INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 29th day of July, 2016, by and
between THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY, hereinafter referred to as VALIC, and
VICTORY CAPITAL MANAGEMENT INC., hereinafter
referred to as the SUB-ADVISER.
VALIC and the SUB-ADVISER recognize the following:
(a) VALIC is a life insurance company
organized under Chapter 3 of the
Texas Insurance Code and an
investment adviser registered under
the Investment Advisers Act of
1940, as amended (Advisers Act).
(b) VALIC is engaged as the investment
adviser of VALIC Company I (VC I),
pursuant to an Investment
Advisory Agreement between
VALIC and VC I, an investment
company organized under the
general corporate laws of Maryland
as a series type of investment
company issuing separate classes (or
series) of shares of common stock.
VC I is registered as an open-end,
management investment company
under the Investment Company Act
of 1940, as amended (1940 Act).
The 1940 Act prohibits any person
from acting as an investment adviser
of a registered investment company
except pursuant to a written contract.
(c) VC I currently consists of thirty-four
portfolios (Funds):
Asset Allocation Fund
Blue Chip Growth Fund
Broad Cap Value Income Fund
Capital Conservation Fund
Core Equity Fund
Dividend Value Fund
Dynamic Allocation Fund
Foreign Value Fund
Global Equity Fund
Global Real Estate Fund
Global Social Awareness Fund
Global Strategy Fund
Government Securities Fund
Growth & Income Fund
Growth Fund
Health Sciences Fund
Inflation Protected Fund
International Equities Fund
International Government Bond Fund
International Growth Fund
Large Cap Core Fund
Large Capital Growth Fund
Mid Cap Index Fund
Mid Cap Strategic Growth Fund
Money Market I Fund
Nasdaq-100? Index Fund
Science & Technology Fund
Small Cap Aggressive Growth
Fund
Small Cap Fund
Small Cap Index Fund
Small Cap Special Values Fund
Small-Mid Growth Fund
Stock Index Fund
Value Fund
In accordance with VC Is Articles
of Incorporation, as otherwise
amended or restated (the Articles),
new Funds may be added to VC I
upon approval of VC Is Board of
Directors without the approval of
Fund shareholders. This Agreement
will apply only to Funds set forth on
the attached Schedule A, and any
other Funds as may be added or
deleted by amendment to the
attached Schedule A (Covered
Fund(s)).
(d) The SUB-ADVISER is engaged
principally in the business of
rendering investment advisory
services and is registered as an
investment adviser under the
Advisers Act.
(e) VALIC desires to enter into an
Investment Sub-Advisory
Agreement with the SUB-ADVISER
for all or a portion of the assets of
the Covered Fund(s) which VALIC
determines from time to time to
assign to the SUB-ADVISER.
VALIC and the SUB-ADVISER agree as follows:
1. Services Rendered and Expenses Paid by the SUB-
ADVISER
The SUB-ADVISER, subject to the supervision and
review of VALIC and VC Is Board of Directors and in
material conformity with (i) the 1940 Act, all
applicable laws and regulations thereunder, (ii) all other
applicable federal laws and regulations, including
section 817(h) and Subchapter M of the Internal
Revenue Code of 1986, as amended (the Code), and
all applicable state laws and regulations that VALIC
notifies the SUB-ADVISER are applicable to the
investment management of the Covered Fund(s); (iii)
VC Is Articles, Bylaws, registration statements,
prospectus and the investment objectives, policies and
restrictions of any Covered Fund(s) stated in the
Covered Fund(s) prospectus and statement of
additional information; and (iv) any applicable
procedures adopted by VC Is Board of Directors and
provided to the SUB-ADVISER, shall:
(a) manage the investment and
reinvestment of the assets of the
Covered Fund(s) including, for
example, the evaluation of pertinent
economic, statistical, financial, and
other data, the determination, in its
discretion without prior consultation
with VALIC or the VC I Board of
Directors, of the industries, securities
and other investments to be
represented in each Covered Funds
portfolio, and the formulation and
implementation of investment
programs.
(b) maintain a trading desk and place
orders for the purchase and sale of
portfolio investments (including
futures contracts or other
derivatives) for each Covered Funds
account with brokers or dealers
(including futures commission
merchants) selected by the SUB-
ADVISER, or arrange for any other
entity to provide a trading desk and
to place orders with brokers and
dealers (including futures
commission merchants) selected by
the SUB-ADVISER, subject to the
SUB-ADVISERs control, direction,
and supervision, which brokers or
dealers may include brokers or
dealers (including futures
commission merchants) affiliated
with the SUB-ADVISER, subject to
applicable law.
