SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
(Amendment No..___)
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14c-5
(d) (2) )
[X] Definitive Information Statement
SEASONS SERIES TRUST
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
1) Title of each class of securities to which transaction applies:
______________________________________________________________________
2) Aggregate number of securities to which transaction applies:
______________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
______________________________________________________________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________________
5) Total fee paid:
______________________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11 (a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
______________________________________________________________________
2) Form, Schedule or Registration Statement No.:
______________________________________________________________________
3) Filing Party:
______________________________________________________________________
4) Date Filed:
______________________________________________________________________
AIG SUNAMERICA RETIREMENT MARKETS, INC. (AIG SUNAMERICA LOGO)
21650 Oxnard Street THE RETIREMENT SPECIALIST
Woodland Hills, CA 91367
(800) 445-7862
April 13, 2006
Dear Contract Owner:
We are writing to provide the enclosed information statement to contract
owners who are invested in the following portfolios of Seasons Series Trust (the
"Trust"):
- Allocation Growth Portfolio
- Allocation Moderate Growth Portfolio
- Allocation Moderate Portfolio
- Allocation Balanced Portfolio
(collectively, the "Portfolios")
The information statement describes a recent change in the ownership of Ibbotson
Associates Advisors, LLC ("Ibbotson"), the subadviser to the Portfolios. The
change of ownership occurred on March 1, 2006 when Morningstar, Inc. acquired
all of the outstanding shares of capital stock of Ibbotson Associates, Inc.,
Ibbotson's previous parent company. The transaction has not had and is not
expected to have any material impact on Ibbotson's management or on Ibbotson's
ability to provide the type or quality of services that it has provided to the
Portfolios prior to the transaction.
AS A MATTER OF REGULATORY COMPLIANCE, WE ARE SENDING YOU AN INFORMATION
STATEMENT WHICH DESCRIBES, AMONG OTHER THINGS, THE MANAGEMENT STRUCTURE OF THE
PORTFOLIOS, THE OWNERSHIP OF IBBOTSON, AND THE TERMS OF THE NEW SUBADVISORY
AGREEMENT WITH IBBOTSON, WHICH HAS BEEN APPROVED BY THE TRUSTEES OF THE TRUST.
THE ENCLOSED DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU ARE NOT
REQUIRED TO TAKE ANY ACTION.
If you have any questions regarding this change, 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
Allocation Growth Portfolio
Allocation Moderate Growth Portfolio
Allocation Moderate Portfolio
Allocation Balanced Portfolio
(collectively, the "Portfolios")
----------
INFORMATION STATEMENT
REGARDING A NEW SUBADVISORY AGREEMENT WITH
IBBOTSON ASSOCIATES ADVISORS, LLC
----------
This information statement is being provided in lieu of a proxy statement
to variable annuity contract owners who have invested all or a portion of their
assets in one of the Portfolios. Seasons Series Trust (the "Trust") has received
an exemptive order from the Securities and Exchange Commission that permits the
Trust's investment adviser, AIG SunAmerica Asset Management Corp. ("AIG SAAMCo")
to hire new subadvisers 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 April 13, 2006 to
contract owners who were invested in one of the Portfolios prior to March 1,
2006.
PURPOSE OF THE INFORMATION STATEMENT
From the inception of the Portfolios, Ibbotson Associates Advisors, LLC
("Ibbotson") has served as the subadviser of the Portfolios. On March 1, 2006,
Morningstar, Inc. ("Morningstar") acquired all of the outstanding shares of
capital stock of Ibbotson Associates, Inc., Ibbotson's parent company (the
"Transaction"). The Transaction has not had and is not expected to have any
material impact on Ibbotson's ability to provide the type or quality of services
that it provided to the Portfolios prior to the Transaction. However, the
Transaction has resulted in a change of control of Ibbotson and an assignment of
the subadvisory agreement between AIG SAAMCo and Ibbotson dated February 14,
2005 (the "Prior Subadvisory Agreement"). The Prior Subadvisory Agreement was
last approved by the Trustees on December 15, 2004. As required by Section 15(a)
of the Investment Company Act of 1940, as amended (the "1940 Act"), the terms of
the Prior Subadvisory Agreement provided for its automatic termination upon such
an assignment.
