<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 Section 240.14a-11(c) or Section
240.14a-12
ANCHOR PATHWAY FUND
SEASONS 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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
Filing Fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
SUNAMERICA INC.
[LOGO]
DEAR SHAREHOLDER,
On August 19, 1998, SunAmerica Inc. entered into an agreement with American
International Group, Inc. ("AIG"), the leading U.S.-based international
insurance organization. Under the terms of the agreement, AIG will acquire
SunAmerica Inc. and consequently SunAmerica Asset Management Corp. ("SAAMCo")
will become a part of AIG. SunAmerica will not change its name and there are no
organizational changes planned which would affect services provided to the
Trusts. As a result of this transaction, it is necessary for the shareholders of
Seasons Series Trust (which underlies the Seasons variable annuity), for which
SAAMCo acts as investment manager, to approve a new investment management
agreement.
In addition, shareholders of both Seasons Series Trust and Anchor Pathway
Fund (which underlies the American Pathway variable annuity) are being asked to
approve certain other matters that are set forth in the attached Notice of Joint
Special Meeting of Shareholders. We also included a Q&A to help you better
understand matters relating to this proxy vote.
THE BOARD MEMBERS OF YOUR TRUSTS BELIEVE THAT EACH OF THE PROPOSALS SET
FORTH IN THIS NOTICE OF JOINT SPECIAL MEETING IS IMPORTANT AND RECOMMEND THAT
YOU READ THE ENCLOSED MATERIALS CAREFULLY AND THEN VOTE FOR ALL PROPOSALS.
Since all of the Trusts which underlie SunAmerica life company variable
annuities are required to conduct shareholder votes, you will receive more than
one proxy card if you are a shareholder in more than one Trust. It is very
important that you respond to all proxy cards that you receive. In addition,
there are five ways to record your vote(s): Internet, touch-tone telephone, live
operator, fax or mail. Some of these options may not be available to you. Please
refer to the insert accompanying these proxy materials to see which of these
options you can use. If we do not receive a response by one of these methods
after a reasonable time, you may receive a call from our proxy solicitor,
Shareholder Communications Corporation, reminding you to vote your shares.
If you have any questions regarding the proxy voting process, you may call
Shareholder Communications Corporation toll-free at 1-800-248-3249.
YOUR VOTE IS IMPORTANT!
We appreciate your cooperation and continued support.
Sincerely,
[LOGO]
Eli Broad
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE>
November 1998
ANCHOR PATHWAY FUND
SEASONS SERIES TRUST
IMPORTANT NEWS
FOR ANCHOR PATHWAY FUND AND SEASONS SERIES TRUST SHAREHOLDERS
While we encourage you to read the full text of the enclosed Proxy
Statement, here is a brief overview of some matters affecting your investment in
the Anchor Pathway Fund and Seasons Series Trust (the "Funds") which require a
shareholder vote. Anchor Pathway Fund and Season Series Trust are the underlying
investments in your variable annuity issued by Anchor National Life Insurance
Company.
Q & A: QUESTIONS AND ANSWERS
Q. WHAT IS HAPPENING?
A. SunAmerica Inc. ("SunAmerica"), the parent company of SunAmerica Asset
Management Corp. ("SAAMCo"), which is the adviser to Seasons Series Trust
and the business manager of Anchor Pathway Fund, has agreed to merge with
and into American International Group, Inc. ("AIG"). AIG is the leading
U.S.-based international insurance organization. As a result of the proposed
merger, there will be a change in ownership of SAAMCo. The following pages
give you additional information on AIG, the proposed merger and the matters
on which you are being asked to vote. THE BOARD MEMBERS OF YOUR FUNDS,
INCLUDING THOSE WHO ARE NOT AFFILIATED WITH THE FUNDS, AIG, SAAMCO OR
SUNAMERICA, UNANIMOUSLY RECOMMEND THAT YOU VOTE FOR THESE PROPOSALS.
Q. WHY DID YOU SEND ME THIS BOOKLET?
A. You are receiving these proxy materials-- a booklet that includes the Proxy
Statement and one or more voting instruction cards-- because you have the
right to provide voting instructions on the important proposals concerning
your investment in the Funds.
Q. WHY ARE MULTIPLE CARDS ENCLOSED?
A. [If your investment is allocated among more than one Portfolio or Series in
your annuity contract, you will receive a voting instructions card for each
Portfolio or Series.]
Q. WHY AM I, A SEASONS SERIES TRUST SHAREHOLDER, BEING ASKED TO VOTE ON THE
PROPOSED NEW ADVISORY AGREEMENT IN PROPOSAL NO. 2?
A. The Investment Company Act of 1940, which regulates investment companies
such as Seasons Series Trust, requires a vote whenever there is a change in
control of an investment company's adviser. Upon a change of control, the
advisory agreement between the investment adviser and the investment company
terminates. SunAmerica's merger with AIG will result in a change of control
of SAAMCo and therefore requires shareholder approval of a new advisory
agreement between Seasons Series Trust and SAAMCo. The new advisory
agreement is identical in all material respects to the existing advisory
agreement.
Q. WHY AM I, AN ANCHOR PATHWAY FUND SHAREHOLDER, NOT BEING ASKED TO VOTE ON A
NEW ADVISORY AGREEMENT?
A. You are NOT being asked to vote on a new advisory agreement because the
current advisory agreement is still in effect. SunAmerica's merger with AIG
does not result in a change of control of, or otherwise legally affect, your
adviser, Capital Research and Management Company.
<PAGE>
Q. WHY AM I, A SEASONS SERIES TRUST SHAREHOLDER, BEING ASKED TO VOTE ON THE
PROPOSED NEW SUBADVISORY AGREEMENTS IN PROPOSAL NO. 3?
A. Each Seasons Series Trust subadvisory agreement provides that it terminates
automatically if the advisory agreement between Seasons Series Trust and
SAAMCo terminates. Because SunAmerica's merger with AIG will cause the
termination of SAAMCo's advisory agreement, shareholder approval of the new
subadvisory agreements is required. Each new subadvisory agreement is
identical in all material respects to the existing subadvisory agreement
that it replaces.
Q. WHY AM I, AN ANCHOR PATHWAY FUND SHAREHOLDER, NOT BEING ASKED TO VOTE ON A
NEW SUBADVISORY AGREEMENT?
A. The Series of your Anchor Pathway Fund do not have any subadvisers. Capital
Research and Management Company provides all advisory services for your
Fund.
Q. WHAT ELSE AM I BEING ASKED TO VOTE ON?
A. You are being asked to elect a Board of Trustees. One consequence of the
merger, as required by the Investment Company Act of 1940, is that the
composition of the Board of Seasons Series Trust be changed so that at least
75% of the Trustees are not interested persons of the Fund. Currently, as
required by the Investment Company Act, 40% of the Trustees are not
interested persons. Anchor Pathway Fund has historically had the same Board
as Seasons Series Trust. In order to maintain consistency, shareholders of
Anchor Pathway Fund are being asked to elect the same slate of nominees as
Seasons Series Trust. Also, in order to save the expense of a subsequent
meeting, shareholders of Seasons Series Trust are being asked to vote to
change certain fundamental investment restrictions. Finally, you are being
asked to vote to ratify each Board's selection of the Funds' independent
accountants.
Q. HOW WILL THE AIG MERGER AFFECT ME?
A. The merger should have no impact on the operations of the Funds and their
Portfolios or Series. SAAMCo has assured the Board that there will be no
reduction in the nature or quality of its services to the Funds as a result
of the merger, and in fact anticipates that its resources may be enhanced.
Q. HOW DOES EACH FUND'S BOARD RECOMMEND THAT I VOTE?
A. After careful consideration, the Boards of the Funds, including those
Trustees who are not affiliated with the Funds, AIG, SAAMCo or SunAmerica,
recommend that you vote FOR all of the proposals on the enclosed voting
instruction card.
Q. WHOM DO I CALL FOR MORE INFORMATION OR TO PLACE MY VOTE?
A. You have several different ways to provide the Funds with your voting
instructions. These ways include mail, speaking with a representative on the
telephone, fax, touch-tone voting and voting on-line over the Internet. Not
all of these options may be available to you and you should refer to the
insert accompanying this Q&A to see which of these options you can use. If
you need more information on how to vote, or if you have any questions,
please call your Funds' information agent, Shareholder Communications
Corporation, at 1-800-248-3249.
YOUR VOTE IS IMPORTANT AND WILL HELP AVOID THE ADDITIONAL
EXPENSE OF ANOTHER SOLICITATION.
THANK YOU FOR COMPLETING YOUR VOTING INSTRUCTIONS CARD(S)
PROMPTLY.
<PAGE>
ANCHOR PATHWAY FUND
SEASONS SERIES TRUST
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 Anchor Pathway Fund ("Anchor Pathway") and Seasons Series Trust
("Seasons") (each a "Fund" and collectively the "Funds") will be held on
December 30, 1998 at [ .M.], Eastern time, at the offices of SunAmerica Asset
Management Corp. ("SAAMCo" or the "Adviser"), The SunAmerica Center, 733 Third
Avenue, New York, NY 10017 for the purpose of considering the following
proposals with respect to the Funds or with respect to one or more of their
separate investment portfolios or series (each, a "Portfolio" and collectively,
the "Portfolios"), as indicated below. Proposal Nos. 2 and 3 will be effective
only upon consummation of the proposed acquisition of SunAmerica Inc. by
American International Group, Inc. pursuant to an Agreement and Plan of Merger
dated as of August 19, 1998, as more fully described in the Proxy Statement
attached hereto.
1. For each Fund separately, to elect a slate of four members to its Board
of Trustees to hold office until their successors are duly elected and
qualified;
2. For each Portfolio of Seasons separately, to approve or disapprove a new
investment advisory and management agreement between Seasons, on behalf of each
Portfolio, and SAAMCo, the terms of which are identical in all material respects
to the existing investment advisory and management agreement;
3. For each Portfolio of Seasons separately, to approve or disapprove a new
subadvisory agreement, the terms of which are identical in all material respects
to the existing subadvisory agreement with respect to each Portfolio, between
SAAMCo and:
(a) Janus Capital Corporation for each of the Multi-Managed Growth
("Growth"), Multi-Managed Moderate Growth ("Moderate Growth"),
Multi-Managed Income/Equity ("Income/Equity") and Multi-Managed
Income ("Income") Portfolios;
(b) Wellington Management Company, LLP for each of the Growth, Moderate
Growth, Income/ Equity and Income Portfolios;
(c) T. Rowe Price Associates, Inc. for the Stock Portfolio;
(d) Putnam Investment Management, Inc. for the Asset Allocation:
Diversified Growth Portfolio;
4. For each Portfolio of Seasons separately, to approve or disapprove
changing the fundamental investment restriction relating to:
(a) the ability to engage in borrowing transactions;
(b) the ability to engage in lending transactions;
5. For each Fund separately, to ratify the selection of independent
accountants; and
6. To transact such other business as may properly come before the Meeting
or any adjournments thereof.
<PAGE>
The Trustees have fixed the close of business on October 30, 1998 as the
record date for determining the number of shares outstanding and the contract
owners entitled to give voting instructions at the Meeting and at any and all
adjournments thereof.
By Order of the Board of Trustees,
Susan L. Harris
SECRETARY
November , 1998
EACH CONTRACT OWNER IS URGED TO EXERCISE THE RIGHT TO GIVE VOTING INSTRUCTIONS
FOR THE JOINT SPECIAL MEETING OF SHAREHOLDERS OF THE FUNDS BY FILLING IN, DATING
AND SIGNING THE ENCLOSED VOTING INSTRUCTIONS CARD(S) AND RETURNING IT IN THE
RETURN ENVELOPE PROVIDED. CONTRACT OWNERS ALSO HAVE THE OPTION TO PROVIDE VOTING
INSTRUCTIONS BY CALLING AN AGENT OF THE FUNDS OR CONTRACT HOLDERS MAY PROVIDE
VOTING INSTRUCTIONS BY TELEPHONE OR ON THE INTERNET BY FOLLOWING THE
INSTRUCTIONS ON THE INSERT ACCOMPANYING THE VOTING INSTRUCTIONS CARD(S).
<PAGE>
PRELIMINARY COPY
ANCHOR PATHWAY FUND
SEASONS SERIES TRUST
P.O. BOX 54299
LOS ANGELES, CALIFORNIA 90054-0299
------------------------
PROXY STATEMENT
JOINT SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 30, 1998, [ .M.]
---------------------
Anchor Pathway Fund ("Anchor Pathway") is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act") and consists of seven separate investment portfolios or series:
Growth Series, International Series, Growth-Income Series, Asset Allocation
Series, High Yield Bond Series, U.S. Government/AAA-Rated Securities Series and
Cash Management Series (each, an "Anchor Pathway Portfolio," and collectively,
the "Anchor Pathway Portfolios"). Anchor Pathway is the underlying investment in
the American Pathway variable annuities.
Seasons Series Trust ("Seasons") is an open-end management investment
company registered under the 1940 Act and consists of six separate investment
portfolios or series: Multi-Managed Growth Portfolio ("Growth"), Multi-Managed
Moderate Growth Portfolio ("Moderate Growth"), Multi-Managed Income/ Equity
Portfolio ("Income/Equity"), Multi-Managed Income Portfolio ("Income"), Asset
Allocation: Diversified Growth Portfolio ("Asset Allocation") and Stock
Portfolio ("Stock") (each, a "Seasons Portfolio" and collectively, the "Seasons
Portfolios"). Anchor Pathway and Seasons are hereinafter each sometimes referred
to as a "Fund" and collectively, as the "Funds." The Anchor Pathway Portfolios
and Seasons Portfolios are hereinafter each sometimes referred to as a
"Portfolio" and collectively, as the "Portfolios." Seasons is the underlying
investment in the Seasons variable annuities.
Shares of the Anchor Pathway Portfolios are offered to the Variable Separate
Account of Anchor National Life Insurance Company ("Anchor National") and shares
of the Seasons Portfolios and offered to the Variable Annuity Account Five of
Anchor National to fund benefits under certain variable annuity contracts
("contracts") issued by Anchor National. SunAmerica Asset Management Corp.
("SAAMCo" or the "Adviser") serves as investment adviser and administrator to
all of the Seasons Portfolios and, in addition, serves as an investment manager
to the Growth, Moderate Growth, Income/Equity and Income Portfolios of Seasons.
SAAMCo also serves as the business manager to the Anchor Pathway Portfolios.
Capital Research and Management Company, located at 333 South Hope Street, Los
Angeles, California, 90071 serves as the investment adviser to Anchor Pathway.
In accordance with applicable law, this Proxy Statement is being mailed, on
or about November 5, 1998 on behalf of the Board of Trustees (the "Trustees" or
the "Board") of each Fund, to the shareholders of each of the respective
Portfolios for their use in obtaining voting instructions from contract owners
on the proposals to be considered at a joint special meeting (the "Meeting") of
shareholders of the Funds scheduled to be held at the offices of SAAMCo, The
SunAmerica Center, 733 Third Avenue, New York, New York 10017, on December 30,
1998 at [ .M], Eastern time. The Trustees have fixed the close of business on
October 30, 1998 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 Anchor National with respect to
their respective "portion" of shares as of the Record Date.
1
<PAGE>
A listing of the proposals described in this Proxy Statement and the
Portfolio(s) to which each applies is set forth below.
<TABLE>
<CAPTION>
SUMMARY OF PROPOSAL PORTFOLIOS TO WHICH PROPOSAL APPLIES
- ----------------------------------------------------------------- ---------------------------------------------
<S> <C>
1. To elect a slate of four members to the Board of Trustees to Each Fund--all Portfolios of each Fund voting
hold office until their successors are duly elected and together as a single class
qualified.
2. To approve or disapprove a new investment advisory and Seasons--each Portfolio of Seasons voting
management agreement between Seasons, on behalf of each separately
Portfolio thereof, and SAAMCo, the terms of which are
identical in all material respects to the existing
investment advisory and management agreement.
3. To approve or disapprove a new subadvisory agreement, the
terms of which are identical in all material respects to the
existing subadvisory agreement with respect to each
Portfolio, between:
(a). SAAMCo and Janus Capital Corporation ("Janus"); Growth, Moderate Growth, Income/ Equity and
Income Portfolios of Seasons--each
Portfolio voting separately
(b). SAAMCo and Wellington Management Company, LLP ("WMC"); Growth, Moderate Growth, Income/ Equity,
Income Portfolios of Seasons--each
Portfolio voting separately
(c). SAAMCo and T. Rowe Price Associates, Inc. ("T.Rowe"); Stock Portfolio of Seasons
and
(d). SAAMCo and Putnam Investment Management, Inc. Asset Allocation Portfolio of Seasons
("Putnam").
4. To approve or disapprove changing the fundamental investment
restriction relating to:
(a). the ability to engage in borrowing transactions; and Seasons--each Portfolio of Seasons voting
separately
(b). the ability to engage in lending transactions. Seasons--each Portfolio of Seasons voting
separately
5. To ratify the selection of independent accountants. Each Fund--all Portfolios of each Fund voting
together as a single class
6. To transact such other business as may properly come before Each Fund
the Meeting or any adjournments thereof.
</TABLE>
The Funds expect 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, Anchor National, or their
affiliates, who will not receive any compensation therefor from the Funds. In
addition, Shareholder Communications Corporation ("SCC"), a professional proxy
solicitation firm, has been engaged to assist in the solicitation of voting
instructions. None of the costs of the
2
<PAGE>
solicitation will be borne by the Funds or the Portfolios. In connection with
the solicitation of voting instructions, Anchor National will furnish a copy of
this Proxy Statement to all contract owners.
Contract owners may also provide their voting instructions through telephone
touch-tone voting or Internet voting. These options require contract owners to
input a twelve digit control number which is located on each voting instructions
card. Subsequent to inputting this number, contract owners will be prompted to
provide their voting instructions on each proposal. Contract owners will have an
opportunity to review their voting instructions and make any necessary changes
before submitting their voting instructions and terminating their telephone call
or internet link. Contract owners who vote on the internet, in addition to
confirming their voting instructions prior to submission, will also receive an
e-mail confirming their voting instructions.
As the Meeting date approaches, certain contract owners may receive a
telephone call from a representative of SCC if their voting instructions have
not yet been received. Authorization to permit SCC to execute voting
instructions may be obtained by telephonically transmitted instructions from
contract holders. Voting instructions that are obtained telephonically will be
recorded in accordance with the procedures set forth below. The Trustees believe
that these procedures are reasonably designed to ensure that the identity of the
contract owner providing the voting instruction is accurately determined and
that the voting instructions of the contract owner are accurately determined.
