Sunamerica Senior Floating Rate Fund Inc – ‘DEFS14A’ for 10/19/01

On:  Monday, 9/10/01   ·   For:  10/19/01   ·   Accession #:  950130-1-504469   ·   File #:  811-08727

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Definitive Proxy Solicitation Material — Special Meeting   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEFS14A     North American Senior Floating Rate Fund, Inc         58    240K 

Document Table of Contents

DEFS14A
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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:                                                      

                                 [_]Confidential, For Use of the

                                  Commission Only (as Permitted by
[_]Preliminary Proxy Statement              Rule 14a-6(e)(2))                   

[X]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:         

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

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

(4) Proposed maximum aggregate value of transaction:                        

(5) Total fee paid:                                                         

[_]Fee paid previously with preliminary materials.                              

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

(1) Amount previously paid:                                                 

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

(3) Filing Party:                                                           

(4) Date Filed:                                                             

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

                                                    September 10, 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 August 29, 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.                                 

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YOUR VOTE IS IMPORTANT

 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/ John I. Fitzgerald

                      John I. Fitzgerald

                                Secretary and Vice President

                                       North American Senior Floating Rate
                Fund, Inc.

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

                                                    September 10, 2001

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 August 29, 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,        
shareholder approval of the new advisory agreement with AGAM is required. 
The new investment advisory                                               

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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. These three nominees currently serve as     
directors/trustees of the SunAmerica family of mutual funds.              

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

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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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 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                                                        

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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 10, 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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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 10, 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, 29,587,845 shares of the Fund were issued and      
outstanding, including 0 Class A shares, 5,566,829 Class B shares, 20,300,943   
Class C shares and 3,720,073 Class D shares. As of September 4, 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,    
FTC & Co., P.O. Box 173736, Denver, CO 80217, beneficially held 280,932.380     
shares of Class D shares of the Fund, which represented approximately 7.55% of  
the outstanding Class D shares. Other than as disclosed above, as of the Record 
Date, there were no other persons who owned of record or beneficially 5% or     
more of any class of shares of the Fund.                                        

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 fourteen 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 or an affiliate thereof, 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 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.                                                                       

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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 August 29, 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. 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 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.                                                           

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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.                                                                      

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Information about the Nominees                                                  

  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.                 

                                                                [Download Table]

                                                           Principal Occupation(s)
                                 Position and Tenure        During the Past Five  
   Name, Age and Address            with the Fund                   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      

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                                                                [Download Table]

                           Position                                           
                             and                                              
                            Tenure                                            
                           with the           Principal Occupation(s)         
  Name, Age and Address      Fund           During the Past Five Years        
  ---------------------    --------         --------------------------        
                                                                              
                                    Corporation (1966-1996); Formerly,        
                                    Director, CypressTree Senior Floating Rate
                                    Fund, Inc. (October 1997 to May 2001).    

Samuel M. Eisenstat (60).. Nominee  Attorney, solo practitioner; Chairman of  
                                    the Boards of Directors/Trustees of       
                                    SunAmerica Mutual Funds and Anchor Series 
                                    Trust (1985 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 (1984
                                    to present).                              

Peter A. Harbeck* (47).... Nominee  Director and President and Chief Executive
                                    Officer, SAAMCo (August 1995 to present); 
                                    Director, AIG 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 (1995
                                    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.                            

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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 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 Audit and Nominating Committee.   

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  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. Alice T. Kane resigned as Chairman of the Board and        
President of the Fund as of August 31, 2001. The business address of each of    
Messrs. Brown, Fitzgerald and Packs is 286 Congress Street, Boston,             
Massachusetts 02210, and the business address of the other officers is 2929     
Allen Parkway, Houston, Texas 77019.                                            

                                                                [Download Table]

                                                            Principal Occupation(s)
                                Position and Tenure          During the Past Five  
  Name, Age and Address            With the Fund                     Years         
  ---------------------         -------------------         -----------------------
                                                                                   
Thomas J. Brown (54)..... Treasurer and Vice President,    Chief Financial Officer 
                          since October 1997               and Chief Administrative
                                                           Officer, AGAM (March    
                                                           2000 to present);       
                                                           Formerly, 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).                  
Evelyn M. Curran (36).... Vice President, since April 2001 Vice President, American
                                                           General Fund Group      
                                                           (1999-present).         
                                                           Formerly, Senior        
                                                           Attorney, American      
                                                           General Corporation     
                                                           (1997-1999); Senior     
                                                           Attorney, Western       
                                                           National Life Insurance 
                                                           Company (1994-1997).    

John I. Fitzgerald (53).. Secretary and Vice President,    Assistant Secretary and 
                          since October 1997               Counsel, AGAM and AGFD  
                                                           (March 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).            

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                                                                [Download Table]

                                                          Principal Occupation(s)
                              Position and Tenure          During the Past Five  
 Name, Age and Address           With the Fund                     Years         
 ---------------------        -------------------         -----------------------
                                                                                 
Nori L. Gabert (48).... Assistant Secretary and          Senior Counsel, American
                        Vice President, since April 2001 General Financial Group 
                                                         (1997-present); Vice    
                                                         President and Secretary 
                                                         of NAFV I and NAFV II   
                                                         (1998-present).         
                                                         Formerly, Vice President
                                                         and Assistant Secretary 
                                                         of NAFV I (1998-2000);  
                                                         Vice President and      
                                                         Assistant Secretary of  
                                                         NAFV II (1998-2000); Of 
                                                         Counsel, Winstead       
                                                         Sechest & Minick P.C.   
                                                         (1997); Vice President  
                                                         and Associate General   
                                                         Counsel of VanKampen,   
                                                         Inc. (1981-1996).       

John N. Packs (46)..... Vice President and Assistant     Director of Research,   
                        Treasurer, since March 2000      AGAM (March 2000 to     
                                                         present); 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).           

