SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14 (c) of the Securities
Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[X] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14c-5
(d)(2))
[ ] Definitive Information Statement
Style Select Series, Inc.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11 (a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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SUNAMERICA ASSET MANAGEMENT CORP.
The SunAmerica Center
733 Third Avenue
New York, NY 10017
212.551.5969
800.858.8850
August ,1999 [Logo]
EDGAR Postmaster, BDM: Postmaster
Re: Style Select Series, Inc.
Securities Act File No. 33-11283
1940 Act File No. 811-07797
Preliminary Information Statement
Dear Sir/Madam:
Following is an EDGAR filing on behalf of Style Select Series, Inc.
(the "Fund") pursuant to Rule 14c-5(a) under the Securities Exchange Act of
1934, as amended, of an Information Statement to be sent to shareholders of each
of the Fund's Aggressive Growth Portfolio, Large-Cap Growth Portfolio and
Small-Cap Value Portfolio (the "Portfolios"). The purpose of this Information
Statement is to give notice of a change in control of Warburg Pincus Asset
Management, Inc., a subadviser to the Aggressive Growth Portfolio. This
Information Statement also will give notice of the engagement of Jennison
Associates LLC to replace L. Roy Papp & Associates as a subadviser to the
Large-Cap Growth Portfolio. Furthermore, the Information Statement will give
notice of the engagement of EQSF Advisers, Inc. to replace The Glenmede Trust
Company as a subadviser to the Small-Cap Value Portfolio. This Statement is
being filed at least ten days prior to the date that it will be first sent to
shareholders. Definitive copies of this Information Statement are intended to be
released to shareholders on or about September 7, 1999.
If you have questions or comments, please feel free to contact me at
(800) 858-8850, extension 5189.
Very truly yours,
SunAmerica Asset Management Corp.
By: /s/ Robert M. Zakem
-------------------
Robert M. Zakem
Senior Vice President
and General Counsel
Enclosures
<PAGE>
SUNAMERICA ASSET MANAGEMENT CORP.
The SunAmerica Center
733 Third Avenue
New York, New York 10017
212.551.5969
800.858.8850
September 7, 1999 [Logo]
Dear Shareholders:
The enclosed information statement is being provided to shareholders of
the Aggressive Growth Portfolio of Style Select Series, Inc. as a result of a
change in control of one of its subadvisers, Warburg Pincus Asset Management,
Inc. ("Warburg"). On July 6, 1999, Credit Suisse Group ("Credit Suisse")
acquired Warburg and combined it with Credit Suisse's existing U.S. asset
management business. Such combined businesses are now conducted by Credit Suisse
Asset Management, LLC, an indirect wholly-owned U.S. subsidiary of Credit
Suisse.
In addition, this information statement details a change in subadvisers
with respect to each of the Large-Cap Growth Portfolio and Small-Cap Value
Portfolio of Style Select Series, Inc. On July 14, 1999, the Board of Directors
(the "Directors") approved the engagement of Jennison Associates LLC
("Jennison") to replace L. Roy Papp & Associates as a subadviser to the
Large-Cap Growth Portfolio, effective as of August 1, 1999. Furthermore, the
Directors approved the engagement of EQSF Advisers, Inc. (investment adviser to
the Third Avenue Funds), to replace The Glenmede Trust Company as a subadviser
to the Small-Cap Value Portfolio, also effective as of August 1, 1999.
Jennison joins Janus Capital Corporation and Montag & Calwell, Inc.,
the Large-Cap Growth Portfolio's other subadvisers, managing approximately
one-third of the portfolio. EQSF Advisers, Inc. joins Berger Associates, Inc.
and Lazard Asset Management as subadvisers to the Small-Cap Value Portfolio,
managing approximately one-third of its assets. We are optimistic that the
Large-Cap Growth and Small-Cap Value Portfolios will continue to benefit under
the management of these fine firms.
