INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 7th day of June 2010, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and
JANUS CAPITAL MANAGEMENT LLC, hereinafter referred to as the "SUB-
ADVISER."
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC is a life insurance company organized under
Chapter 3 of the Texas Insurance Code and an investment
adviser registered under the Investment Advisers Act of
1940, as amended ("Advisers Act").
(b) VALIC is engaged as the investment adviser of VALIC
Company II, an investment company organized under the
laws of Delaware as a business trust ("XX XX"). XX XX is a
series type of investment company issuing separate classes
(or series) of shares of beneficial interest and is registered
as an open-end, management investment company under
the Investment Company Act of 1940, as amended ("1940
Act"). The 1940 Act prohibits any person from acting as
an investment adviser of a registered investment company
except pursuant to a written contract.
(c) XX XX currently consists of fifteen portfolios ("Funds"):
Aggressive Growth Lifestyle Fund
Capital Appreciation Fund
Conservative Growth Lifestyle Fund
Core Bond Fund
High Yield Bond Fund
International Small Cap Equity Fund
Large Cap Value Fund
Mid Cap Growth Fund
Mid Cap Value Fund
Moderate Growth Lifestyle Fund
Money Market II Fund
Small Cap Growth Fund
Small Cap Value Fund
Socially Responsible Fund
Strategic Bond Fund
In accordance with VC II's Agreement and Declaration of
Trust (the "Declaration"), new Funds may be added to XX
XX upon approval of the Board of Trustees (the "Board")
without the approval of shareholders. This Agreement will
apply only to the Fund(s) set forth on the attached Schedule
A, and any other Funds as may be added or deleted by
amendment to the attached Schedule A ("Covered
Fund(s)").
(d) The SUB-ADVISER is engaged principally in the business
of rendering investment advisory services and is registered
as an investment adviser under the Advisers Act.
(e) VALIC desires to enter into an Investment Sub-Advisory
Agreement with the SUB-ADVISER for all or a portion of
the assets of the Covered Fund(s) which VALIC determines
from time to time to assign to the SUB-ADVISER. VALIC
acknowledges that the SUB-ADVISER intends to delegate
the day-to-day portfolio management of the Covered Fund
to its affiliate, Xxxxxxx Investment Management LLC
("XXXXXXX" or the "SUB-SUB-ADVISER").
VALIC and the SUB-ADVISER AGREE AS FOLLOWS:
1. Services Rendered and Expenses Paid by the SUB-ADVISER
The SUB-ADVISER, subject to the supervision and review of VALIC and the
Board and in conformity with the 1940 Act, all applicable laws and
regulations thereunder, and all other applicable federal and state securities
and tax laws and regulations, including section 817(h) and Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), the Declaration,
VC II's Bylaws (the "Bylaws"), each Covered Fund's registration statement,
prospectus, and stated investment objectives, policies and restrictions and
any applicable procedures adopted by the Board and provided to the SUB-
ADVISER, shall:
(a) manage the investment and reinvestment of all of,
or to the extent applicable, a portion of, the assets of each
Covered Fund(s) including, for example, the evaluation of
pertinent economic, statistical, financial, and other data, the
determination of the industries and companies to be
represented in each Covered Fund's portfolio, and the
formulation and implementation of investment programs.
(b) maintain a trading desk and place orders for the
purchase and sale of portfolio investments (including
futures contracts and options thereon) for each Covered
Fund's account with brokers or dealers (including futures
commission merchants) selected by the SUB-ADVISER, or
arrange for any other entity to provide a trading desk and to
place orders with brokers and dealers (including futures
commission merchants) selected by the SUB-ADVISER,
subject to the SUB-ADVISER's control, direction, and
supervision, which brokers or dealers may include brokers
or dealers (including futures commission merchants)
affiliated with the SUB-ADVISER, subject to applicable
law.
