EXHIBIT 4(d)(11)
INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 1st day of January, 2002, by and between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred to as "VALIC," and CREDIT
SUISSE ASSET 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 ("XX XX"), pursuant to an Investment
Advisory Agreement between VALIC and VCII, an
investment company organized under the laws of
Delaware as a business trust. 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 Growth II 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
Small Cap Value Fund
Socially Responsible Fund
Strategic Bond Fund
In accordance with the XX XX Agreement and
Declaration of Trust (the "Declaration"), new Funds
may be added upon approval of the Board of Trustees
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.
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(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 and the SUB-ADVISER AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY THE SUB-ADVISER
The SUB-ADVISER, subject to the control, direction and supervision of VALIC and
the XX XX Board of Trustees and in conformity with the 1940 Act, all applicable
laws and regulations thereunder, all other applicable federal and state laws and
regulations, including section 817(h) of the Internal Revenue Code of 1986, as
amended (the "Code"), the XX XX Declaration, Bylaws, registration statements,
prospectus and stated investment objectives, policies and restrictions and any
applicable procedures adopted by the XX XX Board of Trustees (which procedures
to the extent they govern transactions involving affiliates, will identify any
affiliate of VALIC or the Fund) adopted by the Fund's Board of Trustees
(provided that (i) the Fund or VALIC has provided the SUB-ADVISER with copies of
all applicable provisions of the foregoing Fund documents which relate to the
investment and management of the Fund and promptly notifies the SUB-ADVISER of
any changes in such Fund documents and (ii) VALIC informs the SUB-ADVISER of any
applicable laws relating to the management of the Fund, including restrictions
or limitations on investments in the Fund, and promptly notifies the SUB-ADVISER
of any changes in such laws or restrictions) shall:
(a) manage the investment and reinvestment of the assets
of the 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 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.
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 most favorable overall price and execution. Subject to
approval by the XX XX Board of Trustees 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, including statistical data, to the SUB-ADVISER to be
utilized in respect of any of its clients in accordance with the
parameters of Section 28(e) of the US Securities Exchange Act of 1934,
as amended (the "1934 Act"), which permits the use of "soft dollars" in
certain circumstances.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 according to such authorization.
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 1940 Act and Rule 17e-1 thereunder, the
SUB-ADVISER may engage its affiliates, VALIC and its affiliates, or any
other sub-adviser to the Fund and its respective affiliates, as
broker-dealers or futures commission merchants to effect portfolio
transactions in securities and other investments for a Covered Fund.
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The SUB-ADVISER shall maintain records adequately demonstrating
compliance with its obligations under this Agreement and report
periodically to VALIC and the XX XX Board of Trustees regarding the
performance of services under this Agreement. The SUB-ADVISER will make
available to VALIC and XX XX promptly upon their reasonable request all
of the Covered Fund(s) investment records and ledgers to assist VALIC
and XX XX in compliance with respect to each Covered Fund'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 XX XX Board
of Trustees such periodic and special reports as VALIC and the Board of
Trustees 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. VALIC and 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 information obtained pursuant to this
service relationship, and disclose such information only if VALIC or
the Board of Trustees has authorized such disclosure, or if such
information is or hereafter becomes ascertainable from public or
published information or trade sources, or if such disclosure is
expressly required or requested by applicable federal or state
authorities or as may be required by legal process or in connection
with any litigation.
Should VALIC at any time make any definite determination as to
investment policy and notify the SUB-ADVISER of such determination in
writing, 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.
The SUB-ADVISER will not hold money or investments on behalf of the
Fund. The money and investments will be held by the Custodian of the
Fund. The SUB-ADVISER will seek to arrange for the transmission to the
Custodian for the Fund, 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 shall for all purposes herein be deemed to be an
independent contractor and shall, unless otherwise provided or
authorized, have no authority to act for or represent VALIC or the Fund
other than in furtherance of the SUB-ADVISER's duties and
responsibilities as set forth in this Agreement. It is understood that
SUB-ADVISER and its affiliates perform investment advisory and other
services for various clients. VALIC agrees that SUB-ADVISER and its
affiliates may give advice and take action in the performance of their
duties with respect to any of their other clients which may differ from
advice given, or the timing or nature of actions taken, with respect to
the Covered Fund(s). VALIC also acknowledges that SUB-ADVISER and its
affiliates are fiduciaries to other entities, some of which have the
same or similar investment objectives (and will hold the same or
similar investments) as the Covered Fund(s), and that SUB-ADVISER will
carry out its duties hereunder together with its duties under such
relationships. Nothing in this Agreement shall be deemed to confer upon
SUB-ADVISER any obligation to purchase or sell or to recommend for
purchase or sale for the Covered Fund(s) any investment which
SUB-ADVISER, its affiliates, officers or employees may purchase or sell
for its or their own account or for the account of any other client, if
in the sole and absolute discretion of SUB-ADVISER it is for any reason
impractical or undesirable to take such action or make such
recommendation for the Covered Fund(s).
