FORM OF
SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and between Aetna Life Insurance and Annuity
Company, a Connecticut insurance corporation (the "Adviser") and Aetna Capital
Management, Inc., a Connecticut corporation (the "Subadviser") as of the Date
set forth below.
R E C I T A L
WHEREAS, Aetna Series Fund, Inc. (the "Company") is registered under
the Investment Company Act of 1940, as amended (the "1940 Act") as an open-end,
diversified management investment company, consisting of multiple series of
investment portfolios;
WHEREAS, the Adviser is registered under the Investment Advisers Act of
1940, as amended (the "Advisers Act"), as an investment adviser and engages in
the business of acting as an investment adviser;
WHEREAS, the Subadviser is registered under the Advisers Act as an
investment adviser and engages in the business of acting as an investment
adviser;
WHEREAS, the Company's Articles of Incorporation authorizes the Board
of Directors of the Company to classify or reclassify authorized but unissued
shares of the Company into series of shares representing interests in various
investment portfolios;
WHEREAS, pursuant to such authority, the Company has
established the ________ Fund (the "Fund");
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
of even date herewith with the Company (the "Investment Advisory Agreement"),
pursuant to which the Adviser shall act as investment advisor with respect to
the Fund; and
WHEREAS, pursuant to Paragraph IV of the Investment Advisory Agreement,
the Adviser wishes to retain the Subadviser for purposes of rendering advisory
services to the Adviser in connection with the Fund upon the terms and
conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
I. APPOINTMENT AND OBLIGATIONS OF THE ADVISER
The Adviser hereby appoints the Subadviser to render to the Adviser
with respect to the Fund, investment research and advisory services set forth
below in Section II, under the
supervision of the Adviser and subject to the approval and direction of the
Company's Board of Directors (the "Board"), and the Subadviser hereby accepts
such appointment, all subject to the terms and conditions contained herein. The
Subadviser shall, for all purposes herein, be deemed an independent contractor
and shall have, unless otherwise expressly provided or authorized, no authority
to act for or represent the Fund in any way or otherwise be deemed an agent of
the Fund.
II. DUTIES OF THE SUBADVISER AND THE ADVISER
In carrying out the terms of this agreement, the Subadviser shall
provide the following services:
A. DUTIES OF THE SUBADVISER
The Subadviser shall regularly provide investment advice with
respect to the Fund and shall, subject to the terms of this Agreement,
continuously supervise the investment and reinvestment of cash,
securities and instruments or other property comprising the assets of
the Fund; and in furtherance thereof, the Subadviser's duties shall
include:
1. Obtaining and evaluating pertinent information about
significant developments and economic, statistical and
financial data, domestic, foreign or otherwise, whether
affecting the economy generally or the Fund, and whether
concerning the individual issuers whose securities are
included in the Fund or the activities in which such issuers
engage, or with respect to securities which the Subadviser
considers desirable for inclusion in the Fund's investment
portfolio;
2. Determining which issuers and securities shall be
purchased, sold or exchanged by the Fund or otherwise
represented in the Fund's investment portfolio and regularly
reporting thereon to the Adviser and, at the request of the
Adviser, to the Board;
3. Formulating and implementing continuing programs for the
purchases and sales of the securities of such issuers and
regularly reporting thereon to the Adviser and, at the request
of the Adviser, to the Board; and
4. Taking, on behalf of the Fund, all actions that appear to
the Subadviser necessary to carry into effect such investment
program, including the placing of purchase and sale orders,
and making appropriate reports thereon to the Adviser and the
Board.
B. DUTIES OF THE ADVISER
The Adviser shall retain responsibility for, among other
things, providing the following advice and services with respect to the
Fund:
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1. The Adviser shall monitor the investment program maintained
by the Subadviser for the Fund to ensure that the Fund's
assets are invested in compliance with the Subadvisory
Agreement and the Fund's Registration Statement;
2. The Adviser shall consult with and assist the Subadviser in
maintaining appropriate policies, procedures and records so
that the Subadviser operates its business and any investment
program hereunder in compliance with applicable laws;
3. The Adviser shall establish and maintain periodic
communications with the Subadviser to share information it
obtains with the Subadviser concerning the effect of
developments and data on the investment program maintained by
the Subadviser; and
4. The Adviser shall oversee matters relating to Fund
promotion, marketing materials and the Subadviser's reports to
the Board.
III. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE SUBADVISER
1. Due Incorporation and Organization. The Subadviser is duly
organized and is in good standing under the laws of the State
of Connecticut and is fully authorized to enter into this
Agreement and carry out its duties and obligations hereunder.
