INVESTMENT SUB-ADVISORY AGREEMENT
This AGREEMENT made this 20th day of June 2012, by and
between THE VARIABLE
ANNUITY LIFE INSURANCE COMPANY, hereinafter referred
to as "VALIC," and
MASSACHUSETTS FINANCIAL SERVICES COMPANY,
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 II
("▇▇ ▇▇") pursuant to a written Investment Advisory Agreement
between VALIC
and ▇▇ ▇▇, a Delaware business trust. ▇▇ ▇▇ is a series type of
investment
company issuing separate classes (or series) of shares and 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) ▇▇ ▇▇ currently consists of fifteen portfolios ("Funds"):
Aggressive Growth Lifestyle Fund
Capital Appreciation Fund
Conservative Growth Lifestyle Fund
Core Bond Fund
High Yield Bond Fund
International Opportunities Fund
Large Cap Value Fund
Mid Cap Growth Fund
Mid Cap Value Fund
Moderate Growth Lifestyle Fund
Money Market II Fund
Small Cap Growth Fund
Small Cap Value Fund
Socially Responsible Fund
Strategic Bond Fund
In accordance with VC II's Agreement and Declaration of Trust
(the "Declaration"),new Funds may be added to ▇▇ ▇▇ upon
approval of the ▇▇ ▇▇
Board of Trustees without the approval of shareholders. This
Agreement will
apply only to the Fund(s) set forth on the attached Schedule A, and
any other
Funds as may be added or deleted by amendment to the attached
Schedule A
(each, a "Covered Fund").
(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 approval of
VALIC and the ▇▇ ▇▇
Board of Trustees and in conformity with (i) the 1940 Act, and all
applicable laws and
regulations
thereunder, (ii) all other applicable federal laws and regulations,
including section
817(h) 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 a Covered Fund; (iii) the Declaration
and Bylaws of ▇▇ ▇▇
currently in effect (collectively, the "Charter Documents"); (iv) the
investment
objectives, policies and restrictions stated in each Covered Fund's
prospectus and
statement of additional information; and (iv) any applicable
procedures adopted by the
▇▇ ▇▇ Board of Trustees and communicated to the SUB-ADVISER
in writing, shall:
(a) manage the investment and reinvestment of the assets of
each Covered Fund, and
conduct an investment evaluation for each Covered Fund,
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 ▇▇ ▇▇
Board of Trustees, of the industries, securities and other
investments to be represented
in each Covered Fund's portfolio, and the formulation and
implementation of investment
programs; and
(b) maintain a trading desk and place orders for the purchase
and sale of portfolio
investments (including futures contracts and options thereon) for
each Covered Fund's
account with brokers or dealers (including futures commission
merchants) selected by
the SUB-ADVISER in the SUB-ADVISER's discretion, including
any brokers or dealers that
may be affiliated with the SUB-ADVISER to the extent permitted
by applicable laws and
the rules and regulations thereunder and any exemptive order
currently in effect, 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 in the
SUB-ADVISER's discretion, subject to the SUB-ADVISER's
control, direction, and
supervision, including any brokers or dealers that may be affiliated
with the SUB-ADVISER
to the extent permitted by applicable laws and the rules and
regulations thereunder and
any exemptive order currently in effect.
VALIC agrees that, to the extent SUB-ADVISER is responsible
for managing only a portion
of the assets of a Covered Fund, SUB-ADVISER shall manage the
portion of the assets of a
Covered Fund allocated to it as if it was a separate operating fund,
unless instructed
otherwise in writing from VALIC, and shall comply with the
investment objectives, policies
and restrictions applicable to a Covered Fund and qualifications of
a Covered Fund as a
regulated investment company under the Code with respect to the
portion of assets of a
Covered Fund allocated to SUB-ADVISER.
