SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss.240.14a-12
..............................................................................
(Name of Registrant as Specified In Its Charter)
Aetna GET Fund
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(2) or Item 22(a)(2)
of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
..............................................................................
2) Aggregate number of securities to which transaction applies:
..............................................................................
3) Per unit price or other underlying value of transction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculted and state how it was determined):
..............................................................................
4) Proposed maximum aggregate value of transaction:
..............................................................................
5) Total fee paid: $125.00
..............................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
..............................................................................
2) Form, Schedule or Registration StatementNo.:
..............................................................................
3) Filing Party:
..............................................................................
4) Date Filed:
<PAGE>
[June 10, 1996]
Preliminary Copy
Dear Fellow Shareholders and Contractholders,
You are cordially invited by the Trustees of the Aetna GET Fund (the
"Fund") to attend a Special Meeting of the Fund's Series B Shareholders on
July 19, 1996 at 9:00 a.m. to consider several recommendations which are
important to you and your Fund.
Each of the matters to be voted at this meeting is reviewed in detail in
the enclosed Notice and Proxy Statement, including (i) election of Trustees,
(ii) an amendment to the Declaration of Trust, (iii) a new advisory agreement
which simplifies language, adds certain terms and creates consistency across
the investment advisory agreements for all funds managed by Aetna; and (iv) a
new sub-advisory arrangement.
PLEASE NOTE THAT THIS IS A DIFFERENT PROXY THAN THOSE YOU MAY HAVE
RECEIVED FROM AETNA IN MAY AND THE NEW ADVISORY AGREEMENT WILL NOT RESULT IN A
CHANGE IN ADVISORY FEES FOR THIS FUND.
Over the past several years, the Aetna organization has conducted a
thorough, strategic review of its investment operations with the objective of
significantly modernizing and enhancing its capabilities. This review included
an analysis of resources, pricing strategies and organizational structure in
comparison to competitive practice and customer/market requirements.
Significant enhancements have been made to date as a result of this study and
this Special Meeting is to authorize further significant steps in this regard,
particularly as related to the new subadvisory arrangement.
To respond to these dynamic market conditions, over the past two years,
Aetna has made significant investments in and enhancements to its investment
advisory capacity. A number of highly qualified and experienced investment
professionals with a breadth of different technical expertise have been hired
to manage your Fund under a new market-competitive compensation program. New
quantitative research and analytic tools have been designed and implemented
along with significant upgrades in data bases, information management and
reporting systems to improve the depth of analysis capabilities, reduce risk
and create quicker response time in volatile markets.
To further enhance the depth and quality of its investment advisory
capabilities and better position itself competitively, the Aetna organization
has decided to establish a single stand-alone investment management subsidiary
to focus its advisory activities. As part of this strategic initiative, Aetna
will combine its investment management operations ($22 billion of assets under
management) with another Aetna affiliate, Aeltus Investment Management, Inc.
("Aeltus"), which currently manages approximately $11 billion of total assets
primarily for pension account clients. All of the current investment personnel
and staff of Aetna would assume comparable positions with Aeltus, and
immediately following the combination, it is expected that the current
portfolio manager of Series B will remain
<PAGE>
unchanged. The combined entity will be called Aeltus, and it is proposed that
Aeltus be appointed as sub-advisor to your Fund. This business structure is
used by a number of investment providers in today's marketplace.
Aeltus will bring to the combined entity more depth of personnel,
additional effective styles of investment management and enhanced research and
quantitative modeling capability. Further, through the combined larger entity,
your Fund will benefit from such things as an enhanced ability to execute
securities transactions.
The Trustees have carefully considered this combination of Aetna and
Aeltus investment management operations and unanimously recommend that you
approve the sub-advisory agreement with Aeltus. The Trustees believe that the
establishment of a focused, stand-alone investment management entity is in the
best long-term interest of your Fund.
Your participation in this process is very important. If your contract is
held in Aetna's Separate Account D, Aetna has no authority to vote shares
attributable to your contract. Therefore, if Aetna does not receive any
instructions from you, Aetna will abstain from voting these shares. If you
cannot attend the meeting, you can vote by filing out the enclosed
authorization card in the postage prepaid envelop provided. Please complete,
sign, and return the enclosed card so that your shares will be represented. If
you later decide to attend the meeting, you may revoke your proxy at that time
and vote your shares in person.
If you have any questions related to the Special Meeting and/or this
proxy, please call us at 1-800-632-2386.
Sincerely,
Shaun P. Mathews
President
June 10, 1996
<PAGE>
Preliminary Copy
NOTICE OF SPECIAL MEETING
OF THE
SERIES B SHAREHOLDERS OF
AETNA GET FUND
A Special Meeting of the Series B Shareholders of Aetna GET Fund (the "Fund")
will be held on July 19, 1996, at 9:00 a.m., Eastern time, at 151 Farmington
Avenue, Hartford, Connecticut 06156-8962 for the following purposes:
1. to elect nine Trustees to serve until their successors are elected
and qualified;
2. to approve or disapprove a Subadvisory Agreement, by and among the
Fund, on behalf of Series B, Aetna Life Insurance and Annuity Company
("Aetna"), and its affiliate, Aeltus Investment Management, Inc.;
3. to approve or disapprove a new Investment Advisory Agreement, by and
between the Fund, on behalf of Series B, and Aetna, the Fund's current
investment adviser;
4. to approve or disapprove an amendment to the Fund's Declaration of
Trust to modify the Fund's liability and indemnification provisions; and
5. to transact such other business as may properly come before the
meeting and any adjournments thereof.
Shareholders of record at the close of business on May 31, 1996 are
entitled to notice of and to vote at the meeting.
Susan E. Bryant
Secretary
<PAGE>
PRELIMINARY
PROXY STATEMENT
____________ 1996
This Proxy Statement is given to you to provide information you should
review before voting on the matters listed on the Notice of Special Meeting on
the previous page. Your vote is being solicited by the Board of Trustees (the
"Trustees") of Aetna GET Fund (the "Fund") for a special meeting of the Fund's
Series B ("Series B") shareholders to be held on July 19, 1996, and, if the
meeting is adjourned, at any adjournment of that meeting, for the purposes
listed on the Notice.
This Statement describes the matters that will be voted on at the
meeting. The solicitation of votes is made by the mailing of this Statement
and the accompanying Proxy or authorization card on or about June 10, 1996.
Aetna Life Insurance and Annuity Company ("Aetna") and its affiliates may
contact contract holders and their representatives directly commencing in May
1996 to discuss the proposals described in this Statement. The expenses in
connection with preparing this Statement and its enclosures and of all
solicitations will be paid by Aetna, the Fund's investment adviser.
A copy of the Fund's Annual Report for the fiscal year ended December 31,
1995, as mailed to shareholders on or about February 29, 1996. The Annual
Report is available upon request, without charge, to anyone entitled to vote.
If you did not receive an Annual Report, you may request one by writing to
Wayne Baltzer, c/o Aetna, RT2A 151 Farmington Avenue, Hartford, Connecticut,
06156-8962, or by calling 1-800-632-2386.
Series B shareholders of record on May 31, 1996, the record date, are
entitled to be present and to vote at the meeting or any adjourned meeting. As
of the record date, Aetna was the record shareholder of all of the outstanding
Series B shares of the Fund. These Series B shares are owned by Aetna as
depositor for its variable annuity contracts (the "Contracts") issued to you
or to a group of which you are a part. Under the terms of the Contracts you
have the right to instruct Aetna how to vote the Series B shares related to
your interest through your Contract. This Statement is used to solicit
instructions for voting Series B shares of the Fund.
<PAGE>
The Series B shares held by Aetna are held on behalf of the following
Separate Accounts which hold assets for the Contracts:
Aetna Variable Annuity Account B - __________________ Series B shares (_____%)
Aetna Variable Annuity Account C - __________________ Series B shares (_____%)
Aetna Variable Annuity Account D - __________________ Series B shares (_____%)
Aetna will vote the Series B shares held in its name as directed. The
group Contract holder of some group Contracts has the right to direct the vote
for all Series B shares under the Contract, for, against or abstaining, in the
same proportions as Series B shares for which instructions have been given
under the same Contract. If Aetna does not receive voting instructions for all
of the Series B shares held under Contracts, Aetna will vote all the Series B
shares in all the listed Accounts, except Account D, for, against or
abstaining, in the same proportions as the Series B shares for which they have
received instructions. Aetna will only vote Series B shares held through
Aetna's Variable Annuity Account D for which it receives instructions and will
not vote Series B shares for which no instructions are received.
All Series B shares voted at the meeting will be counted as present at
the meeting whether they vote for, against or abstain on the Proposals. More
than 50% of the total outstanding Series B shares must be present at the
meeting to have a quorum to conduct business. Proposal 2 (Approval of a
Subadvisory Agreement) and Proposal 3 (Approval of a new Investment Advisory
Agreement) require the vote of a "majority of the outstanding voting
securities" of the Fund to be approved. The remaining proposals can be
approved by the vote of a simple majority of Series B shares present at the
meeting. A "majority of the outstanding voting securities" of the Fund means
67% of the Series B shares present at the meeting, assuming a majority of the
Series B shares are present; or, more than 50% of all the outstanding voting
securities of the Fund, if less. A vote to abstain is effectively a negative
vote since the proposals require an affirmative vote to be approved.
In the event that a quorum of shareholders is not represented at the
meeting, the meeting may be adjourned until a quorum exists, or, even if a
quorum is represented, the meeting may be adjourned until sufficient votes to
approve any of the proposals are received. The persons named as proxies may
propose and vote for one or more adjournments of the meeting. Adjourned
meetings must be held within a reasonable time after the date originally set
for the meeting (but not more than 6 months after the date of this Statement).
Solicitation of votes may continue to be made without any obligation to
provide any additional notice of the adjournment. The persons named as proxies
will vote Series B shares in favor of an adjournment at their discretion
whether instructions for those Series B shares are to vote for, against or to
abstain from voting on any of the proposals to be considered at the meeting.
2
<PAGE>
The number of Series B shares that you may vote is shown on the
authorization card accompanying this Statement. This number was calculated
according to the formula described in the materials relating to your Contract.
