Sunamerica Senior Floating Rate Fund Inc – ‘PRES14A’ for 10/19/01

On:  Tuesday, 8/21/01   ·   For:  10/19/01   ·   Accession #:  950130-1-504069   ·   File #:  811-08727

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Preliminary Proxy Solicitation Material — Special Meeting   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: PRES14A     North American Senior Floating Rate Fund, Inc         50    190K 

Document Table of Contents

PRES14A
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SCHEDULE 14A  
(RULE 14a-101)  

INFORMATION REQUIRED IN PROXY STATEMENT 

SCHEDULE 14A INFORMATION  
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES 
EXCHANGE ACT OF 1934 (AMENDMENT NO. )   

Filed by the Registrant  [X]                                                    
Filed by a Party other than the Registrant  [_]                                 

Check the appropriate box:                                                      
[X]  Preliminary Proxy Statement                                                
[_]  Confidential, For Use of the Commission Only (as permitted by Rule 14a-    
6(e)(2))                                                              
[_]  Definitive Proxy Statement                                                 
[_]  Definitive Additional Materials                                            
[_]  Soliciting Material Under Rule 14a-12                                      

North American Senior Floating Rate Fund, Inc.  

____________________________________________  
(Name of Registrant as Specified in Its Charter)  

____________________________________________________________________  
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)  

Payment of Filing Fee (Check the appropriate box):                              
[X]  No fee required.                                                           
[_]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.   
(1)    Title of each class of securities to which transaction applies:          

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(2)    Aggregate number of securities to which transaction applies:             

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(3)    Per unit price or other underlying value of transaction computed pursuant
     to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):                   

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(4)    Proposed maximum aggregate value of transaction:                         

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(5)    Total fee paid:                                                          

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[_]    Fee paid previously with preliminary materials:                          

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[_]    Check box if any part of the fee is offset as provided by Exchange Act   
      Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
     paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.       
(1)    Amount previously paid:                                                  

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(2)    Form, Schedule or Registration Statement No.:                            

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(3)    Filing Party:                                                            

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(4)    Date Filed:                                                              

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PRES14A
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Preliminary Copy  
NORTH AMERICAN SENIOR FLOATING RATE FUND, INC.  
286 Congress Street 
Boston, MA 02210  

September __, 2001  
Dear Shareholder:                                                               

 A Special Meeting of Shareholders of the North American Senior Floating
Rate Fund, Inc. (the "Fund") will be held at 286 Congress Street, Boston,       
Massachusetts 02210 on October 19, 2001, at 10:00 a.m., Eastern time, for the   
purpose of (i) electing directors, (ii) approving a new investment advisory     
agreement between the Fund and American General Asset Management Corp. ("AGAM"),
which will become effective immediately upon shareholder approval and terminate 
at the close of business on or about November 9, 2001, and approving a new      
investment advisory agreement between the Fund and SunAmerica Asset Management  
Corp. ("SAAMCo"), which will become effective at the close of business on or    
about November 9, 2001, and (iii) approving a new subadvisory agreement between 
Stanfield Capital Partners LLC ("Stanfield") and each of AGAM and SAAMCo, to    
correspond to the two new investment advisory agreements.                       

 On ______, 2001, American International Group, Inc. ("AIG"), the parent
company of SAAMCo, acquired American General Corporation ("American General"),  
the parent company of AGAM (the "Merger"). As a result of the Merger, AGAM      
became a subsidiary of AIG. AIG has determined that in order to provide improved
investment advisory and other services to the Fund in a more cost efficient and 
effective manner and to realize economies of scale, it would begin eliminating  
duplicative administrative and other functions entailed in operating both SAAMCo
and AGAM. Consequently, AIG has recommended that, subject to shareholder        
approval, SAAMCo should replace AGAM as the Fund's investment adviser. AIG has  
also determined that an orderly transition from AGAM to SAAMCo would be best    
accomplished if it occurred at the same time that the retail open-end mutual    
funds advised by AGAM reorganize with mutual funds advised by SAAMCo. This is   
expected to occur at the close of business on or about November 9, 2001 (the    
"Reorganization Date"). As part of implementing this strategy, shareholders are 
being asked to approve a new investment advisory agreement with AGAM so that    
AGAM can continue to serve as the Fund's investment adviser until the           
Reorganization Date, and a new investment advisory agreement with SAAMCo as the 
investment adviser of the Fund in place of AGAM, which will become effective on 
the Reorganization Date. If shareholders approve SAAMCo as the Fund's investment
adviser, on the Reorganization Date the Fund's name will be changed to          
"SunAmerica Senior Floating Rate Fund, Inc."                                    

  Shareholders are also being asked to approve a new subadvisory agreement
with Stanfield, which was selected to replace CypressTree Investment Management 
Company, Inc. as the Fund's subadviser. Because it is proposed that the Fund's  
investment adviser will change from AGAM to SAAMCo on the Reorganization Date,  
shareholders are being asked to approve a new subadvisory agreement between     
Stanfield and each proposed investment adviser.                                 

YOUR VOTE IS IMPORTANT                                                

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     Your Board of Directors unanimously determined that the proposals set forth
in the accompanying proxy statement are in the best interests of the Fund and   
its shareholders and voted to approve them, as more fully described in the      
accompanying proxy statement. Your Board of Directors recommends that you read  
the enclosed materials carefully and then vote FOR all proposals. For more      
information about the issues requiring your vote, please refer to the           
accompanying proxy statement.                                                   

  No matter how many shares you own, your timely vote is important. If you
are not able to attend the meeting, then please complete, sign, date and mail   
the enclosed proxy card promptly in the postage-paid envelope provided for that 
purpose, or register your vote by touch-tone telephone or via the Internet as   
instructed on the enclosed proxy card. In order to avoid the expense of         
additional mailings or of having our proxy solicitor, Georgeson Shareholder,    
telephone you to remind you to vote your shares, we ask your cooperation in     
mailing your proxy card promptly.                                               

Thank you in advance for your participation in this important event.  

            Sincerely,

                   /s/ Alice T. Kane

               Alice T. Kane
                        Chairman and President
                                     North American Senior Floating Rate
            Fund, Inc.

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                                                              September __, 2001

Preliminary Copy  
NORTH AMERICAN SENIOR FLOATING RATE FUND, INC.  
IMPORTANT NEWS FOR NORTH AMERICAN 
SENIOR FLOATING RATE FUND, INC. SHAREHOLDERS  

While we encourage you to read the full text of the enclosed Proxy    
Statement, here is a brief overview of some matters affecting your investment in
the Fund which require a shareholder vote.                                      

Q & A: QUESTIONS AND ANSWERS  

Q.   WHAT IS HAPPENING?                                                         

A.   On ______, 2001, American General Corporation ("American General"), the    
 parent company of American General Asset Management Corp. ("AGAM"), the
     Fund's investment adviser, merged into and became a wholly owned subsidiary
 of American International Group, Inc. ("AIG"). AIG is a holding company
     which through its subsidiaries is engaged in a broad range of insurance and
  insurance-related activities and financial services in the United States
 and abroad. As a result of the merger, AGAM became a subsidiary of AIG.
    SunAmerica Asset Management Corp. ("SAAMCo") is another subsidiary of AIG.
     SAAMCo provides investment advisory, management and administration services
to mutual funds and private accounts.                                 

 The following pages give you additional information on AIG, SAAMCo, the
merger and the proposals on which you are being asked to vote. The    
  Directors of the Fund, including those who are not interested persons of
the Fund, AIG, AGAM or SAAMCo, unanimously recommend that you vote for
these proposals.                                                      

Q.   HOW WILL THE AMERICAN GENERAL MERGER AFFECT ME?                            

A.   The merger should have no detrimental impact on the operations of the Fund.
    The Board has been assured that there will be no material reduction in the
    nature and quality of services historically provided to the Fund. In fact,
   it is anticipated that the combined enterprise's resources, and therefore
    the quality of service that it will provide to the Fund, will be enhanced.

Q.   WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW INVESTMENT ADVISORY       
AGREEMENT WITH AGAM IN PROPOSAL NO. 2(a)?                             

A.   The Investment Company Act of 1940 (the "1940 Act"), which governs the     
     Fund, requires a shareholder vote whenever there is a change in control (as
    defined in the 1940 Act) of a fund's investment adviser.  Upon a change of
   control, the investment advisory agreement between the investment adviser
   and the fund terminates automatically.  Because American General's merger
with AIG resulted in a change of control of AGAM and therefore the    
termination of the Fund's investment advisory agreement with AGAM,    

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   shareholder approval of the new advisory agreement with AGAM is required.
     The new investment advisory agreement with AGAM that shareholders are being
asked to approve is the same in all material respects as the Fund's   
previous investment advisory agreement with AGAM.  The new advisory   
agreement will become effective on the date of its approval and will  
terminate on the date that the new investment advisory agreement with 
     SAAMCo becomes effective, if it is approved by shareholders.  The effective
date of the agreement with SAAMCo is anticipated to be at the close of
business on or about November 9, 2001.                                

Q.   WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW ADVISORY AGREEMENT WITH   
SAAMCo IN PROPOSAL NO. 2(b)?                                          

A.   The 1940 Act requires a shareholder vote whenever there is a change in a   
  Fund's investment adviser.  Because the Board has proposed to change the
  Fund's investment adviser from AGAM to SAAMCo, a shareholder vote on the
   proposed new investment advisory agreement is required.  The proposed new
     investment advisory agreement with SAAMCo that shareholders are being asked
to approve is similar to the Fund's investment advisory agreement with
     AGAM.  If shareholders approve SAAMCo as the Fund's investment adviser, the
 Fund's name will change to "SunAmerica Senior Floating Rate Fund, Inc."

Q.   WHY AM I BEING ASKED TO VOTE ON THE PROPOSED NEW SUBADVISORY AGREEMENTS IN 
PROPOSALS NO. 3(a) AND 3(b)?                                          

A.   For the reasons described in the proxy statement, on May 23, 2001, the     
    Fund's Board approved replacing CypressTree Investment Management Company,
 Inc. ("CIMCO") with Stanfield Capital Partners LLC ("Stanfield") as the
     Fund's subadviser.  Stanfield became the Fund's subadviser on June 1, 2001.
Under the 1940 Act, a shareholder vote to approve the new subadvisory 
 agreement between AGAM and Stanfield is required within 150 days of the
   effective date of Stanfield's subadvisory agreement.  The new subadvisory
  agreement provides that it terminates upon termination of the investment
advisory agreement.  If, as is currently proposed, AGAM is replaced by
  SAAMCo as the Fund's investment adviser, the AGAM advisory agreement, as
well as the subadvisory agreement between AGAM and Stanfield, will    
terminate at that time.  Accordingly, shareholders are being asked to 
    approve a new subadvisory agreement between Stanfield and each of AGAM and
SAAMCo.                                                               

Q.   WHAT ELSE AM I BEING ASKED TO VOTE ON?                                     

A.   You are being asked to elect a Board of Directors.  The Board of Directors 
   currently consists of eight members, six of whom are not standing for re-
  election.  Two of the nominees currently serve as Directors of the Fund,
     and three of the nominees do not.  Three of the nominees currently serve as
directors/trustees of the SunAmerica family of mutual funds.          

Q.   HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?                     

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A.   After careful consideration, the Board, including those Directors who are  
    not interested persons of the Fund, American General, AGAM, AIG or SAAMCo,
unanimously recommend that you vote FOR all of the proposals on the   
enclosed proxy card.                                                  

Your vote is important.  Please vote promptly to avoid the additional expense 
of another solicitation.  

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Preliminary Copy  
NORTH AMERICAN SENIOR FLOATING RATE FUND, INC.  
286 Congress Street 
Boston, MA 02210  
(800) 872-8037  

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS 

To the Shareholders:                                                            

Notice is hereby given that a Special Meeting of Shareholders of North
American Senior Floating Rate Fund, Inc. (the "Fund") will be held on October   
19, 2001 at 286 Congress Street, Boston, Massachusetts 02210 at 10:00 a.m.,     
Eastern time (the "Meeting"). A Proxy Statement providing additional information
about the purpose of the Meeting is included with this Notice. At the Meeting,  
shareholders will consider and vote upon the following proposals:               

1. To elect a slate of five (5) members of the Board of Directors to hold   
office until their successors are duly elected and qualified;         

2. (a)  To approve a new investment advisory agreement between American     
 General Asset Management Corp. ("AGAM") and the Fund, which will become
effective immediately upon such approval and will terminate on the    
    Reorganization Date (as defined below), the terms of which are the same in
    all material respects as the Fund's previous investment advisory agreement
with AGAM;                                                            

(b)  To approve a new investment advisory agreement between SunAmerica
     Asset Management Corp. ("SAAMCo") and the Fund, which will become effective
  on the Reorganization Date, the terms of which are similar to the Fund's
previous investment advisory agreement with AGAM;                     

3. (a)  To approve a new subadvisory agreement between AGAM and Stanfield   
   Capital Partners LLC ("Stanfield"), the new subadviser of the Fund, which
will terminate on the Reorganization Date;                            

   (b)  To approve a new subadvisory agreement between SAAMCo and Stanfield,
which will become effective on the Reorganization Date; and           

 4. To transact such other business as may properly come before the Meeting or
any adjournment thereof.                                              

 The Reorganization Date is the date on which the retail open-end mutual
funds advised by AGAM reorganize with and into open-end mutual funds advised by 
SAAMCo.  The Reorganization Date is currently anticipated to be at the close of 
business on or about November 9, 2001.                                          

   Each shareholder of record at the close of business on September 4, 2001,
the record date for determining the number of shares outstanding and the        
shareholders entitled to receive notice                                         

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of, and to vote at, the Meeting or any adjournments thereof, is invited to      
attend the Meeting in person. Whether or not you intend to be present at the    
Meeting, we urge you to fill in, sign, date, and promptly return the enclosed   
proxy card, or register your vote on the proposals in any of the other methods  
described in the accompanying proxy statement, in order that the Meeting may be 
held and the greatest number of shares may be voted. If you attend the Meeting  
you may revoke your proxy and vote your shares in person if you wish.           

        Sincerely,

                    /s/ John I. Fitzgerald

                John I. Fitzgerald
       Secretary
September __, 2001                                                            
Boston, Massachusetts                                                         

YOUR VOTE IS IMPORTANT

Please respond--your vote is important.  Whether or not you plan to attend the  
Meeting, please complete, sign and date the enclosed proxy card and mail it in  
the enclosed postage prepaid envelope provided for that purpose.  You also have 
the option of voting by telephone or via the Internet by following the          
instructions on the enclosed proxy card.                                        

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Preliminary Copy  
NORTH AMERICAN SENIOR FLOATING RATE FUND, INC.  
286 Congress Street 
Boston, MA 02210  

PROXY STATEMENT 
Special Meeting of Shareholders 
October 19, 2001, 10:00 a.m.  

     In accordance with applicable law, this Proxy Statement is being mailed, on
or about September _____, 2001, on behalf of the Board of Directors (the "Board"
or the "Directors") of North American Senior Floating Rate Fund, Inc. (the      
"Fund") to the shareholders of the Fund in connection with the solicitation by  
the Fund's Board of proxies to be used at a Special Meeting of Shareholders (the
"Meeting"), to be held at 286 Congress Street, Boston, Massachusetts 02210 on   
October 19, 2001 at 10:00 a.m., Eastern time, or any adjournment thereof. A     
Notice of the Meeting and a proxy card accompany this Proxy Statement.          

