INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 30th day of May, 2017 by and
between THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY, hereinafter referred to as "VALIC," and JANUS
CAPITAL MANAGEMENT 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 II, an investment
company organized under the laws
of Delaware as a business trust
("XX XX"). XX XX is a series type of
investment company issuing
separate classes (or series) of
shares of beneficial interest and 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) XX XX currently consists of fifteen
portfolios ("Funds"):
Aggressive Growth
Lifestyle Fund
Capital Appreciation Fund
Conservative Growth
Lifestyle Fund
Core Bond Fund
Government Money
Market II Fund
High Yield Bond Fund
International Small Cap
Equity Fund
Large Cap Value Fund
Mid Cap Growth Fund
Mid Cap Value Fund
Moderate Growth
Lifestyle Fund
Small Cap Growth Fund
Small Cap Value Fund
Socially Responsible Fund
Strategic Bond Fund
In accordance with VC II's
Agreement and Declaration of
Trust (the "Declaration"), new
Funds may be added to XX XX upon
approval of the Board of Trustees
(the "Board") without the approval
of shareholders. This Agreement
will apply only to the Fund(s) 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
acknowledges that the
SUB-ADVISER intends to delegate
the day-to-day portfolio
management of the Covered Fund
to its affiliate, Xxxxxxx Investment
Management LLC ("XXXXXXX" or
the "SUB-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 the Board and in conformity
with the 1940 Act, all applicable laws and regulations
thereunder, and all other applicable federal and state
securities and tax laws and regulations, including
section 817(h) and Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), the
Declaration, VC II's Bylaws (the "Bylaws"), each
Covered Fund's registration statement, prospectus,
and stated investment objectives, policies and
restrictions and any applicable procedures adopted by
the Board and provided to the SUB-ADVISER, shall:
(a) manage the investment and reinvestment of all
of, or to the extent applicable, a portion of, the
assets of each Covered Fund(s) including, for
example, the evaluation of pertinent economic,
statistical, financial, and other data, the
determination of the industries and companies
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 and options
thereon) 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.
Without limiting the foregoing, the SUB-ADVISER
represents and warrants to VALIC that all of, or to
the extent applicable the portion of, the assets which
it manages of the Covered Fund(s) set forth in
Schedule A will at all times be operated and managed
in compliance with (a) all applicable federal and state
laws, including securities, commodities and banking
laws, governing its operations and investments;
(b) applicable provisions of Subchapter M, chapter 1
of the Code ("Subchapter M") for each Covered Fund
to be treated as a "regulated investment company"
under Subchapter M; (c) the diversification
requirements specified in the Internal Revenue
Service's regulations under Section 817(h) of the
Code so as not to jeopardize the treatment of the
variable annuity contracts that offer the Covered
Funds as annuity contracts for purposes of the Code;
(d) the distribution requirements necessary to avoid
payment of any excise tax pursuant to Section 4982
of the Code; (e) the provisions of the 1940 Act and
rules adopted thereunder; (f) the objectives, policies,
restrictions and limitations for the Covered Funds as
set forth in the Covered Funds' current prospectus
and statement of additional information as most
recently provided by VALIC to the SUB-ADVISER;
and (g) the policies and procedures as adopted by the
Board, as most recently provided by VALIC to the
SUB-ADVISER. The SUB-ADVISER shall furnish
information to VALIC, as requested, for purposes of
compliance with the distribution requirements
necessary to avoid payment of any excise tax
pursuant to Section 4982 of the Code. The
SUB-ADVISER further represents and warrants that
to the extent that any statements or omissions made
in any Registration Statement for shares of the
Covered Funds, or any amendment or supplement
thereto, are made in reliance upon and in conformity
with information furnished by the SUB-ADVISER
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
1940 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.
VALIC agrees that SUB-ADVISER shall manage the
portion of the assets of a Covered Fund allocated to it
as if it was a separate operating fund, unless
instructed otherwise in writing from VALIC, and
shall comply with the representations and warranties
stated in this Section (including, but not limited to,
the investment objectives, policies and restrictions
applicable to a Covered Fund and qualifications of a
Covered Fund as a regulated investment company
under the Code) with respect to the portion of assets
of a Covered Fund allocated to SUB-ADVISER.
