Exhibit 99(d)(i)
SUNAMERICA EQUITY FUNDS
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as
of January 1, 1999 by and between Sun America Equity Funds, a Massachusetts
business trust (the "Trust"), and SUNAMERICA ASSET MANAGEMENT CORP., a Delaware
corporation (the "Adviser").
W I T N E S S E T H:
- - - - - - - - - -
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, par value $.01 per share,
in separately designated series representing separate funds with their own
investment objectives, policies and purposes (each, a "Fund" and collectively,
the "Funds"); and
WHEREAS, the Adviser is engaged in the business of rendering
investment management, advisory and administrative services and is registered as
an investment adviser under the Investment Advisers Act of 1940; and
WHEREAS, the Trust desires to retain the Adviser to furnish
investment management, advisory and administrative services to the Trust and the
Funds and the Adviser is willing to furnish such services;
NOW, THEREFORE, it is hereby agreed between the parties hereto
as follows:
1. Duties of the Adviser. The Adviser shall manage the affairs of
---------------------
the Funds including, but not limited to, continuously providing the Funds with
investment management, including investment research, advice and supervision,
determining which securities shall be purchased or sold by the Funds, making
purchases and sales of securities on behalf of the Funds and determining how
voting and other rights with respect to securities owned by the Funds shall be
exercised, subject in each case to the control of the Board of Trustees of the
Trust (the "Trustees") and in accordance with the objectives, policies and
principles set forth in Trust's Registration Statement and the Funds' current
Prospectus and Statement of Additional Information, as amended from time to
time, the requirements of the Act and other applicable law. In performing such
duties, the Adviser (i) shall provide such office space, such bookkeeping,
accounting, clerical, secretarial and administrative services (exclusive of, and
in addition to, any such service provided by any others retained by the Funds or
Trust on behalf of the Funds) and such executive and other personnel as shall be
necessary for the operations of the Funds, (ii) shall be responsible for the
financial and accounting records required to be maintained by the Funds
(including those maintained by Trust's custodian) and (iii) shall oversee the
performance of services provided to the Funds by others, including the
custodian, transfer and shareholder servicing agent. The Trust understands that
the Adviser also acts as the manager of other investment companies.
Subject to Section 36 of the Act, the Adviser shall not be
liable to the Funds or Trust
for any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the management of the Funds and the
performance of its duties under this Agreement except for willful misfeasance,
bad faith or gross negligence in the performance of its duties or by reason of
reckless disregard of its obligations and duties under this Agreement.
2. Retention by Adviser, of Sub-advisers, etc. In carrying out
------------------------------------------
its responsibilities hereunder, the Adviser may employ, retain or otherwise
avail itself of the services of other persons or entities including, without
limitation, affiliates of the Adviser, on such terms as the Adviser shall
determine to be necessary, desirable or appropriate. Without limiting the
generality of the foregoing, and subject to the requirements of Section 15 of
the Act, the Adviser may retain one or more sub-advisers to manage all or a
portion of the investment portfolio of a Fund, at the Adviser's own cost and
expense. Retention of one or more subadvisers, or the employment or retention of
other persons or entities to perform services, shall in no way reduce the
responsibilities or obligations of the Adviser under this Agreement and the
Adviser shall be responsible for all acts and omissions of such subadvisers, or
other persons or entities, in connection with the performance of the Adviser's
duties hereunder.
3. Expenses. The Adviser shall pay all of its expenses arising
--------
from the performance of its obligations under Section 1 and shall pay any
salaries, fees and expenses of the Trust's Trustees and Officers who are
employees of the Adviser. The Adviser shall not be required to pay any other
expenses of the Funds, including, but not limited to, direct charges relating to
the purchase and sale of portfolio securities, interest charges, fees and
expenses of independent attorneys and auditors, taxes and governmental fees,
cost of share certificates and any other expenses (including clerical expenses)
of issue, sale, repurchase or redemption of shares, expenses of registering and
qualifying shares for sale, expenses of printing and distributing reports,
notices and proxy materials to shareholders, expenses of data processing and
related services, shareholder recordkeeping and shareholder account service,
expenses of printing and filing reports and other documents filed with
governmental agencies, expenses of printing and distributing prospectuses,
expenses of annual and special shareholders meetings, fees and disbursements of
transfer agents and custodians, expenses of disbursing dividends and
distributions, fees and expenses of Trustees who are not employees of the
Adviser or its affiliates, membership dues in the Investment Company Institute,
insurance premiums and extraordinary expenses such as litigation expenses.
4. Compensation of the Adviser. (a) As full compensation for the
---------------------------
services rendered, facilities furnished and expenses paid by the Adviser under
this Agreement, the Trust agrees to pay to the Adviser a fee at the annual rates
set forth in Schedule A hereto with respect to each Fund indicated 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 is applied to
each prior days' net assets in order to calculate the daily accrual). For
purposes of calculating the Adviser's fee with respect to any Fund, the average
daily net asset value of a Fund shall be determined by taking an average of all
determinations of such net asset value during the month. If the Adviser shall
serve for less than the whole of any month the foregoing compensation shall be
prorated.
(b) The Adviser agrees that if total expenses of a Fund for
any fiscal year of the Trust
-2-
exceed the permissible limits applicable to that Fund in any state in which
shares of that Fund are then qualified for sale, the compensation due the
Adviser for such fiscal year shall be reduced by the amount of such excess by a
reduction or refund thereof at the time such compensation is payable after the
end of each calendar month, subject to readjustment during such fiscal year. In
no event shall the amount of such reduction or refund exceed the amount of the
fee payable to the Adviser with respect to such Fund.
