INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 22nd day of August, 2011, by and between THE
VARIABLE ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to
as "VALIC," and RS INVESTMENT MANAGEMENT CO. LLC, hereinafter
referred to as the "SUB-ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC is a life insurance company organized under
Chapter 3 of the Texas Insurance Code and an
investment adviser registered under the Investment
Advisers Act of 1940, as amended ("Advisers Act").
(b) VALIC is engaged as the investment adviser of VALIC
Company I ("VC I"), pursuant to an Investment
Advisory Agreement between VALIC and VC I, an
investment company organized under the general
corporate laws of Maryland as a series type of
investment company issuing separate classes (or series)
of shares of common stock. VC I is registered as an
open-end, management investment company under the
Investment Company Act of 1940, as amended ("1940
Act"). The 1940 Act prohibits any person from acting
as an investment adviser of a registered investment
company except pursuant to a written contract.
(c) VC I currently consists of thirty-three portfolios
("Funds"):
Asset Allocation Fund
Blue Chip Growth Fund
Broad Cap Value Income Fund
Capital Conservation Fund
Core Equity Fund
Dividend Value Fund
Foreign Value Fund
Global Equity Fund
Global Real Estate Fund
Global Social Awareness Fund
Global Strategy Fund
Government Securities Fund
Growth & Income Fund
Growth Fund
Health Sciences Fund
Inflation Protected Fund
International Equities Fund
International Government Bond Fund
International Growth I Fund
Large Cap Core Fund
Large Capital Growth Fund
Mid Cap Index Fund
Mid Cap Strategic Growth Fund
Money Market I Fund
Nasdaq-100 Index Fund
Science & Technology Fund
Small Cap Aggressive Growth Fund
Small Cap Fund
Small Cap Index Fund
Small Cap Special Values Fund
Small-Mid Growth Fund
Stock Index Fund
Value Fund
In accordance with VC I's Articles of Incorporation
(the "Articles"), new Funds may be added to VC I upon
approval of VC I's Board of Directors without the
approval of Fund shareholders. This Agreement will
apply only to Funds set forth on the attached Schedule
A, and any other Funds as may be added or deleted by
amendment to the attached Schedule A ("Covered
Fund(s)").
(d) The SUB-ADVISER is engaged principally in the
business of rendering investment advisory services and
is registered as an investment adviser under the
Advisers Act.
(e) VALIC desires to enter into an Investment Sub-
Advisory Agreement with the SUB-ADVISER for all or
a portion of the assets of the Covered Fund(s) which
VALIC determines from time to time to assign to the
SUB-ADVISER.
VALIC and the SUB-ADVISER agree as follows:
1. Services Rendered and Expenses Paid by the SUB-ADVISER
The SUB-ADVISER, subject to the supervision and review of VALIC and
VC I's Board of Directors and in material conformity with (i) the 1940
Act, all applicable laws and regulations thereunder, (ii) all other applicable
federal laws and regulations, including section 817(h) and Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"), and all
applicable state laws and regulations that VALIC notifies the SUB-
ADVISER are applicable to the investment management of the Covered
Fund(s); (iii) VC I's Articles, Bylaws, registration statements, prospectus
and the investment objectives, policies and restrictions of any Covered
Fund(s) stated in the Covered Fund(s)' prospectus and statement of
additional information; and (iv) any applicable procedures adopted by VC
I's Board of Directors and provided to the SUB-ADVISER, shall:
(a) manage the investment and reinvestment of the assets of
the Covered Fund(s) including, for example, the
evaluation of pertinent economic, statistical, financial,
and other data, the determination, in its discretion
without prior consultation with VALIC or the VC I
Board of Directors, of the industries, securities and
other investments to be represented in each Covered
Fund's portfolio, and the formulation and
implementation of investment programs.
(b) maintain a trading desk and place orders for the
purchase and sale of portfolio investments (including
futures contracts or other derivatives) for each Covered
Fund's account with brokers or dealers (including
futures commission merchants) selected by the SUB-
ADVISER, or arrange for any other entity to provide a
trading desk and to place orders with brokers and
dealers (including futures commission merchants)
selected by the SUB-ADVISER, subject to the SUB-
ADVISER's control, direction, and supervision, which
brokers or dealers may include brokers or dealers
(including futures commission merchants) affiliated
with the SUB-ADVISER, subject to applicable law.
