EXHIBIT 5.2
INVESTMENT MANAGEMENT AGREEMENT WITH
HARTFORD INVESTMENT FINANCIAL SERVICES COMPANY
INVESTMENT MANAGEMENT AGREEMENT
This Agreement is made by and between Hartford Investment Financial
Services Company, a Delaware corporation ( "HIFSCO") and ITT Hartford Mutual
Funds, Inc., a Maryland corporation (the "Company") whereby HIFSCO will act as
investment manager to each series of the Company as listed on Attachment A (each
a "Portfolio" and together the "Portfolios") and any future series as agreed to
between HIFSCO and the Company.
WHEREAS, the Company and HIFSCO wish to enter into an agreement setting
forth the services to be performed by HIFSCO for each Portfolio of the Company
and the terms and conditions under which such services will be performed.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein contained, the parties hereto agree as follows:
1. GENERAL PROVISION.
The Company hereby employs HIFSCO and HIFSCO hereby undertakes to act
as the investment manager of the Company and to each Portfolio and to
perform for the Company such other duties and functions as are
hereinafter set forth and such other duties as may be necessary or
appropriate in connection with its services as investment manager.
HIFSCO shall, in all matters, give to the Company and its Board of
Directors the benefit of its best judgment, effort, advice and
recommendations and shall, at all times conform to, and use its best
efforts to enable the Company to conform to (i) the provisions of the
Investment Company Act of 1940 (the "Investment Company Act") and any
rules or regulations thereunder, (ii) any other applicable provisions
of state or federal law; (iii) the provisions of the Articles of
Incorporation and By-Laws of the Company as amended from time to time;
(iv) policies and determinations of the Board of Directors of the
Company; (v) the fundamental policies and investment restrictions of
the Company and Portfolios as reflected in the Company's registration
statement under the Investment Company Act or as such policies may,
from time to time, be amended by the Company's shareholders, and (vi)
the Prospectus and Statement of Additional Information of the Company
in effect from time to time. The appropriate officers and employees
of HIFSCO shall be available upon reasonable notice for consultation
with any of the Directors and officers of the Company with respect to
any matters dealing with the business and affairs of the Company
including the valuation of any of each Portfolios' securities which
are either not registered for public sale or not being traded on any
securities market.
2. INVESTMENT MANAGEMENT SERVICES
(a) HIFSCO shall, subject to the direction and control by the
Company's Board of Directors, (i) regularly provide investment
advice and recommendations to each
Portfolio with respect to its
investments, investment policies and the purchase and sale of
securities; (ii) supervise continuously the investment program of
each Portfolio and the composition of its portfolio securities
and determine what securities shall be purchased or sold by each
Portfolio; and (iii) arrange, subject to the provisions of
paragraph 5 hereof, for the purchase of securities and other
investments for each Portfolio and the sale of securities and
other investments held in each Portfolio.
(b) HIFSCO shall provide such economic and statistical data relating
to each Portfolio and such information concerning important
economic, political and other developments as HIFSCO shall deem
appropriate or as shall be requested by the Company's Board of
Directors.
3. ADMINISTRATIVE SERVICES.
In addition to the performance of investment advisory services HIFSCO
shall perform the following services in connection with the
management of the Company:
(a) assist in the supervision of all aspects of the Company's
operation, including the coordination of all matters relating to
the functions of the custodian, transfer agent or other
shareholder servicing agents ( if any), accountants, attorneys
and other parties performing services or operational functions
for the Company;
(b) provide the Company with the services of persons, who may be
HIFSCO's officers or employees, competent to serve as officers of
the Company and to perform such administrative and clerical
functions as are necessary in order to provide effective
administration for the Company, including the preparation and
maintenance of required reports, books and records of the
Company; and
(c) provide the Company with adequate office space and related
services necessary for its operations as contemplated in this
Agreement.
4. SUB-ADVISERS AND SUB-CONTRACTORS.
HIFSCO, upon approval of the Board of Directors and shareholders where
appropriate, may engage one or more investment advisers which are
either registered as such or specifically exempt from registration
under the Investment Advisers Act of 1940, to act as sub-advisers to
provide, with respect to existing and future Portfolios of the
Company, some or all of the services set forth in Sections 2 and 5 of
this Agreement. In addition, HIFSCO may subcontract for any of the
administrative services listed in Section 3.
