EXHIBIT 99.B(5)(a)
SUNAMERICA EQUITY FUNDS
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of September
23, 1993, and amended as of June 15, 1994, by and between SunAmerica 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:
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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
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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 the 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
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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 sub-advisers, 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 sub-advisers, 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
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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 record keeping 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
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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'
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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 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
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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 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 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.
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6. Term of Agreement. This agreement shall continue in full force and
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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 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
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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.
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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
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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 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
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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
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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,
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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.
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12. Separate Series. Pursuant to the provisions of the Declaration, each
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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.
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: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
SUNAMERICA ASSET MANAGEMENT CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and
General Counsel
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SCHEDULE A
(as amended)
FEE RATE
(as a % of average
FUND daily net asset value)
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SunAmerica Value Fund .75% to $350MM
.70% next $350MM
.65% over $700MM
SunAmerica Growth Fund .75% to $350MM
.70% next $350MM
.65% over $700MM
SunAmerica Emerging Growth Fund .75% to $350MM
.70% next $350MM
.65% over $700MM
SunAmerica Balanced Assets Fund .75% to $350MM
.70% next $350MM
.65% over $700MM
SunAmerica Global Balanced Fund 1.00% to $350MM
.90% next $350MM
.85% over $700MM
SunAmerica Growth and Income Fund .75% to $350MM
.70% next $350MM
.65% over $700MM
June 15, 1994