(c) In performing its obligations under
this Agreement, the SUB-ADVISER
may, at its own discretion, and
consistent with the obligations of
Section 8 herein, delegate any or all
of its discretionary investment,
advisory and other rights, powers
and functions hereunder to any
advisory affiliate, without further
written consent of VALIC provided
that the SUB-ADVISER shall
always remain liable for its
obligations hereunder.
The SUB-ADVISER will assist the Covered Fund(s)
and its agents in determining whether prices obtained
by the Covered Fund(s) and its agents for valuation
purposes are consistent with the prices on the SUB-
ADVISERs portfolio records relating to the assets of
the Covered Fund(s) for which the SUB-ADVISER has
responsibility at such times as VALIC shall reasonably
request; provided, however, that the parties
acknowledge that the SUB-ADVISER is not the fund
accounting agent for the Covered Fund(s) and is not
responsible for pricing determinations or calculations
and any information provided pursuant to this position
by SUB-ADVISER will be provided for information
purposes only.
In selecting brokers or dealers to execute transactions
on behalf of the Covered Fund(s), the SUB-ADVISER
will seek best execution, in a manner consistent with
Part II of the SUB-ADVISERs Form ADV and Section
28(e) of the Securities and Exchange Act of 1934, as
amended (the 1934 Act). The SUB-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 acting in accordance
with such authorization. Subject to the requirements of
U.S. law, VALIC agrees that SUB-ADVISER may
follow the SUB-ADVISERS best execution policy, as
described in Part II of the SUB-ADVISERs Form
ADV, which has been provided to VALIC and which
may be amended from time-to-time. The SUB-
ADVISER agrees to provide VALIC a copy of any
material amendment to its best execution policy as soon
as reasonably practicable after such amendment to the
policy.
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 1940 Act and Rule 17e-1 thereunder, the SUB-
ADVISER may engage its affiliates, the VALIC and its
affiliates or any other subadviser to VC I and its
respective affiliates, as broker-dealers or futures
commission merchants to effect Covered Fund
transactions in securities and other investments for a
Covered Fund.
Notwithstanding anything to the contrary in this
Agreement, to the extent that any market counterparty
with whom the SUB-ADVISER deals requires
information relating to the Covered Fund(s) (including
but not limited to the identity and market value of the
Covered Fund(s)), the SUB-ADVISER shall be
permitted to disclose such information to the extent
necessary to effect transactions on behalf of the
Covered Fund(s) in accordance with the terms of this
Agreement.
VALIC hereby agrees that, in managing the Covered
Fund, the SUB-ADVISER may execute trades in
markets that are not regulated markets as that term is
defined in the Markets in Financial Instruments
Directive and may utilize a multilateral trading
facility.
The SUB-ADVISER may aggregate sales and purchase
orders of securities held by the Covered Fund(s) with
similar orders being made for other accounts managed
by the SUB-ADVISER or with accounts of the
affiliates of the SUB-ADVISER that are trading
through a single trading desk or system on the same
trading day, if in the SUB-ADVISERs reasonable
judgment such aggregation is fair and reasonable and
consistent with the SUB-ADVISERS fiduciary
obligations to the Covered Fund(s) and its other clients.
VALIC acknowledges that the determination whether
such aggregation is fair and reasonable by the SUB-
ADVISER is subjective and represents the SUB-
ADVISERs evaluation that the Covered Fund(s) may
benefit by relatively better purchase or sales prices,
lower commission expenses and beneficial timing of
transactions or a combination of these and other factors,
all as described in Part II of the SUB-ADVISERs
Form ADV.
VALIC authorizes and empowers the SUB-ADVISER
to direct the Covered Funds Custodian to open and
maintain brokerage accounts for securities and other
property, including financial and commodity futures
and commodities and options thereon (all such accounts
hereinafter called brokerage accounts) for and in the
name of the Covered Fund(s) and to execute for the
Covered Fund(s) as its agent and attorney-in-fact
standard customer agreements with such broker or
brokers as the SUB-ADVISER shall select as provided
above. With respect to brokerage accounts for financial
and commodity futures and commodities and options
thereon, the SUB-ADVISER shall select such brokers,
as approved by VALIC, prior to the establishment of
such brokerage account. The SUB-ADVISER may,
using such of the securities and other property in the
Covered Fund as the SUB-ADVISER deems necessary
or desirable, direct the Covered Funds Custodian to
deposit for the Covered Fund original and maintenance
brokerage and margin deposits and otherwise direct
payments of cash, cash equivalents and securities and
other property into such brokerage accounts and to such
brokers as the SUB-ADVISER deems desirable or
appropriate.
