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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SUNAMERICA SERIES TRUST
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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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[X] 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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[Letterhead of SunAmerica Marketing, Inc.]
April 29, 1996
RE: Proxy Voting
Dear Polaris Policyholder:
In accordance with your allocation instructions, part or all of the funds in
your Polaris Variable Annuity contract from Anchor National Life Insurance
Company and, in New York, First SunAmerica Life Insurance Company, are invested
in shares of the Fixed Income Portfolio, one of the funds in the underlying
investment known as the SunAmerica Series Trust. As a contract owner with an
interest in the Fixed Income Portfolio, you are entitled to give us instructions
as to how shares of this Portfolio will be voted on the issues presented in the
enclosed proxy materials. To do so, please complete, date, sign and return the
enclosed voting instructions card in the postage-paid envelope provided.
The proxy materials describe the issues to be considered at a special meeting of
shareholders of the Fixed Income Portfolio scheduled to take place on June 3,
1996. The Fixed Income Portfolio will change its name to the Corporate Bond
Portfolio, change certain investment strategies, and change its subadviser to
Federated Investment Counseling. We hope you're pleased with your investment in
the Fixed Income Portfolio and encourage you to return the enclosed voting
instructions card by May 31, 1996.
At the meeting, Anchor National and First SunAmerica will vote all shares of the
Fixed Income Portfolio in proportion to the instructions we receive from
contract owners having an interest in the Portfolio. If you do not return the
proxy, we'll vote your shares in the same proportion as voting instructions that
are returned. You may revoke or change your voting instructions by submitting a
later-dated voting instructions card prior to the meeting.
<PAGE>
We're happy to continue serving your financial planning needs through the
Polaris Variable Annuity, and appreciate you taking the time to complete and
return the proxy.
Sincerely,
/s/ Ronald D. Hansen
Ronald D. Hansen
Senior Vice President
SunAmerica Marketing
<PAGE>
FIXED INCOME PORTFOLIO
OF
SUNAMERICA SERIES TRUST
P.O. BOX 54299
LOS ANGELES, CALIFORNIA 90054-0299
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of the Fixed Income Portfolio, a series of SunAmerica
Series Trust:
A special meeting of shareholders of the Fixed Income Portfolio (the
'Portfolio') of SunAmerica Series Trust (the 'Trust') will be held at the
offices of SunAmerica Asset Management Corp., The SunAmerica Center, 733 Third
Avenue, New York, New York 10017, on Monday, June 3, 1996, at 10:00 a.m.,
Eastern Time, for the following purposes:
1. To approve or disapprove, with respect to the Portfolio, the
continuation of the Investment Advisory and Management Agreement between
the Trust on behalf of the Portfolio and SunAmerica Asset Management
Corp. (the 'Adviser').
2. To approve or disapprove a proposed new Subadvisory Agreement between
the Adviser and Federated Investment Counseling ('Federated') as
subadviser for the Portfolio.
3. To transact such other matters as may properly come before the meeting
or any adjournment thereof.
The Trustees of the Trust have fixed the close of business on April 19,
1996 as the record date for determining the number of shares outstanding and the
contract owners entitled to give voting instructions with respect to the
Portfolio.
By Order of the Trustees,
Susan L. Harris
Secretary
April 29, 1996
EACH CONTRACT OWNER IS URGED TO EXERCISE THE RIGHT TO GIVE VOTING
INSTRUCTIONS FOR THE SPECIAL MEETING OF SHAREHOLDERS OF THE PORTFOLIO BY FILLING
IN, DATING AND SIGNING THE ENCLOSED VOTING INSTRUCTIONS CARD AND RETURNING IT IN
THE RETURN ENVELOPE PROVIDED.
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
FIXED INCOME PORTFOLIO
OF
SUNAMERICA SERIES TRUST
P.O. BOX 54299
LOS ANGELES, CALIFORNIA 90054-0299
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
JUNE 3, 1996, 10:00 A.M.
SunAmerica Series Trust (the 'Trust') is an open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
'1940 Act'). It currently consists of eighteen investment portfolios, including
the Fixed Income Portfolio (referred to herein as the 'Portfolio'). Shares of
the Portfolio are offered to the Variable Separate Account of Anchor National
Life Insurance Company ('Anchor') and FS Variable Separate Account of First
SunAmerica Life Insurance Company ('First SunAmerica,' and, collectively with
Anchor, the 'Companies') to fund benefits under certain variable annuity
contracts ('contracts') issued by the Companies. SunAmerica Asset Management
Corp. (the 'Adviser') serves as the Trust's investment adviser, manager and
administrator.
In accordance with applicable law, this Proxy Statement is being furnished,
on or about April 29, 1996, on behalf of the Trustees of the Trust, to the
shareholders of the Portfolio for their use in obtaining voting instructions
from contract owners on the proposals to be considered at a special meeting of
shareholders of the Portfolio scheduled to be held at the offices of the
Adviser, The SunAmerica Center, 733 Third Avenue, New York, New York 10017, on
Monday, June 3, 1996, at 10:00 a.m. The Trustees have fixed the close of
business on April 19, 1996 as the record date (the 'Record Date') for
determining the number of shares outstanding and the contract owners entitled to
be present at the meeting and give voting instructions to the Companies with
respect to their respective 'portion' of shares of the Portfolio as of such
Record Date.
The Trust expects that the solicitation of voting instructions from
contract owners will be made by mail, and solicitation also may be made by
telephone communications from officers or employees of the Adviser, the
Companies, or their affiliates, who will not receive compensation for such
services. In connection with the solicitation of voting instructions, the
Companies will furnish a copy of this Proxy Statement to all contract owners.
All costs of the meeting and soliciting proxies and voting instructions will be
borne by the Portfolio.
