EXHIBIT d.(ii)
INVESTMENT MANAGEMENT AGREEMENT
INVESTMENT MANAGEMENT AGREEMENT
This Agreement is made by and between HL Investment Advisors, LLC, a
Connecticut limited liability company ("HL Advisors"), and Hartford HLS Series
Fund II, Inc., a Maryland corporation (the "Company") whereby HL Advisors 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 HL Advisors and the Company.
WHEREAS, the Company and HL Advisors wish to enter into an agreement
setting forth the services to be performed by HL Advisors 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 HL Advisors and HL Advisors 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. HL Advisors 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 HL Advisors 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) HL Advisors 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) HL Advisors shall provide such economic and statistical data
relating to each Portfolio and such information concerning important
economic, political and other developments as HL Advisors 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, HL
Advisors 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 HL
Advisors' 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.
HL Advisors, upon approval of the Board of Directors, 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-adviser 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. Such sub-adviser shall assume such responsibilities and obligations
of HL Advisors pursuant to this Investment Management Agreement as shall be
delegated to the sub-adviser or sub-advisers; PROVIDED, HOWEVER, that any
discretionary investment decisions made by a sub-adviser on behalf of any of the
Portfolios shall be subject to approval or ratification by HL Advisors, and,
notwithstanding any delegation of responsibilities and obligations to a
sub-adviser, HL Advisors shall retain the right, in its discretion, to make
investment decisions for each Portfolio. Any appointment of a sub-adviser and
assumption of responsibilities and obligations of HL Advisors by such
sub-adviser shall be subject to approval by the Board of Directors of the Fund
and, to the extent (if any) required by law, by the shareholders of the
Portfolio. Any appointment of a sub-adviser for a Portfolio pursuant hereto
shall in no way limit or diminish HL Advisors' obligations and responsibilities
under this Investment Management Agreement, and HL Advisors shall be responsible
for monitoring compliance by the sub-adviser(s) with the investment policies,
restrictions, and limitations on the Portfolio, and will also be responsible for
ensuring that the Portfolios are managed in a way so that: (1) they meet the
requirements of Subchapter M of the Internal Revenue Code to be taxed
as a regulated investment company; and (2) they comply with the provisions of
Section 817(h) of the Internal Revenue Code, and the regulations promulgated
thereunder.
In addition, HL Advisors may subcontract for any of the administrative
services listed in Section 3.
5. Brokerage Transactions.
When placing orders for the purchase or sale of a Portfolio's
securities, HL Advisors or any sub-adviser 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, HL Advisors
or the sub-adviser, if applicable, may also be authorized to effect individual
securities transactions at commission rates in excess of the minimum commission
rates available, if HL Advisors or the sub-adviser, 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 HL Advisors' or the
sub-adviser'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. HL Advisors or the sub-adviser 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 HL Advisors or of any entity controlling, controlled by or under
common control with HL Advisors, 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 HL Advisors.
As compensation for the services rendered by HL Advisors, each Portfolio
shall pay to HL Advisors 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:
INVESTMENT
ADVISORY AND
SERIES AVERAGE NET ASSETS MANAGEMENT FEE
------ ------------------ --------------
Hartford Multisector Bond HLS For the first $100 million .75%
INVESTMENT
ADVISORY AND
SERIES AVERAGE NET ASSETS MANAGEMENT FEE
------ ------------------ --------------
Fund For assets over $100 million .65%
Hartford American Leaders HLS Fund For the first $35 million .90%
$35 million - $100 million .75%
For assets over $100 million .65%
Hartford Value Opportunities HLS Fund For the first $100 million .70%
For assets over $100 million .60%
Hartford Capital Opportunities HLS Fund For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million .80%
Hartford Blue Chip Stock HLS Fund For the first $100 million .90%
For assets over $100 million .85%
Hartford Blue Chip Stock II HLS Fund For the first $200 million .95%
For assets over $200 million .90%
Hartford MidCap Stock HLS Fund For the first $100 million .90%
For the next $150 million .85%
For assets over $250 million .80%
Hartford SmallCap Value HLS Fund For the first $50 million .90%
For assets over $50 million .85%
Hartford Global Equity HLS Fund For the first $200 million 1.00%
$200 million - $500 million .95%
For assets over $500 million .90%
Hartford Investors Growth HLS Fund For the first $200 million .90%
$200 million - $500 million .85%
For assets over $500 million .80%
Hartford Growth Opportunities HLS Fund For the first $100 million .70%
For assets over $100 million .60%
Hartford SmallCap Growth HLS Fund For the first $100 million .70%
For assets over $100 million .60%
HL Advisors, or an affiliate of HL Advisors, may agree to subsidize any
of the Portfolios to any level that HL Advisors, 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.
8. Liability of HL Advisors.
HL Advisors 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 HL
Advisors shall have acted in good faith and with due care; provided, however,
that no provision in this Agreement shall be deemed to protect HL Advisors
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 April 30, 2002 and shall
continue in effect through June 3, 2003. 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 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 HL
Advisors; (2) shall immediately terminate in the event of its assignment and
(3) may be terminated by HL Advisors 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.
(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 HL Advisors 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 HL
Advisors 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 as of the 30th day of April, 2002.
HL INVESTMENT ADVISORS, LLC.
/s/ Xxxxx X. Xxxxxxxxxxxx
-------------------------
By: Xxxxx X. Xxxxxxxxxxxx
Title: Senior Vice President
HARTFORD HLS SERIES FUND II, INC.
on behalf of its series listed on
Attachment A
/s/ Xxxxx X. Xxxxxxxxxxxx
-------------------------
By: Xxxxx X. Xxxxxxxxxxxx
Title: President
ATTACHMENT A
The following series of Hartford HLS Series Fund II, Inc. are made a party to
this agreement:
Hartford American Leaders HLS Fund
Hartford Blue Chip Stock HLS Fund
Hartford Blue Chip Stock II HLS Fund
Hartford Capital Opportunities HLS Fund
Hartford Global Equity HLS Fund
Hartford Growth Opportunities HLS Fund
Hartford Investors Growth HLS Fund
Hartford MidCap Stock HLS Fund
Hartford Multisector Bond HLS Fund
Hartford SmallCap Growth HLS Fund
Hartford SmallCap Value HLS Fund
Hartford Value Opportunities HLS Fund
Dated: As of April 30, 2002