In selecting brokers or dealers to execute transactions on behalf of
a Covered Fund, the
SUB-ADVISER will attempt to obtain best execution. In seeking
to obtain best execution
for any transaction, the SUB-ADVISER will consider factors it
deems relevant, including,
without limitation, the breadth of the market in the security, the
price of the security,
the financial condition and execution capability of the brokers or
dealers and the
reasonableness of the commission, if any, for the specific
transaction and on a
continuing basis. In selecting brokers or dealers to execute a
particular transaction,
the SUB-ADVISER is authorized to consider the "brokerage and
research services" (within
the meaning of Section 28(e) of the Securities and Exchange Act
of 1934, as amended
(the "1934 Act")) provided to a Covered Fund and/or other
accounts over which the
SUB-ADVISER or any of its affiliates exercise discretion ("Client
Accounts"). As
permitted by Section 28(e) of the 1934 Act, the SUB-ADVISER
may cause a Covered Fund
to pay a broker that provides such brokerage and research services
an amount of
disclosed commission for effecting a portfolio transaction for the
Covered Fund in
excess of the commission that another broker may have charged
for effecting the same
transaction, provided that the SUB-ADVISER determines in good
faith that the amount
paid is reasonable in relation to the services received in terms of
the particular
transaction or the overall responsibilities of the SUB-ADVISER to
the Covered Fund
and any other Client Accounts. 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.
The SUB-ADVISER shall maintain records adequately
demonstrating compliance with its
obligations under this Agreement and report periodically to
VALIC and the ▇▇ ▇▇
Board of Trustees regarding the performance of services under this
Agreement. Upon
receiving written request from VALIC and/or ▇▇ ▇▇, the SUB-
ADVISER will promptly
make available to VALIC and ▇▇ ▇▇ copies of all of the
investment records and
ledgers relating to a Covered Fund to assist VALIC and ▇▇ ▇▇ in
complying with
regulations applicable to the Covered Fund's securities transactions
as required
by the 1940 Act, the Advisers Act or any other applicable law.
The SUB-ADVISER
will furnish to the ▇▇ ▇▇ Board of Trustees such periodic and
special reports as
VALIC and the ▇▇ ▇▇ Board of Trustees may reasonably request.
The SUB-ADVISER
will furnish to regulatory authorities with jurisdiction over the
SUB-ADVISER,
VALIC and/or ▇▇ ▇▇ any information or reports in connection with
the SUB-ADVISER's
investment advisory services which may be requested pursuant to
such regulator's
authority in order to ascertain whether the operations of a Covered
Fund are
being conducted in a manner consistent with applicable laws and
regulations.
The SUB-ADVISER will not hold money or investments on behalf
of a Covered Fund. The
money and investments will be held by the custodian of the
Covered Fund (the
"Custodian"). The SUB-ADVISER will arrange for the
transmission to the Custodian,
on a daily basis, such confirmations, trade tickets and/or other
documents as may
be necessary to enable the Custodian to perform its administrative
responsibilities
with respect to the Covered Fund. The SUB-ADVISER is
authorized and empowered to
instruct the Custodian (i) to pay cash for securities and other
property delivered,
or to be delivered, to the Custodian, (ii) to deliver securities and
other
property against payment for beneficial interests in ▇▇ ▇▇, 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. VALIC
authorizes and empowers the SUB-ADVISER to direct the
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 a Covered
Fund and, as agent
and attorney-in-fact, to execute for the Covered Fund 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
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.
VALIC will vote all proxies relating to securities held by a
Covered Fund. VALIC
will vote all such proxies in accordance with such proxy voting
guidelines and
procedures adopted by the ▇▇ ▇▇ Board of Trustees. VALIC may,
on certain
non-routine matters, consult with the SUB-ADVISER before
voting proxies relating
to securities held by a Covered Fund. VALIC will instruct the
Custodian and other
parties providing services to ▇▇ ▇▇ promptly to forward to the
proxy voting service
copies of all proxies and shareholder communications relating to
securities held by
each Covered Fund. The SUB-ADVISER shall not be responsible
for (i) directing the
vote of any proxy; (ii) instructing the Custodian or any other party
providing services
to ▇▇ ▇▇ to forward to the proxy voting service copies of any
proxies and shareholder
communications relating to securities held by a Covered Fund, or
(iii) taking any
action on behalf of a Covered Fund in connection with a class
action lawsuit,
settlement proceeding, or other legal proceeding (including,
without limitation,
bankruptcies) involving portfolio securities owned by the Covered
Fund.