(c) In performing its obligations under this Agreement, the
SUB-ADVISER may, at its own discretion, and
consistent with the obligations of Section 8 herein,
delegate any or all of its discretionary investment,
advisory and other rights, powers and functions
hereunder to any advisory affiliate, without further
written consent of VALIC provided that the SUB-
ADVISER shall always remain liable for its obligations
hereunder.
The SUB-ADVISER will assist the Covered Fund(s) and its agents in
determining whether prices obtained by the Covered Fund(s) and its agents
for valuation purposes are consistent with the prices on the SUB-
ADVISER's portfolio records relating to the assets of the Covered Fund(s)
for which the SUB-ADVISER has responsibility at such times as VALIC
shall reasonably request; provided, however, that the parties acknowledge
that the SUB-ADVISER is not the fund accounting agent for the Covered
Fund(s) and is not responsible for pricing determinations or calculations
and any information provided pursuant to this position by SUB-ADVISER
will be provided for information purposes only.
In selecting brokers or dealers to execute transactions on behalf of the
Covered Fund(s), the SUB-ADVISER will seek best execution, in a
manner consistent with Part II of the SUB-ADVISER's Form ADV and
Section 28(e) of the Securities and Exchange Act of 1934, as amended
(the "1934 Act"). The SUB-ADVISER shall not be deemed to have acted
unlawfully, or to have breached any duty created by this Agreement, or
otherwise, solely by reason of acting in accordance with such
authorization. Subject to the requirements of U.S. law, VALIC agrees that
SUB-ADVISER may follow the SUB-ADVISER'S best execution policy,
as described in Part II of the SUB-ADVISER's Form ADV, which has
been provided to VALIC and which may be amended from time-to-time.
The SUB-ADVISER agrees to provide VALIC a copy of any material
amendment to its best execution policy as soon as reasonably practicable
after such amendment to the policy.
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
SUB-ADVISER may engage its affiliates, the VALIC and its affiliates or
any other subadviser to VC I and its respective affiliates, as broker-dealers
or futures commission merchants to effect Covered Fund transactions in
securities and other investments for a Covered Fund.
Notwithstanding anything to the contrary in this Agreement, to the extent
that any market counterparty with whom the SUB-ADVISER deals
requires information relating to the Covered Fund(s) (including but not
limited to the identity and market value of the Covered Fund(s)), the SUB-
ADVISER shall be permitted to disclose such information to the extent
necessary to effect transactions on behalf of the Covered Fund(s) in
accordance with the terms of this Agreement.
VALIC hereby agrees that, in managing the Covered Fund, the SUB-
ADVISER may execute trades in markets that are not "regulated markets"
as that term is defined in the "Markets in Financial Instruments Directive"
and may utilize a multilateral trading facility.
The SUB-ADVISER may aggregate sales and purchase orders of
securities held by the Covered Fund(s) with similar orders being made for
other accounts managed by the SUB-ADVISER or with accounts of the
affiliates of the SUB-ADVISER that are trading through a single trading
desk or system on the same trading day, if in the SUB-ADVISER's
reasonable judgment such aggregation is fair and reasonable and
consistent with the SUB-ADVISER'S fiduciary obligations to the Covered
Fund(s) and its other clients. VALIC acknowledges that the determination
whether such aggregation is fair and reasonable by the SUB-ADVISER is
subjective and represents the SUB-ADVISER's evaluation that the
Covered Fund(s) may benefit by relatively better purchase or sales prices,
lower commission expenses and beneficial timing of transactions or a
combination of these and other factors, all as described in Part II of the
SUB-ADVISER's Form ADV.
