EXHIBIT (d)(1)(C)
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of
January 1, 1999, as amended August 1, 2000 and June 17, 2003 between ANCHOR
SERIES TRUST, a Massachusetts business trust (the "Trust") and AIG SUNAMERICA
ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser" or "SAAMCo").
In consideration of the mutual agreements herein made, the parties
hereto agree as follows:
1.
THE TRUST'S PORTFOLIOS. The Trust is authorized to issue shares in separate
series, with each series representing interests in a separate portfolio of
securities and other assets, and currently offers shares of the series set forth
in Schedule A attached hereto (the "Portfolios"). It is recognized that
additional Portfolios may be added and certain current Portfolios may be deleted
in the future.
2.
DUTIES OF THE ADVISER. The Adviser shall manage the affairs of the Trust as set
forth herein, either by taking such actions itself or by delegating its duties
to a subadviser pursuant to a written subadvisory agreement. Such duties shall
include, but not limited to, continuously providing the Trust with investment
management, including investment research, advice and supervision, determining
which securities shall be purchased or sold by each Portfolio of the Trust and
making purchases and sales of securities on behalf of each Portfolio. The
Adviser's management shall be subject to the control of the Trustees of the
Trust (the "Trustees") and in accordance with the objectives, policies and
restrictions for each such Portfolio set forth in the Trust's Registration
Statement and its current Prospectus and Statement of Additional Information, as
amended from time to time, the requirements of the Investment Company Act of
1940, as amended (the "Act") and other applicable law, as well as to the factors
affecting the Trust's status as a regulated investment company under the
Internal Revenue Code of 1986, as amended, (the "Code") and the regulations
thereunder and the status of variable contracts under the diversification
requirements set forth in Section 817(h) of the Code and the regulations
thereunder. In performing such duties, the Adviser shall (i) provide such office
space, bookkeeping, accounting, clerical, secretarial and administrative
services (exclusive of, and in addition to, any such service provided by any
others retained by the Trust or any of its Portfolios) and such executive and
other personnel as shall be necessary for the operations of each Portfolio, (ii)
be responsible for the financial and accounting records required to be
maintained by each Portfolio (including those maintained by the Trust's
custodian), (iii) oversee the performance of services provided to each Portfolio
by others, including the custodian, transfer agent, shareholder servicing agent
and subadviser, if any. The Trust acknowledges that the Adviser also acts as the
manager of other investment companies; (iv) together with the assistance of
affiliates, (a) evaluate the subadviser, if any, and advise the Trustees of the
subadviser(s) which the Adviser believes is/are best suited to invest the assets
of each Portfolio, (b) monitor and evaluate the investment performance of each
subadviser employed by the Trust, (c) allocate the portion of each Portfolios'
assets to be managed by each subadviser; and (d) shall recommend changes of or
the addition of subadvisers when appropriate.
The Adviser may delegate certain of its duties under this Agreement
with respect to a Portfolio to a subadviser pursuant to a written agreement,
subject to the approval of the Trustees as required by the Act. The Adviser may,
as it deems necessary or appropriate from time to time, (i) terminate a
subadvisory arrangement with respect to a Portfolio, or a component of the
assets thereof, and engage a new subadviser for such Portfolio, or component
thereof, or (ii) amend the agreement between itself and a subadviser, without
obtaining shareholder approval in either case; provided, however, that any such
new subadvisory arrangement or amendment to an existing arrangement be approved
by the Trustees in the manner required by either Act or order of the Securities
and Exchange Commission exempting the Adviser and the Trust from the provisions
of Section 15(a) of the Act relating to the engagement of subadvisers for the
Portfolios. The Adviser is solely responsible for payment of any fees or other
charges to a subadviser arising from such delegation and the Trust shall have no
liability therefor.
3.
EXPENSES. The Adviser shall pay all of its expenses arising from the performance
of its obligations under this Agreement and shall pay any salaries, fees and
expenses of the Trustees and any officers of the Trust who are employees of the
Adviser. The Adviser shall not be required to pay any other expenses of the
Trust, including, but not limited to, direct charges relating to the purchase
and sale of portfolio securities, interest charges, fees and expenses of
independent attorneys and auditors, taxes and governmental fees, cost of stock
certificates and any other expenses (including clerical expenses) of issue,
sale, repurchase or redemption of shares, expenses of registering and qualifying
shares for sale, expenses of printing and distributing reports, notices and
proxy materials to shareholders, expenses of data processing and related
services, shareholder recordkeeping and shareholder account service, expenses of
printing and filing reports and other documents filed with governmental
agencies, expenses of printing and distributing prospectuses, expenses of annual
and special shareholders' meetings, fees and disbursements of transfer agents
and custodians, expenses of disbursing dividends and distributions, fees and
expenses of Trustees who are not employees of the Adviser or its affiliates,
membership dues in the Investment Company Institute, insurance premium dues in
the Investment Company Institute, insurance premiums and extraordinary expenses
such as litigation expenses.
4.
