SUB-SUB-ADVISORY AGREEMENT
This SUB-SUB-ADVISORY AGREEMENT is made as of this
7th day of June, 2010 (the "Sub-Sub-Advisory Agreement"), between
Janus Capital Management LLC, a Delaware limited liability company
("Janus") and ▇▇▇▇▇▇▇ Investment Management LLC, a Delaware limited
liability company ("▇▇▇▇▇▇▇").
WHEREAS, THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY ("VALIC") is engaged as the investment adviser of VALIC
Company II, an investment company organized under the laws of Delaware as a
business trust ("▇▇ ▇▇"). pursuant to an Investment Sub-Advisory Agreement,
▇▇ ▇▇ is a series type of investment company issuing separate classes
(or series)of shares of beneficial interest and is registered as an open-end,
management investment company under the Investment Company Act of 1940, as
amended ("1940 Act") ;
WHEREAS, VALIC has entered into an investment Sub-
Advisory Agreement with Janus (the "Sub-Advisory Agreement") in
order for Janus to assume certain responsibilities and obligations of
VALIC under the Investment Advisory Agreement with respect to the
Large Cap Value fund (the "Fund").
WHEREAS, Janus is authorized under the Sub-Advisory
Agreement to delegate any of its duties and obligations to any affiliated
person (as such term is defined in the ▇▇▇▇ ▇▇▇) that is eligible to serve
as an investment adviser to an investment company registered under the
1940 Act on such terms and conditions as Janus deems necessary or
appropriate, provided that VALIC consents to any such delegation and to
the terms and conditions thereof and such delegation is permitted by and
in conformity with the 1940 Act;
WHEREAS, ▇▇▇▇▇▇▇ 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 (the "Advisers
Act");
WHEREAS, Janus desires to delegate to ▇▇▇▇▇▇▇ its duties and
responsibilities for providing the day to day portfolio management of the
Fund and ▇▇▇▇▇▇▇ is willing to accept such delegation and to render such
i portfolio management services;
NOW, THEREFORE, the parties agree as follows:
1. Delegation. Janus hereby delegates to ▇▇▇▇▇▇▇ the
following duties and responsibilities required to be performed by Janus
for the Fund pursuant to the Sub-Advisory Agreement with respect to the
investment and reinvestment of the assets of the Fund: ▇▇▇▇▇▇▇ shall
manage the investment operations of the Fund, shall determine without
prior consultation with VALIC or Janus, what securities and other assets
of the Fund will be acquired, held, disposed of or loaned, and shall direct
Janus with respect to the execution of trades in connection with such
determinations, in conformity with the investment objectives, policies and
restrictions of the Fund. ▇▇▇▇▇▇▇ shall not issue directly to broker(s) or
dealer(s) purchase or sell orders with respect to the securities of the Fund
and shall not be responsible for aggregating purchase or sell orders for the
Fund. ▇▇▇▇▇▇▇ hereby accepts such delegation and agrees to perform such
duties and assume such responsibilities, subject to the oversight of Janus.
2. Further Obligations of ▇▇▇▇▇▇▇.
(a) In all matters relating to the performance of this
Sub-Management Agreement with respect to the Fund, all of ▇▇▇▇▇▇▇'
acts or omissions shall be in conformity with: (i) the Sub-Advisory
Agreement between VALIC and Janus; (ii) the investment goals and
restrictions specified by VALIC and the Fund documents (prospectus
and SAI) provided to ▇▇▇▇▇▇▇; (iii) the Advisers Act; and (iv) all other
applicable federal and state laws governing the Fund's operations and
investments.
(b) ▇▇▇▇▇▇▇ shall provide timely reports to Janus on
its activities under this Sub-Management Agreement as agreed on from
time to time, and shall provide Janus with all information or documents
that Janus may reasonably request in connection with this Sub-
Management Agreement.
(c) ▇▇▇▇▇▇▇ shall maintain all books and records
required to be maintained by ▇▇▇▇▇▇▇ pursuant to the Advisers Act and
shall make such records available to Janus upon reasonable request.