Without limiting the foregoing, the SUB-ADVISER represents and warrants
to VALIC that all of, or to the extent applicable the portion of, the assets
which it manages of the Covered Fund(s) set forth in Schedule A will at all
times be operated and managed in compliance with (a) all applicable federal
and state laws, including securities, commodities and banking laws, governing
its operations and investments; (b) applicable provisions of Subchapter M,
chapter 1 of the Code ("Subchapter M") for each Covered Fund to be treated
as a "regulated investment company" under Subchapter M; (c) the
diversification requirements specified in the Internal Revenue Service's
regulations under Section 817(h) of the Code so as not to jeopardize the
treatment of the variable annuity contracts that offer the Covered Funds as
annuity contracts for purposes of the Code; (d) the distribution requirements
necessary to avoid payment of any excise tax pursuant to Section 4982 of the
Code; (e) the provisions of the 1940 Act and rules adopted thereunder; (f) the
objectives, policies, restrictions and limitations for the Covered Funds as
set forth in the Covered Funds' current prospectus and statement of additional
information as most recently provided by VALIC to the SUB-ADVISER; and
(g) the policies and procedures as adopted by the Board, as most recently
provided by VALIC to the SUB-ADVISER. The SUB-ADVISER shall
furnish information to VALIC, as requested, for purposes of compliance with
the distribution requirements necessary to avoid payment of any excise tax
pursuant to Section 4982 of the Code. The SUB-ADVISER further represents
and warrants that to the extent that any statements or omissions made in any
Registration Statement for shares of the Covered Funds, or any amendment or
supplement thereto, are made in reliance upon and in conformity with
information furnished by the SUB-ADVISER 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 1940 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.
VALIC agrees that SUB-ADVISER shall manage the portion of the assets of a
Covered Fund allocated to it as if it was a separate operating fund, unless
instructed otherwise in writing from VALIC, and shall comply with the
representations and warranties stated in this Section (including, but not
limited to, the investment objectives, policies and restrictions applicable
to a Covered Fund and qualifications of a Covered Fund as a regulated
investmentcompany under the Code) with respect to the portion of assets of a
Covered Fund allocated to SUB-ADVISER.
The SUB-ADVISER may delegate any of its duties and obligations hereunder
to any affiliated person (as such term is defined in the 0000 Xxx) that is
eligible to serve as an investment adviser to an investment company registered
under the 1940 Act on such terms and conditions as it deems necessary or
appropriate, provided that VALIC and the Board consent to any such
delegation and to the terms and conditions thereof and such delegation is
permitted by and in conformity with the 1940 Act. The SUB-ADVISER shall
be liable to VALIC for any loss or damage arising out of, in connection with
or related to the actions or omissions to act of any delegee utilized
hereunder.
In determining liability, the limitation of liability set forth in Section 7
of this Agreement shall apply to the actions or omissions to act of a delegee.
VALIC acknowledges that the SUB-ADVISER shall, pursuant to a separate
Sub-Sub-Advisory Agreement, delegate the day-to-day portfolio management
of the Covered Fund to Xxxxxxx. The SUB-ADVISER shall notify VALIC of
any material amendments to the Sub-Sub-Advisory Agreement.
The SUB-ADVISER makes no representation or warranty, express or implied,
that any level of performance or investment results will be achieved by the
Covered Fund (or portion thereof) or that the Covered Fund will perform
comparably with any standard or index, including other clients of the SUB-
ADVISER.
The SUB-ADVISER will assist the Covered Fund(s) and its agents in
determining whether prices obtained for valuation purposes accurately reflect
the prices on the SUB-ADVISER's portfolio records relating to the assets of
the Covered Fund(s) for which the SUB-ADVISER has responsibility at such
times as VALIC shall reasonably request; provided, however, that the parties
acknowledge that the SUB-ADVISER is not the fund accounting agent for the
Covered Fund(s) and is not responsible for pricing determinations or
calculations and any information provided pursuant to this position by the
SUB-ADVISER will be provided for information purposes only.