Votes may be revoked by written notice to Aetna prior to the meeting or by
attending the meeting in person and indicating that you want to vote your
Series B shares.
The duly appointed proxies or authorized persons may, at their
discretion, vote upon any other matters that are raised at the meeting or any
adjournments. Additional matters would only include matters that were not
expected at the date of this Statement.
MATTERS TO BE ACTED UPON
PROPOSAL 1
ELECTION OF TRUSTEES
The persons listed in the table below are nominated to serve as Trustees of
the Fund until their successors are elected and qualified. The Nominees
consent to being named in this proposal. The Nominees currently serve as
Trustees and will continue to serve if reelected by the shareholders. Once
elected, the Trustees continue to serve indefinitely.
<TABLE>
<CAPTION>
NAME, AGE AND Principal Occupation, First Became
POSITION WITH THE FUND Employment or Public a Trustee
- ---------------------- Directorships
during last five years
---------------------- ------------
<S> <C> <C>
Morton Ehrlich* Chairman and Chief Executive 1988
61 years of age Officer, Integrated Manage-
Trustee ment Trustee Corp.and
Universal Research
Technologies (since January
1992); President, LIFECO
Travel Services Corp. (from
October 1988 to December
1991).
Maria T. Fighetti* Attorney, New York City 1994
52 years of age Department of Mental Health
Trustee (since 1973).
David L. Grove* Private Investor, Economic/ 1987
77 years of age Financial Consultant (since
Trustee December 1988).
3
<PAGE>
Timothy A. Holt Director, Senior Vice President 1996
43 years of age and Chief Financial Officer,
Trustee Aetna (since February 1996);
Vice President, Portfolio
Management/Investment Group,
Aetna Life and Casualty Company
(from August 1991 to February
1996); Treasurer, Aeltus
Investment Management, Inc.,
formerly Aetna Capital
Management Company, Inc. (from
February 1990 to July 1991);
Vice President -- Finance and
Treasurer, Aetna Life and
Casualty Company (from August
1989 through July 1991).
Daniel P. Kearney Chairman (since February 1994
56 years of age 1996), Director (since March
Trustee 1991), President (since March
1994) Aetna; Executive Vice
President (since December
1993), and Group Executive,
Investment Division (from
February 1991 to December
1993), Aetna Life and Casualty
Company.
Sidney Koch* Senior Adviser, Hambro 1994
60 years of age America, Inc. (since January
Trustee 1993); Senior Adviser, Daiwa
Securities America, Inc. (from
1991 to January 1993) Executive
Vice President, Daiwa
Securities America, Inc. (from
1986 to January 1991).
Shaun P. Mathews Vice President and Director, 1991
40 years of age Aetna (since March 1991);
Trustee and President Assistant Vice President, Aetna
Life and Casualty Company
(from July 1989 to March
1991).
4
<PAGE>
Corine T. Norgaard** Dean, School of Management, 1987
58 years of age State University at New York
Trustee (Binghamton) (since August
1993); Professor, accounting,
University of Connecticut (from
September 1969 to June 1993);
Director, The Advest Group,
Inc. (holding company for
brokerage firm) (since August
1983).
Richard G. Scheide* Private banking consultant 1994
66 years of age (since July 1992); Consultant,
Trustee Fleet Bank (from July 1991 to
July 1992); Executive Vice
President and Manager, Trust
and Private Banking, Bank of
New England, N.A. and Bank of
New England Company (from June
1976 to July 1991).
<FN>
* These Trustees (the "Independent Trustees") are not interested persons as
defined by the Investment Company Act of 1940 ("1940 Act") and the related
rules of the Securities and Exchange Commission ("Commission").
** Dr. Norgaard is a director of a holding company that has as a subsidiary a
broker-dealer that sells Contracts for Aetna. The Fund is offered as an
investment option under the Contracts. Her position as a director of the
holding company may cause her to be an "interested person" for purposes of the
1940 Act.
</FN>
</TABLE>
The business address of each Nominee is 151 Farmington Avenue, Hartford,
Connecticut 06156-8962. The Fund held four meetings during 1995 all of which
were in person. Mr. Kearney was unable to attend any of the board meetings in
1995. All other Trustees attended all meetings.
Each Nominee is currently a director or trustee of each of the following
management investment companies managed by Aetna: Aetna Series Fund, Inc.;
Aetna Income Series B shares; Aetna Variable Fund; Aetna Investment Advisers
Fund, Inc.; Aetna Generation Portfolios, Inc.; and Aetna Variable Encore Fund
(collectively with the Fund, the "Fund Complex").
As of May 31, 1996, Trustees and officers of the Fund beneficially owned
less than 1% of the Fund's outstanding Series B shares.
5
<PAGE>
REMUNERATION OF OFFICERS AND TRUSTEES
None of the Fund's officers nor any Trustees who are employees of Aetna
are entitled to any compensation from the Fund. During 1995, the following
Trustees earned the following for their services as Trustees to the Fund and
the Fund Complex:
<TABLE>
<CAPTION>
Aggregate Total Compensation
Compensation From Fund Complex
From Fund Paid to Trustees
------------ ------------------
<S> <C> <C>
Morton Ehrlich $ 1,455 $46,000
Maria T. Fighetti $ 1,455 $46,000
David L. Grove* $ 1,455 $46,500
Sidney Koch $ 1,455 $47,000
Corine T. Norgaard $ 1,586 $51,000
Richard G. Scheide $ 1,455 $46,500
------- -------
Total $ 8,861 $283,000
<FN>
* Mr. Grove elected to defer all compensation.
</FN>
</TABLE>
COMMITTEES
The Trustees have standing Audit, Contract Review and Pricing Committees.
The Contract Review and Audit Committees include all the Trustees who are not
employees of Aetna. Dr. Norgaard is the Chairperson of the Audit Committee and
Mr. Koch is the Chairperson of the Contract Review Committee. The Audit
Committee reviews the relationship between the Fund and its independent public
accountants. The Contract Review Committee reviews the Fund's investment
advisory, subadvisory and administrative services contracts at least annually
in connection with considering the continuation of those contracts. That
Committee also meets any time there is a proposal to amend any of those
agreements. The Fund's Pricing Committee consists of Mr. Mathews
(Chairperson), Mr. Koch, Dr. Norgaard, and Mr. Scheide. The Pricing Committee
is responsible for acting upon and approving the Fund's net asset value at
times of market disruption or in any situation where the range of possible
valuations of individual securities could cause the net asset value of the
Fund's Series B shares to vary materially. In 1995, the Audit Committee met
two times, the Contract Review Committee met two times, and the Pricing
Committee met once. All members of these committees attended all the committee
meetings. The Board of Trustees does not have a standing nominating committee
for the Fund nor a standing compensation committee.
6
<PAGE>
PROPOSAL 2
APPROVAL OF A SUBADVISORY AGREEMENT
The Independent Trustees have unanimously approved, and recommend that
the Series B shareholders of the Fund approve, a subadvisory agreement for
Series B (the "Subadvisory Agreement") among the Fund, on behalf of Series B,
Aetna, and Aetna's affiliate, Aeltus Investment Management, Inc. ("Aeltus"). A
copy of the Subadvisory Agreement is included with this Statement as Exhibit
A.
WHY IS AETNA PROPOSING A SUBADVISORY ARRANGEMENT?
As part of a strategic review of its investment operations, the Aetna
organization performed an in-depth analysis of various organizational
structures. It has concluded that it should combine its investment advisory
businesses into a single stand-alone investment management subsidiary. From an
operating perspective, this is intended primarily as a corporate
restructuring. To accomplish this goal, Aetna would combine its investment
management operations with those of Aetna's affiliate, Aeltus. The combined
entity would be a separate corporate entity managing over $33 billion in
assets and would operate under the name Aeltus. This type of business
structure is used by a number of investment providers in today's marketplace
and is consistent with maintaining a focused, well-qualified and fully
integrated investment capability. Complementing the significant investments
and enhancements Aetna has made to its advisory capabilities over the last two
years, Aeltus would add more depth of personnel, different styles of
investment management and additional research and quantitative modeling
capability. Your Series B would benefit from this larger investment advisory
entity in such ways as more efficient execution of securities transactions.
WHAT IS BEING PROPOSED?
To accomplish the combination, all of the current investment personnel
and staff of Aetna would assume comparable positions with Aeltus and would
continue to provide investment services to your Fund. Immediately following
the combination, it is expected that the current portfolio manager of Series B
will remain unchanged. Aetna and the Fund, on behalf of Series B, then would
enter into a subadvisory agreement with Aeltus to provide the investment
management services to Series B. Although Aeltus is already a part of the
Aetna organization, the 1940 Act requires that the shareholders of Series B
approve the Subadvisory Agreement. Under the proposed Subadvisory Agreement,
Aeltus would be responsible for deciding which securities to buy, which to
sell and which to keep for Series B. It would also be placing trades for those
securities with third party broker-dealers and, to the extent directed by
Aetna, would be handling the back office administrative functions related to
those activities. It is expected that those activities would include
determining the value of Series B's net assets on a daily basis and preparing,
and providing to Aetna, such other reports, data and information as Aetna or
the Trustees request from time to time. In
7
<PAGE>
connection with the management of Series B's portfolio, Aeltus would be
responsible for assuring that the assets acquired for Series B are in
compliance with Series B's objectives and policies.
Aetna would bear the ultimate responsibility for overseeing the
investment advice provided to Series B. It would monitor Aeltus' activities to
ensure that Aeltus is following regulatory and Board policies, restrictions
and guidelines in managing Series B's assets. Aetna would be responsible for
reporting to the Trustees on a regular basis and assuring that Aeltus
maintains an adequate compliance program. The many years of experience Aetna
has in managing assets for mutual funds and for its own portfolio will enable
it to monitor Aeltus' activities to the advantage of Series B's shareholders.
WHO IS AELTUS?