VALIC authorizes and empowers the SUB-ADVISER to direct the
Covered Fund's Custodian to open and maintain brokerage accounts for
securities and other property, including financial and commodity futures
and commodities and options thereon (all such accounts hereinafter called
"brokerage accounts") for and in the name of the Covered Fund(s) and to
execute for the Covered Fund(s) as its agent and attorney-in-fact standard
customer agreements with such broker or brokers as the SUB-ADVISER
shall select as provided above. With respect to brokerage accounts for
financial and commodity futures and commodities and options thereon, the
SUB-ADVISER shall select such brokers, as approved by VALIC, prior to
the establishment of such brokerage account. The SUB-ADVISER may,
using such of the securities and other property in the Covered Fund as the
SUB-ADVISER deems necessary or desirable, direct the Covered Fund's
Custodian to deposit for the Covered Fund original and maintenance
brokerage and margin deposits and otherwise direct payments of cash,
cash equivalents and securities and other property into such brokerage
accounts and to such brokers as the SUB-ADVISER deems desirable or
appropriate.
The SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report
periodically to VALIC and VC I's Board of Directors regarding the
performance of its services under this Agreement. The SUB-ADVISER
will make available to VALIC and VC I promptly upon their reasonable
written request copies of all of the Covered Fund(s)' investment records
and ledgers to assist VALIC and VC I in complying with regulations
applicable to each Covered Fund's securities transactions as required by
the 1940 Act and the Advisers Act, as well as other applicable laws. The
SUB-ADVISER will furnish VC I's Board of Directors such periodic and
special reports as VALIC and VC I's Board of Directors may reasonably
request. The SUB-ADVISER will furnish to regulatory authorities any
information or reports in connection with such services which may be
requested in order to ascertain whether the operations of the Covered
Fund(s) are being conducted in a manner consistent with applicable laws
and regulations.
Should VALIC at any time make any definite determination as to any
investment policy and notify the SUB-ADVISER in writing of such
determination, within a reasonable time after receipt of such notice as
agreed to by the SUBADVISER and VALIC the SUB-ADVISER shall be
bound by such determination for the period, if any, specified in such notice
or until similarly notified that such determination has been revoked,
provided such determination will permit SUB-ADVISER to comply with
the first paragraph of this Section.
The SUB-ADVISER will not hold money or investments on behalf of VC
I. The money and investments will be held by the Custodian of VC I. The
SUB-ADVISER will arrange for the transmission to the Custodian for VC
I, on a daily basis, such confirmation, trade tickets and other documents as
may be necessary to enable the Custodian perform its administrative
responsibilities with respect to the Covered Fund(s). The SUB-ADVISER
further shall have the authority to instruct the Custodian of VC I (i) to pay
cash for securities and other property delivered, or to be delivered, to the
Custodian for VC I, (ii) to deliver securities and other property against
payment for VC I, and (iii) to transfer assets and funds to such brokerage
accounts as the SUB-ADVISER may designate, all consistent with the
powers, authorities and limitations set forth herein. The SUB-ADVISER
shall not have the authority to cause the Custodian to deliver securities and
other property except as expressly provided for in this Agreement or as
provided by VALIC in writing to the Custodian.
VALIC will vote proxies relating to securities held by the Covered
Fund(s). VALIC will vote all such proxies in accordance with such proxy
voting guidelines and procedures adopted by the Board of Directors.
VALIC will instruct the Custodian and other parties providing services to
VC I promptly to forward to the proxy voting service copies of all proxies
and shareholder communications relating to securities held by each
Covered Fund(s). The SUB-ADVISER shall not be responsible for taking
any action on behalf of the Covered Funds in connection with any claim or
potential claim in any bankruptcy proceedings, class action securities
litigation, or other litigation or proceeding affecting securities held at any
time in the Covered Fund(s) including, without limitation, to file proofs of
claim or other documents related to such proceedings (the "Litigation") or
to investigate, initiate, supervise, or monitor the Litigation involving the
Covered Funds' assets.
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized,
have no authority to act or represent VALIC or VC I other than in
furtherance of the SUB-ADVISER's duties and responsibilities as set forth
in this Agreement.
Except as otherwise agreed, or as otherwise provided herein, the SUB-
ADVISER shall bear the expense of discharging its responsibilities
hereunder; provided, however, all brokerage commissions, taxes, charges
and other costs incident to the purchase and sale of investments shall be
charged to and paid from the Covered Fund. VALIC shall pay, or arrange
for others to pay, all VALIC's expenses, except that VALIC shall in all
events pay the compensation described in Section 3 of this Agreement.