The SUB-ADVISER shall maintain records adequately
demonstrating compliance with its obligations under
this Agreement and report periodically to VALIC and
VC Is Board of Directors regarding the performance of
its services under this Agreement. The SUB-ADVISER
will make available to VALIC and VC I promptly upon
their reasonable written request copies of all of the
Covered Fund(s) investment records and ledgers to
assist VALIC and VC I in complying with regulations
applicable to each Covered Funds securities
transactions as required by the 1940 Act and the
Advisers Act, as well as other applicable laws. The
SUB-ADVISER will furnish VC Is Board of Directors
such periodic and special reports as VALIC and VC Is
Board of Directors may reasonably request. The SUB-
ADVISER will furnish to regulatory authorities any
information or reports in connection with such services
which may be requested in order to ascertain whether
the operations of the Covered Fund(s) are being
conducted in a manner consistent with applicable laws
and regulations.
Should VALIC at any time make any definite
determination as to any investment policy and notify
the SUB-ADVISER in writing of such determination,
within a reasonable time after receipt of such notice as
agreed to by the SUBADVISER and VALIC the SUB-
ADVISER shall be bound by such determination for the
period, if any, specified in such notice or until similarly
notified that such determination has been revoked,
provided such determination will permit SUB-
ADVISER to comply with the first paragraph of this
Section.
The SUB-ADVISER will not hold money or
investments on behalf of VC I. The money and
investments will be held by the Custodian of VC I. The
SUB-ADVISER will arrange for the transmission to the
Custodian for VC I, on a daily basis, such confirmation,
trade tickets and other documents as may be necessary
to enable the Custodian perform its administrative
responsibilities with respect to the Covered Fund(s).
The SUB-ADVISER further shall have the authority to
instruct the Custodian of VC I (i) to pay cash for
securities and other property delivered, or to be
delivered, to the Custodian for VC I, (ii) to deliver
securities and other property against payment for VC I,
and (iii) to transfer assets and funds to such brokerage
accounts as the SUB-ADVISER may designate, all
consistent with the powers, authorities and limitations
set forth herein. The SUB-ADVISER shall not have the
authority to cause the Custodian to deliver securities
and other property except as expressly provided for in
this Agreement or as provided by VALIC in writing to
the Custodian.
VALIC will vote proxies relating to securities held by
the Covered Fund(s). VALIC will vote all such proxies
in accordance with such proxy voting guidelines and
procedures adopted by the Board of Directors. VALIC
will instruct the Custodian and other parties providing
services to VC I promptly to forward to the proxy
voting service copies of all proxies and shareholder
communications relating to securities held by each
Covered Fund(s). The SUB-ADVISER shall not be
responsible for taking any action on behalf of the
Covered Funds in connection with any claim or
potential claim in any bankruptcy proceedings, class
action securities litigation, or other litigation or
proceeding affecting securities held at any time in the
Covered Fund(s) including, without limitation, to file
proofs of claim or other documents related to such
proceedings (the Litigation) or to investigate, initiate,
supervise, or monitor the Litigation involving the
Covered Funds assets.
The SUB-ADVISER shall for all purposes herein be
deemed to be an independent contractor and shall,
unless otherwise provided or authorized, have no
authority to act or represent VALIC or VC I other than
in furtherance of the SUB-ADVISERs duties and
responsibilities as set forth in this Agreement.
Except as otherwise agreed, or as otherwise provided
herein, the SUB-ADVISER shall bear the expense of
discharging its responsibilities hereunder; provided,
however, all brokerage commissions, taxes, charges
and other costs incident to the purchase and sale of
investments shall be charged to and paid from the
Covered Fund. VALIC shall pay, or arrange for others
to pay, all VALICs expenses, except that VALIC shall
in all events pay the compensation described in Section
3 of this Agreement.
The SUB-ADVISER is hereby prohibited from
consulting with any other sub-adviser of the Covered
Fund(s) (or a portion thereof) or any other sub-adviser
to a fund under common control with the Covered
Fund(s) (or a portion thereof) concerning securities
transactions of the Covered Fund(s) (or a portion
thereof) in securities or other assets, except as
otherwise permitted by the 1940 Act or any rules
thereunder.