Aeltus is a Connecticut corporation organized in 1972 under the name
Aetna Capital Management, Inc. It currently has its principal offices at 242
Trumbull St., Hartford, Connecticut. Aeltus is a part of the Aetna
organization, and is a wholly-owned subsidiary of Aetna Retirement Holdings,
Inc. which is also the parent of Aetna and which is a wholly-owned subsidiary
of Aetna Retirement Services, Inc. Aetna Retirement Services is a wholly-owned
subsidiary of Aetna Life and Casualty Company, a financial services company
with stock listed for trading on the New York Stock Exchange. John Y. Kim
currently serves as the President, Chief Executive Officer and Chief
Investment Officer of Aeltus. Aeltus is registered with the Commission as an
investment adviser.
WHAT ARE THE MATERIAL TERMS OF THE PROPOSED SUBADVISORY AGREEMENT BETWEEN
AETNA AND AELTUS?
The Subadvisory Agreement gives Aeltus broad latitude in selecting
securities for Series B subject to Aetna's oversight. The Agreement also
allows Aeltus to place trades through brokers of its choosing and to take into
consideration the quality of the brokers' services and execution, as well as
services such as research and providing equipment or paying Series B expenses,
in setting the amount of commissions paid to a broker. The use of research and
expense reimbursements in determining and paying commissions is referred to as
"soft dollar" practices. Aeltus will only use soft dollars for services and
expenses to the extent Aetna is authorized to do so under the Investment
Advisory Agreement, but only as authorized by applicable law and the rules and
regulations of the Commission.
The Subadvisory Agreement requires Aeltus to reduce its fee if Aetna is
required to reduce its fee under the Investment Advisory Agreement. Aetna has
agreed to reduce its fee or reimburse Series B if the expenses borne by Series
B would exceed the expense limitations of any jurisdiction in which Series B's
shares are qualified for sale. Aetna would not be obligated to reimburse
Series B for any expenses which exceed the amount of its advisory fee for that
year. The Subadvisory Agreement obligates Aeltus to reduce its fee by 60% of
the amount of Aetna's fee reduction.
8
<PAGE>
The Subadvisory Agreement provides that, if approved, it will be
effective August 1, 1996 or, if the meeting is adjourned, on the first day of
the next month following the date on which the shareholders approve the
Subadvisory Agreement. It will continue in effect until December 31, 1997 and
thereafter from year to year if approved by the Trustees, including a majority
of the Independent Trustees. The Subadvisory Agreement will terminate
automatically if the Investment Advisory Agreement terminates or if there is a
change in control of Aeltus. It can be terminated by Aeltus, Aetna or the
Fund, on behalf of Series B, on 60 days' notice. If the Subadvisory Agreement
terminates, Series B's investment adviser would automatically assume all
management functions for Series B. The Subadviser can be held liable to the
Adviser and Series B for negligence, bad faith, willful malfeasance or
reckless disregard of its obligations or duties under the Subadvisory
Agreement.
WHAT WILL THE SUBADVISORY AGREEMENT COST SERIES B?
The Subadvisory Agreement provides that Aetna will pay Aeltus a fee at an
annual rate up to 0.35% of the average daily net assets of Series B. Aetna
believes this compensation is fair and reasonable for the services being
provided by Aeltus. This fee is not charged back to, or paid by, Series B; it
is paid by Aetna out of its own resources, including fees and charges it
receives from or in connection with Series B.
WHAT IS THE BOARD OF TRUSTEES RECOMMENDATION?
The Board of Trustees unanimously recommends voting FOR approval of the
Subadvisory Agreement.
WHAT FACTORS DID THE BOARD OF TRUSTEES CONSIDER IN REACHING ITS
RECOMMENDATION?
The Trustees considered the proposed Subadvisory Agreement at meetings
held on December 12, 1995, and February 28, 1996. Moreover, the Contract
Review Committee of the Board of Trustees, consisting solely of the Trustees
who are not employees of Aetna, considered the Subadvisory Agreement at
meetings held on December 11, 1995, February 6, 1996, and February 27, 1996.
At all such meetings, the Trustees were advised throughout by Messrs. Goodwin,
Procter & Hoar, their own independent counsel.
The Trustees' recommendation was based on their conclusion that approval
of the Subadvisory Agreement would mean that the shareholders of Series B
would receive the benefits of the talents of both Aetna and Aeltus working for
Series B.
WHAT HAPPENS IF THE SUBADVISORY AGREEMENT IS NOT APPROVED?
If the Subadvisory Agreement is not approved, Aetna would continue as
investment adviser to Series B and would retain access to all of its current
investment advisory capabilities.
9
<PAGE>
PROPOSAL 3
APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT
The Independent Trustees have unanimously approved a new Investment
Advisory Agreement for Series B (the "Advisory Agreement") between the Fund,
on behalf of Series B, and Aetna as its investment adviser and recommend that
you vote FOR this Proposal.
WHAT IS BEING PROPOSED?
As part of its comprehensive, strategic review of its investment
management operations and products, during the past several years, Aetna has
been reviewing its various agreements and arrangements for providing services
to, and managing, the funds it advises. Based on this review, Aetna proposed
and the Trustees approved a new Administrative Services Agreement for Series B
which, as discussed below, became effective May 1, 1996, and it has proposed a
restructuring of its investment advisory operations as described in Proposal
2. Aetna is also proposing to enter into a new Investment Advisory Agreement
with the Fund, on behalf of Series B, to simplify the language used and to add
certain terms that create consistency across the investment advisory
agreements for all funds managed by Aetna. THE NEW ADVISORY AGREEMENT WILL NOT
RESULT IN A CHANGE IN ADVISORY FEES. The Trustees of the Fund are unanimously
recommending approval of the new Investment Advisory Agreement for the reasons
identified below.
WHAT ARE THE PRIMARY DIFFERENCES BETWEEN THE EXISTING INVESTMENT ADVISORY
AGREEMENT AND THE PROPOSED ADVISORY AGREEMENT?
The proposed Advisory Agreement has been updated in several respects. The
language has been simplified where possible; the liability provisions make it
clear that Aetna is liable to Series B for Aetna's negligence; and it expands
Aetna's ability to use brokerage commissions to pay Series B expenses to the
extent allowed by current law. A copy of the proposed Advisory Agreement is
included with this Statement as Exhibit B and the existing agreement is
included as Exhibit C.
Under both the existing and proposed investment advisory agreements,
Aetna is obligated to manage and oversee Series B's day to day operations and
to manage its investment portfolio, whether directly or as discussed in
Proposal 2 under a Subadvisory Agreement with Aeltus.
WHAT IS THE PROPOSED CHANGE TO THE LIABILITY AND INDEMNIFICATION PROVISIONS?
The existing advisory agreement provides that Aetna is liable to Series
B, and Series B is entitled to be indemnified by Aetna if Series B suffers a
loss or incurs a liability as a result of Aetna's bad faith, gross negligence
or willful or reckless misconduct. The Trustees
10
<PAGE>
recommend that this provision be revised so that the standard is changed from
"gross negligence" to simply "negligence." This change would mean that Aetna
would be held accountable for all its acts of negligence that hurt Series B,
not just its acts of "gross" negligence. The overall effect of the liability
and indemnification provision of the new Advisory Agreement would be to
provide Series B with greater protection.
WHAT IS THE CHANGE IN THE USE OF BROKERAGE COMMISSIONS FOR SERIES B?
The existing agreement allows the investment adviser to take into
consideration research and related services provided by a broker to the
adviser in paying commissions to a broker for Series B's portfolio
transactions. The Trustees recommend that the investment adviser also should
be allowed to take into consideration Series B expenses actually paid by the
broker on behalf of Series B where it is allowed by current law. The
investment adviser of Series B is required to place trades for Series B's
securities with brokers who provide "best execution." This does not always
mean the lowest commission if the broker provides research or other related
services to the adviser. Recent developments have indicated that the
Commission will also allow an adviser to place trades with a broker, and to
take into consideration in the commissions, actual expenses paid by the broker
for Series B. This can only be done in compliance with certain reporting rules
and only with respect to expenses that directly benefit Series B, which is
paying the commissions. The proposed Advisory Agreement would allow such
transactions subject to applicable laws.
WHAT ARE THE OTHER SIGNIFICANT PROVISIONS OF THE ADVISORY AGREEMENT?
The Advisory Agreement gives Aetna broad latitude in selecting securities
for Series B subject to the Trustees' oversight. Under the Advisory Agreement,
Aetna may delegate to a subadviser its functions in managing Series B's
investment portfolio, subject to Aetna's oversight. See Proposal 2. The
Advisory Agreement allows Aetna to place trades through brokers of its
choosing and to take into consideration the quality of the brokers' services
and execution, as well as services such as research, providing equipment to
Series B, or paying Series B expenses, in setting the amount of commissions
paid to a broker. Aetna will only use these commissions for services and
expenses to the extent authorized by applicable law and the rules and
regulations of the Commission.
Under the Advisory Agreement, Aetna has agreed to reduce its fee or
reimburse Series B if the expenses borne by Series B would exceed the expense
limitations of any jurisdiction in which Series B shares are qualified for
sale. Aetna would not be obligated to reimburse Series B for any expenses
which exceed the amount of its advisory fee for that year. The Advisory
Agreement also provides that Aetna would be responsible for all of its own
costs including costs of Aetna personnel required to carry out its investment
advisory duties.
The Advisory Agreement provides that if approved it will be effective
August 1, 1996 or, if the meeting is adjourned, on the first day of the next
month following the date on
11
<PAGE>
which the shareholders approve the Subadvisory Agreement. It will continue in
effect until December 31, 1997 and thereafter from year to year if approved by
the Trustees, including a majority of the Independent Trustees. The Advisory
Agreement will terminate automatically if there is a change in control of
Aetna. It can be terminated by the Trustees, the Series B shareholders or
Aetna on 60 days' notice.
All of these provisions are the same as those in the existing investment
advisory agreement, which has been in effect since the inception of Series B.
WHO IS AETNA?
Aetna is a Connecticut corporation, licensed as an insurance company in
all 50 states. Through its predecessors, Aetna has been offering variable
products and annuities to the public since the 1950's. It currently manages
approximately $22 billion in assets. Aetna is a wholly-owned subsidiary of
Aetna Retirement Holdings, Inc., which, in turn, is a wholly-owned subsidiary
of Aetna Retirement Services, Inc., and an indirect wholly-owned subsidiary of
Aetna Life and Casualty Company. Aetna is registered with the Commission as an
investment adviser and a broker-dealer. Aetna serves as the underwriter for
Series B's Series B shares. The principal offices of Aetna and its parents are
located at 151 Farmington Avenue, Hartford, Connecticut, 06156-8962.