The SUB-ADVISER may delegate any of its duties
and obligations hereunder to any affiliated person (as
such term is defined in the 0000 Xxx) that is eligible
to serve as an investment adviser to an investment
company registered under the 1940 Act on such
terms and conditions as it deems necessary or
appropriate, provided that VALIC and the Board
consent to any such delegation and to the terms and
conditions thereof and such delegation is permitted
by and in conformity with the 1940 Act. The SUB-
ADVISER shall be liable to VALIC for any loss or
damage arising out of, in connection with or related
to the actions or omissions to act of any delegee
utilized hereunder. In determining liability, the
limitation of liability set forth in Section 7 of this
Agreement shall apply to the actions or omissions to
act of a delegee.
VALIC acknowledges that the SUB-ADVISER shall,
pursuant to a separate Sub-Sub-Advisory Agreement,
delegate the day-to-day portfolio management of the
Covered Fund to Xxxxxxx. The SUB-ADVISER shall
notify VALIC of any material amendments to the
Sub-Sub-Advisory Agreement.
The SUB-ADVISER makes no representation or
warranty, express or implied, that any level of
performance or investment results will be achieved
by the Covered Fund (or portion thereof) or that the
Covered Fund will perform comparably with any
standard or index, including other clients of the SUB-
ADVISER.
The SUB-ADVISER will assist the Covered Fund(s)
and its agents in determining whether prices obtained
for valuation purposes accurately reflect 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 the SUB-ADVISER will be
provided for information purposes only.
In performing the services described in paragraph (b)
above, the SUB-ADVISER shall use its best efforts
to obtain for the Covered Fund(s) the best execution
of portfolio transactions determined by SUB-
ADVISER's best execution policy. Subject to
approval by the Board of appropriate policies and
procedures that may be adopted by the Board and
Section 28(e) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), the SUB-ADVISER
may cause the Covered Fund(s) to pay to a broker a
commission, for effecting a portfolio transaction, in
excess of the commission another broker would have
charged for effecting the same transaction, if the first
broker provided brokerage and/or research products
or services, including statistical data, to the SUB-
ADVISER. 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. In accordance with Section II(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-l thereunder, the SUB-ADVISER may engage its
affiliates, the VALIC and its affiliates or any other
sub-adviser to XX XX 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.
Furthermore, on occasions when the SUB-ADVISER
deems the purchase or sale of a security to be in the
best interest of one or more of the Covered Fund(s)
as well as other clients of the SUB-ADVISER, it may
allocate such transactions in the manner it considers
to be the most equitable and consistent with its
fiduciary obligation to the Covered Fund(s) and to
such other clients. 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.
The SUB-ADVISER may aggregate sales and
purchase orders of securities held by the Covered
Fund(s) with similar orders being made
simultaneously for other accounts managed by the
SUB-ADVISER or with accounts of the affiliates of
the SUB-ADVISER, 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, considering factors such as the
advantageous selling or purchase price, brokerage
commission and other expenses. In accounting for
such aggregated order price, commission and other
expenses shall be averaged on a per bond or share
basis daily. VALIC acknowledges that the
determination of such economic benefit to the
Covered Fund(s) by the SUB-ADVISER is subjective
and represents the SUB-ADVISER's evaluation that
the Covered Fund(s) is benefited by relatively better
purchase or sales prices, lower commission expenses
and beneficial timing of transactions or a
combination of these and other factors.
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 reasonable
and customary customer agreements and other
documentation in connection 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 and
as required by applicable law.
The SUB-ADVISER shall maintain records
adequately demonstrating compliance with its
obligations under this Agreement and report
periodically to VALIC and the Board regarding the
performance of its services under this Agreement.
