EXHIBIT (d)(xi)
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of January 2, 2001 by and
between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and XXXXXXX CAPITAL MANAGEMENT, LLC, a Delaware Limited Liability
Company (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and SunAmerica Series Trust, a Massachusetts
business trust (the "Trust"), have entered into an Investment Advisory and
Management Agreement dated as of January 1, 1999, as amended from time to time
(the "Advisory Agreement"), pursuant to which the Adviser has agreed to provide
investment management, advisory and administrative services to the 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, no par value 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; 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. DUTIES OF THE SUBADVISER. (a) 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 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, will provide the Adviser with records concerning its
activities which the Adviser or the Trust is required to maintain, and will
render regular reports to the Adviser and to officers and Trustees of the Trust
concerning its discharge of the foregoing responsibilities. The Subadviser shall
discharge the foregoing responsibilities subject to the control of the officers
and the 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.
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The Subadviser represents and warrants to the Adviser that the
assets of each of the Portfolios 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) the applicable provisions of Subchapter M,
chapter 1 of the Code ("Subchapter M") for each Portfolio 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 Internal Revenue Code of 1986, as amended (the "Code") so
as not to jeopardize the treatment of the variable annuity contracts which offer
the Portfolios (hereinafter "Contracts") as annuity contracts for purposes of
the Code; and (d) the provisions of the Act and rules adopted thereunder.
Subadviser also agrees to furnish information to the Adviser, 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 Subadviser
further represents and warrants that to the extent that any statements or
omissions made in any Registration Statement for the Contracts or shares of the
Trust, or any amendment or supplement thereto, are made in reliance upon and in
conformity with information furnished by the Subadviser expressly for use
therein, such Registration Statement and any amendments or supplements thereto
will, when they become effective, conform in all material respects to the
requirements of the Securities Act of 1933 and the rules and regulations of the
Commission thereunder (the "1933 Act") and the Act and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
The Subadviser accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
(b) The Subadviser agrees: (i) to maintain a level of errors
and omissions or professional liability insurance coverage that, at all times
during the course of this Agreement, is appropriate given the nature of its
business, and (ii) from time to time and upon reasonable request, to supply
evidence of such coverage to the Adviser.
2. PORTFOLIO TRANSACTIONS. (a) The Subadviser is responsible for
decisions to buy or sell securities and other investments for 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 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,
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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, provided, however, that for each
Portfolio the average annual percentage of portfolio transactions which are
engaged in with the Subadviser's affiliates, the Adviser and its affiliates or
any other subadviser to the Trust and its respective affiliates, may not exceed
25% of the Portfolio's total transactions in securities and other investments
during the Trust's fiscal year. 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. To the extent
consistent with applicable law, the Subadviser may aggregate purchase or sell
orders for the Portfolio with contemporaneous purchase or sell orders of other
clients of the Subadviser or its affiliated persons. In such event, allocation
of the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadviser in the manner the Subadviser
determines to be equitable and consistent with its and its affiliates' fiduciary
obligations to the Portfolio and to such other clients. The Adviser hereby
acknowledges that such aggregation of orders may not result in more favorable
pricing or lower brokerage commissions in all instances.
(b) Notwithstanding Section 2(a) above, for such purposes as obtaining
investment research products and services, covering fees and expenses, and
rewarding sales or distribution, the Adviser may direct the Subadviser to effect
a specific percentage of a Portfolio's transactions in securities and other
investments to certain broker-dealers and futures commission merchants'. In
designating the use of a particular broker-dealer or futures commission
merchant, the Adviser and Subadviser acknowledge:
(1) All brokerage transactions are subject to best
execution. As such, Subadviser will use its best
efforts to direct non-risk commission transactions to
a particular broker-dealer or futures commission
merchant designated by the Adviser provided that the
Subadviser obtains best execution;
(2) (2) Such direction may result in the Subadviser
paying a higher commission, depending upon the
Subadviser's arrangements with the particular
broker-dealer or futures commission merchant, or such
other
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factors as market conditions, share values,
capabilities of the particular broker-dealer or
futures commission merchant, etc.;
(3) If the Subadviser directs payments of an excessive
amount of commissions, the executions may not be
accomplished as rapidly. In addition, the Subadviser
may forfeit the possible advantage derived from the
aggregation of multiple orders as a single "bunched"
transaction where Subadviser would, in some
instances, be in a better position to negotiate
commissions; and
(4) Subadviser does not make commitments to allocate
fixed or definite amounts of commissions to brokers.