Todd L. Spillane (42).. Assistant Secretary and          Chief Compliance        
                        Vice President, since            Officer, American       
                        April 2001                       General Investment      
                                                         Management, L.P. (1999- 
                                                         present). Formerly,     
                                                         Chief Compliance        
                                                         Officer, Nicholas       
                                                         Applegate Capital       
                                                         Management (1994-1999). 

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 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                                       

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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

                                                                [Download Table]

                                                      Total        Aggregate    
                                                   Compensation   Compensation  
                                                     from the       from the    
                Name and Position                      Fund     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, 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.      

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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.                               

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                              

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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 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                                                   

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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 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 one year and it has been renewed by     
AGAM annually.                                                                  

 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, whichever 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.                            

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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 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.                                                 

                                                                [Download Table]

                                       Position with AGAM and Principal   
         Name and Address                       Occupation(s)             
         ----------------              --------------------------------   
                                                                          
Alice T. Kane....................  Director, President and Chairman of the
 286 Congress Street               Board of Directors; Executive Vice     
 Boston, MA 02210                  President, American General Fund Group.

John A. Graf.....................  Director, Senior Vice Chairman, Asset  
 2929 Allen Parkway                Accumulation, American General.        
 Houston, TX 77019                                                        

Kent E. Barrett..................  Director and Treasurer; Senior Vice    
 2929 Allen Parkway                President and General Auditor, American
 Houston, TX 77019                 General.                               

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 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 is set      
forth below. This description is qualified in its entirety by reference to the  
form of the SAAMCo Advisory Agreement attached 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.                                

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                                    

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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 upon SAAMCo replacing AGAM as the Fund's      
investment adviser. 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 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.                                                      

 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 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             

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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 disbursements of 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 
both the AGAM and SAAMCo fee waivers 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.                                                                      

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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 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.                                                                         

                                                                [Download Table]

                                    Position with SAAMCo and             
   Name and Address                  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                          
                       Senior Vice President, Treasurer-Mutual & Variable
Peter C. Sutton....... Annuity Funds                                     
                       Senior Vice President, General Counsel and        
Robert M. Zakem....... 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 is a publicly traded company.                                               

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  
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                          

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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                                       

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, 
between Stanfield and the Adviser. Additional information about Stanfield is    
set forth below in the section entitled "Information About Stanfield."          

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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 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     

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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 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                 

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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.      

                                                                [Download Table]

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

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.     

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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, 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.                                                                      

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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.                                                                           

  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 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 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 clause (iii), other than the preparation of the Fund's tax       
returns.                                                                        

                                                                [Download Table]

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

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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   
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 or an 
affiliate thereof. 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 10, 2001                                                              

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EXHIBIT A 

CHARTER OF THE AUDIT COMMITTEE

NORTH AMERICAN FUNDS

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;                                                                  

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

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(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;                              

(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.                     

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.                                                  

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  (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;                                                             

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;              

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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);                                         

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 

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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 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.                                                                        

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           

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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.                                                                 

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 

FORM OF     

INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT      

This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT is dated as of          
           , 2001, as amended from time to time, by and between SUNAMERICA
SENIOR FLOATING RATE FUND, INC., a Maryland corporation (the "Corporation"),    
and SUNAMERICA ASSET MANAGEMENT CORP., a Delaware corporation (the "Adviser").  

W I T N E S S E T H:      

WHEREAS, the Corporation is registered under the Investment Company Act of
1940, as amended (the "Act"), as an closed-end management investment company    
and may issue shares of common stock, par value $.01 per share; and             

WHEREAS, the Adviser is engaged in the business of rendering investment   
management, advisory and administrative services and is registered as an        
investment adviser under the Investment Advisers Act of 1940; and               

  WHEREAS, the Corporation desires to retain the Adviser to furnish investment
management, advisory and administrative services to the Corporation and the     
Adviser is willing to furnish such services;                                    

NOW, THEREFORE, it is hereby agreed between the parties hereto as follows:

1. Duties of the Adviser. The Adviser shall manage the affairs of the     
Corporation including, but not limited to, continuously providing the           
Corporation with investment management, including investment research, advice   
and supervision, determining which securities shall be purchased or sold by the 
Corporation, making purchases and sales of securities on behalf of the          
Corporation and determining how voting and other rights with respect to         
securities owned by the Corporation shall be exercised, subject in each case to 
the control of the Board of Directors of the Corporation (the "Directors") and  
in accordance with the objectives, policies and principles set forth in         
Corporation's Registration Statement and the Corporations' current Prospectus   
and Statement of Additional Information, as amended from time to time, the      
requirements of the Act and other applicable law. In performing such duties,    
the Adviser (i) shall provide such office space, such bookkeeping, accounting,  
clerical, secretarial and administrative services (exclusive of, and in         
addition to, any such service provided by any others retained by the            
Corporation) and such executive and other personnel as shall be necessary for   
the operations of the Corporation, (ii) shall be responsible for the financial  
and accounting records required to be maintained by the Corporation (including  
those maintained by Corporation's custodian) and (iii) shall oversee the        
performance of services provided to the Corporation by others, including the    
custodian, transfer and shareholder servicing agent. The Corporation            
understands that the Adviser also acts as the manager of other investment       
companies.                                                                      

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Subject to Section 36 of the Act, the Adviser shall not be liable to the  
Corporation for any error of judgment or mistake of law or for any loss arising 
out of any investment or for any act or omission in the management of the       
Corporation and the performance of its duties under this Agreement except for   
willful misfeasance, bad faith or gross negligence in the performance of its    
duties or by reason of reckless disregard of its obligations and duties under   
this Agreement.                                                                 

