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Exhibit 10.5
MANAGEMENT AGREEMENT
PROPERTY AND CASUALTY COMPANIES
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 HARTFORD INVESTMENT SERVICES, INC., a corporation organized
pursuant to the laws of the State of Connecticut (the "Manager").
WITNESSETH:
WHEREAS, Client has an obligation to invest its assets in order to meet
the obligations of its policyholders; and
WHEREAS, from time to time Client seeks investment services from
various investment advisers to provide investment management services; and
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 portion of 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
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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, the Account. The "Account" shall mean the invested assets
("Invested Assets") and funds that are available for investment by Manager
("Available Funds") 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. The list of initial accounts is attached as
Schedule 1. 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Manager, assets of the Client may be added to or withdrawn from the
Account, provided, however, that with regard to assets withdrawn by the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
Client hereby directs the Manager to use its best efforts to select
investments for the Account in compliance with Client's Investment Policy
supplied to and agreed to by Manager, in writing. Client may change the
Investment Policy at any time, but Manager will be bound by the changes
only after it has received and agreed to them in writing. 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.
Client shall keep Manager fully and promptly informed of its business
operations, including all relevant management information, for example
actual and projected cash flow, balance
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sheet and income related data, non-investment cash needs, liabilities,
factors affecting income taxes, capital position and state deposit
requirements. In addition, Client shall supply Manager with any other
information deemed relevant by Client or Manager for the development and
operation of Client's Investment Policy.
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 Account 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
Account 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 the Account 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.
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
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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
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 Client's Investment Policy.
6) COMPENSATION TO MANAGER
As compensation for services 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,
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the equivalent of all indirect and direct costs incurred by the Manager
during the relevant period (the "Cost Reimbursement Amount").
Notwithstanding the foregoing, Fencourt Reinsurance Limited, First State
Insurance Company, New England Insurance Company and New England
Reinsurance Corporation shall pay a fee equal to a competitive market rate
as agreed to between Client and Manager within sixty (60) days of the
effective date of this Agreement and thereafter within sixty (60) days of
each anniversary date. The Cost Reimbursement Amount will be established by
Manager and provided to Client within a reasonable period of time 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.
No assignment (as that term is defined in the Investment Advisers Act of
1940) of this Agreement shall be made by the Manager without the consent of
the Client, such consent not to be unreasonably withheld. Notwithstanding
anything contained in the immediately preceding sentence to the contrary,
Manager may assign its rights and obligations under
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this Agreement to any of its affiliates which perform investment advisory
services without Client's prior consent.
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 in any way constitute a waiver or
limitation of any right of any person under the federal securities law.
10) SERVICE TO OTHER CLIENTS
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It is understood that the Manager and its affiliates perform 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 the Account, so long as it
is the Manager's policy, to the extent practical, to allocate investment
opportunities to the Account 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 the Account any securities which its principals, affiliates or
employees may purchase or sell for its or their own accounts or for the
account of any other client, if in the opinion of the Manager such
transaction or investment appears unsuitable, impractical or undesirable
for the 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 a Client listed on Schedule 1:
______________________________ [Relevant Company]
______________________________ [Address]
Attention: ______________________________ [Name of Officer]
______________________________ [Title of Officer]
To the Manager: Hartford Investment Services, Inc.
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000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
President
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 Account. The
voting of such proxies shall be cast in a manner which is in the best
interest of the 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,
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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
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.
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17) MISCELLANEOUS
This Agreement may be executed in two or more 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized officers on the date first above
written.
FENCOURT REINSURANCE COMPANY, LIMITED
FIRST STATE INSURANCE COMPANY
NEW ENGLAND INSURANCE COMPANY
NEW ENGLAND REINSURANCE CORPORATION
NUTMEG INSURANCE COMPANY
HARTFORD FIRE INSURANCE COMPANY
HARTFORD INSURANCE, LTD.
HARTFORD ACCIDENT AND INDEMNITY COMPANY
TRUMBULL INSURANCE COMPANY
HARTFORD CASUALTY INSURANCE COMPANY
PROPERTY AND CASUALTY INSURANCE COMPANY OF HARTFORD
HARTFORD UNDERWRITERS INSURANCE COMPANY
TWIN CITY FIRE INSURANCE COMPANY
HARTFORD INSURANCE COMPANY OF CANADA
HARTFORD LLOYD'S INSURANCE COMPANY
PACIFIC INSURANCE COMPANY, LIMITED
SENTINEL INSURANCE COMPANY, LIMITED
HARTFORD INSURANCE COMPANY OF ILLINOIS
HARTFORD INSURANCE COMPANY OF THE SOUTHEAST
HARTFORD INSURANCE COMPANY OF THE MIDWEST
By:_________________________________________________
Name:
Title:
HARTFORD INVESTMENT SERVICES, INC.
By:_________________________________________________
Name: Xxxxxx X. Xxxxxx
Title: President
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS THAT _____________________, a corporation
organized and existing under the laws of the State of ___________________, and
having its principal place of business in __________________,
______________________ , does hereby constitute and appoint HARTFORD INVESTMENT
SERVICES, INC. of Hartford, Connecticut, its true and lawful attorney for it and
in its name and stead to: (i) to buy, sell, assign, transfer and deliver or
accept stocks, bonds, notes, mortgages, certificates and other securities; (ii)
to make, endorse, execute and deliver under corporate seal of
_______________________________ any and all contracts, assignments, transfers
and other instruments necessary or proper to effect the authority hereby
conferred; and (iii) to open and maintain such bank accounts as are necessary
and proper to effect the authority hereby conferred; provided, however, that all
such authority shall be exercised pursuant to the terms of that certain
Management Agreement between __________________________ and Hartford Investment
Services, Inc. dated March ______, 1997, the said __________________ hereby
ratifying and confirming all that the said attorney shall lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF,______________________ has caused its corporate name to
be signed by its_________________________ and its corporate
seal to be affixed and attested by its (Assistant) Secretary, all being done
on this __________________ day of March, 1997.
ATTEST: ________________________________________
INSURANCE COMPANY
__________________________________ By:_____________________________________
(Assistant) Secretary Name:
Title:
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SCHEDULE 1
Fencourt Reinsurance Company, Limited
First State Insurance Company
New England Insurance Company
New England Reinsurance Corporation
Nutmeg Insurance Company
Hartford Fire Insurance Company
Hartford Insurance, Ltd.
Hartford Accident and Indemnity Company
Trumbull Insurance Company
Hartford Casualty Insurance Company
Property and Casualty Insurance Company of Hartford
Hartford Underwriters Insurance Company
Twin City Fire Insurance Company
Hartford Insurance Company of Canada
Hartford Lloyd's Insurance Company
Pacific Insurance Company, Limited
Sentinel Insurance Company, Limited
Hartford Insurance Company of Illinois
Hartford Insurance Company of the Southeast
Hartford Insurance Company of the Midwest
