PORTFOLIO MANAGEMENT AGREEMENT
For The U.S. Mortgage/Asset Backed Fixed Income Securities Portfolio
AGREEMENT made this 8th day of January, 2013, between Mellon Capital
Management Corporation, a corporation organized under the laws of
California ("Portfolio Manager"), and The Xxxxxx Xxxxxxxxx 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
U.S. Mortgage/Asset Backed Fixed Income Securities 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 Prospectus and Statement of Additional Information
("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 or comply with its
internal recordkeeping policies;
(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");
(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; and
(v) vote proxies relating to investments held in the Account in
accordance with The Bank of New York Mellon's Proxy Voting policy.
3. Portfolio Transaction and Brokerage. In placing orders for
portfolio securities with brokers and dealers, Portfolio Manager shall
seek best execution with respect to securities transactions on behalf
of the Account. 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 0.06% 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 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 and provided that the parties will seek to mutually agree
as to the manner in which expenses associated with the provision of
such assistance shall be satisfied.
(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, investment adviser 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., 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 Mellon 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 therefore.
It is acknowledged and agreed that the name "Mellon Capital
Management Corporation" and any portion or derivative thereof, as
well as any logo that is now or shall later become associated with
the name ("Mellon Marks"), are valuable property of the Portfolio
Manager and that the use of the Mellon 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 and that is within the control of the Portfolio
Manager 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:
Xx. Xxxxxx X. Xxxx, Vice President & Treasurer
HC Capital Trust
Five Tower Bridge, 000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxxxxxxxxx, XX 00000
If to Portfolio Manager:
Mellon Capital Management Corporation
00 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Client Service Manager
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: Mellon Capital Management Corporation
By: \s\ Xxxxx Xxx
Director
ATTEST: The Xxxxxx Xxxxxxxxx Trust
(on behalf of The U.S. Mortgage/Asset Backed Fixed income Securities Portfolio)
By: \s\ Xxxxxxx Xxxx
Vice President and Treasurer