The cost of this assistance is expected to be approximately $45,000 and, as
stated above, will not be borne by the Funds or the Portfolios.
In all cases where telephonic voting instructions are solicited, the SCC
representative is required to ask for each contract owner's full name, address,
social security or taxpayer identification number, title (if the contract owner
is authorized to act on behalf of an entity, such as a corporation), and the
portion of shares beneficially owned and to confirm that the contract owner has
received the Proxy Statement and voting instructions card in the mail. If the
information solicited agrees with the information provided to SCC, then the SCC
representative has the responsibility to explain the process, read the proposals
listed on the voting instructions card, and ask for the contract owner's
instructions on each proposal. The SCC representative, although permitted to
answer questions about the process, is not permitted to recommend to the
contract owner how to vote, other than to read any recommendation set forth in
the Proxy Statement. The SCC representative will record the contract owner's
instructions on the card. Within 72 hours, SCC will send the contract owner a
letter or mailgram to confirm his or her voting instructions and ask the
contract owner to call 1-800-248-3249 immediately if his or her instructions are
not correctly reflected in the confirmation.
If the contract holder wishes to participate in the Meeting, but does not
wish to give his or her proxy by any of the methods outlined above, the contract
owner may still submit the voting instructions card originally sent with the
Proxy Statement or attend in person. Should contract owners require additional
information regarding the Proxy Statement or replacement voting instructions
cards, they may contact SCC toll-free at 1-800-248-3249. Voting instructions
executed by contract owners may be revoked by (i) a written instrument received
by the Secretary of a Fund at any time before they are exercised; (ii) delivery
of a later-dated proxy; or (iii) attendance at the Meeting and voting in person.
3
<PAGE>
The following table sets forth the share ownership of the Portfolios and
each Fund as a whole as of the Record Date:
ANCHOR PATHWAY
<TABLE>
<CAPTION>
TOTAL NUMBER OF SHARES
PORTFOLIO OUTSTANDING
- ------------------------------------------------------------------------------------------------- -----------------------
<S> <C>
Growth Series....................................................................................
International Series.............................................................................
Growth-Income Series.............................................................................
Asset Allocation Series..........................................................................
High Yield Bond Series...........................................................................
U.S. Government/AAA-Rated Securities Series......................................................
Cash Management Series...........................................................................
TOTAL ANCHOR PATHWAY.........................................................................
</TABLE>
SEASONS
<TABLE>
<CAPTION>
TOTAL NUMBER OF SHARES
PORTFOLIO OUTSTANDING
- ------------------------------------------------------------------------------------------------- -----------------------
<S> <C>
Multi-Managed Growth Portfolio...................................................................
Multi-Managed Moderate Portfolio.................................................................
Multi-Managed Income/Equity Portfolio............................................................
Multi-Managed Income Portfolio...................................................................
Asset Allocation: Diversified Growth Portfolio...................................................
Stock Portfolio..................................................................................
TOTAL SEASONS................................................................................
</TABLE>
[There were no persons who, as of the Record Date, were known to the Funds
to have allocated contributions under annuity contracts beneficially owned by
such person such that, upon the pass through of voting rights by Anchor
National, they would have the right to give voting instructions with respect to
more than 5% of the outstanding shares of any Fund or any Portfolio.] [CONFIRM
OR PROVIDE SUCH 5% OWNERS] To the knowledge of management, Trustees and the
executive officers of each Fund, both individually and as a group, owned less
than 1% of the outstanding shares of each Fund and each respective Portfolio as
of the Record Date.
Anchor National, the holder of record shares of each Portfolio, is required
to "pass through" to its contract owners the right to vote shares of each
Portfolio. The Funds expect that Anchor National will vote 100% of the shares of
the Portfolios held by its respective separate accounts. Anchor National 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 the
Proposals. Unmarked voting instructions from contract owners will be voted in
favor of the proposals. Anchor National, as record shareholder of each of the
Portfolios, may adjourn the Meeting to the extent permitted by law, if necessary
to obtain additional voting instructions from contract owners. Neither the
4
<PAGE>
Funds nor the Portfolios will bear the costs of preparing and distributing to
contract owners additional proxy materials, if required in connection with any
adjournment.
Approval of each proposal, except Proposal Nos. 1 and 5, with respect to
each applicable Portfolio, requires the affirmative vote of a majority of the
outstanding voting securities of that Portfolio. "Majority" for this purpose
means more than 50% of the outstanding shares of the Portfolio. Each such
proposal must be approved by shareholders of the respective Portfolio voting
separately. Approval of a Proposal with respect to one Portfolio is not
conditioned on approval by shareholders of any other Portfolio.
For Proposal No. 1, the candidates receiving a majority of the votes cast at
the Meeting will be elected. Approval of Proposal No. 5 requires a majority of
the votes cast at the Meeting. Shareholders of all Portfolios of each Fund vote
together as a single class with respect to Proposal Nos. 1 and 5.
All information in the Proxy Statement about Janus, WMC, T. Rowe and Putnam
(each, a "Subadviser" and collectively, the "Subadvisers") has been provided by
each respective Subadviser. All information in the Proxy Statement about SAAMCo
and Anchor National has been provided by SAAMCo and Anchor National,
respectively. All information in the Proxy Statement about American
International Group, Inc. ("AIG") has been provided by AIG.
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.
5
<PAGE>
ELECTION OF FOUR TRUSTEES
(ANCHOR PATHWAY AND SEASONS)
PROPOSAL NO. 1
INTRODUCTION
On August 19, 1998, SunAmerica Inc. ("SunAmerica") and AIG entered into an
Agreement and Plan of Merger (the "Merger Agreement") pursuant to which
SunAmerica will merge with and into AIG (the "Merger") with AIG as the
corporation surviving the Merger. Under the terms of the Merger Agreement, each
share of common stock, $1.00 par value per share, of SunAmerica outstanding at
the effective time of the Merger will be converted into 0.855 shares of common
stock, $2.50 par value per share, of AIG. SunAmerica and AIG expect that the
closing of the Merger (the "Closing") will take place during either the last
quarter of 1998 or the first quarter of 1999.
The Merger is subject to certain regulatory approvals and other customary
conditions as well as to the approval of the Merger by the stockholders of
SunAmerica and AIG. Shareholders of the Funds are not being asked to vote on the
Merger of SunAmerica and AIG.
SECTION 15(f) OF THE 1940 ACT
Section 15(f) of the 1940 Act provides that an investment adviser (such as
SAAMCo with respect to Seasons) to a registered investment company, and the
affiliates of such adviser, may receive any amount or benefit in connection with
a sale of any interest in such investment adviser which results in an assignment
of an investment advisory contract if the following two conditions are
satisfied: (1) for a period of three years after such assignment, at least 75%
of the board of directors of the investment company cannot be "interested
persons" (within the meaning of Section 2(a)(19) of the 1940 Act) of the new
investment adviser or its predecessor; and (2) no "unfair burden" may be imposed
on the investment company as a result of the assignment or any express or
implied terms, conditions or understandings applicable thereto.
Consistent with the first condition of Section 15(f), SunAmerica and AIG
have agreed in the Merger Agreement that, for a period of three years after the
Closing, they will not take or recommend any action that would cause more than
25% of the Trustees of Seasons to be interested persons of the entity acting as
Seasons' investment adviser.
With respect to the second condition of Section 15(f), an unfair burden on
an investment company is defined in the 1940 Act to include any arrangement
during the two-year period after any such transaction occurs whereby the
investment adviser or its predecessor or successor, or any interested person of
such adviser, predecessor or successor, receives or is entitled to receive any
compensation of two types, either directly or indirectly. The first type is
compensation from any person in connection with the purchase or sale of
securities or other property to, from or on behalf of the investment company,
other than bona fide ordinary compensation as principal underwriter for such
company. The second type is compensation from the investment company or its
security holders for other than bona fide investment advisory or other services.
In the Merger Agreement, SunAmerica and AIG have agreed not to take or
recommend any action that would constitute an unfair burden on Seasons or a
Seasons Portfolio within the meaning of Section 15(f).
INFORMATION REGARDING NOMINEES
At a meeting held on October 15, 1998, the Trustees of each Fund, including
all of those Trustees who are not interested persons of SunAmerica, AIG or any
Subadviser (the "Disinterested Trustees"), unanimously nominated the 4 persons
described below for election as Trustees of each Fund, to take office effective
upon their election. Three of the nominees are currently Trustees of each Fund.
The Board of
6
<PAGE>
each Fund currently consists of five members, two of whom will resign effective
upon the election of the nominees listed in this Proxy Statement. With respect
to Seasons, the change in the composition of the Board is to ensure that at
least 75% of the Board will consist of Trustees who are not interested persons
of SunAmerica, AIG or any Subadviser. With respect to Anchor Pathway, since
Anchor Pathway has historically had the same Board of Trustees as Seasons, two
of the Trustees will resign effective upon the election of the nominees listed
in this Proxy Statement in order to maintain consistency with Seasons. If
elected, each nominee will serve until his or her successor is duly elected and
qualified. It is 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.
If any of the nominees become unavailable for election as a Trustee before
the meeting, proxies will be voted for the other persons that the Trustees
recommend.
Biographical data concerning all nominees is listed below.
PRINCIPAL OCCUPATION AND OTHER INFORMATION
The nominee designated by an asterisk (*), James K. Hunt, is an "interested
person," as that term is defined in the 1940 Act, of the Adviser because Mr.
Hunt is an officer of affiliates of the Adviser.
Unless otherwise noted, the address of each individual listed below is 1
SunAmerica Center, Los Angeles, California, 90067-6022.
<TABLE>
<CAPTION>
NAME, AGE, AND ADDRESS PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
James K. Hunt, *47 ..................................... President of Anchor Pathway and Seasons (since [ ];
Chairman of the Board of Trustees of Anchor Pathway Executive Vice President, SunAmerica Investments, Inc.
since [ ] (1993 to present); President, SunAmerica Corporate
Trustees of Seasons since [ ] Finance (since January 1994); Trustee, Chairman and
President, SunAmerica Series Trust ("SAST") (since
1994).
Monica C. Lozano, 42 ................................... Associate Publisher, LA OPINION (newspaper publishing
3257 Purdue Avenue concern) since 1995, Director, First Interstate Bank
Los Angeles, CA 90066 of California from 1994-1996; Editor, LA OPINION from
1991-1995.
Allan L. Sher, 66 ...................................... Director, Board of Governors, American Stock Exchange
Trustee of Anchor Pathway since [ ] (1991 to present); Trustee, SAST.
Trustee of Seasons since [ ]
William M. Wardlaw, 51 ................................. Partner, Freeman Spogli & Co., Incorporated (privately
Trustee of Anchor Pathway since [ ] owned merchant banking firm) (1988--Present); Trustee,
Trustee of Seasons since [ ] SAST.
</TABLE>
The Trustees of each Fund met [5] times during each of their most recent
fiscal year ends. The incumbents attended [93]% of the aggregate number of
meetings of the Board. Neither Fund's Board has a standing audit, nominating or
compensation committee.
7
<PAGE>
EXECUTIVE OFFICERS OF THE FUNDS
Currently, the principal executive officers of each of the Funds are all
officers and/or employees of Anchor National or its affiliates. The principal
executive officers of each of the Funds are expected to remain the same after
the Closing.
The following table sets forth certain information furnished by each of the
current principal executive officers of each of the Funds who are not listed
above as nominees.
Unless otherwise noted, the address of each individual listed below is 1
SunAmerica Center, Los Angeles, California 90067-6022.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE POSITION WITH THE FUNDS DURING PAST FIVE YEARS
- ------------------------------ ---------------------------------------- ----------------------------------------
<S> <C> <C>
Scott L. Robinson, 52......... Senior Vice President, Treasurer and Senior Vice President, Treasurer and
Controller of each of the Funds Controller of SAST (since 1993);
(Anchor Pathway since 1991 and Seasons Senior Vice President and Controller,
since 1991 SunAmerica (since 1991); Senior Vice
President of Anchor National (since
1988); Joined SunAmerica in 1978.
Susan L. Harris, 41........... Vice President, Counsel and Secretary of Vice President, Counsel and Secretary of
each of the Funds (Anchor Pathway SAST (since 1993); Senior Vice
since [ ] and Seasons President (since November 1995),
since [ ]) Secretary (since 1989) and General
Counsel-- Corporate Affairs (since
December 1994), SunAmerica; Senior
Vice President and Secretary, Anchor
National (since 1990); Joined
SunAmerica in 1985.
Peter C. Sutton, 34 .......... Vice President of each of the Funds Vice President and Assistant Treasurer
The SunAmerica Center (Anchor Pathway since October 1994 and of SAST (since October 1994); Senior
733 Third Avenue Seasons since April 1997) Vice President, SAAMCo (since April
New York, New York 1997); Treasurer (since February
10017-3204 1996), SunAmerica Equity Funds,
SunAmerica Income Funds and SunAmerica
Money Market Funds, Inc. ("SunAmerica
Mutual Funds" or "SAMF"), Anchor
Series Trust ("AST") and Style Select
Series, Inc. ("Style Select");
Formerly, Vice President, SAAMCo
(1994--1997); Controller, SAMF and AST
(1993--1996); Joined SAAMCo in 1990.
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION(S)
NAME, ADDRESS AND AGE POSITION WITH THE FUNDS DURING PAST FIVE YEARS
- ------------------------------ ---------------------------------------- ----------------------------------------
<S> <C> <C>
Robert M. Zakem, 40 .......... Vice President and Assistant Secretary, Vice President and Assistant Secretary,
The SunAmerica Center of each of the Funds (Anchor Pathway SAST (since April 1993); Secretary and
733 Third Avenue since April 1993 and Seasons since Chief Compliance Officer, SAMF and AST
New York, New York April 1997) (since 1993) and Style Select (since
10017-3204 1996) Senior Vice President and
General Counsel, SAAMCo (since April
1993); Executive Vice President,
General Counsel and Director,
SunAmerica Capital Services, Inc.
(since February 1993); Vice President,
General Counsel and Assistant
Secretary, SunAmerica Fund Services,
Inc. (since January 1994).
</TABLE>
All officers of each Fund are elected annually and serve until their
successors are elected and qualified.
REMUNERATION OF TRUSTEES AND OFFICERS
Each Trustee who is not an officer or employee of Anchor National receives a
fee of $8000 from Anchor Pathway and, for each meeting of the Board attended,
each Trustee receives $500 from Seasons and $1250 from Anchor Pathway. In
addition, each Fund pays the expenses of the Trustees that are incurred in
connection with attendance of each Board meeting. Officers of the Funds receive
no direct remuneration in such capacity from the Funds or the Portfolios. The
following table sets forth information summarizing the compensation of each of
the Trustees for his services as Trustee for the most recently completed fiscal
year.
COMPENSATION TABLE
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS
ACCRUED TOTAL COMPENSATION
AGGREGATE AS PART OF ESTIMATED FROM FUNDS AND
COMPENSATION FUNDS ANNUAL BENEFITS FUND COMPLEX PAID
TRUSTEE FROM FUNDS EXPENSES UPON RETIREMENT TO TRUSTEES*
- ----------------------- ------------- --------------- --------------- ------------------
<S> <C> <C> <C> <C>
Richards D. Barger**... $ 14,500 -- -- $ 23,500
William M. Wardlaw..... $ 12,750 -- -- $ 21,250
Norman J. Metcalfe**... $ 14,500 -- -- $ 23,500
Allan L. Sher.......... $ 14,500 -- -- $ 23,500
</TABLE>
- ------------------------
* Information is as of March 31, 1998 for the three funds in the complex which
pay fees to these Trustees (the Funds and SAST).
** Messrs. Barger and Metcalfe are currently Trustees. They are not standing
for re-election.
9
<PAGE>
THE TRUSTEES OF EACH FUND UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE "FOR"
EACH OF THE NOMINEES UNDER PROPOSAL NO. 1
APPROVAL OR DISAPPROVAL OF A NEW INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
BETWEEN SEASONS AND SAAMCO ON BEHALF OF EACH SEASONS PORTFOLIO
PROPOSAL NO. 2
The Board of Seasons is submitting for approval by the shareholders of each
Seasons Portfolio, a new investment advisory and management agreement (the "New
Advisory Agreement") between Seasons, on behalf of each Seasons Portfolio, and
SAAMCo, the terms of which are identical in all material respects to the current
investment advisory and management agreement with respect to each Seasons
Portfolio (the "Existing Advisory Agreement").
As required by the 1940 Act, the Existing Advisory Agreement provides for
automatic termination upon assignment. The Closing of the Merger constitutes an
assignment, as that term is defined in the 1940 Act, of the Existing Advisory
Agreement, and, consequently, its termination. Accordingly, a New Advisory
Agreement with SAAMCo to take effect upon the Closing is being proposed for
approval by the shareholders of each Seasons Portfolio, even though the
agreement will be identical in all material respects to, and essentially a
continuation of, the Existing Advisory Agreement with SAAMCo. (The Existing
Advisory Agreement and New Advisory Agreement are sometimes collectively
referred to as the "Advisory Agreements.")
In addition, each of the current subadvisory agreements (each, an "Existing
Subadvisory Agreement" and together, the "Existing Subadvisory Agreements")
between SAAMCo and the respective Subadviser or Subadvisers to each Seasons
Portfolio provides for termination upon termination of the Existing Advisory
Agreement. Accordingly, each of the Existing Subadvisory Agreements will also
terminate upon the Closing of the Merger. New Subadvisory Agreements are
therefore also being separately proposed for approval by shareholders and are
described in Proposal No. 3.
Although it is anticipated that the Closing will take place subsequent to
the shareholders' consideration and vote upon this Proposal No. 2 regarding the
New Advisory Agreement and Proposal No. 3 regarding New Subadvisory Agreements,
it is possible that due to unforeseen delays in the holding of the Meeting, the
Closing will occur first. If the Closing were to occur prior to the
shareholders' vote upon such Proposals, there would technically be a termination
of the Existing Advisory and Subadvisory Agreements (collectively, the "Existing
Agreements"). To ensure the uninterrupted receipt by the Seasons Portfolios of
investment advice and management services, SAAMCo and Seasons have applied for
an exemptive order (the "Exemptive Order") from the Securities and Exchange
Commission (the "SEC") that would allow SAAMCo and the Subadvisers to continue
to provide services to the Seasons Portfolios, with the advisory and subadvisory
fees being paid into escrow during the period between the termination of the
Existing Agreements and shareholder approval of the New Agreements. The fees
will be released from escrow and paid to SAAMCo and the Subadvisers,
respectively, only if the shareholders approve, respectively, Proposal Nos. 2
and 3. There can be no assurance that the SEC will grant the requested Exemptive
Order.
