PORTFOLIO MANAGEMENT AGREEMENT
For HC Capital Trust International Equity Portfolio
AGREEMENT made this 12th day of March, 2014, between Artisan Partners Limited
Partnership, a limited partnership organized under the laws of Delaware
("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") which offers several series of shares of
beneficial interests ("shares") representing interests in separate investment
portfolios;
WHEREAS, the Trust desires to retain the Portfolio Manager to provide a
continuous program of investment management to that portion of HC Capital
Trust International 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;
and
WHEREAS, this Agreement replaces a prior portfolio management agreement that
terminated because of a change of control of the Portfolio Manager;
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 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.,
Inc., 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 within 30 days after each month end.
For so long as the Combined Assets (as defined below) are greater than $500
million, the fee shall be at the annual rate of 0.47% of the average daily
net assets of the Account. If the Combined Assets are reduced to $500 million
or less due to withdrawals or redemptions, beginning with the first calendar
quarter following the date on which such withdrawal or redemption reduced
such Combined Assets to $500 million or less, the fee shall be calculated
based on average daily net assets of the Account at the following annual
rates.
0.80% on assets up to $50 million; and
0.60% on assets in excess of $50 million.
For purposes of this Section 4, the term "Combined Assets" shall mean the sum
of: (a) the net assets in the Account; and (b) the net assets of HC Capital
Trust Institutional International Equity Portfolio of the HC Capital Trust
managed by Portfolio Manager.
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 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 the Portfolio Manager did not object to the statement or omission
in question or, if it did so object, the Trust incorporated revisions acceptable
to the Portfolio Manager; 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, partner, 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, partner,
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 or
if none is available, shall notify the other party of the request (unless such
notice is prohibited by law) so that at its discretion the other party may
obtain at its own expense a court order quashing or limiting such disclosures.
In addition, each party shall use its reasonable efforts to ensure that its
agents or affiliates who may gain access to such proprietary information shall
be made aware of the proprietary nature and shall likewise treat such materials
as confidential.
It is acknowledged and agreed that the names "Xxxxxx Xxxxxxxxx," "Xxxxxx
Xxxxxxxxx Chief Investment Officers" (which is a registered trademark of
Xxxxxx Xxxxxxxxx & Co., Inc. ("HCCI")), and any derivative of either, as well
as any logo that is now or shall later become associated with either name
("Marks") are valuable property of HCCI and that the use of the Marks, or any
one of them, by the Trust or its agents is subject to the license granted to
the Trust by HCCI. Portfolio Manager agrees that it will not use any Xxxx
without the prior written consent of the Trust. Portfolio Manager consents to
use of its name, performance data, biographical data and other pertinent data,
and the Artisan 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 "Artisan Partners Limited
Partnership" and any portion or derivative thereof, as well as any logo that
is now or shall later become associated with the name ("Artisan Marks"), are
valuable property of the Portfolio Manager and that the use of the Artisan
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 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:
Xxxxxx X. Xxxx
HC Capital Trust
Five Tower Bridge, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxxxxxxx, XX 00000
If to Portfolio Manager:
Artisan Partners Limited Partnership
Attn: General Counsel
000 X. Xxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxxx, 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 Portfolio Manager's Form ADV, copies of which
have been provided to the Trust's Board of Trustees. The Portfolio Manager
represents that it will notify the Trust of any change in the membership of the
Portfolio Manager within a reasonable time after any such change. Delivery of
the Portfolio Manager's Form ADV shall be deemed to satisfy such notice
requirement.
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: Artisan Partners Limited Partnership
By: /s/ Xxxxx X. Xxxxxx, Xx.
Xxxxx X. Xxxxxx, Xx.
Vice President & Assistant Secretary
ATTEST: HC Capital Trust
(on behalf of HC Capital Trust International Equity Portfolio)
By: /s/ Xxxxxxx Xxxxxxx
Xxxxxxx Xxxxxxx
VP & Treasurer