The SUB-ADVISER will make available to VALIC
and XX XX promptly upon their reasonable written
request all of the Covered Fund(s)'s investment
records and ledgers to assist VALIC and XX XX in
compliance with respect to the Covered Fund(s)'s
securities transactions as required by the 1940 Act
and the Advisers Act, as well as other applicable
laws. The SUB-ADVISER will furnish the Board
with quarterly reports and such special reports as
VALIC and the Board 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,
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 the Covered Fund(s). The
money and investments will be held by the Custodian
of XX XX. The SUB-ADVISER will arrange for the
transmission to the Custodian for the Covered
Fund(s), on a daily basis, such confirmation, trade
tickets and other documents as may be necessary to
enable it to perform its administrative responsibilities
with respect to the Covered Fund(s). The SUB-
ADVISER further shall have the authority to instruct
the custodian of the Covered Fund(s) (i) to pay cash
for securities and other property delivered to the
Custodian for the Covered Fund(s) (ii) to deliver
securities and other property against payment for the
Covered Fund(s), 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.
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
Trustees. VALIC may, on certain non-routine
matters, consult with the SUB-ADVISER before
voting proxies relating to securities held by the
Covered Fund(s). VALIC will instruct the Custodian
and other parties providing services to XX XX
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 XX XX 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 and 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 2 of the
Agreement. VALIC and the SUB-ADVISER
acknowledge that XX XX will be ultimately
responsible for all brokerage commissions, taxes,
custodian fees and other transaction-related fees
incurred on behalf of the Covered Fund(s).
The SUB-ADVISER also represents and warrants
that in furnishing services hereunder, the SUB-
ADVISER will not consult with any other sub-
adviser, other than Xxxxxxx, of the Covered Fund(s) or
other series of XX XX, to the extent any other sub-
advisers are engaged by VALIC, or any other sub-
advisers to other investment companies that are under
common control with XX XX, concerning transactions
of the Covered Fund(s) in securities or other assets,
other than for purposes of complying with the
conditions of paragraphs (a) and (b) of rule 12d3-l
under the 1940 Act.
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
reasonably required to execute transactions on behalf
of the Covered Fund(s), 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 XX XX
Board of Trustees has authorized in writing 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 lawfully 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 court of law of competent jurisdiction
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 belonging to the SUB-ADVISER
obtained pursuant to this Agreement in any manner
whatsoever except as expressly authorized in this
Agreement or as reasonably required in performance
of its advisory services to the Covered Funds, and
will keep confidential any information obtained
pursuant to this service relationship, and disclose
such information only if the SUB-ADVISER has
authorized in writing such disclosure, or if such
information is or hereafter becomes ascertainable
from public or published information or trade
sources, or if such information is expressly required
or requested by applicable federal or state authorities
(including VALIC's regulatory examiners) or court of
law of competent jurisdiction or to the extent such
disclosure is reasonably required by auditors or
attorneys of VALIC in connection with the
performance of their professional services or as may
otherwise be contemplated by this Agreement.
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 the Covered Fund(s)'s average daily net
asset value computed for each of the Covered
Fund(s) including cash or cash equivalents as
provided for herein and in the fee schedule attached
hereto as Schedule A. Schedule A may be amended
from time to time, provided that amendments are
made in conformity with applicable laws and
regulations and the Declaration and Bylaws. Any
change in Schedule A pertaining to any new or
existing Covered Fund(s) shall not be deemed to
affect the interest of any other Covered Fund(s) and
shall not require the approval of shareholders of any
other Covered Fund(s).
The average daily net asset value shall be determined
by taking the mean average of all of the
determinations of net asset value, made in the manner
provided in the Declaration, as applicable, 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.
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 XX XX or the Covered Fund(s). Any
reimbursement of management fees required by any
expense limitation provision and any liability arising
out of a violation of Section 36(b) of the 1940 Act
shall be the sole responsibility of VALIC.
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, and VALIC has no
objection to the SUB-ADVISER so acting, provided
that whenever the 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 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 the 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. The SUB-ADVISER 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
Covered Fund.
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(s) complies with such Code
diversification provisions, as directed by VALIC.