5. Purchase and Sale of Securities; Broker-Dealer Selection. The
--------------------------------------------------------
Adviser is responsible for decisions to buy or sell securities and other
investments for each Fund, broker-dealer and futures commission merchants'
selection, and negotiation of brokerage commission and futures commission
merchants' rates. As a general matter, in executing portfolio transactions,
the Adviser may employ or deal with such broker-dealers or futures commission
merchants as may, in the Adviser's best judgment, provide prompt and reliable
execution of the transactions at favorable prices and reasonable commission
rates. In selecting such broker-dealers or futures commission merchants, the
Adviser 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, and 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 Adviser shall not be deemed to have acted unlawfully or to have
breached any duty created by this Agreement or otherwise solely by reason of the
Adviser's having caused a Fund to pay a member of an exchange, broker or dealer
an amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would have
charged for effecting that transaction, if the Adviser determines in good faith
that such amount of commission was reasonable to 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 Adviser's
overall responsibilities with respect to such Fund and to the other clients as
to which the Adviser 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 Adviser may engage its affiliates, or any sub-adviser 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 Fund.
6. Term of Agreement. This agreement shall continue in full force
-----------------
and effect for two years from the date hereof, and shall continue in full force
and effect from year to year thereafter if such continuance is approved in the
manner required by the Act and the Adviser has not notified the Trust in writing
at least 60 days prior to the anniversary date of the previous continuance that
it does not desire such continuance. With respect to each Fund, this Agreement
may be terminated at any time, without payment of penalty by the Fund or the
Trust, on 60 days written notice to the Adviser, by vote of the Trustees, or by
vote of a majority of the outstanding voting securities (as defined by the Act)
of the Fund, voting separately from any other series of the Trust. The
termination of this Agreement with respect to any Fund or the addition of any
Fund to Schedule A
-3-
hereto (in the manner required by the Act) shall not affect the continued
effectiveness of this Agreement with respect to each other Fund subject hereto.
This Agreement shall automatically terminate in the event of its assignment (as
defined by the Act).
The Trust hereby agrees that if (i) the Adviser ceases to act
as investment manager and adviser to the Trust and (ii) the continued use of the
Trust's present name would create confusion in the context of the Adviser's
business, then the Trust will use its best efforts to change its name in order
to delete the word "SunAmerica" from its name.
7. Liability of the Adviser. 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 Adviser (and its
officers, directors, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the Adviser) the Adviser 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
Trust shall indemnify the Adviser (and its officers, directors, partners,
agents, employees, controlling persons, shareholders and any other person or
entity affiliated with the Adviser) (collectively, the "Indemnified Parties")
from any liability arising from the Adviser's conduct under this Agreement.
Indemnification to the Adviser or any of its personnel or
affiliates shall be made when (i) a final decision on the merits rendered, by a
court or other body before whom the proceeding was brought, that the person to
be indemnified was not liable by reason of disabling conduct or, (ii) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the person to be indemnified was not liable by reason of
disabling conduct, by (a) the vote of a majority of a quorum of the Trustees who
are neither "interested persons" of the Trust as defined in section 2(a)(19) of
the Act nor parties to the proceeding ("disinterested, non-party Trustees") or
(b) an independent legal counsel in a written opinion. The Trust may, by vote of
a majority of the disinterested, non-party Trustees advance attorneys' fees or
other expenses incurred by an Indemnified Party in defending a proceeding upon
the undertaking by or on behalf of the Indemnified Party to repay the advance
unless it is ultimately determined that he is entitled to indemnification. Such
advance shall be subject to at least one of the following: (1) the person to be
indemnified shall provide a security for his undertaking, (2) the Trust shall be
insured against losses arising by reason of any lawful advances, or (3) a
majority of a quorum of the disinterested, non-party Trustees or an independent
legal counsel in a written opinion, shall determine, based on a review of
readily available facts, that there is reason to believe that the person to be
indemnified ultimately will be found entitled to indemnification.
8. Non-Exclusivity. Nothing in this Agreement shall limit or
---------------
restrict the right of any director, officer or employee of the Adviser who may
also be a Trustee, officer or employee of the Trust to engage in any other
business or devote his or her time and attention in part to the
-4-
management or other aspects of any business, whether of a similar or dissimilar
nature, nor limit or restrict the right of the Adviser to engage in any other
business or to render services of any kind to any other corporation, firm,
individual or association.
9. 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.
10. 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 apply.
11. Personal Liability. The Declaration of Trust establishing the
------------------
Trust, dated June 18, 1986, a copy of which, together with all amendments
thereto (the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, provides that the name "SunAmerica Equity Funds"
refers to the Trustees under the Declaration collectively as trustees, but not
as individuals or personally, and 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.
12. Separate Series. Pursuant to the provisions of the
---------------
Declaration, each Fund is a separate series of the Trust, and all debts,
liabilities, obligations and expenses of a particular Fund shall be enforceable
only against the assets of that Fund and not against the assets of any other
Fund or of the Trust as a whole.
-5-
IN WITNESS WHEREOF, the Trust and the Adviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
SUNAMERICA EQUITY FUNDS
By:_____________________________
Name: Xxxxx X. Xxxxxxx
Title: Vice President
SUNAMERICA ASSET MANAGEMENT CORP.
By:______________________________
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
and General Counsel
-6-