This information statement describes the new subadvisory agreement between
AIG SAAMCo and Ibbotson, which became effective March 1, 2006 (the "New
Subadvisory Agreement"), the factors the Trustees considered in approving the
New Subadvisory Agreement, and provides information regarding Ibbotson.
THE TRUST
The 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 AIG SAAMCo on January 1, 1999, as amended from
time to time, with the approval of a majority of the independent Trustees, as
such term is defined in the 1940 Act (the "Independent Trustees"). AIG SAAMCo is
an indirect, wholly-owned subsidiary of American International Group, Inc., and
is located at Harborside Financial Center, 3200 Plaza 5, Jersey City, New
1
Jersey 07311. AIG SAAMCo selects the subadvisers for the Trust's portfolios
(including the Portfolios), manages portions of certain portfolios, provides
various administrative services and supervises the portfolios' daily business
affairs, subject to review by the Trustees. The Advisory Agreement authorizes
AIG SAAMCo to retain subadvisers for portfolios or portions thereof for which it
does not manage the assets. AIG SAAMCo selects subadvisers it believes will
provide the portfolios with the highest quality investment services, while
obtaining, within the portfolios' investment objective, a distinct investment
style. AIG SAAMCo 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 act pursuant to agreements with
AIG SAAMCo. Their duties include furnishing continuing advice and
recommendations to the relevant portions of the portfolios regarding securities
to be purchased and sold. The subadvisers are independent of AIG SAAMCo and
discharge their responsibilities subject to the Trust's policies and the
oversight and supervision of AIG SAAMCo. AIG SAAMCo pays the subadvisers for
services rendered and the Trust's portfolios do not pay fees directly to the
subadvisers.
THE NEW SUBADVISORY AGREEMENT
Ibbotson served as the subadviser to the Portfolios under the Prior
Subadvisory Agreement until that agreement was terminated upon the closing of
the Transaction, March 1, 2006. Upon such date, Ibbotson began serving as
subadviser to the Portfolios under the New Subadvisory Agreement. The New
Subadvisory Agreement was approved by the Trustees, including a majority of the
Independent Trustees, at a meeting held on January 26, 2006. The Prior
Subadvisory Agreement was last approved by the Trustees on December 15, 2004.
The New Subadvisory Agreement is identical in form and substance to the
Prior Subadvisory Agreement, except the effective date and termination date, in
that each (i) provides that Ibbotson shall manage the Portfolios on a
discretionary basis, (ii) provides for AIG SAAMCo to compensate Ibbotson for its
services at the same subadvisory fee rate, and (iii) requires Ibbotson to comply
with the Portfolios' investment policies and restrictions and with applicable
law. The New Subadvisory Agreement will not result in an increase in fees to
shareholders. The form of the New Subadvisory Agreement is attached to this
information statement as Exhibit A.
Under the terms of the Advisory Agreement, AIG SAAMCo receives an advisory
fee from the Trust with respect to the Portfolios, which is equal to 0.10% of
average daily net assets in each Portfolio. The advisory fee is accrued daily
and payable monthly. In addition, under the terms of the New Subadvisory
Agreement, AIG SAAMCo pays a subadvisory fee to Ibbotson with respect to each
Portfolio, which is equal to 0.09% on first $500 million of a Portfolio's, 0.07%
on next $500 million, and 0.05% over $1 billion. The subadvisory fee rate
payable to Ibbotson under the New Subadvisory Agreement is identical to the
subadvisory fee rate payable under the Prior Subadvisory Agreement. The
aggregate fees paid to Ibbotson for the fiscal year end March 31, 2006
(unaudited) were as follows:
SUBADVISORY
FEES
NAME (UNAUDITED)
---- -----------
Allocation Growth Portfolio $26,566
Allocation Moderate Growth Portfolio $37,249
Allocation Moderate Portfolio $30,935
Allocation Balanced Portfolio $22,275
Under both the Prior Subadvisory Agreement and New Subadvisory Agreement,
AIG SAAMCo was and is required to pay a minimum annual fee of $150,000, paid in
advance and shall be applied as a credit towards monthly payments of the
subadvisory fee rate.
