SUNAMERICA FOCUSED ALPHA LARGE-CAP FUND, INC. INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
Exhibit 2(g)(1)
This
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of
November 2005, as amended
from time to time, by and between SunAmerica Focused Alpha Growth and Income Fund, Inc., a Maryland
corporation (the “Corporation”), and SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
“Adviser”).
W I T N E S S E T H:
WHEREAS, the Corporation is registered under the Investment Company Act of 1940, as amended
(the “Act”), as a closed-end management investment company and may issue shares of common stock,
par value $.001 per share (the “Fund”); and
WHEREAS, the Adviser is engaged in the business of rendering investment management, advisory
and administrative services and is registered as an investment adviser under the Investment
Advisers Act of 1940; and
WHEREAS, the Corporation desires to retain the Adviser to furnish investment management,
advisory and administrative services to the Corporation and the Fund and the Adviser is willing to
furnish such services;
NOW, THEREFORE, it is hereby agreed between the parties hereto as follows:
1. Duties of the Adviser. The Adviser shall manage the affairs of the Fund including,
but not limited to, continuously providing the Fund with investment management, including
investment research, advice and supervision, determining which securities shall be purchased or
sold by the Fund, making purchases and sales of securities on behalf of the Fund and determining
how voting and other rights with respect to securities owned by the Fund shall be exercised,
subject in each case to the control of the Board of Directors of the Corporation (the “Directors”)
and in accordance with the objectives, policies and principles set forth in Corporation’s
Registration Statement and the Fund’s current Prospectus and Statement of Additional Information,
as amended from time to time, the requirements of the Act and other applicable law. In
performing such duties, the Adviser (i) shall provide such office space, such bookkeeping,
accounting, clerical, secretarial and administrative services (exclusive of, and in addition to,
any such service provided by any others retained by the Fund or Corporation on behalf of the Fund)
and such executive and other personnel as shall be necessary for the operations of the Fund, (ii)
shall be responsible for the financial and accounting records required to be maintained by the Fund
(including those maintained by Corporation’s custodian) and (iii) shall oversee the performance of
services provided to the Fund by others, including the custodian, transfer and shareholder
servicing agent. The Corporation understands that the Adviser also acts as the manager of other
investment companies.
Subject to Section 36 of the Act, the Adviser shall not be liable to the Funds or Corporation
for any error of judgment or mistake of law or for any loss arising out of any investment or for
any act or omission in the management of the Fund and the performance of its duties under this
Agreement except for willful misfeasance, bad faith or gross negligence in the
performance of its duties or by reason of reckless disregard of its obligations and duties under
this Agreement.
2. Retention by Adviser of Sub-Advisers, etc. In carrying out its responsibilities
hereunder, the Adviser may employ, retain or otherwise avail itself of the services of other
persons or entities including, without limitation, affiliates of the Adviser, on such terms as the
Adviser shall determine to be necessary, desirable or appropriate. Without limiting the generality
of the foregoing, and subject to the requirements of Section 15 of the Act, the Adviser may retain
one or more sub-advisers to manage all or a portion of the investment portfolio of a Fund, at the
Adviser’s own cost and expense. Retention of one or more sub-advisers, or the employment or
retention of other persons or entities to perform services, shall in no way reduce the
responsibilities or obligations of the Adviser under this Agreement and the Adviser shall be
responsible for all acts and omissions of such sub-advisers, or other persons or entities, in
connection with the performance of the Adviser’s duties hereunder.
3. Expenses. The Adviser shall pay all of its expenses arising from the performance
of its obligations under Section 1 and shall pay any salaries, fees and expenses of the
Corporation’s Directors and Officers who are employees of the Adviser. The Adviser shall not be
required to pay any other expenses of the Fund, including, but not limited to, direct charges
relating to the purchase and sale of portfolio securities, interest charges, fees and expenses of
independent attorneys and auditors, taxes and governmental fees, cost of share certificates and any
other expenses (including clerical expenses) of issue, sale, repurchase or redemption of shares,
expenses of registering and qualifying shares for sale, expenses of printing and distributing
reports, notices and proxy materials to shareholders, expenses of data processing and related
services, shareholder recordkeeping and shareholder account service, expenses of printing and
filing reports and other documents filed with governmental agencies, expenses of printing and
distributing prospectuses, expenses of annual and special shareholders meetings, fees and
disbursements of transfer agents and custodians, expenses of disbursing dividends and
distributions, fees and expenses of Directors who are not employees of the Adviser or its
affiliates, membership dues in the Investment Company Institute, insurance premiums and
extraordinary expenses such as litigation expenses.
4. Compensation of the Adviser. (a) As full compensation for the services rendered,
facilities furnished and expenses paid by the Adviser under this Agreement, the Corporation agrees
to pay to the Adviser a fee at the annual rates set forth in Schedule A. 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 is applied to each prior days’ net assets in order to calculate the
daily accrual). For purposes of calculating the Adviser’s fee with respect to the Fund, the
average daily net asset value of the Fund shall be determined by taking an average of all
determinations of such net asset value during the month. If the Adviser shall serve for less than
the whole of any month the foregoing compensation shall be prorated.
(b) Upon any termination of this Agreement on a day other than the last day of the month, the
fee for the period from the beginning of the month in which termination occurs to the date of
termination shall be prorated according to the proportion which such period bears to the full
month.
