Exhibit (d)(vii)
[FORM OF]
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of February 14, 2005 by and between
AIG SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"),
and CREDIT SUISSE ASSET MANAGEMENT, LLC, a Delaware limited liability company
(the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Seasons Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of January 1, 1999, as amended from time to time (the
"Advisory Agreement"), pursuant to which the Adviser has agreed to provide
investment management, advisory and administrative services to the Trust, and
pursuant to it which the Adviser may delegate one or more of its duties to a
subadviser pursuant to a written subadvisory agreement; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act"), as an open-end management investment company and may
issue shares of beneficial interest, no par value per share, in separately
designated portfolios representing separate funds with their own investment
objectives, policies and purposes; and
WHEREAS, the Subadviser is engaged in the business of rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Adviser desires to retain the Subadviser to furnish
investment advisory services to the investment portfolio(s) of the Trust listed
on Schedule A attached hereto (the "Portfolio(s)"), and the Subadviser is
willing to furnish such services;
NOW, THEREFORE, it is hereby agreed between the parties hereto as follows:
1. DUTIES OF THE SUBADVISER. The Adviser hereby engages the services of
the Subadviser in furtherance of its Investment Advisory and Management
Agreement with the Trust. Pursuant to this Subadvisory Agreement and subject to
the oversight and review of the Adviser, the Subadviser will manage the
investment and reinvestment of the assets of each Portfolio. The Subadviser will
determine, in its discretion and subject to the oversight and review of the
Adviser, the securities and other investments to be purchased or sold, will
provide the Adviser with records concerning its activities which the Adviser or
the Trust is required to maintain, and will render regular reports to the
Adviser and to officers and Trustees of the Trust concerning its discharge of
the foregoing responsibilities. The Subadviser, as agent and attorney-in-fact of
the Trust, may, when it deems appropriate and without prior consultation with
the Adviser, (a) buy, sell, exchange, convert and otherwise trade in any stocks,
bonds and other securities including money market instruments, whether the
issuer is organized in the United
States or outside the United States, (b) place orders for the execution of such
securities transactions with or through such brokers, dealers or issuers as the
Subadviser may select and (c) purchase, sell, exchange or convert foreign
currency in the spot or forward markets as necessary to facilitate transactions
in international securities for the Portfolio(s). In addition, the custodian
shall provide the Subadviser with daily reports regarding the cash levels in the
Portfolio. The Subadviser shall discharge the foregoing responsibilities subject
to the control of the officers and the Trustees of the Trust and in compliance
with such policies as the Trustees of the Trust may from time to time establish,
and in compliance with (a) the objectives, policies, restrictions and
limitations for the Portfolio(s) as set forth in the Trust's current prospectus
and statement of additional information; and (b) applicable laws and
regulations.
The Subadviser represents and warrants to the Adviser that each
Portfolio will at all times be operated and managed (a) in compliance with all
applicable federal and state laws, including securities, commodities and banking
laws, governing its operations and investments; (b) so as not to jeopardize
either the treatment of the variable annuity contracts which offer the
Portfolio(s) (the "Contracts") as annuity contracts for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"), or the eligibility of the
Contracts to qualify for sale to the public in any state where they may
otherwise be sold; and (c) to minimize any taxes and/or penalties payable by the
Trust or the Portfolio(s). Without limiting the foregoing, the Subadviser
represents and warrants that it will manage each Portfolio in compliance with
(a) the applicable provisions of Subchapter M, chapter 1 of the Code
("Subchapter M") for each Portfolio to be treated as a "regulated investment
company" under Subchapter M; (b) the diversification requirements specified in
the Internal Revenue Service's regulations under Section 817(h) of the Code; (c)
the provisions of the Act and rules adopted thereunder; (d) applicable state
insurance laws; (e) the objectives, policies, restrictions and limitations for
the Portfolio(s) as set forth in the Trust's current prospectus and statement of
additional information as most recently provided by the Adviser to the
Subadviser; and (f) the policies and procedures as adopted by the Trustees of
the Trust. The Subadviser shall furnish information to the Adviser, as
requested, for purposes of compliance with the distribution requirements
necessary to avoid payment of any excise tax pursuant to Section 4982 of the
Code.