The SUB-ADVISER is hereby prohibited from consulting with any other
sub-adviser of the Covered Fund(s) (or a portion thereof) or any other sub-
adviser to a fund under common control with the Covered Fund(s) (or a
portion thereof) concerning securities transactions of the Covered Fund(s)
(or a portion thereof) in securities or other assets, except as otherwise
permitted by the 1940 Act or any rules thereunder.
2. Confidentiality
The SUB-ADVISER 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 otherwise necessary in the
ordinary course of performing its responsibilities under this Agreement,
and will keep confidential any non-public information obtained directly as
a result of this service relationship, and disclose such non-public
information only if VALIC or the VC I Board of Trustees has authorized
such disclosure, or if such information is or hereafter becomes
ascertainable from public or published information or trade sources, or if
such information is or hereafter otherwise is know by the SUB-ADVISER,
or if such disclosure is expressly required or requested by applicable
federal or state authorities (including the SUB-ADVISER'S regulatory
examiners) or to the extent such disclosure is reasonably required by
auditors or attorneys of the SUB-ADVISER in connection with the
performance of their professional services or as may otherwise be
contemplated by this Agreement. Notwithstanding the foregoing, the
SUB-ADVISER may disclose the total return earned by the Covered
Fund(s) and may include such total return in the calculation of composite
performance information.
VALIC 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 perform its
responsibilities under this Agreement or under the Investment Advisory
Agreement between VALIC and VC I, and will keep confidential any
non-public information obtained directly as a result of this relationship,
and disclose such non-public information only if SUB-ADVISER has
authorized such disclosure, or if such information is or hereafter becomes
ascertainable from public or published information or trade sources, or if
such information is or hereafter otherwise is know by VALIC, or if such
disclosure is expressly required or requested by applicable federal or state
authorities (including VALIC's regulatory examiners) or to the extent such
disclosure is reasonably required by VALIC's or the Covered
Fund(s)'auditors or attorneys in connection with the performance of their
professional services or as may otherwise be contemplated by this
Agreement. Without limiting the foregoing, VALIC acknowledges that
the securities holdings of the Covered Fund(s) constitute information of
value to the SUB-ADVISER, and agrees: (1) not to use for any purpose,
other than for VALIC or the Covered Fund(s), or their agents, to supervise
or monitor the SUB-ADVISER, the holdings or other trading-related
information of the Covered Fund(s); and (2) not to disclose the Covered
Fund(s)' holdings or transactions, except: (a) as required by applicable law
or regulation; (b) as required by state or federal regulatory authorities; (c)
to the Board of Directors of VC I, counsel to the Board of Directors of VC
I, counsel to VC I, the administrator or any sub-administrator, the
independent accountants and any other agent of VC I; (d) in accordance
with VC I's portfolio holdings disclosure policy, including other third
parties service providers identified in VC I's registration statement; or (e)
as otherwise agreed to by the parties hereto in writing.
3. Compensation of the SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB-ADVISER, a monthly fee or fees
based on each Covered Fund's average daily net asset value computed for
each Covered Fund as provided for herein and in the fee schedule attached
hereto as Schedule A. Schedule A may be amended from time to time by
written agreement executed by VALIC and the SUB-ADVISER, provided
that amendments are made in conformity with applicable laws and
regulations and the Articles and Bylaws of VC I. Any change in Schedule
A pertaining to any new or existing Fund shall not be deemed to affect the
interest of any other Fund and shall not require the approval of
shareholders of any other Fund.
The average daily net asset value shall be determined by taking the
average of all of the determinations of net asset value, made in the manner
provided in VC I's constitutive documents, for each business day during a
given calendar month. VALIC shall pay this fee for each calendar month
as soon as practicable after the end of that month, but in any event no later
than fifteen (15) days following the end of the month.
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the SUB-
ADVISER under this Agreement shall be the sole responsibility of VALIC
and shall not be the responsibility of VC I.