APPROVAL OF THE NEW ADVISORY AGREEMENTS
As described below, the Trustees are proposing that shareholders of each
Seasons Portfolio approve a New Advisory Agreement with SAAMCo and, as described
in Proposal No. 3, in connection therewith, new subadvisory agreements between
SAAMCo and each Subadviser (each a "New Subadvisory Agreement," together the
"New Subadvisory Agreements" and together with the New Advisory Agreements, the
"New Agreements"), to become effective as of the Closing. A description of the
New Advisory Agreement and the services to be provided by SAAMCo is set forth
below. This description is qualified in its entirety by reference to the form of
the New Advisory Agreement attached to this Proxy Statement as Exhibit A.
10
<PAGE>
As more fully described below, the proposed New Advisory Agreement,
including advisory fees, is identical in all material respects to the Existing
Advisory Agreement. The New Advisory Agreement differs from the Existing
Advisory Agreement only with respect to the effective dates.
At a meeting held on October 15, 1998, the Trustees, including all of the
Disinterested Trustees, unanimously approved the New Agreements. In connection
with this approval, the Trustees considered that the terms of the Merger
Agreement do not contemplate any changes in the overall form of the advisory and
subadvisory contracts, the advisory fees, or any of the Seasons Portfolio's
objectives or policies. Among other things, the Trustees considered the fact
that although ultimate ownership of SAAMCo's parent company will change, senior
officers of SAAMCo had assured the Trustees that there would be no change in the
personnel providing services to the Seasons Portfolios and no reduction in the
nature or quality of those services. Senior officers of SAAMCo also informed the
Trustees that they did not foresee any changes in the day-to-day operations of
SAAMCo as a result of the Merger. As part of their deliberations, the Trustees
also took into account the following, among other factors: the nature and
quality of the services provided or reasonably anticipated to be provided and
the results achieved or reasonably anticipated to be achieved by SAAMCo; the
amount and structure of investment advisers' fees generally and the fees payable
under the New Agreements; and the organizational capability and financial
condition of SAAMCo and its affiliates.
The Trustees also took into account the financial strength of AIG, the
management, personnel and operations of AIG, the commitment of AIG to the
financial services industry, and the proposed structure of the Merger. The
Trustees based their determinations in this regard on discussions with
representatives of AIG at the meeting and a review of materials provided by AIG
in connection with the meeting. The Trustees also considered the additional
resources that were likely to be available to SAAMCo following the Closing.
RECOMMENDATION OF THE BOARD
Based on the considerations set forth above, the Trustees, including all of
the Disinterested Trustees, unanimously determined that it was necessary and in
the best interests of each Seasons Portfolio and its shareholders to enter into
the New Advisory Agreement and to recommend approval of the New Advisory
Agreement by shareholders.
INFORMATION ABOUT THE ADVISER AND AIG
SAAMCO. SAAMCo is a Delaware corporation and an indirect, wholly owned
subsidiary of Anchor National, which is an indirect wholly owned subsidiary of
SunAmerica, an investment grade financial services company with approximately
$55 billion in assets. SAAMCo provides investment advice and management services
to Seasons, Anchor Pathway, other mutual funds and private accounts. As of June
30, 1998, SAAMCo managed, advised or administered assets of more than $15
billion. The address of SAAMCo is The SunAmerica Center, 733 Third Avenue, New
York, NY 10017-3204. The principal business address of Anchor National and
SunAmerica is 1 SunAmerica Center, Century City, Los Angeles, California
90067-6022. SAAMCo is the investment adviser to other investment companies as
indicated in Exhibit B.
11
<PAGE>
The following chart lists the principal 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>
Peter A. Harbeck............. President, Chief Executive Officer and Director
Susan L. Harris.............. Secretary and Director; Senior Vice President, General Counsel-Corporate Affairs
and Secretary, SunAmerica; Senior Vice President, Director and Secretary, Anchor
National and First SunAmerica Life Insurance Company ("First SunAmerica")
Jay S. Wintrob............... Director; Vice Chairman and Director of SunAmerica; Executive Vice President and
Director of Anchor National and First SunAmerica
P. Christopher Leary......... Executive Vice President and Director of Fixed Income
J. Steven Neamtz............. Executive Vice President
Per Furmark.................. Senior Vice President
Vorise Midgette.............. Senior Vice President
Peter C. Sutton.............. Senior Vice President
Robert M. Zakem.............. Senior Vice President, General Counsel and Assistant Secretary
</TABLE>
The business address of each of the above listed persons other than Ms.
Harris and Mr. Wintrob is The SunAmerica Center, 733 Third Avenue, New York, New
York 10017-3204. The business address of Ms. Harris and Mr. Wintrob is 1
SunAmerica Center, Century City, Los Angeles, California 90067-6022. In
addition, Ms. Harris also serves as Vice President, Counsel and Secretary to
each of the Funds; Mr. Sutton serves as Vice President of each of the Funds and
Mr. Zakem serves as Vice President and Assistant Secretary of each of the Funds.
Pursuant to the Existing Advisory Agreement dated as of August 8, 1996,
SAAMCo has agreed to manage the affairs of Seasons. The Existing Advisory
Agreement was last submitted to shareholders of Seasons on April 15, 1997 for
the purpose of obtaining the initial shareholder approval.
The annual advisory fees which SAAMCo is entitled to receive from the
Seasons Portfolios, and which will be payable to SAAMCo following the Closing
provided the New Agreement is approved by the shareholders of the Seasons
Portfolios, is set forth below in the section entitled "Information About the
New Advisory Agreements."
AIG. American International Group, Inc., a Delaware corporation, is a
holding company which through its subsidiaries is primarily engaged in a broad
range of insurance and insurance related activities and financial services in
the United States and abroad. Its member companies write property, casualty,
marine, life and financial services insurance in approximately 130 countries and
jurisdictions. At December 31, 1997, AIG and its subsidiaries had approximately
40,000 employees.
AIG, through its subsidiaries, is also engaged in a range of financial
services activities. AIG's asset management operations are carried out primarily
by AIG Global Investment Group, Inc., a direct wholly owned subsidiary of AIG,
and its affiliates (collectively, "AIG Global"). AIG Global manages the
investment portfolios of various AIG subsidiaries, as well as third party
assets, and is responsible for product design and origination, marketing and
distribution of third party asset management products, including offshore and
private investment funds and direct investment. As of June 30, 1998, AIG Global
managed more than $86 billion of assets, of which approximately $10.8 billion
represented assets of unaffiliated third parties. AIG Capital Management Corp.,
an indirect wholly owned subsidiary of AIG Global Investment Group, Inc., serves
as investment adviser to The AIG Money Market Fund, a separate series of The
Advisors' Inner Circle Fund, a registered investment company. In addition, AIG
Global
12
<PAGE>
Investment Corp., an AIG Global group company, serves as the sub-investment
adviser to an unaffiliated registered investment company. AIG companies do not
otherwise provide investment advice to any registered investment companies.
AIG's common stock is listed on the New York Stock Exchange, as well as the
stock exchanges in London, Paris, Switzerland and Tokyo. For 1997, AIG reported
net income of $3.3 billion on revenues of $30.6 billion. Total assets at
December 31, 1997 were $164.0 billion. For the six months ended June 30, 1998,
AIG reported net income of $1.8 billion on revenues of $15.8 billion, and
period-end total assets of $176.1 billion. AIG's headquarters are located at 70
Pine Street, New York, New York 10270.
INFORMATION ABOUT THE NEW ADVISORY AGREEMENT
As stated above, the form of the New Advisory Agreement is annexed to this
Proxy Statement as Exhibit A.
The New Advisory Agreement is identical in all material respects to the
Existing Advisory Agreement, and provides that SAAMCo shall act as investment
adviser, manage the investments, administer the business affairs, provide office
space and other facilities for the management of the affairs of Seasons, provide
clerical, bookkeeping and administrative services, and permit any of SAAMCo's
officers or employees to serve without compensation as Trustees or officers.
Under the Advisory Agreements, SAAMCo is authorized to retain one or more
Subadvisers to make the investment decisions for the Seasons Portfolios, and to
place the purchase and sale orders for portfolio transactions. Under the
Advisory Agreements, Seasons agrees to assume and pay certain charges and
expenses of its operations, including: direct charges relating to the purchase
and sale of portfolio securities, interest charges, fees and expenses of
independent legal counsel and independent accountants, 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 record keeping and shareholder account service, expense of
printing and filing reports and other documents filed with governmental
agencies, expenses of printing and distributing prospectuses and statements of
additional information, 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 SAAMCo or its affiliates, membership dues in the Investment Company Institute
or any similar organization, all taxes and fees to federal, state or other
governmental agencies, insurance premiums and extraordinary expenses such as
litigation expenses.
The Advisory Agreements provide that as compensation for its services,
SAAMCo will receive a fee from Seasons, computed daily and payable monthly,
based on the net assets of each Seasons Portfolio. The following table sets
forth the rate of the advisory fee payable by each Seasons Portfolio under the
Advisory Agreements and the total advisory fees received by SAAMCo from each
Seasons Portfolio pursuant to the Existing Advisory Agreement for the period
April 15, 1997 (commencement of operations) through March 31, 1998. The
Subadvisers to the Seasons Portfolios are compensated by SAAMCo out of its
advisory fees.
13
<PAGE>
The annual rate of the advisory fees under the New Advisory Agreement is the
same rate that was in effect under the Existing Advisory Agreement.
ADVISORY FEES
<TABLE>
<CAPTION>
ADVISORY FEE FISCAL YEAR
(AS A PERCENTAGE OF END
PORTFOLIO DAILY NET ASSETS) MARCH 31, 1998
- ------------------------------------------------------ --------------------- --------------
<S> <C> <C>
Growth................................................ .89% of net assets $ 137,424
Moderate Growth....................................... .85% of net assets $ 135,378
Income/Equity......................................... .81% of net assets $ 101,740
Income................................................ .77% of net assets $ 76,624
Asset Allocation...................................... .85% of net assets. $ 208,284
Stock................................................. .85% of net assets $ 178,227
</TABLE>
For the period April 15, 1997 (commencement of operations) through March 31,
1998, SAAMCo voluntarily waived fees or reimbursed expenses of each of the
following Seasons Portfolios: Growth-- $23,646; Moderate Growth--$29,927;
Income/Equity--$36,590; Income--$43,490; Asset Allocation-- $77,724; and
Stock--$10,325.
Under the terms of the Advisory Agreements, SAAMCo shall not be liable to
Seasons, or to any other person, for any act or omission by it in the course of,
or connected with, rendering services under the Advisory Agreements, except as
specified in the 1940 Act or for any losses sustained by Seasons or its
shareholders, except in the case of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligation or duty.
If approved by the shareholders, the New Advisory Agreement will continue in
effect for a period of two years from the Closing, and from year to year
thereafter as to each Seasons Portfolio for so long as such renewal is
specifically approved at least annually by (i) the vote of a majority of the
Board, or by the vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of each relevant Portfolio, and (ii) the vote of a
majority of Trustees who are not parties to the New Advisory Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person, at a meeting called for the purpose of voting on such approval. The New
Advisory Agreement provides that it may be terminated by either party without
penalty upon the specified written notice contained in the Agreement. The New
Advisory Agreement also provides for automatic termination upon assignment.
BROKERAGE COMMISSIONS
The following table sets forth the brokerage commissions paid by the Seasons
Portfolios and the amounts of the brokerage commissions which were paid to
affiliated broker-dealers of such Seasons Portfolios for the period April 15,
1997 (commencement of operations) through March 31, 1998.
14
<PAGE>
BROKERAGE COMMISSIONS
<TABLE>
<CAPTION>
AGGREGATE
AGGREGATE AMOUNT PAID PERCENTAGE PAID TO
BROKERAGE TO AFFILIATED AFFILIATED BROKER-
PORTFOLIO COMMISSIONS BROKER- DEALERS DEALERS
- ---------------------------------------------- ------------ --------------- ---------------------
<S> <C> <C> <C>
Growth........................................ $ 36,894 -- --
Moderate Growth............................... $ 31,159 -- --
Income/Equity................................. $ 12,098 -- --
Income........................................ $ 5,374 -- --
Asset Allocation.............................. $ 84,108 $ 635 .75%
Stock......................................... $ 44,763 -- --
</TABLE>
THE TRUSTEES OF SEASONS UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE "FOR"
PROPOSAL NO. 2
If Proposal No. 2 is not approved by the shareholders of any Seasons
Portfolio and the Closing of the Merger is not effectuated, the Trustees will
determine the appropriate actions to be taken with respect to such Seasons
Portfolio's advisory arrangements at that time.
APPROVAL OR DISAPPROVAL OF NEW SUBADVISORY AGREEMENTS
(SEASONS PORTFOLIOS ONLY)
PROPOSAL NO. 3
The Board of Seasons is submitting for approval by the shareholders of each
Seasons Portfolio, a New Subadvisory Agreement between SAAMCo and each
Subadviser, the terms of which are identical in all material respects to each
Existing Subadvisory Agreement.
As described above in Proposal No. 2, each Existing Subadvisory Agreement
will terminate automatically upon termination of the Existing Advisory
Agreement. Accordingly, New Subadvisory Agreements between SAAMCo and each
Subadviser to take effect upon the Closing are being proposed for approval by
the shareholders of each Seasons Portfolio, even though those agreements will be
identical in all material respects to, and essentially a continuation of, the
Existing Subadvisory Agreements between SAAMCo and the respective Subadviser.
(The Existing Subadvisory Agreements and the New Subadvisory Agreements are
hereinafter sometimes collectively referred to as the "Subadvisory Agreements.")
SAAMCo has obtained an exemptive order (the "Subadviser Exemptive Order")
from the SEC which, among other things, would permit Seasons, subject to certain
conditions, to enter into subadvisory agreements with subadvisers approved by
the Board of Seasons without obtaining shareholder approval and continue the
employment of existing subadvisers after events, such as the consummation of the
transaction contemplated in the Merger Agreement, that would otherwise cause an
automatic termination of a subadvisory agreement. However, Seasons may not
currently rely on the Subadviser Exemptive Order because Seasons does not at
present meet certain specified conditions outlined in the Subadviser Exemptive
Application.
APPROVAL OF THE NEW SUBADVISORY AGREEMENTS
As described below, the Trustees are proposing that shareholders of each
Seasons Portfolio approve a New Subadvisory Agreement between SAAMCo and the
respective Portfolio's Subadviser or Subadvisers, to become effective as of the
Closing. A description of the New Subadvisory Agreements and the services to be
provided by the Subadvisers is set forth below. This description is qualified in
its entirety by reference to the New Subadvisory Agreements attached to this
Proxy Statement as Exhibits C-1-C-4.
As more fully described below, the proposed New Subadvisory Agreements,
including subadvisory fees, are identical in all material respects to the
Existing Subadvisory Agreements. The New Subadvisory Agreements differ from the
Existing Subadvisory Agreements only with respect to the effective dates.
15
<PAGE>
At a meeting held on October 15, 1998, the Trustees of Seasons, including
all the Disinterested Trustees, unanimously approved the New Subadvisory
Agreements. In determining to approve the New Subadvisory Agreements, the
Trustees evaluated the factors they deemed relevant with respect to each Seasons
Portfolio, including the factors described in Proposal No. 2 with respect to the
New Advisory Agreements. In addition, the Trustees considered the fact that the
terms of the Merger Agreement do not contemplate any changes in the overall form
of the subadvisory contracts or subadvisory fees and that the Merger will have
no effect with respect to the operations of any of the Subadvisers, since they
are independent of SAAMCo.
RECOMMENDATION OF THE BOARD
Based on the considerations set forth above, the Trustees, including all of
the Disinterested Trustees, unanimously determined that it was necessary and in
the best interests of each Seasons Portfolio and its shareholders to enter into
the New Subadvisory Agreements and to recommend approval of the New Subadvisory
Agreements by shareholders.
INFORMATION ABOUT THE SUBADVISERS
Each of the Growth, Moderate Growth, Income/Equity and Income Portfolios of
Seasons has two Subadvisers: Janus and WMC. Putnam serves as Subadviser to the
Asset Allocation Portfolio and T. Rowe serves as Subadviser to the Stock
Portfolio.
JANUS CAPITAL CORPORATION. One Subadviser of the Growth, Moderate Growth,
Income/Equity and Income Portfolios is Janus, a Colorado corporation with
principal offices at 100 Fillmore Street, Denver, Colorado 80206-4923. Janus
serves as investment adviser to all of the Janus funds, as well as adviser or
subadviser to other mutual funds and individual, corporate, charitable and
retirement accounts, and, as of June 30, 1998, had assets under management of
approximately $89 billion. Kansas City Southern Industries, Inc. ("KCSI") owns
approximately 83% of the outstanding voting stock of Janus. KCSI is a publicly
traded holding company whose primary subsidiaries are engaged in transportation
and financial services. Janus is the investment adviser to other investment
companies having a similar objective to the Janus/ Growth component of the
Growth, Moderate Growth, Income/Equity and Income Portfolios as indicated in
Exhibit D.
The names, positions with Janus 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 100
Fillmore Street, Denver, Colorado 80206-4923.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH JANUS AND PRINCIPAL OCCUPATION
- -------------------------------- --------------------------------------------------------------------------------
<S> <C>
Thomas H. Bailey................ Director, President, Chairman and CEO of Janus; President, Chairman and Trustee
of Janus Investment Fund; President, Chairman and Trustee of Janus Aspen
Series; Director of Janus Distributors, Inc.
James P. Craig.................. Director, Vice Chairman and Chief Investment Officer of Janus; Executive Vice
President and Trustee of Janus Investment Fund; Executive Vice President and
Trustee of Janus Aspen Series.
Michael E. Herman............... Independent Director of Janus; President of Kansas City Royals Baseball Team;
Finance Committee Chairman of Ewing Marion Kauffman Foundation.
Thomas A. McDonnell............. Independent Director of Janus; President of DST Technologies, Inc; President,
CEO and Director of DST Systems, Inc.
Landon H. Rowland............... Independent Director of Janus; President and CEO of Kansas City Southern
Industries, Inc.
Michael Stolper................. Independent Director of Janus; President of Stolper & Co., Inc.