The Subadviser further represents and warrants that to the extent
that any statements or omissions made in any Registration Statement for the
Contracts or shares of the Trust, or any amendment or supplement thereto, are
made in reliance upon and in conformity with information furnished by the
Subadviser expressly for use therein, such Registration Statement and any
amendments or supplements thereto will, when they become effective, conform in
all material respects to the requirements of the Securities Act of 1933 and the
rules and regulations of the Commission thereunder (the "1933 Act") and the Act
and will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
The Subadviser agrees: (a) to maintain a level of errors and
omissions or professional liability insurance coverage that, at all times during
the course of this Agreement, is appropriate given the nature of its business,
and (b) from time to time and upon reasonable request, to supply evidence of
such coverage to the Adviser.
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The Subadviser accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
2. PORTFOLIO TRANSACTIONS. (a) The Subadviser is responsible for decisions
to buy or sell securities and other investments for the assets of each
Portfolio, broker-dealers and futures commission merchants' selection, and
negotiation of brokerage commission and futures commission merchants' rates. As
a general matter, in executing portfolio transactions, the Subadviser may employ
or deal with such broker-dealers or futures commission merchants as may, in the
Subadviser's best judgement, provide prompt and reliable execution of the
transactions at favorable prices and reasonable commission rates. In selecting
such broker-dealers or futures commission merchants, the Subadviser shall
consider all relevant factors including price (including the applicable
brokerage commission, dealer spread or futures commission merchant rate), the
size of the order, the nature of the market for the security or other
investment, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer or futures commission merchant
involved, the quality of the service, the difficulty of execution, the execution
capabilities and operational facilities of the firm involved, and, in the case
of securities, the firm's risk in positioning a block of securities. Subject to
such policies as the Trustees may determine and consistent with Section 28(e) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Subadviser
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of the Subadviser's
having caused a Portfolio to pay a member of an exchange, broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would have
charged for effecting that transaction, if the Subadviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such member of an exchange,
broker or dealer viewed in terms of either that particular transaction or the
Subadviser's overall responsibilities with respect to such Portfolio and to
other clients as to which the Subadviser exercises investment discretion. In
accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder, and
subject to any other applicable laws and regulations including Section 17(e) of
the Act and Rule 17e-1 thereunder, the Subadviser may engage its affiliates, the
Adviser and its affiliates or any other subadviser to the Trust and its
respective affiliates, as broker-dealers or futures commission merchants to
effect portfolio transactions in securities and other investments for a
Portfolio. The Subadviser will promptly communicate to the Adviser and to the
officers and the Trustees of the Trust such information relating to portfolio
transactions as they may reasonably request. To the extent consistent with
applicable law, the Subadviser may aggregate purchase or sell orders for the
Portfolio with contemporaneous purchase or sell orders of other clients of the
Subadviser or its affiliated persons. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadviser in the manner the Subadviser
determines to be equitable and consistent with its and its affiliates' fiduciary
obligations to the Portfolio and to such other clients. The Adviser hereby
acknowledges that such aggregation of orders may not result in more favorable
pricing or lower brokerage commissions in all instances.
