Exhibit 6(iii)
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of January 1, 1999, by and
between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and MASSACHUSETTS FINANCIAL SERVICES COMPANY, a Delaware corporation
(the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and SunAmerica Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of January 1, 1999, (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 beneficial interest, no par value per share, in separately
designated portfolios 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 portfolio or portfolios of the
Trust listed on Schedule A attached hereto (the "Portfolio(s)"), 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 the assets of each Portfolio 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 under provisions of the Act, and
will render regular quarterly 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 subject to the last paragraph of this Section, in compliance with
(a) the objectives, policies, and
limitations for the Portfolio(s) set forth in the Trust's current prospectus and
statement of additional information, and (b) applicable laws and regulations.
Subject to the last paragraph of this Section, the Subadviser
represents and warrants to the Adviser that each of the Portfolios set forth in
Schedule A will be operated and managed (1) in compliance with all applicable
federal and state securities laws governing its operations and investments; and
(2) so as not to jeopardize either the treatment of the variable annuity
contracts which invest in the Portfolios (hereinafter "Contracts") as annuity
contracts for purposes of the Internal Revenue Code of 1986, as amended (the
"Code"). Without limiting the foregoing, and subject to the last paragraph of
this Section the Subadviser represents and warrants (1) to manage each Portfolio
so as to be treated as a "regulated investment company" under subchapter M,
chapter 1 of the Code, and (2) compliance with (a) the provisions of the Act and
rules adopted thereunder; (b) the diversification requirements specified in the
Internal Revenue Service's regulations under Section 817(h) of the Code; (c)
applicable federal and state securities laws; and (d) the distribution
requirements necessary to avoid payment of any excise tax pursuant to Section
4982 of the Code. The Subadviser further represents and warrants that to the
extent that any statements or omissions made in any Registration Statement for
the Contracts or shares of the Trust, or any amendment or supplement thereto,
are made in direct reliance upon and in direct conformity with specific
information furnished by the Subadviser expressly for use therein ("Furnished
Information"), such Registration Statement and any amendments or supplements
thereto will, with respect to the Furnished Information, 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.
Further, any statements or omissions in any Registration Statement for the
Contracts or shares of the Trust, or any amendment or supplement thereto, which
are made based upon Furnished Information and which have been provided to
Subadviser for its review, shall be deemed acknowledged and approved by
Subadviser, unless Subadviser provides Adviser with written indication to the
contrary within 5 business days of its receipt of the Registration Statement,
amendment or supplement for review.
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 acknowledges that the Subadviser is not the compliance agent
for any Portfolio or for the Trust or the Adviser, and does not have access to
all of each Portfolio's books and records necessary to perform certain
compliance testing. To the extent that the Subadviser has agreed to perform the
services specified in this Section in accordance with the Trust's registration
statement, the Trust's Agreement and Declaration of Trust and By-Laws, the
Trust's Prospectus and any policies adopted by the Trust's Board of Trustees
applicable to the Portfolios (collectively, the "Charter Requirements'), and in
accordance with applicable law (including Sub-chapters M and L of the Code, the
Act and the Advisers Act ('Applicable Law')), the Subadviser shall perform such
services based
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upon its books and records with respect to each Portfolio, which comprise a
portion of each Portfolio's books and records, and upon information and written
instructions received from the Adviser or the Trust's administrator, and shall
not be held responsible under this Agreement so long as it performs such
services in accordance with this Agreement, the Charter Requirements and
Applicable Law based upon such books and records and such information and
instructions provided by the Adviser or the Trust's administrator. The Adviser
shall promptly provide the Subadviser with copies of the Trust's registration
statement, the Trust's Agreement and Declaration of Trust and By-Laws, the
Trust's currently effective Prospectus and any written policies or procedures
adopted by the Trust's Board of Trustees applicable to the Portfolio and any
amendments or revisions thereto.
2. Portfolio Transactions. The Subadviser is responsible for decisions to
buy or sell securities and other investments of the assets of each Portfolio,
broker-dealers and futures commission merchants' selection, and negotiation of
brokerage commission and futures commission merchants' rates. As a general
matter, in executing portfolio transactions, the 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 Portfolio 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 Portfolio 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 portfolio transactions in securities and other investments for a
Portfolio. The Subadviser will promptly communicate to the Adviser and to the
officers and the Trustees of the Trust such information relating to portfolio
transactions as they may reasonably request.
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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 the Subadviser a fee at the annual
rates set forth in Schedule A hereto with respect to each Portfolio 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.