2. Confidentiality
The SUB-ADVISER will not disclose or use any
records or information obtained pursuant to this
Agreement in any manner whatsoever except as
expressly authorized in this Agreement or as otherwise
necessary in the ordinary course of performing its
responsibilities under this Agreement, and will keep
confidential any non-public information obtained
directly as a result of this service relationship, and
disclose such non-public information only if VALIC or
the VC I Board of Trustees has authorized such
disclosure, or if such information is or hereafter
becomes ascertainable from public or published
information or trade sources, or if such information is
or hereafter otherwise is know by the SUB-ADVISER,
or if such disclosure is expressly required or requested
by applicable federal or state authorities (including the
SUB-ADVISERS regulatory examiners) or to the
extent such disclosure is reasonably required by
auditors or attorneys of the SUB-ADVISER in
connection with the performance of their professional
services or as may otherwise be contemplated by this
Agreement. Notwithstanding the foregoing, the SUB-
ADVISER may disclose the total return earned by the
Covered Fund(s) and may include such total return in
the calculation of composite performance information.
VALIC will not disclose or use any records or
information obtained pursuant to this Agreement in any
manner whatsoever except as expressly authorized in
this Agreement or as reasonably required to perform its
responsibilities under this Agreement or under the
Investment Advisory Agreement between VALIC and
VC I, and will keep confidential any non-public
information obtained directly as a result of this
relationship, and disclose such non-public information
only if SUB-ADVISER has authorized such disclosure,
or if such information is or hereafter becomes
ascertainable from public or published information or
trade sources, or if such information is or hereafter
otherwise is know by VALIC, or if such disclosure is
expressly required or requested by applicable federal or
state authorities (including VALICs regulatory
examiners) or to the extent such disclosure is
reasonably required by VALICs or the Covered
Fund(s)auditors or attorneys in connection with the
performance of their professional services or as may
otherwise be contemplated by this Agreement.
Without limiting the foregoing, VALIC acknowledges
that the securities holdings of the Covered Fund(s)
constitute information of value to the SUB-ADVISER,
and agrees: (1) not to use for any purpose, other than
for VALIC or the Covered Fund(s), or their agents, to
supervise or monitor the SUB-ADVISER, the holdings
or other trading-related information of the Covered
Fund(s); and (2) not to disclose the Covered Fund(s)
holdings or transactions, except: (a) as required by
applicable law or regulation; (b) as required by state or
federal regulatory authorities; (c) to the Board of
Directors of VC I, counsel to the Board of Directors of
VC I, counsel to VC I, the administrator or any sub-
administrator, the independent accountants and any
other agent of VC I; (d) in accordance with VC Is
portfolio holdings disclosure policy, including other
third parties service providers identified in VC Is
registration statement; or (e) as otherwise agreed to by
the parties hereto in writing.
3. Compensation of the SUB-ADVISER
VALIC shall pay to the SUB-ADVISER, as
compensation for the services rendered and expenses
paid by the SUB-ADVISER, a monthly fee or fees
based on each Covered Funds average daily net asset
value computed for each Covered Fund as provided for
herein and in the fee schedule attached hereto as
Schedule A. Schedule A may be amended from time to
time by written agreement executed by VALIC and the
SUB-ADVISER, provided that amendments are made
in conformity with applicable laws and regulations and
the Articles and Bylaws of VC I. Any change in
Schedule A pertaining to any new or existing Fund
shall not be deemed to affect the interest of any other
Fund and shall not require the approval of shareholders
of any other Fund.
The average daily net asset value shall be determined
by taking the average of all of the determinations of net
asset value, made in the manner provided in VC Is
constitutive documents, for each business day during a
given calendar month. VALIC shall pay this fee for
each calendar month as soon as practicable after the
end of that month, but in any event no later than fifteen
(15) days following the end of the month.
If the SUB-ADVISER serves for less than a whole
month, the foregoing compensation shall be prorated.
The payment of advisory fees related to the services of
the SUB-ADVISER under this Agreement shall be the
sole responsibility of VALIC and shall not be the
responsibility of VC I.
