SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and among AETNA LIFE INSURANCE AND ANNUITY COMPANY, a
Connecticut corporation (the "Adviser"), AETNA SERIES FUND, INC., a Maryland
Corporation, (the "Fund"), on behalf of its series, THE AETNA FUND (the
"Series") 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 Series 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 Series, (the "Investment Advisory Agreement") which
appoints the Adviser as the investment adviser for the Series; 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 Series, hereby appoint the Subadviser to manage the assets of
the Series 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
Series 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 Series and shall continuously supervise the
investment and reinvestment of cash, securities and instruments or
other property comprising the assets of the Series. In carrying out
these duties, the Subadviser shall:
1. 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 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 Series, 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
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 Series appointed by the Board,
concerning deliveries of securities, transfers of
currencies and payments of cash for the Series, as
required to carry out the investment activities of
the Series as contemplated by this Agreement; and
6. provide such financial support, administrative and
other services, such as preparation of financial
data, determination of the Series' 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
Series. 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 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
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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 (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
Series 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 Series;
7. oversee all matters relating to (i) the offer and
sale of shares of the Series, 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 Series,
including monitoring the corporate records of the
Series, maintaining contact with the Board, preparing
for, organizing and attending meetings of the Board
and the Series' 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 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
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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 Series 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 Series 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 Series 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 Series 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 Series in
carrying out its obligations hereunder.
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C. 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:
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 Series 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 Series 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
Series 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 Series 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 Series who provide payment for
expenses of the Series. The Subadviser 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 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 Series to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits received.
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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 Series, 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 Series 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, payable
monthly, based on the average daily net assets in the Series as
follows:
Rate Assets
---- ------
0.50% on the first $500 million
0.47% on the next $500 million
0.44% on the next $1 billion
0.41% 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 Subadvisory fee applied to the daily net assets of the Series.
If this Agreement becomes effective 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.
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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
Series if the expenses borne by the Series exceed the expense
limitations applicable to the Series imposed by the securities laws or
regulations of any jurisdiction in which the Series shares are
qualified for sale. Accordingly, the Subadviser agrees that, if, for
any fiscal year, the total of all ordinary business expenses of the
Series, 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 Series 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 Series 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
Series 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 Series 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 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.
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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 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.
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 Series; or
2. by the Adviser, the Fund, on behalf of the Series, 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 Series and the Adviser and shall indemnify
the Series and the Adviser for any losses incurred by the Series, 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.
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:
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If to the Fund, on Behalf of the Series 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 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 Subadviser 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 --------------------
Aeltus Investment
Management, Inc.
By: /s/Xxxx X. Xxx
-----------------------
Attest: /s/Xxxxxxx X. Xxxxxxx Name: Xxxx X. Xxx
----------------------------- --------------------
Xxxxxxx X. Xxxxxxx Title: President
Assistant 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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Subadvisory Agreement
Schedule Pursuant to Rule 483(d)(e)
Subadvisory 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 0.35% on the first $250 million
0.335% on the next $250 million
0.315% on the next $250 million
0.30% on the next $1.25 billion
0.28% over $2 billion
8/1/96 Aetna Money Market Fund 0.30% on the first $500 million
0.265% on the next $500 million
0.255% on the next $2 billion
0.225% over $3 billion
8/1/96 Aetna Growth and Income Fund 0.45% on the first $250 million
0.42% on the next $250 million
0.405% on the next $250 million
0.39% on the next $1.25 billion
0.355% over $2 billion
8/1/96 Aetna International Growth Fund 0.55% on the first $250 million
0.52% on the next $250 million
0.505% on the next $250 million
0.49% on the next $1.25 billion
0.455% over $2 billion
8/1/96 Aetna Government Fund 0.35% on the first $250 million
0.335% on the next $250 million
0.315% on the next $250 million
0.30% on the next $1.25 billion
0.28% over $2 billion
8/1/96 Aetna Growth Fund 0.45% on the first $250 million
0.42% on the next $250 million
0.405% on the next $250 million
0.39% on the next $1.25 billion
0.355% over $2 billion
8/1/96 Aetna Small Company Fund 0.55% on the first $250 million
0.52% on the next $250 million
0.505% on the next $250 million
0.49% on the next $1.25 billion
0.47% over $2 billion
9/25/96 Aetna Index Plus Fund 0.35% on the first $250 million
0.345% on the next $250 million
0.3275% on the next $250 million
0.31% on the next $250 million
0.30% on the next $1 billion
0.2775% over $2 billion
