<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14c-5
(d)(2))
[X] Definitive Information Statement
SunAmerica 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:
_______________________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________________
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):
_______________________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________________
5) Total fee paid:
_______________________________________________________________
[ ] 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:
_______________________________________________________________
2) Form, Schedule or Registration Statement No.:
_______________________________________________________________
3) Filing Party:
_______________________________________________________________
4) Date Filed:
_______________________________________________________________
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SUNAMERICA ASSET MANAGEMENT CORP.
SunAmerica Asset Management Corp.
The SunAmerica Center
733 Third Avenue
New York, NY 10017
212.551.5969
800.858.8850
[SUN AMERICA ASSET MANAGEMENT LOGO]
July 19, 2000
Dear Shareholders:
The enclosed information statement is being provided to shareholders of the
Small-Cap Value and Focused Value Portfolios of SunAmerica Style Select
Series, Inc. as a result of a change in control of one of its subadvisers, EQSF
Advisers, Inc. On May 24, 2000, Martin J. Whitman, a control person of EQSF
Advisers, Inc. (adviser of the Third Avenue Funds and hereinafter referred to as
"Third Avenue"), a subadviser to the above-referenced Portfolios, returned
voting control of Third Avenue to his adult children. The transaction will not
affect Third Avenue's day-to-day operations, its investment process, or its
portfolio management team.
As a matter of regulatory compliance, we are sending you this information
statement which describes the ownership of Third Avenue, and the terms of the
Subadvisory Agreement with Third Avenue which the Directors have approved.
Please feel free to call your financial adviser or to call us at (800)
858-8850, extension 5125 should you have any questions on the enclosed
information statement. We thank you for your continued interest in the
SunAmerica Style Select Series, Inc. Portfolios.
Sincerely,
/s/ Peter A. Harbeck
Peter A. Harbeck
PRESIDENT
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SUNAMERICA STYLE SELECT SERIES, INC.
SMALL-CAP VALUE PORTFOLIO
FOCUSED VALUE PORTFOLIO
THE SUNAMERICA CENTER
733 THIRD AVENUE
NEW YORK, NEW YORK 10017
------------------------
INFORMATION STATEMENT
---------------------
This information statement is being provided to the shareholders of the
Small-Cap Value Portfolio ("Small-Cap Value") and Focused Value Portfolio
("Focused Value") of SunAmerica 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 July 21, 2000. 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, extension 5125.
PURPOSE OF THE INFORMATION STATEMENT
On May 24, 2000, Martin J. Whitman, a control person of EQSF Advisers, Inc.
(adviser of the Third Avenue Funds and hereinafter referred to as "Third
Avenue"), one of the subadvisers to the Small-Cap Value and Focused Value
Portfolios of Style Select, returned certain voting rights in Third Avenue to
his adult children. Upon formation of Third Avenue, Mr. Whitman's children
purchased approximately 74% of the outstanding shares, and they gave
Mr. Whitman the right to vote the shares by signing an irrevocable proxy.
Mr. Whitman has now revoked the proxy and returned the voting rights of the
shares to his children. This transfer constituted a technical change in control
of Third Avenue which resulted in an assignment, as defined in
Section 2(a)(4) of the Investment Company Act of 1940, as amended (the "1940
Act"), of the Subadvisory Agreement between SunAmerica and Third Avenue which
was in effect at that time. The Subadvisory Agreement, by its terms and
consistent with Section 15(a) of the 1940 Act, provided for its automatic
termination upon assignment. On May 18, 2000, the Board of Directors of Style
Select approved a new Subadvisory Agreement between Third Avenue and SunAmerica
on behalf of the Small-Cap Value Portfolio and the Focused Value Portfolio of
Style Select which is identical in all material respects to the previous
agreement.
THE CORPORATION
The Small-Cap Value Portfolio and the Focused Value Portfolio 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, as amended from time to
time. 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
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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 Portfolios do not pay fees directly to the
subadvisers. 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.
INFORMATION ABOUT THE SMALL-CAP VALUE PORTFOLIO
The Small-Cap Value Portfolio seeks long-term growth of capital primarily
through investment in securities believed to be undervalued in the market.
SunAmerica generally allocates investments in Small-Cap Value to its three
subadvisers, including Third Avenue. Each Subadviser manages a portion of Small-
Cap Value's assets and generally invests in stocks of companies with solid
financial strength that have low price-earnings ratios and may have generally
been overlooked by the market. Each Subadviser may emphasize different
stock-picking styles and may invest in stocks issued by small-cap companies.
Each Subadviser will actively manage its portion of Small-Cap Value and will
continuously review its stock picks.
INFORMATION ABOUT THE FOCUSED VALUE PORTFOLIO
The Focused Value Portfolio seeks long-term growth of capital and current
income by investing generally in equity securities without regard to market
capitalization. SunAmerica generally allocates investments in Focused Value to
its three subadvisers, including Third Avenue. As such, each Subadviser will
each manage approximately one third of its assets and concentrate each portion's
investments in 10 or fewer securities emphasizing a value strategy. The holdings
constitute each subadviser's favorite stock picking ideas at any given moment.
Each Subadviser will actively manage its portion of Focused Value and will
continuously review its stock picks.