(d) Except to the extent otherwise required by any
applicable federal or state laws or by any direction of VALIC or Janus,
▇▇▇▇▇▇▇ shall keep confidential any and all information concerning the
affairs of the Fund.
(e) ▇▇▇▇▇▇▇ at its expense will make available to
VALIC at reasonable times its portfolio managers and other appropriate
personnel, either in person or, at the mutual convenience of VALIC,
Janus and ▇▇▇▇▇▇▇, by telephone, in order to review the investment
policies, performance and other investment related information regarding
the Fund and to consult with the VC II's Board of Trustees ("the Board")
and VALIC regarding the Fund's investment affairs, including economic,
statistical and investment matters related to VALIC's duties hereunder,
and will provide periodic reports as requested to VALIC relating to the
investment strategies it employs as well as Perkin's duties hereunder.
▇▇▇▇▇▇▇ and its personnel shall also cooperate fully with counsel and
auditors for, and the Chief Compliance Officers of, Janus, VALIC, the
Fund and the Board.
(f) In accordance with procedures adopted by the
Board, as amended from time to time, ▇▇▇▇▇▇▇ will provide assistance to
Janus and the Fund in the fair valuation of Fund securities for security
prices that are not readily available. Any valuation assistance provided is
for informational purposes only and is not a recommendation by ▇▇▇▇▇▇▇.
▇▇▇▇▇▇▇ will use its reasonable efforts to provide, based upon its own
expertise, and to arrange with parties independent of ▇▇▇▇▇▇▇ such as
broker-dealers for the provision of, valuation information or prices for
securities for which prices are deemed by VALIC or Fund's accounting
agent not to be readily available in the ordinary course of business from
an automated pricing service. In addition, ▇▇▇▇▇▇▇ will assist the Fund
and its agents in determining whether prices obtained for valuation
purposes accurately reflect market price information relating to the assets
of the Fund at such times as Janus or VALIC shall reasonably request,
including but not limited to, the hours after the close of a securities
market and prior to the daily determination of the Fund's net asset value
per share. VALIC acknowledges that VALIC's designated pricing agent,
and not Janus or ▇▇▇▇▇▇▇, is responsible for providing valuation of the
assets in the Fund.
(g) ▇▇▇▇▇▇▇ at its expense will provide Janus,
VALIC and/or the Fund's Chief Compliance Officer with such
compliance reports as may be reasonably requested from time to time.
Notwithstanding the foregoing, ▇▇▇▇▇▇▇ will promptly report to Janus and
VALIC any material violations of the federal securities laws (as defined
in Rule 38a-1 of the ▇▇▇▇ ▇▇▇) that it is aware of or of any material
violation of Perkin's compliance policies and procedures that pertain to
the Fund, as well as any change in portfolio manager(s) of the Fund.
(h) ▇▇▇▇▇▇▇ will (i) assist in the preparation of
disclosures regarding factors that have affected the Fund's performance,
including the relevant market conditions and the investment strategies
and techniques used by ▇▇▇▇▇▇▇, for each period as requested by Janus or
VALIC; and (ii) review draft reports to shareholders and other
documents provided or available to it and provide comments on a timely
basis.
(i) ▇▇▇▇▇▇▇ shall immediately notify Janus and
VALIC in the event that ▇▇▇▇▇▇▇ or any of its affiliates becomes aware:
i. that it is subject to a statutory
disqualification that prevents ▇▇▇▇▇▇▇
from serving as an investment manager
pursuant to this Agreement; or
ii. that it is the subject of an administration
proceeding or enforcement action by the
Securities and Exchange Commission
(the "Commission") or other regulatory
authority.
(j) ▇▇▇▇▇▇▇ shall use the same skill and care in
providing services to the Fund as it uses in providing services to
fiduciary accounts for which it has investment responsibility.
(k) ▇▇▇▇▇▇▇ is hereby prohibited from consulting
with any other sub-advisers of the Fund, other sub-advisers to another
portfolio of ▇▇ ▇▇, or other sub-advisers to a portfolio under common
control with the Fund concerning transactions of the Fund in securities or
other assets. Notwithstanding the foregoing, ▇▇▇▇▇▇▇ may consult with
Janus regarding transactions of the Fund in securities or other assets, or
as otherwise consistent with the terms of this Sub-Management
Agreement.
