SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of
this 30th day of June, 2016 by and
between SUNAMERICA ASSET MANAGEMENT, LLC, a
Delaware limited liability company
(the Adviser), and CADENCE CAPITAL MANAGEMENT LLC
(the Subadviser).
WITNESSETH:
WHEREAS, the Adviser and SunAmerica Specialty
Series, a Delaware statutory trust (the
Trust), have entered into an Investment Advisory
and Management Agreement dated as of
August 8, 2014 (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
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 (each, a Fund
and collectively, the Funds), 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. (a) 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 the assets of the Funds 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 Subadviser, and in compliance with
(a) the objectives, policies, and limitations for
the Funds set forth in each Funds current
prospectus and statement of additional information
as
provided to Subadviser, and (b) applicable laws and
regulations.
The Subadviser shall have no power,
authority, responsibility, or obligation hereunder
to
take any action on behalf of a Fund with regard to
any claim or potential claim in any bankruptcy
proceedings, class action securities litigation, or
other litigation or proceeding affecting securities
held at any time in a Fund, including, without
limitation, to file proofs of claim or other
documents
related to such proceedings (the Litigation), or to
investigate, initiate, supervise, or monitor the
Litigation involving Fund assets, and the Adviser
acknowledges and agrees that no such power,
authority, responsibility or obligation is
delegated hereunder. Nevertheless, the Subadviser
agrees
that it shall provide the Adviser with any and all
documentation or information relating to the
Litigation as may reasonably be requested by the
Adviser.
The Subadviser represents and warrants to the
Adviser that it will manage the assets of
each Fund, or portion of each Funds assets,
allocated to it, as set forth in Schedule
A, in
compliance with all applicable federal and state
laws governing its operations and investments.
Without limiting the foregoing and subject to
Section 11(c) hereof, the Subadviser represents and
warrants: (1) that the Subadvisers management of
all or a portion of the assets of a Fund will be
designed to achieve qualification by the Fund to be
treated as a "regulated investment company"
under subchapter M, chapter 1 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) federal and state
securities and commodities laws applicable to
Subadvisers Fund management responsibilities;
provided that for purposes of Section 17(a), (d)
and (e) of the Act, the Subadviser shall effect
compliance only in relation to its own affiliates
and
to affiliated persons identified to it by the
Adviser. The Subadviser further represents and
warrants
that to the extent any statements or omissions made
in any Registration Statement for shares of the
Trust, or any amendment or supplement thereto, are
made in reliance upon and in conformity with
information furnished by the Subadviser expressly
for use therein, such 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 also represents and warrants
that in furnishing services hereunder, the
Subadviser will not consult with any other
subadviser of a Fund or other series of the Trust
to the
extent any other subadvisers are engaged by the
Adviser, or any other subadvisers to other
investment companies that are under common control
with the Trust, concerning transactions of a
Fund 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 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.
(b) 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 appropriate
given the nature of its business; 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: (i) decisions, and
is
hereby authorized, to buy or sell securities and
other investments for the Fund or a portion of the
Funds assets allotted to it, (ii) selection of
broker-dealers and futures commission merchants and
(iii) 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 Subadvisers best judgment, 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, including but not limited to,
reports prepared by independent third parties
relating to the execution costs of such
transactions. To the extent consistent with
applicable law,
the Subadviser may aggregate purchase or sell
orders for the 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, the Adviser may request the
Subadviser to effect a specific percentage of the
transactions in securities and other investments it
effects on behalf of a Fund with 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 and agree that 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 consistent with
its obligations regarding best execution. Adviser
acknowledges that Subadviser may be unable to
fulfill the Advisers request for direction for a
number of reasons, including, but not limited to:
1)
such direction may result in the Subadviser paying
a higher commission, depending upon the
Subadvisers arrangements with the particular
broker-dealer or futures commission merchant, etc.;
2) if the Subadviser directs payments of an
excessive amount of commissions, the executions may
not be accomplished as rapidly; 3) the Subadviser
may forfeit the possible advantage derived from
the aggregation of multiple orders as a single
bunched transaction where Subadviser would, in
some instances, be in a better position to
negotiate commissions; or 4) Subadviser does not
make
commitments to allocate fixed or definite amounts
of commissions to brokers.
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 rate set forth in
Schedule A hereto with respect to each Fund, or
portion thereof, that the Subadviser manages. 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.
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 Subadvisers 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
Subadviser shall be deemed to be an independent
contractor and shall, unless otherwise expressly
provided or authorized, have no authority to act
for or represent the Trust in any way or otherwise
be deemed an agent of the Trust.
7. Advertising. Subadviser shall
not provide or in any way distribute any sales or
advertising materials, whether or not related to
the Trust, to any employee or representative of AIG
Capital Services, Inc. or its affiliates, including
wholesaling personnel, unless such material has
been received and approved, in writing, by
the Adviser. Notwithstanding the foregoing,
Subadviser may include the Advisers and Trusts
names in its client list used in promotional
materials with prior consent of the Adviser and/or
Trust.
8. Proxy Voting. Each Fund has
appointed Institutional Shareholder Services as the
proxy-voting agent and will vote all such proxies
in accordance with the proxy voting policies and
procedures adopted by the Board of Trustees. With
respect to certain vote items, a Fund may
request guidance or a recommendation from the
adviser, administrator or subadviser of the Fund.
