SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14c-5
(d) (2) )
[X] Definitive Information Statement
SEASONS SERIES TRUST
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
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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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AIG SUNAMERICA RETIREMENT MARKETS, INC. [AIG SUN AMERICA LOGO]
21650 Oxnard Street
Woodland Hills, CA 91367
(800) 445-7862
March 16, 2006
Dear Contract Owner:
We are writing to provide you with the enclosed information statement. The
information statement provides information regarding the recent addition of a
subadviser to the equity portion of the Balanced component of the Multi-Managed
Growth Portfolio, Multi-Managed Moderate Growth Portfolio, Multi-Managed
Income/Equity Portfolio and Multi-Managed Income Portfolio (collectively, the
"Multi-Managed Portfolios") of Seasons Series Trust (the "Trust").
On December 14, 2005, the Board of Trustees approved a decision to engage
Lord, Abbett & Co. LLC ("Lord Abbett") as a subadviser to manage the equity
investments of the Balanced component of each of the Multi-Managed Portfolios.
Effective January 23, 2006, Lord Abbett began managing such portion of the
Multi-Managed Portfolios, which was previously managed by AIG SunAmerica Asset
Management Corp. ("SunAmerica"). SunAmerica will continue to manage the
fixed-income investments of the Balanced component.
THE CHANGE IN PORTFOLIO MANAGEMENT DID NOT RESULT IN ANY MODIFICATIONS TO
THE PRINCIPAL INVESTMENT OBJECTIVE OF THE BALANCED COMPONENT OF THE
MULTI-MANAGED PORTFOLIOS AS STATED IN THE TRUST'S PROSPECTUS OR TO THE
MANAGEMENT FEE PAYABLE BY THE PORTFOLIOS.
As a matter of regulatory compliance, we are sending you this information
statement, which describes, among other things, the management structure of the
Portfolios, the ownership of Lord Abbett and the terms of the subadvisory
agreement with Lord Abbett, which has been approved by the Trustees, including
the Independent Trustees.
THIS DOCUMENT IS FOR YOUR INFORMATION ONLY AND YOU ARE NOT REQUIRED TO
TAKE ANY ACTION. Should you have any questions about these changes or if we can
be of service to you in any other way, please call our SunLine customer service
center between the hours of 5 a.m. PST and 5 p.m. PST at (800) 445-7862.
Sincerely,
/s/ Jane Aldrich
- --------------------------------------
Jane Aldrich, CFA
Senior Vice President
AIG SunAmerica Retirement Markets, Inc
SEASONS SERIES TRUST
P.O. BOX 54299
LOS ANGELES, CA 90054-0299
MULTI-MANAGED GROWTH PORTFOLIO
MULTI-MANAGED MODERATE GROWTH PORTFOLIO
MULTI-MANAGED INCOME/EQUITY PORTFOLIO
MULTI-MANAGED INCOME PORTFOLIO
(COLLECTIVELY, THE "MULTI-MANAGED PORTFOLIOS" OR "PORTFOLIOS")
--------------------------------
INFORMATION STATEMENT
REGARDING THE ADDITION OF A SUBADVISER
FOR THE BALANCED COMPONENT OF THE
MULTI-MANAGED PORTFOLIOS
--------------------------------
This information statement is being provided to the shareholders of the
Multi-Managed Portfolios of Seasons Series Trust (the "Trust") in lieu of a
proxy statement, pursuant to the terms of an exemptive order the Trust has
received from the Securities and Exchange Commission. The exemptive order
permits the Trust's investment adviser, AIG SunAmerica Asset Management Corp.
("SunAmerica" or "Adviser"), to hire new subadvisers and to make changes to
existing subadvisory contracts with the approval of the Board of Trustees (the
"Trustees"), but without obtaining shareholder approval. This information
statement is being furnished on behalf of the Trustees of the Trust.
WE ARE NOT ASKING FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU ARE NOT REQUIRED
TO TAKE ANY ACTION.
This information statement will be mailed on or about March 16, 2006 to
contract owners who chose one of the Portfolios as an investment option prior to
January 31, 2006.