WHAT FEES OR CHARGES ARE PAID BY SERIES B?
During 1995, Aetna received $613,806 for its services in managing Series
B which had assets as of December 31, 1995 of over $88.5 million. THIS
INVESTMENT ADVISORY FEE IS PAID AT AN ANNUAL RATE OF 0.75% OF THE AVERAGE
DAILY NET ASSETS OF SERIES B, AND WILL REMAIN UNCHANGED UNDER THE TERMS OF THE
NEW ADVISORY AGREEMENT.
Aetna also has been receiving reimbursement by the Fund for its
administrative costs incurred in managing the Fund under an Administrative
Services Agreement with the Fund. The Administrative Services Agreement
provides for the reimbursement of a share of Aetna's overhead related to
managing the Fund. In addition, Aetna has been paying, and the Fund has been
reimbursing Aetna for, certain of the Fund's ordinary recurring expenses.
Under these arrangements, for the year ended October 31, 1995, Series B paid a
total of [$70,133] (an annual rate of [0.03%] of average daily net assets) to
Aetna for reimbursements of its costs in performing administrative services
and for the Fund's other ordinary recurring expenses. The Trustees approved a
new Administrative Services Agreement with the Fund, effective May 1, 1996,
pursuant to which Aetna will continue to provide these services to the Fund,
but on a fixed fee basis at an annual rate of 0.15% of average daily net
assets. The new Administrative Services Agreement was approved to allow Series
B to fix the amount of its costs and expenses, while Aetna assumes all risks
that its costs and Series B's expenses may increase.
12
<PAGE>
WHAT IS THE BOARD OF TRUSTEES RECOMMENDATION?
The Board of Trustees unanimously recommends voting FOR approval of the
new Advisory Agreement.
WHAT FACTORS DID THE BOARD OF TRUSTEES CONSIDER IN REACHING ITS
RECOMMENDATION?
The Trustees considered the proposed Advisory Agreement at meetings held
on December 12, 1995, and February 28, 1996. The Contract Review Committee of
the Board of Trustees, consisting solely of Trustees who are not employees of
Aetna, considered the Advisory Agreement at meetings held on December 11,
1995, February 6, 1996 and February 27, 1996. At all such meetings, these
Trustees were advised throughout by Messrs. Goodwin, Procter & Hoar, their own
independent counsel.
The Trustees' approval of the new Advisory Agreement was based on the
following factors, all of which they considered material and which are listed
in the order of their importance, with the most important factor listed first:
1. The nature, quality, and scope of services Aetna currently provides,
including the enhancements Aetna is currently maintaining and which
have been made over the past two years with regard to investment,
administrative, operational and shareholder services. These
enhancements include: (i) the hiring of a number of highly qualified
and experienced investment professionals, (ii) replacing its former
compensation system with a more competitive system designed to
attract and retain such highly qualified personnel, (iii)
instituting the use of quantitative research and analytical tools
and techniques, and (iv) upgrading its information and reporting
systems.
2. The nature, quality, and scope of services Aeltus would provide
under the Sub-Advisory Agreement, including the benefits to be
derived from the combination of Aetna's and Aeltus' investment
management capabilities;
3. The level of the advisory fee and other fees paid to Aetna in
general, and as compared to its competitive peer group; and
4. The new Advisory Agreement will benefit Series B shareholders by
clarifying the liability provisions, expanding Aetna's ability to
use brokerage commissions to pay Series B expenses and increasing
the efficiency of Aetna's monitoring procedures through the use of
uniform terms and provisions.
In the course of its deliberations, the Trustees asked for and received
extensive data concerning, among other things, (i) the nature, quality and
scope of services that Aetna
13
<PAGE>
currently provides, and that Aeltus, after combining with Aetna, would
provide, (ii) Aetna's profitability, (iii) Aetna's financial condition, and
(iv) the level of Aetna's current fee in general and as compared to its
competitive peer group.
WHAT WOULD HAPPEN IF THE ADVISORY AGREEMENT IS NOT APPROVED?
If the Advisory Agreement is not approved by Series B's shareholders, the
existing agreement will continue in effect. Aetna expects that it would still
proceed with the Subadvisory Agreement with Aeltus, if it is approved.
PROPOSAL 4
APPROVAL OF AN AMENDMENT
TO THE DECLARATION OF TRUST
The Trustees have approved, and recommend that the shareholders of the
Fund approve, deleting and restating Articles 5.2 and 5.3 of the Fund's
Declaration of Trust.
WHAT IS THE PURPOSE OF THE PROPOSED CHANGES?
The provisions being amended relate to the liability of Trustees to the
Fund and the indemnification by the Fund of Trustees and officers for
liabilities incurred while acting as Trustees or officers of the Fund. The
primary purpose of the proposed amendment is to allow the Fund to advance
costs to a Trustee if that Trustee is named in an action for which the Fund
would ultimately be obligated to indemnify the Trustee without the Trustee
being required to post collateral. The advancement of costs would be made only
if: (i) the Trustee provides security for the costs advanced; or (ii) the Fund
is insured against losses arising from unlawful advances; or (iii) a majority
of a quorum of the Independent Trustees who are not parties determines, or a
written opinion of independent legal counsel provides, that based upon a
review of the readily available facts, there is reason to believe the Trustee
ultimately will be entitled to indemnification. This provision would allow a
Fund to provide a Trustee with the resources the Trustee would need to afford
an adequate defense if the Trustee is named in litigation related to the
Trustee's activities in connection with the Fund without posting collateral.
The amounts advanced would have to be repaid if there is a finding that the
Trustee was not entitled to indemnification.
The proposed changes also clarify that under most circumstances Trustees
will not be liable for the wrongdoing of officers, agents, employees and other
service providers to the Fund. The text of the proposed amended Articles 5.2
and 5.3 are attached as Exhibit D. The existing language is attached as
Exhibit E.
14
<PAGE>
WHY IS THE BOARD OF TRUSTEES RECOMMENDING APPROVAL OF THE AMENDMENT?
The Trustees believe that advancing the costs of Trustees who may be
subject to litigation without the need to post collateral is critical to the
Fund's ability to attract and retain the best qualified individuals to serve
the Fund as Trustees and officers. The proposed amendment complies with the
1940 Act's limitations on indemnification, in that indemnification is not
available in cases of willful misfeasance, gross negligence, bad faith or
reckless disregard of the duties of office. The proposed amendment is also
consistent with interpretive positions taken by the staff of the Commission.
The Trustees and officers of the Fund are not subject to any pending
litigation against any of them arising out of any alleged breach of duty to
the Fund or its shareholders and are not aware of any such threatened claims
or of circumstances that might give rise to a claim. The Trustees acknowledge
that current and future Trustees could benefit from the proposed amendment
and, therefore, the Trustees have a conflict of interest in this matter.
WHAT IS THE BOARD OF TRUSTEES' RECOMMENDATION?
The Board of Trustees unanimously recommends voting FOR the proposed
amendment.
If the proposal is approved, the amendment will take effect August 1,
1996 or, if the meeting is adjourned, on the first day of the next month
following the date on which the shareholders approve the amendment. If the
shareholders of the Fund do not approve the proposed amendment, the current
provisions of the Declaration of Trust concerning indemnification will
continue in effect.
WHAT FACTORS DID THE BOARD OF TRUSTEES CONSIDER IN MAKING ITS RECOMMENDATION?
The Trustees believe that approval of the proposed amendment allowing
advancement of costs without posting collateral for liabilities of Trustees
and officers and clarifying the scope of indemnification is in the best
interests of the Fund because it will assist the Fund in attracting and
retaining the best qualified people to serve as Trustees and officers of the
Fund.
15
<PAGE>
ADDITIONAL INFORMATION
OFFICERS OF THE FUND
The principal executive officers of the Fund and his or her principal
occupation are set forth below. The term of office of each executive officer
of the Fund is until the next annual meeting of the Fund or until his or her
successor shall have been duly elected and qualified.
<TABLE>
<CAPTION>
NAME AND POSITION WITH THE FUND
BUSINESS ADDRESS AND OTHER PRINCIPAL OCCUPATIONS
--------------- -------------------------------
<S> <C>
Shaun P. Mathews President and Trustee of the Fund; see
40 years of age description under "Election of Trustees."
James C. Hamilton Vice President and Treasurer of the Fund;
55 years of age Chief Financial Officer, Aetna Investment Services,
Inc.; Vice President and Actuary, Aetna Life
Insurance Company.
Susan E. Bryant Secretary of the Fund; Counsel to Aetna (since
48 years of age March 1993); General Counsel and Corporate
Secretary, First Investors Corporation (April
1991 to March 1993); Administrator, Oklahoma
Department of Securities (August 1986 to
April 1991).
</TABLE>
DIRECTORS AND PRINCIPAL EXECUTIVE OFFICER OF AETNA
The name, business address and principal occupation of Aetna's principal
executive officer and directors are as follows:
<TABLE>
<CAPTION>
NAME AND
BUSINESS ADDRESS PRINCIPAL OCCUPATIONS
---------------- ---------------------
<S> <C>
Daniel P. Kearney Director, President and Principal
151 Farmington Avenue Executive Officer; see description
Hartford, Connecticut 06156 under "Election of Trustees."
16
<PAGE>
Christopher J. Burns Director and Senior Vice President.
151 Farmington Avenue
Hartford, Connecticut 06156
Laura R. Estes Director and Senior Vice President.
151 Farmington Avenue
Hartford, Connecticut 06156
Timothy A. Holt Director and Senior Vice President;
151 Farmington Avenue see description under "Election of
Hartford, Connecticut 06156 Trustees."
Gail P. Johnson Director and Vice President.
151 Farmington Avenue
Hartford, Connecticut 06156
John Y. Kim Director and Senior Vice President.
151 Farmington Avenue
Hartford, Connecticut 06156
Shaun P. Mathews Director and Vice President;
151 Farmington Avenue see description under
Hartford, Connecticut 06156 "Election of Trustees."