 The Fund is a closed-end, non-diversified management investment company
registered under the Investment Company Act of 1940, as amended (the "1940      
Act"). The Fund is a corporation organized under the laws of the State of       
Maryland. The address of the Fund is 286 Congress Street, Boston, Massachusetts 
02210. The Fund currently offers three separate classes of shares, designated as
Class B Shares, Class C Shares and Class D Shares. The Fund also issues Class A 
Shares, which are not offered to the public and are available to investors only 
upon automatic conversion of Class B shares eight years after purchase, and upon
conversion of Class C Shares purchased before August 18, 1999, ten years after  
purchase. For purposes of voting on each proposal at the Meeting, Class A       
Shares, Class B Shares, Class C Shares and Class D Shares of the Fund will be   
treated as one class of shares and will vote together. American General Asset   
Management Corp. ("AGAM") currently serves as investment adviser and            
administrator for the Fund. If Proposal No. 2(b) is approved, on the            
Reorganization Date (as defined below) SunAmerica Asset Management Corp.        
("SAAMCo") will assume these responsibilities in place of AGAM and the Fund's   
name will be changed to "SunAmerica Senior Floating Rate Fund, Inc."            

In order that your shares may be represented at the Meeting or any    
adjournments thereof, you are requested to indicate your vote on the proxy card;
date and sign the proxy card; mail the proxy card promptly in the enclosed      
postage-paid envelope; and allow sufficient time for the proxy card to be       
received before the Meeting.                                                    

 Shares represented by timely received and properly executed proxy cards
will be voted as specified. If you return a signed proxy card and no            
specification is made with respect to a particular matter, shares will be voted 
in accordance with the recommendations of the Directors. Proxies may be revoked 
at any time before they are exercised by sending a written revocation which is  
received by the Secretary of the Fund prior to the Meeting, by properly         
executing a later-dated proxy or by attending the Meeting and voting in person. 
Attendance at the Meeting alone, however, will not serve to revoke the proxy.   

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    The Directors have fixed the close of business on September 4, 2001 as the
record date (the "Record Date") for determining the number of shares outstanding
and entitled to notice of, and to vote at, the Meeting. Only shareholders of    
record on the Record Date are entitled to vote. Each whole share is entitled to 
one vote and each fractional share is entitled to a proportionate fractional    
vote.                                                                           

   As of the Record Date, [_____________] shares of the Fund were issued and
outstanding, including [_____________] Class A shares, [______________] Class B 
shares, [_______________] Class C shares and [_____________] Class D shares. As 
of ____________, 2001, the Fund believes that the Directors and officers of the 
Fund, as a group, owned less than one percent of each class of shares of the    
Fund. As of the Record Date, there were no persons who owned of record or       
beneficially 5% or more of any class of shares of the Fund. [Please confirm.]   

   The Fund will furnish, without charge, a copy of the Fund's Annual Report
for its fiscal year ended December 31, 2000, and the Fund's Semi-Annual Report  
for the six months ended June 30, 2001 to a shareholder upon request. To obtain 
an Annual Report or Semi-Annual Report, please contact the Fund's Distributor,  
American General Funds Distributors, Inc. ("AGFD"), by calling (800) 872-8037 or
by writing to the Distributor at 286 Congress Street, Boston, Massachusetts     
02210, Attn: John I. Fitzgerald, Secretary.                                     

You may also provide your voting instructions via telephone or via the
Internet. These options require you to input a [twelve] digit control number    
which is located on each proxy card. Subsequent to inputting this number, you   
will be prompted to provide your voting instructions on each proposal. You will 
have an opportunity to review your voting instructions and make any necessary   
changes before submitting your voting instructions and terminating your         
telephone call or Internet link. Shareholders voting via the Internet, in       
addition to confirming their voting instructions prior to submission, will also 
receive an email confirming their voting instructions. Shareholders voting via  
the Internet should understand that there may be costs associated with          
electronic access, such as usage charges from Internet access providers and     
telephone companies, that must be borne by the shareholder. Proxies voted by    
telephone or via the Internet may be revoked at any time before they are voted  
in the same manner that proxies voted by mail may be revoked.                   

    Solicitation of the proxies by personal interview, mail, and telephone may
be made by officers and Directors of the Fund and officers and employees of     
AGAM, SAAMCo, their affiliates, and other representatives of the Fund or their  
affiliates, who will not receive any compensation therefor from the Fund. In    
addition, the Fund has retained Georgeson Shareholder ("Georgeson"), a          
professional proxy solicitation firm, to aid in the solicitation of proxies. The
costs of retaining Georgeson and other expenses incurred in connection with the 
solicitation of proxies, and the costs of holding the Meeting, will be borne by 
AIG, except that the Fund may bear those costs that relate to Proposal 3(a).    

As the Meeting date approaches, certain shareholders may receive a    
telephone call from a representative of Georgeson if their proxy has not yet    
been received. Authorizations to permit Georgeson to execute proxies may be     
obtained by telephonically transmitted instructions from shareholders. Proxies  
that are obtained telephonically will be recorded in accordance with            

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procedures that management believes are reasonably designed to ensure that both 
the identity of the shareholder providing the proxy and the proxy provided by   
the shareholder are accurately determined. The cost of this assistance from     
Georgeson, if necessary, is expected to be approximately $15,000, plus out-of-  
pocket expenses.                                                                

    If the shareholder wishes to participate in the Meeting, but does not wish
to give his or her proxy by any of the methods outlined above, the shareholder  
may still submit the proxy card initially sent with the Proxy Statement or      
attend in person.                                                               

BACKGROUND
The Merger                                                                      

On _____, 2001, American International Group, Inc. ("AIG"), the parent
company of SAAMCo, acquired American General Corporation ("American General"),  
the parent company of AGAM (the "Merger").  As a result of the Merger, AGAM     
became a subsidiary of AIG.                                                     

 AIG is a holding company which through its subsidiaries is engaged in a
broad range of insurance and insurance-related activities and financial services
in the United States and abroad. Among the reasons for the Merger were the      
operational synergies and other operational benefits, such as economies of      
scale, that would accrue to the combined enterprise. AIG has determined that in 
order to realize potential operational benefits from the Merger and provide     
improved investment advisory and other services in a more cost efficient and    
effective manner, it would begin eliminating duplicative administrative and     
other functions entailed in operating AGAM and SAAMCo as separate investment    
advisers. To that end, AIG has recommended that, subject to shareholder         
approval, SAAMCo should replace AGAM as the Fund's investment adviser. In       
addition, it is contemplated that the retail open-end mutual funds advised by   
AGAM will reorganize with and into funds advised by SAAMCo, subject to a number 
of conditions. It is currently anticipated that these reorganizations will be   
consummated at the close of business on or about November 9, 2001 (the          
"Reorganization Date"). It is proposed that SAAMCo assume management            
responsibilities for the Fund on the Reorganization Date.                       

Under the 1940 Act, an investment advisory contract must provide for  
automatic termination upon its assignment. "Assignment" is defined in the 1940  
Act to include a change of control of the investment adviser. Generally, under  
the 1940 Act, any person who owns, directly or indirectly, more than 25% of the 
voting securities of a company is presumed to control such company. The         
consummation of the Merger (the "Closing") constituted an assignment of the     
investment advisory agreement between the Fund and AGAM (the "Previous Advisory 
Agreement"), and resulted in the termination of such agreement as of the        
Closing.                                                                        

  The Fund's Directors have unanimously approved the advisory arrangements
for the Fund described herein to ensure the uninterrupted provision of          
management services to the Fund from and after the Closing. In approving these  
advisory arrangements, the Directors considered various factors they deemed     
relevant. In approving a new investment advisory agreement between the Fund and 
AGAM (the "AGAM Advisory Agreement"), the Board considered, among other things, 
the fact that the AGAM Advisory Agreement is essentially a continuation of the  
Previous Advisory Agreement and assurances that until SAAMCo becomes the Fund's 
adviser, there will be no material reduction in the nature and quality of       
services historically provided to the Fund. In                                  

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approving a new advisory agreement between the Fund and SAAMCo (the "SAAMCo     
Advisory Agreement"), the Board reviewed and considered, among other things,    
SAAMCo's name recognition in the investment management community; the           
management, personnel and operations of AIG and SAAMCo; the financial strength  
of AIG; the commitment of AIG to the financial services industry; SAAMCo's      
history of providing investment management services and supervising and         
monitoring subadvisers; and the terms of the Merger. These investment advisory  
arrangements, including the Board considerations in connection therewith, are   
discussed more fully in Proposals 2(a) and 2(b), below.                         

Section 15(f) of the 1940 Act                                                   

    Section 15(f) of the 1940 Act provides that an investment adviser (such as
AGAM) to a registered investment company, and the affiliates of such adviser,   
may receive any amount or benefit in connection with a sale of any interest in  
such investment adviser which results in an assignment of an investment advisory
contract if the following two conditions are satisfied: (1) for a period of     
three years after such assignment, at least 75% of the board of directors of the
investment company are not "interested persons" (within the meaning of Section  
2(a)(19) of the 1940 Act) ("Independent Directors") of the new investment       
adviser or its predecessor; and (2) no "unfair burden" (as defined in the 1940  
Act) may be imposed on the investment company as a result of the assignment or  
any express or implied terms, conditions or understandings applicable thereto.  
Consistent with the first condition of Section 15(f), AIG advised the Board that
for a period of three years after the Merger, it will not take or recommend any 
action that would cause more than 25% of the Fund's Directors to be interested  
persons of SAAMCo or AGAM.  With respect to the second condition of Section     
15(f), an "unfair burden" on an investment company is defined in the 1940 Act to
include any arrangement during the two-year period after any such transaction   
occurs whereby the investment adviser or its predecessor or successor, or any   
interested person of such adviser, predecessor or successor, receives or is     
entitled to receive any compensation of two types, either directly or           
indirectly.  The first type is compensation from any person in connection with  
the purchase or sale of securities or other property to, from or on behalf of   
the investment company, other than bona fide ordinary compensation as principal 
underwriter for such company.  The second type is compensation from the         
investment company or its security holders for other than bona fide investment  
advisory or other services.  AIG advised the Board that it will not take or     
recommend any action that would constitute an unfair burden on the Fund within  
the meaning of Section 15(f).                                                   

ELECTION OF DIRECTORS 
--------------------- 

PROPOSAL NO. 1

 The Board of Directors of the Fund proposes that shareholders elect Dr.
Judith L. Craven, William F. Devin, Samuel M. Eisenstat, Stephen J. Gutman, and 
Peter A. Harbeck (the "Nominees") as Directors of the Fund, each to serve in    
such capacity upon election until his or her successor is elected and has       
qualified.                                                                      

Information about the Nominees                                                  

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   At a meeting held on August 2, 2001, the current Directors, including all
of the Independent Directors, unanimously nominated the five persons listed     
below for election as Directors, to take office effective upon their election.  
Two of the Nominees, Dr. Craven and Mr. Devin, are currently Directors of the   
Fund.  The other three Nominees currently serve as directors/trustees of the    
SunAmerica family of mutual funds.  The Board of Directors currently consists of
eight members, six of whom are not standing for re-election.  If the Nominees   
are elected, at least 75% of the Board will consist of Independent Directors.   
Information about the Nominees is presented below.  Unless otherwise indicated, 
each current Director's business address is 286 Congress Street, Boston,        
Massachusetts 02210, and each of the other Nominee's business address is The    
SunAmerica Center, 733 Third Avenue, New York, New York, 10017.                 

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                                Position and Tenure                Principal Occupation(s)                                  
Name, Age and Address           with the Fund                      During the Past Five Years                               
----------------------------------------------------------------------------------------------------------------------------
                                                                                                                            
Dr. Judith L. Craven (56)       Director, since June 2000          Retired Administrator.  Trustee, North American          
                                                                   Funds, 24 investment portfolios (June 2000 to            
                                                                   present); Trustee, North American Funds Variable         
                                                                   Product Series II, 15 investment portfolios (November    
                                                                   1998 to present); Director, North American Funds         
                                                                   Variable Product Series I, 21 investment portfolios      
                                                                   (August 1998 to present); Director, USLIFE Income        
                                                                   Fund, Inc. (November 1998 to present); Director,         
                                                                   Compaq Computer Corporation (1992 to present);           
                                                                   Director, A.G. Belo Corporation, a media company         
                                                                   (1992 to present); Director, Sysco Corporation, a        
                                                                   food marketing and distribution company (1996 to         
                                                                   present); Director, Luby's, Inc., a restaurant chain     
                                                                   (1998 to present); Director, University of Texas         
                                                                   Board of Regents (May 2001 to present).  Formerly,       
                                                                   Director, CypressTree Senior Floating Rate Fund, Inc.    
                                                                   (June 2000 to May 2001); Formerly, President, United     
                                                                   Way of the Texas Gulf Coast, a not for profit            
                                                                   organization (1992-1998); Formerly, Director, Houston    
                                                                   Branch of the Federal Reserve Bank of Dallas             
                                                                   (1992-2000); Formerly, Board Member, Sisters of          
                                                                   Charity of the Incarnate World (1996-1999).              
----------------------------------------------------------------------------------------------------------------------------
William F. Devin (63)           Director, since February 1998      Member, Board of Governors, Boston Stock Exchange        
                                                                   (1985 to present); Trustee, North American Funds, 24     
                                                                   investment portfolios (October 1997 to present);         
                                                                   Formerly, Executive Vice President, Fidelity Capital     
                                                                   Markets, a division of National Financial Services       
                                                                   Corporation (1966-1996); Formerly, Director,             
                                                                   CypressTree Senior Floating Rate Fund, Inc. (October     
                                                                   1997 to May 2001).                                       
----------------------------------------------------------------------------------------------------------------------------
Samuel M. Eisenstat (60)        Nominee                            Attorney, solo practitioner (___ to present);            
                                                                   Chairman of the Boards of Directors/Trustees of          
                                                                   SunAmerica Mutual Funds and Anchor Series Trust (___     
                                                                   to present).                                             
----------------------------------------------------------------------------------------------------------------------------
Stephen J. Gutman (58)          Nominee                            Partner and Managing Member of B.B. Associates LLC,      
                                                                   menswear specialty retailing and other activities        
                                                                   (June 1988 to present); Director/Trustee, SunAmerica     
                                                                   Mutual Funds and Anchor Series Trust (___ to present).   
----------------------------------------------------------------------------------------------------------------------------
Peter A. Harbeck* (47)          Nominee                            Director and President and Chief Executive Officer,      
                                                                   SAAMCo (August 1995 to present); Director, AIG           
----------------------------------------------------------------------------------------------------------------------------

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                                                                   Asset Management International, Inc. (February 2000 to   
                                                                   present); Managing Director, John McStay Investment      
                                                                   Counsel, L.P. (June 1999 to present); Director,          
                                                                   SunAmerica Capital Services, Inc. (August 1993 to        
                                                                   present); Director and President, SunAmerica Fund        
                                                                   Services, Inc. (May 1988 to present); President,         
                                                                   Director/Trustee, SunAmerica Mutual Funds and Anchor     
                                                                   Series Trust (_______ to present).                       
----------------------------------------------------------------------------------------------------------------------------

*    Denotes an "interested person" of the Fund (as defined by section 2(a)(19) 
 of the 1940 Act).  Mr. Harbeck will be an interested person of the Fund
because he is a director and President and Chief Executive Officer of 
SAAMCo.                                                               

    The term of office of each person elected as Director will be until his or
her successor is elected and qualified.  Each Nominee has agreed to serve, or   
continue to serve, as the case may be, as a Director if elected.  If any Nominee
should be unavailable for election at the time of the Meeting (which is not     
presently anticipated), the persons named as proxies may vote for other persons 
in their discretion, or the Directors may vote to fix the number of Directors at
fewer than five.                                                                

 The Fund's Articles of Incorporation and By-Laws do not provide for the
annual election of Directors.  However, in accordance with the 1940 Act, (i) the
Fund will hold a shareholders' meeting for the election of Directors at such    
time as less than a majority of the Directors holding office have been elected  
by shareholders, and (ii) if, as a result of a vacancy in the Board of          
Directors, less than two-thirds of the Directors holding office have been       
elected by the shareholders, that vacancy may only be filled by a vote of the   
shareholders.                                                                   

     During the fiscal year ended December 31, 2000, the Board of Directors held
four regular meetings.  Each of the incumbent Directors attended at least 75% of
the total number of Board meetings and meetings of the Audit and Nominating     
Committee, and the Investment and Pricing Committee.                            