PURPOSE OF THE INFORMATION STATEMENT
On December 14, 2005, the Board of Trustees approved a decision to engage
Lord, Abbett & Co. LLC ("Lord Abbett" or "Subadviser") as a subadviser to manage
the equity investments of the Balanced component of the Multi-Managed
Portfolios. Accordingly, the Trustees approved a Subadvisory Agreement between
SunAmerica, the Adviser of the Multi-Managed Portfolios, and Lord Abbett. The
decision to engage Lord Abbett is discussed in more detail in the section titled
"Factors Considered by the Board of Trustees." Prior to January 23, 2006,
SunAmerica managed the equity investments and fixed-income investments of the
Balanced component of the Portfolios. SunAmerica will continue to manage the
fixed-income investments of the Balanced component. In addition, Wellington
Management, Janus and SunAmerica will continue to manage the Fixed Income
component, Growth component and Aggressive Growth component of the Multi-Managed
Portfolios, respectively.
THE TRUST
The Multi-Managed Portfolios are investment series of the Trust, a
Massachusetts business trust. The Trust entered into an Investment Advisory and
Management Agreement (the "Advisory Agreement") with SunAmerica on January 1,
1999, as amended from time to time, with the approval of the Trustees.
SunAmerica is an indirect, wholly-owned subsidiary of American International
Group, Inc. and is located at Harborside Financial Center, 3200 Plaza 5, Jersey
City, New Jersey 07311. SunAmerica selects the subadvisers for the Trust's
portfolios, manages certain portfolios, provides various administrative services
and supervises the portfolios' daily business affairs, subject to review by the
Trustees. The Advisory Agreement authorizes SunAmerica to retain subadvisers for
the portfolios for which it does not manage the assets. SunAmerica selects
subadvisers it believes will provide the
1
portfolios with the highest quality investment services. SunAmerica monitors the
activities of the subadvisers and, from time to time, will recommend the
replacement of a subadviser on the basis of investment performance, style drift
or other consideration.
The subadvisers to the Trust's portfolios, including Lord Abbett, act
pursuant to agreements with SunAmerica. Their duties include furnishing
continuing advice and recommendations to the portfolios regarding securities to
be purchased and sold. The subadvisers are independent of SunAmerica and
discharge their responsibilities subject to the policies of the Trustees and the
oversight and supervision of SunAmerica, which pays the subadvisers' fees. The
portfolios do not pay fees directly to a subadviser. However, in accordance with
procedures adopted by the Trustees, a subadviser may effect portfolio
transactions through an affiliated broker-dealer, acting as an agent not as
principal, and the affiliated broker-dealer may receive brokerage commissions in
connection therewith as permitted by Section 17(e) of the Investment Company Act
of 1940, as amended, the rules and interpretations thereunder and other
applicable securities laws.
THE SUBADVISORY AGREEMENT
Prior to January 23, 2006, SunAmerica managed the equity investments of
the Balanced component of each of the Multi-Managed Portfolios. In the ordinary
course of its ongoing evaluation of the Portfolios' performance and investment
strategy and after extensive research and qualitative and quantitative analysis
of numerous candidate firms and their organizational structure, investment
process and style and long-term performance record, SunAmerica recommended to
the Trustees that Lord Abbett be engaged to manage the equity portion of the
Balanced component of each of the Multi-Managed Portfolios. In accordance with
the Trustees' approval of the engagement of Lord Abbett, the Trustees approved
Amendment No. 2 to the Subadvisory Agreement with Lord Abbett, which became
effective January 23, 2006 (the "Subadvisory Agreement").
The Subadvisory Agreement between SunAmerica and Lord Abbett, on behalf of
the Balanced component of each of the Multi-Managed Portfolios, provides that
(i) the Subadviser shall manage the equity investments of the Balanced component
of the Multi-Managed Portfolios, (ii) SunAmerica shall compensate the Subadviser
for its services, (iii) the Subadviser is authorized to select the brokers or
dealers to effect portfolio transactions for the Multi-Managed Portfolios, and
(iv) the Subadviser shall comply with the Portfolios' investment policies and
restrictions and with applicable law. The Subadvisory Agreement will not result
in an increase in fees to shareholders. The Subadvisory Agreement is attached to
this information statement as Exhibit A.
