Exhibit (d)(4)
[FORM OF]
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of November 9, 2001 by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware Corporation and the Trust (the
"Adviser"), and AMERICAN GENERAL INVESTMENT MANAGEMENT, a Delaware Limited
Liability Company (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and SunAmerica Strategic Investment Series, Inc., a
Maryland Corporation (the "Corporation"), and the Adviser and SunAmerica Income
Funds, a Massachusetts business Trust (the "Trust"), have entered into
Investment Advisory and Management Agreements 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 Corporation and the Trust; and
WHEREAS, the Corporation and the Trust are registered under the Investment
Company Act of 1940, as amended (the "Act"), as open-end management investment
companies and may issue shares of common stock in separately designated series
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 series of the Corporation and the Trust
listed on Schedule A attached hereto (the "Fund"), 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 its Investment Advisory and Management
Agreements with the Corporation and 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
Fund 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 of the Corporation and the Trust is
required to maintain, and will render regular reports to the Adviser and to
officers and Directors/Trustees/Trustees of the Corporation and 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 Directors/Trustees of the Corporation and the Trust and
in compliance with such policies as the Directors/Trustees of the Corporation
and the Trust may from time to time establish, and in compliance with (a) the
objectives, policies, and limitations for the Fund set forth in the Corporation
and the Trust's current prospectuses and statements of additional information,
and (b) applicable laws and regulations.
The Subadviser represents and warrants to the Adviser that the portion of
the assets which it manages of the Fund set forth in Schedule A will at all
times be operated and managed in compliance with all applicable federal and
state laws governing its operations and investments. Without limiting the
foregoing, the Subadviser represents and warrants (1) qualification, election
and maintenance of such election by each Fund to be treated as a "regulated
investment company" under Subchapter M, chapter 1 of the Internal Revenue Code
of 1986, as amended (the "Code"), and (2) compliance with (a) the provisions of
the Act and rules adopted thereunder; (b) applicable federal and state
securities, commodities and banking laws; and (c) 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 shares of the
Corporation and 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 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.
(b) The Subadviser agrees to maintain a level of errors and omissions or
professional liability insurance coverage that is from time to time satisfactory
to the Adviser.
2. FUND TRANSACTIONS. The Subadviser is responsible for decisions to buy or
sell securities and other investments for a portion of the assets of each Fund,
broker-dealers and futures commission merchants' selection, and negotiation of
brokerage commission and futures commission merchants' rates. As a general
matter, in executing Fund 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
Directors/Trustees may determine and, consistent with Section 28(e)
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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 Fund 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 Fund 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 l7e-1 thereunder, the Subadviser may engage its affiliates, the
Adviser and its affiliates or any other subadviser to the Corporation and the
Trust and its respective affiliates, as broker-dealers or futures commission
merchants to effect Fund transactions in securities and other investments for a
Fund. The Subadviser will promptly communicate to the Adviser and to the
officers and the Directors/Trustees of the Corporation and the Trust such
information relating to Fund transactions as they may reasonably request. To the
extent consistent with applicable law, the Subadviser may aggregate purchase or
sell orders for the Fund 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 affiliate' fiduciary
obligations to the Fund 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 Corporation and 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 Fund 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).
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 Corporation and the Trust or the
Adviser, the Subadviser in its discretion may make available to the Corporation
and the Trust, office facilities, equipment, personnel and other services. Such
office facilities, equipment, personnel and services shall be provided for or
rendered by the Subadviser and billed to the Corporation and the Trust or the
Adviser at the Subadviser's cost.
5. REPORTS. The Corporation and 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 statement, and such other
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information with regard to their affairs and that of the Corporation and the
Trust as each may reasonably request.
6. STATUS OF THE SUBADVISER. The services of the Subadviser to the Adviser
and the Corporation and the Trust are not be deemed exclusive, and the
Subadviser shall be free to render similar services to others so long as its
services to the Corporation and 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 Corporation and the Trust in any way or otherwise be deemed an
agent of the Corporation and 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 Act,
all records relating to the investments of the Fund that are required to be
maintained by the Corporation and 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 Corporation and
the Trust are the property of the Corporation and the Trust and will be
surrendered promptly to the Corporation and 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
Securities and Exchange Commission, the Corporation and the Trust's auditors,
the Corporation and the Trust or any representative of the Corporation and the.
Trust, the Adviser, or any governmental agency or other instrumentality having
regulatory authority over the Corporation and the Trust.
