AETNA GENERATION PORTFOLIOS, INC.
NSAR Annual Filing
12/31/2001
Sub-Item 77Q1 - Exhibits Y
(e) Investment Advisory Agreement for Aetna Generation Portfolios,
Inc. is attached herewith.
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made by and between AELTUS INVESTMENT MANAGEMENT,
INC., a Connecticut corporation (the "Adviser"), and AETNA GENERATION
PORTFOLIOS, INC., a Maryland corporation (the "Fund"), on behalf of
its portfolio, Aetna Ascent VP (the "Portfolio"), as of the date set
forth above 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 (the
"1940 Act"); and
WHEREAS, the Fund has established the Portfolio; and
WHEREAS, the Adviser is registered with the Commission as an
investment adviser under the Investment Advisers Act of 1940
(the "Advisers Act"), and is in the business of acting as an
investment adviser; and
WHEREAS, the Fund, on behalf of the Portfolio, and the Adviser
desire to enter into an agreement to provide for investment
advisory and management services for the Portfolio 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 Portfolio, hereby appoints the Adviser
to serve as the investment adviser to the Portfolio, 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 Portfolio and has no authority to act for or represent the
Portfolio 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 Portfolio;
2. select the securities to be purchased, sold or exchanged
by the Portfolio or otherwise represented in the Portfolio's
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
Portfolio, securities held by or under consideration for the Portfolio,
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 Portfolio's securities,
transfer agents, dividend paying agents, pricing services and other
service providers as are necessary to carry out the terms of this
Agreement; and
7. 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
The 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 Commission under the Advisers Act. The Adviser
shall maintain such registration 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 Portfolio in carrying out its
obligations hereunder.
B. Representations and Warranties of the Portfolio and the Fund
The Fund, on behalf of the Portfolio, hereby represents and warrants
to the Adviser as follows:
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
Portfolio are registered or qualified for offer and sale to the
public under the Securities Act of 1933 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
Subject to the approval of the Board and the shareholders of the
Portfolio, the Adviser may enter into a Subadvisory Agreement to
engage a subadviser to the Adviser with respect to the Portfolio.
V. BROKER-DEALER RELATIONSHIPS
A. Portfolio Trades
The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio 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 Portfolio 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 or research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) to the
Adviser and/or the other accounts over which the Adviser or its
affiliates exercise investment discretion. The Adviser is authorized
to pay a broker or dealer who provides such brokerage or research
services a commission for executing a portfolio transaction for the
Portfolio 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 or research services provided by such broker or dealer
and is paid in compliance with Section 28(e). 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 Adviser may consider the sale of shares of the
Portfolio and of other investment companies advised by the Adviser
as a factor in the selection of brokers or dealers to effect
transactions for the Portfolio, subject to the Adviser's duty to
seek best execution. The Adviser may also select brokers or
dealers to effect transactions for the Portfolio that provide
payment for expenses of the Portfolio. The Board shall periodically
review the commissions paid by the Portfolio 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 Portfolio 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 current Registration Statement of
the Fund;
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
Portfolio, shall pay to the Adviser an annual fee, payable monthly,
equal to 0.60% of the average daily net assets of the Portfolio.
Except as hereinafter set forth, compensation under this Agreement
shall be calculated and accrued daily at the rate of 1/365
(1/366 in the event of a leap year) of 0.60% of the daily net assets
of the Portfolio. 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.
IX. EXPENSES
The expenses in connection with the management of the Portfolio
shall be allocated between the Portfolio 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 Portfolio, including without limitation, office space,
office equipment, telephone and postage costs; and
2. all fees and expenses of all directors, officers and
employees, if any, of the Fund who are employees of the Adviser,
including any salaries and employment benefits payable to those persons.
B. Expenses of the Portfolio
The Portfolio 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 Portfolio's investment portfolio or other
investment transactions incurred in managing the Portfolio's
assets, including portions of commissions that may be paid to
reflect brokerage research services provided to the Adviser;
3. fees and expenses of the Portfolio's independent
accountants and legal counsel and the independent directors'
legal counsel;
4. fees and expenses of any administrator, transfer agent,
custodian, dividend, accounting, pricing or disbursing agent of
the Portfolio;
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;
8. all fees and expenses of the Fund's directors, who are
not "interested persons" (as defined in the 1940 Act) of the
Fund or the Adviser;
9. expenses of preparing, printing and distributing proxies,
proxy statements, prospectuses and reports to shareholders of the
Portfolio, except for those expenses paid by third parties in
connection with the distribution of Portfolio 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 Portfolio or in cash;
11. costs and expenses (other than those detailed in paragraph
9 above) of promoting the sale of shares in the Portfolio,
including preparing prospectuses and reports to shareholders of
the Portfolio, provided, nothing in this Agreement shall prevent
the charging of such costs to third parties involved in the
distribution and sale of Portfolio shares;
12. fees payable by the Portfolio to the Commission or to any
state securities regulator or other regulatory authority for the
registration of shares of the Portfolio 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 Portfolio's assets, and any nonrecurring or
extraordinary expenses, including organizational expenses,
litigation affecting the Portfolio and any indemnification by
the Fund of its officers, directors or agents.