Under the Advisory Agreement, the annual rate of the investment advisory
fee payable to SunAmerica for managing the Balanced component of the
Multi-Managed Portfolios is as follows:
ADVISORY FEES PAID
ADVISORY FEE FOR PERIOD ENDED
RATE MARCH 31, 2005
------------ ------------------
Multi-Managed Growth Portfolio 0.89% $1,294,086
Multi-Managed Moderate Growth Portfolio 0.85% $2,186,775
Multi-Managed Income/Equity Portfolio 0.81% $1,844,402
Multi-Managed Income Portfolio 0.77% $1,354,391
Prior to January 23, 2006, SunAmerica served as the Manager to the Balanced
component (fixed-income investments and equity investments) of the Multi-Managed
Portfolios and the Balanced component had no subadviser. Under the Subadvisory
Agreement, SunAmerica will pay a subadvisory fee at the annual rate of 0.35% on
the first $200 million; 0.30% on the next $200 million; and 0.25% over $400
million in assets in the equity portion of the Balanced component for the
Multi-Managed Portfolios. Lord Abbett will be paid a composite fee based on the
aggregate assets it manages for the equity portion of the Balanced component for
the Portfolios.
INFORMATION ABOUT THE SUBADVISER
Lord Abbett, located at 90 Hudson Street, Jersey City, New Jersey 07302,
has been an investment manager for over 70 years. Lord Abbett provides similar
services to 54 mutual fund portfolios having various investment
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objectives and also advises other investment clients. As of December 31, 2005,
Lord Abbett had approximately $100 billion in assets under management. Robert S.
Dow is the Managing Partner of Lord Abbett. His address is 90 Hudson Street,
Jersey City, NJ 07302-3973.
Lord Abbett is the investment adviser for two other mutual funds that have
an investment objective similar to the Balanced component of the Portfolios. The
name of such fund(s), together with information concerning the funds' assets,
and the annual fees paid (as a percentage of average net assets) to Lord Abbett
for its services, are set forth below.
ASSETS AS OF FEE RATE
FUND NAME DECEMBER 31, 2005 (% OF AVERAGE DAILY NET ASSETS)
--------- ----------------- ---------------------------------
Lord Abbett Series Fund, Inc. $ 4,992,088 0.70% of the first $1 billion;
Large-Cap Core Portfolio 0.65% of the next $1 billion; and
0.60% over $2 billion.
Lord Abbett Research Fund, Inc. $ 843,547,950 0.70% of the first $1 billion;
Large-Cap Core Portfolio 0.65% of the next $1 billion; and
0.60% over $2 billion.
FACTORS CONSIDERED BY THE BOARD OF TRUSTEES
The Trustees received materials related to certain factors used in their
consideration of whether to approve the Subadvisory Agreement, including: (1)
the nature, extent and quality of services to be provided by Lord Abbett; (2)
the size and structure of the subadvisory fees charged in connection with Lord
Abbett's management of the Portfolios, compared to subadvisory fee rates of a
group of funds with similar investment objectives (respectively, the "Expense
Group/Universe" and the "Subadvisory Expense Group/Universe"), as selected by an
independent third-party provider of investment company data; (3) the investment
performance of the equity portion of the Balanced component of the Multi-Managed
Portfolios and the performance of a comparable portfolio managed by Lord Abbett;
(4) the costs of services and the benefits potentially derived by Lord Abbett;
(5) the terms of the Subadvisory Agreement; (6) whether the Portfolios will
benefit from possible economies of scale by engaging Lord Abbett; and (7)
information regarding Lord Abbett's compliance and regulatory history. In
addition, the Trustees considered the organization capability and financial
condition of Lord Abbett and the conditions and trends prevailing in the
economy, the securities markets and the investment company industry.
The Trustees of the Trust, including a majority of the Trustees who are
not interested persons of the Trust (the "Independent Trustees") as defined in
the Investment Company Act of 1940, as amended, were separately represented by
counsel that is independent of SunAmerica in connection with their consideration
of approval of the Subadvisory Agreement. The matters discussed below were also
considered separately by the Independent Trustees in executive sessions during
which such independent counsel provided guidance to the Independent Trustees.
