UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _____)
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Hartford HLS Series Fund II, Inc.
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if Other than the Registrant)
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HARTFORD HLS SERIES FUND II, INC.,
ON BEHALF OF
HARTFORD SMALLCAP GROWTH HLS FUND
AUGUST 4, 2006
HARTFORD SMALLCAP GROWTH HLS FUND
Dear Hartford HLS Fund Participants:
You are cordially invited to attend a Special Meeting of Shareholders (the
"Meeting") of Hartford SmallCap Growth HLS Fund (the "Fund"), a series of
Hartford HLS Series Fund II, Inc. (the "Company"). The Meeting will take place
on October 24, 2006 at 2:00 p.m. Eastern Time at the offices of HL Investment
Advisors, LLC ("HL Advisors"), 200 Hopmeadow Street, Simsbury, Connecticut
06089.
At the Meeting, shareholders will be asked to vote on the matters listed in the
attached Notice of Special Meeting of Shareholders. As explained in the enclosed
Proxy Statement, the purpose of the Meeting is (i) to vote on the approval of a
sub-advisory agreement between HL Advisors, the Fund's investment manager, and
Hartford Investment Management Company ("Hartford Investment Management"), an
affiliate of HL Advisors, pursuant to which Hartford Investment Management will
serve as an additional sub-adviser to the Fund and manage a portion of the
Fund's assets; and (ii) to transact such other business as may properly come
before the Meeting, or any adjournment(s) or postponement(s) thereof.
We request that you complete the enclosed voting instruction card or proxy card
for the upcoming Meeting. The Company's Board of Directors has reviewed and
approved this proposal and recommends that you vote FOR the proposal. The Proxy
Statement provides more information on the proposed sub-advisory agreement.
Please read it carefully and return your completed voting instruction card or
proxy card in the enclosed, addressed, postage-paid envelope; or take advantage
of the telephonic or internet voting procedures described in the Proxy
Statement. YOUR VOTE IS IMPORTANT. If we do not hear from you after a reasonable
period of time, you may receive a telephone call from a representative of The
Hartford Financial Services Group, Inc. or from our proxy solicitor, MIS, an
ADP Company, reminding you to vote your shares.
Very truly yours,
/s/ David M. Znamierowski
- -------------------------------------
David M. Znamierowski
President and Chief Executive Officer
IMPORTANT INFORMATION
We encourage you to read the enclosed Proxy Statement. However, we thought it
would be helpful to provide brief answers to some questions.
Q. 1. WHAT PROPOSALS ARE SHAREHOLDERS BEING ASKED TO CONSIDER AT THE UPCOMING
SPECIAL MEETING?
A. 1. Shareholders of Hartford SmallCap Growth HLS Fund (the "Fund"), a series
of Hartford HLS Series Fund II, Inc. (the "Company"), are being asked to
consider one proposal (the "Proposal"): to approve a proposed sub-advisory
agreement (the "Agreement") between HL Investment Advisors, LLC ("HL Advisors"),
the Fund's investment manager, and Hartford Investment Management Company
("Hartford Investment Management"), an affiliate of HL Advisors, pursuant to
which Hartford Investment Management will serve as an additional sub-adviser to
the Fund and manage a portion of the Fund's assets. Wellington Management
Company, LLP ("Wellington Management"), the Fund's current sole sub-adviser,
will continue to manage a portion of the Fund's assets.
Q. 2. HOW WILL ADDING HARTFORD INVESTMENT MANAGEMENT AS A NEW SUB-ADVISER
BENEFIT THE FUND AND ITS SHAREHOLDERS?
A. 2. Wellington Management, which currently serves as the Fund's sole
sub-adviser, has limited capacity to manage additional assets in the small-cap
growth strategy. Adding an additional sub-adviser to the Fund will permit the
Fund to remain open to new investments by increasing its capacity for new
assets. The appointment of a new sub-adviser is also expected to benefit Fund
shareholders by: (1) providing existing Fund shareholders with continued access
to the highly demanded small-cap growth asset class within a fund and
operational structure with which they are already familiar; and (2) providing
access to a talented and experienced portfolio manager with a complementary
investment style to the current sub-adviser while achieving greater
diversification.
Q. 3. WHY ARE SHAREHOLDERS BEING ASKED TO APPROVE A NEW SUB-ADVISORY AGREEMENT
WITH HARTFORD INVESTMENT MANAGEMENT?
A. 3. The laws governing mutual funds require a Fund to obtain shareholder
approval before entering into a new advisory or sub-advisory agreement. The Fund
operates pursuant to an order from the U.S. Securities and Exchange Commission
that permits its investment manager to implement new investment sub-advisory
agreements with sub-advisers for the Fund that are not affiliated with the
investment manager with the approval of the Fund's Board of Directors but
without shareholder approval (the "Order"). Under the Order, the investment
manager may not enter into a sub-advisory agreement with a sub-adviser that is
an "affiliated person", as defined in the Investment Company Act of 1940, as
amended, of the Fund or the investment manager without that sub-advisory
agreement being approved by Fund shareholders. Because Hartford Investment
Management is affiliated with HL Advisors, shareholder approval of the proposed
sub-advisory agreement is required.
Q. 4. WILL THE FUND'S INVESTMENT GOAL CHANGE IF THE PROPOSAL IS APPROVED?
A. 4. No. The Fund's investment goal of seeking to maximize short- and long-term
capital appreciation, as well as its policy of investing primarily in small
capitalization companies, will remain the same. However, Hartford Investment
Management may use different strategies to achieve this goal than Wellington
Management currently uses. With Hartford Investment Management's appointment to
manage a portion of the Fund's portfolio, the Fund's investment strategy overall
will reflect a blend of Hartford Investment Management's and Wellington
Management's investment approaches, with each sub-adviser responsible for the
assets allocated to it by HL Advisors. Please refer to the enclosed Proxy
Statement for
information regarding Hartford Investment Management's investment approach and
how it complements Wellington Management's investment approach.
Q. 5. WILL THE PROPOSAL RESULT IN HIGHER FUND EXPENSES?
A. 5. No. The Proposal will not increase Fund expenses. The Fund pays an
advisory fee to HL Advisors and HL Advisors is responsible for paying the
sub-advisory fee to Hartford Investment Management and Wellington Management.
Please refer to the Proxy Statement for further information regarding the
investment advisory fee schedule.
Q. 6. HAS THE BOARD OF DIRECTORS APPROVED THE PROPOSAL?
A. 6. Yes. The Board of Directors has reviewed and approved the Proposal. The
Board recommends that you vote FOR the Proposal.
Q. 7. HOW CAN I VOTE?
A. 7. You can vote:
- By mail: complete and return your proxy card in the enclosed
pre-addressed postage-paid envelope.
- By telephone: call the toll-free number listed on your proxy card and
follow the recorded instructions.
- By internet: log on to the website listed on your proxy card and
follow the on-screen instructions.
Whichever method you choose, please take the time to read the Proxy Statement
before you vote.
Q. 8. WHEN SHOULD I VOTE?
A. 8. Please vote as soon as possible. Representatives of The Hartford or MIS,
an ADP Company, a firm authorized by The Hartford to assist in the solicitation
of proxies, may be contacting you to urge you to vote on this important matter.
Q. 9. WHERE CAN I OBTAIN ADDITIONAL INFORMATION ABOUT THIS PROXY STATEMENT?
A. 9. For information about voting, please call toll free 1-877-333-2297. To
view the Hartford HLS Mutual Funds 2005 Annual Report or a copy of this Proxy
Statement, or to obtain additional information about the Proxy Statement:
For variable life and annuity owners, please go to www.hartfordinvestor.com
(see "Your Vote Counts! Get Your 2006 Proxy Information" under "Points of
Interest" on or after August 21, 2006);
For other retirement programs, please go to www.retire.hartfordlife.com
(see "Your Vote Counts! Get Your 2006 Proxy Information" under "In the News").
Or call: 1-877-372-2935 (if you are a Hartford or Union-Securities variable
annuity owner or a Union-Securities 403b owner); 1-800-800-2000 (if you are a
Union-Securities variable life insurance policy owner); 1-800-476-0499 (if you
are a representative or owner of a Hartford-administered 401k plan);
1-800-528-9009 (if you are a representative or owner of a Hartford-administered
457, 403b or 401a plan); or 1-877-836-5854 (if you are a representative or owner
of any other qualified retirement plan not administered by Hartford).
THE ATTACHED PROXY STATEMENT CONTAINS MORE DETAILED INFORMATION ABOUT THE
PROPOSAL. PLEASE READ IT CAREFULLY.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
A Special Meeting of Shareholders (the "Meeting") of Hartford SmallCap
Growth HLS Fund (the "Fund"), a series of Hartford HLS Series Fund II, Inc. (the
"Company"), will take place on October 24, 2006 at 2:00 p.m. Eastern Time at the
offices of HL Investment Advisors, LLC ("HL Advisors"), 200 Hopmeadow Street,
Simsbury, Connecticut 06089 for the following purposes:
1. To approve a sub-advisory agreement between HL Advisors, the Fund's
investment manager, and Hartford Investment Management Company
("Hartford Investment Management"), an affiliate of HL Advisors,
pursuant to which Hartford Investment Management will serve as an
additional sub-adviser of the Fund and manage a portion of the Fund's
assets; and
2. To transact such other additional matters as may properly come before
the Meeting.