</TABLE>
16
<PAGE>
WELLINGTON MANAGEMENT COMPANY, LLP. One subadviser of the Growth, Moderate
Growth, Income/ Equity and Income Portfolios is WMC, a Massachusetts limited
liability partnership with principal offices at 75 State Street, Boston, MA
02109. WMC is a professional investment counseling firm which provides
investment services to investment companies, employee benefit plans, endowments,
foundations, and other institutions and individuals. As of September 30, 1998,
WMC had discretionary management authority with respect to $186.5 billion of
assets. WMC is managed by its active partners.
WMC is the investment adviser to other investment companies having a similar
objective to the WMC/Fixed Income component of the Growth, Moderate Growth,
Income/Equity and Income Portfolios as indicated in Exhibit E.
The following individuals were managing partners of WMC as of September 30,
1998 and may be reached at the principal offices of the firm: Robert W. Doran,
Duncan M. McFarland and John Ryan.
The following individuals were general partners and Senior Vice Presidents
of WMC as of September 30, 1998, and may be reached at the principal offices of
the firm: Kenneth L. Abrams, Nicholas C. Adams, Rand L. Alexander, Deborah L.
Allinson, James H. Averill, Karl E. Bandtel, Marie-Claude Bernal, William N.
Booth, Paul Braverman, Robert A. Bruno, Pamela Dippel, Robert W. Doran, Charles
T. Freeman, Laurie A. Gabriel, Frank J. Gilday, John H. Gooch, Nicholas P.
Greville, Paul J. Hamel, William C.S. Hicks, Paul D. Kaplan, John C. Keogh,
George C. Lodge, Jr., Nancy T. Lukitsh, Mark T. Lynch, Christine S. Manfredi,
Patrick J. McCloskey, Earl E. McEvoy, Duncan M. McFarland, Paul M. Mecray, III,
Matthew E. Megargel, James N. Mordy, Diane C. Nordin, Stephen T. O'Brien, Edward
P. Owens, Saul J. Pannell, Thomas L. Pappas, David M. Parker, Jonathan M.
Payson, Stephen M. Pazuk, Robert D. Rands, Eugene E. Record, Jr., John R. Ryan,
Joseph H. Schwartz, David W. Scudder, Binkley C. Shorts, Trond Skramstad,
Catherine A. Smith, Stephen A. Soderberg, Harriet T. Taggart, Perry M. Traquina,
Gene R. Tremblay, Mary Ann Tynan, Clare Villari, Ernst H. von Metzsch, James L.
Walters, Kim Williams and Frank V. Wisneski.
T. ROWE PRICE ASSOCIATES, INC. The Subadviser of the Stock Portfolio is T.
Rowe, a Maryland corporation with principal offices at 100 East Pratt Street,
Baltimore, Maryland 21202. Founded in 1937 by the late Thomas Rowe Price, Jr.,
T. Rowe and its affiliates managed assets in excess of $140 billion as of June
30, 1998. T. Rowe is a publicly traded company. T. Rowe is the investment
adviser to other investment companies having a similar objective to the Stock
Portfolio as indicated in Exhibit F.
The names, positions with T. Rowe 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 100 East
Pratt Street, Baltimore, Maryland 21202.
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH T. ROWE AND PRINCIPAL OCCUPATION
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
James E. Halbkat, Jr. .................................. Director of T. Rowe; President of U.S. Monitor
P.O. Box 23109 Corporation.
Hilton Head Island, South Carolina 29925
Richard L. Menschel .................................... Director of T. Rowe; limited partner of The Goldman
85 Broad Street Sachs Group, L.P.
2nd Floor
New York, New York 10004
John W. Rosenblum ...................................... Director of T. Rowe; Dean of the Jepson School of
University of Richmond Leadership Studies at the University of Richmond;
Richmond, Virginia 23173 Director of Comdial Corporation; Director of Cone
Mills Corporation; and Director of Providence Journal
Company.
</TABLE>
17
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH T. ROWE AND PRINCIPAL OCCUPATION
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Robert L. Strickland ................................... Director of T. Rowe; retired as Chairman of Lowe's
604 Two Piedmont Plaza Building Companies, Inc., as of January 31, 1998; Director of
Winston-Salem, North Carolina 27104 Hannaford Bros., Co.
Philip C. Walsh ........................................ Director of T. Rowe; Consultant to Cyprus Amax Minerals
Pleasant Valley Company; Director of Piedmont Mining Company, Inc.
Peapack, New Jersey 07977
Anne Marie Whittemore .................................. Director of T. Rowe; Partner of the law firm of McGuire,
One James Center Woods, Battle & Boothe; Director of Owens & Minor,
Richmond, Virginia 23219 Inc., USF&G Corporation, the James River Corporation
of Virginia, and Albemarle Corporation.
James S. Riepe.......................................... Vice-Chairman of the Board, Director, and Managing
Director of T. Rowe; Chairman of the Board of T. Rowe
Price (Canada), Inc., T. Rowe Price Investment
Services, T. Rowe Price Investment Technologies, Inc.,
T. Rowe Price Retirement Plan Services, Inc., T. Rowe
Price Services, Inc., and T. Rowe Price Trust Company;
Director of Price-Fleming, General Re Corporation, T.
Rowe Price Insurance Agency, Inc.; Director and Vice
President of T. Rowe Price Stable Asset Management,
Inc.; Director and President of TRP Distribution, Inc.
and TRP Suburban Second, Inc.
George A. Roche......................................... Chairman of the Board, President, and Managing Director
of T. Rowe; Chairman of the Board of TRP Finance,
Inc.; Director of T. Rowe Price Retirement Plan
Services, Inc., T. Rowe Price Strategic Partners,
Inc., and TRP Suburban, Inc.; Director and Vice
President of Price-Fleming, T. Rowe Price Threshold
Fund, Inc., and TRP Suburban Second, Inc.
M. David Testa.......................................... Vice-Chairman of the Board, Chief Investment Officer,
and Managing Director of T. Rowe; Chairman of the
Board of Price-Fleming; President and Director of T.
Rowe Price (Canada), Inc.; Director and Vice President
of T. Rowe Price Trust Company; Director of TRPH
Corporation.
Henry H. Hopkins........................................ Director and Managing Director of T. Rowe; Director of
T. Rowe Price Insurance Agency, Inc.; Vice President
and Director of T. Rowe Price Investment Services,
Inc., T. Rowe Price Services, Inc., T. Rowe Price
Threshold Fund Associates, Inc., TRP Distribution,
Inc., and TRPH Corporation; Vice President of
Price-Fleming.
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH T. ROWE AND PRINCIPAL OCCUPATION
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
James A. C. Kennedy III................................. Director and Managing Director of T. Rowe; President and
Director of T. Rowe Price Strategic Partners
Associates, Inc.; Director and Vice President of T.
Rowe Price Threshold Fund Associates, Inc.
John H Laporte, Jr...................................... Director and Managing Director of T. Rowe.
William T. Reynolds..................................... Director and Managing Director of T. Rowe; Chairman of
the Board of T. Rowe Price Stable Asset Management;
Director of TRP Finance, Inc.
Brian C. Rogers......................................... Director and Managing Director of T. Rowe; Vice
President of T. Rowe Price Trust Company
Charles P. Smith........................................ Managing Director of T. Rowe; and Vice President of
Price-Fleming.
Peter Van Dyke.......................................... Managing Director of T. Rowe; Vice President of
Price-Fleming, T. Rowe Price (Canada), Inc., T. Rowe
Price Stable Asset Management, and T. Rowe Price Trust
Company.
Edward C. Bernard....................................... Managing Director of T. Rowe; Director and President of
T. Rowe Price Insurance Agency and T. Rowe Price
Investment Services, Inc.; Director of T. Rowe Price
Services, Inc.; and Vice President of TRP
Distribution, Inc.
Stephen W. Boesel....................................... Managing Director of T. Rowe and Vice President of T.
Rowe Price Trust Company
Edmund M. Notzon........................................ Managing Director of T. Rowe and Vice President of T.
Rowe Price Trust Company
Richard T. Whitney...................................... Managing Director of T. Rowe and Vice President of T.
Rowe Price Trust Company
Michael A. Goff......................................... Managing Director of T. Rowe; Director and President of
T. Rowe Price Investment Technologies, Inc.
Andrew C. Goresh........................................ Managing Director of T. Rowe; Director and Vice
President of TRP Suburban, Inc. and TRP Suburban
Second, Inc.
George A. Murnaghan..................................... Managing Director of T. Rowe; Executive Vice President
of Price-Fleming; Vice President of T. Rowe Price
Trust Company.
R. Todd Ruppert......................................... Managing Director of T. Rowe; Director and President of
TRPH Corporation; Vice President of T. Rowe Price
Retirement Plan Services, Inc. and T. Rowe Price Trust
Company.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH T. ROWE AND PRINCIPAL OCCUPATION
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Charles E. Vieth........................................ Managing Director of T. Rowe; Director and President of
T. Rowe Price Retirement Plan Services, Inc.; Director
and Vice President of T. Rowe Price Services, Inc. and
T. Rowe Price Investment Services, Inc.; Vice
President of TRP Distribution, Inc. and T. Rowe Price
(Canada), Inc.
Alvin M. Younger, Jr.................................... Chief Financial Officer, Managing Director, Secretary,
and Treasurer of T. Rowe; Secretary and Treasurer for
Price-Fleming, T. Rowe Price (Canada), Inc., T. Rowe
Price Insurance Agency, Inc., T. Rowe Price Investment
Services, Inc., T. Rowe Price Investment Technologies,
Inc., T. Rowe Price Recovery Fund Associates, Inc., T.
Rowe Price Retirement Plan Services, Inc., T. Rowe
Price Services, Inc., T. Rowe Price Stable Asset
Management, Inc., T. Rowe Price Strategic Partners
Associates, Inc., T. Rowe Price Trust Company, TRP
Distribution, Inc., and TRPH Corporation; Treasurer
and Clerk of T. Rowe Price Insurance Agency of
Massachusetts, Inc.; Director, Vice President,
Treasurer, and Secretary of TRP Suburban, Inc., and
TRP Suburban Second, Inc.; and Director of TRP
Finance, Inc.
Preston G. Athey........................................ Managing Director of T. Rowe
Brian W. H. Berghuis.................................... Managing Director of T. Rowe
Mary J. Miller.......................................... Managing Director of T. Rowe
Charles A. Morris....................................... Managing Director of T. Rowe
</TABLE>
PUTNAM INVESTMENT MANAGEMENT, INC. The Subadviser of the Asset Allocation
Portfolio is Putnam, a Massachusetts corporation with principal offices at One
Post Office Square, Boston, Massachusetts. Putnam has been managing mutual funds
since 1937 and serves as investment adviser to the funds in the Putnam Family.
Putnam and its affiliates managed approximately $252 billion as of September
[ ] 1998. Putnam is a subsidiary of Putnam Investments, Inc., which, other than
a minority interest owned by employees, 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. Putnam is the investment adviser to other investment
companies having a similar objective to the Asset Allocation Portfolio as
indicated in Exhibit G.
20
<PAGE>
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, Chief Executive Officer and Director
George Putnam.............. Director and Chairman of the Putnam Funds
Gordon H. Silver........... Director, Senior Managing Director and Senior Administrative Officer
</TABLE>
INFORMATION ABOUT THE NEW SUBADVISORY AGREEMENTS
As stated above, the New Subadvisory Agreements are annexed to this Proxy
Statement as Exhibits C-1-C-4. Under each New Subadvisory Agreement, which is
identical in all material respects to each respective Portfolio's Existing
Subadvisory Agreement, the Subadviser will manage the investment and
reinvestment of the assets of the respective Portfolio or portion of the
Portfolio for which it is responsible, subject to the policies of the Board and
oversight and review of SAAMCo, which pays the Subadvisers' fees.
The following table sets forth the fees that the Adviser pays each
Subadviser under the Subadvisory Agreements on a monthly basis with respect to
each applicable Portfolio for which the Subadviser performs services, computed
on average daily net assets, at an annual rate, and the total subadvisory fees
paid to the Subadviser pursuant to the Existing Subadvisory Agreement for the
period April 15, 1997 (commencement of operations) through March 31, 1998.
The rate of the subadvisory fees under the New Subadvisory Agreements is the
same rate that was in effect under the Existing Subadvisory Agreements.
SUBADVISORY FEES
<TABLE>
<CAPTION>
PERIOD APRIL
15, 1997-
SUBADVISER PORTFOLIO MARCH 31, 1998 FEE (AS A PERCENTAGE OF DAILY NET ASSETS)
- --------------- -------------------------- -------------- ---------------------------------------------------
<S> <C> <C> <C>
Janus* Growth $ 37,947 .60% on the first $200 million
Moderate Growth $ 27,549 .55% thereafter
Income/Equity $ 14,021
Income $ 4,971
WMC* Growth $ 6,813 .225% on the first $100 million
Moderate Growth $ 12,720 .125% on the next $100 million
Income/Equity $ 15,084 .10% thereafter
Income $ 16,688
T. Rowe Stock Portfolio $ 104,733 .50% on the first $40 million
.40% thereafter
Putnam Asset Allocation $ 134,772 .55% on the first $150 million
.50% on the next $150 million
.40% thereafter
</TABLE>
- ------------------------
* The Subadvisers' Fee is computed based on the aggregate net assets of
Growth, Moderate Growth, Income/Equity and Income Portfolios.
Under the terms of the Subadvisory Agreements, the Subadvisers, and their
respective officers, directors, agents, employees, controlling persons,
shareholders and any other person or entity affiliated
21
<PAGE>
with the respective Subadviser will not be liable for any acts or omissions in
the course of or connected with the services rendered under the respective
agreements, except where the act or omission results from willful misfeasance,
bad faith, gross negligence or reckless disregard of their duties and
obligations thereunder.
If approved by the Shareholders, each New Subadvisory Agreement will
continue in effect for a period of two years from the Closing, and from year to
year thereafter as to each applicable Portfolio for so long as such renewal is
specifically approved at least annually by (i) the vote of a majority of the
Board, or by the vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of each applicable Portfolio, and (ii) the vote of
a majority of Trustees who are not parties to the New Subadvisory Agreement or
interested persons (as defined in the 1940 Act) of any such party, cast in
person, at a meeting called for the purpose of voting on such approval. The New
Subadvisory Agreements provide that they will terminate in the event of an
assignment (as defined in the 1940 Act) or upon termination of the New Advisory
Agreement of the respective Portfolio. The New Subadvisory Agreements may be
terminated by Seasons, the Adviser or the respective Subadviser upon the
specified written notice contained in the Agreement.
Certain information concerning the Existing Subadvisory Agreements,
including the date of the most recent approval by shareholders and Trustees, is
set forth in Exhibit H.
THE TRUSTEES OF SEASONS UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL NO. 3
If Proposal No. 3 is not approved by the shareholders of any Seasons
Portfolio and the transactions contemplated by the Merger Agreement are
otherwise consummated, the Trustees will determine the appropriate actions to be
taken with respect to such Seasons Portfolio's subadvisory arrangements at that
time.
------------------------
APPROVAL OR DISAPPROVAL OF PROPOSALS TO CHANGE CERTAIN
FUNDAMENTAL INVESTMENT RESTRICTIONS
PROPOSAL NO. 4(a)
PROPOSAL CHANGING THE FUNDAMENTAL INVESTMENT RESTRICTION WITH RESPECT TO THE
ABILITY TO ENGAGE IN BORROWING TRANSACTIONS
(SEASONS PORTFOLIOS ONLY)
The Board of Seasons is submitting for approval by shareholders of each
Seasons Portfolio a proposal to amend the fundamental investment restriction
relating to borrowing transactions in order to permit each Seasons Portfolio to
borrow money from other mutual funds in the SunAmerica complex (the "Affiliate
Funds"), subject to receipt of appropriate exemptive relief from the SEC. The
Board of Seasons approved this proposal at a meeting held on October 15, 1998.
For the reasons described below, Seasons' Trustees recommend that
shareholders approve the proposed amendment. Fundamental investment restrictions
may be changed only with shareholder approval.
If the proposed changes to each Seasons Portfolio's fundamental investment
restrictions are approved by shareholders at the Meeting, Seasons' prospectus
and statement of additional information will be revised as appropriate to
reflect the changes. This Proposal No. 4(a) will not result in a change to the
investment objective or operating procedure of any Seasons Portfolio.
22
<PAGE>
PROPOSED CHANGE
Amending a portion of each Seasons Portfolio's fundamental investment
restriction relating to borrowing transactions by, in each case, adding a clause
permitting interfund borrowing (which is bolded for ease of reference) or taking
out the reference to borrowing "from a bank," as follows:
<TABLE>
<CAPTION>
CURRENT FUNDAMENTAL PROPOSED FUNDAMENTAL
INVESTMENT RESTRICTION INVESTMENT RESTRICTION
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Each Portfolio may not: Each Portfolio may not:
Borrow money, except that (i) each Portfolio may borrow Borrow money, except that (i) each Portfolio may borrow
FROM BANKS ... for temporary or emergency purposes,... ... for temporary or emergency purposes,...
</TABLE>
Upon approval of this Proposal, portions of the existing fundamental
investment restrictions of each Seasons Portfolio relating to borrowing
transactions will be replaced with the applicable portions of the proposed
fundamental investment restrictions, each as set forth above. Those portions of
the existing fundamental investment restrictions that are not described above
will not be affected by the adoption of this Proposal.
DISCUSSION
The proposed change to each applicable Portfolio's fundamental investment
restriction would allow each applicable Portfolio to borrow from persons other
than banks, to the extent consistent with applicable law. The proposed changes
are designed to permit each applicable Portfolio the greatest degree of
flexibility permitted by law in pursuing its investment program.
Current law prohibits a Portfolio from borrowing other than from banks.
Accordingly, a Portfolio may not borrow from an Affiliate Fund. If the proposed
amendments to each Seasons Portfolio's fundamental investment restrictions on
borrowing are approved by shareholders, then Seasons, on behalf of the
Portfolios, may apply to the SEC for an exemption from this prohibition on
interfund borrowing. There is, of course, no assurance that the SEC would grant
such request. If the SEC did grant the request, each Seasons Portfolio would be
allowed to borrow from other Affiliate Funds. The Adviser and each Board
believes that the ability to engage in borrowing transactions with participating
Affiliate Funds as part of a program, referred to as the "interfund lending
program," may allow a Portfolio to obtain lower interest rates on money borrowed
for temporary or emergency purposes.