Nature, Extent and Quality of Services. The Trustees considered the
nature, quality and extent of services to be provided by Lord Abbett. The
Trustees noted that Lord Abbett would be responsible for providing investment
management services, including investment research, advice and supervision, and
determining which securities shall be purchased or sold by the equity portion of
the Balanced component of the Multi-Managed Portfolios. The Trustees reviewed
Lord Abbett's history, structure and size, and investment experience. The
Trustees were informed that in SunAmerica's judgment, Lord Abbett has the size,
visibility and resources to attract and retain highly qualified investment
professionals.
The Trustees reviewed the qualifications, background and responsibilities
of Lord Abbett's personnel who would be responsible for providing investment
management services to the Portfolios. The Trustees concluded that they were
satisfied with the nature, quality and extent of the services to be provided by
Lord Abbett and that there was a reasonable basis on which to conclude that it
would provide high quality services to the Portfolios.
3
Fees and Expenses. The Trustees received and reviewed information
regarding the Multi-Managed Portfolios' anticipated subadvisory fees compared
against the subadvisory fees and expense ratios of other similar funds in its
category as tracked by an independent third-party provider of investment company
data. It was noted that with respect to subadvisory fees, SunAmerica negotiated
such fees with Lord Abbett at arms-length.
The Trustees considered that the subadvisory fee rate payable to Lord
Abbett was below the median of its Subadvisory Expense Group and that the
aggregate subadvisory fees paid by SunAmerica would increase as result of the
addition of Lord Abbett. The Trustees also considered that the subadvisory fees
are paid by SunAmerica and not by the Multi-Managed Portfolios such that the
increase in subadvisory fees will not affect any of the Multi-Managed
Portfolios' total expenses. In addition, it was noted that subadvisory fees may
vary widely within a Subadvisory Expense Group for various reasons, including
market pricing demands, existing relationships, experience and success, and
individual client needs.
On the basis of the information considered, the Trustees concluded that
the subadvisory fee rate was fair and reasonable in light of the usual and
customary charges made for services of the same nature and quality and the other
factors considered.
Investment Performance. The Trustees, including the Independent Trustees,
received and reviewed information prepared by SunAmerica reflecting the Balanced
component's investment performance and the investment performance of fund
managed by Lord Abbett with a substantially similar investment objective and
investment strategy. Generally, the performance information reviewed included
annualized returns for the one-, three- and five-year periods. It was noted that
the Trustees monitor and review the performance of the Multi-Managed Portfolios
on a quarterly basis.
The Trustees considered that SunAmerica's performance as Manager to the
Balanced component of the Multi-Managed Portfolios was in the 5th quintile of
the Morningstar Moderate Allocation Category and the Lipper Balanced Category
for the one-, three- and five-year periods. It was noted that SunAmerica's
performance on the fixed income portion of the Balanced component has been
acceptable. The Trustees took into account SunAmerica's discussion of the
Multi-Managed Portfolios' performance and Lord Abbett's performance with its
Lord Abbett Large Cap Core strategy, which has a similar investment objective
and investment strategy as the equity portion of the Balanced component of the
Portfolios. The Trustees concluded that SunAmerica's performance with respect to
the equity portion of the Balanced component of the Portfolios was such that the
addition of Lord Abbett as a subadviser could improve the Portfolios'
performance.
Cost of Services & Benefits Derived. With respect to indirect costs and
benefits, the Trustees were informed, based on SunAmerica's judgment, that (1)
any indirect costs incurred by Lord Abbett in connection with rendering
investment advisory services to the Multi-Managed Portfolios were
inconsequential to the analysis of the adequacy of its subadvisory fee, and (2)
any collateral benefits derived as a result of providing advisory services to
the Portfolios are de minimis and do not impact upon the reasonableness of the
subadvisory fee. The Trustees concluded that any benefits that Lord Abbett could
be expected to receive with regard to providing investment advisory and other
services to the Portfolios were not unreasonable.
