Exhibit 99.Dii
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of January 1, 2002 by and
between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and AIG GLOBAL INVESTMENT CORP., a Delaware Limited Liability
Company (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and SunAmerica Income Funds, 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 common stock, par value $.01 per share, in separately
designated series representing separate funds with their own investment
objectives, policies and purposes; and
WHEREAS, the Subadviser is engaged in the business of rendering
investment advisory services and is registered as an investment adviser under
the Investment Advisers Act of 1940, as amended; and
WHEREAS, the Adviser desires to retain the Subadviser to furnish
investment advisory services to the investment series of the Trust listed on
Schedule A attached hereto (the "Fund"), and the Subadviser is willing to
furnish such services;
NOW, THEREFORE, it is hereby agreed between the parties hereto as
follows:
1. Duties of the Subadviser. 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 Fund listed on
Schedule A attached hereto. The Subadviser will determine in its discretion, and
subject to the oversight and review of the Adviser, the securities to be
purchased or sold, will provide the Adviser with records concerning its
activities which the Adviser or the Trust is required to maintain, and will
render regular reports to the Adviser and to officers and Directors 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 Directors of the Trust and in compliance with such policies as the
Directors of the Trust may
from time to time establish and communicate to the Subadviser, and in compliance
with (a) the objectives, policies, and limitations for the Fund set forth in the
Trust's current prospectus and statement of additional information as provided
to the Subadviser, and (b) applicable laws and regulations.
The Subadviser represents and warrants to the Adviser that the portion
of each Fund set forth in Schedule A managed by it will at all times be operated
and managed in compliance with all applicable federal and state laws governing
its operations and investments. Without limiting the foregoing and subject to
Section 9(c) hereof, the Subadviser represents and warrants (1) that the
Subadviser's management of the assets of a Fund will be designed to achieve
qualification by each Fund to be treated as a "regulated investment company"
under subchapter M, chapter 1 of the Internal Revenue Code of 1986, as amended
(the "Code"), and (2) compliance with (a) the provisions of the Act and rules
adopted thereunder that relate to the investment of Fund assets, including
depositing those assets in custody with institutions designated by the Trust;
and (b) applicable federal and state securities and commodities laws (other than
state securities laws relating to the amount of Fund shares that may be sold in
a particular state); provided that for purposes of Section 17(a), (d) and (e),
the Subadviser shall effect compliance only in relation to its own affiliates
and to affiliated persons identified to it by the Adviser. The Subadviser
further represents and warrants that only with respect to any statements or
omissions made in any Registration Statement for shares of the Trust, or any
amendment or supplement thereto, 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.
2. Fund Transactions. (a) The Subadviser is responsible for decisions,
and is hereby authorized, to buy or sell securities and other investments for
each Fund, broker-dealers and futures commission merchants' selection, and
negotiation of brokerage commission and futures commission merchants' rates. As
a general matter, in executing Fund transactions, the Subadviser may employ or
deal with such broker-dealers or futures commission merchants as may, in the
Subadviser's best judgement, provide prompt and reliable execution of the
transactions at favorable prices and reasonable commission rates. In selecting
such broker-dealers or futures commission merchants, the Subadviser shall
consider all relevant factors including price (including the applicable
brokerage commission, dealer spread or futures commission merchant rate), the
size of the order, the nature of the market for the security or other
investment, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer or futures commission merchant
involved, the quality of the service, the
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difficulty of execution, the execution capabilities and operational facilities
of the firm involved, and, in the case of securities, the firm's risk in
positioning a block of securities. Subject to such policies as the Directors 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 Fund to pay a
member of an exchange, broker or dealer an amount of commission for effecting a
securities transaction in excess of the amount of commission another member of
an exchange, broker or dealer would have charged for effecting that transaction,
if the Subadviser determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such member of an exchange, broker or dealer viewed in terms of
either that particular transaction or the Subadviser's overall responsibilities
with respect to such Fund and to other clients as to which the Subadviser
exercises investment discretion. In accordance with Section 11(a) of the 1934
Act and Rule 11a2-2(T) thereunder, and subject to any other applicable laws and
regulations including Section 17(e) of the Act and Rule 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 Fund transactions in securities and
other investments for a Fund. The Subadviser will promptly communicate to the
Adviser and to the officers and the Directors of the Trust such information
relating to Fund transactions as they may reasonably request. To the extent
consistent with applicable law, the Subadviser may aggregate purchase or sell
orders for the Fund with contemporaneous purchase or sell orders of other
clients of the Subadviser or its affiliated persons. In such event, allocation
of the securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadviser in the manner the Subadviser
determines to be equitable and consistent with its and its affiliates' fiduciary
obligations to the Fund and to such other clients. The Adviser hereby
acknowledges that such aggregation of orders may not result in more favorable
pricing or lower brokerage commissions in all instances.
(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 Fund'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 seek
to obtain best execution; 2) such direction may result in the Trust paying a
higher commission, depending upon the Subadviser's arrangements with 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 the Subadviser would, in some instances,
be in a better position to negotiate commissions; and 4) the Subadviser does not
make commitments to allocate fixed or definite amounts of commissions to
brokers. As such,
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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
portion of the assets managed by the Subadviser for each Fund listed thereon.