4. Scope of the SUB-ADVISERs Activities
VALIC understands that the SUB-ADVISER and its
affiliates now act, will continue to act and may act in
the future as investment adviser to fiduciary and other
managed accounts and as investment adviser to other
investment companies (including other accounts and
investment companies following the same investment
strategy as the Covered Fund(s) ), and VALIC has no
objection to the SUB-ADVISER so acting, provided
that whenever a Covered Fund(s) and one or more other
accounts or investment companies advised by the SUB-
ADVISER have available funds for investment,
investments suitable and appropriate for each will be
allocated in accordance with a methodology believed
by the SUB-ADVISER to be equitable to each entity.
The SUB-ADVISER similarly agrees to allocate
opportunities to sell securities on an equitable basis.
VALIC recognizes that, in some cases, this procedure
may limit the size of the position that may be acquired
or sold for a Covered Fund(s). In addition, VALIC
understands that the persons employed by the SUB-
ADVISER to assist in the performance of the SUB-
ADVISERs duties hereunder will not devote their full
time to such service and nothing contained herein shall
be deemed to limit or restrict the right of the SUB-
ADVISER or any affiliate of the SUB-ADVISER to
engage in and devote time and attention to other
business or to render services of whatever kind or
nature.
Except as otherwise required by the 1940 Act, any of
the shareholders, directors, officers and employees of
VALIC may be a shareholder, director, officer or
employee of, or be otherwise interested in, the SUB-
ADVISER, and in any person controlling, controlled by
or under common control with the SUB-ADVISER;
and the SUB-ADVISER, and any person controlling,
controlled by or under common control with the SUB-
ADVISER, may have an interest in VALIC.
VALIC shall perform quarterly and annual tax
compliance tests and promptly furnish reports of such
tests to the SUB-ADVISER after each quarter end to
ensure that the Covered Fund(s) is in compliance with
Subchapter M of the Code and Section 817(h) of the
Code. VALIC shall apprise the SUB-ADVISER
promptly after each quarter end of any potential non-
compliance with the diversification requirements in
such Code provisions. If so advised, the SUB-
ADVISER shall take prompt action so that the Covered
Fund complies with such Code diversification
provisions, as directed by VALIC. VALIC
acknowledges that the SUB-ADVISER shall rely
completely upon VALICs determination of whether
and to what extent each Covered Fund(s) is in
compliance with Subchapter M and Section 817(h) of
the Code and that the SUB-ADVISER has no separate
and independent responsibility to test for such
compliance.
The SUB-ADVISER does not guarantee the future
performance of the Covered Fund(s) or any specific
level of performance, the success of any investment
decision or strategy that SUB-ADVISER may use, or
the success of SUB-ADVISERs overall management
of the Covered Fund(s). VALIC and VC I understand
that investment decisions made for the Covered Fund(s)
by the SUB-ADVISER are subject to various market,
currency, economic, political and business risks and
that those investment decisions will not always be
profitable. The SUB-ADVISER will manage only the
assets of the Covered Fund(s) allocated to its
management by VALIC and in making investment
decisions for the Covered Fund(s).
5. Representations of the SUB-ADVISER and VALIC
The SUB-ADVISER represents, warrants, and agrees as
follows:
(a) The SUB-ADVISER (i) is registered
as an investment adviser under the
Advisers Act and will continue to be
so registered for so long as this
Agreement remains in effect: (ii) is
not prohibited by the 1940 Act or the
Advisers Act from performing the
services contemplated by this
Agreement; (iii) has met, and will
continue to meet for so long as this
Agreement remains in effect, any
applicable federal or state
requirements, or the applicable
requirements of any regulatory or
industry self-regulatory agency,
necessary to be met in order to
perform the services contemplated
by this Agreement; (iv) has the
authority to enter into and perform
the services contemplated by this
Agreement, and (v) will immediately
notify VALIC of the occurrence of
any event that would disqualify the
SUB-ADVISER from serving as an
investment adviser of an investment
company pursuant to Section 9(a) of
the 1940 Act or otherwise.
(b) The SUB-ADVISER has adopted a
written code of ethics complying
with the requirements of Rule 17j-1
under the 1940 Act and if it has not
already done so, will provide VALIC
and VC I with a copy of such code
of ethics together with evidence of
its adoption.
(c) The SUB-ADVISER has provided
VALIC and VC I with a copy of its
Form ADV as most recently filed
with the SEC and will promptly after
filing its annual update to its Form
ADV with the SEC, furnish a copy
of such amendment to VALIC.