The SUB-ADVISER may on occasion, when the purchase or sale of a
security is deemed to be in the best interest of the Fund as well as
any other investment advisory clients, to the extent permitted by
applicable laws and regulations, but shall not be obligated to,
aggregate the securities sold or purchased with those of its other
clients where such aggregation is not inconsistent with the policies
set forth in the Fund's registration statement.
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 this Agreement.
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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 each Covered Fund's average monthly net asset value computed
for each Covered Fund 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 XX XX Declaration and Bylaws. Any change
in Schedule A pertaining to any new or existing Fund shall not be
deemed to affect the interest of any other Fund and shall not require
the approval of shareholders of any other Fund.
The average monthly 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 XX XX Declaration, 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 thirty (30) days following the end of the
month.
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 the Fund.
3. SCOPE OF THE SUB-ADVISER'S ACTIVITIES
The SUB-ADVISER, and any person controlled by or under common control
with the SUB-ADVISER, shall remain free to provide similar investment
advisory services to other persons or engage in any other business or
activity which does not impair the services which the SUB-ADVISER
renders to the Covered Fund(s).
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.
The SUB-ADVISER shall not be liable to VALIC, XX XX, the Fund, or to
any shareholder in the Fund, and VALIC shall indemnify the SUB-ADVISER,
for any act or omission in rendering services under this Agreement, or
for any losses sustained in connection with the matters to which this
Agreement relates, so long as there has been no willful misfeasance,
bad faith, gross negligence, or reckless disregard of obligations or
duties on the part of the SUB-ADVISER.
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) are in compliance with
Subchapter M of the Internal Revenue Code of 1986, as amended (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) comply with such Code diversification
provisions, as directed by VALIC.
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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 SEC 48 hours prior to VALIC
signing this Agreement and, after filing any amendment to its
Form ADV with the SEC, furnish a copy of such amendment to
VALIC within a month after such filing.
VALIC represents, warrants, and agrees as follows:
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.
VALIC warrants and represents to SUB-ADVISER (i) that the Covered
Fund(s) has been and throughout the term of this Agreement will be
operated, and any securities or other financial instruments issued by
the Covered Fund(s)have been and throughout the term of this Agreement
will be offered and sold, in full compliance with all applicable laws,
and (ii) that procedures reasonably designed to prevent and detect
direct or indirect investments in securities or other financial
instruments issued by Covered Fund(s), or operations of Covered
Fund(s), for the purpose of, related to, or in any way involving money
laundering have been and throughout the term of this Agreement will be
applied.
5. TERM OF AGREEMENT
This Agreement shall become effective as to the 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
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voting on such approval, and by a vote of a majority of the XX XX Board
of Trustees or a majority of that 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. The Agreement may be
terminated as to any Covered Fund at any time, without the payment of
any penalty, by vote of the Board of Trustees or by vote of a majority
of that Covered Fund's outstanding voting securities on 30-60 days'
prior written notice to the SUB-ADVISER. This Agreement may also be
terminated by VALIC: (i) on 30-60 days' prior written notice to the
SUB-ADVISER, 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 at least 30 days' prior written notice to VALIC.