2. Registration. The Subadviser is registered as an investment
adviser with the Securities and Exchange Commission (the
"SEC") under the Advisers Act, and is registered or licensed
as an investment adviser under all of the laws of all
jurisdictions in which its activities require it to be so
registered or licensed. The Subadviser shall maintain such
registration or license in effect at all times during the term
of this Agreement.
3. Best Efforts. The Subadviser at all times shall provide its
best judgment and effort to the Fund in carrying out its
obligations hereunder.
B. REPRESENTATIONS AND WARRANTIES OF THE ADVISER
1. Due Incorporation and Organization. The Adviser is duly
organized and is in good standing under the laws of the State
of Connecticut and is fully authorized to enter into this
Agreement and carry out its duties and obligations hereunder.
2. Registration. The Adviser is registered as an investment
adviser with the SEC under the Advisers Act, and is registered
or licensed as an investment adviser under all of the laws of
all jurisdictions in which its activities require it to be so
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registered or licensed. The Adviser shall maintain such
registration or license in effect at all times during the term
of this Agreement.
3. Best Efforts. The Adviser at all times shall provide its
best judgment and effort to the Fund in carrying out its
obligations hereunder.
IV. BROKER-DEALER RELATIONSHIPS
A. PORTFOLIO TRADES
The Subadviser, at its own expense, and in consultation with the
Adviser, shall place all orders for the purchase and sale of portfolio
securities for the Fund with brokers or dealers selected by the Subadviser,
which may include brokers or dealers affiliated with the Subadviser. The
Subadviser shall use its best efforts to seek to execute portfolio transactions
at prices that are advantageous to the Fund and at commission rates that are
reasonable in relation to the benefits received.
B. SELECTION OF BROKER-DEALERS
In selecting broker-dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Fund and/or the other accounts over which the
Subadviser or its affiliates exercise investment discretion. The Subadviser is
authorized to pay a broker or dealer who provides such brokerage and research
services a commission for executing a portfolio transaction for the Fund that is
in excess of the amount of commission another broker or dealer would have
charged for effecting that transaction if the Subadviser determines in good
faith that such amount of commission is reasonable in relation to the value of
the brokerage and research services provided by such broker or dealer. This
determination may be viewed in terms of either that particular transaction or
the overall responsibilities that the Subadviser and its affiliates have with
respect to accounts over which they exercise investment discretion. The Adviser
and the Board shall periodically review the commissions paid by the Fund to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits received.
V. CONTROL BY THE BOARD OF DIRECTORS.
Any investment program undertaken by the Subadviser pursuant to this
Agreement, as well as any other activities undertaken by the Subadviser with
respect to the Fund, shall at all times be subject to any directives of the
Board.
VI. COMPLIANCE WITH APPLICABLE REQUIREMENTS.
In carrying out its obligations under this Agreement, the Adviser shall
at all times conform to:
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A. all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;
B. the provisions of the registration statement of the Company, as the
same may be amended from time to time, under the Securities Act of
1933, as amended, and the 1940 Act;
C. the provisions of the Articles of Incorporation of the Company, as
amended from time to time;
D. the provisions of the by-laws of the Company, as amended from time
to time; and
E. any other applicable provisions of state or federal law.
VII. COMPENSATION
The Adviser shall pay the Subadviser, as compensation for services
rendered hereunder, from its own assets, an annual fee, payable monthly, based
on the average daily net assets of the Fund as follows:
Fee Assets
0.30% On first $50 million
$100,000 minimum
0.25% On next $50 million
0.20% Over $100 million
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily at the rate of 1/365 of the annual subadvisory fee
applied to the daily net assets of the Fund. If this Agreement becomes effective
subsequent to the first day of a month or shall terminate before the last day of
a month, compensation for that part of the month this Agreement is in effect
shall be prorated in a manner consistent with the calculation of the fees set
forth above.
Subject to the provisions of Paragraph A. below, payment of the Subadviser's
compensation for the preceding month shall be made as promptly as possible. The
Subadviser acknowledges that, pursuant to the Investment Advisory Agreement, the
Adviser has agreed to reduce its fee or reimburse the Fund if the expenses borne
by the Fund exceed the expense limitations applicable to the Fund imposed by the
securities laws or regulations of any jurisdiction in which the Fund's shares
are qualified for sale. Accordingly, the Subadviser agrees as follows:
A. If, for any fiscal year, the total of all ordinary business expenses
of the Fund, including all investment advisory fees but excluding
brokerage commissions, distribution fees, taxes, interest and
extraordinary expenses and certain other excludable expenses, would
exceed the most restrictive expense limits imposed by any statute or
regulatory authority of any jurisdiction in which shares of the Fund
are offered for sale (unless a waiver is obtained), the Subadviser
shall reduce its advisory fee in order to reduce such
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excess expenses, but will not be required to reimburse the Fund for any
ordinary business expenses which exceed the amount of its advisory fee
for such fiscal year. The amount of any such reduction is to be borne
by the Subadviser and shall be deducted from the fee otherwise payable
to the Subadviser during such fiscal year. For the purposes of this
paragraph, the term "fiscal year" shall exclude the portion of the
current fiscal year which shall have elapsed prior to the date hereof
and shall include the portion of the then current fiscal year which
shall have elapsed at the date of termination of this Agreement; and
B. Such reductions will, in each case, be proportionate to the
reduction in the Adviser's fee for the same period.