At the Record Date, the total number of shares of the Portfolio outstanding
was 3,058,832.237 of which 3,042,714.086 shares (99.473%) were held by the
Variable Separate Account of Anchor and 16,118.151 shares (.527%) were held by
FS Variable Separate Account of First SunAmerica. Attached hereto as Appendix A
is a list of persons who, as of the Record Date, were known to the Trust to have
allocated contributions under their annuity contracts such that, upon the pass-
through of voting rights by the Companies, they would have the right to give
voting instructions with respect to more than 5% of the outstanding shares of
the Portfolio. The Trustees and officers of the Trust, both individually and as
a group, owned less than 1% of the Portfolio's outstanding shares as of the
Record Date.
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Anchor and First SunAmerica, the holders of record of shares of the
Portfolio, are required to 'pass through' to their contract holders the right to
vote shares of the Portfolio. The Trust expects that the Companies will vote
100% of the shares of the Portfolio held by their respective Separate Accounts.
The Companies will vote shares of the Portfolio for which no instructions have
been received in the same proportion as they vote shares for which they have
received instructions. Abstentions will have the effect of a negative vote on a
proposal. Unmarked voting instructions from contract owners will be voted in
favor of the proposals. The Companies, as record shareholders of the Portfolio,
may adjourn the meeting of shareholders for a period or periods of not more than
60 days in the aggregate if necessary to obtain additional voting instructions
from contract owners. The cost of preparing and distributing to contract owners
additional proxy materials if required in connection with any adjournment will
be borne by the Portfolio.
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.
Proxies executed by shareholders may be revoked by a written instrument
received by the Secretary of the Trust at any time before they are exercised, by
the delivery of a later-dated proxy or by attendance at the meeting and voting
in person. Approval of Proposals Nos. 1 and 2 will require the affirmative vote
of the lesser of (1) more than 50% of the outstanding shares of the Portfolio,
or (2) 67% or more of the shares of the Portfolio present at the meeting, in
person or by proxy, if the holders of 50% or more of the outstanding shares of
the Portfolio are present or represented by proxy.
THE PROPOSED CHANGES IN THE ADVISORY ARRANGEMENTS OF THE PORTFOLIO
On April 18, 1996, the Trustees, including the Trustees who are not
interested persons of the Trust (as defined in the 1940 Act)(the 'Disinterested
Trustees'), voted to continue the Trust's Investment Advisory and Management
Agreement (the 'Management Agreement') between the Trust and the Adviser as it
pertains to the Portfolio, and selected Federated Investment Counseling
('Federated') to replace Goldman Sachs Asset Management ('GSAM') as subadviser
to the Portfolio. GSAM resigned as subadviser effective June 2, 1996. The
Trustees, including the Disinterested Trustees, approved a proposed new
Subadvisory Agreement for the Portfolio between the Adviser and Federated (the
'New Subadvisory Agreement'), to become effective as of June 3, 1996.
Information about the Adviser and Federated, respectively, is contained below
under 'General Information--Information about the Adviser' and '--Information
About Federated.' The Trustees also voted to change the name of the Portfolio
from the Fixed Income Portfolio to the Corporate Bond Portfolio and approved
related changes in certain operating policies.
As described in more detail below, the purpose of the meeting is to seek
shareholder approval of the continuation of the Management Agreement as it
pertains to the Portfolio and the implementation of the New Subadvisory
Agreement. The information contained in this Proxy Statement concerning
Federated has been provided by Federated for use in this Proxy Statement.
EACH CONTRACT OWNER IS URGED TO EXERCISE THE RIGHT TO GIVE VOTING
INSTRUCTIONS FOR THE SPECIAL MEETING OF SHAREHOLDERS OF THE PORTFOLIO BY FILLING
IN, DATING AND SIGNING THE VOTING INSTRUCTIONS CARD FOR THE PORTFOLIO AND
RETURNING THE CARD IN THE RETURN ENVELOPE PROVIDED.
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<PAGE>
PROPOSAL NO. 1: APPROVAL OF CONTINUATION
OF THE MANAGEMENT AGREEMENT
AS IT PERTAINS TO THE PORTFOLIO
Pursuant to the Management Agreement, the Adviser manages the affairs of
the Trust and each investment portfolio thereof (including the Portfolio),
either by taking such actions itself or by delegating its duties to a subadviser
pursuant to a written subadvisory agreement. The Management Agreement which is
dated as of September 16, 1992, as amended on August 30, 1994 and April 18,
1996, was last submitted to the Trustees for their consideration on April 18,
1996 and was submitted to shareholders of the Trust for approval at a meeting
held on September 16, 1992. A copy of the Management Agreement is attached to
this Proxy Statement as Appendix B.
Under the Management Agreement, the Adviser is entitled to a fee from the
Portfolio at the annual rate of .70% of the first $50 million of average daily
net assets of the Portfolio, .60% of the next $100 million of such net assets,
.55% of the next $100 million of net assets and .50% of such net assets in
excess of $250 million. The Adviser is required to waive a portion of its
management fee to the extent the aggregate expenses of the Portfolio for a
fiscal year exceeds any applicable state limitation. While there will not be any
change in the terms of the Management Agreement with respect to the Portfolio as
a result of the approval of this Proposal No. 1, as a result of the new, lower
subadvisory fee rate that will be effective under the New Subadvisory Agreement
(as described in Proposal No. 2 under 'Comparison of the Old Subadvisory
Agreement and the New Subadvisory Agreement'), the percentage of the entire
management fee that will be retained by the Adviser will be greater under the
new arrangement. Accordingly, in connection with the approval of the New
Subadvisory Agreement, approval of the continuation of the Management Agreement
is also being sought.
The Management Agreement provides that the Adviser shall act as investment
adviser to the Trust, manage the Trust's investments, administer its business
affairs, furnish offices, necessary facilities and equipment, provide clerical,
bookkeeping and administrative services, and permit any of the Adviser's
officers or employees to serve without compensation as Trustees or officers of
the Trust if duly elected to such positions. Under the Management Agreement, the
Trust 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 recordkeeping and
shareholder account service, 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 the Adviser 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 Management
Agreement provides that the Adviser and persons affiliated with the Adviser will
not be liable for any act or omission in the course of, or
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<PAGE>
connected with, rendering services thereunder, except by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
subadviser's obligations and duties thereunder ('disabling conduct'), and that
such persons will be entitled to indemnity from any liability arising from the
Adviser's conduct thereunder in the absence of such disabling conduct.
