SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of January 1, 1999, by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
WARBURG, XXXXXX COUNSELLORS, INC., a Delaware corporation (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Style Select Series, Inc., a Maryland corporation
(the "Corporation"), 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 Corporation; and
WHEREAS, the Corporation 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 common stock, par value $.0001 per share, in separately
designated series 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 series of the Corporation listed on Schedule
A attached hereto (the "Portfolio"), 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 Corporation. Pursuant to this Subadvisory Agreement and subject to the
oversight and review of the Adviser, the Subadviser will manage the investment
and reinvestment of a portion 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 Corporation is required to maintain, and will render regular
reports to the Adviser and to officers and Directors of the Corporation
concerning its discharge of the foregoing responsibilities. The Subadviser shall
discharge the foregoing responsibilities subject to the control of the officers
and the Directors of the Corporation and in compliance with such policies as the
Directors of the Corporation may from time to time establish and communicate to
Subadviser, and in compliance with (a) the objectives, policies, and limitations
for the Portfolio set forth in the Corporation's current prospectus and
statement of additional information as provided to Subadviser, and (b)
applicable laws and regulations.
The Subadviser represents and warrants to the Adviser that the portion of
each Portfolio set forth in Schedule A managed by it will at all times be
operated and managed in compliance with all applicable federal and state laws
governing its operations and investments. Without limiting the foregoing and
subject to Section 9(c) hereof, the Subadviser represents and warrants (1) that
the management of the assets of a Portfolio managed by it will be designed to
achieve qualification by each Portfolio to be treated as a "regulated investment
company" under subchapter M, chapter 1 of the Internal Revenue Code of 1986, as
amended (the "Code"), and (2) compliance with (a) the provisions of the Act and
rules adopted thereunder that relate to the investment of Portfolio assets,
including depositing those assets in custody with institutions designated by the
Corporation; and (b) applicable federal and state securities and commodities
laws (other than state securities laws relating to the amount of Portfolio
shares that may be sold in a particular state); provided that for purposes of
Section 17(a), (d) and (e), Subadviser shall effect compliance only in relation
to affiliated persons identified to it by the Adviser and its own affiliates.
The Subadviser further represents and warrants that only with respect to any
statements or omissions made in any Registration Statement for shares of the
Corporation, or any amendment or supplement thereto, made in reliance upon and
in conformity with information furnished by the Subadviser expressly for use
therein, such Registration Statement and any amendments or supplements thereto
will, when they become effective, conform in all material respects to the
requirements of the Securities Act of 1933 and the rules and regulations of the
Commission thereunder (the "1933 Act") and the Act and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
The Subadviser accepts such employment and agrees, at its own expense, to
render the services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such services on
the terms and for the compensation provided in this Agreement.
2. Portfolio Transactions. The Subadviser is responsible for decisions to
buy or sell securities and other investments for 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
-2-
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 Directors
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 Corporation 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 Directors of the
Corporation 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 Corporation 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
portion of 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).
If the Subadviser shall provide its services under this Agreement for less than
the whole of any month, the foregoing compensation shall be prorated.
-3-
4. Other Services. At the request of the Corporation or the Adviser, the
Subadviser in its discretion may make available to the Corporation, 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 Corporation or the Adviser at the Subadviser's
cost.
5. Reports. The Corporation, 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 Corporation as each may reasonably request.
6. Status of the Subadviser. The services of the Subadviser to the Adviser
and the Corporation 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
Corporation 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 Corporation in any way
or otherwise be deemed an agent of the Corporation.
7. 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 that are required to be
maintained by the Corporation 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 Corporation are the
property of the Corporation and will be surrendered promptly to the Corporation
or the Adviser on request.
The Subadviser agrees that all accounts, books and other records maintained
and preserved by it as required hereby shall be subject at any time, and from
time to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Corporation's auditors, the Corporation
or any representative of the Corporation, the Adviser, or any governmental
agency or other instrumentality having regulatory authority over the
Corporation.