5. BROKERAGE TRANSACTIONS.
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When placing orders for the purchase or sale of a Portfolio's
securities, HIFSCO or any subadviser approved in accordance with
Section 4 of this Agreement, shall use its best efforts to obtain the
best net security price available for a Portfolio. Subject to and in
accordance with any directions which the Board of Directors may issue
from time to time, HIFSCO or the subadviser, if applicable, may also
be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available,
if HIFSCO or the subadviser, if applicable, determines in good faith
that such amount of commission is reasonable in relation to the value
of the brokerage or research services provided by such broker or
dealer, viewed in terms of either that particular transaction or
HIFSCO's or the subadviser's overall responsibilities with respect to
a Portfolio and other advisory clients. The execution of such
transactions shall not be deemed to represent an unlawful act or
breach of any duty created by this Agreement or otherwise. HIFSCO or
the subadviser will promptly communicate to the Board of Directors
such information relating to portfolio transactions as the Board may
reasonably request.
6. EXPENSES.
Expenses to be paid by the Company, include, but are not limited to
(i) interest and taxes; (ii) brokerage commissions; (iii) premium for
fidelity and other insurance coverage requisite to the Company's
operations; (iv) the fees and expenses of its non-interested
directors; (v) legal, audit and fund accounting expenses; (vi)
custodian and transfer agent fees and expenses; (vii) expenses
incident to the redemption of its shares; (viii) fees and expenses
related to the registration under federal and state securities laws of
shares of the Company for public sale; (ix) expenses of printing and
mailing prospectuses, reports, notices and proxy material to
shareholders of the Company; (x) all other expenses incidental to
holding meetings of the Company's shareholders; and (xi) such
extraordinary non-recurring expenses as may arise, including
litigation affecting the Company and any obligation which the Company
may have to indemnify its officers and Directors with respect thereto.
Any officer or employee of HIFSCO or of any entity controlling,
controlled by or under common control with HIFSCO, who may also serve
as officers, directors or employees of the Company shall not receive
any compensation from the Company for their services.
7. COMPENSATION OF HIFSCO.
As compensation for the services rendered by HIFSCO, each Portfolio
shall pay to HIFSCO as promptly as possible after the last day of each
month during the term of this Agreement, a fee accrued daily and paid
monthly, based upon the following annual rates and upon the calculated
daily net asset value of the Portfolio:
MONEY MARKET FUND.
Net Asset Value Annual Rate
--------------- -----------
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First $500,000,000 0.50%
Next $500,000,000 0.45%
Amount Over $1 Billion 0.40%
THE BOND INCOME STRATEGY FUND.
Net Asset Value Annual Rate
--------------- -----------
First $500,000,000 0.65%
Next $500,000,000 0.55%
Amount Over $1 Billion 0.50%
SMALL COMPANY FUND AND INTERNATIONAL OPPORTUNITIES FUND.
Net Asset Value Annual Rate
--------------- -----------
First $500,000,000 0.85%
Next $500,000,000 0.75%
Amount Over $1 Billion 0.70%
CAPITAL APPRECIATION FUND AND STOCK FUND.
Net Asset Value Annual Rate
--------------- -----------
First $500,000,000 0.80%
Next $500,000,000 0.70%
Amount Over $1 Billion 0.65%
DIVIDEND AND GROWTH FUND AND ADVISERS FUND.
Net Asset Value Annual Rate
--------------- -----------
First $500,000,000 0.75%
Next $500,000,000 0.65%
Amount Over $1 Billion 0.60%
HIFSCO, or an affiliate of HIFSCO, may agree to subsidize any of the
Portfolios to any level that HIFSCO, or any such affiliate, may specify.
Any such undertaking may be modified or discontinued at any time.
If it is necessary to calculate the fee for a period of time which is less
than a month, then the fee shall be (i) calculated at the annual rates
provided above but prorated for the number of days elapsed in the month in
question as a percentage of the total number of days in such month, (ii)
based upon the average of the Portfolio's daily net asset value for the
period in question, and (iii) paid within a reasonable time after the close
of such period.