COMPENSATION. (a) As compensation for services performed and the facilities and
personnel provided by the Adviser under this Agreement, the Trust will pay to
the Adviser, promptly after the end of each month for the services rendered by
the Adviser during the preceding month, the sum of the amounts set forth in
Schedule A attached hereto calculated in accordance with the average daily net
assets of the indicated Portfolio.
To the extent required by the laws of any state in which the Trust is
subject to an expense guarantee limitation, if the aggregate expenses of any
Portfolio in any fiscal year exceed the specified expense limitation ratios for
that year (calculated on a daily basis), the Adviser agrees to waive such
portion of its advisory fee in excess of the limitation, but such waiver shall
not exceed the full amount of the advisory fee for such year except as may be
elected by Adviser in its discretion. For this purpose, aggregate expenses of a
Portfolio shall include the compensation of the Adviser and all normal expenses,
fees and charges, but shall exclude interest, taxes, brokerage fees on portfolio
transactions, fees and expenses incurred in connection with the distribution of
Trust shares, and extraordinary expenses including litigation expenses. In
addition, from time to time the
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Adviser may waive fees or reimburse expenses with respect to a Portfolio in
order that its expense ratio not exceed a specified amount as set forth in the
Portfolio's prospectus. In the event any amounts are so waived or contributed by
the Adviser to the Trust, the Trust agrees to reimburse the Adviser, within a
two-year period after such waiver, any expenses waived, provided that such
reimbursement does not result in increasing the Trust's aggregate expenses above
the aforementioned expense limitation ratios.
The Adviser's fee shall be accrued daily at 1/365th of the applicable
annual rate set forth above. For the purpose of accruing compensation, the net
assets of the Portfolio shall be that determined in the manner and on the dates
set forth in the current prospectus of the Trust and, on days on which the net
assets are not so determined, the net asset computation to be used shall be as
determined on the next day on which the net assets shall have been determined.
(b) Upon any termination of this Agreement on a day other than the last
day of the month, the fee for the period from the beginning of the month in
which termination occurs to the date of termination shall be prorated according
to the proportion which such period bears to the full month.
5.
PURCHASE AND SALE OF SECURITIES. The Adviser shall purchase securities from or
through and sell securities to or through such persons, brokers or dealers as
the Adviser shall deem appropriate in order to carry out the policies with
respect to portfolio transactions as set forth in the Trust's Registration
Statement and its current Prospectus or Statement of Additional Information, as
amended from time to time, or as the Trustees may direct from time to time.
Nothing herein shall prohibit the Trustees from approving the payment
by the Trust of additional compensation to others for consulting services,
supplemental research and security and economic analysis.
6.
TERM OF AGREEMENT. This Agreement shall continue in full force and effect with
respect to each Portfolio until two years from the date approved by the Trustees
of the Trust in respect of such Portfolio, and from year to year thereafter so
long as such continuance is approved at least annually (i) by the Trustees by
vote cast in person at a meeting called for the purpose of voting on such
renewal, or by the vote of a majority of the outstanding voting securities (as
defined by the Act) of such Portfolio with respect to which renewal is to be
effected, and (ii) by a majority of the non-interested Trustees by vote cast in
person at a meeting called for the purpose of voting on such renewal. Any
approval of this Agreement or the renewal thereof with respect to a Portfolio by
the vote of a majority of the outstanding voting securities of that Portfolio,
or by the Trustees of the Trust which shall include a majority of the
non-interested Trustees, shall be effective to continue this Agreement with
respect to that Portfolio notwithstanding (a) that this Agreement or the renewal
thereof has not been so approved as to any other Portfolio, or (b) that this
Agreement or the renewal thereof has not been so approved by the vote of a
majority of the outstanding voting securities of the Trust as a whole.
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7.
TERMINATION. This Agreement may be terminated at any time as to a Portfolio,
without payment of any penalty, by the Trustees or by the vote of a majority of
the outstanding voting securities (as defined in the Act) of such Portfolio on
sixty (60) days' written notice to the Adviser. Similarly, the Adviser may
terminate this Agreement without penalty on like notice to the Trust provided,
however, that this Agreement may not be terminated by the Adviser unless another
investment advisory agreement has been approved by the Trust in accordance with
the Act, or after six months' written notice, whichever is earlier. This
Agreement shall automatically terminate in the event of its assignment (as
defined in the Act).
8.
REPORTS. The Adviser shall report to the Trustees, or to any committee or
officers of the Trust acting pursuant to the authority of the Trustees, at such
times and in such detail as shall be reasonable and as the Board may deem
appropriate in order to enable the Trust to determine that the investment
policies of each Portfolio are being observed and implemented and that the
obligations of the Adviser under this Agreement are being fulfilled. Any
investment program undertaken by the Adviser pursuant to this Agreement and any
other activities undertaken by the Adviser on behalf of the Trust shall at all
times be subject to any directives of the Trustees or any duly constituted
committee or officer of the Trust acting pursuant to the authority of the
Trustees.
9.
RECORDS. The Trust is responsible for maintaining and preserving for such period
or periods as the Securities and Exchange Commission may prescribe by rules and
regulations, such accounts, books and other documents as to constitute the
records forming the basis for all reports, including financial statements
required to be filed pursuant to the Act and for the Trust's auditor's
certification relating thereto. The Adviser hereby undertakes and agrees to
maintain in the form and for the periods required by Rule 31a-2 under the Act,
all records relating to the Portfolio's investments that are required to be
maintained pursuant to the requirements of Rule 31a-1 of the Act.