3. Obligations of Janus.
(a) No provision of this Agreement shall relieve
Janus of its duties or responsibilities under the Sub-Advisory Agreement
and Janus shall appropriately oversee, monitor and evaluate ▇▇▇▇▇▇▇"
performance of its duties and responsibilities under this Sub-Sub-
Advisory- Agreement.
(b) Janus shall be responsible for the execution of
all transactions upon receipt of an order from ▇▇▇▇▇▇▇, including but not
limited to, the broker used to execute the transaction, the compensation
paid to such broker, and the party with which the transaction will be
consummated.
(c) Janus shall be responsible for providing
accurate and current information with respect to records maintained for
the Fund.
(d) Janus shall be responsible for ensuring that
all of Janus' acts or omissions under this Sub-Sub-Advisory Agreement
comply with all applicable federal and state laws.
4. Compensation. ▇▇▇▇▇▇▇ shall be paid by Janus for its
services under the Agreement with respect to the Fund a fee at an annual
rate equal to (i) fifty percent (50%) of the advisory fees Janus receives
from the VALIC.
5. Expenses and Excluded Expenses. ▇▇▇▇▇▇▇ shall pay all
its own costs and expenses incurred in rendering the services required
under this Sub-Management Agreement. Notwithstanding any other
provision hereof, it is expressly agreed that ▇▇▇▇▇▇▇ shall not be
responsible to pay any expenses of Janus or the Fund, including but not
limited to organizational, operational or business expenses of Janus or the
Fund, such as, (a) brokerage commissions and other costs in connection
with the purchase or sale of securities or other investment instruments
with respect to the Fund; (b) custodian fees and expenses of the Fund; and
(c) interest and taxes of the Fund.
6. Termination. This Sub-Management Agreement may be
terminated at any time by Janus by giving written notice to ▇▇▇▇▇▇▇ at
least 60 days prior to the date on which such termination is to become
effective. If ▇▇▇▇▇▇▇ materially breaches the terms of this Agreement,
Janus may terminate the authority of ▇▇▇▇▇▇▇ to act hereunder upon
delivery of written notice effective upon receipt. This Sub-Management
Agreement may be terminated at any time by ▇▇▇▇▇▇▇ by giving written
notice to Janus at least 60 days prior to the date on which such
termination is to become effective. This Sub-Management Agreement
will automatically terminate with respect to VALIC and the Fund in the
event that the Sub-Advisory Agreement by and between Janus and
VALIC is terminated. Termination of this Sub-Management Agreement
will not affect the validity of any action ▇▇▇▇▇▇▇ has previously taken,
or ▇▇▇▇▇▇▇' liabilities or obligations for transactions initiated before
termination.
7. Limited of Liability; Indemnification. Unless otherwise
required by applicable law:
(a) Limitation of Liability. Janus and any
of its affiliates, directors, officers, shareholders, employees or agents
shall not be liable for any error of judgment or for any loss, liability,
cost, damage, or expense (including reasonable attorney's fees and costs)
(collectively referred to as "Losses") suffered by ▇▇▇▇▇▇▇, the Fund or
VALIC in connection with the performance of its obligations under this
Sub-Management Agreement, except a loss resulting from willful
misfeasance, bad faith or gross negligence on Janus' part in the
performance of its duties or from reckless disregard of its obligations and
duties under this Sub-Management Agreement, except as may otherwise
be provided by the 1940 Act or under the provisions of other federal
securities laws or applicable state law which cannot be waived or
modified hereby.
(b) Janus agrees to indemnify and hold harmless
▇▇▇▇▇▇▇, its affiliates and each of their respective officers, directors,
members, agents, employees, controlling persons and shareholders (each
an "Indemnified Party" and collectively, the "Indemnified Parties")
against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses) to which such
Indemnified Parties may become subject arising from Janus' acts or
omissions under this Sub-Management Agreement, including, without
limitation, liability for actions brought by VALIC or the Fund against
any of such Indemnified Parties; provided, however, that in no case is
Janus' indemnity in favor of Indemnified Party deemed to protect or
apply to such Indemnified Party against any liability to which such
Indemnified Party would otherwise be subject by reason of such
Indemnified Party's own willful misfeasance, bad faith, gross negligence
or reckless disregard of its obligations and duties, or any material breach
of this Agreement.