2. Retention by Adviser of Sub-Advisers, etc. In carrying out its         
responsibilities hereunder, the Adviser may employ, retain or otherwise avail   
itself of the services of other persons or entities including, without          
limitation, affiliates of the Adviser, on such terms as the Adviser shall       
determine to be necessary, desirable or appropriate. Without limiting the       
generality of the foregoing, and subject to the requirements of Section 15 of   
the Act, the Adviser may retain one or more sub-advisers to manage all or a     
portion of the investment portfolio of the Corporation, at the Adviser's own    
cost and expense. Retention of one or more sub-advisers, or the employment or   
retention of other persons or entities to perform services, shall in no way     
reduce the responsibilities or obligations of the Adviser under this Agreement  
and the Adviser shall be responsible for all acts and omissions of such sub-    
advisers, or other persons or entities, in connection with the performance of   
the Adviser's duties hereunder.                                                 

3. Expenses. The Adviser shall pay all of its expenses arising from the   
performance of its obligations under Section 1 and shall pay any salaries, fees 
and expenses of the Corporation's Directors and Officers who are employees of   
the Adviser. The Adviser shall not be required to pay any other expenses of the 
Corporation, including, but not limited to, direct charges relating to the      
purchase and sale of portfolio securities, interest charges, fees and expenses  
of independent attorneys and auditors, taxes and governmental fees, cost of     
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 service,    
expenses of printing and filing reports and other documents filed with          
governmental agencies, expenses of printing and distributing prospectuses,      
expenses of annual and special shareholders meetings, fees and disbursements of 
transfer agents and custodians, expenses of disbursing dividends and            
distributions, fees and expenses of Directors who are not employees of the      
Adviser or its affiliates, membership dues in the Investment Company Institute, 
insurance premiums and extraordinary expenses such as litigation expenses.      

4. Compensation of the Adviser. (a) As full compensation for the services 
rendered, facilities furnished and expenses paid by the Adviser under this      
Agreement, the Corporation agrees to pay to the Adviser a fee at the annual     
rates set forth in Schedule A hereto. Such fee shall be accrued daily and paid  
monthly as soon as practicable after the end of each month (i.e., the           
applicable annual fee rate divided by 365 is applied to each prior days' net    
assets in order to calculate the daily accrual). For purposes of calculating    
the Adviser's fee with respect to the Corporation, the average daily net asset  
value shall be determined by taking an average of all determinations of such    
net asset value during the month. If the Adviser shall serve for less than the  
whole of any month the foregoing compensation shall be prorated.                

 (b) Upon any termination of this Agreement on a day other than the last day
of the month, the fee for the period from the beginning of the month in which   
termination occurs to the date of termination shall be prorated according to    
the proportion which such period bears to the full month.                       

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5. Portfolio Transactions. The Adviser is responsible for decisions to buy
or sell securities and other investments for a portion of the assets of the     
Corporation, broker-dealers and futures commission merchants' selection, and    
negotiation of brokerage commission and futures commission merchants' rates. As 
a general matter, in executing Portfolio transactions, the Adviser may employ   
or deal with such broker-dealers or futures commission merchants as may, in the 
Adviser's best judgement, provide prompt and reliable execution of the          
transactions at favorable prices and reasonable commission rates. In selecting  
such broker-dealers or futures commission merchants, the Adviser shall consider 
all relevant factors including price (including the applicable brokerage        
commission, dealer spread or futures commission merchant rate), the size of the 
order, the nature of the market for the security or other investment, the       
timing of the transaction, the reputation, experience and financial stability   
of the broker-dealer or futures commission merchant involved, the quality of    
the service, the difficulty of execution, the execution capabilities and        
operational facilities of the firm involved, and, in the case of securities,    
the firm's risk in positioning a block of securities. Subject to such policies  
as the Directors may determine and consistent with Section 28(e) of the         
Securities Exchange Act of 1934, as amended (the "1934 Act"), the Adviser shall 
not be deemed to have acted unlawfully or to have breached any duty created by  
this Agreement or otherwise solely by reason of the Adviser's having caused the 
Corporation to pay a member of an exchange, broker or dealer an amount of       
commission for effecting a securities transaction in excess of the amount of    
commission another member of an exchange, broker or dealer would have charged   
for effecting that transaction, if the Adviser determines in good faith that    
such amount of commission was reasonable in relation to the value of the        
brokerage and research services provided by such member of an exchange, broker  
or dealer viewed in terms of either that particular transaction or the          
Adviser's overall responsibilities with respect to the Corporation and to other 
clients as to which the Adviser exercises investment discretion. In accordance  
with Section 11(a) of the 1934 Act and Rule 11a2-2(T) thereunder, and subject   
to any other applicable laws and regulations including Section 17(e) of the Act 
and Rule 17e-1 thereunder, the Adviser may engage its affiliates or any other   
subadviser to the Corporation and its respective affiliates, as broker-dealers  
or futures commission merchants to effect Portfolio transactions in securities  
and other investments for the Corporation. The Adviser will promptly            
communicate to the officers and the Directors of the Corporation such           
information relating to Portfolio transactions as they may reasonably request.  
To the extent consistent with applicable law, the Adviser may aggregate         
purchase or sell orders for the Corporation with contemporaneous purchase or    
sell orders of other clients of the Adviser or its affiliated persons. In such  
event, allocation of the securities so purchased or sold, as well as the        
expenses incurred in the transaction, will be made by the Adviser in the manner 
the Adviser determines to be equitable and consistent with its and its          
affiliates' fiduciary obligations to the Corporation and to such other clients. 
The Adviser hereby acknowledges that such aggregation of orders may not result  
in more favorable pricing or lower brokerage commissions in all instances.      

  6. Term of Agreement. This agreement shall continue in full force and effect
for two years from the date hereof, and shall continue in full force and effect 
from year to year thereafter if such continuance is approved in the manner      
required by the Act and the Adviser has not notified the Corporation 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 Corporation, this      
Agreement may be terminated at any time, without payment of penalty by the      
Corporation, on 60 days written notice to the Adviser, by vote of the           
Directors, or by vote of a majority of the outstanding voting securities (as    
defined by the Act) of the Corporation. This Agreement shall automatically      
terminate in the event of its assignment (as defined by the Act).               

