PORTFOLIO MANAGEMENT AGREEMENT
For The Fixed Income Opportunity 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 Fixed Income Opportunity 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 & 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 Agreement. In 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. 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
0.45% 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
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 & 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 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 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 Fixed Income Opportunity Portfolio)
By: _/s/_Colette Bergman__
