SUB-SUB-ADVISORY AGREEMENT
This SUB-SUB-ADVISORY AGREEMENT is made
as of this May 30, 2017 (the "Sub-Sub-Advisory Agreement"),
between Janus Capital Management LLC, a Delaware limited
liability company ("Janus") and Xxxxxxx Investment
Management LLC, a Delaware limited liability company
("Xxxxxxx").
WHEREAS, THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY ("VALIC") is engaged as the
investment adviser of VALIC Company II, an investment
company organized under the laws of Delaware as a business
trust ("XX XX"), pursuant to an Investment Advisory
Agreement. 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") ;
WHEREAS, VALIC has entered into an investment
Sub-Advisory Agreement with Janus (the "Sub-Advisory
Agreement") in order for Janus to assume certain
responsibilities and obligations of VALIC under the
Investment Advisory Agreement with respect to the Large Cap
Value Fund
(the "Fund");
WHEREAS, Janus is authorized under the Sub-
Advisory Agreement to delegate any of its duties and
obligations to any affiliated person (as such term is defined in
the 0000 Xxx) that is eligible to serve as an investment adviser
to an investment company registered under the 1940 Act on
such terms and conditions as Janus deems necessary or
appropriate, provided that VALIC consents to any such
delegation and to the terms and conditions thereof and such
delegation is permitted by and in conformity with the 1940
Act;
WHEREAS, Xxxxxxx 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
(the "Advisers Act");
WHEREAS, Janus desires to delegate to Xxxxxxx its
duties and responsibilities for providing the day to day
portfolio management of the Fund and Xxxxxxx is willing to
accept such delegation and to render such portfolio
management services;
NOW, THEREFORE, the parties agree as follows:
1. Delegation. Janus hereby delegates to
Xxxxxxx the following duties and responsibilities required to be
performed by Janus for the Fund pursuant to the Sub-Advisory
Agreement with respect to the investment and reinvestment of
the assets of the Fund: Xxxxxxx shall manage the investment
operations of the Fund, shall determine without prior
consultation with VALIC or Janus, what securities and other
assets of the Fund will be acquired, held, or disposed of , and
shall direct Janus with respect to the execution of trades in
connection with such determinations, in conformity with the
investment objectives, policies and restrictions of the Fund.
Xxxxxxx shall not issue directly to broker(s) or dealer(s)
purchase or sell orders with respect to the securities of the Fund
and shall not be responsible for aggregating purchase or sell
orders for the Fund. Xxxxxxx hereby accepts such delegation
and agrees to perform such duties and assume such
responsibilities, subject to the oversight of Janus.
2. Further Obligations of Xxxxxxx.
(a) In all matters relating to the
performance of this Sub-Sub-Advisory Agreement with
respect to the Fund, all of Xxxxxxx' acts or omissions shall be
in conformity with: (i) the Sub-Advisory Agreement between
VALIC and Janus; (ii) the investment goals and restrictions
specified by VALIC and the Fund documents (prospectus and
SAI) provided to Xxxxxxx; (iii) the Advisers Act; and (iv) all
other applicable federal and state laws governing the Fund's
operations and investments.
(b) Xxxxxxx shall provide timely
reports to Janus on its activities under this Sub-Sub-Advisory
Agreement as agreed on from time to time, and shall provide
Janus with all information or documents that Janus may
reasonably request in connection with this Sub-Sub-Advisory
Agreement.
(c) Xxxxxxx shall maintain all books
and records required to be maintained by Xxxxxxx pursuant to
the Advisers Act and shall make such records available to
Janus upon reasonable request.
(d) Except to the extent otherwise
required by any applicable federal or state laws or by any
direction of VALIC or Janus, Xxxxxxx shall keep confidential
any and all information concerning the affairs of the Fund.
