THE AAL MUTUAL FUNDS
SUB-ADVISORY AGREEMENT FOR
THE AAL AGGRESSIVE GROWTH FUND
WITH
JANUS CAPITAL CORPORATION
AGREEMENT made this 22nd day of June, 2000, by and among THE AAL MUTUAL
FUNDS (the "Fund"), a Massachusetts Business Trust, AAL Capital Management
Corporation (the "Adviser"), a Delaware Corporation and JANUS CAPITAL
CORPORATION (the "Sub-Adviser"), a Colorado Corporation.
WITNESSETH:
In consideration of the mutual promises and agreements herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, it is hereby agreed by and among the parties hereto as follows:
1. In General
The Sub-Adviser agrees, as more fully set forth herein, to act as Sub-Adviser to
the Fund with respect to the investment and reinvestment of the assets of the
Fund's series of shares described as The AAL Aggressive Growth Fund. It is
understood that the Fund may create one or more additional Fund series from time
to time and that this Agreement may be amended by the mutual written agreement
of the parties to include such additional funds under the terms to this
Agreement.
2. Duties and Obligations of the Sub-Adviser with Respect to Investment
of Assets of The AAL Aggressive Growth Fund
(a) Subject to the succeeding provisions of this section and subject
to the oversight and review of the Adviser and the direction and control of
the Board of Trustees ("Trustees") of the Fund, the Sub-Adviser, as agent
and attorney-in-fact with respect to the Fund, is authorized, to:
(i) Buy, sell, exchange, convert, lend and otherwise trade in any
stocks, bonds, currencies, and any other securities or assets;
(ii) Place orders and negotiate the commissions (if any) for the
execution of transactions in securities or other assets with or
through such brokers, dealers, underwriters or issuers as the
Sub-Adviser may select; including brokers and dealers that may be
affiliates of the Sub-Adviser, and
(iii)Enter into and execute agreements on behalf of the Fund,
relating to the acquisition or disposition of investment assets
and the execution of portfolio transactions, including foreign
exchange contracts and other transactional agreements. Nothing
contained herein, however, shall be deemed to authorize the
Sub-Adviser to take or receive physical possession of any cash or
securities held for the Fund, it being intended that sole
responsibility for safekeeping thereof and the consummation of
all such purchases, sales, deliveries, and investments made
pursuant to the Sub-Adviser's direction shall rest upon the
Fund's Custodian.
(iv) Provide the Adviser and the Trustees with such reports as may
reasonably be requested in connection with the discharge of the
foregoing responsibilities and the discharge of the Adviser's
responsibilities under the Investment Advisory Agreement with the
Fund and those of AAL Capital Management Corporation under the
Primary Underwriting Agreement with the Fund. Provided, however
that the Sub-Adviser shall not be responsible for Fund accounting
(NAV calculation) except to maintain compliance with applicable
investment restrictions and SEC regulations.
Written procedures with respect to (i), (ii) and (iii) above may be
set forth as agreed to among the Fund, the Adviser and Sub-Adviser.
(b) Any investment purchases or sales made by the Sub-Adviser under
this section shall at all times conform to, and be in accordance with, any
requirements imposed by: (1) the provisions of the Investment Company Act
of 1940 (the "Act") and of any rules or regulations in force thereunder;
(2) any other applicable provisions of law; (3) any policies and
determinations of the Board of Trustees of the Fund; and (4) the
fundamental policies of the Fund, as reflected in its Registration
Statement under the Act, or as amended by the shareholders of the Fund;
provided that copies of the items referred to in clauses (3)and (4) shall
have been furnished to the Sub-Adviser. The Adviser shall timely furnish
Sub-Adviser with such additional information as may be reasonably required
or requested by the Sub-Adviser in performing its responsibilities pursuant
to the Agreement.