As a matter of regulatory compliance, we are sending you this
information statement which describes the management structure of the above
referenced portfolios, the ownership of Credit Suisse, Jennison and EQSF
Advisers, Inc., and the terms of the subadvisory agreements with respect to
Credit Suisse, Jennison and EQSF Advisers, Inc. which the Directors have
approved.
Please feel free to call your financial adviser or call us at (800)
858-8850 should you have any questions on the enclosed information statement. We
thank you for your continued interest in the Style Select Series Portfolios.
Sincerely,
Peter A. Harbeck
PRESIDENT
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STYLE SELECT SERIES, INC.
AGGRESSIVE GROWTH PORTFOLIO
LARGE-CAP GROWTH PORTFOLIO
SMALL-CAP VALUE PORTFOLIO
THE SUNAMERICA CENTER
733 THIRD AVENUE
NEW YORK, NEW YORK 10017
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INFORMATION STATEMENT
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This information statement is being provided to the shareholders of the
Aggressive Growth Portfolio ("Aggressive Growth"), Large-Cap Growth Portfolio
("Large-Cap Growth") and Small-Cap Value Portfolio ( "Small-Cap Value")
(collectively, the "Portfolios") of Style Select Series, Inc. ("Style Select" or
the "Corporation") in lieu of a proxy statement, pursuant to the terms of an
exemptive order Style Select has received from the Securities and Exchange
Commission which permits SunAmerica Asset Management Corp. ("SunAmerica") to
hire new subadvisers and to make changes to existing subadvisory contracts with
the approval of the Board of Directors (the "Directors"), but without obtaining
shareholder approval. This information statement is being furnished by the
Directors of the Corporation.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
This information statement will be mailed on or about September 7,
1999. Copies of the most recent annual and semi-annual reports are available
without charge. Copies of such reports of Style Select may be obtained by
writing to SunAmerica, at The SunAmerica Center, 733 Third Avenue, New York, New
York 10017, or by calling (800) 858-8850.
PURPOSE OF THE INFORMATION STATEMENT
On February 15, 1999, the parent companies of Warburg Pincus Asset
Management, Inc. ("Warburg"), a subadviser to Aggressive Growth, entered into a
Merger Agreement and Plan of Reorganization (the "Merger Agreement") with Credit
Suisse Group ("Credit Suisse"). Pursuant to the terms of the Merger Agreement,
Credit Suisse acquired the direct parent company of Warburg on July 6, 1999 (the
"Acquisition"). Credit Suisse combined Warburg with their existing U.S. asset
management business (the "Reorganization"). Such combined businesses are now
conducted by an indirect wholly-owned U.S. subsidiary of Credit Suisse, Credit
Suisse Asset Management, LLC ("CSAM"), a newly formed Delaware limited liability
company. The Acquisition and Reorganization are together referred to herein as
the "Merger." The acquisition constitutes a change in control of Warburg which
results in an "assignment," as that term is defined in Section 2 (a)(4) of the
Investment Company Act of 1940 ( the "1940 Act"), and consequently a termination
of the Subadvisory Agreement between SunAmerica, the investment adviser and
manager, and Warburg with respect to Aggressive Growth.
Additionally, at a meeting held on July 14, 1999, the Directors
approved a Subadvisory Agreement between SunAmerica, the investment adviser and
manager, and Jennison Associates LLC ("Jennison"), the subadviser, with respect
to a component of Large-Cap Growth. Also, the Directors approved a Subadvisory
Agreement between SunAmerica, the investment adviser and manager, and EQSF
Advisers, Inc., (the
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investment adviser to the Third Avenue Funds and hereinafter referred to as
("Third Avenue"), the subadviser, with respect to a component of Small-Cap
Value. As of August 1, 1999, Jennison replaced L. Roy Papp as subadviser to
Large-Cap Growth and Third Avenue replaced The Glenmede Trust Company as
subadviser to Small-Cap Value.
