Exhibit (d)(xx)
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of January 23, 2006 by and between
AIG SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"),
and NORTHERN TRUST INVESTMENTS, N.A., an Illinois corporation (the
"Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Seasons 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
pursuant to it which the Adviser may delegate one or more of its duties to a
subadviser pursuant to a written subadvisory agreement; 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(s) 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 that portion of the assets of the Portfolio
designated from time to time by the Adviser. The Subadviser will determine, in
its discretion and subject to the oversight and review of the Adviser, the
securities and other investments to be purchased or sold, will provide the
Adviser with records concerning its activities which the Subadviser is required
to maintain on behalf of the Trust, 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, as agent and attorney-in-fact of
the Trust, may, when it deems appropriate and without prior consultation with
the Adviser, (a) buy, sell, exchange, convert and otherwise trade in any stocks,
bonds and other securities including money market instruments, whether the
issuer is organized in the United States or outside the United
States, (b) subject to Section 2 hereof, place orders for the execution of such
securities transactions with or through such brokers, dealers or issuers as the
Subadviser may select and (c) purchase, sell, exchange or convert foreign
currency in the spot or forward markets as necessary to facilitate transactions
in international securities for the Portfolio(s). The Subadviser shall discharge
the foregoing responsibilities subject to the control of the Adviser and 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, restrictions and limitations for the
Portfolio(s) as set forth in the Trust's current prospectus and statement of
additional information; and (b) applicable laws and regulations.
The Subadviser shall have no power, authority, responsibility, or
obligation hereunder to take any action with regard to any claim or potential
claim in any bankruptcy proceedings, class action securities litigation, or
other litigation or proceedings affecting securities held at any time in the
Portfolio, 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 Portfolio assets, and
the Adviser acknowledges and agrees that no such power, authority,
responsibility or obligation is delegated hereunder. Nevertheless, the
Subadviser agrees that it shall provide the Adviser with any and all
documentation or information relating to the Litigation in its possession as may
reasonably be requested by the Adviser.
The Subadviser represents and warrants to the Adviser that it will
manage the portion of the assets of the Portfolio allocated to it at all times
in compliance with all applicable federal and state securities, commodities and
banking laws governing its operations and investments. Without limiting the
foregoing and subject to Section 11(c) hereof, the Subadviser represents and
warrants that it will manage its portion of the Portfolio's assets in compliance
with (a) the applicable provisions of Subchapter M, chapter 1 of the Code
("Subchapter M") for the Portfolio to be treated as a "regulated investment
company" under Subchapter M; (b) the diversification requirements currently
specified in the Internal Revenue Service's regulations under Section 817(h) of
the Code, or any changes thereto of which the Subadviser is notified by the
Adviser, as they apply to their portion of the Portfolio; (c) the provisions of
the Act and rules adopted thereunder; (d) applicable state insurance laws to the
extent the Adviser notifies the Subadviser thereof.; (e) the objectives,
policies, restrictions and limitations for the Portfolio(s) as set forth in the
Trust's current prospectus and statement of additional information as most
recently provided by the Adviser to the Subadviser; and (f) the policies and
procedures as adopted by the Trustees of the Trust. The Subadviser shall 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. For purposes of (d) in the preceding sentence,
disclosure in the Trust's current prospectus and/or statement of additional
information as most recently provided by the Adviser to the Subadviser of
applicable state insurance laws and regulations shall constitute "notice"
thereof. For purposes of compliance with this paragraph, the Subadviser shall be
entitled to treat the portion of the assets of the Portfolio that it manages as
though such portion constituted the entire portfolio, and the Subadviser shall
not be responsible in any way for the compliance of other portions of the
Portfolio or for compliance of the Portfolio as a whole with this paragraph.
- 2 -
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 information 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 and the Adviser each agree: (a) 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 (b) from time to time and upon reasonable request, to
supply evidence of such coverage to the other.
The Adviser represents and warrants to the Subadviser (1) that the
Adviser has been duly appointed in accordance with the Act to provide investment
services to the Portfolio as contemplated by the Advisory Agreement; (2) that
the execution, delivery and performance of this Agreement are within the
Adviser's powers, have been and remain duly authorized by all necessary action
and will not violate or constitute a default under any applicable law or
regulation or of any decree, order, judgment, agreement or instrument binding on
the Adviser; and (3) compliance with all applicable laws and rules, including
without limitation (a) the provisions of the Act and rules adopted thereunder
that relate to the investment of Portfolio assets, including depositing those
assets in custody with institutions designated by the Corporation; and (b)
federal and state securities and commodities laws applicable to Adviser's
portfolio management responsibilities.
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. PORTFOLIO TRANSACTIONS. The Subadviser is responsible for decisions to
buy or sell securities and other investments for the assets of the 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, 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
- 3 -
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 the
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, but only as they apply to the Subadviser's
affiliates, 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 the 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, including but not limited to any reports prepared
by independent third parties relating to the execution costs of such
transactions. 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.
