STYLE SELECT SERIES, INC.
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of
September 17, 1996, as amended on August 20, 1997, by and between Style
Select Series, Inc., a Maryland corporation (the "Corporation"), and
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser").
W I T N E S S E T H:
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 Portfolio representing separate funds
with their own investment objectives, policies and purposes (each, a
"Fund" and collectively, the "Funds"); and
WHEREAS, the Adviser is engaged in the business of rendering
investment management, advisory and administrative services and is
registered as an investment adviser under the Investment Advisers Act of
1940; and
WHEREAS, the Corporation desires to retain the Adviser to
furnish investment management, advisory and administrative services to
the Corporation and the Funds and the Adviser is willing to furnish such
services;
NOW, THEREFORE, it is hereby agreed between the parties hereto
as follows:
1. Duties of the Adviser. The Adviser shall manage the affairs
of the Funds including, but not limited to, continuously providing the
Funds with investment management, including investment research, advice
and supervision, determining which securities shall be purchased or sold
by the Funds, making purchases and sales of securities on behalf of the
Funds and determining how voting and other rights with respect to
securities owned by the Funds shall be exercised, subject in each case to
the control of the Board of Directors of the Corporation (the
"Directors") and in accordance with the objectives, policies and
principles set forth in Corporation's Registration Statement and the
Funds' current Prospectus and Statement of Additional Information, as
amended from time to time, the requirements of the Act and other
applicable law. In performing such duties, the Adviser (i) shall provide
such office space, such bookkeeping, accounting, clerical, secretarial
and administrative services (exclusive of, and in addition to, any such
service provided by any others retained by the Funds or Corporation on
behalf of the Funds) and such executive and other personnel as shall be
necessary for the operations of the Funds, (ii) shall be responsible for
the financial and accounting records required to be maintained by the
Funds (including those maintained by Corporation's custodian) and (iii)
shall oversee the performance of services provided to the Funds by
others, including the custodian, transfer and shareholder servicing
agent. The Corporation understands that the Adviser also acts as the
manager of other investment companies.
Subject to Section 36 of the Act, the Adviser shall not be
liable to the Funds or Corporation for any error of judgment or mistake
of law or for any loss arising out of any investment or for any act or
omission in the management of the Funds and the performance of its duties
under this Agreement except for willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of reckless
disregard of its obligations and duties under this Agreement.
2. Retention by Adviser of Sub-Advisers, etc. In carrying out
its responsibilities hereunder, the Adviser may employ, retain or
otherwise avail itself of the services of other persons or entities
including, without limitation, affiliates of the Adviser, on such terms
as the Adviser shall determine to be necessary, desirable or appropriate.
Without limiting the generality of the foregoing, and subject to the
requirements of Section 15 of the Act, the Adviser may retain one or more
sub-advisers to manage all or a portion of the investment portfolio of a
Fund, at the Adviser's own cost and expense. Retention of one or more
sub-advisers, or the employment or retention of other persons or entities
to perform services, shall in no way reduce the responsibilities or
obligations of the Adviser under this Agreement and the Adviser shall be
responsible for all acts and omissions of such sub-advisers, or other
persons or entities, in connection with the performance of the Adviser's
duties hereunder.
3. Expenses. The Adviser shall pay all of its expenses arising
from the performance of its obligations under Section 1 and shall pay any
salaries, fees and expenses of the Corporation's Directors and Officers
who are employees of the Adviser. The Adviser shall not be required to
pay any other expenses of the Funds, including, but not limited to,
direct charges relating to the purchase and sale of portfolio securities,
interest charges, fees and expenses of independent attorneys and
auditors, taxes and governmental fees, cost of share certificates and any
other expenses (including clerical expenses) of issue, sale, repurchase
or redemption of shares, expenses of registering and qualifying shares
for sale, expenses of printing and distributing reports, notices and
proxy materials to shareholders, expenses of data processing and related
services, shareholder recordkeeping and shareholder account service,
expenses of printing and filing reports and other documents filed with
governmental agencies, expenses of printing and distributing
prospectuses, expenses of annual and special shareholders meetings, fees
and disbursements of transfer agents and custodians, expenses of
disbursing dividends and distributions, fees and expenses of Directors
who are not employees of the Adviser or its affiliates, membership dues
in the Investment Company Institute, insurance premiums and extraordinary
expenses such as litigation expenses.
4. Compensation of the Adviser. (a) As full compensation for the
services rendered, facilities furnished and expenses paid by the Adviser
under this Agreement, the Corporation agrees to pay to the Adviser a fee
at the annual rates set forth in Schedule A hereto with respect to each
Fund indicated 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 is applied to each prior days' net assets
in order to calculate the daily accrual). For purposes of calculating the
Adviser's fee with respect to any Fund, the average daily net asset value
of a Fund shall be determined by taking an average of all determinations
of such net asset value during the month. If the Adviser shall serve for
less than the whole of any month the foregoing compensation shall be
prorated.