Committees of the Board                                                         

  During the fiscal year ended December 31, 2000, the Audit and Nominating
Committee of the Board, which also functions as a compensation committee, held  
four meetings. Mr. Devin (Chairman), Dr. Judith L. Craven, Dr. Timothy J. Ebner,
Judge Gustavo E. Gonzales, Jr., Kenneth J. Lavery, Ben H. Love, and Dr. John E. 
Maupin, Jr. are the current members of the Audit and Nominating Committee. None 
of the Audit and Nominating Committee members are "interested persons" under the
1940 Act, and all meet the definition of "independent" according to the listing 
standards of the New York Stock Exchange. The principal responsibilities of the 
Audit and Nominating Committee under the Audit Committee Charter are to: (i)    
recommend to the Board the selection, retention or termination of the Fund's    
independent auditors; (ii) review with the independent auditors the scope,      
performance and anticipated cost of their audit; (iii) discuss with the         
independent auditors certain matters relating to the Fund's financial           
statements, including any adjustment to such financial statements recommended by
such independent auditors, or any other results of any audit; (iv) ensure that  
the independent auditors submit on a periodic basis a formal written statement  
as to their independence, discuss with the independent auditors any             
relationships or services disclosed in the statement that may impact the        
objectivity and independence of the                                             
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Fund's independent auditors and recommend that the Board take appropriate action
in response to this statement to satisfy itself of the independent auditors'    
independence; and (v) consider the comments of the independent auditors and     
management's responses thereto with respect to the quality and adequacy of the  
Fund's accounting and financial reporting policies and practices and internal   
controls. The Audit and Nominating Committee also serves as the compensation    
committee, and acts as nominating committee with regard to Independent          
Directors.                                                                      

   The Fund initially adopted an Audit and Nominating Committee Charter at a
meeting held on June 13, 2000. At a meeting held on April 17, 2001, the Fund    
adopted a revised Audit Committee Charter, a copy of which is attached to this  
Proxy Statement as Exhibit A. At the April 17, 2001 meeting, the Fund also      
adopted a Nominating Committee Charter. The Audit and Nominating Committee has  
(a) received written disclosures and the letter required by Independence        
Standards Board Standard No. 1 from Deloitte and Touche LLP ("DT"), the Fund's  
independent auditors and (b) discussed certain matters required to be discussed 
by Statements on Auditing Standards No. 61 with DT. The Audit and Nominating    
Committee has considered that other than the preparation of the Fund's tax      
returns, the Fund's independent auditors did not provide any non-audit services 
for the Fund, or services of any kind for the Fund's investment adviser or its  
affiliates. A representative of DT will be present at the Meeting and will have 
an opportunity to make a statement, if any, and respond to questions from       
shareholders.                                                                   

   At its meeting held on April 17, 2001, the Audit and Nominating Committee
reviewed and discussed the audit of the Fund's financial statements with Fund   
management and the independent auditors.  Had any material concerns arisen      
during the course of the audit and the preparation of the audited financial     
statements mailed to stockholders and included in the Fund's Annual Report, the 
Audit and Nominating Committee would have been notified by Fund management or   
the independent auditors.  The Audit and Nominating Committee received no such  
notifications.  Based on its review and discussions with the independent        
auditors, the Audit and Nominating Committee recommended to the Board that the  
Fund's audited financial statements for the fiscal year ended December 31, 2000 
should be included in the Fund's Annual Report to shareholders.                 

     Recommendations by shareholders with respect to candidates for the Board of
Directors are not routinely considered by the Auditing and Nominating Committee.

  Alice T. Kane (Chairman) and Messrs. Lavery and Devin are members of the
Investment and Pricing Committee of the Board of Directors.  The Investment and 
Pricing Committee is responsible for the valuation and revaluation, between     
meetings of the Board, of investments for which market quotations or sale prices
are not readily available and provides an overview to the full Board of the     
activities of the subadviser.  The Investment and Pricing Committee also reviews
the Fund's advisory contracts and advisory fees.                                

Information About the Executive Officers                                        

   The Executive Officers of the Fund, their ages, their business addresses,
their position with the Fund and a description of their principal occupations   
are set forth below.  Unless otherwise indicated, each officer's business       
address is 286 Congress Street, Boston, Massachusetts 02210.                    

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                              Position and Tenure                Principal Occupation(s)                           
Name, Age and Address         With the Fund                      During the Past Five Years                        
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   
Thomas J. Brown               Treasurer and Vice                 Chief Financial Officer and Chief Administrative  
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(54)                          President, since October           Officer, AGAM (March 2000 to present); Formerly,         
                              1997                               Principal of Cypress Holding Company, Inc. (July         
                                                                 1997-March 2000); Formerly, Treasurer, CypressTree       
                                                                 Senior Floating Rate Fund, Inc. and North American       
                                                                 Funds (March 2000 to May 2001); Formerly, Assistant      
                                                                 Treasurer, CypressTree Senior Floating Rate Fund,        
                                                                 Inc. (July 1997-March 2000); Formerly, Consultant to     
                                                                 financial services industry (October 1995-July 1997).    

--------------------------------------------------------------------------------------------------------------------------
John I. Fitzgerald            Secretary and Vice President,      Assistant Secretary and Counsel, AGAM and AGFD (March    
(53)                          since October 1997                 2000 to present); Formerly, Secretary and Counsel,       
                                                                 Cypress Holding Company, Inc. (April 1997-March          
                                                                 2000); Formerly, Secretary, CypressTree Senior           
                                                                 Floating Rate Fund, Inc. (July 1997 to May 2001);        
                                                                 Secretary, North American Funds (October 1997 to         
                                                                 present); Formerly, Executive Vice President--Legal      
                                                                 Affairs and Government Relations, Boston Stock           
                                                                 Exchange (June 1993-March 1997).                         

--------------------------------------------------------------------------------------------------------------------------
Alice T. Kane                 Chairman of the Board,             Director, President and Chairman of the Board of         
(53)                          President, since March 2000        Directors of AGAM (March 2000 to present); Executive     
                                                                 Vice President, American General Fund Group (1999 to     
                                                                 present); Formerly, Director, CypressTree Senior         
                                                                 Floating Rate Fund, Inc. (March 2000 to May 2001);       
                                                                 Formerly, Executive Vice President, American General     
                                                                 Investment Management, LP (1998-1999); Formerly,         
                                                                 Executive Vice President, New York Life Insurance        
                                                                 Company (1994-1998); Formerly, Chair, MainStay Mutual    
                                                                 Funds (1994-1998); Chairman of the Board, Trustee and    
                                                                 President of North American Funds (March                 
                                                                 2000-present).                                           

--------------------------------------------------------------------------------------------------------------------------
John N. Packs                 Vice President and Assistant       Director of Research, AGAM (March 2000 to present);      
(46)                          Treasurer, since March 2000        Vice President and Assistant Treasurer,  North           
                                                                 American Funds (March 2000 to present); Formerly,        
                                                                 Vice President, Cypress Holding Company, Inc.            
                                                                 (November 1995-March 2000); Formerly, Vice President     
                                                                 and Assistant Treasurer, CypressTree Senior Floating     
                                                                 Rate Fund, Inc. (March 2000 to May 2001).                
--------------------------------------------------------------------------------------------------------------------------

All officers of the Fund are elected annually and serve until their   
successors are elected and qualified.                                           

Compensation of the Directors and Certain Executive Officers                    

 The Fund does not pay any remuneration to its officers, all of whom are
employees or officers of AGAM or its affiliates.  The Fund does not pay any     
remuneration to its Directors who are officers or employees of the Fund's       
investment adviser or its affiliates, or who are "interested persons" (as       
defined by section 2(a)(19) of the 1940 Act) of the Fund.  Independent Directors
receive a retainer of $900 per quarter for each quarter during which the        
Director serves, plus $900 for each meeting of the Directors attended in person 
and $500 for each meeting in which                                              

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the Director participates by telephone. The Directors of the Fund have adopted  
the North American Senior Floating Rate Fund, Inc. Directors Retirement Plan    
(the "Retirement Plan"), effective as of January 21, 2001, and a Deferred       
Compensation Agreement (the "Deferred Compensation Agreement"), effective as of 
January 21, 2001, for the Fund's Independent Directors. The Retirement Plan     
provides for the payment of retirement benefits to each Independent Director.   
Each Independent Director is eligible to receive benefits under the Retirement  
Plan upon retirement at age 67 and before age 67 under certain circumstances.   
Benefits payable under the Retirement Plan are based upon the highest total     
annual compensation received by the retiring Independent Director in the three  
calendar years preceding the Independent Director's retirement. The Deferred    
Compensation Agreement allows the Independent Directors to defer their          
Director's fees otherwise payable by the Fund. Deferrals of fees must be for a  
minimum two-year period or until the Director ceases to act as Director of the  
Fund. The deferred fees are deemed invested in certain mutual funds selected by 
the Independent Director. Payments due under the Deferred Compensation Agreement
will be paid from the Fund's general assets, and the Independent Director will  
be considered a general unsecured creditor of the Fund. Directors are reimbursed
for travel and other out-of-pocket expenses incurred in connection with         
attendance at Board and committee meetings. The officers listed above are       
furnished to the Fund pursuant to the investment advisory agreement described   
below and receive no compensation from the Fund.                                

    The following table sets forth information regarding compensation received
by the Independent Directors of the Fund for the fiscal year ended December 31, 
2000:                                                                           

COMPENSATION TABLE  

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                                              Total Compensation            Aggregate Compensation        
Name and Position                             from the Fund                 from the Fund Complex (1)     
----------------------------------------------------------------------------------------------------------
                                                                                                          
William F. Achtmeyer, Director*               $3,750                        $11,250                       
----------------------------------------------------------------------------------------------------------
William F. Devin, Director                    $6,525                        $20,850                       
----------------------------------------------------------------------------------------------------------
Kenneth J. Lavery, Director**                 $6,525                        $20,850                       
----------------------------------------------------------------------------------------------------------
Dr. Judith L. Craven                          $3,300                        $59,100                       
----------------------------------------------------------------------------------------------------------
Dr. Timothy J. Ebner**                        $3,300                        $59,100                       
----------------------------------------------------------------------------------------------------------
Judge Gustavo E. Gonzales, Jr.**              $3,300                        $55,600                       
----------------------------------------------------------------------------------------------------------
Ben H. Love**                                 $3,300                        $60,350                       
----------------------------------------------------------------------------------------------------------
Dr. John E. Maupin, Jr.**                     $3,300                        $56,600                       
----------------------------------------------------------------------------------------------------------

*    Resigned as Director, effective June 1, 2000. Amounts shown were paid for  
service from January 1, 2000 through May 31, 2000.                              

**   Not standing for re-election.                                              

(1)  Amounts listed in this column include total compensation paid to the       
     Directors for their services as Directors of the Fund, as trustees of North
    American Funds, and as directors of CypressTree Senior Floating Rate Fund,
    Inc. With respect to Drs. Craven, Ebner and Maupin, Judge Gonzales and Mr.
Love, amounts listed in this column also include compensation paid for
     services as trustees of the North American Funds Variable Product Series II
    and directors of North American Funds Variable Product Series I and USLIFE
   Income Fund, Inc. By virtue of AGAM serving as investment adviser to each
   entity during the relevant time period, North American Funds, CypressTree
Senior Floating Rate Fund, Inc., North American Funds Variable Product
Series II, North American Funds Variable Product Series I,            

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USLIFE Income Fund, Inc. and the Fund are considered to be in the same
   "Fund Complex" for these purposes. CypressTree Senior Floating Rate Fund,
Inc. merged into the Fund in May 2001.                                

Required Vote                                                                   

     The election of the Directors of the Fund will be by a plurality of all the
votes cast at the Meeting in person or by proxy.                                

The Directors unanimously recommend a vote FOR each of the Nominees.  

APPROVAL OF TWO NEW INVESTMENT ADVISORY AGREEMENTS
--------------------------------------------------

PROPOSALS NO. 2(a) AND 2(b) 

As described below, the Board is submitting for approval by the       
shareholders: (a) the AGAM Advisory Agreement, which will become effective      
immediately upon shareholder approval and will terminate on the Reorganization  
Date, the terms of which are similar in all material respects to the Previous   
Advisory Agreement between the Fund and AGAM, and (b) the SAAMCo Advisory       
Agreement, the terms of which are similar to the Previous Advisory Agreement and
the AGAM Advisory Agreement.  If approved by shareholders, the SAAMCo Advisory  
Agreement will become effective on the Reorganization Date.  As used in this    
proxy statement, AGAM and SAAMCo are sometimes referred to individually as the  
"Adviser," and the AGAM Advisory Agreement and the SAAMCo Advisory Agreement are
referred to together as the "New Advisory Agreement."                           

The Interim Advisory Agreement                                                  

  As discussed above, the Closing resulted in the automatic termination of
the Previous Advisory Agreement. This occurred before the shareholders'         
consideration and vote upon the proposed new advisory arrangements described    
herein. To ensure the uninterrupted receipt by the Fund of investment advisory  
services during the period between the Closing and the Meeting, at a meeting of 
the Board held on July 16-17, 2001, the Board (including the Independent        
Directors), unanimously approved an interim advisory agreement (the "Interim    
Advisory Agreement") between the Fund and AGAM, which became effective as of the
Closing pursuant to Rule 15a-4 under the 1940 Act. This Rule, under certain     
circumstances, allows interim advisory agreements to take effect, and to remain 
in effect for up to 150 days, without receiving prior shareholder approval, as  
long as the fees payable under such agreement do not exceed the fees payable    
under the predecessor agreement that had been approved by the shareholders and  
certain other contractual provisions are included in the interim agreement. The 
Interim Advisory Agreement requires all advisory fees earned by AGAM to be      
escrowed pending shareholder approval of the AGAM Advisory Agreement. If the    
AGAM Advisory Agreement is not approved, AGAM will be entitled to receive from  
escrow the lesser of any costs incurred in performing the Interim Advisory      
Agreement (plus interest earned on the amount while in escrow), or the total    
amount in the escrow account (plus interest earned). The Interim Advisory       
Agreement will terminate on the earlier of the effective date of the AGAM       
Advisory Agreement or 150 days after the Closing.                               

