SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of August 12, 1996 by and
between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and JANUS CAPITAL CORPORATION, a Colorado 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 August 8, 1996, (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 "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 registered as an investment adviser 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. (a) DUTIES OF THE SUBADVISER. The Adviser hereby engages the
services of the Subadviser in furtherance of its Investment Advisory and
Management Agreement with the Trust. Pursuant to this Subadvisory Agreement and
subject to the oversight and review of the Adviser, the Subadviser will manage
the investment and reinvestment of 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, and shall furnish the Adviser with such
monthly, quarterly, and annual reports concerning transactions and performance
of each Portfolio in the form as reasonably requested by the Adviser. The
Subadviser shall also provide the Adviser with such other information and
reports as may reasonably be requested by the Adviser from time to time, other
than proprietary information, and provided the Subadviser shall not be
responsible for portfolio accounting, nor shall it be required to generate
information derived from portfolio accounting data. 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 and regulations.
The Subadviser agrees to manage each of the Portfolios set forth in
Schedule A (1) in compliance with all applicable federal and state laws
governing its operations and investments; (2) so as not to jeopardize either the
treatment of the Seasons variable annuity contracts issued by Variable Annuity
Account Five (File No. 33-08859; hereinafter "Contracts") as annuity contracts
for purposes of the Internal Revenue Code of 1986, as amended (the "Code"), or
the eligibility of the Contracts to qualify for sale to the public in any state
where they may otherwise be sold; and (3) to minimize any taxes and/or penalties
payable by the Trust or such Portfolio. Without limiting the foregoing, the
Subadviser agrees to manage each Portfolio (1) so that it qualifies to be
treated as a "regulated investment company" under subchapter M, chapter 1 of the
Code, and (2) in compliance with (a) the provisions of the Act and rules adopted
thereunder; (b) the diversification requirements specified in the Internal
Revenue Service's regulations under Section 817(h) of the Code; (c) applicable
state insurance laws to the extent the Adviser notifies the Subadviser of any
such applicable state insurance laws; (d) applicable federal and state
securities, commodities and banking laws; and (e) the distribution requirements
necessary to avoid payment of any excise tax pursuant to Section 4982 of the
Code. For purposes of 2(c) in the preceding sentence, disclosure in the Trust's
prospectus and/or statement of additional information of applicable state
insurance laws and regulations shall constitute "notice" thereof. For purposes
of compliance with this paragraph, the Subadviser shall be entitled to treat the
portion of the assets of each Portfolio that it manages as though such portion
constituted the entire portfolio, and the Subadviser shall not be responsible in
any way for the compliance of other portions of the Portfolio or for compliance
of the Portfolio as a whole with this paragraph.
(b) The Subadviser shall be responsible for the preparation and
filing of Schedule 13G and Form 13F on behalf of the Portfolio(s). The
Subadviser shall not be responsible for the preparation or filing of any reports
required of the Portfolio(s) by any governmental or regulatory agency, except as
expressly agreed to in writing. The Subadviser shall vote proxies received in
connection with securities held by the Portfolio(s).
(c) 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.
(d) The Adviser shall timely furnish Subadviser with such information
as may be reasonably necessary for or requested by Subadviser to perform its
responsibilities under this Agreement. The Subadviser shall establish and
maintain brokerage accounts or other accounts necessary for the purchase or sale
of various forms of securities and the Adviser shall take such actions as
Subadviser deems advisable or necessary to enable Subadviser to establish such
accounts on behalf of the Trust.