8. REFERENCE TO THE SUBADVISER. Neither the Corporation and 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.
9. 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 Corporation and the Trust or to any shareholder
of the Corporation and 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/Trustees, partners, agents, employees,
controlling persons, shareholders and any other person or entity affiliated with
the Subadviser) (collectively, the "Indemnified Parties") from any liability
arising from the Subadviser's
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conduct under this Agreement.
(b) The Subadviser agrees to indemnify and hold harmless the Adviser and
its affiliates and each of its Directors/Trustees and officers and each person,
if any, who controls the Adviser within the meaning of Section 15 of the 1933
Act against any an all losses, claims, damages, liabilities or litigation
(including legal and other expenses), to which the Adviser or its affiliates or
such Directors/Trustees, officers or controlling person may become subject under
the 1933 Act, under other statutes, at common law or otherwise, which may be
based upon (i) any wrongful act or breach of this Agreement by the Subadviser,
or (ii) any failure by the Subadviser to comply with the 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 obligation 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 Fund with respect to the portion of
the assets of a Fund not managed by Subadviser and (ii) acts of the Subadviser
which result from 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 any other subadviser to a Fund, which records
are not also maintained by or otherwise available to the Subadviser upon
reasonable request. The adviser agrees that Subadviser shall manage the portion
of the assets of a Fund allocated to it as if it was a separate operating Fund
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 Fund and qualifications of a Fund as a
regulated investment company under the Code) with respect to the portion of
assets of a Fund allocated to Subadviser. The Adviser shall indemnify the
Indemnified Parties from any liability arising from the conduct of the Adviser
and any other subadviser with respect to the portion of a Fund's assets not
allocated to Subadviser.
10. PERMISSIBLE INTERESTS. Directors/Trustees and agents of the Corporation
and 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 Corporation and the Trust as
Directors/Trustees, or otherwise; and the Subadviser (or any successor) is or
may be interested in the Corporation and the Trust in some manner.
11. TERM OF THE AGREEMENT. This Agreement shall continue in full force and
effect with respect to each Fund 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 Directors/Trustees of the
Corporation and 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 Directors/Trustees of the Corporation
and the Trust or by vote of a majority of the outstanding voting securities of
the Fund voting separately from any other series of the Corporation and the
Trust.
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With respect to each Fund, this Agreement may be terminated at any time,
without payment of a penalty by the Fund or the Corporation and the Trust, by
vote of a majority of the Directors/Trustees, or by vote of a majority of the
outstanding voting securities (as defined in the Act) of the Fund, voting
separately from any other series of the Corporation and 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 Fund, 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 Corporation and the Trust; provide, however, that
this Agreement may not be terminated by the Subadviser unless another
subadvisory agreement has been approved by the Corporation and the Trust in
accordance with the Act, or after six months' written notice, whichever is
earlier. The termination of this Agreement with respect to any Fund or the
addition of any Fund to Schedule A hereto (in the manner required by the Act)
shall not affect the continue effectiveness of this Agreement with respect to
each other Fund 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 Corporation and the Trust and the Adviser is terminated.
12. 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.
13. AMENDMENTS. This Agreement may be amended by mutual consent in writing,
but the consent of the Corporation and the Trust must be obtained in conformity
with the requirements of the Act.
14. 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.
15. SEPARATE SERIES. Pursuant to the provisions of the Articles of
Incorporation and the Declaration of Trust, each Fund is a separate series of
the Corporation and the Trust, and all debts, liabilities, obligations and
expenses of a particular Fund shall be enforceable only against the assets of
that Fund and not against the assets of any other Fund or of the Corporation and
the Trust as a whole.
16. 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 General Investment Management
000 X. Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
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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
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:
Title:
AMERICAN GENERAL INVESTMENT
MANAGEMENT
By:
-----------------------------
Name:
Title:
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SCHEDULE A
FEE
(AS PERCENTAGE OF AVERAGE
DAILY NET ASSETS THE SUBADVISER
FUND MANAGES FOR THE FUND)
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SUNAMERICA INCOME FUNDS
Strategic Income Fund First $50 million 0.350%
Next $150 million 0.350%
Next $300 million 0.250%
Thereafter 0.200%
Core Bond Fund First $50 million 0.250%
Next $150 million 0.250%
Next $300 million 0.200%
Thereafter 0.150%
High Yield Bond Fund First $50 million 0.450%
Next $150 million 0.450%
Next $300 million 0.350%
Thereafter 0.300%
Municipal Money Market Fund First $50 million 0.250%
Next $150 million 0.250%
Next $300 million 0.200%
Thereafter 0.150%
SUNAMERICA STRATEGIC INVESTMENT SERIES, INC.
Stock Index Fund First $150 million 0.200%
Thereafter 0.100%
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