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Proposal 2(a): Approval of the AGAM Advisory Agreement                          

The Board is proposing that shareholders approve the AGAM Advisory    
Agreement to become effective immediately on the date of such approval, and to  
terminate on the Reorganization Date. A description of the AGAM Advisory        
Agreement and the services to be provided by AGAM is set forth below. This      
description is qualified in its entirety by reference to the form of the AGAM   
Advisory Agreement attached to this Proxy Statement as Exhibit B-1. Additional  
information about AGAM is set forth below in the section entitled "Information  
About AGAM." Additional information about AIG is set forth below in the section 
entitled "Information About AIG."                                               

As more fully described below, the terms of the proposed AGAM Advisory
Agreement, including the advisory fees, are similar in all material respects to 
the Previous Advisory Agreement. In fact, the AGAM Advisory Agreement is        
essentially a continuation of the Previous Advisory Agreement. The AGAM Advisory
Agreement differs from the Previous Advisory Agreement only with respect to the 
effective date and the termination date.                                        

Approval of the AGAM Advisory Agreement by the Board                            

  At the meeting held on July 16-17, 2001, the Board, including all of the
Independent Directors, unanimously approved the AGAM Advisory Agreement, which  
will become effective upon shareholder approval and will terminate on the       
Reorganization Date. At the meeting, the Board received a presentation relating 
to AIG and SAAMCo, as well as a presentation from AGAM. As part of the          
presentation, the Board was informed that AIG proposed that SAAMCo replace AGAM 
as the Fund's investment adviser, and that an orderly transition from AGAM to   
SAAMCo would be best accomplished if SAAMCo becomes the Fund's adviser (subject 
to shareholder approval) on the Reorganization Date. In approving the AGAM      
Advisory Agreement (including its proposed termination on the Reorganization    
Date), the Directors considered various factors they deemed relevant, including 
those described below with respect to the SAAMCo Advisory Agreement. The Board  
also considered the fact that although the ultimate ownership of AGAM's parent  
company will change, the Board was assured that, until SAAMCo becomes the Fund's
adviser, there will be no material reduction in the nature and quality of       
services historically provided to the Fund.                                     

     The Board also considered that the terms of the AGAM Advisory Agreement are
similar in all material respects to the Previous Advisory Agreement, and that   
the AGAM Advisory Agreement is essentially a continuation of the Previous       
Advisory Agreement. The Board, including all of the Independent Directors,      
determined that the terms of the AGAM Advisory Agreement are fair and reasonable
and that the approval of the AGAM Advisory Agreement is necessary and in the    
best interests of the Fund and its shareholders to ensure the continued receipt 
of the same quality of services as is currently provided to the Fund.           

Description of the AGAM Advisory Agreement                                      

     As discussed above, AGAM currently serves as investment adviser of the Fund
pursuant to the Interim Advisory Agreement. The AGAM Advisory Agreement is      
similar in all material                                                         

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respects to the Previous Advisory Agreement except for the effective date and   
the termination date. The Previous Advisory Agreement, dated June 1, 2000, was  
last approved by the shareholders of the Fund at a meeting held on the same date
in connection with its initial approval.                                        

The AGAM Advisory Agreement requires that, subject to the general     
supervision of the Directors, AGAM will at its own expense select, contract     
with, and compensate an investment subadviser (the "Subadviser") to manage the  
investments and determine the composition of the assets of the Fund. Subject    
always to the direction and control of the Directors, AGAM will monitor         
compliance of the Subadviser with the Fund's investment objectives and          
investment policies, as set forth in the Fund's registration statement as filed 
with the Securities and Exchange Commission ("SEC"), and review and report to   
the Directors on the performance of the Subadviser.                             

The AGAM Advisory Agreement provides that AGAM will oversee the       
administration of certain aspects of the Fund's business and affairs, and that  
AGAM will supply office space to the Fund, as well as such other office         
facilities, utilities, and office equipment as are necessary for the Fund's     
operations. The AGAM Advisory Agreement also provides that AGAM will permit     
individuals who are AGAM's officers, directors, or employees to serve (if duly  
elected) as Directors or officers of the Fund, without remuneration or other    
cost to the Fund. The AGAM Advisory Agreement further provides that AGAM will   
furnish to the Fund, at the Fund's expense, any other personnel necessary for   
the operations of the Fund. In addition, the AGAM Advisory Agreement also       
provides that AGAM will furnish to the Fund such information, reports,          
valuations, analyses and opinions as the Fund may from time to time reasonably  
request, provided that the expenses associated with any such materials furnished
by AGAM at the request of the Fund will be borne by the Fund.                   

   The AGAM Advisory Agreement provides that the Fund, in addition to paying
the advisory fee described below, will also pay all expenses of the Fund's      
organization, operations, and business not specifically assumed or agreed to be 
paid by AGAM as provided in the AGAM Advisory Agreement, by the Subadviser as   
provided in the New Subadvisory Agreement (as defined below), by the Fund's     
administrator under an administration agreement, or by the Fund's principal     
underwriter under a distribution agreement. Without limiting the generality of  
the foregoing, the Fund will pay or arrange for payment of expenses related to  
custody and accounting services, shareholder servicing and communications,      
shareholder meetings, prospectuses, pricing, communication equipment, legal and 
accounting fees and expenses, Directors and officers (except with regard to     
Directors and officers who are also affiliates of AGAM), federal registration   
fees, state registration fees, issue and repurchase of Fund shares, bonding and 
insurance, brokerage commissions, taxes, trade association fees, and non-       
recurring and extraordinary expenses.                                           

The advisory fee rates payable by the Fund to AGAM under the Previous 
Advisory Agreement are the same as those payable to AGAM under the AGAM Advisory
Agreement and no change in the current fee structure is being proposed. The     
Previous Advisory Agreement contained a provision relating to a voluntary       
investment fee waiver by AGAM. The AGAM Advisory Agreement contains the same    
voluntary waiver provision (as described more fully below). Under the AGAM      
Advisory Agreement, the Fund will pay AGAM a monthly advisory                   

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fee at the following annual rates, based on the average daily net assets of the 
Fund (net assets are total assets minus all liabilities except the principal    
amount of any indebtedness for money borrowed, including debt securities issued 
by the Fund): 0.85% of the Fund's average daily net assets up to and including  
$1 billion; 0.80% of the Fund's average daily net assets between $1 billion and 
up to and including $2 billion; and 0.75% of the Fund's average daily net assets
in excess of $2 billion.                                                        

 AGAM has agreed to waive a portion of its advisory fee or reimburse the
Fund to prevent the total expenses of the Fund, excluding taxes, portfolio      
brokerage commissions, interest, certain litigation and indemnification         
expenses, and extraordinary expenses, from exceeding 1.45% of average daily net 
assets for Class A and Class B shares, 1.55% of average daily net assets for    
Class C shares, and 1.25% of average daily net assets for Class D shares of the 
Fund. The initial term of this fee waiver was five years and it has been renewed
by AGAM every year.                                                             

     The AGAM Advisory Agreement provides that it will, unless sooner terminated
in accordance with its terms, continue in effect with respect to the Fund until 
a new investment advisory agreement with SAAMCo, approved by the vote of a      
majority of the Fund's outstanding voting securities, becomes effective or two  
years from the date thereof, which ever is less.                                

The AGAM Advisory Agreement may be terminated at any time, without the
payment of any penalty, by the Directors or by vote of a majority of the        
outstanding voting securities of the Fund upon 60 days' written notice to AGAM, 
or by AGAM upon 60 days' written notice to the Fund.                            

The AGAM Advisory Agreement provides that neither AGAM nor any of its 
officers, directors, or employees, nor any person performing executive,         
administrative, trading, or other functions for the Fund (at the direction or   
request of AGAM) or AGAM in connection with its discharge of obligations        
undertaken or reasonably assumed by it shall be liable for any error of judgment
or mistake of law or for any loss suffered by the Fund in connection with the   
matters to which the AGAM Advisory Agreement relates, except for loss resulting 
from willful misfeasance, bad faith, or gross negligence in the performance of  
its or his duties on behalf of the Fund or from reckless disregard by AGAM or   
any such person of the duties of AGAM under the AGAM Advisory Agreement.        

    The AGAM Advisory Agreement is governed by the laws of the Commonwealth of
Massachusetts.                                                                  

    For the fiscal year ended December 31, 2000, the Fund paid AGAM $1,004,136
under the Previous Advisory Agreement, after waiver of fees.                    

Information About AGAM                                                          

CypressTree Investments, Inc. ("CypressTree") and its affiliates were 
formed in 1996 to acquire, advise and distribute mutual funds through broker-   
dealers and other intermediaries. CypressTree Asset Management Corporation, Inc.
("CAM") was CypressTree's wholly owned advisory subsidiary and CypressTree Funds
Distributors, Inc. ("CFD") was CypressTree's wholly owned distribution          
subsidiary. On March 10, 2000, CypressTree sold substantially all of            

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its assets, including all of the stock of CAM and CFD, to American General.     
Thereafter, CAM was renamed American General Asset Management Corp. and CFD was 
renamed American General Funds Distributors, Inc. Pursuant to the Previous      
Advisory Agreement, AGAM oversaw the administration of all aspects of the       
business and affairs of the Fund, and selected, contracted with and compensated 
a Subadviser to manage the assets of the Fund. AGAM continues to perform these  
functions under the Interim Advisory Agreement.                                 

   AGAM is located at 286 Congress Street, Boston, Massachusetts 02210. AGAM
is wholly owned by American General, which is located at 2929 Allen Parkway,    
Houston, Texas 77019. As a result of the Merger, American General became a      
wholly owned subsidiary of AIG. The principal address of AIG is 70 Pine Street, 
New York, New York 10270.                                                       

    The following chart lists the principal executive officer and directors of
AGAM, their business addresses, and their principal occupations, if different   
from their positions with AGAM.                                                 

                                                        [Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------
              Name and Address                           Position with AGAM and Principal Occupation(s)          
              ----------------                           ----------------------------------------------          
-----------------------------------------------------------------------------------------------------------------
                                                                                                                 
  Alice T. Kane                                Director, President and Chairman of the Board of Directors;       
  286 Congress Street                          Executive Vice President, American General Fund Group.  Ms. Kane  
  Boston, MA 02210                             also serves as the Chairman of the Board, Trustee and President   
                                               of North American Funds.                                          
-----------------------------------------------------------------------------------------------------------------
  John A. Graf                                 Director, Senior Vice Chairman, Asset Accumulation, American      
  2929 Allen Parkway                           General.                                                          
  Houston, TX 77019                                                                                              
-----------------------------------------------------------------------------------------------------------------
  Kent E. Barrett                              Director and Treasurer; Senior Vice President and General         
  2929 Allen Parkway                           Auditor, American General.                                        
  Houston, TX 77019                                                                                              
-----------------------------------------------------------------------------------------------------------------

     In addition, the following officers of the Fund also are employees of AGAM:

       Thomas J. Brown, Treasurer and Vice President of the Fund and Chief
Financial Officer and Chief Administrative Officer of AGAM.           

    John I. Fitzgerald, Secretary and Vice President of the Fund and
Assistant Secretary and Counsel of AGAM.                              

         John N. Packs, Assistant Treasurer and Vice President of the Fund and
Director of Research of AGAM.                                         

Recommendation of the Board                                                     

    The Directors unanimously recommend that shareholders of the Fund vote FOR
approval of the AGAM Advisory Agreement.                                        

Proposal 2(b): Approval of the SAAMCo Advisory Agreement                        

  The Board is proposing that the shareholders approve the SAAMCo Advisory
Agreement to become effective on the Reorganization Date. A description of the  
SAAMCo Advisory Agreement and the services to be provided by SAAMCo are set     
forth below. This description is qualified in its entirety by reference to the  
form of the SAAMCo Advisory Agreement attached                                  

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to this Proxy Statement as Exhibit B-2. Additional information about SAAMCo is  
set forth below in the section entitled "Information About SAAMCo." Additional  
information about AIG is set forth below in the section entitled "Information   
About AIG."                                                                     

 As more fully described below, although the forms of the agreements are
different, the terms of the proposed SAAMCo Advisory Agreement, including the   
advisory fee rates, are similar to the Previous Advisory Agreement and the AGAM 
Advisory Agreement. The SAAMCo Advisory Agreement differs from the Previous     
Advisory Agreement and the AGAM Advisory Agreement with respect to, among other 
things, the effective and termination dates, the identity of the Adviser, the   
governing law and the indemnification provision. Moreover, as more fully        
discussed below, the initial term of AGAM's advisory fee waiver is longer than  
that of SAAMCo.                                                                 

Approval of the SAAMCo Advisory Agreement by the Board                          

At a meeting held on July 16-17, 2001, the Board, including all of the
Independent Directors, unanimously approved the SAAMCo Advisory Agreement. At   
the meeting, SAAMCo's representatives explained the rationale for replacing AGAM
with SAAMCo as the Fund's investment adviser. They indicated that AIG has       
determined that in order to realize potential operational benefits from the     
Merger and provide improved investment advisory and other services in a more    
cost efficient and effective manner, AIG would begin eliminating and            
consolidating duplicative administrative and other functions entailed in        
operating AGAM and SAAMCo as separate investment advisers. They also indicated  
that AIG has recommended that, subject to shareholder approval, SAAMCo should   
replace AGAM as the Fund's investment adviser and that an orderly transition    
from AGAM to SAAMCo would be best accomplished if SAAMCo became the Fund's      
investment adviser (subject to shareholder approval) on the Reorganization Date.
The Board received a presentation relating to SAAMCo and AIG, as well as a      
presentation from AGAM. In selecting SAAMCo to be the Fund's investment adviser 
(subject to shareholder approval) beginning on the Reorganization Date, the     
Board reviewed and considered, among other things, SAAMCo's name recognition in 
the investment community; the management, personnel and operations of AIG and   
SAAMCo; the financial strength of AIG; the commitment of AIG to the financial   
services industry, including SAAMCo's commitment to the investment advisory     
business; and the structure of the Merger. The Board considered that SAAMCo has 
a substantial history of providing investment management services and           
supervising and monitoring subadvisers. The Directors took into account         
assurances that although the corporate identity of the investment adviser will  
change, there will be no material change in the nature and quality of           
services currently and historically provided to the Fund. The Board was also    
assured that SAAMCo has the financial ability and other resources to fulfill its
commitment to the Fund under the SAAMCo Advisory Agreement.                     

