Exhibit (h)(1)
ADMINISTRATION AGREEMENT
This AGREEMENT made this 1st day of April, 2002 between Aetna
Income Shares, doing business as Aetna Bond VP (the "Fund"), a Massachusetts
business trust, on behalf of each series of the Fund, set forth on Schedule A
hereto (each a "Fund," collectively, the "Funds"), as such schedule may be
amended from time to time to add additional series, and ING Funds Services, LLC
(the "Administrator"), a Delaware limited liability company.
WHEREAS, the Fund is an open-end investment management company
registered under the Investment Company Act of 1940, as amended (the "1940
Act");
WHEREAS, the Fund desires to avail itself of the services of
the Administrator for the provision of administrative services for the Fund; and
WHEREAS, the Administrator is willing to render such services
to the Fund;
NOW THEREFORE, in consideration of the premises, the promises
and mutual covenants herein contained, it is agreed between the parties as
follows:
1. Appointment. The Fund hereby appoints the Administrator,
subject to the direction of the Board of Trustees, for the period and on the
terms set forth in this Agreement, to provide administrative services, as
described herein, with respect to the Fund. The Administrator accepts such
appointment and agrees to render the services set forth herein.
2. Services of the Administrator. Subject to the general
supervision of the Board of Trustees of the Fund, the Administrator shall
provide the following administrative services:
(a) Provide all administrative services reasonably necessary
for the operation of the Fund other than the investment advisory services
performed by the investment manager or sub-adviser, including, but not limited
to: (i) coordinating all matters relating to the operation of the Fund,
including any necessary coordination among the investment manager, custodian,
transfer agent, dividend disbursing agent, and portfolio accounting agent
(including pricing and valuation of the portfolio), accountants, attorneys, and
other parties performing services or operational functions for the Fund; (ii)
supervising the maintenance by third parties engaged by the Fund of such books
and records of the Fund as may be required by applicable federal or state law;
(iii) preparing or supervising the preparation by third parties selected by the
Fund of all federal, state, and local tax returns and reports required by
applicable law; (iv) preparing and filing, with the assistance of counsel, and
arranging for the distribution of proxy materials and periodic reports to
shareholders as required by applicable law; (v) preparing and arranging for the
filing, with the assistance of counsel, of registration statements and other
documents with the Securities and Exchange Commission (the "SEC") and other
federal and state regulatory authorities as may be required by applicable law;
(vi) taking such other action with respect to the Fund as may be required by
applicable law, including without limitation the rules and regulations
of the SEC and other regulatory agencies; (vii) providing the Fund, at the
Administrator's expense, with adequate personnel, office space, communications
facilities, and other facilities necessary for operation of the Fund as
contemplated in this Agreement; (viii) assist the Fund in conducting periodic
repurchase offers in accordance with Rule 23c-3 under the 1940 Act; (ix)
arranging for meetings of the Fund's Board of Trustees and, in connection
therewith, providing the Board with necessary or appropriate information for its
meetings; (x) providing non-investment related statistical and research data and
such other reports, evaluations and information as the Fund may request from
time to time; (xi) maintaining the Fund's existence, and during such time as
shares of the Fund are publicly offered, maintaining the registration and
qualification of the Fund's shares under federal and state law; and (xii)
responding to inquiries from shareholders or their agents or representatives
relating to the Fund, concerning, among other things, exchanges among funds, or
referring any such inquiries to the Fund's officers or transfer agent. Nothing
in this provision shall be deemed to inhibit the Fund or its officers from
engaging, at the expense of the Fund, other persons to assist in providing
administrative services to the Fund including, but not limited to, accounting
agents, recordkeeping agents, proxy solicitation agents, attorneys, accountants,
consultants and others.
(b) Render to the Board of Trustees of the Fund such periodic
and special reports as the Board may reasonably request;
(c) Make available its officers and employees to the Board of
Trustees and officers of the Fund for consultation and discussions regarding the
administration of the Fund and the services provided to the Fund under this
Agreement; and
(d) Develop and implement, if appropriate, management and
shareholder services designed to enhance the value or convenience of the Fund as
an investment vehicle.
3. Conformity with Applicable Law. The Administrator, in the
performance of its duties and obligations under this Agreement, shall act in
conformity with the Registration Statement of the Fund and with the instructions
and directions of the Board of Trustees of the Fund and will conform to, and
comply with, the requirements of the 1940 Act and all other applicable federal
and state laws and regulations.
4. Exclusivity. The services of the Administrator to the Fund
under this Agreement are not to be deemed exclusive, and the Administrator, or
any affiliate thereof, shall be free to render similar services to other
investment companies and other clients (whether or not their investment
objectives and policies are similar to those of the Fund) and to engage in other
activities, so long as its services hereunder are not impaired thereby.