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 with a copy of such code of
ethics together with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC
with a copy of its Form ADV as most
recently filed with the Securities and
Exchange Commission ("SEC") and will
promptly after filing any annual amendment
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 XX XX to delegate some or all of
its responsibilities to one or more sub-
advisers and the delegation to the
SUB-ADVISER under this Agreement is
authorized by and consistent with the grant
of authority in that Investment Advisory
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 the XX XX trustees 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 the Board or a majority of that Covered Fund's
outstanding voting securities.
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 XX XX 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 the Board 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'
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' 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' written notice to
VALIC, or upon such shorter notice as may be
mutually agreed upon by the parties.
7. Indemnification
(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 SUB-ADVISER (and its officers, directors,
agents, employees, controlling persons, shareholders
and any other person or entity affiliated with the
SUB-ADVISER) the SUB-ADVISER shall not be
subject to liability to XX XX, the Covered Funds, or to
any shareholder of the Covered Funds 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, VALIC shall indemnify the SUB-ADVISER
(and its officers, directors, partners, agents,
employees, controlling persons, shareholders and any
other person or entity affiliated with the SUB-
ADVISER) (collectively, the "Indemnified Parties")
from any and all losses, claims, damages, liabilities
or litigation (including reasonable legal and other
expenses) arising from the SUB-ADVISER's conduct
under this Agreement.
(b) The SUB-ADVISER agrees to indemnify and
hold harmless VALIC and its affiliates and each of its
directors and officers and each person, if any, who
controls VALIC within the meaning of Section 15 of
the 1933 Act against any and all losses, claims,
damages, liabilities or litigation (including reasonable
legal and other expenses), to which VALIC 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
breach of this Agreement by the SUB-ADVISER, or
(ii) any failure by the SUB-ADVISER to comply
with the representations and warranties set forth in
Section 1 of this Agreement; provided, however, that
in no case is the SUB-ADVISER'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 SUB-ADVISER shall not be liable to VALIC
for (i) any acts of VALIC or any other sub-adviser to
the Covered Fund(s) with respect to the portion of the
assets of the Covered Fund(s) not managed by
SUB-ADVISER and (ii) acts of the SUB-ADVISER
which result from acts of VALIC, including, but not
limited to, a failure of VALIC to provide accurate
and current information with respect to any records
maintained by VALIC or any other sub-adviser to a
Covered Fund, which records are not also maintained
by or otherwise available to the SUB-ADVISER
upon reasonable request. VALIC shall indemnify the
Indemnified Parties from any liability arising from
the conduct of VALIC and any other sub-adviser
with respect to the portion of a Covered Fund's assets
not allocated to SUB-ADVISER.
8. Other Matters
The SUB-ADVISER may from time to time employ
or associate with itself any person or persons
believed to be particularly fit to assist in its
performance of services under this Agreement,
provided no such person serves 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 XX XX
with respect to them.
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 XX
XX, to promptly surrender the 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 Rule 31a-1 under the 1940 Act. The
SUB-ADVISER agrees that all books and records
which it maintains for the Covered Fund(s) are the
Covered Fund(s)'s property and will be surrendered
promptly to the Covered Fund(s) or VALIC upon
request, provided the SUB-ADVISER will not be
required to surrender or delete any books and records
from back-up, archival or electronic storage
maintained by the SUB-ADVISER. The SUB-
ADVISER 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 Covered Fund(s)'s auditors, the
Covered Fund(s) or any representative of the Covered
Fund(s), VALIC, or any governmental agency or
other instrumentality having regulatory authority over
the Covered Fund(s).
VALIC has herewith furnished the SUB-ADVISER
copies of VC II's Prospectus, Statement of Additional
Information, investment objectives, policies and
restrictions, and any applicable procedures adopted
by VC II's Board of Trustees, 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 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, statements of additional information,
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 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(s) as the SUB-ADVISER at
any time, or from time to time, may reasonably
request in order to discharge obligations hereunder.