   The Board also considered that the terms of the SAAMCo Advisory Agreement
are similar to those of the Previous Advisory Agreement and the AGAM Advisory   
Agreement, including with respect to the schedule of fees. The Board also noted 
that SAAMCo agreed to waive the advisory fee to be paid to it under the SAAMCo  
Advisory Agreement to the same extent as AGAM with respect to the Previous      
Advisory Agreement and the AGAM Advisory Agreement. Based on the considerations 
set forth above, the Board, including all of the Independent Directors,         
unanimously determined that it is necessary and in the best interests of        

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the Fund and its shareholders to enter into the SAAMCo Advisory Agreement to    
ensure the continued receipt of the same quality of services as is currently    
provided to the Fund.                                                           

Description of the SAAMCo Advisory Agreement                                    

   Although the form of the SAAMCo Advisory Agreement is different from that
of the AGAM Advisory Agreement, the terms of the SAAMCo Advisory Agreement are  
similar to those of the AGAM Advisory Agreement described above. As described   
below, the agreements differ in, among other things, their effective dates,     
termination dates, the identity of the Adviser, the governing law and the       
indemnification provision. Moreover, although both AGAM and SAAMCo have agreed  
to waive their advisory fees to the same extent, AGAM had committed to waive its
fees for an initial term of five years, while SAAMCo has committed to waive its 
fees for an initial term of one year. Each of AGAM and SAAMCo may continue their
respective fee waivers beyond their initial terms.                              

     The SAAMCo Advisory Agreement provides that SAAMCo shall manage the affairs
of the Fund, including continuously providing the Fund with investment research,
advice and supervision, determining which securities shall be purchased or sold 
by the Fund, making such purchases and sales on behalf of the Fund and          
determining how voting and other rights with respect to securities owned by the 
Fund shall be exercised, subject in each case to the control of the Directors   
and in accordance with the objectives, policies and principles set forth in the 
Fund's registration statement. In performing such duties, SAAMCo (i) shall      
provide such office space, such bookkeeping, accounting, clerical, secretarial  
and certain administrative services (exclusive of, and in addition to, any such 
service provided by others retained by the Fund) and such executive and other   
personnel as shall be necessary for the operations of the Fund, (ii) shall be   
responsible for financial and accounting records, and (iii) shall oversee the   
performance of services provided to the Fund by others.                         

    Pursuant to the SAAMCo Advisory Agreement, SAAMCo may retain other persons
to perform its duties under the SAAMCo Advisory Agreement, including one or more
subadvisers to manage all of the portions of the Fund's investment portfolio, at
SAAMCo's own cost and expense. SAAMCo shall be responsible for all acts and     
omissions of such subadvisers, or other persons in connection with the          
performance of SAAMCo's duties thereunder.                                      

Pursuant to the SAAMCo Advisory Agreement, SAAMCo shall pay all of its
expenses arising from the performance of its duties under the SAAMCo Advisory   
Agreement and shall pay any salaries, fees and expenses of the Fund's Directors 
and officers who are employees of SAAMCo. Under the SAAMCo Advisory Agreement,  
the Fund agrees to assume and pay certain charges and expenses of its           
operations, including: direct charges relating to the purchase and sale of      
portfolio securities, interest charges, fees and expenses of independent        
attorneys and auditors, taxes and governmental fees, cost of share 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 services, 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                                                 

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disbursements of administrators, transfer agents and custodians, expenses of    
disbursing dividends and distributions, fees and expenses of Directors who are  
not employees of SAAMCo or its affiliates, membership dues in the Investment    
Company Institute, insurance premiums and extraordinary expenses such as        
litigation expenses.                                                            

   AGAM's advisory fee schedule under the Previous Advisory Agreement is the
same as that of SAAMCo under the SAAMCo Advisory Agreement, and no change in the
current fee structure is being proposed. Under the SAAMCo Advisory Agreement,   
the Fund will pay SAAMCo a monthly advisory fee at the following annual rates,  
based on the average daily net assets of the Fund: .85% on the first $ 1        
billion; .80% on the next $ 1 billion; and .75% thereafter.                     

     Although the SAAMCo Advisory Agreement does not, like the Previous Advisory
Agreement and the AGAM Advisory Agreement, contain a provision stating that the 
investment adviser may waive a portion of its advisory fees, such provision is  
not necessary in order for SAAMCo to waive a portion of its advisory fees. Like 
AGAM with respect to the advisory fees payable to it under the Previous Advisory
Agreement and the AGAM Advisory Agreement, SAAMCo has agreed to waive a portion 
of its advisory fee or reimburse the Fund to prevent the total expenses of the  
Fund, excluding taxes, portfolio brokerage commissions, interest, certain       
litigation and indemnification expenses, and extraordinary expenses, from       
exceeding 1.45% of average daily net assets for Class A and Class B shares,     
1.55% of average daily net assets for Class C shares and 1.25% of average daily 
net assets for Class D shares of the Fund. The initial term of AGAM's fee waiver
was five years, that of SAAMCo however is one year. Each of AGAM and SAAMCo may,
in their discretion, renew their respective fee waivers beyond their initial    
term.                                                                           

     The SAAMCo Advisory Agreement provides that it shall continue in full force
and effect for two years from the date thereof, and shall continue in full force
and effect from year to year thereafter if such continuance is approved in the  
manner required by the 1940 Act and SAAMCo has not notified the Fund in writing 
at least 60 days prior to the anniversary date of the previous continuance that 
it does not desire such continuance. With respect to the Fund, the SAAMCo       
Advisory Agreement may be terminated at any time, without payment of penalty by 
the Fund, on 60 days written notice to SAAMCo, by vote of the Directors, or by  
vote of a majority of the outstanding voting securities (as defined by the 1940 
Act) of the Fund. The SAAMCo Advisory Agreement further provides that it shall  
automatically terminate in the event of its assignment (as defined by the 1940  
Act).                                                                           

    The SAAMCo Advisory Agreement also states that the Fund agrees that if (i)
SAAMCo ceases to act as investment manager and adviser to the Fund and (ii) the 
continued use of the Fund's present name would create confusion in the context  
of SAAMCo's business, then the Fund will use its best efforts to change its name
in order to delete the word "SunAmerica" from its name. Neither the Previous    
Advisory Agreement nor the AGAM Advisory Agreement contains a similar provision.

The SAAMCo Advisory Agreement provides that in the absence of willful 
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties ("disabling conduct") thereunder on the part of SAAMCo (and its          
affiliates), SAAMCo shall not be subject to liability                           

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to the Fund or any of its shareholders for any act or omission in the course of,
or connected with, rendering services thereunder, 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 the SAAMCo Advisory Agreement relates,  
except to the extent specified in Section 36(b) of the 1940 Act concerning loss 
resulting from a breach of fiduciary duty with respect to the receipt of        
compensation for services. Unlike the Previous Advisory Agreement and the AGAM  
Advisory Agreement, the SAAMCo Advisory Agreement goes on to state that except  
for such disabling conduct, the Fund shall indemnify SAAMCo (and its affiliates)
from any liability arising from SAAMCo's conduct under the SAAMCo Advisory      
Agreement and provides procedures therefor.                                     

     Unlike the Previous Advisory Agreement and the AGAM Advisory Agreement, the
SAAMCo Advisory Agreement is governed by the laws of the State of New York.     

Information About SAAMCo                                                        

    SAAMCo was organized as a Delaware corporation in 1982. It is an indirect,
wholly owned subsidiary of SunAmerica, Inc., which in turn is a wholly owned    
subsidiary of AIG. Information about AIG is set forth below in the section      
called "Information about AIG." SAAMCo provides investment advice and management
services to mutual funds and private accounts. As of June 30, 2001, SAAMCo      
managed, advised or administered assets of more than $28 billion.               

     SAAMCo is located at The SunAmerica Center, 733 Third Avenue, New York, New
York 10007-3204. The principal business address of SunAmerica, Inc. is 1        
SunAmerica Center, Century City, Los Angeles, California 90067-6022. The        
principal business address of AIG is 70 Pine Street, New York, New York, 10270. 

    The following chart lists the principal executive officer and directors of
SAAMCo and their principal occupations, if different from their positions with  
SAAMCo.                                                                         

                                                        [Enlarge/Download Table]

-------------------------------------------------------------------------------------------------------------------
           Name and Address                         Position with SAAMCo and Principal Occupation(s)               
           ----------------                         ------------------------------------------------               
-------------------------------------------------------------------------------------------------------------------
                                                                                                                   
  Peter A. Harbeck                        President, Chief Executive Officer and Director                          
-------------------------------------------------------------------------------------------------------------------
  Jay S. Wintrob                          Director; President, COO and Director, SunAmerica, Inc.; Executive Vice  
                                          Director, Anchor National Insurance Company and SunAmerica, Inc.         
-------------------------------------------------------------------------------------------------------------------
  J. Steven Neamtz                        Executive Vice President                                                 
-------------------------------------------------------------------------------------------------------------------
  Peter C. Sutton                         Senior Vice President, Treasurer-Mutual & Variable Annuity Funds         
-------------------------------------------------------------------------------------------------------------------
  Robert M. Zakem                         Senior Vice President, General Counsel and Assistant Secretary           
-------------------------------------------------------------------------------------------------------------------
  Debbie Potash-Turner                    Senior Vice President and Chief Financial Officer                        
-------------------------------------------------------------------------------------------------------------------
  Christopher Nixon                       Secretary                                                                
-------------------------------------------------------------------------------------------------------------------

 The business address of each of the above listed persons other than Mr.
Wintrob is The SunAmerica Center, 733 Third Avenue, New York, New York 10017-   
3204. The business address of Mr. Wintrob is 1 SunAmerica Center, Century City, 
Los Angeles, California 90067-6022.                                             

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Information About AIG                                                           

 AIG is a holding company which through its subsidiaries is engaged in a
broad range of insurance and insurance-related activities and financial services
in the United States and abroad. AIG's primary activities include both general  
and life insurance operations. Other significant activities include financial   
services and asset management. AIG's general insurance subsidiaries are multiple
line companies writing substantially all lines of property and casualty         
insurance. One or more of these companies is licensed to write substantially all
of these lines in all states of the United States and in approximately 70       
foreign countries. AIG's life insurance subsidiaries offer a wide range of      
traditional insurance and financial and investment products. One or more of     
these subsidiaries is licensed to write life insurance in all states in the     
United States and in over 70 foreign countries. AIG's financial services        
subsidiaries engage in diversified financial products and services including    
aircraft, consumer and premium financing, and banking services. AIG's asset     
management operations offer a wide variety of investment vehicles and services, 
including variable annuities, mutual funds, and investment asset management.    
AIG's common stock is listed on the New York Stock Exchange, as well as the     
stock exchanges in London, Paris, Switzerland and Tokyo.                        

Recommendation of the Board                                                     

    The Directors unanimously recommend that shareholders of the Fund vote FOR
approval of the SAAMCo Advisory Agreement. If Proposal No. 2(b) is not approved 
by the shareholders of the Fund, the Directors will determine the appropriate   
actions to be taken with respect to the Fund's advisory arrangements at that    
time.                                                                           

Required Vote for Proposals No. 2(a) and 2(b)                                   

  Shareholders vote on the approval of the AGAM Advisory Agreement and the
SAAMCo Advisory Agreement as separate proposals. Approval of the AGAM Advisory  
Agreement and the SAAMCo Advisory Agreement each requires the affirmative vote  
of a "majority of the outstanding voting securities" of the Fund, which means   
the affirmative vote of the lesser of (1) more than 50% of the outstanding      
shares of the Fund, or (2) 67% or more of the shares of the Fund present at the 
Meeting if more than 50% of the outstanding shares of the Fund are represented  
at the Meeting in person or by proxy.                                           

    The Directors unanimously recommend that shareholders of the Fund vote FOR
approval of the AGAM Advisory Agreement and FOR approval of the SAAMCo Advisory 
Agreement.                                                                      

APPROVAL OF NEW SUBADVISORY AGREEMENTS
--------------------------------------

PROPOSALS NO. 3(a) AND 3(b) 
Background                                                                      

     Prior to June 1, 2001, CIMCO served as the Fund's Subadviser, pursuant to a
subadvisory agreement dated June 1, 2000 between AGAM and CIMCO (the "Previous  

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Subadvisory Agreement"). At a meeting of the Board held on April 17, 2001, the  
Board was informed that the three original portfolio managers at CIMCO had left 
or would be leaving by the end of April 2001 and that CIMCO had hired           
replacement portfolio managers. At a meeting of the Board held on May 23, 2001, 
AGAM presented the Board with its recommendation with respect to CIMCO based on 
its evaluation of CIMCO's resources. At the meeting, AGAM recommended that it   
was in the best interests of the Fund and its shareholders to engage Stanfield  
Capital Partners LLC ("Stanfield") as a new Subadviser for the Fund in place of 
CIMCO. For the reasons described below, the Board approved the termination of   
the Previous Subadvisory Agreement effective as of the close of business on May 
31, 2001, and approved a new subadvisory agreement with Stanfield (the "New     
Subadvisory Agreement"). The Board anticipated that shareholder approval of the 
New Subadvisory Agreement would be sought at a meeting that would be held, as   
required by the 1940 Act, before the end of October 2001. As discussed below,   
the terms of the New Subadvisory Agreement are similar in all material respects 
to the Previous Subadvisory Agreement.                                          

  To ensure the uninterrupted receipt by the Fund of investment management
services during the period between June 1, 2001 and the anticipated shareholder 
meeting to consider and approve of the New Subadvisory Agreement, at the May 23,
2001 meeting, the Board (including the Independent Directors) unanimously       
approved an interim subadvisory agreement (the "First Interim Subadvisory       
Agreement") between AGAM and Stanfield. The First Interim Subadvisory Agreement 
became effective on June 1, 2001, without prior shareholder approval pursuant to
Rule 15a-4 under the 1940 Act, which, under certain circumstances, allows such  
agreements to take effect, and to remain in effect for up to 150 days, without  
receiving prior shareholder approval, as long as the fees payable under such    
agreement do not exceed the fees payable under the predecessor agreement that   
had been approved by the shareholders.                                          

    The First Interim Subadvisory Agreement provided for automatic termination
upon termination of the Previous Advisory Agreement. As discussed above, the    
Closing of the Merger resulted in the termination of the Previous Advisory      
Agreement. At a meeting held on July 16-17, 2001, the Board (including the      
Independent Directors), unanimously approved the continuation of the First      
Interim Subadvisory Agreement (as so continued, the "Second Interim Subadvisory 
Agreement" and, together with the First Interim Subadvisory Agreement, the      
"Interim Subadvisory Agreement"), which became effective as of the Closing. The 
Interim Subadvisory Agreement may remain in effect until no later than 150 days 
after termination of the Previous Subadvisory Agreement.                        