The Corporation hereby agrees that if (i) the Adviser ceases to act as    
investment manager and adviser to the Corporation and (ii) the continued use of 
the Corporation's present name would create confusion in the                    

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context of the Adviser's business, then the Corporation will use its best       
efforts to change its name in order to delete the word "SunAmerica" from its    
name.                                                                           

7. Liability of the Adviser. In the absence of willful misfeasance, bad   
faith, gross negligence or reckless disregard of obligations or duties          
("disabling conduct") hereunder on the part of the Adviser (and its officers,   
directors, agents, employees, controlling persons, shareholders and any other   
person or entity affiliated with the Adviser) the Adviser shall not be subject  
to liability to the Corporation or to any shareholder of the Corporation for    
any act or omission in the course of, or connected with, rendering services     
hereunder, including without limitation, any error of judgment or mistake of    
law or for any loss suffered by any of them in connection with the matters to   
which this Agreement relates, except to the extent specified in Section 36(b)   
of the Act concerning loss resulting from a breach of fiduciary duty with       
respect to the receipt of compensation for services. Except for such disabling  
conduct, the Corporation shall indemnify the Adviser (and its officers,         
directors, partners, agents, employees, controlling persons, shareholders and   
any other person or entity affiliated with the Adviser) (collectively, the      
"Indemnified Parties") from any liability arising from the Adviser's conduct    
under this Agreement.                                                           

Indemnification to the Adviser or any of its personnel or affiliates shall
be made when (i) a final decision on the merits rendered, by a court or other   
body before whom the proceeding was brought, that the person to be indemnified  
was not liable by reason of disabling conduct or, (ii) in the absence of such a 
decision, a reasonable determination, based upon a review of the facts, that    
the person to be indemnified was not liable by reason of disabling conduct, by  
(a) the vote of a majority of a quorum of the Directors who are neither         
"interested persons" of the Corporation as defined in section 2(a)(19) of the   
Act nor parties to the proceeding ("disinterested, non-party Directors") or (b) 
an independent legal counsel in a written opinion. The Corporation may, by vote 
of a majority of the disinterested, non-party Directors advance attorneys' fees 
or other expenses incurred by an Indemnified Party in defending a proceeding    
upon the undertaking by or on behalf of the Indemnified Party to repay the      
advance unless it is ultimately determined that he is entitled to               
indemnification. Such advance shall be subject to at least one of the           
following: (1) the person to be indemnified shall provide a security for his    
undertaking, (2) the Corporation shall be insured against losses arising by     
reason of any lawful advances, or (3) a majority of a quorum of the             
disinterested, non-party Directors or an independent legal counsel in a written 
opinion, shall determine, based on a review of readily available facts, that    
there is reason to believe that the person to be indemnified ultimately will be 
found entitled to indemnification.                                              

8. Non-Exclusivity. Nothing in this Agreement shall limit or restrict the 
right of any director, officer or employee of the Adviser who may also be a     
Director, officer or employee of the Corporation to engage in any other         
business or devote his or her time and attention in part to the management or   
other aspects of any business, whether of a similar or dissimilar nature, nor   
limit or restrict the right of the Adviser to engage in any other business or   
to render services of any kind to any other corporation, firm, individual or    
association.                                                                    

9. Amendments. This Agreement may be amended by mutual consent in writing,
but the consent of the Corporation must be obtained in conformity with the      
requirements of the Act.                                                        

 10. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York and the applicable provisions of the Act. To the  
extent the applicable laws of the State of New York, or any of the provisions   
herein, conflict with the applicable provisions of the Act, the latter shall    
apply.                                                                          

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IN WITNESS WHEREOF, the Corporation and the Adviser have caused this      
Agreement to be executed by their duly authorized officers as of the date       
first above written.                                                            

                                     SunAmerica Senior Floating Rate
          Fund, Inc.

                                     By:____________________________

                  [Name]

                   [Title]

                                       SunAmerica Asset Management Corp.

                                     By:____________________________

                  [Name]

                   [Title]

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SCHEDULE A      

                                                                [Download Table]

                                                               FEE RATE       
                                                          (as a % of average  
PORTFOLIO                                               daily net asset value)
---------                                               ----------------------
                                                                              
SunAmerica Senior Floating Rate Fund, Inc. .... 0.85% on first $1 billion     
                                                0.80% on next $1 billion      
                                                0.75% in excess of $2 billion 

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EXHIBIT C     

FORM OF SUBADVISORY AGREEMENT BETWEEN STANFIELD AND ADVISER     

 SUBADVISORY AGREEMENT

THIS SUBADVISORY AGREEMENT is made and entered into as of              ,  
2001, between                          (the "Adviser"), a Delaware corporation  
registered under the Investment Advisers Act of 1940, as amended (the "Advisers 
Act"), and STANFIELD CAPITAL PARTNERS LLC (the "Subadviser"), a New York        
limited liability company also registered under the Advisers Act.               

