<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ANCHOR PATHWAY FUND, SUNAMERICA SERIES TRUST
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
------------------------------------------------------------------------
<PAGE>
PRELIMINARY COPY
SUNAMERICA SERIES TRUST
ANCHOR PATHWAY FUND
P.O. BOX 54299
LOS ANGELES, CALIFORNIA 90054-0299
NOTICE OF JOINT SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders:
NOTICE IS HEREBY GIVEN that a Joint Special Meeting (the "Meeting") of
shareholders of SunAmerica Series Trust and Anchor Pathway Fund (each a "Trust",
and, collectively, the "Trusts"), will be held on March 21, 1997, at 10:00 a.m.,
Eastern time, at the offices of SunAmerica Asset Management Corp., The
SunAmerica Center, 733 Third Avenue, New York, NY 10017 for the purpose of
considering the following proposals with respect to each Trust or with respect
to one or more of their respective series or portfolios ("Portfolios"), as
indicated below:
1. For each Trust, to elect a slate of five members to its Board of Trustees to
hold office until their successors are duly elected and qualified;
2. For each Portfolio, to approve or disapprove certain changes to its
fundamental investment restrictions;
3. For Provident Growth Portfolio, a separate series of SunAmerica Series
Trust, to approve or disapprove (a) a new subadvisory agreement between
SunAmerica Asset Management Corp. ("SAAMCo") and Putnam Investment
Management, Inc., the proposed new subadviser for the Portfolio; and (b) an
amendment to the advisory agreement (the "Advisory Agreement") between the
Trust and SAAMCO in order to revise the breakpoints in the fee the Portfolio
pays to SAAMCO pursuant to the Advisory Agreement;
4. For Venture Value Portfolio, a separate series of SunAmerica Series Trust,
to approve or disapprove an amendment to the subadvisory agreement (the
"Davis Subadvisory Agreement") between SAAMCo and Davis Selected Advisers,
L.P. ("Davis"), the Portfolio's subadviser, pursuant to which Davis may
delegate any of its responsibilities under the Davis Subadvisory Agreement
to one of its affiliates, including Davis Selected Advisers-NY, Inc.;
5. For each Portfolio of SunAmerica Series Trust, to approve or disapprove a
proposal to permit SAAMCo to enter into new or amended contracts with
subadvisers without obtaining shareholder approval;
<PAGE>
6. For each Trust, to ratify the selection of independent accountants for its
current fiscal year; and
7. To transact such other business as may properly come before the Meeting or
any adjournments thereof.
The Trustees of each Trust have fixed the close of business on February 7,
1997 as the record date for determining the number of shares outstanding and the
contract owners entitled to give voting instructions with respect to the
Portfolios of each Trust.
By Order of the Boards of Trustees,
Susan L. Harris
Secretary
February 17, 1997
EACH CONTRACT OWNER IS URGED TO EXERCISE THE RIGHT TO GIVE VOTING
INSTRUCTIONS FOR THE JOINT SPECIAL MEETING OF SHAREHOLDERS OF THE TRUSTS BY
FILLING IN, DATING AND SIGNING THE ENCLOSED VOTING INSTRUCTIONS CARD AND
RETURNING IT IN THE RETURN ENVELOPE PROVIDED.
<PAGE>
PRELIMINARY COPY
SUNAMERICA SERIES TRUST
ANCHOR PATHWAY FUND
P.O. BOX 54299
LOS ANGELES, CALIFORNIA 90054-0299
PROXY STATEMENT
JOINT SPECIAL MEETING OF SHAREHOLDERS
MARCH 21, 1997, 10:00 A.M.
Each of SunAmerica Series Trust ("Series Trust") and Anchor Pathway Fund
("Anchor Pathway") (each a "Trust") is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"). Series Trust currently consists of eighteen investment portfolios
("Series Trust Portfolios"). Anchor Pathway currently consists of seven
investment portfolios ("Anchor Pathway Portfolios," and, collectively with the
Series Trust Portfolios, "Portfolios"). Shares of the Series Trust Portfolios
are offered to the Variable Separate Account and to the Variable Annuity Account
Four of Anchor National Life Insurance Company ("Anchor National") and to the FS
Variable Separate Account of First SunAmerica Life Insurance Company ("First
SunAmerica," and collectively with Anchor National, the "Companies"), and shares
of the Anchor Pathway Portfolios are offered to the Variable Separate Account of
Anchor National, to fund benefits under certain variable annuity contracts
("contracts") issued by the Companies. SunAmerica Asset Management Corp.
("SAAMCo") serves as investment adviser, manager and administrator for Series
Trust. Capital Research and Management Company ("CRMC") serves as investment
adviser, and Anchor Investment Adviser, Inc., a wholly owned subsidiary of
Anchor National, serves as business manager and administrator for Anchor
Pathway.
A listing of the proposals described in this Proxy Statement and the
Portfolio(s) to which each applies is set forth below.
<TABLE>
<CAPTION>
PORTFOLIOS TO WHICH PROPOSAL
SUMMARY OF PROPOSAL APPLIES
- ------------------------------------------------------ -------------------------------
<S> <C>
1. To elect a slate of five members to the Board of Series Trust Portfolios: All
Trustees to hold office until their successors are Anchor Pathway Portfolios: All
duly elected and qualified
</TABLE>
1
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<TABLE>
<CAPTION>
PORTFOLIOS TO WHICH PROPOSAL
SUMMARY OF PROPOSAL APPLIES
- ------------------------------------------------------ -------------------------------
2. To approve certain changes to its fundamental Series Trust Portfolios: All
investment restrictions. Each of such changes will be Anchor Pathway Portfolios: All
voted on separately, as described in Proposal No. 2.
<S> <C>
3. To approve or disapprove (a) a new subadvisory Series Trust Portfolios:
agreement between SAAMCo and Putnam Investment Provident Growth Portfolio only
Management Inc. ("Putnam"), the proposed new
subadviser for the Provident Growth Portfolio, and (b)
an amendment to the advisory agreement (the "Advisory
Agreement") between the Trust and SAAMCO in order to
revise the breakpoints in the fees the Portfolio pays
to SAAMCO pursuant to the Advisory Agreement.
4. To approve or disapprove an amendment to the Series Trust Portfolios:
subadvisory agreement between SAAMCo and Davis Venture Value Portfolio only
Selected Advisers, L.P. ("Davis"), the Portfolio's
subadviser, pursuant to which Davis may delegate any
of its responsibilities under the Davis Subadvisory
Agreement to one of its affiliates, including Davis
Selected Advisers-NY, Inc. ("DSA-NY")
5. To approve or disapprove a proposal to permit Series Trust Portfolios: All
SAAMCo to enter into new or amended contracts with
subadvisers without obtaining shareholder approval.
6. To ratify the selection of independent accountants Series Trust Portfolios: All
for its current fiscal year. Anchor Pathway Portfolios: All
7. To transact such other business as may properly Series Trust Portfolios: All
come before the Meeting or any adjournments thereof. Anchor Pathway Portfolios: All
</TABLE>
In accordance with applicable law, this Proxy Statement is being mailed, on
or about February 20, 1997, on behalf of the Board of Trustees of each Trust, to
the shareholders of each of their respective Portfolios for their use in
obtaining voting instructions from contract owners on the proposals to be
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considered at a joint special meeting of shareholders of each Trust scheduled to
be held at the offices of SAAMCo, The SunAmerica Center, 733 Third Avenue, New
York, New York 10017, on March 21, 1997, at 10:00 a.m., Eastern time. The
Trustees have fixed the close of business on February 7, 1997 as the record date
(the "Record Date") for determining the number of shares outstanding and the
contract owners entitled to be present at the Meeting and give voting
instructions to the Companies with respect to their respective "portion" of
shares of the Trust or each Portfolio as of the Record Date.
Each Trust expects that the solicitation of voting instructions from
contract owners will be made by mail, and solicitation also may be made by
telephone communications from officers or employees of SAAMCo, the Companies, or
their affiliates, who will not receive any compensation therefor from the
Trusts. Fees and expenses of such solicitation will be borne pro rata by the
Portfolios, except that half of such fees and expenses with respect to the
Venture Value Portfolio of Series Trust will be borne by Davis. In connection
with the solicitation of voting instructions, the Companies will furnish a copy
of this Proxy Statement to all contract owners.
At the Record Date, the total number of shares of Series Trust outstanding
was of which shares ( %) were held by the Variable Separate
Account of Anchor National, shares ( %) were held by the FS Variable
Separate Account of First SunAmerica and shares ( %) were held by the
Variable Annuity Account Four of Anchor National; and the total number of shares
of Anchor Pathway outstanding was , all of which were held by the Variable
Separate Account of Anchor National.
[There were no persons who, as of the Record Date, were known to the Trusts
to have allocated contributions under their annuity contracts such that, upon
the pass through of voting rights by the Companies, they would have the right to
give voting instructions with respect to more than 5% of the outstanding shares
of either Trust or any Portfolio.] [Confirm] To the knowledge of management, the
Trustees and executive officers of each Trust, both individually and as a group,
owned less than 1% of the outstanding shares of such Trust and each respective
Portfolio as of the Record Date.
The Companies, the holders of record shares of each Portfolio, are required
to "pass through" to their contract owners the right to vote shares of each
Portfolio. Each Trust expects that the Companies will vote 100% of the shares of
the Portfolios held by their respective separate accounts. The Companies will
vote shares of the Portfolios for which no instructions have been received in
the same proportion as they vote shares for which they have received
instructions. Abstentions will have the effect of a negative vote on a
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proposal. Unmarked voting instructions from contract owners will be voted in
favor of the proposals. The Companies, as record shareholders of each of the
Portfolios, may adjourn the Meeting for a period or periods of not more than 60
days in the aggregate, if necessary to obtain additional voting instructions
from contract owners. The cost of preparing and distributing to contract owners
additional proxy materials if required in connection with any adjournment will
be borne by the Portfolios.
Voting instructions executed by contract owners may be revoked by a written
instrument received by the Secretary of each Trust at any time before they are
exercised, by the delivery of a later-dated voting instructions card or by
attendance at the Meeting and voting in person.
All information in the Proxy Statement about Davis and DSA-NY has been
provided by Davis; all information in the Proxy Statement about Putnam has been
provided by Putnam; and all information in the Proxy Statement about SAAMCo and
the Companies has been provided by SAAMCo and the Companies.
The Trustees do not know of any other business to be brought before the
Meeting. If any other matters properly come before the Meeting, the proxies
named by the shareholders will vote on such matters in their discretion.
ELECTION OF FIVE TRUSTEES
PROPOSAL NO. 1
INTRODUCTION
Prior to November 23, 1996, the Board of Trustees of each Trust was composed
of five members, two of whom were not interested persons of the Trusts, as that
term is defined in the 1940 Act. As a result of the untimely death of Mr. Gordon
Hampton on November 23, 1996 and the resignation of Mr. Frank Ellsworth
effective February 1, 1997, the Board of Trustees of each Trust has been reduced
to three members, all of whom are interested persons. Under the 1940 Act, no
more than 60% of the Board of Trustees can be interested persons. In this
regard, the Trusts expect to obtain an order of exemption from the Securities
and Exchange Commission (the "Commission"), pursuant to which the Trusts have
until March 21, 1997 to fill the vacancies on the Boards in order to bring the
composition of each Board into compliance with the requirements of the 1940 Act.
At the Meeting, a slate of five persons, including two who are not
interested persons of either Trust, will be elected to serve as Trustees of each
Trust, to hold office until their successors are duly elected and qualified. It
is
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the intention of the persons named in the accompanying form of proxy to vote for
the election of each of the nominees named below, each of whom has consented to
be a nominee. The nominees consist of the three incumbent Trustees and two other
individuals, as shown in the table below.
If any of the nominees would become unavailable for election as a Trustee
before the Meeting, proxies will be voted for the other persons that the
Trustees recommend.
INFORMATION REGARDING NOMINEES
PRINCIPAL OCCUPATION AND OTHER INFORMATION
The nominees designated by an asterisk (*) are "interested persons" of each
Trust, as that term is defined in the Investment Company Act of 1940 (the "1940
Act").
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS DURING PAST
NAME (AGE) SHARES OWNED FIVE YEARS
- ------------------------------ --------------- -------------------------------------
<S> <C> <C>
Richards D. Barger (67)* Senior Partner, Law Firm of Barger &
(Trustee since 1987) Wolen; former Director, Anchor
National (1980 to 1986).
James K. Hunt (44)* Executive Vice President, SunAmerica
(Trustee since 1994) Investments, Inc. (1993 to present);
President, SunAmerica Corporate
Finance (since January 1994); Senior
Vice President, SunAmerica
Investments, Inc. (1990-1993).
Norman J. Metcalfe (53)* Vice Chairman and Chief Financial
(Trustee since 1989) Officer, The Irvine Company (March
1993 to December 1996); Executive
Vice President (1986-1992) and
Director (1984-1993), SunAmerica
Inc.; formerly, President, SunAmerica
Investments, Inc.(1988-1992); and
Executive Vice President and
Director, Anchor National
(1986-1992).
</TABLE>
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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS DURING PAST
NAME (AGE) SHARES OWNED FIVE YEARS
- ------------------------------ --------------- -------------------------------------
Allan L. Sher (65) Director, Board of Governors,
American Stock Exchange (1991 to
present); Former Chairman and Chief
Executive Officer, Bateman Eichler,
Hill Richards (securities firm)
(1990-1992); Vice Chairman
(1989-1990), Senior Executive Vice
President (1985-1989) and Executive
Vice President (1983-1985), Drexel
Burnham Lambert Incorporated.
<S> <C> <C>
William M. Wardlaw (50) Partner, Freeman Spogli & Co.,
Incorporated (privately owned
merchant banking firm)
(1988-Present); Managing Partner,
Riordan & McKinzie (law firm
specializing in corporate and
securities law) (1984-1988); Partner
(1980-1984) and Associate
(1972-1980), O'Melveny & Meyers (law
firm).
</TABLE>
The Trustees met four times during the fiscal year ended November 30, 1996.
The incumbents attended 100% of the aggregate number of meetings of the
Trustees.
EXECUTIVE OFFICERS OF EACH TRUST
<TABLE>
<CAPTION>
POSITION WITH EXPERIENCE DURING
NAME (AGE) THE TRUSTS THE PAST FIVE YEARS
- --------------------------- ----------------- ---------------------------------------
<S> <C> <C>
James K. Hunt (44) Chairman of the Executive Vice President, SunAmerica
Board; President Investments, Inc. (1993 to present);
(Series Trust President, SunAmerica Corporate Finance
only) (since January 1994); Senior Vice
President, SunAmerica Investments, Inc.
(1990-1993).
</TABLE>
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<TABLE>
<CAPTION>
POSITION WITH EXPERIENCE DURING
NAME (AGE) THE TRUSTS THE PAST FIVE YEARS
- --------------------------- ----------------- ---------------------------------------
Scott L. Robinson (50) Senior Vice Senior Vice President and Controller,
President, SunAmerica Inc. (since 1991); Senior
Treasurer and Vice President, Anchor National (since
Controller 1988); Vice President and Controller,
SunAmerica Inc. (1986-1991), joined
SunAmerica Inc. in 1978.
<S> <C> <C>
Susan L. Harris (39) Vice President, Senior Vice President (since November
Counsel and 1995), Secretary (since 1989) and
Secretary General Counsel--Corporate Affairs
(since December 1994), SunAmerica Inc.;
Senior Vice President and Secretary,
Anchor National (since 1990); joined
SunAmerica Inc. in 1985.
Peter C. Sutton (31) Vice President Vice President, SunAmerica Asset
Management Corp. (since September
1994); Treasurer, SunAmerica Funds
(since February 1996); Controller,
SunAmerica Mutual Funds (1993-1996);
Assistant Controller, SunAmerica Mutual
Funds (1990-1993).
</TABLE>
All officers of each Trust are elected annually and serve until their
successors are elected and qualified. Mr. Robinson's and Ms. Harris's principal
business address is 1 SunAmerica Center, Los Angeles, CA 90067. Mr. Sutton's
principal business address is 733 Third Avenue, New York, NY 10017.
REMUNERATION OF TRUSTEES AND OFFICERS
The Trusts pay no salaries or compensation to any of their officers, all of
whom are officers or employees of Anchor National or its affiliates. Series
Trust pays an annual fee of $7,000, plus $500 for each meeting attended, and
expenses to each Trustee who is not an officer or employee of Anchor National or
its affiliates for attendance at meetings of the Board of Trustees. Anchor
Pathway pays an annual fee of $8,000, plus $1,250 for each
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meeting attended, and expenses to each Trustee who is not an officer or employee
of Anchor National or its affiliates for attendance at meetings of the Board of
Trustees. The following table sets forth information summarizing the
compensation of each of the Trustees for his services as Trustee for the fiscal
year ended November 30, 1996.
COMPENSATION TABLE
<TABLE>
<CAPTION>
TOTAL COMPENSATION
AGGREGATE AGGREGATE PAID TO TRUSTEES
COMPENSATION COMPENSATION FROM EACH TRUST
INDEPENDENT FROM FROM AND THE FUND
TRUSTEES SERIES TRUST ANCHOR PATHWAY COMPLEX*
- ----------------- --------------- ------------------ --------------------
<S> <C> <C> <C>
Richards D.
Barger........... $ 9,000 $ 13,000 $ 22,000
Norman J.
Metcalfe......... $ 9,000 $ 13,000 $ 22,000
Frank L.
Ellsworth........ $ 9,000 $ 13,000 $ 22,000
Gordon F.
Hampton.......... $ 9,000 $ 13,000 $ 22,000
</TABLE>
- ------------------------
* Each of the Trustees served on the Board of Trustees of one other investment
company within the same fund complex as the Trusts.
REQUIRED VOTE. For each Trust, the candidates receiving the affirmative
vote of a majority of the votes cast for the election of Trustees at the Meeting
will be elected, provided a quorum is present. Shares of all Portfolios of each
Trust vote together as a single class for the Trustees of such Trust's Board.
EACH BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" EACH OF THE NOMINEES UNDER
PROPOSAL NO. 1
------------------------
APPROVAL OR DISAPPROVAL OF PROPOSAL
TO AMEND CERTAIN
FUNDAMENTAL INVESTMENT RESTRICTIONS
PROPOSAL NO. 2
The Meeting has been called to consider a proposal to amend certain
fundamental investment restrictions of each Trust. The Board of Trustees of each
Trust approved this proposal at a meeting held on January 21, 1997.