(e) Xxxxxxx at its expense will make
available to VALIC at reasonable times its portfolio managers
and other appropriate personnel, either in person or, at the
mutual convenience of VALIC, Janus and Xxxxxxx, by
telephone, in order to review the investment policies,
performance and other investment related information
regarding the Fund and to consult with the VC II's Board of
Trustees ("the Board") and VALIC regarding the Fund's
investment affairs, including economic, statistical and
investment matters related to Xxxxxxx' duties hereunder, and
will provide periodic reports as requested to VALIC relating
to the investment strategies it employs as well as Xxxxxxx'
duties hereunder. Xxxxxxx and its personnel shall also
cooperate fully with counsel and auditors for, and the Chief
Compliance Officers of, Janus, VALIC, the Fund and the
Board.
(f) In accordance with procedures
adopted by the Board, as amended from time to time, Xxxxxxx
will provide assistance to Janus and the Fund in the fair
valuation of Fund securities for security prices that are not
readily available. Any valuation assistance provided is for
informational purposes only and is not a recommendation by
Xxxxxxx. Xxxxxxx will use its reasonable efforts to provide,
based upon its own expertise, and to arrange with parties
independent of Xxxxxxx such as broker-dealers for the
provision of, valuation information or prices for securities for
which prices are deemed by VALIC or Fund's accounting
agent not to be readily available in the ordinary course of
business from an automated pricing service. In addition,
Xxxxxxx will assist the Fund and its agents in determining
whether prices obtained for valuation purposes accurately
reflect market price information relating to the assets of the
Fund at such times as Janus or VALIC shall reasonably
request, including but not limited to, the hours after the close
of a securities market and prior to the daily determination of
the Fund's net asset value per share. VALIC's designated
pricing agent, and not Janus or Xxxxxxx, is responsible for
providing valuation of the assets in the Fund.
(g) Xxxxxxx at its expense will provide
Janus, VALIC and/or the Fund's Chief Compliance Officer
with such compliance reports as may be reasonably requested
from time to time. Notwithstanding the foregoing, Xxxxxxx
will promptly report to Janus and VALIC any material
violations of the federal securities laws (as defined in Rule
38a-1 of the 0000 Xxx) that it is aware of or of any material
violation of Perkin's compliance policies and procedures that
pertain to the Fund, as well as any change in portfolio
manager(s) of the Fund.
(h) Xxxxxxx will (i) assist in the
preparation of disclosures regarding factors that have affected
the Fund's performance, including the relevant market
conditions and the investment strategies and techniques used
by Xxxxxxx, for each period as requested by Janus or VALIC;
and (ii) review draft reports to shareholders and other
documents provided or available to it and provide comments
on a timely basis.
(i) Xxxxxxx shall immediately notify
Janus and VALIC in the event that Xxxxxxx or any of its
affiliates becomes aware:
i. that it is subject to a
statutory disqualification
that prevents Xxxxxxx from
serving as an investment
manager pursuant to this
Sub-Sub-Advisory
Agreement; or
ii. that it is the subject of an
administration proceeding
or enforcement action by
the Securities and
Exchange Commission
(the "Commission") or
other regulatory authority.
(j) Xxxxxxx shall use the same skill and
care in providing services to the Fund as it uses in providing
services to fiduciary accounts for which it has investment
responsibility.
(k) Xxxxxxx is hereby prohibited from
consulting with any other sub-advisers of the Fund, other sub-
advisers to another portfolio of XX XX, or other sub-advisers to
a portfolio under common control with the Fund concerning
transactions of the Fund in securities or other assets.
Notwithstanding the foregoing, Xxxxxxx may consult with
Janus regarding transactions of the Fund in securities or other
assets, or as otherwise consistent with the terms of this Sub-
Sub-Advisory Agreement.
3. Obligations of Janus.
(a) No provision of this Agreement
shall relieve Janus of its duties or responsibilities under the
Sub-Advisory Agreement and Janus shall appropriately
oversee, monitor and evaluate Xxxxxxx" performance of its
duties and responsibilities under this Sub-Sub-Advisory
Agreement.
(b) Janus shall be responsible for the
execution of all transactions upon receipt of an order from
Xxxxxxx, including but not limited to, the broker used to
execute the transaction, the compensation paid to such broker,
and the party with which the transaction will be consummated.