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8.LIABILITY OF HIFSCO.
HIFSCO shall not be liable for any loss or losses sustained by reason
of any investment including the purchase, holding or sale of any
security, or with respect to the administration of the Company, as
long as HIFSCO shall have acted in good faith and with due care;
provided, however, that no provision in this Agreement shall be deemed
to protect HIFSCO against any liability to the Company or its
shareholders by reason of its willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its
reckless disregard of its obligations and duties under this Agreement.
9. DURATION OF AGREEMENT.
(a) This Agreement shall be effective on March 3, 1997 and shall
continue in effect through July 22, 1998. This Agreement, unless
sooner terminated in accordance with 9(b) below, shall continue
in effect from year to year thereafter provided that its
continuance is specifically approved at least annually (1) by a
vote of a majority of the members of the Board of Directors of
the Company or by a vote of a majority of the outstanding voting
securities of each Portfolio, and (2) in either event, by the
vote of a majority of the members of the Company's Board of
Directors who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called for
the purpose of voting on this Agreement.
(b) This Agreement (1) may be terminated at any time without the
payment of any penalty either by a vote of a majority of the
members of the Board of Directors of the Company or by a vote of
a majority of the Portfolio's outstanding voting securities, on
sixty days' prior written notice to HIFSCO; (2) shall immediately
terminate in the event of its assignment and (3) may be
terminated by HIFSCO on sixty days' prior written notice to the
Portfolio, but such termination will not be effective until the
Portfolio shall have contracted with one or more persons to serve
as a successor investment adviser for the Portfolio and such
person(s) shall have assumed such position.
(c) As used in this Agreement, the terms "assignment", "interested
person" and "vote of majority of the Company's outstanding voting
securities" shall have the meanings set forth for such terms in
the 1940 Act, as amended.
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(d) Any notice under this Agreement shall be given in writing,
addressed and delivered, or mailed postpaid, to the other party
to this Agreement to whom such notice is to be given at such
party's current address.
10. OTHER ACTIVITIES.
Nothing in this Agreement shall limit or restrict the right of any
director, officer, or employee of HIFSCO to engage in any other
business or to devote his or her time and attention in part to the
management or other aspects of any other business, whether of a
similar nature or a dissimilar nature, nor to limit or restrict the
right of HIFSCO to engage in any other business or to render services
of any kind to any other corporation, firm individual or association.
11. ADDITIONAL SERIES.
The amendment of this Agreement for the sole purpose of adding one or
more Portfolios shall not be deemed an amendment affecting an already
existing Portfolio and requiring the approval of shareholders of that
Portfolio.
12. INVALID PROVISIONS.
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.
13. GOVERNING LAW.
To the extent that federal securities laws do not apply, this
Agreement and all performance hereunder shall be governed by the laws
of the State of Connecticut which apply to contracts made and to be
performed in the State of Connecticut.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the 3rd day of March, 1997.
HARTFORD INVESTMENT FINANCIAL
SERVICES COMPANY
/s/ Xxxxxx X. Xxxxxx
----------------------------------
By: Xxxxxx X. Xxxxxx
Title: Executive Vice President
ITT HARTFORD MUTUAL FUNDS, INC.
on behalf of:
ITT Hartford Small Company Fund
ITT Hartford Capital Appreciation Fund
ITT Hartford International Opportunities Fund
ITT Hartford Dividend and Growth Fund
ITT Hartford Stock Fund
ITT Hartford Advisers Fund
ITT Hartford Bond Income Strategy Fund
ITT Hartford Money Market Fund
/s/ Xxxxxx X. Xxxxxx
----------------------------------
By: Xxxxxx X. Xxxxxx
Title: Vice President
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ATTACHMENT A
The following series of the ITT Hartford Mutual Funds, Inc. are made a part of
this agreement:
ITT Hartford Small Company Fund
ITT Hartford Capital Appreciation Fund
ITT Hartford International Opportunities Fund
ITT Hartford Dividend and Growth Fund
ITT Hartford Stock Fund
ITT Hartford Advisers Fund
ITT Hartford Bond Income Strategy Fund
ITT Hartford Money Market Fund
Dated: March 3, 1997