INFORMATION ABOUT IBBOTSON
Ibbotson provides subadvisory services to financial service firms.
Ibbotson's principal offices are located at 225 N. Michigan Avenue, Suite 700,
Chicago, Illinois 60601. As of December 31, 2005, Ibbotson had
2
approximately $7.1 billion in assets under management. Ibbotson Associates, Inc.
is Ibbotson's direct parent company and is recognized as a leading authority on
asset allocation. Ibbotson Associates provides extensive training, client
education materials, asset allocation, investment management services and
software to help its clients, which include brokerage firms, mutual fund
companies, banks, insurance companies, individual planners, investment
consultants, plan sponsors, and investment managers.
Ibbotson is an indirect, wholly-owned subsidiary of Morningstar. The
principal offices of Morningstar are located at 225 West Wacker Drive, Chicago,
Illinois 60606.
The names and positions of the directors and the principal executive
officer of Ibbotson are as follows:
NAME POSITION
---- --------
Mike Henkel President
Peng Chen Managing Director and Chief
Information Officer
Scott Wentsel Vice President
Scott Schilling Chief Compliance Officer and
Secretary
The address for each of the named directors and officer is 225 N. Michigan
Avenue, Suite 700, Chicago, Illinois 60601.
Ibbotson serves as a subadviser or consultant to several other mutual funds
that have similar investment objectives as the Portfolios. Generally,
subadvisory clients are charged an ongoing fee of basis points of the aggregate
value of the assets invested in accordance with the models created. The
following range of fees depends on the services determined by the contract.
ASSETS UNDER MANAGEMENT FEE RANGES
------------------------- -------------
$0 to $1 billion 0.05% to 0.12%
>$1 billion to $2 billion 0.03% to 0.10%
> $2 billion 0.01% to 0.10%
FACTORS CONSIDERED BY THE BOARD OF TRUSTEES
At a meeting held on January 26, 2006, the Trustees, including a majority
of the Independent Trustees, approved the New Subadvisory Agreement. The
Trustees received materials related to certain factors used in their
consideration of whether to approve the New Subadvisory Agreement, including:
(1) the nature, extent and quality of services to be provided by Ibbotson; (2)
the size and structure of the subadvisory fees charged in connection with
Ibbotson's management of the Portfolios; (3) the investment performance of the
Portfolios; and (4) the terms of the New Subadvisory Agreement. In addition, the
Trustees considered the organization capability and financial condition of
Ibbotson and the conditions and trends prevailing in the economy, the securities
markets and the investment company industry.
The Independent Trustees were separately represented by counsel that is
independent of AIG SAAMCo in connection with their consideration of approval of
the New Subadvisory Agreement. The matters discussed below were also considered
separately by the Independent Trustees in executive session 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 Ibbotson. The Trustees noted
that Ibbotson has served as the subadviser to the Portfolios since their
inception on February 14, 2005 and that Ibbotson is recognized as a leading
authority on asset allocation strategies and models. The Trustees were provided
with information regarding Morningstar's financial condition and recent
financial highlights. In addition, the Trustees noted that Ibbotson
representatives reported that they did not expect the Transaction to affect
Ibbotson's ability to subadvise the Portfolios. It was further noted that
Ibbotson reported
3
that it did not anticipate staffing changes or any disruption of service to the
Portfolios as a result of the Transaction. Based on the information presented,
the Trustees concluded that there was a reasonable basis on which to conclude
that Ibbotson would continue to provide high quality services to the Portfolios.
