EXHIBIT (e)
DISTRIBUTION AGREEMENT
AETNA VARIABLE ENCORE FUND D/B/A AETNA MONEY MARKET VP
00 XXXXX XXXXX XXXXXX
XXXXXXXX, XXXXXXXXXXX 00000-0000
AGREEMENT made this 1st day of January, 2002, by and between Aetna
Variable Encore Fund d/b/a Aetna Money Market VP (the "Trust") and ING Pilgrim
Securities, Inc. ("Distributor"), a Delaware corporation.
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as a diversified open-end investment company
and offers its shares continuously to separate accounts of insurance companies
("Separate Accounts") to serve as an investment option under variable annuity
contracts or variable life insurance policies issued by the insurance companies;
and its shares may be sold in the future to separate accounts of other
affiliated or unaffiliated insurance companies; and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc. ("NASD"); and
WHEREAS, the Trust and the Distributor wish to enter into this
Agreement whereby the Distributor will act as the Trust's principal underwriter
for the sale of shares of the Trust to the Separate Accounts;
NOW, THEREFORE, the parties hereto agree as follows:
I. Appointment of the Distributor
The Trust hereby appoints the Distributor as the principal
underwriter and distributor of the Trust to sell shares of the Trust to the
Separate Accounts and any other persons, and the Distributor hereby accepts such
appointment.
II. Purchase of Shares from the Trust
A. The Trust herewith engages the Distributor to act as exclusive
distributor of the shares of the Trust. Said sales shall be made only to
investors eligible to invest in a registered investment company consistent with
such company's serving as an investment vehicle for
variable annuities and variable life insurance company contracts. Distributor
need not hold itself available to receive by mail, telex and/or telephone,
orders for the purchase of shares.
B. All shares sold by the Distributor under this Agreement shall be sold
at the net asset value per share ("Offering Price") determined in the manner
described in the Trust's prospectus, as it may be amended from time to time.
III. Redemption of Shares by the Trust
A. Any of the outstanding shares of the Trust may be tendered for
redemption at any time, and the Trust agrees to redeem any such shares so
tendered in accordance with the applicable provisions of the prospectus and the
Trust's Declaration of Trust and By-Laws. The redemption price is the net asset
value per share next determined after the initial receipt of proper request for
redemption.
B. The right to redeem shares or to receive payment with respect to any
redemption may be suspended only in accordance with applicable law.
IV. Duties of the Trust
A. The Trust shall furnish to the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of the shares of the Trust.
B. The Trust shall take, from time to time, subject to the necessary
approval of its shareholders, all necessary action to fix the number of its
authorized shares and to register shares under the Securities Act of 1933, as
amended (the "1933 Act"), in order that there will be available for sale at
least the number of shares as investors may reasonably be expected to purchase.
V. Duties of the Distributor
In selling the shares of the Trust, the Distributor shall use its best
efforts to conform with the requirements of all applicable federal and state
laws and regulations, and the regulations of the NASD, relating to the sale of
such securities. Except as provided below, the Distributor is not authorized by
the Trust to give any information or make any representations, other than those
contained in the registration statement for the Trust and its shares, the
prospectus, and any sales literature specifically approved by a principal of the
Distributor. The Distributor shall furnish applicable federal and state
regulatory authorities with any information or reports in connection with its
services under this Agreement which such authorities may request in order to
ascertain whether the Trust's operations are being conducted in an manner
consistent with any applicable law or regulations. Nothing contained in this
Agreement shall prevent the Distributor from entering into distribution
agreements with other investment companies.
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VI. Allocation of Expenses
A. The Trust will pay the following expenses in connection with the sales
and distribution of shares of the Trust.
1. expenses pertaining to the preparation of its audited and
certified financial statements to be included in any amendments ("Amendments")
to the Trust's registration statement under the 1933 Act, including the
prospectus and Statement of Additional Information ("SAI") included therein;
2. expenses pertaining to the preparation, printing, and
distribution of any reports or communications, including the prospectus and SAI,
which are sent to existing shareholders of the Trust;
3. filing and other fees to federal and state securities regulatory
authorities necessary to register and maintain registration of the shares; and
4. expenses of the Trust's administration, including all costs and
expenses in connection with the issuance, transfer and registration of the
shares, including, but not limited to, any taxes and other governmental charges
in connection therewith.