(b) Upon any termination of this Agreement on a day
other than the last day of the month, the fee for the period from the
beginning of the month in which termination occurs to the
-2-
date of termination shall be prorated according to the proportion which
such period bears to the full month.
5. Portfolio Transactions. The Adviser is responsible for
decisions to buy or sell securities and other investments for a portion
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 Adviser may employ or deal with such broker-dealers or
futures commission merchants as may, in the Adviser'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 Adviser 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 Directors may determine and consistent
with Section 28(e) of the Securities Exchange Act of 1934, as amended
(the "1934 Act"), the 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 the Adviser'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 Adviser 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 Adviser's overall responsibilities with respect to such Portfolio and
to other clients as to which the Adviser 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 Adviser
may engage 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 Adviser will promptly communicate 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 Adviser may aggregate purchase or
sell orders for the Portfolio with contemporaneous purchase or sell
orders of other clients of the Adviser 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 Adviser in the
manner the Adviser 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.
6. Term of Agreement. This agreement shall continue in full
force and effect for two years from the date hereof, and shall continue
in full force and effect from year to year thereafter if such continuance
is approved in the manner required by the Act and the Adviser has not
notified the Corporation in writing at least 60 days prior to the
anniversary date of the previous continuance that it does not desire such
continuance. With respect to each Fund, this Agreement may be terminated
at any time, without payment of penalty by the Fund or the Corporation,
on 60
-3-
days written notice to the Adviser, by vote of the Directors, or by vote
of a majority of the outstanding voting securities (as defined by the
Act) of the Fund, voting separately from any other Portfolio of the
Corporation. The termination of this Agreement with respect to any Fund
or the addition of any Fund 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 Fund subject hereto. This Agreement
shall automatically terminate in the event of its assignment (as defined
by the Act).
The Corporation hereby agrees that if (i) the Adviser
ceases to act as investment manager and adviser to the Corporation and
(ii) the continued use of the Corporation's present name would create
confusion in the context of the Adviser's business, then the Corporation
will use its best efforts to change its name in order to delete the word
"SunAmerica" from its name.
7. Liability of the Adviser. 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
Adviser (and its officers, directors, agents, employees, controlling
persons, shareholders and any other person or entity affiliated with the
Adviser) the Adviser shall not be subject to liability 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 Corporation shall indemnify the Adviser (and its
officers, directors, partners, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Adviser)
(collectively, the "Indemnified Parties") from any liability arising from
the Adviser's conduct under this Agreement.
Indemnification to the Adviser or any of its personnel or
affiliates shall be made when (i) a final decision on the merits
rendered, by a court or other body before whom the proceeding was
brought, that the person to be indemnified was not liable by reason of
disabling conduct or, (ii) in the absence of such a decision, a
reasonable determination, based upon a review of the facts, that the
person to be indemnified was not liable by reason of disabling conduct,
by (a) the vote of a majority of a quorum of the Directors who are
neither "interested persons" of the Corporation as defined in section
2(a)(19) of the Act nor parties to the proceeding ("disinterested,
non-party Directors") or (b) an independent legal counsel in a written
opinion. The Corporation may, by vote of a majority of the disinterested,
non-party Directors advance attorneys' fees or other expenses incurred by
an Indemnified Party in defending a proceeding upon the undertaking by or
on behalf of the Indemnified Party to repay the advance unless it is
ultimately determined that he is entitled to indemnification. Such
advance shall be subject to at least one of the following: (1) the person
to be indemnified shall provide a security for his undertaking, (2) the
Corporation shall be insured against losses arising by reason of any
lawful advances, or (3) a majority of a quorum of the disinterested,
non-party Directors or an independent legal counsel in a written opinion,
shall determine, based on a review of readily available facts, that there
is reason to believe that the person to be indemnified ultimately will be
found entitled to indemnification.
8. Non-Exclusivity. Nothing in this Agreement shall limit or
restrict the right of any director, officer or employee of the Adviser
who may also be a Director, officer or employee of the Corporation to
engage in any other business or devote his or her time and attention in
part to the
-4-
management or other aspects of any business, whether of a similar or
dissimilar nature, nor limit or restrict the right of the Adviser to
engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
9. 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.
10. 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 apply.
11. Separate Portfolio. Pursuant to the provisions of the
Declaration, each Fund is a separate Portfolio of the Corporation, and
all debts, liabilities, obligations and expenses of a particular Fund
shall be enforceable only against the assets of that Fund and not against
the assets of any other Fund or of the Corporation as a whole.
IN WITNESS WHEREOF, the Corporation and the Adviser have caused
this Agreement to be executed by their duly authorized officers as of the
date first above written.
STYLE SELECT SERIES, INC.
By: /s/ Xxxxx X. Xxxxxxx
------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
SUNAMERICA ASSET MANAGEMENT CORP.
By: /s/ Xxxxxx X. Xxxxx
------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
- 5 -