(c) The Sub-Adviser shall give the Fund the benefit of its best
judgment and effort in rendering services hereunder. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
its obligations and duties ("disabling conduct") hereunder on the part of
the Sub-Adviser (and its officers, directors, agents, employees,
controlling persons, shareholders and any other person or entity affiliated
with the Sub-Adviser) the Sub-Adviser shall not be subject to liability to
the Fund or to any shareholder of the Fund or the Adviser (and its
officers, directors, agents, employees, controlling persons, shareholders
and any other person or entity affiliated with the Adviser), for any act or
omission in the course of, or connected with rendering services hereunder,
including without limitation, any error of judgment or mistake of law or
for any loss suffered by any of them in connection with the matters to
which this Agreement relates, except to the extent specified in Section 36
(b) of the Act concerning loss resulting from a breach of fiduciary duty
with respect to the receipt of compensation for services pursuant to this
Agreement. Except for such disabling conduct, the Fund and Adviser shall
jointly and severally, indemnify and hold harmless the Sub-Adviser (and its
officers, directors, agents, employees, controlling persons, shareholders
and any other person or entity affiliated with the Sub-Adviser) against any
liability arising from the Sub-Adviser's conduct under this Agreement to
the extent permitted by the Articles of Incorporation and applicable law.
The obligations of this section shall survive termination of the Agreement.
(d) Nothing in this Agreement shall prevent the Sub-Adviser or any
"affiliated person" (as defined in the Act) of the Sub-Adviser from acting
as investment adviser or manager for any other person, firm or corporation
and shall not in any way limit or restrict the Sub-Adviser or any such
affiliated person from buying, selling or trading any securities for its or
their own accounts or for the accounts of others for whom it or they may be
acting, provided, however, that the Sub-Adviser expressly represents that
it will undertake no activities which, in its judgment, will adversely
affect the performance of its obligations to the Fund under this Agreement
provided, however, that the Sub-Adviser makes no representation or
warranty, express or implied, that any level of performance or investment
results will be achieved by the Portfolio or that the Portfolio will
perform comparably with any standard or index, including other clients of
the Sub-Adviser, whether public or private. It is agreed that the
Sub-Adviser shall have no responsibility or liability for the accuracy or
completeness of the Fund's Registration Statement under the Act and the
Securities Act of 1933 except for information supplied by the Sub-Adviser
for inclusion therein. The Sub-Adviser shall be deemed to be an independent
contractor and, unless otherwise expressly provided or authorized, have no
authority to act or represent the Fund in any way or otherwise be deemed an
agent of the Fund.
(e) In connection with its duties to arrange for the purchase and sale
of The AAL Aggressive Growth Fund's securities and other assets, the
Sub-Adviser shall follow the principles set forth in any investment
advisory agreement in effect from time to time between the Fund and the
Adviser, provided that a copy of any such agreement shall have been
provided to the Sub-Adviser. The Sub-Adviser will promptly communicate to
the Adviser and to the officers and the Trustees of the Fund such
information relating to portfolio transactions as they may reasonably
request.
(f) The Sub-Adviser may place orders both as to sales and purchases of
assets directly through any broker or dealer it chooses. Brokers or dealers
may be selected who provide brokerage and/or research services to the Fund
and/or other accounts over which the Sub-Adviser or its affiliates exercise
investment discretion. Brokers or dealers who execute portfolio
transactions on behalf of the Fund may receive commissions which are in
excess of the amount of commissions which other brokers or dealers would
have charged for effecting such transactions. In order to cause the Fund to
pay such higher commissions, the Sub-Adviser must determine in good faith
that such commissions are reasonable in relation to the value of the
brokerage and/or research services or other goods, provided by such
executing brokers or dealers viewed in terms of a particular transaction or
the Sub-Adviser's overall responsibilities to the Fund or its other
discretionary client accounts.
(g) On occasions when the Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Fund as well as other clients,
the Sub-Adviser, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be sold or purchased in order
to obtain the best execution and lower brokerage commissions, if any. In
such event, allocation of the securities so purchased or sold, as well as
the expenses incurred in the transaction, will be made by the Sub-Adviser
in the manner it considers to be most equitable and consistent with its
fiduciary obligations to the Fund and to such clients.