Subject to provisions of this paragraph, the SUB-
ADVISER grants VALIC and the Covered Fund(s) a
non-exclusive right to use the "Janus" and/or
"Xxxxxxx" name in connection with the SUB-
ADVISER's management of the Covered Fund(s) (i)
for so long as this Agreement, any other investment
management agreement between VALIC and SUB-
ADVISER with respect to XX XX, or to any extension,
renewal or amendment thereof, remain in effect, and
(ii) for subsequent periods as long as required by law,
rule or regulation or to the extent necessary to refer to
or illustrate the historical performance of the Covered
Fund(s). All references contained in this Agreement
to "the name or xxxx 'Xxxxx"' shall include but not be
limited to the Janus logo, the website
xxx.xxxxx.xxx and any and all electronic links
relating to such website. VALIC will make no use of
the name or xxxx "Xxxxx" except as expressly
provided in this Agreement or expressly authorized
by JCM in writing. All goodwill associated with the
name and xxxx "Janus" shall inure to the benefit of
the SUB-ADVISER or its affiliates.
VALIC agrees that the SUB-ADVISER may use the
name of VALIC or XX XX in any material that merely
refers in accurate terms to the appointment of the
SUB-ADVISER hereunder.
Notwithstanding any other provisions of this
Agreement, in no event shall the SUB-ADVISER be
responsible for the accuracy or adequacy of any
communications or marketing materials used by
VALIC or XX XX, including any investment
performance information included therein, except to
the extent such marketing material accurately reflects
information provided to VALIC or XX XX by the
SUB-ADVISER in writing, or refers to the SUB-
ADVISER and was reviewed and approved by the
SUB-ADVISER.
Effective upon the execution of this Agreement by
both parties, VALIC will not, directly or indirectly,
and will not permit its affiliates, employees, officers,
directors, agents, contractors, or the Covered Fund to,
in any form or by any means, to use or disclose to
any person or entity, records or information
concerning the business of the SUB-ADVISER, or
the SUB-SUB-ADVISER, including but not limited
to portfolio holdings of SUB-ADVISER or SUB-
SUB-ADVISER Accounts, except as permitted by
this Agreement, or as required by law upon prior
written notice to the SUB-ADVISER. VALIC
acknowledges that any such information is the
confidential property of the SUB-ADVISER or the
SUB-SUB-ADVISER. VALIC agrees to limit access
to the information to its employees or agents who, on
a need to know basis, are (1) authorized to have
access to the information and (2) subject to
confidentiality obligations, including the duty not to
trade on nonpublic information. Upon request,
VALIC agrees to promptly return or destroy, as
directed, any such information.
9. 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 SEC or such interpretive positions as may be
taken by the SEC 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.
10. Amendment and Waiver
Provisions of this Agreement may be amended,
waived, discharged or terminated only by an
instrument in writing signed by the party against
which enforcement of the change, waiver, discharge
or termination is sought. 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.
11. Force Majeure
Neither party to this Agreement shall be liable for
damages resulting from delayed or defective
performance when such delays arise out of causes
beyond the control and without the fault or
negligence of the offending party and could not have
been reasonably prevented by the offending party
through back-up systems and other business
continuation and disaster recovery procedures
commonly employed by other SEC-registered
investment advisers that meet reasonable commercial
standards in the investment company industry. Such
causes may include, but are not restricted to, Acts of
God or of the public enemy, terrorism, acts of the
State in its sovereign capacity, fires, floods,
earthquakes, power failure, disabling strikes,
epidemics, quarantine restrictions, and freight
embargoes.
12. 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:
The Variable Annuity Life Insurance Company
Attn: Mutual Fund Legal
0000 Xxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
If to SUB-ADVISER:
Janus Capital Management LLC
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
13. Severability
If any part of this Agreement be held invalid or
unenforceable to any extent, the remainder of this
Agreement shall be enforced to the greatest extent
permitted by law.
[Signature Page Follows]
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: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Vice President
ATTEST: /s/ Xxxxx X. Xxxxxx XX
NAME: Xxxxx X. Xxxxxx XX
XXXXX CAPITAL MANAGEMENT LLC
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Sebior Vice President
ATTEST: /s/ Xxxx Xxxxxxxxxxx
NAME: Xxxx Xxxxxxxxxxx
SCHEDULE A
COVERED FUNDS
Effective May 30, 2017
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
Large Cap Value Fund 0.250% on the first $500 million
0.225% on over $500 million