When a Portfolio is required to borrow money, under the 1940 Act it may do
so only from banks. When a Portfolio borrows money from banks, it typically pays
interest on those borrowings at a rate that is higher than rates available
contemporaneously from investments in repurchase agreements. If the proposed
amendments are approved (and an SEC exemptive order is granted), eligible
Affiliate Funds would be permitted to participate in an interfund lending
program to allow various Affiliate Funds, through a master loan agreement to
lend available cash to, and borrow from, other Affiliate Funds. Each lending
fund could lend available cash to another Affiliate Fund only when the interfund
rate was higher than repurchase agreement rates or rates on other comparable
short-term investments. Each borrowing fund could borrow through the interfund
lending program only when the interfund loan rate was lower than available bank
loan rates. Thus, each Affiliate Fund would participate in the interfund lending
program only when it would be in such fund's economic best interest to do so.
In determining to recommend the proposed amendments to shareholders for
approval, the Adviser discussed with each Board the possible risks to a
Portfolio of participating in the interfund lending program. The Adviser has
indicated that it does not view the difference in rates available on bank
borrowings and repurchase agreements or other short-term investments as
reflecting a material difference in the quality of the risk of the transactions,
but rather as an indication of the ability of banks to earn a higher rate of
interest on loans than they pay on repurchase agreements or other short-term
investments.
23
<PAGE>
There is a risk that a lending fund could experience a delay in obtaining prompt
repayment of a loan and, unlike repurchase agreements, the lending fund would
not necessarily have received collateral for its loan, although it could require
that collateral be provided as a condition for making an interfund loan. A delay
in obtaining prompt payment could cause a lending fund to miss an investment
opportunity or to incur costs to borrow money to replace the delayed payment.
There is also a risk that a borrowing fund could have a loan recalled on one
day's notice and the borrowing fund might then have to borrow from a bank at a
higher interest rate if money could not be borrowed from another Affiliate Fund.
A Portfolio will participate in the interfund lending program only if its Board
considers that the benefits to the Portfolio of participating in the program
outweigh the possible risks of such participation.
As discussed above, in order to permit each Seasons Portfolio to engage in
interfund lending transactions, regulatory approval of the SEC is required
because, among other reasons, the transactions may be considered to be among
affiliated parties. If the proposed amendments are approved by shareholders, the
proposed interfund lending program would be implemented only to the extent
permitted by rule or by order of the SEC and to the extent that the transactions
were otherwise consistent with the investment objectives and limitations of each
participating Affiliate Fund. As previously noted, if exemptive relief from the
SEC is not granted, no Portfolio will be able to engage in the interfund lending
program even though shareholders have approved this proposal. No prediction can
be made as to whether the SEC would grant such relief.
In this proposal, shareholders are being asked to approve an amendment to
each Seasons Portfolio's fundamental investment restriction on borrowing.
Shareholders are also being asked to vote separately on an amendment to each
Seasons Portfolio's fundamental investment restriction on lending (see Proposal
No. 4(b)). If both amendments are adopted, each Seasons Portfolio, subject to
its investment objective and policies, will be able to participate in the
interfund lending program as both a lender and a borrower. If only one of the
two proposals is adopted, then such Portfolio's participation in the interfund
lending program will be confined to either lending or borrowing, depending on
which amendment is approved.
Each Board believes the proposed amendments may benefit each Seasons
Portfolio by facilitating its flexibility to explore cost-effective alternatives
to satisfy its borrowing requirements by borrowing money from other Affiliate
Funds. Implementation of interfund borrowing would be accomplished consistent
with applicable regulatory requirements, including the provisions of any order
the SEC might issue to each Seasons Portfolio and to other Affiliate Funds.
PROPOSAL NO. 4(b)
PROPOSAL CHANGING THE FUNDAMENTAL INVESTMENT
RESTRICTION WITH RESPECT TO THE
ABILITY TO ENGAGE IN LENDING TRANSACTIONS
(SEASONS PORTFOLIOS ONLY)
The Board of Seasons is submitting for approval by shareholders of each
Seasons Portfolio a proposal to amend the fundamental investment restriction
relating to lending transactions in order to permit each Seasons Portfolio to
participate in interfund lending transactions as described in Proposal No. 4(a).
The Board of Seasons approved this proposal at a meeting held on October 15,
1998.
For the reasons described below, Seasons' Trustees recommend that
shareholders approve the proposed amendment. Fundamental investment restrictions
may be changed only with shareholder approval.
If the proposed changes to each of the Seasons Portfolio's fundamental
investment restrictions are approved by shareholders at the Meeting, Seasons'
prospectus and statement of additional information will be revised as
appropriate to reflect the changes. This Proposal No. 4(b) will not result in a
change to the investment objective or operating procedure of any Seasons
Portfolio.
24
<PAGE>
PROPOSED CHANGE
Amending each Seasons Portfolio's fundamental investment restriction
relating to lending transactions by, in each case, adding a clause (which is
bolded for ease of reference) permitting interfund lending, as follows:
<TABLE>
<CAPTION>
CURRENT FUNDAMENTAL PROPOSED FUNDAMENTAL
INVESTMENT RESTRICTION INVESTMENT RESTRICTION
- -------------------------------------------------------- --------------------------------------------------------
<S> <C>
Each Portfolio may not: Each Portfolio may not:
Make loans to others except for ... and (c) the lending Make loans to others except for ... (c) the lending of
of its portfolio securities. its portfolio securities; AND (D) PARTICIPATING IN AN
INTERFUND LENDING PROGRAM WITH OTHER FUNDS THAT ARE IN
THE SUNAMERICA COMPLEX.
</TABLE>
Upon approval of this Proposal, the existing fundamental investment
restriction of each Seasons Portfolio relating to lending transactions will be
amended by adding the bolded portions of the proposed fundamental investment
restrictions, as set forth above. No other portions of the existing fundamental
investment restrictions will be affected by the adoption of this Proposal.
DISCUSSION
The proposed amendment to each applicable Portfolio's fundamental investment
restriction would allow a Portfolio to participate in an interfund lending
program with other Affiliate Funds. The nature of this program and the risks
associated with each applicable Portfolio's participation therein are set forth
under Proposal No. 4(a). Shareholders are being asked to consider, and vote
separately, on each applicable Portfolio's participation in the interfund
lending program as a borrower and as a lender.
The Board believes that the interfund lending program: (i) may benefit each
Seasons Portfolio by providing it with greater flexibility to engage in lending
transactions; and (ii) could facilitate each Seasons Portfolio's ability to earn
a higher return on short-term investments by allowing it to lend cash to other
Affiliate Funds. Implementation of interfund lending would be accomplished
consistent with applicable regulatory requirements, including the provisions of
any order the SEC might issue to Seasons, on behalf of the Portfolios and to
other Affiliate Funds. Seasons has not yet applied for such order and there can
be no assurance that any such order would be granted, even if applied for.
THE TRUSTEES OF THE FUNDS UNANIMOUSLY RECOMMEND THAT
SHAREHOLDERS VOTE "FOR" EACH ITEM IN PROPOSAL NO. 4
If one or more of the changes contemplated by Proposal No. 4 are not
approved by the shareholders of one of the applicable Portfolios, the related
existing fundamental restriction(s) of that Portfolio will continue in effect
for that Portfolio. Disapproval of all or part of Proposal No. 4 by shareholders
of one Portfolio will not affect any approvals of Proposal No. 4 that are
obtained with respect to any other Portfolio.
RATIFICATION OF SELECTION OF
INDEPENDENT ACCOUNTANTS
(ANCHOR PATHWAY AND SEASONS)
PROPOSAL NO. 5
Subject to ratification by the shareholders at the Meeting, the Trustees
including all of the Disinterested Trustees, at a meeting held October 15, 1998,
approved the selection of PricewaterhouseCoopers LLP as the independent
accountants for the fiscal year ending November 30, 1999 for Anchor Pathway and
March 31, 1999 for Seasons.
25
<PAGE>
The firm of PricewaterhouseCoopers LLP, and its predecessor entity has
extensive experience in investment company accounting and auditing and has
served as independent accountants to the Funds since their inception. The
financial statements included in each Fund's Annual Report have been examined by
PricewaterhouseCoopers LLP. It is not expected that a representative of
PricewaterhouseCoopers LLP will be present at the meeting.
PricewaterhouseCoopers LLP and its members do not have any direct or
indirect material financial interest in or connection with a Fund in any
capacity other than as independent accountants.
THE TRUSTEES OF EACH FUND UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS
VOTE "FOR" PROPOSAL NO. 5
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.
GENERAL INFORMATION
SHAREHOLDER PROPOSALS AND SHAREHOLDER MEETINGS
Notwithstanding the approval or disapproval of the proposals described
above, as in the past, the Boards do not intend to hold annual meetings of
shareholders of each Fund. The Board will call meetings of shareholders as may
be required under the 1940 Act (such as to approve a new investment advisory
agreement for a Fund) or as they may determine in their discretion. The Board
will call a meeting of shareholders to elect additional Trustees if more than
50% of the Trustees were not elected by shareholders. Each Fund's By-laws
requires the Board to call a meeting of shareholders of a Fund when requested to
do so by shareholders holding a majority of the outstanding shares of beneficial
interest of each respective Fund, provided that, pursuant to Section 16(c) of
the 1940 Act, a meeting requested exclusively for the stated purpose of removing
a Trustee shall be called when requested in writing to do so by the record
holders of not less than 10% of the outstanding shares. If a shareholder wishes
to present a proposal to be included in the proxy statement for the next meeting
of shareholders of a Fund, such proposal must be received by the Fund a
reasonable time before the solicitation is to be made.
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
EACH FUND WILL FURNISH, WITHOUT CHARGE, A COPY OF THE MOST RECENT ANNUAL AND
SEMI-ANNUAL REPORT TO SHAREHOLDERS TO CONTRACT OWNERS OF THE FUND. COPIES OF
SUCH REPORTS MAY BE OBTAINED BY CONTACTING EACH FUND IN WRITING 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 CARDS AND RETURN THEM PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE.
CONTRACT OWNERS ALSO HAVE THE OPTION TO PROVIDE VOTING INSTRUCTIONS BY TELEPHONE
OR ON THE INTERNET BY FOLLOWING THE INSTRUCTIONS ON THE INSERT ACCOMPANYING THE
VOTING INSTRUCTION CARD(S).
Board of Trustees,
Anchor Pathway Fund
Seasons Series Trust
November [ ], 1998
26
<PAGE>
EXHIBIT LIST
<TABLE>
<S> <C> <C>
EXHIBIT A -- Form of New Advisory Agreement
EXHIBIT B -- Mutual Funds Advised by SAAMCo
EXHIBIT C-1 -- New Subadvisory Agreement Between SAAMCo and Janus
EXHIBIT C-2 -- New Subadvisory Agreement Between SAAMCo and WMC
EXHIBIT C-3 -- New Subadvisory Agreement Between SAAMCo and T. Rowe
EXHIBIT C-4 -- New Subadvisory Agreement Between SAAMCo and Putnam
EXHIBIT D -- Other Mutual Funds Advised by Janus with a Similar Investment Objective to
the Janus/ Growth Component of the Growth, Moderate Growth, Income/Equity and
Income Portfolios
EXHIBIT E -- Other Mutual Funds Advised by WMC with a Similar Investment Objective to the
WMC/ Fixed Income Component of the Growth, Moderate Growth, Income/Equity and
Income Portfolios
EXHIBIT F -- Other Mutual Funds Advised by T. Rowe with a Similar Investment Objective to
the Stock Portfolio
EXHIBIT G -- Other Mutual Funds Advised by Putnam with a Similar Investment Objective to
the Asset Allocation: Diversified Growth Portfolio
EXHIBIT H -- Certain Information Regarding Existing Subadvisory Agreements with Respect to
the Seasons Portfolios
</TABLE>
<PAGE>
EXHIBIT A
[FORM OF]
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of
between SEASONS 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 to be
maintained by each Portfolio (including those maintained by the Trust's
custodian), (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; (iv) together with the assistance of
affiliates, (a) evaluate the subadviser, if any, and advise the Trustees of the
subadviser(s) which the Adviser believes is/are best suited to invest the assets
of each Portfolio, (b) monitor and evaluate the investment performance of each
subadviser employed by the Trust, (c) allocate the portion of each Portfolio's
assets to be managed by each subadviser; and (d) shall recommend changes of or
the addition of subadvisers when appropriate.
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 as required by the Act. The Adviser may, as it
deems necessary or appropriate from time to time, (i) terminate a subadvisory
arrangement with respect to a Portfolio, or a component of the assets thereof,
and engage a new subadviser for such Portfolio, or component thereof, or (ii)
amend the agreement between itself and a subadviser, without obtaining
shareholder approval in either case; PROVIDED, HOWEVER, that any such new
subadvisory arrangement or amendment to an existing arrangement be approved by
the Trustees in the manner required by either Act or order of the Securities and
Exchange Commission exempting the Adviser and the
A-1
<PAGE>
Trust from the provisions of Section 15(a) of the Act relating to the engagement
of subadvisers for the Portfolios. 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 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
addition, from time to time the Adviser may waive fees or reimburse expenses
with respect to a Portfolio in order that its expense ratio not exceed a
specified amount as set forth in the Portfolio's prospectus. In the event any
amounts are so waived or contributed by the Adviser to the Trust, the Trust
agrees to reimburse the Adviser, within a two-year period after such waiver, 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.
A-2
<PAGE>
5.
PURCHASE AND SALE OF SECURITIES. The Adviser shall purchase securities from
or through 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.
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.
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 to 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
A-3
<PAGE>
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 (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
A-4
<PAGE>
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.
<TABLE>
<S> <C> <C>
SEASONS SERIES TRUST
By:
-----------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
SUNAMERICA ASSET MANAGEMENT CORP.
By:
-----------------------------------------
</TABLE>
A-5
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
FEE RATE
(AS A % OF AVERAGE
DAILY NET ASSET
FUND VALUE)
- --------------------------------------------------------------------------------------------- ---------------------
<S> <C>
Multi-Managed Growth Portfolio............................................................... .89%
Multi-Managed Moderate Growth Portfolio...................................................... .85%
Multi-Managed Income/Equity Portfolio........................................................ .81%
Multi-Managed Income Portfolio............................................................... .77%
Asset Allocation: Diversified Growth Portfolio............................................... .85%
Stock Portfolio.............................................................................. .85%
</TABLE>
A-6
<PAGE>
EXHIBIT B
INVESTMENT OBJECTIVES AND ADVISORY FEES
FOR FUNDS ADVISED BY SUNAMERICA ASSET MANAGEMENT CORP.
<TABLE>
<CAPTION>
NET ASSETS ANNUAL ADVISORY
(AS OF SEPTEMBER 30, FEE AS A PERCENTAGE
FUND 1998) OF NET ASSETS
- ------------------------------------------------- ------------------------ ------------------------------------
<S> <C> <C>
DOMESTIC EQUITY FUNDS
ANCHOR SERIES TRUST*
Capital Appreciation Portfolio................. $ 822,618,819 0.750% on first $100 million
0.675% on next $150 million
0.625% on next $250 million
0.600% thereafter
Growth Portfolio............................... $ 531,472,722 0.750% on first $250 million
0.675% on next $250 million
0.600% thereafter
Growth and Income Portfolio.................... $ 43,419,683 0.700% on first $100 million
0.650% on next $150 million
0.600% on next $250 million
0.575% thereafter
SEASONS SERIES TRUST*
Multi-Managed Growth Portfolio................. $ 45,882,835 0.89%
Multi-Managed Moderate Growth Portfolio........ $ 49,135,686 0.85%
Stock Portfolio................................ $ 62,369024 0.85%
STYLE SELECT SERIES, INC.
Aggressive Growth Portfolio.................... $ 136,431,133+ 1.000% on first $750 million
0.950% on next $750 million
0.900% thereafter
Focus Portfolio................................ $ 95,231,521+ 0.850%
Large-Cap Blend Portfolio...................... $ 26,602,315+ 1.000%
Large-Cap Growth Portfolio..................... $ 42,285,010+ 1.000%
Large-Cap Value Portfolio...................... $ 42,242,450+ 1.000%
Mid-Cap Growth Portfolio....................... $ 89,403,531+ 1.000% on first $750 million
0.950% on next $750 million
0.900% thereafter
Small-Cap Value Portfolio...................... $ 44,535,215+ 1.000%
Value Portfolio................................ $ 183,288,467+ 1.000% on first $750 million
0.950% on next $750 million
0.900% thereafter
</TABLE>
B-1
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS ANNUAL ADVISORY
(AS OF SEPTEMBER 30, FEE AS A PERCENTAGE
FUND 1998) OF NET ASSETS
- ------------------------------------------------- ------------------------ ------------------------------------
<S> <C> <C>
SUNAMERICA EQUITY FUNDS
SunAmerica Blue Chip Growth Fund............... $ 108,376,466 0.750% on first $350 million
0.700% on next $350 million
0.650% thereafter
SunAmerica Growth and Income Fund.............. $ 136,984,018+ 0.750% on first $350 million
0.700% on next $350 million
0.650% thereafter
SunAmerica Mid-Cap Growth Fund................. $ 48,218,491 0.750% on first $350 million
0.700% on next $350 million
0.650% thereafter
SunAmerica Small-Company Growth Fund........... $ 167,744,383 0.750% on first $350 million
0.700% on next $350 million
0.650% thereafter
"Dogs" of Wall Street Fund..................... $ 56,146,950 0.35%
SUNAMERICA SERIES TRUST*
Alliance Growth Portfolio...................... $ 1,092,068,236 0.70% on first $50 million
0.65% on next $100 million
0.60% on next $150 million
0.55% on next $200 million
0.50% thereafter
Aggressive Growth Portfolio.................... $ 103,369,840 0.75% on first $100 million
0.675% on next $150 million
0.625% on next $250 million
0.60% thereafter
"Dogs" of Wall Street Portfolio................ $ 44,171,974 0.60%
Growth-Income Portfolio........................ $ 808,122,639 0.70% on first $50 million
0.65% on next $100 million
0.60% on next $150 million
0.55% on next $200 million
0.50% thereafter
Growth/Phoenix Investment Counsel Portfolio.... $ 218,272,854 0.35% on first $50 million
0.30% on next $100 million
0.25% on next $150 million
0.20% on next $200 million
0.15% thereafter
Putnam Growth Portfolio........................ $ 333,221,134 0.85% on first $150 million
0.80% on next $150 million
0.70% thereafter
Venture Value Portfolio........................ $ 1,445,244,534 0.80% on first $100 million
0.75% on next $400 million
0.70 thereafter
</TABLE>
B-2
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS ANNUAL ADVISORY
(AS OF SEPTEMBER 30, FEE AS A PERCENTAGE
FUND 1998) OF NET ASSETS
- ------------------------------------------------- ------------------------ ------------------------------------
<S> <C> <C>
INTERNATIONAL AND GLOBAL EQUITY
ANCHOR SERIES TRUST*
Foreign Securities Portfolio................... $ 27,235,989 0.900% on first $100 million
0.825% on next $150 million
0.750% on next $250 million
0.700% thereafter
STYLE SELECT SERIES, INC.