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As described below, the Trustees recommend that shareholders approve a
number of changes to the Trusts' fundamental investment restrictions, including
the re-classification of certain of these investment restrictions as
non-fundamental. Fundamental restrictions may be changed only with shareholder
approval, while restrictions designated as non-fundamental may be changed by a
Trust's Board of Trustees without shareholder approval.
SUMMARY
Certain of the fundamental restrictions that the Trusts have adopted in the
past reflect regulatory, business or industry conditions, practices or
requirements that are no longer in effect. Other of the fundamental restrictions
reflect regulatory requirements which remain in effect, but are not required to
be stated as fundamental, or in some cases even as non-fundamental,
restrictions. Accordingly, the Boards have approved amendments to their
respective Trusts' fundamental restrictions in order to simplify, modernize and
make more uniform those investment restrictions that are required to be
fundamental, and to eliminate those that are no longer legally required. In
certain instances, existing fundamental restrictions that are eliminated because
they are not required to be fundamental would be re-classified as
non-fundamental restrictions, and therefore could be further modified by the
Boards without shareholder approval.
Each Trust's Board believes that the proposed changes to the Trust's
fundamental restrictions will enhance investment flexibility and the ability of
SAAMCo or CRMC (each, an "Adviser," and together, the "Advisers"), as
appropriate, to manage the Portfolios more efficiently as regulatory and
investment conditions change. In addition, by reducing to a minimum those
policies which can be changed only with a vote of the shareholders, each Trust
will more often be able to avoid the cost and delay of a shareholder meeting
when making changes to investment policies that the Board considers desirable.
However, the Boards do not anticipate at this time that the changes,
individually or in the aggregate, will result in a major restructuring of any of
the Trusts' investment portfolios.
A summary of each proposed change to the Trusts' fundamental restrictions is
set forth below. Shareholders should refer to Exhibit A for the text of each
Trust's fundamental restrictions as they currently exist. Also described below
are those non-fundamental restrictions that would be adopted by the Boards in
conjunction with the elimination of certain fundamental restrictions. A
non-fundamental restriction may be modified or eliminated by the appropriate
Board at any time without approval of shareholders.
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If the proposed changes to the Trusts' investment restrictions are approved
by shareholders at the Meeting, the Trusts' prospectuses and statements of
additional information will be revised as appropriate to reflect those changes.
This Proposal No. 2 will not result in a change to the investment objective of
any Portfolio of the Trusts.
PROPOSED CHANGES:
2(A). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
INVESTMENTS IN ILLIQUID SECURITIES.
2(B). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
PLEDGING THEIR ASSETS.
2(C). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
OPTIONS TRANSACTIONS.
2(D). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
INVESTMENTS IN SECURITIES OF OTHER INVESTMENT COMPANIES.
2(E). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
INVESTMENTS IN COMPANIES FOR THE PURPOSE OF EXERCISING CONTROL.
2(F). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
UNDERWRITING OF SECURITIES ISSUED BY OTHERS.
2(G). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
SHORT SALES.
2(H). AMENDING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
MAKING LOANS.
2(I). AMENDING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
BORROWING MONEY.
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<PAGE>
The relevant Trust and the Portfolios affected by each of these proposed
changes are listed below:
<TABLE>
<CAPTION>
TRUST NAME APPLICABLE PROPOSALS
- --------------------------------------- -----------------------------------------
<S> <C>
Series Trust:
Cash Management Portfolio 2(a), 2(b), 2(c), 2(d)
All Other Portfolios 2(b), 2(d), 2(e), 2(f), 2(g), 2(h), 2(i)
Anchor Pathway:
Cash Management Series 2(a), 2(b), 2(c), 2(d)
U.S. Government/AAA-Rated 2(a), 2(b), 2(d)
Securities Series
All Other Portfolios 2(a), 2(b), 2(c), 2(d), 2(e), 2(f), 2(g),
2(h), 2(i)
</TABLE>
DISCUSSION
2(A). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
INVESTMENTS IN ILLIQUID SECURITIES.
Upon approval of this Proposal, the existing fundamental restrictions of
each applicable Portfolio relating to investments in repurchase agreements
maturing in more than seven days or in any other illiquid securities would be
eliminated. Each such Portfolio, except for the Cash Management Portfolio of
Series Trust and the Cash Management Series of Anchor Pathway, would in turn
become subject to the following proposed non-fundamental restriction:
The Portfolio may not:
Enter into any repurchase agreement maturing in more than seven
days or invest in any other illiquid security if, as a result,
more than 15% of a Portfolio's total assets would be so
invested. Restricted securities eligible for resale pursuant to
Rule 144A under the Securities Act that have a readily available
market, and commercial paper exempted from registration under
the Securities Act pursuant to Section 4(2) of that Act that may
be offered and sold to "qualified institutional buyers" as
defined in Rule 144A, which the Adviser has determined to be
liquid pursuant to guidelines established by the Trustees, will
not be considered illiquid for purposes of this limitation on
illiquid securities.
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The Cash Management Portfolio of Series Trust and the Cash Management Series
of Anchor Pathway would become subject to the following proposed non-fundamental
restriction:
The Portfolio may not:
Enter into any repurchase agreement maturing in more than seven
days or invest in any other illiquid security if, as a result,
more than 10% of the Portfolio's total assets would be so
invested. Restricted securities eligible for resale pursuant to
Rule 144A under the Securities Act that have a readily available
market, and commercial paper exempted from registration under
the Securities Act pursuant to Section 4(2) of that Act that may
be offered and sold to "qualified institutional buyers" as
defined in Rule 144A, which the Adviser has determined to be
liquid pursuant to guidelines established by the Trustees, will
not be considered illiquid for purposes of this limitation on
illiquid securities.
DISCUSSION. Each Portfolio's investment restriction relating to illiquid
securities was initially adopted as fundamental due to regulatory requirements
at such time limiting such investments to 10% of its net assets. Current
regulatory requirements no longer mandate that an investment company's policy
restricting investment in illiquid securities be fundamental. In addition,
although money market funds continue to be subject to a 10% limitation on
holdings of illiquid securities, other investment companies are subject to a
limitation of 15% of net assets, which may be invested in any combination of (a)
securities which are not readily marketable, (b) securities restricted as to
resale (excluding securities determined by the Trustees of the Trust (or the
person designated by the Trustees of the Trust to make such determinations) to
be readily marketable), and (c) repurchase agreements maturing in more than
seven days. With respect to (b), the Commission currently looks to the
marketability of a security, rather than the existence of market quotations, to
determine a security's illiquidity.
The current restrictions are reflected in the proposed non-fundamental
restriction that will be adopted by each of the applicable Portfolios upon
approval of this Proposal by shareholders. The Trustees believe that eliminating
this fundamental restriction would provide the Portfolios with the needed
flexibility to respond quickly to legal, regulatory and market developments
regarding investments in illiquid securities. The Trustees could then modify or
eliminate the restriction to increase each Portfolio's investment flexibility
without the costs associated with a special meeting of shareholders, or
depriving a Portfolio of beneficial investment opportunities.
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<PAGE>
To the extent a Portfolio invests in illiquid securities, it may encounter
difficulty in determining the fair value of such securities for purposes of
computing net asset value. In addition, a Portfolio could encounter difficulties
satisfying redemption requests within seven days if it could not readily dispose
of its illiquid investments.
2(B). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
PLEDGING THEIR ASSETS.
Upon approval of this Proposal, the existing fundamental restrictions
relating to pledging of assets would be eliminated. Each Portfolio would in turn
become subject to a proposed non-fundamental restriction that will be identical
to the fundamental restriction currently in effect, except that it may be
changed at any time by the Board of Trustees without a vote of shareholders.
DISCUSSION. The Trustees believe that approval of this proposal will
provide enhanced flexibility and could assist each Portfolio in achieving its
investment objectives. There are currently no regulatory limits on pledging
activity. Re-classifying the fundamental restriction related thereto as non-
fundamental would provide each Portfolio with maximum flexibility to respond
quickly to market developments, as the Trustees could modify or eliminate the
restriction without the costs associated with a special meeting of shareholders.
Pledging assets does entail certain risks. To the extent that a Portfolio
pledges its assets, such Portfolio may have less flexibility in liquidating
assets. This may delay such Portfolio's ability to meet redemption requests or
other obligations.
2(C). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT
RESTRICTIONS RELATING TO OPTIONS TRANSACTIONS
Upon approval of this Proposal, the existing fundamental restrictions of the
applicable Portfolios relating to options transactions would be eliminated. Each
such Portfolio would in turn become subject to the following proposed
non-fundamental restriction, as appropriate:
The Portfolio may not:
Invest in puts, calls, straddles, spreads or any combination
thereof, except as permitted by the Prospectus and Statement of
Additional Information, as amended from time to time.
13
<PAGE>
DISCUSSION. If this Proposal is approved, each Portfolio will be able to
engage in a variety of options transactions for hedging purposes and to increase
investment returns. The Advisers believe that approval of this proposal will
provide enhanced investment flexibility and could assist each Portfolio in
achieving its investment objectives.
When a Portfolio purchases a call option, it obtains the right to purchase,
and obligates the writer to sell, a security, currency or unit of an index, at
the exercise price prior to or on the expiration date. In order for a call
option purchased by a Portfolio to be profitable, the market price of the
underlying security must rise sufficiently above the exercise price to cover the
premium and transaction costs paid by the Portfolio. When a Portfolio purchases
a put option, it obtains the right to sell, and obligates the writer to buy, a
security at the exercise price prior to or on the expiration date. In order for
a put option purchased by a Portfolio to be profitable, the market price of the
underlying security must decline sufficiently below the exercise price to cover
the premium and transaction costs paid by the Portfolio. If an option expires
unexercised, the Portfolio will lose its premium payment.
When a Portfolio writes a call option, it loses the opportunity to profit
from any increase in the price of the security above the exercise price. When a
Portfolio writes a put option, it takes a risk that it will be required to
purchase the security from the option holder at a price above the current market
value. A Portfolio receives a premium for writing a call or put option
(representing the cost of the option), which increases the return to the
Portfolio if the option expires unexercised.
The successful use of options depends on the ability of the Adviser to
predict correctly interest rate and market movements. It also depends on the
Portfolio's ability to terminate option positions at times when the Adviser
believes it is desirable to do so. There is no assurance that the Portfolio will
be able to effect closing transactions at any particular time or at an
acceptable price.
14
<PAGE>
2(D). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT
RESTRICTIONS RELATING TO INVESTMENTS IN SECURITIES OF OTHER INVESTMENT
COMPANIES.
Upon approval of this Proposal, the fundamental restrictions of the
applicable Portfolios relating to investments in securities of other investment
companies would be eliminated. Each such Portfolio would in turn become subject
to the following proposed non-fundamental restriction:
The Portfolio may not:
Invest in securities of other investment companies, except to the
extent permitted by applicable law and the Prospectus and Statement of
Additional Information, as amended from time to time.
DISCUSSION. The 1940 Act imposes limitations on an investment company's
ability to purchase and sell securities of other investment companies which are
less restrictive than each of the applicable Portfolio's current restrictions.
If this proposal is approved, each of these Portfolios would be able to invest
in other open-end investment companies and unit investment trusts to the extent
allowed by the 1940 Act and the Portfolio's investment policies. Investment in
these entities may involve duplication of certain fees and expenses, but the
Trustees believe that this enhanced flexibility could provide attractive
investment opportunities and may assist each Portfolio in meeting its investment
objective.
2(E). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT
RESTRICTIONS RELATING TO INVESTMENTS IN COMPANIES FOR THE
PURPOSE OF EXERCISING CONTROL.
Upon approval of this Proposal, the fundamental restrictions of the
applicable Portfolios relating to investments in companies for the purpose of
exercising control would be eliminated. Each such Portfolio would in turn become
subject to the following proposed non-fundamental restriction:
The Portfolio may not:
Invest in companies for the purpose of exercising control or
management.
DISCUSSION. Eliminating this restriction would allow the applicable
Portfolios flexibility in the future to freely exercise their rights as
shareholders in the various companies in which they can invest. These rights may
include the active opposition or support of such companies' management. These
activities could at times fall within the technical definition of control under
the securities laws.
15
<PAGE>
The Trustees believe that approval of this proposal will provide each
applicable Portfolio with additional flexibility to protect the value of their
investments through the exercise of influence on the management of the companies
in which they invest. The proposed non-fundamental restriction could be
eliminated by the Trustees at any time that they believed it was in the best
interest of a Portfolio to do so, without incurring the cost and delay of a
shareholder meeting. If this occurred, the Portfolio would be allowed to freely
communicate its views as a shareholder on company policies that affect the value
of such Portfolio's investment. Activities in which a Portfolio would then be
able to engage include seeking changes in a company's goals, management, or
board of directors, seeking the sale of some or all of a company's assets, or
voting to participate in or oppose a takeover effort with respect to the
company.
These types of corporate activities are highly susceptible to litigation,
and the Portfolios may be drawn into lawsuits related to them. The Trustees and
the Adviser will direct their efforts toward those instances where they feel the
benefit to a Portfolio outweighs the potential risk of litigation.
2(F). ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT
RESTRICTIONS RELATING TO UNDERWRITING OF SECURITIES ISSUED
BY OTHERS.
Upon approval of this Proposal, the fundamental restrictions of the
applicable Portfolios relating to the underwriting of securities issued by
others would be eliminated. Each such Portfolio would in turn become subject to
the following proposed non-fundamental restriction:
The Portfolio may not:
Engage in underwriting of securities issued by others, except to
the extent it may be deemed to be acting as an underwriter in
the purchase and resale of portfolio securities.
DISCUSSION. The securities laws limit an investment company's ability to
act as an underwriter of securities issued by others. However, this limitation
does not need to be a fundamental restriction. The Trustees believe that
re-classifying the applicable fundamental restrictions as non-fundamental would
allow each Portfolio to respond quickly to changes to the applicable laws, if
market conditions so warranted. This could then be done without incurring the
cost to each Portfolio associated with a shareholder meeting.
16
<PAGE>
2(G) ELIMINATING THE TRUSTS' FUNDAMENTAL INVESTMENT
RESTRICTIONS RELATING TO SHORT SALES.
Upon approval of this Proposal, the fundamental restriction of the
applicable Portfolios relating to short sales would be eliminated. Each such
Portfolio would in turn become subject to the following proposed non-fundamental
restriction:
The Portfolio may not:
Sell securities short, except to the extent permitted by
applicable law.
DISCUSSION. If this Proposal is approved, each of the applicable Portfolios
will be able to engage in short sales. However, each Adviser currently intends
only to engage in short sales "against the box" with respect to these
Portfolios, a practice which the current fundamental restrictions permit.
In a typical short sale, a Portfolio borrows from a broker a security that
it anticipates will decline in value in order to sell such security to a third
party. The Portfolio is then obligated to return a security of the same issue
and quantity at some future date, and it realizes a loss to the extent that the
security increases in value and a profit to the extent the security declines in
value (after including any associated costs). Short sales "against the box" are
those where the Portfolio owns or has the right to acquire at no added cost the
identical security to that sold short.
2(H). AMENDING THE TRUSTS' FUNDAMENTAL INVESTMENT
RESTRICTIONS RELATING TO MAKING LOANS.
Upon approval of this Proposal, the fundamental restriction of the
applicable Portfolios relating to making loans would be amended to standardize
the language of each such restriction and to allow each such Portfolio to enter
into securities loans. The proposed amended fundamental restriction is set forth
below:
The Portfolio may not:
Make loans to others except for (a) the purchase of debt
securities; (b) entering into repurchase agreements; and (c) the
lending of its portfolio securities.
DISCUSSION. If this Proposal is approved, each of the applicable Portfolios
will be able to lend its portfolio securities to brokers, dealers and other
financial institutions. The Trustees believe that this investment flexibility
may assist each applicable Portfolio in achieving its investment objective.
17
<PAGE>
In lending its portfolio securities, a Portfolio receives income while
retaining the securities' potential for capital appreciation. Such loans are at
all times secured by cash or equivalent collateral. The advantage of such loans
is that a Portfolio continues to earn interest and dividends on the loaned
securities while at the same time earning interest on the collateral. These
loans involve some risk to the Portfolio if the other party should default on
its obligation. If the other party in these transactions should become involved
in bankruptcy proceedings, it is possible that the Portfolio may encounter a
delay in recovery or even a loss of rights in the collateral. However, loans of
a Portfolio's securities will only be made to firms deemed by the Adviser to be
creditworthy.
2(I). AMENDING THE TRUSTS' FUNDAMENTAL INVESTMENT RESTRICTIONS RELATING TO
BORROWING MONEY.
Upon approval of this Proposal, the fundamental restriction of the
applicable Portfolios relating to borrowing money would be amended to
standardize the language of each such restriction and to allow each such
Portfolio to borrow for investment purposes. The proposed amended fundamental
restriction is set forth below:
The Portfolio may not:
Borrow money, except to the extent permitted by applicable law.
DISCUSSION. Several of the applicable Portfolios are currently allowed to
borrow only in an amount not in excess of 5% of the value of such Portfolios'
total assets. Current regulatory requirements prohibit the Portfolios from
borrowing more than 10% of their total assets, except that a Portfolio may
temporarily borrow up to 25% of its total assets when such borrowing is
necessary to meet redemption requests. Accordingly, the revised policy on
borrowing would provide the applicable Portfolios with additional authority to
borrow. The Trustees believe that amending this fundamental restriction as set
forth above would provide the applicable Portfolios with the needed flexibility
to respond quickly to legal, regulatory and market developments regarding the
borrowing of money and could assist each Portfolio in achieving its investment
objectives. Portfolios occasionally borrow money to fund substantial shareholder
redemptions or exchange requests or for the clearance of transactions when
available cash is not sufficient for these needs. Although the Portfolios have
not experienced difficulties under the current restrictions, the Adviser
believes that the proposed change would enhance flexibility. The proposed change
would also afford each of these Portfolios the same capacity
18
<PAGE>
to satisfy net redemptions of its shares on a temporary basis without having to
resort to sales of portfolio securities at possibly disadvantageous prices.
