Exhibit (e)
DISTRIBUTION AGREEMENT
AETNA BALANCED VP, INC.
00 XXXXX XXXXX XXXXXX
XXXXXXXX, XXXXXXXXXXX 00000-0000
AGREEMENT made this 1st day of January, 2002, by and between Aetna
Balanced VP, Inc. (the "Company") and ING Pilgrim Securities, Inc.
("Distributor"), a Delaware corporation.
WHEREAS, the Company is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as a diversified open-end investment
company and offers its shares continuously to separate accounts of insurance
companies ("Separate Accounts") to serve as an investment option under variable
annuity contracts or variable life insurance policies issued by the insurance
companies; and its shares may be sold in the future to separate accounts of
other affiliated or unaffiliated insurance companies; and
WHEREAS, the Distributor is registered as a broker-dealer under the
Securities Exchange Act of 1934 and is a member of the National Association of
Securities Dealers, Inc. ("NASD"); and
WHEREAS, the Company and the Distributor wish to enter into this
Agreement whereby the Distributor will act as the Company's principal
underwriter for the sale of shares of the Company to the Separate Accounts;
NOW, THEREFORE, the parties hereto agree as follows:
I. Appointment of the Distributor
The Company hereby appoints the Distributor as the principal
underwriter and distributor of the Company to sell shares of the Company to the
Separate Accounts and any other persons, and the Distributor hereby accepts such
appointment.
II. Purchase of Shares from the Company
A. The Company herewith engages the Distributor to act as exclusive
distributor of the shares of the Company. Said sales shall be made only to
investors eligible to invest in a registered investment company consistent with
such company's serving as an investment vehicle
for variable annuities and variable life insurance company contracts.
Distributor need not hold itself available to receive by mail, telex and/or
telephone, orders for the purchase of shares.
B. All shares sold by the Distributor under this Agreement shall be
sold at the net asset value per share ("Offering Price") determined in the
manner described in the Company's prospectus, as it may be amended from time to
time.
III. Redemption of Shares by the Company
A. Any of the outstanding shares of the Company may be tendered for
redemption at any time, and the Company agrees to redeem any such shares so
tendered in accordance with the applicable provisions of the prospectus and the
Company's Articles of Incorporation and By-Laws. The redemption price is the net
asset value per share next determined after the initial receipt of proper
request for redemption.
B. The right to redeem shares or to receive payment with respect to any
redemption may be suspended only in accordance with applicable law.
IV. Duties of the Company
A. The Company shall furnish to the Distributor copies of all
information, financial statements and other papers which the Distributor may
reasonably request for use in connection with the distribution of the shares of
the Company.
B. The Company shall take, from time to time, subject to the necessary
approval of its shareholders, all necessary action to fix the number of its
authorized shares and to register shares under the Securities Act of 1933, as
amended (the "1933 Act"), in order that there will be available for sale at
least the number of shares as investors may reasonably be expected to purchase.
V. Duties of the Distributor
In selling the shares of the Company, the Distributor shall use its
best efforts to conform with the requirements of all applicable federal and
state laws and regulations, and the regulations of the NASD, relating to the
sale of such securities. Except as provided below, the Distributor is not
authorized by the Company to give any information or make any representations,
other than those contained in the registration statement for the Company and its
shares, the prospectus, and any sales literature specifically approved by a
principal of the Distributor. The Distributor shall furnish applicable federal
and state regulatory authorities with any information or reports in connection
with its services under this Agreement which such authorities may request in
order to ascertain whether the Company's operations are being conducted in an
manner consistent with any applicable law or regulations. Nothing contained in
this Agreement shall prevent the Distributor from entering into distribution
agreements with other investment companies.
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VI. Allocation of Expenses
A. The Company will pay the following expenses in connection with the
sales and distribution of shares of the Company.