CONSIDERATIONS OF THE TRUSTEES
The Trustees believe that the continuation of the Management Agreement is
in the best interests of the Portfolio and its shareholders.
In connection with their consideration of the continuance of the Management
Agreement and the management fee thereunder, the Trustees took into account,
among other things, the current size of the Portfolio and the fact that it was
newly organized at the time the Old Subadvisory Agreement became effective. They
also considered the nature, quality and value of the services under the
Management Agreement provided by the Adviser since the Portfolio's inception as
well as those anticipated to be provided by the Adviser in the future, the
competitive environment in which the Portfolio is marketed and the investment
and other characteristics of the Portfolio, including in comparison to similar
funds. The Trustees further acknowledged the level of compliance monitoring
engaged in by the Adviser, the comprehensiveness of the compliance reporting
provided by the Adviser to the Board on a quarterly basis, and the Adviser's
expertise in the business. In considering the fact that the reduced fees payable
to Federated under the New Subadvisory Agreement would result in the Adviser
retaining a higher portion of the Portfolio's management fee, the Trustees took
into account the additional compliance monitoring requirements that will be the
Adviser's responsibility upon the implementation of certain changes in
investment strategy which will take place upon Federated becoming subadviser to
the Portfolio. Those changes include the requirements that 65% of the
Portfolio's net assets be invested in corporate debt securities and that 65% of
such net assets must be invested in investment grade debt securities, and the
higher percentage of below investment grade debt securities in which the
Portfolio may invest. Based upon these factors, and upon consideration of the
information provided by the Adviser, the Trustees concluded that the fee
schedule for the Portfolio under the Management Agreement continued to remain
appropriate. Accordingly, the Trustees, including the Disinterested Trustees,
unanimously approved the continuance of the Management Agreement with respect to
the Portfolio.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE
'FOR' PROPOSAL NO. 1.
4
<PAGE>
PROPOSAL NO. 2: APPROVAL OF PROPOSED
NEW SUBADVISORY AGREEMENT WITH FEDERATED
COMPARISON OF THE OLD SUBADVISORY AGREEMENT AND THE NEW SUBADVISORY AGREEMENT
Except with respect to the subadvisory fee rate payable thereunder, and
except as otherwise described below, the material terms of the New Subadvisory
Agreement are substantially the same as those of the subadvisory agreement
between the Adviser and GSAM with respect to the Portfolio (the 'Old Subadvisory
Agreement'). A copy of the New Subadvisory Agreement is attached to this proxy
statement as Appendix C. The following is a comparison of the material terms of
the two agreements:
ADVISORY SERVICES. Both the Old and New Subadvisory Agreements provide
that, subject to the oversight and review of the Adviser and the control of
the officers and Trustees of the Trust, and in compliance with (i) such
policies as the Trustees may from time to time establish, (ii) the
objectives, policies and limitation for the Portfolio set forth in the
Trust's current prospectus and statement of additional information, and
(iii) applicable laws and regulations, the subadviser will manage the
investment and reinvestment of the assets of the Portfolio and will
determine in its discretion the securities to be purchased or sold by the
Portfolio.
REPRESENTATIONS AND WARRANTIES OF THE SUBADVISER. Under the New
Subadvisory Agreement, the subadviser represents and warrants to the
Adviser that its management of the Portfolio will at all times conform
with: (1) the objectives, policies, and limitations for the Portfolio set
forth in the current prospectus and statement of additional information;
(2) the provisions of Subchapter M of the Internal Revenue Code of 1986, as
amended (the 'Code'), applicable to 'regulated investment companies',
including those investment companies underlying variable annuities; (3) the
provisions of the 1940 Act and rules thereunder; (4) the diversification
requirements specified in the regulations under Section 817(h) of the Code;
(5) applicable state insurance laws provided to the subadviser by the
Adviser in writing or as acknowledged in a written undertaking by the
subadviser; (6) applicable federal and state securities laws; and (7) the
distribution requirements necessary to avoid payment of any excise tax
pursuant to Section 4982 of the Code. The subadviser also represents and
warrants that to the extent that any statements or omissions made in any
registration statement made in reliance upon and in conformity with
information furnished by the subadviser expressly for use therein will,
when they become effective, conform in all material respects to the
requirements of the Securities Act of 1933 and the rules and regulations
thereunder (the '1933 Act') and the 1940 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.
PAYMENTS OF EXPENSES AND TRANSACTION CHARGES. Under both the Old and
New Subadvisory Agreements, the subadviser agrees, at its own expense, to
render the services set forth therein and to provide the office space,
furnishings, equipment and personnel required to perform such services on
the terms and for the compensation provided thereunder.
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COMPENSATION OF THE SUBADVISER. Under the New Subadvisory Agreement,
Federated will be compensated by the Adviser for its services as subadviser
to the Portfolio at the annual rate of .30% on the first $25 million of
average daily net assets of the Portfolio, .25% on the next $25 million of
such net assets, .20% on the next $100 million of net assets and .15% of
such net assets in excess of $150 million. Under the Old Subadvisory
Agreement, GSAM was compensated for its services as subadviser to the
Portfolio at the annual rate of .35% of the first $50 million of average
daily net assets of the Portfolio, .25% of the next $100 million of such
net assets, .20% of the next $100 million of net assets and .15% of such
net assets in excess of $250 million. Additional information concerning the
fee payable by the Adviser to Federated in respect of the Portfolio, and
the effect of the proposed reduction in the subadviser's fee, is contained
below under 'General Information--Information About the Portfolio's
Management Fees.'