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
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including price (including the applicable brokerage commission, dealer spread or
futures commission merchant rate), the size of the order, the nature of the
market for the security or other investment, the timing of the transaction, the
reputation, experience and financial stability of the broker-dealer or futures
commission merchant involved, the quality of the service, the difficulty of
execution, the execution capabilities and operational facilities of the firm
involved, and, in the case of securities, the firm's risk in positioning a
block of securities. Subject to such policies as the Trustees may determine and
consistent with Section 28(e) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), the Subadviser shall not be deemed to have acted unlawfully or
to have breached any duty created by this Agreement or otherwise solely by
reason of the Subadviser's having caused a Portfolio to pay a member of an
exchange, broker or dealer an amount of commission for effecting a securities
transaction in excess of the amount of commission another member of an exchange,
broker or dealer would have charged for effecting that transaction, if the
Subadviser determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such member of an exchange, broker or dealer viewed in terms of
either that particular transaction or the Subadviser's overall responsibilities
with respect to such Portfolio and to other clients as to which the Subadviser
exercises investment discretion. In accordance with Section 11(a) of the 1934
Act and Rule 11a2-2(T) thereunder, and subject to any other applicable laws and
regulations including Section 17(e) of the Act and Rule 17e-1 thereunder, the
Subadviser may engage its affiliates, the Adviser and its affiliates or any
other subadviser to the Trust and its respective affiliates, as broker-dealers
or futures commission merchants to effect portfolio transactions in securities
and other investments for a Portfolio. The Subadviser will promptly communicate
to the Adviser and to the officers and the Trustees of the Trust such
information relating to portfolio transactions as they may reasonably request.
3. (a) 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.
(b) EXPENSES. Adviser, the Trust and the Portfolio(s) shall assume
and pay their respective organizational, operational, and business expenses not
specifically assumed or agreed to be paid by Subadviser pursuant to this
Agreement. Subadviser shall pay its own organizational, operational, and
business expenses but shall not be obligated to pay any expenses of Adviser, the
Trust, or the Portfolio(s), including without limitation, (a) interest and
taxes; (b) brokerage commissions and other costs in connection with the purchase
or sale of securities or other investment instruments for the Portfolio(s); and
(c) custodian fees and expenses.
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4. OTHER SERVICES. At the request of the Trust or the Adviser, the
Subadviser in its discretion may make available to the Trust, office facilities,
equipment, personnel and other services. 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. The Subadviser may provide advice to
or take action with respect to other clients, which advice or action, including
the timing and nature of such action, may differ from or be identical to advice
given or action taken with respect to the Portfolio(s). In the event of such
activities, the transactions and associated costs will be allocated among such
clients (including the Portfolio(s)) in a manner that the Subadviser believes to
be equitable to the accounts involved and consistent with such accounts'
objectives, policies and limitations.
7. CERTAIN RECORDS. While the Subadviser is not being engaged to serve
as the Trust's official record keeper, the Subadviser nevertheless hereby
undertakes and agrees to maintain, in the form and for the period required by
Section 204 of the Advisers Act and Rule 204-2 thereunder, all records relating
to the investments of the Portfolio(s) that are required to be maintained by
the Subadviser pursuant to the requirements of Rule 204-2 under the Advisers
Act. The Subadviser will also, in connection with the purchase and sale of
securities for each Portfolio, arrange for the transmission to the custodian for
the Trust on a daily basis, such confirmation, trade tickets, and other
documents and information, that identify securities to be purchased or sold on
behalf of the Portfolio, as may be reasonably necessary to enable the custodian
to perform its administrative and recordkeeping responsibilities with respect to
the Portfolio.
The Subadviser agrees that all accounts, books and other records
maintained and preserved by it with respect to the Portfolios as required hereby
shall be subject at any time, and from time to time, to such reasonable
periodic, special and other examinations by the Securities and Exchange
Commission, the Trust's auditors, the Trust or any representative of the Trust,
the Adviser, or any governmental agency or other instrumentality having
regulatory authority over the Trust.
8. CONFIDENTIALITY AND PROPRIETARY RIGHTS. The Adviser will not,
directly or indirectly, and will not permit its affiliates, employees, officers,
directors, agents, contractors, or the Trust to, in any form or by any means,
use, disclose, or furnish, to any person or entity, records or information
concerning the business of the Subadviser, except as necessary for the
performance of its duties under this Agreement or the Advisory Agreement, or as
required by law upon prior written notice to the Subadviser. The Subadviser is
the sole owner of the name and xxxx
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"Janus." The Adviser shall not, and shall not permit the Trust to, without
prior written consent of the Subadviser, use the name or xxxx "Xxxxx" or make
representations regarding the Subadviser or its affiliates. Upon termination of
this Agreement for any reasons, the Adviser shall immediately cease, and the
Adviser shall cause the Trust to immediately cease, all use of the Janus name
or any Xxxxx xxxx.