Notwithstanding the above, the Adviser may waive a portion or all
of the fees it is entitled to receive.
In addition, the Adviser may reimburse the Fund, on behalf of a
Portfolio, for expenses allocated to a Portfolio.
The Adviser has agreed to waive fees and/or reimburse expenses
through December 31, 2002 so that the Portfolio's total annual
operating expenses (excluding distribution fees) do not exceed
0.75% of the average daily net assets.
X. ADDITIONAL SERVICES
Upon the request of the Board, the Adviser may perform certain
accounting, shareholder servicing or other administrative services
on behalf of the Portfolio that are not required by this Agreement.
Such services will be performed on behalf of the Portfolio and
the Adviser may receive from the Portfolio 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 Portfolio and its shareholders.
Payment or assumption by the Adviser of any Portfolio 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 Portfolio nor obligate the Adviser to pay or
assume any similar Portfolio expense on any subsequent occasions.
XI. NONEXCLUSIVITY
The services of the Adviser to the Portfolio 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.
XII. TERM
This Agreement shall become effective on December 12, 2001, and
shall remain in force and effect through December 31, 2002,
unless earlier terminated under the provisions of Article XIV.
XIII. 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 Portfolio's 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.
XIV. 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 Portfolio's 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 defined in Section 2(a)(4) of the 1940 Act).
XV. 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.
XVI. 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, on behalf of the Portfolio:
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax number 860/000-0000
Attention: President
if to the Adviser:
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax number 860/000-0000
Attention: President or Chief Compliance Officer
XVII. 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 or orders of the
Commission issued pursuant to the 1940 Act, or contained in
no-action and interpretive positions taken by the Commission
staff. In addition, where the effect of a requirement of the
1940 Act reflected in the provisions of this Agreement is
revised by rule or order of the Commission, such provisions
shall be deemed to incorporate the effect of such rule or
order.
XVIII. SERVICE MARK
The service mark of the Fund and the Portfolio and the name
"Aetna" have been adopted by the Fund with the permission of
Aetna Services, Inc. (formerly known as Aetna Life and Casualty
Company) and their continued use is subject to the right of
Aetna Services, Inc. to withdraw this permission in the event
the Adviser or another affiliated corporation of Aetna Services,
Inc. should not be the investment adviser of the Portfolio.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in duplicate by their respective officers on the
12th day of December 2001.
Aeltus Investment Management, Inc.
Attest:
By:
/s/ Xxxxxxx Xxxxxxx
By:
/s/ Xxxx Xxxxxx
Name: Xxxxxxx Xxxxxxx Name: Xxxx Xxxxxx
Title: Secretary Title: Executive Vice President
Aetna Generation Portfolios, Inc.
on behalf of its Portfolio,
Aetna Ascent VP
Attest:
By:
/s/ Xxxxx Xxxxxxx
By:
/s/ X. Xxxxx Xxx
Name: Xxxxx Xxxxxxx Name: X. Xxxxx Xxx
Title: Assistant Secretary Title: President
Investment Advisory Agreement
Schedule Pursuant to Rule 483(d)(2) under the Securities
Act of 1933
Investment Advisory Agreements have been entered into by
Aetna Generation Portfolios, Inc. on behalf of the following
portfolios in substantially the same form and type as the
Investment Advisory Agreement, included herewith.
Date
Portfolio
Difference in
Compensation
Difference in
Expenses
12/12/2001
Aetna Crossroads VP
0.60% of the average daily net assets of the Portfolio
Total annual operating expenses (excluding distribution
fees) do not exceed 0.70% of the average daily net assets
12/12/2001
Aetna Legacy VP
0.60% of the average daily net assets of the Portfolio
Total annual operating expenses (excluding distribution
fees) do not exceed 0.65% of the average daily net assets