5. Expenses. During the term of this Agreement, the
Administrator will pay all expenses incurred by it in connection with its
activities under this Agreement, except such expenses as are assumed by the Fund
under this Agreement and such expenses as are assumed by the investment manager
pursuant to an Investment Management Agreement. The Fund shall be
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responsible for all of the other expenses of its operations, including, without
limitation, the administration fee payable hereunder; advisory fees; brokerage
commissions; interest; legal fees and expenses of attorneys; fees of auditors,
transfer agents and dividend disbursing agents, custodians and shareholder
servicing agents; fees of accountants and accounting services; the expense of
obtaining quotations for calculating the Fund's net asset value; taxes, if any,
and the preparation of the Fund's tax returns; cost of stock certificates and
any other expenses (including clerical expenses) of issue, sale, repurchase or
redemption of shares; expenses of registering and qualifying shares of the Fund
under federal and state laws and regulations; all expenses of periodic
repurchase offers and of preparing, printing, and mailing repurchase offer
material to shareholders; expenses of printing and distributing reports, notices
and proxy materials to existing shareholders; expenses of printing and filing
reports and other documents filed with governmental agencies; expenses in
connection with shareholder and trustee meetings; expenses of printing and
distributing prospectuses and statements of additional information to existing
shareholders; fees and expenses of Trustees of the Fund who are not "interested
persons" of the Fund as that term is defined in the 1940 Act; trade association
dues; insurance premiums; and extraordinary expenses such as litigation
expenses. To the extent the Administrator incurs any costs or performs any
services which are an obligation of the Fund, as set forth herein, the Fund
shall promptly reimburse the Administrator for such costs and expenses. To the
extent the services for which the Fund is obligated to pay are performed by the
Administrator, the Administrator shall be entitled to recover from the Fund only
to the extent of its costs for such services.
6. Compensation.
(a) For the services provided by the Administrator pursuant to
this Agreement, the Fund will pay to the Administrator the annual fee set forth
in Schedule A hereto.
(b) The administration fee shall be accrued daily by the Fund
and paid to the Administrator at the end of each calendar month.
7. Liability of the Administrator. The Administrator may rely
on information reasonably believed by it to be accurate and reliable. Except as
may otherwise be required by the 1940 Act or the rules thereunder, neither the
Administrator nor its stockholders, officers, trustees, employees, or agents
shall be subject to any liability for, or any damages, expenses, or losses
incurred in connection with, any act or omission connected with or arising out
of any services rendered under this Agreement, except by reason of willful
misfeasance, bad faith, or negligence in the performance of the Administrator's
duties, or by reason of reckless disregard of the Administrator's obligations
and duties under this Agreement. The liability incurred by the Administrator
pursuant to this paragraph 7 in any year shall be limited to the revenues of the
Administrator derived from the Fund in that fiscal year of the Fund. The
Administrator shall look solely to Fund property for satisfaction of claims of
any nature against the Fund or a trustee, officer, employee or agent of the Fund
individually arising in connection with the affairs of the Fund.
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8. Continuation and Termination. This Agreement shall become
effective on the date first written above, subject to the condition that the
Fund's Board of Trustees, including a majority of those Trustees who are not
"interested persons" (as such term is defined in the 0000 Xxx) of the Fund or
the Administrator, shall have approved this Agreement. Unless terminated as
provided herein, the Agreement shall continue in full force and effect through
December 31, 2002 and shall continue from year to year thereafter so long as
such continuance is specifically approved at least annually by the vote of a
majority of the Board of Trustees of the Fund, including a majority of the Board
of Trustees of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of the Fund or the Administrator.
This Agreement may be terminated by the Fund at any time,
without the payment of any penalty, by vote of a majority of the Board of
Trustees of the Fund on sixty (60) days' written notice to the Administrator, or
by the Administrator at any time, without the payment of any penalty, on sixty
(60) days' written notice to the Fund.
9. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
10. Applicable Law.
(a) This Agreement shall be governed by the laws of the State
of Delaware, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any
rules or order of the SEC thereunder.
(b) 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 and, to this extent, the provisions of
this Agreement shall be deemed to be severable.
(c) The captions of this Agreement are included for
convenience only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
11. Limitation of Liability for Claims. The Distributor is
hereby expressly put on notice of the limitation of liability as set forth in
the Declaration and agrees that the obligations assumed by the Trust on behalf
of each Series pursuant to this Agreement shall be limited in all cases to each
applicable Series and their assets, and the Distributor shall not seek
satisfaction of any such obligation from the shareholders or any shareholder of
any Series or any other Series of the Trust, or from any trustee, officer,
employee or agent of the Trust. The Distributor understands that the rights and
obligations of each Series under the Declaration are separate and distinct from
those of any and all other Series.
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.
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AETNA INCOME SHARES
By: /s/ Xxxxxx X. Naka
-------------------------------------------------
Xxxxxx X. Naka,
Senior Vice President
ING FUNDS SERVICES, LLC
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
Xxxxxxx X. Xxxxxx,
Executive Vice President and
Chief Financial Officer
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SCHEDULE A
WITH RESPECT TO THE
ADMINISTRATION AGREEMENT
DATED APRIL 1, 2002
BETWEEN
AETNA INCOME SHARES
AND
ING FUNDS SERVICES, LLC
SERIES ADMINISTRATIVE SERVICES FEE APPROVED BY BOARD REAPPROVAL DATE
------ --------------------------- ----------------- ---------------
Aetna Bond VP .055% on the 1st $5 billion December 12, 2001 December 31, 2002
of assets of each Fund
.03% over $5 billion
of assets of each Fund
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