4. Scope of the SUB-ADVISER's Activities
VALIC understands that the SUB-ADVISER and its affiliates now act,
will continue to act and may act in the future as investment adviser to
fiduciary and other managed accounts and as investment adviser to other
investment companies (including other accounts and investment
companies following the same investment strategy as the Covered Fund(s)
), and VALIC has no objection to the SUB-ADVISER so acting, provided
that whenever a Covered Fund(s) and one or more other accounts or
investment companies advised by the SUB-ADVISER have available
funds for investment, investments suitable and appropriate for each will be
allocated in accordance with a methodology believed by the SUB-
ADVISER to be equitable to each entity. The SUB-ADVISER similarly
agrees to allocate opportunities to sell securities on an equitable basis.
VALIC recognizes that, in some cases, this procedure may limit the size of
the position that may be acquired or sold for a Covered Fund(s). In
addition, VALIC understands that the persons employed by the SUB-
ADVISER to assist in the performance of the SUB-ADVISER's duties
hereunder will not devote their full time to such service and nothing
contained herein shall be deemed to limit or restrict the right of the SUB-
ADVISER or any affiliate of the SUB-ADVISER to engage in and devote
time and attention to other business or to render services of whatever kind
or nature.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder,
director, officer or employee of, or be otherwise interested in, the SUB-
ADVISER, and in any person controlling, controlled by or under common
control with the SUB-ADVISER; and the SUB-ADVISER, and any person
controlling, controlled by or under common control with the SUB-
ADVISER, may have an interest in VALIC.
VALIC shall perform quarterly and annual tax compliance tests and
promptly furnish reports of such tests to the SUB-ADVISER after each
quarter end to ensure that the Covered Fund(s) is in compliance with
Subchapter M of the Code and Section 817(h) of the Code. VALIC shall
apprise the SUB-ADVISER promptly after each quarter end of any
potential non-compliance with the diversification requirements in such
Code provisions. If so advised, the SUB-ADVISER shall take prompt
action so that the Covered Fund complies with such Code diversification
provisions, as directed by VALIC. VALIC acknowledges that the SUB-
ADVISER shall rely completely upon VALIC's determination of whether
and to what extent each Covered Fund(s) is in compliance with Subchapter
M and Section 817(h) of the Code and that the SUB-ADVISER has no
separate and independent responsibility to test for such compliance.
The SUB-ADVISER does not guarantee the future performance of the
Covered Fund(s) or any specific level of performance, the success of any
investment decision or strategy that SUB-ADVISER may use, or the
success of SUB-ADVISER's overall management of the Covered Fund(s).
VALIC and VC I understand that investment decisions made for the
Covered Fund(s) by the SUB-ADVISER are subject to various market,
currency, economic, political and business risks and that those investment
decisions will not always be profitable. The SUB-ADVISER will manage
only the assets of the Covered Fund(s) allocated to its management by
VALIC and in making investment decisions for the Covered Fund(s).
5. Representations of the SUB-ADVISER and VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
(a) The SUB-ADVISER (i) is registered as an investment
adviser under the Advisers Act and will continue to be
so registered for so long as this Agreement remains in
effect: (ii) is not prohibited by the 1940 Act or the
Advisers Act from performing the services
contemplated by this Agreement; (iii) has met, and will
continue to meet for so long as this Agreement remains
in effect, any applicable federal or state requirements,
or the applicable requirements of any regulatory or
industry self-regulatory agency, necessary to be met in
order to perform the services contemplated by this
Agreement; (iv) has the authority to enter into and
perform the services contemplated by this Agreement,
and (v) will immediately notify VALIC of the
occurrence of any event that would disqualify the SUB-
ADVISER from serving as an investment adviser of an
investment company pursuant to Section 9(a) of the
1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of
ethics complying with the requirements of Rule 17j-1
under the 1940 Act and if it has not already done so,
will provide VALIC and VC I with a copy of such code
of ethics together with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC and VC I
with a copy of its Form ADV as most recently filed
with the SEC and will promptly after filing its annual
update to its Form ADV with the SEC, furnish a copy
of such amendment to VALIC.