The Board of Directors of the Company recommends that you vote FOR the
proposal listed in this notice. Shareholders of record on July 31, 2006 are
entitled to notice of and to vote at the Meeting.
The Fund issues and sells its shares to separate accounts of certain
insurance companies (the "Separate Accounts") and to qualified retirement plans
(the "Retirement Plans"). The Separate Accounts hold shares of the Fund, which
is a vehicle for funding benefits under flexible premium deferred variable
annuity contracts or flexible premium variable life insurance contracts that are
issued by insurance companies. As the owners of the assets held in the Separate
Accounts, the insurance companies, as well as the Retirement Plans, are the
shareholders of the Fund and are entitled to vote their shares. Pursuant to
applicable laws, the insurance companies vote outstanding shares of the Fund in
accordance with instructions received from the owners of the annuity and life
insurance contracts. In addition to the shareholders of the Fund, this Notice is
being delivered to annuity and life insurance contract owners who do not invest
directly in or hold shares of the Fund, but who, by virtue of their ownership of
the contracts, have a beneficial interest in the Fund as of the record date, so
that they may instruct the insurance companies how to vote the shares of the
Fund that underlies their contracts. Retirement Plan fiduciaries should forward
the proxy materials (or arrange to have the proxy materials forwarded) to the
appropriate plan participants and beneficiaries as required by applicable law
and the plan documents governing the plan.
Please read the enclosed Proxy Statement carefully for information
concerning the proposal to be placed before the Meeting or any adjournments or
postponements thereof. Additional matters would include only matters that were
not anticipated as of the date of the enclosed Proxy Statement.
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE
MEETING, PLEASE FILL IN, SIGN, DATE, AND MAIL THE ENCLOSED VOTING INSTRUCTION
CARD OR PROXY CARD AS PROMPTLY AS POSSIBLE, OR TAKE ADVANTAGE OF THE TELEPHONIC
OR INTERNET VOTING PROCEDURES DESCRIBED IN THE PROXY STATEMENT, IN ORDER TO SAVE
ANY FURTHER SOLICITATION EXPENSE. AN ADDRESSED, POSTAGE-PAID ENVELOPE IS
ENCLOSED.
By order of the Board of Directors,
/s/ Edward P. Macdonald
----------------------------------------
Edward P. Macdonald
Secretary
August 4, 2006
HARTFORD HLS SERIES FUND II, INC.
200 HOPMEADOW STREET
SIMSBURY, CONNECTICUT 06089
HARTFORD SMALLCAP GROWTH HLS FUND
(THE "FUND")
PROXY STATEMENT
August 4, 2006
This proxy statement is furnished in connection with a solicitation of
proxies made by, and on behalf of the Board of Directors (the "Board") of
Hartford HLS Series Fund II, Inc. (the "Company"), in connection with the
Special Meeting of Shareholders of Hartford SmallCap Growth HLS Fund (the
"Fund"), to be held October 24, 2006, at 2:00 p.m., Eastern Time, at the offices
of HL Investment Advisors, LLC ("HL Advisors"), 200 Hopmeadow Street, Simsbury,
Connecticut 06089, and at any adjournment(s) or postponement(s) of the Meeting.
The purpose of the Meeting is set forth in the accompanying Notice. The
approximate mailing date of this Proxy Statement is August 18, 2006. The costs
of solicitation, including the cost of preparing and mailing the Notice of the
Special Meeting of Shareholders and this Proxy Statement, will be paid by HL
Advisors, the Fund's investment manager. Representatives of The Hartford
Financial Services Group, Inc. ("The Hartford") or MIS, an ADP Company ("MIS"),
a firm authorized by The Hartford to assist in the solicitation of proxies and
voting instructions, may contact you to solicit your proxy by mail or by
telephone. As the meeting date approaches, certain Contract Owners, as defined
below, and shareholders of the Fund may receive a telephone call from a
representative of MIS if their votes have not yet been received. Proxies and
voting instructions that are obtained telephonically will be recorded in
accordance with the procedures described below. These procedures are reasonably
designed to ensure that both the identity of the Contract Owner or shareholder
casting the vote and the voting instructions of the Contract Owner or
shareholder are accurately determined.
HL Advisors, the Fund's investment manager, and Hartford Life Insurance
Company ("Hartford Life"), the administrator for the Fund, are principally
located at 200 Hopmeadow Street, Simsbury, Connecticut 06089. Hartford
Securities Distribution Company, Inc., 200 Hopmeadow Street, Simsbury,
Connecticut 06089, acts as the Fund's principal underwriter.
The Fund issues and sells its shares to separate accounts of various
insurance companies (the "Separate Accounts") and certain qualified retirement
plans (the "Retirement Plans"). The insurance companies and the Retirement Plans
are the shareholders of the Fund. The Separate Accounts hold shares of the Fund,
which is a vehicle for funding benefits under flexible premium deferred variable
annuity contracts or flexible premium variable life insurance contracts which
are issued by the insurance companies. Each Separate Account has subaccounts,
some of which invest in the Fund and certain other mutual funds. Owners of the
variable annuity and variable life insurance contracts issued by these insurance
companies ("Contract Owners") allocate the value of their contracts among these
subaccounts. Although the insurance companies are the owners of the assets held
in the Separate Accounts, the Contract Owners may be indirect participants in
the Fund. Under applicable law, the participating insurance companies provide
pass-through voting privileges to the Contract Owners. Contract Owners are asked
to complete a voting instruction card, instructing their respective insurance
companies on how to vote the shares in which they are the indirect participants.
If you own shares beneficially through a Retirement Plan, you should
contact the plan sponsor, trustee, or other administrator for information
regarding your right to provide instructions as to the voting of
Fund shares. If you are a Retirement Plan sponsor, trustee, or other
administrator and are authorized to vote shares held by a Retirement Plan,
please complete the enclosed proxy card and return it in the enclosed envelope.
Contract Owners may revoke their voting instructions at any time until the
voting results are announced at the Meeting by either submitting another voting
instruction card or submitting prior written notice of their revocation to their
respective insurance company. Shareholders may revoke authority to vote their
shares by submitting another proxy or submitting written notice of revocation to
the Secretary of the Company. Unless revoked, properly executed voting
instruction cards or proxy cards that have been returned by Contract Owners or
shareholders without instructions will be voted "FOR" the proposal to approve a
sub-advisory agreement between HL Advisors and Hartford Investment Management
Company ("Hartford Investment Management") pursuant to which Hartford Investment
Management will serve as an additional sub-adviser of the Fund and manage a
portion of the Fund's assets (the "Proposal"). In instances where choices are
specified by the Contract Owners or shareholders in the voting instruction cards
or proxy cards, those Contract Owners' or shareholders' votes will be voted or
the votes will be withheld in accordance with the Contract Owners' or
shareholders' choices. Votes of Contract Owners for which no voting instructions
are received will be voted by an insurance company in the same proportion as the
votes of Contract Owners for which voting instructions are received by such
insurance company. Votes can be cast to approve or disapprove the Proposal.
Abstentions and broker non-votes (proxy cards received by the Company from
brokers or nominees when the broker or nominee has not received instructions
from the beneficial owner or other persons entitled to vote and has no
discretion to vote on a particular matter) will be counted as present for
purposes of determining whether a quorum of shares is present at the Meeting,
and will have the same effect as a vote "AGAINST" the Proposal. So far as the
Board is aware, no matters other than those described in this Proxy Statement
will be acted upon at the Meeting. Should any other matters properly come before
the Meeting calling for a vote of shareholders, the persons named as proxies
intend to vote upon such matters according to their best judgment.
Contract Owners and shareholders may vote by completing and returning the
enclosed voting instruction card or proxy card. Contract Owners and shareholders
may also vote by touchtone telephone or by internet, by following the
instructions on the proxy card. To vote by internet or by telephone, a Contract
Owner or shareholder will need the "control number" that appears on the proxy
card. After inputting this number, the Contract Owner or shareholder will be
prompted to provide their voting instructions on the Proposal. Contract Owners
and shareholders will have an opportunity to review the voting instructions and
make any necessary changes before submitting the voting instructions and
terminating the telephone call or internet link.
In all cases where a telephonic proxy or voting instructions are solicited
by MIS, the MIS representative is required to ask for each Contract Owner's or
shareholder's full name and address, or the zip code or employer identification
number, and to confirm that the Contract Owner or shareholder has received the
proxy materials in the mail. If the Contract Owner or shareholder is a
corporation or other entity, the MIS representative is required to ask for the
person's title and for confirmation that the person is authorized to direct the
voting of the shares. If the information solicited agrees with the information
previously provided to MIS, then the MIS representative will explain the proxy
voting process, read the Proposal listed on the proxy card and ask for the
Contract Owner's or shareholder's instructions on the Proposal. Although the MIS
representative is permitted to answer questions about the process, he or she is
not permitted to recommend to the Contract Owner or shareholder how to vote,
other than to read any recommendation set forth in this Proxy Statement. The MIS
representative will record the Contract Owner's or shareholder's instructions on
the card. Within 72 hours, the Contract Owner or shareholder will be sent a
letter or mailgram to confirm his or her vote and asking the Contract Owner or
shareholder to call the MIS representative immediately if his or her
instructions are not correctly reflected in the confirmation.