LIMITATION OF LIABILITY; INDEMNIFICATION. The New Subadvisory
Agreement provides that the subadviser and any of its affiliated persons
will not be liable to the Trust and its shareholders for any act or
omission in the course of, or connected with, rendering services
thereunder, except by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the subadviser's obligations and duties
thereunder ('disabling conduct'). The Old Subadvisory Agreement provides
that the subadviser and any of its affiliated persons will not be liable to
the Adviser or any other persons for any such act or omission except by
reason of such disabling conduct. Both agreements provide that the Adviser
will indemnify the subadviser, except for disabling conduct, from any
liability arising from the subadviser's actions in advising the Portfolio.
Under the Old Subadvisory Agreement, the Adviser also agreed to indemnify
GSAM for certain other potential liabilities. Under the New Subadvisory
Agreement, the subadviser agrees to indemnify the Adviser and its
affiliates against any and all losses, claims, damages, liabilities or
litigation (including legal and other expenses), to which the Adviser or
its affiliates may become subject under the 1933 Act, other statutes, at
common law or otherwise, which arise out of or result from any breach of
any representation or warranty indicated above, except such indemnity does
not protect any such persons against any liability arising from such
person's disabling conduct.
TERM. The New Subadvisory Agreement provides that it will remain in
effect until two years from the date thereof, and both the New Subadvisory
Agreement and the Old Subadvisory Agreement provide that they shall
continue from year to year after their initial terms so long as such
continuance is approved at least annually (i) by a majority of the
Disinterested Trustees, cast in person at a meeting called for the purpose
of voting on such approval and (ii) by the Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio voting
separately from any other series of the Trust.
TERMINATION; ASSIGNMENT. Both the Old and New Subadvisory Agreements
provide that they may be terminated at any time without penalty upon not
less than 30 nor more that 60 days' written notice by the Trustees, or by
the affirmative vote of the holders of a 'majority of the outstanding
voting securities' of the Portfolio (as defined in the 1940 Act). The New
Subadvisory Agreement also provides that it may be terminated by the
Adviser upon not less than 30 nor more than 60 days' written notice. In
addition, the Agreements also provide that
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they may be terminated by the subadviser at any time without penalty, in
the case of the New Subadvisory Agreement on not less than 30 nor more than
60 days' written notice, and in the case of the Old Subadvisory Agreement
on not less than 90 days' written notice, to the Adviser and the Trust;
provided that, the Agreements may not be terminated by the subadviser
unless another subadvisory agreement has been approved by the Trustee in
accordance with the 1940 Act, or after six months' written notice,
whichever is earlier. Both Agreements also provide that they will
automatically terminate in the event of their assignment (as defined in the
1940 Act) or upon termination of the Management Agreement.
CONSIDERATIONS OF THE TRUSTEES
The Trustees believe that approval of the New Subadvisory Agreement between
the Adviser and Federated, is in the best interests of the Portfolio and its
shareholders.
In connection with their consideration of the New Subadvisory Agreement,
the Trustees, including the Disinterested Trustees, took into account, among
other factors, the similarity of the material terms of the New Subadvisory
Agreement to the terms of the Old Subadvisory Agreement (other than with respect
to the subadvisory fee) as well as the scope of the new representations and
warranties given under the New Subadvisory Agreement by Federated. The Trustees
also considered the reputation of Federated and its affiliates within the
investment advisory industry, including with respect to investment company
clients, and representations by Federated as to the financial condition of it
and its parent companies and the overall commitment of Federated and its parent
companies and affiliates to the investment advisory business. The Trustees
further reviewed and considered performance results of similar products managed
by Federated and its affiliates and the superior long-term track record of such
products. Based upon these factors, and upon consideration of the information
provided by Federated and by the Adviser, the Trustees concluded that Federated
would provide high quality investment advisory services to the Portfolio
notwithstanding its fee being lower than that paid to the previous subadviser.
Accordingly, the Trustees, including the Disinterested Trustees, unanimously
approved the New Subadvisory Agreement with Federated.
THE TRUSTEES UNANIMOUSLY RECOMMEND THAT SHAREHOLDERS VOTE
'FOR' PROPOSAL NO. 2.
GENERAL INFORMATION
INFORMATION ABOUT THE PORTFOLIO'S MANAGEMENT FEES
For the fiscal year ended November 30, 1995, the Portfolio paid the Adviser
a fee of $144,546, of which $72,273 was paid to GSAM.
If the New Subadvisory Agreement, and the new reduced fee rates thereunder,
had been in effect during the fiscal year ended November 30, 1995, the total fee
paid to the subadviser by the Adviser with respect to the Portfolio would have
been $61,712. This would have amounted to a reduction of 14.6% from the fee
actually paid to the subadviser during such fiscal year.
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INFORMATION ABOUT THE ADVISER
The Adviser is a Delaware corporation and an indirect, wholly owned
subsidiary of Anchor, which is an indirect subsidiary of SunAmerica Inc., an
investment grade financial services company which has over $29 billion in
assets. The Adviser is engaged in providing investment advice and management
services to the Trust, other mutual funds and private accounts. As of March 31,
1996, the Adviser and its affiliates managed, advised or administered assets of
approximately $7.5 billion. The address of the Adviser is The SunAmerica Center,
733 Third Avenue, New York, New York 10017-3204. The address of Anchor and
SunAmerica Inc. is 1 SunAmerica Center, Century City, Los Angeles, California
90067-6022.
The following chart lists the executive officers and Directors of the
Adviser and their principal occupations, if different from their positions with
the Adviser:
<TABLE>
<CAPTION>
NAME POSITION WITH THE ADVISER AND PRINCIPAL OCCUPATION
- ---------------------- ---------------------------------------------------------
<S> <C>
Gary W. Krat.......... Chairman and Director; Chairman of Royal Alliance
Associates, Inc., SunAmerica Securities, Inc. and
Advantage Capital Corporation
Peter A. Harbeck...... President and Director
Susan L. Harris....... Secretary and Director; Senior Vice President, General
Counsel-Corporate Affairs and Secretary, SunAmerica Inc.;
Senior Vice President and Secretary, Anchor and First
SunAmerica
Jay S. Wintrob........ Director; Vice Chairman of SunAmerica Inc.
