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
Seasons Series Trust
(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:
----------------------------------------------------
<PAGE>
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:
----------------------------------------------------
<PAGE>
[Logo]
August 4, 1999
Dear Policyholder:
The enclosed information statement is being provided to Seasons Select Variable
Annuity policyholders who are invested in the Large Cap Growth, Large Cap
Composite, Large Cap Value, Mid Cap Growth, Mid Cap Value, Small Cap,
International Equity and Diversified Fixed Income Portfolios (the "Portfolios")
of Seasons Series Trust in connection with the change in control of one of its
subadvisers, Bankers Trust Company ("BT"). On June 4, 1999, Bankers Trust
Corporation, the parent company of BT, a subadviser for each of the Portfolios,
merged with Deutsche Bank AG, resulting in BT becoming an indirect wholly owned
subsidiary of Deutsche Bank AG.
As a matter of regulatory compliance, we are sending you this information
statement which describes the management structure of the Portfolios, the
ownership of BT, and the terms of the Subadvisory Agreement with BT which the
Trustees have approved.
Please feel free to call your financial adviser or to call us at (800) 445-7862
should you have any questions on the enclosed information statement. We thank
you for your continued interest in the Seasons Select Variable Annuity.
Sincerely,
/s/ Scott H. Richland
Scott H. Richland
Vice President
<PAGE>
SEASONS SERIES TRUST
P.O. BOX 54299
LOS ANGELES, CALIFORNIA 90054-0299
-----------------------------
INFORMATION STATEMENT
-----------------------------
This information statement is being provided to the Seasons Select
Variable Annuity policyholders who are invested in the Large Cap Growth, Large
Cap Composite, Large Cap Value, Mid Cap Growth, Mid Cap Value, Small Cap,
International Equity and Diversified Fixed Income Portfolios (the "Portfolios")
of Seasons Series Trust ("Seasons" or the "Trust") in lieu of a proxy statement,
pursuant to the terms of an exemptive order Seasons received from the Securities
and Exchange Commission which permits SunAmerica Asset Management Corp.
("SunAmerica" or the "Adviser") to hire new subadvisers and to make changes to
existing subadvisory contracts with the approval of the Board of Trustees (the
"Trustees"), but without obtaining shareholder approval. This information
statement is being furnished by the Trustees of Seasons.
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 August 4, 1999.
Copies of the most recent annual and semi-annual reports of Seasons are
available without charge and may be obtained by writing to the Trust at P.O. Box
54299, Los Angeles, California 90054-0299 or by calling (800) 445-7862.
PURPOSE OF THE INFORMATION STATEMENT
On November 30, 1998, Bankers Trust Corporation entered into an
Agreement and Plan of Merger whereby Deutsche Bank AG ("Deutsche Bank") would
acquire Bankers Trust Corporation, the parent company of Bankers Trust Company
("BT" or the "Subadviser"), a subadviser to the Portfolios. Bankers Trust
Corporation and Deutsche Bank completed the merger on June 4, 1999, resulting in
BT becoming an indirect wholly owned subsidiary of Deutsche Bank. The
acquisition constitutes a change in control of BT 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 BT with respect to the Portfolios.
THE TRUST
The Portfolios are separate investment series of Seasons, a
Massachusetts business trust. The Trust entered into an Investment Advisory
Agreement (the "Advisory Agreement") with SunAmerica on January 1, 1999.
SunAmerica selects the subadvisers for and/or manages the investments of the
Portfolios of Seasons, provides various administrative services and supervises
the Portfolios' daily business affairs, subject to general review by the
Trustees. 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.
The subadvisers to the Trust 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. Each of the subadvisers is independent of
SunAmerica and discharges its responsibilities subject to the oversight and
supervision of SunAmerica, which pays the
<PAGE>
subadvisers' fees. The Portfolios do not pay fees directly to the subadvisers.