This proposal will also allow each of the affected Portfolios to borrow
money to take advantage of investment opportunities. This type of borrowing
involves the additional risk that interest expense may be greater that the
income from or appreciation of the securities financed and the value of such
securities may decline below the amount borrowed. If a Portfolio were to follow
this practice, any investment gains made on the securities in excess of the
interest paid on the borrowing would cause the net asset value of the Portfolio
to rise faster than would otherwise be the case. Conversely, if the investment
performance of the additional securities purchased failed to cover their cost
(including any accrued interest on the money borrowed) to the Portfolio, the net
asset value would decrease faster than would otherwise be the case. This is the
speculative factor known as "leverage."
Notwithstanding the foregoing, there is no present intention to make any
change to the way in which any Portfolio is managed.
------------------------
REQUIRED VOTE FOR PROPOSAL 2(A)-(I): Approval of each of the nine items
contained in Proposal No. 2 with respect to the applicable Portfolios of each
Trust requires the affirmative vote of a majority of the outstanding voting
securities of that Portfolio. "Majority" for this purpose under the 1940 Act
means the lesser of (1) more than 50% of the outstanding shares of the Portfolio
or (2) 67% or more of the shares of the Portfolio represented at the meeting if
more than 50% of such shares are represented. Shareholders of any Portfolio may
vote against the changes proposed in any item with respect to specific
fundamental restrictions applicable to their Portfolio in the manner indicated
on the proxy card.
IF ONE OR MORE OF THE ITEMS CONTAINED IN PROPOSAL NO. 2 IS NOT APPROVED BY
THE SHAREHOLDERS OF ONE PORTFOLIO OF A TRUST, THE RELATED EXISTING FUNDAMENTAL
RESTRICTION OF THAT PORTFOLIO WILL CONTINUE IN EFFECT FOR THAT PORTFOLIO OF THAT
TRUST, BUT FAILURE TO APPROVE ALL OR PART OF PROPOSAL NO. 2 BY THE SHAREHOLDERS
OF ONE PORTFOLIO OF A TRUST WILL NOT AFFECT OTHER PARTS OF PROPOSAL NO. 2 THAT
ARE APPROVED WITH RESPECT TO THAT PORTFOLIO OR ANY APPROVALS OF PROPOSAL NO. 2
THAT ARE OBTAINED WITH RESPECT TO ANY OTHER PORTFOLIO OF THE SAME TRUST OR OF
THE OTHER TRUST.
19
<PAGE>
EACH BOARD OF TRUSTEES RECOMMENDS THAT
SHAREHOLDERS VOTE "FOR" EACH ITEM CONTAINED
IN PROPOSAL NO. 2
------------------------
APPROVAL OR DISAPPROVAL OF
(A) NEW SUBADVISORY AGREEMENT BETWEEN SAAMCO
AND PUTNAM, AND (B) AMENDMENT TO ADVISORY
AGREEMENT BETWEEN SAAMCO AND THE TRUST
PROPOSAL NO. 3
SAAMCo is submitting for approval by the shareholders of the Provident
Growth Portfolio, a separate series of Series Trust, of (a) a new subadvisory
agreement between SAAMCO and Putnam (the "Putnam Subadvisory Agreement"), and
(b) an amendment to the Advisory Agreement between the Trust, on behalf of the
Portfolio, and SAAMCo in order to revise the breakpoints in the fee payable by
the Portfolio to SAAMCo pursuant to the Advisory Agreement.
On February , 1997, Provident Investment Counsel, Inc. ("Provident"),
the Portfolio's current subadviser, informed SAAMCo of its intention to resign
as the Portfolio's subadviser effective as of April 15, 1997. In connection
therewith, SAAMCo proposes entering into the Putnam Subadvisory Agreement,
pursuant to which Putnam would serve as the Portfolio's subadviser in place of
Provident. The Putnam Subadvisory Agreement is annexed as Exhibit B. Except for
an increase in the breakpoints in the fee payable by SAAMCo to Putnam thereunder
as described below, the material terms of the Putnam Subadvisory Agreement are
substantially similar to those of the current subadvisory agreement with
Provident (the "Provident Subadvisory Agreement"). In addition, because of the
higher breakpoints in the fee payable by SAAMCo to Putnam pursuant to the Putnam
Subadvisory Agreement, SAAMCo also proposes an amendment to the Advisory
Agreement. Such amendment (the "Fee Amendment") will increase the breakpoints in
the fee payable by the Portfolio to SAAMCo pursuant to the Advisory Agreement to
correspond to the proposed breakpoints in the Putnam Subadvisory Agreement. A
copy of the Advisory Agreement, as proposed to be amended, is annexed as Exhibit
C. The Putnam Subadvisory Agreement and the Fee Amendment will take effect on or
about April 15, 1997, if approved by shareholders of the Provident Growth
Portfolio and the Board of Trustees of Series Trust. It is expected that
Provident will remain as subadviser to the Portfolio until such time.
20
<PAGE>
SAAMCo's responsibilities pursuant to the Advisory Agreement include, among
others, (i) evaluating the Portfolio's performance in comparison to similar
mutual funds and other market information, (ii) conducting searches for a
replacement subadviser for the Portfolio, (iii) selecting, subject to the review
and approval of the Trustees, a subadviser that has distinguished itself by able
performance and (iv) overseeing the continued performance of the subadviser. In
accordance with these duties, following a comprehensive selection process,
SAAMCo has selected Putnam as the replacement subadviser for the Portfolio,
subject to Board and shareholder approval. SAAMCo believes that the retention of
Putnam as subadviser is in the best interests of the Portfolio and its
shareholders.
In identifying Putnam as the replacement subadviser for Provident, SAAMCo
reviewed, among other things, Putnam's historical performance record in managing
growth accounts for private account clients as well as other investment
companies, its name recognition in the investment community, its financial
condition, and overall commitment to the investment advisory business. SAAMCo
also took into account Putnam's normal fee schedule. The fee rate reflected in
the Putnam Subadvisory Agreement reflects the rate agreed upon in arm's length
bargaining between SAAMCo and Putnam, and Putnam has represented to SAAMCo that
such fee rate is the same rate that Putnam charges the other mutual funds for
which it serves as subadviser.
SAAMCo is proposing the Fee Amendment to its Advisory Agreement to ensure
that the amount of the Advisory Fee retained by it remains level. Under the
original arrangement with Provident, SAAMCo retained .35% of average net assets
as its advisory fee. If SAAMCo's rates are not adjusted pursuant to the Fee
Amendment, under the Putnam Subadvisory Agreement, at certain asset levels,
SAAMCo's advisory fee would be reduced to .20%-.30% of average net assets.
Accordingly, SAAMCo has proposed the Fee Amendment so that its advisory fee will
not be diminished if Putnam is retained as subadviser pursuant to the Putnam
Subadvisory Agreement.
The 1940 Act requires that any advisory or subadvisory agreement be approved
by the Board of Trustees, including by the Trustees who are not interested
persons of the Trust. As described under Proposal No. 1 above, due to unforeseen
circumstances, at present the Board of Trustees of Series Trust does not consist
of any Trustees who are not interested persons of the Trust. Accordingly, the
requisite approval by the Trustees of the Putnam Subadvisory Agreement and the
Fee Amendment has not yet been obtained, and cannot be obtained until after the
Trustees have been elected pursuant to Proposal No. 1. It is contemplated that
if this Proposal No. 3 is approved by shareholders, the Trustees, including the
Trustees who are not parties to the
21
<PAGE>
agreement, who have no financial interest in the agreement and who are not
interested persons of any party to the agreement (the "Independent Trustees")
will be asked to vote on and approve the Putnam Subadvisory Agreement and the
Fee Amendment at an in-person meeting of the Board of Trustees to be held on or
about April 15, 1997. Absent such approval, the Putnam Subadvisory Agreement and
the Fee Amendment will not take effect. SAAMCo intends to present to the Board
the information that it reviewed in selecting Putnam as subadviser and has no
reason to believe that the Putnam Subadvisory Agreement and the Fee Amendment
will not be approved by the Board.
When Provident discontinues its position as subadviser to the Portfolio, the
Portfolio will no longer use the word "Provident" in its name. Accordingly,
SAAMCo anticipates that the Trustees will designate "Putnam Growth Portfolio" as
the new name for the Portfolio.
PROPOSED AND CURRENT ADVISORY AND SUBADVISORY FEES
The following chart contains the proposed advisory fee to be payable by the
Portfolio to SAAMCo pursuant to the Fee Amendment and the proposed subadvisory
fee to be payable by SAAMCo to Putnam under the Putnam Subadvisory Agreement. In
addition, the chart contains the fees payable under the Advisory Agreement as
currently in effect and the Provident Subadvisory Agreement. Fees are expressed
as annual percentage rates of the average net assets of the Portfolio. As can be
seen, the maximum fee payable to SAAMCo under the Advisory Agreement and
Provident or Putnam under the respective subadvisory agreement is not proposed
to be changed. The proposed changes are in the breakpoints.
<TABLE>
<CAPTION>
PROPOSED ADVISORY FEE TO SAAMCO PROPOSED SUBADVISORY FEE TO PUTNAM
- ------------------------------------- ----------------------------------------
<S> <C>
.85% on the first $150 million .50% on the first $150 million
.80% on the next $150 million .45% on the next $150 million
.70% over $300 million .35% over $300 million
<CAPTION>
CURRENT ADVISORY FEE TO SAAMCO CURRENT SUBADVISORY FEE TO PROVIDENT
- ------------------------------------- ----------------------------------------
<S> <C>
.85% on the first $50 million .50% on the first $50 million
.80% on the next $100 million .45% on the next $100 million
.70% on the next $100 million .35% on the next $100 million
.65% on the next $100 million .30% on the next $100 million
.60% over $350 million .25% over $350 million
</TABLE>
22
<PAGE>
For the fiscal year ended November 30, 1996, the Portfolio paid SAAMCo an
advisory fee of $1,073,769 (an effective annual fee rate of .83%), of which
$614,721 was paid to Provident (an effective annual fee rate of .48%). Had the
rates pursuant to the Fee Amendment and the Putnam Subadvisory Agreement been in
effect during the fiscal year ended November 30, 1996, the Portfolio would have
paid SAAMCo an advisory fee of $1,114,921 (an effective annual fee rate of
.85%), of which $655,836 would have been paid to the subadviser (an effective
annual fee rate of .50%). These amounts represent increases of $41,152 and
$41,115, or approximately 3.8% and 6.7%, respectively, over such fees actually
paid.
INFORMATION ABOUT SAAMCO AND THE ADVISORY AGREEMENT
SAAMCo is a Delaware corporation and an indirect, wholly owned subsidiary of
Anchor National, which is an indirect subsidiary of SunAmerica Inc., a financial
services company with approximately $39 billion in assets. SAAMCo provides
investment advice and management services to Series Trust, other mutual funds
and private accounts. As of January 31, 1997, SAAMCo and its affiliates managed,
advised or administered assets of more than $8.5 billion. The address of SAAMCo
and First SunAmerica is The SunAmerica Center, 733 Third Avenue, New York, NY
10017-3204. The principal business address of Anchor National and SunAmerica
Inc. is 1 SunAmerica Center, Los Angeles, California 90067-6022.
The following chart lists the executive officers and Directors of SAAMCo and
their principal occupations, if different from their positions with SAAMCo:
<TABLE>
<CAPTION>
NAME POSITION WITH SAAMCO AND PRINCIPAL OCCUPATION
- ----------------------------------- --------------------------------------------------
<S> <C>
Gary W. Krat....................... Chairman of the Board; Chairman of the Board of
Royal Alliance Associates, Inc., SunAmerica
Securities, Inc. and Advantage Capital Corporation
Peter A. Harbeck................... President and Director
Susan L. Harris.................... Secretary and Director; Senior Vice President,
General Counsel-Corporate Affairs and Secretary,
SunAmerica Inc.; Senior Vice President and
Secretary, Anchor National and First SunAmerica
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
NAME POSITION WITH SAAMCO AND PRINCIPAL OCCUPATION
- ----------------------------------- --------------------------------------------------
Jay S. Wintrob..................... Director; Vice Chairman of SunAmerica Inc.;
Executive Vice President of Anchor National and
First SunAmerica
<S> <C>
Joseph M. Tumbler.................. Director; Vice Chairman of SunAmerica Inc.;
Executive Vice President of Anchor National and
First SunAmerica
Stanton J. Feeley.................. Executive Vice President and Chief Investment
Officer
J. Steven Neamtz................... Executive Vice President
Robert M. Zakem.................... Senior Vice President, General Counsel and
Assistant Secretary
Steven E. Rothstein................ Senior Vice President and Chief Financial Officer
</TABLE>
The business address of each of the above listed persons other than Ms.
Harris and Messrs. Wintrob and Tumbler is The SunAmerica Center, 733 Third
Avenue, New York, New York 10017-3204. The business address of Ms. Harris and
Messrs. Wintrob and Tumbler is 1 SunAmerica Center, Los Angeles, California
90067-6022. In addition to serving as Secretary and Director to SAAMCo, Ms.
Harris also serves as Vice President, Counsel and Secretary to Series Trust.
Peter C. Sutton, a Vice President of SAAMCo, also serves as Vice President of
Series Trust. Robert M. Zakem, Senior Vice President, General Counsel and
Assistant Secretary of SAAMCo, also serves as Assistant Secretary of Series
Trust.
Pursuant to the Advisory Agreement dated as of September 16, 1992, and
amended on August 30, 1994 and April 18, 1996, SAAMCo has agreed to provide
investment management, advisory and administrative services to Series Trust. The
Advisory Agreement was last submitted to shareholders of the Trust on September
16, 1992, for the purpose of obtaining the initial shareholder approval. The
Board of Directors of SAAMCo amended the Advisory Agreement at a Board Meeting
held on April 18, 1996 in order to reflect the addition of four new investment
portfolios of the Trust. The Advisory Agreement permits SAAMCo to delegate its
duties to a subadviser pursuant to a written subadvisory agreement.
24
<PAGE>
INFORMATION ABOUT PUTNAM AND THE PUTNAM SUBADVISORY AGREEMENT
Putnam, a Massachusetts corporation, has been managing mutual funds since
1937 and serves as investment adviser to the funds in the Putnam Family. Putnam
and its affiliates manage assets of approximately $173 billion as of December
31, 1996. Putnam is a subsidiary of Putnam Investments, Inc., which is wholly
owned by Marsh & McLennan Companies, Inc., a publicly-owned holding company
whose principal businesses are international insurance and reinsurance
brokerage, employee benefit consulting and investment management. The principal
office of Putnam is located at One Post Office Square, Boston, Massachusetts.
Putnam is the investment adviser to other investment companies having similar
investment objectives to the Portfolio as indicated in Exhibit D.
The names, positions with Putnam and principal occupations of the persons
who are its principal executive officers and its directors are as shown below.
Unless otherwise indicated, the business address of each such person is One Post
Office Square, Boston, Massachusetts.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PUTNAM AND PRINCIPAL OCCUPATION
- ---------------------------- --------------------------------------------------------
<S> <C>
Lawrence J. Lasser President and Director; Chief Executive Officer of
Putnam Investments, Inc., and its subsidiaries
George Putnam Director; Chairman and President of the Putnam Fund
Gordon H. Silver Director; Senior Managing Director of Putnam
Investments, Inc. and its subsidiaries
</TABLE>
Pursuant to the proposed Putnam Subadvisory Agreement, Putnam would manage
the investment and reinvestment of the Portfolio's assets, subject to the
oversight and review of SAAMCo. Putnam would determine in its discretion the
securities to be purchased or sold, provide SAAMCo with records concerning its
activities which SAAMCo or the Trust is required to maintain, and render regular
reports to SAAMCo and to officers and Trustees of the Trust concerning its
discharge of the foregoing responsibilities.
25
<PAGE>
AFFILIATED BROKERAGE TRANSACTIONS
The Provident Growth Portfolio did not pay any brokerage commissions to
affiliated brokers during the fiscal year ended November 30, 1996.
------------------------
REQUIRED VOTE. Approval of this Proposal No. 3 will require the affirmative
vote of the lesser of (1) more than 50% of the outstanding shares of the
Provident Growth Portfolio, or (2) 67% or more of the shares of the Provident
Growth Portfolio present at the meeting, in person or by proxy, if the holders
of 50% or more of the outstanding shares of the Portfolio are present or
represented by proxy. The proposed Fee Amendment and the proposed Putnam
Subadvisory Agreement are part of the same Proposal and will not be voted on
separately.
IF THIS PROPOSAL NO. 3 IS NOT APPROVED, NEITHER THE FEE AMENDMENT TO THE
ADVISORY AGREEMENT NOR THE PUTNAM SUBADVISORY AGREEMENT WILL TAKE EFFECT. THE
ADVISORY AGREEMENT WILL CONTINUE IN EFFECT IN ITS CURRENT FORM, AND SAAMCO WILL
CONTINUE ITS EFFORTS TO CONTRACT WITH A SUBADVISER TO REPLACE PROVIDENT. ANY
ADDITIONAL COSTS ASSOCIATED WITH OBTAINING SHAREHOLDER APPROVAL OF A SUBADVISORY
AGREEMENT WITH ANY SUCH SUBADVISER WILL BE BORNE BY THE PORTFOLIO.
SAAMCO RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
PROPOSAL NO. 3.
------------------------
APPROVAL OR DISAPPROVAL OF AMENDMENT
TO THE SUBADVISORY AGREEMENT
BETWEEN SAAMCO AND DAVIS
PROPOSAL NO. 4
SAAMCo is submitting for approval by the shareholders of the Venture Value
Portfolio, a separate series of Series Trust, an amendment to the subadvisory
agreement between SAAMCo and Davis (the "Davis Subadvisory Agreement") dated
September 16, 1994. Such amendment (the "Davis Amendment") provides that Davis
may delegate any of its responsibilities under the Davis Subadvisory Agreement
to one of its affiliates, including DSA-NY, its New York affiliate. Nonetheless,
pursuant to the Davis Amendment, Davis would remain ultimately responsible
(subject to supervision by SAAMCo) for the management of the assets of the
Portfolio allocated to it. Furthermore, Davis has indicated that it has no
current plans to make any
26
<PAGE>
changes with regard to its investment personnel responsible for the management
of the assets of the Portfolio allocated to it. Except for the Davis Amendment,
no other changes to the existing terms of the Davis Subadvisory Agreement have
been proposed. The Davis Amendment will take effect on or about April 15, 1997,
if approved by shareholders and the Board of Trustees of Series Trust (as
described below). The Davis Subadvisory Agreement, as proposed to be amended, is
attached as Exhibit E hereto.