Although a Contract Owner's or shareholder's vote may be solicited and
taken by telephone, each Contract Owner and shareholder will also receive a copy
of this Proxy Statement and may vote by mail
2
using the enclosed proxy card or voting instruction card, or by touchtone
telephone or the internet as set forth on the voting instruction and proxy
cards. The last proxy vote received in time to be voted, whether by voting
instruction card or proxy card, touchtone telephone or internet, will be the
vote that is counted and will revoke all previous votes by the Contract Owner or
shareholder.
Only those shareholders owning shares as of the close of business on July
31, 2006 (the "Record Date") may vote at the Meeting or any adjournment(s) or
postponement(s) of the Meeting. Appendix A sets forth the issued and outstanding
shares of the Fund as of the Record Date. Each full share outstanding is
entitled to one vote, and each fractional share outstanding is entitled to a
proportionate share of one vote. As a shareholder, you will not have appraisal
rights in connection with the Proposal described in this Proxy Statement.
The presence, either in person or by proxy, of shareholders owning a
majority of shares of the Fund entitled to vote at the Meeting shall constitute
a quorum. Because Hartford Life and its affiliates are the majority shareholders
of the Fund, their presence at the Meeting in person or proxy will meet the
quorum requirement. If a quorum is not present at the Meeting, or if a quorum is
present but sufficient votes to approve any proposal are not received, the
persons named as proxies may propose one or more adjournments of the Meeting to
permit further solicitation of votes. In determining whether to adjourn the
Meeting, the following factors may be considered: the nature of the proposals
that are the subject of the Meeting, the percentage of votes actually cast, the
percentage of negative votes actually cast, the nature of any further
solicitation, and the information to be provided to shareholders with respect to
the reasons for the solicitation. Any adjournment will require the affirmative
vote of a majority of those shares represented at the Meeting in person or by
proxy. A shareholder vote may be taken for the Proposal in this Proxy Statement
prior to any adjournment provided that there is a quorum. If the Proposal
receives a sufficient number of votes for approval prior to any adjournment, the
Proposal shall be deemed adopted and shall not require any further shareholder
approval at any adjournment or otherwise.
3
PROPOSAL
APPROVAL OF A SUB-ADVISORY AGREEMENT
WITH HARTFORD INVESTMENT MANAGEMENT COMPANY
GENERAL OVERVIEW
The Board is asking shareholders to vote on a proposal to approve, with
respect to Hartford SmallCap Growth HLS Fund (the "Fund"), a sub-advisory
agreement between HL Investment Advisors, LLC ("HL Advisors") and Hartford
Investment Management Company ("Hartford Investment Management") (the
"Agreement"), pursuant to which Hartford Investment Management will serve as an
additional sub-adviser to the Fund and will provide investment sub-advisory
services to the Fund with respect to a portion of the Fund's assets.(1)
HL Advisors serves as the Fund's investment manager pursuant to an
investment management agreement between HL Advisors and the Company on behalf of
the Fund, approved by Fund shareholders on May 31, 2001, as part of the
reorganization of the series of Fortis Series Fund, Inc. into series of the
Company. Pursuant to the investment management agreement, HL Advisors
establishes the Fund's investment program and selects, supervises and evaluates
the sub-adviser or sub-advisers who, in turn, make the Fund's investment
decisions, subject to the oversight of the Fund's Board. HL Advisors recommends
sub-advisers it believes will provide the Fund with high quality investment
services consistent with the Fund's strategy of investing primarily in common
stocks of small capitalization companies with potential for capital
appreciation. HL Advisors is also responsible for the overall monitoring of the
Fund's sub-adviser(s). HL Advisors does not make the day-to-day investment
management decisions for the Fund.
Wellington Management Company, LLP ("Wellington Management") currently
serves as the Fund's sole sub-adviser. Wellington Management is not affiliated
with HL Advisors and discharges its responsibilities subject to HL Advisors'
oversight and supervision. Wellington Management is paid by HL Advisors, and not
by the Fund, from the investment management fees HL Advisors receives from the
Fund.
Wellington Management has told management and the Board that it no longer
has capacity to manage additional assets in the small cap growth strategy for
the Fund. After a review of the current market demands for the small-cap growth
asset class and the limited access to good managers in the small-cap growth
field, HL Advisors recommended that the Board approve the engagement of Hartford
Investment Management to serve as an additional sub-adviser to the Fund
contingent upon shareholder approval of the Agreement. In making this
recommendation, HL Advisors believes that adding Hartford Investment Management
as sub-adviser to the Fund will benefit Fund shareholders by: (1) providing
existing shareholders with continued access to the highly demanded small-cap
growth asset class within a fund and operational structure with which they are
already familiar; and (2) providing access to a talented and experienced
portfolio manager with a complementary investment style to the current
sub-adviser while achieving greater diversification. HL Advisors made the
recommendation to appoint Hartford Investment Management as an additional
sub-adviser to the Fund based on its confidence in Hartford Investment
Management and in the investment expertise of the portfolio management team that
will manage the Fund.
- ----------
(1) Hartford Investment Management currently serves as sub-adviser to several
other funds advised by HL Advisors pursuant to the same Agreement. Pursuant
to its terms, and subject to approval by the relevant fund shareholders,
the Agreement may be modified from time to time to apply to additional
funds for which Hartford Investment Management will serve as sub-adviser.
If the Agreement is approved on behalf of the Fund by the Fund's
shareholders, HL Advisors and Hartford Investment Management will amend the
Agreement to extend it to the Fund.
4
If the Proposal is approved by Fund shareholders, HL Advisors will initially
allocate to Hartford Investment Management all net positive cash flows into the
Fund after March 31, 2006.
The Board, including a majority of those Directors who are not "interested
persons" of the Fund (as that term is defined in the Investment Company Act of
1940, as amended, (the "1940 Act")), the Company or the investment manager
("Independent Directors"), approved HL Advisors' proposal to enter into the
Agreement. The Agreement is subject to approval by the Fund's shareholders. More
information about the Board's considerations is set forth under "Board of
Directors' Considerations."
The 1940 Act requires a fund to obtain shareholder approval of any
investment advisory or investment sub-advisory agreement. The Company has
received, and shareholders have approved reliance upon, an exemptive order from
the U.S. Securities and Exchange Commission that permits HL Advisors to
implement new investment sub-advisory agreements with sub-advisers for the Fund
and to make changes to existing investment sub-advisory agreements with the
approval of the Board but without shareholder approval (the "Order"), as long as
the sub-adviser is not an affiliate of HL Advisors. The Order does not eliminate
the shareholder approval requirement where HL Advisors hires an affiliated
person to serve as sub-adviser to the Fund. Since Hartford Investment Management
is a subsidiary of The Hartford, which also controls HL Advisors, Hartford
Investment Management is affiliated with HL Advisors. Therefore, shareholder
approval of the proposed Agreement, which is described more fully below, is
required. The Board recommends that you vote for the proposal.
DESCRIPTION OF THE AGREEMENT
The following discussion of the terms of the Agreement is qualified in its
entirety by reference to the Agreement, a form of which is attached hereto as
Appendix B.
Under the Agreement, Hartford Investment Management would serve as a
sub-adviser and provide investment sub-advisory services to the Fund with
respect to a portion of the Fund's portfolio. Wellington Management would
continue to serve as a sub-adviser to the Fund with respect to a portion of the
Fund's portfolio. HL Advisors' responsibilities as the Fund's investment manager
would generally remain unchanged. HL Advisors will continue to be responsible
for overseeing and reviewing the performance of the Fund's sub-advisers and will
be responsible for allocating the Fund's assets between the sub-advisers.
If the Proposal is approved, and as set forth in the Agreement, Hartford
Investment Management will perform investment management services with respect
to a portion of the Fund's assets in conformity with the Company's Articles of
Incorporation and By-Laws, each as amended from time to time, the 1940 Act, and
other applicable laws. The Agreement will require Hartford Investment Management
to provide advisory services in accordance with the investment objectives,
policies and restrictions of the Fund as set forth in the Fund's prospectus and
statement of additional information, and in accordance with any investment
guidelines or other instructions received in writing from HL Advisors, and
subject further to such policies and instructions as the Board or HL Advisors
may from time to time establish and deliver to Hartford Investment Management.
The Agreement will provide that, with respect to that portion of the
portfolio allocated to Hartford Investment Management, Hartford Investment
Management, in consultation with HL Advisors as appropriate, will make all
determinations with respect to the investment of Fund assets and the purchase or
sale of portfolio securities. The Agreement requires Hartford Investment
Management to report to the Board at its regular periodic meetings. These
reports would cover Hartford Investment Management's economic outlook and
investment strategy and a discussion of the portfolio activity and the
performance of that portion of the Fund allocated to Hartford Investment
Management. Copies of all such reports would be
5
furnished to HL Advisors for examination and review within a reasonable time
prior to the presentation of such reports to the Company's Board.
Consistent with the terms of the Agreement, Hartford Investment Management
would be permitted, in its discretion, to select broker-dealers that would
execute the purchases and sales of portfolio securities for the Fund. In
selecting broker-dealers, Hartford Investment Management would be required to
use its best efforts to obtain the best net security price available for the
Fund. Additionally, subject to and in accordance with any directions that the
Board may issue from time to time, Hartford Investment Management may also be
authorized to effect individual securities transactions at commission rates in
excess of the minimum commission rates available, if Hartford Investment
Management 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
Hartford Investment Management's overall responsibilities with respect to the
Fund and Hartford Investment Management's other advisory clients. Hartford
Investment Management will promptly communicate to the Board such information
relating to portfolio transactions as it may reasonably request.
