SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of
October 24, 2014 by and between SUNAMERICA ASSET
MANAGEMENT, LLC, a Delaware limited liability company
(the "Adviser"), and MASSACHUSETTS FINANCIAL
SERVICES COMPANY, a Delaware corporation (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, as amended from time to time (the "Advisory
Agreement"), pursuant to which the Adviser has agreed to provide
investment management, advisory and administrative services to
the Trust, and pursuant to it which the Adviser may delegate one or
more of its duties to a subadviser pursuant to a written subadvisory
agreement; 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 (the "Advisers Act"); and
WHEREAS, the Adviser desires to retain the Subadviser to
furnish investment advisory services to the investment portfolio(s)
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.
The Subadviser will determine, in its discretion and subject to the
oversight and review of the Adviser, the securities and other
investments 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, as agent and
attorney-in-fact of the Trust, may, when it deems appropriate and
without prior consultation with the Adviser, (a) buy, sell,
exchange, convert and otherwise trade in any stocks, bonds and
other securities including money market instruments, whether the
issuer is organized in the United States or outside the United
States, (b) place orders for the execution of such securities
transactions with or through such brokers, dealers or issuers as the
Subadviser may select and (c) purchase, sell, exchange or convert
foreign currency in the spot or forward markets as necessary to
facilitate transactions in international securities for the Portfolio(s).
In addition, the custodian shall provide the Subadviser with daily
reports regarding the cash levels in the Portfolio. 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, subject to the last paragraph of this Section, in
compliance with (a) the objectives, policies, restrictions and
limitations for the Portfolio(s) as set forth in the Trust's current
prospectus and statement of additional information; and (b)
applicable laws and regulations. The Subadviser shall manage the
portion of the assets of a Portfolio allocated to it as if it was a
separate operating portfolio and the provisions, representations and
warranties of this Section 1 of the Subadvisory Agreement shall
apply only the portion of assets of a Portfolio managed by the
Subadviser.
Subject to the last paragraph of this Section, the
Subadviser represents and warrants to the Adviser that each
Portfolio will at all times be operated and managed in compliance
with all applicable federal and state laws, including securities,
commodities and banking laws, governing its operations and
investments; (b) so as not to jeopardize either the treatment of the
variable annuity contracts which offer the Portfolio(s) (the
"Contracts") as annuity contracts for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"). Without limiting
the foregoing, the Subadviser represents and warrants that it will
manage each Portfolio in compliance with (a) the applicable
provisions of Subchapter M, chapter 1 of the Code ("Subchapter
M") for each Portfolio to be treated as a "regulated investment
company" under Subchapter M; (b) the diversification
requirements specified in the Internal Revenue Service's
regulations under Section 817(h) of the Code; (c) the provisions of
the Act and rules adopted thereunder as applicable to the services
provided by the Subadviser under this Agreement; (d) applicable
state insurance laws as provided in writing by the Adviser to the
Subadviser; (e) the objectives, policies, restrictions and limitations
for the Portfolio(s) as set forth in the Trust's current prospectus and
statement of additional information (the "Prospectus") as most
recently provided by the Adviser to the Subadviser; and (f) the
policies and procedures as adopted by the Trustees of the Trust
applicable to the services provided by the Subadviser hereunder.
The Subadviser shall furnish information to the Adviser, as
requested, for purposes of compliance with the distribution
requirements necessary to avoid payment of any excise tax
pursuant to Section 4982 of the Code.
(b) The Subadviser agrees: (a) to maintain a level of
errors and omissions or professional liability insurance coverage
that, at all times during the course of this Agreement, is
appropriate given the nature of its business, and (b) from time to
time and upon reasonable request, to supply evidence of such
coverage to the Adviser.
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 also represents and warrants that in
furnishing services hereunder, the Subadviser will not consult with
any other subadviser of the Portfolios or other series of the Trust,
to the extent any other subadvisers are engaged by the Adviser, or
any other subadvisers to other investments companies that are
under common control with the Trust, concerning transactions of
the Portfolios 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 Act.
The Adviser acknowledges that the Subadviser is
not the compliance agent for any Portfolio or for the Trust or the
Adviser, and does not have access to all of a Portfolio's books and
records necessary to perform certain compliance testing. To the
extent the Subadviser has agreed to perform the services specified
in this Section in accordance with the Trust's Prospectus, any
policies and procedures adopted by the Trust's Board of Trustees
applicable to the Portfolios, and applicable law (including Sub-
chapters L and M of the Code, the Act and the Advisers Act, the
Subadviser shall perform such services based upon its books and
records with respect to a Portfolio, which comprise a portion of a
Portfolio's books and records, and upon information and written
instructions received from the Adviser or the Trust's administrator.
2. Portfolio Transactions. (a) The Subadviser is
responsible for decisions to buy or sell securities and other
investments for 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
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.