VALIC represents, warrants, and agrees as follows:
(a) VALIC: (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered
for so long as this Agreement remains in effect: (ii) is
not prohibited by the 1940 Act or the Advisers Act
from performing the services contemplated by this
Agreement; (iii) has met, and will continue to meet for
so long as this Agreement remains in effect, any
applicable federal or state requirements, or the
applicable requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement;
(iv) has the authority to enter into and perform the
services contemplated by this Agreement; and (v) will
immediately notify the SUB-ADVISER of the
occurrence of any event that would disqualify VALIC
from serving as an investment adviser of an investment
company pursuant to Section 9(a) of the 1940 Act or
otherwise.
(b) VALIC has the authority under the Investment
Advisory Agreement between VALIC and VC I to
delegate some or all of its responsibilities to one or
more sub-advisers, and has obtained from each Covered
Fund's Directors and shareholders, as applicable, all
approvals required under the 1940 Act for the SUB-
ADVISER to perform the services, and to receive the
fees, contemplated by this Agreement.
6. Term of Agreement
This Agreement shall become effective as to the Covered Fund(s) set forth
on Schedule A on the date hereof and as to any other Fund on the date of
the Amendment to Schedule A adding such Fund in accordance with this
Agreement. Unless sooner terminated as provided herein, this Agreement
shall continue in effect for two years from its effective date. Thereafter,
this Agreement shall continue in effect, but with respect to any Covered
Fund, subject to the termination provisions and all other terms and
conditions hereof, only so long as such continuance is approved at least
annually by the vote of a majority of VC I's Directors who are not parties
to this Agreement or interested persons of any such parties, cast in person
at a meeting called for the purpose of voting on such approval, and by a
vote of a majority of VC I's Board of Directors or a majority of that
Covered Fund's outstanding voting securities (as defined in the 1940 Act).
This Agreement shall automatically terminate in the event of its
assignment as that term is defined in the 1940 Act, or in the event of the
termination of the Investment Advisory Agreement between VALIC and
VC I as it relates to any Covered Fund(s). The Agreement may be
terminated as to any Covered Fund at any time, without the payment of
any penalty, by vote of VC I's Board of Directors or by vote of a majority
of that Covered Fund's outstanding voting securities on not more than 60
days' nor less than 30 days' prior written notice to the SUB-ADVISER, or
upon such shorter notice as may be mutually agreed upon by the parties.
This Agreement may also be terminated by VALIC: (i) on not more than
60 days' nor less than 30 days' prior written notice to the SUB-ADVISER,
or upon such shorter notice as may be mutually agreed upon by the parties,
without the payment of any penalty; or (ii) if the SUB-ADVISER becomes
unable to discharge its duties and obligations under this Agreement. The
SUB-ADVISER may terminate this Agreement at any time, or preclude its
renewal without the payment of any penalty, on not more than 60 days' nor
less than 30 days' prior written notice to VALIC, or upon such shorter or
longer notice as may be mutually agreed upon by the parties.
7. Indemnification
The SUB-ADVISER shall not be liable to VALIC, VC I, or to any
shareholder in the Covered Fund(s), and VALIC shall indemnify the SUB-
ADVISER, for any act or omission in rendering services under this
Agreement, or for any losses sustained in connection with the matters to
which this agreement relates, so long as there has been no willful
misfeasance, bad faith, gross negligence, or reckless disregard of
obligations or duties on the part of the SUB-ADVISER in performing its
duties under this Agreement.
Notwithstanding the foregoing, VALIC agrees to indemnify the SUB-
ADVISER for losses, costs, fees, expenses and claims which arise directly
(i) as a result of a failure by VALIC to provide the services or furnish
materials required under the terms of this Agreement, or (ii) as the result
of any untrue statement of a material fact or any omission to state a
material fact required to be stated or necessary to make the statements, in
light of the circumstances under which they were made, not misleading in
any registration statements, proxy materials, advertisements, or sales
literature pertaining to VC I or a Covered Fund, except insofar as any such
statement or omission was specifically made in reliance on written
information provided by the SUB-ADVISER to VALIC.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims
which arise directly (i) as a result of the willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or duties by the SUB-
ADVISER; or (ii) as the result of any untrue statement of a material fact or
any omission to state a material fact required to be stated or necessary to
make the statements, in light of the circumstances under which they were
made, not misleading in any registration statements, proxy materials,
advertisements, or sales literature pertaining to VC I or a Covered Fund to
the extent any such statement or omission was made in reliance on written
information provided by the SUB-ADVISER.
