AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS
AGREEMENT,
dated and effective as of the 1st day of April, 2006 is made and entered into
by
and between AMERICAN FUNDS INSURANCE SERIES, a Massachusetts business trust,
(hereinafter called the "Trust"), on behalf of its Growth Fund, Blue Chip Income
and Growth Fund, Growth-Income Fund, Asset Allocation Fund, Bond Fund and
High-Income Bond Fund, (hereinafter called the “Funds”), and CAPITAL RESEARCH
AND MANAGEMENT COMPANY, a Delaware corporation, (hereinafter called the
"Adviser"). The parties agree as follows:
1.
The
Trust hereby
employs the Adviser to furnish advice to the Trust with respect to the
investment and reinvestment of the assets of the Funds. The Adviser hereby
accepts such employment and agrees to render the services and to assume the
obligation to the extent herein set forth, for the compensation herein provided.
The Adviser shall, for all purposes herein, be deemed an independent contractor
and not an agent of the Trust.
2.
The
Adviser agrees
to provide supervision of the portfolios of the Funds and to determine what
securities or other property shall be purchased or sold by the Funds, giving
due
consideration to the policies of the Trust as expressed in the Trust's
Declaration of Trust, By-Laws, Registration Statement under the Investment
Company Act of 1940, as amended (the "1940 Act"), Registration Statement under
the Securities Act of 1933, as amended (the "1933 Act"), and Prospectus as
in
use from time to time, as well as to the factors affecting the Funds' status
as
regulated investment companies under the Internal Revenue Code of 1986, as
amended.
The
Adviser shall
provide adequate facilities and qualified personnel for the placement of orders
for the purchase, or other acquisition, and sale, or other disposition, of
portfolio securities for the Funds. With respect to such transactions, the
Adviser, subject to such directions as may be furnished from time to time by
the
Trustees, shall endeavor as the primary objective to obtain the most favorable
prices and execution of orders. Subject to such primary objective, the Adviser
may place order with broker-dealer firms which have sold shares of the Trust
or
which furnish statistical and other information to the Adviser, taking into
account the value and quality of the brokerage services of such broker-dealers,
including the availability and quality of such statistical and other
information. Receipt by the Adviser of any such statistical and other
information and services shall not be deemed to give rise to any requirement
for
abatement of the advisory fee payable pursuant to Section 6 hereof.
3.
The
Adviser (a)
shall furnish to the Trust the services of qualified personnel to (i) manage
the
investments of the Funds, (ii) perform the executive and related administrative
functions of the Trust with respect to the Funds and (iii) if desired by the
Trust, serve as Trustees of the Trust, in all cases without additional
compensation of such persons by the Trust; (b) pay the expenses of all persons
whose services are to be furnished by the Adviser under this Section; (c)
provide office space, furniture, small office equipment, and telephone
facilities and utilities, all of which may be the same as occupied or used
by
the Adviser; and (d) provide general purpose forms, supplies, stationery, and
postage used at the offices of the Trust relating to the services to be
furnished by the Adviser hereunder.
4.
Except
to the
extent expressly assumed by the Adviser herein, and subject to an expense fee
agreement described in Section 7 below, the Trust shall pay all costs and
expenses in connection with its operations. Without limiting the generality
of
the foregoing, such costs and expenses shall include the following: compensation
paid to the Trustees who are not affiliated persons of the Adviser; fees and
expenses of the transfer agent, dividend disbursing agent, legal counsel and
independent public accounts, and custodian, including charges of such custodian
for the preparation and maintenance of the books of account and records of
the
Trust and the daily determination of the Trust's net asset value per share;
costs of designing, printing, and mailing reports, prospectuses, proxy
statements and notices to shareholders; fees and expenses of sale (including
registration and qualification), issuance (including costs of any share
certificates) and redemption of shares; association dues; interest; and
taxes.
5.
The
Adviser agrees
to pay the expenses incurred in connection with the organization of the Trust,
its qualification to do business as a foreign corporation in the State of
California, and its registration as an investment company under the 1940 Act,
and all fees and expenses including fees of legal counsel to the Trust, which
would otherwise be required to be paid by the Trust pursuant to Section 4 which
are incurred by the Trust prior to the effective date of its Registration
Statement, except for the costs of any share certificates and transfer agent
fees and costs.
6.
