SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and among AETNA LIFE INSURANCE AND ANNUITY COMPANY, a
Connecticut corporation (the "Adviser"), AETNA GENERATION PORTFOLIOS, INC., a
Maryland Corporation, (the "Fund"), on behalf of its AETNA ASCENT VARIABLE
PORTFOLIO (the "Portfolio") and AELTUS INVESTMENT MANAGEMENT, INC., a
Connecticut corporation (the "Subadviser") as of the date set forth below.
W I T N E S S E T H
WHEREAS, the Fund is registered with the Securities and Exchange Commission (the
"Commission") as an open-end, diversified, management investment company
consisting of multiple investment portfolios, under the Investment Company Act
of 1940, as amended (the "1940 Act"); and
WHEREAS, pursuant to authority granted by the Fund's Articles of Incorporation,
the Fund has established the Portfolio as a separate investment portfolio; and
WHEREAS, both the Adviser and the Subadviser are registered with the Commission
as investment advisers under the Investment Advisers Act of 1940, as amended
(the "Advisers Act") and both are in the business of acting as investment
advisers; and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement with the
Fund, on behalf of the Portfolio, (the "Investment Advisory Agreement") which
appoints the Adviser as the investment adviser for the Portfolio; and
WHEREAS, Article IV of the Investment Advisory Agreement authorizes the Adviser
to delegate all or a portion of its obligations under the Investment Advisory
Agreement to a subadviser;
NOW THEREFORE, the parties agree as follows:
I. APPOINTMENT AND OBLIGATIONS OF THE ADVISER
Subject to the terms and conditions of this Agreement, the Adviser and the Fund,
on behalf of the Portfolio, hereby appoint the Subadviser to manage the assets
of the Portfolio as set forth below in Section II, under the supervision of the
Adviser and subject to the approval and direction of the Fund's Board of
Directors (the "Board"). The Subadviser hereby accepts such appointment and
agrees that it shall, for all purposes herein, undertake such obligations as an
independent contractor and not as an agent of the Adviser. The Subadviser
agrees, that except as required to carry out its duties under this Agreement or
otherwise expressly authorized, it has no authority to act for or represent the
Portfolio in any way.
II. DUTIES OF THE SUBADVISER AND THE ADVISER
A. Duties of the Subadviser
The Subadviser shall regularly provide investment advice with respect to
the assets held by the Portfolio and shall continuously supervise the
investment and reinvestment of cash, securities and instruments or other
property comprising the assets of the Portfolio. In carrying out these
duties, the Subadviser shall:
1. select the securities to be purchased, sold or exchanged by the
Portfolio or otherwise represented in the Portfolio's investment
portfolio, place trades for all such securities and regularly
report thereon to the Adviser and, at the request of the Adviser,
to the Board;
2. formulate and implement continuing programs for the purchase and
sale of securities and regularly report thereon to the Adviser and,
at the request of the Adviser or the Portfolio, to the Board;
3. obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy
generally, the Portfolio, securities held by or under consideration
for the Portfolio, or the issuers of those securities;
4. provide economic research and securities analyses as requested by
the Adviser from time to time, or as the Adviser considers
necessary or advisable in connection with the Subadviser's
performance of its duties hereunder; and
5. give instructions to the custodian and/or sub-custodian of the
Portfolio appointed by the Board, concerning deliveries of
securities, transfers of currencies and payments of cash for the
Portfolio, as required to carry out the investment activities of
the Portfolio as contemplated by this Agreement; and
6. provide such financial support, administrative and other services,
such as preparation of financial data, determination of the
Portfolio's net asset value, preparation of financial and
performance reports, as the Adviser from time to time, deems
necessary and appropriate and which the Subadviser is willing and
able to provide.