International Equity Portfolio................. $ 77,331,516+ 1.100% on first $750 million
1.050% on next $750 million
1.000% thereafter
SUNAMERICA SERIES TRUST*
Emerging Markets Portfolio..................... $ 25,161,994 1.25%
Global Equities Portfolio...................... $ 355,437,814 0.90% on first $50 million
0.80% on next $100 million
0.70% on next $150 million
0.65% thereafter
International Growth and Income Portfolio...... $ 102,653,451 1.00% on first $150 million
0.90% on next $150 million
0.80% thereafter
International Diversified Equities Portfolio... $ 296,903,485 1.000%
DOMESTIC FIXED INCOME
ANCHOR SERIES TRUST*
Fixed Income Portfolio......................... $ 17,826,195 0.625% on first $200 million
0.575% on next $300 million
0.500% thereafter
Government and Quality Bond Portfolio.......... $ 373,807,107 0.625% on first $200 million
0.575% on next $300 million
0.500% thereafter
High Yield Portfolio........................... $ 26,004,577 0.700% on first $250 million
0.575% on next $250 million
0.500% thereafter
SEASONS SERIES TRUST*
Multi-Managed Income Portfolio................. $ 32,953,853 0.77%
</TABLE>
B-3
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS ANNUAL ADVISORY
(AS OF SEPTEMBER 30, FEE AS A PERCENTAGE
FUND 1998) OF NET ASSETS
- ------------------------------------------------- ------------------------ ------------------------------------
<S> <C> <C>
SUNAMERICA INCOME FUNDS
SunAmerica Diversified Income Fund............. $ 71,732,231 0.650% on first $350 million
0.600% thereafter
SunAmerica Federal Securities Fund............. $ 55,408,272 0.550% on first $25 million
0.500% on next $25 million
0.450% thereafter
SunAmerica High Income Fund.................... $ 157,285,790 0.750% on first $200 million
0.720% on next $200 million
0.550% thereafter
SunAmerica Tax Exempt Insured Fund............. $ 107,981,185 0.500% on first $350 million
0.450% thereafter
SunAmerica U.S. Government Securities Fund..... $ 284,236,480 0.750% on first $200 million
0.720% on next $200 million
0.550% thereafter
SUNAMERICA SERIES TRUST*
Corporate Bond Portfolio....................... $ 129,225,050 0.70% on first $50 million
0.60% on next $100 million
0.55% on next $100 million
0.50% thereafter
High-Yield Bond Portfolio...................... $ 258,454,534 0.70% on first $50 million
0.65% on next $100 million
0.60% on next $100 million
0.55% thereafter
INTERNATIONAL AND GLOBAL FIXED INCOME
SUNAMERICA SERIES TRUST*
Global Bond Portfolio.......................... $ 128,437,423 0.75% on first $50 million
0.65% on next $100 million
0.60% on next $100 million
0.55% thereafter
Worldwide High Income Portfolio................ $ 108,620,733 1.00%
ASSET ALLOCATION
ANCHOR SERIES TRUST*
Multi-Asset Portfolio.......................... $ 134,773,617 1.000% on first $200 million
0.875% on next $300 million
0.800% thereafter
Strategic Multi-Asset Portfolio................ $ 44,365,552 1.000% on first $200 million
0.875% on next $300 million
0.800% thereafter
</TABLE>
B-4
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS ANNUAL ADVISORY
(AS OF SEPTEMBER 30, FEE AS A PERCENTAGE
FUND 1998) OF NET ASSETS
- ------------------------------------------------- ------------------------ ------------------------------------
<S> <C> <C>
SEASONS SERIES TRUST*
Asset Allocation: Diversified Growth $ 76,254,323 0.85%
Portfolio....................................
Multi-Managed Income/Equity Portfolio.......... $ 41,227,837 0.81%
SUNAMERICA EQUITY FUNDS
SunAmerica Balanced Assets Fund................ $ 355,891,072 0.750% on first $350 million
0.700% on next $350 million
0.650% thereafter
SUNAMERICA SERIES TRUST*
Asset Allocation Portfolio..................... $ 657,318,956 0.75% on first $50 million
0.65% on next $100 million
0.60% on next $100 million
0.55% thereafter
Balanced/Phoenix Investment Counsel $ 119,739,829 0.35% on first $50 million
Portfolio.................................... 0.30% on next $100 million
0.25% on next $150 million
0.20% on next $200 million
0.15% thereafter
Federated Value Portfolio...................... $ 119,331,542 0.75% on first $150 million
0.60% on next $350 million
0.50% thereafter
SunAmerica Balanced Portfolio.................. $ 112,033,596 0.70% on first $50 million
0.65% on next $100 million
0.60% on next $150 million
0.55% on next $200 million
0.50% thereafter
MONEY MARKET
ANCHOR SERIES TRUST*
Money Market Portfolio......................... $ 71,244,988 0.500% on first $150 million
0.475% on next $100 million
0.450% on next $250 million
0.425% thereafter
SUNAMERICA MONEY MARKET FUNDS, INC.
SunAmerica Money Market Fund................... $ 692,803,417 0.500% on first $600 million
0.450% on next $900 million
0.40% thereafter
SUNAMERICA SERIES TRUST*
Cash Management Portfolio...................... $ 299,176,786 0.55% on first $100 million
0.50% on next $200 million
0.45% thereafter
</TABLE>
B-5
<PAGE>
<TABLE>
<CAPTION>
NET ASSETS ANNUAL ADVISORY
(AS OF SEPTEMBER 30, FEE AS A PERCENTAGE
FUND 1998) OF NET ASSETS
- ------------------------------------------------- ------------------------ ------------------------------------
<S> <C> <C>
SPECIALTY
ANCHOR SERIES TRUST*
Natural Resources Portfolio.................... $ 42,261,724 0.750%
SUNAMERICA SERIES TRUST*
Real Estate Portfolio.......................... $ 56,858,074 0.80% on first $100 million
0.75% on next $400 million
0.70% thereafter
Utility Portfolio.............................. $ 57,477,132 0.75% on first $150 million
0.60% on next $350 million
0.50% thereafter
</TABLE>
- ------------------------
* Funds underlie variable annuities
+ Subject to waivers and/or expense limitations
B-6
<PAGE>
EXHIBIT C-1
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
JANUS CAPITAL CORPORATION, a Colorado corporation (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Seasons Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of (the "Advisory Agreement") pursuant to which
the Adviser has agreed to provide investment management, advisory and
administrative services to the Trust; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act"), as an open-end management investment company and may
issue shares of beneficial interest, par value $.01 per share, in separately
designated portfolios representing separate funds with their own investment
objectives, policies and purposes; and
WHEREAS, the Subadviser is engaged in the business of rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); 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. (A) 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 a portion of the assets of each Portfolio listed
on Schedule A attached hereto. The Subadviser will determine in its discretion
and subject to the oversight and review of the Adviser, the securities to be
purchased or sold, and shall furnish the Adviser with such monthly, quarterly,
and annual reports concerning transactions and performance of each Portfolio in
the form as reasonably requested by the Adviser. The Subadviser shall also
provide the Adviser with such other information and reports as may reasonably be
requested by the Adviser from time to time, other than proprietary information,
and provided the Subadviser shall not be responsible for portfolio accounting,
nor shall it be required to generate information derived from portfolio
accounting data. The Subadviser shall discharge the foregoing responsibilities
subject to the control of the officers and the Trustees of the Trust and in
compliance with such policies as the Trustees of the Trust may from time to time
establish, and in compliance with (a) the objectives, policies, and limitations
for the Portfolio(s) set forth in the Trust's current prospectus and statement
of additional information, and (b) applicable laws and regulations.
The Subadviser agrees to manage each of the Portfolios set forth in Schedule
A (1) in compliance with all applicable federal and state laws governing its
operations and investments; (2) so as not to jeopardize either the treatment of
the Seasons variable annuity contracts issued by Variable Annuity Account Five
(File No. 33-08859; hereinafter "Contracts") as annuity contracts for purposes
of the Internal Revenue Code of 1986, as amended (the "Code"), or the
eligibility of the Contracts to qualify for sale to the public in any state
where they may otherwise be sold; and (3) to minimize any taxes and/or penalties
payable by the Trust or such Portfolio. Without limiting the foregoing, the
Subadviser agrees to manage each Portfolio (1) so that it qualifies to be
treated as a "regulated investment company" under subchapter M, chapter 1 of the
Code, and (2) in compliance with (a) the provisions of the Act and rules adopted
thereunder; (b) the
C-1-1
<PAGE>
diversification requirements specified in the Internal Revenue Service's
regulations under Section 817(h) of the Code; (c) applicable state insurance
laws to the extent the Adviser notifies the Subadviser of any such 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. For purposes of
2(c) in the preceding sentence, disclosure in the Trust's prospectus and/or
statement of additional information of applicable state insurance laws and
regulations shall constitute "notice" thereof. For purposes of compliance with
this paragraph, the Subadviser shall be entitled to treat the portion of the
assets of each Portfolio that it manages as though such portion constituted the
entire portfolio, and the Subadviser shall not be responsible in any way for the
compliance of other portions of the Portfolio or for compliance of the Portfolio
as a whole with this paragraph.
(b) The Subadviser shall be responsible for the preparation and filing of
Schedule 13G and Form 13F on behalf of the Portfolio(s). The Subadviser shall
not be responsible for the preparation or filing of any reports required of the
Portfolio(s) by any governmental or regulatory agency, except as expressly
agreed to in writing. The Subadviser shall vote proxies received in connection
with securities held by the Portfolio(s).
(c) 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.
(d) The Adviser shall timely furnish Subadviser with such information as may
be reasonably necessary for or requested by Subadviser to perform its
responsibilities under this Agreement. The Subadviser shall establish and
maintain brokerage accounts or other accounts necessary for the purchase or sale
of various forms of securities and the Adviser shall take such actions as
Subadviser deems advisable or necessary to enable Subadviser to establish such
accounts on behalf of the Trust.
2. PORTFOLIO TRANSACTIONS. The Subadviser is responsible for decisions to
buy or sell securities and other investments for a portion of the assets of each
Portfolio, broker-dealers and futures commission merchants' selection, and
negotiation of brokerage commission and futures commission merchants' rates. As
a general matter, in executing portfolio transactions, the Subadviser may employ
or deal with such broker-dealers or futures commission merchants as may, in the
Subadviser's best judgement, provide prompt and reliable execution of the
transactions at favorable prices and reasonable commission rates. In selecting
such broker-dealers or futures commission merchants, the Subadviser shall
consider all relevant factors including price (including the applicable
brokerage commission, dealer spread or futures commission merchant rate), the
size of the order, the nature of the market for the security or other
investment, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer or futures commission merchant
involved, the quality of the service, the difficulty of execution, the execution
capabilities and operational facilities of the firm involved, and, in the case
of securities, the firm's risk in positioning a block of securities. Subject to
such policies as the Trustees may determine and consistent with Section 28(e) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Subadviser
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of the Subadviser's
having caused a Portfolio to pay a member of an exchange, broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would have
charged for effecting that transaction, if the Subadviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such member of an exchange,
broker or dealer viewed in terms of either that particular transaction or the
Subadviser's overall responsibilities with respect to such Portfolio and to
other clients as to which the Subadviser exercises investment discretion. In
accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder, and
subject to any other applicable laws and regulations including Section 17(e) of
the Act and Rule 17e-1 thereunder, the Subadviser may engage its affiliates, the
Adviser and its affiliates or any other subadviser to the Trust
C-1-2
<PAGE>
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.
3. (A) COMPENSATION OF THE SUBADVISER. The Subadviser shall not be
entitled to receive any payment from the Trust and shall look solely and
exclusively to the Adviser for payment of all fees for the services rendered,
facilities furnished and expenses paid by it hereunder. As full compensation for
the Subadviser under this Agreement, the Adviser agrees to pay to the Subadviser
a fee at the annual rates set forth in Schedule A hereto with respect to the
portion of the assets managed by the Subadviser for each Portfolio listed
thereon. Such fee shall be accrued daily and paid monthly as soon as practicable
after the end of each month (I.E., the applicable annual fee rate divided by 365
applied to each prior days' net assets in order to calculate the daily accrual).
For purposes of calculating the Subadviser's fee, the average daily net asset
value of a Portfolio shall mean the average daily net assets for which the
Subadviser actually provides advisory services, and shall be determined by
taking an average of all determinations of such net asset value during the
month. If the Subadviser shall provide its services under this Agreement for
less than the whole of any month, the foregoing compensation shall be prorated.
(B) EXPENSES. Adviser, the Trust and the Portfolio(s) shall assume and pay
their respective organizational, operational, and business expenses not
specifically assumed or agreed to be paid by Subadviser pursuant to this
Agreement. Subadviser shall pay its own organizational, operational, and
business expenses but shall not be obligated to pay any expenses of Adviser, the
Trust, or the Portfolio(s), including without limitation, (a) interest and
taxes; (b) brokerage commissions and other costs in connection with the purchase
or sale of securities or other investment instruments for the Portfolio(s); and
(c) custodian fees and expenses.
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.
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. The Subadviser may provide advice to or take action with
respect to other clients, which advice or action, including the timing and
nature of such action, may differ from or be identical to advice given or action
taken with respect to the Portfolio(s). In the event of such activities, the
transactions and associated costs will be allocated among such clients
(including the Portfolio(s)) in a manner that the Subadviser believes to be
equitable to the accounts involved and consistent with such accounts'
objectives, policies and limitations.
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
C-1-3
<PAGE>
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 with respect to the Portfolios 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. CONFIDENTIALITY AND PROPRIETARY RIGHTS. The Adviser will not, directly
or indirectly, and will not permit its affiliates, employees, officers,
directors, agents, contractors, or the Trust to, in any form or by any means,
use, disclose, or furnish, to any person or entity, records or information
concerning the business of the Subadviser, except as necessary for the
performance of its duties under this Agreement or the Advisory Agreement, or as
required by law upon prior written notice to the Subadviser. The Subadviser is
the sole owner of the name and mark "Janus." The Adviser shall not, and shall
not permit the Trust to, without prior written consent of the Subadviser, use
the name or mark "Janus" or make representations regarding the Subadviser or its
affiliates. Upon termination of this Agreement for any reasons, the Adviser
shall immediately cease, and the Adviser shall cause the Trust to immediately
cease, all use of the Janus name or any Janus mark.
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) neither the Subadviser nor its
officers, directors, agents, employees, controlling persons, shareholders, and
any other person or entity affiliated with the Subadviser shall be subject to
liability for any act or omission in the course of, or connected with, rendering
services hereunder, including without limitation, any error of judgment or
mistake of law or for any loss suffered by any of them in connection with the
matters to which this Agreement relates, except to the extent specified in
Section 36(b) of the Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services. Except for such
disabling conduct, the Adviser shall indemnify the Subadviser (and its officers,
directors, partners, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the Subadviser) (collectively, the
"Indemnified Parties") from any liability arising from (1) the Subadviser's
conduct under this Agreement, or (2) any untrue 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 statements therein not misleading,
if such statement or omission was made in reliance on information furnished by
the Adviser.
(b) The Subadviser agrees to indemnify and hold harmless the Adviser and its
affiliates and each of its directors and officers and each person, if any, who
controls the Adviser within the meaning of Section 15 of the 1933 Act against
any and all losses, claims, damages, liabilities or litigation (including legal
and other expenses), to which the Adviser or its affiliates or such directors,
officers or controlling person may become subject under the 1933 Act, under
other statutes, at common law or otherwise, which may be based upon (i) any
wrongful act or material breach of this Agreement by the Subadviser resulting
from Subadviser's disabling conduct, or (ii) any untrue 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 statements therein not
misleading, if such statement or omission was made in reliance on information
furnished by the Subadviser; provided, however, that in no case is the
Subadviser's indemnity in favor of any person deemed to protect such other
persons against any liability to which such person would otherwise be subject by
reasons of willful misfeasance, bad faith, or gross negligence in the
performance of his, her or its duties or by reason of his, her or its reckless
disregard of obligation and duties under this Agreement.
(c) The Subadviser shall not be liable for (i) any acts of the Adviser or
any other subadviser to the Portfolio with respect to the portion of the assets
of a Portfolio not managed by the Subadviser and (ii) acts
C-1-4
<PAGE>
of the Subadviser which result from acts of the Adviser, including, but not
limited to, a failure of the Adviser to provide accurate and current information
with respect to any records maintained by the Adviser or any other subadviser to
a Portfolio, which records are not also maintained by the Subadviser. The
Adviser agrees that the Subadviser shall manage the portion of the assets of a
Portfolio allocated to it as if it was a separate operating series and shall
comply with subsections (a) and (b) of Section I of this Subadvisory Agreement
(including, but not limited to, the investment objectives, policies and
restrictions applicable to a Portfolio and qualifications of a Portfolio as a
regulated investment company under the Code) with respect to the portion of
assets of a Portfolio allocated to the Subadviser. The Adviser shall indemnify
the Indemnified Parties from any liability arising from the conduct of the
Adviser and any other subadviser with respect to the portion of a Portfolio's
assets not allocated to the Subadviser.
10. PERMISSIBLE INTERESTS. Trustees and agents of the Trust are or may be
interested in the Subadviser (or any successor thereof) as directors, partners,
officers, or shareholders, or otherwise; directors, partners, officers, agents,
and shareholders of the Subadviser are or may be interested in the Trust as
trustees, or otherwise; and the Subadviser (or any successor) is or may be
interested in the Trust in some manner.
11. TERM OF THE AGREEMENT. This Agreement shall continue in full force and
effect with respect to each Portfolio until two years from the date hereof, and
from year to year thereafter so long as such continuance is specifically
approved at least annually (i) by the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio voting separately from any other
series of the Trust.
With respect to each Portfolio, this Agreement may be terminated at any
time, without payment of a penalty by the Portfolio or the Trust, by vote of a
majority of the Trustees, or by vote of a majority of the outstanding voting
securities (as defined in the Act) of the Portfolio, voting separately from any
other series of the Trust, or by the Adviser, on not less than 30 nor more than
60 days' written notice to the Subadviser. With respect to each Portfolio, this
Agreement may be terminated by the Subadviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser and the Trust.