VIII. ALLOCATION OF EXPENSES
The Subadviser shall pay the salaries, employment benefits and other
related costs of those of its personnel engaged in providing investment advice
to the Fund hereunder, including, without limitation, office space, office
equipment, telephone and postage costs. In the event that any other expense
hereunder shall, in the first instance, be paid by the Subadviser, the Adviser
shall reimburse the Subadviser for such expense on presentation of a statement
with respect thereto.
IX. NON-EXCLUSIVITY
The services of the Subadviser with respect to the Company and the Fund
are not to be deemed to be exclusive, and the Subadviser shall be free to render
investment advisory and administrative or other services to others (including
other investment companies) and to engage in other activities. It is understood
and agreed that officers or directors of the Subadviser may serve as officers or
directors of the Adviser or of the Company; hat officers or directors of the
Adviser or of the Company may serve as officers or directors of the Subadviser
to the extent permitted by law; and that the officers and directors of the
Subadviser are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust, including other
investment advisory companies.
X. TERM
This Agreement shall become effective at the close of business on the
date hereof and shall remain in force and effect, subject to Paragraphs XI and
XII hereof and approval by the Fund's shareholders, for a period of two years
from the date hereof.
XI. RENEWAL
Following the expiration of its initial two-year term, the Agreement
shall continue in force and effect from year to year, provided that such
continuance is specifically approved at least annually:
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A. (1) by the Company's directors or (2) by the vote of a majority of
the Fund's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), and
B. by the affirmative vote of a majority of the directors who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a director of the Company), by votes cast in
person at a meeting specifically called for such purpose.
XII. TERMINATION
This Agreement may be terminated as to the Fund at any time, without
the payment of any penalty, by vote of the Company's directors or by vote of a
majority of the Fund's outstanding voting securities, or by the Adviser, or by
the Subadviser on sixty (60) days' written notice to the other party and to the
Company. The notice provided for herein may be waived by the party required to
be notified. This Agreement shall automatically terminate in the event of its
"assignment," as defined in Section 2 (a) (4) of the 1940 Act.
XIII. LIABILITY OF SUBADVISER
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Subadviser or any of its officers, directors or employees, the Subadviser shall
not be subject to liability to the Adviser for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security.
XIV. NOTICES
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to such address as may be designated for the
receipt of such notice with a copy to the Company. Until further notice, it is
agreed that the address of the Company, that of the Adviser and that of the
Subadviser shall be 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
XV. QUESTIONS OF INTERPRETATION
This Agreement shall be governed by the laws of the State of
Connecticut. Any question of interpretation of any term or provision of this
Agreement having a counterpart in or otherwise derived from a term or provision
of the 1940 Act shall be resolved by reference to such term or provision of the
1940 Act and to interpretations thereof, if any, by the United States Courts or,
in the absence of any controlling decision of any such court, by rules,
regulations or orders of the SEC issued pursuant to the 1940 Act. In addition,
where the effect of a requirement of the 1940 Act reflected in any provision of
the Agreement is revised by rule, regulation or order of the SEC, such provision
shall be deemed to incorporate the effect of such rule, regulation or order.
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XVI. SERVICE XXXX
The service xxxx of the Company and the Fund and the name "Aetna" have
been adopted by the Company with the permission of Aetna Life and Casualty
Company and their continued use is subject to the right of Aetna Life and
Casualty to withdraw this permission in the event the Subadviser or another
subsidiary or affiliated corporation of Aetna Life and Casualty Corporation
should not be the investment adviser of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the 8th day of December,
1993.
Attest: Aetna Life Insurance and Annuity Company
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
Attest: Aetna Capital Management, Inc.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxx
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Subadvisory Agreement
Schedule of Parties
Subadvisory Agreements have been entered into with the following parties in
substantially the same form and type as the exhibit included herewith.
Party Date
----- ----
Aetna Growth Fund 12/8/93
Aetna Small Company Growth 12/8/93
Aetna Tax Free Fund 12/8/93
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