Joseph M. Tumbler..... Director; Vice Chairman of SunAmerica Inc.
Stanton J. Feeley..... Executive Vice President and Chief Investment Officer
J. Steven Neamtz...... Executive Vice President
Robert M. Zakem....... Senior Vice President and General Counsel
Steven E. Rothstein... Senior Vice President, Chief Financial Officer and
Controller
</TABLE>
The business address of each of the above listed persons other than Ms. Harris
and Messrs. Wintrob and Tumbler is The SunAmerica Center, 733 Third Avenue, New
York, New York 10017-3204. The business address of Ms. Harris and Messrs.
Wintrob and Tumbler is 1 SunAmerica Center, Century City, Los Angeles,
California 90067-6022.
INFORMATION ABOUT FEDERATED
Federated, together with its predecessor organization, has been in business
since 1971. Federated is a wholly-owned subsidiary of FII Holdings, Inc., which
is itself a wholly-owned subsidiary of Federated Investors, Inc., which is in
turn a wholly-owned subsidiary of Federated Investors. Federated Investors'
subsidiaries have since 1955 served as investment advisers to a number of
investment companies and private accounts, with approximately $62 billion of
assets
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under management as of December 31, 1995. The address of Federated and Federated
Investors is 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.
The following persons will be primarily responsible for the day-to-day
management of the Portfolio (their business experience for at least the last 5
years is indicated parenthetically): Joseph M. Balestrino, Vice President of
Federated Advisers (another subsidiary of Federated Investors)(with Federated
Investors and its subsidiaries since 1986) and Mark E. Durbiano, Senior Vice
President of Federated (with Federated Investors and its subsidiaries since
1982).
The names, position with Federated and principal occupations of the persons
who are its principal executive officers and its trustees are as shown below.
Unless otherwise indicated, the business address of each such person is 1001
Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779:
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH THE FEDERATED AND PRINCIPAL OCCUPATION
- --------------------------- ----------------------------------------------------
<S> <C>
John Francis Donahue....... Trustee, Federated; Trustee and Chairman, Federated
Investors; Trustee or Director of other subsidiaries
of Federated Investors
John Christopher Donahue... Trustee, Federated; Trustee and President, Federated
Investors; Trustee or Director of other subsidiaries
of Federated Investors
Mark Lee Mallon............ Trustee, President and Chief Executive Officer,
Federated; Executive Officer of other subsidiaries
of Federated Investors
Henry John Galliot......... Trustee and Chairman, Federated; Trustee, Federated
Investors; Executive Officer of other subsidiaries
of Federated Investors
Mark Douglas Olson ........ Trustee, Federated; Trustee of other subsidiaries of
107 West Market Street Federated Investors; Attorney and Director with the
Georgetown, Delaware 19947 law firm of Wilson, Halbrook & Bayard
John William McGonigle..... Trustee, Vice President and Secretary, Federated;
Trustee, Vice President and Secretary, Federated
Investors; Director or Trustee and Executive Officer
of other subsidiaries of Federated Investors
Edward Conrad Gonzales..... Vice President and Treasurer, Federated; Trustee,
Vice President and Treasurer, Federated Investors;
Trustee or Director and Executive Officer of other
subsidiaries of Federated Investors
</TABLE>
REPORTS TO SHAREHOLDERS AND FINANCIAL STATEMENTS
The Trust's Annual Report to shareholders, including the audited financial
statements of the Portfolio for the fiscal year ended November 30, 1995, is
available from the Trust. The Trust's Annual Report should be read in
conjunction with this Proxy Statement, but is not part of the
9
<PAGE>
proxy soliciting material. Copies of the Annual Report may be obtained from the
Trust, without charge, by contacting the Trust in writing at the address on the
cover of this Proxy Statement, or by calling 1-800-445-7862.
SHAREHOLDER PROPOSALS
The Trust is not required to hold annual meetings of shareholders and the
Trustees currently do not intend to hold such meetings unless shareholder action
is required in accordance with the 1940 Act or the Trust's Declaration of Trust.
A shareholder proposal to be considered for inclusion in the proxy statement at
any meeting of shareholders hereafter called must be submitted a reasonable time
before the proxy statement relating thereto is mailed. Whether a proposal
submitted will be included in the proxy statement will be determined in
accordance with applicable federal and state laws.
Respectfully Submitted,
Susan L. Harris
Secretary
Dated: April 29, 1996
CONTRACT OWNERS ARE REQUESTED TO FILL IN, DATE AND SIGN THE VOTING
INSTRUCTIONS CARD AND RETURN IT PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE.
10
<PAGE>
APPENDIX A
BENEFICIAL OWNERSHIP OF GREATER THAN 5% OF PORTFOLIO SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER AND PERCENTAGE OF
OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED
- ------------------------ ----------------------------------
<S> <C>
Earl S. Butterfield 997.19 (6.6%)
120 Kristin Road
N. Syracuse, NY 13212
Evelyn R. Mason 877.22 (5.8%)
P.O. Box 34
Alden, NY 14004
Thomas P. Walker 2,315.48 (15.2%)
4-A Fairchild Road
Sloatsburg, NY 10974
Anna M. Stys 1,167.95 (7.7%)
406 Homestead Drive
Utica, NY 13502
Joseph G. Makofske 1,996.48 (13.1%)
8 Weinmann Drive
Melville, NY 11747
Anthony Cripps 1,003.01 (6.6%)
10 Miles Avenue
Albertson, NY 11507
Jane Cripps 1,003.01 (6.6%)
10 Miles Avenue
Albertson, NY 11507
Josephine Herley 814.97 (5.4%)
102-39 86th Street
Ozone Park, NY 11416
</TABLE>
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<PAGE>
APPENDIX B
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of September
16, 1992, as amended on August 30, 1994 and April 18, 1996, between SUNAMERICA
SERIES TRUST, a Massachusetts business trust (the 'Trust') and SUNAMERICA ASSET
MANAGEMENT CORP., a Delaware corporation (the 'Adviser' or 'SAAMCo').
