AETNA GENERATION PORTFOLIOS INC, PRE 14A, 1996-04-11

AETNA GENERATION PORTFOLIOS INC
PRE 14A, 1996-04-11

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PRELIMINARY COPY

[May 1, 1996]

Dear Fellow Shareholders and Contractholders,

You are cordially invited by the Directors of Aetna Generation
Portfolios, Inc. (the "Fund"), on behalf of each of the Fund's investment
portfolios (individually, a "Portfolio" and collectively, the "Generation
Portfolios") to attend a Special Meeting of Shareholders on June 17, 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 Directors,
(ii) a new advisory agreement for each Portfolio with a change in investment
advisory fee paid by each Portfolio and (iii) a new sub-advisory arrangement
for each Portfolio. The latter two recommendations are of particular
importance to you.

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.

As part of these enhancements, a number of highly qualified and
experienced investment professionals with a breadth of different technical
expertise have been hired to manage your Generation Portfolios under a new
market-competitive compensation program. New quantitative research and
analytical 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.

After a comprehensive review of the (i) resources required to effectively
manage your Generation Portfolios, (ii) the enhanced services provided by
Aetna to the Generation Portfolios, and (iii) an in-depth analysis of
competitive advisory fees, the Directors are recommending an increase in the
management fee paid by the Generation Portfolios. The Directors believe the
new advisory contract is fair to you, your Generation Portfolios, and Aetna
and will assure for the future that essential financial resources are
available to provide products responsive to market demands and competitive,
high quality advisory services in increasingly complex financial markets.

<PAGE>

Please note that, in conjunction with this proposal, the Directors have
approved a change to the Administrative Services Agreement between Aetna and
each Portfolio, which sets a fixed fee to be paid to Aetna for each
Portfolio's administrative costs. Under this new agreement, on an annualized
basis, the total expenses of each Portfolio would be less than that charged in
1995.

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. The combined entity will be called
Aeltus, and it is proposed that Aeltus be appointed as sub-advisor to each
Portfolio. 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,
each Portfolio will benefit from such things as an enhanced ability to execute
securities transactions.

The Directors 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 Directors believe that the
establishment of a focused, stand-alone investment management entity is in the
best long-term interest of your Fund and each of its Portfolios.

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-___-____.

Sincerely,

Shaun P. Mathews
President

<PAGE>

May 1, 1996 PRELIMINARY COPY

NOTICE OF SPECIAL MEETING
of the Shareholders of

AETNA GENERATION PORTFOLIOS, INC.
Aetna Ascent Variable Portfolio
Aetna Crossroads Variable Portfolio
Aetna Legacy Variable Portfolio

A Special Meeting of the Shareholders of Aetna Generation Portfolios, Inc.
(the "Fund"), including each of its investment portfolios (individually, a
"Portfolio" and collectively, the "Generation Portfolios"), will be held on
June 17, 1996, at 9:00 a.m., Eastern time, at 151 Farmington Avenue, Hartford,
Connecticut 06156-8962 for the following purposes:

1. to elect nine Directors to serve until their successors are
elected and qualified;

2. to approve or disapprove a separate Subadvisory Agreement for
each Portfolio, by and among the Fund, on behalf of each
Portfolio, Aetna Life Insurance and Annuity Company ("Aetna")
and its affiliate, Aeltus Investment Management, Inc.;

3. to approve or disapprove a new separate Investment Advisory
Agreement for each Portfolio, by and between the Fund, on behalf
of each Portfolio, and Aetna, the Fund's current investment
adviser;

4. 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 April 30, 1996
are entitled to notice of and to vote at the meeting.

Susan E. Bryant
Secretary

<PAGE>

PRELIMINARY
PROXY STATEMENT
April 11, 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 Directors (the
"Directors") of Aetna Generation Portfolios, Inc. (the "Fund"), on behalf of
each of its investment portfolios (individually, a "Portfolio" and
collectively, the "Generation Portfolios"), for a special meeting of
shareholders to be held on June 17, 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 May 1, 1996.
Aetna Life Insurance and Annuity Company ("Aetna") and its affiliates may
contact contract holders and their representatives directly commencing in
April 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, was mailed to shareholders on or about February xx, 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
___________________, 151 Farmington Avenue, Hartford, Connecticut, 06156-8962,
or by calling 1-800-xxx-xxxx.

Shareholders of record on April 30, 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 and its subsidiary, Aetna Insurance Company of America
("Aetna Insurance") were the record shareholders of ____ shares (___% of the
outstanding shares) of the Aetna Ascent Variable Portfolio, _____ shares (__%
of the outstanding shares) of the Aetna Crossroads Variable Portfolio, and
_____ shares (__% of the outstanding shares) of the Aetna Legacy Variable
Portfolio. These shares were owned by Aetna and Aetna Insurance as depositors
for their respective variable annuity contracts or variable life insurance
policies (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 shares related to your interest through your Contract. This
Statement is used to solicit instructions for voting shares as well as for
soliciting proxies from individual shareholders in the Fund. All persons
entitled to direct the voting of shares, whether or not they are shareholders
will be described as voting for purposes of this Statement.

The shares of each portfolio held by Aetna and Aetna Insurance are held
on behalf of the following Separate Accounts which hold assets for the
Contracts:

<PAGE>

Aetna Ascent Variable Porfolio

Aetna Variable Annuity Account B - ___________________ shares (_____%)
Aetna Variable Annuity Account C - ___________________ shares (_____%)
Aetna Variable Annuity Account D - ___________________ shares (_____%)
Aetna Variable Life Account B - ___________________ shares (_____%)
Aetna Insurance Variable
Annuity Account I - ___________________ shares (_____%)

Aetna Crossroads Variable Porfolio

Aetna Legacy Variable Porfolio

Aetna and Aetna Insurance will vote the shares in the Generation
Portfolios held in their names as directed. The group Contract holder of some
group Contracts has the right to direct the vote for all shares under the
Contract, for, against or abstaining, in the same proportions as shares for
which instructions have been given under the same Contract. If Aetna does not
receive voting instructions for all of the shares held under Contracts, Aetna
and Aetna Insurance will vote all the shares in all the listed Accounts,
except Account D, for, against or abstaining, in the same proportions as the
shares for which they have received instructions. Aetna will only vote shares
of the Generation Portfolios held through Aetna's Variable Annuity Account D
for which it receives instructions and will not vote shares for which no
instructions are received.

All 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 shares of the Fund 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 Investment Advisory Agreement) require
the vote of a "majority of the outstanding voting securities" of each
Portfolio to be approved. The remaining proposals can be approved by the vote
of a simple majority of Fund shares present at the meeting. A "majority of the
outstanding voting securities" of a Portfolio means 67% of the shares of the
Portfolio present at the meeting, assuming a majority of the shares are
present; or, more than 50% of all the outstanding voting securities of the
Portfolio, if less. A vote to abstain is effectively a negative vote since the
proposals require an affirmative vote to be approved.

<PAGE>

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 shares in favor of an adjournment at their discretion whether
instructions for those shares are to vote for, against or to abstain from
voting on any of the proposals to be considered at the meeting.