WITNESSETH

WHEREAS, the Adviser, pursuant to an Advisory Agreement (the Advisory     
Agreement") with the SunAmerica Senior Floating Rate Fund, Inc., a Maryland     
Corporation (the "Fund"), has been retained to act as investment adviser for    
the Fund;                                                                       

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

WHEREAS, the Adviser desires to retain the Subadviser to provide a        
continuous investment program for the Fund, and the Subadviser is willing to    
render those services subject to the terms and conditions set forth in this     
Agreement.                                                                      

NOW, THEREFORE, the parties agree as follows:                             

1. INVESTMENT DESCRIPTION; APPOINTMENT AS SUBADVISER                            

The Fund desires to employ its capital by investing and reinvesting in    
securities of the kind and in accordance with the limitations specified in the  
Fund's Prospectus and Statement of Additional Information relating to the Fund  
as may be in effect from time to time (collectively, the "Prospectus") and      
which are filed with the SEC as part of the Fund's Registration Statement on    
Form N-2, as amended from time to time, and in such manner and to such extent   
as may be approved by the Board of Directors of the Fund. A copy of the         
Prospectus has been provided to the Subadviser. The Adviser retains the         
Subadviser to act as investment adviser for and to manage the Fund's Assets     
subject to the supervision of the Adviser and the Board of Directors of the     
Fund and subject to the terms of this Agreement, and the Subadviser accepts     
that employment. In this capacity, the Subadviser will be responsible for the   
investment management of the Fund's assets. It is recognized that the           
Subadviser now acts, and that from time to time hereafter may act, as           
investment adviser to one or more other investment companies and to fiduciary   
or other managed accounts and that the Adviser and the Fund have no objection   
to those activities and such other activities as more fully described in the    
Subadviser's Part II of its Form ADV referenced in Section 7(d).                

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2. DUTIES OF THE SUBADVISER                                                     

a. Investments. The Subadviser is authorized and directed and agrees,     
subject to the stated investment policies and restrictions of the Fund as set   
forth in the Prospectus and subject to the directions of the Adviser and the    
Fund's Board of Directors, to purchase, hold and sell investments for the Fund  
("Fund Investments") and to monitor on a continuous basis the performance of    
such Fund Investments. Subject to the supervision of the Board of Directors and 
the Adviser and the terms and conditions of this Agreement, including without   
limitation section 2(b), the Subadviser will: (1) manage the Fund Investments   
in accordance with the Fund's investment objective, policies and limitations as 
stated in the Prospectus; (2) make investment decisions for the Fund; (3) place 
purchase and sale orders for portfolio transactions for the Fund, including the 
manner, method and timing of such investment transactions; and (4) manage       
otherwise uninvested Fund cash. In providing these services, the Subadviser     
will formulate and implement a continuous program of investment, evaluation     
and, if appropriate, sale and reinvestment of the Fund Investments. The Adviser 
agrees to provide to the Subadviser such assistance as may be reasonably        
requested by the Subadviser in connection with its activities under this        
Agreement, including, without limitation, information concerning the Fund, its  
funds available (or to become available) for investment, and generally as to    
the condition of the Fund's affairs.                                            

b. Compliance with Applicable Laws and Governing Documents. In the        
performance of its duties and obligations under this Agreement, the Subadviser  
will act in conformity with the Prospectus and with the instructions and        
directions received in writing from the Adviser or the Board of Directors of    
the Fund and will comply with the requirements of the 1940 Act, the Advisers    
Act, the Internal Revenue Code of 1986, as amended (the "Code") (including the  
requirements for qualification as a regulated investment company) and all other 
federal and state laws and regulations applicable to its services under this    
Agreement.                                                                      

The Adviser will provide the Subadviser with reasonable advance notice of 
any change in the Fund's investment objectives, policies and restrictions as    
stated in the Prospectus, and the Subadviser will, in the performance of its    
duties and obligations under this Agreement, manage the Fund Investments        
consistent with such changes. The Adviser acknowledges and agrees that the      
Prospectus will at all times be in compliance with all disclosure requirements  
under all applicable federal and state laws and regulations relating to the     
Fund, including, without limitation, the 1940 Act and the rules and regulations 
under this Agreement, and that the Subadviser will have no liability in         
connection therewith, except as to the accuracy of material information         
furnished in writing by the Subadviser to the Fund or to the Adviser            
specifically for inclusion in the Prospectus. The Subadviser hereby agrees to   
provide to the Adviser in a timely manner such information relating to the      
Subadviser and its relationship to, and actions for, the Fund as may be         
required to be contained in the Prospectus.                                     

 In fulfilling these requirements and its other requirements and obligations
under this Agreement, the Subadviser will be entitled to rely on and act in     
accordance with (1) information provided to it by the Fund's administrator,     
fund accountant, custodian or other service provider and (2) instructions,      
which may be standing instructions, from the Adviser. The Adviser agrees to     
provide or cause to be provided to the Subadviser on an ongoing basis upon      
request by the Subadviser, such information as is requested by the Subadviser   
for the performance of its obligations under this Agreement, and the Subadviser 
will not be in breach of any term of this Agreement or be deemed to have acted  
negligently if the Adviser fails to provide or cause to be provided such        
information and the Subadviser relies on the information most recently provided 
to it.                                                                          

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 c. Voting of Proxies. The Subadviser will have the power to vote, either in
person or by proxy, all matters related to Fund Investments from time to time,  
and will not be required to seek instructions from the Adviser or the Fund.     

d. Agent. Subject to any other written instructions of the Adviser or the 
Fund, the Subadviser is hereby appointed the Adviser's and the Fund's agent and 
attorney-in-fact for the limited purposes of executing account documentation,   
agreements, contracts and other documents as the Subadviser will be requested   
by brokers, dealers, counterparties and other persons in connection with its    
management of the assets of the Fund.                                           

  e. Portfolio Transactions. Subject to the approval of the Board of Directors
of the Fund, the Subadviser, in carrying out its duties hereunder, may cause    
the Fund to pay a broker-dealer which furnishes brokerage or research services  
as such services are defined under Section 28(e) of the Securities Exchange Act 
of 1934, as amended (the "34 Act"), a higher commission than that which might   
be charged by another broker- dealer which does not furnish brokerage or        
research services or which furnishes brokerage or research services deemed to   
be of lesser value, if such commission is deemed reasonable in relation to the  
brokerage and research services provided by the broker-dealer, viewed in terms  
of either that particular transaction or the overall responsibilities of the    
Subadviser with respect to the accounts as to which it exercises investment     
discretion (as such term is defined under Section 3(a)(35) of the 34 Act).      