In performing the services described in paragraph (b) above, the SUB-
ADVISER shall use its best efforts to obtain for the Covered Fund(s) the best
execution of portfolio transactions determined by SUB-ADVISER's best
execution policy. Subject to approval by the Board of appropriate policies
and procedures, the SUB-ADVISER may cause the Covered Fund(s) to pay to
a broker a commission, for effecting a portfolio transaction, in excess of the
commission another broker would have charged for effecting the same
transaction, if the first broker provided brokerage and/or research services
to the SUB-ADVISER. The SUB-ADVISER shall not be deemed to have acted
unlawfully, or to have breached any duty created by this Agreement, or
otherwise, solely by reason of acting in accordance with such authorization.
The SUB-ADVISER may aggregate sales and purchase orders of securities
held by the Covered Fund(s) with similar orders being made simultaneously
for other accounts managed by the SUB-ADVISER or with accounts of the
affiliates of the SUB-ADVISER, if in the SUB-ADVISER's reasonable
judgment such aggregation shall result in an overall economic benefit to the
Covered Fund(s) considering the advantageous selling or purchase price,
brokerage commission and other expenses. In accounting for such aggregated
order price, commission and other expenses shall be averaged on a per bond
or share basis daily. VALIC acknowledges that the determination of such
economic benefit to the Covered Fund(s) by the SUB-ADVISER is subjective
and represents the SUB-ADVISER's evaluation that the Covered Fund(s) is
benefited by relatively better purchase or sales prices, lower commission
expenses and beneficial timing of transactions or a combination of these and
other factors.
The SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report periodically
to VALIC and the Board regarding the performance of its services under this
Agreement. The SUB-ADVISER will make available to VALIC and XX XX
promptly upon their reasonable written request all of the Covered Fund(s)'s
investment records and ledgers to assist VALIC and XX XX in compliance with
respect to the Covered Fund(s)'s securities transactions as required by the
1940 Act and the Advisers Act, as well as other applicable laws. The SUB-
ADVISER will furnish the Board with quarterly reports and such special
reports as VALIC and the Board may reasonably request. The SUB-
ADVISER will furnish to regulatory authorities any information or reports in
connection with such services which may be requested in order to ascertain
whether the operations of the Covered Fund(s) are being conducted in a
manner consistent with applicable laws and regulations.
The SUB-ADVISER 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, and will keep confidential any non-
public information obtained directly as a result of this service relationship,
and the SUB-ADVISER shall disclose such non-public information only if VALIC
or the Board have authorized such disclosure, or if such information is or
hereafter otherwise is known by the SUB-ADVISER or has been disclosed,
directly or indirectly, by VALIC or XX XX 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 Court of Law of competent jurisdiction, or to the extent such
disclosure is reasonably required by auditors or attorneys of the SUB-
ADVISER in connection with the performance of their professional services.
Notwithstanding the foregoing, the SUB-ADVISER may disclose the total
return earned by the Covered Fund(s) and may include such total return in the
calculation of composite performance information without prior approval by
VALIC or the Board.
Should VALIC at any time make any definite determination as to any
investment policy and notify the SUB-ADVISER in writing of such
determination, the SUB-ADVISER shall be bound by such determination for
the period, if any, specified in such notice or until similarly notified that
such determination has been revoked, provided such determination will permit
SUB-ADVISER to comply with the first paragraph of this Section.
The SUB-ADVISER will not hold money or investments on behalf of the
Covered Fund(s). The money and investments will be held by the Custodian
of the Covered Fund(s) as identified pursuant to Schedule B. The SUB-
ADVISER will arrange for the transmission to the Custodian for the Covered
Fund(s), on a daily basis, such confirmation, trade tickets and other documents
as may be necessary to enable it to perform its administrative responsibilities
with respect to the Covered Fund(s). The SUB-ADVISER further shall have
the authority to instruct the custodian of the Covered Fund(s) (i) to pay cash
for securities and other property delivered to the Custodian for the Covered
Fund(s) (ii) to deliver securities and other property against payment for the
Covered Fund(s), and (iii) to transfer assets and funds to such brokerage
accounts as the SUB-ADVISER may designate, all consistent with the powers,
authorities and limitations set forth herein. The SUB-ADVISER shall not have
the authority to cause the Custodian to deliver securities and other property
except as expressly provided for in this Agreement.