The number of shares that you may vote are shown on the authorization
card accompanying this Statement. The number of shares which you are entitled
to vote is calculated according to the formula described in 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
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 DIRECTORS

The persons listed in the table below are nominated to serve as Directors of
the Fund until their successors are elected and qualified. The Nominees
consent to being named in this proposal. The Nominees currently serve as
Directors and will continue to serve if reelected by the shareholders. Once
elected, the Directors continue to serve indefinitely.

<PAGE>

<TABLE>
<CAPTION>
Principal Occupation, Shares of the
Employment or Public First Fund
Name, Age and Position Directorships Became a Beneficially
with the Fund during last five years Director Owned
<S> <C> <C>
Morton Ehrlich Chairman and Chief Executive 1994
61 years of age Officer, Integrated Management
Director 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
Director (since 1973).

David L. Grove Private Investor, Economic/ 1994
77 years of age Financial Consultant
Director (since December 1988).

Timothy A. Holt* Senior Vice President and Chief 1996
43 years of age Financial Officer, Aetna (since
Director February 1996); Vice President,
Portfolio Management Group,
Aetna Life Insurance Company
(since ___); Vice President,
Portfolio Management Group,
The Aetna Casualty and Surety
Company (since _____).

Daniel P. Kearney* Director and President of Aetna 1994
56 years of age Executive Vice President of
Director Aetna Life and Casualty Company.

Sidney Koch Senior Adviser, Hambro 1994
60 years of age America, Inc. (since January
Director 1993); Senior Adviser, Daiwa

4
<PAGE>

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 of 1994
40 years of age Aetna (since March 1991);
Director and Assistant Vice President,
President Pension Operations (from
July 1989 to March 1991);
Assistant Vice President,
Corporate Planning, Aetna
Life and Casualty Company
(from April 1988 to June
1989).

Corine T. Norgaard** Dean, School of Management, 1994
58 years of age State University at New York
Director (Binghamton) (since August
1991); 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,
Director 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>
* 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. Norgard 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>

<PAGE>

The business address of each Nominee is 151 Farmington Avenue, Hartford,
Connecticut 06156. 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 Directors 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 Shares; Aetna Variable Encore Fund; Aetna Investment Advisers
Fund, Inc.; Aetna Variable Fund; and Aetna GET Fund (collectively with the
Fund, the "Fund Complex").

As of April 30, 1996, Directors and officers of the Fund beneficially
owned less than 1% of each Portfolio's outstanding shares.

Remuneration of Officers and Directors

None of the Fund's officers nor any Aetna employee Directors are entitled
to any compensation from the Fund. During 1995, the following Directors earned
the following for their services as Directors to the Fund and the Fund
Complex:

<TABLE>
<CAPTION>
Aggregate Total Compensation
Compensation From Fund Complex
From Fund Paid to Directors

<S> <C> <C>
Morton Ehrlich $ 1,324 $46,000
Maria T. Fighetti $ 1,324 $46,000
David L. Grove* $ 1,324 $46,500
Sidney Koch $ 1,324 $47,000
Corine T. Norgaard $ 1,344 $51,000
Richard G. Scheide $ 1,324 $46,500
------- ----------
Total $ 7,964 $283,000
<FN>

* Mr. Grove elected to defer all compensation.
</FN>
</TABLE>

Committees

The Directors have standing Audit, Contract Review and Pricing
Committees. The Contract Review and Audit Committees include all the Directors
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 shares to vary by one cent or more per share. 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 Directors does not have a standing nominating
committee for the Fund nor a standing compensation committee.

<PAGE>

PROPOSAL 2

APPROVAL OF A SUBADVISORY AGREEMENT

The Directors have unanimously approved, and recommend that the
shareholders of each Portfolio approve, a subadvisory agreement for each
Portfolio (the "Subadvisory Agreement"), by and among Aetna, the Fund, on
behalf of each Portfolio, and Aetna's affiliate, Aeltus Investment Management,
Inc. ("Aeltus"). The Subadvisory Agreements for each Portfolio are identical
in all material respects, and a copy of the form of Subadvisory Agreement to
be entered into separately by the Fund for each Portfolio 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 Fund and each of its Portfolios would benefit from this
larger investment advisory entity by such things as more efficient execution
of securities transactions.

<PAGE>

What is being proposed?

To accomplish the combination, the investment personnel and staff of
Aetna would be transferred to Aeltus. Aetna and each Portfolio would enter
into a separate Subadvisory Agreement with Aeltus to provide investment
management services to the Portfolio. Although Aeltus is already a part of the
Aetna organization, the 1940 Act requires that the shareholders of each
Portfolio 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 each Portfolio. 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 each Portfolio's net assets on a daily basis
and preparing, and providing to Aetna, such other reports, data and
information as Aetna or the Directors request from time to time. In connection
with the management of each Portfolio's investments, Aeltus would be
responsible for assuring that the assets acquired for the Portfolio are in
compliance with the Portfolio's objectives and policies.

Aetna would bear the ultimate responsibility for overseeing the
investment advice provided to the Generation Portfolios. It would monitor
Aeltus' activities to ensure that Aeltus is following regulatory and Board
policies, restrictions and guidelines in managing each Portfolio's assets.
Aetna would be responsible for reporting to the Directors 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
the shareholders of the Generation Portfolios.

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 currently is a wholly-owned subsidiary of Aetna Retirement
Services, Inc. which is also the parent of Aetna. Aetna Retirement Services is
an indirect, 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 each Portfolio 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 Portfolio
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.

<PAGE>

The Subadvisory Agreement requires Aeltus to reduce its fee if Aetna is
required to do so under the Investment Advisory Agreement. Aetna has agreed to
reduce its fee or reimburse each Portfolio if the expenses borne by the
Portfolio would exceed the expense limitations of any jurisdiction in which
the Portfolio's shares are qualified for sale. Aetna would not be obligated to
reimburse the Portfolio 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.

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 Subadvisory Agreement is
approved by shareholders, and will continue until December 31, 1997 and
thereafter from year to year if approved by the Directors, including a
majority of the Independent Directors. The Subadvisory Agreement will
terminate automatically if the Investment Advisory Agreement terminates or if
there is a change in control of Aeltus. The Subadvisory Agreement for any
Portfolio can be terminated by Aeltus, Aetna or the Portfolio on 60 days'
notice. If the Subadvisory Agreement for any Portfolio terminates, the
Portfolio's investment adviser would automatically assume all management
functions for the Portfolio. The Subadviser can be held liable to the Adviser
and the Generation Portfolios for negligence, bad faith, willful malfeasance
or reckless disregard of its obligations or duties under the Subadvisory
Agreement.

What will the Subadvisory Agreement cost each Portfolio?

The Subadvisory Agreement for each Portfolio provides that Aetna will pay
Aeltus a fee at an annual rate up to 0.35% of the average daily net assets of
the Portfolio. 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, the Portfolio; it is paid by Aetna out of its own resources, including
fees and charges it receives from or in connection with the Fund.

What is the Board of Directors recommendation?

The Board of Directors unanimously recommends voting FOR approval of the
Subadvisory Agreement for each Portfolio.

