INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made by and between AETNA LIFE INSURANCE AND ANNUITY COMPANY,
a Connecticut corporation (the "Adviser") and AETNA SERIES FUND, INC., a
Maryland corporation (the "Fund"), on behalf of its series, THE AETNA FUND (the
"Series"), as of the date set forth below the parties' signatures.
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 under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Fund has established the Series; and
WHEREAS, the Adviser is registered with the Commission as an investment adviser
under the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and
is in the business of acting as an investment adviser; and
WHEREAS, the Fund, on behalf of the Series, and the Adviser desire to enter into
an agreement to provide for investment advisory and management services for the
Series on the terms and conditions hereinafter set forth;
NOW THEREFORE, the parties agree as follows:
I. APPOINTMENT AND OBLIGATIONS OF THE ADVISER
Subject to the terms and conditions of this Agreement and the policies and
control of the Fund's Board of Directors (the "Board"), the Fund, on behalf of
the Series, hereby appoints the Adviser to serve as the investment adviser to
the Series, to provide the investment advisory services set forth below in
Section II. The Adviser agrees that, except as required to carry out its duties
under this Agreement or otherwise expressly authorized, it is acting as an
independent contractor and not as an agent of the Series and has no authority to
act for or represent the Series in any way.
II. DUTIES OF THE ADVISER
In carrying out the terms of this Agreement, the Adviser shall do the following:
1. supervise all aspects of the operations of the Series;
2. select the securities to be purchased, sold or exchanged by
the Series or otherwise represented in the Series' investment
portfolio, place trades for all such securities and regularly
report thereon to the Board;
3. formulate and implement continuing programs for the purchase
and sale of securities and regularly report thereon to the
Board;
4. obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy
generally, the Series, securities held by or under
consideration for the Series, or the issuers of those
securities;
5. provide economic research and securities analyses as the
Adviser considers necessary or advisable in connection with
the Adviser's performance of its duties hereunder;
6. obtain the services of, contract with, and provide
instructions to custodians and/or subcustodians of the Series'
securities, transfer agents, dividend paying agents, pricing
services and other service providers as are necessary to carry
out the terms of this Agreement;
7. prepare financial and performance reports, calculate and
report daily net asset values, and prepare any other financial
data or reports, as the Adviser from time to time, deems
necessary or as are requested by the Board; and
8. take any other actions which appear to the Adviser and the
Board necessary to carry into effect the purposes of this
Agreement.
III. REPRESENTATIONS AND WARRANTIES
A. Representations and Warranties of the Adviser
Adviser hereby represents and warrants to the Fund 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 Securities and Exchange Commission ("the
Commission") under the Advisers Act, and is registered or
licensed as an investment adviser under 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. Best Efforts. The Adviser at all times shall provide its
best judgment and effort to the Series in carrying out
its obligations hereunder.
B. Representations and Warranties of the Series and the Fund,
The Fund, on behalf of the Series, hereby represents and warrants to
the Adviser as follows:
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1. Due Incorporation and Organization. The Fund has been
duly incorporated 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 Series are registered or qualified for offer and
sale to the public under the Securities Act of 1933, as
amended (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. DELEGATION OF RESPONSIBILITIES
A. Appointment of Subadviser
Subject to the approval of the Board and the shareholders of the
Series, the Adviser may enter into a Subadvisory Agreement to engage a
subadviser (the "Subadviser") to the Adviser with respect to the
Series.
B. Duties of Subadviser
Under a Subadvisory Agreement, the Subadviser may be delegated some or
all of the following duties of the Adviser:
1. determine which securities from which issuers shall be
purchased, sold or exchanged by the Series or otherwise
represented in the Series' investment portfolio, place
trades for all such securities and regularly report
thereon to the Board;
2. formulate and implement continuing programs for the
purchase and sale of the securities of such issuers and
regularly report thereon 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 Series, securities
held by or under consideration for the Series, or the
issuers of those securities;
4. provide economic research and securities analyses as the
Adviser considers necessary or advisable in connection
with the Adviser's performance of its duties hereunder;
5. give instructions to the custodian and/or sub-custodian
of the Series appointed by the Board, as to deliveries of
securities, transfers of currencies and payments of cash
for the Series as required to carry out the investment
activities of the Series, in relation to the matters
contemplated by this Agreement; and
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6. provide such financial support, administrative services
and other duties as the Adviser deems necessary and
appropriate.