The Sub-Adviser may purchase or sell for the Fund, pursuant to the Fund's
Rule 10f-3 Procedures, any security (including securities of the same class
as those underwritten or other securities of the same or related issuer)
for which any affiliate of the Sub-Adviser acts as (1) an underwriter
(either as lead underwriter or syndicate member), both during the pendency
of any underwriting or selling syndicate and thereafter, or (2) a market
maker, provided that such security is purchased from a non-affiliated
party.
(h) The Sub-Adviser shall be responsible for 13F reporting for the
securities held by The AAL Aggressive Growth Fund.
(i) The Sub-Adviser shall have no responsibility to monitor certain
limitations or restrictions, including without limitation, the 90%-source
test, for which Sub-Adviser determines it has not been provided sufficient
information in accordance with Section 2 of the Agreement or otherwise. All
such monitoring shall be the responsibility of the Adviser.
(j) Custodian. The Portfolio assets shall be maintained in the custody
of the custodian identified pursuant to Exhibit B. Any assets added to the
Portfolio shall be delivered directly to such custodian. The Sub-Adviser
shall have no liability for the acts or omissions of any custodian of the
Portfolio's assets. The Sub-Adviser shall have no responsibility for the
segregation requirement of the 1940 Act or other applicable law.
2.1 Obligations of the Adviser and the Portfolio
(a) The Adviser has provided the Sub-Adviser with the information and
documents listed in Exhibit B. The Adviser shall provide such information
and documents throughout the term of the Agreement as amended, updated or
supplemented, before or at the time such amendments, updates or supplements
become effective. The Adviser shall timely furnish Sub-Adviser with such
additional information as may be reasonably required or requested by the
Sub-Adviser in performing its responsibilities pursuant to this Agreement.
(b) The Adviser shall be responsible for setting up and maintaining
brokerage accounts and other accounts the Sub-Adviser deems advisable to
allow for the purchase or sale of various forms of securities pursuant to
the Agreement.
3. Allocation of Expenses
The Adviser, the Fund and the Portfolio shall assume and pay their
respective organizational, operational, and business expenses not
specifically assumed or agreed to be paid by the Sub-Adviser pursuant to
the Agreement. The Sub-Adviser shall pay its own organizational,
operational, and business expenses but shall not be obligated to pay any
expenses of the Adviser, the Fund or the Portfolio, including without
limitation: (a) interest and taxes; (b) brokerage commissions and other
costs in connection with the purchase or sale of securities or other
investment instruments for the Portfolio; and (c) custodian fees and
expenses. Any reimbursement of management fees required by any expense
limitation provision and any liability arising out of a violation of
Section 36(b) of the 1940 Act shall be the sole responsibility of the
Adviser.
4. Certain Records
Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 under the Act that are prepared or
maintained by the Sub-Adviser on behalf of the Fund are the property of the
Fund and will be surrendered promptly to the Fund or Adviser on request.
5. Reference to the Sub-Adviser
Neither the Fund, the Adviser or any affiliate or agent thereof shall
make reference to or use the name or make "Janus" or disclose any
information related to the business of the Sub-Adviser or any of its
affiliates in any advertising or promotional materials without the prior
approval of the Sub-Adviser, which approval shall not be unreasonably
withheld.
6. Compensation of the Sub-Adviser
The Adviser agrees to pay the Sub-Adviser and the Sub-Adviser agrees
to accept as full compensation for all services rendered by the Sub-Adviser
as such, a management fee, payable monthly in arrears and computed on the
average daily net asset value of The AAL Aggressive Growth Fund at rates
shown on Exhibit A attached hereto.
