EXHIBIT (d)(1)
INVESTMENT MANAGEMENT AGREEMENT
This AGREEMENT made this 1st day of March, 2002 between AETNA GENERATION
PORTFOLIOS, INC. (the "Fund"), a Maryland corporation, and ING INVESTMENTS, LLC
(the "Manager"), a Delaware limited liability company (the "Agreement").
WHEREAS, the Fund is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Fund is authorized to issue shares of common stock in
separate series with each such series representing interests in a separate
portfolio of securities and other assets;
WHEREAS, the Fund may offer shares of additional series in the future;
WHEREAS, the Fund desires to avail itself of the services of the Manager
for the provision of advisory and management services for the Fund; and
WHEREAS, the Manager is willing to render such services to the Fund;
NOW, THEREFORE, in consideration of the premises, the promises and mutual
covenants herein contained, it is agreed between the parties as follows:
1. Appointment. The Fund hereby appoints the Manager, subject to the
direction of the Board of Trustees, for the period and on the terms set forth in
this Agreement, to provide advisory, management, and other services, as
described herein, with respect to each series of the Fund (individually and
collectively referred to herein as "Series"). The Manager accepts such
appointment and agrees to render the services herein set forth for the
compensation herein provided.
In the event the Fund establishes and designates additional series with
respect to which it desires to retain the Manager to render advisory services
hereunder, it shall notify the Manager in writing. If the Manager is willing to
render such services, it shall notify the Fund in writing, whereupon such
additional series shall become a Series hereunder.
2. Services of the Manager. The Manager represents and warrants that it is
registered as an investment adviser under the Investment Advisers Act of 1940
and will maintain such registration for so long as required by applicable law.
Subject to the general supervision of the Board of Trustees of the Fund, the
Manager shall provide the following advisory, management, and other services
with respect to the Series:
(a) Provide general investment advice and guidance with respect to the
Series and provide advice and guidance to the Fund's Trustees, and oversee the
management of the investments of the Series and the composition of each Series'
portfolio of securities and investments, including cash, and the purchase,
retention and disposition thereof, in accordance
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with each Series' investment objective or objectives and policies as stated in
the Fund's current registration statement, which management may be provided by
others selected by the Manager and approved by the Board of Trustees as provided
below or directly by the Manager as provided in Section 3 of this Agreement;
(b) In the event that the Manager wishes to select others to render
investment management services, the Manager shall analyze, select and recommend
for consideration and approval by the Fund's Board of Trustees investment
advisory firms (however organized) to provide investment advice to one or more
of the Series, and, at the expense of the Manager, engage (which engagement may
also be by the Fund) such investment advisory firms to render investment advice
and manage the investments of such Series and the composition of each such
Series' portfolio of securities and investments, including cash, and the
purchase, retention and disposition thereof, or any offering thereof, in
accordance with the Series' investment objective or objectives and policies as
stated in the Fund's current registration statement (any such firms approved by
the Board of Trustees and engaged by the Fund and/or the Manager are referred to
herein as "Sub-Advisers");
(c) Periodically monitor and evaluate the performance of the
Sub-Advisers with respect to the investment objectives and policies of the
Series;
(d) Monitor the Sub-Advisers for compliance with the investment
objective or objectives, policies and restrictions of each Series, the 1940 Act,
Subchapter M of the Internal Revenue Code, and if applicable, regulations under
such provisions, and other applicable law;
(e) If appropriate, analyze and recommend for consideration by the
Fund's Board of Trustees termination of a contract with a Sub-Adviser under
which the Sub-Adviser provides investment advisory services to one or more of
the Series;
(f) Supervise Sub-Advisers with respect to the services that such
Sub-Advisers provide under respective portfolio management agreements
("Sub-Adviser Agreements");
(g) Render to the Board of Trustees of the Fund such periodic and
special reports as the Board may reasonably request; and
(h) Make available its officers and employees to the Board of
Trustees and officers of the Fund for consultation and discussions regarding the
administration and management of the Series and services provided to the Fund
under this Agreement.
3. Investment Management Authority. In the event the Manager wishes to
render investment management services directly to a Series, then with respect to
any such Series, the Manager, subject to the supervision of the Fund's Board of
Trustees, will provide a continuous investment program for the Series' portfolio
and determine the composition of the assets of the Series' portfolio, including
determination of the purchase, retention, or sale, or any offering, of the
securities, cash, and other investments contained in the portfolio. The Manager
will provide investment research and conduct a continuous program of evaluation,
investment, sales, and
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reinvestment of the Series' assets by determining the securities and other
investments that shall be purchased, entered into, sold, closed, offered to the
public, or exchanged for the Series, when these transactions should be executed,
and what portion of the assets of the Series should be held in the various
securities and other investments in which it may invest, and the Manager is
hereby authorized to execute and perform such services on behalf of the Series.