C. Duties of the Adviser
In the event the Adviser delegates certain responsibilities hereunder
to a Subadviser, the Adviser shall, among other things:
1. monitor the investment program maintained by the
Subadviser for the Series and the Subadviser's compliance
program to ensure that the Series' assets are invested in
compliance with the Subadvisory Agreement and the Series'
investment objectives and policies as adopted by the
Board and described in the most current effective
amendment of the registration statement for the Series,
as filed with the Commission under the Securities Act of
1933, as amended, 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. establish and maintain regular communications with the
Subadviser to share information it obtains with the
Subadviser concerning the effect of developments and data
on the investment program maintained by the Subadviser;
and
4. oversee all matters relating to the offer and sale of the
Series' shares, the Fund's corporate governance, reports
to the Board, contracts with all third parties on behalf
of the Series for services to the Series, reports to
regulatory authorities and compliance with all applicable
rules and regulations affecting the Series' operations.
V. BROKER-DEALER RELATIONSHIPS
A. Series Trades
The Adviser, at its own expense, shall place all orders for the
purchase and sale of portfolio securities for the Series with brokers
or dealers selected by the Adviser, which may include brokers or
dealers affiliated with the Adviser. The Adviser shall use its best
efforts to seek to execute portfolio transactions at prices that are
advantageous to the Series 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 Series and/or the
other accounts over which
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the Adviser or its affiliates exercise investment discretion. The
Adviser may also select brokers or dealers to effect transactions for
the Series who provide payment for expenses of the Series. The Adviser
is authorized to pay a broker or dealer who provides such brokerage and
research services or expenses, a commission for executing a portfolio
transaction for the Series that is in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the
brokerage and research 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
Adviser and its affiliates have with respect to accounts over which
they exercise investment discretion. The Board shall periodically
review the commissions paid by the Series to determine if the
commissions paid over representative periods of time were reasonable in
relation to the benefits received.
VI. CONTROL BY THE BOARD
Any investment program undertaken by the Adviser pursuant to this Agreement, as
well as any other activities undertaken by the Adviser on behalf of the Series
pursuant thereto, shall at all times be subject to any directives of the Board.
VII. COMPLIANCE WITH APPLICABLE REQUIREMENTS
In carrying out its obligations under this Agreement, the Adviser shall at all
times conform to:
1. all applicable provisions of the 1940 Act;
2. the provisions of the registration statement of the Fund, as
the same may be amended from time to time, under the 1933 Act
and the 1940 Act;
3. the provisions of the Fund's Articles of Incorporation, as
amended;
4. the provisions of the Bylaws of the Fund, as amended; and
5. any other applicable provisions of state and federal law.
VIII. COMPENSATION
For the services to be rendered, the facilities furnished and the expenses
assumed by the Adviser, the Fund, on behalf of the Series, shall pay to the
Adviser an annual fee, payable monthly, based upon the following average daily
net assets of the Series:
Rate Assets
0.80% on the first $500 million
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0.75% on the next $500 million
0.70% on next $1 billion
0.65% over $2 billion
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily at the rate of 1/365 of the annual advisory fee
applied to the daily net assets of the Series. If this Agreement becomes
effective subsequent to the first day of a month or terminates 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. Subject to the provisions of Section X hereof, payment of the
Adviser's compensation for the preceding month shall be made as promptly as
possible. For so long as a Subadvisory Agreement is in effect, the Series
acknowledges on behalf of the Series that the Adviser will pay to the
Subadviser, as compensation for acting as Subadviser to the Series, the fees
specified in the Subadvisory Agreement.