However, in accordance with procedures adopted by the Trustees, 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 PORTFOLIOS
The Portfolios are each multi-managed, which means that they pursue
their investment goals by allocating assets among several separate managers, one
of which is currently BT. For each Portfolio, BT manages an "index" component in
which BT employs a passively managed, strategy which seeks to replicate the
performance of a target index or subset of an index. Since BT's component of
each of the Portfolios is passively managed, BT does not buy or sell stocks over
the course of a year other than in conjunction with changes in the target index.
THE SUBADVISORY AGREEMENTS
Pursuant to a Subadvisory Agreement with SunAmerica dated January 12,
1999 (the "Previous Agreement"), BT has been serving as one of the subadvisers
for the Portfolios. This Previous Agreement terminated upon the consummation of
the merger between Deutsche Bank and Bankers Trust Corporation on June 4, 1999.
At the Board meeting held on April 20, 1999, the Trustees approved a new
Subadvisory Agreement with BT (the "New Agreement"), effective June 4, 1999,
which is identical in all material respects to the Previous Agreement.
Under the Advisory Agreement, the annual rates of the investment
advisory fees payable to SunAmerica for the Portfolios are as follows:
- --------------------------------------------------------------------------------
PORTFOLIO ADVISORY FEE (AS A PERCENTAGE OF ASSETS)
- --------------------------------------------------------------------------------
Large-Cap Growth Portfolio First $250 million 0.800%
----------------------------------------
Next $250 million 0.750%
----------------------------------------
Over $500 million 0.700%
- --------------------------------------------------------------------------------
Large-Cap Composite Portfolio First $250 million 0.800%
----------------------------------------
Next $250 million 0.750%
----------------------------------------
Over $500 million 0.700%
- --------------------------------------------------------------------------------
Large-Cap Value Portfolio First $250 million 0.800%
----------------------------------------
Next $250 million 0.750%
----------------------------------------
Over $500 million 0.700%
- --------------------------------------------------------------------------------
Mid-Cap Growth Portfolio First $250 million 0.850%
----------------------------------------
Next $250 million 0.800%
----------------------------------------
Over $500 million 0.750%
-2-
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO ADVISORY FEE (AS A PERCENTAGE OF ASSETS)
- --------------------------------------------------------------------------------
Mid-Cap Value Portfolio First $250 million 0.850%
----------------------------------------
Next $250 million 0.800%
----------------------------------------
Over $500 million 0.750%
- --------------------------------------------------------------------------------
Small-Cap Portfolio First $250 million 0.850%
----------------------------------------
Next $250 million 0.800%
----------------------------------------
Over $500 million 0.750%
- --------------------------------------------------------------------------------
International Equity Portfolio 1.00%
- --------------------------------------------------------------------------------
Diversified Fixed Income Portfolio First $200 million 0.700%
----------------------------------------
Next $200 million 0.650%
----------------------------------------
Over $400 million 0.600%
- --------------------------------------------------------------------------------
The term "Assets" means the average daily net assets of the Portfolio. This fee
is accrued daily and paid monthly, and may be higher than those charged to other
mutual funds. The following table sets forth the aggregate fees SunAmerica paid
fees to all subadvisers and the aggregate fees retained by SunAmerica, expressed
as a percentage of Assets, for the period February 8, 1999 (commencement of
operations) through the fiscal year ended March 31, 1999:
- --------------------------------------------------------------------------------
FEES PAID BY
SUNAMERICA FEES RETAINED BY
PORTFOLIO TO ALL SUBADVISERS SUNAMERICA
- --------------------------------------------------------------------------------
Large Cap Growth Portfolio 0.37% 0.43%
- --------------------------------------------------------------------------------
Large Cap Composite Portfolio 0.16% 0.64%
- --------------------------------------------------------------------------------
Large Cap Value Portfolio 0.32% 0.48%
- --------------------------------------------------------------------------------
Mid Cap Growth Portfolio 0.32% 0.53%
- --------------------------------------------------------------------------------
Mid Cap Value Portfolio 0.35% 0.50%
- --------------------------------------------------------------------------------
Small Cap Portfolio 0.17% 0.68%
- --------------------------------------------------------------------------------
International Equity Portfolio 0.46% 0.54%
- --------------------------------------------------------------------------------
Diversified Fixed Income Portfolio 0.11% 0.59%
- --------------------------------------------------------------------------------
-3-
<PAGE>
The New Agreement between BT and SunAmerica, on behalf of the
Portfolios, is identical in all material respects to the Previous Agreement, and
provides for (i) the Subadviser to manage its respective portion of the
Portfolios allocated to it on a discretionary basis, (ii) the Adviser to
compensate the Subadviser for its services, (iii) the Subadviser to select the
brokers or dealers to effect portfolio transactions for the Portfolios, and (iv)
the Subadviser to comply with the Portfolios' investment policies and
restrictions and with applicable law. THE NEW AGREEMENT WILL NOT RESULT IN ANY
INCREASE IN FEES TO SHAREHOLDERS. A copy of the New Agreement is attached to
this information statement as Exhibit A.
