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EXHIBIT 5(b)
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of October 15, 1996, as
amended April 15, 1997, by and between SUNAMERICA ASSET MANAGEMENT CORP., a
Delaware corporation (the "Adviser"), and XXXXX SELECTED ADVISERS, L.P., a
Colorado limited partnership (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 September 16, 1992, (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 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 in Schedule A 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. (a) The Adviser hereby engages the
services of the Subadviser in furtherance of its Investment Advisory and
Management Agreement. 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. 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 in compliance with the objectives, policies,
and limitations for the Portfolio(s) set forth in the Trust's current
prospectus and statement of additional information, and applicable laws and
regulations. The Adviser shall inform the Subadviser of any requirements of
the California Insurance Code (or other applicable insurance Code, if any) and
any regulations thereunder that operate to limit or restrict the investments
the Portfolio(s) may otherwise make, and to inform the Subadviser promptly of
any changes in such requirements.
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The Subadviser represents and warrants to the Adviser that
each of the Portfolios set forth in Schedule A will at all times be operated
and managed (1) in compliance with all applicable federal and state laws
governing its operations and investments; (2) so as not to jeopardize either
the treatment of the Polaris variable annuity contracts issued by Variable
Separate Account (File No. 33-47473; hereinafter "Contracts") as annuity
contracts for purposes of the Internal Revenue Code of 1986, as amended (the
"Code"), or the eligibility of the Contracts to qualify for sale to the public
in any state where they may otherwise be sold; and (3) to minimize any taxes
and/or penalties payable by the Trust or such Portfolio. Without limiting the
foregoing, the Subadviser represents and warrants (1) qualification, election
and maintenance of such election by each Portfolio 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 state
insurance laws; (d) applicable federal and state securities, commodities and
banking laws; and (e) 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 reliance upon and in
conformity with information furnished by the Subadviser expressly for use
therein, such Registration Statement and any amendments or supplements thereto
will, when they become effective, conform in all material respects to the
requirements of the Securities Act of 1933 and the rules and regulations of the
Commission thereunder (the "1933 Act") and the Act and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading.
The Subadviser accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
(b) In performing its investment advisory services,
Subadviser, while remaining ultimately responsible for management of the
portion of the assets of the Portfolio allocated to it, may delegate any of its
responsibilities to one of its affiliates, including Xxxxx Selected Advisers -
NY, Inc., its New York affiliate.
2. PORTFOLIO TRANSACTIONS. The Subadviser is authorized to
select the brokers or dealers that will execute the purchases and sales of
portfolio securities and is directed to use its best efforts to obtain the best
price and execution. In selecting such broker or dealers, the Subadviser shall
consider all relevant factors, including price (including the applicable
brokerage commission or dealer spread), 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 or dealer
involved, the quality of the service, the difficulty of execution, the
execution capabilities and operations facilities of the firm involved, and 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 Subadviser shall not be deemed to have
acted unlawfully or to have breached
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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. 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.
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). For purposes of calculating
the Subadviser's fee, the average daily net asset value of a Portfolio shall be
determined by taking an average of all determinations of such net asset value
during the month. If the Subadviser shall provide its services under this
Agreement for less than the whole of any month, the foregoing compensation
shall be prorated.
The Subadviser, not the Adviser or the Trust, will pay Xxxxx
Selected Advisers - NY, Inc., or any other affiliate the services of which are
utilized hereunder, all of such affiliate's reasonable direct and indirect
costs associated with maintenance of an office and performance of such
services.
To the extent required by the laws of any state in which the
Trust is subject to an expense guarantee limitation, if the aggregate expenses
of any Portfolio in any fiscal year exceed the specified expense limitation
ratios for that year (calculated on a daily basis), as a result of which the
Adviser is required to reduce or refund its advisory and management fee payable
by the Portfolio, the Subadviser agrees to waive such portion of its
subadvisory fee in the same proportion as the fees waived by the Adviser bear
to the total advisory and management fee paid by the Portfolio. Such waiver,
however, shall not exceed the full amount of the subadvisory fee for such year
except as may be elected by the Subadviser in its discretion. For this
purpose, aggregate expenses of a Portfolio shall include the compensation of
the Adviser and all normal expenses, fees and charges, but shall exclude
interest, taxes, brokerage fees on portfolio transactions, fees and expenses
incurred in connection with the distribution of Trust shares, and extraordinary
expenses including litigation expenses. In the event any amounts are so
contributed by the Subadviser to the Adviser, the Adviser agrees to reimburse
the Subadviser for any expenses waived, provided that the Adviser has been
reimbursed by the Trust.