5. Portfolio Transactions. The Adviser is responsible for decisions to buy or sell
securities and other investments for a portion of the assets of the Fund, 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
Adviser may employ or deal with such broker-dealers or futures commission merchants as may, in the
Adviser’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 Adviser 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
Directors may determine and consistent with Section 28(e) of the Securities Exchange Act of 1934,
as amended (the “1934 Act”), the 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 the Adviser’s having
caused the Fund to pay a member of an exchange, broker or dealer an amount of commission for
effecting a securities transaction in excess of the amount of commission another member of an
exchange, broker or dealer would have charged for effecting that transaction, if the Adviser
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 Adviser’s overall responsibilities with
respect to the Fund and to other clients as to which the Adviser 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 Adviser may engage its affiliates or any other subadviser to the Corporation and its respective
affiliates, as broker-dealers or futures commission merchants to effect portfolio transactions in
securities and other investments for the Fund. The Adviser will promptly communicate to the
officers and the Directors of the Corporation such information relating to portfolio transactions
as they may reasonably request. To the extent consistent with applicable law, the Adviser may
aggregate purchase or sell orders for the Fund with contemporaneous purchase or sell orders of
other clients of the Adviser 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 Adviser in the manner the Adviser determines to be equitable and consistent with its and its
affiliates’ fiduciary obligations to the Fund and to such other clients. The Adviser hereby
acknowledges that such aggregation of orders may not result in more favorable pricing or lower
brokerage commissions in all instances.
6. Term of Agreement. This agreement shall continue in full force and effect for two
years from the date hereof, and shall continue in full force and effect from year to year
thereafter if such continuance is approved in the manner required by the Act and the Adviser has
not notified the Corporation in writing at least 60 days prior to the anniversary date of the
previous continuance that it does not desire such continuance. This Agreement may be terminated at
any time, without payment of penalty by the Fund or the Corporation, on 60 days written notice to
the Adviser, by vote of the Directors, or by vote of a majority of the outstanding voting
securities (as defined by the Act) of the Fund. Addition of any Fund to Schedule A hereto (in the
manner required by the Act) shall not affect the continued effectiveness of this Agreement with
respect to the Fund subject hereto. This Agreement shall automatically terminate in the event of
its assignment (as defined by the Act).
The Corporation hereby agrees that if (i) the Adviser ceases to act as investment manager and
adviser to the Corporation and (ii) the continued use of the Corporation’s present name would
create confusion in the context of the Adviser’s business, then the Corporation will use its best
efforts to change its name in order to delete the word “SunAmerica” from its name.
7. Liability of the Adviser. 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 Adviser (and its officers, directors, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Adviser) the Adviser shall not be
subject to liability to the Corporation or to any shareholder of the Corporation 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 Corporation shall
indemnify the Adviser (and its officers, directors, partners, agents, employees, controlling
persons, shareholders and any other person or entity affiliated with the Adviser) (collectively,
the “Indemnified Parties”) from any liability arising from the Adviser’s conduct under this
Agreement.
Indemnification to the Adviser or any of its personnel or affiliates shall be made when (i) a
final decision on the merits rendered, by a court or other body before whom the proceeding was
brought, that the person to be indemnified was not liable by reason of disabling conduct or, (ii)
in the absence of such a decision, a reasonable determination, based upon a review of the facts,
that the person to be indemnified was not liable by reason of disabling conduct, by (a) the vote of
a majority of a quorum of the Directors who are neither “interested persons” of the Corporation as
defined in section 2(a)(19) of the Act nor parties to the proceeding (“disinterested, non-party
Directors”) or (b) an independent legal counsel in a written opinion. The Corporation may, by vote
of a majority of the disinterested, non-party Directors advance attorneys’ fees or other expenses
incurred by an Indemnified Party in defending a proceeding upon the undertaking by or on behalf of
the Indemnified Party to repay the advance unless it is ultimately determined that he is entitled
to indemnification. Such advance shall be subject to at least one of the following: (1) the person
to be indemnified shall provide a security for his undertaking, (2) the Corporation shall be
insured against losses arising by reason of any lawful advances, or (3) a majority of a quorum of
the disinterested, non-party Directors or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts, that there is reason to believe that the
person to be indemnified ultimately will be found entitled to indemnification.
8. Non-Exclusivity. Nothing in this Agreement shall limit or restrict the right of
any director, officer or employee of the Adviser who may also be a Director, officer or employee of
the Corporation to engage in any other business or devote his or her time and attention in part to
the management or other aspects of any business, whether of a similar or dissimilar nature, nor
limit or restrict the right of the Adviser to engage in any other business or to render services of
any kind to any other corporation, firm, individual or association.
9. Amendments. This Agreement may be amended by mutual consent in writing, but the
consent of the Corporation must be obtained in conformity with the requirements of the Act.
10. 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 apply.
IN WITNESS WHEREOF, the Corporation and the Adviser have caused this Agreement to be executed
by their duly authorized officers as of the date first above written.
| SUNAMERICA FOCUSED ALPHA LARGE-CAP FUND, INC. |
||||
| By: | ||||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | President | |||
| SUNAMERICA ASSET MANAGEMENT CORP. |
||||
| By: | ||||
| Name: | Xxxxxxx Xxxxx | |||
| Title: | President | |||
SCHEDULE A
| FEE RATE | ||||
| (as a % of average | ||||
| Fund | daily total asset value) | |||
SunAmerica Focused Alpha Large-Cap Fund |
1.00% of total assets. | |||