B. The Distributor will pay the following expenses:
1. expenses of printing additional copies of the prospectus and SAI
and any Amendments or supplements thereto which are necessary to continue to
offer shares of the Trust to the public; and
2. expenses pertaining to the printing of additional copies, for use
by the Distributor as sales literature, of reports or other communications which
have been prepared for distribution to existing shareholders of the Trust or
incurred by the Distributor in advertising, promoting and selling shares of the
Trust.
VII. Compensation
The Trust shall not pay any compensation to the Distributor for its
services as a distributor hereunder, nor shall the Trust reimburse the
Distributor for any expenses related to such services except to the extent
permitted under a distribution plan adopted by the Trust pursuant to Rule 12b-1
under the Investment Company Act of 1940 ("1940 Act"). Distributor may receive a
fee described in any distribution plan adopted by the Trust pursuant to Rule
12b-1 under the 1940 Act.
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VIII. Records
All records maintained by the Distributor in connection with this
Agreement shall be the property of the Trust and shall be returned to the Trust
upon termination of this Agreement, free from any claims or retention of rights
by the Distributor. The Distributor shall keep confidential any information
obtained pursuant to this Agreement and shall disclose such information, only if
the Trust has authorized such disclosure, or if such disclosure is expressly
required by applicable federal or state regulatory authorities.
IX. Duration and Termination of this Agreement
This Agreement shall become effective on the date first written
above or on such later date approved by the Trust's Board of Trustees, including
a majority of those Trustees who are not parties to this Agreement or interested
persons (as such term is defined in the 1940 Act) thereof. Unless terminated as
provided herein, the Agreement shall continue in full force and effect through
December 31, 2002, and shall continue in effect from year to year thereafter for
successive one (1) year periods if approved at least annually (i) by a vote of a
majority of the outstanding voting securities of the Trust or by a vote of the
Trustees of the Trust, and (ii) by a vote of a majority of the Trustees of the
Trust who are not interested persons or parties to this Agreement (other than as
Trustees of the Trust), cast in person at a meeting called for the purpose of
voting on this Agreement.
This Agreement may be terminated at any time without penalty on at
least sixty (60) days' notice by the Trust's Board of Trustees or by a majority
vote of its shareholders, or by the Distributor on sixty (60) days' notice.
This Agreement shall terminate automatically in the event of its
assignment.
X. Amendment
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought. If shareholder approval of an amendment is required under the 1940 Act,
no such amendment shall become effective until approved by the requisite number
of outstanding shares of the Trust. Otherwise, a written amendment of this
Agreement is effective upon the approval of the Board and the Manager.
XI. Miscellaneous
This Agreement shall be subject to the laws of the State of Delaware
and shall be interpreted and construed to further and promote the operation of
the Trust as an open-end investment company. As used herein, the terms "Net
Asset Value," "Investment Company," "Open-End Investment Company," "Assignment,"
"Principal Underwriter," "Interested Person,"
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and "Majority of the Outstanding Voting Securities," shall have the meanings set
forth in the 1933 Act and the 1940 Act, as applicable, and the rules and
regulations promulgated thereunder.
XII. Liability
Nothing contained herein shall be deemed to protect the Distributor
against any liability to the Trust or its shareholders to which the Distributor
would otherwise be subject by reason of willful misfeasance, bad faith or
negligence in the performance of the Distributor's duties hereunder, or by
reason of the Distributor's reckless disregard of its obligations and duties
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year first
above written.
AETNA VARIABLE ENCORE FUND d/b/a
AETNA MONEY MARKET VP
By: /s/ Xxxxxx X. Naka
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Name: Xxxxxx X. Naka
Title: Senior Vice President
ING PILGRIM SECURITIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
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