THE CORPORATION
Aggressive Growth, Large-Cap Growth and Small-Cap Value are each an
investment series of Style Select, a Maryland corporation. The Corporation
initially entered into an Investment Advisory Agreement (the "Advisory
Agreement") with SunAmerica on September 17, 1996 and entered into a new
Advisory Agreement with SunAmerica on January 1, 1999. SunAmerica selects the
subadvisers for and/or manages the investments of the Portfolios of Style
Select, provides various administrative services and supervises the Portfolios'
daily business affairs, subject to general review by the Directors. The Advisory
Agreement authorizes SunAmerica to retain the subadvisers for the Portfolios or
portions thereof for which it does not manage the assets. SunAmerica selects the
subadvisers it believes will provide the Portfolios with the highest quality
investment services, while obtaining, within the Portfolios' overall investment
objective, a distinct investment style. SunAmerica monitors the activities of
the subadviser and, from time to time, will recommend the replacement of a
subadviser on the basis of investment performance, style drift or other
consideration.
The subadvisers to Style Select act pursuant to agreements with
SunAmerica. Their duties include furnishing continuing advice and
recommendations to the relevant portion of their respective Portfolios regarding
securities to be purchased and sold. The subadviser is independent of SunAmerica
and discharges its responsibilities subject to the oversight and supervision of
SunAmerica, which pays the subadviser's fees. The Portfolio does not pay fees
directly to the subadviser. However, in accordance with procedures adopted by
the Directors, a subadviser may effect portfolio transactions through an
affiliated broker-dealer, acting as agent not as principal, and receive
brokerage commissions in connection therewith as permitted by Section 17(e) of
the 1940 Act, as amended, the rules thereunder and other applicable securities
laws.
THE SUBADVISORY AGREEMENTS
Pursuant to a Subadvisory Agreement with SunAmerica on behalf of
Aggressive Growth, Warburg has been serving as a subadviser since September 17,
1996. This Subadvisory Agreement terminated upon the consummation of the Merger
between Credit Suisse and Warburg on July 6, 1999. At the Board meeting held on
May 26, 1999, the Directors approved a new Subadvisory Agreement with CSAM,
identical to the one prior to the acquisition of Warburg by Credit Suisse, which
became effective on July 1, 1999.
Pursuant to a Subadvisory Agreement with SunAmerica on behalf of
Large-Cap Growth, L. Roy Papp & Associates had served as subadviser since August
20, 1997. Pursuant to a Subadvisory Agreement with SunAmerica on behalf of
Small-Cap Value, The Glenmede Trust Company also had served as a subadviser
since August 20, 1997. These agreements, together with the September 17, 1996
agreement with Warburg, are hereinafter collectively referred to as the
"Previous Agreements". At a meeting held on July 14, 1999, the Directors,
including a majority of the Directors who are not interested persons of
Large-Cap Growth and Small-Cap Value or SunAmerica, approved SunAmerica's
recommendation to replace L. Roy Papp & Associates and The Glenmede Trust
Company. Accordingly, the Directors approved Subadvisory Agreements with
Jennison and Third Avenue, which became effective August 1,1999. SunAmerica
recommended Jennison and Third Avenue in the ordinary course of its ongoing
evaluation of subadviser performance and investment strategy and after extensive
research and qualitative and quantitative analysis of numerous candidate firms
and their organizational structure, investment process and style, and long-term
performance record. SunAmerica believes that each of Jennison's and Third
Avenue's investment style is appropriately suited to the respective Portfolios
and expects these investment styles to complement those of the respective
Portfolios' other subadvisers.
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Under the Advisory Agreement, the annual rates of the investment
advisory fees payable to SunAmerica for each of the relevant Portfolios are as
follows: 1.00% of Assets for Aggressive Growth, 1.00% of Assets for Large-Cap
Growth and 1.00% of Assets for Small-Cap Value. The term "Assets" means the
average daily net assets of the respective Portfolios. This fee is accrued daily
and paid monthly, and may be higher than those charged to other mutual funds.