The SUB-ADVISER shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or authorized,
have no authority to act or represent VALIC or XX XX other than in furtherance
of the SUB-ADVISER's duties and responsibilities as set forth in this
Agreement.
Except as otherwise agreed, or as otherwise provided herein, the SUB-
ADVISER shall bear the expense of discharging its responsibilities hereunder
and VALIC shall pay, or arrange for others to pay, all VALIC's expenses,
except that VALIC shall in all events pay the compensation described in
Section 2 of the Agreement. VALIC and the SUB-ADVISER acknowledge
that XX XX will be ultimately responsible for all brokerage commissions, taxes,
custodian fees and other transaction-related fees incurred on behalf of the
Covered Fund(s).
The SUB-ADVISER also represents and warrants that in furnishing services
hereunder, the SUB-ADVISER will not consult with any other sub-adviser,
other than Xxxxxxx, of the Covered Fund(s) or other series of XX XX, to the
extent any other sub-advisers are engaged by VALIC, or any other sub-
advisers to other investment companies that are under common control with
XX XX, concerning transactions of the Covered Fund(s) in securities or other
assets, other than for purposes of complying with the conditions of paragraphs
(a) and (b) of rule 12d3-1 under the 1940 Act.
2. Compensation of the SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as compensation for the services
rendered and expenses paid by the SUB-ADVISER, a monthly fee or fees
based on the Covered Fund(s)'s average daily net asset value computed for
each of the Covered Fund(s) including cash or cash equivalents as provided
for herein and in the fee schedule attached hereto as Schedule A. Schedule A
may be amended from time to time, provided that amendments are made in
conformity with applicable laws and regulations and the Declaration and
Bylaws. Any change in Schedule A pertaining to any new or existing Covered
Fund(s) shall not be deemed to affect the interest of any other Covered
Fund(s) and shall not require the approval of shareholders of any other
Covered Fund(s).
The average daily net asset value shall be determined by taking the mean
average of all of the determinations of net asset value, made in the manner
provided in the Declaration, as applicable, for each business day during a
given calendar month. VALIC shall pay this fee for each calendar month as
soon as practicable after the end of that month, but in any event no later
than ten (10) business days following the end of the month, along with
supporting calculation documentation
If the SUB-ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
The payment of advisory fees related to the services of the SUB-ADVISER
under this Agreement shall be the sole responsibility of VALIC and shall
not be the responsibility of XX XX or the Covered Fund(s). Any
reimbursement of management fees required by any expense limitation
provision and any liability arising out of a violation of Section 36(b) of the
1940 Act shall be the sole responsibility of VALIC.
3. Scope of the SUB-ADVISER's Activities
VALIC understands that the SUB-ADVISER and its affiliates now act, will
continue to act and may act in the future as investment adviser to fiduciary
and other managed accounts and as investment adviser to other investment
companies, and VALIC has no objection to the SUB-ADVISER so acting,
provided that whenever the Covered Fund(s) and one or more other accounts
or investment companies advised by the SUB-ADVISER have available funds
for investment, investments suitable and appropriate for each will be
allocated in accordance with a methodology believed to be equitable to each
entity. The SUB-ADVISER similarly agrees to allocate opportunities to sell
securities.VALIC recognizes that, in some cases, this procedure may limit the
size of the position that may be acquired or sold for the Covered Fund(s).
In addition, VALIC understands that the persons employed by the SUB-ADVISER to
assist in the performance of the SUB-ADVISER's duties hereunder will not
devote their full time to such service and nothing contained herein shall be
deemed to limit or restrict the right of the SUB-ADVISER or any affiliate of
the SUB-ADVISER to engage in and devote time and attention to other
business or to render services of whatever kind or nature. The SUB-
ADVISER may provide advice to or take action with respect to other clients,
which advice or action, including the timing and nature of such action, may
differ from or be identical to advice given or action taken with respect to
the Covered Fund.