On October 15, 1996, the Board of Trustees discussed the Davis Amendment.
The Trustees determined that it is advantageous to the Portfolio to enable Davis
to utilize the services of its affiliate offices and attract additional
experienced personnel who may desire to remain in the vicinity of New York City
to perform such services on behalf of the Portfolio. As not enough Trustees were
present during such discussion to constitute a quorum, however, the Board was
not able to approve the Davis Amendment. Before the Davis Amendment could be
approved by the Board of Trustees at an in-person meeting as required by the
1940 Act, one of the Independent Trustees died. It will not be possible to
obtain the approval of the Trustees in the manner required by the 1940 Act until
after the Trustees of Series Trust have been elected pursuant to Proposal No. 1.
If this Proposal No. 4 is approved by shareholders, as required by the 1940 Act,
the Trustees, including the Independent Trustees, will be asked to vote on and
approve the Davis Amendment at an in-person meeting of the Board of Trustees to
be held on or about April 15, 1997. Absent approval by the Independent Trustees,
the Davis Amendment will not take effect. SAAMCo anticipates that the requisite
Board approval will be obtained.
Davis will pay DSA-NY all reasonable direct and indirect costs associated
with the maintenance of an office and the performance of research and portfolio
management services pursuant to the Amendment. All of the fees paid to DSA-NY
will be paid by Davis and not SAAMCo or the Portfolio. The fees paid by SAAMCo
to Davis pursuant to the Davis Subadvisory Agreement will not be affected by the
Davis Amendment.
INFORMATION ABOUT DAVIS AND THE DAVIS SUBADVISORY AGREEMENT
Davis is a Colorado limited partnership, the sole general partner of which
is Venture Advisers, Inc. ("Venture"). Venture is controlled by Shelby M.C.
Davis, who is the Chief Executive Officer of Davis. The address of Davis and
Venture is 124 East Marcy Street, Santa Fe, New Mexico 87501. Davis is the
investment adviser or, in the case of the New England Zenith Fund, the sub-
adviser, to other investment companies having similar investment objectives to
the Portfolio as indicated in Exhibit F.
27
<PAGE>
Pursuant to the Davis Subadvisory Agreement, Davis manages the investment
and reinvestment of the Portfolio's assets, subject to the oversight and review
of SAAMCo. Davis determines in its discretion the securities to be purchased or
sold, provides SAAMCo with records concerning its activities which SAAMCo or the
Trust is required to maintain, and renders regular reports to SAAMCo and to
officers and Trustees of the Trust concerning its discharge of the foregoing
responsibilities. SAAMCo pays Davis a fee based on the Portfolio's average daily
net assets at the annual rate of 0.45% of the first $100 million, 0.40% of the
next $400 million and 0.35% of the average daily net assets in excess of $500
million. During the fiscal year ended November 30, 1996, the subadvisory fees
paid by SAAMCo to Davis were $1,252,661. The Davis Subadvisory Agreement was
last submitted to shareholders on October 28, 1994, for the purpose of obtaining
the initial approval of the sole shareholder.
INFORMATION ABOUT DSA-NY
DSA-NY, a wholly-owned subsidiary of Davis, was organized as a Delaware
corporation in September 1996 and registered as an investment adviser with the
Commission in November 1996. The names and principal occupations of DSA-NY's
principal executive officer and directors are as follows:
<TABLE>
<CAPTION>
NAME POSITION WITH DSA-NY; PRINCIPAL OCCUPATION
- ------------------------------ ---------------------------------------------
<S> <C>
Christopher C. Davis.......... Chief Executive Officer and President;
Director
Shelby M.C. Davis............. Director; Chief Executive Officer of Davis
Andrew A. Davis............... Director; Co-President of Davis
Carl R. Luff.................. Director; Co-President of Davis
Russell O. Wiese.............. Director; Vice President of Davis
</TABLE>
The address of each of these persons, except for Christopher Davis, is 124
East Marcy Street, Santa Fe, NM 87504; the address of Christopher Davis is 609
Fifth Avenue, New York, New York 10017.
AFFILIATED BROKERAGE TRANSACTIONS
The Portfolio paid $34,200 in brokerage commissions, or % of the
Portfolio's aggregate brokerage commissions during the fiscal year ended
November 30, 1996, to Shelby Collum Davis & Company ("Shelby") during such
fiscal year. Shelby is [IDENTIFY RELATIONSHIP THAT CAUSES SHELBY TO BE AN
AFFILIATED BROKER]
28
<PAGE>
REQUIRED VOTE. Approval of this proposal will require the affirmative vote
of the lesser of (1) more than 50% of the outstanding shares of the Venture
Value Portfolio, or (2) 67% or more of the shares of the Venture Value Portfolio
present at the meeting, in person or by proxy, if the holders of 50% or more of
the outstanding shares of the Portfolio are present or represented by proxy.
IF THIS PROPOSAL NO. 4 IS NOT APPROVED, THE DAVIS SUBADVISORY AGREEMENT WILL
REMAIN IN EFFECT IN ITS CURRENT FORM, AND THE DAVIS AMENDMENT WILL NOT TAKE
EFFECT.
SAAMCO RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 4
------------------------
APPROVAL OR DISAPPROVAL OF PROPOSAL
TO PERMIT SAAMCO TO ENTER INTO
NEW OR AMENDED CONTRACTS WITH SUBADVISERS
WITHOUT OBTAINING SHAREHOLDER APPROVAL
PROPOSAL NO. 5
SAAMCo is submitting for approval by the shareholders of each of the Series
Trust Portfolios a proposal to permit SAAMCo to enter into new or amended
contracts with subadvisers without obtaining shareholder approval. On October
15, 1996, the Board of Trustees discussed this proposal. As not enough Trustees
were present during such discussion to constitute a quorum, however, the Board
was not able to approve this proposal. Before they could approve the proposal at
an in-person meeting, one of the Independent Trustees died. Because of the
current composition of the Board, the proposal described herein cannot be
approved at an in-person meeting of the Board until after the new slate of
Trustees has been elected pursuant to Proposal No. 1. If this Proposal No. 5 is
approved by shareholders, the Independent Trustees will be asked to vote on and
approve this proposal at an in-person meeting of the Board of Trustees to be
held on or about April 15, 1997. Absent approval by the Trustees, including the
Independent Trustees, this proposal will not take effect. SAAMCo anticipates
that approval of the Trustees will be obtained.
SAAMCo recommends that shareholders of each Series Trust Portfolio approve a
proposal which would permit SAAMCo from time to time to enter into a new or
materially amended subadvisory agreement with a subadviser to the Portfolio
without obtaining shareholder approval. Approval by the Trustees, including a
majority of Independent Trustees, will continue to be required to approve any
new or amended advisory agreement. The proposal
29
<PAGE>
will apply to any subadvisory agreement entered into by SAAMCo with a subadviser
that is not otherwise an affiliated person (as defined in Section 2(a)(3) of the
1940 Act) of the Trust or SAAMCo, other than by reason of serving as a
subadviser (an "Affiliated Subadviser"). Among other changes, the proposal would
cover new subadvisory agreements necessitated because the prior subadvisory
agreements were terminated as a result of an "assignment" (as defined in the
1940 Act), an amendment to a subadvisory agreement or a new subadvisory
agreement to substitute a new subadviser for an old subadviser.
This Proposal is being submitted to shareholders pursuant to the
requirements of an order (the "Order") obtained from the Securities and Exchange
Commission (the "Commission") on December 3, 1996. The Order grants exemptive
relief from certain provisions of the 1940 Act and certain rules thereunder and
is discussed below.
REASON WHY SHAREHOLDER APPROVAL IS SOUGHT
Section 15 of the 1940 Act makes it unlawful for any person to act as
investment adviser to an investment company except pursuant to a written
contract which has been approved by shareholders. For purposes of Section 15,
the term "investment adviser" includes any subadviser to an investment company.
Section 15 also requires that an investment advisory agreement provide that it
will terminate automatically upon its assignment. "Assignment," for purposes of
the 1940 Act, includes in substance the transfer of an advisory agreement or the
transfer of control of the investment adviser through the transfer of a
controlling block of the adviser's outstanding voting securities.
In conformity with Section 15 of the 1940 Act, the Trust currently obtains
shareholder approval of a subadvisory agreement in three general situations:
A. The employment of a new subadviser: (i) to replace an existing
subadviser; (ii) as an additional subadviser; or (iii) to act as subadviser
for a new portfolio;
B. A change in the terms of a subadvisory agreement; and
C. The continued employment of an existing subadviser on the same terms
where there has been or is expected to be an assignment of a subadvisory
agreement as a result of a change of control of the subadviser.
30
<PAGE>
SAAMCo may currently terminate a subadvisory agreement without shareholder
approval. Shareholders of a Series Trust Portfolio may also currently terminate
a subadvisory agreement with respect to that Portfolio at any time by a vote of
a majority of the Portfolio's outstanding shares, as defined in the 1940 Act.
The proposed Putnam Subadvisory Agreement (but NOT the Fee Amendment to the
Advisory Agreement with SAAMCo) that is described in Proposal No. 3 and the
proposed Davis Amendment that is described in Proposal No. 4 are examples of the
types of new or amended subadvisory agreements that would no longer require
shareholder approval if this Proposal No. 5 is approved, subject to compliance
with the other conditions of the Order, which are set forth below.
[As described in Proposal No. 3, where a Portfolio bears the name of its
subadviser, the name of the Portfolio will change if the subadviser becomes
disassociated with the Portfolio. This would be the case whether the subadviser
resigns or is terminated by shareholders, by the Board of Trustees or by SAAMCo.
The Trustees will designate a new name for the Portfolio in such instances.]
Series Trust does not intend to rely on the Order with respect to any Portfolio
that includes the name of its current subadviser in its name, unless and until
the name of the Portfolio has been changed to delete any reference to a specific
subadviser.]
DISCUSSION
As a "multi-manager" type of fund, Series Trust employs SAAMCo, subject to
the supervision of the Trustees, to manage or provide for the management of each
Portfolio. SAAMCo selects a subadviser to invest the assets of each Portfolio,
subject to the review and approval of the Trustees, and, currently, subject to
the approval of each Portfolio's shareholders, and on an ongoing basis reviews
the subadviser's performance. SAAMCo is responsible for communicating
performance expectations and evaluations to the subadviser and for recommending
to the Trustees whether the subadviser's contract should be renewed, modified or
terminated. The subadviser is entitled to receive a fee from SAAMCo. SAAMCo and
the Trustees believe that requiring shareholders to approve changes in a
subadviser and to the subadvisory agreement (including continuation of an
assigned subadvisory agreement) not only results in unnecessary administrative
expenses to each Portfolio, but may also cause harmful delays in executing
changes that SAAMCo and the Trustees have determined are necessary or desirable.
SAAMCo and the Trustees believe that such expenses, and the possibility of
delays, may result in shareholders receiving less satisfactory service than
would be the case if this proposal is implemented.
31
<PAGE>
Accordingly, the Trust obtained the Order. Pursuant to the Order, subject to
receipt of approval of this Proposal No. 5 and the other conditions described
below, the shareholders of each Series Trust Portfolio will receive an
information statement complying with certain provisions of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules promulgated
thereunder, following a change of subadviser and/or the entry into a new or
amended subadvisory agreement that would have otherwise required shareholder
approval. The information statement will contain substantially all of the
information about the subadviser and the subadvisory agreement that would
otherwise be contained in a written proxy statement. The information statement
will include disclosure as to the level of fees to be paid to SAAMCo and the
subadviser (except to the extent there is "Aggregate Fee Disclosure," as defined
below) and will disclose subadviser changes or changes to a subadvisory
agreement.
If a Portfolio has more than one subadviser, the information statement (as
well as the prospectus) with respect to such Portfolio may include only
"Aggregate Fee Disclosure." "Aggregate Fee Disclosure" means: (1) the total
advisory fee charged by SAAMCo with respect to such Portfolio; (2) the aggregate
fees paid by SAAMCo to all subadvisers managing assets of such Portfolio; and
(3) the net advisory fee retained by SAAMCo with respect to such Portfolio after
SAAMCo pays all subadvisers managing assets of the Portfolio. "Aggregate Fee
Disclosure" also will include separate disclosure of any fees paid to any
subadviser who is an Affiliated Subadviser. (The portion of the Order that
permits Aggregate Fee Disclosure is referred to as the "Aggregate Fee Disclosure
Order.")
SAAMCo intends that the information statement described above, as well as
adherence to the conditions of the Order as set forth below, will protect
shareholders of each Series Trust Portfolio, including by enabling Portfolio
shareholders to receive adequate disclosure about the subadviser. If this
Proposal No. 5 is approved, amendments to the Advisory Agreement between SAAMCo
and the Trust will remain subject to shareholder and Trustee approval
requirements of Section 15 of the 1940 Act and related proxy disclosure
requirements. Moreover, although approval of the proposal will generally permit
SAAMCo and the Trustees to change the fees payable to a subadviser without
shareholder approval, such changes will not permit SAAMCo and the Trustees to
increase the rate of the fees payable by each Portfolio to SAAMCo without first
obtaining shareholder approval.
SAAMCo believes that approval of the proposal to permit SAAMCo to enter into
new or amended contracts with subadvisers without obtaining shareholder approval
is in the best interests of the shareholders of each
32
<PAGE>
Series Trust Portfolio. As discussed above, the Board of Trustees, including the
Independent Trustees, will be asked to approve this proposal at an in-person
meeting to be held on or about April 15, 1997.
CONDITIONS
The Order grants Series Trust relief from Section 15(a) of the 1940 Act and
certain rules thereunder in order for Series Trust and its Portfolios to operate
in the manner described in this Proposal, subject to certain conditions
including approval of this Proposal by shareholders of each Series Trust
Portfolio. Series Trust will not rely on the Order until all such conditions
have been met.
The conditions for the relief are as follows:
1. SAAMCo will provide general management and administrative services to
the Series Trust, including overall supervisory responsibility for the
general management and investment of the Trust's securities Portfolios,
and, subject to review and approval by the Board with respect to each
Portfolio, will (a) set a Portfolio's overall investment strategies; (b)
select subadvisers; (c) monitor and evaluate the performance of
subadvisers; (d) allocate and, when appropriate, reallocate a
Portfolio's assets among its subadvisers in those cases where a
Portfolio has more than one subadviser; and (e) implement procedures
reasonably designed to ensure that the subadvisers comply with the
Trust's and each Portfolio's investment objectives, policies, and
restrictions.
2. Before a Portfolio may rely on any order granting the requested relief,
the operation of the Portfolio in the manner described in the
application will be approved by a majority of the unitholders of any
separate account for which the Trust serves as a funding medium, as
defined in the 1940 Act, or, in the case of a new Portfolio whose public
shareholders purchased shares on the basis of a prospectus containing
the disclosure contemplated by condition 4 below, by the sole
shareholder before the offering of shares of such Portfolio to the
public.
3. The Trust will furnish to its shareholders all information about a new
subadviser or subadvisory agreement for a Portfolio that would be
included in a proxy statement, except as may be modified by the
Aggregate Fee Disclosure Order. Such information will include disclosure
as to the level of fees to be paid to SAAMCo and the subadvisers of such
Portfolio (unless the Trust is relying on the
33
<PAGE>
Aggregate Fee Disclosure Order, in which case it will include Aggregate
Fee Disclosure) and any change in such disclosure caused by the addition
of a new subadviser or any material change in a subadvisory agreement.
The Trust will meet this condition by providing its shareholders with an
informal information statement complying with the provisions of
Regulation 14C under the Exchange Act and Schedule 14C thereunder. With
respect to a newly retained subadviser, or a change in a subadvisory
agreement, this information statement will be provided to shareholders
of the Portfolio a maximum of sixty (60) days after the addition of the
new subadviser or the implementation of any change in a subadvisory
agreement. The information statement will also meet the requirements of
Schedule 14A under the Exchange Act, except as may be modified by the
Aggregate Fee Disclosure Order. The Trust will ensure that the
information statement is furnished to unitholders of any separate
account for which the Trust serves as a funding medium.
4. The Trust will disclose in its prospectus the existence, substance and
effect of the order.
5. No trustee, or officer of the Trust or director or officer of SAAMCo
will own directly or indirectly (other than through a pooled investment
vehicle that is not controlled by any such trustee or officer) any
interest in any subadviser except for (a) ownership of interests in
SAAMCo or any entity that controls, is controlled by or is under common
control with SAAMCo; or (b) ownership of less than 1% of the outstanding
securities of any class of equity or debt of a publicly-traded company
that is either a subadviser or any entity that controls, is controlled
by or is under common control with a subadviser.
6. SAAMCo will not enter into a subadvisory agreement with any Affiliated
Subadviser without such agreement, including the compensation to be paid
thereunder, being approved by the shareholders of the applicable
Portfolio.
7. At all times, a majority of the members of the Board will be persons
each of whom is an Independent Trustee of the Trust, as defined in
Section 2 (a) (19) of the 1940 Act, and the nomination of new or
additional Independent Trustees will be placed within the discretion of
the then existing Independent Trustees.
8. When a subadviser change is proposed for a Portfolio with an Affiliated
Subadviser, the Board, including a majority of the Independent
34
<PAGE>
Trustees, will make a separate finding, reflected in the Board's
minutes, that such change is in the best interests of the Portfolio and
the unitholders of any separate account for which the Trust serves as a
funding medium and does not involve a conflict of interest from which
SAAMCo or the Affiliated Subadviser derives an inappropriate advantage.
REQUIRED VOTE. Approval of this proposal will require the affirmative vote
of the lesser of (1) more than 50% of the outstanding shares of each Series
Trust Portfolio, or (2) 67% or more of the shares of each Series Trust Portfolio
present at the meeting, in person or by proxy, if the holders of 50% or more of
the outstanding shares of such Portfolio are present or represented by proxy.
If this Proposal No. 5 is not approved by shareholders of any Series Trust
Portfolio, the Order obtained by the Trust will have no effect with respect to
that Portfolio. In such event, shareholders of such Portfolio would continue to
have to approve any new or amended subadvisory agreements entered into by SAAMCo
with respect to such Portfolio.