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4. REPORTS. 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.
5. 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.
6. 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) that are
required to be maintained by the Trust pursuant to the requirements of Rule
31a-1 of that Act. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under the
Act which are prepared or maintained by the Subadviser on behalf of the Trust
are the property of the Trust and will be surrendered promptly to the Trust or
the Adviser on request.
The Subadviser agrees that all accounts, books and other
records maintained and preserved by it as required hereby shall be subject at
any time, and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, the Trust's auditors,
the Trust or any representative of the Trust, the Adviser, or any governmental
agency or other instrumentality having regulatory authority over the Trust.
7. 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 in any advertising or
promotional materials without the prior approval of the Subadviser, which
approval shall not be unreasonably withheld.
8. INDEMNIFICATION. The Adviser agrees to indemnify and hold
harmless the Subadviser and its affiliates and each of its directors and
officers and each person, if any, who controls the Subadviser within the
meaning of Section 15 of the 1933 Act against any and all losses, claims,
damages, liabilities or litigation (including legal and other expenses), to
which the Subadviser or its affiliates or such directors, officers or
controlling person may become subject under the 1933 Act, under any other
statute, at common law or otherwise, which may be based upon any wrongful act
or breach of this Agreement by the Adviser; provided, however, that in no case
is the Adviser's indemnity in favor of any person deemed to protect such person
against any liability to which such person would otherwise be subject by reason
of willful misfeasance, bad faith, or gross negligence in the performance of
his, her or its duties or by reasons of his, her or its reckless disregard of
obligations and duties under this Agreement.
The Subadviser agrees to indemnify and hold harmless the
Adviser and its affiliates and each of its directors and officers and each
person, if any, who controls the
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Adviser within the meaning of Section 15 of the 1933 Act against any and all
losses, claims, damages, liabilities or litigation (including legal and other
expenses), to which the Adviser or its affiliates or such directors, officers
or controlling person may become subject under the 1933 Act, under other
statutes, at common law or otherwise, which may be based upon (i) any wrongful
act or breach of this Agreement by the Subadviser, or (ii) any failure by the
Subadviser to comply with the representations and warranties set forth in
Section 1 of this Agreement; provided, however, that in no case is the
Subadviser's indemnity in favor of any person deemed to protect such other
persons against any liability to which such person would otherwise be subject
by reasons of willful misfeasance, bad faith, or gross negligence in the
performance of his, her or its duties or by reason of his, her or its reckless
disregard of obligation and duties under this Agreement.
9. TERM OF THE AGREEMENT. This Agreement shall continue in full
force and effect with respect to each Portfolio until the earlier of (a) two
years from the date this Agreement is approved by the Trustees, or (b) the
first meeting of the shareholders of the Portfolio of the Trust after the date
hereof. If approved at such meeting by the affirmative vote of a majority of
the outstanding voting securities (as defined in the Act), of the Portfolio
with respect to such Portfolio, voting separately from any other series of the
Trust, this Agreement shall continue in full force and effect with respect to
such Portfolio 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 voting
separately from any other series of the Trust, provided, however, that if the
shareholders fail to approve the Agreement as provided herein, the Subadviser
may continue to serve hereunder in the manner and to the extent permitted by
the Act and rules thereunder. The foregoing requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the Act and the rules and regulations thereunder.
With respect to each Portfolio, this Agreement may be
terminated at any time, without payment of 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. 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 terminate in the event that the
Advisory Agreement by and between the Trust and the Adviser is terminated.
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10. 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.
11. AMENDMENTS. This Agreement may be amended by mutual consent
in writing, but the consent of the Trust must be obtained in conformity the
requirements of the Act.
12. 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.
13. 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.
14. 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.
15. 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: Xxxxx Selected Advisers, L.P.
000 X. Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxx Xx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Xx.
Executive Vice President
Adviser: SunAmerica Asset Management Corp.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Senior Vice President
and General Counsel
with a copy to: SunAmerica Inc.
0 XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Vice President, Associate
General Counsel 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
XXXXX SELECTED ADVISERS, L.P.