For the fiscal year ended October 31, 1998, SunAmerica paid fees to the
Subadvisers equal to the aggregate annual rates as follows: 0.38% of Assets for
Aggressive Growth, which amounted to $481,172; 0.48% of Assets for Large-Cap
Growth, which amounted to $160,671; and 0.55% of Assets for Small-Cap Value,
which amounted to $216,474. The fees retained by SunAmerica for each of the
relevant Portfolios are as follows: 0.62% for Aggressive Growth, or $769,952;
0.52% for Large-Cap Growth, or $171,371; and 0.45% for Small-Cap Value, or
$177,154.
The new agreements between CSAM and SunAmerica on behalf of Aggressive
Growth, Jennison and SunAmerica on behalf of Large-Cap Growth, and Third Avenue
and SunAmerica on behalf of Small-Cap Value, are substantially similar in form
and in substance to the Previous Agreements, in that they (i) provide for the
Subadviser to manage the portion of the relevant portfolio allocated to it on a
discretionary basis, (ii) provide for the Adviser to compensate the Subadviser
for its services, (iii) authorize the Subadviser to select the brokers or
dealers to effect portfolio transactions for the Portfolio, and (iv) require the
Subadviser to comply with the Portfolio's investment policies and restrictions
and with applicable law. The new agreements and change in subadvisers will not
result in any increase in fees to shareholders. A form of the Subadvisory
Agreement is attached to this information statement as Exhibit A.
INFORMATION ABOUT CSAM
Credit Suisse is a global financial services company, providing a
comprehensive range of banking and insurance products. Active on every continent
and in all major financial centers, Credit Suisse is comprised of five business
units: CSAM (asset management); Credit Suisse First Boston (investment banking);
Credit Suisse Private Banking (private banking); Credit Suisse (retail banking);
and Winterthur (insurance). Credit Suisse has approximately $680 billion of
global assets under management and employs approximately 62,000 people
worldwide. The principal business address of Credit Suisse is Paradeplatz 8, CH
8070, Zurich, Switzerland.
CSAM is the global institutional asset management and mutual fund arm
of Credit Suisse. CSAM employs approximately 1,600 people worldwide and has
global assets under management of approximately $210 billion in multiple product
services, including equities, fixed income, derivatives and balanced portfolios.
Together with its predecessor firms, CSAM has been engaged in the investment
advisory business for over 60 years. The principal worldwide business address of
CSAM is Uetlibergstrasse 231, CH 8045, Zurich, Switzerland.
In the U.S., CSAM is an investment manager for corporate and state
pension funds, endowments and other institutions and has assets under management
of approximately $57 billion. The principal U.S.business address of CSAM is 153
East 53rd Street, New York, New York 10022.
CSAM seeks investment success through a bottom-up approach that
identifies long-term secular changes and companies with unrecognized growth
opportunities that, based on fundamental intrinsic value, can be bought at
attractive prices. CSAM identifies investments through fundamental analysis and
assessment of the economic developments within each country in which it seeks to
invest. CSAM then undertakes in-depth research by focusing on company and
industry fundamentals and visiting with management. It examines a company's
return on invested capital, cash flows, balance sheet, intrinsic value,
institutional ownership and owner management. CSAM identifies potential
investments with the following qualities: strong management; proprietary
products and services; excess cash flow; strong unit growth and
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consistent earnings; minimal cyclical sensitivity; equity participation by
management; private value significantly above public market value; and low
institutional recognition.
CSAM's portion of the Aggressive Growth is managed by Elizabeth Dater
and Stephen J. Lurito. Ms. Dater has been with the firm since 1978, is a member
of the Executive Operating Committee and had been Director of Research for
Warburg's investment management activities. Prior to joining the firm, Ms. Dater
was Vice President of research at Fiduciary Trust Company of New York and an
institutional sales assistant at Lehman Brothers. She holds a B.A. from Boston
University and was a participant in the Chartered Financial Analyst Program.
Mr. Lurito has been with Warburg since 1987. Previously, he had been a
research analyst with Sanford C. Bernstein & Company, Inc. He holds a B.A. from
the University of Virginia and an M.B.A. from The Wharton School of the
University of Pennsylvania.
