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EXHIBIT 5.2
SUB-ADVISORY AGREEMENT BETWEEN
AMERICAN UNITED LIFE INSURANCE COMPANY
AND XXXX INVESTMENT ASSOCIATES
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SUB-ADVISORY AGREEMENT
FOR THE TACTICAL ASSET ALLOCATION
SERIES OF AUL AMERICAN SERIES FUND, INC.
AGREEMENT made as of this 15th day of May, 1995 among American United Life
Insurance Company(R) ("AUL"), a life insurance company domiciled in Indiana,
Xxxx Investment Associates ("Xxxx"), a division of X.X. Xxxx and Associates,
Inc., an Ohio corporation, and AUL American Series Fund, Inc. (the "Fund"), a
Maryland corporation, on behalf of the Tactical Asset Allocation Series of the
Fund.
WHEREAS, the Fund is registered under the Investment Company Act of 1940,
as amended (the "1940 Act"), as an open-end, diversified management investment
company and is authorized to issue separate series, each series having its own
investment objective, policies and limitations;
WHEREAS, the Fund intends to offer shares in, among other series, the
Tactical Asset Allocation Series (the "Series");
WHEREAS, the Fund has retained AUL to render investment advisory
services to the Series pursuant to an Investment Advisory Agreement;
WHEREAS, AUL is a registered investment adviser under the Investment
Advisers Act of 1940, as amended ("Advisers Act"); and
WHEREAS, AUL and the Fund desire to retain Xxxx to furnish sub-advisory
services to the Series in connection with AUL's investment advisory activities
on behalf of the Series, and Xxxx is willing to furnish such services to AUL and
the Fund;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between XXX, Xxxx and the Fund as follows:
1. APPOINTMENT. AUL and the Fund hereby appoint Xxxx to act as Sub-Adviser to
the Series, for the periods and on the terms set forth in this Agreement.
Xxxx accepts such appointment and agrees to furnish the services herein set
forth, for the compensation herein provided.
In the event the Fund designates one or more of its series other than the
Series with respect to which AUL and the Fund desire to retain Xxxx to
render sub-advisory services hereunder, they shall notify Xxxx in writing.
If Xxxx is willing to render such services, it shall notify AUL and the
Fund in writing, whereupon such series shall become a Series hereunder, and
be subject to this Agreement.
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2. SUB-ADVISORY DUTIES. Subject to the supervision of AUL and the Fund's Board
of Directors, Xxxx will provide a continuous investment program for the
Series' portfolio, including investment research and management with
respect to all securities and investments and cash equivalents in the
portfolio. Xxxx will determine from time to time what securities and other
investments will be purchased, retained or sold by the Series. Xxxx will
provide the services under this Agreement in accordance with the Series'
investment objectives, policies and restrictions as stated in the Fund's
Registration Statement filed with the Securities and Exchange Commission
("SEC"), as amended from time to time. Xxxx agrees that it will:
(a) conform with all applicable rules and regulations of the 1940 Act, all
other applicable federal and state laws and regulations and with any
applicable procedures adopted by the Fund's Board of Directors;
(b) Xxxx will (1) manage the Series so that it will qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code,
(2) manage the Series so as to ensure compliance by the Series with
the diversification requirements of Section 817(h) of the Internal
Revenue Code and regulations issued thereunder, and (3) use reasonable
efforts to manage the Series so as to ensure compliance by the Series
with any other rules and regulations pertaining to investment vehicles
underlying variable annuity or variable life insurance policies. AUL
or the Fund will notify Xxxx of any pertinent changes, modifications
to, or interpretations of Section 817(h) of the Internal Revenue Code
and regulations issued thereunder.
