AMENDED AND
RESTATED
AAL VARIABLE PRODUCT SERIES FUND, INC.
SUB-ADVISORY AGREEMENT FOR THE
AAL AGGRESSIVE GROWTH PORTFOLIO
WITH
JANUS CAPITAL CORPORATION
Agreement made this 1st
day of January, 2002, by and among AAL Variable Product Series Fund,
Inc (the “Fund”), a Maryland corporation, Aid Association for
Lutherans (the “Adviser”, “AAL”), a fraternal benefit
society founded under the laws of the State of Wisconsin, and Janus Capital
Corporation (the “Sub-Adviser”), a Colorado Corporation.
RECITAL:
Since January 1, 2000, AAL
Capital Management Corporation (“CMC”) a Delaware Corporation, served
as investment adviser to the Fund. Effective on January 1, 2002, AAL will serve
as investment adviser to the Fund. Accordingly, the parties hereto have a agreed
to amend and restate, in the form set forth herein, the subadvisory agreement
pursuant to which CMC and the Subadviser heretofore have provided such advisory
services to the Fund (the “Predecessor Agreement”). The parties
acknowledge that the terms and conditions of this Amended and Restated Agreement
are substantively identical to the terms and conditions of the Predecessor
Agreement, except that this Amended and Restated Agreement identifies AAL as the
Adviser of the Fund in lieu of CMC.
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 AAL Aggressive Growth Portfolio (the “Portfolio”).
It is understood that the Fund may create one or more additional portfolios from
time to time and that this Agreement may be amended by the mutual written
agreement of the parties to include such additional portfolios under the terms
to this Agreement.
2. Duties and
Obligations of the Sub-Adviser with Respect to Investment of Assets of the
Portfolio
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(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 Directors (“Directors”) of the Fund, the Sub-Adviser, as agent and
attorney-in-fact with respect to the Fund, is authorized, to: |
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(i) Buy, sell, exchange, convert, lend and otherwise trade in any stocks,
bonds, currencies, and any other securities or assets; |
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(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 |
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(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. |
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(iv)
Provide the Adviser and the Directors 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 Principal 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 2(a)(i), (ii) and (iii) above may be set forth as agreed to among the
Fund, the Adviser and Sub-Adviser.
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(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 Directors 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. Any changes to
the items referred to in clauses (3) and (4) directly affecting the Portfolio
shall be submitted to the Sub-Adviser for prior approval. 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. |
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(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. |
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(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. |
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(e)
In connection with its duties to arrange for the purchase and sale of the
Portfolio’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 Directors of the
Fund such information relating to portfolio transactions as they may reasonably
request. |
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(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. |
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(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. |
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(h) The Sub-Adviser shall be responsible for 13F reporting for the securities
held by the Portfolio. |
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(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. |
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(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 Act or other applicable law. |
2.1
Obligations of the Adviser and the Portfolio
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(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. |
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(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 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 xxxx “Xxxxx” 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
Portfolio at rates shown on Exhibit A attached hereto.
7. Duration
and Termination
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(a)
This Agreement shall go into effect for the Portfolio on January 1, 2002, 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 Directors 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. |
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(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 Directors 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 Portfolio, 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 Portfolio
The provisions of this
Agreement and any amendments hereto with respect to a portfolio may be approved
by the shareholders of that portfolio and become effective with respect to the
assets of that portfolio without the necessity of approval thereof by
shareholders of any other portfolio.
10. Notices
The
Sub-Adviser agrees to promptly notify the Adviser of the occurrence of any of
the following events:
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(a) any change in the Portfolio manager; |
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(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; |
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(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 Portfolio, or |
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(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: The Sub-Adviser:
Xxxxxxx X. Xxx, Secretary General Counsel
Senior Vice President and General Counsel Janus Capital Corporation
Aid Association for Lutherans 000 Xxxxxxxx Xxxxxx
0000 X. Xxxxxxx Xxxx Xxxxxx, Xxxxxxxx 00000
Xxxxxxxx, XX 00000-0000
The Fund:
Xxxxx X. Xxxxx, Secretary
AAL Variable Product Series Fund, Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxx 00000-0000
Fax (000) 000-0000
12.