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(b) Notwithstanding Section 2(a) above, for such purposes as obtaining
investment research products and services, covering fees and expenses, the
Adviser may direct the Subadviser to effect a specific percentage of a
Portfolio's transactions in securities and other investments to certain
broker-dealers and futures commission merchants. In designating the use of a
particular broker-dealer or futures commission merchant, the Adviser and
Subadviser acknowledge:
(1) All brokerage transactions are subject to best execution. As
such, Subadviser will use its best efforts to direct non-risk
commission transactions to a particular broker-dealer or
futures commission merchant designated by the Adviser provided
that the Subadviser obtains best execution;
(2) Such direction may result in the Subadviser paying a higher
commission, depending upon the Subadviser's arrangements with
the particular broker-dealer or futures commission merchant,
or such other factors as market conditions, share values,
capabilities of the particular broker-dealer or futures
commission merchant, etc.;
(3) If the Subadviser directs payments of an excessive amount of
commissions, the executions may not be accomplished as
rapidly. In addition, the Subadviser may forfeit the possible
advantage derived from the aggregation of multiple orders as a
single "bunched" transaction where Subadviser would, in some
instances, be in a better position to negotiate commissions;
and
(4) Subadviser does not make commitments to allocate fixed or
definite amounts of commissions to brokers. As such the
Subadviser may be unable to fulfill the Adviser's request for
direction due to the reasons stated above.
3. COMPENSATION OF THE SUBADVISER. The Subadviser shall not be entitled to
receive any payment from the Trust and shall look solely and exclusively to the
Adviser for payment of all fees for the services rendered, facilities furnished
and expenses paid by it hereunder. As full compensation for the Subadviser under
this Agreement, the Adviser agrees to pay to the Subadviser a fee at the annual
rates set forth in Schedule A hereto with respect to the assets managed by the
Subadviser for each Portfolio listed thereon. Such fee shall be accrued daily
and paid monthly as soon as practicable after the end of each month (i.e., the
applicable annual fee rate divided by 365 applied to each prior days' net assets
in order to calculate the daily accrual). For purposes of calculating the
Subadviser's fee, the average daily net asset value of a Portfolio shall mean
the average daily net assets for which the Subadviser actually provides advisory
services, and shall be determined by taking an average of all determinations of
such net asset value during the month. If the Subadviser shall provide its
services under this Agreement for less than the whole of any month, the
foregoing compensation shall be prorated.
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4. OTHER SERVICES. At the request of the Trust or the Adviser, the
Subadviser in its discretion may make available to the Trust, office facilities,
equipment, personnel and other services in order to facilitate meetings or other
similar functions. Such office facilities, equipment, personnel and services
shall be provided for or rendered by the Subadviser and billed to the Trust or
the Adviser at the Subadviser's cost.
5. REPORTS. The Trust, the Adviser and the Subadviser agree to furnish to
each other, if applicable, current prospectuses, statements of additional
information, proxy statements, reports of shareholders, certified copies of
their financial statements, and such other information with regard to their
affairs and that of the Trust as each may reasonably request.
6. STATUS OF THE SUBADVISER. The services of the Subadviser to the Adviser
and the Trust are not to be deemed exclusive, and the Subadviser shall be free
to render similar services to others so long as its services to the Trust are
not impaired thereby. The Subadviser shall be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
7. ADVERTISING. Subadviser shall not provide or in any way distribute any
sales or advertising materials, whether or not related to the Trust, to any
employee or representative of AIG SunAmerica Capital Services, Inc. ("SACS") or
its affiliates, including wholesaling personnel, unless such material has been
received and approved, in writing, by the Adviser.
8. PROXY VOTING. The Adviser will vote proxies relating to the Portfolio's
securities. The Adviser will vote all such proxies in accordance with such proxy
voting guidelines and procedures adopted by the Board of Trustees. The Adviser
may, on certain non-routine matters, consult with the Subadviser before voting
proxies relating to the Portfolio's securities. The Adviser will instruct the
custodian and other parties providing services to the Trust promptly to forward
to the proxy voting service copies of all proxies and shareholder communications
relating to securities held by each Portfolio (other than materials relating to
legal proceedings).
9. CERTAIN RECORDS. The Subadviser hereby undertakes and agrees to
maintain, in the form and for the period required by Rule 31a-2 under the Act,
all records relating to the investments of the Portfolio(s) that are required to
be maintained by the Trust pursuant to the requirements of Rule 31a-1 of that
Act. Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 promulgated under the Act which are
prepared or maintained by the Subadviser on behalf of the Trust.