   At the July 16-17, 2001 meeting, the Board took into account that the New
Subadvisory Agreement provides that it automatically terminates upon termination
of the advisory agreement with AGAM, and that it was anticipated that the AGAM  
Advisory Agreement would terminate on the Reorganization Date. Accordingly, at  
the meeting the Board approved another subadvisory agreement with Stanfield to  
correspond with the SAAMCo Advisory Agreement. In approving this subadvisory    
agreement, the Board noted that it is essentially a continuation of the new     
subadvisory agreement with AGAM. In this Proxy Statement, the subadvisory       
agreements between Stanfield and each of AGAM and SAAMCo are together referred  
to as the "New Subadvisory Agreement."                                          

Approval of the New Subadvisory Agreement                                       

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    The Board is proposing that the shareholders approve (i) a new subadvisory
agreement between Stanfield and AGAM, to become effective on the date of such   
approval, which will terminate upon the termination of the AGAM Advisory        
Agreement (i.e., on the Reorganization Date), and (ii) a new subadvisory        
agreement between Stanfield and SAAMCO, to become effective on the              
Reorganization Date. The terms of each agreement are materially the same, with  
the exception of the effective date and the Adviser. A description of the New   
Subadvisory Agreement and the services to be provided by Stanfield is set forth 
below. This description is qualified in its entirety by reference to the form of
the New Subadvisory Agreement attached to this Proxy Statement as Exhibit C-1,  
between Stanfield and the Adviser. Additional information about Stanfield is set
forth below in the section entitled "Information About Stanfield."              

Approval of the New Subadvisory Agreement by the Board                          

    In determining that a change of subadvisers from CIMCO to Stanfield was in
the best interests of the Fund and its shareholders, the Directors considered   
many factors. The Board considered AGAM's evaluation of CIMCO's resources,      
including the experience and capabilities of CIMCO's replacement portfolio      
managers. In considering the termination of the Previous Subadvisory Agreement, 
the Board noted that AGAM (and not the Fund) would pay CIMCO the subadvisory fee
due to it for a sixty-day period in lieu of the notice provided for in the      
Previous Subadvisory Agreement. In considering alternatives to CIMCO, the Board 
considered Stanfield as well as several other advisers evaluated by AGAM. The   
Board considered that Stanfield was being recommended by AGAM for several       
reasons, including the following: (i) the portfolio management team at Stanfield
had ten years of experience in managing large, diversified pools of bank loans, 
and showed particular strength with respect to controlling risk and managing    
credit; (ii) Stanfield was the first group to be involved in bank loans as an   
asset class for individual investors; and (iii) Stanfield is believed to be the 
only manager in this asset class with a full-time bank loan trader.             

  Based upon the foregoing factors, the Directors concluded that it was in
the Fund's and the shareholders' best interests for the Fund to terminate the   
Previous Subadvisory Agreement and cause the Adviser to enter into the New      
Subadvisory Agreement with Stanfield.                                           

In evaluating the New Subadvisory Agreement, the Directors took into  
account the fact that the New Subadvisory Agreement and the Previous Subadvisory
Agreement are substantially similar, including the fees paid thereunder, after  
taking into account CIMCO's voluntary fee waiver (as described more fully       
below).  Accordingly, the Directors unanimously approved the New Subadvisory    
Agreement and recommend its approval by the shareholders.                       

Description of the New Subadvisory Agreement                                    

  The New Subadvisory Agreement is similar in all material respects to the
Interim Subadvisory Agreement and the Previous Subadvisory Agreement with CIMCO.
Although the subadvisory fee under the Previous Subadvisory Agreement was higher
than that in the Interim Subadvisory Agreement and the New Subadvisory          
Agreement, CIMCO had agreed in writing (the "Fee Waiver Agreement") to waive its
subadvisory fee. Taking CIMCO's fee waiver into account the subadvisory fees    
under each of the Previous Advisory Agreements, the Interim Advisory Agreement  
and the New Advisory Agreement are the same. The Previous Subadvisory           

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Agreement, dated June 1, 2000, was last approved by the shareholders of the Fund
at a meeting held on the same date in connection with its initial approval.     

The New Subadvisory Agreement provides that, subject to the stated    
investment policies and restrictions of the Fund as set forth in the Fund's     
current Prospectus and Statement of Additional Information (as filed with the   
SEC as part of the Fund's Registration Statement, and as amended or supplemented
from time to time, the "Prospectus"), and subject to the general supervision of 
the Fund's Directors and of the Adviser, Stanfield shall purchase, hold and sell
investments for the Fund and monitor on a continuous basis the performance of   
such Fund investments.  Under the New Subadvisory Agreement, Stanfield will     
manage the Fund's assets in accordance with the Fund's investment objective,    
policies, and limitations (as stated in the Prospectus), make investment        
decisions for the Fund, place purchase and sale orders for portfolio            
transactions for the Fund, and manage otherwise uninvested cash of the Fund.  In
addition, Stanfield's duties under the New Subadvisory Agreement include        
compliance with applicable law and governing documents, voting of proxies,      
acting as a limited agent of the Fund and of the Adviser, maintaining books and 
records for the Fund, and providing information concerning the Fund's           
investments (and concerning Stanfield) to the Adviser, to the Fund, and to the  
Fund's custodian, as applicable.                                                

     The New Subadvisory Agreement provides that Stanfield will pay all expenses
incurred by it in connection with its activities under the New Subadvisory      
Agreement, other than the cost of securities, commodities, and other investments
(including brokerage fees and commissions and other transaction charges, if any)
purchased for the Fund.  Stanfield will not be responsible for any expenses of  
the operations of the Fund including, without limitation, brokerage fees and    
commissions and other transaction charges, if any.  Stanfield will not be       
responsible for the Fund's or the Adviser's expenses.                           

The Previous Subadvisory Agreement provided that CIMCO's fee would be 
computed daily and paid monthly, at the following annual rates, based on the    
size of the Fund: 0.45% for the first $1 billion of average daily net assets,   
0.40% for the next $1 billion of average daily net assets, and 0.35% for average
daily net assets more than $2 billion. Pursuant to the Fee Waiver Agreement,    
CIMCO agreed to waive its subadvisory fees so that its fee would be paid by the 
Adviser at the following annual rate, based on the size of the Fund; 0.25% for  
the first $1 billion of average daily net assets and 0.20% for the average daily
net assets of more than $1 billion. Under the New Subadvisory Agreement (and    
each Interim Subadvisory Agreement), Stanfield is to receive a fee, computed    
daily and paid monthly, at the following annual rates, based on the size of the 
Fund: 0.25% for the first $1 billion of average daily net assets and 0.20% for  
average daily net assets of more than $1 billion. The fee to Stanfield is paid  
by the Adviser, and is not an additional charge to the Fund or its shareholders.
For the fiscal year ended December 31, 2000, CIMCO received $693,122 for its    
portfolio management services with respect to the Fund, after waiver of fees.   

    The New Subadvisory Agreement provides that it will continue in effect for
a period of two years from its effective date and thereafter on an annual basis,
provided such continuance is approved at least annually (a) by the vote of a    
majority of the Board of Directors of the Fund or (b) by the vote of a majority 
of the outstanding voting securities of the Fund, and provided that continuance 
is also approved by the vote of a majority of the Independent Directors who are 
not                                                                             

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parties to the agreement, cast in person at a meeting called for the purpose of 
voting on such approval. The New Subadvisory Agreement may be amended in writing
(signed by the parties), provided that the terms of any material amendment shall
be approved (i) by the vote of a majority of the outstanding voting securities  
of the Fund and (ii) by the vote of a majority of the Independent Directors of  
the Fund who are not parties to the agreement, cast in person at a meeting      
called for the purpose of voting on such approval, if such approval is required 
by law.                                                                         

  The New Subadvisory Agreement may be terminated at any time, without the
payment of any penalty, by (a) the Fund by vote of a majority of the Board of   
Directors, or by vote of a majority of the outstanding voting securities of the 
Fund, upon 60 days' written notice to Stanfield, or (b) by the Adviser upon 60  
days' written notice to Stanfield, or (c) by Stanfield upon 60 days' written    
notice to the Fund and to the Adviser.  The New Subadvisory Agreement will      
terminate automatically, without the payment of any penalty, in the event of its
assignment (as defined in the 1940 Act) or in the event of the termination of   
the applicable advisory agreement.                                              

     The New Subadvisory Agreement provides that, in connection with Stanfield's
discharge of its obligations under the New Subadvisory Agreement, neither       
Stanfield nor any of its officers, directors, or employees (nor any person      
performing executive, administrative, trading or other functions for the Fund or
Stanfield at the direction or request of Stanfield) shall be liable for any     
error of judgment or mistake of law or for any loss suffered by the Fund, except
for loss resulting from willful misfeasance, bad faith, or gross negligence in  
the performance of its or his or her duties on behalf of the Fund, or from      
reckless disregard by Stanfield or any such person of the duties of Stanfield   
under the New Subadvisory Agreement.                                            

Information About Stanfield                                                     

Stanfield is a New York limited liability company, controlled by its  
management and dedicated exclusively to high yield investment management.       
Stanfield was formed in February 1998 by a team of investment professionals with
strong high yield bank loan and high yield bond management capability. Stanfield
is controlled (as such term is defined in the 1940 Act) by Messrs. Baldwin,     
Alfieri and Jansen by virtue of each of their ownership of more than 25% of the 
interests of Stanfield. Messrs. Baldwin, Alfieri and Jansen, are also the       
managing partners of Stanfield. Since 1990, the investment professionals at     
Stanfield have managed assets aggregating approximately $9.9 billion. As of June
30, 2001, Stanfield's total assets under management were approximately $4.2     
billion, consisting of $3.7 billion of high yield bank loans and $500 million of
high yield bonds.                                                               

The following chart lists the principal executive officer and managing
partners of Stanfield and their principal occupations, if different from their  
position with Stanfield, are set forth below.  Unless otherwise indicated, each 
persons' business address is 330 Madison Avenue, New York, New York 10017.      

                                                        [Enlarge/Download Table]

--------------------------------------------------------------------------------------------------------
           Name and Address                      Position with Stanfield and Principal Occupation(s)    
           ----------------                      ---------------------------------------------------    
--------------------------------------------------------------------------------------------------------
                                                                                                        
   Daniel Baldwin                                Administrative and Managing Partner, CIO               
--------------------------------------------------------------------------------------------------------
   Stephen Alfieri                               Managing Partner                                       
--------------------------------------------------------------------------------------------------------
   Christopher Jansen                            Managing Partner                                       
--------------------------------------------------------------------------------------------------------

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Required Vote for Proposals No. 3(a) and 3(b)                                   

     Shareholders vote on whether to approve each New Subadvisory Agreement as a
separate proposal.  Approval of each New Subadvisory Agreement requires the     
affirmative vote of a "majority of the outstanding voting securities" of the    
Fund, which means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund or (2) 67% or more of the shares of the Fund     
present at the Meeting if more than 50% of the outstanding shares of the Fund   
are represented at the Meeting in person or by proxy.  If the shareholders of   
the Fund do not approve either New Subadvisory Agreement, the Directors will    
take such further action as they may deem to be in the best interests of the    
shareholders of the Fund.                                                       

    The Directors unanimously recommend that the shareholders of the Fund vote
FOR approval of the New Subadvisory Agreement between AGAM and Stanfield and FOR
approval of the New Subadvisory Agreement between SAAMCo and Stanfield.         

GENERAL INFORMATION 
------------------- 

Brokerage and Research Services                                                 

It is not anticipated that the Fund will pay significant brokerage    
commissions, since the Fund typically purchases its portfolio securities in     
principal transactions.  However, on occasion it may be necessary or desirable  
to purchase or sell a security through a broker on an agency basis.  Agency     
transactions involve the payment by the Fund of negotiated brokerage            
commissions.  Such commissions vary among different brokers.  Also, a particular
broker may charge different commissions according to such factors as the        
difficulty and size of the transaction.                                         

  When the Subadviser places orders for the purchase and sale of portfolio
securities for the Fund, it is anticipated that such transactions will be       
effected through a number of brokers and dealers. In so doing, the Subadviser   
will seek to obtain for the Fund the most favorable price and execution         
available, except to the extent it may be permitted to pay higher brokerage     
commissions as described below. In seeking the most favorable price and         
execution, the Subadviser considers all factors deemed relevant, including, by  
way of illustration, price, the size of the transaction, the nature of the      
market for the security, the amount of commission, the timing of the            
transactions taking into account market prices and trends, the reputation,      
experience and financial stability of the broker-dealer involved and the quality
of service rendered by the broker-dealer in other transactions.                 

 It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors 
to receive research, statistical and quotation services from broker-dealers that
execute portfolio transactions for the clients of such advisers.  Consistent    
with this practice, the Subadviser may receive research, statistical and        
quotation services from the broker-dealers with which the Fund's portfolio      
transactions are placed.  These services, which in some instances could also be 
purchased for cash, include such matters as general economic and security market
reviews, industry and company reviews,                                          

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evaluations of securities and recommendations as to the purchase and sale of    
securities. Some of these services are of value to the Subadviser in advising   
its other clients, although not all of these services are necessarily useful and
of value in advising the Fund. The advisory fees paid by the Fund are not       
reduced because the Subadviser receives such services.                          

   As permitted by Section 28(e) of the Securities Exchange Act of 1934 (the
"1934 Act"), under the New Advisory Agreement, the New Subadvisory Agreement,   
the Interim Advisory Agreement and the Interim Subadvisory Agreement, AGAM,     
SAAMCo or Stanfield may cause the Fund to pay a broker-dealer that provides     
"brokerage and research services" (as defined by the 1934 Act) to AGAM, SAAMCo  
or Stanfield an amount of commission for effecting a securities transaction for 
the Fund in excess of the commission which another broker-dealer would have     
charged for effecting the same transaction. The authority of AGAM, SAAMCo or    
Stanfield to cause the Fund to pay any such greater commission is subject to    
such policies as the Directors may adopt from time to time.                     

  During the fiscal year ended December 31, 2000, the Fund did not pay any
brokerage commissions to any broker then affiliated with AGAM, SAAMCo, CIMCO or 
Stanfield                                                                       

Section 16(a) Beneficial Ownership Reporting Compliance                         

   Section 30(h) of the 1940 Act requires the Fund's Directors and officers,
investment advisers, affiliates of the investment advisers, and persons who     
beneficially own more than 10% of a registered class of the Fund's securities   
("Reporting Persons"), to file reports of ownership of the Fund's securities and
changes in ownership with the SEC.  Reporting Persons are also required by such 
regulations to furnish the Fund with copies of all such forms that they file.   