To the extent permitted by the investment policies of the Series, the Manager
shall make decisions for the Series as to foreign currency matters and make
determinations as to, and execute and perform, foreign currency exchange
contracts on behalf of the Series. The Manager will provide the services under
this Agreement in accordance with the Series' investment objective or
objectives, policies, and restrictions as stated in the Fund's Registration
Statement filed with the Securities and Exchange Commission (the "SEC"), as
amended. Furthermore:
(a) The Manager will manage the Series so that each will qualify as
a regulated investment company under Subchapter M of the Internal Revenue Code.
In managing the Series in accordance with these requirements, the Manager shall
be entitled to receive and act upon advice of counsel to the Fund or counsel to
the Manager.
(b) The Manager will conform with the 1940 Act and all rules and
regulations thereunder, all other applicable federal and state laws and
regulations, with any applicable procedures adopted by the Fund's Board of
Trustees, and the provisions of the Registration Statement of the Fund under the
Securities Act of 1933 and the 1940 Act, as supplemented or amended.
(c) On occasions when the Manager deems the purchase or sale of a
security to be in the best interest of the Series as well as any other
investment advisory clients, the Manager may, to the extent permitted by
applicable laws and regulations and any applicable procedures adopted by the
Fund's Board of Trustees, but shall not be obligated to, aggregate the
securities to be so sold or purchased with those of its other clients where such
aggregation is not inconsistent with the policies set forth in the Registration
Statement. 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 Manager in
a manner that is fair and equitable in the judgment of the Manager in the
exercise of its fiduciary obligations to the Fund and to such other clients.
(d) In connection with the purchase and sale of securities of the
Series, the Manager will arrange for the transmission to the custodian for the
Fund on a daily basis, of such confirmation, trade tickets, and other documents
and information, including, but not limited to, Cusip, Cedel, or other numbers
that identify securities to be purchased or sold on behalf of the Series, as may
be reasonably necessary to enable the custodian to perform its administrative
and recordkeeping responsibilities with respect to the Series. With respect to
portfolio securities to be purchased or sold through the Depository Trust
Company, the Manager will arrange for the prompt transmission of the
confirmation of such trades to the Fund's custodian.
(e) The Manager will assist the custodian or portfolio accounting
agent for the Fund in determining, consistent with the procedures and policies
stated in the Registration Statement for the Fund and any applicable procedures
adopted by the Fund's Board of Trustees, the value of any portfolio securities
or other assets of the Series for which the custodian or
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portfolio accounting agent seeks assistance or review from the Manager.
(f) The Manager will make available to the Fund, promptly upon
request, any of the Series' or the Manager's investment records and ledgers as
are necessary to assist the Fund in complying with the requirements of the 1940
Act, as well as other applicable laws. The Manager will furnish to regulatory
authorities having the requisite authority any information or reports in
connection with its services which may be requested in order to ascertain
whether the operations of the Fund are being conducted in a manner consistent
with applicable laws and regulations.
(g) The Manager will regularly report to the Fund's Board of
Trustees on the investment program for the Series and the issuers and securities
represented in the Series' portfolio, and will furnish the Fund's Board of
Trustees with respect to the Series such periodic and special reports as the
Trustees may reasonably request.
(h) In connection with its responsibilities under this Section 3,
the Manager is responsible for decisions to buy and sell securities and other
investments for the Series' portfolio, broker-dealer selection, and negotiation
of commission rates. The Manager's primary consideration in effecting a security
transaction will be to obtain the best execution for the Series, taking into
account the factors specified in the Prospectus and/or Statement of Additional
Information for the Fund, which include price (including the applicable
brokerage commission or dollar spread), the size of the order, the nature of the
market for the security, the timing of the transaction, the reputation,
experience and financial stability of the broker-dealer involved, the quality of
the service, the difficulty of execution, execution capabilities and operational
facilities of the firms involved, and the firm's risk in positioning a block of
securities. Accordingly, the price to the Series in any transaction may be less
favorable than that available from another broker-dealer if the difference is
reasonably justified, in the judgment of the Manager in the exercise of its
fiduciary obligations to the Fund, by other aspects of the portfolio execution
services offered. Subject to such policies as the Board of Trustees may
determine and consistent with Section 28(e) of the Securities Exchange Act of
1934, as amended, the Manager shall not be deemed to have acted unlawfully or to
have breached any duty created by this Agreement or otherwise solely by reason
of its having caused the Series to pay a broker-dealer for effecting a portfolio
investment transaction in excess of the amount of commission another
broker-dealer would have charged for effecting that transaction, if the Manager
determines in good faith that such amount of commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker-dealer, viewed in terms of either that particular transaction or the
Manager's overall responsibilities with respect to the Series and to its other
clients as to which it exercises investment discretion. To the extent consistent
with these standards and in accordance with Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, the Manager is further
authorized to allocate the orders placed by it on behalf of the Series to the
Manager if it is registered as a broker-dealer with the SEC, to an affiliated
broker-dealer, or to such brokers and dealers who also provide research or
statistical material or other services to the Series, the Manager or an
affiliate of the Manager. Such allocation shall be in such amounts and
proportions as the Manager shall determine consistent with the above standards,
and the Manager will report on said allocation regularly to the Board of
Trustees of the Fund indicating the broker-dealers to which such allocations
have been made and the basis
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therefor.