By: /s/ XXXX X. XXXX
---------------------------------
Name: Xxxx X. Xxxx
Title: President
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SCHEDULE A
FEE
(AS PERCENTAGE OF
AVERAGE DAILY NET ASSETS OF
PORTFOLIO THE PORTFOLIO)
--------- --------------
Venture Value .45% - first $100MM
.40% - next $400MM
.35% - over $500MM
Real Estate .45% - first $100MM
.40% - next $400MM
.35% - over $500MM
April 17, 1997
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Exhibit 5(b)
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of April 15, 1997 by
and between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and XXXXXX INVESTMENT MANAGEMENT, INC., a Massachusetts 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 September 16, 1992, as amended (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, 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 as delivered in
writing to the Subadviser, and 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 as delivered to the
Subadviser, and (b) applicable laws and regulations.
The Subadviser agrees that it will operate and manage the
Portfolio set forth in Schedule A (1) in compliance with all applicable federal
and state laws governing the Subadviser's
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management of the Portfolio and investments; and (2) so as not to jeopardize
either the treatment of the SunAmerica Series Trust variable annuity contracts
issued by Variable Separate Account and FS Variable Separate Account (File
Nos. 33-47473 and 33-85014, respectively; hereinafter "Contracts") as annuity
contracts for purposes of the Internal Revenue Code of 1986, as amended (the
"Code"). Without limiting the foregoing, the Subadviser agrees to manage the
Portfolio in 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
state insurance laws; and (d) applicable federal and state securities,
commodities and banking laws; provided that Adviser shall provide Subadviser
with written direction as to the requirements of applicable state insurance
laws and applicable federal and state banking laws. For purposes of the
preceding sentence, disclosure in the Trust's prospectus and/or statement of
additional information of applicable state insurance laws and regulations and
applicable federal and state banking laws and regulations shall constitute
"written direction" thereof. The Adviser acknowledges and agrees that the
Subadviser's compliance with its obligations under this Agreement will be
based, in part, on information supplied by the Adviser, or an agent thereof, as
to each Portfolio, including but not limited to, portfolio security lot level
realized and unrealized gain/loss allocation. The Adviser agrees that all such
information will be supplied on a timely basis. 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 reliance upon and in
conformity with information furnished by the Subadviser expressly for use
therein, such Registration Statement and any amendments or supplements thereto
will, when they become effective, conform in all material respects to the
requirements of the Securities Act of 1933 and the rules and regulations of the
Commission thereunder (the "1933 Act") and the Act and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading.
The Subadviser accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement. The
Subadviser shall not have any responsibility for the administrative affairs of
the Portfolio, including any responsibility for the calculation of the net
asset value of the Portfolio's shares or shareholder accounting services;
provided, however, that the Subadviser shall, as requested from time to time by
the Adviser, assist the Adviser in obtaining pricing information relating to
the Portfolio's investment securities.
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
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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. To the extent consistent with applicable law,
the Subadviser may aggregate purchase or sell orders for the Portfolio 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 Portfolio 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.
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). For purposes of calculating
the Subadviser's fee, the average daily net asset value of a Portfolio shall be
determined by taking an average of all determinations of such net asset value
during the month. 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.
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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. While the Subadviser is not being engaged to
serve as the Trust's official record keeper, the Subadviser nevertheless hereby
undertakes and agrees to maintain, in the form and for the period required by
Section 204 of the Advisers Act and Rule 204- 2 thereunder, all records
relating to the investments of the Portfolio(s) that are required to be
maintained by the Subadviser pursuant to the requirements of Rule 204-2 under
the Advisers Act. The Subadviser will also, in connection with the purchase
and sale of securities for each Portfolio, arrange for the transmission to the
custodian for the Trust on a daily basis, such confirmation, trade tickets, and
other documents and information, that identify securities to be purchased or
sold on behalf of the Portfolio, as may be reasonably necessary to enable the
custodian to perform its administrative and recordkeeping responsibilities with
respect to the Portfolio.
The Subadviser agrees that all accounts, books and other
records maintained and preserved by it as required hereby shall be subject at
any time, and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, the Trust's auditors,
the Trust or any representative of the Trust, the Adviser, or any governmental
agency or other instrumentality having regulatory authority over the Trust.
