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Exhibit 10.4
HARTFORD FIRE & HARTFORD ACCIDENT & INDEMNITY
MANAGEMENT AGREEMENT
This Agreement, made as of this ___ day of March, 1997, by and between
each of the companies listed in the signature block below, individually and in
no case jointly (each such company being hereinafter individually referred to as
(the "Client") and THE HARTFORD INVESTMENT MANAGEMENT COMPANY, a corporation
organized pursuant to the laws of the State of Delaware and an investment
adviser registered under the Investment Advisers Act of 1940 (the "Manager").
WITNESSETH:
WHEREAS, Manager is in the business of providing investment management
services; and
WHEREAS, Client wishes to appoint Manager to serve as investment manager
with respect to a certain portion of the Client's assets and the Manager is
willing to so serve;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1) APPOINTMENT OF MANAGER
Effective as of the ___ day of March, 1997, and until this appointment is
terminated as provided in Paragraph 8 hereof, the Client hereby appoints
the Manager as an investment manager and delegates to the Manager the
power to manage (including the power to acquire or dispose of), in
accordance with the terms and conditions of this Agreement, that portion
of the assets of the Client which constitute, from time to time, one or
more separate, segregated accounts established by Client from time to time
(each such account is hereinafter individually referred to as an "Account"
and are collectively referred to as the "Accounts"). Each Account shall
consist of assets of the Client which, by notice given or caused to be
given by the Client to the Manager, are placed in the Account, and the
investments and reinvestments of, and all income earned by, any assets
from time to time in the Account. By notice given or caused to be given by
the Client to the Manager, assets of the Client may be added to or
withdrawn from each or any one or more of the Accounts from time to time,
provided, however, that with regard to assets withdrawn by the Client
under this Paragraph 1, Client may not engage the investment advisory
services of any investment adviser which is not affiliated with Manager
without Manager's prior written approval.
2) INVESTMENT DIRECTION
The Client's investment objectives for each Account and a statement of the
restrictions on the investment of the assets of each such Account
("Investment Guidelines") shall be as supplied by the Client and
acknowledged and agreed to in writing by the Manager from time to time and
are initially as set forth in Schedule A attached hereto and made a part
hereof. Further, Client and Manager acknowledge and agree that the
investment of assets in each Account shall also be subject to the
restrictions set forth in the "ITT
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Hartford Group, Inc. Restricted Securities" Chart (attached hereto as
Exhibit 2, as the same may be amended from time to time) which are
applicable to an "Internal Manager" under the heading "Actively Managed
Funds". The Client hereby directs the Manager to use its best efforts to
select investments for each Account in compliance with applicable
restrictions and on the basis of the investments' possibilities for
achieving each such Account's objectives and satisfying such needs. The
Client understands and is willing to accept the risk involved therein and
further understands that there can be no assurance that such objectives
will be achieved. A list of the initial Accounts is contained in Exhibit I
attached hereto, as the same may be amended from time to time. Under no
circumstances shall the obligations, liabilities, or remedies relating to
a particular Account constitute the obligations, liabilities or remedies
for any other Account.
3) CUSTODY, DELIVERY AND RECEIPT OF SECURITIES
The Manager will be responsible for the establishment and maintenance of
proper arrangements regarding the custody of the securities and other
assets in the Accounts and the delivery and receipt of such securities and
other assets.
4) AUTHORITY OF THE MANAGER
The Manager is hereby authorized on behalf of the Client, as its agent and
attorney-in-fact, without obtaining the consent of or consulting with the
Client or any other person, to issue to brokers and dealers instructions
to purchase, sell and otherwise trade in or deal with, any security in the
Accounts for the account and at risk of, and in the name of, the Client;
to purchase from or sell to any person any security in any of the Accounts
for the account and at risk of, and in the name of the Client; and
generally to perform any other act necessary to enable the Manager to
carry out its obligations under this Agreement. Such authorization,
however, does not include authority to deliver or pay securities or cash
to the Manager.
Manager will arrange for securities transactions for the Account to be
executed through those brokers, dealers or banks that Manager believes
will provide best execution. In choosing a broker, dealer or bank, Manager
will consider the broker, dealer or bank's execution capability,
reputation and access to the markets for the securities being traded for
the Account. Manager will seek competitive commission rates, but not
necessarily the lowest rates available.