7. Duration and Termination
(a) This Agreement shall go into effect for The AAL Aggressive Growth
Fund on July 1, 2000 or as soon thereafter as it receives shareholder
approval, and shall, unless terminated as hereinafter provided, continue in
effect thereafter from year to year, but only so long as such continuance
is specifically approved at least annually by a majority of the Fund's
Board of Trustees, or by the vote of the holders of a "majority" (as
defined in the Act) of the outstanding voting securities of the Fund, with
respect to The AAL Aggressive Growth Fund, and, in either case, a majority
of the Trustees who are not parties to this Agreement or "interested
persons" (as defined in the Act) of any such party cast in person at a
meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated by the Sub-Adviser at any time
without penalty upon giving the Fund and the Adviser sixty (60) days'
written notice (which notice may be waived by the Fund and Adviser) and may
be terminated by the Fund or the Adviser at any time without penalty upon
giving the Sub-Adviser sixty (60) days' written notice (which notice may be
waived by the Sub-Adviser), provided that such termination by the Fund
shall be directed or approved by the vote of a majority of all of the
Trustees in office at the time or by the vote of the holders of a majority
(as defined in the Act) of the voting securities of the Fund, with respect
to The AAL Aggressive Growth Fund, or with respect to any Fund by the vote
of a majority of the outstanding shares of such Fund. This Agreement shall
automatically terminate in the event of its "assignment" (as defined in the
Act). This Agreement will also terminate in the event that the Investment
Advisory Agreement is terminated.
8. Agreement Binding Only On Fund Property
The Sub-Adviser understands that the obligations of this Agreement are
not binding upon any shareholder of the Fund personally, but bind only the
Fund's property.
9. Action By An Individual Fund
The provisions of this Agreement and any amendments hereto with
respect to a Series may be approved by the shareholders of that Series and
become effective with respect to the assets of that Series without the
necessity of approval thereof by shareholders of any other Series. The
Adviser represents that the holders of a majority (as defined in the "Act")
of The AAL Aggressive Growth Fund, will vote on approval of the entry into
this Agreement on behalf of said fund.
10. Notices
The Sub-Adviser agrees to promptly notify the Adviser of the
occurrence of any of the following events:
(a) any change in the AAL Aggressive Growth portfolio manager;
(b) the Sub-Adviser fails to be registered as an investment adviser
under the Advisers Act or under the laws of any jurisdiction in which the
Sub-Adviser is required to be registered as an investment adviser in order
to perform its obligations under this Agreement;
(c) the Sub-Adviser is the subject of any action, suit, proceeding,
inquiry or investigation at law or in equity, before any court, public
board or body, involving the affairs of The AAL Aggressive Growth Fund, or
(d) any change in ownership or control of the Sub-Adviser.
11. Manner of Notice
Any notice given hereunder shall be in writing and may be served by
being sent by telex, facsimile or other electronic transmission, or sent by
registered mail or by courier to the address set forth below for the party
for which it is intended. A notice served by mail shall be deemed served
seven days after mailing and in the case of telex, facsimile or other
electronic transmission, twelve hours after confirmed receipt thereof.
Addresses for notice may be changed by written notice to the other party.
The Adviser
Xxxxxx X. Same, President
AAL Capital Management Corporation
000 Xxxx Xxxxxxx Xxx.
Xxxxxxxx, XX 00000-0000
The Sub-Adviser
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Janus Capital Corporation
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12. Representations and Warranties
The Adviser represents and warrants the following:
(a) The Adviser has been duly incorporated, is validly existing and in
good standing as a corporation under the laws of the state of Delaware,
having all requisite corporate power and authority under state law and
federal securities laws to execute, deliver and perform the Agreement.
(b) All necessary corporate proceedings of the Adviser have been duly
taken to authorize execution, delivery and performance of the Agreement by
the Adviser.
(c) The Adviser is a registered investment adviser under the
Investment Advisers Act of 1940 and is in compliance with other
registrations required.
(d) The Adviser has complied, in all material respects, with all
registrations required by, and will comply, in all material respects, with
all applicable rules and regulations of, the Securities and Exchange
Commission.
(e) The Adviser has the authority under the Investment Advisory
Agreement to execute, deliver and perform this Sub-Advisory Agreement
(f) The Adviser has received a copy of Part II of the Sub-Adviser's
Form ADV.
The Fund represents and warrants the following:
(a) The Fund has been duly organized and is in good standing as a
business trust under the laws of the state of Massachusetts having all
requisite power and authority under state law and federal securities laws
to execute, deliver and perform the Agreement
(b) All necessary corporate proceedings of the Fund have been duly
taken to authorize the execution, delivery and performance of the Agreement
by the Fund.
