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INVESTMENT POLICY
MARCH 29, 2006
PROXY VOTING
DEFINITION OF THE FIRM
Hartford Investment Management Company (The Firm) is an investment adviser
registered with the Securities and Exchange Commission, providing advisory
services to affiliates, Hartford sponsored mutual funds and third party (client)
accounts.
INTRODUCTION
Hartford Investment Management Company has adopted and implemented policies and
procedures that it believes are reasonably designed to ensure that proxies are
voted in the best interests of its clients, including investment companies
registered under the Investment Company Act of 1940. These policies and
procedures are intended to comply with Rule 206(4)-6 under the Investment
Advisers Act of 1940 (the "Advisers Act"). In addition to Securities and
Exchange Commission requirements governing advisers, Hartford Investment
Management proxy voting policies reflect the fiduciary standards and
responsibilities for ERISA accounts set out in Department of Labor Bulletin
94-2, 29 C.F.R. 2509.94-2 (July 29, 1994).
Hartford Investment Management Proxy Voting Procedures set forth below contain
the guidelines (the "Proxy Voting Guidelines") that Hartford Investment
Management uses in voting specific proposals presented by the boards of
directors or shareholders of companies whose securities are held in client
portfolios for which Hartford Investment Management has voting discretion. While
the Proxy Voting Procedures set forth general guidelines for voting proxies,
each proposal is evaluated on its merits, and Hartford Investment Management
reserves the right to vote proxies in the best interests of the particular
client. The vote entered on a client's behalf with respect to a particular
proposal may differ from the guidelines set forth in the Proxy Voting
Procedures.
PROXY VOTING POLICIES
As a matter of policy, Hartford Investment Management:
1. Votes all proxies in the best interests of its clients as shareholders,
i.e., to maximize long-term economic value.
2. Develops and maintains broad guidelines setting out positions on common
proxy issues, but also considers each proposal in the context of the issuer
and industry in which it is involved.
3. Evaluates all factors it deems relevant when considering a vote, including
client directions and other relevant facts and circumstances at the time of
the vote, and may determine in certain instances that it is in the best
interest of one or more clients to refrain from voting a given proxy
ballot.
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INVESTMENT POLICY
MARCH 29, 2006
4. Identifies and resolves all material proxy-related conflicts of interest
between The Firm and its clients in the best interests of the client.
5. Believes that sound corporate governance practices may enhance shareholder
value and therefore encourages consideration of an issuer's corporate
governance as part of the investment process.
6. Believes that proxy voting is a valuable tool that may be used to promote
sound corporate governance to the ultimate benefit of the client as
shareholder.
7. Provides all clients, upon request, with copies of these Proxy Voting
Policies and Procedures, as they may be updated from time to time, and
related reports, with such frequency as required to fulfill obligations
under applicable law or as reasonably requested by clients.
8. Reviews annually the proxy voting record with the Proxy Committee to ensure
that proxies are voted in accordance with these Proxy Voting Policies and
Procedures; and ensures that procedures, documentation, and reports
relating to the voting of proxies are promptly and properly prepared and
disseminated.
Hartford Investment Management has established a Proxy Committee that is
responsible for the review and approval of The Firm's written Proxy Voting
Policies and Procedures, and for providing advice and guidance, when needed, on
specific proxy votes for individual issuers. The Proxy Committee will meet in
May and November of each year and is comprised of a representative from each of
the following areas of Hartford Investment Management: Investment Law,
Investment Compliance, and Funds Management. A quorum of the Proxy Committee,
which quorum shall consist of at least one representative from two of the three
areas of Hartford Investment Management identified above, is necessary to
conduct business at any meeting. All actions requiring the approval of the Proxy
Committee must be approved by a simple majority of those Proxy Committee members
present at a meeting at which business may be conducted. If a majority vote
cannot be obtained, the President of Hartford Investment Management or his/her
designee shall have the authority to decide the final vote. Meetings may be held
in person, by telephone, written consent, or any other means deemed appropriate
by the Proxy Committee. Day-to-day administration of the proxy voting process at
Hartford Investment Management is the responsibility of the portfolio manager of
the relevant client account. Investment Compliance is responsible for reviewing
regularly the voting record to ensure that proxies are voted in accordance with
these Proxy Voting Policies and Procedures and for ensuring that procedures,
documentation, and reports relating to the voting of proxies are promptly and
properly prepared and disseminated.