The names, business addresses and principal occupations of the
Directors and Principal Executive Officers of CSAM are set forth below:
<TABLE>
<CAPTION>
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NAME POSITION BUSINESS ADDRESS
- ---- -------- ----------------
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<S> <C> <C>
Michael Guarasci Director and Executive Officer of Credit 153 East 53rd Street
Suisse and/or its affiliates. New York, New York 10022
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Hal Liebes Director and Executive Officer of Credit 153 East 53rd Street
Suisse and/or its affiliates. New York, New York 10022
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William W. Priest Chief Executive Officer, Chairman of the 153 East 53rd Street
Management Committee, Executive Director New York, New York 10022
and Director of TIG Holdings, Inc. and other
investment companies advised by CSAM.
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Agnes Reicke Director and Executive Officer of Credit Uetlibergstrasse 231, CH 8045
Suisse and/or its affiliates. Zurich, Switzerland
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Philip Ryan Director and Executive Officer of Credit Beaufort House, 15 St. Botolph Street
Suisse and/or its affiliates. London EC3A 7JJ England
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</TABLE>
INFORMATION ABOUT JENNISON
Jennison is a Delaware Limited Liability Company wholly owned by The
Prudential Insurance Company of America, with principal offices at 466 Lexington
Avenue, New York, New York 10017. They manage accounts for some of the nation's
largest pool of assets, including many Fortune 500 companies' retirement assets,
as well as endowments and foundations. They manage assets for single client
accounts and, under subadvisory relationships, for commingled funds and mutual
funds. As of June 30, 1999, Jennison had approximately $50.1 billion in assets
under management.
Jennison seeks superior returns through investment in companies that
are able to achieve superior absolute and relative earnings growth. They look
for companies with above average revenue and earnings per share growth, strong
market position, superior management, improving profitability and distinctive
attributes, such as unique marketing ability, strong research and development,
and financial strength. Jennison employs a bottom-up approach to investing,
seeking stocks of companies that have the ability to maintain or achieve
superior absolute and relative sales and earnings growth, while being reasonably
priced relative to its potential growth prospects.
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The basis for Jennison's equity investment decisions is the independent
research provided by its equity analysts. The analysts normally visit with all
companies held in Jennison's portfolios, which is a critical factor in their
ability to develop accurate earnings estimates and to judge investments solidly.
Approximately 25% of Jennison's research is received from outside sources. They
use TELERATE, Reuters, Dow Jones, BRIDGE, StockVal and Bloomberg as basic
sources of real-time market information.
A portfolio manager's sell decisions reflect both company fundamentals
and market action. A stock is usually sold for one or more of the following
reasons: a fundamental disappointment in earnings; a stock has reached an
intermediate-term price objective and its outlook no longer seems sufficiently
promising; or a relatively more attractive stock emerges. Even if a company's
fundamentals remain intact, when a stock's price movement fails to meet
Jennison's expectations, they may reduce that position.
Jennison's portion of the Large-Cap Growth is managed by Spiros "Sig"
Segalas. Mr. Segalas is a founding director of Jennison Associates, which was
established in April 1969. He has served as President and Chief Investment
Officer of Jennison since 1993 and 1971, respectively. He received a B.A. from
Princeton University in 1955 and is a member of the New York Society of Security
Analysts.
