<PAGE>
As filed with the Securities and Exchange Commission February 6, 1997
File No. 333-01551
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 / X /
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Pre-Effective Amendment No. / /
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Post-Effective Amendment No. 1 / X /
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and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 / X /
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Amendment No. 3 / X /
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HARTFORD SMALL COMPANY FUND, INC.
(Exact Name of Registrant as Specified in Charter)
P. O. Box 2999, Hartford, Connecticut 06104-2999
(Address of Principal Executive Offices)
Registrant's Telephone Number including Area Code: (203) 547-5000
C. Michael O'Halloran, Esquire
P.O. Box 2999, Hartford, Connecticut 06104-2999
(Name and Address of Agent for Service)
Approximate Date of Proposed Public Offering
Upon this Registration Statement being declared effective.
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b) of Rule 485
------
X on February 10, 1997 pursuant to paragraph (b) of Rule 485
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60 days after filing pursuant to paragraph (a)(1) of Rule 485
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on May 1, 1997 pursuant to paragraph (a)(1) of Rule 485
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75 days after filing pursuant to paragraph (a)(2) of Rule 485
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on pursuant to paragraph (a)(2) of Rule 485
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Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
previously elected to register an indefinite number of shares of its Common
Stock.
The Rule 24f-2 Notice for the Registrant's most recent fiscal year will be filed
by February 28, 1997.
<PAGE>
The purpose of this post-effective amendment is to (i) include a per share table
for the Hartford Small Company Fund, Inc.; and (ii) include certain financial
statements as part of the Statement of Additional Information in Part B of this
Registration Statement. Parts A and B of the Registration Statement, which are
amended hereby, are incorporated by reference herein.
<PAGE>
HARTFORD SMALL COMPANY FUND, INC.
Report for the period
August 9, 1996 (Commencement of Operations)
to
December 31, 1996
<PAGE>
SUPPLEMENT, DATED FEBRUARY 10, 1997
TO THE PROSPECTUS DATED MAY 1, 1996
AS REVISED EFFECTIVE AUGUST 9, 1996
Hartford Advisers Fund, Inc.
Hartford Bond Fund, Inc.
Hartford Capital Appreciation Fund, Inc.
Hartford Dividend and Growth Fund, Inc.
Hartford Index Fund, Inc.
Hartford International Advisers Fund, Inc.
Hartford International Opportunities Fund, Inc.
Hartford Money Market Fund, Inc.
Hartford Mortgage Securities Fund, Inc.
Hartford Small Company Fund, Inc.
Hartford Stock Fund, Inc.
Hartford U.S. Government Money Market Fund, Inc.
HVA Money Market Fund, Inc.
Effective February 10, 1997 the prospectus dated May 1, 1996 as revised
effective August 9, 1996 is amended by including as part thereof the following
unaudited selected per share data and ratio information for Hartford Small
Company Fund for the period ended December 31, 1996. This information should
be read in conjunction with the financial statements and related notes for the
Funds included in the Statement of Additional Information dated May 1, 1996 as
revised effective August 9, 1996, as supplemented through February 10, 1997.
HARTFORD SMALL COMPANY FUND, INC.
SELECTED PER SHARE DATA AND RATIOS (unaudited)
Selected data for a share of Capital Stock outstanding
throughout the period:
YEAR ENDED 1996(a)
Net asset value at beginning of period $1.00
Net investment income .002
Net realized and unrealized gains (losses) on investments .07
----------
Total from investment operations .07
Dividends from net investment income [.002]
Distribution from net realized gains on securities 0
Return of capital 0
----------
Total from distributions [.002]
----------
Net increase (decrease) in net assets .07
Net asset value at end of period 1.07
----------
----------
Total return 7.15%
Net Assets (in thousands) $ 42,802
Ratio of operating expenses to average net assets .72%(b)
Ratio of net investment income to average net assets .31%
Portfolio turnover rate 31.77%
Average commission rate paid ($) $.02978
(a) The Fund was declared effective by the Securities and Exchange Commission
on August 9, 1996.
(b) Without the Manager's voluntary waiver of certain of its expenses during
the period, the Fund's ratio of expenses to average net assets would have
been .88% (annualized).
<PAGE>
HARTFORD SMALL COMPANY FUND, INC.
Financial Statements for the period
August 9, 1996 (Commencement of Operations)
to
December 31, 1996
<PAGE>
SCHEDULE OF INVESTMENTS
HARTFORD SMALL COMPANY FUND DECEMBER 31, 1996
Shares or Principal Amount Market Value
COMMON STOCKS 88.05%
AEROSPACE AND DEFENSE 1.06%
14,100 Gulfstream Aerospace Corp. $341,925
5,000 Rohr Inc. $113,125
$455,050
BUSINESS SERVICES 2.40%
44,100 Borg-Warner Security $474,075
3,000 Lason Inc. $ 61,500
16,800 Prepaid Legal Services $306,600
13,500 Western Wireless Corp. Class A $187,313
$1,029,488
COMMUNICATIONS EQUIPMENT 5.17%
4,200 Etec Systems Inc. $160,650
23,600 Gilat Satellite Network $581,150
16,600 Natural Microsystems Corp. $522,900
14,400 Oak Industries Inc. $331,200
22,100 Scitex Corp. $209,950
9,600 Videoserver Inc. $408,000
$2,213,850
COMPUTERS & OFFICE EQUIPMENT 1.11%
40,000 Diamond Multimedia Systems $475,000
$475,000
CONSUMER DURABLES 1.01%
15,200 First Brands Corp. $431,300
$431,300
CONSUMER NON-DURABLES 0.14%
4,900 Vans Inc. $61,250
$61,250
CONSUMER SERVICES 2.90%
22,600 Golden Bear Golf Inc. $254,250
43,600 Iwerks Entertainment Inc. $218,000
3,200 PJ America Inc. $57,600
4,700 Planet Hollywood International Inc $92,825
25,800 Prime Hospitality Corp. $416,025
44,600 Rally's Hamburgers Inc. $203,488
$1,242,188
ELECTRONICS 5.43%
15,100 Actel Corp. $358,625
18,400 Cinductus Inc. $119,600
25,800 Dallas Semiconductor $593,392
25,000 Gemstar International Group LTD $437,500
87,300 Intelligent Electronics $698,400
6,900 Puma Technology Inc. $119,025
$2,326,542
ENERGY AND SERVICES 1.18%
12,900 Falcon Drilling Co. $506,325
$506,325
FINANCIAL SERVICES 9.82%
8,700 Bancorp Hawaii Inc. $365,400
992 Conseco Inc. $63,248
12,500 Frontier Insurance Group $478,125
16,900 Imperial Bancorp $386,588
29,000 Imperial Credit Industries $609,000
12,500 Legg Mason Inc. $481,250
9,300 MMI Companies Inc. $299,925
12,600 Reinsurance Group Of America $593,775
20,000 Resource Bancshares $285,000
29,300 Westcorp Inc. $640,938
$4,203,249
FOOD, BEVERAGE AND TOBACCO 1.07%
12,600 Robert Mondavi Corp. Class B $459,900
$459,900
HEALTH CARE 18.70%
16,800 Alliance Pharmaceuticlas Corp. $228,900
27,700 Amylin Pharmaceuticals Inc. $360,100
19,400 Apria Healthcare $363,750
11,800 Bergen Brunswig Corp. Class A $336,300
12,600 FHP International $467,775
17,000 Genesis Health Ventures Inc. $529,125
21,900 Haemonetics $413,363
15,200 IDX Systems Corp. $435,100
10,600 Isomedix Inc. $137,800
33,900 Kinetic Concepts Inc. $415,275
16,800 Ligand Pharmaceuticals Class B $249,900
13,600 Liposome Co., Inc. $260,100
23,500 Magainin Pharmaceuticals Inc. $226,188
24,000 Magellan Health Services Inc. $537,000
18,300 Mckesson $1,024,800
22,100 Medpartners $464,100
39,400 NABI Inc. $344,750
20,900 Physio-Control International Corp. $470,250
23,500 Vencor Inc. $743,188
$8,007,764
INDUSTRIAL MATERIALS 2.18%
21,500 Noble Drilling Corp. $427,313
20,000 Tetra Technologies $505,000
$932,313
MANUFACTURING 4.21%
15,000 Fore Systems Inc. $493,125
9,800 Memtec LTD ADR $322,175
12,100 NN Ball & Roller Inc. $184,525
34,500 Tyco Toys Inc. $405,375
10,600 UCAR International Inc. $398,825
$1,804,025
MEDIA AND SERVICES 6.20%
29,900 American Telecasting $171,925
17,730 HSN $421,088
15,500 International Cabletel Inc. $391,375
19,300 Macromedia Inc. $347,400
1,700 Metro Networks Inc. $42,925
30,500 Pegasus Communications Corp. $419,375
25,400 Peoples Choice TV Corp. $155,575
32,500 Playboy Enterprises Class B $316,875
62,300 Valuevision International Inc. Class A $334,863
2,400 West Teleservices Corp. $54,600
$2,656,001
REAL ESTATE 0.75%
20,200 Castle & Cooke Inc. $320,675
$320,675
<PAGE>
RETAIL 8.22%
13,900 Bed & Bath Beyond Inc. $337,075
12,900 Brinker International Inc. $206,400
18,500 Ethan Allen Inc. $712,250
21,200 Gymboree Corp. $484,950
9,700 Mercantile Stores Inc. $478,938
14,000 Saks Holding Inc. $378,000
69,000 Sports And Recreation $534,750
29,700 Urban Outfitters Inc. $386,100
$3,518,463
SOFTWARE & SERVICES 11.38%
13,000 Affiliated Computer Services Class A $386,750
5,100 Aurum Software Inc. $117,938
3,500 BA Merchant Services Inc. Class A $62,563
12,500 Bisys Group Inc. $463,281
18,650 Boole & Babbage Inc. $466,250
12,200 Caere Corp. $140,300
6,700 Cybermedia Inc. $105,525
4,500 Desktop Data Inc. $86,625
18,000 DST Systems Inc. $564,750
24,100 IKOS Systems Inc. $482,000
3,200 Information Management Resources $67,600
11,600 Kronos Inc. $371,200
22,300 Mercury Interactive Corp. $289,900
29,800 Premenos Technology Corp. $257,025
11,137 Sterling Commerce $392,579
19,500 Sterling Software Inc. $616,688
$4,870,974
TRANSPORTATION 2.84%
23,500 Air Express International $757,875
19,400 Swift Transportation $455,900
$1,213,775
UTILITIES 2.26%
21,100 Mcleod Inc. Class A $538,050
134,600 Peoples Telephone Co., Inc. $429,038
$967,088
TOTAL COMMON STOCKS (cost $37,333,972) $37,695,220
PREFERRED STOCKS 0.61%
CONSUMER SERVICES 0.61%
9,600 AMC Entertainment $259,200
$259,200
TOTAL PREFERRED STOCKS (cost $314,555) $259,200
REPURCHASE AGREEMENT 10.35%
S/T SECURITY 10.35%
1,470,000 U.S. Govt Repo $1,470,000
6.75 1/2/97
2,959,000 U.S. Govt Repo $2,959,000
6.77 1/2/97
$4,429,000
TOTAL REPURCHASE AGREEMENT (cost $4,429,000) $4,429,000
TOTAL INVESTMENTS 99.00% $42,383,420
TOTAL LIABILITIES, LESS CASH
AND OTHER LIABILITIES 1.00% $428,501