The Agreement will not prevent Hartford Investment Management from acting
as investment manager or manager for any other investment companies or other
clients, whether or not the investment objectives or policies of any such other
clients are similar to those of the Fund, provided that the provision of such
services to those other clients does not impair Hartford Investment Management's
ability to provide services to the Fund under the Agreement.
The Agreement will provide that, as compensation for the performance of the
services by Hartford Investment Management, HL Advisors shall, as promptly as
possible after the last day of each calendar quarter, pay Hartford Investment
Management the equivalent of all direct and indirect expenses incurred in the
performance of its duties under this Agreement (indirect expenses may include
an allocation of expenses for various support services for Hartford Investment
Management's operations, such as legal, human resources, accounts payable,
employee benefits and other services). This will be Hartford Investment
Management's sole compensation for sub-advisory services provided to the Fund.
Hartford Investment Management will not be entitled to a fee calculated on the
basis of the Fund's average daily net assets.
Pursuant to the Agreement, Hartford Investment Management will not be
liable for any loss or losses suffered by the Fund by reason of any investment
made by Hartford Investment Management in the performance of its duties under
the Agreement, except for those losses resulting from (i) willful misfeasance,
bad faith or gross negligence on Hartford Investment Management's part in the
performance of its duties or (ii) reckless disregard by Hartford Investment
Management of its obligations under the Agreement.
Subject to shareholder approval, it is expected that the Agreement will
take effect on or about November 13, 2006. The Agreement will provide that it
will remain in effect for its initial two-year term and will continue thereafter
from year to year, if the Board or a majority of the outstanding voting
securities of the Fund, in either case with the support of a majority of the
Independent Directors, specifically approves its continuance at least annually.
The Agreement will provide that it can be terminated at any time, without the
payment of any penalty, by the Board, by a majority of the Fund's outstanding
voting securities, or by HL Advisors, on sixty days' written notice to Hartford
Investment Management. The Agreement will also be terminable by Hartford
Investment Management on sixty days' written notice to HL Advisors, but such
termination would not be effective until (i) HL Advisors shall have contracted
with one or more persons to serve as a successor to Hartford Investment
Management in its role as sub-adviser to the Fund and (ii) those person(s) have
assumed that position. The Agreement will terminate automatically in the event
of its assignment or in the event of an assignment or termination, for any
reason, of the investment management agreement between HL Advisors and the
Company.
The form of the Agreement is attached as Appendix B to this Proxy
Statement. The above description of the terms of the Agreement is qualified in
its entirety by reference to Appendix B.
6
INFORMATION ABOUT HARTFORD INVESTMENT MANAGEMENT COMPANY
Hartford Investment Management, a Delaware corporation with its main
offices located at 55 Farmington Avenue, Hartford, Connecticut 06105, is a
professional money management firm that provides services to investment
companies, employee benefit plans, its affiliated insurance companies and other
institutional accounts. Hartford Investment Management is a wholly owned
subsidiary of The Hartford, which is located at Hartford Plaza, 690 Asylum
Avenue, Hartford, Connecticut 06115. As of June 30, 2006, Hartford Investment
Management had investment management authority over approximately $118 billion
in assets. As of June 30, 2006, Hartford Investment Management provided
sub-advisory services for mutual funds advised by HL Advisors or its affiliate
representing 25 funds.
Currently, Hartford Investment Management is primarily a fixed income
manager, although it also engages in passive equity index management and asset
allocation for certain Hartford-sponsored mutual funds, and in June 2006
commenced active equity management of a portion of two Hartford-sponsored mutual
funds. In 2005, recognizing capacity constraints in various significant actively
managed equity classes, which could negatively affect HL Advisors' ability to
find qualified sub-advisers with sufficient capacity for the Hartford-sponsored
mutual funds, Hartford Investment Management undertook to develop an active
equity management capability. After an extensive search, Hartford Investment
Management hired Hugh Whelan, who will be the portfolio manager for Hartford
Investment Management's portion of the Fund's assets. Mr. Whelan has sixteen
years of investment management experience and currently serves as Hartford
Investment Management's Executive Vice President for Quantitative Strategies.
Prior to joining Hartford Investment Management in 2005, Mr. Whelan was head of
Quantitative Equities at ING where he was responsible for the team managing
large cap, mid cap and small cap quantitative equity strategies and for managing
ING's quantitative equity research group. Prior to 1999, Mr. Whelan was a
quantitative portfolio manager and analyst in ING's fixed income group. Mr.
Whelan earned a B.S. degree in Geology and an M.S. in Petroleum Geology from
Stanford University and an M.B.A. from the University of Pennsylvania's Wharton
School of Finance.
Hartford Investment Management and Mr. Whelan have assembled a
Multi-Discipline Equity Team of portfolio managers, research analysts and other
investment personnel to support Hartford Investment Management's active equity
management function. The core of Hartford Investment Management's
Multi-Discipline Equity Team has been together since 2002 and uses a
quantitative multifactor investment approach to stock selection.
During the Fund's last fiscal year, Hartford Investment Management did not
receive any fees, commissions or other payments from the Fund. Appendix C to
this Proxy Statement sets forth information regarding the principal executive
officers and directors of Hartford Investment Management and the principal
executive officers of the Company. As of June 30, 2006, Hartford Investment
Management sub-advised the following Funds that have investment objectives
similar to the investment objectives of the Fund:
FUND NET ASSETS COMPENSATION RATE(2)
- ---- ---------- -------------------------
The Hartford Small Company Fund $382,802,782.20 Cost of advisory services
Hartford Small Company HLS Fund $1,378,180,928.67 Cost of advisory services
- ----------
(2) As sub-adviser to the funds listed in the above table, Hartford Investment
Management does not receive a management fee calculated on the basis
average daily net assets. Instead, Hartford Investment Management's
compensation is limited to reimbursement for all direct and indirect
expenses incurred in the performance of advisory services. Hartford
Investment Management has not waived, reduced, or otherwise agreed to
reduce its compensation for the funds listed.
7
David M. Znamierowski currently serves as President of Hartford Investment
Management. Mr. Znamierowski is also the President and Chief Executive Officer
of the Company and has been a director of the Company since 2005. No other
officer or director of the Fund is currently an officer, employee, director or
shareholder of Hartford Investment Management. Mr. Znamierowski, Thomas Marra
and Lowndes Smith, the interested directors of the Fund, and each of the Fund's
officers have an equity ownership interest in The Hartford, the parent company
of Hartford Investment Management.
MORE INFORMATION ABOUT ANTICIPATED BENEFITS TO THE FUND
If shareholders approve the Proposal, the Fund will be a "multi-managed"
fund and Wellington Management and Hartford Investment Management will each
manage a portion of the assets of the Fund, as determined by HL Advisors with
oversight by the Fund's Board of Directors. The addition of Hartford Investment
Management as a sub-adviser will permit the Fund to remain open to investments
and increase its capacity for new assets, while decreasing the Fund's reliance
on the investment performance of a single sub-adviser.
Wellington Management will continue to manage its portion of the Fund's
assets in accordance with its current investment objectives, policies and
strategies, as described in the Fund's current prospectus. Like Wellington
Management, Hartford Investment Management will seek to maximize short- and
long-term capital appreciation as its investment goal, through investing
primarily in small capitalization companies, and will evaluate securities using
what is sometimes referred to as a "bottom-up" approach (the use of fundamental
analysis to identify specific securities for purchase or sale). However, it is
expected that Hartford Investment Management's investment strategy will
complement Wellington Management's investment strategy. It is anticipated that
Hartford Investment Management will use a quantitative multifactor approach to
"bottom-up" stock selection, utilizing a broad set of individual fundamental
stock characteristics to model each stock's relative attractiveness, with a
focus on those factors that have been demonstrated historically to drive market
returns. In contrast to Wellington Management's investment strategy of
complementing research with a quantitative analytical approach, Hartford
Investment Management frequently and consistently measures the characteristics
of every stock in the eligible universe and incorporates these measurements in a
rigorous, repeatable process that considers both volatility and correlations. It
is expected that Hartford Investment Management's portfolio for the Fund will
include a larger number of stocks than Wellington Management's portfolio, and
that Hartford Investment Management will use a team of investment professionals
who may invest in different securities than companies targeted by Wellington,
leading to a more diverse portfolio of investments. Accordingly, the Fund's
performance will reflect a blend of Wellington Management's and Hartford
Investment Management's investment strategies and performance, in proportion to
the assets that HL Advisors allocates to each of them. It is possible that the
multiple sub-adviser approach could result in a higher level of portfolio
turnover, resulting in higher brokerage expenses and increased realization of
capital gains.
BOARD OF DIRECTORS' CONSIDERATIONS
Section 15(c) of the Investment Company Act of 1940, as amended (the "1940
Act"), requires that each mutual fund's board of directors, including a majority
of those directors who are not "interested persons" of the mutual fund, as
defined in the 1940 Act ("Independent Directors"), review and approve each new
investment advisory and sub-advisory agreement.
At a meeting held on June 20 and 21, 2006, the Board of Directors of the
Fund, including each of the Independent Directors, voted to approve the
investment sub-advisory agreement between HL Investment
8
Advisors, LLC ("HL Advisors"), and Hartford Investment Management Company
("Hartford Investment Management") (the "Agreement").
