portfolio
securities with brokers anddealers, Portfolio Manager shall use its best
efforts to execute securities transactions on behalf of theAccount in such a
manner that the total cost or proceeds in each transaction is the most
favorable underthe circumstances. Portfolio Manager may, however, in its
discretion, direct orders to brokers thatprovide 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 brokersfor similar transactions, provided that Portfolio
Manager determines in good faith that such commissionis reasonable in terms
either of the particular transaction or of the overall responsibility of the
PortfolioManager to the Account and any other accounts with respect to which
Portfolio Manager exercisesinvestment discretion, and provided further that
the extent and continuation of any such practice issubject to review by the
Trust's Board of Trustees. Portfolio Manager shall not execute any
portfoliotransactions for the Trust with a broker or dealer which is an
"affiliated person" of the Trust or PortfolioManager, including any other
investment advisory organization that may, from time to time act as aportfolio
manager for the Portfolio or any of the Trust's other Portfolios, without
prior written approvalof the Trust. The Trust shall provide a list of such
affiliated brokers and dealers to Portfolio Managerand will promptly advise
Portfolio Manager of any changes in such list.
4. Expenses and Compensation.Portfolio Manager shall pay all of its expenses
incurred in the performance of its duties under thisAgreement and shall not
be required to pay any other expenses of the Trust, including
withoutlimitation, brokerage expenses. For its services under this Agreement,
Portfolio Manager shall beentitled to receive a fee at the annual rate of .30%
of the average daily net asset value of the Account,which fee shall be payable
monthly.
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
losssuffered by the Trust in connection with the matters to which this
Agreement relates including, withoutlimitation, losses that may be sustained
in connection with the purchase, holding, redemption or saleof any security
or other investment by the Trust except a loss resulting from willful
misfeasance, badfaith or gross negligence on the part of Portfolio Manager in
the performance of its duties or fromreckless disregard by it of its duties
under this Agreement. (b) Notwithstanding the foregoing, Portfolio Manager
expressly agrees that the Trust may rely uponwritten information provided, in
writing, by Portfolio Manager to the Trust (including, withoutlimitation,
information contained in Portfolio Manager's then current Form ADV) in
accordance withSection 9 of the Agreement or otherwise, in preparing the
Trust's registration statement and amendmentsthereto and certain periodic
reports relating to the Trust and its Portfolios that are required to
befurnished to shareholders of the Trust and/or filed with the Securities and
Exchange Commission ("SECFilings"). Portfolio Manager agrees to indemnify and
hold harmless the Trust and each of its Trustees,officers and employees from
any claims, liabilities and expenses, including reasonable attorneys'
fees,incurred as a result of any untrue statement or alleged untrue statement
of a material fact made by Portfolio Manager in any such written information
and upon which the Trust relies in preparing anySEC Filing, or any omission or
alleged omission to state in such written information a material factnecessary
to make such statements not misleading ("material omission"). Portfolio
Manager will not,however, be required to so indemnify any person under this
Section 5 to the extent that PortfolioManager relied upon an untrue statement
or material omission made by an officer or Trustee of theTrust or where such
untrue statement or material omission was made in reliance upon
informationfurnished to the Portfolio Manager in writing by such officer or
Trustee, or by the Trust's Custodian,Administrator or Accounting Agent.
6. Permissible Interest.Subject to and in accordance with the Trust's
Declaration of Trust and Bylaws and correspondinggoverning documents of
Portfolio Manager, Trustees , officers, agents and shareholders of the
Trustmay have an interest in the Portfolio Manager as officers, directors,
agents and/or shareholders orotherwise. Portfolio Manager may have similar
interests in the Trust. The effect of any suchinterrelationships shall be
governed by said governing documents and the provisions of the
InvestmentCompany Act.
7. Duration, Termination and Amendments.This Agreement shall become effective
as of the date first written above and shall continue in effect fortwo years.
Thereafter, this Agreement shall continue in effect from year to year for so
long as itscontinuance is specifically approved, at least annually, by (i) a
majority of the Board of Trustees or thevote of the holders of a majority of
the Portfolio's outstanding voting securities; and (ii) the affirmativevote,
cast in person at a meeting called for the purpose of voting on such
continuance, of a majority ofthose members of the Board of Trustees
("Independent Trustees ") who are not "interested persons" ofthe Trust or any
investment adviser to the Trust.This Agreement may be terminated by the Trust
or by Portfolio Manager at any time and withoutpenalty upon sixty days written
notice to the other party, which notice may be waived by the partyentitled to
it. This Agreement may not be amended except by an instrument in writing and
signed bythe party to be bound thereby provided that if the Investment Company
Act requires that suchamendment be approved by the vote of the Board, the
Independent Trustees and/or the holders of theTrust's or the Portfolio's
outstanding shareholders, such approval must be obtained before any
suchamendment 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 acknowledges and agrees
that during the course of its responsibilities hereunder, itmay have access to
certain information that is proprietary to the Trust or to one or more of the
Trust'sagents or service providers. Portfolio Manager agrees that Portfolio
Manager, its officers and itsemployees shall treat all such proprietary
information as confidential and will not use or discloseinformation contained
in, or derived from such material for any purpose other than in connection
withthe carrying out of Portfolio Manager's responsibilities hereunder. In
addition, Portfolio Manager shalluse its best efforts to ensure that any agent
or affiliate of Portfolio Manager who may gain access tosuch proprietary
materials shall be made aware of the proprietary nature of such materials and
shalllikewise treat such materials as confidential. It is acknowledged and
agreed that the names "Xxxxxx Xxxxxxxxx," "Xxxxxx Xxxxxxxxx Chief
InvestmentOfficers" (which is a registered trademark of Xxxxxx, Xxxxxxxxx &
Co., Inc. ("HCCI")), and derivativeof 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 itsagents is subject to the license granted to the Trust by HCCI.