Glen Salow Director and Vice President.
151 Farmington Avenue
Hartford, Connecticut 06156
Creed R. Terry Director and Vice President.
151 Farmington Avenue
Hartford, Connecticut 06156
</TABLE>
OTHER BUSINESS
The management of the Fund knows of no other business to be presented at
the meeting other than the matters set forth in this Statement. If any other
business properly comes before the meeting, the proxies will exercise their
best judgment in deciding how to vote on such matters.
17
<PAGE>
SHAREHOLDER PROPOSALS
The Declaration of Trust and the By-Laws of the Fund provide that the
Fund need not hold shareholder meetings, except as required by the 1940 Act
(or Massachusetts law). Therefore, it is probable that no annual meeting of
shareholders will be held in 1996 or in subsequent years until so required.
For those years in which annual shareholder meetings are held, proposals which
shareholders of the Fund intend to present for inclusion in the proxy
materials with respect to the annual meeting of shareholders must be received
by the Fund within a reasonable period of time before the solicitation is
made.
Please complete the enclosed authorization card and return it promptly in
the enclosed self-addressed postage-paid envelope. You may revoke your proxy
at any time prior to the meeting by written notice to the Fund or by
submitting an authorization card bearing a later date.
Susan E. Bryant
SECRETARY
18
<PAGE>
APPENDIX
AETNA GET FUND
Series B
THIS AUTHORIZATION CARD IS SOLICITED ON BEHALF OF
THE BOARD OF TRUSTEES OF THE FUND
THIS AUTHORIZATION CARD, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED. IF NO DIRECTION IS MADE, THIS
AUTHORIZATION CARD WILL BE VOTED FOR THE ELECTION OF THE NOMINEES NAMED IN
THIS AUTHORIZATION CARD AND FOR APPROVAL OF THE OTHER PROPOSALS.
Dated: ____________________________ , 1996
Please sign exactly as name appears on this card. When
account is joint tenants, all should sign. When signing as
administrator, trustee or guardian, please give title. If a
corporation or partnership, sign in entity's name and by
authorized persons.
X_______________________
X_______________________
<PAGE>
Please refer to the Proxy Statement for a discussion of these matters. This
authorization card is solicited in connection with the special meeting of
Series B shareholders of the Fund to be held at 9:00 a.m., Eastern Standard
Time, on July 19, 1996, and at any adjournment thereof. THIS AUTHORIZATION
CARD, WHEN PROPERLY EXECUTED, DIRECTS SHAUN P. MATHEWS AND SUSAN E. BRYANT TO
VOTE THE SHARES LISTED ON THE FRONT OF THIS CARD AS DIRECTED AND REVOKES ALL
PRIOR AUTHORIZATION CARDS.
[ ] Please vote by filling in the appropriate box below, as shown, using blue
or black ink or dark pencil. Do not use red ink.
[box is filled in solidly]
THE TRUSTEES RECOMMEND A VOTE FOR EACH OF THE FOLLOWING:
1. Election of trustees [ ] FOR all nominees listed
(except as marked on the line below)
[ ] WITHHOLD AUTHORITY to vote
for all nominees listed below
Morton Ehrlich Maria T. Fighetti David L. Grove Timothy A. Holt
Daniel P. Kearney Sidney Koch Shaun P. Mathews Corine T. Norgaard
Richard G. Scheide
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
WRITE THE NOMINEE'S NAME ON THE LINE BELOW.)
2. Approve the Subadvisory Agreement. [ ]FOR [ ]AGAINST [ ]ABSTAIN
3. Approve the New Investment Advisory
Agreement. [ ]FOR [ ]AGAINST [ ]ABSTAIN
4. Approve an amendment to the Declaration
of Trust. [ ]FOR [ ]AGAINST [ ]ABSTAIN
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS, INCLUDING ANY ADJOURNMENT OF THE MEETING, AS MAY PROPERLY COME
BEFORE THE MEETING.
<PAGE>
EXHIBIT A
SUBADVISORY AGREEMENT
THIS AGREEMENT is made by and among AETNA LIFE INSURANCE AND ANNUITY COMPANY,
a Connecticut insurance corporation (the "Adviser"), AETNA GET FUND, a
Massachusetts Business Trust, on behalf of its Series B (the "Fund") 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,
under the Investment Company Act of 1940, as amended (the "1940 Act"); 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 (the "Investment Advisory Agreement") which appoints the Adviser as
the investment adviser for the Fund; 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 hereby appoint the Subadviser to manage the assets of the Fund 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 Trustees (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 Fund in any way.
<PAGE>
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 Fund and shall continuously supervise the
investment and reinvestment of cash, securities and instruments or other
property comprising the assets of the Fund. In carrying out these duties,
the Subadviser shall:
1. select the securities to be purchased, sold or exchanged by the
Fund or otherwise represented in the Fund's 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 Fund, 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 Fund, securities held by or under consideration
for the Fund, 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
Fund appointed by the Board, as to deliveries of securities,
transfers of currencies and payments of cash for the Fund, in
relation to the matters contemplated by this Agreement; and
6. provide such financial support, administrative and other
services, such as preparation of financial data, determination
of the Fund's 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
Fund. In carrying out its obligations under this Agreement and the
Investment Advisory Agreement, the Adviser shall:
-2-
<PAGE>
1. monitor the investment program maintained by the Subadviser for
the Fund and the Subadviser's compliance program to ensure that
the Fund's assets are invested in compliance with the
Subadvisory Agreement and the Fund's investment objectives and
policies as adopted by the Board and described in the most
current effective amendment of the registration statement for
the Fund, as filed with the Commission under the Securities Act
of 1933 (the "1933 Act"), 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. file all periodic reports required to be filed by the Fund 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 Fund;
7. oversee all matters relating to (i) the offer and sale of
shares of the Fund, 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 Fund, including
monitoring the corporate records of the Fund, maintaining
contact with the Board, preparing for, organizing and attending
meetings of the Board and the Fund's 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:
-3-
<PAGE>
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 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 Fund 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 Fund 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 Fund in carrying out its
obligations hereunder.
B. REPRESENTATIONS AND WARRANTIES OF THE ADVISER
The Adviser hereby represents and warrants to the Subadvisor 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
-4-
<PAGE>
terms of this Agreement. The Adviser will notify the Subadviser
and the Fund 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 Fund in carrying out its obligations
hereunder.
C. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund hereby represents and warrants to the Adviser as follows:
1. DUE INCORPORATION AND ORGANIZATION. The Fund has been duly
formed as a business trust under the laws of the Commonwealth
of Massachusetts 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 Fund
are registered for offer and sale to the public under the 1933
Act and all applicable state securities laws. Such
registrations 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 Fund 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 Fund 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 Fund 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 Fund who provide payment for expenses of
the Fund. 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
-5-
<PAGE>
transaction for the Fund 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 Fund to determine if the commissions paid
over representative periods of time were reasonable in relation to the
benefits received.
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 with respect to the Fund, 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:
A. all applicable provisions of the 1940 Act, the Advisers Act and any
rules and regulations adopted thereunder;
B. all policies and procedures of the Fund as adopted by the Board and
as described in the Registration Statement;
C. the provisions of the Declaration of Trust of the Fund, as amended
from time to time;
D. the provisions of the Bylaws of the Fund, as amended from time to
time; and
E. 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 of up to .35% of
the average daily net assets in the Fund, payable monthly. 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 of up to .35% applied to the daily net assets of the
Fund. If this Agreement becomes effective subsequent to
-6-
<PAGE>
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.
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 Fund if the
expenses borne by the Fund exceed the expense limitations applicable to
the Fund imposed by the securities laws or regulations of any
jurisdiction in which the Fund shares are qualified for sale.
Accordingly, the Subadviser agrees that, if, for any fiscal year, the
total of all ordinary business expenses of the Fund, 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 Fund 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 Fund 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
Fund 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 Fund 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 trustees of the Fund; that officers or
directors of the Adviser or officers or trustees of the Fund may serve as
officers or directors of the Subadviser to the extent permitted by law; and
that the officers and
-7-
<PAGE>
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.
X. TERM
This Agreement shall become effective at the close of business on _________,
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:
A. (1) by the Fund's trustees or (2) by the vote of a majority of the
Fund's outstanding voting securities (as defined in Section 2(a)(42)
of the 1940 Act), and
B. by the affirmative vote of a majority of the trustees who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a trustee of the Fund), by votes cast in
person at a meeting specifically called for such purpose.
XI. TERMINATION
This Agreement may be terminated:
A. at any time, without the payment of any penalty, by vote of the
Fund's trustees or by vote of a majority of the outstanding voting
securities of the Fund; or
B. by the Adviser, the Fund 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
C. automatically in the event there is an "assignment" of this
Agreement, as defined in Section 2 (a) (4) of the 1940 Act.
XII. LIABILITY
A. LIABILITY OF THE SUBADVISER
The Subadviser shall be liable to the Fund and the Adviser and shall
indemnify the Fund and the Adviser for any losses incurred by the Fund,
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.
-8-
<PAGE>
B. LIABILITY OF THE FUND, THE SHAREHOLDERS AND THE TRUSTEES
A copy of the Declaration of Trust of the Fund is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the trustees of the
Fund as trustees and not individually and that the obligations of this
instrument are not binding upon any of the trustees or shareholders
individually but are binding only upon the assets and property of the
Fund. No provision of this Agreement shall be construed to protect any
trustee or officer of the Fund or director or officer of the Adviser,
from liability in violation of Section 17(h) and (i) of the 1940 Act.
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 the following
addresses:
IF TO THE FUND OR THE ADVISER:
151 Farmington Avenue, RE4C
Hartford, Connecticut 06156
Fax number: 860/273-8340
Attn: Secretary
IF TO THE SUBADVISER:
242 Trumbull Street
Hartford, Connecticut 06103-1205
Fax number: 860/275-4440
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.
-9-
<PAGE>
XV. SERVICE MARK
The service mark of the Fund and Adviser, 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 Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the ______ day of
______________, 19__.
AETNA LIFE INSURANCE AND ANNUITY COMPANY
By: _____________________________
Name:____________________________
Title:___________________________
ATTEST:
_______________________________
AELTUS INVESTMENT MANAGEMENT, INC.