In advance of the June meeting, the Board requested, received, and reviewed
written responses from HL Advisors and Hartford Investment Management to
questions posed to them on behalf of the Independent Directors and supporting
materials relating to those questions and responses. The Board also received
in-person presentations from management and the proposed portfolio manager for
the Fund regarding the capabilities of Hartford Investment Management's
multi-discipline equity management team and the associated benefits to the Fund
and its shareholders. The Board's Investment Committee also received an
in-person presentation from the portfolio manager about the team's capabilities
and the associated benefits to shareholders at its meeting on May 9, 2006. In
addition, the Board had previously received information with respect to the Fund
and Hartford Investment Management when Hartford Investment Management was
re-approved as a sub-adviser to certain of the Company's other funds on August
3, 2005, and when Hartford Investment Management was approved as an additional
sub-adviser to one of the Company's equity funds on February 8, 2006.
In determining to approve the Agreement, the Board determined that the
Agreement, including the appointment of Hartford Investment Management as
sub-adviser, was fair and reasonable and in the best interests of the Fund and
its shareholders.
In determining to approve the Agreement, the Board considered the following
categories of material factors, among others, relating to the Agreement.
Nature, Extent and Quality of Services
The Board requested and considered information and data concerning the
nature, extent, and quality of the services to be provided to the Fund by
Hartford Investment Management. The Board considered, among other things, the
terms of the Agreement, the range of services to be provided, and Hartford
Investment Management's organizational structure, systems and personnel. The
Board received information on the background and experience of senior management
and relevant investment and other personnel at Hartford Investment Management,
and the adequacy of the time and attention that they would devote to the Fund.
The Board considered Hartford Investment Management's reputation and overall
financial strength, noting that Hartford Investment Management's current
reputation and the Board's past experience with Hartford Investment Management
was predominantly based on Hartford Investment Management's performance as a
fixed income manager. The Board also considered the experience and reputation of
equity personnel hired by Hartford Investment Management to service the Fund,
and the level of support provided by the organization as a whole. The Board and
the Investment Committee met with Hugh Whelan, the proposed portfolio manager
for the Fund. The Board considered HL Advisors' and Hartford Investment
Management's investments in infrastructure in light of increased regulatory
requirements and the needs of Hartford Investment Management's proposed active
equity management function.
The Board also requested and evaluated information concerning Hartford
Investment Management's regulatory and compliance environment. Taking note that
such material was recently reviewed in August 2005 in connection with the
renewal of Hartford Investment Management's agreements with respect to certain
of the Company's other funds, the Board focused on regulatory and compliance
matters particular to the management of equity securities as opposed to fixed
income securities. In this regard, the Board requested and reviewed information
on Hartford Investment Management's compliance policies and procedures,
compliance history, and reports from the Fund's Chief Compliance Officer on
Hartford Investment Management's compliance with applicable laws and
regulations, including its responses to regulatory developments and compliance
issues raised by regulators. The Board also noted HL Advisors' and Hartford
Investment Management's support of the Company's compliance control structure,
particularly
9
the resources devoted by HL Advisors and Hartford Investment Management in
support of the Company's obligations pursuant to Rule 38a-1 under the 1940 Act.
With respect to the day-to-day portfolio management services to be provided
by Hartford Investment Management, the Board considered the quality of Hartford
Investment Management's investment personnel (including its ability to attract
and retain qualified investment professionals); its investment philosophy and
process (and adherence to that philosophy and process); and its investment
research capabilities and resources, performance record, and trade execution
capabilities and experience. The Board noted the quality of the presentations to
and communications with the Board, and responsiveness to Board inquiries, of
Hartford Investment Management, including in particular Mr. Whelan and his team
and senior management of Hartford Investment Management in their in-person
discussions with the Board and their discussions with the Investment Committee.
The Board recognized that HL Advisors is responsible for the overall management
of the Fund, provides investment advisory services in connection with selecting,
monitoring and supervising the Fund's sub-advisers, and had recommended to the
Board that Hartford Investment Management be appointed as a sub-adviser to the
Fund.
In considering this information, the Board evaluated not only the
information presented to the Board and the Investment Committee in connection
with its consideration of the Agreement, but also the Board's experience through
past interactions with HL Advisors and Hartford Investment Management. Based on
these considerations, the Board concluded that it was satisfied with the nature,
extent and quality of the services to be provided to the Fund by HL Advisors and
Hartford Investment Management.
Performance
The Board considered the investment performance of the Fund as managed by
Wellington Management. In this regard, the Board considered information and
materials provided to the Board from HL Advisors comparing the Fund's investment
performance over various periods of time with appropriate benchmark indices, and
with a performance universe of funds selected by Lipper, Inc., an independent
provider of investment company data ("Lipper"), which demonstrated that the Fund
had performed well under Wellington Management's management.
As Hartford Investment Management does not have a performance track record
for active equity management, HL Advisors and Hartford Investment Management
presented information regarding the performance record of funds managed by Mr.
Whelan for his previous employer. This information included the performance
record for other equity funds for which Mr. Whelan served as portfolio manager
between April 2000 and November 2005. The Board reviewed materials that compared
the performance of funds previously managed by Mr. Whelan and his team to the
performance of appropriate benchmarks and other matrices as well as to a
universe of funds selected by Lipper. HL Advisors and Hartford Investment
Management provided additional information about the broad range of Mr. Whelan's
and his team's recent investment experience and about their investment
philosophy and process. The Board considered HL Advisors' representations and
judgment that although Mr. Whelan's team has not previously managed a small cap
growth fund using the proposed quantitative strategy, the team has demonstrated
its ability to do so by successfully managing small cap assets in another
strategy and successfully using a similar quantitative strategy in different
assets classes.
Based on these considerations, the Board concluded that, while there could
be no guarantee of future results, the Board was satisfied that Hartford
Investment Management has the capability of providing satisfactory investment
performance for the Fund.
Costs of the Services and Profitability of HL Advisors and Hartford Investment
Management
10
The Board reviewed information regarding HL Advisors' and Hartford
Investment Management's costs to provide investment management and related
services to the Fund and the profitability to them from managing the Fund. The
Board considered information related to both HL Advisors and Hartford Investment
Management because it was proposed that Hartford Investment Management be
reimbursed for its costs rather than receive a set fee, with the result that any
profitability from managing the Fund would be realized only with respect to HL
Advisors. The Board also had information about the profitability to HL Advisors
and its affiliates from all services provided to the Fund and all aspects of its
relationships with the Fund. In evaluating HL Advisors' profitability, the Board
considered that initially HL Advisors did not anticipate making a profit on the
portion of the Fund's assets allocated to Hartford Investment Management, and
that future profitability to HL Advisors would depend on the growth of Hartford
Investment management's equity assets under management. The Board considered
statements by HL Advisors that HL Advisors' profitability from the Fund is not
expected to increase over the course of the next year.
The Board reviewed with HL Advisors the assumptions and allocation methods
used in preparing the cost and profitability data provided to the Board. The
Board recognized that allocation methods are inherently subjective, and
different methods may be reasonable although they lead to different results. The
Board noted the difficulty in obtaining reliable comparative data about adviser
profitability, since such information is not generally publicly available and is
impacted by numerous factors, including the structure of an adviser's
organization, the types of funds it manages, and the adviser's capital structure
and costs of capital. The Board considered the profitability of HL Advisors'
relationship with the Fund on a pre-tax basis without regard to distribution
expenses.
Based on these considerations, the Board concluded that the profits
anticipated to be realized by HL Advisors, Hartford Investment Management and
their affiliates from their relationships with the Fund would not be excessive.
Comparison of Fees and Services Provided by HL Advisors and Hartford Investment
Management
The Board considered comparative information with respect to the investment
management fees to be paid by the Fund to HL Advisors and its affiliates. In
this regard, the Board received information from HL Advisors and Hartford
Investment Management relating to the management fees, sub-advisory fees, and
total operating expenses for the Fund. HL Advisors also referenced information
comparing the Fund's management fees and total expense ratio relative to those
of a peer group of funds identified by Lipper as being in the small
capitalization growth category. The Board considered that according to the
information provided by Lipper, the proposed management fee is below the median
and average fee for the Fund's peer group at all asset levels. While the Board
recognized that comparisons between the Fund and peer funds are imprecise, given
the differing service levels and characteristics of mutual funds, and the
different business models and cost structures of advisers, the comparative
information assisted the Board in evaluating the reasonableness of the Fund's
management advisory and sub-advisory fees.
In considering the reasonableness of the Fund's fees and total expense
ratios, the Board particularly considered that the overall management fee for
the Fund would remain the same under the Proposal and that the advisory fee the
Fund pays HL Advisors will not change, as described in these proxy materials
under the caption "Fees and Expenses." The Board noted that because HL Advisors
is responsible for paying the sub-advisory fee to Hartford Investment Management
and Wellington Management, approval of the Proposal would not increase fund
expenses.
Based on these considerations, and after taking into account the fee
arrangement described above, the Board concluded that the comparative
information reviewed indicates that the Fund's management fee and sub-advisory
fee and total operating expenses are within a range that is competitive and, in
conjunction with the information about quality of services, profitability,
economies of scale, and other matters discussed, supports the conclusion that
these fees and expenses are reasonable.
11
Economies of Scale
The Board considered the extent to which economies of scale would be
realized as the Fund grows and whether the fee levels reflect these economies of
scale for the benefit of the Fund's investors.