Profitability and Economies of Scale. In considering the profitability to
Lord Abbett in connection with its relationship with the Multi-Managed
Portfolios, the Trustees noted that the fees under the Subadvisory Agreement are
paid by SunAmerica. The Trustees also relied on the ability of SunAmerica to
negotiate the Subadvisory Agreement and the fees thereunder at arm's length. For
each of the above reasons, the profitability to Lord Abbett from its
relationship with the Multi-Managed Portfolios was determined not to be a
material factor in the Trustees' deliberations. For similar reasons, the
potential for the Portfolios to experience economies of scale from Lord Abbett's
management of the Multi-Managed Portfolios was not considered a material factor
to the Trustees' consideration of Lord Abbett.
Terms of Subadvisory Agreement. The Trustees reviewed the terms of the
Subadvisory Agreement including the duties and responsibilities undertaken by
Lord Abbett. The Trustees noted that the Subadvisory Agreement provides that
Lord Abbett will pay all of its own expenses in connection with the performance
of its duties as well as the cost of maintaining the staff and personnel as
necessary for it to perform its obligations. The
4
Trustees also considered other provisions of the Subadvisory Agreement and
concluded that the terms of the Subadvisory Agreement are reasonable, fair and
in the best interest of the Multi-Managed Portfolios and their shareholders.
Compliance. The Trustees considered whether Lord Abbett was subject to any
recent regulatory or compliance-related actions or investigations. The Trustees
concluded that there was no material litigation or proceeding that would
materially effect Lord Abbett's ability to serve as a subadviser to a component
of the Multi-Managed Portfolios.
Conclusions. In reaching their decision to approve the Subadvisory
Agreement, the Trustees based their decision on the totality of the factors and
each Trustee contributed different weight to the various factors. Based upon the
materials they reviewed, the representations made to them and the considerations
described above, and as part of their deliberations, the Trustees, including the
Independent Trustees, concluded that Lord Abbett possesses the capability and
resources to perform the duties required of it under its Subadvisory Agreement.
OWNERSHIP OF SHARES
The table set forth below reflects the total shares outstanding for each
of the Multi-Managed Portfolios as of January 31, 2006 and the record holders of
those shares.
MULTI-MANAGED
MULTI-MANAGED MODERATE GROWTH MULTI-MANAGED MULTI-MANAGED
GROWTH PORTFOLIO PORTFOLIO INCOME/EQUITY PORTFOLIO INCOME PORTFOLIO
------------------- ------------------- ----------------------- ------------------
Shares % Shares % Shares % Shares %
---------- ------ ---------- ------ ---------- -------- ---------- ------
Variable Annuity Account Five of AIG
SunAmerica Life Assurance Company
11,784,179 99.97% 22,275,655 99.85 19,409,793 99.86% 14,253,464 99.97%
FS Variable Annuity Account Five of First 3,536 0.03% 33,464 0.15% 27,212 0.14% 4,277 0.03%
SunAmerica Life Insurance Company
---------- ----- ---------- ----- ---------- ------ ---------- -----
TOTAL SHARES OUTSTANDING 11,787,715 100% 22,309,119 100% 19,437,005 100% 14,257,741 100%
---------- ----- ---------- ----- ---------- ------ ---------- -----
To SunAmerica's knowledge, no person owns a Contract or interests therein
for more than 5% of the outstanding shares of the Portfolios. The Trustees and
officers of the Trust and members of their families as a group, beneficially
owned less than 1% of the beneficial interest of the Portfolios as of December
31, 2005.
BROKERAGE COMMISSIONS
The Portfolios did not conduct any transactions with affiliated
broker/dealers for the fiscal year ended March 31, 2005.
SHAREHOLDER REPORTS
The Trust has previously sent its Annual and Semi-Annual Reports to its
shareholders. Copies of the most recent annual and semi-annual reports of the
Trust are available without charge and may be obtained by writing the Trust at
P.O. Box 54299, Los Angeles, California 90054-0299 or by calling 1-800-445-7862.