1. expenses pertaining to the preparation of its audited and
certified financial statements to be included in any amendments ("Amendments")
to the Company's registration statement under the 1933 Act, including the
prospectus and Statement of Additional Information ("SAI") included therein;
2. expenses pertaining to the preparation, printing, and
distribution of any reports or communications, including the prospectus and SAI,
which are sent to existing shareholders of the Company;
3. filing and other fees to federal and state securities
regulatory authorities necessary to register and maintain registration of the
shares; and
4. expenses of the Company's administration, including all costs
and expenses in connection with the issuance, transfer and registration of the
shares, including, but not limited to, any taxes and other governmental charges
in connection therewith.
B. The Distributor will pay the following expenses:
1. expenses of printing additional copies of the prospectus and
SAI and any Amendments or supplements thereto which are necessary to continue to
offer shares of the Company to the public; and
2. expenses pertaining to the printing of additional copies, for
use by the Distributor as sales literature, of reports or other communications
which have been prepared for distribution to existing shareholders of the
Company or incurred by the Distributor in advertising, promoting and selling
shares of the Company.
VII. Compensation
The Company shall not pay any compensation to the Distributor for
its services as a distributor hereunder, nor shall the Company reimburse the
Distributor for any expenses related to such services except to the extent
permitted under a distribution plan adopted by the Company pursuant to Rule
12b-1 under the Investment Company Act of 1940 ("1940 Act"). Distributor may
receive a fee described in any distribution plan adopted by the Company pursuant
to Rule 12b-1 under the 1940 Act.
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VIII. Records
All records maintained by the Distributor in connection with this
Agreement shall be the property of the Company and shall be returned to the
Company upon termination of this Agreement, free from any claims or retention of
rights by the Distributor. The Distributor shall keep confidential any
information obtained pursuant to this Agreement and shall disclose such
information, only if the Company has authorized such disclosure, or if such
disclosure is expressly required by applicable federal or state regulatory
authorities.
IX. Duration and Termination of this Agreement
This Agreement shall become effective on the date first written
above or on such later date approved by the Company's Board of Directors
("Board"), including a majority of those Directors who are not parties to this
Agreement or interested persons (as such term is defined in the 1940 Act)
thereof. Unless terminated as provided herein, the Agreement shall continue in
full force and effect through December 31, 2002, and shall continue in effect
from year to year thereafter for successive one (1) year periods if approved at
least annually (i) by a vote of a majority of the outstanding voting securities
of the Company or by a vote of the Directors of the Company, and (ii) by a vote
of a majority of the Directors of the Company who are not interested persons or
parties to this Agreement (other than as Directors of the Company), cast in
person at a meeting called for the purpose of voting on this Agreement.
This Agreement may be terminated at any time without penalty on at
least sixty (60) days' notice by the Company's Board or by a majority vote of
its shareholders, or by the Distributor on sixty (60) days' notice.
This Agreement shall terminate automatically in the event of its
assignment.
X. Amendment
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or
termination is sought. If shareholder approval of an amendment is required
under the 1940 Act, no such amendment shall become effective until
approved by the requisite number of outstanding shares of the Fund.
Otherwise, a written amendment of this Agreement is effective upon the
approval of the Board and the Manager.
XI. Miscellaneous
This Agreement shall be subject to the laws of the State of Delaware
and shall be interpreted and construed to further and promote the operation of
the Company as an open-end investment company. As used herein, the terms "Net
Asset Value," "Investment Company," "Open-End Investment Company," "Assignment,"
"Principal Underwriter," "Interested Person,"
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and "Majority of the Outstanding Voting Securities," shall have the meanings set
forth in the 1933 Act and the 1940 Act, as applicable, and the rules and
regulations promulgated thereunder.
XII. Liability
Nothing contained herein shall be deemed to protect the Distributor
against any liability to the Company or its shareholders to which the
Distributor would otherwise be subject by reason of willful misfeasance, bad
faith or negligence in the performance of the Distributor's duties hereunder, or
by reason of the Distributor's reckless disregard of its obligations and duties
hereunder.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers below as of the day and year of first above
written.
AETNA BALANCED VP, INC.
By: /s/ Xxxxxx X. Naka
--------------------------
Name: Xxxxxx X. Naka
Title: Senior Vice President
ING PILGRIM SECURITIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
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