SAAMCO RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" PROPOSAL NO. 5
------------------------
RATIFICATION OF THE SELECTION
OF INDEPENDENT ACCOUNTANTS
PROPOSAL NO. 6
Under Proposal No. 6, shareholders of each Trust are being asked to ratify
their Board's selection of independent accountants for their Trust for the
fiscal year ending November 30, 1997. The firm of Price Waterhouse LLP has
extensive experience in investment company accounting and auditing and has
served as independent accountants to each Trust since its inception. The
financial statements included in each Trust's Annual Report, dated November 30,
1996, have been examined by Price Waterhouse LLP. It is not expected that a
representative of Price Waterhouse LLP will be present at the Meeting.
If the selection of Price Waterhouse LLP is not ratified by shareholders,
Price Waterhouse LLP would not serve as the Trusts' independent accountants for
the fiscal year ending November 30, 1997 and the Board of Trustees of each Trust
would be required to select new independent accountants.
REQUIRED VOTE. For each Trust, approval of Proposal No. 6 requires a
majority of the votes cast with respect to Proposal No. 6 at the Meeting. The
35
<PAGE>
shareholders of all Portfolios of each Trust will vote together as a single
class with respect to this Proposal.
THE BOARD OF TRUSTEES RECOMMENDS
THAT SHAREHOLDERS VOTE FOR
PROPOSAL NO. 6
------------------------
OTHER MATTERS
The Trustees know of no matters to be presented at the Meeting other than
those specified in the attached Notice of Meeting. However, if any other matters
come before the Meeting, it is intended that the proxies will vote thereon in
their discretion.
SHAREHOLDER MEETINGS
Notwithstanding the approval or disapproval of the proposals described
above, as in the past, the Trustees do not intend to hold annual meetings of
shareholders of the Trusts. If a shareholder wishes to present a proposal to be
included in the proxy statement for the next meeting of shareholders of a
Portfolio, such proposal must be received by the Trust a reasonable time before
the solicitation is to be made. The Trustees will call meetings of shareholders
of a Trust or a Portfolio as may be required under the 1940 Act (such as to
approve a new investment advisory agreement for a Portfolio or to remove
Trustees) or as they may determine in their discretion. The Trustees will call a
meeting of shareholders to elect additional Trustees if more than 50% of the
Trustees are "interested persons" of the Trust or its investment adviser, as
such term is defined in the 1940 Act. Each Trust's By-laws require the Trustees
to call a meeting of shareholders when requested in writing to do so by the
holders of shares entitled to vote not less than 25% of all the votes entitled
to be cast at such meeting, provided that, pursuant to Section 16(c) of the 1940
Act, a meeting requested exclusively for the stated purpose of removing a
Trustee shall require only the holders of shares entitled to vote not less than
10% of all the votes entitled to be cast at such meeting as to the matter to be
acted on thereat, provided that certain procedural requirements are met.
[CONFIRM] The costs of such meetings will be borne by the applicable Portfolio.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
Each Trust will furnish, without charge, a copy of the most recent Annual
Report to Shareholders of the respective Trust and to contract owners. Copies of
such reports may be obtained by contacting the respective Trust in writing
36
<PAGE>
at the address on the cover of this Proxy Statement, or by calling
1-800-445-7862.
CONTRACT OWNERS ARE REQUESTED TO FILL IN, DATE AND SIGN THE VOTING
INSTRUCTIONS CARD AND RETURN IT PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE.
Board of Trustees,
SunAmerica Series Trust
Anchor Pathway Fund
February 17, 1997
37
<PAGE>
EXHIBIT LIST
<TABLE>
<S> <C> <C>
EXHIBIT A -- Current Investment Restrictions
EXHIBIT B -- Putnam Subadvisory Agreement
EXHIBIT C -- Amended Advisory Agreement
EXHIBIT D -- Other Mutual Funds with a Similar Investment
Objective to the Provident Growth Portfolio's
EXHIBIT E -- Davis Subadvisory Agreement, as amended
EXHIBIT F -- Other Mutual Funds with a Similar Investment
Objective to the Venture Value Portfolio's
</TABLE>
38
<PAGE>
EXHIBIT A
SUNAMERICA SERIES TRUST
INVESTMENT RESTRICTIONS
The Trust has adopted certain investment restrictions for each Portfolio
that cannot be changed without approval by a majority of its outstanding voting
securities. Such majority is defined as the vote of the lesser of (i) 67% or
more of the outstanding shares of the Portfolios present at a meeting, if the
holders of more than 50% of the outstanding shares are present in person or by
proxy or (ii) more than 50% of the outstanding shares of the Portfolios.
INVESTMENT RESTRICTIONS OF THE CASH MANAGEMENT PORTFOLIO
The Cash Management Portfolio has adopted the following restrictions that
are fundamental policies. These fundamental policies, as well as the Cash
Management Portfolio's investment objective, cannot be changed without approval
by a majority of its outstanding voting securities. All percentage limitations
expressed in the following investment restrictions are measured immediately
after the relevant transaction is made. The Cash Management Portfolio may not:
1. Invest more than 5% of the value of its total assets in the securities
of any one issuer, provided that this limitation shall apply only to 75% of the
value of the Portfolio's total assets, and, provided further, that the
limitation shall not apply to obligations of the government of the U.S. or of
any corporation organized as an instrumentality of the U.S. under a general act
of Congress.
2. As to 75% of its total assets, purchase more than 10% of the outstanding
voting class of securities of an issuer.
3. Invest more than 25% of the Portfolio's total assets in the securities
of issuers in the same industry. Obligations of the U.S. Government, its
agencies and instrumentalities, are not subject to this 25% limitation on
industry concentration. In addition, the Portfolio may, if deemed advisable,
invest more than 25% of its assets in the obligations of domestic commercial
banks.
4. Enter into any repurchase agreement maturing in more than seven days or
invest in any other illiquid security if, as a result, more than 10% of the
Portfolio's total assets would be so invested.
A-1
<PAGE>
5. Make loans to others except for the purchase of the debt securities
listed above under its Investment Policies. The Portfolio may, however, enter
into repurchase agreements.
6. Borrow money, except from banks for temporary purposes, and then in an
amount not in excess of 5% of the value of the Portfolio's total assets.
Moreover, in the event that the asset coverage for such borrowings falls below
300%, the Portfolio will reduce within three days the amount of its borrowings
in order to provide for 300% asset coverage.
7. Pledge or hypothecate its assets.
8. Sell securities short except to the extent that the Portfolio
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short.
9. Invest in puts, calls, straddles, spreads or any combination thereof.
10. Purchase or sell securities of other investment companies (except in
connection with a merger, consolidation, acquisition or reorganization), real
estate or commodities.
11. Act as underwriter of securities issued by others, engage in
distribution of securities for others, or make investments in other companies
for the purpose of exercising control or management.
Notwithstanding investment restriction Number 1 above, in order to comply
with Rule 2a-7 under the 1940 Act, the Cash Management Portfolio has adopted a
more restrictive policy (which may be changed by the trustees without
shareholder approval) of investing no more than 5% of its assets (measured at
the time of purchase) in the securities of any one issuer (other than the U.S.
Government); provided however, that the Cash Management Portfolio may invest, as
to 25% of its assets, more than 5% of its assets in certain high quality
securities (as defined in the Rule) of a single issuer for a period of up to
three business days. The purchase by the Cash Management Portfolio of securities
that have "put" or "stand-by" commitment features are not considered "puts" for
purposes of investment restriction Number 9 above.
A-2
<PAGE>
INVESTMENT RESTRICTIONS OF THE CORPORATE BOND PORTFOLIO, GLOBAL BOND PORTFOLIO,
HIGH-YIELD BOND PORTFOLIO, WORLDWIDE HIGH INCOME PORTFOLIO, BALANCED/PHOENIX
INVESTMENT COUNSEL PORTFOLIO, SUNAMERICA BALANCED PORTFOLIO, ASSET ALLOCATION
PORTFOLIO, GROWTH-INCOME PORTFOLIO, AGGRESSIVE GROWTH PORTFOLIO, ALLIANCE GROWTH
PORTFOLIO, GROWTH/PHOENIX INVESTMENT COUNSEL PORTFOLIO, PROVIDENT GROWTH
PORTFOLIO, FEDERATED VALUE PORTFOLIO, VENTURE VALUE PORTFOLIO, UTILITY
PORTFOLIO, GLOBAL EQUITIES PORTFOLIO AND INTERNATIONAL DIVERSIFIED EQUITIES
PORTFOLIO
The Corporate Bond Portfolio, Global Bond Portfolio, High-Yield Bond
Portfolio, Worldwide High Income Portfolio, Balanced/Phoenix Investment Counsel
Portfolio, SunAmerica Balanced Portfolio, Asset Allocation Portfolio,
Growth-Income Portfolio, Aggressive Growth Portfolio, Alliance Growth Portfolio,
Growth/Phoenix Investment Counsel Portfolio, Provident Growth Portfolio,
Federated Value Portfolio, Venture Value Portfolio, Utility Portfolio, Global
Equities Portfolio and International Diversified Equities Portfolio have each
adopted the following investment restrictions that are fundamental policies.
These fundamental policies cannot be changed without the approval of the holders
of a majority of the outstanding voting securities of the respective Portfolio.
All percentage limitations expressed in the following investment restrictions
are measured immediately after the relevant transaction is made. These
Portfolios may not:
1. Other than the Global Bond, Worldwide High Income and International
Diversified Equities Portfolios, invest more than 5% of the value of the total
assets of a Portfolio in the securities of any one issuer, provided that this
limitation shall apply only to 75% of the value of the Portfolio's total assets
and, provided further, that the limitation shall not apply to obligations issued
or guaranteed by the government of the United States or of any of its agencies
or instrumentalities.
2. As to 75% of its total assets, purchase more than 10% of any class of
the outstanding voting securities of an issuer. This restriction does not apply
to the Global Bond, International Diversified Equities and Worldwide High Income
Portfolios.
3. Invest more than 25% of the Portfolio's total assets in the securities
of issuers in the same industry, except that the Utility Portfolio will invest
at least 25% of its total assets in the securities of utility companies.
Obligations of the U.S. Government, its agencies and instrumentalities are not
subject to
A-3
<PAGE>
this 25% limitation on industry concentration. The Portfolio may, if deemed
advisable, invest more than 25% of its assets in the obligations of domestic
commercial banks.
4. Invest in real estate (including limited partnership interests but
excluding securities of companies, such as real estate investment trusts, which
deal in real estate or interests therein); provided that a Portfolio may hold or
sell real estate acquired as a result of the ownership of securities.
5. Purchase commodities or commodity contracts; except that any Portfolio
may engage in transactions in put and call options on securities, indices and
currencies, forward and futures contracts on securities, indices and currencies,
put and call options on such futures contracts, forward commitment transactions,
forward foreign currency exchange contracts, interest-rate, mortgage and
currency swaps and interest-rate floors and caps.
6. Invest in companies for the purpose of exercising control or management.
7. Make loans to others except for (a) the purchase of debt securities; (b)
entering into repurchase agreements; and (c) with respect to the Corporate Bond,
Global Bond, High-Yield Bond, Worldwide High Income, Balanced/ Phoenix
Investment Counsel, SunAmerica Balanced, Asset Allocation, Growth-Income,
Aggressive Growth, Federated Value, Venture Value, Utility, Global Equities and
International Diversified Equities Portfolios, the lending of its portfolio
securities.
8. Borrow money, except from banks for temporary purposes, and then in an
amount not in excess of one-third of the value of a Portfolio's total assets.
Moreover, in the event that the asset coverage for such borrowings falls below
300%, the Portfolio will reduce, within three days, the amount of its borrowings
in order to provide for 300% asset coverage. A Portfolio, other than the
Worldwide High Income and Aggressive Growth Portfolios, will not purchase
additional securities while the value of their borrowings exceeds 5% of its
total assets. Notwithstanding the foregoing, the Worldwide High Income and
Aggressive Growth Portfolios may borrow for investment purposes.
9. Purchase securities on margin.
10. Pledge, mortgage or hypothecate its assets, except to the extent
necessary to secure permitted borrowings and, to the extent related to the
segregation of assets in connection with the writing of covered put and call
options and the purchase of securities or currencies on a forward commitment or
delayed-delivery basis and collateral and initial or variation margin
arrangements with respect to forward contracts, options, futures contracts
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and options on futures contracts. In addition, the Corporate Bond, High-Yield
Bond, Worldwide High Income, SunAmerica Balanced, Aggressive Growth, Federated
Value and Utility Portfolios may pledge units in reverse repurchase agreements.
11. Sell securities short except to the extent that a Portfolio
contemporaneously owns, or has the right to acquire at no additional cost,
securities identical to those sold short. This restriction does not preclude the
segregation of assets by the Worldwide High Income and Aggressive Growth
Portfolios in connection with short sales of securities that it does not
contemporaneously own or have the right to acquire without additional cost.
12. Purchase or sell securities of other investment companies (except in
connection with a merger, consolidation, acquisition or reorganization);
provided, however, that (a) the Global Equities Portfolio may purchase
securities of a closed-end investment company, (b) to the extent permitted by
applicable law and approved by the Trustees, the Asset Allocation and Global
Bond Portfolios may invest uninvested cash balances in any money market fund for
which their respective Subadvisers or any affiliate thereof acts as investment
adviser, and (c) the Worldwide High Income, Balanced/Phoenix Investment Counsel,
SunAmerica Balanced, Federated Value, Venture Value, Utility, International
Diversified Equities and Aggressive Growth Portfolios may purchase securities of
other investment companies; provided, however, that in each case (i) a Portfolio
owns no more than 3% of the total outstanding voting stock of any investment
company, (ii) no more than 5% of the value of a Portfolio's total assets are
invested in securities of any investment company, and (iii) no more than 10% of
such value is invested in investment companies in the aggregate.
13. Engage in underwriting of securities issued by others, except to the
extent it may be deemed to be acting as an underwriter in the purchase and
resale of portfolio securities.
In addition to the foregoing, the Corporate Bond, Global Bond, High-Yield
Bond, Worldwide High Income, Balanced/Phoenix Investment Counsel, SunAmerica
Balanced, Asset Allocation, Growth-Income, Aggressive Growth, Alliance Growth,
Growth/Phoenix Investment Counsel, Provident Growth, Federated Value, Venture
Value, Utility, Global Equities and International Diversified Equities
Portfolios have each adopted a non-fundamental policy (which may be changed by
the Trustees without shareholder approval) of not entering into any repurchase
agreement maturing in more than seven days or investing in any other illiquid
security if, as a result, more than 15% of a Portfolio's total assets would be
so invested.
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ANCHOR PATHWAY FUND
INVESTMENT RESTRICTIONS
The Fund has adopted certain investment restrictions for each Series that
cannot be changed without approval by a majority of its outstanding shares. Such
majority is defined as the vote of the lesser of (i) 67 percent or more of the
outstanding shares of the Series present at a meeting, if the holders of more
than 50 percent of the outstanding shares of the Series are present in person or
by proxy or (ii) more than 50 percent of the outstanding shares of the Series.
INVESTMENT RESTRICTIONS OF THE CASH MANAGEMENT SERIES
The Cash Management Series has adopted the following restrictions that are
fundamental policies. These fundamental policies, as well as the Cash Management
Series' investment objective, cannot be changed without approval by a majority
of its outstanding shares. All percentage limitations expressed in the following
investment restrictions are measured immediately after the relevant transaction
is made. The Cash Management Series may not:
1. Invest more than 5% of the value of its total assets in the securities
of any one issuer, provided that this limitation shall apply only to 75% of the
value of the Series' total assets, and, provided further, that the limitation
shall not apply to obligations of the government of the U.S. or of any
corporation organized as an instrumentality of the U.S. under a general act of
Congress. The short-term obligations of commercial banks are excluded from this
5% limitation with respect to 25% of the Series' total assets.
2. As to 75% of its total assets, purchase more than 10% of the outstanding
voting class of securities of an issuer.
3. Invest more than 25% of the Series' total assets in the securities of
issuers in the same industry. Obligations of the U.S. Government, its agencies
and instrumentalities, are not subject to this 25% limitation on industry
concentration. In addition, the Series may, if deemed advisable, invest more
than 25% of its assets in the obligations of domestic commercial banks.
4. Enter into any repurchase agreement maturing in more than seven days or
invest in any other illiquid security if, as a result, more than 10% of the
Series' total assets would be so invested.
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5. Make loans to others except for the purchase of the debt securities
listed above under its Investment Policies. The Series may, however, enter into
repurchase agreements.
6. Borrow money, except from banks for temporary purposes, and then in an
amount not in excess of 5% of the value of the Series' total assets. Moreover,
in the event that the asset coverage for such borrowings falls below 300%, the
Series will reduce within three days the amount of its borrowings in order to
provide for 300% asset coverage.
7. Pledge or hypothecate its assets.
8. Sell securities short except to the extent that the Series
contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short.
9. Invest in puts, calls, straddles, spreads or any combination thereof.
10. Purchase or sell securities of other investment companies (except in
connection with a merger, consolidation, acquisition or reorganization), real
estate or commodities.
11. Act as underwriter of securities issued by others, engage in
distribution of securities for others, or make investments in other companies
for the purpose of exercising control or management.
Notwithstanding investment restriction Number 1 above, in order to comply
with Rule 2a-7 under the Investment Company Act of 1940, the Cash Management
Series has adopted a more restrictive policy (that may be changed by the
trustees without shareholder approval) of investing no more than 5% of its
assets (measured at the time of purchase) in the securities of any one issuer
(other than the U.S. Government); provided however, that the Cash Management
series may invest, as to 25% of its assets, more than 5% of its assets in
certain high-quality securities (as defined in the Rule) of a single issuer for
a period of up to three business days. The purchase by the Cash Management
Series of securities that have "put" or "stand-by" commitment features are not
considered "puts" for purposes of investment restriction Number 9 above.
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INVESTMENT RESTRICTIONS OF THE HIGH-YIELD
BOND SERIES, THE ASSET ALLOCATION SERIES,
THE GROWTH-INCOME SERIES,
THE INTERNATIONAL SERIES AND
THE GROWTH SERIES
The High-Yield Bond Series, the Asset Allocation Series, the Growth-Income
Series, the International Series and the Growth Series have each adopted the
following investment restrictions that are fundamental policies. These
fundamental policies, as well as each Series' investment objective, cannot be
changed without the approval of the holders of a majority of the outstanding
shares of the respective Series. All percentage limitations expressed in the
following investment restrictions are measured immediately after the relevant
transaction is made. The High-Yield Bond Series, the Asset Allocation Series,
the Growth-Income Series, the International Series and the Growth Series may
not:
1. Invest more than 5% of the value of the total assets of the Series in
the securities of any one issuer, provided that this limitation shall apply only
to 75% of the value of the Series' total assets and, provided further, that the
limitation shall not apply to obligations of the government of the United States
or of any corporation organized as an instrumentality of the U.S. under a
general Act of Congress. The short-term obligations of commercial banks are
excluded from this 5% limitation with respect to 25% of the Series' total
assets.