Such fee shall be accrued daily and paid monthly as soon as practicable after
the end of each month (i.e., the applicable annual fee rate divided by 365
applied to each prior days' net assets in order to calculate the daily accrual).
If the Subadviser shall provide its services under this Agreement for less than
the whole of any month, the foregoing compensation shall be prorated. The
Adviser and Subadviser acknowledge that the Fund will be ultimately responsible
for all brokerage commissions, taxes, custodian fees and any other
transaction-related fees, but that, for the purposes of this Agreement, as
between the Adviser and the Subadviser, the Adviser will be responsible for such
expenses, and the Adviser authorizes the Subadviser to incur and pay such
expenses for the Fund, as deemed appropriate by the Subadviser.
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.
7. Certain Records. The Subadviser hereby undertakes and agrees to
maintain, in the form and for the period required by Rule 31a-2 under the Act,
all records relating to the investments of the Fund that are required to be
maintained by the 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.
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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 or logo
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) Except for damages resulting
directly from willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder ("disabling conduct") on the part
of the Subadviser, the Subadviser shall not be subject to liability to the
Adviser, its officers, directors, agents, employees, controlling persons or
shareholders or to the Trust or to any shareholder of the Trust or to any third
party 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 (collectively, the
"Indemnified Parties") from any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses) arising from the
Subadviser's providing services under this Agreement or the sale of securities
of the Trust.
(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 reasonable 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, directly
caused by the Subadviser's disabling conduct; provided, however, that in no case
is the Subadviser's indemnity in favor of any person deemed to protect such
other persons against any liability to which such person would otherwise be
subject by reasons of willful misfeasance, bad faith, or gross negligence in the
performance of his, her or its duties or by reason of his, her or its reckless
disregard of obligation and duties under this Agreement.
(c) The Subadviser shall not be liable to the Adviser its
officers, directors, agents, employees, controlling persons or shareholders or
to the Trust or its shareholders for (i) any acts of the Adviser or any other
subadviser to the Fund with respect to the portion of the assets of a Fund not
managed by Subadviser and (ii) acts of the Subadviser which result from or are
based upon acts of the Adviser, including, but not limited to, a failure of the
Adviser to provide accurate and current information with respect to any records
maintained by Adviser or any other subadviser to a Fund, which records are not
also maintained by the Subadviser or, to the extent such records relate to the
portion of the assets managed by the Subadviser, otherwise
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available to the Subadviser upon reasonable request. The Adviser and Subadviser
each agree that the Subadviser shall manage the portion of the assets of a Fund
allocated to it as if it was a separate operating Fund and shall comply with
subsections (a) and (b) of Section 1of this Subadvisory Agreement (including,
but not limited to, the investment objectives, policies and restrictions
applicable to a Fund and qualifications of a Fund as a regulated investment
company under the Code) only with respect to the portion of assets of a Fund
allocated to Subadviser. The Adviser shall indemnify the Indemnified Parties
from any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) arising from the conduct of the Adviser,
the Trust and any other subadviser with respect to the portion of a Fund's
assets not allocated to the Subadviser and with respect to any other Fund of the
Trust.
10. Permissible Interests. Directors 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 Directors, 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 Fund until two years from the date hereof, and
from year to year thereafter so long as such continuance is specifically
approved at least annually (i) by the vote of a majority of those Directors 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 Directors of the Trust or by vote of a majority of the
outstanding voting securities of the Fund voting separately from any other
series of the Trust.
With respect to each Fund, this Agreement may be terminated at any
time, without payment of a penalty by the Fund or the Trust, by vote of a
majority of the Directors, or by vote of a majority of the outstanding voting
securities (as defined in the Act) of the Fund, voting separately from any other
series of the Trust, or by the Adviser, on not less than 30 nor more than 60
days' written notice to the Subadviser. With respect to each Fund, this
Agreement may be terminated by the Subadviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser and the Trust. The
termination of this Agreement with respect to any Fund or the addition of any
Fund to Schedule A hereto (in the manner required by the Act) shall not affect
the continued effectiveness of this Agreement with respect to each other Fund
subject hereto. This Agreement shall automatically terminate in the event of its
assignment (as defined by the Act).
This Agreement will also terminate in the event that the Advisory
Agreement by and between the Trust and the Adviser is terminated.
12. Severability. This Agreement constitutes the entire Agreement
between the parties hereto. 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. Separate Series. Pursuant to the provisions of the Articles of
InTrust and the General Laws of the State of Maryland, each Fund is a separate
series of the Trust, and all debts, liabilities, obligations and expenses of a
particular Fund shall be enforceable only against the assets of that Fund and
not against the assets of any other Fund or of the Trust as a whole.
16. Notices. All notices shall be in writing and deemed properly given
when delivered or mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
Subadviser:
AIG GLOBAL INVESTMENT CORP.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy to:
AIG GLOBAL INVESTMENT CORP.
General Counsel
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 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
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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: ________________________________
Name: Xxxxx X. Xxxxxxx
Title: President & CEO
AIG GLOBAL INVESTMENT CORP.
By: ________________________________
Name:
Title:
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