B. Duties of the Adviser
The Adviser shall retain responsibility for oversight of all activities
of the Subadviser and for monitoring its activities on behalf of the
Portfolio. In carrying out its obligations under this Agreement and the
Investment Advisory Agreement, the Adviser shall:
1. monitor the investment program maintained by the Subadviser for the
Portfolio and the Subadviser's compliance program to ensure that
the
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Portfolio's assets are invested in compliance with the Subadvisory
Agreement and the Portfolio's investment objectives and policies as
adopted by the Board and described in the most current effective
amendment of the registration statement for the Portfolio, as filed
with the Commission under the Securities Act of 1933, as amended
(the "1933 Act"), and the 1940 Act ("Registration Statement");
2. review all data and financial reports prepared by the Subadviser to
assure that they are in compliance with applicable requirements and
meet the provisions of applicable laws and regulations;
3. file all periodic reports required to be filed by the Portfolio
with the applicable regulatory authorities;
4. review and deliver to the Board all financial, performance and
other reports prepared by the Subadviser under the provisions of
this Agreement or as requested by the Adviser;
5. establish and maintain regular communications with the Subadviser
to share information it obtains concerning the effect of
developments and data on the investment program maintained by the
Subadviser;
6. maintain contact with and enter into arrangements with the
custodian, transfer agent, auditors, outside counsel, and other
third parties providing services to the Portfolio;
7. oversee all matters relating to (i) the offer and sale of shares of
the Portfolio, including promotions, marketing materials,
preparation of prospectuses, filings with the Commission and state
securities regulators, and negotiations with broker-dealers; (ii)
shareholder services, including, confirmations, correspondence and
reporting to shareholders; (iii) all corporate matters on behalf of
the Portfolio, including monitoring the corporate records of the
Portfolio, maintaining contact with the Board, preparing for,
organizing and attending meetings of the Board and the Portfolio's
shareholders; (iv) preparation of proxies when required; and (v)
any other matters not expressly delegated to the Subadviser by this
Agreement.
III. REPRESENTATIONS AND WARRANTIES
A. Representations and Warranties of the Subadviser
The Subadviser hereby represents and warrants to the Adviser as follows:
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
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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 Commission 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. Regulatory Orders. The Subadviser is not subject to any stop
orders, injunctions or other orders of any regulatory authority
affecting its ability to carry out the terms of this Agreement. The
Subadviser will notify the Adviser and the Portfolio immediately if
any such order is issued or if any proceeding is commenced that
could result in such an order.
4. Compliance. The Subadviser has in place compliance systems and
procedures designed to meet the requirements of the Advisers Act
and the 1940 Act and it shall at all times assure that its
activities in connection with managing the Portfolio follow these
procedures.
5. Authority. The Subadviser is authorized to enter into this
Agreement and carry out the terms hereunder.
6. Best Efforts. The Subadviser at all times shall provide its best
judgment and effort to the Portfolio in carrying out its
obligations hereunder.
B. Representations and Warranties of the Adviser
The Adviser hereby represents and warrants to the Subadviser as follows:
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 Commission 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 Adviser shall maintain such
registration or license in effect at all times during the term of
this Agreement.
3. Regulatory Orders. The Adviser is not subject to any stop orders,
injunctions or other orders of any regulatory authority affecting
its ability to carry out the terms of this Agreement. The Adviser
will notify the Subadviser and the
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Portfolio immediately if any such order is issued or if any
proceeding is commenced that could result in such an order.
4. Authority. The Adviser is authorized to enter into this Agreement
and carry out the terms hereunder.
5. Best Efforts. The Adviser at all times shall provide its best
judgment and effort to the Portfolio in carrying out its
obligations hereunder.
C. Representations and Warranties of the Portfolio and the Fund
The Fund, on behalf of the Portfolio, hereby represents and warrants to
the Adviser as follows:
1. Due Incorporation and Organization. The Fund has been duly
incorporated as a Corporation under the laws of the State of
Maryland and it is authorized to enter into this Agreement and
carry out its obligations hereunder.