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 the 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 the
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,
- 4 -
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. ADVERTISING. Subadviser shall not provide or in any way distribute any
sales or advertising materials related to the Trust, to any employee or
representative of AIG SunAmerica Capital Services, Inc. ("SACS") or its
affiliates, including wholesaling personnel, unless such material has been
received and approved, in writing, by the Adviser.
8. PROXY VOTING. The Portfolio has appointed Investor Responsibility
Research Center as the proxy-voting agent and will vote all such proxies in
accordance with such proxy voting guidelines and procedures adopted by the Board
of Trustees. The Adviser may, on certain non-routine matters, consult with the
Subadviser before voting proxies relating to the Portfolio's securities. The
Adviser will instruct the custodian and other parties providing services to the
Trust promptly to forward to the proxy voting service copies of all proxies and
shareholder communications relating to securities held by the Portfolio (other
than materials relating to legal proceedings).
9. 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 Subadviser on behalf of the Trust pursuant to the
requirements of Rule 31a-1 of that Act. Copies of 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 will be provided 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.
10. 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
- 5 -
any advertising or promotional materials without the prior approval of the
Subadviser, which approval shall not be unreasonably withheld.
11. 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, 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 or the sale
of securities of the Trust.
(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) and/or
the Trust (and its officers, directors/trustees, agents, employees, controlling
persons, shareholders and any other person or entity affiliated with the Trust)
against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which the Adviser and/or the
Trust and their affiliates or such directors/trustees, officers or controlling
person may become subject under the Act, the 1933 Act, under other statutes,
common law or otherwise, which arise from the Subadviser's disabling conduct,
including but not limited to any material failure by the Subadviser to comply
with the provisions and 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 obligations 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 Portfolio with respect to the portion of the assets of the
Portfolio 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 the Portfolio,
which records are not also maintained by the Subadviser
- 6 -
or, to the extent such records relate to the portion of the assets managed by
the Subadviser, otherwise available to the Subadviser upon reasonable request.
The Adviser and Subadviser each agree that the Subadviser shall manage the
portion of the assets of the Portfolio allocated to it as if it was a separate
operating portfolio and shall comply with subsections (a) and (b) of Section 1
of this Subadvisory Agreement (including, but not limited to, the investment
objectives, policies and restrictions applicable to the Portfolio and
qualifications of the Portfolio as a regulated investment company under the
Code) only with respect to the portion of assets of the Portfolio allocated to
Subadviser. 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) 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 the Portfolio's assets not
allocated to the Subadviser and with respect to any other portfolio of the
Trust.
12. 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.
13. TERM OF THE AGREEMENT. This Agreement shall continue in full force and
effect with respect to the 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 the 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 the 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 the 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 any 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.
- 7 -
14. 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.
15. 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.
16. 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.
17. 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," as defined in the Declaration,
only shall be liable.
18. SEPARATE SERIES. Pursuant to the provisions of the Declaration, the
Portfolio is a separate series of the Trust, and all debts, liabilities,
obligations and expenses of the Portfolio shall be enforceable only against the
assets of the Portfolio and not against the assets of any other Portfolio or of
the Trust as a whole.
19. CONFIDENTIALITY. The Subadviser 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 Portfolio, and will keep confidential any
non-public information obtained directly as a result of this service
relationship, and the Subadviser shall disclose such non-public information only
if the Adviser or the Board of Trustees has authorized such disclosure by prior
written consent, or if such information is or hereafter otherwise is known by
the Subadviser or has been disclosed, directly or indirectly, by the Adviser or
the Trust to others becomes ascertainable from public or published information
or trade sources, or if such disclosure is expressly required or requested by
applicable federal or state regulatory authorities, or to the extent such
disclosure is reasonably required by auditors or attorneys of the Subadviser in
connection with the performance of their professional services or as may
otherwise be contemplated by this Agreement. Notwithstanding the foregoing, the
Subadviser may disclose the total return earned by the Portfolio and may include
such total return in the calculation of composite performance information. The
Adviser will not disclose or use any confidential information pertaining to the
Subadviser obtained as a result of this service relationship except as
contemplated by this Agreement or as required by law.
- 8 -
20. 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: Northern Trust Investments, N.A.
00 Xxxxx XxXxxxx Xx., X-0
Xxxxxxx, Xxxxxxxx 00000
Attention: Legal Department
Adviser: AIG SunAmerica Asset Management Corp.
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Senior Vice President and General Counsel
with a copy to: AIG Retirement Services, Inc.
0 XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Assistant Secretary of Seasons Series Trust
21. SURVIVAL. Sections 9, 10, 11, 14, 16, 17, 18, 19 and this Section 21
shall survive the termination of this Agreement for any cause whatsoever.
IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Agreement as of the date first above
written.
AIG SUNAMERICA ASSET MANAGEMENT CORP.
By: /s/ XXXXX X. XXXXXXX
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
NOTHERN TRUST INVESTMENTS, N.A.
By: /s/ XXXXX X. AICHESON
----------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President
- 9 -