NET ASSETS 100.00% $42,811,921
<PAGE>
HARTFORD SMALL COMPANY FUND
STATEMENT OF ASSETS, LIABILITIES, AND SHAREHOLDER'S EQUITY
(UNAUDITED)
As of December 31, 1996
-----------------------
ASSETS
Investment at value $42,383,421
Cash 439
Foreign Currency 0
Receivables
Investment sold 0
Fund share sold 564,446
Dividend 9,753
Interest 832
Variation margin 0
Foreign currency contracts 0
Other Assets 0
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TOTAL ASSETS 42,958,890
LIABILITIES
Payable
Investment purchased 135,951
Fund shares redeemed 0
Management fee 0
Custodian 10,420
Transfer agent 0
Administrative service fees 17
Dividends (0)
Accrued expenses 581
Foreign currency contracts 0
Other liabilities 0
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TOTAL LIABILITIES 146,969
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NET ASSETS $42,811,921
SHARES OUTSTANDING 40,042,487
NET ASSET VALUE PER SHARE $1.07
NET ASSETS CONSIST OF:
Shares paid in capital 42,316,556
Accumulated undistributed net investment income 156
Accumulated undistributed net realized gains (losses) 189,315
Unrealized appreciation/(depreciation) of investments 305,894
----------
Total Net Assets $42,811,921
CAPITAL SHARES
Authorized Unlimited
Outstanding $.01 Par Value 40,042,487
NAV PER SHARE $1.07
<PAGE>
HARTFORD SMALL COMPANY FUND
STATEMENT OF OPERATIONS
(UNAUDITED)
As of December 31, 1996
-----------------------
INVESTMENT INCOME
INCOME:
Dividends (net of foreign tax withheld) $26,636
Interest 66,493
----------
TOTAL INCOME 93,118
EXPENSES:
Investment advisory fee 43,473
Administrative service fee 13,232
Custodian expenses 10,420
Accounting services 417
Professional fees 71
Registration fees 225
Board of Directors fees 45
Audit fees 69
Legal fees 43
Reports to shareholders 238
Other expenses 81
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TOTAL EXPENSES (BEFORE WAIVERS, REIMBURSEMENTS & OFFSETS) 68,313
Expense Waivers, Reimbursements, Offsets (11,952)
----------
TOTAL EXPENSES, NET 56,361
NET INVESTMENT INCOME/(LOSS) 36,757
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) on investments 189,315
Change in unrealized appreciation or
depreciation of investments 305,894
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NET GAIN/(LOSS) ON INVESTMENTS 495,210
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS 531,966
<PAGE>
HARTFORD SMALL COMPANY FUND
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
As of December 31, 1996
-----------------------
OPERATIONS:
Net investment income (loss) $36,757
Net realized gain/(loss) from investment
transactions and foreign currency 189,315
Change in unrealized net appreciation/
(depreciation) of investments 305,894
----------
Net increase/(decrease) in net assets resulting
from operations 531,966
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (36,601)
Net realized gain/(loss) from investment transactions 0
----------
Net increase/(decrease) from distributions (36,601)
CAPITAL SHARE TRANSACTIONS:
Proceeds from sale of shares 42,814,882
Reinvested dividends and distributions 29,636
Cost of shares repurchased (527,962)
----------
Net increase/(decrease) from capital share transactions 42,316,556
Net increase/(decrease) in net assets 42,811,921
NET ASSETS:
Beginning of period 0
End of period 42,811,921
----------
CAPITAL SHARE TRANSACTIONS:
Shares outstanding beginning of period 0
Shares sold 40,509,778
Reinvested distributions 27,965
----------
Total Shares Added 40,537,743
Shares repurchased (495,256)
----------
Net increase/(decrease) 40,042,487
----------
Shares outstanding end of period 40,042,487
----------
----------
<PAGE>
Hartford Small Company Fund Inc.
Notes to Financial Statements
December 31, 1996
1. ORGANIZATION:
Hartford Small Company Fund Inc. (the Fund) is organized under the laws
of the State of Maryland and registered with the Securities and Exchange
Commission (SEC) under the Investment Company Act of 1940, as amended,
as a diversified open-ended management investment company.
Fund shares are made available to serve as the underlying investment
media of the variable annuity, variable life insurance and group pension
contracts issued by the affiliated life insurance company Separate
Accounts of the ITT Hartford Life Insurance Companies (Hartford Life
Insurance Company and ITT Hartford Life and Annuity Insurance Company).
The Fund's objectives are as follows:
Hartford Small Company Fund, Inc. Seeks growth of capital by investing
primarily in equity securities selected on the basis of potential for
capital appreciation.
2. SIGNIFICANT ACCOUNTING POLICIES:
The following is a summary of significant accounting policies of the
Funds, which are in accordance with generally accepted accounting
principles in the investment company industry:
a) SECURITY TRANSACTIONS - Security transactions are recorded on the
trade date (date the order to buy or sell is executed). Security gains
and losses are determined on the basis of identified cost.
b) SECURITY VALUATION - Debt securities (other than short-term
obligations) are valued on the basis of valuations furnished by an
unaffiliated pricing service which determines valuations for normal
institutional size trading units of debt securities. In Hartford Small
Company Fund, Inc., short-term investments with a maturity of 60 days or
less when purchased are valued at amortized cost, which approximates
market value. Short-term investments with a maturity of more than 60
days when purchased are valued based on market quotations until the
remaining days to maturity become less than 61 days. From such time
until maturity, the investments are valued at amortized cost.
<PAGE>
Equity securities are valued at the last sales price reported on
principal securities exchanges (domestic or foreign). If no sale took
place on such day and in the case of certain equity securities traded
over-the-counter, then such securities are valued at the mean between
the bid and asked prices. Securities quoted in foreign currencies are
translated into U.S. dollars at the exchange rate at the end of the
reporting period. Options are valued at the last sales price; if no
sale took place on such day, then options are valued at the mean between
the bid and asked prices. Securities for which market quotations are
not readily available and all other assets are valued in good faith at
fair value by a person designated by the Fund's Board of Directors.
c) FOREIGN CURRENCY TRANSACTIONS - The accounting records of the Fund
are maintained in U.S. dollars. All assets and liabilities initially
expressed in foreign currencies are converted into U.S. dollars at
prevailing exchange rates. Purchases and sales of investment securities,
dividend and interest income, and certain expenses are translated at the
rates of exchange prevailing on the respective dates of such
transactions.
The fund does not isolate that portion of the results of operations
resulting from changes in the foreign exchange rates on investments from
the fluctuations arising from changes in the market prices of securities
held. Such fluctuations are included with the net realized and
unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales of foreign currencies, and the difference
between asset and liability amounts initially stated in foreign
currencies and the U.S. dollar value of the amounts actually received or
paid. Net unrealized foreign exchange gains or losses arise from
changes in the value of portfolio securities and other assets and
liabilities at the end of the reporting period, resulting from changes
in the exchange rates.
d) REPURCHASE TRANSACTIONS - A repurchase agreement is an agreement by
which the seller of a security agrees to repurchase the security sold at
a mutually agreed upon time and price. At the time the Funds enter into
a repurchase agreement, the value of the underlying collateral
security(ies), including accrued interest, will be equal to or exceed
the value of the repurchase agreement and, in the case of repurchase
agreements exceeding one day, the value of the underlying security(ies),
including accrued interest, is required during the term of the agreement
to be equal to or exceed the value of the repurchase agreement.
Securities which serve to collateralize the repurchase agreement are
held by each Fund's custodian in book entry or physical form in the
custodial account of the Fund. Repurchase agreements are valued at cost
plus accrued interest receivable.
e) JOINT TRADING ACCOUNT - Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund may transfer uninvested
cash balances into a joint trading account managed by Hartford
Investment Management Company (HIMCO), or Wellington Management Company.
These balances may be invested in one or more repurchase agreements
and/or short-term money market instruments.
f) FUTURES, OPTIONS ON FUTURES AND OPTIONS ACCOUNTING PRINCIPLES - The
Fund enters into futures contracts to retain their cash balance and yet
be exposed to the market thereby providing the liquidity necessary to
accommodate redemptions while at the same time providing shareholders
the investment return of a fully invested portfolio. A futures
contract is an agreement between two parties to buy and sell a security
for a set price on a future date. When the fund enters into such
contracts, it is required to deposit with the custodian an amount of
"initial margin" of cash or U.S. Treasury bills. Subsequent payments,
called maintenance margin, to and from the broker, are made on a daily
basis as the price of the underlying debt security fluctuates, making
the long and short positions in the futures contract more or less
valuable (i.e., mark-to-market), which results in an unrealized gain or
loss to the Funds. The market value of a traded futures contract is the
last sale price or, in the absence of a last sale price, the last
offering price or, in the absence of either of these prices, fair
<PAGE>
value is determined according to procedures established by the Fund's
Board of Directors.