The Adviser and the Trust agree that all accounts, books and other
records maintained and preserved by each as required hereby shall be subject at
any time, and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, the Trust's auditors,
the Trust or any representative of the Trust, or any governmental agency or
other instrumentality having regulatory authority over the Trust. It is
expressly understood and agreed that the books and records maintained by the
Adviser on behalf of each Portfolio shall, at all times, remain the property of
the Trust.
10.
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LIABILITY OF ADVISER. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties ("disabling conduct")
hereunder on the part of the Adviser (and its officers, directors, agents,
employees, controlling persons, shareholders and any other person or entity
affiliated with the Adviser), the Adviser shall not be subject to liability to
the Trust or to any other person for any act or omission in the course of, or
connected with, rendering services hereunder including, without limitation, any
error of judgment or mistake of law or for any loss suffered by any of them in
connection with the matters to which this Agreement relates, except to the
extent specified in Section 36(b) of the Act concerning loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services. Except for such disabling conduct or liability under Section 36(b) of
the Act, the Trust shall indemnify the Adviser (and its officers, directors,
agents, employees, controlling persons, shareholders and any other person or
entity affiliated with the Adviser) from any liability arising from the
Adviser's conduct under this Agreement.
Indemnification to the Adviser or any of its personnel or
affiliates shall be made when (A) a final decision on the merits rendered, by a
court or other body before whom the proceeding was brought, that the person to
be indemnified was not liable by reason of disabling conduct or, (B) in the
absence of such a decision, a reasonable determination, based upon a review of
the facts, that the person to be indemnified was not liable by reason of
disabling conduct, by (a) the vote of a majority of a quorum of Trustees who are
neither "interested persons" of the Trust as defined in Section 2(a)(19) of the
Act nor parties to the proceeding ("disinterested, non-party Trustees"), or (b)
an independent legal counsel in a written opinion. The Trust may, by vote of a
majority of the disinterested, non-party Trustees, advance attorneys' fees or
other expenses incurred by officers, Trustees, investment advisers, subadvisers
or principal underwriters, in defending a proceeding upon the undertaking by or
on behalf of the person to be indemnified to repay the advance unless it is
ultimately determined that such person is entitled to indemnification. Such
advance shall be subject to at least one of the following: (i) the person to be
indemnified shall provide adequate security for his undertaking, (ii) the Trust
shall be insured against losses arising by reason of any lawful advances, or
(iii) a majority of a quorum of the disinterested, non-party Trustees, or an
independent legal counsel in a written opinion, shall determine, based on a
review of readily available facts, that there is reason to believe that the
person to be indemnified ultimately will be found entitled to indemnification.
11.
MISCELLANEOUS. Anything herein to the contrary notwithstanding, this Agreement
shall not be construed to require, or to impose any duty upon either of the
parties, to do anything in violation of any applicable laws or regulations.
The Declaration of Trust establishing the Trust, a copy of which is on
file in the office of the Secretary of the Commonwealth of Massachusetts,
provides that the name of the Trust refers to the Trustees collectively as
Trustees, not as individuals or personally; and that no Trustee, shareholder,
officer, employee or agent of the Trust shall be held to any personal liability,
nor shall resort be had to their private property for the satisfaction of any
obligation or claim or otherwise in connection with the affairs of the Trust or
any Portfolio; but that the Trust Estate shall be liable. Notice is hereby given
that nothing contained herein shall be construed to be binding upon any of the
Trustees, officers, or shareholders of the Trust individually.
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IN WITNESS WHEREOF, the Trust and the Adviser have caused this
Agreement to be executed by their duly authorized officers as of the date first
above written.
ANCHOR SERIES TRUST
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
President
AIG SUNAMERICA ASSET MANAGEMENT CORP.
By: /s/ Xxxxx X. Xxxxxx
--------------------
Xxxxx X. Xxxxxxx
President and CEO
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SCHEDULE A
FEE RATE
PORTFOLIO (AS A % OF AVERAGE DAILY NET ASSET VALUE)
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Money Market Portfolio .50% first $150 million
.475% next $100 million
.450% next $250 million
.425% thereafter
Government & Quality Bond Portfolio .625% first $200 million
.575% next $300 million
.50% thereafter
Growth Portfolio .75% first $250 million
.675% next $250 million
.60% thereafter
Strategic Multi-Asset Portfolio 1.00% first $200 million
.875% next $300 million
.80% thereafter
Multi-Asset Portfolio 1.00% first $200 million
.875% next $300 million
.80% thereafter
Capital Appreciation Portfolio .75% first $50 million
.725% next $50 million
.70% thereafter
Growth and Income Portfolio .70% first $100 million
.65% next $150 million
.60% next $250 million
.575% thereafter
Natural Resources Portfolio .75% net assets
Asset Allocation Portfolio .75% first $50 million
.65% next $100 million
.60% next $100 million
.55% thereafter