Under no circumstances shall VALIC or the SUB-ADVISER be liable to
any indemnified party for indirect, special or consequential damages, even
if VALIC or the SUB-ADVISER is apprised of the likelihood of such
damages.
Promptly after receipt by either VALIC or SUB-ADVISER (an
"Indemnified Party") under this Section 7 of the commencement of an
action, such Indemnified Party will, if a claim in respect thereof is to be
made against the other party (the "Indemnifying Party") under this section,
notify Indemnifying Party of the commencement thereof; but the omission
so to notify Indemnifying Party will not relieve it from any liability that it
may have to any Indemnified Party otherwise than under this section. In
case any such action is brought against any Indemnified Party, and it
notified Indemnifying Party of the commencement thereof, Indemnifying
Party will be entitled to participate therein and, to the extent that it may
wish, assume the defense thereof, with counsel satisfactory to such
Indemnified Party. After notice from Indemnifying Party of its intention
to assume the defense of an action, the Indemnified Party shall bear the
expenses of any additional counsel obtained by it, and Indemnifying Party
shall not be liable to such Indemnified Party under this section for any
legal or other expenses subsequently incurred by such Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation.
The provisions of this Section 7 shall survive the termination of this
Agreement.
8. Delegation
Except where prohibited by applicable law or regulation, SUB-ADVISER
may employ an affiliate or a third party to perform any accounting,
administrative, reporting and ancillary services required to enable SUB-
ADVISER to perform its functions under this Agreement; provided
however, that no such person shall serve or acts as an investment adviser
separate from the SUB-ADVISER so as to require a new written contract
pursuant to the 1940 Act.. The compensation of any such persons will be
paid by the SUB-ADVISER, and no obligation will be incurred by, or on
behalf of, VALIC or VC I with respect to them. Notwithstanding any
other provision of this Agreement, SUB-ADVISER may provide
information about the Fund to any such affiliate or other third party for the
purpose of providing the services contemplated under this clause. SUB-
ADVISER will act in good faith and due diligence in the selection, use and
monitoring of affiliates and other third parties, and any delegation or
appointment hereunder shall not relieve SUB-ADVISER of any of its
obligations under this Agreement. SUB-ADVISER shall remain liable for
SUB-ADVISER'S obligations hereunder and for all actions of any such
affiliates, third parties or agents to the same extent as SUB-ADVISER is
liable for its own actions hereunder. The compensation of any such
persons will be paid by SUB-ADVISER, and no obligations will be
incurred by, or on behalf of, VALIC, XX XX or the Covered Fund(s) with
respect to them.
9. Customer Identification Program
To help the government fight the funding of terrorism and money
laundering activities, SUB-ADVISER has adopted a Customer
Identification Program, ("CIP") pursuant to which SUB-ADVISER is
required to obtain, verify and maintain records of certain information
relating to its clients. In order to facilitate SUB-ADVISER's compliance
with its CIP, VALIC hereby represents and warrants that (i) the Fund's
taxpayer identification number or other government issued identification
number is reflected on Schedule A, (ii) all documents provided to SUB-
ADVISER are true and accurate as of the date hereof, and (iii)
MassMutual agrees to provide to SUB-ADVISER such other information
and documents that SUB-ADVISER requests in order to comply with
SUB-ADVISER's CIP.
10. Other Matters
The SUB-ADVISER agrees that all books and records which it maintains
for the Covered Fund(s) are the Covered Fund's property. The SUB-
ADVISER also agrees upon request of VALIC or VC I, to promptly
surrender such books and records in accordance with the 1940 Act and
rules thereunder; provided, however, that the SUB-ADVISER may retain
copies of such books and records to the extent necessary to comply with
applicable law or regulation. The SUB-ADVISER further agrees to
preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records required to be maintained by subparagraphs (b)(5), (6), (7), (9),
(10), (11) and paragraph (f) of Rule 31a-1 under the 1940 Act.