As such the Subadviser may be unable to fulfill the
Adviser's request for direction due to the reasons
stated above.
3. 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
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.
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 in order to facilitate meetings or other
similar functions. 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.
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7. CERTAIN RECORDS. The Subadviser hereby undertakes and agrees to
maintain, in the form and for the period required by Rule 31a-2 under the Act,
all records relating to the investments of the Portfolio(s) that are required to
be maintained by the Trust pursuant to the requirements of Rule 31a-1 of that
Act. Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 promulgated under the Act which are
prepared or maintained by the Subadviser on behalf of the Trust are the property
of the Trust and will be surrendered promptly to the Trust or the Adviser on
request.
The Subadviser agrees that all accounts, books and other
records maintained and preserved by it as required hereby shall be subject at
any time, and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, the 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. REFERENCE TO THE SUBADVISER. Neither the Trust nor the Adviser or
any affiliate or agent thereof shall make reference to or use the name of the
Subadviser or any of its affiliates in any advertising or promotional materials
without the prior approval of the Subadviser, which approval shall not be
unreasonably withheld.
9. LIABILITY OF THE SUBADVISER. (a) In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties ("disabling conduct") hereunder on the part of the Subadviser (and its
officers, directors/trustees, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Subadviser) the
Subadviser shall not be subject to liability to the Adviser (and its officers,
directors/trustees, agents, employees, controlling persons, shareholders and any
other person or entity affiliated with the Adviser) or to the Trust (and its
officers, directors/trustees, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Trust) for any
act or omission in the course of, or connected with, rendering services
hereunder, including without limitation, any error of judgment or mistake of law
or for any loss suffered by any of them in connection with the matters to which
this Agreement relates, except to the extent specified in Section 36(b) of the
Act concerning loss resulting from a breach of fiduciary duty with respect to
the receipt of compensation for services. Except for such disabling conduct, the
Adviser shall indemnify the Subadviser (and its officers, directors/trustees,
partners, agents, employees, controlling persons, shareholders and any other
person or entity affiliated with the Subadviser) from any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses) arising from Subadviser's rendering of services under this Agreement.
(b) The Subadviser agrees to indemnify and hold harmless the
Adviser (and its officers, directors/trustees, agents,
employees, controlling persons, shareholders and any other person or entity
affiliated with the Adviser) against any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses), to
which the Adviser or its affiliates or such directors/trustees, officers or
controlling person may become subject under the 1933 Act, under other statutes,
at common law or otherwise, which may be based upon (i) any disabling conduct or
breach of this Agreement by the Subadviser, or (ii) any material failure
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by the Subadviser to comply with the representations and warranties set forth in
Section 1 of this Agreement; provided, however, that in no case is the
Subadviser's indemnity in favor of any person deemed to protect such other
persons against any liability to which such person would otherwise be subject by
reasons of willful misfeasance, bad faith, or gross negligence in the
performance of his, her or its duties or by reason of his, her or its reckless
disregard of obligation and duties under this Agreement.
10. PERMISSIBLE INTERESTS. Trustees and agents of the Trust are or may
be interested in the Subadviser (or any successor thereof) as
directors/trustees, partners, officers, or shareholders, or otherwise;
directors/trustees, partners, officers, agents, and shareholders of the
Subadviser are or may be interested in the 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; provided, however, that this Agreement may not be terminated by
the Subadviser unless another subadvisory agreement has been approved by the
Trust in accordance with the Act, or after six months' written notice, whichever
is earlier. The termination of this Agreement with respect to any 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.
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.
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14. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York and the applicable provisions of the Act. To
the extent the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Act, the
latter shall control.
15. 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: Xxxxxxx Capital Management, LLC
0000 00xx Xxxxxx - Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
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: Xxxxxxx Xxxxxx
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.
By: /s/ XXXXX X. XXXXXXX
--------------------
Name: Xxxxx X. Xxxxxxx
Title: President
XXXXXXX CAPITAL MANAGEMENT, LLC
By: /s/ XXXXXXX X. XXXXX
--------------------
Name: Xxxxxxx X. Xxxxx
Title: President
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SCHEDULE A
FEE RATE
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS THE
PORTFOLIO SUBADVISER MANAGES FOR THE PORTFOLIO)
--------- ------------------------------------------------
Xxxxxxx Growth Portfolio 0.45%
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