What factors did the Board of Directors consider in reaching its
recommendation?

The Directors considered the proposed Subadvisory Agreement for each
Portfolio at meetings held on December 12, 1995, and February 28, 1996.
Moreover, the Contract Review Committee of the Board of Directors, consisting
solely of the Directors 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 Directors were advised
throughout by Messrs. Goodwin, Procter & Hoar, their own independent counsel.

<PAGE>

The Directors' recommendation was based on their conclusion that approval
of the Subadvisory Agreement for each Portfolio would mean that the
shareholders of each Portfolio would receive the benefits of the talents of
both Aetna and Aeltus working for the Portfolio.

What happens if the Subadvisory Agreement is not approved?

If the Subadvisory Agreement is not approved by the shareholders of a
Portfolio, Aetna would continue as investment adviser to that Portfolio and
would retain access to all of its current investment advisory capabilities.

PROPOSAL 3

APPROVAL OF A NEW INVESTMENT ADVISORY AGREEMENT

The Directors have unanimously approved a new Investment Advisory
Agreement for each Portfolio (the "Advisory Agreement"), by and between the
Fund, on behalf of each Portfolio, 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 Directors approved a new Administrative Services Agreement for each
Portfolio which, as discussed below, will be effective May 1, 1996, and it has
proposed a restructuring of its investment advisory operations as described in
Proposal 2. The new Administrative Services Agreement will limit the fees for
other expenses of the Fund to a maximum of 0.15%, which is significantly less
than the fees charged for the year ended December 31, 1995, as described
below. Aetna is also proposing to enter into a new Investment Advisory
Agreement with each Portfolio of the Fund providing an increase in the annual
fee from 0.50% to 0.60% of average daily net assets as more fully discussed
below. The Directors of the Fund are unanimously recommending approval of the
new Investment Advisory Agreement for the reasons identified below.

10
<PAGE>

What are the primary differences between the existing Investment Advisory
Agreement and the proposed Investment Advisory Agreement?

The proposed Advisory Agreement for each Portfolio has been updated in
several respects. The language has been simplified where possible; the
liability provisions make it clear that Aetna is liable to the Portfolio for
Aetna's negligence; it provides a new fee schedule for Aetna; and it expands
Aetna's ability to use brokerage commissions to pay Portfolio expenses to the
extent allowed by current law. The proposed Advisory Agreements for each
Portfolio are identical in all material respects and a copy of the form of
proposed Advisory Agreement to be entered into by the Fund for each Portfolio
is included with this Statement as Exhibit B. The existing investment advisory
agreements are included as Exhibit C.

Under both the existing and proposed investment advisory agreements,
Aetna is obligated to manage and oversee each Portfolio'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 are the other significant provisions of the Advisory Agreement?

The Advisory Agreement gives Aetna broad latitude in selecting securities
for the Fund subject to the Directors' oversight. Under the Agreement, Aetna
may delegate to a subadviser its functions in managing each Portfolio'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
the Portfolio, or paying Portfolio 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 for each Portfolio, Aetna has agreed to
reduce its fee or reimburse the Portfolio, if the expenses borne by the
Portfolio would exceed the expense limitations of any jurisdiction in which
the Portfolio's shares are qualified for sale. Aetna would not be obligated to
reimburse the Portfolio 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 which the Advisory Agreement is approved by
shareholders, and will continue until December 31, 1997 and thereafter from
year to year if approved by the Directors, including a majority of the
Independent Directors. The Advisory Agreement will terminate automatically if
there is a change in control of Aetna. It can be terminated by the Directors,
the shareholders of a Portfolio or Aetna on 60 days' notice.

<PAGE>

All of these provisions are the same as in the existing investment
advisory agreements for each Portfolio, which have been in effect since June
1995 when they were initially approved by shareholders.

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 Services, Inc., which, in turn, is a wholly-owned indirect
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 the Fund's shares. The principal offices of Aetna, Aetna
Retirement Services, Inc., and Aetna Life and Casualty Company are located at
151 Farmington Avenue, Hartford, Connecticut, 06156-8962.

Why has Aetna proposed a change in its fee schedule?

Aetna has entered into two contracts with respect to each Portfolio: (i)
an Advisory Agreement and (ii) an Administrative Services Agreement. As
outlined below, the Board of Directors is recommending changes to the Advisory
Agreement, including a fee increase, and in conjunction with this
recommendation has changed the Administrative Services Agreement to a fixed
fee contract at a lower annual rate than that paid by each Portfolio in 1995.
The net impact of these changes lowers the total fees paid by each Portfolio.

The advisory fee currently paid to Aetna under the existing investment
advisory agreement is determined at an annual rate of 0.50% of average daily
net assets. This fee was originally set in 1994. During 1995, Aetna received
$44,673, $44,352, and $43,540 for its services in managing the Aetna Ascent,
the Aetna Crossroads, and the Aetna Legacy Variable Portfolios, respectively,
which had assets as of December 31, 1995 of approximately $18.8 million, $18.8
million, and $18.2 million, respectively.

In operating your Generation Portfolios since 1994, we have determined
that the cost and complexity of managing the multiple asset class portfolio
are greater than we anticipated. At the same time, the financial markets have
become increasingly complex and the need for high quality personnel, research
and equipment has increased proportionately. With the recent growth in the
mutual fund industry, such resources have become more expensive and harder to
retain.

Further, during the past two years, Aetna has: (i) hired a number of
highly-qualified and experienced investment professionals, attracting them in
part by replacing its existing compensation structure with a competitive
compensation program designed to attract and retain such personnel; (ii)
instituted the use of quantitative research and analytical tools and
techniques to augment its traditional stock selection processes for the
purpose of improving performance of the portfolios it manages, including those
of the Generation Portfolios; and (iii) upgraded its information and reporting
systems to increase the volume of data gathered, the speed at which such data
are collected, and its ability to analyze and report on such data.

<PAGE>

Aetna believes that these trends in the financial markets will continue;
therefore, the proposed advisory fees are critical to retaining the resources
it has added and are necessary for Aetna to continue providing high quality
management to the Generation Portfolios in an increasingly competitive and
dynamic environment whether through Aetna directly or through Aeltus as
discussed in Proposal 2. Aetna believes enhancements are integral to its goal
of improving performance and reducing volatility for the investment portfolios
that it manages, including those of the Generation Portfolios, and for these
Portfolios to remain competitive in their respective markets.

Aetna believes that the proposed advisory fee at an annual rate of 0.60%
of each Portfolio's average daily net assets is competitive with fees charged
by comparable advisers for managing similar funds. The Portfolio's fees were
compared specifically to those of flexible portfolios which involve management
of fewer asset classes than the Portfolio. If the new Advisory Agreement had
been in effect for 1995, the Aetna Ascent, Aetna Crossroads, and Aetna Legacy
Variable Portfolios would have paid advisory fees of $52,888, $52,578, and
$51,618, respectively, which represents a 20% increase.

What are the changes to the Administrative Services Agreement?