In consideration of the mutual agreements herein made, the parties hereto
agree as follows:
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.
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), and (iii) oversee the performance of services provided to each
Portfolio by others, including the custodian, transfer agent, shareholder
servicing agent and subadviser, if any. The Trust acknowledges that the Adviser
also acts as the manager of other investment companies.
With respect to the Cash Management Portfolio, the Adviser hereby accepts
the responsibilities for making the determinations required by Rule 2a-7 under
the Act to be made by the Trustees of the Trust and which are delegable by the
Trustees pursuant to paragraph (e) of
B-1
<PAGE>
such Rule, to the extent that the Trustees may hereinafter delegate such
responsibilities to the Adviser.
The Adviser may delegate certain of its duties under this Agreement with
respect to a Portfolio to a subadviser pursuant to a written agreement, subject
to the approval of the Trustees and a Portfolio's shareholders, as required by
the Act. The Adviser is solely responsible for payment of any fees or other
charges to a subadviser arising from such delegation and the Trust shall have no
liability therefor.
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.
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 the
event any amounts are so contributed by the Adviser to the Trust, the Trust
agrees to reimburse the Adviser for any expenses waived, provided that such
reimbursement does not result in increasing the Trust's aggregate expenses above
the aforementioned expense limitation ratios.
B-2
<PAGE>
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.
PURCHASE AND SALE OF SECURITIES. The Adviser shall purchase securities
from or though and sell securities to or through such persons, brokers or
dealers as the Adviser shall deem appropriate in order to carry out the policies
with respect to portfolio transactions as set forth in the Trust's Registration
Statement and its current Prospectus or Statement of Additional Information, as
amended from time to time, or as the Trustees may direct from time to time.
Nothing herein shall prohibit the Trustees from approving the payment by
the Trust of additional compensation to others for consulting services,
supplemental research and security and economic analysis.
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.
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).
B-3
<PAGE>
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.
RECORDS. The Trust is responsible for maintaining and preserving for such
period or periods as the Securities and Exchange Commission may prescribe by
rules and regulations, such accounts, books and other documents as constitute
the records forming the basis for all reports, including financial statements
required to be filed pursuant to the Act and for the Trust's auditor's
certification relating thereto. The Adviser hereby undertakes and agrees to
maintain in the form and for the periods required by Rule 31a-2 under the Act,
all records relating to the Portfolio's investments that are required to be
maintained pursuant to the requirements of Rule 31a-1 of the Act.
The Adviser and the Trust agree that all accounts, books and other records
maintained and preserved by each as required hereby shall be subject at any
time, and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, the Trust's auditors,
the Trust or any representative of the Trust, or any governmental agency or
other instrumentality having regulatory authority over the Trust. It is
expressly understood and agreed that the books and records maintained by the
Adviser on behalf of each Portfolio shall, at all times, remain the property of
the Trust.
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
B-4
<PAGE>
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.
MISCELLANEOUS. Anything herein to the contrary notwithstanding, this
Agreement shall not be construed to require, or to impose any duty upon either
of the parties, to do anything in violation of any applicable laws or
regulations.
The Declaration of Trust establishing the Trust, a copy of which is on file
in the office of the Secretary of the Commonwealth of Massachusetts, provides
that the name of the Trust refers to the Trustees collectively as Trustees, not
as individuals or personally; and that no Trustee, shareholder, officer,
employee or agent of the Trust shall be held to any personal liability, nor
shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise in connection with the affairs of the Trust or
any Portfolio; but that the Trust Estate shall be liable. Notice is hereby given
that nothing contained herein shall be construed to be binding upon any of the
Trustees, officers, or shareholders of the Trust individually.
IN WITNESS WHEREOF, the Trust and the Adviser have caused this Agreement to
be executed by their duly authorized officers as of the date first above
written.
SUNAMERICA SERIES TRUST
By: /s/ JAMES K. HUNT
Authorized Officer
SUNAMERICA ASSET MANAGEMENT CORP.
By: /s/ PETER A. HARBECK
Authorized Officer
B-5
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
FEE RATE
(AS A % OF AVERAGE
DAILY NET ASSET
FUND VALUE)
- ---------------------------- ---------------------
<S> <C>
Alliance Growth Portfolio... .70% to $ 50MM
.65% next $100MM
.60% next $150MM
.55% next $200MM
.50% over $500MM
Growth/Phoenix Investment
Counsel Portfolio......... .70% to $ 50MM
.65% next $100MM
.60% next $150MM
.55% next $200MM
.50% over $500MM
Balanced/Phoenix Investment
Counsel Portfolio......... .70% to $ 50MM
.65% next $100MM
.60% next $150MM
.55% next $200MM
.50% over $500MM
Growth-Income Portfolio..... .70% to $ 50MM
.65% next $100MM
.60% next $150MM
.55% next $200MM
.50% over $500MM
Provident Growth
Portfolio................. .85% to $ 50MM
.80% next $100MM
.70% next $100MM
.65% next $100MM
.60% over $350MM
Global Equities Portfolio... .90% to $ 50MM
.80% next $100MM
.70% next $150MM
.65% over $300MM
Venture Value Portfolio..... .80% to $100MM
.75% next $400MM
.70% over $500MM
Asset Allocation
Portfolio................. .75% to $ 50MM
.65% next $100MM
.60% next $100MM
.55% over $250MM
</TABLE>
B-6
<PAGE>
<TABLE>
<CAPTION>
FEE RATE
(AS A % OF AVERAGE
DAILY NET ASSET
FUND VALUE)
- ---------------------------- ---------------------
<S> <C>
Global Bond Portfolio....... .75% to $ 50MM
.65% next $100MM
.60% next $100MM
.55% over $250MM
High-Yield Bond Portfolio... .70% to $ 50MM
.65% next $100MM
.60% next $100MM
.55% over $250MM
Corporate Bond Portfolio.... .70% to $ 50MM
.60% next $100MM
.55% next $100MM
.50% over $250MM
International Diversified
Equities Portfolio........ 1.00% of Net Assets
Worldwide High Income
Portfolio................. 1.00% of Net Assets
Cash Management Portfolio... .55% to $ 10MM
.50% next $200MM
.45% over $300MM
Federated Value Portfolio... .75% to $150MM
.60% next $350MM
.50% over $500MM
Utility Portfolio........... .75% to $150MM
.60% next $350MM
.50% over $500MM
Aggressive Growth
Portfolio................. .75% to $100MM
.675% next $150MM
.625% next $250MM
.600% over $500MM
SunAmerica Balanced
Portfolio................. .70% to $ 50MM
.65% next $100MM
.60% next $150MM
.55% next $200MM
.50% over $500MM
</TABLE>
April 18, 1996
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<PAGE>
APPENDIX C
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of April 18, 1996 by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the 'Adviser'), and
FEDERATED INVESTMENT COUNSELING, a Delaware business trust (the 'Subadviser').