(c) Janus shall be responsible for
providing accurate and current information with respect to
records maintained for the Fund.
(d) Janus shall be responsible for
ensuring that all of Janus' acts or omissions under this Sub-
Sub-Advisory Agreement comply with all applicable federal
and state laws.
4. Compensation. Xxxxxxx shall be paid by
Janus for its services under the Sub-Sub-Advisory Agreement
with respect to the Fund a fee at an annual rate equal to (i) fifty
percent (50%) of the advisory fees Janus receives from VALIC.
5. Expenses and Excluded Expenses. Xxxxxxx
shall pay all its own costs and expenses incurred in rendering
the services required under this Sub-Sub-Advisory Agreement.
Notwithstanding any other provision hereof, it is expressly
agreed that Xxxxxxx shall not be responsible to pay any
expenses of Janus or the Fund, including but not limited to
organizational, operational or business expenses of Janus or the
Fund, such as, (a) brokerage commissions and other costs in
connection with the purchase or sale of securities or other
investment instruments with respect to the Fund; (b) custodian
fees and expenses of the Fund; and (c) interest and taxes of the
Fund.
6. Term of Agreement. This Sub-Sub-
Advisory Agreement shall become effective on the date hereof.
Unless sooner terminated as provided herein, this Sub-Sub-
Advisory Agreement shall continue in effect for two years from
its effective date. Thereafter, this Sub-Sub-Advisory
Agreement shall continue in effect, 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 Sub-Sub-Advisory Agreement or interested persons of any
such parties, cast in person at a meeting called for the purpose
of voting on such approval, and by a vote of a majority of the
Board or a majority of the Fund's outstanding voting securities.
This Sub-Sub-Advisory 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 Sub-
Advisory Agreement. The Sub-Sub-Advisory Agreement may
be terminated at any time, without the payment of any penalty,
by vote of the Board or by vote of a majority of the Fund's
outstanding voting securities, or by Janus, on not more than 60
days' nor less than 30 days' written notice to Xxxxxxx, or upon
such shorter notice as may be mutually agreed upon by the
parties. Xxxxxxx may terminate this Agreement at any time, on
not more than 60 days' nor less than 30 days' written notice to
Janus, or upon such shorter notice as may be mutually agreed
upon by the parties. If Xxxxxxx materially breaches the terms of
this Sub-Sub-Advisory Agreement, Janus may terminate the
authority of Xxxxxxx to act hereunder upon delivery of written
notice effective upon receipt. Termination of this Sub-Sub-
Advisory Agreement will not affect the validity of any action
Xxxxxxx has previously taken, or Xxxxxxx' liabilities or
obligations for transactions initiated before termination.
7. Limitation of Liability; Indemnification.
Unless otherwise required by applicable
law:
(a) Limitation of Liability.
Janus and any of its affiliates, directors, officers, shareholders,
employees or agents shall not be liable for any error of
judgment or for any loss, liability, cost, damage, or expense
(including reasonable attorney's fees and costs) (collectively
referred to as "Losses") suffered by Xxxxxxx, the Fund or
VALIC in connection with the performance of its obligations
under this Sub-Sub-Advisory Agreement, except a loss
resulting from willful misfeasance, bad faith or gross
negligence on Janus' part in the performance of its duties or
from reckless disregard of its obligations and duties under this
Sub-Sub-Advisory Agreement, except as may otherwise be
provided by the 1940 Act or under the provisions of other
federal securities laws or applicable state law which cannot be
waived or modified hereby.
(b) Janus agrees to indemnify and
hold harmless Xxxxxxx, its affiliates and each of their
respective officers, directors, members, agents, employees,
controlling persons and shareholders (each an "Indemnified
Party" and collectively, the "Indemnified Parties") against any
and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) to which such
Indemnified Parties may become subject arising from Janus'
acts or omissions under this Sub-Sub-Advisory Agreement,
including, without limitation, liability for actions brought by
VALIC or the Fund against any of such Indemnified Parties;
provided, however, that in no case is Janus' indemnity in favor
of Indemnified Party deemed to protect or apply to such
Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of
such Indemnified Party's own willful misfeasance, bad faith,
gross negligence or reckless disregard of its obligations and
duties, or any material breach of this Agreement.