The Board reviewed the breakpoints in the management fee schedule, which
reduce fees as Fund assets grow over time. These breakpoints provide economies
of scale to the Fund and its shareholders in that, as the Fund grows, its
effective management fee rate declines. The Board recognized that the Fund would
continue to benefit from economies of scale with assets beyond the last
breakpoint, because additional assets are charged the lowest breakpoint fee,
resulting in a lower overall effective management fee rate. The Board considered
that the Fund may achieve some economies as certain fixed expenses are spread
over a larger asset base, noting that there is no precise way to measure such
economies, and that certain expenses do not necessarily decrease as assets
increase. The Board noted that increasing asset capacity and keeping the Fund
open to new investments increased the likelihood that asset growth in the Fund
would enable shareholders to benefit from the breakpoints in the management fee
schedule.
The Board received information regarding HL Advisors' and Hartford
Investment Management's realization of economies of scale with respect to the
Fund. The Board considered representations from HL Advisors that the initial
start-up costs Hartford Investment Management would incur in building its equity
management capability relating to the Fund would be high relative to the small
amount of assets under management. However, the Board considered that HL
Advisors and Hartford Investment Management were likely to realize some
economies of scale over time as Hartford Investment Management's equity assets
under management increased, which the Board would consider in determining
whether to renew the agreement on an annual basis.
After considering all of the information available to it, the Board
concluded that it was satisfied with the extent to which economies of scale
would be shared for the benefit of the Fund's investors, based on currently
available information and the effective advisory fees and expense ratios for the
Fund at its current and reasonably anticipated asset levels. The Board noted,
however, that it would continue to monitor future growth in Fund assets and the
appropriateness of additional breakpoints.
Other Benefits
The Board considered information regarding other benefits to HL Advisors,
Hartford Investment Management and their affiliates from their relationships
with the Fund. The Board considered Hartford Investment Management's statements
that Hartford Investment Management was undertaking a review of its soft dollar
practices in light of the recent addition of equity management capability, but
that it had determined that at present Hartford Investment Management will
utilize soft dollars to obtain only: (i) brokerage services; (ii) research
created and provided by a broker-dealer involved in effecting a trade (i.e.,
research provided by a full service broker-dealer, or provided by a
broker-dealer to which a portion of a trade is directed for the purpose of
obtaining access to the research, in either case on a bundled basis); and (iii)
access to management personnel. The Board considered Hartford Investment
Management's representations that Hartford Investment Management will not at
present utilize soft dollars to obtain research from parties who have no role in
effecting a trade, although Hartford Investment Management's practices could
change in the future. The Board considered that these soft dollar practices
would benefit Hartford Investment Management by providing it with research that
could be utilized with its other active equity clients. The Board also
considered that the following companies, which are affiliates of Hartford
Investment Management, provide services to the Fund and receive compensation
from the Fund:
- Hartford Life Insurance Company provides administrative and fund
accounting services to the Fund and receives administrative and fund
accounting fees.
12
- The Fund currently pays the cost of certain legal services in support
of the Fund provided by personnel of Hartford Life Insurance Company,
but it is expected that such cost will be absorbed by Hartford Life
Insurance Company as of January 1, 2007.
- Hartford Securities Distribution Company, Inc., serves as the Fund's
principal underwriter and receives 12b-1 fees from the Fund.
- Hartford Investor Services Company, LLC, the Fund's transfer and
dividend disbursing agent is reimbursed for out-of-pocket expenses and
other costs associated with the services it provides.
- Hartford Administrative Services Company, the Fund's sub-transfer
agent, receives transfer agency compensation from the Fund.
The Board considered that, because HL Advisors intends to allocate to
Hartford Investment Management new inflows of assets into the Fund, HL Advisors
and Hartford Investment Management would benefit from the Fund's existing
performance record.
* * * * *
Based upon its review of these various factors, among others, the Board
concluded that it is in the best interests of the Fund and its shareholders to
approve the Agreement with Hartford Investment Management. In reaching this
decision, the Board did not assign relative weights to the factors discussed
above or deem any one or group of them to be controlling in and of themselves.
In connection with their deliberations, the Independent Directors met with
independent legal counsel to review the relevant materials and consider their
responsibilities under relevant laws and regulations.
REQUIRED VOTE
Approval of the Agreement by the Fund's shareholders requires an
affirmative vote of the lesser of (i) 67% or more of the Fund's shares present
at the Meeting, if more than 50% of the outstanding shares of the Fund are
present or represented by proxy, or (ii) more than 50% of the outstanding shares
of the Fund. Unless otherwise instructed, the proxies will vote properly
executed proxy cards and voting instruction cards FOR the approval of the
Proposal.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE PROPOSAL.
OTHER MATTERS
Management does not intend to present any business to the Meeting not
mentioned in this Proxy Statement and currently knows of no other business to be
presented. If any other matters are brought before the Meeting, the persons
named as proxies will vote on such matters in accordance with their judgment of
the best interests of the Company.
BENEFICIAL OWNERS
As of June 30, 2006, all directors and officers as a group owned less than
1% of the outstanding shares of each class of the Fund's shares. As of June 30,
2006, to the knowledge of the Company, no person
13
owned beneficially more than 5% of the outstanding shares of any class of shares
of the Fund, except as listed in Appendix D.
As of June 30, 2006, none of the Independent Directors (or their immediate
family members) had share ownership in securities of the Company's investment
manager or principal underwriter or in an entity controlling, controlled by or
under common control with the investment manager or principal underwriter (not
including registered investment companies).
FEES AND EXPENSES
The Fund pays HL Advisors an investment advisory fee at the following
annual rates (calculated as a percentage of the Fund's average daily net
assets):
AVERAGE DAILY NET ASSETS ANNUAL RATE
- ------------------------ -----------
First $100 million 0.70%
Over $100 million 0.60%
As of June 30, 2006, net assets in the Fund were $952,528,510.10.
HL Advisors will pay all expenses relating to this Notice and Proxy
Statement and the Meeting, including the printing, mailing, solicitation and
vote tabulation expenses and out-of-pocket expenses.
The companies listed below, which are affiliates of Hartford Investment
Management, provide services to the Fund, and will continue to do so whether or
not Fund shareholders approve the Agreement with Hartford Investment Management.
HL Advisors provides investment advisory services to the Fund. For the
fiscal year ended December 31, 2005, the Fund paid HL Advisors $5,136,322.
Hartford Life provides administrative services to the Fund. The management fee
paid by the Fund to HL Advisors covers, in addition to investment advisory
services, certain administrative services provided by Hartford Life.
Hartford Life also provides fund accounting services to the Fund. For the
fiscal year ended December 31, 2005, the Fund paid no reimbursement or
compensation to Hartford Life for fund accounting services.
In addition, the Fund pays the cost of certain legal services in support of
the Fund provided by personnel of Hartford Life. For the fiscal year ended
December 31, 2005, the Fund paid Hartford Life a total of $2,410 for such
services.
Hartford Securities Distribution Company, Inc ("HSD") serves as the Fund's
principal underwriter and receives 12b-1 fees from the Fund. As underwriter, HSD
is responsible for the sale and distribution of Fund shares. For the fiscal year
ended December 31, 2005, the Fund paid HSD a total of $593,907 in 12b-1 fees.
Hartford Investor Services Company, LLC ("HISC") serves as transfer and
dividend disbursing agent for the Fund. HISC issues and redeems shares of the
Fund and disburses any dividends declared by the Fund. For its services, HISC is
entitled to be reimbursed for out-of-pocket expenses and other costs associated
with the services it provides to the Fund, including costs invoiced by
sub-contractors. HISC has entered into an agreement with Hartford Administrative
Services Company ("HASCO"), whereby HASCO
14
performs certain sub-transfer agency services, including acting as dividend
disbursement agent, in connection with investments in the Fund by qualified
retirement plans.
For the fiscal year ended December 31, 2005, the Fund paid HISC a total of
$36,422.59 which HISC in turn paid HASCO for sub-transfer agency services
provided to the Fund.
SHAREHOLDER MAILINGS
A COPY OF THE COMPANY'S MOST RECENT ANNUAL REPORT AND THE MOST RECENT
SEMI-ANNUAL REPORT SUCCEEDING THE ANNUAL REPORT, IF ANY, OR A COPY OF THE
PROSPECTUS OR PROXY, IS AVAILABLE UPON REQUEST, AND WITHOUT CHARGE.
If you would like to view a copy on the internet, for variable life and
annuity owners, please go to www.hartfordinvestor.com (see "Your Vote Counts!
Get Your 2006 Proxy Information" under "Points of Interest"); or for other
retirement programs, please go to www.retire.hartfordlife.com (see "Your Vote
Counts! Get Your 2006 Proxy Information" under "In the News"). Alternatively, if
you would like to receive a copy, please contact the Fund at 200 Hopmeadow
Street, Simsbury, Connecticut 06089, or call 1-877-372-2935, if you are a
Hartford or Union-Securities variable annuity owner or a Union-Securities 403b
owner; 1-800-800-2000, if you are a Union-Securities variable life insurance
policy owner; 1-800-476-0499, if you are a representative of a
Hartford-administered 401k plan; 1-800-528-9009, if you are a representative of
a Hartford-administered 457, 403b or 401a plan; or 1-877-836-5854, if you are a
representative of a qualified retirement plan that is not administered by
Hartford; and a copy will be sent, without charge, by first class mail within
three business days of your request.