Under an Administrative Services Agreement with each Portfolio, effective
through April 1996, each Portfolio reimburses Aetna for its administrative
costs in managing the Portfolio. The Administrative Services Agreement
provides for the reimbursement of a share of Aetna's overhead related to
managing the Portfolio. In addition, each Portfolio has been paying its
ordinary recurring expenses such as legal fees, Directors' fees, custodial
fees and insurance premiums. Under these agreements, in 1995, Aetna Ascent,
Aetna Crossroads, and Aetna Legacy Variable Portfolios paid a total of
$96,041, $96,466, and $96,465, respectively (equal to an annual rate of 1.09%,
1.10%, and 1.12%, respectively, of average daily net assets) to Aetna for
reimbursements of its costs in performing administrative services and for the
Portfolios' other ordinary recurring expenses.

As mentioned above, the Directors approved a change to the Administrative
Services Agreement with each Portfolio that would fix these charges so they
would no longer vary. This arrangement was adopted so that each Portfolio
would be able to fix the amount of its costs and expenses. The new
Administrative Services Agreement with each Portfolio provides for a fixed fee
at an annual rate of 0.15% of average daily net assets. This new rate
represents a reduction in cost to each Portfolio at current asset levels.

The following tables and examples summarize the effect of the proposed
advisory fee on each Portfolio's expenses.

<PAGE>

COMPARATIVE FEE TABLES

<TABLE>
Aetna Ascent Variable Portfolio
<CAPTION>
Annual Fund Operating Expenses (as a Fees as of Proposed Fee
percentage of average daily net assets) 5/1/96** for 8/1/96
<S> <C> <C>
Management Fee 0.50% 0.60%

Administrative Costs and other Expenses 0.15% 0.15%

Total Fund Operating Expenses 0.65% 0.75%
</TABLE>

<TABLE>
Aetna Crossroads Variable Portfolio
<CAPTION>
Annual Fund Operating Expenses (as a Fees as of Proposed Fee
percentage of average daily net assets) 5/1/96** for 8/1/96
<S> <C> <C>
Management Fee 0.50% 0.60%

Administrative Costs and other Expenses 0.15% 0.15%

Total Fund Operating Expenses 0.65% 0.75%
</TABLE>

<TABLE>
Aetna Legacy Variable Portfolio
<CAPTION>
Annual Fund Operating Expenses (as a Fees as of Proposed Fee
percentage of average daily net assets) 5/1/96** for 8/1/96
<S> <C> <C>
Management Fee 0.50% 0.60%

Administrative Costs and other Expenses 0.15% 0.15%

Total Fund Operating Expenses 0.65% 0.75%

<FN>
** The administrative fee was changed by the Board of Directors effective May 1, 1996.
</FN>
</TABLE>

14
<PAGE>

Examples:

The following charts show the expenses that you would pay on a $1,000
investment under the existing and proposed fees and expenses described above,
assuming (1) a 5% annual return and (2) redemption at the end of each time
period:

<TABLE>
Aetna Ascent Variable Portfolio
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Fees and Expenses as of 5/1/96 $7 $21 $36 $81

Proposed Fees and Expenses $8 $24 $42 $93
</TABLE>

<TABLE>
Aetna Crossroads Variable Portfolio
<CAPTION>

1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Fees and Expenses as of 5/1/96 $7 $21 $36 $81

Proposed Fees and Expenses $8 $24 $42 $93
</TABLE>

<TABLE>
Aetna Legacy Variable Portfolio
<CAPTION>

1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
Fees and Expenses as of 5/1/96 $7 $21 $36 $81

Proposed Fees and Expenses $8 $24 $42 $93
</TABLE>

The purpose of the above tables and examples is to assist shareholders in
understanding the effects of the proposed fee on the fees and expenses charged
to each Portfolio. The Generation Portfolios are only available through a
variable annuity contract or variable life policy. The above tables and
examples do not reflect separate account and other charges and expenses,
including sales loads, for these Contracts. The examples above should not be
considered a representation of past or future expenses or returns of any
Portfolio. Actual expenses and returns may vary from year to year and may be
higher or lower than those shown above.

<PAGE>

What is the change in the use of brokerage commissions for the Generation
Portfolios?

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 the portfolio transactions of
the Generation Portfolios. The Directors recommend that the investment adviser
also should be allowed to take into consideration Portfolio expenses actually
paid by the broker on behalf of the Portfolio where it is allowed by current
law. The investment adviser of the Portfolio is required to place trades for
the Portfolio'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 the Portfolio. This can only be done in compliance with certain
reporting rules and only with respect to expenses that directly benefit the
Portfolio paying the commissions. The proposed Advisory Agreement for each
Portfolio would allow such transactions subject to applicable laws.

What is the Board of Directors recommendation?

The Board of Directors unanimously recommends voting FOR approval of the
Advisory Agreement for each Portfolio.

What factors did the Board of Directors consider in reaching its
recommendation?

The Directors considered the proposed Advisory Agreement for each
Portfolio at meetings held on December 12, 1995, and February 28, 1996. The
Contract Review Committee of the Board of Directors, consisting solely of
Directors 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, the Independent Directors were advised throughout by
Messrs. Goodwin, Procter & Hoar, their own independent counsel.

The Directors' approval of the new Advisory Agreement for each Portfolio
with an increased fee 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 new fee will provide Aetna with the essential financial
resources it needs to compete effectively in the increasingly
complex and competitive financial markets.

2. The Directors believe that Aetna should receive a fair,
competitive fee in order to provide it with adequate resources
to produce and provide competitive, high quality services on
behalf of the Generation Portfolios.

3. The new fee would compensate Aetna for costly enhancements it 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.

<PAGE>

4. The new fee would reflect the benefits to be derived from the
combination of Aetna's and Aeltus' investment management
capabilities.

In the course of its deliberations, the Directors asked for and received
extensive data concerning, among other things, (i) the nature, quality and
scope of services that Aeltus, after combining with Aetna, would provide, (ii)
Aetna's profitability, (iii) Aetna's financial condition, (iv) the expense
ratios of each Portfolio both before and after the proposed fee increase and
as compared with other comparable variable funds, and (v) the level of Aetna's
current fee in general and as compared to other comparable variable funds.

What would happen if the Advisory Agreement is not approved?

If the Advisory Agreement is not approved by a Portfolio's shareholders,
the existing agreement will continue in effect with respect to that Portfolio.
Although Aetna expects that it would proceed with the Subadvisory Agreement
with Aeltus, (if it is approved) it would have fewer resources available, to
manage your Generation Portfolios effectively in the future.

ADDITIONAL INFORMATION

Executive 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 Director of the Fund; See
151 Farmington Avenue description under "Election of
Hartford, Connecticut 06156 Directors."

James C. Hamilton Vice President and Treasurer of the Fund;
151 Farmington Avenue Chief Financial Officer, Aetna Investment
Services,
Hartford, Connecticut 06156 Inc.; Vice President and Actuary, Aetna Life
Insurance Company.

