Exhibit (d)(ix)
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of January 1, 1999 by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
FEDERATED INVESTMENT COUNSELING, a Delaware business trust (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, (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; 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. 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. Subject to the oversight and review of the Adviser, the Subadviser will
determine in its discretion the securities to be purchased or sold, and through
delegated authority from the Adviser, execute such documents as may be necessary
in connection therewith; 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
the objectives, policies, and limitations for the Portfolio(s) set forth in the
Trust's current prospectus and statement of additional information.
The Subadviser represents and warrants that its management of the
Portfolios will at all times conform with: (1) the objectives, policies, and
limitations for the Portfolio(s) set forth in the Trust's current prospectus and
statement of additional information; (2) the provisions of Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code") applicable to regulated
investment companies including those investment companies underlying variable
annuities; (3) the provisions of the Act and rules adopted thereunder applicable
to the Portfolios; (4) the diversification requirements specified in the
Internal Revenue Service's regulations under Section 817(h) of the Code; (5)
applicable state insurance laws provided to Subadviser by Adviser in writing
(which may be satisfied through delivery to Subadviser of a copy of the Trust's
current prospectus), or as acknowledged in a written undertaking by Subadviser;
(6) applicable federal and state securities laws; and (7) 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.
2. Representations and Warranties of the Adviser. The Adviser represents
and warrants to the Subadviser that: (1) it is a corporation duly formed and
validly existing under the laws of Delaware; (2) it is duly authorized to
execute and deliver this Agreement and to perform its obligations thereunder;
and (3) it is registered with the Securities and Exchange Commission as an
investment adviser under the Investment Advisers Act of 1940, as amended.
3. Portfolio Transactions. The Subadviser is responsible for decisions to
buy or sell securities and other investments 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 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
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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.
To the extent consistent with applicable law, the Subadviser may aggregate
purchase or sell orders for the Portfolios 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 Portfolios 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.
4. 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 the Subadviser a fee at the annual
rates set forth in Schedule A hereto with respect to 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 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.
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, policies and procedures
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relating to the management of the Trust as adopted by the Board of Trustees, 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 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 written 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, 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 Trust or to any shareholder of 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, 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 the Subadviser's conduct under this
Agreement. Subadviser hereby indemnifies, defends and protects Adviser and holds
Adviser harmless, from and against any and all liability arising out of
Subadviser's disabling conduct.
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(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 arise out of or
result from any breach of any representation or warranty 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.
(c) The Adviser is hereby expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of the Subadviser and agrees
that the obligations assumed by the Subadviser pursuant to this Agreement will
be limited in any case to the Subadviser and its assets and the Adviser shall
not seek satisfaction of any such obligations from the shareholders of the
Subadviser, the trustees of the Subadviser, officers, employees or agents of the
Subadviser, or any of them.
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 not less than
30 nor more than 60 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 from the date written notice is given, whichever is
earlier. Notwithstanding the requirements set forth in the immediately preceding
sentence, Subadviser may terminate this Agreement on 30 days' written notice
upon the
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institution of formal proceedings against the Adviser or the Trust by the NASD,
the SEC, any state securities or insurance department or any other regulatory
body regarding the Adviser's obligations under this Agreement or related to the
sale of the Contracts, operation of the separate account, or sale of shares of
the Trust, provided that such formal proceedings are likely to have a material
adverse impact on the Subadviser. 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.
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: Federated Investment Counseling
Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
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Adviser: SunAmerica Asset Management Corp.
The SunAmerica Center
000 Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
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
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
FEDERATED INVESTMENT COUNSELING
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: President
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SCHEDULE A
FEE
(AS A PERCENTAGE OF
THE AVERAGE DAILY NET
PORTFOLIO(S) ASSETS OF THE PORTFOLIO)
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Federated Value Portfolio .55% on first $20 million
.35% on next $30 million
.25% on next $100 million
.20% on next $350 million
.15% thereafter
Utility Portfolio .55% on first $20 million
.35% on next $30 million
.25% on next $100 million
.20% on next $350 million
.15% thereafter
Corporate Bond Portfolio .30% on first $25 million
.25% on next $25 million
.20% on next $100 million
.15% over $150 million
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