EXHIBIT 5(b)
INVESTMENT SUB-ADVISORY AGREEMENT
This Investment Sub-advisory Agreement made by and between THE
HARTFORD INVESTMENT MANAGEMENT COMPANY, a Connecticut corporation (the
"Manager") and Wellington Management Company, a Massachusetts partnership
("Wellington Management" or "Sub-Adviser").
WITNESSETH
WHEREAS, The Manager has entered into an agreement for the provision of
investment management services to Hartford Small Company Fund, Inc. (the "Fund")
by the Manager, and
WHEREAS, The Manager wishes to engage the services of Wellington
Management Company as Sub-Adviser of the Fund, and
WHEREAS, Wellington Management is willing to perform advisory services on
behalf of the Fund upon the terms and conditions and for the compensation
hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and mutual agreements
herein contained, the parties hereto agree as follows:
1. The Manager hereby employs Wellington Management to serve as Sub-Adviser
with respect to the assets of the Fund under the management of the Manager
and to perform the services hereinafter set forth subject to the terms and
conditions of the investment objectives, policies and restrictions of the
Fund, and Wellington Management hereby accepts such employment and agrees
during such period to assume the obligations herein set forth for the
compensation herein provided.
2. Wellington Management shall provide an investment program to the Manager
for utilization by the Manager in rendering services to the Fund which
program shall be amended and updated from time to time as financial and
other economic conditions change.
3. Wellington Management will make all determinations with respect to the
investment of the assets of the Fund and the purchase or sale of portfolio
securities, and shall take such steps as may be necessary to implement the
same. Such determinations and services shall include advising the Fund's
Board of Directors of the manner in which voting rights, rights to consent
to corporate action, and any other non-investment decisions pertaining to
the Fund's portfolio securities should be exercised.
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4. Wellington Management will regularly furnish reports to the Fund at
periodic meetings of the Fund's Board of Directors and at such other times
as may be reasonably requested by the Fund's Board of Directors, which
reports shall include Wellington Management's economic outlook and
investment strategy and a discussion of the portfolio activity and the
performance of the Fund since the last report. Copies of all such reports
shall be furnished to the Manager for examination and review within a
reasonable time prior to the presentation of such reports to the Fund's
Board of Directors.
5. Wellington Management will select the brokers or dealers that wil execute
the purchases and sales of portfolio securities for the Fund and place, in
the name of the Fund or its nominees, all such orders. When placing such
orders, Wellington Management shall use its best efforts to obtain the
best net security price available for the Fund. Subject to and in
accordance with any directions that the Board of Directors may issue from
time to time, Wellington Management may also be authorized to effect
individual securities transactions at commission rates in excess of the
minimum commission rates available, if Wellington Management determines in
good faith that such amount of commission was 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
Wellington Management's overall responsibilities with respect to the Fund
and Wellington Management's 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. Wellington Management
will promptly communicate to the Board of Directors such information
relating to portfolio transactions as they may reasonably request.
6. (a) As compensation for the performance of the services by Wellington
Management hereunder, the Manager shall pay to Wellington
Management, as promptly as possible after the last day of each
calendar year quarter, a fee accrued daily and paid quarterly, based
upon the following annual rates and calculated based upon the
average daily net asset values of the Fund:
ASSETS ANNUAL FEE
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On First $50 million .400%
On Next $100 million .300%
On Next $350 million .250%
Over $500 million .200%
Wellington Management shall waive its fees until the Fund's assets
(excluding assets contributed by companies affiliated with the
Manager) reach $20 million.
If it is necessary to calculate the fee for a period of time which
is not a calendar quarter, then the fee shall be (i) calculated at
the annual rates provided above but prorated for the number of days
elapsed in the period in question, as a
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percentage of the total number of days in such period, (ii) based
upon the average of the Fund's daily net asset value on the close of
business for the period in question, and (iii) paid within a
reasonable time after the close of such period.
(b) Wellington Management will bear all expenses in connection with the
performance of its services under the Agreement.
(c) Wellington Management will not be entitled to receive any payment
for the performance of its services hereunder from the Fund.
(d) Wellington Management agrees to notify the Manager of any change in
Wellington Management's general partners within a reasonable time
following the occurrence of such change.
7. Wellington Management shall not be liable for any loss or losses sustained
by reason of any investment including the purchase, holding or sale of any
security as long as Wellington Management shall have acted in good faith
and with due care; provided, however, that Wellington Management shall be
liable for 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.
8. (a) This Agreement shall become effective on ______________, 1996 and
shall continue in effect for a period of two years from that date.
This Agreement, unless sooner terminated in accordance with 8(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 the majority of the members of the Board
of Directors of the Fund or by a vote of a majority of the
outstanding voting securities of the Fund, and (2) in either event,
by the vote of a majority of the members of the Fund'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 vote of the members of the Board of
Directors of the Fund or by a vote of a majority of the Fund's
outstanding voting securities, or by the Manager on sixty days'
prior written notice to Wellington Management, (2) shall immediately
terminate in the event of its assignment, (3) may be terminated by
Wellington Management on ninety days' prior written notice to the
Fund, but such termination will not be effective until the Fund or
the Manager shall have contracted with one or more persons to serve
as a successor Sub-Adviser for the Fund and such person(s) shall
have assumed such position, and (4) will terminate automatically
upon termination of the advisory Agreement between the Manager and
the Fund of even date herewith.
(c) As used in this Agreement, the terms "assignment," "interested
parties" and "vote of a majority of the Fund's outstanding voting
securities" shall have the
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meanings set forth for such terms in the Investment Company Act of
1940, as amended.
(d) Any notice under this Agreement shall be given in writing, addressed
and delivered, or mailed postpaid, to the other party or parties at
the current office address of such party or parties.
9. Nothing in this Agreement shall limit or restrict the right of any
partner, officer, or employee of Wellington Management to engage in any
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
Wellington Management to engage in any other business or to render
services of any kind to any other corporation, firm, individual or
association.
10. The Manager agrees that neither it nor any affiliate of the Manager will
use Wellington Management's name or refer to Wellington Management or
Wellington Management's clients in marketing and promotional materials
without prior notification to and authorization by Wellington Management,
such authorization not to be unreasonably withheld.
11. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the __________ day of ______________________, 1996.
THE HARTFORD INVESTMENT
MANAGEMENT COMPANY, INC.
ATTEST:
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WELLINGTON MANAGEMENT COMPANY
ATTEST: By:______________________
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