To the extent that a Covered Fund invests in the securities of an
issuer that provides
investors with an opportunity to tender their interests with respect
to such securities,
the SUB-ADVISER is authorized and empowered to determine
whether a tender should be made
with respect to the Covered Fund's investment in such securities.
The SUB-ADVISER may aggregate sales or purchase orders
placed or received for a Covered
Fund with sales or purchase orders being made generally
concurrently with any other
Client Account, provided that in the SUB-ADVISER's reasonable
judgment, including its
consideration of various factors (including the selling or purchase
price, brokerage
commission and other expenses), such aggregation is fair and
reasonable and consistent
with the SUB-ADVISER's fiduciary obligations to the Covered
Fund and such other Client
Accounts. In accounting for such aggregated order price,
commission and other expenses
shall be averaged on a per bond or share basis daily. VALIC
acknowledges that the
SUB-ADVISER's determination of whether such aggregation is
fair and reasonable is
subjective and based on the SUB-ADVISER's determination that a
Covered Fund 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.
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 for or
represent VALIC or a Covered Fund other than in furtherance of
the SUB-ADVISER's 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 and
VALIC shall pay, or arrange
for others to pay, all of VALIC's expenses, except that VALIC
shall in all events pay
the compensation described in Section 3 of this Agreement. The
SUB-ADVISER shall not be
responsible for bearing any cost or expense of a Covered Fund,
such as the cost of any
brokerage commissions, taxes, Blue Sky qualification fees, outside
auditing and legal
expenses, custodial fees or other transaction-related fees incurred
by or on behalf of
a Covered Fund.
The SUB-ADVISER represents and warrants that in furnishing the
services hereunder, the
SUB-ADVISER will not consult with any other sub-adviser of a
Covered Fund or other series
of ▇▇ ▇▇, to the extent any other sub-advisers are engaged by
VALIC, or any other
sub-advisers to other investments companies that are controlled by
▇▇ ▇▇, concerning
transactions of the Covered Fund in securities or other assets, other
than for purposes
of complying with the conditions of paragraphs (a) and (b) of Rule
12d3-1 under the
1940 Act.
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 reasonably required to execute transactions on behalf of a
Covered Fund, and will
keep confidential any non-public information obtained directly as
a result of its
management of Covered Fund assets, and disclose such non-public
information only if
VALIC or the ▇▇ ▇▇ 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 known by the
SUB-ADVISER, or if such
disclosure is expressly required or requested by applicable
regulatory authorities or
self-regulatory organization (including the SUB-ADVISER's
regulatory examiners) or valid
order of a court or other tribunal of competent jurisdiction, 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 without prior approval by
VALIC or the Board of
Trustees of ▇▇ ▇▇.
VALIC will not disclose or use any records or information
belonging to the SUB-ADVISER
obtained pursuant to this Agreement in any manner whatsoever
except as expressly authorized
in this Agreement or as reasonably required in performance of its
advisory services to the
Covered Funds, and will keep confidential any information
obtained pursuant to this service
relationship, and disclose such information only if the 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 known by VALIC, or if such disclosure is expressly required or
requested by applicable
federal or state authorities (including VALIC's regulatory
examiners) or court of law of
competent jurisdiction or to the extent such disclosure is
reasonably required by auditors
or attorneys of the VALIC in connection with the performance of
their professional
services or as may otherwise be contemplated by this Agreement.
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 sub- advisory fee based on each
Covered Fund's average daily
net asset value, calculated as described in this Section 3 and in the
fee schedule attached
hereto as Schedule A. VALIC and the SUB-ADVISER may agree
to amend Schedule A in writing
from time to time, provided that any such amendment is made in
conformity with the Charter
Documents and applicable laws and regulations. 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
mean average of all of
the determinations of net asset value, made in the manner provided
in the Declaration, 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
thirty (30) days following the end of such month.