(c) Limitation of Liability. ▇▇▇▇▇▇▇ and any
of its affiliates, directors, officers, shareholders, employees or agents
shall not be liable for any error of judgment or for any loss, liability,
cost,damage, or expense (including reasonable attorney's fees and costs)
(collectively referred to as "Losses") suffered by Janus, the Fund or
VALIC in connection with the performance of its obligations under this
Sub-Management Agreement, except a loss resulting from willful
misfeasance, bad faith or gross negligence on ▇▇▇▇▇▇▇' part in the
performance of its duties or from reckless disregard of its obligations and
duties under this Sub-Management Agreement, except as may otherwise
be provided by the 1940 Act or under the provisions of other federal
securities laws or applicable state law which cannot be waived or
modified hereby.
(d) ▇▇▇▇▇▇▇ agrees to indemnify and hold
harmless Janus and its affiliates and each of their respective directors,
officers, members, agents, employees, controlling persons and
shareholders against any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses) to which Janus
or its affiliates or such directors, officers, agents, employees, controlling
persons or shareholders may become subject arising from ▇▇▇▇▇▇▇' acts or
omissions under this Sub-Management Agreement, including, without
limitation, liability for actions brought by VALIC or the Fund against any
of such Indemnified Parties; provided, however, that in no case is ▇▇▇▇▇▇▇
indemnity in favor of any person deemed to protect or apply to such
person 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 such person's obligations and duties under this
Agreement, or any material breach of this Agreement.
8. Representations of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ hereby represents,
warrants and covenants as follows:
(a) ▇▇▇▇▇▇▇: (i) is registered as an investment
adviser under the Advisers Act and will continue to be so registered for
so long as this Sub-Management Agreement remains in effect; (ii) is not
prohibited by the Advisers Act from performing the services
contemplated by this Sub-Management Agreement; (iii) has met, and
will continue to meet for so long as this Sub-Management Agreement
remains in effect, any other applicable federal or state requirements, or
the applicable requirements of any regulatory or industry self-regulatory
organization necessary to be met in order to perform the services
contemplated by this Sub-Management Agreement; (iv) has the legal and
corporate authority to enter into and perform the services contemplated
by this Sub-Management Agreement; and (v) will immediately notify
Janus of the institution of any administrative, regulatory or judicial
proceeding against ▇▇▇▇▇▇▇ that could have a material adverse effect upon
▇▇▇▇▇▇▇' ability to fulfill its obligations under this Sub-Management
Agreement.
(b) ▇▇▇▇▇▇▇ has provided Janus with a copy of its
Form ADV as most recently filed with the U.S. Securities and Exchange
Commission ("SEC") and will, promptly after filing any amendment to
its Form ADV with the SEC, furnish a copy of such amendment to Janus.
(c) ▇▇▇▇▇▇▇ will notify Janus of any change in the
identity or control of its members owning a 10% or greater interest in
▇▇▇▇▇▇▇, or any change that would constitute a change in control of
▇▇▇▇▇▇▇ under the 1940 Act, prior to any such change if ▇▇▇▇▇▇▇ is aware,
or should be aware, of any such change, but in any event as soon as any
such change becomes known to ▇▇▇▇▇▇▇.
(d) ▇▇▇▇▇▇▇ has adopted a code of ethics meeting the
requirements of Rule 17j-1 under the 1940 Act and the requirements of
Rule 204A-1 under the Advisers Act and has provided VALIC and the
Board a copy of such code of ethics, together with evidence of its
adoption, and will promptly provide copies of any changes thereto,
together with evidence of their adoption. Upon request of Janus or
VALIC, ▇▇▇▇▇▇▇ will supply VALIC a written report that (A) describes
any issues arising under the code of ethics or procedures since ▇▇▇▇▇▇▇'
last report, including but not limited to material violations of the code of
ethics or procedures and sanctions imposed or remedial action taken in
response to the material violations; and (B) certifies that the procedures
contained in ▇▇▇▇▇▇▇' code of ethics are reasonably designed to prevent
"access persons" from violating the code of ethics.