8. REFERENCE TO THE SUBADVISER. The Adviser covenants as
follows:
(a) The Adviser will (and will cause its affiliates
(including the Trust) (each an "Affiliate") to) use the name "Xxxxxx Investment
Management", "Xxxxxx Investments", "Xxxxxx" or any derivation thereof only for
so long as this Agreement remains in effect. At such times as this Agreement
is no longer in effect, the Adviser will, and will cause each Affiliate to,
cease using any such name or any other name indicating that any Portfolio is
advised by or otherwise connected to the Subadviser.
(b) It will not, and will cause its Affiliates to not,
refer to the Subadviser or any Affiliate in any sales literature or promotional
material except with the prior approval of the Subadviser. In the case of
materials, such as the portfolio's prospectus, required by law to be prepared,
such approval shall not be unreasonably withheld.
(c) It will permit the Portfolios to be used as a funding
vehicle only for insurance contracts issued by SunAmerica Inc. or any of its
affiliates.
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(d) It will not (and will cause it Affiliates to not)
engage in marketing programs (written or otherwise) directed toward Xxxxxx
Capital Manager Annuity Contract ("PCM") which directly solicit transfers from
PCM to the Adviser's products or those of its Affiliates. For purposes of the
foregoing, general marketing efforts by SunAmerica Inc. and its affiliates
shall not constitute a direct solicitation of PCM contract holders. The
Adviser will not (and will cause its Affiliates to not) create or use marketing
materials which provide direct comparisons between PCM and the Adviser's
products or those of any of its Affiliates. The Adviser, in connection with
any exchange program, will not (and will cause its Affiliates to not) reimburse
voluntarily, or enter into any contract or policy after the date hereof
providing for the reimbursement of, any deferred sales charges to encourage
the transfer of assets from PCM to the Adviser's products or those of any
Affiliate. For purposes hereof, the term "Affiliate" shall not be construed to
include agents of SunAmerica Inc. or affiliates thereof, who are not employees
of such entities.
9. 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, 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, any shareholder of the Trust or
the Adviser 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 for such
disabling conduct, the Adviser shall indemnify the Subadviser (and its
officers, directors, partners, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Subadviser)
(collectively, the "Indemnified Parties") from any liability arising from the
Subadviser's conduct under this Agreement.
(b) The Subadviser agrees to indemnify and hold harmless
the Adviser and its affiliates and each of its directors 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 directors, officers or controlling persons
may become subject under the 1933 Act, under other statutes, at common law or
otherwise, which may be based upon (i) any wrongful act or material breach of
this Agreement by the Subadviser resulting from Subadviser's disabling conduct,
or (ii) any untrue statement of a material fact in the Trust's registration
statement or omission to state a material fact required to be stated therein or
necessary to make the statement therein not misleading, if such statement or
omission was made in reliance on information furnished by the Subadviser to use
in such registration statement, 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.
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.
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14
11. TERM OF THE AGREEMENT. This Agreement shall continue in full
force and effect with respect to each Portfolio until the earlier of (a) two
years from the date this Agreement is approved by the Trustees, or (b) the
first meeting of the shareholders of the Portfolio of the Trust after the date
hereof. If approved at such meeting by the affirmative vote of a majority of
the outstanding voting securities (as defined in the Act), of the Portfolio
with respect to such Portfolio, voting separately from any other series of the
Trust, this Agreement shall continue in full force and effect with respect to
such Portfolio 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 voting
separately from any other series of the Trust, provided, however, that if the
shareholders fail to approve the Agreement as provided herein, the Subadviser
may continue to serve hereunder in the manner and to the extent permitted by
the Act and rules thereunder. The foregoing requirement that continuance of
this Agreement be "specifically approved at least annually" shall be construed
in a manner consistent with the Act and the rules and regulations thereunder.
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 60 days' written notice to the
Adviser and the Trust. 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 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 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
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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: Xxxxxx Investment Management, Inc.
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: 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
XXXXXX INVESTMENT MANAGEMENT, INC.
By: /s/ XXXXXX X. SILVER
------------------------------------
Name: Xxxxxx X. Silver
Title: Senior Managing Director
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SCHEDULE A
FEE
(AS PERCENTAGE OF
AVERAGE DAILY NET ASSETS OF
PORTFOLIO(S) THE PORTFOLIO)
------------ ---------------------------
Xxxxxx Growth .50% on the first $150MM
.45% on the next $150MM
.35% over $300MM
International Growth and Income .65% on the first $150MM
.55% on the next $150MM
.45% over $300MM
Emerging Markets 1.00% on the first $150MM
.95% on the next $150MM
.85% over $300MM
April 17, 1997
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