If this Agreement is terminated before month-end, the foregoing
compensation shall be
prorated. The payment of sub- 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 ▇▇ ▇▇.
4. Scope of the SUB-ADVISER's Activities
VALIC understands that the SUB-ADVISER and/or its affiliates
now act, will continue to
act and may act in the future as investment adviser or sub-adviser
to one or more
fiduciary and/or other managed accounts or investment companies.
VALIC has no objection
to the SUB-ADVISER and/or its affiliates so acting; provided that,
whenever a Covered
Fund and one or more other Client Accounts have available funds
for investment, investments
suitable and appropriate for each fund or account will be allocated
in accordance with a
methodology believed by the SUB-ADVISER to be equitable to
each entity. VALIC recognizes
that, in some cases, this procedure may adversely affect the price
paid or received by a
Covered Fund or limit the size of the position that may be acquired
or sold for a
Covered Fund. In addition, VALIC understands that the persons
employed by the SUB-ADVISER
to assist in the performance of the SUB-ADVISER's duties
hereunder will not devote their
full time to such services 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 or 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.
The SUB-ADVISER does not guarantee the future performance of
a Covered Fund or any specific
level of performance, the success of any investment decision or
strategy that the SUB-ADVISER
may use, or the success of the SUB-ADVISER's overall
management of the assets of a
Covered Fund. Each of VALIC and ▇▇ ▇▇ understand that each
investment decision made for a
Covered Fund by the SUB-ADVISER is subject to risk, including
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
a Covered Fund allocated to
its management by VALIC, including by making investment
decisions for the Covered Fund.
The SUB-ADVISER shall not be liable to any of VALIC, ▇▇ ▇▇,
the Funds, or any shareholder
in a Fund, and VALIC shall indemnify the SUB-ADVISER for
any act or omission, and against
any demand, claim, action, suit, or other proceeding, in connection
with rendering services
under this Agreement, or for any losses sustained in connection
with 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.
Nothing in this Agreement shall constitute a waiver or limitation of
any rights which VALIC
may have under federal and state securities laws.
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 each Covered Fund 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 seek to take prompt action so that the
relevant Covered Fund complies
with such Code diversification provisions, as directed by VALIC.
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 or sub- 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 with a
copy of such code of ethics.
(c) The SUB-ADVISER has provided VALIC with a copy of
its Form ADV and, after filing any
annual amendment 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 ▇▇ ▇▇ to
delegate some or all of its responsibilities to one or more sub-
advisers, and the delegation to the
SUB-ADVISER under this Agreement is authorized by and
consistent with the grant of authority in that
Investment Advisory Agreement.
6. Term of Agreement
This Agreement shall become effective as to each Covered Fund
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 each 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 the ▇▇ ▇▇ trustees 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 the ▇▇ ▇▇ Board of
Trustees or a majority of the
Covered Fund's outstanding voting securities.
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 ▇▇ ▇▇ as it relates to a Covered Fund.
VALIC agrees to give the SUB-ADVISER
prompt notice in the event of termination of the Investment
Advisory Agreement. This Agreement
may be terminated as to any Covered Fund at any time, without the
payment of any penalty, by vote of
▇▇ ▇▇ Board of Trustees or by vote of the holders of a majority of
the Covered Fund's outstanding
voting securities on not more than 60 days' nor less than 30 days'
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) without payment of any penalty on not
more than 60 days' nor less than
30 days' written notice to the SUB-ADVISER, or upon such
shorter notice as may be mutually agreed
upon by the parties; or (ii) if the SUB-ADVISER becomes unable
to discharge its duties and
obligations under this Agreement. The SUB-ADVISER, without
payment of any penalty, may terminate
this Agreement at any time or preclude its renewal on not more
than 60 days' or less than 30 days'
written notice to VALIC, or upon such shorter notice as may be
mutually agreed upon by the parties.
