SUBADVISORY AGREEMENT
This SUBADVISORY
AGREEMENT is dated as of August 3rd, 2007 by
and between AIG SUNAMERICA ASSET
MANAGEMENT CORP., a Delaware corporation
(the Adviser), and ▇▇▇▇▇▇ INVESTMENT
MANAGEMENT, LLC, a limited liability company
organized pursuant to the laws of the state of
Delaware (the Subadviser).
WITNESSETH:
WHEREAS, the Adviser and Seasons Series
Trust, a Massachusetts business trust (the Trust), have
entered into an Investment Advisory and
Management Agreement dated as of January 1, 1999
(the Advisory Agreement) pursuant to which the
Adviser has agreed to provide investment
management, advisory and administrative services to
the Trust; and
WHEREAS, the Trust is registered under the
Investment Company Act of 1940, as amended (the
Act), as an open-end management investment
company and may issue shares of beneficial interest,
par value $.01 per share, in separately designated
portfolios representing separate funds with their own
investment objectives, policies and purposes; and
WHEREAS, the Subadviser is engaged in the
business of rendering investment advisory services
and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Adviser desires to retain the
Subadviser to furnish investment advisory services to
the investment portfolio or portfolios of the Trust
listed on Schedule A attached hereto (the
Portfolio(s)), and the Subadviser is willing to furnish
such services;
NOW, THEREFORE, it is hereby agreed
between the parties hereto as follows:
1. Duties of the Subadviser. The
Adviser hereby engages the services of the Subadviser
in furtherance of its Investment Advisory and
Management Agreement with the Trust. Pursuant to
this Subadvisory Agreement and subject to the
oversight and review of the Adviser, the Subadviser
will manage the investment and reinvestment of the
assets of each Portfolio listed on Schedule A attached
hereto. The Subadviser will determine in its
discretion and subject to the oversight and review of
the Adviser, the securities to be purchased or sold,
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 as delivered in
writing to the Subadviser, and in compliance with (a)
the objectives, policies, and limitations for the
Portfolio(s) set forth in the Trusts current prospectus
and statement of additional information as delivered
to the Subadviser, and (b) applicable laws and
regulations.
The Subadviser agrees that it will
operate and manage the Portfolio set forth in Schedule
A (1) in compliance with all applicable federal and
state laws governing the Subadviser=s management of
the Portfolio and investments; and (2) so as not to
jeopardize either the treatment of the Seasons variable
annuity contracts issued by Variable Annuity Account
Five (File No. 333-08859; hereinafter Contracts), or
such other variable annuity contracts established in
the future, as annuity contracts for purposes of the
Internal Revenue Code of 1986, as amended (the
Code). Without limiting the foregoing, the
Subadviser agrees to manage the Portfolio in
compliance with (a) the provisions of the Act and
rules adopted thereunder; (b) the diversification
requirements specified in the Internal Revenue
Services regulations under Section 817(h) of the
Code; (c) applicable state insurance laws; and (d)
applicable federal and state securities, commodities
and banking laws; provided that Adviser shall provide
Subadviser with written direction as to the
requirements of applicable state insurance laws and
applicable federal and state banking laws. For
purposes of the preceding sentence, disclosure in the
Trust=s prospectus and/or statement of additional
information of applicable state insurance laws and
regulations and applicable federal and state banking
laws and regulations shall constitute Awritten
direction@ thereof. The Adviser acknowledges and
agrees that the Subadviser=s compliance with its
obligations under this Agreement will be based, in
part, on information supplied by the Adviser, or an
agent thereof, as to each Portfolio, including but not
limited to, portfolio security lot level realized and
unrealized gain/loss allocation. The Adviser agrees
that all such information will be supplied on a timely
basis. 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. The
Subadviser shall not have any responsibility for the
administrative affairs of the Portfolio, including any
responsibility for the calculation of the net asset value
of the Portfolio=s shares or shareholder accounting
services; provided, however, that the Subadviser shall,
as requested from time to time by the Adviser, assist
the Adviser in obtaining pricing information relating
to the Portfolio=s investment securities.
2. Portfolio Transactions. The
Subadviser is responsible for decisions to buy or sell
securities and other investments of the assets of each
Portfolio, broker-dealers and futures commission
merchants= selection, and negotiation of brokerage
commission and futures commission merchants=
rates. As a general matter, in executing portfolio
transactions, the Subadviser may employ or deal with
such broker-dealers or futures commission merchants
as may, in the Subadviser=s best 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 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 firms 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
A1934 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 Subadvisers 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 Subadvisers 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 Portfolio
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 Portfolio 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.
3. Compensation of the Subadviser.
The Subadviser shall not be entitled to receive any
payment from the Trust and shall look solely and
exclusively to the Adviser for payment of all fees for
the services rendered, facilities furnished and
expenses paid by it hereunder. As full compensation
for the Subadviser under this Agreement, the Adviser
agrees to pay the Subadviser a fee at the annual rates
set forth in Schedule A hereto with respect to each
Portfolio listed thereon. Such fee shall be accrued
daily and paid monthly as soon as practicable after the
end of each month (i.e., the applicable annual fee rate
divided by 365 applied to each prior days net assets in
order to calculate the daily accrual). For purposes of
calculating the Subadvisers 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.