By: _____________________________
Name:____________________________
Title:___________________________
ATTEST:
_______________________________
AETNA GET FUND, SERIES B
By: _____________________________
Name:____________________________
Title:___________________________
ATTEST:
_______________________________
-10-
<PAGE>
EXHIBIT B
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made by and between AETNA LIFE INSURANCE AND ANNUITY
COMPANY, a Connecticut corporation (the "Adviser") and AETNA GET FUND, a
Massachusetts business trust, on behalf of its Series B (the "Fund"), 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
under the Investment Company Act of 1940, as amended (the "1940 Act"); 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 and the Adviser desire to enter into an agreement to provide
for investment advisory and management services for the Fund 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 Trustees (the "Board"), the Fund hereby
appoints the Adviser to serve as the investment adviser to the Fund, 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 Fund and has no authority to act for or
represent the Fund in any way.
II. DUTIES OF THE ADVISER
In carrying out the terms of this Agreement, the Adviser shall do the
following:
A. supervise all aspects of the operations of the Fund;
B. select the securities to be purchased, sold or exchanged by the Fund
or otherwise represented in the Fund's investment portfolio, place
trades for all such securities and regularly report thereon to the
Board;
C. formulate and implement continuing programs for the purchase and
sale of securities and regularly report thereon to the Board;
<PAGE>
D. obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally, the
Fund, securities held by or under consideration for the Fund, or the
issuers of those securities;
E. provide economic research and securities analyses as the Adviser
considers necessary or advisable in connection with the Adviser's
performance of its duties hereunder;
F. obtain the services of, contract with, and provide instructions to
custodians and/or subcustodians of the Fund's securities, transfer
agents, dividend paying agents, pricing services and other service
providers as are necessary to carry out the terms of this Agreement;
G. 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
H. 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 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 Fund in carrying out its obligations
hereunder.
-2-
<PAGE>
B. REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund hereby represents and warrants to the Adviser as follows:
1. DUE INCORPORATION AND ORGANIZATION. The Fund has been duly
formed as a business trust under the laws of the Commonwealth
of Massachusetts 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 Fund
are registered 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 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 Fund,
the Adviser may enter into a Subadvisory Agreement to engage a subadviser
(the "Subadviser") to the Adviser with respect to the Fund.
B. DUTIES OF SUBADVISER
Under a Subadvisory Agreement, the Subadviser may be delegated some or
all of the following duties of the Adviser:
1. select the securities to be purchased, sold or exchanged by the
Fund or otherwise represented in the Fund's 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 Fund, securities held by or under consideration
for the Fund, 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;
-3-
<PAGE>
5. give instructions to the custodian and/or sub-custodian of the
Fund appointed by the Board, as to deliveries of securities,
transfers of currencies and payments of cash for the Fund as
required to carry out the investment activities of the Fund, in
relation to the matters contemplated by this Agreement; and
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 Fund and the Subadviser's compliance program to ensure that
the Fund's assets are invested in compliance with the
Subadvisory Agreement and the Fund's investment objectives and
policies as adopted by the Board and described in the most
current effective amendment of the registration statement for
the Fund, as filed with the Commission under 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. 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
Fund's shares, the Fund's corporate governance, reports to the
Board, contracts with all third parties on behalf of the Fund
for services to the Fund, reports to regulatory authorities and
compliance with all applicable rules and regulations affecting
the Fund's operations.
V. BROKER-DEALER RELATIONSHIPS
A. PORTFOLIO TRADES
The Adviser, at its own expense, shall place all orders for the purchase
and sale of portfolio securities for the Fund 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
-4-
<PAGE>
execute portfolio transactions at prices that are advantageous to the
Fund 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 Fund and/or the
other accounts over which the Adviser or its affiliates exercise
investment discretion. The Adviser may also select brokers or dealers to
effect transactions for the Fund who provide payment for expenses of the
Fund. 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 Fund 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 Fund to determine if the commissions paid over
representative periods of time were reasonable in relation to the
benefits received.
VI. CONTROL BY THE BOARD OF TRUSTEES
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
Fund 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:
A. all applicable provisions of the 1940 Act, the Advisers Act and any
rules and regulations adopted thereafter;
B. all policies and procedures of the Fund as adopted by the Board and
as described in the Registration Statement;
C. the provisions of the Fund's Declaration of Trust, as amended;
D. the provisions of the Bylaws of the Fund, as amended; and
E. any other applicable provisions of state and federal law.
-5-
<PAGE>
VIII. COMPENSATION
For the services to be rendered, the facilities furnished and the expenses
assumed by the Adviser, the Fund shall pay to the Adviser an annual fee,
payable monthly, equal to .75% of the average daily net assets of the Fund.
Except as hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily at the rate of 1/365 of .75% of the daily net
assets of the Fund. 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 Fund acknowledges
that the Adviser will pay to the Subadviser, as compensation for acting as
Subadviser to the Fund, the fees specified in the Subadvisory Agreement.
IX. EXPENSES
The expenses in connection with the management of the Fund shall be allocated
between the Fund 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 Fund, including without limitation,
office space, office equipment, telephone and postage costs;
2. all fees and expenses of all Trustees, 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 FUND
The Fund 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 Fund's investment portfolio or other
investment transactions incurred in managing the Fund's assets,
including portions of commissions that may be paid to reflect
brokerage research services provided to the Adviser;
-6-
<PAGE>
3. fees and expenses of the Fund's independent accountants and
legal counsel and the independent Trustees' legal counsel;
4. fees and expenses of any administrator, transfer agent,
custodian, dividend, accounting, pricing or disbursing agent of
the Fund;
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 Trustees) of the Fund which benefit the Fund;
8. all fees and expenses of the Fund's Trustees, 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
Fund, except for those expenses paid by third parties in
connection with the distribution of Fund 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 Fund or in cash;
11. costs and expenses of promoting the sale of shares in the Fund,
including preparing prospectuses and reports to shareholders of
the Fund, provided, nothing in this Agreement shall prevent the
charging of such costs to third parties involved in the
distribution and sale of Fund shares;
12. fees payable by the Fund to the Commission or to any state
securities regulator or other regulatory authority for the
registration of shares of the Fund in any state or territory of
the United States or in 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 Fund's assets, and any nonrecurring or extraordinary
expenses, including organizational expenses, litigation
affecting the Fund and any indemnification by the Fund of its
officers, Trustees or agents.
-7-
<PAGE>
X. EXPENSE LIMITATION
If, for any fiscal year, the total of all ordinary business expenses payable
by the Fund, including all investment advisory fees but excluding brokerage
commissions, distribution fees, taxes, interest and 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 Fund 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 Fund 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 Fund
that are not required by this Agreement. Such services will be performed on
behalf of the Fund and the Adviser may receive from the Fund 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
Fund and its shareholders. Payment or assumption by the Adviser of any Fund
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 Fund
nor obligate the Adviser to pay or assume any similar Fund 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 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 Fund; and (c) such other administrative services as may be furnished from
time to time by the Adviser to the Fund at the request of the Board.
XII. NONEXCLUSIVITY
The services of the Adviser to the Fund 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.
-8-
<PAGE>
It is understood and agreed that officers and directors of the Adviser may
serve as officers or trustees of the Fund, and that officers or trustees 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.
XIII. TERM
This Agreement shall become effective at the close of business on the date
hereof and shall remain in force and effect, subject to Paragraphs XIV and XV
hereof and approval by the Fund's shareholders, for a period of two years from
the date hereof.
XIV. RENEWAL
Following the expiration of its initial two-year term, the Agreement shall
continue in force and effect from year to year, provided that such continuance
is specifically approved at least annually:
A. 1. by the Fund's trustees, or
2. by the vote of a majority of the Fund's outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act),
and
B. by the affirmative vote of a majority of the trustees who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a trustee 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 Fund's Trustees or by vote of a majority of the Fund'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 that term is defined in Section 2(a)(4) of the 1940 Act.
XVI. LIABILITY
A. LIABILITY OF THE ADVISER
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
-9-
<PAGE>
that such losses resulted from an act or omission on the part of the
Adviser or its officers, Trustees 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.
B. LIABILITY OF THE FUND, THE SHAREHOLDERS AND THE TRUSTEES
A copy of the Declaration of Trust of the Fund is on file with the
Secretary of The Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the trustees of the
Fund as trustees and not individually and that the obligations of this
instrument are not binding upon any of the trustees or shareholders
individually but are binding only upon the assets and property of the
Fund. No provision of this Agreement shall be construed to protect any
trustees or officer of the Fund or director or officer of the Adviser,
from liability in violation of Section 17(h) and (i) of the 1940 Act.
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 OR THE ADVISER:
151 Farmington Avenue, RE4C
Hartford, Connecticut 06156
Fax number: 860/273-8340
Attention: Secretary
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.
-10-
<PAGE>
XIX. SERVICE MARK
The service mark of the Fund 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 Fund.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the ___ day of
_______________, 199__.
AETNA LIFE INSURANCE AND ANNUITY
COMPANY
By: _____________________________
Name:____________________________
Title:___________________________
ATTEST:
_______________________________
AETNA GET FUND, SERIES B
By: _____________________________
Name:____________________________
Title:___________________________
ATTEST:
_______________________________
-11-
<PAGE>
EXHIBIT C
INVESTMENT ADVISORY AGREEMENT
THIS AGREEMENT is made by and between AETNA GET FUND, a Massachusetts
business trust (the "Company"), on behalf of its Series B Fund and AETNA LIFE
INSURANCE AND ANNUITY COMPANY, a Connecticut insurance corporation (the
"Adviser"), as of the Date set forth below.
R E C I T A L
- - - - - - -
WHEREAS, the Company is registered as an open-end diversified management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act") and the rules and regulations promulgated thereunder;
WHEREAS, the Adviser is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"), and engages
in the business of acting as an investment adviser;
WHEREAS, the Company has established its Series B Fund (the "Fund");
WHEREAS, the Company, on behalf of the Fund, and the Adviser desire to
enter into an agreement to provide for investment advisory and management
services for the Fund on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
I. APPOINTMENT AND OBLIGATIONS OF THE ADVISER
The Adviser is hereby appointed to serve as the investment adviser to the
Fund, to provide investment advisory services set forth below in Section II,
subject to the terms of this Agreement and the policies and control of the
Company's Board of Trustees (the "Board"). The Adviser shall, for all purposes
herein, be deemed an independent contractor and shall have, unless otherwise
expressly provided or authorized, no authority to act for or represent the
Fund in any way or otherwise be deemed an agent of the Fund.
