SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of
April 18, 1996 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 September 16, 1992,
as amended, (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
2. 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 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
3. 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.
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3. Portfolio Transactions. The Subadviser is
4. 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
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
5. 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.
5. Reports. The Trust, the Adviser and the
6. 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
7. 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
8. 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
9. 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
10. 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 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
(c) 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
(d) 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
11. 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
12. 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.
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
13. 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
14. 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
15. 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
16. 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 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
17. 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
18. 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
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇
▇▇▇▇▇
Adviser: SunAmerica Asset
Management Corp.
The SunAmerica Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇
Senior Vice
President
and General Counsel
with a copy to: SunAmerica Inc.
▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
FEDERATED INVESTMENT
COUNSELING
By:
Name:
Title:
SCHEDULE A
Fee(as percentage
of
average daily net assets of
Portfolio(s) the Portfolio)
Federated Value Portfolio .55% on first
$20 million
.35% on next
$30 million
.25% on next
$100 million
.20% on next
$350 million
.15% over
$500 million
Utility Portfolio .55% on first
20 million
.35% on next
$30 million
.25% on next
$100 million
.20% on next
$350 million
.15% over
$500 million
Corporate Bond Portfolio .30% on first
$25 million
.25% on next
$25 million
.20% on next
$100 million
.15% over
$150 million