7. Other Matters
The SUB-ADVISER may from time to time employ or associate
with itself any person or persons
believed to be particularly fit to assist in the SUB-ADVISER's
performance of services under this
Agreement, provided that no such person serves or acts as an
investment adviser independent of the
SUB-ADVISER so as to require a new written contract pursuant to
the 1940 Act. The compensation of
any such person will be paid by the SUB-ADVISER, and no
obligation will be incurred by, or on
behalf of, VALIC or ▇▇ ▇▇ with respect to any such person.
The SUB-ADVISER agrees that all books and records which it
maintains for a Covered Fund are the
property of the Covered Fund. The SUB-ADVISER also agrees
upon request of VALIC or ▇▇ ▇▇, 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, or its or its parent
company's policies and procedures
relating to the retention of records. The SUB-ADVISER further
agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records relating
to a Covered Fund required to be
maintained by Rule 31a-1 under the 1940 Act.
VALIC has furnished the SUB-ADVISER copies of each Covered
Fund's prospectus and statement of
additional information, the Charter Documents, and any applicable
policies and procedures adopted
by the ▇▇ ▇▇ Board of Trustees, as currently in effect, and VALIC
also agrees, for so long as this
Agreement remains in effect, to furnish to the SUB-ADVISER
copies of any amendments or supplements
thereto, and any new policies and procedures, before or at the time
the amendments, supplements or
policies and procedures become effective. Until VALIC delivers
any amendments, supplements or
new policies and procedures to the SUB-ADVISER, the SUB-
ADVISER shall be fully protected in relying
on the documents previously furnished to it.
VALIC shall provide on an on-going basis a list of all publicly
traded affiliates of the VALIC and
each Covered Fund that may not be purchased by a Covered Fund
and a list of all brokers and
underwriters affiliated with VALIC or a Covered Fund and shall
provide the SUB-ADVISER with prompt
written notice of all changes to such list.
The SUB-ADVISER is authorized to honor, rely on and act on any
notice, instruction or confirmation
given by VALIC on behalf of a Covered Fund in writing signed or
sent by any of the persons whose
names, addresses and specimen signatures will be provided by
VALIC from time to time. The
SUB-ADVISER shall not be liable for so acting in good faith upon
such notice, instruction,
confirmation or authority, notwithstanding that it shall
subsequently be shown that the same was
not given or signed or sent by an authorized person.
VALIC agrees to submit for preapproval to the SUB-ADVISER at
its principal office prior to use
thereof, copies of all prospectuses, reports to shareholders, sales
literature, or other
material prepared for distribution to interest holders of the Funds
or the public that refer
in any way to the SUB-ADVISER. The SUB-ADVISER agrees to
review and respond in writing with
comments or approval within ten (10) business days (or such other
time as may be mutually agreed)
after receipt thereof, and if written approval or comments are not
received within such time period
then the use of such documents or materials shall be presumed
approved by the SUB-ADVISER. 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's name and/or logo as soon as
practicable. VALIC shall furnish or
otherwise make available to the SUB-ADVISER such other
information relating to the business affairs
of VALIC and ▇▇ ▇▇ as the SUB-ADVISER at any time, or from
time to time, may reasonably request
in order to discharge its obligations hereunder.
VALIC agrees to provide to the SUB-ADVISER in writing a list
of, and all relevant details relating
to, all custodial accounts containing assets being managed by the
SUB-ADVISER pursuant to this
Agreement and shall provide the SUB-ADVISER with prompt
written notice of all changes to such
list and related details.
VALIC agrees to provide the SUB-ADVISER with any further
documents, materials or information that
the SUB-ADVISER may reasonably request from time to time,
including such documents, materials or
information that the SUB-ADVISER deems necessary in order to
complete any annual due diligence of
VALIC, ▇▇ ▇▇ and each Covered Fund. VALIC shall also provide
the SUB-ADVISER with a copy of its
Form ADV Part II, and furnish to the SUB-ADVISER any annual
amendment to its Form ADV promptly
after filing such amendment with the SEC.