VALIC represents, warrants, and agrees as follows:
(a) VALIC: (i) is registered as an
investment adviser under the
Advisers Act and will continue to be
so registered for so long as this
Agreement remains in effect: (ii) is
not prohibited by the 1940 Act or the
Advisers Act from performing the
services contemplated by this
Agreement; (iii) has met, and will
continue to meet for so long as this
Agreement remains in effect, any
applicable federal or state
requirements, or the applicable
requirements of any regulatory or
industry self-regulatory agency,
necessary to be met in order to
perform the services contemplated
by this Agreement; (iv) has the
authority to enter into and perform
the services contemplated by this
Agreement; and (v) will immediately
notify the SUB-ADVISER of the
occurrence of any event that would
disqualify VALIC from serving as
an investment adviser of an
investment company pursuant to
Section 9(a) of the 1940 Act or
otherwise.
(b) VALIC has the authority under the
Investment Advisory Agreement
between VALIC and VC I to
delegate some or all of its
responsibilities to one or more sub-
advisers, and has obtained from each
Covered Funds Directors and
shareholders, as applicable, all
approvals required under the 1940
Act for the SUB-ADVISER to
perform the services, and to receive
the fees, contemplated by this
Agreement.
6. Term of Agreement
This Agreement shall become effective as to the
Covered Fund(s) set forth on Schedule A on the date
hereof and as to any other Fund on the date of the
Amendment to Schedule A adding such Fund in
accordance with this Agreement. Unless sooner
terminated as provided herein, this Agreement shall
continue in effect for two years from its effective date.
Thereafter, this Agreement shall continue in effect, but
with respect to any Covered Fund, subject to the
termination provisions and all other terms and
conditions hereof, only so long as such continuance is
approved at least annually by the vote of a majority of
VC Is Directors who are not parties to this Agreement
or interested persons of any such parties, cast in person
at a meeting called for the purpose of voting on such
approval, and by a vote of a majority of VC Is Board
of Directors or a majority of that Covered Funds
outstanding voting securities (as defined in the 1940
Act).
This Agreement shall automatically terminate in the
event of its assignment as that term is defined in the
1940 Act, or in the event of the termination of the
Investment Advisory Agreement between VALIC and
VC I as it relates to any Covered Fund(s). The
Agreement may be terminated as to any Covered Fund
at any time, without the payment of any penalty, by
vote of VC Is Board of Directors or by vote of a
majority of that Covered Funds outstanding voting
securities on not more than 60 days nor less than 30
days prior written notice to the SUB-ADVISER, or
upon such shorter notice as may be mutually agreed
upon by the parties. This Agreement may also be
terminated by VALIC: (i) on not more than 60 days
nor less than 30 days prior written notice to the SUB-
ADVISER, or upon such shorter notice as may be
mutually agreed upon by the parties, without the
payment of any penalty; or (ii) if the SUB-ADVISER
becomes unable to discharge its duties and obligations
under this Agreement. The SUB-ADVISER may
terminate this Agreement at any time, or preclude its
renewal without the payment of any penalty, on not
more than 60 days nor less than 30 days prior written
notice to VALIC, or upon such shorter or longer notice
as may be mutually agreed upon by the parties.
7. Indemnification
The SUB-ADVISER shall not be liable to VALIC, VC
I, or to any shareholder in the Covered Fund(s), and
VALIC shall indemnify the SUB-ADVISER, for any
act or omission in rendering services under this
Agreement, or for any losses sustained in connection
with the matters to which this agreement relates, so
long as there has been no willful misfeasance, bad faith,
gross negligence, or reckless disregard of obligations or
duties on the part of the SUB-ADVISER in performing
its duties under this Agreement.
Notwithstanding the foregoing, VALIC agrees to
indemnify the SUB-ADVISER for losses, costs, fees,
expenses and claims which arise directly (i) as a result
of a failure by VALIC to provide the services or furnish
materials required under the terms of this Agreement,
or (ii) as the result of any untrue statement of a material
fact or any omission to state a material fact required to
be stated or necessary to make the statements, in light
of the circumstances under which they were made, not
misleading in any registration statements, proxy
materials, advertisements, or sales literature pertaining
to VC I or a Covered Fund, except insofar as any such
statement or omission was specifically made in reliance
on written information provided by the SUB-ADVISER
to VALIC.
The SUB-ADVISER agrees to indemnify VALIC for
losses and claims which arise directly (i) as a result of
the willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties by the SUB-
ADVISER; or (ii) as the result of any untrue statement
of a material fact or any omission to state a material
fact required to be stated or necessary to make the
statements, in light of the circumstances under which
they were made, not misleading in any registration
statements, proxy materials, advertisements, or sales
literature pertaining to VC I or a Covered Fund to the
extent any such statement or omission was made in
reliance on written information provided by the SUB-
ADVISER.