The names, business address and principal occupations of the current
Directors and Chief Executive Officer of Jennison are set forth below:
<TABLE>
<CAPTION>
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Name Position Address
- ---- -------- -------
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<S> <C> <C>
Blair A. Boyer Senior Vice President, Director 466 Lexington Avenue
New York, New York 10017
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Cecilia M. Brancato Senior Vice President, Director 466 Lexington Avenue
New York, New York 10017
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David Chan Senior Vice President, Director 466 Lexington Avenue
New York, New York 10017
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Michael Del Balso Executive Vice President, Director 466 Lexington Avenue
New York, New York 10017
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Thomas F. Doyle Executive Vice President, Director 100 Winter Street, Suite 4900
Waltham, Massachusetts 02154
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Joseph P. Ferrugio Senior Vice President, Director 466 Lexington Avenue
New York, New York 10017
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Bradley L. Goldberg Executive Vice President, Director 466 Lexington Avenue
New York, New York 10017
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John H. Hobbs Chairman & Chief Executive 466 Lexington Avenue
Officer New York, New York 10017
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James N. Kannry Executive Vice President and 466 Lexington Avenue
Director New York, New York 10017
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Karen E. Kohler Treasurer, Secretary, Senior Vice 466 Lexington Avenue
President & Director New York, New York 10017
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Jonathan R. Longley Executive Vice President, Director 100 Winter Street, Suite 4900
Waltham, Massachusetts 02154
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Paul Lowenstein Director 751 Broad Street
Newark, New Jersey 07101
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Kathleen A. McCarragher Executive Vice President, Director 466 Lexington Avenue
New York, New York 10017
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Philip H.B. Moss Executive Vice President, Director 15820 Glen Isle Way
Fort Myers, Florida 33912
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Eric S. Philo Senior Vice President, Director 466 Lexington Avenue
New York, New York 10017
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Peter H. Reinemann Senior Vice President, Director 466 Lexington Avenue
New York, New York 10017
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Spiros Segalas President, Director 466 Lexington Avenue
New York, New York 10017
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Jeffrey P. Siegel Executive Vice President, Director 466 Lexington Avenue
New York, New York 10017
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</TABLE>
INFORMATION ABOUT THIRD AVENUE
EQSF Advisers, Inc. is commonly referred to as the Third Avenue Funds
and is located at 767 Third Avenue, New York, New York 10017. Third Avenue has
been an investment adviser and manager for mutual funds and private accounts
since its organization in 1986 and is controlled by Martin J. Whitman.
Third Avenue pursues long-term capital appreciation by adhering to a
discliplined bottom-up, value approach. Third Avenue's value approach to
investing is best defined as buying what is safe and cheap, with a primary
emphasis on safe. With respect to equities, an issuer must have an exceptionally
strong financial position, as measured by an absence of liabilities and
ownership of high quality assets, to be considered safe. Moreover, the company
must be reasonably well managed and engage in a business which Third Avenue
understands. Third Avenue deems bonds as safe to invest in only if they are
protected by strong covenants, so that in the event of a money default, the Fund
has a reasonably good prospect of recovering at least its cost. Third Avenue
strives to pay no more than 50% of what it believes a common stock would be
worth were the company to become a takeover candidate or a private business.
Bonds must have a yield to maturity of at least 500 basis points more than
performing credits of comparable quality in order to be considered cheap.
Third Avenue's value approach to investing is based on stringent
"bottom-up" analysis. Third Avenue seeks to limit investment risk by learning as
much as it can about a company and its securities before it invests. As
long-term buy and hold investors, Third Avenue's analytical approach
concentrates on understanding the business of an individual issuer and all but
ignores stock market trends and predictions. The buy and hold approach ensures
very low turnover. This helps to minimize the tax liability due to realized
capital gains.
Third Avenue's portion of the Small-Cap Value is managed by Martin J.
Whitman and Curtis Jensen. Mr. Whitman manages the Third Avenue Value Fund and
co-manages the Third Avenue Small-Cap Value Fund and Third Avenue Real Estate
Value Fund. Mr. Whitman is Chairman, CEO and CIO of M.J. Whitman Advisers, Inc.,
an investment adviser to private and institutional clients; and Chairman and CEO
of M.J. Whitman, Inc., a full-service broker-dealer specializing in the
research, sales and trading of distressed securities. Additionally, Mr. Whitman
is the Chairman and CEO of Danielson Holding Corporation, an American Stock
Exchange listed company with subsidiaries engaged in insurance. Mr. Whitman has
served as an adjunct professor at the Yale School of Management since 1972 and
presently mentors doctoral
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<PAGE>
candidates. Mr. Whitman is the author of THE AGGRESSIVE CONSERVATIVE INVESTOR
AND VALUE INVESTING - A BALANCED APPROACH. Mr. Whitman graduated from Syracuse
University magna cum laude in 1949 and received a Masters degree in Economics
from the New School for Social Research in 1956.