(b) Notwithstanding Section 2(a) above, for such
purposes as obtaining investment research products and services,
covering fees and expenses, the Adviser may direct the Subadviser
to effect a specific percentage of a Portfolio's transactions in
securities and other investments to certain broker-dealers and
futures commission merchants. In designating the use of a
particular broker-dealer or futures commission merchant, the
Adviser and Subadviser acknowledge:
(1) All brokerage transactions are subject to best
execution. As such, Subadviser will use its
best efforts to direct non-risk commission
transactions to a particular broker-dealer or
futures commission merchant designated by
the Adviser provided that the Subadviser
obtains best execution;
(2) Such direction may result in the Subadviser
paying a higher commission, depending
upon the Subadviser's arrangements with the
particular broker-dealer or futures
commission merchant, or such other factors
as market conditions, share values,
capabilities of the particular broker-dealer or
futures commission merchant, etc.;
(3) If the Subadviser directs payments of an
excessive amount of commissions, the
executions may not be accomplished as
rapidly. In addition, the Subadviser may
forfeit the possible advantage derived from
the aggregation of multiple orders as a
single "bunched" transaction where
Subadviser would, in some instances, be in a
better position to negotiate commissions;
and
(4) Subadviser does not make commitments to
allocate fixed or definite amounts of
commissions to brokers. As such the
Subadviser may be unable to fulfill the
Adviser's request for direction due to the
reasons stated above.
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 to the Subadviser
a fee at the annual rates set forth in Schedule A hereto with respect
to the assets managed by the Subadviser for 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 mean the average daily net assets for which the Subadviser
actually provides advisory services, and 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. 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.
5. 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.
6. Advertising. Subadviser shall not provide or in any
way distribute any sales or advertising materials that reference the
Trust or any series thereof, the Adviser, AIG Capital Services, Inc.
or any of their respective officers, directors, employees or
affiliates, unless such material has been received and approved, in
writing, by the Adviser, which consent shall not be unreasonably
withheld.
7. Proxy Voting. The Adviser will vote proxies
relating to the Portfolio's securities. The Adviser will vote all such
proxies in accordance with such proxy voting guidelines and
procedures adopted by the Board of Trustees. The Adviser may,
on certain non-routine matters, consult with the Subadviser before
voting proxies relating to the Portfolio's securities. The Adviser
will instruct the custodian and other parties providing services to
the Trust promptly to forward to the proxy voting service copies of
all proxies and shareholder communications relating to securities
held by each Portfolio (other than materials relating to legal
proceedings).
8. Certain Records. The Subadviser hereby
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) in connection with the provision of
services hereunder 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 shall be surrendered
promptly to the Trust or the Adviser on request; provided that the
Subadviser may retain copies of these records.
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.
9. Reference to the Subadviser. Neither the 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 approval of
the Subadviser, which approval shall not be unreasonably
withheld.
10. Liability of the Subadviser. (a) In the 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/trustees,
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 Adviser (and its officers,
directors/trustees, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the
Adviser) or to the Trust (and its officers, directors/trustees, agents,
employees, controlling persons, shareholders and any other person
or entity affiliated with 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) from any
and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) arising from Subadviser's
rendering of services under this Agreement.
(b) The Subadviser agrees to indemnify and
hold harmless the Adviser (and its officers, directors/trustees,
agents, employees, controlling persons, shareholders and any other
person or entity affiliated with the Adviser) and/or the Trust (and
its officers, directors/trustees, agents, employees, controlling
persons, shareholders and any other person or entity affiliated with
the Trust) against any and all losses, claims, damages, liabilities or
litigation (including reasonable legal and other expenses), to which
the Adviser and/or the Trust and their affiliates or such
directors/trustees, officers or controlling person may become
subject under the Act, the 1933 Act, under other statutes, common
law or otherwise, which arise from the Subadviser's disabling
conduct, including but not limited to any material failure by the
Subadviser to comply with the provisions and representations and
warranties 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 obligations and duties under this Agreement.
11. Permissible Interests. Trustees and agents of the
Trust are or may be interested in the Subadviser (or any successor
thereof) as directors/trustees, partners, officers, or shareholders, or
otherwise; directors/trustees, 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.
12. 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 90 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' written notice,
whichever is earlier. In the event of such a termination, the Adviser
shall use its best efforts, and cause the Trust to use its best efforts,
to engage another subadviser for the Portfolio as soon as possible.
Notwithstanding the foregoing, the Subadviser may terminate the
Agreement on 60 days' written notice to the Adviser and the Trust
in the event of the breach of this Agreement by the Adviser. 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.
13. 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.
14. 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.
15. 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.
16. 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," as defined in
the Declaration, only shall be liable.
17. 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.
18. 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 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 as may otherwise be
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.
To the extent the Adviser is permitted under applicable law,
it shall keep all advice and information received from the
Subadviser in the course of the Subadviser's retention under this
Agreement confidential and shall not disclose such information to
third parties.
19. Counterparts. This Amendment may be
executed in two or more counterparts, each of which shall be an
original and all of which together shall constitute one instrument.
20. 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: Massachusetts Financial Services
Company
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Adviser: SunAmerica Asset Management,
LLC.
Harborside Financial Center
0000 Xxxxx 0
Xxxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
Senior Vice President
and
General Counsel
with a copy to: AIG Retirement Services, Inc.
0 XxxXxxxxxx Xxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
General Counsel
[Reminder of the Page Intentionally Left Blank]
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, LLC
By: /s/ XXXXX X.
XXXXXXX
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
MASSACHUSETTS
FINANCIAL SERVICES
COMPANY
By: /s/ XXXXXX X.
XXXXXXX
Name: Xxxxxx X. Xxxxxxx
Title: Chairman and Chief
Executive Officer
Schedule A
Portfolio(s)
Annual Fee
(as a percentage of the average
daily net assets the Subadviser
manages in the portfolio)
Mid Cap Value Portfolio
0.45% first $250 million
0.425% next $250 million
0.40% over $500 million