At any time prior to expiration of the futures contract, the Fund may
close the position by taking an opposite position which would operate to
terminate the position in the futures contract. A final determination
of maintenance margin is then made, additional cash is required to be
paid by or released to the Fund and the Fund realizes a gain or loss.
The premium paid by the Fund for the purchase of a call or put option is
included in the Fund's Statement of Net Assets as an investment and
subsequently "marked to market" to reflect the current market value of
the option purchased as of the end of the reporting period. If an
option which the Fund has purchased expires on its stipulated expiration
date, the Fund realizes a loss in the amount of the cost of the option.
If the Fund enters into a closing transaction, it realizes a gain or
loss, depending on whether the proceeds from the sale are greater or
less than the cost of the option. If the Fund exercises a put option,
it realizes a gain or loss from the sale of the underlying security and
the proceeds from such sale will be decreased by the premium originally
paid. If the Fund exercises a call option, the cost of the security
which the Fund purchases upon exercise will be increased by the premium
originally paid.
g) FEDERAL INCOME TAXES - For Federal income tax purposes, the Fund
intends to continue to qualify as regulated investment companies under
Subchapter M of the Internal Revenue Code by distributing substantially
all of its taxable income to its shareholders or otherwise complying
with the requirements for regulated investment companies. Accordingly,
no provision for Federal income taxes has been made.
h) FUND SHARE VALUATION AND DIVIDEND DISTRIBUTIONS TO SHAREHOLDERS -
Orders for the Fund's shares are executed in accordance with the
investment instructions of the contract owners. Dividend income is
accrued as of the ex-dividend date. Interest income and expenses are
accrued on a daily basis. The net asset value of the Fund's shares is
determined as of the close of each business day of the New York Stock
Exchange (the Exchange). Orders for the purchase of the Funds' shares
received prior to the close of the Exchange on any day on which the
fund is open for business are priced at the per-share net asset value
determined as of the close of the Exchange. Orders received after the
close of the Exchange, or on a day on which the Exchange and/or the Fund
is not open for business, are priced at the per-share net asset value
next determined.
Dividends are declared by the Fund's Board of Directors based upon the
investment performance of the Fund. The policy with respect to the
Hartford Small Company Fund Inc. is to distribute dividends from net
investment income monthly and distribute realized capital gains, if any,
annually.
j) USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities as of the date of the financial
statements and the reported amounts of income and expenses during the
period. Operating results in the future could vary from the amounts
derived from management's estimates.
<PAGE>
3. EXPENSES:
a) INVESTMENT MANAGEMENT AND ADVISORY AGREEMENTS - HIMCO, a
wholly-owned subsidiary of Hartford Life Insurance Company (HL) provides
investment management and supervision for Hartford Small Company Fund
Inc. pursuant to an Investment Management Agreement, which was approved
by each Fund's Board of Directors and shareholders.
The schedule below reflects the rates of compensation paid to HIMCO for
services rendered:
HARTFORD SMALL COMPANY FUND, INC.
AVERAGE DAILY NET ASSETS ANNUAL FEE
On first $250 million .575%
On next $250 million .525%
On next $500 million .475%
Over $1 billion .425%
Wellington Management Company (Wellington), under a Sub-Investment
Advisory Agreement with HIMCO, furnishes an investment program to HIMCO,
for utilization by HIMCO in rendering services to the Hartford Small
Company Fund. Wellington determines the purchase and sale of portfolio
securities and places such orders for execution, in the name of the
Fund. In conjunction with such activities, Wellington regularly
furnishes reports to the Fund's Board of Directors concerning economic
forecasts, investment strategy, portfolio activity and performance of
the Funds.
b) ADMINISTRATIVE SERVICES AGREEMENT - Under the Administrative
Services Agreement between HL and each of the Funds, HL provides
administrative services to the Funds and receives monthly compensation
at the annual rate of .175% of each Fund's average daily net assets.
The Fund assumes and pays certain other expenses (including, but not
limited to, shareholder accounting, state taxes and directors' fees).
Directors' fees represent remuneration paid or accrued to directors not
affiliated with HL or any other related company.
<PAGE>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) Financial statements: Incorporated by reference to Parts A and B
of this Post-Effective Amendment to the Registration Statement.
(b) Exhibits:
(1) Articles of Incorporation(a)
(2) By-Laws(a)
(3) Not Applicable
(4) Share Certificate(c)
(5) Form of Investment Management Agreement(a)
(5.1) Form of Investment Sub-Advisory Agreement(a)
(6) Not Applicable
(7) Not Applicable
(8) Form of Custodian Agreement(a)
(8.1) Custodian Agreement with State Street Bank and
Trust Company
(9) Form of Administrative Services Agreement(a)
(9.1) Form of Share Purchase Agreement(a)
(10) Opinion and Consent of Counsel(b)
(11) Consent of Independent Public Accountants(c)
(12) 1996 Annual Report to Shareholders' Financial
Statements(c)
(13) Not Applicable
(14) Not Applicable
(15) Not Applicable
(16) Schedule of Computation for Performance Quotations(c)
(17) Not Applicable
(18) Not Applicable
(19) Powers of Attorney(a)
(27) Financial Data Schedule
- ---------------
(a) Previously filed as exhibit to Registrant's Initial Registration Statement
filed on March 7, 1996.
(b) Filed with Registrant's Rule 24f-2 Notice.
(c) To be filed by Amendment.
<PAGE>
Items 25 through 29 and Item 31 are incorporated by reference to Part C of
Registrant's Registration Statement.
Item 30. LOCATION OF ACCOUNTS & RECORDS
The Hartford Life Insurance Company
P.O. Box 2999
Hartford, CT 06104-2999
AND
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Item 32. UNDERTAKING
The Registrant undertakes to furnish to each person to whom a
prospectus has been delivered a copy of the Registrant's latest annual
report to shareholders, upon request and without charge.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, the Registrant certifies that it
meets all of the requirements for effectiveness of this Registration Statement
pursuant to Rule 485(b) under the Securities Act of 1933 and has caused this
Registration Statement to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Hartford, and State of Connecticut on the 5th
day of February, 1997.
HARTFORD SMALL COMPANY FUND, INC.
By: *
------------------------------------
Joseph H. Gareau
Its: President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
* President February 5, 1997
- --------- ---------- (Chief Executive Officer
Joseph H. Gareau & Director)
* Controller February 5, 1997
- --------- ---------- (Chief Accounting Officer)
George R. Jay
* Vice President & Treasurer February 5, 1997
- --------- ---------- (Chief Financial Officer)
J. Richard Garrett
* Director February 5, 1997
- --------- ----------
Joseph A. Biernat
* Director February 5, 1997
- --------- ----------
Winifred E. Coleman
* Director February 5, 1997
- --------- ----------
William A. O'Neill
<PAGE>
* Director February 5, 1997
- --------- ----------
Millard H. Pryor, Jr.
* Director February 5, 1997
- --------- -----------
Lowndes A. Smith
* Director February 5, 1997
- --------- -----------
John K. Springer
/s/ Kevin J. Carr February 5, 1997
- ---------------------
* By Kevin J. Carr
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit No. Page No.
- ----------- --------
8.1 Custodian Agreement with State Street
Bank and Trust Company
27 Financial Data Schedule
<PAGE>
EXHIBIT 8.1
GLOBAL CUSTODY AGREEMENT WITH
STATE STREET BANK AND TRUST COMPANY
<PAGE>
CUSTODIAN CONTRACT
Between
HARTFORD SMALL COMPANY FUND, INC.
and
STATE STREET BANK AND TRUST COMPANY
Global/Corporation
<PAGE>
TABLE OF CONTENTS
Page
----
1. Employment of Custodian and Property to be
Held By It. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2. Duties of the Custodian with Respect to Property of
the Fund Held by the Custodian in the United States . . . . . . . .
2.1 Holding Securities. . . . . . . . . . . . . . . . . . . . . .
2.2 Delivery of Securities. . . . . . . . . . . . . . . . . . . .
2.3 Registration of Securities. . . . . . . . . . . . . . . . . .
2.4 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . .
2.5 Availability of Federal Funds . . . . . . . . . . . . . . . .
2.6 Collection of Income. . . . . . . . . . . . . . . . . . . . .
2.7 Payment of Fund Monies. . . . . . . . . . . . . . . . . . . .
2.8 Liability for Payment in Advance of
Receipt of Securities Purchased . . . . . . . . . . . . . . .
2.9 Appointment of Agents . . . . . . . . . . . . . . . . . . . .
2.10 Deposit of Securities in U.S. Securities System . . . . . . .
2.11 Fund Assets Held in the Custodian's Direct
Paper System. . . . . . . . . . . . . . . . . . . . . . . . .
2.12 Segregated Account. . . . . . . . . . . . . . . . . . . . . .
2.13 Ownership Certificates for Tax Purposes . . . . . . . . . . .
2.14 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.15 Communications Relating to Fund Portfolio Securities. . . . .
2.16 Reports to Fund by Independent Public Accountants . . . . . .
3. Duties of the Custodian with Respect to Property of
the Fund Held Outside of the United States. . . . . . . . . . . . .