PROXY VOTING PROCEDURES
Hartford Investment Management is responsible for voting securities in response
to proxies solicited by the issuers of such securities. Hartford Investment
Management has established these Proxy Voting Procedures to provide guidance in
our voting of proxies. The Proxy Voting Guidelines contained in these Proxy
Voting Procedures are based on our fiduciary obligation to act in the best
long-term interest of our clients as shareholders. Hence, our practice is to
examine each proposal from an economic standpoint so that the long-term effect
of the vote will ultimately increase shareholder economic value for our client.
Based on our experience in voting proposals, we have found that
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INVESTMENT POLICY
MARCH 29, 2006
similar proposals often have different consequences for different companies.
Thus, we analyze every proposal to determine what impact it might have for the
particular company as well as its industry.
RETENTION OF THIRD-PARTY PROXY SERVICE. In order to facilitate the proxy voting
process, Hartford Investment Management has retained Glass Lewis & Company (GL")
and Institutional Shareholder Services ("ISS" and, collectively with GL, "Glass
Lewis") as experts in the proxy voting and corporate governance area. Glass
Lewis specializes in providing a variety of fiduciary-level proxy advisory and
voting services. These services include in-depth research, analysis and voting
recommendations as well as vote execution, reporting, auditing and consulting
assistance for the handling of proxy voting responsibility and corporate
governance-related efforts. While Hartford Investment Management will rely upon
Glass Lewis research and recommendations in voting proxies (and will often
follow such recommendations), Hartford Investment Management may deviate from
Glass Lewis's recommendations on general policy issues or specific proxy
proposals.
Glass Lewis provides comprehensive summaries of proxy proposals, publications
discussing key proxy voting issues and specific vote recommendations regarding
portfolio company proxies to assist in the proxy research process. Upon request,
portfolio managers may receive any or all of the above-mentioned research
materials to assist in the vote determination process. The final authority and
responsibility for proxy voting decisions remains with Hartford Investment
Management.
Portfolio managers may decide to vote their proxies (consistent with Hartford
Investment Management's policies) and instruct Glass Lewis to vote all proxies
accordingly.
"MIRROR" OR "ECHO" VOTING. Except in the cases where it lacks authority,
Hartford Investment Management votes proxies solicited by an investment company
in the same proportion as the vote of the investment company's other
shareholders (sometimes called "mirror" or "echo" voting). Each investment
company in which Hartford Investment Management's asset allocation fund clients
(e.g., asset allocation mutual funds and targeted retirement mutual funds)
invest has granted to its respective sub-adviser the authority to vote proxies
on its behalf with respect to the assets managed by the sub-adviser. The asset
allocation mutual funds advised by Hartford Investment Management will from time
to time hold shares of certain underlying mutual funds ("Affiliated Underlying
Funds") that are advised and/or principally underwritten by one or more "control
affiliates" of Hartford Investment Management. Hartford Investment Management
recognizes that if an Affiliated Underlying Fund were to solicit its
shareholders with respect to a proxy vote, a material conflict of interest may
arise with respect to Hartford Investment Management if Hartford Investment
Management were to vote such proxies. Accordingly, it is Hartford Investment
Management's policy that proxy votes solicited by any Affiliated Underlying Fund
will be voted by Hartford Investment Management using the "mirror" or "echo"
voting procedures outlined in this paragraph.
AUTHORIZATION TO VOTE. Hartford Investment Management will vote only those
proxies for which it has proxy-voting authority. Hartford Investment Management
retains the right to decline to accept the authority to vote any client's
securities.
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INVESTMENT POLICY
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RECEIPT OF PROXY. Proxy materials from an issuer or its information agent are
forwarded to registered owners of record, typically the client's custodian bank.
Where Hartford Investment Management votes proxies on its client's behalf, the
client must instruct its custodian bank to deliver all relevant voting material
to Hartford Investment Management. Hartford Investment Management may receive
this voting information by mail, fax, or other electronic means.