THE SUBADVISORY AGREEMENT
Pursuant to a Subadvisory Agreement with SunAmerica dated August 1, 1999 and
revised November 1, 1999, Third Avenue has been serving as one of the
subadvisers to the Small-Cap Value Portfolio and the Focused Value Portfolio,
respectively. This Subadvisory Agreement terminated upon the consummation of the
change of control of Third Avenue on May 24, 2000. At the Board meeting held on
May 18, 2000, the Directors approved a new Subadvisory Agreement with Third
Avenue, substantially identical to the one prior to the change of control of
Third Avenue, which became effective on May 24, 2000.
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% or $455,883 of Assets for Small-Cap Value and and 1.00% or $534,284 of
Assets for Focused 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, 1999, SunAmerica paid fees to the Subadvisers equal to the
aggregate annual rate of 0.55% of Assets for Small-Cap Value. The fee retained
by SunAmerica for Small-Cap Value is 0.45% or $258,986. Focused Value commenced
operations on November 1, 1999, however the highest annual rate of fees payable
to SunAmerica to the subadvisers for the first year of operation - I.E., the fee
rate charged on the first dollar held by Focused Value - is 0.50% of the average
daily net assets. Thus, the fee retained by SunAmerica for Focused Value would
be 0.50% or $267,142.
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The new agreement between Third Avenue and SunAmerica, on behalf of
Small-Cap Value and Focused Value, is substantially similar in form and in
substance to the previous agreement, in that it (i) provides for the Subadviser
to manage the portion of the relevant portfolio allocated to it on a
discretionary basis, (ii) provides for the Adviser to compensate the Subadviser
for its services, (iii) authorizes the Subadviser to select the brokers or
dealers to effect portfolio transactions for the Portfolio, and (iv) requires
the Subadviser to comply with the Portfolio's investment policies and
restrictions and with applicable law. The new agreement 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 THIRD AVENUE
Third Avenue is a New York corporation with principal offices at 767 Third
Avenue, New York, New York 10017. As of June 30, 2000 Third Avenue had in excess
of $2.0 billion in assets under management.
Third Avenue's investment management objective is to pursue long-term
capital appreciation by adhering to a disciplined 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 a 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 must make available
comprehensive and meaningful financial and related information. 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.
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.
The names and principal occupations of the Directors and Principal Executive
Officers of Third Avenue are set forth below:
<TABLE>
<CAPTION>
NAME POSITION ADDRESS
---- -------- -------
<S> <C> <C>
Martin J. Whitman Chairman and Chief 767 Third Avenue
Executive Officer New York, NY 10017-2023
David M. Barse President, Chief 767 Third Avenue
Operating Officer New York, NY 10017-2023
Michael Carney Treasurer, Chief 767 Third Avenue
Financial Officer New York, NY 10017-2023
Kerri Weltz Assistant Treasurer 767 Third Avenue
New York, NY 10017-2023
Barbara Whitman Director 767 Third Avenue
New York, NY 10017-2023
</TABLE>
BOARD OF DIRECTORS' CONSIDERATION
In approving the Subadvisory Agreement described hereto, the Directors, at
in-person meetings held on May 18, 2000, considered certain factors, including
(i) the nature and quality of the services expected to
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be rendered by Third Avenue, including the credentials and investment experience
of each of its officers and employees; (ii) Third Avenue's investment approach
and management style; (iii) the structure of Third Avenue and their ability to
provide services, based on both their financial conditions as well as their
performance records; (iv) a favorable comparison of Third Avenue's subadvisory
fees with those of other advisers; (v) the fact that the terms of the new
agreement are substantially similar in form and substance to the previous
agreement; and (vi) indirect costs and benefits of providing such subadvisory
services. 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 Third
Avenue. In making their determination, the Directors stressed the importance of
Third Avenue's expectation that the management and key personnel involved with
Small-Cap Value and Focused Value would not be affected following the change of
control. The Directors determined that the engagement of Third Avenue as
subadviser to Small-Cap Value and Focused Value and the subadvisory fee were
reasonable, fair and in the best interests of Small-Cap Value, Focused Value 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: July 19, 2000
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EXHIBIT A
[FORM OF]
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of , 2000, by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
EQSF ADVISERS, INC., a New York corporation (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and SunAmerica 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.
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 Subadviser's management of the assets of a Portfolio 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
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sold in a particular state); provided that for purposes of Section 17(a),
(d) and (e), the Subadviser shall effect compliance only in relation to its own
affiliates and to affiliated persons identified to it by the Adviser. 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,
and is hereby authorized, 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 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.
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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.
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 or logo
of the Subadviser or any of its affiliates (including, without limitation, Third
Avenue Funds) in any advertising or promotional materials without the prior
approval of the Subadviser, which approval shall not be unreasonably withheld.
All such use shall cease upon the termination of this Agreement.
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
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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 or the sale of securities
of the Corporation.
(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.
(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 the 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
8
<PAGE>
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).
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. 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:
<TABLE>
<S> <C>
Subadviser: EQSF Advisers, Inc.
767 Third Avenue
New York, NY 10017
Attention:
Adviser: SunAmerica Asset Management Corp.
The SunAmerica Center
733 Third Avenue, Third Floor
New York, NY 10017-3204
Attention:
</TABLE>
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of the date first above written.
<TABLE>
<S> <C> <C>
SUNAMERICA ASSET MANAGEMENT CORP.
By:
-----------------------------------------
Name: Peter A. Harbeck
Title: PRESIDENT
EQSF ADVISERS, INC.
By:
-----------------------------------------
Name:
Title:
</TABLE>
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