Manager may also send transactions for the Account to brokers who charge
higher commissions than other brokers, provided that Manager determines in
good faith that the amount of commissions Manager pays is reasonable in
relation to the value of the brokerage and research services provided,
viewed in terms either of that particular transaction or Manager's overall
responsibilities with respect to all clients whose accounts Manager
manages on a discretionary basis.
5) DOCUMENTATION TO BE FURNISHED
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The Client hereby agrees to furnish the Manager with such information,
authorizations and documentation as the Manager may from time to time
require to enable it to carry out its obligations under this Agreement.
The Manager shall furnish to the Client such information and documentation
in such form as the Client from time to time may reasonably require,
including such information to permit the Client to independently assess
Manager's compliance with each Account's Investment Guidelines.
6) COMPENSATION TO MANAGER
As compensation for services which Manager renders to Client pursuant to
this Agreement and while this agreement is in effect, Manager shall charge
Client and Client shall pay Manager quarterly fees in arrears, within 30
business days after the close of each calendar quarter, the equivalent of
all indirect and direct costs incurred by the Manager during the relevant
period (the "Cost Reimbursement Amount"). The Cost Reimbursement Amount
will be established by Manager and provided to Client within a reasonable
time period following the end of each such calendar quarter.
7) SUB-ADVISORY SERVICES; ASSIGNMENT
If Manager at any time deems it to be in the best interest of Client,
Manager may designate and engage the services of a sub-adviser or
sub-advisers and may apportion to such sub-adviser(s) a portion of the
assets of Client described in Paragraph 1. above as Manager shall
determine in its absolute discretion. The designation of an additional
investment adviser(s) and the apportionment of any of Client's assets to
any such investment adviser(s) pursuant to this Paragraph 7. shall not
modify the respective rights and obligations of Client and Manager
hereunder.
8) TERMINATION
This Agreement shall run for an initial period beginning on March __, 1997
and ending on March __, 2000 (the "Initial Period"). Thereafter, this
Agreement shall be renewable automatically for successive one year periods
on March __ ("Successive One Year Period"), unless on or after September
30, 1999 one party gives to the other party one hundred and eighty (180)
calendar days' prior written notice of its intention to terminate the
Agreement.
9) DUTY AND LIABILITY OF THE MANAGER
Unless the Manager has not acted prudently or has otherwise violated the
provisions of applicable law, the Manager shall not be subject to any
liability to the Client or to any other person, firm or organization in
the course of, or connected with its obligations under this Agreement. The
Manager shall have no obligation to seek any material non-public
("inside") information about any issuer of securities, and shall not
purchase or sell, or recommend for purchase or sale, the securities of any
issuer for the Account on the basis of any such information as may come
into its possession. Nothing herein shall
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in any way constitute a waiver or limitation of any right of any person
under the federal securities law.
Solely for purposes of complying with the conditions set forth in
Prohibited Transaction Exemption 84-14 (PTE 84-14) issued pursuant to the
Employee Retirement Income Security Act of 1974, a copy of which exemption
is attached hereto as Exhibit 3, Manager acknowledges that with respect to
any Account comprised of pension plan assets, it is a fiduciary with
respect to each such plan within the meaning of Section V(a) of PTE 84-14.
10) SERVICE TO OTHER CLIENTS
It is understood that the Manager and certain of its affiliates perform(s)
investment advisory services for various clients (including investment
companies). The Client agrees that the Manager may give advice and take
action with respect to any of its other clients which may differ from
advice given or the timing or nature of action taken with respect to any
of the Accounts, so long as it is the Manager's policy, to the extent
practical, to allocate investment opportunities to each of the Accounts
over a period of time on a fair and equitable basis relative to other
clients. It is understood that the Manager shall not have any obligation
to purchase or sell, or to recommend for purchase or sale, for an Account
any securities which its principals, affiliates or employees may purchase
or sell for its or their own accounts or for any other client, if in the
opinion of the Manager such transaction or investment appears unsuitable,
impractical or undesirable for a particular Account.