3.1 Appointment of Foreign Sub-Custodians . . . . . . . . . . . .
3.2 Assets to be Held . . . . . . . . . . . . . . . . . . . . . .
3.3 Foreign Securities Systems. . . . . . . . . . . . . . . . . .
3.4 Holding Securities. . . . . . . . . . . . . . . . . . . . . .
3.5 Agreements with Foreign Banking Institutions. . . . . . . . .
3.6 Access of Independent Accountants of the Fund . . . . . . . .
3.7 Reports by Custodian. . . . . . . . . . . . . . . . . . . . .
3.8 Transactions in Foreign Custody Account . . . . . . . . . . .
<PAGE>
3.9 Liability of Foreign Sub-Custodians . . . . . . . . . . . . .
3.10 Liability of Custodian. . . . . . . . . . . . . . . . . . . .
3.11 Reimbursement for Advances. . . . . . . . . . . . . . . . . .
3.12 Monitoring Responsibilities . . . . . . . . . . . . . . . . .
3.13 Branches of U.S. Banks. . . . . . . . . . . . . . . . . . . .
3.14 Tax Law . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Payments for Repurchases or Redemptions and Sales
of Shares of the Fund . . . . . . . . . . . . . . . . . . . . . . .
5. Proper Instructions . . . . . . . . . . . . . . . . . . . . . . . .
6. Actions Permitted Without Express Authority . . . . . . . . . . . .
7. Evidence of Authority . . . . . . . . . . . . . . . . . . . . . . .
8. Duties of Custodian with Respect to the Books of
Account and Calculations of Net Asset Value and
Net Income. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10. Opinion of Fund's Independent Accountant. . . . . . . . . . . . . .
11. Compensation of Custodian . . . . . . . . . . . . . . . . . . . . .
12. Responsibility of Custodian . . . . . . . . . . . . . . . . . . . .
13. Effective Period, Termination and Amendment . . . . . . . . . . . .
14. Successor Custodian . . . . . . . . . . . . . . . . . . . . . . . .
15. Interpretive and Additional Provisions. . . . . . . . . . . . . . .
16. Massachusetts Law to Apply. . . . . . . . . . . . . . . . . . . . .
17. Prior Contracts . . . . . . . . . . . . . . . . . . . . . . . . . .
18. Shareholder Communications Election . . . . . . . . . . . . . . . .
<PAGE>
CUSTODIAN CONTRACT
This Contract between Hartford Small Company Fund, Inc., a corporation
organized and existing under the laws of the State of Maryland, having its
principal place of business at 690 Asylum Avenue, Hartford Plaza, Hartford,
Connecticut 06115 hereinafter called the "Fund", and State Street Bank and Trust
Company, a Massachusetts trust company, having its principal place of business
at 225 Franklin Street, Boston, Massachusetts, 02110, hereinafter called the
"Custodian",
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund hereby employs the Custodian as the custodian of its assets,
including securities it desires to be held in places within the United States
("domestic securities") and securities it desires to be held outside the United
States ("foreign securities") pursuant to the provisions of the Articles of
Incorporation. The Fund agrees to deliver to the Custodian all securities and
cash owned by it, and all payments of income, payments of principal or capital
distributions received by it with respect to all securities owned by the Fund
from time to time, and the cash consideration received by it for such new or
treasury shares of capital stock, $0.10 par value, ("Shares") of the Fund as may
be issued or sold from time to time. The Custodian shall not be responsible for
any property of the Fund held or received by the Fund and not delivered to the
Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Article 5),
the Custodian shall from time to time employ one or more sub-custodians located
in the United States, but only in accordance with an applicable vote by the
Board of Directors of the Fund, and provided that the Custodian shall have no
more or less responsibility or liability to the Fund on account of any actions
or omissions of any sub-custodian so employed than any such sub-custodian has to
the Custodian. The Custodian may employ as sub-custodians for the Fund's
securities and other assets the foreign banking institutions and foreign
securities depositories designated in Schedule "A" hereto but only in accordance
with the provisions of Article 3.
2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY THE
CUSTODIAN IN THE UNITED STATES
2.1 HOLDING SECURITIES. The Custodian shall hold and physically segregate
for the account of the Fund all non-cash property, to be held by it in the
United States, including all domestic investments owned by the Fund, other
than (a) securities which are maintained pursuant to Section 2.10 in a
clearing agency which acts as a securities depository or in a book-entry
system authorized by the U.S. Department of the Treasury and certain
federal agencies (each, a "U.S. Securities System") and (b) commercial
paper of an issuer for which the Custodian acts as issuing and paying agent
("Direct Paper") which is deposited and/or maintained in the Direct Paper
<PAGE>
System of the Custodian (the "Direct Paper System") pursuant to Section
2.11.
2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a U.S.
Securities System account of the Custodian or in the Custodian's Direct
Paper book-entry system account ("Direct Paper System Account") only upon
receipt of Proper Instructions, which may be continuing instructions when
deemed appropriate by the parties, and only in the following cases:
1) Upon sale of such securities for the account of the Fund and
receipt of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a U.S. Securities System,
in accordance with the provisions of Section 2.10 hereof;
4) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable; provided
that, in any such case, the cash or other consideration is to be
delivered to the Custodian;
6) To the issuer thereof, or its agent, for transfer into the name
of the Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.9 or into the name or nominee name of any
sub-custodian appointed pursuant to Article 1; or for exchange
for a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
PROVIDED that, in any such case, the new securities are to be
delivered to the Custodian;
7) Upon the sale of such securities for the account of the Fund, to
the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery" custom; provided
that in any such case, the Custodian shall have no responsibility
or liability for any loss arising from the delivery of such
securities prior to receiving payment for such securities except
as may arise from the Custodian's own negligence or willful
misconduct;
8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
<PAGE>
9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that, in
any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
10) For delivery in connection with any loans of securities made by
the Fund, BUT ONLY against receipt of adequate collateral as
agreed upon from time to time by the Custodian and the Fund,
which may be in the form of cash or obligations issued by the
United States government, its agencies or instrumentalities,
except that in connection with any loans for which collateral is
to be credited to the Custodian's account in the book-entry
system authorized by the U.S. Department of the Treasury, the
Custodian will not be held liable or responsible for the delivery
of securities owned by the Fund prior to the receipt of such
collateral;
11) For delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Fund, BUT ONLY against
receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian and a broker-dealer registered
under the Securities Exchange Act of 1934 (the "Exchange Act")
and a member of The National Association of Securities Dealers,
Inc. ("NASD"), relating to compliance with the rules of The
Options Clearing Corporation and of any registered national
securities exchange, or of any similar organization or
organizations, regarding escrow or other arrangements in
connection with transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian, and a Futures Commission Merchant
registered under the Commodity Exchange Act, relating to
compliance with the rules of the Commodity Futures Trading
Commission and/or any Contract Market, or any similar
organization or organizations, regarding account deposits in
connection with transactions by the Fund;
14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for the Fund, for delivery to such Transfer Agent or to
the holders of shares in connection with distributions in kind,
as may be described from time to time in the Fund's currently
effective prospectus and statement of additional information
("prospectus"), in satisfaction of requests by holders of Shares
for repurchase or redemption; and
15) For any other proper corporate purpose, BUT ONLY upon receipt of,
in addition to Proper Instructions, a certified copy of a
resolution of the Board of Directors or of the Executive
Committee signed by an officer of the Fund and certified by the
Secretary or an Assistant Secretary, specifying the securities to
be delivered, setting forth the purpose for which such delivery
is to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of
such
<PAGE>
securities shall be made.
2.3 REGISTRATION OF SECURITIES. Domestic securities held by the Custodian
(other than bearer securities) shall be registered in the name of the Fund or in
the name of any nominee of the Fund or of any nominee of the Custodian which
nominee shall be assigned exclusively to the Fund, UNLESS the Fund has
authorized in writing the appointment of a nominee to be used in common with
other registered investment companies having the same investment adviser as the
Fund, or in the name or nominee name of any agent appointed pursuant to Section
2.9 or in the name or nominee name of any sub-custodian appointed pursuant to
Article 1. All securities accepted by the Custodian on behalf of the Fund under
the terms of this Contract shall be in "street name" or other good delivery
form. If, however, the Fund directs the Custodian to maintain securities in
"street name", the Custodian shall utilize its best efforts only to timely
collect income due the Fund on such securities and to notify the Fund on a best
efforts basis only of relevant corporate actions including, without limitation,
pendency of calls, maturities, tender or exchange offers.
2.4 BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
account or accounts in the United States in the name of the Fund, subject only
to draft or order by the Custodian acting pursuant to the terms of this
Contract, and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Fund, other than
cash maintained by the Fund in a bank account established and used in accordance
with Rule 17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for the Fund may be deposited by it to its credit as Custodian in the
Banking Department of the Custodian or in such other banks or trust companies as
it may in its discretion deem necessary or desirable; PROVIDED, however, that
every such bank or trust company shall be qualified to act as a custodian under
the Investment Company Act of 1940 and that each such bank or trust company and
the funds to be deposited with each such bank or trust company shall be approved
by vote of a majority of the Board of Directors of the Fund. Such funds shall
be deposited by the Custodian in its capacity as Custodian and shall be
withdrawable by the Custodian only in that capacity.
2.5 AVAILABILITY OF FEDERAL FUNDS. Upon mutual agreement between the Fund and
the Custodian, the Custodian shall, upon the receipt of Proper Instructions,
make federal funds available to the Fund as of specified times agreed upon from
time to time by the Fund and the Custodian in the amount of checks received in
payment for Shares of the Fund which are deposited into the Fund's account.
2.6 COLLECTION OF INCOME. Subject to the provisions of Section 2.3, the
Custodian shall collect on a timely basis all income and other payments with
respect to United States registered securities held hereunder to which the Fund
shall be entitled either by law or pursuant to custom in the securities
business, and shall collect on a timely basis all income and other payments with
respect to United States bearer securities if, on the date of payment by the
issuer, such securities are held by the Custodian or its agent thereof and shall
credit such income, as collected, to the Fund's custodian account. Without
limiting the generality of the foregoing, the Custodian shall detach
<PAGE>
and present for payment all coupons and other income items requiring
presentation as and when they become due and shall collect interest when due on
securities held hereunder. Income due the Fund on United States securities
loaned pursuant to the provisions of Section 2.2 (10) shall be the
responsibility of the Fund. The Custodian will have no duty or responsibility
in connection therewith, other than to provide the Fund with such information or
data as may be necessary to assist the Fund in arranging for the timely delivery
to the Custodian of the income to which the Fund is properly entitled.