The Subadviser agrees that all accounts, books and other records
maintained and preserved by it as required hereby shall be subject at any time,
and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, the Trust's auditors,
the Trust or any representative of the Trust, the Adviser, or any governmental
agency or other instrumentality having regulatory authority over the Trust.
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10. REFERENCE TO THE SUBADVISER. Neither the Trust nor the Adviser or any
affiliate or agent thereof shall make reference to or use the name of the
Subadviser or any of its affiliates in any advertising or promotional materials
without the prior approval of the Subadviser, which approval shall not be
unreasonably withheld.
11. LIABILITY OF THE SUBADVISER. (a) In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties ("disabling conduct") hereunder on the part of the Subadviser (and its
officers, directors/trustees, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Subadviser) the
Subadviser shall not be subject to liability to the Adviser (and its officers,
directors/trustees, agents, employees, controlling persons, shareholders and any
other person or entity affiliated with the Adviser) or to the Trust (and its
officers, directors/trustees, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Trust) for any
act or omission in the course of, or connected with, rendering services
hereunder, including without limitation, any error of judgment or mistake of law
or for any loss suffered by any of them in connection with the matters to which
this Agreement relates, except to the extent specified in Section 36(b) of the
Act concerning loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services. Except for such disabling conduct, the
Adviser shall indemnify the Subadviser (and its officers, directors, partners,
agents, employees, controlling persons, shareholders and any other person or
entity affiliated with the Subadviser) from any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses)
arising from Subadviser's rendering of services under this Agreement.
(b) The Subadviser agrees to indemnify and hold harmless the Adviser
(and its officers, directors/trustees, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Adviser) and/or
the Trust (and its officers, directors/trustees, agents, employees, controlling
persons, shareholders and any other person or entity affiliated with the Trust)
against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which the Adviser and/or the
Trust and their affiliates or such directors/trustees, officers or controlling
person may become subject under the Act, the 1933 Act, under other statutes,
common law or otherwise, which arise from the Subadviser's disabling conduct,
including but not limited to any material failure by the Subadviser to comply
with the provisions and representations and warranties set forth in Section 1 of
this Agreement; provided, however, that in no case is the Subadviser's indemnity
in favor of any person deemed to protect such other persons against any
liability to which such person would otherwise be subject by reasons of willful
misfeasance, bad faith, or gross negligence in the performance of his, her or
its duties or by reason of his, her or its reckless disregard of obligations and
duties under this Agreement.
(c) The Subadviser shall not be liable to the Adviser, its officers,
directors, agents, employees, controlling persons or shareholders or to the
Trust or its shareholders for (i) any acts of the Adviser or any other
subadviser to the Portfolio with respect to the portion of the assets of a
Portfolio not managed by Subadviser and (ii) acts of the Subadviser which result
from or are based upon acts of the Adviser, including, but not limited to, a
failure of the Adviser to provide accurate and current information with respect
to any records maintained by Adviser or
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any other subadviser to a Portfolio, which records are not also maintained by
the Subadviser or, to the extent such records relate to the portion of the
assets managed by the Subadviser, otherwise available to the Subadviser upon
reasonable request. The Adviser agrees that Subadviser shall manage the portion
of the assets of a Portfolio allocated to it as if it was a separate operating
portfolio and shall comply with subsections (a) and (b) of Section 1 of this
Subadvisory Agreement (including, but not limited to, the investment objectives,
policies and restrictions applicable to a Portfolio and qualifications of a
Portfolio as a regulated investment company under the Code) only with respect to
the portion of assets of a Portfolio allocated to Subadviser. The Adviser shall
indemnify the Indemnified Parties from any and all losses, claims, damages,
liabilities or litigation (including reasonalbe legal and other expenses)
arising from the conduct of the Adviser, the Trust and any other subadviser with
respect to the portion of a Portfolio's assets not allocated to Subadviser and
with respect to any other portfolio of the Trust.
12. PERMISSIBLE INTERESTS. Trustees and agents of the Trust are or may be
interested in the Subadviser (or any successor thereof) as directors/trustees,
partners, officers, or shareholders, or otherwise; directors/trustees, partners,
officers, agents, and shareholders of the Subadviser are or may be interested in
the Trust as trustees, or otherwise; and the Subadviser (or any successor) is or
may be interested in the Trust in some manner.