The Subadviser shall not have responsibilities in
connection with proxy voting for a Fund unless it
is affirmatively requested to make a proxy voting
recommendation.
9. Certain Records. The Subadviser
hereby undertakes and agrees to maintain, in the
form and for the period required by Rule
31a-2 under the Act, all records relating to
the
investments of the Funds that are required to be
maintained by the Trust pursuant to the
requirements of Rule 31a-1 of that Act. Copies of
any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1
and Rule 31a-2 promulgated under the Act
which are prepared or maintained by the Subadviser
on behalf of the Trust will be provided
promptly to the Trust or the Adviser on request.
The Subadviser agrees that all
accounts, books and other records maintained and
preserved by it as required hereby shall be subject
at any time, and from time to time, to such
reasonable periodic, special and other examinations
by the Securities and Exchange Commission,
the Trust's auditors, the Trust or any
representative of the Trust, the Adviser, or any
governmental
agency or other instrumentality having regulatory
authority over the Trust.
10. Reference to the Subadviser.
Neither the Trust nor the Adviser or any affiliate
or
agent thereof shall make reference to or use the
name 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.
11. Liability of the Subadviser. (a)
In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of
obligations or duties (disabling conduct) hereunder
on
the part of the Subadviser (and its officers,
partners, agents, employees, controlling persons,
shareholders and any other person or entity
affiliated with the Subadviser), the Subadviser
shall not
be subject to liability to the Adviser, its
officers, Trustees, agents, employees, controlling
persons
or shareholders or 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 Subadvisers
receipt
of compensation for services. Except for such
disabling conduct, the Adviser shall indemnify the
Subadviser (and its officers, partners, agents,
employees, controlling persons, shareholders and
any
other person or entity affiliated with the
Subadviser) (collectively, the Indemnified Parties)
from
any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other
expenses) arising from the Subadvisers providing
services under this Agreement or the sale of
securities of the Trust.
(b) The Subadviser agrees to
indemnify and hold harmless the Adviser and its
affiliates and each of its Trustees and officers
and each person, 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 reasonable
legal and other expenses), to which the Adviser or
its
affiliates or such Trustees, officers or
controlling person may become subject under the
1933 Act,
under other statutes, at common law or otherwise,
which are caused by Subadvisers disabling
conduct; 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, Trustees,
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
Funds 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 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
subsections (a) and (b) of Section 1 of this
Subadvisory Agreement (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 Subadviser. 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 Funds assets not allocated to
the Subadviser.
12. Confidentiality. The Subadviser
will not disclose or use any records or information
obtained pursuant to this Agreement in any manner
whatsoever except as expressly authorized in
this Agreement or as reasonably required to execute
transactions on behalf of a Fund, and will
keep confidential any non-public information
obtained directly as a result of this service
relationship, and the Subadviser shall disclose
such non-public information only if the Adviser or
the Board of Trustees has authorized such
disclosure by prior written consent, or if
such
information is or hereafter otherwise is known by
the Subadviser or has been disclosed, directly or
indirectly, by the Adviser or the Trust to others
becomes ascertainable from public or published
information or trade sources, or if such disclosure
is expressly required or requested by applicable
federal or state regulatory authorities, or to the
extent such disclosure is reasonably required by
auditors or attorneys of the Subadviser in
connection with the performance of their
professional
services or as may otherwise be contemplated by
this Agreement. Notwithstanding the foregoing,
the Subadviser may disclose the total return earned
by a Fund and may include such total return in
the calculation of composite performance
information.
13. Representations. By execution of
the Agreement, Subadviser represents that: (i) it
is duly registered as an Investment Adviser
with the Securities and Exchange Commission
pursuant to the Investment Advisers Act of 1940, as
amended (the Advisers Act) and that it
provided to the Adviser Part 2A of its registration
statement on Form ADV (the ADV) prior to
signing the Agreement.
14. Permissible Interests. Trustees
and agents of the Trust are or may be interested in
the Subadviser (or any successor thereof) as
partners, officers, agents or shareholders, or
otherwise; 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.
15. Term of the Agreement. This
Agreement shall continue in full force and effect
until June 30, 2018, 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.
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, or by the Adviser, on not less
than 30 nor more than 60 days' written notice
to the Subadviser. 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 Fund. 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.
16. 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.
17. 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.
18. 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.
19. 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: Cadence Capital Management LLC
000 Xxxxxxxx Xx.
00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Adviser: SunAmerica Asset Management, LLC
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: Legal Department
[Signature page follows]
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, LLC
/s/ Xxxxx X. Xxxxxxx
By:
Name: Xxxxx X. Xxxxxxx
Title: President and CEO
CADENCE CAPITAL MANAGEMENT LLC
/s/ Xxxxxxx X. Xxxxxxxx
By:
Name: Xxxxxxx X. Xxxxxxxx
Title: CEO
SCHEDULE A
Fund
Fee
Rate
(as a
perce
ntage
of
daily
net
assets
the
Suba
dvise
r
mana
ges
for
the
Fund
)
SunAmerica Small-Cap Fund 0.50%
4