Except as otherwise required by the 1940 Act, any of the shareholders,
directors, officers and employees of VALIC may be a shareholder, director,
officer or employee of, or be otherwise interested in, the SUB-ADVISER, and
in any person controlling, controlled by or under common control with the
SUB-ADVISER; and the SUB-ADVISER, and any person controlling,
controlled by or under common control with the SUB-ADVISER, may have
an interest in VALIC.
VALIC shall perform quarterly and annual tax compliance tests and promptly
furnish reports of such tests to the SUB-ADVISER after each quarter end to
ensure that the Covered Fund(s) is in compliance with Subchapter M of the
Code and Section 817(h) of the Code. VALIC shall apprise the SUB-
ADVISER promptly after each quarter end of any potential non-compliance
with the diversification requirements in such Code provisions. If so advised,
the SUB-ADVISER shall take prompt action so that the Covered Fund(s)
complies with such Code diversification provisions, as directed by VALIC.
4. Representations of the SUB-ADVISER and VALIC
The SUB-ADVISER represents, warrants, and agrees as follows:
(a) The SUB-ADVISER (i) is registered as an investment adviser under
the Advisers Act and will continue to be so registered for so long as
this Agreement remains in effect; (ii) is not prohibited by the 1940
Act or the Advisers Act from performing the services contemplated
by this Agreement; (iii) has met, and will continue to meet for so
long as this Agreement remains in effect, any applicable federal or
state requirements, or the applicable requirements of any regulatory
or industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the
authority to enter into and perform the services contemplated by this
Agreement; and (v) will immediately notify VALIC of the
occurrence of any event that would disqualify the SUB-ADVISER
from serving as an investment adviser of an investment company
pursuant to Section 9(a) of the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and if it has
not already done so, will provide VALIC with a copy of such code of
ethics together with evidence of its adoption.
(c) The SUB-ADVISER has provided VALIC with a copy of its Form
ADV as most recently filed with the Securities and Exchange
Commission ("SEC") and will promptly after filing any annual
amendment to its Form ADV with the SEC, furnish a copy of such
amendment to VALIC.
VALIC represents, warrants, and agrees as follows:
(a) VALIC: (i) is registered as an investment adviser under the Advisers
Act and will continue to be so registered for so long as this
Agreement remains in effect; (ii) is not prohibited by the 1940 Act or
the Advisers Act from performing the services contemplated by this
Agreement; (iii) has met, and will continue to meet for so long as this
Agreement remains in effect, any applicable federal or state
requirements, or the applicable requirements of any regulatory or
industry self-regulatory agency, necessary to be met in order to
perform the services contemplated by this Agreement; (iv) has the
authority to enter into and perform the services contemplated by this
Agreement; and (v) will immediately notify the SUB-ADVISER of
the occurrence of any event that would disqualify VALIC from
serving as an investment adviser of an investment company pursuant
to Section 9(a) of the 1940 Act or otherwise.
(b) VALIC has the authority under the Investment Advisory Agreement
between VALIC and XX XX to delegate some or all of its
responsibilities to one or more sub-advisers and the delegation to the
SUB-ADVISER under this Agreement is authorized by and
consistent with the grant of authority in that Investment Advisory
Agreement.
5. Term of Agreement
This Agreement shall become effective as to the Covered Fund(s) set forth on
Schedule A on the date hereof and as to any other Fund on the date of the
Amendment to Schedule A adding such Fund in accordance with this
Agreement. Unless sooner terminated as provided herein, this Agreement
shall continue in effect for two years from its effective date. Thereafter,
this Agreement shall continue in effect, but with respect to any Covered Fund,
subject to the termination provisions and all other terms and conditions
hereof, only so long as such continuance is approved at least annually by
the vote of a majority of the XX XX trustees who are not parties to this
Agreement or interested persons of any such parties, cast in person at a
meeting called for the purpose of voting on such approval, and by a vote of
a majority of the Board or a majority of that Covered Fund's outstanding
voting securities.