IX. EXPENSES
The expenses in connection with the management of the Series shall be allocated
between the Series and the Adviser as follows:
A. Expenses of the Adviser
The Adviser shall pay:
1. the salaries, employment benefits and other related
costs and expenses of those of its personnel engaged
in providing investment advice to the Series,
including without limitation, office space, office
equipment, telephone and postage costs;
2. all fees and expenses of all directors, officers and
employees, if any, of the Fund who are employees of
the Adviser or an affiliated entity, including any
salaries and employment benefits payable to those
persons;
B. Expenses of the Series
The Series shall pay:
1. investment advisory fees pursuant to this Agreement;
2. brokers' commissions, issue and transfer taxes or
other transaction fees payable in connection with any
transactions in the securities in the Series'
investment portfolio or other investment transactions
incurred in managing the Series' assets, including
portions of commissions that may be paid to reflect
brokerage research services provided to the Adviser;
3. fees and expenses of the Series' independent
accountants and legal counsel and the independent
Directors' legal counsel;
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4. fees and expenses of any administrator, transfer
agent, custodian, dividend, accounting, pricing or
disbursing agent of the Series;
5. interest and taxes;
6. fees and expenses of any membership in the Investment
Company Institute or any similar organization in
which the Board deems it advisable for the Fund to
maintain membership;
7. insurance premiums on property or personnel
(including officers and directors) of the Fund which
benefit the Series;
8. all fees and expenses of the Company's directors, who
are not "interested persons" (as defined in the 0000
Xxx) of the Fund or the Adviser;
9. expenses of preparing, printing and distributing
proxies, proxy statements, prospectuses and reports
to shareholders of the Series, except for those
expenses paid by third parties in connection with the
distribution of Series shares and all costs and
expenses of shareholders' meetings;
10. all expenses incident to the payment of any dividend,
distribution, withdrawal or redemption, whether in
shares of the Series or in cash;
11. costs and expenses of promoting the sale of shares in
the Series, including preparing prospectuses and
reports to shareholders of the Series, provided,
nothing in this Agreement shall prevent the charging
of such costs to third parties involved in the
distribution and sale of Series shares;
12. fees payable by the Series to the Commission or to
any state securities regulator or other regulatory
authority for the registration of shares of the
Series in any state or territory of the United States
or of the District of Columbia;
13. all costs attributable to investor services,
administering shareholder accounts and handling
shareholder relations, (including, without
limitation, telephone and personnel expenses), which
costs may also be charged to third parties by the
Adviser; and
14. any other ordinary, routine expenses incurred in the
management of the Series' assets, and any
nonrecurring or extraordinary expenses, including
organizational expenses, litigation affecting the
Series and any indemnification by the Fund of its
officers, directors or agents.
X. EXPENSE LIMITATION
If, for any fiscal year, the total of all ordinary business expenses payable by
the Series, including all investment advisory fees but excluding brokerage
commissions, distribution fees, taxes, interest and
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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 Series are offered for sale (unless a
waiver is obtained), the Adviser shall reduce its advisory fee to the extent
necessary to meet such expense limit, but the Adviser will not be required to
reimburse the Series for any ordinary business expenses which exceed the amount
of its advisory fee for such fiscal year. The amount of any such reduction is to
be borne by the Adviser and shall be deducted from the monthly advisory fee
otherwise payable to the Adviser during such fiscal year. For the purposes of
this paragraph, the term "fiscal year" shall exclude the portion of the current
fiscal year which shall have elapsed prior to the date hereof and shall include
the portion of the then current fiscal year which shall have elapsed at the date
of termination of this Agreement.
XI. ADDITIONAL SERVICES
Upon the request of the Board, the Adviser may perform certain accounting,
shareholder servicing or other administrative services on behalf of the Series
that are not required by this Agreement. Such services will be performed on
behalf of the Series and the Adviser may receive from the Series such
reimbursement for costs or reasonable compensation for such services as may be
agreed upon between the Adviser and the Board on a finding by the Board that the
provision of such services by the Adviser is in the best interests of the Series
and its shareholders. Payment or assumption by the Adviser of any Series expense
that the Adviser is not otherwise required to pay or assume under this Agreement
shall not relieve the Adviser of any of its obligations to the Series nor
obligate the Adviser to pay or assume any similar Series expense on any
subsequent occasions. Such services may include, but are not limited to, (a) the
services of a principal financial officer of the Fund (including applicable
office space, facilities and equipment) whose normal duties consist of
maintaining the financial accounts and books and records of the Fund and the
Series and the services (including applicable office space, facilities and
equipment) of any of the personnel operating under the direction of such
principal financial officer;
(b) the services of staff to respond to shareholder inquiries concerning the
status of their accounts, providing assistance to shareholders in exchanges
among the investment companies managed or advised by the Adviser, changing
account designations or changing addresses, assisting in the purchase or
redemption of shares; or otherwise providing services to shareholders of the
Series; and (c) such other administrative services as may be furnished from time
to time by the Adviser to the Fund on the Series at the request of the Board.
