1
EXHIBIT (d)(ix)
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of August 21, 2001 by
and between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and AMERICAN CENTURY INVESTMENT MANAGEMENT, INC., a Delaware
corporation (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
WHEREAS, the Trust is registered under the Investment Company Act of
1940, as amended (the "1940 Act"), as an open-end management investment company
and may issue shares of beneficial interest, par value $.01 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 an "investment adviser" as defined under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser desires to retain the Subadviser to furnish
investment advisory services to the investment portfolio or portfolios 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. (a) The Adviser hereby engages the
services of the Subadviser in furtherance of the Advisory 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 a portion of the assets of each Portfolio listed on Schedule A
attached hereto. The Subadviser will determine, in its discretion and subject to
the oversight and review of the Adviser, the securities 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 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, and
limitations for the Portfolio(s) set forth in the Trust's current prospectus and
statement of additional information, and (b) applicable laws
2
and regulations. The Subadviser shall manage the portion of the assets of a
Portfolio allocated to it as if it was a separate operating portfolio and the
provisions, representations and warranties of this Section 1 of the Subadvisory
Agreement shall apply only the portion of assets of a Portfolio managed by the
Subadviser.
The Subadviser represents and warrants to the Adviser that the
portion of assets allocated to it of each Portfolio will at all times be
operated and managed in compliance with all applicable federal and state laws,
including securities, commodities and banking laws, governing its operations and
investments. Without limiting the foregoing, the Subadviser represents and
warrants that it will manage the portion of assets allocated to it of each
Portfolio in compliance with (a) the diversification requirements specified in
the Internal Revenue Services's regulations under Section 817(h) of the Internal
Revenue Code of 1986, as amended (the "Code"); (b) the provisions of the 1940
Act and rules adopted thereunder; (c) applicable state insurance laws, as may be
notified by the Adviser; (d) 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 (e) the policies and procedures as adopted by the
Trustees of the Trust. The Adviser agrees that it, and not the Subadviser, shall
be solely responsible for insuring that each Portfolio set forth in Schedule A
managed by the Subadviser (i) qualifies as a "regulated investment company"
under Subchapter M, chapter 1 of the Code; and (ii) complies with any limits in
its current prospectus or statement of additional information concerning
concentration of investments or the amount of assets that may be invested by the
Portfolio in any one or more securities. Should the Adviser determine that the
Portfolio is not in compliance with Subchapter M, chapter 1 of the Code, the
Subadviser agrees to follow instructions of the Adviser to remedy such
non-compliance. 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 variable annuity contracts which offer the Portfolio(s) 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 information will, when the Registration Statement becomes
effective, conform in all material respects to the requirements of the
Securities Act of 1933, as amended (the "1933 Act"), and the rules and
regulations of the Securities and Exchange Commission (the "Commission")
thereunder and the 1940 Act and the information provided by the Subadviser 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.
2
3
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. The Subadviser is responsible
for decisions to buy or sell securities and other investments for a portion of
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 broker1 1 -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 1940 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; provided, however, that for each
Portfolio the average annual percentage of portfolio transactions which are
engaged in with the Subadviser's affiliates, the Adviser and its affiliates or
any other subadviser to the Trust and its respective affiliates, may not exceed
25% of the Portfolio's total transactions in securities and other investments
during the Trust's fiscal year. 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, in accordance
with the policies contained in the Compliance Handbook, as amended from time to
time, which has been provided to the Subadviser. 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
3
4
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.
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
portion of 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.
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. CERTAIN RECORDS. The Subadviser hereby undertakes and agrees
to maintain, in the form and for the period required by Rule 31a-2 under the
1940 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 the 1940 Act. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
1940
4
5
Act which are prepared or maintained by the Subadviser on behalf of the Trust
are the property of the Trust and will be surrendered promptly to the Trust or
the Adviser on request.
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 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.
8. 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, any derivative thereof or logo associated
with such name, or any other information about the Subadviser in any advertising
or promotional materials without the prior approval of the Subadviser, which
approval shall not be unreasonably withheld. The Adviser shall provide all such
materials to the Subadviser for approval prior to use and the Subadviser will
review and respond with any comments as soon as is reasonably practicable. Upon
the termination of this Agreement, the Trust and the Adviser shall immediately
cease to use such name, derivative logo or other information.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE ADVISER. The
Adviser represents, warrants and covenants as follows:
(a) The Adviser is a duly registered investment adviser under the
Advisers Act and a duly registered investment adviser in all states in which the
Adviser is required to be registered.
(b) The appointment of the Subadviser has been duly authorized by
all necessary parties.
(c) The shares of the Portfolio are registered in accordance with
the terms of the 1940 Act and the 1933 Act and are or will be registered or
qualified for sale in each jurisdiction where the failure to so register or
qualify would have a material adverse effect on the Trust or the Portfolio.
(d) The Registration Statement for the Portfolio contains, and any
amendment will contain, no untrue statement of a material fact and does not, and
any amendments will not, omit any statement of a material fact which is required
to be stated therein or necessary to make the statements contained therein not
misleading.
(e) The Adviser will promptly notify the Subadviser of any
proposed change in investment objective or strategy of the Portfolio which is
approved by the Trust's Board of Trustees.
10. 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
5
6
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
1940 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/trustees, 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 (i) the Subadviser's rendering of services under this
Agreement; (ii) any wrongful act or breach of this Agreement by the Adviser; and
(iii) any conduct of the Adviser and/or any other subadviser with respect to the
portion of a Portfolio's assets not allocated to the Subadviser.
(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 officers,
directors/trustees, agents, employees, controlling persons and shareholders may
become subject under the 1940 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 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) reasonable acts of the Subadviser which result from a failure of the
Adviser to provide accurate and current information with respect to any records
maintained by the Adviser or any other subadviser to a Portfolio, which records
are not also maintained by or otherwise available to the Subadviser upon
reasonable request.
11. 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.
6
7
12. 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 0000 Xxx) 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; provided, however, that this Agreement may not be
terminated by the Subadviser unless another subadvisory agreement has been
approved by the Trust in accordance with the 1940 Act, or after six months'
written notice, whichever is earlier. 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 0000 Xxx) 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.
13. 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.
14. 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 1940 Act.
15. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Delaware and the applicable provisions of the 1940
Act. To the extent the applicable laws of the State of Delaware, or any of the
provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
16. 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.
17. 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
7
8
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.
18. 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:
Subadviser: American Century Investment Management, Inc.
0000 Xxxx Xxxxxx
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxx
Vice President and Assistant
General Counsel
Adviser: SunAmerica Asset Management Corp.
The SunAmerica Center
000 Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx
Senior Vice President and
General Counsel
with a copy to: SunAmerica Inc.
0 XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Secretary, Seasons Series Trust
8
9
IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Agreement as of the date first above
written.
SUNAMERICA ASSET MANAGEMENT CORP.
By:
---------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
AMERICAN CENTURY INVESTMENT MANAGEMENT, INC.
By:
---------------------------------
Name:
Title:
9
10
SCHEDULE A
ANNUAL FEE
(AS A PERCENTAGE OF THE AVERAGE DAILY NET ASSETS THE
PORTFOLIO(S) SUBADVISER MANAGES IN THE PORTFOLIO)
Focus Value Portfolio
10