(c) Limitation of Liability.
Xxxxxxx and any of its affiliates, directors, officers,
shareholders, employees or agents shall not be liable for any
error of judgment or for any loss, liability, cost, damage, or
expense (including reasonable attorney's fees and costs)
(collectively referred to as "Losses") suffered by Janus, the
Fund or VALIC in connection with the performance of its
obligations under this Sub-Sub-Advisory Agreement, except a
loss resulting from willful misfeasance, bad faith or gross
negligence on Xxxxxxx' part in the performance of its duties or
from reckless disregard of its obligations and duties under this
Sub-Sub-Advisory Agreement, except as may otherwise be
provided by the 1940 Act or under the provisions of other
federal securities laws or applicable state law which cannot be
waived or modified hereby.
(d) Xxxxxxx agrees to
indemnify and hold harmless Janus and its affiliates and each
of their respective directors, officers, members, agents,
employees, controlling persons and shareholders against any
and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) to which Janus
or its affiliates or such directors, officers, agents, employees,
controlling persons or shareholders may become subject arising
from Xxxxxxx' acts or omissions under this Sub-Sub-Advisory
Agreement, including, without limitation, liability for actions
brought by VALIC or the Fund against any of such
Indemnified Parties; provided, however, that in no case is
Xxxxxxx indemnity in favor of any person deemed to protect or
apply to such person 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
such person's obligations and duties under this Sub-Sub-
Advisory Agreement, or any material breach of this Sub-Sub-
Advisory Agreement.
8. Representations of Xxxxxxx. Xxxxxxx hereby
represents, warrants and covenants as follows:
(a) Xxxxxxx: (i) is registered as an
investment adviser under the Advisers Act and will continue
to be so registered for so long as this Sub-Sub-Advisory
Agreement remains in effect; (ii) is not prohibited by the
Advisers Act from performing the services contemplated by
this Sub-Sub-Advisory Agreement; (iii) has met, and will
continue to meet for so long as this Sub-Sub-Advisory
Agreement remains in effect, any other applicable federal or
state requirements, or the applicable requirements of any
regulatory or industry self-regulatory organization necessary
to be met in order to perform the services contemplated by this
Sub-Sub-Advisory Agreement; (iv) has the legal and corporate
authority to enter into and perform the services contemplated
by this Sub-Sub-Advisory Agreement; and (v) will
immediately notify Janus of the institution of any
administrative, regulatory or judicial proceeding against
Xxxxxxx that could have a material adverse effect upon
Xxxxxxx' ability to fulfill its obligations under this Sub-Sub-
Advisory Agreement.
(b) Xxxxxxx has provided Janus with a
copy of its Form ADV as most recently filed with the U.S.
Securities and Exchange Commission ("SEC") and will,
promptly after filing any amendment to its Form ADV with
the SEC, furnish a copy of such amendment to Janus.
(c) Xxxxxxx will notify Janus of any
change in the identity or control of its members owning a 10%
or greater interest in Xxxxxxx, or any change that would
constitute a change in control of Xxxxxxx under the 1940 Act,
prior to any such change if Xxxxxxx is aware, or should be
aware, of any such change, but in any event as soon as any
such change becomes known to Xxxxxxx.
(d) Xxxxxxx has adopted a code of
ethics meeting the requirements of Rule 17j-1 under the 1940
Act and the requirements of Rule 204A-1 under the Advisers
Act and has provided VALIC and the Board a copy of such
code of ethics, together with evidence of its adoption, and will
promptly provide copies of any changes thereto, together with
evidence of their adoption. Upon request of Janus or VALIC,
Xxxxxxx will supply VALIC a written report that (A) describes
any issues arising under the code of ethics or procedures since
Xxxxxxx' last report, including but not limited to material
violations of the code of ethics or procedures and sanctions
imposed or remedial action taken in response to the material
violations; and (B) certifies that the procedures contained in
Xxxxxxx' code of ethics are reasonably designed to prevent
"access persons" from violating the code of ethics.