WITNESSETH:
WHEREAS, the Adviser and SunAmerica Series Trust, a Massachusetts business
trust (the 'Trust'), have entered into an Investment Advisory and Management
Agreement dated as of September 16, 1992, as amended, (the 'Advisory Agreement')
pursuant to which the Adviser has agreed to provide investment management,
advisory and administrative services to the Trust; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the 'Act'), as an open-end management investment company and may
issue shares of beneficial interest, 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. Subject to the oversight and review of the Adviser, the
Subadviser will determine in its discretion the securities to be purchased or
sold, and through delegated authority from the Adviser, execute such documents
as may be necessary in connection therewith; 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 the objectives, policies, and limitations for
the Portfolio(s) set forth in the Trust's current prospectus and statement of
additional information.
C-1
<PAGE>
The Subadviser represents and warrants that its management of the
Portfolios will at all times conform with: (1) the objectives, policies, and
limitations for the Portfolio(s) set forth in the Trust's current prospectus and
statement of additional information; (2) the provisions of Subchapter M of the
Internal Revenue Code of 1986, as amended (the 'Code'), applicable to 'regulated
investment companies', including those investment companies underlying variable
annuities; (3) the provisions of the Act and rules adopted thereunder applicable
to the Portfolios; (4) the diversification requirements specified in the
Internal Revenue Service's regulations under Section 817(h) of the Code; (5)
applicable state insurance laws provided to Subadviser by Adviser in writing
(which may be satisfied through delivery to Subadviser of a copy of the Trust's
current prospectus), or as acknowledged in a written undertaking by Subadviser;
(6) applicable federal and state securities laws; and (7) 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. REPRESENTATIONS AND WARRANTIES OF THE ADVISER. The Adviser represents
and warrants to the Subadviser that: (1) it is a corporation duly formed and
validly existing under the laws of Delaware; (2) it is duly authorized to
execute and deliver this Agreement and to perform its obligations thereunder;
and (3) it is registered with the Securities and Exchange Commission as an
investment adviser under the Investment Advisers Act of 1940, as amended.
3. 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
C-2
<PAGE>
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
Portfolios with contemporaneous purchase or sell orders of other clients of the
Subadviser or its affiliated persons. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Subadviser in the manner the Subadviser
determines to be equitable and consistent with its and its affiliates' fiduciary
obligations to the Portfolios 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.
4. 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.
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, policies and procedures relating to the management
of the Trust as adopted by the Board of Trustees, and such other information
with regard to their affairs and that of the Trust as each may reasonably
request.
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<PAGE>
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 written 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.
(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
C-4
<PAGE>
statutes, at common law or otherwise, which arise out of or result from any
breach of any representation or warranty 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 Adviser is hereby expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of the Subadviser and agrees
that the obligations assumed by the Subadviser pursuant to this Agreement will
be limited in any case to the Subadviser and its assets and the Adviser shall
not seek satisfaction of any such obligations from the shareholders of the
Subadviser, the trustees of the Subadviser, officers, employees or agents of the
Subadviser, or any of them.
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 not less than 30 nor more than 60 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 from the
date written notice is given, whichever is earlier. Notwithstanding the
requirements set forth in the immediately preceding sentence, Subadviser may
terminate this Agreement on 30 days' written notice upon the institution of
formal proceedings against the Adviser or the Trust by the NASD, the SEC, any
state securities or insurance department or any other regulatory body regarding
the Adviser's obligations under this Agreement or related to the sale of the
Contracts, operation of the separate account, or sale of shares of the Trust,
provided that such formal proceedings are likely to have a material adverse
impact on the Subadviser. 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
C-5
<PAGE>
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.