6. USE OF NAME
For the duration of this Sub-Advisory Agreement, SUB-ADVISER grants XX
XX and VALIC a non-transferable, non-exclusive license to use the
following names in any of the Fund's prospectuses, statements of
additional information, proxy statements, reports to shareholders,
sales literature or other materials prepared for distribution to direct
or indirect holders of the Covered Fund (beneficial or otherwise) or to
the public that refer in any way to the SUB-ADVISER:
"Credit Suisse"
"CS"
"CSAM"
"Credit Suisse Warburg Pincus"
"Warburg Pincus"
"Warburg"
("SUB-ADVISER names") or any combination thereof. For all other uses of
SUB-ADVISER's name, VALIC may seek, and SUB-ADVISER shall not
unreasonably withhold, consents to the use of the name of the
SUB-ADVISER for any materials developed and distributed by or on behalf
of the Covered Fund. In the event of termination, VALIC agrees that the
Covered Fund's license to use these names will terminate and VALIC will
take all necessary actions on behalf of the Covered Fund to delete such
names from any material distributed to direct or indirect holders of
the Covered Fund (beneficial or otherwise) or to the public that refer
in any way to the SUB-ADVISER (other than the material to advise of
such termination).
7. OTHER MATTERS
The SUB-ADVISER may from time to time employ or associate with itself
any person or persons believed to be particularly fitted 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 the Fund with respect to them.
The SUB-ADVISER agrees that all books and records which it maintains
for the Fund are the Fund's property. The SUB-ADVISER also agrees upon
request of VALIC or the Fund, to promptly surrender the books and
records in accordance with the 1940 Act and rules thereunder. The
SUB-ADVISER further 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.
VALIC has herewith furnished the SUB-ADVISER copies of the Fund's
Prospectus, Statement of Additional Information, Declaration and Bylaws
as currently in effect and agrees during the continuance of this
Agreement
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to furnish the SUB-ADVISER copies of any amendments or supplements
thereto before or at the time the amendments or supplements become
effective.
The SUB-ADVISER is authorized to honor and act on any notice,
instruction or confirmation given by VALIC on behalf of the Fund in
writing signed or sent by any of the persons whose names, addresses and
specimen signatures will be provided by VALIC from time to time. The
SUB-ADVISER shall not be liable for so acting in good faith upon such
instructions, confirmation or authority, notwithstanding that it shall
subsequently be shown that the same was not given or signed or sent by
an authorized person.
VALIC agrees to furnish the SUB-ADVISER at its principal office prior
to use thereof, copies of all prospectuses, proxy statements, reports
to shareholders, sales literature, or other material prepared for
distribution to interest holders of the Fund 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. VALIC shall furnish
or otherwise make available to the SUB-ADVISER such other information
relating to the business affairs of VALIC and the Fund as the
SUB-ADVISER at any time, or from time to time, may reasonably request
in order to discharge obligations hereunder.
VALIC agrees to indemnify the SUB-ADVISER for losses and claims which
arise (i) as a result of a failure by VALIC to provide the services or
furnish materials required under the terms of this Investment
Sub-Advisory Agreement, or (ii) as the result of any untrue statement
of a material fact or any omission to state a material fact required to
be stated or necessary to make the statements, in light of the
circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements,
sales literature, or other materials pertaining to the Fund, except
insofar as any such statement or omission was made in reliance on
information provided by the SUB-ADVISER or its affiliates.
The SUB-ADVISER agrees to indemnify VALIC for losses and claims which
arise (i) as a result of the willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties by the
SUB-ADVISER; or (ii) as the result of any untrue statement of a
material fact or any omission to state a material fact required to be
stated or necessary to make the statements, in light of the
circumstances under which they were made, not misleading in any
registration statements, proxy materials, reports, advertisements,
sales literature, or other materials pertaining to the Fund to the
extent any such statement or omission was made in reliance on
information provided by the SUB-ADVISER or its affiliates.
8. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with the laws of the
State of Texas 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 Securities and Exchange Commission or
such interpretive positions as may be taken by the Commission or its
staff. To the extent that the applicable law of the State of Texas, 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.
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10. 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 X. Xxxxxx, Esq.
0000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
If to SUB-ADVISER:
Attn: General Counsel
Credit Suisse Asset Management, LLC
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
11. MISCELLANEOUS.
Affiliated Transactions. VALIC shall notify SUB-ADVISER promptly, in
writing, if VALIC or any of its affiliates, is or becomes an affiliate,
director, trustee or controlling person of any issuer whose securities
are or may be purchased for the Covered Fund(s).
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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:
-------------------------------------------
Name:
Title:
ATTEST:
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CREDIT SUISSE ASSET MANAGEMENT, LLC
By:
-------------------------------------------
Name: Xxx Xxxxxx
Title: Managing Director and General Counsel
ATTEST:
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