9. Independent Contractor. Xxxxxxx shall for all
purposes hereunder by deemed to be an independent
contractor and shall, unless otherwise provided or authorized,
have no authority to act for or represent Janus, the Fund or
VALIC in any way.
10. Notices. All notices or other
communications under this Sub-Sub-Advisory Agreement will
be in writing and will be deemed properly given when
received by delivery in person, by overnight courier or by
facsimile transmission followed by hard copy by regular mail,
at the addresses set forth below, or to such other address as
may be designated by the party entitled to receive the same by
notice similarly given:
(a) To Janus at:
Janus Capital Management LLC
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: General Counsel
(b) To Xxxxxxx at:
Xxxxxxx Investment Management
LLC
000 X. Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxx Xxxx
Telephone: (000) 000-0000
11. Amendments. This Sub-Sub-Advisory
Agreement may be amended by the parties only in a written
instrument signed by the parties to this Sub-Sub-Advisory
Agreement, subject to the requirements of the 1940 Act and
the rules and regulations promulgated and orders granted
thereunder.
12. Governing Law. This Sub-Sub-Advisory
Agreement shall be construed in accordance with the laws of
the State of Colorado (without giving effect to the conflicts of
laws principles thereof) and the Advisers Act and 1940 Act.
To the extent that the applicable laws of the State of Colorado
conflict with the applicable provisions of the Advisers Act or
the 1940 Act, the latter shall control.
13. Miscellaneous. This Sub-Sub-Advisory
Agreement may be executed in two or more counterparts,
which taken together shall constitute one and the same
instrument. The headings in this Sub-Sub-Advisory
Agreement are included for convenience of reference only and
in no way define or limit any of the provisions thereof or
otherwise affect their constructions or effect. If any provision
of this Sub-Sub-Advisory Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Sub-Sub-Advisory Agreement shall not be
affected thereby. This Sub-Sub-Advisory Agreement shall be
binding upon and shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
14. Books and Records. Xxxxxxx shall keep the
books and records required to be maintained by Xxxxxxx
pursuant to this Sub-Sub-Advisory Agreement and shall
timely furnish to VALIC all information relating to Xxxxxxx'
services under this Sub-Sub-Advisory Agreement needed by
VALIC to keep the books and records of the Fund required by
Rule 31a-1 under the 1940 Act. Xxxxxxx agrees that all records
that it maintains on behalf of the Fund are property of the
Fund and Xxxxxxx will surrender promptly to the Fund any of
such records upon the Fund's request; provided, however, that
Xxxxxxx may retain a copy of such records. Xxxxxxx further
agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be
maintained by it pursuant to this Sub-Sub-Advisory
Agreement, and to provide reasonable advance notice to
VALIC of its intention to destroy any such records after the
expiration of the applicable retention period.
15. Use of Names. Xxxxxxx shall not use the
name, trade name, trademarks, service marks and/or logo of
VALIC, XX XX, and/or any subsidiaries or affiliates in any
communications (written, verbal or electronic), including
publicity releases, advertising or sales activities or brochures,
or similar written materials or activities, other than in
communications which are solely internal to Xxxxxxx or are
with Janus, VALIC, the Fund, or any of their respective
officers, directors or employees, without the prior written
consent of VALIC.
16. Third-Party Beneficiary. The parties
acknowledge and agree that VALIC, XX XX and the Fund are
third-party beneficiaries of this Sub-Sub-Advisory Agreement,
and it is intended that VALIC, XX XX and the Fund shall have
the authority to enforce their respective rights hereunder.
IN WITNESS WHEREOF, the parties have caused
this instrument to be executed by their officers designated
below as of the day and year first above written.
JANUS
CAPITAL MANAGEMENT LLC
By: /s/
Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx
X. Xxxxxxx
Title: Senior
Vice President
XXXXXXX
INVESTMENT MANAGEMENT LLC
By: /s/ Xxx
Xxxx
Name: Xxx
Xxxx
Title: Chief
Operating Officer