(c) place orders pursuant to its investment determinations for the Series
either directly with the issuer or with any broker or dealer. Xxxx
will select brokers and dealers for and on behalf of the Series in
accordance with procedures established by AUL and approved by the
Fund's Board of Directors. In placing orders with brokers and dealers,
Xxxx will attempt to obtain the best net price and the most favorable
execution of its orders and shall comply with any criteria set forth
in the Fund's Registration Statement. Consistent with this obligation,
when, in its view, the execution and price offered by two or more
brokers or dealers are comparable, Xxxx may, in its discretion, and to
the extent consistent with applicable law, give preference to brokers
and dealers who provide it with research, statistical and other
related services;
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(d) on occasions when Xxxx xxxxx the purchase or sale of a security to be
in the best interest of the Fund as well as other investment advisory
clients, Xxxx may, to the extent permitted by applicable laws and
regulations, but shall not be obligated to, aggregate the securities
to be so sold or purchased with those of its other clients where such
aggregation is not inconsistent with the policies set forth in the
Fund's Registration Statement. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in
the transactions, will be made by Xxxx in the manner it considers to
be the most equitable and consistent with its fiduciary obligations to
the Fund and to such other clients, subject to review and supervision
by AUL and the Fund's Board of Directors;
(e) in connection with the purchase and sale of securities of the Series,
Xxxx will arrange for the transmission to the custodian for the Fund
on a daily basis, such confirmations, trade tickets and other
documents as may be necessary to enable the custodian to perform its
responsibilities with respect to the Series in connection with such
transactions. Such transmission may be automatic with respect to
portfolio securities to be purchased or sold through the Depository
Trust Company;
(f) assist the custodian and recordkeeping agent for the Fund in
determining or confirming, consistent with the procedures and policies
stated in the Fund's Registration Statement, the value of any
portfolio securities or other assets of the Series for which the
custodian and recordkeeping agent seeks assistance from or identifies
for review by Xxxx; and
(g) maintain and preserve for the periods prescribed under the 1940 Act
any such records as are required to be maintained by Xxxx with respect
to the Series by the 1940 Act. Xxxx further agrees that all records
which it maintains for the Series are the property of the Series and
it will promptly surrender any of such records upon request.
(h) Xxxx will not disclose any information relating to the Series'
portfolio transactions in any manner whatsoever except: (i) as
expressly authorized in this Agreement, (ii) in the ordinary course of
business in connection with placing orders for the purchase or sale of
securities, (iii) if authorized by the Board of Directors of the Fund,
or (iv) if expressly required to do so by federal or state regulatory
authorities.
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(i) Xxxx shall give AUL and the Fund the benefit of Xxxx'x best judgment
and efforts in rendering services under this Agreement.
3. EXPENSES. During the term of this Agreement, Xxxx will pay all expenses
incurred by it and its staff in connection with its sub-advisory services
under this Agreement. This does not include costs payable by the Fund or
AUL as set forth in the Investment Advisory Agreement.
4. COMPENSATION. For the services provided by Xxxx, XXX will pay Xxxx fees
equal to (i) 55% of the fees received by AUL for services rendered under
the Investment Advisory Agreement by AUL to the Series during the term of
this Agreement, less (ii) 50% of the amount paid by AUL on behalf of the
Series pursuant to any expense limitation or the amount of any other
reimbursement made by AUL to the Series. In the event that this Agreement
shall be effective for only part of a period to which any such fee received
by AUL is attributable, then an appropriate pro- ration of the fee that
would have been payable hereunder if this Agreement had remained in effect
until the end of such period shall be made, based on the number of calendar
days in such period and the number of calendar days during the period in
which this Agreement was in effect. The fees payable to Xxxx hereunder
shall be payable upon receipt by AUL from the Series of advisory fees
payable to AUL.
5. REPRESENTATION AND WARRANTY. Xxxx represents and warrants that it is duly
registered as an investment adviser under the Advisers Act and agrees to
remain registered as long as this Agreement is in effect. Xxxx shall
immediately notify AUL and the Fund in the event that the SEC has censured
Xxxx, placed limitations upon its activities, suspended or revoked its
registration as an investment adviser, or commenced proceedings or an
investigation that may result in any of these actions.
6. SERVICES NOT EXCLUSIVE. It is understood that the services of Xxxx are not
exclusive, and nothing in this Agreement shall prevent Xxxx, or any of its
affiliates, from providing similar services to other clients.
