Sub-Item 77Q1(e)
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of March 26, 2010 by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation
(the "Adviser"), and PINEBRIDGE INVESTMENTS LLC, a Delaware limited
liability company (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and SunAmerica Equity Funds, 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 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 common stock, par value $.01
per share, in separately designated series 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 series of the Trust listed on Schedule A attached hereto
(the "Fund"), 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 a portion of the assets of each
Fund listed on Schedule A attached hereto. The Subadviser will determine
in its discretion, and subject to the oversight and review
of the Adviser, the securities to be purchased or sold, 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 communicate to the Subadviser, and in compliance with (a) the
objectives, policies, and limitations for the Fund set forth
in the Trust's current prospectus and statement of additional information
as provided to the Subadviser, and (b) applicable laws and regulations.
The Subadviser represents and warrants to the Adviser that the portion of
each Fund set forth in Schedule A, or portion of each Fund's assets,
managed by it will at all times be operated and managed in compliance with
all applicable federal and state laws governing its operations and
investments. Without limiting the foregoing and subject to Section
9(c) hereof, the Subadviser represents and warrants (1) that
the Subadviser's management of the assets of a Fund will be designed
to achieve qualification by each Fund to be treated as a "regulated
investment company" under subchapter M, chapter I of the Internal
Revenue Code of 1986, as amended (the "Code"), and (2) compliance with
(a) the provisions of the Act and rules adopted thereunder that relate
to the investment of Fund assets, including depositing
those assets in custody with institutions designated by the Trust; and
(b) applicable federal and state securities and commodities laws (other
than state securities laws relating to the amount of Fund shares that
may be sold in a particular state); provided that for purposes of
Section 17(a), (d) and (e), the Subadviser shall effect compliance
only in relation to its own affiliates and to
affiliated persons identified to it by the Adviser. The Subadviser
also represents and warrants that in furnishing services hereunder,
the Subadviser will not consult with any other subadviser of the Series
or other series of the Trust, to the extent any other subadvisers are
engaged by the Adviser, or any other subadvisers to other investments
companies that are under common control with the Trust, concerning
transactions of the Series 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 Act. The Subadviser further
represents and warrants that only with respect to any statements or
omissions made in any Registration Statement for shares of the Trust,
or any amendment or supplement thereto, 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.
The Adviser and Subadviser each agree that, to the extent the Subadviser
is responsible for managing only a portion of a Fund, the Subadviser shall
manage the portion of the assets of a Fund allocated to it as if it was
a separate operating Fund and shall comply with this Section l (including,
but not limited to, the investment objectives, policies and restrictions
applicable to a Fund and qualifications of a Fund as a regulated investment
company under the Code) only with respect to the portion of assets of a
Fund allocated to the Subadviser.
The Subadviser agrees: (i) to maintain a level of errors and omissions or
professional liability insurance coverage that, at all times during the
course of this Agreement, is acceptable to the Adviser; and (ii) from
time to time and upon reasonable request, to supply evidence of such
coverage to the Adviser.
2. Fund Transactions. (a) The Subadviser is responsible for
decisions, and is hereby authorized, to buy or sell securities and other
investments for each Fund, or portion of the Fund's assets allocated to
it, broker-dealers and futures commission merchants' selection, and
negotiation of brokerage commission and futures commission merchants'
rates. As a general matter, in executing Fund 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 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 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 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 Fund 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 Fund
transactions in securities and other investments for a Fund. The
Subadviser will promptly communicate to the Adviser and to the officers
and the Trustees of the Trust such information relating to Fund
transactions as they may reasonably request. To the extent consistent
with applicable law, the Subadviser may aggregate purchase or sell
orders for the Fund 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 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.
(b) Notwithstanding Section 2(a) above, for such purposes as
obtaining investment research products and services, covering fees
and expenses, and rewarding sales or distribution, the Adviser may
direct the Subadviser to effect a specific percentage of a Fund's
transactions in securities and other investments to certain
broker-dealers and futures commission merchants. In designating the
use of a particular broker-dealer or futures commission merchant, the
Adviser and Subadviser acknowledge: 1) all brokerage transactions
are subject to best execution. As such, Subadviser will use
its best efforts to direct non-risk commission transactions to a
particular broker-dealer or futures commission merchant designated
by the Adviser provided that the Subadviser seek to obtain best
execution; 2) such direction may result in the Trust paying a higher
commission, depending upon the Subadviser's arrangements with the
particular broker-dealer or futures commission merchant, etc.; 3) if
the Subadviser directs payments of an excessive amount of
commissions, the executions may not be accomplished as rapidly. In
addition, the Subadviser may forfeit the possible advantage derived
from the aggregation of multiple orders as a single "bunched"
transaction where the Subadviser would, in some instances, be in a better
position to negotiate commissions; and 4) the Subadviser does not
make commitments to allocate fixed or definite amounts of commissions
to brokers. As such, the Subadviser may be unable to fulfill the
Adviser's request for direction due to the reasons stated above.
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 each Fund
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). If the
Subadviser shall provide its services under this Agreement for less
than the whole of any month, the foregoing compensation shall be
prorated. The Adviser and Subadviser acknowledge that the
Fund will be ultimately responsible for all brokerage commissions,
taxes, custodian fees and any other transaction-related fees, but
that, for the purposes of this Agreement, as between the Adviser
and the Subadviser, the Adviser will be responsible for such
expenses, and the Adviser authorizes the Subadviser to incur
and pay such expenses for the Fund, as deemed appropriate by the
Subadviser.
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. Such
office facilities, 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. 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 Fund 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 or logo of the Subadviser or any of its affiliates in
any advertising or promotional materials without the prior approval
of the Subadviser, which approval shall not be unreasonably withheld.
9. Liability of the Subadviser. 1)x.Xx 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.
(b) The Subadviser agrees to indemnify and hold harmless the Adviser,
its officers, directors, partners, agents, employees, controlling
persons, shareholders and any other person or entity affiliated with the
Adviser, 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, its officers, directors, partners, agents, employees,
controlling persons, shareholders and any other person or entity
affiliated with the Adviser 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
Subadviser, or (ii) any failure by the Subadviser to comply with the
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 obligation 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 Fund with respect to the
portion of the assets of a Fund 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 a Fund, which records are not
also maintained by the Subadviser 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 shall indemnify the Indemnified Parties 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 a Fund's
assets not allocated to the Subadviser and with respect to any other Fund
of the Trust.
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 Fund until August 31, 2011, 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 Fund voting
separately from any other series of the Trust.
With respect to each Fund, this Agreement may be terminated at any time,
without payment of a penalty by the Fund 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 Fund, 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 Fund,
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. The termination of this
Agreement with respect to any Fund or the 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 each other Fund 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. This Agreement constitutes the entire Agreement
between the parties hereto. 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. Separate Series. Pursuant to the provisions of the Declaration
of Trust and the General Laws of the Commonwealth of Massachusetts, each
Fund is a separate series of the Trust, and all debts, liabilities,
obligations and expenses of a particular Fund shall be enforceable only
against the assets of that Fund and not against the assets of any other
Fund or of the Trust as a whole.
16. 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:
PineBridge Investments LLC
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
With a copy to:
PineBridge Investments LLC
General Counsel
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Adviser:
SunAmerica Asset Management Corp.
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Senior Vice President and
General Counsel
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:
Name:
Title:
PINEBRIDGE INVESTMENTS LLC
By:
Name:
Title:
SCHEDULE A
Portfolio Fee
(as percentage of average daily net
assets the Subadviser manages for
the Portfolio)
SunAmerica International Equity Fund 0.47%
SunAmerica International Small-Cap Fund 0.60%