5
SHAREHOLDER PROPOSALS
The Trust is not required to hold annual shareholder meetings, and
therefore, it cannot be determined when the next meeting of shareholders will be
held. If a shareholder wishes to submit proposals for consideration at a future
shareholder meeting, the Trust must receive the proposal a reasonable time
before the solicitation is to be made. Written proposals should be sent to Nori
L. Gabert, Esq., Secretary of Seasons Series Trust, 2929 Allen Parkway, Houston,
Texas 77019.
By Order of the Trustees,
/s/ Nori L. Gabert.
-------------------------
Nori L. Gabert
Secretary
Seasons Series Trust
Dated: March 16, 2006
6
EXHIBIT A
AMENDMENT NO. 2 TO SUBADVISORY AGREEMENT
This AMENDMENT NO. 2 TO SUBADVISORY AGREEMENT (the "Amendment") is
effective as of January 23, 2006 by and between AIG SUNAMERICA ASSET MANAGEMENT
CORP. (formerly known as SunAmerica Asset Management Corp.), a Delaware
corporation (the "Adviser"), and LORD, ABBETT & CO. LLC (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Seasons Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of January 1, 1999, as amended from time to time (the
"Advisory Agreement"), pursuant to which the Adviser has agreed to provide
investment management, advisory and administrative services to the Trust, and
pursuant to it which the Adviser may delegate one or more of its duties to a
subadviser pursuant to a written subadvisory agreement; and
WHEREAS, the Adviser and Subadviser are parties to that certain
Subadvisory Agreement dated January 12, 1999, as amended (the "Subadvisory
Agreement"), with respect to the Trust; and
WHEREAS, the parties wish to amend the Subadvisory Agreement as set forth
below; and
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties agree as follows:
1. Schedule A to the Subadvisory Agreement is hereby amended to reflect the
addition of the fees with respect to the equity portion of the Balanced
Component for the Multi-Managed Growth, Multi-Managed Moderate Growth,
Multi-Managed Income/Equity and Multi-Managed Income Portfolios of Seasons
Series Trust (together, the "Seasons Multi-Managed Portfolios). Schedule A
is also attached hereto.
Fee Rate
(as a percentage of the average daily net
assets the Subadviser manages in the
Portfolio(s) portfolio)
Multi-Managed Growth Portfolio 0.35% on the first $200 million
0.30% on the next $200 million
0.25% over $400 million
Multi-Managed Moderate Growth Portfolio 0.35% on the first $200 million
0.30% on the next $200 million
0.25% over $400 million
Multi-Managed Income/Equity Portfolio 0.35% on the first $200 million
0.30% on the next $200 million
0.25% over $400 million
Multi-Managed Income Portfolio 0.35% on the first $200 million
0.30% on the next $200 million
0.25% over $400 million
Subadviser shall manage the assets of the equity portion of the Balanced
Component for the Seasons Multi-Managed Portfolios. Subadviser shall be paid a
composite fee based on the aggregate assets it manages for the equity portion of
the Balanced Component for the Seasons Multi-Managed Portfolios.
A-1
2. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be an original and all of which together
shall constitute one instrument.
3. FULL FORCE AND EFFECT. Except as expressly supplemented, amended or
consented to hereby, all of the representations, warranties, terms,
covenants, and conditions of the Agreement shall remain unchanged and
shall continue to be in full force and effect.
4. MISCELLANEOUS. Capitalized terms used but not defined herein shall have
the meanings assigned to them in the Subadvisory Agreement.
IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Amendment as of the date first above
written.