   Each of the following officers of the Fund failed to timely file a Form 3
during fiscal year 2000: Evelyn Curran, Nori Gabert and Todd Spillane. Based    
solely on its review of the copies of forms received by it and written          
representations of Reporting Persons, the Fund believes that during fiscal year 
2000, all other Reporting Persons complied with all applicable filing           
requirements.                                                                   

Principal Underwriter                                                           

     AGFD, whose address is 286 Congress Street, Boston, Massachusetts 02210, is
currently the principal underwriter for the Fund.  AGFD is an affiliate of AGAM.
SunAmerica Capital Services, Inc., whose address is The SunAmerica Center, 733  
Third Avenue, New York, New York, 10017, will serve as the Fund's principal     
underwriter from and after the Reorganization Date.  For the fiscal year ending 
December 31, 2000, the Fund paid AGFD  $1,051,950 for its services as principal 
underwriter.                                                                    

Administrator                                                                   

     AGAM, whose address is 286 Congress Street, Boston, Massachusetts 02210, is
currently the administrator for the Fund. In return for AGAM's services as      
Administrator, the Fund pays AGAM an annual fee paid monthly equal to 0.40% of  
the average daily net assets of the Fund as compensation under the              
Administration Agreement. From and after the Reorganization Date, SAAMCo, a     
wholly owned subsidiary of AIG, whose address is The SunAmerica Center, 733     
Third Avenue, New York, New York, 10017, will provide administrative services to
the Fund at the same annual rate. For the fiscal year ended December            

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31, 2000, after waivers and reimbursements, no administrative fee was paid to   
AGAM by the Fund.                                                               

Independent Auditors' Fees                                                      

   The following table sets forth the aggregate fees paid to the independent
auditors for the Fund's most recent fiscal year ended December 31, 2000 for     
professional services rendered for: (i) the audit of the Fund's annual financial
statements and the review of financial statements included in the Fund's report 
to stockholders; (ii) financial information systems design and implementation   
services provided to the Fund, its investment adviser and entities controlling, 
controlled by or under common control with the investment adviser that provide  
services to the Fund; and (iii) all other non-audit services provided to the    
Fund, its investment adviser, and entities controlling, controlled by or under  
common control with the investment adviser that provide services to the Fund.   
The Audit and Nominating Committee of the Fund has considered that the Fund's   
independent auditors did not provide any information technology services under  
clause (ii) or provide any non-audit services under claus (iii), other than the 
preparation of the Fund's tax returns. [Confirm]                                

                                                        [Enlarge/Download Table]

---------------------------------------------------------------------------------------------------
          Audit Fees Charged         Financial Information Systems Design and                      
             to the Fund                    Implementation Fees                       Other Fees   
             -----------                    -------------------                       ----------   
---------------------------------------------------------------------------------------------------
                                                                                                   
               $28,500                             None                                5,000       
---------------------------------------------------------------------------------------------------

Quorum and Methods of Tabulation                                                

The presence in person or by proxy of shareholders entitled to cast a 
majority of the votes entitled to be cast at the meeting shall be a quorum for  
the transaction of business by the shareholders of the Fund at the Meeting.     
Votes cast by proxy or in person at the Meeting will be counted by persons      
appointed by the Fund as tellers for the Meeting. The tellers will count the    
total number of votes cast "for" approval of each Proposal for purposes of      
determining whether sufficient affirmative votes have been cast. The tellers    
will count all shares represented by proxies that reflect abstentions and       
"broker non-votes" (i.e., shares held by brokers or nominees as to which (a)    
instructions have not been received from the beneficial owners or the persons   
entitled to vote and (b) the broker or nominee does not have discretionary      
voting power on a particular matter) as shares that are present and entitled to 
vote for purposes of determining the presence of a quorum, but that have not    
been cast. Assuming the presence of a quorum, abstentions and broker non-votes  
have the effect of a negative vote on Proposals 2(a), 2(b) 3(a) and 3(b)        
(approval of advisory and subadvisory agreements, respectively). Abstentions and
broker non-votes will not be considered votes cast and therefore will have no   
effect on Proposal 1 (election of directors).                                   

Adjournments                                                                    

In the event that a quorum is not present for purposes of acting on a 
Proposal, or if sufficient votes in favor of a Proposal are not received by the 
time of the Meeting, the persons named as proxies may propose one or more       
adjournments of the Meeting to permit further solicitation of proxies.  Any such
adjournment will require the affirmative vote of a majority of those votes      
present in person or represented by proxy at the session of the Meeting to be   

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adjourned. The persons named as proxies will vote in favor of such adjournment  
those proxies which they are entitled to vote in favor of any Proposal that has 
not then been adopted. They will vote against any such adjournment those proxies
required to be voted against each Proposal that has not then been adopted and   
will not vote any proxies that direct them to abstain from voting on such       
Proposals.                                                                      

    The costs of any additional solicitation and of any adjourned session with
respect to Proposal 3(a) may be borne by the Fund, all other costs of any       
additional solicitation and of any adjourned session will be borne by AIG.  Any 
Proposal for which sufficient favorable votes have been received by the time of 
the Meeting will be acted upon at the Meeting and such action will be final     
regardless of whether the Meeting is adjourned to permit additional solicitation
with respect to another Proposal.                                               

Shareholder Proposals at Future Meetings                                        

  The Fund does not hold regular annual or other meetings of shareholders.
Shareholder proposals to be presented at any future meeting of shareholders of  
the Fund must be received by the Fund a reasonable time before that meeting in  
order for such proposals to be considered for inclusion in the proxy materials  
relating to that meeting.                                                       

OTHER MATTERS 
------------- 

  The Fund is not aware of any other matters that are expected to arise at
the Meeting.  If any other matter should arise, however, the persons named in   
properly executed proxies have discretionary authority to vote such proxies as  
they shall decide.                                                              

September __, 2001                                                              

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EXHIBIT A 

CHARTER OF THE AUDIT COMMITTEE  

North American Funds
CypressTree Senior Floating Rate Fund, Inc. 
North American Senior Floating Rate Fund, Inc.

MEMBERSHIP

      The Board of Trustees/Directors, acting by resolution adopted by a
majority of the full Board, shall elect from among its members an audit         
committee of not fewer than three (3) nor more than ten (10) members, each of   
whom shall be a trustee/director who is not an interested person (as defined by 
the Investment Company Act of 1940).  No member will have a relationship with   
any American General registered investment company, American General            
Corporation, or any affiliates that, in the opinion of the Board of             
Trustees/Directors, would interfere with the exercise of independent judgment as
a committee member.  The chairman of the committee shall be elected by a        
majority of the full Board of Trustees/Directors at the time the committee is   
elected or at such time as it becomes necessary to elect a new chairman because 
of the chairman's death, resignation or removal.  Each member of the committee  
shall be financially literate, or shall undertake to become financially literate
within a reasonable period of time after being elected to the committee, and at 
least one member shall have accounting or related financial management          
expertise, as these qualifications are determined in the opinion of the Board of
Trustees/Directors.                                                             

PROCESS 

The audit committee shall meet at such times and places as may be fixed by the  
committee, or on the call of its chairman, at such times and places as may be   
designated in the call of such meetings.  The committee shall also meet promptly
upon the request of a registered investment company's outside auditors.  The    
committee shall maintain a record of its proceedings and shall report to the    
Board of Trustees/Directors a summary of its activities not less frequently than
twice each fiscal year, along with such recommendations as the committee deems  
appropriate.                                                                    

RESPONSIBILITIES

The audit committee shall have the following powers and duties:                 

    (a) subject to confirmation by the Board of Trustees/Directors, to select,
evaluate and, where appropriate, replace the outside auditors (or to  
  nominate the outside auditors to be proposed for shareholder approval in
any proxy statement);                                                 

 (b) to make clear to the outside auditors that the outside auditors are
 ultimately accountable to the Board of Trustees/Directors and the audit
committee;                                                            

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   (c) to review at regular intervals audit arrangements for each registered
investment company and the reports to be rendered;                    

     (d) to review in advance the plan and scope of the audit of each registered
    investment company to be performed by the outside auditors and the related
     estimate of fees, and to recommend such audit plan, scope, and fee estimate
for board approval;                                                   

 (e) to review non-audit services and fees of each registered investment
company's outside auditors, giving appropriate consideration to the   
 possible effect on the auditors' independence of each non-audit service
provided;                                                             

  (f) to ensure that the outside auditors submit to the committee at least
   annually a formal written statement delineating all relationships between
  the outside auditors and each registered investment company and American
General Corporation and its affiliates, and to review with the outside
auditors any disclosed relationships or services that may impact the  
 objectivity and independence of the outside auditors for the purpose of
recommending, as necessary, that the Board of Trustees/Directors take 
     appropriate action to satisfy itself of the outside auditors' independence;

(g) to review periodically with each registered investment company's  
    outside auditors the accounting principles and policies of each registered
investment company, including any matters required to be discussed by 
Statement on Auditing Standards No. 61, as it may be amended or       
supplemented;                                                         

(h) to review periodically with each registered investment company's  
  management, internal auditors, and independent auditors the adequacy and
effectiveness of accounting and financial controls, including the     
    investment company's system to monitor and manage business risk, and legal
   and ethical compliance programs, including compliance with the Investment
   Company Act of 1940 and qualification as a "regulated investment company"
  under Subchapter M of the Internal Revenue Code, as the committee or the
 Board of Trustees/Directors may determine to be necessary or desirable;

(i) to review periodically the coordination between each registered   
investment company's outside auditors and each registered investment  
company's internal audit staff, and to review with each registered    
investment company's outside auditors, upon completion of their audit,
    their findings and recommendations and the responses of management to such
findings and recommendations;                                         

(j) to review and discuss with management each registered investment  
company's audited financial statements;                               

(k) to recommend to the Board of Trustees/Directors that the audited  
   financial statements presented to the audit committee be included in each
registered investment company's annual report;                        

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(l) to conduct from time to time, or cause to be conducted, such      
   investigations or inquiries relating to the committee's responsibilities,
including accounting or audit matters, as the facts presented to the  
     committee warrant and as the committee may deem necessary or appropriate in
  the interest of each registered investment company and its shareholders;

  (m) to confer with and direct the officers of each registered investment
   company to the extent necessary to exercise the committee's powers and to
carry out its duties;                                                 

     (n) to meet with representatives of the outside auditors of each registered
investment company and/or the internal audit staff of each registered 
 investment company in the absence of management, whenever the committee
deems such to be appropriate; and                                     

   (o) to perform such additional duties as may be assigned to the committee
by the Board of Trustees/Directors.                                   

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EXHIBIT B-1 

FORM OF AGAM
ADVISORY AGREEMENT

ADVISORY AGREEMENT (the "Agreement") made as of __________ __, 2001,  
between NORTH AMERICAN SENIOR FLOATING RATE FUND, INC., a Maryland corporation  
(the "Fund"), and AMERICAN GENERAL ASSET MANAGEMENT CORP., a Delaware           
corporation (the "Adviser").                                                    

WITNESSETH        

    WHEREAS, the Fund is registered with the Securities and Exchange
Commission as a closed-end management investment company under the    
    Investment Company Act of 1940, as amended (the "Investment Company Act");

         WHEREAS, the Fund desires to retain the Adviser as investment manager
to furnish certain investment advisory services to the Fund, and the  
Adviser is willing to furnish those services;                         

NOW THEREFORE, the parties agree as follows:                

1.   APPOINTMENT OF ADVISER                                                     

 The Fund hereby appoints the Adviser, subject to the supervision of the
  Directors of the Fund and the terms of this Agreement, as the investment
   adviser for the Fund.  The Adviser accepts such appointment and agrees to
render the services and to assume the obligations set forth in this   
Agreement commencing on its effective date.  The Adviser will be an   
   independent contractor and will have no authority to act for or represent
the Fund in any way or otherwise be deemed an agent unless expressly  
authorized in this Agreement or another writing by the Fund and the   
Adviser.                                                              

2.  DUTIES OF THE ADVISER                                                       

  a.   Subject to the general supervision of the Directors of the Fund and
    the terms of this Agreement, the Adviser will at its own expense
       select, contract with, and compensate an investment subadviser (the
         "Subadviser") to manage the investments and determine the composition
   of the assets of the Fund; provided, that any contract with the
       Subadviser (the "Subadvisory Agreement") will be in compliance with
    and approved as required by the Investment Company Act.  Subject
         always to the direction and control of the Directors of the Fund, the
         Adviser will monitor compliance of the Subadviser with the investment
  objectives and investment policies, as set forth in the Fund's
    registration statement as filed with the Securities and Exchange
         Commission, and review and report to the Directors of the Fund on the
performance of the Subadviser.                              

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    b.   The Adviser will oversee the administration of certain aspects of the
          Fund's business and affairs and will furnish to the Fund the following
services:                                                   

            (1)  Office and Other Facilities.  The Adviser will furnish to
---------------------------             
            the Fund office space in the offices of the Adviser or in such
      other place as may be agreed upon by the parties to this
           Agreement from time to time and such other office facilities,
            utilities and office equipment as are necessary for the Fund's
operations.                                       

        (2)  Directors and Officers.  The Adviser agrees to permit
----------------------                  
         individuals who are directors, officers or employees of the
             Adviser to serve (if duly elected or appointed) as Directors or
              officers of the Fund, without remuneration from or other cost to
the Fund.                                         

             (3)  Other Personnel.  The Adviser will furnish to the Fund, at
---------------                         
       the Fund's expense, any other personnel necessary for the
operations of the Fund.                           

            (4)  Reports to Fund.  The Adviser will furnish to or place at
---------------                         
             the disposal of the Fund such information, reports, valuations,
             analyses and opinions as the Fund may, at any time or from time
               to time, reasonably request or as the Adviser may deem helpful to
           the Fund, provided that the expenses associated with any such
           materials furnished by the Adviser at the request of the Fund
will be borne by the Fund.                        

3.   EXPENSES ASSUMED BY THE FUND                                               

    In addition to paying the advisory fee provided for in Section 5, the Fund
will pay all expenses of its organization, operations and business not
 specifically assumed or agreed to be paid by the Adviser as provided in
     this Agreement, by the Subadviser as provided in the Subadvisory Agreement,
     by the Administrator under an administration agreement, or by the principal
underwriter (the "Distributor") of the Fund's shares, as that term is 
     defined in Section 2(a)(29) of the Investment Company Act, as provided in a
    distribution agreement.  Without limiting the generality of the foregoing,
     the Fund, in addition to certain expenses specifically described in Section
2 above, will pay or arrange for the payment of the following:        

a.   Custody and Accounting Services.  All expenses of the transfer,  
-------------------------------                             
       receipt, safekeeping, servicing and accounting for the Fund's cash,
          securities, and other property, including all charges of depositories,
custodians and other agents, if any;                        

b.   Shareholder Servicing.  All expenses of maintaining and servicing
---------------------                                       
       shareholder accounts, including all charges of the Fund's transfer,
         shareholder recordkeeping, dividend disbursing, repurchase, and other
agents, if any;                                             

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 c.   Shareholder Communications.  All expenses of preparing, setting in
--------------------------                                  
       type, printing, and distributing reports, repurchase notifications,
and other communications to shareholders;                   

    d.   Shareholder Meetings.  All expenses incidental to holding meetings of
--------------------                                        
  Fund shareholders, including the printing of notices and proxy
material, and proxy solicitation;                           

e.   Prospectuses.  All expenses of preparing, setting in type, and   
------------                                                
          printing of annual or more frequent revisions of the Fund's prospectus
        and statement of additional information and any supplements to those
documents and of mailing them to shareholders;              

    f.   Pricing.  All expenses of computing the net asset value per share for
-------                                                     
      the Fund, including the cost of any equipment or services used for
    obtaining price quotations and valuing its investment portfolio;

   g.   Communication Equipment.  All charges for equipment or services used
-----------------------                                     
        for communication between the Adviser or the Fund and the custodian,
transfer agent or any other agent selected by the Fund;     

    h.   Legal and Accounting Fees and Expenses.  All charges for services and
--------------------------------------                      
  expenses of the Fund's legal counsel and independent auditors;

 i.   Directors and Officers.  Except as expressly provided otherwise in
----------------------                                      
      paragraph 2.b.(2), all compensation of Directors and officers, all
     expenses incurred in connection with the service of Directors and
          officers, and all expenses of meetings of the Directors and Committees
of Directors;                                               

   j.   Federal Registration Fees.  All fees and expenses of registering and
-------------------------                                   
         maintaining the registration of the Fund under the Investment Company
          Act and the registration of the Fund's shares under the Securities Act
         of 1933, as amended (the "1933 Act"), including all fees and expenses
          incurred in connection with the preparation, setting in type, printing
          and filing of any registration statement and prospectus under the 1933
        Act or the Investment Company Act, and any amendments or supplements
to those documents that may be made from time to time;      

k.   State Registration Fees.  All fees and expenses of qualifying and
-----------------------                                     
      maintaining qualification of the Fund and of the Fund's shares for
         sale under securities laws of various states or jurisdictions, and of
   registration and qualification of the Fund under all other laws
applicable to the Fund or its business activities (including
          registering the Fund as a broker-dealer, or any officer of the Fund or
any person as agent or salesman of the Fund in any state);  