Fees and Expenses. The Trustees received and reviewed information regarding
the Portfolios' anticipated subadvisory fees compared against the subadvisory
fees and expense ratios of other similar funds in their categories as tracked by
an independent third-party provider of investment company data. It was noted
that with respect to subadvisory fees, AIG SAAMCo negotiated such fees with
Ibbotson at arms-length. In addition, the Trustees noted that the subadvisory
fee rates payable to Ibbotson pursuant to the New Subadvisory Agreement were the
same as the rates provided in the Prior Subadvisory Agreement. On the basis of
the information considered, the Trustees concluded that the subadvisory fee
rates payable to Ibbotson were 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 received and reviewed information
reflecting the Portfolios' investment performance, which included the
performance over the last quarter and the performance since their inception,
February 14, 2005. This information was prepared by SunAmerica, as well as by
Morningstar, Inc. and Lipper, Inc., which are third party providers of
investment company information. It was noted that the Trustees monitor and
review the performance of the Portfolios on a quarterly basis. The Trustees
concluded that Ibbotson's performance was satisfactory.
Cost of Services & Benefits Derived. The Trustees did not consider this
factor material in their approval of the New Subadvisory Agreement.
Profitability and Economies of Scale. The Trustees did not consider this
factor material in their approval of the New Subadvisory Agreement.
Terms of the New Subadvisory Agreement. The Trustees reviewed the terms of
the New Subadvisory Agreement, including the duties and responsibilities
undertaken by Ibbotson. The Trustees noted that the New Subadvisory Agreement is
identical to the terms of the Prior Subadvisory Agreement. The New Subadvisory
Agreement provides that Ibbotson 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 Trustees also
considered other provisions of the New Subadvisory Agreement and concluded that
the terms of the New Subadvisory Agreement are reasonable, fair and in the best
interests of the Portfolios and their shareholders.
Conclusions. In reaching their decision to approve the New 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 Ibbotson possesses the capability and
resources to perform the duties required of it under the New Subadvisory
Agreement.
OWNERSHIP OF SHARES
The table set forth below reflects the total shares outstanding for each of
the Portfolios as of March 1, 2006 and the record holders of those shares.
ALLOCATION ALLOCATION MODERATE ALLOCATION ALLOCATION BALANCED
GROWTH PORTFOLIO GROWTH PORTFOLIO MODERATE PORTFOLIO PORTFOLIO
---------------- ------------------- ------------------ -------------------
Shares % Shares % Shares % Shares %
--------- ---- --------- ---- --------- ---- --------- -----
AIG SunAmerica Life Assurance Comp.
Variable Annuity Account Five 4,942,983 98.6 7,481,634 98.2 5,723,338 98.1 3,626,052 99.09
First SunAmerica Life Insurance Comp.
Variable Annuity Account Five 71,175 1.4 134,952 1.8 108,343 1.9 33,239 0.91
--------- ---- --------- ---- --------- ---- --------- -----
TOTAL SHARES OUTSTANDING 5,014,158 100% 7,616,616 100% 5,831,681 100% 3,659,291 100%
========= ==== ========= ==== ========= ==== ========= =====
4
To AIG SAAMCo's knowledge, no person owns a Contract or interests therein
for more than 5% of the outstanding shares of either Portfolio. 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 any of the Portfolios as of
March 1, 2006.
BROKERAGE COMMISSIONS
The Portfolios did not engage in any brokerage transactions with affiliated
broker/dealers for the period ended March 31, 2006.
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.
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: April 13, 2006
5
EXHIBIT A
SUBADVISORY AGREEMENT
This SUBADVISORY AGREEMENT is dated as of March 1, 2006 by and between AIG
SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser"), and
IBBOTSON ASSOCIATES ADVISORS LLC, a Delaware limited liability company, (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 which the Adviser may delegate one or more of its duties to a
subadviser pursuant to a written subadvisory agreement; and
WHEREAS, the Trust is registered under the Investment Company Act of 1940,
as amended (the "Act"), as an open-end management investment company and may
issue shares of beneficial interest, no par value per share, in separately
designated portfolios representing separate funds with their own investment
objectives, policies and purposes; and
WHEREAS, the Subadviser is engaged in the business of rendering investment
advisory services and is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended; and
WHEREAS, the Adviser desires to retain the Subadviser to furnish investment
advisory services to the investment portfolio(s) 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. The Subadviser will determine,
in its discretion and subject to the oversight and review of the Adviser, the
shares of open-end management investment companies 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, as agent and attorney-in-fact of
the Trust, may, when it deems appropriate and without prior consultation with
the Adviser, buy, sell, exchange, convert and otherwise trade shares of open-end
management investment companies for the Portfolios. 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, restrictions and limitations for the Portfolio(s)
as set forth in the Trust's current prospectus and statement of additional
information; and (b) applicable laws and regulations.