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, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the Subadviser) neither the
Subadviser nor its officers, directors, agents, employees, controlling persons,
shareholders, and any other person or entity affiliated with the Subadviser
shall be subject to liability for any act or omission in the course of, or
connected with, rendering services hereunder, including without limitation, any
error of judgment or mistake of law or for any loss suffered by any of them in
connection with the matters to which this Agreement relates, except to the
extent specified in Section 36(b) of the Act concerning loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services. Except for such disabling conduct, the Adviser shall indemnify the
Subadviser (and its officers, directors, partners, agents, employees,
controlling persons, shareholders and any other person or entity affiliated with
the Subadviser) (collectively, the "Indemnified Parties") from any liability
arising from (1) the Subadviser's conduct under this Agreement, or (2) any
untrue statement of a material fact in the Trust's registration statement or
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, if such statement or omission was
made in reliance on information furnished by the Adviser.
(b) The Subadviser agrees to indemnify and hold harmless the Adviser
and its affiliates and each of its directors and officers and each person, if
any, who controls the Adviser within the meaning of Section 15 of the 1933 Act
against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses), to which the Adviser or its affiliates or
such directors, 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 material breach of this Agreement by the Subadviser
resulting from Subadviser's disabling conduct, or (ii) any untrue statement of
a material fact in the Trust's registration statement or omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, if such statement or omission was made in reliance on
information furnished by the Subadviser; 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 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 the 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 the Adviser or any other subadviser to a
Portfolio, which records are not also maintained by the Subadviser. The
Adviser agrees that the Subadviser shall manage the portion of the assets of a
Portfolio allocated to it as if it was a separate operating series and
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shall comply with subsections (a) and (b) of Section I of this Subadvisory
Agreement (including, but not limited to, the investment objectives, policies
and restrictions applicable to a Portfolio and qualifications of a Portfolio as
a regulated investment company under the Code) with respect to the portion of
assets of a Portfolio allocated to the 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 Portfolio's
assets not allocated to the Subadviser.
10. PERMISSIBLE INTERESTS. Trustees and agents of the Trust are or may be
interested in the Subadviser (or any successor thereof) as directors, partners,
officers, or shareholders, or otherwise; directors, 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.
11. TERM OF THE AGREEMENT. This Agreement shall continue in full force
and effect with respect to each Portfolio until two years from the date hereof,
and from year to year thereafter so long as such continuance is specifically
approved at least annually (i) by the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio voting separately from any other
series of the Trust.
With respect to each Portfolio, this Agreement may be terminated at
any time, without payment of a penalty by the Portfolio or the Trust, by vote of
a majority of the Trustees, or by vote of a majority of the outstanding voting
securities (as defined in the Act) of the Portfolio, voting separately from any
other series of the Trust, or by the Adviser, on not less than 30 nor more than
60 days' written notice to the Subadviser. With respect to each Portfolio, this
Agreement may be terminated by the Subadviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser and the Trust.
Notwithstanding the foregoing, the Subadviser may terminate the Agreement upon
60 days' written notice in the event of a breach of the Agreement by the
Adviser. The termination of this Agreement with respect to any Portfolio or the
addition of any Portfolio to Schedule A hereto (in the manner required by the
Act) shall not affect the continued effectiveness of this Agreement with respect
to each other Portfolio subject hereto. This Agreement shall automatically
terminate in the event of its assignment (as defined by the Act).
This Agreement will also terminate in the event that the Advisory
Agreement by and between the Trust and the Adviser is terminated. The
obligations contained in Section 9 shall survive termination of this Agreement.
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 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
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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. 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" only shall be liable.
16. SEPARATE SERIES. Pursuant to the provisions of the Declaration, each
Portfolio is a separate series of the Trust, and all debts, liabilities,
obligations and expenses of a particular Portfolio shall be enforceable only
against the assets of that Portfolio and not against the assets of any other
Portfolio or of the Trust as a whole.
17. 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: Janus Capital Corporation
000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx
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: Xxxxx X. Xxxxxx
Senior Vice President,
General Counsel - Corporate Affairs
and Secretary
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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.
/s/ Xxxxx X. Xxxxxxx
By: ____________________________________
Name: Xxxxx X. Xxxxxxx
Title: President
JANUS CAPITAL CORPORATION
/s/ Xxxxxxx X. Xxxxxxxxx
By: ____________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
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