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l.   Issue and Repurchase of Fund Shares.  All expenses incurred in   
-----------------------------------                         
       connection with the issue, repurchase, and transfer of Fund shares,
  including the expense of confirming all share transactions, of
          preparing and transmitting certificates for shares of the Fund, and of
sending notifications of repurchase offers to shareholders; 

m.   Bonding and Insurance.  All expenses of bond, liability and other
---------------------                                       
        insurance coverage required by law or regulation or deemed advisable
     by the Fund's Directors including, without limitation, such bond,
       liability and other insurance expense that may from time to time be
allocated to the Fund in a manner approved by its Directors;

 n.   Brokerage Commissions.  All brokers' commissions and other charges
---------------------                                       
      incident to the purchase, sale, or lending of the Fund's portfolio
securities;                                                 

   o.   Taxes.  All taxes or governmental fees payable by or with respect to
-----                                                       
        the Fund to federal, state, or other governmental agencies, domestic
         or foreign, including stamp or other transfer taxes, and all expenses
incurred in the preparation of tax returns;                 

   p.   Trade Association Fees.  All fees, dues, and other expenses incurred
----------------------                                      
        in connection with the Fund's membership in any trade association or
other investment organization; and                          

   q.   Nonrecurring and Extraordinary Expenses.  Such nonrecurring expenses
---------------------------------------                     
          as may arise, including the costs of actions, suits, or proceedings to
   which the Fund is, or is threatened to be made, a party and the
      expenses the Fund may incur as a result of its legal obligation to
  provide indemnification to its Directors, officers, agents and
shareholders.                                               

4.   COMPENSATION OF ADVISER                                                    

    a.   The Fund will pay the Adviser a fee, computed daily and paid monthly,
     on or before the last business day of the month, at the following
      annualized rate:  0.85% of the Fund's average daily net assets for
         average daily net assets up to and including $1 billion; 0.80% of the
        Fund's average daily net assets for average daily net assets between
          $1 billion and up to and including $2 billion; and 0.75% of the Fund's
         average daily net assets for average daily net assets in excess of $2
       billion.  In calculating the net assets of the Fund for purposes of
       this computation, all liabilities of the Fund will be deducted from
          gross assets except the principal amount of any indebtedness for money
borrowed, including debt securities issued by the Fund.     

  b.   If this Agreement becomes effective or terminates before the end of
        any month, the fee for the period from the effective date to the end
of such month or from the                                   

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    beginning of the prorated according to the proportion which that
period bears to the full month in which the effectiveness or
termination occurs.                                         

5.   EXPENSE LIMITATION                                                         

From time to time, the Adviser may waive all or a portion of its fee  
    provided for under this Agreement, or agree to reimburse the Fund in order
    to limit the Fund's aggregate expenses.  The Adviser agrees to be bound by
     the terms of any publicly announced waiver of its fee, or any limitation of
the Fund's expenses.                                                  

6.   NON-EXCLUSIVITY                                                            

The services of the Adviser to the Fund are not to be deemed to be    
  exclusive, and the Adviser will be free to render investment advisory or
other services to others (including other investment companies) and to
engage in other activities.  It is understood and agreed that the     
   directors, officers, and employees of the Adviser are not prohibited from
     engaging in any other business activities or from rendering services to any
     other person, or from serving as partners, officers, directors, trustees or
employees of any other firm or corporation, including other investment
companies.                                                            

7.   SUPPLEMENTAL ARRANGEMENTS                                                  

    The Adviser may enter into arrangements with other persons affiliated with
  the Adviser to enable it to fulfill its obligations under this Agreement
for the provision of certain personnel and facilities to the Adviser. 

8.   CONFLICTS OF INTEREST                                                      

   It is understood that Directors, officers, agents and shareholders of the
Fund are or may be interested in the Adviser as directors, officers,  
stockholders, or otherwise; that directors, officers, agents and      
stockholders of the Adviser are or may be interested in the Fund as   
 Directors, officers, shareholders or otherwise; that the Adviser may be
  interested in the Fund; and that the existence of any such dual interest
     will not affect the validity of this Agreement or of any transactions under
this Agreement except as otherwise provided in the Articles of        
     Incorporation of the Fund and the Articles of Incorporation of the Adviser,
respectively, or by specific provisions of applicable law.            

9.   REGULATION                                                                 

    The Adviser will submit to all regulatory and administrative bodies having
jurisdiction over the services provided pursuant to this Agreement any
 information, reports or other material which any such body by reason of
this Agreement may request or require pursuant to applicable laws and 
  regulations.  The Adviser will comply in all material respects with Rule
17j-1 under the Investment Company Act.                               

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10.  DURATION AND TERMINATION OF AGREEMENT                                      

This Agreement will become effective as of the date hereof and will   
continue in effect until a new investment advisory agreement with     
  SunAmerica Asset Management Corp., approved by the vote of a majority of
 the outstanding voting securities (as defined in the Investment Company
     Act) of the Fund, becomes effective in accordance with its terms or for two
years from the date hereof, whichever is less.                        

  This Agreement may be terminated at any time, without the payment of any
   penalty, by the Directors of the Fund or by the vote of a majority of the
    outstanding voting securities of the Fund, upon sixty days' written notice
to the Adviser, or by the Adviser on sixty days' written notice to the
    Fund.  This Agreement will automatically terminate, without the payment of
   any penalty, in the event of its assignment (as defined in the Investment
Company Act).                                                         

11.  PROVISION OF CERTAIN INFORMATION BY ADVISER                                

   The Adviser will promptly notify the Fund in writing of the occurrence of
any of the following events:                                          

    a.   the Adviser fails to be registered as an investment adviser under the
          Investment Advisers Act or under the laws of any jurisdiction in which
        the Adviser is required to be registered as an investment adviser in
order to perform its obligations under this Agreement;      

b.   the Adviser is served or otherwise receives notice of any action,
    suit, proceeding, inquiry or investigation, at law or in equity,
          before or by any court, public board or body, involving the affairs of
the Fund; and                                               

    c.   the chief executive officer or controlling stockholder of the Adviser
or the portfolio manager of the Fund changes.               

12.  AMENDMENTS TO THE AGREEMENT                                                

   This Agreement may be amended by written amendment signed by the parties,
    provided that the terms of any material amendment shall be approved (i) by
     the vote of a majority of the outstanding voting securities of the Fund and
 (ii) by the vote of a majority of the Directors of the Fund who are not
interested persons of any party to this Agreement, cast in person at a
     meeting called for the purpose of voting on such approval, if such approval
is required by law.                                                   

13.  ENTIRE AGREEMENT                                                           

This Agreement contains the entire understanding and agreement of the 
parties.                                                              

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14.  HEADINGS                                                                   

     The headings in the sections of this Agreement are inserted for convenience
of reference only and will not constitute a part of this Agreement.   

15.  NOTICES                                                                    

All notices required to be given pursuant to this Agreement will be   
delivered or mailed to the last known business address of the Fund or 
Adviser in person or by registered mail or a private mail or delivery 
     service providing the sender with notice of receipt.  Notice will be deemed
given on the date delivered or mailed in accordance with this section.

16.  SEVERABILITY                                                               

If any provision of this Agreement is held or made invalid by a court 
     decision, statute, rule, or otherwise, the remainder of this Agreement will
not be affected.                                                      

17.  GOVERNING LAW                                                              

The provisions of this Agreement will be construed and interpreted in 
  accordance with the laws of the Commonwealth of Massachusetts, or any of
 the applicable provisions of the Investment Company Act.  To the extent
that the laws of the Commonwealth of Massachusetts, or any of the     
  provisions in this Agreement, conflict with applicable provisions of the
Investment Company Act, the latter will control.                      

18.  LIMITATION OF LIABILITY OF ADVISER                                         

   Neither the Adviser nor any of its officers, directors, or employees, nor
any person performing executive, administrative, trading, or other    
    functions for the Fund (at the direction or request of the Adviser) or the
Adviser in connection with the Adviser's discharge of its obligations 
   undertaken or reasonably assumed with respect to this Agreement, shall be
     liable for any error of judgment or mistake of law or for any loss suffered
     by the Fund in connection with the matters to which this Agreement relates,
 except for loss resulting from willful misfeasance, bad faith, or gross
     negligence in the performance of its or his duties on behalf of the Fund or
    from reckless disregard by the Adviser or any such person of the duties of
the Adviser under this Agreement.                                     

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IN WITNESS WHEREOF, the parties to this Agreement have caused this    
     Agreement to be executed under seal by their duly authorized officers as of
the date first set forth above.                                       

NORTH AMERICAN SENIOR         
FLOATING RATE FUND, INC.      

     By:  ______________________________

AMERICAN GENERAL              
ASSET MANAGEMENT CORP.        

     By:  ______________________________

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EXHIBIT B-2 

[SAAMCo Advisory Agreement to come] 

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EXHIBIT C-1 

Form of Subadvisory Agreement between Stanfield and Adviser 

[to come] 

1 

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Preliminary Copy  

North American Senior Floating Rate Fund, Inc.                                  
286 Congress Street                                                             
Boston, MA  02210                                                               

P R O X Y                                                                       

This proxy is solicited on behalf of the Board of Directors of North American   
Senior Floating Rate Fund, Inc.                                                 

        The undersigned hereby appoints _____, ______ and ______ and each of
them, as proxies, each with the power to appoint his or her substitute, and     
hereby authorizes each of them to represent and to vote, as designated on the   
reverse side of this card, all of the shares of the North American Senior       
Floating Rate Fund, Inc. (the "Fund") held of record by the undersigned on      
September 4, 2001, at a Special Meeting of Shareholders of the Fund to be held  
on October 19, 2001 at 10 a.m. Eastern time and at any adjournment thereof.     

        THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER HEREIN
DIRECTED BY THE UNDERSIGNED SHAREHOLDER.  IF NO DIRECTION IS MADE, THIS PROXY   
WILL BE VOTED FOR PROPOSALS 1, 2(a), 2(b), 3(a) AND 3(b).                       

          By signing and dating the reverse side of this card, you authorize the
proxies to vote each proposal as marked, or if not marked, to vote "FOR" each   
proposal, and to use their discretion to vote for any other matter as may       
properly come before the meeting or any adjournment thereof.  If you do not     
intend to personally attend the meeting, please complete and return this card at
once in the enclosed envelope.  Alternatively, you may vote your shares in by   
calling a specially designated telephone number (toll free 1-____________ ) or  
via the Internet at http://proxy. ____________ .com.                            
------------                            

                                (Continued and to be signed on the reverse side)

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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING:                     
     ---

                                                        [Enlarge/Download Table]
                                                                                                                     

1.  To elect Directors:                                          FOR ALL                   FOR ALL                   
                                                                 NOMINEES     WITHHOLD     EXCEPT                    
                                                                 [      ]    [        ]   [       ]                  

     (01)  Dr. Judith L. Craven                                                                                      
     (02)  William F. Devin                                                                                          
     (03)  Samuel M. Eisenstat                                                                                       
     (04)  Stephen J. Gutman                                                                                         
     (05)  Peter A. Harbeck                                                                                          

Note: If you do not wish your shares voted "FOR" a particular                                                        
nominee, mark the "For All Except" box and strike a line                                                             
through the name(s) of the nominee(s).  Your shares will be                                                          
voted for the remaining nominee(s).                                                                                  

2.  (a) To approve a new investment advisory agreement between     FOR         AGAINST     ABSTAIN                   
American General Asset Management Corp. ("AGAM") and the Fund,   [      ]    [        ]   [       ]                  
which will become effective immediately upon such approval and                                                       
will terminate at the close of business on or about November 9,                                                      
2001 (the "Reorganization Date"), the terms of which are the                                                         
same in all material respects as the Fund's previous investment                                                      
advisory agreement with AGAM;                                                                                        
                                                                   FOR         AGAINST     ABSTAIN                   
    (b) To approve a new investment advisory agreement between   [      ]    [        ]   [       ]                  
SunAmerica Asset Management Corp. ("SAAMCO") and the Fund,                                                           
which will become effective on the Reorganization Date, the                                                          
terms of which are similar to the Fund's previous                                                                    
investment advisory agreement with AGAM;                                                                             

3.  (a) To approve a new subadvisory agreement between AGAM and    FOR         AGAINST     ABSTAIN                   
Stanfield Capital Partners LLC ("Stanfield"), the new            [      ]    [        ]   [       ]                  
subadviser of the Fund, which will terminate on the                                                                  
Reorganization Date;                                                                                                 

    (b) To approve a new subadvisory agreement between SAAMCo      FOR         AGAINST     ABSTAIN                   
and Stanfield, which will become effective on the                [      ]    [        ]   [       ]                  
Reorganization Date; and                                                                                             

4.  In their discretion, the named proxies may vote to transact                                                      
such other business as properly may come before the meeting or                                                       
any adjournment thereof.                                          PLEASE SIGN EXACTLY AS NAME APPEARS HEREON.  When  
                                                                  shares are held by joint tenants, both should sign.
RECEIPT OF THE NOTICE OF THE SPECIAL MEETING AND THE              When signing as attorney or as executor,           
ACCOMPANYING PROXY STATEMENT IS HEREBY ACKNOWLEDGED.              administrator, trustee or guardian, or as custodian
                                                                  for a minor, please give full title as such.  If a 
PLEASE MARK BOXES /X/ OR [X] IN BLUE OR BLACK INK.  SIGN, DATE    corporation, please sign in full corporate name by 
AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.   president or other authorized officer.  If a       
                                                                  partnership, please sign in partnership name by    
                                                                  authorized persons.                                

                                                                 Dated:_____________________________                 

                                                                 X_________________________________                  

                                                                              Signature                              
                                                                 X_________________________________                  
                                                                      Signature, if held jointly                     

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘PRES14A’ Filing		Date		First		Last			Other Filings
		11/9/01		2		50
For Period End:		10/19/01		2		49			DEFS14A
		9/4/01		7		49
Filed on:		8/21/01
		8/2/01		13
		6/30/01		10		31			N-30D,  NSAR-A
		6/1/01		5		28
		5/31/01		28
		5/23/01		5		28
		4/17/01		15		28			N-23C3A
		1/21/01		17
		12/31/00		10		34			N-30D,  NSAR-B
		6/13/00		15
		6/1/00		17		30			DEF 14A,  PRE 14A
		5/31/00		17
		3/10/00		21					497
		1/1/00		17
		8/18/99		9
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