Susan E. Bryant Secretary of the Fund; Counsel to Aetna
151 Farmington Avenue
Hartford, Connecticut 06156
</TABLE>

<PAGE>

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>

Name and
Business Address Principal Occupations
<CAPTION>
<S> <C>
Christopher J. Burns Director and Senior Vice President,
151 Farmington Avenue Sales and Service.
Hartford, Connecticut 06156

Laura R. Estes Director and Senior Vice President,
151 Farmington Avenue Manage/Design Products and Service.
Hartford, Connecticut 06156

Timothy A. Holt Director and Senior Vice President;
151 Farmington Avenue See description under "Election of
Hartford, Connecticut 06156 Directors."

Gail P. Johnson Director and Vice President,
151 Farmington Avenue Service and Retain Customers.
Hartford, Connecticut 06156

Daniel P. Kearney Director, President and Principal
151 Farmington Avenue Executive Officer; See description
Hartford, Connecticut 06156 under "Election of Directors."

John Y. Kim Director and Senior Vice President,
151 Farmington Avenue Investment Management.
Hartford, Connecticut 06156

Shaun P. Mathews Director and Vice President,
151 Farmington Avenue Intergrator; See description under
Hartford, Connecticut 06156 "Election of Directors."

Glen Salow Director and Vice President,
151 Farmington Avenue Information Technology.
Hartford, Connecticut 06156

Creed R. Terry Director and Vice President,
151 Farmington Avenue Select and Manage Markets.
Hartford, Connecticut 06156
</TABLE>

<PAGE>

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.

SHAREHOLDER PROPOSALS

The Articles of Incorporation and the By-Laws of the Fund provide that
the Fund need not hold annual shareholder meetings, except in those years in
which the election of Directors is required by the 1940 Act. 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

<PAGE>

APPENDIX I

AETNA GENERATION PORTFOLIO, INC. ("THE FUND")
AETNA ASCENT VARIABLE PORTFOLIO
THIS AUTHORIZATION CARD IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE FUND

Please refer to the Proxy Statement for a discussion of these matters. This
authorization card is solicited in connection with the special meeting of
shareholders of the Fund's Aetna Ascent Variable Portfolio to be held at
9:00 a.m., Eastern Standard Time, on June 17, 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 BELOW AS DIRECTED AND
REVOKES ALL PRIOR AUTHORIZATION CARDS.

1. Election of directors of the Fund

[ ] FOR all nominees listed below
(except as marked to the contrary below)

[ ] WITHHOLD AUTHORITY to vote
for all nominees listed below

(INSTRUCTION: To withhold authority to vote for any individual nominee strike
a line through the nominee's name in the list 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

2. Approve the Subadvisory Agreement. [ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Approve the New Investment Advisory
Agreement. [ ] 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>

AUTHORIZATION CARD

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.

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 person.

X_____________________________

Dated: ______________________

<PAGE>

APPENDIX II

AETNA GENERATION PORTFOLIO, INC. ("THE FUND")
AETNA CROSSROADS VARIABLE PORTFOLIO
THIS AUTHORIZATION CARD IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE FUND

Please refer to the Proxy Statement for a discussion of these matters. This
authorization card is solicited in connection with the special meeting of
shareholders of the Fund's Aetna Crossroads Variable Portfolio to be held at
9:00 a.m., Eastern Standard Time, on June 17, 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 BELOW AS DIRECTED AND
REVOKES ALL PRIOR AUTHORIZATION CARDS.

1. Election of directors of the Fund

[ ] FOR all nominees listed below
(except as marked to the contrary below)

[ ] WITHHOLD AUTHORITY to vote
for all nominees listed below

(INSTRUCTION: To withhold authority to vote for any individual nominee strike
a line through the nominee's name in the list 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

2. Approve the Subadvisory Agreement. [ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Approve the New Investment Advisory
Agreement. [ ] 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>

AUTHORIZATION CARD

X_____________________________

Dated: ______________________

<PAGE>

APPENDIX III

AETNA GENERATION PORTFOLIO, INC. ("THE FUND")
AETNA LEGACY VARIABLE PORTFOLIO
THIS AUTHORIZATION CARD IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS OF THE FUND

Please refer to the Proxy Statement for a discussion of these matters. This
authorization card is solicited in connection with the special meeting of
shareholders of the Fund's Aetna Legacy Variable Portfolio to be held at
9:00 a.m., Eastern Standard Time, on June 17, 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 BELOW AS DIRECTED AND
REVOKES ALL PRIOR AUTHORIZATION CARDS.

1. Election of directors of the Fund

[ ] FOR all nominees listed below
(except as marked to the contrary below)

[ ] WITHHOLD AUTHORITY to vote
for all nominees listed below

(INSTRUCTION: To withhold authority to vote for any individual nominee strike
a line through the nominee's name in the list 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

2. Approve the Subadvisory Agreement. [ ] FOR [ ] AGAINST [ ] ABSTAIN

3. Approve the New Investment Advisory
Agreement. [ ] 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>

AUTHORIZATION CARD

X_____________________________

Dated: ______________________

<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 Generation
Portfolios, Inc. Portfolio, a Maryland Corporation, (the "Fund"), on behalf of
its Aetna ---------- Variable Portfolio 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 a Maryland corporation that is registered with the
Securities and Exchange Commission (the "Commission") as an open-end,
diversified, management investment Fund, under the Investment Company Act of
1940, as amended (the "1940 Act"); and

WHEREAS, the Fund has established the Aetna ---------- Variable Portfolio (the
"Portfolio"); and

WHEREAS, both the Adviser and the Subadviser are registered with the
Commission as investment advisers under the Investment Advisers Act of 1940,
as amended (the "Advisers Act") and both are in the business of acting as
investment advisers; and

WHEREAS, the Adviser has entered into an Investment Advisory Agreement with
the Fund, on behalf of the Portfolio, (the "Investment Advisory Agreement")
which appoints the Adviser as the investment adviser for the Portfolio; 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 set forth herein, the Adviser and the
Fund, on behalf of the Portfolio, hereby appoint the Subadviser to manage the
assets of the Portfolio as set forth below in Section II, under the
supervision of the Adviser and subject to the approval and direction of the
Fund's Board of Directors (the "Board"). The Subadviser hereby accepts such
appointment and agrees that it shall, for all purposes herein, undertake such
obligations as an independent contractor and not as an agent of the Adviser.
The Subadviser agrees, that except as required to carry out its duties under
this Agreement or otherwise expressly authorized, it has no authority to act
for or represent the Portfolio 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 Portfolio and shall continuously supervise the
investment and reinvestment of cash, securities and instruments or other
property comprising the assets of the Portfolio. In carrying out these
duties, the Subadviser shall:

1. select the securities to be purchased, sold or exchanged by the
Portfolio or otherwise represented in the Portfolio's investment
portfolio, place trades for all such securities and regularly
report thereon to the 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 Portfolio, 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 Portfolio, securities held by or under
consideration for the Portfolio, 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 Adviser's
performance of its duties hereunder; and

5. provide such financial support, administrative and other
services, such as preparation of financial data, determination of
the Portfolio'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
Portfolio. In carrying out its obligations under this Agreement and the
Investment Advisory Agreement, the Adviser shall:

<PAGE>

most current effective amendment of the registration statement
for the Portfolio, as filed with the Commission under the
Securities Act of 1933, 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 Portfolio
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 Portfolio;

7. oversee all matters relating to (i) the offer and sale of shares
of the Portfolio, 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 Portfolio, including
monitoring the corporate records of the Portfolio, maintaining
contact with the Board, preparing for, organizing and attending
meetings of the Board and the Portfolio'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:

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.