2.7 PAYMENT OF FUND MONIES. Upon receipt of Proper Instructions, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of domestic securities, options, futures contracts
or options on futures contracts for the account of the Fund but only
(a) against the delivery of such securities, or evidence of title to
such options, futures contracts or options on futures contracts, to
the Custodian (or any bank, banking firm or trust company doing
business in the United States or abroad which is qualified under the
Investment Company Act of 1940, as amended, to act as a custodian and
has been designated by the Custodian as its agent for this purpose)
registered in the name of the Fund or in the name of a nominee of the
Custodian referred to in Section 2.3 hereof or in proper form for
transfer; (b) in the case of a purchase effected through a U.S.
Securities System, in accordance with the conditions set forth in
Section 2.10 hereof; (c) in the case of a purchase involving the
Direct Paper System, in accordance with the conditions set forth in
Section 2.11; (d) in the case of repurchase agreements entered into
between the Fund and the Custodian, or another bank, or a
broker-dealer which is a member of NASD, (i) against delivery of the
securities either in certificate form or through an entry crediting
the Custodian's account at the Federal Reserve Bank with such
securities or (ii) against delivery of the receipt evidencing purchase
by the Fund of securities owned by the Custodian along with written
evidence of the agreement by the Custodian to repurchase such
securities from the Fund or (e) for transfer to a time deposit account
of the Fund in any bank, whether domestic or foreign; such transfer
may be effected prior to receipt of a confirmation from a broker
and/or the applicable bank pursuant to Proper Instructions from the
Fund as defined in Article 5;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued by the Fund as set
forth in Article 4 hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of
the Fund: interest, taxes, management, accounting, transfer agent and
legal fees, and operating expenses of the Fund whether or
<PAGE>
not such expenses are to be in whole or part capitalized or treated as
deferred expenses;
5) For the payment of any dividends declared pursuant to the governing
documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) For any other proper purpose, BUT ONLY upon receipt of, in addition to
Proper Instructions, a certified copy of a resolution of the Board of
Directors or of the Executive Committee of the Fund signed by an
officer of the Fund and certified by its Secretary or an Assistant
Secretary, specifying the amount of such payment, setting forth the
purpose for which such payment is to be made, declaring such purpose
to be a proper purpose, and naming the person or persons to whom such
payment is to be made.
2.8 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
Except as specifically stated otherwise in this Contract, in any and every case
where payment for purchase of domestic securities for the account of the Fund is
made by the Custodian in advance of receipt of the securities purchased in the
absence of specific written instructions from the Fund to so pay in advance, the
Custodian shall be absolutely liable to the Fund for such securities to the same
extent as if the securities had been received by the Custodian.
2.9 APPOINTMENT OF AGENTS. The Custodian may at any time or times in its
discretion appoint (and may at any time remove) any other bank or trust company
which is itself qualified under the Investment Company Act of 1940, as amended,
to act as a custodian, as its agent to carry out such of the provisions of this
Article 2 as the Custodian may from time to time direct; PROVIDED, however, that
the appointment of any agent shall not relieve the Custodian of its
responsibilities or liabilities hereunder.
2.10 DEPOSIT OF SECURITIES IN U.S. SECURITIES SYSTEMS. The Custodian may
deposit and/or maintain domestic securities owned by the Fund in a clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934, which acts as a securities depository,
or in the book-entry system authorized by the U.S. Department of the Treasury
and certain federal agencies, collectively referred to herein as "U.S.
Securities System" in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and subject to
the following provisions:
1) The Custodian may keep domestic securities of the Fund in a U.S.
Securities System provided that such securities are represented in an
account ("Account") of the Custodian in the U.S. Securities System
which shall not include any assets of the Custodian other than assets
held as a fiduciary, custodian or otherwise for customers;
2) The records of the Custodian with respect to domestic securities of
the Fund which are maintained in a U.S. Securities System shall
identify by book-entry those securities
<PAGE>
belonging to the Fund;
3) The Custodian shall pay for domestic securities purchased for the
account of the Fund upon (i) receipt of advice from the U.S.
Securities System that such securities have been transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of the
Fund. The Custodian shall transfer domestic securities sold for the
account of the Fund upon (i) receipt of advice from the U.S.
Securities System that payment for such securities has been
transferred to the Account, and (ii) the making of an entry on the
records of the Custodian to reflect such transfer and payment for the
account of the Fund. Copies of all advices from the U.S. Securities
System of transfers of domestic securities for the account of the Fund
shall identify the Fund, be maintained for the Fund by the Custodian
and be provided to the Fund at its request. Upon request, the
Custodian shall furnish the Fund confirmation of each transfer to or
from the account of the Fund in the form of a written advice or notice
and shall furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the U.S. Securities System for
the account of the Fund.
4) The Custodian shall provide the Fund with any report obtained by the
Custodian on the U.S. Securities System's accounting system, internal
accounting control and procedures for safeguarding domestic securities
deposited in the U.S. Securities System;
5) The Custodian shall have received the initial or annual certificate,
as the case may be, required by Article 13 hereof;
6) Anything to the contrary in this Contract notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the U.S. Securities System by reason of any
negligence, misfeasance or misconduct of the Custodian or any of its
agents or of any of its or their employees or from failure of the
Custodian or any such agent to enforce effectively such rights as it
may have against the U.S. Securities System; at the election of the
Fund, it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against the U.S. Securities System
or any other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the Fund has not
been made whole for any such loss or damage.
2.11 FUND ASSETS HELD IN THE CUSTODIAN'S DIRECT PAPER SYSTEM. The Custodian may
deposit and/or maintain securities owned by the Fund in the Direct Paper System
of the Custodian subject to the following provisions:
1) No transaction relating to securities in the Direct Paper System will
be effected in the absence of Proper Instructions;
2) The Custodian may keep securities of the Fund in the Direct Paper
System only if such
<PAGE>
securities are represented in an account ("Account") of the Custodian
in the Direct Paper System which shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
3) The records of the Custodian with respect to securities of the Fund
which are maintained in the Direct Paper System shall identify by
book-entry those securities belonging to the Fund;
4) The Custodian shall pay for securities purchased for the account of
the Fund upon the making of an entry on the records of the Custodian
to reflect such payment and transfer of securities to the account of
the Fund. The Custodian shall transfer securities sold for the
account of the Fund upon the making of an entry on the records of the
Custodian to reflect such transfer and receipt of payment for the
account of the Fund;
5) The Custodian shall furnish the Fund confirmation of each transfer to
or from the account of the Fund, in the form of a written advice or
notice, of Direct Paper on the next business day following such
transfer and shall furnish to the Fund copies of daily transaction
sheets reflecting each day's transaction in the U.S. Securities System
for the account of the Fund;
6) The Custodian shall provide the Fund with any report on its system of
internal accounting control as the Fund may reasonably request from
time to time;
2.12 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.10 hereof, (i) in accordance with the provisions
of any agreement among the Fund, the Custodian and a broker-dealer registered
under the Exchange Act and a member of the NASD (or any futures commission
merchant registered under the Commodity Exchange Act), relating to compliance
with the rules of The Options Clearing Corporation and of any registered
national securities exchange (or the Commodity Futures Trading Commission or any
registered contract market), or of any similar organization or organizations,
regarding escrow or other arrangements in connection with transactions by the
Fund, (ii) for purposes of segregating cash or government securities in
connection with options purchased, sold or written by the Fund or commodity
futures contracts or options thereon purchased or sold by the Fund, (iii) for
the purposes of compliance by the Fund with the procedures required by
Investment Company Act Release No. 10666, or any subsequent release or releases
of the Securities and Exchange Commission relating to the maintenance of
segregated accounts by registered investment companies and (iv) for other proper
corporate purposes, BUT ONLY, in the case of clause (iv), upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution of the Board
of Directors or of the Executive Committee signed by an officer of the Fund and
certified by the Secretary or an Assistant Secretary, setting forth the purpose
or purposes of such segregated account and declaring such purposes to be proper
corporate
<PAGE>
purposes.
2.13 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to domestic securities of the Fund held by it and in connection
with transfers of such securities.
2.14 PROXIES. The Custodian shall, with respect to the domestic securities
held hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in the
name of the Fund or a nominee of the Fund, all proxies, without indication
of the manner in which such proxies are to be voted, and shall promptly
deliver to the Fund such proxies, all proxy soliciting materials and all
notices relating to such securities.
2.15 COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. Subject to the
provisions of Section 2.3, the Custodian shall transmit promptly to the
Fund all written information (including, without limitation, pendency of
calls and maturities of domestic securities and expirations of rights in
connection therewith and notices of exercise of call and put options
written by the Fund and the maturity of futures contracts purchased or sold
by the Fund) received by the Custodian from issuers of the domestic
securities being held for the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund all written
information received by the Custodian from issuers of the domestic
securities whose tender or exchange is sought and from the party (or his
agents) making the tender or exchange offer. If the Fund desires to take
action with respect to any tender offer, exchange offer or any other
similar transaction, the Fund shall notify the Custodian at least three
business days prior to the date on which the Custodian is to take such
action.