8. Reference to the Subadviser. Neither the Corporation 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.
9. 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, agents, employees, controlling persons, shareholders and any other
person or entity affiliated with the Subadviser) the Subadviser shall not
-4-
be subject to liability to the Adviser, its officers, directors, agents,
employees, controlling persons or shareholders or to the Corporation or to any
shareholder of the Corporation for any act or omission in the course of, or
connected with, rendering services hereunder, including without limitation, any
error of judgment or mistake of law or for any loss suffered by any of them in
connection with the matters to which this Agreement relates, except to the
extent specified in Section 36(b) of the Act concerning loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services. Except for such disabling conduct, the Adviser shall indemnify the
Subadviser (and its officers, directors, partners, agents, employees,
controlling persons, shareholders and any other person or entity affiliated with
the Subadviser) (collectively, the "Indemnified Parties") from any and all
losses, claims, damages, liabilities or litigation (including reasonable legal
and other expenses) arising from the Subadviser's providing services 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 person
may become subject under the 1933 Act, under other statutes, at common law
or otherwise, which may be based upon breach of this Agreement by the
Subadviser; provided, however, that in no case is the Subadviser's
indemnity in favor of any person deemed to protect such other persons
against any liability to which such person would otherwise be subject by
reasons of willful misfeasance, bad faith, or gross negligence in the
performance of his, her or its duties or by reason of his, her or its
reckless disregard of obligation and duties under this Agreement.
(c) The Subadviser shall not be liable to the Adviser its officers,
directors, agents, employees, controlling persons or shareholders or to the
Corporation or its shareholders for (i) any acts of the Adviser or any
other subadviser to the Portfolio with respect to the portion of the assets
of a Portfolio not managed by Subadviser and (ii) acts of the Subadviser
which result from or are based upon acts of the Adviser, including, but not
limited to, a failure of the Adviser to provide accurate and current
information with respect to any records maintained by Adviser or any other
subadviser to a Portfolio, which records are not also maintained by the
Subadviser or, to the extent such records relate to the portion of the
assets managed by the Subadviser, otherwise available to the Subadviser
upon reasonable request. The Adviser agrees that Subadviser shall manage
the portion of the assets of a Portfolio allocated to it as if it was a
separate operating portfolio and shall comply with subsections (a) and (b)
of Section I of this Subadvisory Agreement (including, but not limited to,
the investment objectives, policies and restrictions applicable to a
Portfolio and qualifications of a Portfolio as a regulated investment
company under the Code) only with respect to the portion of assets of a
Portfolio allocated to Subadviser. The Adviser shall indemnify the
Indemnified Parties from any and all losses, claims, damages, liabilities
or litigation (including reasonable legal and other expenses) arising from
the conduct of the Adviser, the Corporation and
-5-
any other subadviser with respect to the portion of a Portfolio's assets
not allocated to Subadviser and with respect to any other portfolio of the
Corporation.
10. Permissible Interests. Directors and agents of the Corporation 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 Corporation as Directors, or otherwise; and the Subadviser (or any
successor) is or may be interested in the Corporation 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 Directors of
the Corporation 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 Directors of the Corporation or by vote of a
majority of the outstanding voting securities of the Portfolio voting separately
from any other series of the Corporation.
With respect to each Portfolio, this Agreement may be terminated at any
time, without payment of a penalty by the Portfolio or the Corporation, by vote
of a majority of the Directors, 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 Corporation, 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 Corporation. 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 Corporation and the Adviser is terminated.
12. Severability. This Agreement constitutes the entire Agreement between
the parties hereto. 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. Survival. Section 9 and the right to receive amounts due under Section
3 shall survive termination of this Agreement.
14. Amendments. This Agreement may be amended by mutual consent in writing,
but the consent of the Corporation must be obtained in conformity with the
requirements of the Act.
-6-
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. Separate Series. Pursuant to the provisions of the Articles of
Incorporation and the General Laws of the State of Maryland, each Portfolio is a
separate series of the Corporation, 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
Corporation as a whole.
17. 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: Warburg, Xxxxxx Counsellors, Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxx
with a copy to:
Adviser: SunAmerica Asset Management Corp.
The SunAmerica Center
000 Xxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxx
Senior Vice President and
General Counsel
-7-
IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Agreement as of the date first above
written.
SUNAMERICA ASSET MANAGEMENT CORP.
By:
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
WARBURG, XXXXXX COUNSELLORS, INC.
By:
--------------------------------
Name:
Title:
-8-