This Agreement shall automatically terminate in the event of its assignment as
that term is defined in the 1940 Act or in the event of the termination of the
Investment Advisory Agreement between VALIC and XX XX as it relates to
any Covered Fund(s). The Agreement may be terminated as to any Covered
Fund at any time, without the payment of any penalty, by vote of the Board or
by vote of a majority of that Covered Fund's outstanding voting securities on
not more than 60 days' nor less than 30 days' written notice to the SUB-
ADVISER, or upon such shorter notice as may be mutually agreed upon by
the parties. This Agreement may also be terminated by VALIC: (i) on not
more than 60 days' nor less than 30 days' written notice to the SUB-
ADVISER, or upon such shorter notice as may be mutually agreed upon by
the parties, without the payment of any penalty; or (ii) if the SUB-ADVISER
becomes unable to discharge its duties and obligations under this Agreement.
The SUB-ADVISER may terminate this Agreement at any time, or preclude
its renewal without the payment of any penalty, on not more than 60 days' nor
less than 30 days' written notice to VALIC, or upon such shorter notice as
may be mutually agreed upon by the parties.
6. Other Matters
The SUB-ADVISER may from time to time employ or associate with itself
any person or persons believed to be particularly fit to assist in its
performance of services under this Agreement, provided no such person
serves or acts as an investment adviser separate from the SUB-ADVISER so
as to require a new written contract pursuant to the 1940 Act. The
compensation of any such persons will be paid by the SUB-ADVISER, and no
obligation will be incurred by, or on behalf of, VALIC or XX XX with respect
to them.
The SUB-ADVISER agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act. The SUB-ADVISER agrees that all books and records
which it maintains for the Covered Fund(s) are the Covered Fund(s)'s
property and will be surrendered promptly to the Covered Fund(s) or VALIC
upon request. The SUB-ADVISER 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 Covered
Fund(s)'s auditors, the Covered Fund(s) or any representative of the Covered
Fund(s), VALIC, or any governmental agency or other instrumentality having
regulatory authority over the Covered Fund(s)
VALIC has herewith furnished the SUB-ADVISER with the documents listed
in Schedule B, including copies of the Covered Fund(s)'s Prospectus,
Statement of Additional Information, the Declaration and Bylaws as are
currently in effect and agrees during the continuance of this Agreement to
furnish SUB-ADVISER copies of any amendments or supplements thereto
before or at the time the amendments or supplements become effective. Until
VALIC delivers any documents, amendments, supplements or new policies
and procedures to the SUB-ADVISER, the SUB-ADVISER shall be fully
protected in relying on the documents previously furnished to it.
The SUB-ADVISER is authorized to honor and act on any notice, instruction
or confirmation given by VALIC on behalf of the Covered Fund(s) in writing
signed or sent by any of the persons who the SUB-ADVISER has reason to
believe are acting in good authority. The SUB-ADVISER shall not be liable
for so acting in good faith upon such instructions, confirmation or authority.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior to
use thereof, copies of all prospectuses, statements of additional information,
proxy statements, reports to shareholders, sales literature, or other material
prepared for distribution to shareholders of the Covered Fund(s) or the public
that refer in any way to the SUB-ADVISER, and not to use such material if
the SUB-ADVISER reasonably objects in writing within ten (10) business
days (or such other time as may be mutually agreed) after receipt thereof. In
the event of termination of this Agreement, VALIC will continue to furnish to
the SUB-ADVISER copies of any of the above-mentioned materials that refer
in any way to the SUB-ADVISER and shall cease to use the SUB-ADVISER
name and logo as soon as is reasonable. VALIC shall furnish or otherwise
make available to the SUB-ADVISER such other information relating to the
business affairs of VALIC and the Covered Fund(s) as the SUB-ADVISER at
any time, or from time to time, may reasonably request in order to discharge
obligations hereunder. Subject to provisions of this paragraph, the SUB-
ADVISER grants VALIC and the Covered Fund(s) a non-exclusive right to
use the "Janus" and/or "Xxxxxxx" name in connection with the SUB-
ADVISER's management of the Covered Fund(s) (i) for so long as this
Agreement, any other investment management agreement between VALIC and
SUB-ADVISER with respect to XX XX, or to any extension, renewal or
amendment thereof, remain in effect, and (ii) for subsequent periods as long as
required by law, rule or regulation or to the extent necessary to refer to or
illustrate the historical performance of the Covered Fund(s). All references
contained in this Agreement to "the name or xxxx 'Xxxxx'" shall include but
not be limited to the Janus logo, the website xxx.xxxxx.xxx and any and all
electronic links relating to such website. VALIC will make no use of the
name or xxxx "Xxxxx" except as expressly provided in this Agreement or
expressly authorized by JCM in writing. All goodwill associated with the
name and xxxx "Janus" shall inure to the benefit of the SUB-ADVISER or its
affiliates.