2. Registration. The Fund is registered as an investment company with
the Commission under the 1940 Act and shares of the Portfolio are
registered or qualified for offer and sale to the public under the
1933 Act and all applicable state securities laws. Such
registrations or qualifications, will be kept in effect during the
term of this Agreement.
IV. BROKER-DEALER RELATIONSHIPS
A. Portfolio Trades
The Subadviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio 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
Portfolio giving consideration to the services and research provided 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 Portfolio and/or the
other accounts over which the Subadviser or its affiliates exercise
investment discretion. The Subadviser may also select brokers or dealers
to effect transactions for the Portfolio who provide payment for expenses
of the Portfolio. The Subadviser is authorized to pay a broker or dealer
who provides such brokerage and research services or expenses, a
commission for
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executing a portfolio transaction for the Portfolio 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, research and other services provided by such broker or
dealer and is paid in compliance with Section 28(e) or other rules and
regulations of the Commission. 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 Board shall periodically
review the commissions paid by the Portfolio 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 TRUSTEES
Any investment program undertaken by the Subadviser pursuant to this Agreement,
as well as any other activities undertaken by the Subadviser at the direction of
the Adviser on behalf of the Portfolio, 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 Subadviser shall at
all times conform to:
1. all applicable provisions of the 1940 Act, the Advisers Act and any
rules and regulations adopted thereunder;
2. all policies and procedures of the Portfolio as adopted by the
Board and as described in the Registration Statement;
3. the provisions of the Articles of Incorporation of the Fund, as
amended from time to time;
4. the provisions of the Bylaws of the Fund, as amended from time to
time; and
5. any other applicable provisions of state or federal law.
VII. COMPENSATION
A. Payment Schedule
The Adviser shall pay the Subadviser, as compensation for services
rendered hereunder, from its own assets, an annual fee of up to .35% of
the average daily net assets in the Portfolio, payable monthly. 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 of up to .35% applied to the daily net assets of the
Portfolio. If this Agreement becomes effective
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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.
B. Reduction
Payment of the Subadviser's compensation for the preceding month shall be
made as promptly as possible, except as provided below. The Subadviser
acknowledges that, pursuant to the Investment Advisory Agreement, the
Adviser has agreed to reduce its fee or reimburse the Portfolio if the
expenses borne by the Portfolio exceed the expense limitations applicable
to the Portfolio imposed by the securities laws or regulations of any
jurisdiction in which the Portfolio shares are qualified for sale.
Accordingly, the Subadviser agrees that, if, for any fiscal year, the
total of all ordinary business expenses of the Portfolio, including all
investment advisory fees but excluding brokerage commissions,
distribution fees, taxes, interest, 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 Portfolio are offered for sale (unless a waiver is
obtained), the Subadviser shall reduce its advisory fee to the extent
necessary to meet such expense limit, but will not be required to
reimburse the Portfolio for any ordinary business expenses which exceed
the amount of its advisory fee for the fiscal year. The Subadviser shall
contribute to the amount of such reduction by reimbursing the Adviser in
proportion to the amounts which the Adviser and Subadviser would have
been entitled to receive for such year. For the purposes of this
paragraph, the term "fiscal year" shall exclude the portion of the
current fiscal year which elapsed prior to the effective date of this
Agreement, but shall include the portion of the then current fiscal year
has elapsed at the date of termination of this Agreement.
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
Portfolio hereunder, including, but not limited to, office space, office
equipment, telephone and postage costs. In the event the Subadviser incurs any
expense that is the obligation of the Adviser as set out in this Agreement, the
Adviser shall reimburse the Subadviser for such expense on presentation of a
statement indicating the expenses incurred and the amount paid by the
Subadviser.