INFORMATION ABOUT BANKERS TRUST COMPANY
BT is the principal banking subsidiary of Bankers Trust Corporation and
has principal offices in New York, NY. BT provides a broad range of commercial
banking and financial services and is a major wholesale supplier of financial
services to the international and domestic institutional markets. BT also
engages in trading currencies, securities, derivatives and commodities. As of
March 31, 1999, BT managed approximately $378 billion in assets.
BT's objective with respect to "index" portfolios is to create
portfolios that replicate the risk and total return characteristics of
identified target indices while keeping transaction costs associated with the
trading of the securities as low as possible. BT employs a proprietary
stratified sampling and linear optimization technique to select the liquid
securities, which when combined with a portfolio's holdings will continue to
match the risk and return of the target index. The benefit of this approach is
efficiency: a portfolio constructed in this manner will be cheaper to transact
than a "full replication" portfolio because rigid positions are not required and
the least expensively traded securities which meet the portfolio's needs will be
selected.
The names, business addresses and principal occupations of the current
Trustees and chief executive officer of BT are set forth below:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
NAME POSITION ADDRESS
- -------------------------------------------------------------------------------------------------
Josef Ackermann Member, Board of Managing Director Deutsche Bank AG
Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
- -------------------------------------------------------------------------------------------------
Robert B. Allardice III Executive Vice President Deutsche Bank
Deutsche Bank Americas Holding Corp. 31 West 52nd Street
New York, New York 10019
- -------------------------------------------------------------------------------------------------
George B. Beitzel Director of Various Corporations 29 King Street
Chappaqua, New York 10514
- -------------------------------------------------------------------------------------------------
William R. Howell Chairman Emeritus, J.C. Penney Company, Inc.
J.C. Penney Company, Inc. P.O. Box 10001
Dallas, Texas 75301
- -------------------------------------------------------------------------------------------------
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
NAME POSITION ADDRESS
- -------------------------------------------------------------------------------------------------
Hermann-Josef Lamberti Member, Board of Managing Trustees Deutsche Bank AG
Deutsche Bank AG Taunusanlage 12
D-60262 Frankfurt am Main
Federal Republic of Germany
- -------------------------------------------------------------------------------------------------
John A. Ross Regional Chief Executive Officer Deutsche Bank
Deutsche Bank Americas Holding Corp. 31 West 52nd Street
New York, New York 10019
- -------------------------------------------------------------------------------------------------
</TABLE>
Deutsche Bank is a banking company with limited liability organized
under the laws of the Federal Republic of Germany. Deutsche Bank is the parent
company of a group consisting of banks, capital markets companies, funds
management companies, mortgage banks and a property finance company, installment
financing and leasing companies, insurance companies, research and consultancy
companies and other domestic and foreign companies. At December 31, 1998, based
on international accounting standards and converted at the exchange rate on
December 30, 1998 of US $1 = DM 1.6730, the Deutsche Bank Group had total assets
of DM 1,225.5 billion, or U.S. $732.5 billion. The Deutsche Bank Group's capital
and reserves at December 31, 1998, in accordance with Bank for International
Settlements standards, were DM 57.4 billion, or U.S. $34.3 billion.