XII. NONEXCLUSIVITY
The services of the Adviser to the Series are not to be deemed to be exclusive,
and the Adviser shall be free to render investment advisory or other services to
others (including other investment companies) and to engage in other activities,
so long as its services under this Agreement are not impaired thereby. It is
understood and agreed that officers and directors of the Adviser may serve as
officers or directors of the Fund, and that officers or directors of the Fund
may serve as officers or directors of the Adviser to the extent permitted by
law; and that the officers and directors of the Adviser are not prohibited from
engaging in any other business 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 companies.
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XIII. 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 XV.
XIV. RENEWAL
Following the expiration of its initial term, the Agreement shall continue in
force and effect from year to year, provided that such continuance is
specifically approved at least annually:
1. a. by the Board, or
b. by the vote of a majority of the Series' 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.
XV. TERMINATION
This Agreement may be terminated at any time, without the payment of any
penalty, by vote of the Board or by vote of a majority of the Series'
outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act),
or by the Adviser, on sixty (60) days' written notice to the other party. The
notice provided for herein may be waived by the party required to be notified.
This Agreement shall automatically terminate in the event of its "assignment",
as that term is defined in Section 2(a)(4) of the 1940 Act.
XVI. LIABILITY
The Adviser shall be liable to the Fund and shall indemnify the Fund for any
losses incurred by the Fund, 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 Adviser or its officers, directors or employees,
that is found to involve willful misfeasance, bad faith or negligence, or
reckless disregard by the Adviser of its duties under this Agreement, in
connection with the services rendered by the Adviser hereunder.
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XVII. 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 addresses shall be:
if to the Fund, the Series or the Adviser:
000 Xxxxxxxxxx Xxxxxx, XX0X
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax number: 860/000-0000
XVIII. 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 the provisions of this Agreement
is revised by rule, regulation or order of the Commission, such provisions shall
be deemed to incorporate the effect of such rule, regulation or order.
XIX. SERVICE XXXX
The service xxxx of the Fund and the Series 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 Adviser or another subsidiary or
affiliated corporation of Aetna Life and Casualty Company should not be the
investment adviser of the Series.
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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: /s/XxXxx X. Xxxxxxxxx Name: Xxxxx X. Xxxxxxx
----------------------------- -----------------
XxXxx X. Xxxxxxxxx Title: Vice President
Assistant Corporate Secretary -----------------
Aetna Series Fund, Inc.
on behalf of its series,
The Aetna Fund
By: /s/Xxxxx X. Xxxxxxx
--------------------
Attest: /s/Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxx
----------------------------- ------------------
Xxxxx X. Xxxxxx Title: President
Secretary -----------------
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Investment Advisory Agreement Exhibit
Investment Advisory Agreement
Schedule Pursuant to Rule 483(d)(e)
Investment Advisory Agreements have been entered into by Aetna Series Fund, Inc.
on behalf of the following funds in substantially the same form and type as the
exhibit included herewith.
Date Fund Difference - Compensation
---- ---- -------------------------
Rate Assets
---- ------
8/1/96 Aetna Bond Fund 0.50% on the first $250 million
0.475% on the next $250 million
0.45% on the next $250 million
0.425% on the next $1.25 billion
0.40% over $2 billion
8/1/96 Aetna Money Market Fund 0.40% on the first $500 million
0.35% on the next $500 million
0.34% on the next $1 billion
0.33% on the next $1 billion
0.30% over $3 billion
8/1/96 Aetna Growth and Income Fund 0.70% on the first $250 million
0.65% on the next $250 million
0.625% on the next $250 million
0.60% on the next $1.25 billion
0.55% over $2 billion
8/1/96 Aetna International Growth Fund 0.85% on the first $250 million
0.80% on the next $250 million
0.775% on the next $250 million
0.75% on the next $1.25 billion
0.70% over $2 billion
8/1/96 Aetna Government Fund 0.50% on the first $250 million
0.475% on the next $250 million
0.45% on the next $250 million
0.425% on the next $1.25 billion
0.40% over $2 billion
8/1/96 Aetna Growth Fund 0.70% on the first $250 million
0.65% on the next $250 million
0.625% on the next $250 million
0.60% on the next $1.25 billion
0.55% over $2 billion
8/1/96 Aetna Small Company Growth Fund 0.85% on the first $250 million
0.80% on the next $250 million
0.775% on the next $250 million
0.75% on the next $1.25 billion
0.725% over $2 billion
9/25/96 Aetna Index Plus Fund 0.45% on the first $250 million
0.45% on the next $250 million
0.425% on the next $250 million
0.40% on the next $250 million
0.40% on the next $1 billion
0.375% over $2 billion