VALIC agrees that the SUB-ADVISER may use the name of VALIC or XX XX
in any material that merely refers in accurate terms to the appointment of the
SUB-ADVISER hereunder.
Notwithstanding any other provisions of this Agreement, in no event shall the
SUB-ADVISER be responsible for the accuracy or adequacy of any
communications or marketing materials used by VALIC or XX XX, including
any investment performance information included therein, except to the extent
such marketing material accurately reflects information provided to VALIC or
XX XX by the SUB-ADVISER in writing, or refers to the SUB-ADVISER and
was reviewed and approved by the SUB-ADVISER.
Effective upon the execution of this Agreement by both parties, VALIC will
not, directly or indirectly, and will
not permit its affiliates, employees, officers, directors, agents, contractors,
or the Covered Fund to, in any form or by any means, to use or disclose to any
person or entity, records or information concerning the business of the SUB-
ADVISER, or the SUB-SUBADVISER, including but not limited to portfolio
holdings of SUB-ADVISER or SUB-SUB-ADVISER Accounts, except as
permitted by this Agreement, or as required by law upon prior written notice
to the SUB-ADVISER. VALIC acknowledges that any such information is the
confidential property of the SUB-ADVISER or the SUB-SUB-ADVISER.
VALIC agrees to limit access to the information to its employees or agents
who, on a need to know basis, are (1) authorized to have access to the
information and (2) subject to confidentiality obligations, including the duty
not to trade on nonpublic information. Upon request, VALIC agrees to
promptly return or destroy, as directed, any such information.
7. Liability of the SUB-ADVISER
(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 SUB-ADVISER (and its officers, directors, agents, employees,
controlling persons, shareholders and any other person or entity affiliated
with the SUB-ADVISER) the SUB-ADVISER shall not be subject to liability to
XX XX, the Covered Funds, or to any shareholder of the Covered Funds 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 beach of fiduciary duty with
respect to the receipt of compensation for services. Except for such disabling
conduct, VALIC shall indemnify the SUB-ADVISER (and its officers,
directors, partners, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the SUB-ADVISER) (collectively,
the "Indemnified Parties") from any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses)
arising from the SUB-ADVISER's conduct under this Agreement.
(b) The SUB-ADVISER agrees to indemnify and hold harmless VALIC and
its affiliates and each of its directors and officers and each person, if any,
who controls VALIC 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 VALIC 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 may be based upon
(i) any wrongful act or breach of this Agreement by the SUB-ADVISER, or (ii)
any failure by the SUB-ADVISER to comply with the representations and
warranties set forth in Section 1 of this Agreement; provided, however, that
in no case is the SUB-ADVISER'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 SUB-ADVISER shall not be liable to VALIC for (i) any acts of
VALIC or any other subadviser to the Covered Fund(s) with respect to the
portion of the assets of the Covered Fund(s) not managed by SUB-ADVISER
and (ii) acts of the SUB-ADVISER which result from acts of VALIC,
including, but not limited to, a failure of VALIC to provide accurate and
current information with respect to any records maintained by VALIC or any
other subadviser to a Covered Fund, which records are not also maintained by
or otherwise available to the SUB-ADVISER upon reasonable request.
VALIC shall indemnify the Indemnified Parties from any liability arising from
the conduct of VALIC and any other subadviser with respect to the portion of
a Covered Fund's assets not allocated to SUB-ADVISER.