Representations and Warranties
The Adviser represents and warrants the following:
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(a)
The Adviser has been duly incorporated, is validly existing and in good standing
as a corporation under the laws of the state of Wisconsin, having all requisite
corporate power and authority under state law and federal securities laws to
execute, deliver and perform the Agreement. |
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(b)
All necessary corporate proceedings of the Adviser have been duly taken to
authorize execution, delivery and performance of the Agreement by the Adviser. |
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(c)
The Adviser is a registered investment adviser under the Investment Advisers Act
of 1940 and is in compliance with other registrations required. |
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(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. |
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(e) The Adviser has the authority under the Investment Advisory Agreement to
execute, deliver and perform this Sub-Advisory Agreement |
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(f) The Adviser has received the most recent copy of Part II of the
Sub-Adviser's Form ADV. |
The Fund represents and warrants the following:
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(a)
The Fund has been duly organized and is in good standing as a corporation under
the laws of the state of Maryland having all requisite power and authority under
state law and federal securities laws to execute, deliver and perform the
Agreement |
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(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. |
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(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. |
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(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:
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(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 |
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(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. |
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(c)
The Sub-Adviser is a registered investment adviser under the Investment Advisers
Act of 1940 and is in compliance with other registrations required. |
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(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. |
13.
Miscellaneous
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(a)
No provisions of this Agreement may be changed, waived, discharged or terminated
orally, but only by an instrument in writing signed by both parties. |
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(b)
The Adviser acknowledges receipt of the Sub-Adviser’s most recently filed
Part II, Form ADV at least 48 hours in advance of signing this Agreement. |
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(c)
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. |
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(d) This Agreement shall be governed by the laws of the State of Colorado. |
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.
AAL VARIABLE PRODUCT SERIES FUND, INC.
ATTEST:
/s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. Same
------------------------------------ --------------------------------
Xxxxx X. Xxxxx, Secretary Xxxxxx X. Same, President
JANUS CAPITAL CORPORATION
ATTEST:
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxxx Xxxx
------------------------------------ --------------------------------
Xxxxxx X. Xxxxxx, Associate Counsel Xxxxxx Xxxx, Vice President
AID ASSOCIATION FOR LUTHERANS
ATTEST:
/s/ Xxxxxxx X. Xxx /s/ Xxxxx X. Xxxxxxxxx
------------------------------------ --------------------------------
Xxxxxxx X. Xxx Xxxxx X. Xxxxxxxxx, President
Senior Vice President
Secretary and General Counsel
EXHIBIT A
for the
AAL Aggressive Growth Portfolio
The management fee for the
Portfolio, payable to the Sub-Adviser by the Adviser, calculated in accordance
with paragraph 6 of the Sub-Advisory Agreement, shall be at the annual rate of:
Percent of Average Daily Net Assets If Average Daily Net Assets are:
o 0.55% $100,000,000 or less
o 0.50% Over $100,000,000 but less than $500,000,000
o 0.45% Over $500,000,000
EXHIBIT B
for the
AAL Aggressive Growth Portfolio
Information and documentation provided by Adviser:
- Copies of the Fund's prospectus and statement of additional information.
- Copies of the Fund's organizational documents, bylaws and applicable minutes
of meetings of the Board of Directors.
- Notice of the Fund's custodian designated to hold assets in the Fund.
- A list of countries approved by the Fund Directors in accordance with Rule
17f-5.
- Certified copies of financial statements or reports prepared for the Fund by
certified independent accountants.
- Copies of any financial statement or reports made by the Fund to its
shareholders or to any governmental body or securities exchange.
- Reports as to the composition of the Fund, cash requirements and cash
available for investment in the Fund.
- 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.
- An Internal Revenue Service Form W-9 completed by the Fund.
- A qualified Institutional Investor Certification completed by the Fund.
- A list of persons authorized to act on behalf of the Fund.
- Applicable Commodities Futures Trading Commission exemptions, notifications
or related documentation.