Notwithstanding the foregoing, the Subadviser may terminate the Agreement upon
60 days' written notice in the event of a breach of the Agreement by the
Adviser. 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. The obligations
contained in Section 9 shall survive termination of this Agreement.
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
C-1-5
<PAGE>
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.
17. NOTICES. All notices shall be in writing and deemed properly given
when delivered or mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
Subadviser: Janus Capital Corporation
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
Attention: David C. Tucker
General Counsel
Adviser: SunAmerica Asset Management Corp.
The SunAmerica Center
733 Third Avenue, Third Floor
New York, NY 10017-3204
Attention: Robert M. Zakem
Senior Vice President and
General Counsel
with a copy to: SunAmerica Inc.
1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Susan L. Harris
Senior Vice President,
General Counsel--Corporate Affairs
and Secretary
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
JANUS CAPITAL CORPORATION
By:
--------------------------------------
Name:
Title: VICE PRESIDENT
C-1-6
<PAGE>
SCHEDULE A
The Subadviser shall be paid a composite fee of .60% on first $200 million
of average daily net assets and .55% on average daily net assets over $200
million, based on the aggregate assets it manages in the following Portfolios:
Multi-Managed Growth Portfolio
Multi-Managed Moderate Growth Portfolio
Multi-Managed Income/Equity Portfolio
Multi-Managed Income Portfolio
C-1-7
<PAGE>
EXHIBIT C-2
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
WELLINGTON MANAGEMENT COMPANY, a Massachusetts general partnership (the
"Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Seasons Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of (the "Advisory Agreement") pursuant to which
the Adviser has agreed to provide investment management, advisory and
administrative services to the Trust; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act"), as an open-end management investment company and may
issue shares of beneficial interest, par value $.01 per share, in separately
designated portfolios representing separate funds with their own investment
objectives, policies and purposes; and
WHEREAS, the Subadviser is engaged in the business of rendering investment
advisory services and is 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 a portion of the assets of each Portfolio listed
on Schedule A attached hereto. The Subadviser will determine in its discretion
and subject to the oversight and review of the Adviser, the securities to be
purchased or sold, will provide the Adviser with records concerning its
activities which the Adviser or the Trust is required to maintain, and will
render regular reports to the Adviser and to officers and Trustees of the Trust
concerning its discharge of the foregoing responsibilities. The Subadviser shall
discharge the foregoing responsibilities subject to the control of the officers
and the Trustees of the Trust and in compliance with such policies as the
Trustees of the Trust may from time to time establish, and in compliance with
(a) the objectives, policies, and limitations for the Portfolio(s) set forth in
the Trust's current prospectus and statement of additional information, and (b)
applicable laws and regulations.
The Subadviser represents and warrants to the Adviser that the portion of
assets allocated to it of each of the Portfolios set forth in Schedule A will at
all times be operated and managed (1) in compliance with all applicable federal
and state laws governing its operations and investments; (2) so as not to
jeopardize either the treatment of the Seasons variable annuity contracts issued
by Variable Annuity Account Five (File No. 33-08859; hereinafter "Contracts") as
annuity contracts for purposes of the Internal Revenue Code of 1986, as amended
(the "Code"), or the eligibility of the Contracts to qualify for sale to the
public in any state where they may otherwise be sold; and (3) to minimize any
taxes and/or penalties payable by the Trust or such Portfolio. Without limiting
the foregoing, the Subadviser represents and warrants (1) qualification,
election and maintenance of such election by each Portfolio to be treated as a
"regulated investment company" under subchapter M, chapter 1 of the Code, and
(2) compliance with (a) the provisions of the Act and rules adopted thereunder;
(b) the diversification requirements specified in the Internal Revenue Service's
regulations under Section 817(h) of the Code; (c) applicable state insurance
C-2-1
<PAGE>
laws; (d) applicable federal and state securities, commodities and banking laws;
and (e) the distribution requirements necessary to avoid payment of any excise
tax pursuant to Section 4982 of the Code. The Subadviser further represents and
warrants that to the extent that any statements or omissions made in any
Registration Statement for the Contracts or shares of the Trust, or any
amendment or supplement thereto, are made in reliance upon and in conformity
with information furnished by the Subadviser expressly for use therein, such
Registration Statement and any amendments or supplements thereto will, when they
become effective, conform in all material respects to the requirements of the
Securities Act of 1933 and the rules and regulations of the Commission
thereunder (the "1933 Act") and the Act and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
The Subadviser accepts such employment and agrees, at its own expense, to
render the services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such services on
the terms and for the compensation provided in this Agreement.
2. PORTFOLIO TRANSACTIONS. The Subadviser is responsible for decisions to
buy or sell securities and other investments for a portion of the assets of each
Portfolio, broker-dealers and futures commission merchants' selection, and
negotiation of brokerage commission and futures commission merchants' rates. As
a general matter, in executing portfolio transactions, the Subadviser may employ
or deal with such broker-dealers or futures commission merchants as may, in the
Subadviser's best judgement, provide prompt and reliable execution of the
transactions at favorable prices and reasonable commission rates. In selecting
such broker-dealers or futures commission merchants, the Subadviser shall
consider all relevant factors including price (including the applicable
brokerage commission, dealer spread or futures commission merchant rate), the
size of the order, the nature of the market for the security or other
investment, the timing of the transaction, the reputation, experience and
financial stability of the broker-dealer or futures commission merchant
involved, the quality of the service, the difficulty of execution, the execution
capabilities and operational facilities of the firm involved, and, in the case
of securities, the firm's risk in positioning a block of securities. Subject to
such policies as the Trustees may determine and consistent with Section 28(e) of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), the Subadviser
shall not be deemed to have acted unlawfully or to have breached any duty
created by this Agreement or otherwise solely by reason of the Subadviser's
having caused a Portfolio to pay a member of an exchange, broker or dealer an
amount of commission for effecting a securities transaction in excess of the
amount of commission another member of an exchange, broker or dealer would have
charged for effecting that transaction, if the Subadviser determines in good
faith that such amount of commission was reasonable in relation to the value of
the brokerage and research services provided by such member of an exchange,
broker or dealer viewed in terms of either that particular transaction or the
Subadviser's overall responsibilities with respect to such Portfolio and to
other clients as to which the Subadviser exercises investment discretion. In
accordance with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder, and
subject to any other applicable laws and regulations including Section 17(e) of
the Act and Rule 17e-1 thereunder, the Subadviser may engage its affiliates, the
Adviser and its affiliates or any other subadviser to the Trust and its
respective affiliates, as broker-dealers or futures commission merchants to
effect portfolio transactions in securities and other investments for a
Portfolio. The Subadviser will promptly communicate to the Adviser and to the
officers and the Trustees of the Trust such information relating to portfolio
transactions as they may reasonably request.
3. COMPENSATION OF THE SUBADVISER. The Subadviser shall not be entitled to
receive any payment from the Trust and shall look solely and exclusively to the
Adviser for payment of all fees for the services rendered, facilities furnished
and expenses paid by it hereunder. As full compensation for the Subadviser under
this Agreement, the Adviser agrees to pay to the Subadviser a fee at the annual
rates set forth in Schedule A hereto with respect to the portion of the assets
managed by the Subadviser for each Portfolio listed thereon. Such fee shall be
accrued daily and paid monthly as soon as practicable after the end of each
month (i.e., the applicable annual fee rate divided by 365 applied to each prior
days' net assets in order to calculate the daily accrual). For purposes of
calculating the Subadviser's fee, the average daily net
C-2-2
<PAGE>
asset value of a Portfolio shall mean the average daily net assets for which the
Subadviser actually provides advisory services, and shall be determined by
taking an average of all determinations of such net asset value during the
month. If the Subadviser shall provide its services under this Agreement for
less than the whole of any month, the foregoing compensation shall be prorated.
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.
6. STATUS OF THE SUBADVISER. The services of the Subadviser to the Adviser
and the Trust are not to be deemed exclusive, and the Subadviser shall be free
to render similar services to others so long as its services to the Trust are
not impaired thereby. The Subadviser shall be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
7. CERTAIN RECORDS. The Subadviser hereby undertakes and agrees to
maintain, in the form and for the period required by Rule 31a-2 under the Act,
all records relating to the investments of the Portfolio(s) that are required to
be maintained by the Trust pursuant to the requirements of Rule 31a-1 of that
Act. Any records required to be maintained and preserved pursuant to the
provisions of Rule 31a-1 and Rule 31a-2 promulgated under the Act which are
prepared or maintained by the Subadviser on behalf of the Trust are the property
of the Trust and will be surrendered promptly to the Trust or the Adviser on
request.
The Subadviser agrees that all accounts, books and other records maintained
and preserved by it as required hereby shall be subject at any time, and from
time to time, to such reasonable periodic, special and other examinations by the
Securities and Exchange Commission, the Trust's auditors, the Trust or any
representative of the Trust, the Adviser, or any governmental agency or other
instrumentality having regulatory authority over the Trust.
8. REFERENCE TO THE SUBADVISER. Neither the Trust nor the Adviser or any
affiliate or agent thereof shall make reference to or use the name of the
Subadviser or any of its affiliates in any advertising or promotional materials
without the prior approval of the Subadviser, which approval shall not be
unreasonably withheld.
9. LIABILITY OF THE SUBADVISER. (a) In the absence of willful misfeasance,
bad faith, gross negligence or reckless disregard of obligations or duties
("disabling conduct") hereunder on the part of the Subadviser (and its officers,
directors, agents, employees, controlling persons, shareholders and any other
person or entity affiliated with the Subadviser) the Subadviser shall not be
subject to liability to the Trust or to any shareholder of the Trust for any act
or omission in the course of, or connected with, rendering services hereunder,
including without limitation, any error of judgment or mistake of law or for any
loss suffered by any of them in connection with the matters to which this
Agreement relates, except to the extent specified in Section 36(b) of the Act
concerning loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services. Except for such disabling conduct, the
Adviser shall indemnify the Subadviser (and its officers, directors, partners,
agents, employees, controlling persons, shareholders and any other person or
entity affiliated with the Subadviser) (collectively, the "Indemnified Parties")
from any liability arising from the Subadviser's conduct under this Agreement.
Subadviser hereby indemnifies, defends and protects Adviser and holds Adviser
harmless, from and against any and all liability arising out of Subadviser's
disabling conduct.
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<PAGE>
(b) The Subadviser agrees to indemnify and hold harmless the Adviser and its
affiliates and each of its directors and officers and each person, if any, who
controls the Adviser within the meaning of Section 15 of the 1933 Act against
any and all losses, claims, damages, liabilities or litigation (including legal
and other expenses), to which the Adviser or its affiliates or such directors,
officers or controlling person may become subject under the 1933 Act, under
other statutes, at common law or otherwise, which may be based upon (i) any
wrongful act or breach of this Agreement by the Subadviser, or (ii) any failure
by the Subadviser to comply with the representations and warranties set forth in
Section 1 of this Agreement; provided, however, that in no case is the
Subadviser's indemnity in favor of any person deemed to protect such other
persons against any liability to which such person would otherwise be subject by
reasons of willful misfeasance, bad faith, or gross negligence in the
performance of his, her or its duties or by reason of his, her or its reckless
disregard of obligation and duties under this Agreement.
(c) The Subadviser shall not be liable to the Adviser for (i) any acts of
the Adviser or any other subadviser to the Portfolio with respect to the portion
of the assets of a Portfolio not managed by Subadviser and (ii) acts of the
Subadviser which result from acts of the Adviser, including, but not limited to,
a failure of the Adviser to provide accurate and current information with
respect to any records maintained by Adviser or any other subadviser to a
Portfolio, which records are not also maintained by or otherwise available to
the Subadviser upon reasonable request. The Adviser agrees that Subadviser shall
manage the portion of the assets of a Portfolio allocated to it as if it was a
separate operating series and shall comply with subsections (a) and (b) of
Section I of this Subadvisory Agreement (including, but not limited to, the
investment objectives, policies and restrictions applicable to a Portfolio and
qualifications of a Portfolio as a regulated investment company under the Code)
with respect to the portion of assets of a Portfolio allocated to Subadviser.
The Adviser shall indemnify the Indemnified Parties from any liability arising
from the conduct of the Adviser and any other subadviser with respect to the
portion of a Portfolio's assets not allocated to Subadviser.
10. PERMISSIBLE INTERESTS. Trustees and agents of the Trust are or may be
interested in the Subadviser (or any successor thereof) as directors, partners,
officers, or shareholders, or otherwise; directors, partners, officers, agents,
and shareholders of the Subadviser are or may be interested in the Trust as
trustees, or otherwise; and the Subadviser (or any successor) is or may be
interested in the Trust in some manner.
11. TERM OF THE AGREEMENT. This Agreement shall continue in full force and
effect with respect to each Portfolio until two years from the date hereof, and
from year to year thereafter so long as such continuance is specifically
approved at least annually (i) by the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio voting separately from any other
series of the Trust.
With respect to each Portfolio, this Agreement may be terminated at any
time, without payment of a penalty by the Portfolio or the Trust, by vote of a
majority of the Trustees, or by vote of a majority of the outstanding voting
securities (as defined in the Act) of the Portfolio, voting separately from any
other series of the Trust, or by the Adviser, on not less than 30 nor more than
60 days' written notice to the Subadviser. With respect to each Portfolio, this
Agreement may be terminated by the Subadviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser and the Trust;
provided, however, that this Agreement may not be terminated by the Subadviser
unless another subadvisory agreement has been approved by the Trust in
accordance with the Act, or after six months' written notice, whichever is
earlier. Notwithstanding the foregoing, the Subadviser may terminate the
Agreement upon 60 days' written notice in the event of a breach of the Agreement
by the Adviser. 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).
C-2-4
<PAGE>
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.
17. NOTICES. All notices shall be in writing and deemed properly given
when delivered or mailed by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
Subadviser: Wellington Management Company
75 State Street
Boston, MA 02109
Attention: Mary Ann Tynan
Senior Vice President
and Director of Regulatory Affairs
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 to: SunAmerica Inc.
1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Susan L. Harris
Senior Vice President,
General Counsel--Corporate Affairs
and Secretary
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<PAGE>
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of the date first above written.
SUNAMERICA ASSET MANAGEMENT CORP.
By:
--------------------------------------
Name: Peter A. Harbeck
Title: President
WELLINGTON MANAGEMENT COMPANY
By:
--------------------------------------
Name: Duncan M. McFarland
Title: President and Chief
Executive Officer
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<PAGE>
SCHEDULE A
The Subadviser shall be paid a composite fee of .225% on first $100 million
of average daily net assets, .125% on the next $100 million of average daily
next assets and .10% on average daily net assets over $200 million, based on the
aggregate assets it manages in the following Portfolios:
Multi-Managed Growth Portfolio
Multi-Managed Moderate Growth Portfolio
Multi-Managed Income/Equity Portfolio
Multi-Managed Income Portfolio
C-2-7
<PAGE>
EXHIBIT C-3
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
T. ROWE PRICE ASSOCIATES, INC., a Maryland corporation (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Seasons Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of (the "Advisory Agreement") pursuant to which
the Adviser has agreed to provide investment management, advisory and
administrative services to the Trust; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act"), as an open-end management investment company and may
issue shares of beneficial interest, par value $.01 per share, in separately
designated portfolios representing separate funds with their own investment
objectives, policies and purposes; and
WHEREAS, the Subadviser is engaged in the business of rendering investment
advisory services and is 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 appoints the Subadviser,
in furtherance of its Investment Advisory and Management Agreement with the
Trust, to 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 the Portfolio's investment activity which the Subadviser is required
to maintain in connection therewith, and will render regular reports to the
Adviser and to officers and Trustees of the Trust concerning its discharge of
the foregoing responsibilities. The Subadviser shall discharge the foregoing
responsibilities subject to the control of the officers and the Trustees of the
Trust and in compliance with such policies as the Trustees of the Trust may from
time to time establish, and in compliance with (a) the objectives, policies, and
limitations for the Portfolio(s) set forth in the Trust's current prospectus and
statement of additional information, and (b) applicable laws and regulations.
The Subadviser agrees that it will operate and manage each of the Portfolios
set forth in Schedule A at all times (1) in compliance with applicable federal
and state laws governing its operations and investments as set forth below; (2)
so as not to jeopardize either the treatment of the Seasons variable annuity
contracts issued by Variable Annuity Account Five (File No. 33-08859;
hereinafter "Contracts") as annuity contracts for purposes of the Internal
Revenue Code of 1986, as amended (the "Code"), or the eligibility of the
Contracts to qualify for sale to the public in any state where they may
otherwise be sold; and (3) to minimize any taxes and/or penalties payable by the
Trust or such Portfolio. 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 Subchapter M, Chapter 1 of the
Code, and 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.
C-3-1
<PAGE>
The Subadviser further represents and warrants that to the extent that any
statements or omissions regarding the Subadviser 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 written
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. In
addition, the Adviser represents and warrants that the Registration Statement
for the Contract or shares of the Trust, or any amendment or supplement thereto,
other than statements or omissions regarding the Subadviser provided in writing
by the Subadviser expressly for use therein, will, when they become effective,
conform in all material respects to the requirements of the 1933 Act and the Act
and will not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading.
The Subadviser accepts such appointment and agrees, at its own expense, to
render the services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such services on
the terms and for the compensation provided in this Agreement.
2. PORTFOLIO TRANSACTIONS. The Subadviser is responsible for decisions to
buy or sell securities and other investments 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 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 may be mutually agreed with the Subadviser.
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
C-3-2
<PAGE>
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), but in no event later
than the 15th day of the following month. 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.
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.
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. SERVICES TO OTHER CLIENTS. Nothing contained in this Agreement shall
limit or restrict (i) the freedom of the Sub-Adviser, or any affiliated persons
thereof, to render investment management and corporate administrative services
to other investment companies, to act as investment manager or investment
counselor to other persons, firms, or corporations, or to engage in any other
business activities, or (ii) the right of any director, officer, or employee of
the Subadviser, who may also be a director, officer, or employee of the Company,
to engage in any other business or to devote his or her time and attention in
part to the management or other aspects of any other business, whether of a
similar nature or a dissimilar nature.
8. 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, or any governmental agency or other
instrumentality having regulatory authority over the Trust, and upon reasonable
request and during normal business hours the Trust's auditors, the Trust or any
representative of the Trust, the Adviser.
9. REFERENCE TO THE SUBADVISER. Subject to the terms of a separate Logo
Licensing Agreement, 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.