Under no circumstances shall VALIC or the SUB-
ADVISER be liable to any indemnified party for
indirect, special or consequential damages, even if
VALIC or the SUB-ADVISER is apprised of the
likelihood of such damages.
Promptly after receipt by either VALIC or SUB-
ADVISER (an Indemnified Party) under this Section
7 of the commencement of an action, such Indemnified
Party will, if a claim in respect thereof is to be made
against the other party (the Indemnifying Party)
under this section, notify Indemnifying Party of the
commencement thereof; but the omission so to notify
Indemnifying Party will not relieve it from any liability
that it may have to any Indemnified Party otherwise
than under this section. In case any such action is
brought against any Indemnified Party, and it notified
Indemnifying Party of the commencement thereof,
Indemnifying Party will be entitled to participate
therein and, to the extent that it may wish, assume the
defense thereof, with counsel satisfactory to such
Indemnified Party. After notice from Indemnifying
Party of its intention to assume the defense of an action,
the Indemnified Party shall bear the expenses of any
additional counsel obtained by it, and Indemnifying
Party shall not be liable to such Indemnified Party
under this section for any legal or other expenses
subsequently incurred by such Indemnified Party in
connection with the defense thereof other than
reasonable costs of investigation.
The provisions of this Section 7 shall survive the
termination of this Agreement.
8. Delegation
Except where prohibited by applicable law or
regulation, SUB-ADVISER may employ an affiliate or
a third party to perform any accounting, administrative,
reporting and ancillary services required to enable
SUB-ADVISER to perform its functions under this
Agreement; provided however, that no such person
shall serve or acts as an investment adviser separate
from the SUB-ADVISER so as to require a new written
contract pursuant to the 1940 Act. The compensation of
any such persons will be paid by the SUB-ADVISER,
and no obligation will be incurred by, or on behalf of,
VALIC or VC I with respect to them. Notwithstanding
any other provision of this Agreement, SUB-ADVISER
may provide information about the Fund to any such
affiliate or other third party for the purpose of
providing the services contemplated under this clause.
SUB-ADVISER will act in good faith and due
diligence in the selection, use and monitoring of
affiliates and other third parties, and any delegation or
appointment hereunder shall not relieve SUB-
ADVISER of any of its obligations under this
Agreement. SUB-ADVISER shall remain liable for
SUB-ADVISERS obligations hereunder and for all
actions of any such affiliates, third parties or agents to
the same extent as SUB-ADVISER is liable for its own
actions hereunder. The compensation of any such
persons will be paid by SUB-ADVISER, and no
obligations will be incurred by, or on behalf of,
VALIC, XX XX or the Covered Fund(s) with respect to
them.
9. Customer Identification Program
To help the government fight the funding of terrorism
and money laundering activities, SUB-ADVISER has
adopted a Customer Identification Program, (CIP)
pursuant to which SUB-ADVISER is required to
obtain, verify and maintain records of certain
information relating to its clients. In order to facilitate
SUB-ADVISERs compliance with its CIP, VALIC
hereby represents and warrants that (i) the Funds
taxpayer identification number or other government
issued identification number is reflected on Schedule A,
(ii) all documents provided to SUB-ADVISER are true
and accurate as of the date hereof, and (iii) MassMutual
agrees to provide to SUB-ADVISER such other
information and documents that SUB-ADVISER
requests in order to comply with SUB-ADVISERs
CIP.
10. Other Matters
The SUB-ADVISER agrees that all books and records
which it maintains for the Covered Fund(s) are the
Covered Funds property. The SUB-ADVISER also
agrees upon request of VALIC or VC I, to promptly
surrender such books and records in accordance with
the 1940 Act and rules thereunder; provided, however,
that the SUB-ADVISER may retain copies of such
books and records to the extent necessary to comply
with applicable law or regulation. The SUB-ADVISER
further agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act the records required to
be maintained by subparagraphs (b)(5), (6), (7), (9),
(10), (11) and paragraph (f) of Rule 31a-1 under the
1940 Act.
VALIC has herewith furnished the SUB-ADVISER
copies of VC Is Prospectus, Statement of Additional
Information, investment objectives, policies and
restrictions, and any applicable procedures adopted by
VC Is Board of Directors, as currently in effect for the
Covered Fund(s) and agrees during the continuance of
this Agreement to furnish the SUB-ADVISER copies
of any amendments or supplements thereto before or at
the time the amendments or supplements become
effective. Until VALIC delivers any amendments or
supplements to the SUB-ADVISER, the SUB-
ADVISER shall be fully protected in relying on the
documents previously furnished to it.