<PAGE>

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 Portfolio 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 Portfolio 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 Portfolio in
carrying out its obligations hereunder.

B. Representations and Warranties of the Adviser

The Adviser hereby represents and warrants to the Adviser as follows:

1. Due Incorporation and Organization. The Adviser is duly organized
and is in good standing under the laws of the State of
Connecticut and is fully authorized to enter into this Agreement
and carry out its duties and obligations hereunder.

2. Registration. The Adviser is registered as an investment adviser
with the Commission under the Advisers Act, and is registered or
licensed as an investment adviser under all of the laws of all
jurisdictions in which its activities require it to be so
registered or licensed. The Adviser shall maintain such
registration or license in effect at all times during the term of
this Agreement.

3. Regulatory Orders. The Adviser is not subject to any stop orders,
injunctions or other orders of any regulatory authority affecting
its ability to carry out the terms of this Agreement. The Adviser
will notify the Subadviser and the Portfolio immediately if any
such order is issued or if any proceeding is commenced that could
result in such an order.

<PAGE>

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 Portfolio in carrying out its
obligations hereunder.

C. Representations and Warranties of the Portfolio and the Fund

The Fund, on behalf of the Portfolio, hereby represents and warrants to
the Adviser as follows:

1. Due Incorporation and Organization. The Fund has been duly
incorporated as a Corporation under the laws of the State of
Maryland and it is authorized to enter into this Agreement and
carry out its obligations hereunder.

2. Registration. The Fund is registered as an investment Fund with
the Commission under the 1940 Act and shares of the Portfolio are
registered or qualified for offer and sale to the public under
the Securities Act of 1933, as amended (the "1933 Act") and all
applicable state securities laws. Such registrations or
qualifications, will be kept in effect during the term of this
Agreement.

IV. BROKER-DEALER RELATIONSHIPS

A. Portfolio Trades

The Subadviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio 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 Portfolio
giving consideration to the services and research provided and at
commission rates that are reasonable in relation to the benefits received
("best execution").

B. Selection of Broker-Dealers

<PAGE>

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 Portfolio 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 Portfolio, 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 Adviser shall at all
times conform to:

A. all applicable provisions of the 1940 Act and any rules and
regulations adopted thereunder;

B. all policies and procedures of the Portfolio as adopted by the Board
and as described in the Registration Statement;

C. the provisions of the Articles of Incorporation 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 Portfolio, 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
Portfolio. If this Agreement becomes effective subsequent to the first day

<PAGE>

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 Portfolio if the
expenses borne by the Portfolio exceed the expense limitations applicable
to the Portfolio imposed by the securities laws or regulations of any
jurisdiction in which the Portfolio shares are qualified for sale.
Accordingly, the Subadviser agrees that, if, for any fiscal year, the
total of all ordinary business expenses of the Portfolio, 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
Portfolio 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 Portfolio
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
Portfolio 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 Portfolio are not to be
deemed to be exclusive, and the Subadviser shall be free to render investment
advisory and administrative or other services to others (including other
investment companies) and to engage in other activities. It is understood and
agreed that officers or Directors of the Subadviser may serve as officers or
Directors of the Adviser or officers or Directors of the Portfolio; that
officers or Directors of the Adviser or officers or Directors of the Portfolio
may serve as officers or Directors of the Subadviser to the extent permitted
by law; and that the officers and Directors of the Subadviser are not

<PAGE>

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 Directors or (2) by the vote of a majority of the
Portfolio's outstanding voting securities (as defined in Section
2(a)(42) of the 1940 Act), and

B. by the affirmative vote of a majority of the Directors who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a Director of the Fund), by votes cast in
person at a meeting specifically called for such purpose.

XI. TERMINATION

This Agreement may be terminated:

A. at any time, without the payment of any penalty, by vote of the
Fund's Directors or by vote of a majority of the outstanding voting
securities of the Portfolio; or

B. by the Adviser, Fund, on behalf of the Portfolio, 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 Portfolio and the Adviser and shall
indemnify the Portfolio and the Adviser for any losses incurred by the
Portfolio, 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,

<PAGE>

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.

B. Liability of the Portfolio, the Shareholders and the Directors

A copy of the Articles of Incorporation of the Fund is on file with the
Department of Assessments and Taxation in the State of Maryland, and
notice is hereby given that this instrument is executed on behalf of the
Directors of the Fund as Directors and not individually and that the
obligations of this instrument are not binding upon any of the Directors
or shareholders individually but are binding only upon the assets and
property of the Portfolio. No provision of this Agreement shall be
construed to protect any Director 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 the following addresses:

if to the Fund, the Portfolio 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.

<PAGE>

XV. SERVICE MARK

The service mark of the Portfolio or Adviser, and the name "Aetna" have been
adopted by the Portfolio with the permission of Aetna Life and Casualty
Company and their continued use is subject to the right of Aetna Life and
Casualty to withdraw this permission in the event the Subadviser or another
subsidiary or affiliated corporation of Aetna Life and Casualty should not be
the investment adviser of the Portfolio.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in duplicate by their respective officers on the ______ day of
______________, 19__.

Aetna Life Insurance and Annuity Company

By:_____________________________
Attest:____________________ Name:___________________________
Title:__________________________

Aeltus Investment Management, Inc.

By:_____________________________
Attest:____________________ Name:___________________________
Title:__________________________

Aetna Generation Portfolios, Inc.
on behalf of its Portfolio
Aetna ---------- Variable Portfolio

By:_____________________________
Attest:____________________ Name:___________________________
Title:__________________________

<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 GENERATION
PORTFOLIOS, INC., a Maryland corporation (the "Fund"), on behalf of its Aetna
- ------ Variable Portfolio (the "Portfolio"), as of the date set forth below
the parties' signatures.

W I T N E S S E T H

WHEREAS, the Fund is registered with the Securities and Exchange Commission
(the "Commission") as an open-end, diversified, management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"); and

WHEREAS, the Fund has established the Portfolio; and

WHEREAS, the Adviser is registered with the Commission as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), and is in the business of acting as an investment adviser; and

WHEREAS, the Fund, on behalf of the Portfolio, and the Adviser desire to enter
into an agreement to provide for investment advisory and management services
for the Portfolio on the terms and conditions hereinafter set forth;

NOW THEREFORE, the parties agree as follows:

I. APPOINTMENT AND OBLIGATIONS OF THE ADVISER

Subject to the terms and conditions of this Agreement and the policies and
control of the Fund's Board of Directors (the "Board"), the Fund, on behalf of
the Portfolio, hereby appoints the Adviser to serve as the investment adviser
to the Portfolio, to provide the investment advisory services set forth below
in Section II. The Adviser agrees that, except as required to carry out its
duties under this Agreement or otherwise expressly authorized, it is acting as
an independent contractor and not as an agent of the Portfolio and has no
authority to act for or represent the Portfolio in any way.