The Subadviser agrees to comply with all applicable federal and state laws,
including securities, commodities and banking laws in carrying out its
obligations under this Subadvisory Agreement. The Subadviser also agrees to
comply with any policies, guidelines, instructions and procedures approved by
the Board of Trustees of the Trust or the Adviser and provided to the
Subadviser. The Subadviser shall also maintain compliance procedures that it
reasonably believes are adequate to ensure its compliance with the Investment
Advisers Act of 1940. No supervisory activity undertaken by the Adviser shall
limit the Subadviser's full responsibility for any of the foregoing.
The Adviser is responsible for monitoring each Portfolio's compliance with
all applicable laws including compliance with Section 817 of the Internal
Revenue Code of 1986, as amended (the "Code") and the diversification
regulations thereunder. The Subadviser will provide the Adviser with any
information that is requested of it by the Adviser in connection with the
Adviser's compliance programs.
The Subadviser 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
A-1
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 agrees: (a) to maintain a level of errors and omissions or
professional liability insurance coverage that, at all times during the course
of this Agreement, is appropriate given the nature of its business, and (b) from
time to time and upon reasonable request, to supply evidence of such coverage to
the Adviser.
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 shares of open-end management investment companies for the
Portfolios. The Subadviser will calculate daily trades for each Portfolio and
initiate and communicate all trade execution orders to the Trust's custodian.
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 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 day's 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.
The Adviser shall be responsible for calculating the Subadviser's fees due
and payable under this Section 3.
4. OTHER SERVICES. At the request of the Trust or the Adviser, the
Subadviser in its discretion may make available to the Trust, office facilities,
equipment, personnel and other services in order to facilitate meetings or other
similar functions. Such office facilities, equipment, personnel and services
shall be provided for or rendered by the Subadviser and billed to the Trust or
the Adviser at the Subadviser's cost.
5. REPORTS. The Trust, the Adviser and the Subadviser agree to furnish to
each other, if applicable, current prospectuses, statements of additional
information, proxy statements, reports of shareholders, certified copies of
their financial statements, and such other information with regard to their
affairs and that of the Trust as each may reasonably request.
6. STATUS OF THE SUBADVISER. The services of the Subadviser to the Adviser
and the Trust are not to be deemed exclusive, and the Subadviser shall be free
to render similar services to others so long as its services to the Trust are
not impaired thereby. The Subadviser shall be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
7. ADVERTISING. Subadviser shall not provide or in any way distribute any
sales or advertising materials, whether or not related to the Trust, to any
employee or representative of AIG SunAmerica Capital Services, Inc. ("SACS") or
its affiliates, including wholesaling personnel, unless such material has been
received and approved, in writing, by the Adviser.
8. PROXY VOTING. The Adviser will vote proxies relating to the Portfolio's
securities. The Adviser will vote all such proxies in accordance with such proxy
voting guidelines and procedures adopted by the Board of Trustees. The Adviser
may, on certain non-routine matters, consult with the Subadviser before voting
proxies relating to the Portfolio's
A-2
securities. The Adviser will instruct the custodian and other parties providing
services to the Trust promptly to forward to the proxy voting service copies of
all proxies and shareholder communications relating to securities held by each
Portfolio (other than materials relating to legal proceedings).
9. CERTAIN RECORDS. The Subadviser hereby agrees that any records that it
maintains and preserves on behalf of the Trust, will be maintained and preserved
in the form and for the periods required by Rules 31a-1 and 31a-2 under the Act.
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.
10. 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.