BOARD OF TRUSTEES' CONSIDERATION
In approving the New Agreement described herein, the Trustees, at an
in-person meeting held on April 20, 1999, considered certain factors, including
(i) the nature and quality of the services expected to be rendered by BT,
including the credentials and investment experience of its officers and
employees; (ii) the assurance from BT that the merger would not affect the
nature and quality of the services provide by BT to the Portfolios; (iii) the
structure of BT and its ability to provide services, based on both its financial
conditions as well as its performance record; (iv) a comparison of BT's
subadvisory fees with those of other advisers, as well as any indirect costs and
benefits of providing such subadvisory services to the Portfolios; and (v) the
fact that the terms of the New Agreement are identical in form and substance to
those of the Previous Agreement. The Trustees determined that the engagement of
BT as subadviser for the Portfolios and the subadvisory fees were reasonable,
fair and in the best interests of the Portfolios and its shareholders.
ADDITIONAL INFORMATION
The Trust 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 Trustees,
/s/ Robert M. Zakem
Robert M. Zakem
VICE PRESIDENT AND ASSISTANT SECRETARY,
SEASONS SERIES TRUST
Dated: August 4, 1999
-5-
EXHIBIT A
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of June 4, 1999 by and
between SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the
"Adviser"), and BANKERS TRUST COMPANY, a wholly-owned indirect subsidiary of
Deutsche Bank AG (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Seasons Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of January 1, 1999, as amended from time to time (the
"Advisory Agreement"), pursuant to which the Adviser has agreed to provide
investment management, advisory and administrative services to the Trust; and
WHEREAS, the Trust 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 beneficial interest, par value $.01 per share, in separately
designated portfolios 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 a "bank" as defined 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 portfolio or portfolios of the
Trust listed on Schedule A attached hereto (the "Portfolio(s)"), and the
Subadviser is willing to furnish such services;
NOW, THEREFORE, it is hereby agreed between the parties hereto as
follows:
1. DUTIES OF THE SUBADVISER. (a) The Adviser hereby engages the
services of the Subadviser in furtherance of its Investment Advisory and
Management Agreement with the Trust. 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 Trust is required to
maintain, and will render regular reports to the Adviser and to officers and
Trustees of the Trust concerning its discharge of the foregoing
responsibilities. The Subadviser shall discharge the foregoing responsibilities
subject to the control of the officers and the Trustees of the Trust and in
compliance with such policies as the Trustees of the Trust may from time to time
establish, and in compliance with (a) the objectives, policies, and limitations
for the Portfolio(s) set forth in the Trust's current prospectus and statement
of additional information, and (b) applicable laws and regulations.
-6-
<PAGE>
The Subadviser represents and warrants to the Adviser that the
portion of assets allocated to it of each of the Portfolios set forth in
Schedule A will at all times be operated and managed (1) in compliance with all
applicable federal and state laws governing its operations and investments; (2)
so as not to jeopardize either the treatment of the Seasons variable annuity
contracts issued by Variable Annuity Account Five (File No. 33-08859;
hereinafter "Contracts") as annuity contracts for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"), or the eligibility of the
Contracts to qualify for sale to the public in any state where they may
otherwise be sold; and (3) to minimize any taxes and/or penalties payable by the
Trust or such Portfolio. Without limiting the foregoing, the Subadviser
represents and warrants (1) qualification, election and maintenance of such
election by each Portfolio to be treated as a "regulated investment company"
under Subchapter M, chapter 1 of the Code, and (2) compliance with (a) the
provisions of the Act and rules adopted thereunder; (b) the diversification
requirements specified in the Internal Revenue Service's regulations under
Section 817(h) of the Code; (c) applicable state insurance laws; (d) applicable
federal and state securities, commodities and banking laws; and (e) the
distribution requirements necessary to avoid payment of any excise tax pursuant
to Section 4982 of the Code. The Subadviser further represents and warrants that
to the extent that any statements or omissions made in any Registration
Statement for the Contracts or shares of the Trust, or any amendment or
supplement thereto, are made in reliance upon and in conformity with information
furnished by the Subadviser expressly for use therein, such Registration
Statement and any amendments or supplements thereto will, when they become
effective, conform in all material respects to the requirements of the
Securities Act of 1933 and the rules and regulations of the Commission
thereunder (the "1933 Act") and the Act and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
The Subadviser accepts such employment and agrees, at its own
expense, to render the services set forth herein and to provide the office
space, furnishings, equipment and personnel required by it to perform such
services on the terms and for the compensation provided in this Agreement.