II. DUTIES OF THE ADVISER

In carrying out the terms of this Agreement, the Adviser shall do the
following:

A. supervise all aspects of the operations of the Portfolio;

<PAGE>

B. select the securities to be purchased, sold or exchanged by the
Portfolio or otherwise represented in the Portfolio's investment
portfolio, place trades for all such securities and regularly report
thereon to the Board;

C. formulate and implement continuing programs for the purchase and sale
of securities and regularly report thereon to the Board;

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
Portfolio, securities held by or under consideration for the
Portfolio, 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 Portfolio's securities,
transfer agents, dividend paying agents, pricing services and other
service providers as are necessary to carry out the terms of this
Agreement;

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 Securities and Exchange Commission ("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.

<PAGE>

3. Best Efforts. The Adviser at all times shall provide its best
judgment and effort to the Portfolio in carrying out its
obligations hereunder.

B. Representations and Warranties of the Portfolio and the Fund,

The Fund, on behalf of the Portfolio, hereby represents and warrants to
the Adviser as follows:

1. Due Incorporation and Organization. The Fund has been duly
incorporated under the laws of the State of Maryland and it is
authorized to enter into this Agreement and carry out its
obligations hereunder.

2. Registration. The Fund is registered as an investment company
with the Commission under the 1940 Act and shares of the
Portfolio are registered or qualified for offer and sale to the
public under the Securities Act of 1933, as amended (the "1933
Act") and all applicable state securities laws. Such
registrations or qualifications will be kept in effect during
the term of this Agreement.

IV. DELEGATION OF RESPONSIBILITIES

A. Appointment of Subadviser

Subject to the approval of the Board and the shareholders of the
Portfolio, the Adviser may enter into a Subadvisory Agreement to engage a
subadviser (the "Subadviser") to the Adviser with respect to the
Portfolio.

B. Duties of Subadviser

Under a Subadvisory Agreement, the Subadviser may be delegated some or all
of the following duties of the Adviser:

1. determine which securities from which issuers shall be
purchased, sold or exchanged by the Portfolio or otherwise
represented in the Portfolio's investment portfolio, place
trades for all such securities and regularly report thereon to
the Board;

2. formulate and implement continuing programs for the purchase and
sale of the securities of such issuers and regularly report
thereon to the Board;

<PAGE>

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;

5. give instructions to the custodian and/or sub-custodian of the
Portfolio appointed by the Board, as to deliveries of
securities, transfers of currencies and payments of cash for the
Portfolio as required to carry out the investment activities of
the Portfolio, 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 Portfolio and the Subadviser's compliance program to ensure
that the Portfolio's assets are invested in compliance with the
Subadvisory Agreement and the Portfolio's investment objectives
and policies as adopted by the Board and described in the most
current effective amendment of the registration statement for
the Portfolio, as filed with the Commission under the Securities
Act of 1933, 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. 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
Portfolio's shares, the Fund's corporate governance, reports to
the Board, contracts with all third parties on behalf of the
Portfolio for services to the Portfolio, reports to regulatory
authorities and compliance with all applicable rules and
regulations affecting the Portfolio's operations.

<PAGE>

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 Portfolio with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to
execute portfolio transactions at prices that are advantageous to the
Portfolio and at commission rates that are reasonable in relation to the
benefits received.

B. Selection of Broker-Dealers

In selecting broker-dealers qualified to execute a particular transaction,
brokers or dealers may be selected who also provide brokerage and research
services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Portfolio 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
Portfolio who provide payment for expenses of the Portfolio. 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 Portfolio that is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage 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 Portfolio to determine if the commissions paid over
representative periods of time were reasonable in relation to the benefits
received.

VI. CONTROL BY THE BOARD

Any investment program undertaken by the Adviser pursuant to this Agreement,
as well as any other activities undertaken by the Adviser on behalf of the
Portfolio pursuant thereto, shall at all times be subject to any directives of
the Board.

VII. COMPLIANCE WITH APPLICABLE REQUIREMENTS

In carrying out its obligations under this Agreement, the Adviser shall at all
times conform to:

<PAGE>

A. all applicable provisions of the 1940 Act;

B. the provisions of the registration statement of the Fund, as the same
may be amended from time to time, under the 1933 Act and the 1940 Act;

C. the provisions of the Fund's Articles of Incorporation, as amended;

D. the provisions of the Bylaws of the Fund, 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 Fund, on behalf of the Portfolio, shall pay to the
Adviser an annual fee, payable monthly, equal to .60% of the average daily net
assets of the Portfolio. Except as hereinafter set forth, compensation under
this Agreement shall be calculated and accrued daily at the rate of 1/365 of
.60% of the daily net assets of the Portfolio. If this Agreement becomes
effective subsequent to the first day of a month or terminates before the last
day of a month, compensation for that part of the month this Agreement is in
effect shall be prorated in a manner consistent with the calculation of the
fees set forth above. Subject to the provisions of Section X hereof, payment
of the Adviser's compensation for the preceding month shall be made as
promptly as possible. For so long as a Subadvisory Agreement is in effect, the
Portfolio acknowledges on behalf of the Portfolio that the Adviser will pay to
the Subadviser, as compensation for acting as Subadviser to the Portfolio, the
fees specified in the Subadvisory Agreement.

IX. EXPENSES

The expenses in connection with the management of the Portfolio shall be
allocated between the Portfolio and the Adviser as follows:

A. Expenses of the Adviser

The Adviser shall pay:

1. the salaries, employment benefits and other related costs and
expenses of those of its personnel engaged in providing
investment advice to the Portfolio, including without
limitation, office space, office equipment, telephone and
postage costs;

2. all fees and expenses of all directors, 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;

<PAGE>

B. Expenses of the Portfolio

The Portfolio shall pay:

1. investment advisory fees pursuant to this Agreement;

2. brokers' commissions, issue and transfer taxes or other
transaction fees payable in connection with any transactions in
the securities in the Portfolio's investment portfolio or other
investment transactions incurred in managing the Portfolio's
assets, including portions of commissions that may be paid to
reflect brokerage research services provided to the Adviser;

3. fees and expenses of the Portfolio's independent accountants and
legal counsel and the independent Directors' legal counsel;

4. fees and expenses of any administrator, transfer agent,
custodian, dividend, accounting, pricing or disbursing agent of
the Portfolio;

5. interest and taxes;

6. fees and expenses of any membership in the Investment Company
Institute or any similar organization in which the Board deems
it advisable for the Fund to maintain membership;

7. insurance premiums on property or personnel (including officers
and directors) of the Fund which benefit the Portfolio;

8. all fees and expenses of the Company's directors, who are not
"interested persons" (as defined in the 1940 Act) of the Fund or
the Adviser;

9. expenses of preparing, printing and distributing proxies, proxy
statements, prospectuses and reports to shareholders of the
Portfolio, except for those expenses paid by third parties in
connection with the distribution of Portfolio shares and all
costs and expenses of shareholders' meetings;

10. all expenses incident to the payment of any dividend,
distribution, withdrawal or redemption, whether in shares of the
Portfolio or in cash;

11. costs and expenses of promoting the sale of shares in the
Portfolio, including preparing prospectuses and reports to
shareholders of the Portfolio, provided, nothing in this
Agreement shall prevent the charging of such costs to third
parties involved in the distribution and sale of Portfolio
shares;

12. fees payable by the Portfolio to the Commission or to any state
securities regulator or other regulatory authority for the
registration of shares of the Portfolio in any state or
territory of the United States or of the District of Columbia;

<PAGE>

13. all costs attributable to investor services, administering
shareholder accounts and handling shareholder relations,
(including, without limitation, telephone and personnel
expenses), which costs may also be charged to third parties by
the Adviser; and

14. any other ordinary, routine expenses incurred in the management
of the Portfolio's assets, and any nonrecurring or extraordinary
expenses, including organizational expenses, litigation
affecting the Portfolio and any indemnification by the Fund of
its officers, directors or agents.