13. TERM OF THE AGREEMENT. This Agreement shall continue in full force and
effect with respect to each Portfolio until two years from the date hereof, and
from year to year thereafter so long as such continuance is specifically
approved at least annually (i) by the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio voting separately from any other
series of the Trust.
With respect to each Portfolio, this Agreement may be terminated at
any time, without payment of a penalty by the Portfolio or the Trust, by vote of
a majority of the Trustees, or by vote of a majority of the outstanding voting
securities (as defined in the Act) of the Portfolio, voting separately from any
other series of the Trust, or by the Adviser, on not less than 30 nor more than
60 days' written notice to the Subadviser. With respect to each Portfolio, this
Agreement may be terminated by the Subadviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser and the Trust. The
termination of this Agreement with respect to any Portfolio or the addition of
any Portfolio to Schedule A hereto (in the manner required by the Act) shall not
affect the continued effectiveness of this Agreement with respect to each other
Portfolio subject hereto. This Agreement shall automatically terminate in the
event of its assignment (as defined by the Act).
This Agreement will also terminate in the event that the Advisory
Agreement by and between the Trust and the Adviser is terminated.
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14. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
15. AMENDMENTS. This Agreement may be amended by mutual consent in
writing, but the consent of the Trust must be obtained in conformity with the
requirements of the Act.
16. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York and the applicable provisions of the Act. To
the extent the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Act, the
latter shall control.
17. PERSONAL LIABILITY. The Declaration of the Trust establishing the
Trust (the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, and, in accordance with that Declaration, no
Trustee, shareholder, officer, employee or agent of the Trust shall be held to
any personal liability, nor shall resort be had to their private property for
satisfaction of any obligation or claim or otherwise in connection with the
affairs of the Trust, but the "Trust Property," as defined in the Declaration,
only shall be liable.
18. SEPARATE SERIES. Pursuant to the provisions of the Declaration, each
Portfolio is a separate series of the Trust, and all debts, liabilities,
obligations and expenses of a particular Portfolio shall be enforceable only
against the assets of that Portfolio and not against the assets of any other
Portfolio or of the Trust as a whole.
19. CONFIDENTIALITY. The Subadviser will not disclose or use any records
or information obtained pursuant to this Agreement in any manner whatsoever
except as expressly authorized in this Agreement or as reasonably required to
execute transactions on behalf of the Portfolio, and will keep confidential any
non-public information obtained directly as a result of this service
relationship, and the Subadviser shall disclose such non-public information only
if the Adviser or the Board of Trustees has authorized such disclosure by prior
written consent, or if such information is or hereafter otherwise is known by
the Subadviser or has been disclosed, directly or indirectly, by the Adviser or
the Trust to others becomes ascertainable from public or published information
or trade sources, or if such disclosure is expressly required or requested by
applicable federal or state regulatory authorities, or to the extent such
disclosure is reasonably required by auditors or attorneys of the Subadviser in
connection with the performance of their professional services or as may
otherwise be contemplated by this Agreement. Notwithstanding the foregoing, the
Subadviser may disclose the total return earned by the Portfolio and may include
such total return in the calculation of composite performance information.
20. NOTICES. All notices shall be in writing and deemed properly given
when delivered or mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
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Subadviser: Credit Suisse Asset Management, LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: General Counsel
Adviser: AIG SunAmerica Asset Management Corp.
0000 Xxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx
Vice President and Associate
General Counsel
with a copy to: AIG Retirement Services, Inc.
0 XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Secretary of Seasons Series Trust
IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Agreement as of the date first above
written.
AIG SUNAMERICA ASSET MANAGEMENT CORP.
By: ______________________________
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
CREDIT SUISSE ASSET MANAGEMENT. LLC
By: ______________________________
Name: Xxxxxx Plump
Title: Managing Driector
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