VALIC has herewith furnished the SUB-ADVISER copies of VC I's
Prospectus, Statement of Additional Information, investment objectives,
policies and restrictions, and any applicable procedures adopted by VC I's
Board of Directors, as currently in effect for the Covered Fund(s) and
agrees during the continuance of this Agreement to furnish the SUB-
ADVISER copies of any amendments or supplements thereto before or at
the time the amendments or supplements become effective. Until VALIC
delivers any amendments or supplements to the SUB-ADVISER, the SUB-
ADVISER shall be fully protected in relying on the documents previously
furnished to it.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of VC I or the
Covered Fund(s) in writing signed or sent by any of the persons who the
SUB-ADVISER has reason to believe are acting in good authority. The
SUB-ADVISER shall not be liable for so acting in good faith upon such
instructions, confirmation or authority.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports to
shareholders, sales literature, or other material prepared for distribution to
shareholders of the Covered Fund(s) or the public that refer in any way to
the SUB-ADVISER, and not to use such material if the SUB-ADVISER
reasonably objects in writing within ten (10) business days (or such other
time as may be mutually agreed) after receipt thereof. In the event of
termination of this agreement, VALIC will continue to furnish to the SUB-
ADVISER copies of any of the above-mentioned materials that refer in
any way to the SUB-ADVISER and shall cease to use the SUB-ADVISER
name and/or logo as soon as is reasonable. VALIC shall furnish or
otherwise make available to the SUB-ADVISER such other information
relating to the business affairs of VALIC and the Covered Fund as the
SUB-ADVISER at any time, or from time to time, may reasonably request
in order to discharge obligations hereunder. The provisions of this Section
10 shall survive the termination of this Agreement.
A successor by law of the parties to this Agreement shall be entitled to the
benefits of the indemnification contained herein.
11. Applicability of Federal Securities Laws
This Agreement shall be interpreted in accordance with the laws of the
State of New York and applicable federal securities laws and regulations,
including definitions therein and such exemptions as may be granted to
VALIC or the SUB-ADVISER by the Securities and Exchange
Commission or such interpretive positions as may be taken by the
Commission or its staff. To the extent that the applicable law of the State
of New York, or any of the provisions herein, conflict with applicable
provisions of the federal securities laws, the latter shall control.
12. Amendment and Waiver
The Agreement may be amended by mutual written consent of the parties,
subject to the requirements of the 1940 Act and the rules and regulations
promulgated and orders granted thereunder.
13. Notices
All notices hereunder shall be given in writing (and shall be deemed to
have been duly given upon receipt) by delivery in person, by facsimile, by
registered or certified mail or by overnight delivery (postage prepaid,
return receipt requested) to VALIC and to SUB-ADVISER at the address
of each set forth below:
If to VALIC: With a copy to:
Attn: Xxxx Xxxxxxxx Attn: Xxxx X. Xxxxxx
0000 Xxxxx Xxxxxxx, L13 0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx
00000
Tel: (000) 000-0000 Tel: (713) 831-
5165
Fax: (000) 000-0000 Fax: (713) 831-
2258
If to SUB-ADVISER: With a copy to:
R.S. INVESTMENTS
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
The parties hereto have each caused this Agreement to be signed in
duplicate on its behalf by its duly authorized officer on the above date.
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
By:
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
ATTEST:
Attest:
Name: Xxxx X. Xxxxxx
Title: Vice President & Secretary (VC I)
RS Investment Management Co. LLC
By:
Name:
Title:
ATTEST:
Attest:
Name:
Title:
SCHEDULE A
COVERED FUND(S)
Annual Fee computed at the following annual rate, based on
average daily net asset value for each month on that portion
of the assets managed by SUB-ADVISER, and payable monthly:
Covered Fund Fee
Small Cap Aggressive Growth Fund 0.55% of the first
$250 million; and
(TIN: 00-0000000) 0.50% on assets over $250 million.
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