X. EXPENSE LIMITATION

If, for any fiscal year, the total of all ordinary business expenses payable
by the Portfolio, 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 Portfolio 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 Portfolio 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
Portfolio that are not required by this Agreement. Such services will be
performed on behalf of the Portfolio and the Adviser may receive from the
Portfolio such reimbursement for costs or reasonable compensation for such
services as may be agreed upon between the Adviser and the Board on a finding
by the Board that the provision of such services by the Adviser is in the best
interests of the Portfolio and its shareholders. Payment or assumption by the
Adviser of any Portfolio expense that the Adviser is not otherwise required to
pay or assume under this Agreement shall not relieve the Adviser of any of its
obligations to the Portfolio nor obligate the Adviser to pay or assume any
similar Portfolio expense on any subsequent occasions. 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 Portfolio and the services
(including applicable office space, facilities and equipment) of any of the
personnel operating under the direction of such principal financial officer;

<PAGE>

(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
Portfolio; and (c) such other administrative services as may be furnished from
time to time by the Adviser to the Fund on the Portfolio at the request of the
Board.

XII. NONEXCLUSIVITY

The services of the Adviser to the Portfolio are not to be deemed to be
exclusive, and the Adviser shall be free to render investment advisory or
other services to others (including other investment companies) and to engage
in other activities, so long as its services under this Agreement are not
impaired thereby. It is understood and agreed that officers and directors of
the Adviser may serve as officers or directors of the Fund, and that officers
or directors of the Fund may serve as officers or directors of the Adviser to
the extent permitted by law; and that the officers and directors of the
Adviser are not prohibited from engaging in any other business activity or
from rendering services to any other person, or from serving as partners,
officers, directors or trustees of any other firm or trust, including other
investment companies.

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 Portfolio'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 Board, or

2. by the vote of a majority of the Portfolio's outstanding voting
securities (as defined in Section 2(a)(42) of the 1940 Act), and

B. by the affirmative vote of a majority of the directors who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a director of the Fund), by votes cast in
person at a meeting specifically called for such purpose.

<PAGE>

XV. TERMINATION

This Agreement may be terminated at any time, without the payment of any
penalty, by vote of the Board or by vote of a majority of the Portfolio's
outstanding voting securities (as defined in Section 2(a)(42) of the 1940
Act), or by the Adviser, on sixty (60) days' written notice to the other
party. The notice provided for herein may be waived by the party required to
be notified. This Agreement shall automatically terminate in the event of its
"assignment", as that term is defined in Section 2(a)(4) of the 1940 Act.

XVI. LIABILITY

The Adviser shall be liable to the Fund and shall indemnify the Fund for any
losses incurred by the Fund, whether in the purchase, holding or sale of any
security or otherwise, to the extent that such losses resulted from an act or
omission on the part of the Adviser or its officers, directors or employees,
that is found to involve willful misfeasance, bad faith or negligence, or
reckless disregard by the Adviser of its duties under this Agreement, in
connection with the services rendered by the Adviser hereunder.

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, the Portfolio or the Adviser:

151 Farmington Avenue, RE4C
Hartford, Connecticut 06156
Fax number: 860/273-8340

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 Portfolio 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 Portfolio.

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:_____________________________
Attest:____________________ Name:___________________________
Title:__________________________

AETNA GENERATION PORTFOLIOS, INC.
on behalf of its
Aetna ------ Variable Portfolio

By:_____________________________
Attest:____________________ Name:___________________________
Title:__________________________

<PAGE>

EXHIBIT C - 1

INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT is made by and between AETNA GENERATION PORTFOLIOS, INC., a
Maryland corporation (the "Company"), on behalf of its Aetna Ascent Variable
Portfolio 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 the Aetna Ascent Variable Portfolio
(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 Directors (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.

<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 Incorporation and Organization. The Company has been duly
incorporated under the laws of the State of Maryland and it is
authorized to enter into this Agreement and carry out its 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

<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

<PAGE>

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 Articles of Incorporation, 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 .50% 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 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.

<PAGE>

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 directors 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 directors who
are not "interested persons" (as defined in the 1940 Act) of the
Company or the Adviser;

7. Shareholders' meeting expenses;

<PAGE>

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,
directors 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 directors) 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 portion of the then
current fiscal year which shall have elapsed at the date of termination of
this Agreement.

<PAGE>

XI. ADDITIONAL SERVICES

Upon the request of the Board of Directors, 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 directors of the Company, and that
officers or directors 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.

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.

<PAGE>

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 directors 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 directors who are not
parties to this Agreement or interested persons of a party to this
Agreement (other than as a director 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 directors 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 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, negligence or
reckless disregard of obligations or duties hereunder on the part of the
Adviser or any officer, 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, directors, employees or agents in
alleged violation of applicable federal, state or foreign laws, rules or
regulations.

<PAGE>

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.

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in duplicate by their respective officers on the 15th day of
June, 1995.

AETNA GENERATION
PORTFOLIOS, INC.
on behalf of its Aetna Ascent
Attest: Variable Portfolio series

/s/Julie E. Rockmore By: /s/Shaun P. Mathews
- --------------------- ---------------------------
Name: Shaun P. Mathews
Title: President

AETNA LIFE INSURANCE AND
ANNUITY COMPANY
Attest:
By: /s/James C. Hamilton
---------------------------
Name: James C. Hamilton
Title: Vice President and
/s/Susan E. Schechter Treasurer
- ---------------------

<PAGE>

EXHIBIT C - 2

INVESTMENT ADVISORY AGREEMENT

THIS AGREEMENT is made by and between AETNA GENERATION PORTFOLIOS, INC., a
Maryland corporation (the "Company"), on behalf of its Aetna Crossroads
Variable Portfolio 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 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 the Aetna Crossroads Variable
Portfolio (the "Fund");

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

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>

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;

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.

3. Best Efforts. The Adviser at all times shall provide its best
judgment and effort to the Fund in carrying out its obligations
hereunder.

<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 Incorporation and Organization. The Company has been duly
incorporated under the laws of the State of Maryland and it is
authorized to enter into this Agreement and carry out its terms.

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.