EXHIBIT (d)(vi)
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
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the 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 ASSETS OF
PORTFOLIO(S) THE PORTFOLIO)
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Federated Value Portfolio .55% on first $20 million
.35% on next $25 million
.25% on next $100 million
.20% on next $350 million
.15% thereafter
Utility Portfolio .55% on first $20 million
.35% on next $25 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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