11) NOTICES
Any notice, direction, instruction, acknowledgment, or other communication
required or contemplated by this Agreement shall be in writing and
addressed as follows:
To the Client: Hartford Fire Insurance Company
Xxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attention:
(Above for regular U.S. Postal Service mail deliveries)
Hartford Fire Insurance Company
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention:
(Above for all other deliveries)
To the Client: Hartford Accident and Indemnity Company
000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
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Attention:
(Above for all other deliveries)
To the Manager: The Hartford Investment Management Company
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xx. Xxxxxx X. Xxxxxx, President
(Above for regular U.S. Postal Service mail deliveries)
The Hartford Investment Management Company
000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx, President
(Above for all other deliveries)
Any party hereto by notice hereunder to the other may designate a
different address.
12) GOVERNING LAW
The laws of the State of Connecticut shall control all matters relating to
this Agreement and shall apply to the extent not preempted by the laws of
the United States of America.
13) VOTING OF PROXIES
Manager will execute or cause to be executed proxies received by the
custodian bank from issuers of securities being held in the Accounts. The
voting of such proxies shall be cast in a manner which is in the best
interest of the relevant Account. Further, copies of all proxies, proxy
solicitation materials and other notices and written communications
relating to such securities ("Proxy Information") shall be retained by the
Manager for the Client hereunder. Client shall have access to such Proxy
Information, including the delivery of such information by Manager to
Client upon request.
14) RECORD KEEPING
Manager agrees that all records which it maintains for the Account shall
be the property of the Client and that it will surrender promptly to the
designated officers or employees of the Client any or all such records
upon request. All such records shall be made available, within a mutually
agreeable time upon request by Client, to the Client or to Client's
accountants or auditors during regular business hours at the Manager's
offices upon reasonable prior written notice; provided, however, that the
Manager shall be permitted to keep such records or copies thereof for such
period of time as are necessary to comply with all applicable rules and
regulations of state or federal law.
15) CONFIDENTIAL INFORMATION
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All information and advice furnished by the Manager to the Client shall be
treated as confidential and shall not be disclosed to third parties by
Client except as required by law or rule or regulation of any federal or
state regulatory or supervisory body, exchange or board. All information
identified by Client as proprietary shall be treated as confidential and
shall not be disclosed to the public by the Manager, except as required by
law or regulation or in order for the Manager to carry out its
responsibilities hereunder.
16) INDEPENDENT CONTRACTOR
The Manager shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided herein or
authorized, have no authority to act for or represent the Client in any
way.
17) MISCELLANEOUS
This Agreement has been executed in several counterparts, each of which
shall be considered as an original. Where the context admits, words in the
plural shall include the singular and the singular shall include the
plural. This Agreement contains the entire agreement between the parties
with respect to the subject matter hereof and may not be modified orally.
If any provision of this Agreement is held to be illegal, invalid or
unenforceable under present or future law, such provision shall be fully
severable, and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part of
this Agreement, and the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or its severance from this Agreement.
The Client acknowledges receipt of Part II of the Manager's Form ADV filed
with the Securities and Exchange Commission pursuant to Section 203(c) of
the Investment Advisers Act of 1940, which states information relative to
the Manager's investment and brokerage policies and other important
matters, and which the Manager warrants is the current filing of such
form, at least 48 hours prior to the execution of this Agreement, as
required by Rule 204-3 under such Act.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement,
as of the date first above written.
HARTFORD FIRE INSURANCE COMPANY
HARTFORD ACCIDENT AND INDEMNITY COMPANY
By:___________________________________
Title:________________________________
THE HARTFORD INVESTMENT MANAGEMENT COMPANY
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By:___________________________________
Xxxxxx X. Xxxxxx
Title: President
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EXHIBIT 1
LIST OF ACCOUNTS
The following constitutes a List of the Accounts referred to in Section 2
of the Management Agreement entered into among Hartford Fire Insurance Company
and Hartford Accident and Indemnity Company, each such company expressed to be
the "Client" therein and The Hartford Investment Management Company, expressed
to be the "Manager" therein, dated as of March ____, 1997 (the "Management
Agreement").
The Accounts contained in the following list may be added to or deleted
from such list from time to time by a written agreement between the parties to
the Management Agreement. Such supplemental agreement(s) shall be annexed
hereto.
Hartford Fire Insurance Company - High-Yield Portfolio
Hartford Accident and Indemnity Company - High-Yield Portfolio
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