SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of August 20, 1997 by
and between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and XXXXXX ASSOCIATES, 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 "Series"), 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 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 Series 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 such
regular reports to the Adviser and to officers and Directors of the Corporation
as they may reasonably request concerning the Subadviser's 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.
The Subadviser represents and warrants to the Adviser that
the portion of the assets which it manages of the Series set forth in Schedule
A will at all times be managed in compliance with (a) the objectives, policies,
and limitations for the applicable Series set forth in the Corporation's
current prospectus and statement of additional information, (b) such policies
as the Directors of the Corporation may from time to time establish and which
have
been furnished to the Subadviser in writing, (c) the provisions of the Internal
Revenue Code of 1986, as amended (the "Code") applicable to "regulated
investment companies" (as defined in Section 851 of the Code), all as from time
to time in effect, and (d) all applicable federal and state laws governing such
Series' operations and investments, including, without limitation, the
provisions of the Act and rules adopted thereunder and applicable federal and
state securities, tax and banking laws. For purposes of compliance with the
foregoing, the Subadviser shall be entitled to treat each such portion of the
assets of each such Series set forth in Schedule A managed by the Subadviser as
though such portion of the assets constituted the entire Series, and the
Subadviser shall not be responsible in any way for the compliance of any assets
of the Series, other than such portion of the assets of such Series managed by
the Subadviser, with any of the foregoing or for the compliance of the Series,
taken as a whole, with any of the foregoing. 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 in writing by the Subadviser expressly for use therein,
such parts of such Registration Statement and any amendments or supplements
thereto consisting of such statements or omissions will, when they become
effective, conform in all material respects to the requirements of the
Securities Act of 1933 and the rules and regulation thereunder (the "1933 Act")
and the Act and will not contain any untrue statement of a material fact or
fail 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.
Except for expenses specifically assumed or agreed to be paid by the Subadviser
pursuant hereto, the Subadviser shall not be liable for any organizational,
operational or business expenses of the Adviser or the Corporation, including
without limitation, brokerage commissions and other costs in connection with
the purchase or sale of securities or other investment instruments with respect
to the Series.
2. Series Transactions. The Subadviser is responsible for decisions to
buy or sell securities and other investments for that portion of the assets of
each Series set forth on Schedule A managed by the Subadviser, broker-dealers
and futures commission merchants' selection, and negotiation of brokerage
commission and futures commission merchants' rates. As a general matter, in
executing Series 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 which have been furnished in writing to the
Subadviser, 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 Series 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 Series 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 Series transactions in securities and other
investments for a Series. The Subadviser will promptly communicate to the
Adviser and to the officers and the Directors of the Corporation such
information relating to transactions for that portion of the assets of the
Series set forth on Schedule A managed by the Subadviser as they may reasonably
request. To the extent consistent with applicable law, the Subadviser may
aggregate purchase or sell orders for the Series 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 at a price
and in the manner the Subadviser determines to be equitable and consistent with
its and its affiliates' fiduciary obligations to the Series 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 to
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 Series
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 Series 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. 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 to 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; provided, however, that the Subadviser shall not be
obligated to follow any amendment to any of the foregoing documents or
information relating to the Adviser or the Corporation until the Subadviser has
received such amendments in writing from the Adviser or Corporation.
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. Notwithstanding
anything herein to the contrary, the Subadviser may delegate any or all of its
investment advisory services, duties and responsibilities under this Agreement
to Perkins, Wolf, XxXxxxxxx & Company. No delegation pursuant to this provision
shall relieve the Subadviser of its duties or responsibilities hereunder, and
the Subadviser shall appropriately oversee, monitor and evaluate the activities
of any party appointed hereunder.
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 for that portion of the assets of each
Series set forth on Schedule A managed by the Subadviser 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 Adviser, the Corporation, any such
Series, or any shareholder of the Corporation or any such Series 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 and hold harmless 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 and against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and
other expenses) 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 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) such Disabling Conduct or any material
breach of this Agreement by the Subadviser, or (ii) any willful and material
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 or apply to
such person 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 such person's obligations and duties under this
Agreement.
(c) The Subadviser shall not be liable to the Adviser, the
Corporation or any such Series for (i) any acts or omissions of the Adviser,
the Corporation, the Series Administrator, or any other subadviser to the
Series with respect to the portion of the assets of a Series not managed by the
Subadviser and (ii) acts of the Subadviser which result from acts or omissions
of the Adviser, the Corporation or the Series Administrator, including, but not
limited to, a failure of the Adviser, the Corporation or the Series
Administrator to provide accurate and current information with respect to any
records maintained by the Adviser, the Corporation or the Series Administrator
or any other subadviser to a Series, which records are not also maintained by
the Subadviser and, with respect to any records maintained only by the Series
Administrator, are not otherwise available to the Subadviser from the Series
Administrator upon reasonable request. The Adviser agrees that the Subadviser
shall manage the portion of the assets of a Series allocated to it as if it was
a separate operating series and shall comply with Section 1 of this Subadvisory
Agreement (including, but not limited to, the investment objectives, policies
and restrictions applicable to a Series and qualifications of a Series as a
regulated investment company under the Code) with respect to the portion of
assets of a Series allocated to the Subadviser. The Adviser shall indemnify and
hold harmless the Indemnified Parties from and against any and all losses,
claims, damages, liabilities or litigation (including reasonable legal and
other expenses) arising from the conduct of the Adviser, the Corporation, the
Series Administrator or any other subadviser with respect to the portion of a
Series's assets not allocated to the 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 Series 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 Series voting separately
from any other series of the Corporation.
With respect to each Series, this Agreement may be terminated
at any time, without payment of a penalty by the Series 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 Series, 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 Series, 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. In the event of such a termination by the
Subadviser, the Adviser will use its best efforts, and cause the Corporation to
use its best efforts, to engage another subadviser for the Series as soon as
possible. Notwithstanding the foregoing, the Subadviser may terminate the
Agreement on 60 days' written notice to the Adviser and the Corporation, in the
event of a breach of this Agreement by the Adviser. The termination of this
Agreement with respect to any Series or the addition of any Series 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 Series 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. 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 Series is a
separate series of the Corporation, and all debts, liabilities, obligations and
expenses of a particular Series shall be enforceable only against the assets of
that Series and not against the assets of any other Series 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 Associates, Inc.
000 Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxx
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
Name: Xxxxx X. Xxxxxxx
Title: President
XXXXXX ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: President