(b) The Subadviser agrees: (i) to maintain a level of errors
and omissions or professional liability insurance coverage that, at all times
during the course of this Agreement, is appropriate given the nature of its
business, and (ii) from time to time and upon reasonable request, to supply
evidence of such coverage to the Adviser.
2. PORTFOLIO TRANSACTIONS. The Subadviser is responsible for decisions
to buy or sell securities and other investments for a portion of the assets of
each Portfolio, broker-dealers and futures commission merchants' selection, and
negotiation of brokerage commission and futures commission merchants' rates. As
a general matter, in executing portfolio transactions, the Subadviser may employ
or deal with such broker-dealers or futures commission merchants as may, in the
Subadviser's best judgement, provide prompt and reliable execution of the
transactions at favorable prices and reasonable commission rates. In selecting
such broker-dealers or futures commission merchants, the Subadviser shall
consider all relevant factors including price (including
-7-
<PAGE>
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 Trustees 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 Trust 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 Trustees of the Trust 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 Trust 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).
For purposes of calculating the Subadviser's fee, the average daily net asset
value of a Portfolio shall mean the average daily net assets for which the
Subadviser actually provides advisory services, and shall be determined by
taking an average of all determinations of such net asset value during the
month. If the Subadviser shall provide its services under this Agreement for
less than the whole of any month, the foregoing compensation shall be prorated.
-8-
<PAGE>
4. OTHER SERVICES. At the request of the Trust or the Adviser, the
Subadviser in its discretion may make available to the Trust, office facilities,
equipment, personnel and other services in order to facilitate meetings or other
similar functions. Such office facilities, equipment, personnel and services
shall be provided for or rendered by the Subadviser and billed to the Trust or
the Adviser at the Subadviser's cost.
5. REPORTS. The Trust, 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 Trust as each may reasonably request.
6. STATUS OF THE SUBADVISER. The services of the Subadviser to the
Adviser and the Trust 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
Trust 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 Trust in any way or
otherwise be deemed an agent of the Trust.
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(s) that are required to
be maintained by the Trust 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 Trust are the property
of the Trust and will be surrendered promptly to the Trust 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 Trust's auditors,
the Trust or any representative of the Trust, the Adviser, or any governmental
agency or other instrumentality having regulatory authority over the Trust.
8. REFERENCE TO THE SUBADVISER. Neither the Trust 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 Trust or to any shareholder of the Trust for
any act or omission in the
-9-
<PAGE>
course of, or connected with, rendering services hereunder, including without
limitation, any error of judgment or mistake of law or for any loss suffered by
any of them in connection with the matters to which this Agreement relates,
except to the extent specified in Section 36(b) of the Act concerning loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services. Except for such disabling conduct, the Adviser shall
indemnify the Subadviser (and its officers, directors, partners, agents,
employees, controlling persons, shareholders and any other person or entity
affiliated with the Subadviser) (collectively, the"Indemnified Parties") from
any liability arising from the Subadviser's conduct under this Agreement.