7. DURATION AND TERMINATION. This Agreement shall become effective on the date
first designated above. Unless terminated as provided herein, the Agreement
shall remain in full force and effect for two years from such date and
continue on an annual basis thereafter with respect to a Series unless
terminated in accordance with the following sentence; provided that such
annual continuance is specifically approved each year after the initial two
year period, by (a) the vote of a majority of the entire Board of Directors
of the Fund, or by the vote of a majority of the
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outstanding voting securities of the Series (as defined in the 1940 Act),
and (b) the vote of a majority of those Directors who are not parties to
this Agreement or interested persons (as such term is defined in the 0000
Xxx) of any such party to this Agreement cast in person at a meeting called
for the purpose of voting on such approval. In the event this Agreement is
not approved with respect to a Series in the manner described in the
preceding sentence, Xxxx shall not provide any services for such Series or
receive any fees on account of such Series. Notwithstanding the foregoing,
this Agreement may be terminated with respect to a Series: (a) by AUL at
any time without penalty, upon sixty (60) days' written notice to Xxxx and
the Fund (b) by the Fund at any time without penalty, upon the vote of a
majority of the Fund's Board of Directors or a majority of the outstanding
voting securities of the Series, upon sixty (60) days' written notice to
Xxxx, or (c) by Xxxx at any time without penalty, upon six (6) months'
written notice to AUL and the Fund. In the event of termination for any
reason, all records of each Series for which the Agreement is terminated
shall promptly be returned to AUL or the Fund, free from any claim or
retention of rights by Xxxx. The Agreement shall automatically terminate in
the event of its assignment (as such term is defined in the 1940 Act).
8. AMENDMENTS. This Agreement may be amended only by an instrument in writing
signed by each party, and no amendment of this Agreement shall be effective
until approved by an affirmative vote of (i) the holders of a majority of
the outstanding voting securities of the Series as defined in the 1940 Act,
and (ii) the Directors of the Fund, including a majority of the Directors
of the Fund who are not interested persons of any party to this Agreement,
cast in person at a meeting called for the purpose of voting on such
approval, if such approval is required by applicable law.
9. USE OF NAME. It is understood that the names "American United" and "AUL" or
any derivative thereof or logo associated with those names is the valuable
property of AUL and its affiliates, and that the Fund and/or the Series
have the right to use such names (or derivative or logo) only so long as
AUL is Investment Adviser to the Fund and/or the Series. Upon termination
of the Investment Advisory Agreement between the Fund (or Series) and AUL,
the Fund (or Series) shall forthwith cease to use such names (or derivative
or logo) and, in the case of the Fund, shall promptly amend its Articles of
Incorporation to change its name.
It is understood that the name "Xxxx" or any derivative thereof or logo
associated with that name is the valuable property of Xxxx and its
affiliates and that the Fund and/or the Series have the right to use such
name (or derivative or logo) in offering materials of the Fund with the
approval of Xxxx and for so long as Xxxx is Sub- Adviser to the Fund and/or
the Series. Upon termination of this Agreement between the Fund (or Series)
AUL and the Fund (or Series) shall forthwith cease to use such name (or
derivative or logo).
10. MISCELLANEOUS
(a) This Agreement shall be governed by the laws of the State of Indiana,
provided that nothing herein shall be construed in a manner
inconsistent with the 1940 Act, the Advisers Act or rules or orders of
the SEC thereunder.
(b) The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise
affect their construction or effect.
(c) 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, and to this extent, the
provisions of this Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting Xxxx as an agent of
AUL.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed as of the day and year first above written.
AMERICAN UNITED LIFE INSURANCE COMPANY(R)
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Chairman of the
Board, President, and Chief
Executive Officer
XXXX INVESTMENT ASSOCIATES, INC.
A division of X.X. Xxxx and Associates, Inc.
By: /s/ Xxxxxxxx X. Xxxx
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Xxxxxxxx X. Xxxx, Chairman,
Chief Executive Officer
AUL AMERICAN SERIES FUND, INC.
By: /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Chairman of the Board of Directors
and President
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