2. As to 75% of its total assets, purchase more than 10% of the outstanding
voting class of securities of an issuer.
3. Invest more than 25% of the Series' total assets in the securities of
issuers in the same industry. Obligations of the U.S. Government, its agencies
and instrumentalities are not subject to this 25% limitation on industry
concentration. The Series may, if deemed advisable, invest more than 25% of its
assets in the obligations of domestic commercial banks.
4. Enter into any repurchase agreement maturing in more than seven days or
invest in any other illiquid security if, as a result, more than 10% of the
Series' total assets would be so invested.
5. Invest in real estate (including limited partnership interests but
excluding securities of companies, such as real estate investment trusts, which
deal in real estate or interests therein).
6. Purchase commodities or commodity contracts; except that the Asset
Allocation Series, the High-Yield Bond Series and the International
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Series may engage in transactions involving currencies (including forward and
futures contracts or put and call options).
7. Invest in companies for the purpose of exercising control or management.
8. Make loans to others except for (a) the purchase of debt securities; (b)
entering into repurchase agreements; and (c) with respect to the High-Yield Bond
Series and the Asset Allocation Series, the loaning of its portfolio securities.
9. Borrow money, except from banks for temporary purposes, and then in an
amount not in excess of 5% of the value of the Series' total assets. Moreover,
in the event that the asset coverage for such borrowings falls below 300%, the
Series will reduce, within three days, the amount of its borrowings in order to
provide for 300% asset coverage.
10. Purchase securities on margin.
11. Pledge or hypothecate its assets.
12. Sell securities short except to the extent that the Series
contemporaneously owns, or has the right to acquire at no additional cost,
securities identical to those sold short.
13. Invest in puts, calls, straddles, spreads or any combination thereof;
except as described above in investment restriction number 6.
14. Purchase or sell securities of other investment companies (except in
connection with a merger, consolidation, acquisition or reorganization).
15. Engage in underwriting of securities issued by others, except to the
extent it may be deemed to be acting as an underwriter in the purchase and
resale of portfolio securities.
The High-Yield Bond Series and the International Series may invest not in
excess of 10% of the market value of their total assets in securities that are
restricted as to resale. The Asset Allocation, Growth-Income and the Growth
Series may invest not in excess of 5% of the market value of their total assets
in securities that are restricted as to resale. As a condition to the
acquisition of the type of securities mentioned herein, these Series will
ordinarily require that the issuer agree to bear the expenses of registration
under the 1933 Act, if and when the Series desires to sell the securities.
Registration could result in a delay in disposing of these securities. This
policy of the Fund is not deemed a fundamental policy and therefore may be
changed without shareholder approval.
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INVESTMENT RESTRICTIONS OF THE U.S. GOVERNMENT/
AAA-RATED SECURITIES SERIES
The Government/AAA Series has adopted the following investment restrictions
that are fundamental policies. These fundamental policies, as well as the
Government/AAA Series' investment objective, cannot be changed without approval
of a majority of its outstanding shares. All percentage limitations expressed in
the following investment restrictions are measured immediately after the
relevant transaction is made. The Government/AAA Series may not:
1. Purchase any security (other than securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities ("U.S. Government
securities")) if, immediately after and as a result of such investment, more
than 5% of the value of the Government/AAA Series' total assets would be
invested in securities of the issuer.
2. Invest 25% or more of the value of its total assets in the securities of
issuers conducting their principal business activities in the same industry,
except that this limitation shall not apply to U.S. Government securities or
other securities to the extent they are backed by or represent interests in U.S.
Government securities or U.S. Government-guaranteed mortgages.
3. Invest in companies for the purpose of exercising control or management.
4. Knowingly purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition, or reorganization.
5. Buy or sell real estate or commodities or commodity contracts in the
ordinary course of its business; however, the Government/AAA Series may purchase
or sell readily marketable debt securities secured by real estate or interests
therein or issued by companies which invest in real estate or interests therein,
including real estate investment trusts.
6. Acquire securities subject to restrictions on disposition imposed by the
Securities Act of 1933, if, immediately after and as a result of such
acquisition, the value of such restricted securities and all other illiquid
securities would exceed 10% of the value of its total assets.
7. Engage in the business of underwriting securities of other issuers,
except to the extent that the disposal of an investment position may technically
cause the Series to be considered an underwriter as that term is defined under
the Securities Act of 1933.
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8. Make loans, except that the Government/AAA Series may purchase readily
marketable debt securities and invest in repurchase agreements and make loans of
portfolio securities. The Series will not invest in repurchase agreements
maturing in more than seven days if any such investment, together with any
illiquid securities (including securities which are subject to legal or
contractual restrictions on resale) exceeds 10% of the value of its total
assets.
9. Sell securities short, except to the extent that the Government/AAA
Series contemporaneously owns or has the right to acquire at no additional cost
securities identical to those sold short.
10. Purchase securities on margin, except that the Series may obtain
necessary short-term credits for the clearance of purchases and sales of
securities.
11. Borrow money, except from banks for temporary or emergency purposes not
in excess of 5% of the value of the Government/AAA Series' total assets, except
that the Series may enter into reverse repurchase agreements.
12. Mortgage, pledge, or hypothecate any of its assets, provided that this
restriction shall not apply to the sale of securities pursuant to a reverse
repurchase agreement.
13. Write, purchase or sell puts, calls or combinations thereof.
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EXHIBIT B
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of , 1997 by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
PUTNAM INVESTMENT MANAGEMENT, INC., a Massachusetts corporation (the
"Subadviser").
WITNESSETH:
WHEREAS, the Adviser and SunAmerica Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of September 16, 1992, as amended (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, no par value 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 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 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. 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 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
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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 as delivered in writing to
the Subadviser, 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 as delivered to the Subadviser, and (b)
applicable laws and regulations.
The Subadviser agrees that it will operate and manage the Portfolio set
forth in Schedule A (1) in compliance with all applicable federal and state laws
governing the Subadviser's management of the Portfolio and investments; and (2)
so as not to jeopardize either the treatment of the SunAmerica Series Trust
variable annuity contracts issued by Variable Separate Account and FS Variable
Separate Account (File Nos. 33-47473 and 33-85014, respectively; hereinafter
"Contracts") as annuity contracts for purposes of the Internal Revenue Code of
1986, as amended (the "Code"). Without limiting the foregoing, the Subadviser
agrees to manage the Portfolio in 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; and (d) applicable federal and state
securities, commodities and banking laws; provided that Adviser shall provide
Subadviser with written direction as to the requirements of applicable state
insurance laws and applicable federal and state banking laws. For purposes of
the preceding sentence, disclosure in the Trust's prospectus and/or statement of
additional information of applicable state insurance laws and regulations and
applicable federal and state banking laws and regulations shall constitute
"written direction" thereof. 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.
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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 spensation
provided in this Agreement. The Subadviser shall not have any responsibility for
the administrative affairs of the Portfolio, including any responsibility for
the calculation of the net asset value of the Portfolio's shares or shareholder
accounting services; PROVIDED, HOWEVER, that the Subadviser shall, as requested
from time to time by the Adviser, assist the Adviser in obtaining pricing
information relating to the Portfolio's investment securities.
2. PORTFOLIO TRANSACTIONS. The Subadviser is responsible for decisions to
buy or sell securities and other investments of the assets of each Portfolio,
broker-dealers and futures commission merchants' selection, and negotiation of
brokerage commission and futures commission merchants' rates. As a general
matter, in executing portfolio transactions, the Subadviser may employ or deal
with such broker-dealers or futures commission merchants as may, in the
Subadviser's best judgement, provide prompt and reliable execution of the
transactions at favorable prices and reasonable commission rates. In selecting
such broker-dealers or futures commission merchants, the Subadviser shall
consider all relevant factors including price (including the applicable
brokerage commission, dealer spread or futures commission merchant rate), the
size of the order, the nature of the market for the security or other
investment, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer or futures commission merchant
involved, the quality of the service, the difficulty of execution, the execution
capabilities and operational facilities of the firm involved, and, in the case
of securities, the firm's risk in positioning a block of securities. Subject to
such policies as the 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
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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 the Subadviser a fee at the annual
rates set forth in Schedule A hereto with respect to 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 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 Agreemen foregoing compensation shall be
prorated.
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. 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.
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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. While the Subadviser is not being engaged to serve as
the Trust's official record keeper, the Subadviser nevertheless hereby
undertakes and agrees to maintain, in the form and for the period required by
Section 204 of the Advisers Act and Rule 204-2 thereunder, all records relating
to the investments of the Portfolio(s) that are required to be maintained by the
Subadviser pursuant to the requirements of Rule 204-2 under the Advisers Act.
The Subadviser will also, in connection with the purchase and sale of securities
for each Portfolio, arrange for the transmission to the custodian for the Trust
on a daily basis, such confirmation, trade tickets, and other documents and
information, that identify securities to be purchased or sold on behalf of the
Portfolio, as may be reasonably necessary to enable the custodian to perform its
administrative and recordkeeping responsibilities with respect to the Portfolio.
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. The Adviser covenants as follows:
(a) The Adviser will (and will cause its affiliates (including the Trust)
(each an "Affiliate") to) use the name "Putnam Investment Management", "Putnam
Investments", "Putnam" or any derivation thereof only for so long as this
Agreement remains in effect. At such times as this Agreement is no longer in
effect, the Adviser will, and will cause each Affiliate to, cease using any such
name or any other name indicating that any Portfolio is advised by or otherwise
connected to the Subadviser.
(b) It will not, and will cause its Affiliates to not, refer to the
Subadviser or any Affiliate in any sales literature or promotional material
except with the prior approval of the Subadviser. In the case of materials, such
as the portfolio's prospectus, required by law to be prepared, such approval
shall not be unreasonably withheld.
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(c) It will permit the Portfolios to be used as a funding vehicle only for
insurance contracts issued by SunAmerica Inc. or any of its affiliates.
(d) It will not (and will cause it Affiliates to not) engage in marketing
programs (written or otherwise) directed toward Putnam Capital Manager Annuity
Contract ("PCM") which directly solicit transfers from PCM to the Adviser's
products or those of its Affiliates. For purposes of the foregoing, general
marketing efforts by SunAmerica Inc. and its affiliates shall not constitute a
direct solicitation of PCM contract holders. The Adviser will not (and will
cause its Affiliates to not) create or use marketing materials which provide
direct comparisons between PCM and the Adviser's products or those of any of its
Affiliates. The Adviser, in connection with any exchange program, will not (and
will cause its Affiliates to not) reimburse voluntarily, or enter into any
contract or policy after the date hereof providing for the reimbursement of, any
deferred sales charges to encourage the transfer of assets from PCM to the
Adviser's products or those of any Affiliate. For purposes hereof, the term
"Affiliate" shall not be construed to include agents of SunAmerica Inc. or
affiliates thereof, who are not employees of such entities.
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, any shareholder of the Trust or the Adviser
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 for such disabling conduct, the Adviser shall
indemnify the Subadviser (and its officers, directors, partners, ageson 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
reasonable legal and other expenses), to which the Adviser or its affiliates or
such directors, officers or controlling persons 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 material breach of this Agreement by the Subadviser
resulting from Subadviser's disabling conduct, or (ii) any untrue
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statement of a material fact in the Trust's registration statement or omission
to state a material fact required to be stated therein or necessary to make the
statement therein not misleading, if such statement or omission was made in
reliance on information furnished by the Subadviser to use in such registration
statement, 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.
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 succesor) is or may be
interested in the Trust in some manner.
11. TERM OF THE AGREEMENT. This Agreement shall continue in full force and
effect with respect to each Portfolio until the earlier of (a) two years from
the date this Agreement is approved by the Trustees, or (b) the first meeting of
the shareholders of the Portfolio of the Trust after the date hereof. If
approved at such meeting by the affirmative vote of a majority of the
outstanding voting securities (as defined in the Act), of the Portfolio with
respect to such Portfolio, voting separately from any other series of the Trust,
this Agreement shall continue in full force and effect with respect to such
Portfolio 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, provided, however, that if the shareholders
fail to approve the Agreement as provided herein, the Subadviser may continue to
serve hereunder in the manner and to the extent permitted by the Act and rules
thereunder. The foregoing requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a manner
consistent with the Act and the rules and regulations thereunder.
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
B-7
<PAGE>
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 termithout the payment of any penalty, on 60 days' written
notice to the Adviser and the Trust. 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.
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.
B-8
<PAGE>
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:
<TABLE>
<S> <C>
Subadviser: Putnam Investment Management, Inc.
One Post Office Square
Boston, MA 02109
Attn: General Counsel
Adviser: SunAmerica Asset Management Corp.
The SunAmerica Center
733 Third Avenue, Third Floor
New York, NY 10017
Attention: Robert M. Zakem
Senior Vice President and
General Counsel
with a copy SunAmerica Inc.
to: 1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Susan L. Harris
Senior Vice President,
General Counsel--Corporate Affairs
and Secretary
</TABLE>
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
PUTNAM INVESTMENT MANAGEMENT, INC.
By:
------------------------------------------------------------------
Name:
Title:
B-9
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
FEE
(AS PERCENTAGE OF
AVERAGE DAILY NET ASSETS OF
PORTFOLIO(S) THE PORTFOLIO)
- ------------------------------------------- -----------------------------------
<S> <C> <C>
Putnam Growth.............................. .50% on the first $150MM
.45% on the next $150MM
.35% over $300MM
International Value: Growth and Income..... .65% on the first $150MM
.55% on the next $150MM
.45% over $300MM
International Opportunities................ 1.00% on the first $150MM
.95% on the next $150MM
.85% over $300MM
</TABLE>
B-10
<PAGE>
EXHIBIT C
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of September
16, 1992, as amended on August 30, 1994, April 18, 1996 and April 15, 1997,
between SUNAMERICA SERIES TRUST, a Massachusetts business trust (the "Trust")
and SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser" or
"SAAMCo").
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
1. THE TRUST'S PORTFOLIOS. The Trust is authorized to issue shares in
separate series, with each series representing interests in a separate portfolio
of securities and other assets, and currently offers shares of the series set
forth in Schedule A attached hereto (the "Portfolios"). It is recognized that
additional Portfolios may be added and certain current Portfolios may be deleted
in the future.
2. DUTIES OF THE ADVISER. The Adviser shall manage the affairs of the
Trust as set forth herein, either by taking such actions itself or by delegating
its duties to a subadviser pursuant to a written subadvisory agreement. Such
duties shall include, but not limited to, continuously providing the Trust with
investment management, including investment research, advice and supervision,
determining which securities shall be purchased or sold by each Portfolio of the
Trust and making purchases and sales of securities on behalf of each Portfolio.
The Adviser's management shall be subject to the control of the Trustees of the
Trust (the "Trustees") and in accordance with the objectives, policies and
restrictions for each such Portfolio set forth in the Trust's Registration
Statement and its current Prospectus and Statement of Additional Information, as
amended from time to time, the requirements of the Investment Company Act of
1940, as amended (the "Act") and other applicable law, as well as to the factors
affecting the Trust's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended, (the "Code") and the regulations
thereunder and the status of variable contracts under the diversification
requirements set forth in Section 817(h) of the Code and the regulations
thereunder. In performing such duties, the Adviser shall (i) provide such office
space, bookkeeping, accounting, clerical, secretarial and administrative
services (exclusive of, and in addition to, any such service provided by any
others retained by the Trust or any of its Portfolios) and such executive and
other personnel as shall be necessary for the operations of each Portfolio, (ii)
be responsible for the financial and accounting records required
C-1
<PAGE>
to be maintained by each Portfolio (including those maintained by the Trust's
custodian), and (iii) oversee the performance of services provided to each
Portfolio by others, including the custodian, transfer agent, shareholder
servicing agent and subadviser, if any. The Trust acknowledges that the Adviser
also acts as the manager of other investment companies.
With respect to the Cash Management Portfolio, the Adviser hereby accepts
the responsibilities for making the determinations required by Rule 2a-7 under
the Act to be made by the Trustees of the Trust and which are delegable by the
Trustees pursuant to paragraph (e) of such Rule, to the extent that the Trustees
may hereinafter delegate such responsibilities to the Adviser.
The Adviser may delegate certain of its duties under this Agreement with
respect to a Portfolio to a subadviser pursuant to a written agreement, subject
to the approval of the Trustees and a Portfolio's shareholders, as required by
the Act. The Adviser is solely responsible for payment of any fees or other
charges to a subadviser arising from such delegation and the Trust shall have no
liability therefor.
3. EXPENSES. The Adviser shall pay all of its expenses arising from the
performance of its obligations under this Agreement and shall pay any salaries,
fees and expenses of the Trustees and any officers of the Trust who are
employees of the Adviser. The Adviser shall not be required to pay any other
expenses of the Trust, including, but not limited to, direct charges relating to
the purchase and sale of portfolio securities, interest charges, fees and
expenses of independent attorneys and auditors, taxes and governmental fees,
cost of stock certificates and any other expenses (including clerical expenses)
of issue, sale, repurchase or redemption of shares, expenses of registering and
qualifying shares for sale, expenses of printing and distributing reports,
notices and proxy materials to shareholders, expenses of data processing and
related services, shareholder recordkeeping and shareholder account service,
expenses of printing and filing reports and other documents filed with
governmental agencies, expenses of printing and distributing prospectuses,
expenses of annual and special shareholders' meetings, fees and disbursements of
transfer agents and custodians, expenses of disbursing dividends and
distributions, fees and expenses of Trustees who are not employees of the
Adviser or its affiliates, membership dues in the Investment Company Institute,
insurance premium dues in the Investment Company Institute, insurance premiums
and extraordinary expenses such as litigation expenses.
4. COMPENSATION. (a) As compensation for services performed and the
facilities and personnel provided by the Adviser under this Agreement, the Trust
will pay to the Adviser, promptly after the end of each month for the
C-2
<PAGE>
services rendered by the Adviser during the preceding month, the sum of the
amounts set forth in Schedule A attached hereto calculated in accordance with
the average daily net assets of the indicated Portfolio.