9. Independent Contractor. ▇▇▇▇▇▇▇ shall for all purposes hereunder
by deemed to be an independent contractor and shall, unless
otherwise provided or authorized, have no authority to act for or
represent Janus, the Fund or VALIC in any way.
10. Notices. All notices or other communications under this
Agreement will be in writing and will be deemed properly given
when received by delivery in person, by overnight courier or by
facsimile transmission followed by hard copy by regular mail, at
the addresses set forth below, or to such other address as may be
designated by the party entitled to receive the same by notice
similarly given:
(a) To Janus at:
Janus Capital Management LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
(b) To ▇▇▇▇▇▇▇ at:
▇▇▇▇▇▇▇, Investment Management LLC
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
13. Amendments. This Sub-Management Agreement may
be amended by the parties only in a written instrument signed by the
parties to this Agreement.
14. Governing Law. This Sub-Management Agreement
shall be construed in accordance with the laws of the State of Colorado
(without giving effect to the conflicts of laws principles thereof) and the
Advisers Act. To the extent that the applicable laws of the State of
Colorado conflict with the applicable provisions of the Advisers Act, the
latter shall control.
15. Assignment. No assignment, as that term is defined in
the Advisers Act, of this Sub-Management Agreement shall be made by
▇▇▇▇▇▇▇ without the written consent of Janus and VALIC.
16. Miscellaneous. This Sub-Management Agreement may
be executed in two or more counterparts, which taken together shall
constitute one and the same instrument. The headings in this Sub-
Management Agreement are included for convenience of reference only
and in no way define or limit any of the provisions thereof or otherwise
affect their constructions or effect. If any provision of this Sub-
Management Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Sub-
Management Agreement shall not be affected thereby. This Sub-
Management Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
17. Books and Records. ▇▇▇▇▇▇▇ shall keep the books and
records required to be maintained by ▇▇▇▇▇▇▇ pursuant to this Sub-
Management Agreement and shall timely furnish to VALIC all
information relating to ▇▇▇▇▇▇▇' services under this Sub-Management
Agreement needed by VALIC to keep the books and records of the Fund
required by Rule 31a-1 under the 1940 Act. ▇▇▇▇▇▇▇ agrees that all
records that it maintains on behalf of the Fund are property of the Fund
and ▇▇▇▇▇▇▇ will surrender promptly to the Fund any of such records upon
the Fund's request; provided, however, that ▇▇▇▇▇▇▇ may retain a copy of
such records. ▇▇▇▇▇▇▇ further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act any such records as are required to be
maintained by it pursuant to this Agreement, and to provide reasonable
advance notice to VALIC of its intention to destroy any such records after
the expiration of the applicable retention period.
19. Use of Names. ▇▇▇▇▇▇▇ shall not use the name, trade
name, trademarks, service marks and/or logo of VALIC, ▇▇ ▇▇, and/or
any subsidiaries or affiliates in any communications (written, verbal or
electronic), including publicity releases, advertising or sales activities or
brochures, or similar written materials or activities, other than in
communications which are solely internal to ▇▇▇▇▇▇▇ or are with Janus,
VALIC, the Fund, or any of their respective officers, directors or
employees, without the prior written consent of VALIC.
20. Third-Party Beneficiary. The parties acknowledge and
agree that VALIC, ▇▇ ▇▇ and the Fund are third-party beneficiaries of this
Sub-Management Agreement, and it is intended that VALIC, ▇▇ ▇▇ and
the Fund shall have the authority to enforce their respective rights
hereunder.
IN WITNESS WHEREOF, the parties have caused this
instrument to be executed by their officers designated below as of the
day and year first above written.
JANUS CAPITAL MANAGEMENT LLC
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇▇▇ INVESTMENT MANAGEMENT LLC
By: /S/ ▇▇▇ ▇▇▇▇
Name: ▇▇▇ ▇▇▇▇
Title: Chief Operations Officer