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 Portfolio(s) in connection with
the provision of services hereunder that are required to be maintained by the
Trust pursuant to the requirements of Rule 31a-1 of that Act. Any such records
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; provided that the Subadviser may retain copies of these
records.
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. Each
party to this Agreement agrees to cooperate with each other party and with
appropriate authorities having the requisite jurisdiction (including, but not
limited to, the SEC and state insurance regulators) in connection with any
investigation or inquiry relating to this Agreement or
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the Trust. This agreement to cooperate does not restrict either party's right to
assert that information requested is privileged or confidential.
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 of the
Subadviser or any of its affiliates or any derivation thereof or logo associated
therewith in any advertising or promotional materials or otherwise without the
prior approval of the Subadviser. Any such withholding of approval by the
Subviser shall be made in writing to the Adviser and shall indicate the specific
reason(s) why such approval is being withheld.
9. Standard of Care and Indemnification.
(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, 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 and hold harmless the Subadviser (and its officers, directors,
partners, agents, employees, controlling persons, shareholders and any other
person or entity affiliated with the Subadviser) from any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and other
expenses) arising from the Subadviser's conduct under this Agreement. Subadviser
hereby agrees to indemnify, defend and protect Adviser (and its officers,
directors, partners, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the Adviser) and hold Adviser
harmless, from and against any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses) arising out of
Subadviser's disabling conduct.
(b) In no case is any indemnity provided in this Agreement 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 obligations and duties under
this Agreement.
(c) Any person seeking indemnification hereunder shall furnish the
indemnifying party with (i) prompt notice of any claim, suit or action and (ii)
full information and all reasonable assistance necessary to defend such claim.
The indemnifying party shall have full authority to control the defense and
settlement of any such action with counsel of its own selection; and the
indemnified party shall not have any right to indemnification hereunder for any
settlement entered into by the indemnified party without the indemnifying
party's prior written consent.
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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 Portfolio until two years from the date hereof, 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 Portfolio(s) voting separately from any
other series of the Trust.
With respect to each Portfolio, this Agreement may be terminated at
any time, without payment of a penalty by the Portfolio 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 Portfolio, 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 Portfolio, 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;
provided, however, that this Agreement may not be terminated by the Subadviser
unless another subadvisory agreement has been approved by the Trust in
accordance with the Act, or after six months' written notice, whichever is
earlier. In the event of such a termination, the Adviser will use its best
efforts, and cause the Trust to use its best efforts, to engage another
subadviser for the portfolio as soon as possible. Notwithstanding the foregoing,
the Subadviser may terminate the Agreement on 60 days' written notice to the
Adviser and the Trust, in the event of a breach of this Agreement by the
Adviser. The termination of this Agreement with respect to any Portfolio or the
addition of any Portfolio 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 Portfolio subject hereto. This Agreement shall automatically
terminate in the event of its assignment (as defined by the Act). This Agreement
will also automatically terminate in the event that the Advisory Agreement by
and between the Trust and the Adviser is terminated.
12. Severability. 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
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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. Personal Liability. The Declaration of the Trust establishing the
Trust (the "Declaration"), is on file in the office of the Secretary of The
Commonwealth of Massachusetts, and, in accordance with that Declaration, no
Trustee, shareholder, officer, employee or agent of the Trust shall be held to
any personal liability, nor shall resort be had to their private property for
satisfaction of any obligation or claim or otherwise in connection with the
affairs of the Trust, but the "Trust Property" only shall be liable.
16. Separate Series. Pursuant to the provisions of the Declaration, each
Portfolio is a separate series of the Trust, and all debts, liabilities,
obligations and expenses of a particular Portfolio shall be enforceable only
against the assets of that Portfolio and not against the assets of any other
Portfolio or of the Trust as a whole.
17. 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: Massachusetts Financial Services Company
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
Adviser: SunAmerica Asset Management Corp.
The SunAmerica Center
000 Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Senior Vice President and
General Counsel
with a copy to: SunAmerica Inc.
0 XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx
Senior Vice President,
General Counsel - Corporate Affairs
and Secretary
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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: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
MASSACHUSETTS FINANCIAL SERVICES COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
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SCHEDULE A
Annual Fee
(as percentage of
average daily net assets of
Portfolio(s) the Portfolio)
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MFS Growth and Income Portfolio 0.40% - first $300 million
0.375% - next $300 million
0.35% - next $300 million
0.325% - next $600 million
0.25% - over $1.5 billion
MFS Mid-Cap Growth Portfolio 0.40% - first $300 million
0.375% - next $300 million
0.35% - next $300 million
0.325% - next $600 million
0.25% - over $1.5 billion
MFS Total Return Portfolio 0.375%
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