VALIC agrees that the SUB-ADVISER may use the name of
VALIC or ▇▇ ▇▇ in any material that merely
refers in accurate terms to the appointment of the SUB-ADVISER
hereunder.
In addition to the indemnification set forth in Section 4 of this
Agreement, VALIC agrees to
indemnify and hold harmless the SUB-ADVISER (and its
affiliated companies and their respective
officers, directors and employees) from any and all claims, losses,
liabilities or damages
(including reasonable attorneys' fees and other related expenses)
arising out of or in
connection with (i) any failure by VALIC to provide the services
or furnish materials
required under the terms of this Agreement, or (ii) 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 the Funds, except insofar as any such statement or omission was
made in reasonable
reliance on information provided in writing by the SUB-ADVISER
or its affiliates.
The SUB-ADVISER shall indemnify and hold harmless VALIC
(and its affiliated companies and
their respective officers, directors and employees) from any and all
claims, losses,
liabilities or damages (including reasonable attorneys' fees and
other related expenses)
arising out of or in connection with (1) any willful misfeasance,
bad faith, gross
negligence, or reckless disregard of obligations or duties of the
SUB-ADVISER in performing
hereunder; or (2) any untrue statement of material fact or any
omission to state a material
fact required to be stated or necessary to make statements, in light
of the circumstances
under which they are made, not misleading in any registration
statement, proxy materials,
advertisements or sales literature, pertaining to a Covered Fund to
the extent any such
statement or omission was made in reasonable reliance on
information provided in writing
by the SUB-ADVISER to VALIC for the express purpose of
inclusion in such materials.
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 the SUB-ADVISER (an
"Indemnified Party") under
this Section 7 of notice 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; but the omission
to notify the Indemnifying Party will not relieve the Indemnifying
Party from any liability
that it may have to the Indemnified Party otherwise than under this
section. In case any
such action is brought against any Indemnified Party, and the
Indemnified Party notified the
Indemnifying Party of the commencement thereof, the
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 receiving
notice from the 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 the
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.
A successor by law of the parties to this Agreement shall be
entitled to the benefits of the
indemnification contained herein. The indemnification provisions
contained herein shall
survive any termination or preclusion of renewal of this
Agreement.
8. Applicability of Federal Securities Laws
This Agreement shall be interpreted in accordance with the laws of
the State of Texas 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 SEC or such interpretive
positions as may be taken by the SEC or its staff. To the extent
that the applicable law
of the State of Texas, or any of the provisions herein, conflict with
applicable provisions
of the federal securities laws, the latter shall control.
9. Amendment and Waiver
Provisions of this Agreement may be amended, waived, discharged
or terminated only by an
instrument in writing signed by the party against which
enforcement of the change, waiver,
discharge or termination is sought. 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.
10. Force Majeure
Neither party to this Agreement shall be liable for damages
resulting from delayed or
defective performance when such delayed or defective
performance arise out of causes beyond
the control and without the fault or negligence of the offending
party and could not have
been reasonably prevented by the offending party through back-up
systems and other business
continuation and disaster recovery procedures commonly
employed by other SEC-registered
investment advisers that meet reasonable commercial standards in
the investment company
industry. Such causes may include, but are not restricted to, Acts of
God or of the public
enemy, terrorism, acts of the State in its sovereign capacity, fires,
floods, earthquakes,
power failure, disabling strikes, epidemics, quarantine restrictions
and freight embargoes.
11. 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:
If to the SUB-ADVISER:
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Attn: President
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇-▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
With a copy to:
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Attn: General Counsel
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇-▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
ATTEST: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
MASSACHUSETTS FINANCIAL
SERVICES COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
ATTEST: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
NAME: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
SCHEDULE A
(Effective June 20, 2012)
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
International Opportunities Fund 0.60%
on first $50 million;
0.55% on the next $50 million; and
0.50% on assets above $100 million.