It is recognized that the services provided by such brokers or other      
entities may be useful to the Subadviser in connection with the Subadviser's    
services to other clients.                                                      

  On occasions when the Subadviser deems the purchase or sale of a security to
be in the best interests of the Fund as well as other clients of the            
Subadviser, the Subadviser, to the extent permitted by applicable laws and      
regulations, may, but is under no obligation to, aggregate the securities to be 
sold or purchased in order to obtain the most favorable price or lower          
brokerage commissions and efficient execution. In that event, allocation of     
securities so sold or purchased, as well as the expenses incurred in the        
transaction, will be made by the Subadviser in the manner the Subadviser        
considers to be the most equitable and consistent with its fiduciary            
obligations to the Fund and to its other clients over time. It is recognized    
that in some cases, this procedure may adversely affect the price paid or       
received by the Fund or the size of the position obtainable for, or disposed of 
by, the Fund.                                                                   

f. Certain Transactions. The Subadviser and any affiliated person of the  
Subadviser will not purchase securities or other instruments from or sell       
securities or other instruments to the Fund; provided, however, the Subadviser  
may purchase securities or other instruments from or sell securities or other   
instruments to the Fund if the transaction is permissible under applicable laws 
and regulations, including, without limitation, the 1940 Act and the Advisers   
Act and the rules and regulations promulgated under both those acts.            

The Subadviser, including its Access Persons (as defined in Rule 17j-1(e) 
under the 1940 Act), agrees to observe and comply with Rule 17j-1 and its Code  
of Ethics (which will comply in all material respects with Rule 17j-1, as       
amended from time to time). On a quarterly basis, the Subadviser will either    
(i) certify to the Adviser that the Subadviser and its Access Persons have      
complied with the Subadviser's Code of Ethics with respect to the Fund's assets 
or (ii) identify any material violations that have occurred with respect to the 
Fund's assets. In addition, the Subadviser will report at least annually to the 
Adviser concerning any other violations of the Subadviser's Code of Ethics that 
required significant remedial action and that were not previously reported.     

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  g. Books and Records. Pursuant both to the 1940 Act and the Advisers Act and
the rules and regulations promulgated under those acts, the Subadviser will     
maintain separate books and records of all matters pertaining to its management 
of the Fund's assets. The Fund's books and records will be available to the     
Adviser at any time upon reasonable request during normal business hours and    
will be available for telecopying without unreasonable delay to the Adviser     
during any day that the Fund is open for business.                              

  h. Information Concerning Fund Investments and Subadviser. From time to time
as the Adviser or the Fund may reasonably request (but no less often than       
quarterly), the Subadviser will furnish or cause to be furnished the requesting 
party reports on portfolio transactions and reports on Fund Investments held in 
the portfolio, all in such detail as the Adviser or the Fund may reasonably     
request. The Subadviser will also inform the Adviser promptly of changes in     
portfolio managers responsible for Subadviser Assets or of changes in the       
control of the Subadviser. The Subadviser will make available its officers and  
employees to meet with the Fund's Board of Directors in person on reasonable    
notice to review the Fund Investments and the Subadviser will report to the     
Board of Directors in writing on the Fund Investments monthly.                  

i. Custody Arrangements. The Subadviser will on each business day provide 
the Adviser and the Fund's custodian such information as the Adviser and the    
Fund's custodian may reasonably request relating to all transactions concerning 
the Fund Investments including, without limitation, recommendations, in         
accordance with policies and procedures established by the Directors, as to the 
fair value of securities for which market quotes are not available.             

3. INDEPENDENT CONTRACTOR                                                       

 In the performance of its duties under this Agreement, the Subadviser is an
independent contractor and unless otherwise expressly provided in this          
Agreement or otherwise authorized in writing, will have no authority to act for 
or represent the Fund or the Adviser in any way or otherwise be deemed an agent 
of the Fund or the Adviser.                                                     

4. EXPENSES                                                                     

  During the term of this Agreement, Subadviser will pay all expenses incurred
by it in connection with its activities under this 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.  
The Subadviser 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. The Subadviser will not be responsible for   
the Fund's or the Adviser's expenses.                                           

5. COMPENSATION                                                                 

a. The Adviser will pay the Subadviser a fee, computed daily and paid     
monthly on or before the last business day of the month, at the following       
annualized rate: 0.25% of the Fund's average daily net assets for average daily 
net assets up to and including $1 billion; and 0.20% of the Fund's average      
daily net assets in excess of $1 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.                   

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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 beginning of such month to the date of termination, as the case may 
be, shall be prorated according to the proportion which such period bears to    
the full month in which the effectiveness or termination occurs.                

  c. Notwithstanding any other provision of this Agreement, the Subadviser may
from time to time agree not to impose all or a portion of its fee otherwise     
payable under this Agreement (in advance of the time such fee or portion of the 
fee would otherwise accrue). Any such fee reduction may be discontinued or      
modified by the Subadviser at any time.                                         

d. The waiver, if any, by the Adviser of its Advisory Fee from the Fund   
shall not affect the payment of the fee to the Subadviser set forth in          
subsection (a) above.                                                           

6. REPRESENTATION AND WARRANTIES OF SUBADVISER                                  

The Subadviser represents and warrants to the Adviser and the Fund as     
follows:                                                                        

 a. The Subadviser is registered as an investment adviser under the Advisers
Act;                                                                            

  b. The Subadviser is a corporation duly organized and validly existing under
the laws of the State of New York with the power to own and possess its assets  
and carry on its business as it is now being conducted;                         

c. The execution, delivery and performance by the Subadviser of this      
Agreement are within the Subadviser's powers and have been duly authorized by   
its Managing Directors or members, and no action by or in respect of, or filing 
with, any governmental body, agency or official is required on the part of the  
Subadviser for the execution, delivery and performance by the Subadviser of     
this Agreement, and the execution, delivery and performance by the Subadviser   
of this Agreement do not contravene or constitute a default under (i) any       
provision of applicable law, rule or regulation, (ii) the Subadviser's          
governing instruments, or (iii) any material agreement, judgment, injunction,   
order, decree or other instrument binding upon the Subadviser;                  

d. The Form ADV of the Subadviser previously provided to the Adviser is a 
true and complete copy of the form filed with the SEC and the information       
contained therein is accurate and complete in all material respects.            

