AAL VARIABLE PRODUCT SERIES FUND, INC. SUB-ADVISORY AGREEMENT FOR THE AAL AGGRESSIVE GROWTH PORTFOLIO WITH JANUS CAPITAL CORPORATION
AAL VARIABLE
PRODUCT SERIES FUND, INC.
SUB-ADVISORY AGREEMENT FOR THE
AAL AGGRESSIVE GROWTH PORTFOLIO
WITH
JANUS CAPITAL CORPORATION
Agreement made this 14th day of December, 2000, by and among AAL Variable Product Series Fund, Inc (the “Fund”), a Maryland corporation, 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 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
- 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:
- Buy, sell, exchange, convert, lend and otherwise trade in any stocks, bonds, currencies, and any other
securities or assets;
- 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
- 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.
- 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. 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- The Sub-Adviser shall be responsible for 13F reporting for the securities held by the Portfolio.
- 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.
- 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
- 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.
- 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
- This Agreement shall go
into effect for the Portfolio on March 1, 2001, or as soon thereafter as
registration for the Portfolio’s shares become effective, 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.
- 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:
- any change in the Portfolio manager;
- 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;
- 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
- 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: Xxxxxx X. Same, President General Counsel AAL Capital Management Corporation Janus Capital Corporation 000 Xxxx Xxxxxxx Xxx. 000 Xxxxxxxx Xxxxxx Xxxxxxxx, XX 00000-0000 Xxxxxx, Xxxxxxxx 00000
12. Representations and Warranties
The Adviser represents and warrants the following:
- 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.
- All necessary corporate proceedings of the Adviser have been duly taken to authorize execution, delivery and
performance of the Agreement by the Adviser.
- The Adviser is a
registered investment adviser under the Investment Advisers Act of 1940 and is
in compliance with other registrations required.
- 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.
- The Adviser has the authority under the Investment Advisory Agreement to execute, deliver and perform this
Sub-Advisory Agreement
- 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:
- 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
- All necessary corporate proceedings of the Fund have been duly taken to authorize the execution, delivery and
performance of the Agreement by the Fund.
- 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.
- 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:
- 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
- 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.
- The Sub-Adviser is a registered investment adviser under the Investment Advisers Act of 1940 and is in compliance
with other registrations required.
- 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
- 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 most recently filed 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 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/ Xxxxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Same
------------------------ ------------------
Xxxxxxxxx X. Xxxxxxx, Secretary Xxxxxx X. Same, President
JANUS CAPITAL CORPORATION
ATTEST:
/s/ Xxxxx Xxxxxx/s/ Xxxxxx Xxxx
-------------------------------
Xxxxxx Xxxx, Vice President
AAL Capital Management Corporation
ATTEST:
/s/ Xxxxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Same
------------------------ ------------------
Xxxxxxxxx X. Xxxxxxx, Secretary Xxxxxx X. Same, President
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 If Average Daily Net Assets are: Daily Net Assets 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.