AIG SUNAMERICA ASSET MANAGEMENT CORP. LORD, ABBETT & CO. LLC
By: /s/ PETER A. HARBECK By:/s/ LAWRENCE H. KAPLAN
-------------------- ----------------------
Name: Peter A. Harbeck Name: Lawrence H. Kaplan
Title: President and Chief Executive Officer Title: Member
A-2
AMENDMENT NO. 1 TO SUBADVISORY AGREEMENT
This AMENDMENT NO. 1 TO SUBADVISORY AGREEMENT (the "Amendment") is
effective as of October 3, 2005 by and between AIG SUNAMERICA ASSET MANAGEMENT
CORP. (formerly known as SunAmerica Asset Management Corp.), a Delaware
corporation (the "Adviser"), and LORD, ABBETT & CO. LLC (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Seasons Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of January 1, 1999, as amended from time to time (the
"Advisory Agreement"), pursuant to which the Adviser has agreed to provide
investment management, advisory and administrative services to the Trust, and
pursuant to it which the Adviser may delegate one or more of its duties to a
subadviser pursuant to a written subadvisory agreement; and
WHEREAS, the Adviser and Subadviser are parties to that certain
Subadvisory Agreement dated January 12, 1999, as amended (the "Subadvisory
Agreement"), with respect to the Trust; and
WHEREAS, the parties wish to amend the Subadvisory Agreement as set forth
below; and
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, the parties agree as follows:
1. Schedule A to the Subadvisory Agreement is hereby amended to reflect the
amended fees with respect to the Seasons Series Trust International
Equities Portfolio and Mid Cap Value Portfolio. The revised Schedule A is
also attached hereto.
Fee Rate
(as a percentage of the average daily net
assets the Subadviser
Portfolio(s) manages in the portfolio)
International Equities Portfolio [OMITTED]
Mid Cap Value Portfolio
2. The following new paragraph shall be added to the Subadvisory
Agreement:
18. CONFIDENTIALITY. The receiving party will not disclose or use
any records or information obtained pursuant to this Agreement in any
manner whatsoever except as expressly authorized in this Agreement or as
reasonably required to execute transactions on behalf of the Portfolios,
and will keep confidential any non-public information obtained directly as
a result of this service relationship, and the receiving party shall
disclose such non-public information only if the disclosing party or the
Board of Trustees has authorized such disclosure by prior written consent,
or if such information is or hereafter otherwise is known by the receiving
party or has been disclosed, directly or indirectly, by the disclosing
party or the Trust to others becomes ascertainable from public or
published information or trade sources, or if such disclosure is expressly
required or requested by applicable federal or state regulatory
authorities, or to the extent such disclosure is reasonably required by
auditors or attorneys of the receiving party in connection with the
performance of their professional services or as may otherwise be
contemplated by this Agreement. Notwithstanding the foregoing, the
Subadviser may disclose the total return earned by the Portfolios and may
include such total return in the calculation of composite performance
information.
A-3
3. COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall be an original and all of which together
shall constitute one instrument.
4. FULL FORCE AND EFFECT. Except as expressly supplemented, amended or
consented to hereby, all of the representations, warranties, terms,
covenants, and conditions of the Agreement shall remain unchanged and
shall continue to be in full force and effect.
5. MISCELLANEOUS. Capitalized terms used but not defined herein shall have
the meanings assigned to them in the Subadvisory Agreement.
IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Amendment as of the date first above
written.
AIG SUNAMERICA ASSET MANAGEMENT CORP. LORD, ABBETT & CO. LLC
By: /s/ PETER A. HARBECK By: /s/ LAWRENCE H. KAPLAN
-------------------- ----------------------
Name: Peter A. Harbeck Name: Lawrence H. Kaplan
Title: President and Chief Executive Officer Title: Member
A-4
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of January 12, 1999 by and between
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
LORD ABBETT & CO. (the "Subadviser").
WITNESSETH:
WHEREAS, the Adviser and Seasons Series Trust, a Massachusetts business
trust (the "Trust"), have entered into an Investment Advisory and Management
Agreement dated as of January 1, 1999, (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 each of the
Portfolios set forth in Schedule A will at all times be operated and managed (1)
in compliance with all applicable federal and state laws governing its
operations and investments; (2) so as not to jeopardize either the treatment of
the Seasons variable annuity contracts issued by Variable Annuity Account Five
(File No. 33-08859; hereinafter "Contracts") as annuity contracts for purposes
of the Internal Revenue Code of 1986, as amended (the "Code"), or the
eligibility of the Contracts to qualify for sale to the public in any state
where they may otherwise be sold; and (3) to minimize any taxes and/or penalties
payable by the Trust or such Portfolio. Without limiting the foregoing, the
Subadviser represents and warrants (1) qualification, election and maintenance
of such election by each Portfolio to be treated as a "regulated investment
company" under subchapter M, chapter 1 of the Code, and (2) compliance with (a)
the provisions of the Act and rules adopted thereunder; (b) the diversification
requirements specified in the Internal Revenue Service's regulations under
Section 817(h) of the Code; (c) applicable state insurance laws; (d) applicable
federal and state securities, commodities and banking laws; and (e) the
distribution requirements necessary to avoid payment of any excise tax pursuant
to Section 4982 of the Code. The Subadviser further represents and warrants that
to the extent that any statements or omissions made in any Registration
Statement for the Contracts or shares of the Trust, or any amendment or
supplement thereto, are made in reliance upon and in conformity with information
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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 judgment, 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 A1934 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 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.