(b) The Subadviser agrees to indemnify and hold harmless the
Adviser and its affiliates and each of its directors and officers and each
person, if any, who controls the Adviser within the meaning of Section 15 of the
1933 Act against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses), to which the Adviser or its affiliates or
such directors, officers or controlling person may become subject under the 1933
Act, under other statutes, at common law or otherwise, which may be based upon
(i) any wrongful act or breach of this Agreement by the Subadviser, or (ii) any
failure by the Subadviser to comply with the representations and warranties set
forth in Section 1 of this Agreement; provided, however, that in no case is the
Subadviser's indemnity in favor of any person deemed to protect such other
persons against any liability to which such person would otherwise be subject by
reasons of willful misfeasance, bad faith, or gross negligence in the
performance of his, her or its duties or by reason of his, her or its reckless
disregard of obligation and duties under this Agreement.
(c) The Subadviser shall not be liable to the Adviser for (i)
any acts of the Adviser or any other subadviser to the Portfolio with respect to
the portion of the assets of a Portfolio not managed by Subadviser and (ii) acts
of the Subadviser which result from acts of the Adviser, including, but not
limited to: (A), a failure of the Adviser to provide accurate and current
information with respect to any records maintained by Adviser or any other
subadviser to a Portfolio, which records are not also maintained by or otherwise
available to the Subadviser upon reasonable request; and (B) acts of the
Subadviser that were made in reasonable reliance upon information provided to it
by the Adviser. 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 1 of this
Subadvisory Agreement (including, but not limited to, the investment objectives,
policies and restrictions applicable to a Portfolio and qualifications of a
Portfolio as a regulated investment company under the Code) with respect to the
portion of assets of a Portfolio allocated to Subadviser. The Adviser shall
indemnify the Indemnified Parties from any liability arising from the conduct of
the Adviser and any other subadviser with respect to the portion of a
Portfolio's assets not allocated to Subadviser.
10. PERMISSIBLE INTERESTS. Trustees and agents of the Trust 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 Trust as trustees, or otherwise; and the Subadviser (or any successor) is or
may be interested in the Trust in some manner.
-10-
<PAGE>
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 Trustees of
the Trust 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 Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio voting separately from any other
series of the Trust.
With respect to each Portfolio, this Agreement may be
terminated at any time, without payment of a penalty by the Portfolio or the
Trust, by vote of a majority of the Trustees, 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 Trust, 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 Trust; provided, however, that this Agreement may not be terminated by
the Subadviser unless another subadvisory agreement has been approved by the
Trust in accordance with the Act, or after six months' written notice, whichever
is earlier. The termination of this Agreement with respect to any Portfolio or
the addition of any Portfolio to Schedule A hereto (in the manner required by
the Act) shall not affect the continued effectiveness of this Agreement with
respect to each other Portfolio subject hereto. This Agreement shall
automatically terminate in the event of its assignment (as defined by the Act).
This Agreement will also terminate in the event that the
Advisory Agreement by and between the Trust and the Adviser is terminated.
12. SEVERABILITY. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
13. AMENDMENTS. This Agreement may be amended by mutual consent in
writing, but the consent of the Trust 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. PERSONAL LIABILITY. The Declaration of the Trust establishing the
Trust (the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, and, in accordance with that Declaration, no
Trustee, shareholder, officer, employee or agent of the Trust shall be held to
any personal liability, nor shall resort be had to their private property for
satisfaction of any obligation or claim or otherwise in connection with the
affairs of the Trust, but the "Trust Property" only shall be liable.
-11-
<PAGE>
16. SEPARATE SERIES. Pursuant to the provisions of the Declaration,
each Portfolio is a separate series of the Trust, 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 Trust 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: Bankers Trust Company
130 Liberty Street
New York, New York 10006
Attention: Structured Investment
Management-Documentation Group
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
with a copy to: SunAmerica Inc.
1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Susan L. Harris
Senior Vice President,
General Counsel - Corporate Affairs
and Secretary
-12-
<PAGE>
IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Agreement as of the date first above
written.
SUNAMERICA ASSET MANAGEMENT CORP.
By: /s/ PETER A. HARBECK
----------------------------
Name: Peter A. Harbeck
Title: President
BANKERS TRUST COMPANY
By: /s/ IRENE S. GREEBERG
----------------------------
Name: Irene S. Greenberg
Title: Vice President
-13-