2.16 REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS The Custodian shall
provide the Fund, at such times as the Fund may reasonably require, with
reports by independent public accountants on the accounting system,
internal accounting control and procedures for safeguarding securities,
futures contracts and options on futures contracts, including domestic
securities deposited and/or maintained in a U.S. Securities System,
relating to the services provided by the Custodian under this Contract;
such reports shall be of sufficient scope and in sufficient detail, as may
reasonably be required by the Fund to provide reasonable assurance that any
material inadequacies would be disclosed by such examination, and, if there
are no such inadequacies, the reports shall so state.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD OUTSIDE
OF THE UNITED STATES
3.1 APPOINTMENT OF FOREIGN SUB-CUSTODIANS. The Fund hereby authorizes and
instructs the Custodian to employ as sub-custodians for the Fund's
securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories designated
on Schedule A hereto ("foreign sub-custodians"). Upon receipt of "Proper
Instructions", as defined in Section 5 of this Contract, together with a
certified resolution of the
<PAGE>
Fund's Board of Directors, the Custodian and the Fund may agree to amend
Schedule A hereto from time to time to designate additional foreign banking
institutions and foreign securities depositories to act as sub-custodian.
Upon receipt of Proper Instructions, the Fund may instruct the Custodian to
cease the employment of any one or more such sub-custodians for maintaining
custody of the Fund's assets.
3.2 ASSETS TO BE HELD. The Custodian shall limit the securities and other
assets maintained in the custody of the foreign sub-custodians to: (a)
"foreign securities", as defined in paragraph (c)(1) of Rule 17f-5 under
the Investment Company Act of 1940, and (b) cash and cash equivalents in
such amounts as the Custodian or the Fund may determine to be reasonably
necessary to effect the Fund's foreign securities transactions. The
Custodian shall identify on its books as belonging to the Fund, the foreign
securities of the Fund held by each foreign sub-custodian.
3.3 FOREIGN SECURITIES SYSTEMS. Except as may otherwise be agreed upon in
writing by the Custodian and the Fund, assets of the Fund shall be
maintained in a clearing agency which acts as a securities depository or in
a book-entry system for the central handling of securities located outside
the United States (each, a "Foreign Securities System") only through
arrangements implemented by the foreign banking institutions serving as
sub-custodians pursuant to the terms hereof (Foreign Securities Systems and
U.S. Securities Systems are collectively referred to herein as the
"Securities System"). Where possible, such arrangements shall include
entry into agreements containing the provisions set forth in Section 3.5
hereof.
3.4 HOLDING SECURITIES. The Custodian may hold securities and other non-
cash property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, PROVIDED HOWEVER, that (i) the
records of the Custodian with respect to securities and other non-cash
property of the Fund which are maintained in such account shall identify by
book-entry those securities and other non-cash property belonging to the
Fund and (ii) the Custodian shall require that securities and other non-
cash property so held by the foreign sub-custodian be held separately from
any assets of the foreign sub-custodian or of others.
3.5 AGREEMENTS WITH FOREIGN BANKING INSTITUTIONS. Each agreement with a
foreign banking institution shall provide that: (a) the Fund's assets will
not be subject to any right, charge, security interest, lien or claim of
any kind in favor of the foreign banking institution or its creditors or
agent, except a claim of payment for their safe custody or administration;
(b) beneficial ownership of the Fund's assets will be freely transferable
without the payment of money or value other than for custody or
administration; (c) adequate records will be maintained identifying the
assets as belonging to the Fund; (d) officers of or auditors employed by,
or other representatives of the Custodian, including to the extent
permitted under applicable law the independent public accountants for the
Fund, will be given access to the books and records of the foreign banking
institution relating to its actions under its agreement with the Custodian;
and (e) assets of the
<PAGE>
Fund held by the foreign sub-custodian will be subject only to the
instructions of the Custodian or its agents.
3.6 ACCESS OF INDEPENDENT ACCOUNTANTS OF THE FUND. Upon request of the
Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books and
records of any foreign banking institution employed as a foreign
sub-custodian insofar as such books and records relate to the performance
of such foreign banking institution under its agreement with the Custodian.
3.7 REPORTS BY CUSTODIAN. The Custodian will supply to the Fund from time
to time, as mutually agreed upon, statements in respect of the securities
and other assets of the Fund held by foreign sub-custodians, including but
not limited to an identification of entities having possession of the
Fund's securities and other assets and advices or notifications of any
transfers of securities to or from each custodial account maintained by a
foreign banking institution for the Custodian on behalf of the Fund
indicating, as to securities acquired for the Fund, the identity of the
entity having physical possession of such securities.
3.8 TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT. (a) Except as otherwise
provided in paragraph (b) of this Section 3.8, the provision of Sections
2.2 and 2.7 of this Contract shall apply, MUTATIS MUTANDIS to the foreign
securities of the Fund held outside the United States by foreign
sub-custodians. (b) Notwithstanding any provision of this Contract to the
contrary, settlement and payment for securities received for the account of
the Fund and delivery of securities maintained for the account of the Fund
may be effected in accordance with the customary established securities
trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with
the expectation of receiving later payment for such securities from such
purchaser or dealer. (c) Securities maintained in the custody of a foreign
sub-custodian may be maintained in the name of such entity's nominee to the
same extent as set forth in Section 2.3 of this Contract, and the Fund
agrees to hold any such nominee harmless from any liability as a holder of
record of such securities.
3.9 LIABILITY OF FOREIGN SUB-CUSTODIANS. Each agreement pursuant to which
the Custodian employs a foreign banking institution as a foreign
sub-custodian shall require the institution to exercise reasonable care in
the performance of its duties and to indemnify, and hold harmless, the
Custodian and each Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to
any claims against a foreign banking institution as a consequence of any
such loss, damage, cost, expense, liability or claim if and to the extent
that the Fund has not been made whole for any such loss, damage, cost,
expense, liability or claim.
<PAGE>
3.10 LIABILITY OF CUSTODIAN. The Custodian shall be liable for the acts or
omissions of a foreign banking institution to the same extent as set forth
with respect to sub-custodians generally in this Contract and, regardless
of whether assets are maintained in the custody of a foreign banking
institution, a foreign securities depository or a branch of a U.S. bank as
contemplated by paragraph 3.13 hereof, the Custodian shall not be liable
for any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism or any loss where the sub-custodian has otherwise exercised
reasonable care. Notwithstanding the foregoing provisions of this
paragraph 3.10, in delegating custody duties to State Street London Ltd.,
the Custodian shall not be relieved of any responsibility to the Fund for
any loss due to such delegation, except such loss as may result from (a)
political risk (including, but not limited to, exchange control
restrictions, confiscation, expropriation, nationalization, insurrection,
civil strife or armed hostilities) or (b) other losses (excluding a
bankruptcy or insolvency of State Street London Ltd. not caused by
political risk) due to Acts of God, nuclear incident or other losses under
circumstances where the Custodian and State Street London Ltd. have
exercised reasonable care.
3.11 REIMBURSEMENT FOR ADVANCES. If the Fund requires the Custodian to
advance cash or securities for any purpose including the purchase or sale
of foreign exchange or of contracts for foreign exchange, or in the event
that the Custodian or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful
misconduct, any property at any time held for the account of the Fund shall
be security therefor and should the Fund fail to repay the Custodian
promptly, the Custodian shall be entitled to utilize available cash and to
dispose of the Fund assets to the extent necessary to obtain reimbursement.
3.12 MONITORING RESPONSIBILITIES. The Custodian shall furnish annually to
the Fund, during the month of June, information concerning the foreign
sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection with
the initial approval of this Contract. In addition, the Custodian will
promptly inform the Fund in the event that the Custodian learns of a
material adverse change in the financial condition of a foreign
sub-custodian or any material loss of the assets of the Fund or in the case
of any foreign sub-custodian not the subject of an exemptive order from the
Securities and Exchange Commission is notified by such foreign
sub-custodian that there appears to be a substantial likelihood that its
shareholders' equity will decline below $200 million (U.S. dollars or the
equivalent thereof) or that its shareholders' equity has declined below
$200 million (in each case computed in accordance with generally accepted
U.S. accounting principles).
3.13 BRANCHES OF U.S. BANKS. (a) Except as otherwise set forth in this
Contract, the provisions hereof shall not apply where the custody of the
Fund assets are maintained in a foreign branch of a banking institution
which is a "bank" as defined by Section 2(a)(5) of the Investment Company
Act of 1940 meeting the qualification set forth in Section 26(a) of said
Act. The appointment of any such branch as a sub-custodian shall be
governed by paragraph 1 of this Contract. (b) Cash
<PAGE>
held for the Fund in the United Kingdom shall be maintained in an interest
bearing account established for the Fund with the Custodian's London
branch, which account shall be subject to the direction of the Custodian,
State Street London Ltd. or both.
3.14 TAX LAW. The Custodian shall have no responsibility or liability for
any obligations now or hereafter imposed on the Fund or the Custodian as
custodian of the Fund by the tax law of the United States of America or any
state or political subdivision thereof. It shall be the responsibility of
the Fund to notify the Custodian of the obligations imposed on the Fund or
the Custodian as custodian of the Fund by the tax law of jurisdictions
other than those mentioned in the above sentence, including responsibility
for withholding and other taxes, assessments or other governmental charges,
certifications and governmental reporting. The sole responsibility of the
Custodian with regard to such tax law shall be to use reasonable efforts to
assist the Fund with respect to any claim for exemption or refund under the
tax law of jurisdictions for which the Fund has provided such information.
4. PAYMENTS FOR REPURCHASES OR REDEMPTIONS AND SALES OF SHARES OF THE FUND
From such funds as may be available for the purpose but subject to the
limitations of the Articles of Incorporation and any applicable votes of the
Board of Directors of the Fund pursuant thereto, the Custodian shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares of the Fund, the Custodian is authorized upon receipt of
instructions from the Transfer Agent to wire funds to or through a commercial
bank designated by the redeeming shareholders. In connection with the
redemption or repurchase of Shares of the Fund, the Custodian shall honor checks
drawn on the Custodian by a holder of Shares, which checks have been furnished
by the Fund to the holder of Shares, when presented to the Custodian in
accordance with such procedures and controls as are mutually agreed upon from
time to time between the Fund and the Custodian.