10. LIABILITY OF THE SUBADVISER. (a) In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties ("disabling conduct") hereunder on the part of the Subadviser (and its
officers, directors, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the Subadviser) the Subadviser shall
not be subject to liability to the Trust or to any
C-3-3
<PAGE>
shareholder of the Trust for any act or omission in the course of, or connected
with, rendering services hereunder, including without limitation, any error of
judgment or mistake of law or for any loss suffered by any of them in connection
with the matters to which this Agreement relates, except to the extent specified
in Section 36(b) of the Act concerning loss resulting from a breach of fiduciary
duty with respect to the receipt of compensation for services. Except for such
disabling conduct, the Adviser shall indemnify the Subadviser (and its officers,
directors, partners, agents, employees, controlling persons, shareholders and
any other person or entity affiliated with the Subadviser) (collectively, the
"Indemnified Parties") from any liability arising from the Subadviser's conduct
under this Agreement. Subadviser hereby indemnifies, defends and protects
Adviser and holds Adviser harmless, from and against any and all liability
arising out of Subadviser's disabling conduct.
(b) The Subadviser agrees to indemnify and hold harmless the Adviser and its
affiliates and each of its directors and officers and each person, if any, who
controls the Adviser within the meaning of Section 15 of the 1933 Act against
any and all losses, claims, damages, liabilities or litigation (including legal
and other expenses), to which the Adviser or its affiliates or such directors,
officers or controlling person may become subject under the 1933 Act, under
other statutes, at common law or otherwise, which may be based upon (i) any
wrongful act or material breach of this Agreement by the Subadviser arising from
the Subadviser's disabling conduct, 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.
11. PERMISSIBLE INTERESTS. Trustees and agents of the Trust are or may be
interested in the Subadviser (or any successor thereof) as directors, partners,
officers, or shareholders, or otherwise; directors, partners, officers, agents,
and shareholders of the Subadviser are or may be interested in the Trust as
trustees, or otherwise; and the Subadviser (or any successor) is or may be
interested in the Trust in some manner.
12. TERM OF THE AGREEMENT. This Agreement shall continue in full force and
effect with respect to each Portfolio until two years from the date hereof, and
from year to year thereafter so long as such continuance is specifically
approved at least annually (i) by the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio voting separately from any other
series of the Trust.
With respect to each Portfolio, this Agreement may be terminated at any
time, without payment of a penalty by the Portfolio or the Trust, by vote of a
majority of the Trustees, or by vote of a majority of the outstanding voting
securities (as defined in the Act) of the Portfolio, voting separately from any
other series of the Trust, or by the Adviser, on not less than 30 nor more than
60 days' written notice to the Subadviser. With respect to each Portfolio, this
Agreement may be terminated by the Subadviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser and the Trust;
provided, however, that this Agreement may not be terminated by the Subadviser
unless another subadvisory agreement has been approved by the Trust in
accordance with the Act, or after six months' written notice, whichever is
earlier. In the event of such a termination, the Adviser will use its best
efforts, and cause the Trust to use its best efforts, to engage another
subadviser for the Portfolio as soon as possible. Notwithstanding the foregoing,
the Subadviser may terminate the Agreement on 60 days' written notice to the
Adviser and the Trust, in the event of a breach of this Agreement by the
Adviser. 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).
C-3-4
<PAGE>
This Agreement will also terminate in the event that the Advisory Agreement
by and between the Trust and the Adviser is terminated.
13. 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.
14. 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.
15. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York and the applicable provisions of the Act. To
the extent the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Act, the
latter shall control.
16. 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.
17. 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.
18. NOTICES. All notices shall be in writing and deemed properly given
when delivered or express delivery service by United States certified or
registered mail, return receipt requested, postage prepaid, addressed as
follows:
Subadviser: T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 20202
Attention: John H. Cammack,
Vice President
with a copy to: Henry H. Hopkins, Esq.
Legal Counsel
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 20202
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 to: SunAmerica Inc.
1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Susan L. Harris
Senior Vice President,
General Counsel--Corporate Affairs
and Secretary
C-3-5
<PAGE>
IN WITNESS WHEREOF, the parties have caused their respective duly authorized
officers to execute this Agreement as of the date first above written.
SUNAMERICA ASSET MANAGEMENT CORP.
By:
--------------------------------------
Name: Peter A. Harbeck
Title: President
T. ROWE PRICE ASSOCIATES, INC.
By:
--------------------------------------
Name:
Title: Vice President
C-3-6
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
FEE (AS PERCENTAGE OF AVERAGE DAILY
PORTFOLIO(S) NET ASSETS OF THE PORTFOLIO)
- ------------- -------------------------------------------
<S> <C>
Stock........................................... .50% on first $40 million
.40% on the portion of average daily
net assets over $40 million
</TABLE>
C-3-7
<PAGE>
EXHIBIT C-4
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of 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 Seasons Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of (the "Advisory Agreement") pursuant to which
the Adviser has agreed to provide investment management, advisory and
administrative services to the Trust; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act"), as an open-end management investment company and may
issue shares of beneficial interest, par value $.01 per share, in separately
designated portfolios representing separate funds with their own investment
objectives, policies and purposes; and
WHEREAS, the Subadviser is engaged in the business of rendering investment
advisory services and is 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 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 Seasons variable annuity
contracts issued by Variable Annuity Account Five (File No. 333-08859;
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
C-4-1
<PAGE>
regulations and applicable federal and state banking laws and regulations shall
constitute "written direction" thereof. The Adviser acknowledges and agrees that
the Subadviser's compliance with its obligations under this Agreement will be
based, in part, on information supplied by the Adviser, or an agent thereof, as
to each Portfolio, including but not limited to, portfolio security lot level
realized and unrealized gain/loss allocation. The Adviser agrees that all such
information will be supplied on a timely basis. The Subadviser further
represents and warrants that to the extent that any statements or omissions made
in any Registration Statement for the Contracts or shares of the Trust, or any
amendment or supplement thereto, are made in reliance upon and in conformity
with information furnished by the Subadviser expressly for use therein, such
Registration Statement and any amendments or supplements thereto will, when they
become effective, conform in all material respects to the requirements of the
Securities Act of 1933 and the rules and regulations of the Commission
thereunder (the "1933 Act") and the Act and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
The Subadviser accepts such employment and agrees, at its own expense, to
render the services set forth herein and to provide the office space,
furnishings, equipment and personnel required by it to perform such services on
the terms and for the compensation provided in this Agreement. 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 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
C-4-2
<PAGE>
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 Agreement for less than the whole of any month,
the 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.
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,
C-4-3
<PAGE>
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.
(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, agents,
employees, controlling persons, shareholders and any other person or entity
affiliated with the Subadviser) (collectively, the "Indemnified Parties") from
any liability arising from the Subadviser's conduct under this Agreement.
(b) The Subadviser agrees to indemnify and hold harmless the Adviser and its
affiliates and each of its directors and officers and each person, if any, who
controls the Adviser within the meaning of Section 15 of the 1933 Act against
any and all losses, claims, damages, liabilities or litigation (including
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 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,
C-4-4
<PAGE>
officers, agents, and shareholders of the Subadviser are or may be interested in
the Trust as trustees, or otherwise; and the Subadviser (or any successor) is or
may be interested in the Trust in some manner.
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
other series of the Trust, or by the Adviser, on not less than 30 nor more than
60 days' written notice to the Subadviser. With respect to each Portfolio, this
Agreement may be terminated by the Subadviser at any time, without the payment
of any penalty, on 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.
C-4-5
<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:
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 to: SunAmerica Inc.
1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Susan L. Harris
Senior Vice President,
General Counsel--Corporate Affairs
and Secretary
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:
C-4-6
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
FEE (AS PERCENTAGE OF AVERAGE
DAILY NET ASSETS OF THE
PORTFOLIO(S) PORTFOLIO)
- ------------------------------------------------------------- -------------------------------
<S> <C>
Asset Allocation: Diversified Growth......................... .55% on the first $150MM
.50% on the next $150MM
.40% over $300MM
</TABLE>
C-4-7
<PAGE>
EXHIBIT D
OTHER MUTUAL FUNDS ADVISED BY JANUS WITH A SIMILAR INVESTMENT OBJECTIVE TO THE
JANUS/GROWTH COMPONENT OF THE GROWTH, MODERATE GROWTH, INCOME/EQUITY AND INCOME
PORTFOLIOS
<TABLE>
<CAPTION>
NET ASSETS OF OTHER
FUND (IN MILLIONS)
ON SEPTEMBER 30,
OTHER FUND 1997 ANNUAL FEE RATE
- ----------------------------------------------------- -------------------- ------------------------------------
<S> <C> <C>
Janus Investment Fund--
Janus Mercury Fund................................. $ 2,253.4 .75% on first $300 million
.70 on next $200 million
.65% thereafter
JNL Series Trust--
JNL Aggressive Growth Series....................... $ 117.1 .55% on first $100 million
.50% on next $400 million
.45% thereafter
New England Funds Trust I--
New England Star Advisers Fund..................... $ 258.9 .55% on first $50 million
.50% thereafter
Pacific Select Fund--
Growth LT Portfolio................................ $ 920.0 .60% on first $100 million
.55% thereafter
Sierra Trust Funds--
Growth Fund........................................ $ 263.7 .55% on first $100 million
.50% thereafter
The Sierra Variable Trust--
Growth Fund........................................ $ 126.6 .55% on first $25 million
.50% thereafter
</TABLE>
D-1
<PAGE>
EXHIBIT E
OTHER MUTUAL FUNDS ADVISED BY WMC WITH A SIMILAR INVESTMENT OBJECTIVE
TO THE WMC COMPONENT OF THE GROWTH, MODERATE GROWTH, INCOME/EQUITY AND INCOME
PORTFOLIO
<TABLE>
<CAPTION>
NET ASSETS OF OTHER
FUND (IN MILLIONS)
ON SEPTEMBER 30,
OTHER FUND 1997 ANNUAL FEE RATE
- ---------------------------------------------------------- ------------------- ---------------------------------
<S> <C> <C>
North American Investment Quality Bond Fund*.............. $ 17.2 .$225% on first $200 million
.$150% on next $300 million
.100% thereafter
Investment Quality Bond Trust, a series of Manufacturers $ 292.1 .$225% on first $200 million
Investment Trust+....................................... .$150% on next $300 million
.100% thereafter
</TABLE>
- ------------------------
* Each Fund may be subject to voluntary waivers from time to time.
+ Fund serves as the underlying investment vehicle for a variable annuity
contract or variable life insurance policy.
E-1
<PAGE>
EXHIBIT F
OTHER MUTUAL FUNDS ADVISED BY T. ROWE WITH A SIMILAR INVESTMENT OBJECTIVE TO THE
STOCK PORTFOLIO
<TABLE>
<CAPTION>
NET ASSETS OF
OTHER
FUND (IN MILLIONS) ANNUAL
OTHER FUND ON JUNE 26, 1998 FEE RATE (AS A % OF FUND ASSETS)
- ---------------------------------------------- ------------------ ----------------------------------------------
<S> <C> <C>
T. Rowe Price Growth ......................... $ 4,677.1 .32% group fee*
Stock Fund .25% individual fee
Portfolio Partners, Inc. ..................... $ 468.8 .40% on the first $500 million
T. Rowe Price Growth .375% thereafter
Equity Fund
Endeavor Series Trust: $ 168.8 .40% on all assets
T. Rowe Price Growth .........................
Stock Portfolio
JNL Series Trust ............................. $ 183.1 .45% on first $20 million
T. Rowe Price/JNL .40% on next $30 million
Established Growth .40% thereafter
Series
</TABLE>
- ------------------------
* For its services to each investment company sponsored and managed by T. Rowe
Price ("Price Funds"), T. Rowe is paid a management fee consisting of two
elements: a "group" fee and an "individual" fund fee. The "group" fee varies
based on the combined net assets of certain Price Funds distributed by T.
Rowe Price Investment Service, Inc. (excluding T. Rowe Price Index Trust, T.
Rowe Price Spectrum Funds and any institutional and private label mutual
funds) (the "Combined Price Funds"). Each such investment company pays, as a
portion of the "group" fee, an amount equal to the ratio of its daily net
assets to the daily net assets of all the Combined Price Funds. Each
investment company also pays a flat "Individual" fund fee based on its net
assets. The table below sets for the current "group" fee rate at various
asset levels of the Combined Price Funds:
.480% next $1 billion
.450% next $1 billion
.420% next $1 billion
.390% next $1 billion
.370% next $1 billion
.360% next $2 billion
.350% next $2 billion
.340% next $5 billion
.330% next $10 billion
.320% next $10 billion
.310% next $16 billion
.305% next $30 billion
.300% thereafter
F-1
<PAGE>
EXHIBIT G
OTHER MUTUAL FUNDS ADVISED BY PUTNAM WITH A SIMILAR INVESTMENT OBJECTIVE TO THE
ASSET ALLOCATION: DIVERSIFIED GROWTH PORTFOLIO
<TABLE>
<CAPTION>
NET ASSETS OF OTHER
FUND (IN MILLIONS)
OTHER FUND ON AUGUST 31, 1998 ANNUAL FEE RATE
- ------------------------------------------------------------ -------------------- -----------------------------
<S> <C> <C>
Putnam Asset Allocation: Growth............................. $ 1,286.0 .70% on first $500 million
.60% on next $500 million
.55% on next $500 million
.50% thereafter
</TABLE>
G-1
<PAGE>
PRELIMINARY COPY
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER /X/ USING
BLUE OR BLACK INK OR DARK PENCIL.
- --------------------------------------------------------------------------------
PLEASE DO NOT USE RED INK
THIS VOTING INSTRUCTIONS, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE CONTRACT HOLDER. 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 WITHHOLD
ALL AUTHORITY
1. Election of Trustees.
James K. Hunt, Monica C. Lozano,
Allan L. Sher, William M. Wardlaw / / / /
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, PRINT THAT NOMINEE'S NAME ON THE LINE BELOW.
_______________________________________________
FOR AGAINST ABSTAIN
2. To approve a new investment / / / / / /
advisory and management agreement
between Seasons Series Trust, on
behalf of each separate
investment portfolio thereof
("Portfolio") and SunAmerica
Asset Management Corp.
("SAAMCo"), the terms of which
are identical in all material
respects to the existing
investment advisory and
management agreement.
3. To approve a new subadvisory
agreement, the terms of which are
identical in all material
respects to the existing
subadvisory agreement between:
(a). SAAMCo and Janus / / / / / /
Capital Corporation
(Multi-Managed Growth,
Multi-Managed Moderate
Growth, Multi-Managed
Income/Equity and
Multi-Managed Income
Portfolios Only);
<PAGE>
FOR AGAINST ABSTAIN
(b). SAAMCo and Wellington / / / / / /
Management Company, LLP
(Multi-Managed Growth,
Multi-Managed Moderate
Growth, Multi-Managed
Income/Equity and Multi-
Managed Income Portfolios
Only);
(c). SAAMCo and T. Rowe / / / / / /
Price Associates, Inc.
(Stock Portfolio Only);
(d). SAAMCo and Putnam / / / / / /
Investment Management, Inc.
(Asset Allocation: Diversified
Growth Portfolio Only).
4. To approve changing the
fundamental investment
restriction relating to:
(a). the ability to engage / / / / / /
in borrowing transactions;
and
(b). the ability to engage / / / / / /
in lending transactions.
5. To ratify the selection of / / / / / /
independent accountants.
6. To transact such other business
as may properly come before the
Meeting or any adjournments
thereof.
<PAGE>
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 DECEMBER
29, 1998 TO BE VOTED FOR THE MEETING TO BE HELD ON DECEMBER 30, 1998.
ANCHOR NATIONAL LIFE INSURANCE COMPANY
THESE VOTING INSTRUCTIONS ARE SOLICITED BY ANCHOR NATIONAL LIFE INSURANCE
COMPANY IN CONNECTION WITH A SOLICITATION OF PROXIES BY THE TRUSTEES OF SEASONS
SERIES TRUST. A VOTING INSTRUCTIONS CARD IS PROVIDED FOR THE PORTFOLIOS IN
WHICH YOUR CONTRACT VALUES WERE INVESTED AS OF OCTOBER 30, 1998.
The undersigned hereby instructs Anchor National Life Insurance Company to vote
the shares of the Seasons Series Trust attributable to his or her variable
annuity contract at the Joint Special Meeting of Shareholders to be held at
the offices of SAAMCo, The SunAmerica Center, 733 Third Avenue, New York,
New York 10017 at [ .m.], Eastern Standard Time, December 30, 1998,
and any adjournments thereof, as indicated on the reverse side.
<PAGE>
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.
-------------------------------------
Dated:
-------------------------------------
Signature(s)
Title(s), if
applicable
<PAGE>
PRELIMINARY COPY
INDICATE YOUR VOTE BY FILLING IN THE APPROPRIATE BOXES IN THIS MANNER /x/ USING
BLUE OR BLACK INK OR DARK PENCIL.
- --------------------------------------------------------------------------------
PLEASE DO NOT USE RED INK
THIS VOTING INSTRUCTIONS, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE CONTRACT HOLDER. 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 WITHHOLD
ALL AUTHORITY
1. Election of Trustees.
James K. Hunt, Monica C. Lozano,
Allan L. Sher, William M. Wardlaw / / / /
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, PRINT THAT NOMINEE'S NAME ON THE LINE BELOW.
_______________________________________________
FOR AGAINST ABSTAIN
2. To ratify the selection of / / / / / /
independent accountants.
3. To transact such other business
as may properly come before the
Meeting or any adjournments
thereof.
<PAGE>
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 DECEMBER
29, 1998 TO BE VOTED FOR THE MEETING TO BE HELD ON DECEMBER 30, 1998.
ANCHOR NATIONAL LIFE INSURANCE COMPANY
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 PORTFOLIOS IN
WHICH YOUR CONTRACT VALUES WERE INVESTED AS OF OCTOBER 30, 1998.
The undersigned hereby instructs Anchor National Life Insurance Company to vote
the shares of the Anchor Pathway Fund attributable to his or her variable
annuity contract at the Joint Special Meeting of Shareholders to be held at
the offices of SAAMCo, The SunAmerica Center, 733 Third Avenue, New York,
New York 10017 at [ .m.], Eastern Standard Time, December 30, 1998,
and any adjournments thereof, as indicated on the reverse side.
<PAGE>
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.
-------------------------------------
Dated:
-------------------------------------
Signature(s)
Title(s), if
applicable