4. Other Services. At the request of the
Trust or the Adviser, the Subadviser in its discretion
may make available to the Trust, office facilities,
equipment, personnel and other services. Such office
facilities, equipment, personnel and services shall be
provided for or rendered by the Subadviser and billed
to the Trust or the Adviser at the Subadviser=s cost.
5. Reports. The Trust, the Adviser and
the Subadviser agree to furnish to each other, if
applicable, current prospectuses, statements of
additional information, proxy statements, reports of
shareholders, certified copies of their financial
statements, and such other information with regard to
their affairs and that of the Trust as each may
reasonably request.
6. Status of the Subadviser. The
services of the Subadviser to the Adviser and the
Trust are not to be deemed exclusive, and the
Subadviser shall be free to render similar services to
others so long as its services to the Trust are not
impaired thereby. The Subadviser shall be deemed to
be an independent contractor and shall, unless
otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way
or otherwise be deemed an agent of the Trust.
7. Certain Records. While the
Subadviser is not being engaged to serve as the
Trust=s official record keeper, the Subadviser
nevertheless hereby undertakes and agrees to
maintain, in the form and for the period required by
Section 204 of the Advisers Act and Rule 204-2
thereunder, all records relating to the investments of
the Portfolio(s) that are required to be maintained by
the Subadviser pursuant to the requirements of Rule
204-2 under the Advisers Act. The Subadviser will
also, in connection with the purchase and sale of
securities for each Portfolio, arrange for the
transmission to the custodian for the Trust on a daily
basis, such confirmation, trade tickets, and other
documents and information, that identify securities to
be purchased or sold on behalf of the Portfolio, as
may be reasonably necessary to enable the custodian
to perform its administrative and recordkeeping
responsibilities with respect to the Portfolio.
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 Trusts
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. The
Adviser covenants as follows:
(a) The Adviser will (and will
cause its affiliates (including the Trust) (each an
AAffiliate@) to) use the name APutnam Investment
Management@, APutnam Investments@, APutnam@ or
any derivation thereof only for so long as this
Agreement remains in effect. At such times as this
Agreement is no longer in effect, the Adviser will, and
will cause each Affiliate to, cease using any such
name or any other name indicating that any Portfolio
is advised by or otherwise connected to the
Subadviser.
(b) It will not, and will cause its
Affiliates to not, refer to the Subadviser or any
Affiliate in any sales literature or promotional
material except with the prior approval of the
Subadviser. In the case of materials, such as the
portfolio=s prospectus, required by law to be
prepared, such approval shall not be unreasonably
withheld.
(c) It will permit the Portfolios to
be used as a funding vehicle only for insurance
contracts issued by SunAmerica Inc. or any of its
affiliates.
(d) It will not (and will cause it
Affiliates to not) engage in marketing programs
(written or otherwise) directed toward ▇▇▇▇▇▇ Capital
Manager Annuity Contract (APCM@) which directly
solicit transfers from PCM to the Adviser=s products
or those of its Affiliates. For purposes of the
foregoing, general marketing efforts by SunAmerica
Inc. and its affiliates shall not constitute a direct
solicitation of PCM contract holders. The Adviser
will not (and will cause its Affiliates to not) create or
use marketing materials which provide direct
comparisons between PCM and the Adviser=s
products or those of any of its Affiliates. The
Adviser, in connection with any exchange program,
will not (and will cause its Affiliates to not) reimburse
voluntarily, or enter into any contract or policy after
the date hereof providing for the reimbursement of,
any deferred sales charges to encourage the transfer of
assets from PCM to the Adviser=s products or those
of any Affiliate. For purposes hereof, the term
AAffiliate@ shall not be construed to include agents of
SunAmerica Inc. or affiliates thereof, who are not
employees of such entities.
9. Liability of the Subadviser. (a) In the
absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or
duties (Adisabling 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, any shareholder of the Trust or the Adviser 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 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 AIndemnified
Parties@) from any liability arising from the
Subadviser=s conduct under this Agreement.
(b) The Subadviser agrees to
indemnify and hold harmless the Adviser and its
affiliates and each of its directors and officers and
each person, if any, who controls the Adviser within
the meaning of Section 15 of the 1933 Act against any
and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to
which the Adviser or its affiliates or such directors,
officers or controlling persons may become subject
under the 1933 Act, under other statutes, at common
law or otherwise, which may be based upon (i) any
wrongful act or material breach of this Agreement by
the Subadviser resulting from Subadviser=s disabling
conduct, or (ii) any untrue statement of a material fact
in the Trust=s registration statement or omission to
state a material fact required to be stated therein or
necessary to make the statement therein not
misleading, if such statement or omission was made
in reliance on information furnished by the Subadviser
to use in such registration statement, 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.