PROXY VOTING. Each proxy is compared against the Proxy Voting Guidelines
contained in these Proxy Voting Procedures, and handled as follows:
- Generally, issues for which explicit proxy voting guidance is provided
in the Proxy Voting Guidelines (i.e., "For", "Against") are reviewed
by the portfolio manager or his or her designee and voted in
accordance with the Proxy Voting Guidelines. The portfolio manager may
decide not to vote in accordance with the Proxy Voting Guidelines if
the portfolio manager determines that such a vote is in the best
interest of the client.
- Issues identified as "case-by-case" in the Proxy Voting Guidelines,
and issues for which no guidance is provided in the Proxy Voting
Guidelines, are reviewed by the portfolio manager, and voted as he or
she determines.
- Absent a material conflict of interest, the portfolio manager will
decide the final vote. Different portfolio managers holding the same
securities may arrive at different voting conclusions for their
clients' proxies.
- If the portfolio manager identifies an apparent conflict of interest,
he or she will bring the matter to the Proxy Committee, as described
below.
MATERIAL CONFLICT OF INTEREST IDENTIFICATION AND RESOLUTION PROCESSES. Hartford
Investment Management's functional lines of responsibility serve to minimize the
number of, but not prevent, material conflicts of interest it faces in voting
proxies. The portfolio manager or his or her designee reviews each proxy to
assess the extent to which there may be a potential conflict of interest. Some
of these potential conflicts of interest may include:
- The issuer that is soliciting The Firm's proxy vote is also a client
of The Firm or an affiliate;
- A Firm employee has acquired non-public information about an issuer
that is soliciting proxies;
- A Firm employee has a business relationship with, or financial
interest in, the issuer; and
- A Firm employee is contacted by management of a company regarding an
upcoming proxy vote.
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INVESTMENT POLICY
MARCH 29, 2006
All personnel are required to contact the Proxy Committee about any apparent
conflicts of interest, including apparent conflicts of interest involving
personal relationships. Apparent conflicts are reviewed by the Proxy Committee
to determine if there is a conflict, and if so, whether the conflict is
material.
If a proxy is identified as presenting a material conflict of interest, the
matter must be reviewed by the Proxy Committee, which will resolve the conflict
and direct the vote. The representative from Investment Compliance will document
the conflict of interest and the actions taken in the Proxy Committee meeting
minutes. In order to avoid even the appearance of impropriety, the Proxy
Committee will not take Hartford Investment Management's relationship with a
company into account, and will vote the company's proxies in the best interest
of Hartford Investment Management's clients, in accordance with the Proxy Voting
Policies and Procedures. Notwithstanding the foregoing all proxy votes solicited
by an Affiliated Underlying Fund will be voted by Hartford Investment Management
using the "mirror" or "echo" voting procedures described above. Any Proxy
Committee member who is himself or herself subject to the identified conflict
will not participate in the Proxy Committee's proxy voting activities regarding
and any discussions of the particular proxy, including the decision on whether
and how to vote the proxy in question. Investment Compliance will record and
maintain minutes for the Proxy Committee meetings to document the factors that
were considered to evidence that there was a reasonable basis for the Proxy
Committee's decision.
In certain instances, Hartford Investment Management may be unable to vote or
may determine not to vote a proxy on behalf of one or more clients. While not
exhaustive, the following list of considerations highlights some potential
instances in which a proxy vote might not be entered.
SECURITIES LENDING. Hartford Investment Management may be unable to vote proxies
when the underlying securities have been lent out pursuant to a client's
securities lending program. In general, Hartford Investment Management does not
know when securities have been lent out and are therefore unavailable to be
voted.
LACK OF ADEQUATE INFORMATION OR UNTIMELY RECEIPT OF PROXY. Hartford Investment
Management may be unable to enter an informed vote in certain circumstances due
to the lack of information provided in the proxy statement or by the issuer or
other resolution sponsor, and may abstain from voting in those instances. Proxy
materials not delivered in a timely fashion may prevent analysis or entry of a
vote by voting deadlines.
