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
LAZARD ASSET MANAGEMENT A DIVISION OF LAZARD FRERES & CO. LLC (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. (a) The Adviser hereby engages the services of
the Subadviser in furtherance of its Advisory 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 of 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 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,
and (b) applicable laws and regulations.
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The Subadviser represents and warrants to the Adviser that the portion of
the assets which it manages of the Portfolio set forth in Schedule A 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, the Subadviser represents and warrants (1) qualification, election
and maintenance of such election 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; (b) applicable federal and state
securities, commodities and banking laws; and (c) the distribution requirements
necessary to avoid payment of any excise tax pursuant to Section 4982 of the
Code. The Subadviser further represents and warrants that to the extent that any
statements or omissions made in any Registration Statement for shares of the
Corporation, or any amendment or supplement thereto, are made in reliance upon
and in conformity with information furnished by the Subadviser expressly for use
therein, such Registration Statement and any amendments or supplements thereto
will, when they become effective, conform in all material respects to the
requirements of the Securities Act of 1933 and the rules and regulations of the
Commission thereunder (the "1933 Act") and the Act and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.
The Subadviser accepts such employment and agrees, at its own expense, to
render the services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such services on
the terms and for the compensation provided in this Agreement.
(b) The Subadviser agrees to maintain a level of errors and omissions
or professional liability insurance coverage that is from time to time
satisfactory to the Adviser.
2. Portfolio Transactions. The Subadviser 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 Subadviser may employ
or deal with such broker-dealers or futures commission merchants as may, in the
Subadviser's best judgment, provide prompt and reliable execution of the
transactions at favorable prices and reasonable commission rates. In selecting
such broker-dealers or futures commission merchants, the Subadviser shall
consider all relevant factors including price (including the applicable
brokerage commission, dealer spread or futures commission merchant rate), the
size of the order, the nature of the market for the security or other
investment, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer or futures commission merchant
involved, the quality of the service, the difficulty of execution, the execution
capabilities and operational facilities of the firm involved, and, in the case
of securities, the 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
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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.
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 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
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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 the 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 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
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 liability arising from the Subadviser's conduct under this Agreement.
(b) The Subadviser agrees to indemnify and hold harmless the Adviser
and its affiliates and each of its directors and officers and each person,
if any, who controls the Adviser within the meaning of Section 15 of the
1933 Act against any and all losses, claims, damages, liabilities or
litigation (including 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 (i) any wrongful act or breach of this
Agreement by the Subadviser, or (ii) any failure by the Subadviser to
comply with the 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 obligation and duties under this Agreement.
(c) The Subadviser shall not be liable to the Adviser for (i) any acts
of the
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Adviser or any other subadviser to the Portfolio with respect to the
portion of the assets of a Portfolio not managed by the Subadviser and (ii)
acts of the Subadviser which result from 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 the Adviser
or any other subadviser to a Portfolio, which records are not also
maintained by or otherwise available to the Subadviser upon reasonable
request. The Adviser agrees that the 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 1 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) with respect to the portion of assets of a Portfolio allocated to the
Subadviser. The Adviser shall indemnify the Indemnified Parties from any
liability arising from the conduct of the Adviser and any other subadviser
with respect to the portion of a Portfolio's assets not allocated to the
Subadviser. Nothing stated herein shall be deemed to waive any rights the
Adviser or the Corporation may have against the Subadviser under federal or
state securities laws.
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; provided, however, that this Agreement may not be
terminated by the Subadviser unless another subadvisory agreement has been
approved by the Corporation in accordance with the Act, or after six months'
written notice, whichever is earlier. 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.
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12. Severability. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
13. Amendments. This Agreement may be amended by mutual consent in writing,
but the consent of the Corporation must be obtained in conformity with the
requirements of the Act.
14. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York and the applicable provisions of the Act. To the
extent the applicable laws of the State of New York, or any of the provisions
herein, conflict with the applicable provisions of the Act, the latter shall
control.
15. 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.
16. 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: Lazard Asset Management
a division of Lazard Freres & Co. LLC
00 Xxxxxxxxxxx Xxxxx - 00xx xxxxx
Xxx Xxxx, XX 00000
Attn:
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
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
LAZARD ASSET MANAGEMENT,
A DIVISION OF LAZARD FRERES & CO. LLC
By: _____________________________________
Name:
Title:
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