Portfolio Manager agrees that it will notuse any Xxxx without the prior
written consent of the Trust. Portfolio Manager consents to use of itsname,
performance data, biographical data and other pertinent data by the Trust for
use in marketingand sales literature, provided that any such marketing and
sales literature shall not be used by the Trustwithout the prior written
consent of Portfolio Manager, which consent shall not be
unreasonablywithheld. 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 ("InvestmentAdvisers Act"), it will maintain such registration in
full force and effect and will promptly report to theTrust the commencement
of any formal proceeding that could render the Portfolio Manager ineligibleto
serve as an investment adviser to a registered investment company under
Section 9 of the InvestmentCompany Act.
(b) It understands that, as a result of its services hereunder, certain of its
employees and officers maybe deemed "access persons" of the Trust within the
meaning of Rule 17j-1 under the InvestmentCompany Act and that each such
access person is subject to the provisions of the code of ethics
("Trust'sCode") adopted by the Trust in compliance with such rule. Portfolio
Manager further represents thatit is subject to a written code of ethics
("Portfolio Manager's Code") complying with the requirementsof Rule
204-2(a)(12) under the Investment Advisers Act and will provide the Trust with
a copy of suchcode of ethics. During the period that this Agreement is in
effect, an officer or director of PortfolioManager shall certify to the Trust,
on a quarterly basis, that Portfolio Manager has complied with the
requirements of the Portfolio Manager's Code during the prior year; and that
either (i) that no violationof such code occurred or (ii) if such a violation
occurred, that appropriate action was taken in responseto such violation.
Upon the written request of the Trust, Portfolio Manager shall permit the
Trust, orit designated agents, to examine the reports required to be made by
Portfolio Manager under rule 17j-1(c)(1) under the Investment Company Act. In
addition, Portfolio Manager acknowledges that the Trustmay, in response to
regulations or recommendations issued by the Securities and Exchange
Commissionor other regulatory agencies, from time to time, request additional
information regarding the personalsecurities trading of its directors,
partners, officers and employees and the policies of Portfolio Managerwith
regard to such trading. Portfolio Manager agrees that it make every effort to
respond to the Trust'sreasonable requests in this area.
(c) Upon request of the Trust, Portfolio Manager shall promptly supply the
Trust with any informationconcerning Portfolio Manager and its stockholders,
employees and affiliates that the Trust mayreasonably 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 orFederal agencies or to be provided to shareholders of the
Trust.
10. Status of Portfolio Manager. The Trust and Portfolio Manager acknowledge
and agree that the relationship between PortfolioManager and the Trust is that
of an independent contractor and under no circumstances shall anyemployee of
Portfolio Manager be deemed an employee of the Trust or any other organization
that theTrust 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 theright of
Portfolio Manager or its affiliates to perform investment management or other
services to anyperson or entity, including without limitation, other
investment companies and persons who may retainPortfolio Manager to provide
investment management services and the performance of such servicesshall 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 anoriginal. 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. Xxxxxxxxx, President
The Xxxxxx Xxxxxxxxx Trust
000 Xxxx Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
If to Portfolio Manager:
Xxxxxx X. Xxxx
Institutional Capital Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
12. Miscellaneous. The captions in this Agreement are included for
convenience of reference only andin 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 orotherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall bebinding upon and shall inure to the
benefit of the parties hereto and their respective successors and shallbe
governed by the law of the state of Delaware provided that nothing herein
shall be construed asinconsistent with the Investment Company Act or the
Investment Advisers Act.
Portfolio Manager is hereby expressly put on notice of the limitations of
shareholder and Trusteeliability set forth in the Declaration of Trust of the
Trust and agrees that obligations assumed by theTrust pursuant to this
Agreement shall be limited in all cases to the assets of The Value
EquityPortfolio. Portfolio Manager further agrees that it will not seek
satisfaction of any such obligationsfrom the shareholders or any individual
shareholder of the Trust, or from the Trustees of the Trust orany individual
Trustee of the Trust.
13. Acknowledgement. The Trust acknowledges that it has received a copy of
PortfolioManagerscurrent Form ADV, as filed with the Securities and Exchange
Commission. IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by theirofficers thereunto duly authorized as of the day and
year first written above.
By: /s/
Institutional Capital Corporation
By: /s/
The Xxxxxx Xxxxxxxxx Trust