RECORD KEEPING. Hartford Investment Management has retained Glass Lewis to
maintain all records of proxies voted, research analysis, written requests from
clients, and any written response from Hartford Investment Management (to either
a written or an oral request) and other information pursuant to Section 204-2 of
the Advisers Act, the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and other applicable laws. Glass Lewis will maintain these
records in an easily accessible place for five years from the end of the fiscal
year during which the last entry was made on such record, the first two in an
appropriate Glass Lewis office.
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INVESTMENT POLICY
MARCH 29, 2006
With respect to Hartford Investment Management's investment company clients,
Glass Lewis will create and maintain (or cause to be created and maintained)
records of each company's proxy voting record for 12-month periods ended June
30. Glass Lewis will compile (or cause to be compiled) the following information
for each matter relating to a portfolio security considered at any shareholder
meeting held during the period covered by the report and with respect to which
the company was entitled to vote:
- The name of the issuer of the portfolio security;
- The exchange ticker symbol of the portfolio security (if the symbol is
available through reasonably practicable means);
- The Council on Uniform Securities Identification Procedures cusip
number for the portfolio security (if the number is available through
reasonably practicable means);
- The shareholder meeting date;
- A brief identification of the matter voted on;
- Whether the matter was proposed by the issuer or by a security holder;
- Whether the fund cast its vote on the matter;
- How the fund cast its vote (e.g. for or against proposal, or abstain;
for or withhold regarding election of directors); and
- Whether the company cast its vote for or against management.
Hartford Investment Management's Proxy Voting Policies and Procedures may be
amended from time to time by Hartford Investment Management. Hartford Investment
Management provides clients with a copy of its Proxy Voting Policies and
Procedures, upon written request. In addition, Hartford Investment Management
will make specific client information relating to proxy voting available to a
client upon reasonable written request.
PROXY VOTING GUIDELINES. Following is a list of common proposals and our
guidelines on how to vote these proposals. The ("SP") after a proposal indicates
that the proposal is usually presented as a Shareholder Proposal.
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INVESTMENT POLICY
MARCH 29, 2006
PROPOSAL GUIDELINE VOTING POSITION
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Election of Directors................................ Case-by-Case
Ratify Selection of Auditors......................... Case-by-Case
Adopt/Amend Stock Option Plans....................... Case-by-Case
Adopt/Amend Employee Stock Purchase Plans............ Case-by-Case
Increase Authorized Common Stock..................... Case-by-Case
Approve Merger or Acquisition........................ Case-by-Case
Approve Other Business............................... Case-by-Case
Approve Technical Amendments to Charter.............. Case-by-Case
Adopt Cumulative Voting (SP)......................... Case-by-Case
Repeal Classified Boards (SP)........................ Case-by-Case
Approve Reincorporation.............................. Case-by-Case
Vote to Repeal Poison Pill (SP)...................... Case-by-Case
Endorse the CERES Principles (SP).................... Case-by-Case
Require a Majority of Independent Directors (SP)..... Case-by-Case
Authorize Blank Check Preferred Stock................ Case-by-Case
Opt Out of State Takeover Statutes................... Case-by-Case
Adopt Director Tenure/Retirement Age (SP)............ Case-by-Case
Disclose Political and PAC Gifts (SP)................ Case-by-Case
Eliminate Right to Call a Special Meeting............ Case-by-Case
Minimum Stock Ownership by Directors (SP)............ Case-by-Case
Adopt Director & Officer Indemnification............. Case-by-Case
Increase Supermajority Vote Requirement.............. Case-by-Case
Adopt Anti-Greenmail Provision....................... Case-by-Case
Allow Special Interest Representation to Board (SP).. Case-by-Case
Create Independent Nominating Committee (SP)......... Case-by-Case
Eliminate Golden Parachutes (SP)..................... Case-by-Case
Restore Preemptive Rights............................ Case-by-Case
Adopt Confidential Voting (SP)....................... Case-by-Case
Approve Unequal Voting Rights........................ Case-by-Case
Approve Binding Shareholder Proposals................ Case-by-Case
Requiring Companies to Expense Stock Options......... Case-by-Case
Requiring Companies to Include Net Pension Expense in
Calculation of Net Income............................ Case-by-Case
/s/ David M. Znamierowski
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Signature
David M. Znamierowski
President
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