SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of April 1, 1998 by
and between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and XXXXXX XXXXXXX ASSET MANAGEMENT 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 September 17, 1996, as amended August 20,
1997 (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 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.
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
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"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 necessary to make the statements therein, in light of the
circumstance under which they were made 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 a portion of the
assets of each Portfolio, the selection of broker-dealers and futures
commission merchants', 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 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
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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 as agreed upon by the
Corporation or the Adviser and the Subadviser.
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.
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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 hereunder on the part of the Subadviser (and its officers,
directors, 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.
(b) The Adviser agrees to indemnify and hold harmless the
Subadviser and its affiliates and each of their directors and officers and
each persons, if any, who controls the Subadviser 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 Subadviser or its affiliates or such directors, officers or
controlling person may become subject under the 1933 Act, under an other
statute, at common law or otherwise, which may be based upon any breach of
this Agreement by the Adviser; provided, however, that in no case is the
Adviser's indemnity in favor of any persons deemed to protect such person
against any liability to which such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of his, here or its duties or by reasons of his, her or its
reckless disregard of obligations and duties under this Agreement.
(c) 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 (i) 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.
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(d) The Subadviser shall not be liable to the Adviser 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
or (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 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 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) with respect to the portion of
assets of a Portfolio allocated to 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 Subadviser.
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: Xxxxxx Xxxxxxx Asset Management Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Xx.
General Counsel
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: /s/Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: President
XXXXXX XXXXXXX ASSET MANAGEMENT INC.
By: /s/Xxxxxx X. Xxxxxx, Xx.
------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: General Counsel
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