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<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: Federated Investment Counseling
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Attention: J. Crilley Kelly
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: /s/ PETER A. HARBECK
Name: Peter A. Harbeck
Title: President
FEDERATED INVESTMENT COUNSELING
By: /s/ MARK L. MALLON
Name: Mark L. Mallon
Title: President
C-7
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
FEE
(AS A PERCENTAGE OF
AVERAGE DAILY NET ASSETS
PORTFOLIO(S) OF THE PORTFOLIO)
- ------------------------------ --------------------------
<S> <C>
Federated Value Portfolio..... .55% on first $ 20 million
.35% on next $ 30 million
.25% on next $100 million
.20% on next $350 million
.15% over $500 million
Utility Portfolio............. .55% on first $ 20 million
.35% on next $ 30 million
.25% on next $100 million
.20% on next $350 million
.15% over $500 million
Corporate Bond Portfolio...... .30% on first $ 25 million
.25% on next $ 25 million
.20% on next $100 million
.15% over $150 million
</TABLE>
C-8
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<PAGE>
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ANCHOR NATIONAL LIFE INSURANCE COMPANY VOTING INSTRUCTIONS CARD
- -------------------------------------------------------------------------------
FIXED INCOME PORTFOLIO
THESE VOTING INSTRUCTIONS ARE SOLICITED BY ANCHOR NATIONAL LIFE INSURANCE
COMPANY IN CONNECTION WITH A SOLICITATION OF PROXIES BY THE TRUSTEES OF
SUNAMERICA SERIES TRUST. A VOTING INSTRUCTIONS CARD IS PROVIDED FOR THE FIXED
INCOME PORTFOLIO (THE "PORTFOLIO"), A SEPARATE SERIES OF SUNAMERICA SERIES
TRUST IN WHICH YOUR CONTRACT VALUES WERE INVESTED AS OF APRIL 19, 1996.
The undersigned hereby instructs Anchor National Life Insurance Company to vote
the shares of SunAmerica Series Trust (the "Trust") attributable to his or her
variable annuity contract at the Special Meeting of Shareholders to be held at
the Trust's offices, The SunAmerica Center, 733 Third Avenue, New York, NY 10017
at 10:00 a.m., Eastern Standard Time, June 3, 1996, and any adjournments
thereof, as indicated on the reverse side.
DATE: ______________________, 1996
PLEASE SIGN IN BOX BELOW
If a contract is held jointly, each
contract owner should sign. If only one
signs, his or her signature will be
binding. If the contract owner is a
corporation, the President or a Vice
President should sign in his or her own
name, indicating title. If the contract
owner is a partnership, a partner should
sign in his or her own name, indicating
that he or she is a partner.
----------------------------------------
----------------------------------------
Signature(s) Title(s), if applicable
INDICATE YOUR VOTE BELOW 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 INSTRUCTION, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE CONTRACTHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL PROPOSALS. PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION
OF THE PROPOSALS.
1. To approve or disapprove, with respect to the Portfolio, the
continuation of the Investment Advisory and Management Agreement between
the Trust on behalf of the Portfolio and SunAmerica Asset Management Corp.
(the "Adviser").
FOR AGAINST ABSTAIN
/ / / / / /
2. To approve or disapprove a proposed new Subadvisory Agreement between the
Adviser and Federated Investment Counseling as Subadviser for the
Portfolio.
FOR AGAINST ABSTAIN
/ / / / / /
3. To transact such other matters as may properly come before the meeting or
any adjournment thereof.
- ------------------------------------------------------------------------------
PLEASE MARK YOUR VOTING INSTRUCTIONS CARD, DATE AND SIGN IT ON THE REVERSE
SIDE, AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. VOTING INSTRUCTIONS MUST BE RECEIVED
BY MAY 31, 1996 TO BE VOTED FOR THE MEETING TO BE HELD ON JUNE 3, 1996.
FIRST SUNAMERICA LIFE INSURANCE COMPANY VOTING INSTRUCTIONS CARD
- -------------------------------------------------------------------------------
FIXED INCOME PORTFOLIO
THESE VOTING INSTRUCTIONS ARE SOLICITED BY FIRST SUNAMERICA LIFE INSURANCE
COMPANY IN CONNECTION WITH A SOLICITATION OF PROXIES BY THE TRUSTEES OF
SUNAMERICA SERIES TRUST. A VOTING INSTRUCTIONS CARD IS PROVIDED FOR THE
FIXED INCOME PORTFOLIO (THE "PORTFOLIO"), A SEPARATE SERIES OF SUNAMERICA SERIES
TRUST IN WHICH YOUR CONTRACT VALUES WERE INVESTED AS OF APRIL 19, 1996.
The undersigned hereby instructs First SunAmerica Life Insurance Company to vote
the shares of SunAmerica Series Trust (the "Trust") attributable to his or her
variable annuity contract at the Special Meeting of Shareholders to be held at
the Trust's offices, The SunAmerica Center, 733 Third Avenue, New York, NY 10017
at 10:00 a.m., Eastern Standard Time, June 3, 1996, and any adjournments
thereof, as indicated on the reverse side.
DATE: ______________________, 1996
PLEASE SIGN IN BOX BELOW
If a contract is held jointly, each
contract owner should sign. If only one
signs, his or her signature will be
binding. If the contract owner is a
corporation, the President or a Vice
President should sign in his or her own
name, indicating title. If the contract
owner is a partnership, a partner should
sign in his or her own name, indicating
that he or she is a partner.
----------------------------------------
----------------------------------------
Signature(s) Title(s), if applicable
INDICATE YOUR VOTE BELOW 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 INSTRUCTION, IF PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE CONTRACTHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR ALL PROPOSALS. PLEASE REFER TO THE PROXY STATEMENT FOR A DISCUSSION
OF THE PROPOSALS.
1. To approve or disapprove, with respect to the Portfolio, the continuation
of the Investment Advisory and Management Agreement between the Trust on
behalf of the Portfolio and SunAmerica Asset Management Corp. (the
"Adviser).
FOR AGAINST ABSTAIN
/ / / / / /
2. To approve or disapprove a proposed new Subadvisory Agreement between the
Adviser and Federated Investment Counseling as Subadviser for the
Portfolio.
FOR AGAINST ABSTAIN
/ / / / / /
3. To transact such other matters as may properly come before the meeting or
any adjournment thereof.
- ------------------------------------------------------------------------------
PLEASE MARK YOUR VOTING INSTRUCTIONS CARD, DATE AND SIGN IT ON THE REVERSE
SIDE, AND RETURN IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. VOTING INSTRUCTIONS MUST BE RECEIVED
BY MAY 31, 1996 TO BE VOTED FOR THE MEETING TO BE HELD ON JUNE 3, 1996.