The Custodian shall receive from the distributor for the Fund's Shares or
from the Transfer Agent of the Fund and deposit into the Fund's account such
payments as are received for Shares of the Fund issued or sold from time to time
by the Fund. The Custodian will provide timely notification to the Fund and the
Transfer Agent of any receipt by it of payments for Shares of the Fund.
5. PROPER INSTRUCTIONS
Proper Instructions as used herein means a writing signed or initialled by
one or more person or persons as the Board of Directors shall have from time to
time authorized. Each such writing shall set forth the specific transaction or
type of transaction involved, including a specific statement of the purpose for
which such action is requested. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in
writing. Upon receipt of a certificate of the Secretary or an Assistant
Secretary as to the authorization by
<PAGE>
the Board of Directors of the Fund accompanied by a detailed description of
procedures approved by the Board of Directors, Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Board of Directors and the Custodian are satisfied
that such procedures afford adequate safeguards for the Fund's assets. For
purposes of this Section, Proper Instructions shall include instructions
received by the Custodian pursuant to any three-party agreement which requires a
segregated asset account in accordance with Section 2.12.
6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Contract, PROVIDED that all such payments shall be accounted
for to the Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments; and
4) in general, attend to all non-discretionary details in connection with
the sale, exchange, substitution, purchase, transfer and other
dealings with the securities and property of the Fund except as
otherwise directed by the Board of Directors of the Fund.
7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions, notice,
request, consent, certificate or other instrument or paper believed by it to be
genuine and to have been properly executed by or on behalf of the Fund. The
Custodian may receive and accept a certified copy of a vote of the Board of
Directors of the Fund as conclusive evidence (a) of the authority of any person
to act in accordance with such vote or (b) of any determination or of any action
by the Board of Directors pursuant to the Articles of Incorporation as described
in such vote, and such vote may be considered as in full force and effect until
receipt by the Custodian of written notice to the contrary.
8. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND CALCULATION OF
NET ASSET VALUE AND NET INCOME
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board of Directors of the Fund to keep the
books of account of the Fund and/or compute the net asset value per share of the
outstanding shares of the Fund or, if directed in writing to do so by the Fund,
shall itself keep such books of account and/or compute such net asset value per
share. If so directed, the Custodian shall also calculate daily the net income
of the Fund as described in the Fund's currently effective prospectus and shall
advise the Fund and the Transfer Agent daily of the total amounts
<PAGE>
of such net income and, if instructed in writing by an officer of the Fund to do
so, shall advise the Transfer Agent periodically of the division of such net
income among its various components. The calculations of the net asset value
per share and the daily income of the Fund shall be made at the time or times
described from time to time in the Fund's currently effective prospectus.
9. RECORDS
The Custodian shall create and maintain all records relating to its
activities and obligations under this Contract in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder.
All such records shall be the property of the Fund and shall at all times during
the regular business hours of the Custodian be open for inspection by duly
authorized officers, employees or agents of the Fund and employees and agents of
the Securities and Exchange Commission. The Custodian shall, at the Fund's
request, supply the Fund with a tabulation of securities owned by the Fund and
held by the Custodian and shall, when requested to do so by the Fund and for
such compensation as shall be agreed upon between the Fund and the Custodian,
include certificate numbers in such tabulations.
10. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to obtain from year to year favorable opinions from the Fund's
independent accountants with respect to its activities hereunder in connection
with the preparation of the Fund's Form N-1A, and Form N-SAR or other annual
reports to the Securities and Exchange Commission and with respect to any other
requirements of such Commission.
11. COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between the Fund and
the Custodian.
12. RESPONSIBILITY OF CUSTODIAN
So long as and to the extent that it is in the exercise of reasonable care,
the Custodian shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received by it or delivered by it
pursuant to this Contract and shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties, including any
futures commission merchant acting pursuant to the terms of a three-party
futures or options agreement. The Custodian shall be held to the exercise of
reasonable care in carrying out the provisions of this Contract, but shall be
kept indemnified by and shall be without liability to the Fund for any action
taken or omitted by it in good faith without negligence. It shall be entitled
to rely on and may act upon advice of counsel (who may be counsel for the Fund)
on all matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice.
<PAGE>
Except as may arise from the Custodian's own negligence or willful
misconduct or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances beyond
the reasonable control of the Custodian or any sub-custodian or Securities
System or any agent or nominee of any of the foregoing, including, without
limitation, nationalization or expropriation, imposition of currency controls or
restrictions, the interruption, suspension or restriction of trading on or the
closure of any securities market, power or other mechanical or technological
failures or interruptions, computer viruses or communications disruptions, acts
of war or terrorism, riots, revolutions, work stoppages, natural disasters or
other similar events or acts; (ii) errors by the Fund or the Investment Advisor
in their instructions to the Custodian provided such instructions have been in
accordance with this Contract; (iii) the insolvency of or acts or omissions by a
Securities System; (iv) any delay or failure of any broker, agent or
intermediary, central bank or other commercially prevalent payment or clearing
system to deliver to the Custodian's sub-custodian or agent securities purchased
or in the remittance or payment made in connection with securities sold; (v) any
delay or failure of any company, corporation, or other body in charge of
registering or transferring securities in the name of the Custodian, the Fund,
the Custodian's sub-custodians, nominees or agents or any consequential losses
arising out of such delay or failure to transfer such securities including non-
receipt of bonus, dividends and rights and other accretions or benefits; (vi)
delays or inability to perform its duties due to any disorder in market
infrastructure with respect to any particular security or Securities System; and
(vii) any provision of any present or future law or regulation or order of the
United States of America, or any state thereof, or any other country, or
political subdivision thereof or of any court of competent jurisdiction.
The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to sub-
custodians generally in this Contract.
If the Fund requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or agents,
to advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the Custodian
shall be entitled to utilize available cash and to dispose of the Fund assets to
the extent necessary to obtain reimbursement.
In no event shall the Custodian be liable for indirect, special or
consequential damages.
13. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
<PAGE>
This Contract shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than thirty (30)
days after the date of such delivery or mailing; PROVIDED, however that the
Custodian shall not act under Section 2.10 hereof in the absence of receipt of
an initial certificate of the Secretary or an Assistant Secretary that the Board
of Directors of the Fund has approved the initial use of a particular U.S.
Securities System, as required by Rule 17f-4 under the Investment Company Act of
1940, as amended and that the Custodian shall not act under Section 2.11 hereof
in the absence of receipt of an initial certificate of the Secretary or an
Assistant Secretary that the Board of Directors has approved the initial use of
the Direct Paper System; PROVIDED FURTHER, however, that the Fund shall not
amend or terminate this Contract in contravention of any applicable federal or
state regulations, or any provision of the Articles of Incorporation, and
further provided, that the Fund may at any time by action of its Board of
Directors (i) substitute another bank or trust company for the Custodian by
giving notice as described above to the Custodian, or (ii) immediately terminate
this Contract in the event of the appointment of a conservator or receiver for
the Custodian by the Comptroller of the Currency or upon the happening of a like
event at the direction of an appropriate regulatory agency or court of competent
jurisdiction.
Upon termination of the Contract, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
14. SUCCESSOR CUSTODIAN
If a successor custodian shall be appointed by the Board of Directors of
the Fund, the Custodian shall, upon termination, deliver to such successor
custodian at the office of the Custodian, duly endorsed and in the form for
transfer, all securities then held by it hereunder and shall transfer to an
account of the successor custodian all of the Fund's securities held in a
Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Board of
Directors of the Fund, deliver at the office of the Custodian and transfer such
securities, funds and other properties in accordance with such vote.
In the event that no written order designating a successor custodian or
certified copy of a vote of the Board of Directors shall have been delivered to
the Custodian on or before the date when such termination shall become
effective, then the Custodian shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the Investment Company Act of 1940,
doing business in Boston, Massachusetts, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $25,000,000, all securities, funds and other
properties held by the Custodian and all instruments held by the Custodian
relative thereto and all other property held by it under this Contract and to
transfer to an account of such successor custodian all of the Fund's securities
<PAGE>
held in any Securities System. Thereafter, such bank or trust company shall be
the successor of the Custodian under this Contract.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to procure the certified copy of the vote referred to or of
the Board of Directors to appoint a successor custodian, the Custodian shall be
entitled to fair compensation for its services during such period as the
Custodian retains possession of such securities, funds and other properties and
the provisions of this Contract relating to the duties and obligations of the
Custodian shall remain in full force and effect.
15. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Contract, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Contract as may in their joint opinion be
consistent with the general tenor of this Contract. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the Articles of Incorporation of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Contract.
16. MASSACHUSETTS LAW TO APPLY
This Contract shall be construed and the provisions thereof interpreted
under and in accordance with laws of the Commonwealth of Massachusetts.
17. PRIOR CONTRACTS
This Contract supersedes and terminates, as of the date hereof, all prior
contracts between the Fund and the Custodian relating to the custody of the
Fund's assets.
18. SHAREHOLDER COMMUNICATIONS ELECTION
Securities and Exchange Commission Rule 14b-2 requires banks which hold
securities for the account of customers to respond to requests by issuers of
securities for the names, addresses and holdings of beneficial owners of
securities of that issuer held by the bank unless the beneficial owner has
expressly objected to disclosure of this information. In order to comply with
the rule, the Custodian needs the Fund to indicate whether it authorizes the
Custodian to provide the Fund's name, address, and share position to requesting
companies whose securities the Fund owns. If the Fund tells the Custodian "no",
the Custodian will not provide this information to requesting companies. If the
Fund tells the Custodian "yes" or does not check either "yes" or "no" below, the
Custodian is required by the rule to treat the Fund as consenting to disclosure
of this information for all securities owned by the Fund or any funds or
accounts established by the Fund. For the Fund's protection, the Rule prohibits
the requesting company from using
<PAGE>
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.
YES [ ] The Custodian is authorized to release the Fund's name, address,
and share positions.