SHAREHOLDER PROPOSALS
The Fund is not required to hold annual meetings of shareholders and
currently does not intend to hold such meetings, unless shareholder action is
required in accordance with the 1940 Act. To be considered for inclusion in the
proxy statement at any subsequent meeting of shareholders, a shareholder
proposal must be submitted to the Fund at the address above at a reasonable time
before the proxy statement for that meeting is mailed. Whether a proposal is
included in the proxy statement will be determined in accordance with applicable
federal and state laws. The timely submission of a proposal does not guarantee
its inclusion.
By order of the Board of Directors,
/s/ Edward P. Macdonald
----------------------------------------
Edward P. Macdonald
Secretary
August 4, 2006
15
[FORM OF PROXY CARD]
EVERY SHAREHOLDER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY
HARTFORD SMALLCAP GROWTH HLS FUND
C/O PROXY TABULATOR
P.O. BOX 9112
FARMINGDALE, NY 11735
VOTING BY TELEPHONE. Call toll-free 1-888-221-0697 and follow the
recorded instructions.
VOTING BY INTERNET. Log on to www.proxyweb.com and follow the on-screen
instructions.
VOTING BY MAIL. Complete and return your proxy card in the addressed
envelope.
If you vote by telephone or internet, you do not need to mail your proxy.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF HARTFORD HLS
SERIES FUND II, INC. ON BEHALF OF HARTFORD SMALLCAP GROWTH HLS FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 24, 2006
The undersigned appoints Tamara Fagely, Edward Macdonald and Michael Phillips or
each of them separately with power to act without the other and with the right
of substitution in each, the proxies of the undersigned (the "Proxies"), to
vote, as designated herein, all shares of Hartford SmallCap Growth HLS Fund (the
"Fund") held by the undersigned on July 31, 2006, at a Special Meeting of
Shareholders (the "Meeting"), to be held at the offices of HL Investment
Advisors, LLC, 200 Hopmeadow Street, Simsbury, Connecticut, on October 24, 2006
at 2:00 p.m., Eastern Time, and at any adjournments or postponements thereof,
upon the matters on the reverse as set forth in the Notice of Special Meeting of
Shareholders and Proxy Statement, with all powers the undersigned would possess
if present in person.
By executing this proxy, the undersigned revokes all previous proxies with
respect to the Meeting and acknowledges receipt of the Notice of Special Meeting
of Shareholders and Proxy Statement. This proxy may be revoked at any time
before it is exercised by giving written notice of revocation to the Secretary
of the Fund or by executing a superceding proxy.
Date
-----------------------------------
----------------------------------------
Signature(s) (Please sign in box)
Please sign exactly as name appears to
the left. When signing as attorney,
executor, administrator, trustee, or
guardian, please give full title as
such. If signing for a corporation,
please sign in full corporate name by
authorized person. If signing for a
partnership, please sign in partnership
name by authorized person.
16
THIS PROXY WILL BE VOTED AS INSTRUCTED ON THE MATTER SET FORTH BELOW. IT IS
UNDERSTOOD THAT IF NO CHOICE IS SPECIFIED, THIS PROXY WILL BE VOTED "FOR" SUCH
MATTER.
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS OR POSTPONEMENTS OF
THE MEETING. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE RECOMMENDATION OF THE
BOARD OF DIRECTORS, SIMPLY SIGN AND DATE THIS PROXY CARD AND RETURN IT IN THE
ENVELOPE PROVIDED.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
[ ] [ ] [ ] PROPOSAL TO APPROVE A SUB-ADVISORY AGREEMENT WITH
FOR AGAINST ABSTAIN HARTFORD INVESTMENT MANAGEMENT COMPANY.
PLEASE VOTE, SIGN, DATE AND PROMPLY RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE.
THANK YOU!
17
[FORM OF VOTING INSTRUCTION CARD]
EVERY CONTRACT OWNER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR
VOTING INSTRUCTIONS TODAY
HARTFORD SMALLCAP GROWTH HLS FUND
C/O PROXY TABULATOR
P.O. BOX 9112
FARMINGDALE, NY 11735
VOTING BY TELEPHONE. Call toll-free 1-888-221-0697 and follow the
recorded instructions.
VOTING BY INTERNET. Log on to www.proxyweb.com and follow the on-screen
instructions.
VOTING BY MAIL. Complete and return your voting instruction card in the
addressed envelope.
THESE VOTING INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE
INSURANCE COMPANY LISTED BELOW
VOTING INSTRUCTIONS FOR SPECIAL SHAREHOLDERS MEETING
TO BE HELD ON OCTOBER 24, 2006
[INSURANCE NAME]
HARTFORD SMALLCAP GROWTH HLS FUND
The undersigned is the owner of a variable annuity or variable insurance
contract issued by the above-referenced Insurance Company. (The issuer of such
contract being referred to herein as the "Issuer.") The undersigned hereby
instructs the Issuer to represent and vote, as designated herein, the number of
shares of Hartford SmallCap Growth HLS Fund (the "Fund") represented by the
number of votes attributable to the undersigned's variable annuity contract or
variable insurance contract as of July 31, 2006 at a Special Meeting of
Shareholders (the "Meeting") to be held at the offices of HL Investment
Advisors, LLC, 200 Hopmeadow Street, Simsbury, Connecticut, on October 24, 2006
at 2:00 p.m., Eastern Time, and at any adjournments or postponements thereof,
upon the matter on the reverse side as set forth in the Notice of Special
Meeting of Shareholders and Proxy Statement.
By executing these voting instructions, the undersigned revokes all previous
voting instructions with respect to the Meeting and acknowledges receipt of the
Notice of Special Meeting of Shareholders and Proxy Statement.
In its discretion, the Issuer is authorized to vote upon such other business as
may properly come before the Meeting and any adjournments or postponements of
the Meeting unless otherwise prohibited by the undersigned. Contract and policy
owners wishing to vote in accordance with the Board of Directors' recommendation
need only sign and date this voting instruction form and return it in the
envelope provided.
Date
-----------------------------------
----------------------------------------
Signature(s) (Please sign in box)
Please sign exactly as name appears to
the left. When signing as attorney,
executor, administrator, trustee, or
guardian, please give full title as
such. If signing for a corporation,
please sign in full corporate name by
authorized person. If signing for a
partnership, please sign in partnership
name by authorized person.
18
EVERY CONTRACT OWNER'S VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN YOUR
VOTING INSTRUCTIONS TODAY
THESE VOTING INSTRUCTIONS WILL BE VOTED AS INSTRUCTED ON THE MATTER SET FORTH
BELOW. IT IS UNDERSTOOD THAT IF NO CHOICE IS SPECIFIED, THESE VOTING
INSTRUCTIONS WILL BE VOTED "FOR" SUCH MATTER. UPON ALL OTHER MATTERS, ISSUER
SHALL VOTE ACCORDING TO ITS BEST JUDGMENT.
VOTES OF CONTRACT AND POLICY OWNERS FOR WHICH NO VOTING INSTRUCTIONS ARE
RECEIVED WILL BE VOTED IN THE SAME PROPORTION AS THE VOTES OF CONTRACT AND
POLICY OWNERS FOR WHICH VOTING INSTRUCTIONS ARE RECEIVED.
PLEASE FILL IN BOX(ES) AS SHOWN USING BLACK OR BLUE INK OR NUMBER 2 PENCIL. [X]
PLEASE DO NOT USE FINE POINT PENS.
[ ] [ ] [ ] PROPOSAL TO APPROVE A SUB-ADVISORY AGREEMENT WITH
FOR AGAINST ABSTAIN HARTFORD INVESTMENT MANAGEMENT COMPANY.
PLEASE VOTE, SIGN, DATE AND PROMPTLY RETURN YOUR VOTING INSTRUCTIONS IN THE
ENCLOSED ENVELOPE. THANK YOU!
19
APPENDIX A
FUND SHARES OUTSTANDING ON JULY 31, 2006
HARTFORD SMALLCAP GROWTH HLS FUND
CLASS SHARES OUTSTANDING ON RECORD DATE
----- ---------------------------------
Class IA 33,836,464.98
Class IB 11,651,469.30
Total 45,487,934.28
20
APPENDIX B
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
This Amended and Restated Investment Services Agreement ("Agreement") made
by and between HL Investment Advisors, LLC, a Connecticut limited liability
company ("HL Advisors") and Hartford Investment Management Company, a Delaware
corporation ("Hartford Investment Management").
WHEREAS, HL Advisors has entered into an agreement for the provision of
investment management services (the "Principal Advisory Contract") to the
Hartford HLS Series Fund II, Inc. (the "Company"), and,
WHEREAS, HL Advisors wishes to engage Hartford Investment Management to
provide investment management services to each series of shares of the Company
listed on Attachment A (each a "Portfolio" and together the "Portfolios"), and
WHEREAS, Hartford Investment Management is willing to perform such services
on behalf of each Portfolio 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. HL Advisors hereby employs Hartford Investment Management to provide
investment management services with respect to the assets of the Portfolio
and to perform the services hereinafter set forth subject to the terms and
conditions of the investment objectives, policies and restrictions of the
Portfolio, and Hartford Investment Management hereby accepts such
employment and agrees during such period to assume the obligations herein
set forth for the compensation herein provided.
2. Hartford Investment Management shall evaluate and implement an investment
program appropriate for the Portfolio which shall be amended and updated
from time to time as financial and other economic conditions change as
determined by HL Advisors and Hartford Investment Management.