IX. NONEXCLUSIVITY
The services of the Subadviser with respect to the Portfolio 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 officers or directors of the Fund; that officers or
directors of the Adviser or officers or directors of the Fund 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
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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 July 31, 1996,
and shall remain in force and effect through December 31, 1997, unless earlier
terminated under the provisions of Article XI. Following the expiration of its
initial term, the Agreement shall continue in force and effect for one year
periods, provided such continuance is specifically approved at least annually:
1. (a) by the Board or (b) by the vote of a majority of the
Portfolio's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), and
2. 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 Fund), by votes cast in
person at a meeting specifically called for such purpose.
XI. TERMINATION
This Agreement may be terminated:
1. at any time, without the payment of any penalty, by vote of the
Board or by vote of a majority of the outstanding voting securities
of the Portfolio; or
2. by the Adviser, the Fund, on behalf of the Portfolio, or the
Subadviser on sixty (60) days' written notice to the other party,
unless written notice is waived by the party required to be
notified; or
3. automatically in the event there is an "assignment" of this
Agreement, as defined in Section 2 (a) (4) of the 1940 Act.
XII. LIABILITY
The Subadviser shall be liable to the Portfolio and the Adviser and shall
indemnify the Portfolio and the Adviser for any losses incurred by the
Portfolio, or the Adviser whether in the purchase, holding or sale of any
security or otherwise, to the extent that such losses resulted from an act or
omission on the part of the Subadviser or its officers, directors or employees,
that is found to involve willful misfeasance, bad faith or negligence, or
reckless disregard by the Subadviser of its duties under this Agreement, in
connection with the services rendered by the Subadviser hereunder.
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XIII. NOTICES
Any notices under this Agreement shall be in writing, addressed and delivered,
mailed postage paid, or sent by other delivery service, or by facsimile
transmission to each party at such address as each party may designate for the
receipt of notice. Until further notice, such address shall be:
if to the Fund, on behalf of the Portfolio or the Adviser:
000 Xxxxxxxxxx Xxxxxx, XX0X
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax number: 860/000-0000
Attn: Secretary
if to the Subadviser:
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Fax number: 860/000-0000
Attention: President
XIV. 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 Commission 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 Commission, such provision shall be
deemed to incorporate the effect of such rule, regulation or order.
XV. SERVICE XXXX
The service xxxx of the Fund and the Portfolio and the name "Aetna" have been
adopted by the Fund with the permission of Aetna Life and Casualty Company and
their continued use is subject to the right of Aetna Life and Casualty Company
to withdraw this permission in the event the Subadviser or another subsidiary or
affiliated corporation of Aetna Life and Casualty Company should not be the
investment adviser of the Portfolio.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
in duplicate by their respective officers on the 1st day of August 1996.
Aetna Life Insurance and Annuity Company
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Attest: Name: Xxxxx X. Xxxxxxx
Title: Vice President
/s/ XxXxx X. Xxxxxxxxx
------------------------------
XxXxx X. Xxxxxxxxx
Assistant Corporate Secretary
Aeltus Investment Management, Inc.
Attest: By: /s/ Xxxx X. Xxx
-----------------------------------
Name: Xxxx X. Xxx
Title: President
/s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx
Asst. Secretary Aetna Generation Portfolios, Inc.
on behalf of its
Aetna Ascent Variable Portfolio
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Attest: Title: President
/s/ Xxxxx X. Xxxxxx
------------------------------
Xxxxx X. Xxxxxx
Secretary
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Subadvisory Agreement
Schedule Pursuant to Rule 483(d)(2) under the Securities Act of 1933
Subadvisory Agreements have been entered into by Aetna Generation Portfolios,
Inc. on behalf of the following portfolios in substantially the same form and
type as exhibit 24(b)(5)(b) - Subadvisory Agreement between Aetna Life Insurance
and Annuity Company and Aeltus Investment Management, Inc., included herewith.
Date Portfolio Difference
---- --------- ----------
8/1/96 Aetna Crossroads Variable Portfolio none
8/1/96 Aetna Legacy Variable Portfolio none