NO [X] The Custodian is not authorized to release the Fund's name,
address, and share positions.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the 22nd day of August, 1996.
ATTEST HARTFORD SMALL COMPANY FUND, INC.
/s/ Kevin J. Carr By /s/ George R. Jay
- --------------------------- -------------------------------
ATTEST STATE STREET BANK AND TRUST COMPANY
By /s/ Mark J. Bowler
- --------------------------- -------------------------------
Mark J. Bowler
Senior Vice President
<PAGE>
SCHEDULE A
The following foreign banking institutions and foreign securities
depositories have been approved by the Board of Directors of Hartford Small
Company Fund, Inc. for use as sub-custodians for the Fund's securities and other
assets:
(Insert banks and securities depositories)
Certified:
- ----------------------------
Fund's Authorized Officer
Date:
- ----------------------------
<PAGE>
SCHEDULE A
----------
STATE STREET BANK AND TRUST COMPANY
GLOBAL CUSTODY NETWORK
FOR MUTUAL FUND CLIENTS
1996
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
<S> <C> <C>
Argentina Citibank, N.A. Caja de Valores S.A.
Australia Westpac Banking Austraclear Limited;
Corporation
Reserve Bank Information and
Transfer System (RITS)
Austria GiroCredit Bank Oesterreichische
Aktiengesellschaft Kontrollbank AG
der Sparkassen (Wertpapiersammelbank Division)
Bangladesh Standard Chartered Bank None
Belgium Generale Bank Caisse Interprofessionelle
de Depots et de Virements
de Titres S.A. (CIK);
Banque Nationale de Belgique
Botswana Barclays Bank of Botswana Limited None
Brazil Citibank, N.A. Bolsa de Valores de Sao Paulo
(Bovespa); (Bovespa);
Banco Central do Brasil,
Systema Especial de Liquidacao
e Custodia (SELIC)
Canada Canada Trustco The Canadian Depository
Mortgage Company for Securities Limited (CDS)
Chile Citibank, N.A. None
</TABLE>
<PAGE>
STATE STREET BANK AND TRUST COMPANY
GLOBAL CUSTODY NETWORK
FOR MUTUAL FUND CLIENTS
1996
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
<S> <C> <C>
People's Republic of The Hongkong and Shanghai Shanghai Securities Central
China Banking Corporation Limited, Clearing and Registration
Shanghai and Shenzhen branches Corporation (SSCCRC);
Shenzhen Securities Registrars
Co., Ltd. and it designated
agent banks
Colombia Cititrust Colombia S.A. None
Sociedad Fiduciaria
Cyprus Barclays Bank PLC None
Cyprus Offshore Banking Unit
Czech Republic Ceskoslovenska Obchodni Stredisko Cennych Papiru (SCP);
Banka A.S.
Czech National Bank (CNB)
Denmark Den Danske Bank Vaerdipapircentralen -
The Danish Securities
Center (VP)
Ecuador Citibank, N.A. None
Egypt National Bank of Egypt None
Finland Merita Bank Limited The Central Share Register of
Finland
France Banque Paribas Societe Interprofessionnelle
pour la Compensation des
Valeurs Mobilieres (SICOVAM);
Banque de France,
Saturne System
Germany Dresdner Bank A.G. The Deutscher Kassenverein AG
Ghana Barclays Bank of Ghana Limited None
</TABLE>
<PAGE>
STATE STREET BANK AND TRUST COMPANY
GLOBAL CUSTODY NETWORK
FOR MUTUAL FUND CLIENTS
1996
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
<S> <C> <C>
Greece National Bank of The Central Securities Depository
Greece S.A. (Apothetirion Titlon A.E.)
Hong Kong Standard Chartered Bank The Central Clearing and
Settlement System (CCASS)
Hungary Citibank Budapest Rt. The Central Depository and Clearing
House (Budapest) Ltd.
(KELER Ltd.)
India Deutsche Bank AG None
The Hongkong and Shanghai None
Banking Corporation Limited
Indonesia Standard Chartered Bank None
Ireland Bank of Ireland None;
The Central Bank of Ireland,
The Gilt Settlement Office (GSO)
Israel Bank Hapoalim B.M. The Clearing House of the
Tel Aviv Stock Exchange
Italy Morgan Guaranty Trust Monte Titoli S.p.A.;
Company
Banca d'Italia
Ivory Coast Societe Generale de Banques None
en Cote d'Ivoire
Japan The Daiwa Bank, Limited Japan Securities Depository Center
(JASDEC);
Bank of Japan Net System
The Fuji Bank, Limited Japan Securities Depository Center
(JASDEC);
Bank of Japan Net System
</TABLE>
<PAGE>
STATE STREET BANK AND TRUST COMPANY
GLOBAL CUSTODY NETWORK
FOR MUTUAL FUND CLIENTS
1996
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
<S> <C> <C>
Japan The Sumitomo Trust Japan Securities Depository
& Banking Co., Ltd. Center (JASDEC);
Bank of Japan Net System
Jordan The British Bank of the None
Middle East
Kenya Barclays Bank of Kenya Limited None
Republic of Korea SEOULBANK Korea Securities Depository (KSD)
Malaysia Standard Chartered Bank Malaysian Central Depository Sdn.
Malaysian Berhad Bhd. (MCD)
Mauritius The HongKong and Shanghai None
Banking Corporation Limited
Mexico Citibank Mexico, S.A. S.D. INDEVAL, S.A. de C.V.
(Instituto para el Deposito de
Valores);
Banco de Mexico
Morocco Banque Commerciale du Maroc None
Netherlands MeesPierson N.V. Nederlands Centraal
Instituut voor Giraal
Effectenverkeer B.V.
(NECIGEF)
New Zealand ANZ Banking Group New Zealand Central Securities
(New Zealand) Limited Depository Limited (NZCSD)
Norway Cristiania Bank og Verdipapirsentralen -
Kreditkasse The Norwegian Registry of
Securities (VPS)
Pakistan Deutsche Bank AG None
</TABLE>
<PAGE>
STATE STREET BANK AND TRUST COMPANY
GLOBAL CUSTODY NETWORK
FOR MUTUAL FUND CLIENTS
1996
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
<S> <C> <C>
Peru Citibank, N.A. Caja de Valores (CAVAL)
Phillipines Standard Chartered Bank None
Poland Citibank Poland S.A. The National Depository
of Securities (Centrum
Krajowego Depozytu
Papierow Wartos ciowych)
Portugal Banco Comercial Portugues Central de Valores
Mobiliarios (Central)
Russia Credit Suisse, Zurich via
Credit Suisse (Moscow) Limited
Singapore The Development Bank The Central Depository
of Singapore Ltd. (Pte) Limited (CDP)
Slovak Republic Ceskoslovenska Obchadna Stredisko cennych
Banka A.S. papierov (SCP);
National Bank of Slovakia
South Africa Standard Bank of The Central Depository Limited
South Africa Limited
Spain Banco Santander, S.A. Servicio de Compensacion y
Liquidacion de Valores (SCLV);
Banco de Espana,
Anotaciones en Cuenta
Sri Lanka The Hongkong and Shanghai The Central Depository
Banking Corporation Limited System (Pvt) Limited
Swaziland Barclays Bank of Swaziland None
Limited
Sweden Skandinaviska Enskilda Vardepapperscentralen VPC AB -
Banken The Swedish Central Securities
Depository
Switzerland Union Bank of Switzerland Schweizerische Effekten -
Giro AG (SEGA)
</TABLE>
<PAGE>
STATE STREET BANK AND TRUST COMPANY
GLOBAL CUSTODY NETWORK
FOR MUTUAL FUND CLIENTS
1996
<TABLE>
<CAPTION>
COUNTRY SUBCUSTODIAN CENTRAL DEPOSITORY
<S> <C> <C>
Taiwan-R.O.C. Central Trust of China The Taiwan Securities
Central Depository
Company, Ltd. (TSCD)
Thailand Standard Chartered Bank Thailand Securities Depository
Company Limited (TSD)
Turkey Citibank, N.A. Takas ve Saklama Bankasi A.S.
(TAKASBANK)
United Kingdom State Street Bank and None;
Trust Company
The Bank of England,
The Central Gilts Office (CGO);
The Central Moneymarkets Office
(CMO)
Uruguay Citibank, N.A. None
Venezuela Citibank, N.A. None
Zambia Barclays Bank of Zambia Limited Lusaka Central Depository (LCD)
Zimbabwe Barclays Bank of Zimbabwe Limited None
</TABLE>
Euroclear (The Euroclear System)/State Street London Limited
Cedel (Cedel Bank societe anonyme)/State Street London Limited
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 42,077,526
<INVESTMENTS-AT-VALUE> 42,383,421
<RECEIVABLES> 564,446
<ASSETS-OTHER> 11,024
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 42,958,891
<PAYABLE-FOR-SECURITIES> 135,951
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 11,018
<TOTAL-LIABILITIES> 146,969
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 4,231,656
<SHARES-COMMON-STOCK> 40,042,487
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 156
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 189,315
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 305,894
<NET-ASSETS> 42,811,921
<DIVIDEND-INCOME> 26,626
<INTEREST-INCOME> 66,493
<OTHER-INCOME> 0
<EXPENSES-NET> 56,361
<NET-INVESTMENT-INCOME> 36,757
<REALIZED-GAINS-CURRENT> 189,315
<APPREC-INCREASE-CURRENT> 305,894
<NET-CHANGE-FROM-OPS> 531,966
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 40,509,778
<NUMBER-OF-SHARES-REDEEMED> 495,256
<SHARES-REINVESTED> 27,965
<NET-CHANGE-IN-ASSETS> 42,811,921
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 55,425
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 68,313
<AVERAGE-NET-ASSETS> 19,526,150
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0.070
<PER-SHARE-DIVIDEND> (0.002)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.070
<EXPENSE-RATIO> 0.880
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