To the extent required by the laws of any state in which the Trust is
subject to an expense guarantee limitation, if the aggregate expenses of any
Portfolio in any fiscal year exceed the specified expense limitation ratios for
that year (calculated on a daily basis), the Adviser agrees to waive such
portion of its advisory fee in excess of the limitation, but such waiver shall
not exceed the full amount of the advisory fee for such year except as may be
elected by Adviser in its discretion. For this purpose, aggregate expenses of a
Portfolio shall include the compensation of the Adviser and all normal expenses,
fees and charges, but shall exclude interest, taxes, brokerage fees on portfolio
transactions, fees and expenses incurred in connection with the distribution of
Trust shares, and extraordinary expenses including litigation expenses. In the
event any amounts are so contributed by the Adviser to the Trust, the Trust
agrees to reimburse the Adviser for any expenses waived, provided that such
reimbursement does not result in increasing the Trust's aggregate expenses above
the aforementioned expense limitation ratios.
The Adviser's fee shall be accrued daily at 1/365th of the applicable annual
rate set forth above. For the purpose of accruing compensation, the net assets
of the Portfolio shall be that determined in the manner and on the dates set
forth in the current prospectus of the Trust and, on days on which the net
assets are not so determined, the net asset computation to be used shall be as
determined on the next day on which the net assets shall have been determined.
(b) Upon any termination of this Agreement on a day other than the last day
of the month, the fee for the period from the beginning of the month in which
termination occurs to the date of termination shall be prorated according to the
proportion which such period bears to the full month.
5. PURCHASE AND SALE OF SECURITIES. The Adviser shall purchase securities
from or though and sell securities to or through such persons, brokers or
dealers as the Adviser shall deem appropriate in order to carry out the policies
with respect to portfolio transactions as set forth in the Trust's Registration
Statement and its current Prospectus or Statement of Additional Information, as
amended from time to time, or as the Trustees may direct from time to time.
Nothing herein shall prohibit the Trustees from approving the payment by the
Trust of additional compensation to others for consulting services, supplemental
research and security and economic analysis.
C-3
<PAGE>
6. TERM OF AGREEMENT. This Agreement shall continue in full force and
effect with respect to each Portfolio until two years from the date approved by
the Trustees of the Trust in respect of such Portfolio, and from year to year
thereafter so long as such continuance is approved at least annually (i) by the
Trustees by vote cast in person at a meeting called for the purpose of voting on
such renewal, or by the vote of a majority of the outstanding voting securities
(as defined by the Act) of such Portfolio with respect to which renewal is to be
effected, and (ii) by a majority of the non-interested Trustees by vote cast in
person at a meeting called for the purpose of voting on such renewal. Any
approval of this Agreement or the renewal thereof with respect to a Portfolio by
the vote of a majority of the outstanding voting securities of that Portfolio,
or by the Trustees of the Trust which shall include a majority of the
non-interested Trustees, shall be effective to continue this Agreement with
respect to that Portfolio notwithstanding (a) that this Agreement or the renewal
thereof has not been so approved as to any other Portfolio, or (b) that this
Agreement or the renewal thereof has not been so approved by the vote of a
majority of the outstanding voting securities of the Trust as a whole.
7. TERMINATION. This Agreement may be terminated at any time as to a
Portfolio, without payment of any penalty, by the Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the Act) of such
Portfolio on sixty (60) days' written notice to the Adviser. Similarly, the
Adviser may terminate this Agreement without penalty on like notice to the Trust
provided, however, that this Agreement may not be terminated by the Adviser
unless another investment advisory agreement has been approved by the Trust in
accordance with the Act, or after six months' written notice, whichever is
earlier. This Agreement shall automatically terminate in the event of its
assignment (as defined in the Act).
8. REPORTS. The Adviser shall report to the Trustees, or to any committee
or officers of the Trust acting pursuant to the authority of the Trustees, at
such times and in such detail as shall be reasonable and as the Board may deem
appropriate in order to enable the Trust to determine that the investment
policies of each Portfolio are being observed and implemented and that the
obligations of the Adviser under this Agreement are being fulfilled. Any
investment program undertaken by the Adviser pursuant to this Agreement and any
other activities undertaken by the Adviser on behalf of the Trust shall at all
times be subject to any directives of the Trustees or any duly constituted
committee or officer of the Trust acting pursuant to the authority of the
Trustees.
C-4
<PAGE>
9. RECORDS. The Trust is responsible for maintaining and preserving for
such period or periods as the Securities and Exchange Commission may prescribe
by rules and regulations, such accounts, books and other documents as constitute
the records forming the basis for all reports, including financial statements
required to be filed pursuant to the Act and for the Trust's auditor's
certification relating thereto. The Adviser hereby undertakes and agrees to
maintain in the form and for the periods required by Rule 31a-2 under the Act,
all records relating to the Portfolio's investments that are required to be
maintained pursuant to the requirements of Rule 31a-1 of the Act.
The Adviser and the Trust agree that all accounts, books and other records
maintained and preserved by each 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, or any governmental agency or
other instrumentality having regulatory authority over the Trust. It is
expressly understood and agreed that the books and records maintained by the
Adviser on behalf of each Portfolio shall, at all times, remain the property of
the Trust.
10. LIABILITY OF ADVISER. 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 Adviser (and its officers,
directors, agents, employees, controlling persons, shareholders and any other
person or entity affiliated with the Adviser), the Adviser shall not be subject
to liability to the Trust or to any other person 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 or liability under
Section 36(b) of the Act, the Trust shall indemnify the Adviser (and its
officers, directors, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the Adviser) from any liability
arising from the Adviser's conduct under this Agreement.
Indemnification to the Adviser or any of its personnel or affiliates shall
be made when (A) a final decision on the merits rendered, by a court or other
body before whom the proceeding was brought, that the person to be indemnified
was not liable by reason of disabling conduct or, (B) in the absence of such a
decision, a reasonable determination, based upon a review of the facts, that the
person to be indemnified was not liable by reason of disabling conduct, by
C-5
<PAGE>
(a) the vote of a majority of a quorum of Trustees who are neither "interested
persons" of the Trust as defined in Section 2(a)(19) of the Act nor parties to
the proceeding ("disinterested, non-party Trustees"), or (b) an independent
legal counsel in a written opinion. The Trust may, by vote of a majority of the
disinterested, non-party Trustees, advance attorneys' fees or other expenses
incurred by officers, Trustees, investment advisers, subadvisers or principal
underwriters, in defending a proceeding upon the undertaking by or on behalf of
the person to be indemnified to repay the advance unless it is ultimately
determined that such person is entitled to indemnification. Such advance shall
be subject to at least one of the following: (i) the person to be indemnified
shall provide adequate security for his undertaking, (ii) the Trust shall be
insured against losses arising by reason of any lawful advances, or (iii) a
majority of a quorum of the disinterested, non-party Trustees, or an independent
legal counsel in a written opinion, shall determine, based on a review of
readily available facts, that there is reason to believe that the person to be
indemnified ultimately will be found entitled to indemnification.
11. MISCELLANEOUS. Anything herein to the contrary notwithstanding, this
Agreement shall not be construed to require, or to impose any duty upon either
of the parties, to do anything in violation of any applicable laws or
regulations.
The Declaration of Trust establishing the Trust, a copy of which is on file
in the office of the Secretary of the Commonwealth of Massachusetts, provides
that the name of the Trust refers to the Trustees collectively as Trustees, not
as individuals or personally; and that 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 the satisfaction of any
obligation or claim or otherwise in connection with the affairs of the Trust or
any Portfolio; but that the Trust Estate shall be liable. Notice is hereby given
that nothing contained herein shall be construed to be binding upon any of the
Trustees, officers, or shareholders of the Trust individually.
IN WITNESS WHEREOF, the Trust and the Adviser have caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.
SUNAMERICA SERIES TRUST
By: /s/ JAMES K. HUNT
------------------------------------------------------------------
James K. Hunt
Chairman and President
C-6
<PAGE>
SUNAMERICA ASSET MANAGEMENT CORP.
By: /s/ PETER A. HARBECK
------------------------------------------------------------------
Peter A. Harbeck
President
C-7
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
FEE RATE
(AS A % OF AVERAGE
FUND DAILY NET ASSET VALUE)
- -------------------------------------------------------- ---------------------------------
<S> <C> <C> <C>
Alliance Growth Portfolio............................... .70% to $ 50MM
.65% next $ 100MM
.60% next $ 150MM
.55% next $ 200MM
.50% over $ 500MM
Growth/Phoenix Investment
Counsel Portfolio..................................... .70% to $ 50MM
.65% next $ 100MM
.60% next $ 150MM
.55% next $ 200MM
.50% over $ 500MM
Balanced/Phoenix Investment
Counsel Portfolio..................................... .70% to $ 50MM
.65% next $ 100MM
.60% next $ 150MM
.55% next $ 200MM
.50% over $ 500MM
Growth-Income Portfolio................................. .70% to $ 50MM
.65% next $ 100MM
.60% next $ 150MM
.55% next $ 200MM
.50% over $ 500MM
Putnam Growth Portfolio................................. .85% to $ 150MM
.80% next $ 150MM
.70% over $ 300MM
Global Equities Portfolio............................... .90% to $ 50MM
.80% next $ 100MM
.70% next $ 150MM
.65% over $ 300MM
Venture Value Portfolio................................. .80% to $ 100MM
.75% next $ 400MM
.70% over $ 500MM
</TABLE>
C-8
<PAGE>
<TABLE>
<CAPTION>
FEE RATE
(AS A % OF AVERAGE
FUND DAILY NET ASSET VALUE)
- -------------------------------------------------------- ---------------------------------
Asset Allocation Portfolio.............................. .75% to $ 50MM
<S> <C> <C> <C>
.65% next $ 100MM
.60% next $ 100MM
.55% over $ 250MM
Global Bond Portfolio................................... .75% to $ 50MM
.65% next $ 100MM
.60% next $ 100MM
.55% over $ 250MM
High-Yield Bond Portfolio............................... .70% to $ 50MM
.65% next $ 100MM
.60% next $ 100MM
.55% over $ 250MM
Corporate Bond Portfolio................................ .70% to $ 50MM
.60% next $ 100MM
.55% next $ 100MM
.50% over $ 250MM
International Diversified Equities Portfolio............ 1.00% of Net Assets
Worldwide High Income Portfolio......................... 1.00% of Net Assets
Cash Management Portfolio............................... .55% to $ 100MM
.50% next $ 200MM
.45% over $ 300MM
Federated Value Portfolio............................... .75% to $ 150MM
.60% next $ 350MM
.50% over $ 500MM
Utility Portfolio....................................... .75% to $ 150MM
.60% next $ 350MM
.50% over $ 500MM
Aggressive Growth Portfolio............................. .75% to $ 100MM
.675% next $ 150MM
.625% next $ 250MM
.600% over $ 500MM
SunAmerica Balanced Portfolio........................... .70% to $ 50MM
.65% next $ 100MM
.60% next $ 150MM
.55% next $ 200MM
.50% over $ 500MM
</TABLE>
C-9
<PAGE>
<TABLE>
<CAPTION>
FEE RATE
(AS A % OF AVERAGE
FUND DAILY NET ASSET VALUE)
- -------------------------------------------------------- ---------------------------------
International Value: Growth and Income Portfolio........ .65% to $ 150MM
<S> <C> <C> <C>
.55% next $ 150MM
.45% over $ 300MM
International Opportunities Portfolio................... 1.00% to $ 150MM
.95% next $ 150MM
.85% over $ 300MM
</TABLE>
April 18, 1996
C-10
<PAGE>
EXHIBIT D
OTHER MUTUAL FUNDS ADVISED BY PUTNAM WITH A SIMILAR
INVESTMENT OBJECTIVE TO THE PROVIDENT GROWTH PORTFOLIO'S
<TABLE>
<CAPTION>
FEE
NET ASSETS OF OTHER FUND (AS A PERCENTAGE OF
OTHER FUND (IN MILLIONS) ON /96 AVERAGE DAILY NET ASSETS)
- ----------------------------- --------------------------- -------------------------------
<S> <C> <C> <C> <C>
PUTNAM FUNDS
Putnam Capital Appreciation
Fund....................... $558,094,000 0.65% 1st $ 500M
0.55% next $ 500M
0.50% next $ 500M
0.45% over $ 1.5B
Putnam Investors Fund........ $1,489,302,000 Same as Capital Appreciation
Putnam Vista Fund............ $2,683,511,000 Same as Capital Appreciation
Putnam Health Sciences
Trust...................... $1,631,901,000 0.70% 1st $ 500M
0.60% next $ 500M
0.55% next $ 500M
0.50% over $ 1.5B
Putnam Research Fund......... $7,058,000 Same as Capital Appreciation
Putnam American Renaissance Same as Health Sciences
Fund....................... $3,057,000
</TABLE>
As Putnam provides a full range of administrative services to the funds
noted above in addition to portfolio management, Putnam does not consider the
fees set forth above to be directly comparable to the fees it will receive as
sub-adviser of the Growth Portfolio.
<TABLE>
<S> <C> <C> <C> <C>
NON-PUTNAM FUNDS
Allmerica Investment
Trust-Select Growth
Fund................. $228,457,000 0.50% 1st $ 50M
0.45% next $ 100M
0.35% next $ 100M
0.30% next $ 100M
0.25% over $ 350M
</TABLE>
D-1
<PAGE>
EXHIBIT E
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of October 15, 1996 by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
DAVIS SELECTED ADVISERS, L.P., a Colorado limited partnership (the
"Subadviser").
WITNESSETH:
WHEREAS, the Adviser and SunAmerica Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of September 16, 1992, (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 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 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 portfolio or portfolios of the Trust listed
in Schedule A 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. Pursuant to this Subadvisory Agreement and subject to the oversight
and review of the Adviser, the Subadviser will manage the investment and
reinvestment of the assets of each Portfolio listed. 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
E-1
<PAGE>
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 the objectives, policies, and limitations for
the Portfolio(s) set forth in the Trust's current prospectus and statement of
additional information, and applicable laws and regulations. The Adviser shall
inform the Subadviser of any requirements of the California Insurance Code (or
other applicable insurance Code, if any) and any regulations thereunder that
operate to limit or restrict the investments the Portfolio(s) may otherwise
make, and to inform the Subadviser promptly of any changes in such requirements.
The Subadviser represents and warrants to the Adviser that 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 Polaris variable annuity contracts issued by Variable Separate Account (File
No. 33-47473; 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.
E-2
<PAGE>
The Subadviser accepts such employment and agrees, at its own expense, to
render the services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such services on
the terms and for the compensation provided in this Agreement.
(b) In performing its investment advisory services, Subadviser, while
remaining ultimately responsible for management of the portion of the assets of
the Portfolio allocated to it, may delegate any of its responsibilities to one
of its affiliates, including Davis Selected Advisers-NY, Inc., its New York
affiliate.
2. PORTFOLIO TRANSACTIONS. The Subadviser is authorized to select the
brokers or dealers that will execute the purchases and sales of portfolio
securities and is directed to use its best efforts to obtain the best price and
execution. In selecting such broker or dealers, the Subadviser shall consider
all relevant factors, including price (including the applicable brokerage
commission or dealer spread), 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 or dealer involved,
the quality of the service, the difficulty of execution, the execution
capabilities and operations facilities of the firm involved, and 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 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. 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.
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 the
E-3
<PAGE>
Subadviser a fee at the annual rates set forth in Schedule A hereto with respect
to 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 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.
The Subadviser, not the Adviser or the Trust, will pay Davis Selected
Advisers--NY, Inc., or any other affiliate the services of which are utilized
hereunder, all of such affiliate's reasonable direct and indirect costs
associated with maintenance of an office and performance of such services.
To the extent required by the laws of any state in which the Trust is
subject to an expense guarantee limitation, if the aggregate expenses of any
Portfolio in any fiscal year exceed the specified expense limitation ratios for
that year (calculated on a daily basis), as a result of which the Adviser is
required to reduce or refund its advisory and management fee payable by the
Portfolio, the Subadviser agrees to waive such portion of its subadvisory fee in
the same proportion as the fees waived by the Adviser bear to the total advisory
and management fee paid by the Portfolio. Such waiver, however, shall not exceed
the full amount of the subadvisory fee for such year except as may be elected by
the Subadviser in its discretion. For this purpose, aggregate expenses of a
Portfolio shall include the compensation of the Adviser and all normal expenses,
fees and charges, but shall exclude interest, taxes, brokerage fees on portfolio
transactions, fees and expenses incurred in connection with the distribution of
Trust shares, and extraordinary expenses including litigation expenses. In the
event any amounts are so contributed by the Subadviser to the Adviser, the
Adviser agrees to reimburse the Subadviser for any expenses waived, provided
that the Adviser has been reimbursed by the Trust.
4. REPORTS. 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.
5. 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
E-4
<PAGE>
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.
6. 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.
7. 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.
8. INDEMNIFICATION. The Adviser agrees to indemnify and hold harmless the
Subadviser and its affiliates and each of its directors and officers and each
person, if any, who controls the Subadviser 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 Subadviser or its
affiliates or such directors, officers or controlling person may become subject
under the 1933 Act, under any other statute, at common law or otherwise, which
may be based upon any wrongful act or breach of this Agreement by the Adviser;
provided, however, that in no case is the Adviser's indemnity in favor of any
person deemed to protect such person against any liability to which such person
would otherwise be subject by reason of willful misfeasance, bad faith, or gross
negligence in the performance of his, her or its duties or by reasons of his,
her or its reckless disregard of obligations and duties under this Agreement.
E-5
<PAGE>
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.
9. TERM OF THE AGREEMENT. This Agreement shall continue in full force and
effect with respect to each Portfolio until the earlier of (a) two years from
the date this Agreement is approved by the Trustees, or (b) the first meeting of
the shareholders of the Portfolio of the Trust after the date hereof. If
approved at such meeting by the affirmative vote of a majority of the
outstanding voting securities (as defined in the Act), of the Portfolio with
respect to such Portfolio, voting separately from any other series of the Trust,
this Agreement shall continue in full force and effect with respect to such
Portfolio 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, provided, however, that if the shareholders
fail to approve the Agreement as provided herein, the Subadviser may continue to
serve hereunder in the manner and to the extent permitted by the Act and rules
thereunder. The foregoing requirement that continuance of this Agreement be
"specifically approved at least annually" shall be construed in a manner
consistent with the Act and the rules and regulations thereunder.