II. DUTIES OF THE ADVISER
In carrying out the terms of this Agreement, the Adviser shall provide
the following services:
A. supervise all aspects of the operations of the Fund;
<PAGE>
B. obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the
Fund's portfolio and whether concerning the individual issuers of the
securities included in the Fund's portfolio or the activities in which
the issuers engage, or with respect to securities that the Adviser
considers desirable for inclusion in the Fund's portfolio;
C. determine which issuers and securities shall be represented in the
Fund's portfolio and regularly report thereon to the Board;
D. formulate and implement continuing programs for the purchases and
sales of the securities of such issuers and regularly report thereon to
the Board;
E. give instructions to the custodian and/or sub-custodian of the Fund
appointed by the Board as to deliveries of securities, transfers of
currencies and payments of cash for the account of the Fund, in relation
to the matters contemplated by this Agreement; and
F. take, on behalf of the Fund, all actions which appear to the Company
and the Fund necessary to carry into effect the purchase and sale of
securities for the Fund and the supervisory functions listed above,
including the placing of orders for the purchase and sale of securities
for the Fund.
III. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF THE ADVISER
Adviser hereby represents and warrants to the Company 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 "SEC")
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 Fund in carrying out its obligations
hereunder.
-2-
<PAGE>
B. REPRESENTATIONS AND WARRANTIES OF THE FUND AND THE COMPANY
The Company, on behalf of the Fund, hereby represents and warrants
to the Adviser as follows:
1. DUE ORGANIZATION. The Company has been duly organized as a
"business trust" under the laws of the Commonwealth of Massachusetts
and is authorized to enter into this Agreement and carry out its
terms.
2. REGISTRATION. The Company is registered as an investment
company with the SEC under the 1940 Act and shares of the Fund are
registered 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 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
Fund, the Adviser may enter into a Subadvisory Agreement to engage a
subadviser (the "Subadviser") to the Adviser with respect to the Fund.
B. DUTIES OF SUBADVISER
Under a Subadvisory Agreement, the Subadviser shall:
1. provide the Adviser with such economic research and securities
analysis as the Adviser may from time to time consider necessary or
advisable in connection with the Adviser's performance of its duties
hereunder;
2. obtain and evaluate pertinent information about significant
developments and economic, statistical and financial data, domestic,
foreign or otherwise, whether affecting the economy generally or the
Fund, and whether concerning the individual issuers whose securities
are included in the Fund or the activities in which such issuers
engage, or with respect to securities that the Subadviser considers
desirable for inclusion in the Fund's investment portfolio;
3. determine which issuers and securities shall be purchased, sold
or exchanged by the Fund or otherwise represented in the Fund's
investment portfolio and regularly report thereon to the Adviser
and, at the request of the Adviser, to the Board; and
-3-
<PAGE>
4. formulate and implement continuing programs for the purchase
and sale of the securities of such issuers and regularly report
thereon to the Adviser and, at the request of the Adviser, to the
Board.
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 Fund to ensure that the Fund's assets are invested in compliance
with the Subadvisory Agreement and the Fund's Registration
Statement;
2. consult with and assist the Subadviser in maintaining
appropriate policies, procedures and records so that the Subadviser
operates its business and any investment program hereunder in
compliance with applicable laws;
3. establish and maintain periodic 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 matters relating to Fund promotion, marketing materials
and the Subadviser's reports to the Board.
V. BROKER-DEALER RELATIONSHIPS
A. PORTFOLIO TRADES
The Adviser, at its own expense, shall place all orders for the purchase
and sale of portfolio securities for the Fund 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 Fund 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, as amended) to the Fund 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 and research services a commission for executing a portfolio
transaction for the Fund 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
-4-
<PAGE>
value of the brokerage and research services provided by such broker or
dealer. 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
Fund to determine if the commissions paid over representative periods of time
were reasonable in relation to the benefits received.
VI. CONTROL BY THE BOARD OF DIRECTORS
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 Fund 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:
A. all applicable provisions of the 1940 Act;
B. the provisions of the registration statement of the Company, as the
same may be amended from time to time, under the 1933 Act and the 1940
Act;
C. the provisions of the Company's Declaration of Trust, as amended;
D. the provisions of the By-Laws of the Company, as amended; and
E. 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 Company, on behalf of the Fund, shall pay
to the Adviser an annual fee, payable monthly, equal to 0.75% of the average
daily net assets of the Fund; except that prior to the date on which the
assets of the Fund are managed so as to achieve a minimum targeted rate of
return, the fee shall be at an annual rate of 0.25% of the average daily net
assets of the Fund. 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 Fund. 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 as set forth above. Subject to the provisions
of Paragraph 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
-5-
<PAGE>
effect, the Company acknowledges on behalf of the Fund that the Adviser will
pay to the Subadviser, as compensation for acting as Subadviser to the Fund,
the fees specified in the Subadvisory Agreement.
IX. EXPENSES
The expenses in connection with the management of the Fund shall be
allocable between the Fund and the Adviser as follows:
A. EXPENSES OF THE ADVISER
The Adviser shall pay:
1. The salaries, employment benefits and other related costs of
those of its personnel engaged in providing investment advice to the
Fund, including, without limitation, office space, office equipment,
telephone and postage costs; and
2. Any fees and expenses of all Trustees of the Company who are
employees of the Adviser or an affiliated entity and any salaries
and employment benefits of officers of the Company who are
affiliated persons of the Adviser for acting as officers of the
Company.
B. EXPENSES OF THE FUND
The Fund shall pay:
1. Investment advisory fees pursuant to this Agreement;
2. Brokers' commissions, issue and transfer taxes or other
transaction fees chargeable in connection with securities or other
investment transactions, including portions of commissions that may
be paid to reflect brokerage research services provided to the
Adviser;
3. Fees and expenses of the Fund's independent public accountants
and outside legal counsel;
4. Expenses of printing and distributing proxies, proxy
statements, prospectuses and reports to shareholders of the Fund,
except as such expenses may be borne by any distributor of the Fund;
5. Interest and taxes;
6. The fees and expenses of those of the Company's Trustees who
are not "interested persons" (as defined in the 1940 Act) of the
Company or the Adviser;
-6-
<PAGE>
7. Shareholders' meeting expenses;
8. Administrator, transfer agent, custodian and dividend
disbursing agent fees and expenses;
9. Fees of dividend, accounting or pricing agents appointed by the
Fund;
10. Fees payable by the Company to the SEC or in connection with
the registration of shares of the Fund under the laws of any state
or territory of the United States or of the District of Columbia;
11. Fees and assessments of the Investment Company Institute or any
successor organization or other association memberships approved by
the Board;
12. Such nonrecurring or extraordinary expenses as may arise,
including organizational expenses, litigation affecting the Fund and
any indemnification by the Company of its officers, Trustees or
agents with respect thereto;
13. All other ordinary business expenses incurred in the operations
of the Fund unless specifically provided otherwise in this paragraph
IX;
14. All costs attributable to investor services, administering
shareholder accounts and handling shareholder relations (including,
without limitation, telephone and personnel expenses);
15. All expenses incident to the payment of any dividend,
distribution, withdrawal or redemption, whether in shares of the
Fund or in cash; and
16. Insurance premiums on property or personnel (including officers
and Trustees) of the Company which inure to its benefit.
X. EXPENSE LIMITATION
If, for any fiscal year, the total of all ordinary business expenses of
the Fund, including all investment advisory fees but excluding brokerage
commissions, distribution fees, taxes, interest and 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 Fund are offered for sale (unless a waiver is obtained),
the Adviser shall reduce its advisory fee in order to reduce such excess
expenses, but will not be required to reimburse the Fund 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 management 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
-7-
<PAGE>
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 Fund that are not required by this Agreement. Such services will be
performed on behalf of the Fund and the Adviser may receive from the Fund 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
Fund and its shareholders. Payment or assumption by the Adviser of any Fund
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 Fund
nor obligate the Adviser to pay or assume any similar Fund expense on any
subsequent occasions. Such services may include, but are not limited to, (a)
the services of a principal financial officer of the Company (including
applicable office space, facilities and equipment) whose normal duties consist
of maintaining the financial accounts and books and records of the Company and
the Fund, 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 Fund; and (c) such other
administrative services as may be furnished from time to time by the Adviser
to the Company or the Fund at the request of the Board.
XII. NON-EXCLUSIVITY
The services of the Adviser to the Fund 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 Trustees of the Company, and that
officers or Trustees of the Company 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.
-8-
<PAGE>
XIII. TERM
This Agreement shall become effective at the close of business on the
date hereof and shall remain in force and effect, subject to Paragraphs XIV
and XV hereof and approval by the Fund's shareholders, for a period of two
years from the date hereof.
XIV. RENEWAL
Following the expiration of its initial two-year term, the Agreement
shall continue in force and effect from year to year, provided that such
continuance is specifically approved at least annually:
A. (1) by the Company's Trustees or (2) by the vote of a majority of
the Fund's outstanding voting securities (as defined in Section 2(a)(42)
of the 1940 Act), and
B. by the affirmative vote of a majority of the Trustees who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a Trustee of the Company), 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 Company's Trustees or by vote of a majority of the
Fund'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 that term is defined in Section 2(a)(4) of the 1940 Act.
XVI. LIABILITY OF ADVISER AND INDEMNIFICATION
A. LIABILITY
In the absence of willful misfeasance, bad faith or gross negligence on
the part of the Adviser or its officers, directors or employees, or reckless
disregard by the Adviser of its duties under this Agreement, the Adviser shall
not be liable to the Company or to any shareholder of the Company for any act
or omission in the course of, or connected with, rendering services hereunder
or for any losses that may be sustained in the purchase, holding or sale of
any security.