7. REPRESENTATIONS AND WARRANTIES OF ADVISER                                    

The Adviser represents and warrants to the Subadviser as follows:         

a. The Adviser is registered as an investment adviser under the Advisers  
Act;                                                                            

b. The Adviser is a corporation duly organized and validly existing under 
the laws of the State of Delaware with the power to own and possess its assets  
and carry on its business as it is now being conducted;                         

 c. The execution, delivery and performance by the Adviser of this Agreement
are within the Adviser's powers and have been duly authorized by its Board of   
Directors or shareholders, and no action by or in respect of, or filing with,   
any governmental body, agency or official is required on the part of the        
Adviser for the execution, delivery and performance by the Adviser of this      
Agreement, and the execution, delivery and performance by the Adviser of this   
Agreement do not contravene or constitute a default under (i) any provision of  
applicable law, rule or regulation, (ii) the Adviser's governing instruments,   
or (iii) any material agreement, judgment, injunction, order, decree or other   
instrument binding upon the Adviser;                                            

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d. The Form ADV of the Adviser previously provided to the Subadviser is a 
true and complete copy of the form filed with the SEC and the information       
contained therein is accurate and complete in all material respects;            

 e. The Adviser acknowledges that it has received a copy of the Subadviser's
Form ADV prior to the execution of this Agreement;                              

f. The Fund is in compliance in all material respects, and during the term
of this Agreement will remain in compliance in all material respects, with all  
federal and state laws, rules and regulations applicable to the Fund and the    
operation of its business (other than those related to investment objectives,   
policies and restrictions over which the Subadviser has discretion pursuant to  
the terms hereof), including, without limitation, applicable disclosure and     
filing obligations for prospectuses, statements of additional information,      
registration statements, periodic reports to shareholders and regulatory        
bodies, proxy statements and promotional materials and advertisements; and      

g. The Fund is in compliance in all material respects, and during the term
of this Agreement will remain in compliance in all material respects, with the  
terms and conditions of the Prospectus (other than those related to investment  
objectives, policies and restrictions over which the Subadviser has discretion  
pursuant to the terms hereof), including, without limitation, provisions        
relating to the computation of the Fund's net asset value and those relating to 
processing purchase, exchange and repurchase requests.                          

8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; DUTY TO UPDATE INFORMATION       

All representations and warranties made by the Subadviser and the Adviser 
pursuant to Sections 6 and 7, respectively, will survive for the duration of    
this Agreement and the parties to this Agreement will promptly notify each      
other in writing upon becoming aware that any of the foregoing representations  
and warranties are no longer true.                                              

9. LIABILITY                                                                    

  Neither the Subadviser 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 Subadviser) or the Subadviser  
in connection with the Subadviser'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 or her duties on behalf of the Fund or from reckless  
disregard by the Subadviser or any such person of the duties of the Subadviser  
under this Agreement.                                                           

As to any matters not expressly provided for by this Agreement, the       
Subadviser shall be in all cases fully protected in acting or refraining from   
acting hereunder or thereunder in accordance with the instruction of the        
Adviser.                                                                        

10. DURATION AND TERMINATION                                                    

a. This Agreement shall become effective as of the date hereof, and unless
sooner terminated as provided herein, shall continue in effect for two years    
from its effective date. Thereafter, this Agreement shall continue in effect,   
subject to the termination provisions and all other terms and conditions        
hereof, only so long as such                                                    

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continuance is approved at least annually by the vote of a majority of the      
Board of Directors who are not parties to this Agreement or interested persons  
of any such parties, cast in person at a meeting called for the purpose of      
voting on such approval.                                                        

 b. This Agreement may be terminated at any time, without the payment of any
penalty, by the Directors of the Fund, by the Adviser, or by the vote of a      
majority of the outstanding voting securities of the Fund, on sixty days'       
written notice to the Subadviser; or by the Subadviser on sixty days' written   
notice to the Fund and the Adviser. This Agreement may be terminated            
immediately in the event of a material breach of any provision of this          
Agreement by the other party to this Agreement. This Agreement will             
automatically terminate, without the payment of any penalty, in the event of    
its assignment (as defined in the Investment Company Act), or on termination    
of the Advisory Agreement.                                                      

11. REFERENCE TO ADVISER AND SUBADVISER                                         

Neither the Adviser, the Fund nor any affiliated person or agent of the   
Adviser or the Fund will make reference to or use the name of "Stanfield        
Capital Partners LLC" or any derivative thereof or logo associated with that    
name, except references concerning the identity of and services provided by     
the Subadviser to the Fund, which references will not differ in substance from  
those included in the Prospectus and this Agreement, in any advertising or      
promotional materials without the prior approval of the Subadviser, which       
approval will not be unreasonably withheld or delayed.                          

 Upon termination of this Agreement in accordance with Section 10(b) hereof,
the Adviser, the Fund and the Fund and their affiliates will cease to make      
such reference or use such name (or derivative or logo).                        

The Adviser consents to the use of its name in materials produced by the  
Subadviser which lists the Adviser as a client utilizing the services of the    
Subadviser.                                                                     

12. PROVISION OF CERTAIN INFORMATION BY SUBADVISER                              

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

 a. the Subadviser 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 Subadviser 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      
Subadviser or the portfolio manager of the Fund changes.                    