With respect to each Portfolio, this Agreement may be terminated at any
time, without payment of 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
E-6
<PAGE>
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.
10. 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.
11. AMENDMENTS. This Agreement may be amended by mutual consent in
writing, but the consent of the Trust must be obtained in conformity the
requirements of the Act.
12. 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.
13. 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.
14. 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.
E-7
<PAGE>
15. 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: Davis Selected Advisers, L.P.
124 E. Marcy Street
P.O. Box 1688
Santa Fe, NM 87504-1688
Attention: Edward A. Leskowicz, Jr.
Executive Vice President
Adviser: SunAmerica Asset Management Corp.
733 Third Avenue
New York, New York 10017
Attention: Robert M. Zakem
Senior Vice President
and General Counsel
with a copy to: SunAmerica Inc.
1 SunAmerica Center
Century City
Los Angeles, California 90067-6022
Attention: Susan L. Harris
Vice President,
Associate General Counsel
and Secretary
</TABLE>
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
DAVIS SELECTED ADVISERS, L.P.
By: /s/ CARL L. LUFF
------------------------------------------------------------------------
Name: Carl L. Luff
Title: President
E-8
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
FEE
(AS A PERCENTAGE OF
AVERAGE DAILY NET ASSETS OF
SUBADVISER PORTFOLIO(S) THE PORTFOLIO)
- -------------------------------------- ----------------- ----------------------------
<S> <C> <C>
Davis Selected Advisers, L.P. Venture Value .45% - first $100MM
.40% - next $400MM
.35% - over $500MM
</TABLE>
<PAGE>
EXHIBIT F
OTHER MUTUAL FUNDS ADVISED BY DAVIS WITH A SIMILAR INVESTMENT OBJECTIVE TO THE
VENTURE VALUE PORTFOLIO'S
<TABLE>
<CAPTION>
NET ASSETS
OF OTHER FUND
(IN MILLIONS) ANNUAL FEE AVERAGE NET
OTHER FUND ON 9/30/96 RATE ASSET LEVEL
- ------------------- --------------- ----------- -----------------------------------------
<S> <C> <C> <C>
Davis New York
Venture Fund ...... $ 2,878 0.75% of the first $250 million
0.65% of the next $250 million
0.55% of amounts in excess of
$500 million
Selected American
Shares, Inc. ...... $ 1,180 0.65% of the first $500 million
0.60% of the next $500 million
0.55% of amounts in excess of $1 billion
New England Zenith
Fund .............. $ 0.45% of the first $100 million
0.40% of the next $400 million
0.35% of amounts in excess of
$500 million
[Any waivers or
reductions of
compensation?]
</TABLE>
F-1
<PAGE>
<TABLE>
<S><C>
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER / / USING BLUE OR BLACK INK OR DARK PENCIL.
PLEASE DO NOT USE RED INK.
- ------------------------------------------------------------------------------------------------------------------------------------
THIS VOTING INSTRUCTION, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE CONTRACTHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS. PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION OF THE PROPOSALS.
FOR ALL WITHHOLD AUTHORITY
1. Election of Trustees: / / / /
Richards D. Barger, Norman J. Metcalfe, James K. Hunt, Allan L.
Sher, William M. Wardlaw
Instructions: To withhold authority to vote on any individual nominee,
please strike the nominee's name above.
FOR AGAINST ABSTAIN
2. Eliminating the Trusts' Fundamental Investment Restrictions relating to:
(a) Investments in Illiquid Securities (All Anchor Pathway Portfolios / / / / / /
and Series Trust-Cash Management Portfolio).
2. Eliminating the Trusts' Fundamental Investment Restrictions relating to:
(a) Investments in Illiquid Securities (All Anchor Pathway Portfolios / / / / / /
and Series Trust-Cash Management Portfolio).
(b) Pledging their Assets (All Portfolios). / / / / / /
(c) Options Transactions (All Anchor Pathway Portfolios except / / / / / /
U.S. Government/AAA Series, and Series Trust-Cash Management
Portfolio only).
(d) Investments in Securities of Other Investment Companies (All Portfolios). / / / / / /
(e) Investments in Companies for the purpose of Exercising Control (All / / / / / /
Portfolios except Anchor Pathway-Cash Management Series, Anchor Pathway-
U.S. Government/AAA Series, and Series Trust-Cash Management Portfolio).
(f) Underwriting of Securities Issued by Others (All Portfolios except Anchor / / / / / /
Pathway-Cash Management Series, Anchor Pathway-U.S. Government/AAA Series,
and Series Trust-Cash Management Portfolio).
(g) Short Sales (All Portfolios except Anchor Pathway-Cash Management Series, / / / / / /
Anchor Pathway-U.S. Government/AAA Series, and Series Trust-Cash Management
Portfolio).
Amending the Trusts' Fundamental Investment Restrictions relating to:
(h) Making Loans (All Portfolios except Anchor Pathway-Cash Management Series, / / / / / /
Anchor Pathway-U.S. Government/AAA Series, and Series Trust-Cash
Management Portfolio).
(i) Borrowing Money (All Portfolios except Anchor Pathway-Cash Management / / / / / /
Series, Anchor Pathway-U.S. Government/AAA Series, and Series Trust-Cash
Management Portfolio).
3. To approve or disapprove, with respect to the Provident Growth Portfolio of / / / / / /
Series Trust, (a) a new subadvisory agreement between SunAmerica Asset
Management Corp. ("SAAMCo") and Putnam Investment Management, Inc. and (b) an
amendment to the Investment Advisory and Management Agreement between Series
Trust and SAAMCo.
4. To approve or disapprove, with respect to the Venture Value Portfolio of Series / / / / / /
Trust, an amendment to the Subadvisory Agreement between SAAMCo and Davis
Selected Advisers, L.P., the Portfolio's subadviser.
5. To approve or disapprove a proposal, with respect to Series Trust, to permit / / / / / /
SAAMCo to enter into new or amended contracts with subadvisers without
obtaining shareholder approval.
6. For each Trust, to ratify the selection of independent accountants. / / / / / /
7. To transact such other matters as may properly come before the meeting or any / / / / / /
adjournment thereof.
</TABLE>
<PAGE>
<TABLE>
<S><C>
PLEASE MARK YOUR VOTING INSTRUCTIONS CARD, DATE AND SIGN IT WHERE INDICATED, AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. VOTING INSTRUCTIONS MUST BE RECEIVED BY MARCH 20, 1997 TO BE VOTED FOR
THE MEETING TO BE HELD ON MARCH 21, 1997.
FIRST SUNAMERICA LIFE INSURANCE COMPANY VOTING INSTRUCTIONS CARD
THESE VOTING INSTRUCTIONS ARE SOLICITED BY FIRST SUNAMERICA LIFE INSURANCE COMPANY IN CONNECTION WITH A SOLICITATION OF PROXIES BY
THE TRUSTEES OF SUNAMERICA SERIES TRUST. A VOTING INSTRUCTIONS CARD IS PROVIDED FOR THE PORTFOLIOS IN WHICH YOUR CONTRACT VALUES
WERE INVESTED AS OF FEBRUARY 7, 1997.
The undersigned hereby instructs First SunAmerica Life Insurance Company to vote the shares of SunAmerica Series Trust ("Series
Trust") attributable to his or her variable annuity contract at the Special Meeting of Shareholders to be held at the Trust's
offices, The SunAmerica Center, 733 Third Avenue, New York, NY 10017 at 10:00 a.m., Eastern Standard Time, March 21, 1997, and any
adjournments thereof, as indicated on the reverse side.
Dated: , 1997
-----------------------
PLEASE SIGN IN BOX BELOW
If a contract is held jointly, each contract owner should sign. If only one signs, his or her signature will be binding. If the
contract owner is a corporation, the President or a Vice President should sign in his or her own name, indicating title. If the
contract owner is a partnership, a partner should sign in his or her own name, indicating that he or she is a partner.
--------------------------------------------------------------
Signature(s) Title(s), if applicable FSLIC
</TABLE>
<PAGE>
<TABLE>
<S><C>
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER / / USING BLUE OR BLACK INK OR DARK PENCIL.
PLEASE DO NOT USE RED INK.
- ------------------------------------------------------------------------------------------------------------------------------------
THIS VOTING INSTRUCTION, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE CONTRACTHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS. PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION OF THE PROPOSALS.
FOR ALL WITHHOLD AUTHORITY
1. Election of Trustees: / / / /
Richards D. Barger, Norman J. Metcalfe, James K. Hunt, Allan L.
Sher, William M. Wardlaw
Instructions: To withhold authority to vote on any individual nominee,
please strike the nominee's name above.
FOR AGAINST ABSTAIN
2. Eliminating the Trusts' Fundamental Investment Restrictions relating to:
(a) Investments in Illiquid Securities (All Anchor Pathway Portfolios / / / / / /
and Series Trust-Cash Management Portfolio).
2. Eliminating the Trusts' Fundamental Investment Restrictions relating to:
(a) Investments in Illiquid Securities (All Anchor Pathway Portfolios / / / / / /
and Series Trust-Cash Management Portfolio).
(b) Pledging their Assets (All Portfolios). / / / / / /
(c) Options Transactions (All Anchor Pathway Portfolios except / / / / / /
U.S. Government/AAA Series, and Series Trust-Cash Management
Portfolio only).
(d) Investments in Securities of Other Investment Companies (All Portfolios). / / / / / /
(e) Investments in Companies for the purpose of Exercising Control (All / / / / / /
Portfolios except Anchor Pathway-Cash Management Series, Anchor Pathway-
U.S. Government/AAA Series, and Series Trust-Cash Management Portfolio).
(f) Underwriting of Securities Issued by Others (All Portfolios except Anchor / / / / / /
Pathway-Cash Management Series, Anchor Pathway-U.S. Government/AAA Series,
and Series Trust-Cash Management Portfolio).
(g) Short Sales (All Portfolios except Anchor Pathway-Cash Management Series, / / / / / /
Anchor Pathway-U.S. Government/AAA Series, and Series Trust-Cash Management
Portfolio).
Amending the Trusts' Fundamental Investment Restrictions relating to:
(h) Making Loans (All Portfolios except Anchor Pathway-Cash Management Series, / / / / / /
Anchor Pathway-U.S. Government/AAA Series, and Series Trust-Cash
Management Portfolio).
(i) Borrowing Money (All Portfolios except Anchor Pathway-Cash Management / / / / / /
Series, Anchor Pathway-U.S. Government/AAA Series, and Series Trust-Cash
Management Portfolio).
3. To approve or disapprove, with respect to the Provident Growth Portfolio of / / / / / /
Series Trust, (a) a new subadvisory agreement between SunAmerica Asset
Management Corp. ("SAAMCo") and Putnam Investment Management, Inc. and (b) an
amendment to the Investment Advisory and Management Agreement between Series
Trust and SAAMCo.
4. To approve or disapprove, with respect to the Venture Value Portfolio of Series / / / / / /
Trust, an amendment to the Subadvisory Agreement between SAAMCo and Davis
Selected Advisers, L.P., the Portfolio's subadviser.
5. To approve or disapprove a proposal, with respect to Series Trust, to permit / / / / / /
SAAMCo to enter into new or amended contracts with subadvisers without
obtaining shareholder approval.
6. For each Trust, to ratify the selection of independent accountants. / / / / / /
7. To transact such other matters as may properly come before the meeting or any / / / / / /
adjournment thereof.
</TABLE>
<PAGE>
<TABLE>
<S><C>
PLEASE MARK YOUR VOTING INSTRUCTIONS CARD, DATE AND SIGN IT WHERE INDICATED, AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. VOTING INSTRUCTIONS MUST BE RECEIVED BY MARCH 20, 1997 TO BE VOTED FOR
THE MEETING TO BE HELD ON MARCH 21, 1997.
ANCHOR NATIONAL LIFE INSURANCE COMPANY VOTING INSTRUCTIONS CARD
THESE VOTING INSTRUCTIONS ARE SOLICITED BY ANCHOR NATIONAL LIFE INSURANCE COMPANY IN CONNECTION WITH A SOLICITATION OF PROXIES BY
THE TRUSTEES OF SUNAMERICA SERIES TRUST. A VOTING INSTRUCTIONS CARD IS PROVIDED FOR THE PORTFOLIOS IN WHICH YOUR CONTRACT VALUES
WERE INVESTED AS OF FEBRUARY 7, 1997.
The undersigned hereby instructs Anchor National Life Insurance Company to vote the shares of SunAmerica Series Trust ("Series
Trust") attributable to his or her variable annuity contract at the Special Meeting of Shareholders to be held at the Trust's
offices, The SunAmerica Center, 733 Third Avenue, New York, NY 10017 at 10:00 a.m., Eastern Standard Time, March 21, 1997, and any
adjournments thereof, as indicated on the reverse side.
Dated: , 1997
-----------------------
PLEASE SIGN IN BOX BELOW
If a contract is held jointly, each contract owner should sign. If only one signs, his or her signature will be binding. If the
contract owner is a corporation, the President or a Vice President should sign in his or her own name, indicating title. If the
contract owner is a partnership, a partner should sign in his or her own name, indicating that he or she is a partner.
--------------------------------------------------------------
Signature(s) Title(s), if applicable ANLIC
</TABLE>
<PAGE>
<TABLE>
<S><C>
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER / / USING BLUE OR BLACK INK OR DARK PENCIL.
PLEASE DO NOT USE RED INK.
- ------------------------------------------------------------------------------------------------------------------------------------
THIS VOTING INSTRUCTION, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE CONTRACTHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR ALL PROPOSALS. PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION OF THE PROPOSALS.
FOR ALL WITHHOLD AUTHORITY
1. Election of Trustees: / / / /
Richards D. Barger, Norman J. Metcalfe, James K. Hunt, Allan L.
Sher, William M. Wardlaw
Instructions: To withhold authority to vote on any individual nominee,
please strike the nominee's name above.
FOR AGAINST ABSTAIN
2. Eliminating the Trusts' Fundamental Investment Restrictions relating to:
(a) Investments in Illiquid Securities (All Anchor Pathway Portfolios / / / / / /
and Series Trust-Cash Management Portfolio).
2. Eliminating the Trusts' Fundamental Investment Restrictions relating to:
(a) Investments in Illiquid Securities (All Anchor Pathway Portfolios / / / / / /
and Series Trust-Cash Management Portfolio).
(b) Pledging their Assets (All Portfolios). / / / / / /
(c) Options Transactions (All Anchor Pathway Portfolios except / / / / / /
U.S. Government/AAA Series, and Series Trust-Cash Management
Portfolio only).
(d) Investments in Securities of Other Investment Companies (All Portfolios). / / / / / /
(e) Investments in Companies for the purpose of Exercising Control (All / / / / / /
Portfolios except Anchor Pathway-Cash Management Series, Anchor Pathway-
U.S. Government/AAA Series, and Series Trust-Cash Management Portfolio).
(f) Underwriting of Securities Issued by Others (All Portfolios except Anchor / / / / / /
Pathway-Cash Management Series, Anchor Pathway-U.S. Government/AAA Series,
and Series Trust-Cash Management Portfolio).
(g) Short Sales (All Portfolios except Anchor Pathway-Cash Management Series, / / / / / /
Anchor Pathway-U.S. Government/AAA Series, and Series Trust-Cash Management
Portfolio).
Amending the Trusts' Fundamental Investment Restrictions relating to:
(h) Making Loans (All Portfolios except Anchor Pathway-Cash Management Series, / / / / / /
Anchor Pathway-U.S. Government/AAA Series, and Series Trust-Cash
Management Portfolio).
(i) Borrowing Money (All Portfolios except Anchor Pathway-Cash Management / / / / / /
Series, Anchor Pathway-U.S. Government/AAA Series, and Series Trust-Cash
Management Portfolio).
3. To approve or disapprove, with respect to the Provident Growth Portfolio of / / / / / /
Series Trust, (a) a new subadvisory agreement between SunAmerica Asset
Management Corp. ("SAAMCo") and Putnam Investment Management, Inc. and (b) an
amendment to the Investment Advisory and Management Agreement between Series
Trust and SAAMCo.
4. To approve or disapprove, with respect to the Venture Value Portfolio of Series / / / / / /
Trust, an amendment to the Subadvisory Agreement between SAAMCo and Davis
Selected Advisers, L.P., the Portfolio's subadviser.
5. To approve or disapprove a proposal, with respect to Series Trust, to permit / / / / / /
SAAMCo to enter into new or amended contracts with subadvisers without
obtaining shareholder approval.
6. For each Trust, to ratify the selection of independent accountants. / / / / / /
7. To transact such other matters as may properly come before the meeting or any / / / / / /
adjournment thereof.
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<PAGE>
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<S><C>
PLEASE MARK YOUR VOTING INSTRUCTIONS CARD, DATE AND SIGN IT WHERE INDICATED, AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. VOTING INSTRUCTIONS MUST BE RECEIVED BY MARCH 20, 1997 TO BE VOTED FOR
THE MEETING TO BE HELD ON MARCH 21, 1997.
ANCHOR NATIONAL LIFE INSURANCE COMPANY VOTING INSTRUCTIONS CARD
THESE VOTING INSTRUCTIONS ARE SOLICITED BY ANCHOR NATIONAL LIFE INSURANCE COMPANY IN CONNECTION WITH A SOLICITATION OF PROXIES BY
THE TRUSTEES OF ANCHOR PATHWAY FUND. A VOTING INSTRUCTIONS CARD IS PROVIDED FOR THE SERIES IN WHICH YOUR CONTRACT VALUES WERE
INVESTED AS OF FEBRUARY 7, 1997.
The undersigned hereby instructs Anchor National Life Insurance Company to vote the shares of Anchor Pathway Fund ("Anchor Pathway")
attributable to his or her variable annuity contract at the Special Meeting of Shareholders to be held at the Trust's offices, The
SunAmerica Center, 733 Third Avenue, New York, NY 10017 at 10:00 a.m., Eastern Standard Time, March 21, 1997, and any adjournments
thereof, as indicated on the reverse side.
Dated: , 1997
-----------------------
PLEASE SIGN IN BOX BELOW
If a contract is held jointly, each contract owner should sign. If only one signs, his or her signature will be binding. If the
contract owner is a corporation, the President or a Vice President should sign in his or her own name, indicating title. If the
contract owner is a partnership, a partner should sign in his or her own name, indicating that he or she is a partner.
--------------------------------------------------------------
Signature(s) Title(s), if applicable ANLIC
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