SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of September 17,
1996, as amended August 20, 1997, by and between SUNAMERICA ASSET
MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and XXXXX
SELECTED ADVISERS, L.P., a Colorado limited partnership (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. (a) 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 the current prospectus and statement of additional
information. 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) In performing its investment advisory services,
Subadviser, while remaining ultimately responsible for management of the
portion of the assets of the Portfolio allocated to it, may draw on the
research and market expertise of its affiliate offices, including Xxxxx
Selected Advisers - NY, Inc., its New York affiliate, for portfolio
decisions and management.
(c) 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
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
-2-
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.
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 a mutually agreed-upon fee.
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.
-3-
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, which are not otherwise
available to 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
relating to the Corporation, or any Portfolio thereof, 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
-4-
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 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 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).
-5-
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
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: Xxxxx Selected Advisers, L.P.
000 X. Xxxxx Xxxxxx
X.X. Xxx 0000
Xxxxx Xx, XX 00000-0000
Attention: Xxxxxxx X. Xxxx
Chief Operating Officer
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
-6-
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
XXXXX SELECTED ADVISERS, L.P.
By: /s/ Xxxxxxx X. Xxxx
Name: Xxxxxxx X. Xxxx
Title: Chief Operating Officer
-7-