Curtis Jensen co-manages the Third Avenue Small-Cap Value Fund with
Martin Whitman. Mr. Jensen is also a Senior Research Analyst for Third Avenue
Value Fund and M.J. Whitman Advisers, Inc. Mr. Jensen's professional experience
includes work as an Industry Analyst in the corporate development group of
EnviroSource, a major waste-management concern. Additionally, he has held
various corporate finance positions with Manufacturers Hanover Trust Company and
Enright and Company, a private investment banking firm. Mr. Jensen graduated
with a Masters in Public and Private Management (MPPM) from the Yale School of
Management, where he studied under Mr. Whitman. He received his B.A. in
Economics from Williams College.
The names, business address and principal occupations of the current
Trustees and Chief Executive Officer of Third Avenue are set forth below:
<TABLE>
<CAPTION>
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Name Position Business Address
- ---- -------- ----------------
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Phyllis W. Beck Trustee GSB Bldg, Suite 800
City Line & Belmont Avenue
Bala Cynwyd, PA 19004-1611
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Lucinda Franks Trustee 64 East 86th Street
New York, NY 10028
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Gerald Hellerman Trustee 10965 Eight Bells Lane
Columbia, MD 21044
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Marvin Moser, M.D. Trustee 13 Murray Hill Road
Scarsdale, NY 10583
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Myron M. Sheinfeld Trustee 1001 Fannin St., Suite 3700
Houston, TX 77002
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Martin Shubik Trustee Yale University Dept. of Economics
Box 2125, Yale Station
New Haven, CT 06520
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Charles C. Walden Trustee 11 Williamsburg Circle
Madison, CT 06443
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Barbara Whitman Trustee 767 Third Avenue
New York, NY 10017-2023
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Martin J. Whitman Chairman, CEO and CIO 767 Third Avenue
New York, NY 10017-2023
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</TABLE>
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BOARD OF DIRECTORS' CONSIDERATION
In approving the Subadvisory Agreements described hereto, the
Directors, at in-person meetings held on May 26, 1999 and July 14, 1999,
considered certain factors, including (i) the nature and quality of the services
expected to be rendered by CSAM, Jennison and Third Avenue, including the
credentials and investment experience of each of its officers and employees;
(ii) CSAM's, Jennison's and Third Avenue's investment approach and management
style, which is expected to compliment the other investment managers of their
respective Portfolios; (iii) the structure of CSAM, Jennison and Third Avenue
and their ability to provide services, based on both their financial conditions
as well as their performance records; (iv) a comparison of each of CSAM's,
Jennison's and Third Avenue's subadvisory fee with those of other advisers; (v)
the fact that the terms of the new agreements are substantially similar in form
and substance to the Previous Agreements; and (vi) indirect costs and benefits
of providing such subadvisory services. With respect to CSAM, the Directors also
considered the effects the Merger would have on CSAM's management and key
personnel. The Directors determined that, with respect to Large-Cap Growth and
Small-Cap Value, the change in subadvisers and the subadvisory fees were
reasonable, fair and in the best interests of the shareholders. With respect to
Aggressive Growth, in light of the fact that the Subadvisory Agreement was being
approved due to a change in control of the subadviser, the Directors found the
most important factor in their decision to be the continuity of management of
Warburg. In making their determination, the Directors stressed the importance of
CSAM's assurance that the management and key personnel involved with Aggressive
Growth would not be affected following the merger. The Directors determined that
the engagement of CSAM as subadviser to Aggressive Growth and the subadvisory
fee were reasonable, fair and in the best interests of Aggressive Growth and its
shareholders.