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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.
(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
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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 1 of this Subadvisory Agreement
(including, but not limited to, the investment objectives, policies and
restrictions applicable to a Portfolio and qualifications of a Portfolio as a
regulated investment company under the Code) with respect to the portion of
assets of a Portfolio allocated to Subadviser. The Adviser shall indemnify the
Indemnified Parties from any liability arising from the conduct of the Adviser
and any other subadviser with respect to the portion of a Portfolio's assets not
allocated to Subadviser.
10. PERMISSIBLE INTERESTS. Trustees and agents of the Trust are or may be
interested in the Subadviser (or any successor thereof) as directors, partners,
officers, or shareholders, or otherwise; directors, partners, officers, agents,
and shareholders of the Subadviser are or may be interested in the Trust as
trustees, or otherwise; and the Subadviser (or any successor) is or may be
interested in the Trust in some manner.
11. TERM OF THE AGREEMENT. This Agreement shall continue in full force and
effect with respect to each Portfolio until two years from the date hereof, and
from year to year thereafter so long as such continuance is specifically
approved at least annually (i) by the vote of a majority of those Trustees of
the Trust who are not parties to this Agreement or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio voting separately from any other
series of the Trust.
With respect to each Portfolio, this Agreement may be terminated at any
time, without payment of a penalty by the Portfolio or the Trust, by vote of a
majority of the Trustees, or by vote of a majority of the outstanding voting
securities (as defined in the Act) of the Portfolio, voting separately from any
other series of the Trust, or by the Adviser, on not less than 30 nor more than
60 days' written notice to the Subadviser. With respect to each Portfolio, this
Agreement may be terminated by the Subadviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser and the Trust;
provided, however, that this Agreement may not be terminated by the Subadviser
unless another subadvisory agreement has been approved by the Trust in
accordance with the Act, or after six months' written notice, whichever is
earlier. The termination of this Agreement with respect to any Portfolio or the
addition of any Portfolio to Schedule A hereto (in the manner required by the
Act) shall not affect the continued effectiveness of this Agreement with respect
to each other Portfolio subject hereto. This Agreement shall automatically
terminate in the event of its assignment (as defined by the Act).
This Agreement will also terminate in the event that the Advisory
Agreement by and between the Trust and the Adviser is terminated.
12. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
13. AMENDMENTS. This Agreement may be amended by mutual consent in
writing, but the consent of the Trust must be obtained in conformity with the
requirements of the Act.
14. GOVERNING LAW. This Agreement shall be construed in accordance with
the laws of the State of New York and the applicable provisions of the Act. To
the extent the applicable laws of the State of New York, or any of the
provisions herein, conflict with the applicable provisions of the Act, the
latter shall control.
15. PERSONAL LIABILITY. The Declaration of the Trust establishing the
Trust (the "Declaration"), is on file in the office of the Secretary of the
Commonwealth of Massachusetts, and, in accordance with that Declaration, no
Trustee, shareholder, officer, employee or agent of the Trust shall be held to
any personal liability, nor shall resort be had to their private property for
satisfaction of any obligation or claim or otherwise in connection with the
affairs of the Trust, but the "Trust Property" only shall be liable.
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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: Lord Abbett & Co.
767 5th Avenue
NY, NY 10153
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
LORD ABBETT & CO.
By: /s/ Daniel E. Carper
-----------------------------------
Name: Daniel E. Carper
Title: Partner
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