4. Conformity with Applicable Law. The Manager, in the performance of its
duties and obligations under this Agreement, shall act in conformity with the
Registration Statement of the Fund and with the instructions and directions of
the Board of Trustees of the Fund and will conform to, and comply with, the
requirements of the 1940 Act and all other applicable federal and state laws and
regulations.
5. Exclusivity. The services of the Manager to the Fund under this
Agreement are not to be deemed exclusive, and the Manager, or any affiliate
thereof, shall be free to render similar services to other investment companies
and other clients (whether or not their investment objectives and policies are
similar to those of any of the Series) and to engage in other activities, so
long as its services hereunder are not impaired thereby.
6. Records. The Fund agrees to maintain and to preserve for the periods
prescribed under the 1940 Act any such records as are required to be maintained
by the Fund with respect to the Series by the 1940 Act. The Manager further
agrees that all records of the Series are the property of the Fund and, to the
extent held by the Manager, it will promptly surrender any of such records upon
request.
7. Expenses. During the term of this Agreement, the Manager will pay all
expenses incurred by it in connection with its activities under this Agreement,
except such expenses as are assumed by the Fund under this Agreement and such
expenses as are assumed by a Sub-Adviser under its Sub-Adviser Agreement. The
Manager further agrees to pay all fees payable to the Sub-Advisers, executive
salaries and expenses of the Trustees of the Fund who are employees of the
Manager or its affiliates, and office rent of the Fund. The Fund shall be
responsible for all of the other expenses of its operations, including, without
limitation, the management fee payable hereunder; brokerage commissions;
interest; legal fees and expenses of attorneys; fees of auditors, transfer
agents and dividend disbursing agents, custodians and shareholder servicing
agents; the expense of obtaining quotations for calculating each Fund's net
asset value; taxes, if any, and the preparation of the Fund's tax returns; cost
of stock certificates and any other expenses (including clerical expenses) of
issue, sale, repurchase or redemption of shares; expenses of registering and
qualifying shares of the Fund under federal and state laws and regulations
(including the salary of employees of the Manager engaged in the registering and
qualifying of shares of the Fund under federal and state laws and regulations or
a pro-rata portion of the salary of employees to the extent so engaged);
expenses of disposition or offering any of the portfolio securities held by a
Series; expenses of printing and distributing reports, notices and proxy
materials to existing shareholders; expenses of printing and filing reports and
other documents filed with governmental agencies; expenses in connection with
shareholder and trustee meetings; expenses of printing and distributing
prospectuses and statements of additional information to existing shareholders;
fees and expenses of Trustees of the Fund who are not employees of the Manager
or any Sub-Adviser, or their affiliates; trade association dues; insurance
premiums; extraordinary expenses such as litigation expenses. To the extent the
Manager incurs any costs or performs any services which are an obligation of the
Fund, as set forth herein, the Fund shall promptly reimburse the Manager for
such costs and expenses. To the extent the services for which the Fund is
obligated to pay are performed by the Manager, the
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Manager shall be entitled to recover from the Fund only to the extent of its
costs for such services.
8. Compensation. For the services provided by the Manager to each Series
pursuant to this Agreement, the Fund will pay to the Manager an annual fee equal
to the amount specified for such Series in Schedule A hereto, payable monthly in
arrears. Payment of the above fees shall be in addition to any amount paid to
the Manager for the salary of its employees for performing services which are an
obligation of the Fund as provided in Section 7. The fee will be appropriately
pro-rated to reflect any portion of a calendar month that this Agreement is not
in effect between us.