13. AMENDMENT                                                                   

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.                                           

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14. CONFIDENTIALITY                                                             

Subject to the duties of the Subadviser to comply with applicable law,    
including any demand of any regulatory or taxing authority having jurisdiction, 
the Subadviser will treat as confidential all records and other information     
pertaining to the Fund or the Adviser that the Subadviser maintains or receives 
as a result of its responsibilities under this Agreement. In addition, subject  
to the duties to comply with any applicable law, the Adviser agrees to treat as 
confidential any information concerning the Subadviser, including its           
investment policies or objectives, that the Adviser receives as the result of   
its actions under this Agreement.                                               

15. NOTICE                                                                      

All notices required to be given pursuant to this Agreement will be       
delivered or mailed to the last known business address of the Fund, the         
Adviser, or the Subadviser 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. 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.                                                        

17. COUNTERPARTS                                                                

This Agreement may be executed in one or more counterparts, each of which 
will be deemed an original, all of which will together constitute one and the   
same instrument.                                                                

18. CERTAIN DEFINITIONS                                                         

For the purposes of this Agreement, "interested person," "affiliated      
person", "majority of outstanding voting securities" and "assignment" have      
their respective meanings as set forth in the 1940 Act, subject, however, to    
such exemptions as may be granted by the SEC.                                   

19. 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.             

20. 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.                                                                    

21. ENTIRE AGREEMENT                                                            

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

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first written above.                                               

                                         -------------------------------------

                                         By: _________________________________

                                            ----------------------------------

                                  Stanfield Capital Partners LLC

                                         By: _________________________________

                                            ----------------------------------

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VOTE TODAY BY MAIL, 
TOUCH-TONE PHONE OR THE INTERNET  
CALL TOLL-FREE 1-888-221-0697   
OR LOG ON TO WWW.PROXYWEB.COM 

*** CONTROL NUMBER: 999 999 999 999 99  *** 

NORTH AMERICAN SENIOR FLOATING               PROXY FOR A MEETING OF SHAREHOLDERS
RATE FUND, INC.                              TO BE HELD ON OCTOBER 19, 2001     

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

      The undersigned hereby appoints Thomas J. Brown, John I. Fitzgerald,
Nori L. Gabert and Todd L. Spillane 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 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 by calling a specially        
designated telephone number (toll free 1-888-221-0697) or via the Internet at   
http://www.proxyweb.com.                                                        

RECEIPT OF THE NOTICE OF THE SPECIAL                                            
MEETING AND THE ACCOMPANYING PROXY                                              
STATEMENT IS HEREBY ACKNOWLEDGED.                                               

                Dated:
                                               -------------------------

                                          SIGN, DATE AND RETURN THE PROXY CARD
                                           PROMPTLY USING THE ENCLOSED ENVELOPE.

                                        ----------------------------------------

                                        ----------------------------------------
                                      Signature(s)

                                   PLEASE SIGN EXACTLY AS NAME APPEARS
                                     HEREON. When shares are held by joint
                                       tenants, both should sign. When signing
                           as attorney or as executor,
                                      administrator, trustee or guardian, or
                                as custodian for a minor, please
                                 indicate your title as such. If a
                                corporation, please sign in full
                                     corporate name by president, or other
                                     authorized officer. If a partnership,
                                  please sign in partnership name by
                   authorized persons.

                                                                           VALIC

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                                                        [Enlarge/Download Table]
                                                                                                                                    
                                                     Please fill in box(es) as shown using black or blue ink or number 2 pencil. [X]
                                                     PLEASE DO NOT USE FINE POINT PENS.                                             

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

 1. To elect Directors:                                                                                                             
                                                                                        FOR ALL    WITHHOLD     FOR ALL             
    (01) Dr. Judith L. Craven, (02) William F. Devin, (03) Samuel M. Eisenstat,         NOMINEES      ALL       EXCEPT              
    (04) Stephen J. Gutman (05) Peter A. Harbeck                                          ( )         ( )        ( )       1.       

 Note: If you do not wish your shares voted "FOR" a particular nominee, mark the                                                    
 "FOR ALL EXCEPT" box and write the name(s) of the nominee(s) on the line                                                           
 provided below. Your shares will be voted for the remaining nominee(s).                                                            

------------------------------------------------------------------------------------                                                
                                                                                          FOR       AGAINST    ABSTAIN              

 2. (a) To approve a new investment advisory agreement between American General           ( )         ( )        ( )       2a.      
    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;                                                                                                   

 2. (b) To approve a new investment advisory agreement between SunAmerica Asset           ( )         ( )        ( )       2b.      
    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                 ( )         ( )        ( )       3a.      
    Capital Partners LLC ("Stanfield"), the new subadviser of the Fund, which                                                       
    will terminate on the Reorganization Date;                                                                                      

 3. (b) To approve a new subadvisory agreement between SAAMCo and Stanfield,              ( )         ( )        ( )       3b.      
    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.                                                    

(Continued and to be signed on the reverse side)  

                                                                           VALIC

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEFS14A’ Filing		Date		First		Last			Other Filings
		11/9/01		2		58
For Period End:		10/19/01		2		57			PRES14A
Filed on:		9/10/01		2		33
		9/4/01		6		57
		8/31/01		15
		8/29/01		2		10			N-30D
		8/2/01		12
		6/30/01		9		30			N-30D,  NSAR-A
		6/1/01		5		27
		5/31/01		27
		5/23/01		5		27
		4/17/01		14		26			N-23C3A
		1/21/01		16
		12/31/00		9		32			N-30D,  NSAR-B
		6/13/00		14
		6/1/00		17		28			DEF 14A,  PRE 14A
		5/31/00		17
		3/10/00		21					497
		1/1/00		17
		8/18/99		8
									List all Filings