10. Permissible Interests. Trustees and
agents of the Trust are or may be interested in the
Subadviser (or any successor thereof) as directors,
partners, officers, or shareholders, or otherwise;
directors, partners, officers, agents, and shareholders
of the Subadviser are or may be interested in the Trust
as trustees, or otherwise; and the Subadviser (or any
successor) is or may be interested in the Trust in some
manner.
11. Term of the Agreement. This
Agreement shall continue in full force and effect with
respect to each Portfolio until two years from the date
hereof, and from year to year thereafter so long as
such continuance is specifically approved at least
annually (i) by the vote of a majority of those Trustees
of the Trust who are not parties to this Agreement or
interested persons of any such party, cast in person at
a meeting called for the purpose of voting on such
approval, and (ii) by the Trustees of the Trust or by
vote of a majority of the outstanding voting securities
of the Portfolio voting separately from any other
series of the Trust.
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 60 days= written notice to the Adviser and
the Trust. The termination of this Agreement with
respect to any Portfolio or the addition of any
Portfolio to Schedule A hereto (in the manner
required by the Act) shall not affect the continued
effectiveness of this Agreement with respect to each
other Portfolio subject hereto. This Agreement shall
automatically terminate in the event of its assignment
(as defined by the Act).
This Agreement will also terminate in
the event that the Advisory Agreement by and
between the Trust and the Adviser is terminated.
12. Severability. If any provision of this
Agreement shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
13. Amendments. This Agreement may
be amended by mutual consent in writing, but the
consent of the Trust must be obtained in conformity
with the requirements of the Act.
14. Governing Law. This Agreement
shall be construed in accordance with the laws of the
State of New York and the applicable provisions of
the Act. To the extent the applicable laws of the State
of New York, or any of the provisions herein, conflict
with the applicable provisions of the Act, the latter
shall control.
15. Personal Liability. The Declaration
of the Trust establishing the Trust (the Declaration), is
on file in the office of the Secretary of the
Commonwealth of Massachusetts, and, in accordance
with that Declaration, no Trustee, shareholder, officer,
employee or agent of the Trust shall be held to any
personal liability, nor shall resort be had to their
private property for satisfaction of any obligation or
claim or otherwise in connection with the affairs of
the Trust, but the Trust Property only shall be liable.
16. Separate Series. Pursuant to the
provisions of the Declaration, each Portfolio is a
separate series of the Trust, and all debts, liabilities,
obligations and expenses of a particular Portfolio shall
be enforceable only against the assets of that Portfolio
and not against the assets of any other Portfolio or of
the Trust as a whole.
17. Confidentiality. The Subadviser 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 execute
transactions on behalf of the Portfolios, and will keep
confidential any non-public information obtained
directly as a result of this service relationship, and the
Subadviser shall disclose such non-public information
only if the Adviser or the Board of Trustees has
authorized such disclosure by prior written consent, or
if such information is or hereafter otherwise is known
by the Subadviser or has been disclosed, directly or
indirectly, by the Adviser or the Trust to others,
becomes ascertainable from public or published
information or trade sources, or if such disclosure is
expressly required or requested by applicable federal
or state regulatory authorities, or self regulatory
organizations, or to the extent such disclosure is
reasonably required by auditors or attorneys of the
Subadviser in connection with the performance of
their professional services or necessary for employees
of the Subadviser to carry out its duties on behalf of
the Portfolio(s) as contemplated by this Agreement.
Notwithstanding the foregoing, the Subadviser may
disclose the total return earned by the Portfolios and
may include such total return in the calculation of
composite performance information.
18. Notices. All notices shall be in writing
and deemed properly given when delivered or mailed
by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as
follows:
Subadviser: ▇▇▇▇▇▇
Investment Management, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇
▇▇▇▇▇
Attn: General
Counsel
Adviser: AIG
SunAmerica Asset Management Corp.
Harborside
Financial Center
▇▇▇▇ ▇▇▇▇▇ ▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
S
enior Vice President and
G
eneral Counsel
with a copy to: AIG Retirement
Services, Inc.
▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
D
eputy General Counsel
IN WITNESS WHEREOF, the parties have
caused their respective duly authorized officers to
execute this Agreement as of the date first above
written.
AIG
SUNAMERICA ASSET MANAGEMENT CORP.
By: /s/
▇▇▇▇▇
▇.
HARBE
CK
Name:
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
Title:
President and
Chief Executive
Officer
▇▇▇▇▇▇
INVESTMENT MANAGEMENT, LLC
By: /s/
MITCHE
LL
FISHMA
N
Name:
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Title:
Managing Director
SCHEDULE A
Portfolio(s) Fee(as a percentage
of the average daily net assets
of the Portfolio)
Asset
Allocation:
Diversified
Growth
..55% on the first $150MM .50%
on the next $150MM .40% over $300MM
P:\PUBLIC\PRODLAW\Securities Compliance\SA Board
Meetings\2007\05-07-07\15c\Exhibit D - SST ▇▇▇▇▇▇
Subadvisory Agreement (05-31-07).doc