9. Liability of the Manager. The Manager may rely on information
reasonably believed by it to be accurate and reliable. Except as may otherwise
be required by the 1940 Act or the rules thereunder, neither the Manager nor its
stockholders, officers, trustees, employees, or agents shall be subject to any
liability for, or any damages, expenses, or losses incurred in connection with,
any act or omission connected with or arising out of any services rendered under
this Agreement, except by reason of willful misfeasance, bad faith, or
negligence in the performance of the Manager's duties, or by reason of reckless
disregard of the Manager's obligations and duties under this Agreement. Except
as may otherwise be required by the 1940 Act or the rules thereunder, neither
the Manager nor its stockholders, officers, trustees, employees, or agents shall
be subject to any liability for, or any damages, expenses, or losses incurred in
connection with, any act or omission by a Sub-Adviser or any of the
Sub-Adviser's stockholders or partners, officers, trustees, employees, or agents
connected with or arising out of any services rendered under a Sub-Adviser
Agreement, except by reason of willful misfeasance, bad faith, or negligence in
the performance of the Manager's duties under this Agreement, or by reason of
reckless disregard of the Manager's obligations and duties under this Agreement.
The debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a Series shall be enforceable against the
assets and property of that Series only, and not against the assets or property
of any other series of the Fund.
10. Continuation and Termination. This Agreement shall become effective on
the date first written above, subject to the condition that the Fund's Board of
Trustees, including a majority of those Trustees who are not interested persons
(as such term is defined in the 0000 Xxx) of the Manager, and the shareholders
of each Series, shall have approved this Agreement. Unless terminated as
provided herein, the Agreement shall continue in full force and effect with
respect to each Fund ending on the date indicated on Schedule A and shall
continue from year to year thereafter with respect to each Series so long as
such continuance is specifically approved at least annually (i) by the vote of a
majority of the Board of Trustees of the Fund, or (ii) by vote of a majority of
the outstanding voting shares of the Series (as defined in the 1940 Act), and
provided continuance is also approved by the vote of a majority of the Board of
Trustees of the Fund who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of the Fund or the Manager, cast in person
at a meeting called for the purpose of voting on such approval.
However, any approval of this Agreement by the holders of a majority of
the outstanding shares (as defined in the 0000 Xxx) of a Series shall be
effective to approve or continue this
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Agreement with respect to such Series notwithstanding (i) that this Agreement
has not been approved by the holders of a majority of the outstanding shares of
any other Series or (ii) that this Agreement has not been approved by the vote
of a majority of the outstanding shares of the Fund, unless such approval shall
be required by any other applicable law or otherwise. This Agreement may be
terminated by the Fund at any time, in its entirety or with respect to a Series,
without the payment of any penalty, by vote of a majority of the Board of
Trustees of the Fund or by a vote of a majority of the outstanding voting shares
of the Fund, or with respect to a Series, by vote of a majority of the
outstanding voting shares of such Series, on sixty (60) days' written notice to
the Manager, or by the Manager at any time, without the payment of any penalty,
on sixty (60) days' written notice to the Fund. This Agreement will
automatically and immediately terminate in the event of its "assignment" as
described in the 1940 Act.
11. Amendments. 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 a vote
of the majority of the outstanding shares of the Fund. Otherwise, a written
amendment of this Agreement is effective upon the approval of the Board of
Trustees and the Manager.
12. Use of Names. It is understood that the names "ING" and "ING
Investments, LLC" or any derivatives thereof or logos associated with those
names is the valuable property of the Manager and its affiliates, and that the
Fund and/or the Series have the right to use such names (or derivatives or
logos) only so long as this Agreement shall continue with respect to such Fund
and/or Series. Upon termination of this Agreement, the Fund (or Series) shall
forthwith cease to use such names (or derivatives or logos) and, in the case of
the Fund, shall promptly amend its Articles of Incorporation to change its name
(if such names are included therein).
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original.
14. Applicable Law.
(a) This Agreement shall be governed by the laws of the State of
Arizona, provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Investment Advisers Act of 1940, or any
rules or order of the SEC thereunder.
(b) 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(c) The captions of this Agreement are included for convenience only
and in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
AETNA GENERATION PORTFOLIOS, INC.
By: /s/ Xxxxxx X. Naka
-------------------------------
Xxxxxx X. Naka
Senior Vice President
ING INVESTMENTS, LLC
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President
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SCHEDULE A
WITH RESPECT TO THE
INVESTMENT MANAGEMENT AGREEMENT
DATED MARCH 1, 2002
BETWEEN
AETNA GENERATION PORTFOLIOS, INC.
AND
ING INVESTMENTS, LLC
ANNUAL INVESTMENT
SERIES MANAGEMENT FEE APPROVED BY BOARD REAPPROVAL DATE
------ -------------- ----------------- ---------------
Ascent VP .60% of average daily net assets of each portfolio December 12, 2001 December 31, 2002
Crossroads VP .60% of average daily net assets of each portfolio December 12, 2001 December 31, 2002
Legacy VP .60% of average daily net assets of each portfolio December 12, 2001 December 31, 2002