(c) The Fund has complied, in all material respects, with all
registrations required by, and will comply, in all material respects, with
all applicable rules and regulations of, the Securities and Exchange
Commission.
(d) The Fund has the authority under the Investment Advisory Agreement
to execute, deliver and perform this Sub-Advisory Agreement
The Sub-Adviser represents and warrants the following:
(a) The Sub-Adviser has been duly incorporated, is validly existing
and in good standing as a corporation under the laws of the state of
Colorado, having all requisite corporate power and authority under state
law and federal securities laws to execute, deliver and perfume the
Agreement
(b) All necessary corporate proceedings of the Sub-Adviser have been
duly taken to authorize the execution, delivery and performance of the
Agreement by the Sub-Adviser.
(c) The Sub-Adviser is a registered investment adviser under the
Investment Advisers Act of 1940 and is in compliance with other
registrations required.
(d) The Sub-Adviser has complied, in all material respects, with all
registrations required by, and will comply, in all material respects, with
all applicable rules and regulations of, the Securities and Exchange
Commission.
No provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by both
parties.
The Adviser acknowledges receipt of the Sub-Adviser's Part II, Form
ADV at least 48 hours in advance of signing this Agreement.
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule,
or otherwise, the remainder of this Agreement shall not be affected
thereby.
This Agreement shall be governed by the laws of the State of
Wisconsin.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers and their seals
to be hereunto affixed, all as of the day and year first above written.
THE AAL MUTUAL FUNDS JANUS CAPITAL CORPORATION
/s/Xxxxxx X. Same /s/Xxxxxx X. Xxxx
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Xxxxxx X. Same, President Xxxxxx X. Xxxx, Vice President
ATTEST: ATTEST
/s/Xxxxxxxxx X. Xxxxxxx /s/Xxxxx Xxxxxx
------------------------------- -------------------------------
Xxxxxxxxx X. Xxxxxxx, Secretary Xxxxx Xxxxxx
AAL Capital Management Corporation
/s/Xxxxxx X. Same
-------------------------------
Xxxxxx X. Same, President
ATTEST:
/s/Xxxxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxxxx X. Xxxxxxx, Secretary
EXHIBIT A
TO
THE AAL Mutual Funds
SUB-ADVISORY AGREEMENT
(Dated June 22, 2000)
1. The AAL Aggressive Growth Fund
The management fee for The AAL Aggressive Growth Fund, payable to the
Sub-Adviser by the Adviser, calculated in accordance with paragraph 6 of The AAL
Mutual Funds Sub-Advisory Agreement, shall be at the annual rate of:
0.55 of 1% of the average daily net assets of $100 million or less;
0.50 of 1% of the average daily net assets over $100 million but less
than $500 million; and,
0.45 of 1% of the average daily net assets over $500 million
Exhibit B
Information and documentation provided by Adviser:
1. Copies of the Fund's prospectus and statement of additional information
2. Copies of the Fund's organizational documents, bylaws and as applicable
minutes of meetings of the Trustees
3. Notice of the Fund's custodian designated to hold assets in the Fund
4. A list of countries approved by the Fund Trustees in accordance with Rule
17f-5
5. Certified copies of financial statements or reports prepared for the Fund
by certified independent accountants
6. Copies of any financial statement or reports made by the Fund to its
shareholders or to any governmental body or securities exchange.
7. Reports as to the composition of the Fund, cash requirements and cash
available for investment in the Fund
8. Copies of the Adviser's liquidity procedures, cross-trade procedures,
repurchase agreement procedures and other procedures that may affect the
duties of the Sub-Adviser
9. An Internal Revenue Service Form W-9 completed by the Fund
10. A qualified Institutional Investor Certification completed by the Fund
11. A list of persons authorized to act on behalf of the Fund
12. Applicable Commodities Futures Trading Commission exemptions, notifications
or related documentation