11. 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/trustees, 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 Adviser (and its officers, directors/trustees,
agents, employees, controlling persons, shareholders and any other person or
entity affiliated with the Adviser) or to the Trust (and its officers,
directors/trustees, agents, employees, controlling persons, shareholders and any
other person or entity affiliated with 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) from any and all losses, claims, damages,
liabilities or litigation (including reasonable legal and other expenses)
arising from Subadviser's rendering of services under this Agreement.
(b) The Subadviser agrees to indemnify and hold harmless the Adviser (and
its officers, directors/trustees, agents, employees, controlling persons,
shareholders and any other person or entity affiliated with the Adviser) and/or
the Trust (and its officers, directors/trustees, agents, employees, controlling
persons, shareholders and any other person or entity affiliated with the Trust)
against any and all losses, claims, damages, liabilities or litigation
(including reasonable legal and other expenses), to which the Adviser and/or the
Trust and their affiliates or such directors/trustees, officers or controlling
person may become subject under the Act, the 1933 Act, under other statutes,
common law or otherwise, which arise from the Subadviser's disabling conduct,
including but not limited to any material failure by the Subadviser to comply
with the provisions and 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 obligations and
duties under this Agreement.
12. PERMISSIBLE INTERESTS. Trustees and agents of the Trust are or may be
interested in the Subadviser (or any successor thereof) as directors/trustees,
partners, officers, or shareholders, or otherwise; directors/trustees, 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.
13. 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.
A-3
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.
14. 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.
15. 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.
16. 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.
17. 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," as defined in the Declaration,
only shall be liable.
18. 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.
19. CONFIDENTIALITY. The Subadviser 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, including non-public information provided to the Subadviser
regarding the securities held by Trust portfolios underlying each of the
Portfolios, and the Subadviser shall disclose such non-public information only
if the Adviser 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 Subadviser or has been disclosed, directly or indirectly, by the Adviser 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 Subadviser 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.
20. 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: Ibbotson Associates Advisors LLC
225 North Michigan Drive
Chicago, Illinois 60601
Attention: Michael Annin
Managing Director
A-4
Adviser: AIG SunAmerica Asset Management Corp.
2929 Allen Parkway
Houston, TX 77019
Attention: Nori L. Gabert
Vice President and Deputy
General Counsel
with a copy to: AIG Retirement Services, Inc.
1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Mallary L. Reznik
Seasons Series Trust
IN WITNESS WHEREOF, the parties have caused their respective duly
authorized officers to execute this Agreement as of the date first above
written.
AIG SUNAMERICA ASSET MANAGEMENT CORP.
By: /S/ NORI L. GABERT
------------------------------------
Name: Nori L. Gabert
Title: Vice President and Deputy General
Counsel
IBBOTSON ASSOCIATES ADVISORS LLC
By: /s/ MICHAEL C. HENKEL
------------------------------------
Name: Michael C. Henkel
Title: President
A-5
SCHEDULE A
Compensation pursuant to Paragraph 3 of this Agreement shall be calculated in
accordance with the following schedule:
NAME OF SERIES AVERAGE DAILY NET ASSETS ANNUAL FEE RATE
-------------- ------------------------ ---------------
Allocation Growth Portfolio $0 to $500 Million 0.09%
$500 Million to $1000 million 0.07%
$Over $1000 million 0.05%
Allocation Moderate Growth $0 to $500 Million 0.09%
Portfolio $500 Million to $1000 million 0.07%
$Over $1000 million 0.05%
Allocation Moderate Portfolio $0 to $500 Million 0.09%
$500 Million to $1000 million 0.07%
$Over $1000 million 0.05%
Allocation Balanced Portfolio $0 to $500 Million 0.09%
$500 Million to $1000 million 0.07%
$Over $1000 million 0.05%
There will be a minimum annual fee of $150,000 paid in advance for each year
this Agreement remains in effect. The minimum annual fee shall be applied as a
credit towards payment of the annual fee rate. The minimum annual fee is due
upon execution of this Agreement and in subsequent years on the anniversary date
of this agreement.
A-6