B. INDEMNIFICATION
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of the
Adviser or any officer,
-9-
<PAGE>
director or employee of the Adviser, to the extent permitted by applicable
law, the Company hereby agrees to indemnify and hold the Adviser harmless from
and against all claims, actions, suits and proceedings at law or in equity,
whether brought or asserted by a private party or a governmental agency,
instrumentality or entity of any kind, relating to the sale, purchase, pledge
of, advertisement of, or solicitation of sales or purchases of any security
(whether of the Fund or otherwise) by the Company, its officers, Trustees,
employees or agents in alleged violation of applicable federal, state or
foreign laws, rules or regulations.
XVII. NOTICES
Any notices under this Agreement shall be in writing, addressed and
delivered or mailed postage paid to the other party at such address as such
other party may designate for the receipt of such notice. Until further notice
to the other party, it is agreed that the address of the Adviser and that of
the Company for this purpose shall be 151 Farmington Avenue, Hartford,
Connecticut 06156.
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 SEC 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 SEC, such
provisions shall be deemed to incorporate the effect of such rule, regulation
or order.
XIX. SERVICE MARK
The service mark of the Company and the Fund and the name "Aetna" have
been adopted by the Company 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
Corporation should not be the investment adviser of the Fund.
-10-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in duplicate by their respective officers on the 8th day of
December, 1993.
Attest: AETNA GET FUND, on behalf of its Series
B Fund
/s/Susan E. Bryant By: /s/Shaun P. Mathews
------------------ --------------------
Name: Shaun P. Mathews
Title: President
Attest: AETNA LIFE INSURANCE AND
ANNUITY COMPANY
/s/Paige L. Falasco By: /s/Lucille M. Nickerson
------------------- ---------------------------
Name: Lucille M. Nickerson
Title: Corporate Secretary
-11-
<PAGE>
EXHIBIT D
Article 5.2, Nonliability of Trustees, and Others, of the Fund's
Declaration of Trust, shall be amended and restated to read as follows:
5.2 Nonliability of Trustees, and Others:
The exercise by the Trustees of their powers and discretion hereunder
shall be binding upon everyone interested. A Trustee shall be liable to the
Trust and the Shareholders for such Trustee's own willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved in the
conduct of the office of Trustee, and for nothing else, and shall not be
liable for errors of judgment or mistakes of fact and law. Subject to the
foregoing, the Trustees shall not be responsible or liable in any event for
any neglect or wrongdoing of any officer, agent, employee, consultant,
adviser, administrator, distributor or principal underwriter, custodian or
transfer, dividend disbursing, shareholder servicing or accounting agent of
the Trust, nor shall any Trustee be responsible for the act or omission of any
other Trustee. Furthermore, no officer, employee or agent of the Trust shall
be liable to the Trust, its Shareholders, or to any Shareholder, Trustee,
officer, employee, or agent for any action or failure to act (including the
failure to compel in any way any former or acting Trustee to redress any
breach of trust), except upon a showing of bad faith, willful misfeasance,
gross negligence or reckless disregard of duties.
Article 5.3, Indemnification, of the Fund's Declaration of Trust, shall be
amended and restated to read as follows:
5.3 Indemnification. The Trust shall indemnify its Trustees, officers,
employees and agents and any person who serves at the request of the Trust as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise as follows:
(a) Every person who is or has been a Trustee or officer of the Trust and
persons who serve at the Trust's request as director or officer of another
corporation, partnership, joint venture, trust or other enterprise shall be
indemnified by the Trust to the fullest extent permitted by law against
liability and against all expenses reasonably incurred or paid in connection
with any debt, claim, action, demand, suit, proceeding, judgment, decree,
liability or obligation of any kind in which he or she becomes involved as a
party or otherwise by virtue of being or having been a Trustee or officer of
the Trust or of another corporation, partnership, joint venture, trust or
other enterprise at the request of the Trust and against amounts paid or
incurred in the settlement thereof.
(b) The words "claim," "action," "suit" or "proceeding" shall apply to all
claims, actions, suits or proceedings (civil, criminal, administrative,
legislative, investigative or other, including appeals), actual or threatened,
and the words "liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.
<PAGE>
(c) No indemnification shall be provided hereunder to a Trustee, officer,
employee or agent against any liability to the Trust or its shareholders by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of office.
(d) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect any
other rights to which any Trustee, officer, employee or agent may now or
hereafter be entitled, shall continue as to a person who has ceased to be such
Trustee, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(e) In the absence of a final decision on the merits by a court or other
body before which such proceeding was brought, an indemnification payment will
not be made, except as provided in paragraph (f) of this Article, unless in
the absence of such a decision, a reasonable determination based upon a
factual review has been made (1) by a majority vote of a quorum of non-party
Trustees who are not interested persons of the Trust, or (2) by independent
legal counsel in a written opinion that the indemnitee was not liable for an
act of willful misfeasance, bad faith, gross negligence, or reckless disregard
of duties.
(f) The Trust further undertakes that advancement of expenses incurred in
the defense of a proceeding (upon undertaking for repayment unless it is
ultimately determined that indemnification is appropriate) against a Trustee
or officer of the Trust will not be made absent the fulfillment of at least
one of the following conditions: (i) the indemnitee provides security for his
undertaking, (ii) the Trust is insured against losses arising by reason of any
lawful advances or (iii) a majority of a quorum of disinterested non-party
Trustees or independent legal counsel in a written opinion shall have
determined, based on a review of readily available facts (as opposed to a full
trial-type inquiry) that there is reason to believe the indemnitee ultimately
will be entitled to indemnification.
(g) No amendment of this Declaration or repeal of any of its provisions
shall limit or eliminate the rights of indemnification provided hereunder with
respect to acts or omission occurring prior to such amendment or repeal.
<PAGE>
EXHIBIT E
Article 5.2, Non-Liability of Trustees, and Others, currently reads as
follows:
5.2 Non-Liability of Trustees, and Others:
No Trustee, officer employee or agent of the Trust shall be liable to the
Trust, any series, its Shareholders, or to any Shareholder, Trustee, officer,
employee, or agent for any action or failure to act (including the failure to
compel in any way any former or acting Trustee to redress any breach of
trust), except upon a showing of bad faith, willful misfeasance, gross
negligence or reckless disregard of duties.
5.3 Indemnification
(a) Every person who is or was a Trustee, officer or employee of this
Trust or a director, officer or employee of any corporation which he served at
the request of this Trust (and his firm, executors and administrators) shall
have a right to be indemnified by this Trust against all liability and
reasonable expenses incurred by him in connection with or resulting from any
claim, action, suit or proceeding in which he may become involved as a party
or otherwise by reason of his being or having been a Trustee, officer or
employee of this Trust as a director, officer or employee of such corporation,
provided (1) said claim, action, suit or proceeding shall be prosecuted to a
final determination and he shall be vindicated on the merits, or (2) in the
absence of such final determination vindicating him on the merits, the Board
shall determine that he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Trust, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful; said determination to be made (i) by the
Board, by a majority vote of a quorum consisting of disinterested Trustees; or
(ii) if such quorum is not obtainable or if a quorum of disinterested Trustees
so directs, by independent legal counsel in a written opinion, or (iii) by the
Shareholders.
(b) For purpose of the preceding subsection: (1) "liability and reasonable
expenses" shall include, but not be limited to, reasonable counsel fees and
disbursements, amounts of any judgment, fine or penalty, and reasonable
amounts paid in settlement; (2) "claim, action, suit or proceeding" shall
include every such claim, action, suit or proceeding, whether civil or
criminal, derivative or otherwise, administrative, judicial or investigative,
any appeal relating thereto, and shall include any reasonable apprehension or
threat of such a claim, action, suit or proceeding; (3) a settlement, plea of
nolo contendere, consent judgment, adverse civil judgment, or conviction shall
not of itself create a presumption that the conduct of the person seeking
indemnification did not meet the standard of conduct set forth in subsection
(2) hereof.
<PAGE>
(c) Notwithstanding the foregoing, the following additional limitations
shall apply with respect to any actin by or in the right of the Trust: (1) no
indemnification shall be made in respect of any claim, issue or matter as to
which the person seeking indemnification shall have been adjudged to be liable
for negligence or misconduct in the performance of his duty to the Trust
unless the court which made such a finding, or any other court of equity in
the county where the Trust has its principal office determines that despite
the adjudication of liability, such person is fairly and reasonably entitled
to indemnity for some or all of such expenses; and (2) indemnification shall
extend only to reasonable expenses, including reasonable counsel's fees and
disbursements, and shall not include judgments, fines and amounts paid in
settlement.
(d) The right of indemnification shall extend to any person otherwise
entitled to it under this Article whether or not that person continues to be a
Trustee, officer or employee of this Trust or a director, officer or employee
of such corporation at the time such liability or expense shall be incurred.
The right of indemnification shall extend to the legal representative and
heirs of any person otherwise entitled to indemnification. If a person meets
the requirements of this Article with respect to some matters in a claim,
action, suit or proceeding, but not with respect to others, he shall be
entitled to indemnification as to the former. Expenses incurred in defending
an action, suit or proceeding may be paid by the Trust in advance of the final
disposition of such action, suit or proceeding as authorized by the Board in
the specific case: (1) upon receipt of an undertaking for which security has
been provided by or on behalf of the Trustee, director, officer, employee or
agent to repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Trust as authorized in this Article, or (2)
if the Trust is at the time of such advance insured against losses arising by
reason of the advance.
(e) This Article shall not exclude any other rights of indemnification or
other rights to which any Trustee, officer, or employee may be entitled to by
contract, vote of the Shareholders or as a matter of law. If any clause,
provision or application of this Section 5.3 shall be determined to be
invalid, the other clauses, provisions or applications of this section shall
not be affected, but shall remain in full force and effect.
(f) The Trust shall have the power to purchase and maintain insurance on
behalf of any person who is or was a Trustee, officer, employee or agent of
the Trust, or is or was serving at the request of the Trust as a director,
officer, employee or agent of a corporation, against any liability asserted
against him or her and incurred by him or her in any such capacity, or arising
out of his status as such, whether or not the Trust would have the power to
indemnify him or her against such liability under the provisions of this
Article.