ADDITIONAL INFORMATION
SunAmerica Capital Services, Inc. (the "Distributor") serves as
distributor of the shares of each Portfolio of the Corporation. Both SunAmerica
and the Distributor are located at The SunAmerica Center, 733 Third Avenue, New
York, New York 10017.
The Corporation is not required to hold annual meetings of shareholders
and, therefore, it cannot be determined when the next meeting of shareholders
will be held. Shareholder proposals to be considered for inclusion in the proxy
statement for the next meeting of shareholders must be submitted at a reasonable
time before the proxy statement is mailed. Whether a proposal submitted will be
included in the proxy statement will be determined in accordance with applicable
state and federal law.
By Order of the Directors,
/s/ Robert M. Zakem
Robert M. Zakem
Secretary
Dated: September 7, 1999
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Exhibit A
[Form of]
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of ____________, by and
between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and CREDIT SUISSE ASSET MANAGEMENT, LLC, (formerly "Warburg Pincus
Asset Management, Inc.") a Delaware limited liability company (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. 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 communicate to Subadviser, 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 as
provided to Subadviser, and (b) applicable laws and regulations.
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The Subadviser represents and warrants to the Adviser that the
portion of each Portfolio set forth in Schedule A managed by it 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 and subject to Section 9(c) hereof, the Subadviser represents and
warrants (1) that the management of the assets of a Portfolio managed by it will
be designed to achieve qualification 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 that relate to the investment
of Portfolio assets, including depositing those assets in custody with
institutions designated by the Corporation; and (b) applicable federal and state
securities and commodities laws (other than state securities laws relating to
the amount of Portfolio shares that may be sold in a particular state); provided
that for purposes of Section 17(a), (d) and (e), Subadviser shall effect
compliance only in relation to affiliated persons identified to it by the
Adviser and its own affiliates. The Subadviser further represents and warrants
that only with respect to any statements or omissions made in any Registration
Statement for shares of the Corporation, or any amendment or supplement thereto,
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.
2. PORTFOLIO TRANSACTIONS. The Subadviser is responsible for decisions
to buy or sell securities and other investments for 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
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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 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 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.
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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.
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, its officers, directors, agents,
employees, controlling persons or shareholders or 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 and all
losses, claims, damages, liabilities or litigation (including reasonable legal
and other expenses) arising from the Subadviser's providing services 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 breach of this Agreement by the Subadviser; 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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(c) The Subadviser shall not be liable to the Adviser its officers,
directors, agents, employees, controlling persons or shareholders or to the
Corporation or its shareholders 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 or are based upon 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 the Subadviser or, to the extent such
records relate to the portion of the assets managed by the Subadviser, 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) only with respect to the portion of assets of a Portfolio
allocated to Subadviser. The Adviser shall indemnify the Indemnified Parties
from any and all losses, claims, damages, liabilities or litigation (including
reasonable legal and other expenses) arising from the conduct of the Adviser,
the Corporation and any other subadviser with respect to the portion of a
Portfolio's assets not allocated to Subadviser and with respect to any other
portfolio of the Corporation.
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. 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).
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This Agreement will also terminate in the event that the Advisory
Agreement by and between the Corporation and the Adviser is terminated.
12. SEVERABILITY. This Agreement constitutes the entire Agreement
between the parties hereto. 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. SURVIVAL. Section 9 and the right to receive amounts due under
Section 3 shall survive termination of this Agreement.
14. 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.
15. 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.
16. 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.
17. 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: Credit Suisse Asset Management, Inc.
466 Lexington Avenue
New York, NY 10017
Attn: General Counsel
Adviser: SunAmerica Asset Management Corp.
The SunAmerica Center
733 Third Avenue, Third Floor
New York, NY 10017-3204
Attention: Robert M. Zakem
Senior Vice President and
General Counsel
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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: Peter A. Harbeck
Title: President
CREDIT SUISSE ASSET MANAGEMENT, LLC
By: _______________________________
Name:
Title:
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