The
Trust shall pay
to the Adviser on or before the tenth (10th) day of each month, as compensation
for the services rendered by the Adviser during the preceding month, an amount
to be computed by applying to the total net asset value of each Fund at the
annual rates of:
Growth
Fund:
0.50% on the
first $600 million of net assets, plus 0.45% on net assets from $600 million
to
$1.0 billion, plus 0.42% on net assets from $1.0 billion to $2.0 billion, plus
0.37% on net assets from $2.0 billion to $3.0 billion, plus 0.35% on net assets
from $3.0 billion to $5.0 billion, plus 0.33% from $5.0 billion to $8.0 billion,
plus 0.315% on net assets from $8.0 billion to $13 billion, plus 0.30% on net
assets from $13 billion to $21 billion, plus 0.29% on net assets from $21
billion to $27 billion, plus 0.285% on net assets in excess of $27
billion;
Blue
Chip Income
and Growth Fund:
0.50% on the
first $600 million of net assets, plus 0.45% on net assets from $600 million
to
$1.5 billion, plus 0.40% on net assets from $1.5 billion to $2.5 billion, plus
0.38% on net assets from $2.5 billion to $4.0 billion, plus 0.37% on net assets
in excess of $4.0 billion;
Global
Growth
and Income Fund:
0.69%
on all
assets;
Growth-Income
Fund:
0.50% on the
first $600 million of net assets, plus 0.45% on net assets from $600 million
to
$1.5 billion, plus 0.40% on net assets from $1.5 billion to $2.5 billion,
plus 0.32% on net assets from $2.5 billion to $4.0 billion, plus 0.285% on
net
assets from $4.0 billion to $6.5 billion, plus 0.256% on net assets from $6.5
billion to $10.5 billion, plus 0.242% on net assets from $10.5 billion to $13
billion, plus 0.235% on net assets from $13 billion to $17 billion, plus 0.23%
on net assets from
$17 billion to
$21 billion, plus 0.225% on net assets from
$21 billion
to $27 billion; plus 0.222% on net assets in excess of $27
billion;
Asset
Allocation
Fund:
0.50% on the
first $600 million of net assets, plus 0.42% on net assets from $600 million
to
$1.2 billion, plus 0.36% on net assets from $1.2 billion to $2.0 billion, plus
0.32% on net assets from $2.0 billion to $3.0 billion, plus 0.28% on net assets
from $3.0 billion to $5.0 billion, plus 0.26% on net assets from
$5.0 billion
to $8.0 billion, plus 0.250% on net assets over $8.0 billion;
Bond
Fund:
0.48% on the
first $600 million of net assets, plus 0.44% on net assets from $600 million
to
$1.0 billion, plus 0.40% on net assets from $1.0 billion to $2.0 billion, plus
0.38% on net assets from $2.0 billion to $3.0 billion, plus 0.36% on net assets
in excess of $3.0 billion;
High-Income
Bond
Fund:
0.50% on the
first $600 million of net assets, plus 0.46% on net assets from $600 million
to
$1.0 billion, plus 0.44% on net assets from $1.0 billion to $2.0 billion, plus
0.42% on net assets in excess of $2.0 billion;
The
advisory fee
shall be accrued daily based on the number of days per year. The net asset
value
of the Funds shall be determined in the manner set forth in the Declaration
of
Trust and prospectus of the Trust as of the close of the New York Stock Exchange
on each day on which said Exchange is open, and in the case of Saturdays,
Sundays, and other days on which said exchange shall not be open, as at the
close of the last preceding day on which said Exchange shall have been
open.
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 of the Trust.
7.
The
advisory fee
will be reduced to the extent that the annual
ordinary net
operating expenses of each Fund exceed 1 1/2% of the first $30,000,000 of the
average month-end total net assets of each Fund and 1% of the average month-end
total net assets in excess thereof. For the International Fund, the advisory
fee
will be reduced to the extent that the Fund's annual ordinary net operating
expenses exceed 1 1/2% of its average month-end total net assets. Expenses
which
are not subject to this limitation are interest, taxes, and extraordinary items
such as litigation. Expenditures, including costs incurred in connection with
the purchase or sale of portfolio securities, which are capitalized in
accordance with generally accepted accounting principles applicable to
investment companies, are accounted for as capital items and not as
expenses.
8.
Nothing
contained
in this Agreement shall be construed to prohibit the Adviser from performing
investment advisory, management, or distribution services for other investment
companies and other persons or companies, nor to prohibit affiliates of the
Adviser from engaging in such business or in other related or unrelated
businesses.
9.
The
Adviser shall
have no liability to the Trust, or its shareholders or creditors, for any error
of judgment, mistake of law, or for any loss arising out of any investment,
or
for any other act or omission in the performance of its obligations to the
Trust
not involving willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations and duties hereunder.
10.
This
Agreement
shall continue in effect until the close of business on June 30, 2006. It may
thereafter be renewed from year to year thereafter by mutual consent, provided
that such renewal shall be specifically approved at least annual by (i) the
Trustees or by the vote of a majority (as defined in the 0000 Xxx) of the
outstanding voting securities of the Trust, and (ii) a majority of those
Trustees who are not parties to this Agreement or interested persons (as defined
in the 0000 Xxx) of any such party cast in person at a meeting called for the
purpose of voting on such approval. Such mutual consent to renewal shall not
be
deemed to have been given unless evidenced by a writing signed by both parties
hereto.
11.
The
obligations of
the Trust under this Agreement are not binding upon any of the Trustees,
officers, employees, agents or shareholders of the Trust individually, but
bind
only the Trust Estate. The Adviser agrees to look solely to the assets of the
Trust for the satisfaction of any liability of the Trust in respect of this
Agreement and will not seek recourse against such Trustees, officers, employees,
agents or shareholders, or any of them, or any of their personal assets for
such
satisfaction.
12.
This
Agreement may
be terminated at any time with respect to any Fund, without payment of any
penalty, by the Trustees or by the vote of a majority (as defined in the 0000
Xxx) of the outstanding voting securities of the Fund, on sixty (60) days'
written notice to the Adviser, or by the adviser on like notice to the Trust.
This Agreement shall automatically terminate in the event of its assignment
(as
defined in the 1940 Act).
IN
WITNESS WHEREOF,
the parties hereto have caused this Agreement to be executed in duplicate
originals by their officers thereunto duly authorized as of the day and year
first above written.
On
behalf of the
Growth Fund, Blue Chip Income and Growth Fund, Global Growth and Income Fund,
Growth-Income Fund, Asset Allocation Fund, Bond Fund and High-Income Bond
Fund
By
Xxxxx
X. Xxxxxx,
Vice Chairman of the Board
By
Xxxx
X. Xxxxxx,
Secretary
CAPITAL
RESEARCH
AND MANAGEMENT COMPANY
By
Xxxx
X. Xxxxx, Xx.,
Executive Vice President
By
Xxxxxxx
X. Xxxxxx,
Secretary