The SUB-ADVISER is authorized to honor and act on
any notice, instruction or confirmation given by VALIC
on behalf of VC I or the Covered Fund(s) in writing
signed or sent by any of the persons who the SUB-
ADVISER has reason to believe are acting in good
authority. The SUB-ADVISER shall not be liable for so
acting in good faith upon such instructions,
confirmation or authority.
VALIC agrees to furnish the SUB-ADVISER at its
principal office prior to use thereof, copies of all
prospectuses, proxy statements, reports to shareholders,
sales literature, or other material prepared for
distribution to shareholders of the Covered Fund(s) or
the public that refer in any way to the SUB-ADVISER,
and not to use such material if the SUB-ADVISER
reasonably objects in writing within ten (10) business
days (or such other time as may be mutually agreed)
after receipt thereof. In the event of termination of this
agreement, VALIC will continue to furnish to the SUB-
ADVISER copies of any of the above-mentioned
materials that refer in any way to the SUB-ADVISER
and shall cease to use the SUB-ADVISER name and/or
logo as soon as is reasonable. VALIC shall furnish or
otherwise make available to the SUB-ADVISER such
other information relating to the business affairs of
VALIC and the Covered Fund as the SUB-ADVISER
at any time, or from time to time, may reasonably
request in order to discharge obligations hereunder.
The provisions of this Section 10 shall survive the
termination of this Agreement.
A successor by law of the parties to this Agreement
shall be entitled to the benefits of the indemnification
contained herein.
11. Applicability of Federal Securities Laws
This Agreement shall be interpreted in accordance with
the laws of the State of New York and applicable
federal securities laws and regulations, including
definitions therein and such exemptions as may be
granted to VALIC or the SUB-ADVISER by the
Securities and Exchange Commission or such
interpretive positions as may be taken by the
Commission or its staff. To the extent that the
applicable law of the State of New York, or any of the
provisions herein, conflict with applicable provisions of
the federal securities laws, the latter shall control.
12. Amendment and Waiver
The Agreement may be amended by mutual written
consent of the parties, subject to the requirements of the
1940 Act and the rules and regulations promulgated and
orders granted thereunder.
13. Notices
All notices hereunder shall be given in writing (and
shall be deemed to have been duly given upon receipt)
by delivery in person, by facsimile, by registered or
certified mail or by overnight delivery (postage prepaid,
return receipt requested) to VALIC and to SUB-
ADVISER at the address of each set forth below:
If to VALIC:
The Variable Annuity Life Insurance
Company
Attn: Mutual Fund Legal
0000 Xxxxx Xxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
With a copy to:
SunAmerica Asset Management, LLC
Attn: Mutual Fund Legal
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, Xxx Xxxxxx 00000
If to SUB-ADVISER:
Victory Capital Management Inc.
0000 Xxxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxx Xxxxx
With a copy to:
Victory Capital Management Inc.
0000 Xxxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attn.: Xxxxxxx Xxxxxxxxx
[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]
The parties hereto have each caused this Agreement
to be signed in duplicate on its behalf by its duly authorized
officer on the above date.
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title: Vice President - Investments
ATTEST:
Attest: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Paralegal
VICTORY CAPITAL MANAGEMENT INC.
By: /s/ Xxxxxxx Pelicarp
Name: Xxxxxxx Pelicarpo
Title: Chief Operating Officer / Chief Financial Officer
ATTEST:
Attest: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chief Legal Officer
SCHEDULE A
COVERED FUND(S)
Annual Fee computed at the following annual rate, based on
average daily net asset value for each month on that portion of
the assets managed by SUB-ADVISER, and payable monthly:
Covered Fund
Fee
Small Cap Aggressive Growth Fund
0.55% of the first $250 million; and
0.50% on assets over $250 million.
2
P:\VC I\Agreements\Sub-Advisory Agreements\Victory Capital
(formerly RS Investments)\Investment Sub-Advisory Agreement
(Victory) (execution copy) eff 6-30-2016.doc
P:\VC I\Agreements\Sub-Advisory Agreements\Victory Capital
(formerly RS Investments)\Investment Sub-Advisory Agreement
(Victory) (execution copy) eff 6-30-2016.doc
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