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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 FEDERATED INVESTMENT COUNSELING, a Delaware business trust (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, par value $.01 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. Subject to the oversight and review of the Adviser,
the Subadviser will determine in its discretion the securities to be purchased
or sold, and through delegated authority from the Adviser, execute such
documents as may be necessary in connection therewith; 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
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compliance with the objectives, policies, and limitations for the Portfolio(s)
set forth in the Trust's current prospectus and statement of additional
information.
The Subadviser represents and warrants that its management of
the Portfolios will at all times conform with: (1) the objectives, policies,
and limitations for the Portfolio(s) set forth in the Trust's current
prospectus and statement of additional information; (2) the provisions of
Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code")
applicable to regulated investment companies including those investment
companies underlying variable annuities; (3) the provisions of the Act and
rules adopted thereunder applicable to the Portfolios; (4) the diversification
requirements specified in the Internal Revenue Service's regulations under
Section 817(h) of the Code; (5) applicable state insurance laws provided to
Subadviser by Adviser in writing (which may be satisfied through delivery to
Subadviser of a copy of the Trust's current prospectus), or as acknowledged in
a written undertaking by Subadviser; (6) applicable federal and state
securities laws; and (7) 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.
2. REPRESENTATIONS AND WARRANTIES OF THE ADVISER. The Adviser
represents and warrants to the Subadviser that: (1) it is a corporation duly
formed and validly existing under the laws of Delaware; (2) it is duly
authorized to execute and deliver this Agreement and to perform its obligations
thereunder; and (3) it is registered with the Securities and Exchange
Commission as an investment adviser under the Investment Advisers Act of 1940,
as amended.
3. 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
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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. To the extent consistent with
applicable law, the Subadviser may aggregate purchase or sell orders for the
Portfolios 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 Portfolios 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.
4. 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.
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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, policies and procedures relating to the
management of the Trust as adopted by the Board of Trustees, 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) 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.
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 in any advertising or promotional
materials without the prior written approval of the Subadviser, which approval
shall not be unreasonably withheld.
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 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
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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 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.
Subadviser hereby indemnifies, defends and protects Adviser and holds Adviser
harmless, from and against any and all liability arising out of Subadviser's
disabling conduct.
(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 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
arise out of or result from any breach of any representation or warranty 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.
(c) The Adviser is hereby expressly put on notice of the
limitation of liability as set forth in the Declaration of Trust of the
Subadviser and agrees that the obligations assumed by the Subadviser pursuant
to this Agreement will be limited in any case to the Subadviser and its assets
and the Adviser shall not seek satisfaction of any such obligations from the
shareholders of the Subadviser, the trustees of the Subadviser, officers,
employees or agents of the Subadviser, or any of them.
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 voting
separately from any other series of the Trust.
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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 not less than 30 nor more than 60 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 from the date written notice is given, whichever is earlier.
Notwithstanding the requirements set forth in the immediately preceding
sentence, Subadviser may terminate this Agreement on 30 days' written notice
upon the institution of formal proceedings against the Adviser or the Trust by
the NASD, the SEC, any state securities or insurance department or any other
regulatory body regarding the Adviser's obligations under this Agreement or
related to the sale of the Contracts, operation of the separate account, or
sale of shares of the Trust, provided that such formal proceedings are likely
to have a material adverse impact on the Subadviser. 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 the Trust shall be held to
any personal liability, nor shall resort be had to their private property for
satisfaction
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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: Federated Investment Counseling
Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
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
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/Authorized Signatory
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Name:
Title:
FEDERATED INVESTMENT COUNSELING
By: /s/Authorized Signatory
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Name:
Title:
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