3. Hartford Investment Management, in consultation with HL Advisors when
appropriate, will make all determinations with respect to the investment of
the assets of the Portfolio 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 Company'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 Portfolio's securities should be exercised.
4. Hartford Investment Management will regularly furnish reports with respect
to the Portfolio at periodic meetings of the Company's Board of Directors
and at such other times as may be reasonably requested by the Company's
Board of Directors, which reports shall include Hartford Investment
Management's economic outlook and investment strategy and a discussion of
the portfolio activity and the performance of the Portfolio since the last
report. Copies of all such
21
reports shall be furnished to HL Advisors for examination and review within
a reasonable time prior to the presentation of such reports to the
Company's Board of Directors.
5. Hartford Investment Management shall manage the Portfolio in conformity
with the Company's Articles of Incorporation and By-laws, each as amended
from time to time, and the Investment Company Act of 1940, as amended,
other applicable laws, and to the investment objectives, policies and
restrictions of the Portfolio as set forth in the Portfolio's prospectus
and statement of additional information, or any investment guidelines or
other instructions received in writing from HL Advisors, and subject
further to such policies and instructions as the Company's Board of
Directors may from time to time establish and deliver to Hartford
Investment Management.
6. Hartford Investment Management will select the brokers or dealers that will
execute the purchases and sales of portfolio securities for the Portfolio
and place, in the name of the Portfolio or its nominees, all such orders.
When placing such orders, Hartford Investment Management shall use its best
efforts to obtain the best net security price available for the Portfolio.
Subject to and in accordance with any directions that the Board of
Directors may issue from time to time, Hartford Investment Management may
also be authorized to effect individual securities transactions at
commission rates in excess of the minimum commission rates available, if
Hartford Investment 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 Hartford Investment Management's
overall responsibilities with respect to the Portfolio and Hartford
Investment 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. Hartford Investment
Management will promptly communicate to the Board of Directors such
information relating to portfolio transactions as they may reasonably
request.
7. As compensation for the performance of the services by Hartford Investment
Management hereunder, HL Advisors shall, as promptly as possible after the
last day of each calendar year quarter, pay Hartford Investment Management
the equivalent of all direct and indirect expenses incurred in the
performance of its duties under this Agreement.
8. Hartford Investment 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 Hartford Investment Management shall have
acted in good faith and with due care; provided, however, that no provision
in this Agreement shall be deemed to protect Hartford Investment Management
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. (a) This Amended and Restated Investment Services Agreement shall be
effective on April 30, 2002. This Agreement shall continue in effect for
the same term as the Principal Advisory Contract and shall be submitted to
the Company's Board of Directors for reapproval at the same time as the
Principal Advisory Contract. 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 the 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 the Portfolio, and (2) in either event, by the vote of
a majority of the members of the
22
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 with respect to the Portfolio at
any time without the payment of any penalty either by vote 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, or by HL Advisors on sixty days'
prior written notice to Hartford Investment Management, (2) shall
immediately terminate in the event of its assignment, (3) may be terminated
by Hartford Investment Management on sixty days' prior written notice to HL
Advisors, but such termination will not be effective until HL Advisors
shall have contracted with one or more persons to serve as a successor to
Hartford Investment Management for the Portfolio (or HL Advisors or an
affiliate of HL Advisors agrees to manage the Portfolio) and such person(s)
shall have assumed such position, and (4) will terminate automatically upon
termination of the investment management agreement between HL Advisors and
the Company.
(c) As used in this Agreement, the terms "assignment," "interested parties"
and "vote of a majority of the Company's outstanding voting securities"
shall have the 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 provided by each party.
10. Nothing in this Agreement shall limit or restrict the right of any partner,
officer, or employee of Hartford Investment 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
Hartford Investment Management to engage in any other business or to render
services of any kind to any other corporation, firm, individual or
association.
11. It is the intention of the parties hereto that by this Agreement Hartford
Investment Management shall provide HL Advisors with such investment
management and advisory services as may be required by HL Advisors in
managing and advising the Portfolio pursuant to the terms of the Principal
Advisory Contract. No provision of this Agreement shall be construed or
interpreted to grant Hartford Investment Management any right or authority
not granted to HL Advisors under the Principal Advisory Contract, or to
impose on Hartford Investment Management any duty or obligation not
otherwise imposed on HL Advisors under the Principal Advisory Contract.
12. HL Advisors agrees that neither it nor any affiliate of HL Advisors will
use Hartford Investment Management's name or refer to Hartford Investment
Management or Hartford Investment Management's clients in marketing and
promotional materials without prior notification to and authorization by
Hartford Investment Management, such authorization not to be unreasonably
withheld.
13. 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.
23
14. 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.
15. 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the 30th day of April, 2002.
HL INVESTMENT ADVISORS, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
HARTFORD INVESTMENT MANAGEMENT COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
FORM OF AMENDMENT TO INVESTMENT SUB-ADVISORY AGREEMENT
Pursuant to the Investment Services Agreement between HL Investment
Advisors, LLC, and Hartford Investment Management Company dated April 30, 2002
(the "Agreement"), the following fund is hereby included in the Agreement as a
Portfolio. All provisions in the Agreement shall apply to the management of the
new fund.
- Hartford SmallCap Growth HLS Fund
This amended Agreement is effective for a period of two years from the date
hereof and shall continue in effect thereafter in accordance with the provisions
of Section 9 of the Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed on __ day of _____, 2006.
HL INVESTMENT ADVISORS, LLC
By:
------------------------------------
Name:
----------------------------------
24
Title:
----------------------------------
HARTFORD INVESTMENT MANAGEMENT COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
25
APPENDIX C
PRINCIPAL EXECUTIVE OFFICERS AND DIRECTORS OF HARTFORD INVESTMENT MANAGEMENT
COMPANY
POSITION AND PRINCIPAL
NAME OCCUPATION ADDRESS
---- ---------------------- -------
David M. Znamierowski President and Director 55 Farmington Avenue
Hartford, CT 06105
Kevin M. Scarrozzo Executive Vice President and 55 Farmington Avenue
Chief Financial Officer Hartford, CT 06105
Edmund V. Mahoney Senior Vice President and 55 Farmington Avenue
Chief Compliance Officer Hartford, CT 06105
Leonard J. Saltiel Chief Operating Officer, 55 Farmington Avenue
Managing Director and Director Hartford, CT 06105
Andrew W. Kohnke Managing Director 55 Farmington Avenue
Hartford, CT 06105
M. Timothy Corbett Managing Director and Director 55 Farmington Avenue
Hartford, CT 06105
William H. Davison, Jr. Managing Director and Director 55 Farmington Avenue
Hartford, CT 06105
Nasri A. Toutoungi Managing Director 55 Farmington Avenue
Hartford, CT 06105
Michael J. Bacevich Managing Director 55 Farmington Avenue
Hartford, CT 06105
William P. Meaney Managing Director 55 Farmington Avenue
Hartford, CT 06105
David N. Levenson Managing Director 55 Farmington Avenue
Hartford, CT 06105
Ronald A. Mendel Managing Director 55 Farmington Avenue
Hartford, CT 06105
Walter F. Garger Secretary and Chief Legal 55 Farmington Avenue
Officer Hartford, CT 06105
26
PRINCIPAL EXECUTIVE OFFICERS OF HARTFORD HLS SERIES FUND II, INC.
POSITION AND PRINCIPAL
NAME OCCUPATION ADDRESS
---- ---------------------- -------
David M. Znamierowski President, Chief Executive c/o Hartford Mutual Funds
Officer and Director P.O. Box 2999
Hartford, CT 06104-2999
Tamara L. Fagely Vice President, Controller and c/o Hartford Mutual Funds
Treasurer 500 Bielenberg Drive
Woodbury, MN 55125
Thomas D. Jones III Vice President and Chief c/o Hartford Mutual Funds
Compliance Officer P.O. Box 2999
Hartford, CT 06104-2999
Edward P. Macdonald Vice President, Secretary and c/o Hartford Mutual Funds
Chief Legal Officer P.O. Box 2999
Hartford, CT 06104-2999
27
APPENDIX D
5% BENEFICIAL OWNERS OF FUND SHARES AS JUNE 30, 2006
As of June 30, 2006, Hartford Life Insurance Company (or its affiliates)
beneficially owned the percentages of outstanding shares of the Fund indicated
below (such shares are held for the benefit of contract holders and policy
owners):
Hartford SmallCap Growth HLS Fund
NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENTAGE OF
CLASS OF SHARES BENEFICIAL OWNER* BENEFICIAL OWNERSHIP CLASS OWNED
- --------------- ------------------- -------------------- -------------
- Class IA Hartford Life Insurance Company 18,152,285.72 54%
200 Hopmeadow St.
Simsbury, CT 06089
- Class IA Union Security Insurance Company 10,744,340.32 32%
P.O. Box 64272
St. Paul, MN 55164
- Class IA The Northern Trust Co. 1,715,567.26 5%
TTEE FBO
Guidant Corporation DV.
P.O. Box 92994
Chicago, IL 60675-2994
- Class IB Hartford Life Insurance Company 10,534,881.36 91%
200 Hopmeadow St.
Simsbury, CT 06089
* Each entity set forth in this column is the shareholder of record and may
be deemed to be the beneficial owner of certain of the shares listed for
certain purposes under the securities laws, although certain of the
entities generally do not have an economic interest in these shares and
would ordinarily disclaim any beneficial ownership therein.
28