8. Applicability of Federal Securities Laws
This Agreement shall be interpreted in accordance with the laws of the State
of New York and applicable federal securities laws and regulations, including
definitions therein and such exemptions as may be granted to VALIC or the
SUB-ADVISER by the SEC or such interpretive positions as may be taken by
the SEC or its staff. To the extent that the applicable law of the State of
New York, or any of the provisions herein, conflict with applicable provisions
of the federal securities laws, the latter shall control.
9. Amendment and Waiver
Provisions of this Agreement may be amended, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. The
Agreement may be amended by mutual written consent of the parties, subject
to the requirements of the 1940 Act and the rules and regulations promulgated
and orders granted thereunder.
10. Force Majuere
Neither party to this Agreement shall be liable for damages resulting from
delayed or defective performance when such delays arise out of causes beyond
the control and without the fault or negligence of the offending party and
could not have been reasonably prevented by the offending party through
back-up systems and other business continuation and disaster recovery
procedures commonly employed by other SEC-registered investment advisers
that meet reasonable commercial standards in the investment company
industry. Such causes may include, but are not restricted to, Acts of God or
of the public enemy, terrorism, acts of the State in its sovereign capacity,
fires, floods, earthquakes, power failure, disabling strikes, epidemics,
quarantine restrictions, and freight embargoes.
11. Notices
All notices hereunder shall be given in writing (and shall be deemed to have
been duly given upon receipt) by delivery in person, by facsimile, by
registered or certified mail or by overnight delivery (postage prepaid, return
receipt requested) to VALIC and to SUB-ADVISER at the address of each set
forth below:
If to VALIC:
Attn: Xxxx Xxxxxxxx
0000 Xxxxx Xxxxxxx, X00-00
Xxxxxxx, Xxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to:
Attn: Xxxx X. Xxxxxx, Esq.
0000 Xxxxx Xxxxxxx, XX00-00
Xxxxxxx, Xxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
If to SUB-ADVISER:
Janus Capital Management LLC
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
12. Severability
If any part of this Agreement be held invalid or unenforceable to any extent,
the remainder of this Agreement shall be enforced to the greatest extent
permitted by law.
The parties hereto have each caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /S/ XXXX X. XXXXXXXX
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
ATTEST: /S/ XXXXX X. XXXXXX
NAME: Xxxxx X. Xxxxxx
JANUS CAPITAL MANAGEMENT, LLC
By: /S/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
ATTEST: /S/ XXXXX X. XXXXXX
NAME: Xxxxx X. Xxxxxx
SCHEDULE A
(Effective June 7, 2010)
Annual Fee computed at the following annual rate, based on average daily net
asset value for each month on that portion of the assets managed by
SUB-ADVISER,and payable monthly:
Covered Fund Fee
Large Cap Value Fund 0.250% on the first $500 million
0.225% on over $500 million
SCHEDULE B
Information and documentation provided by VALIC:
1. Copies of the Covered Fund's prospectus and statement of additional
information.
2. Copies of the Covered Fund's organizational documents and Bylaws.
3. Notice of VALIC's custodian designated to hold assets in the Covered
Fund.
4. A list of the countries approved by the Board in accordance with Rule 17f-
5 in which the Covered Fund's assets may be maintained and a list of those
countries available immediately.
5. Reports as to the composition of assets in the Covered Fund, cash
requirements and cash available for investment in the Covered Fund.
6. Copies of the Covered Fund's liquidity procedures, cross-trade procedures,
repurchase agreement procedures, 10f-3, 17a-7 and 17e-1 procedures and
other procedures that may affect the duties of the SUB-ADVISER.
7. A Qualified Institutional Buyer Certification completed by the Covered
Fund.
8. A New Issues Questionnaire completed by the Covered Fund.
9. A list of persons authorized to act on behalf of the Covered Fund.
10. A list of "affiliates" of VALIC, as such term is used in the 1940 Act,
including all broker-dealers affiliated with the Covered Fund.
11. Applicable Commodities Futures Trading Commission exemptions,
notifications and/or related documentation.
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