AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS
AGREEMENT,
dated and effective as of the 1st day of October 1, 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 Global Discovery
Fund,
Global Growth Fund, Global Small Capitalization Fund, International Fund,
New
World Fund, Global Bond Fund, U.S. Government/AAA-Rated Securities Fund and
Cash
Management 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:
Global
Discovery
Fund:
0.58% on the
first $500 million of net assets, plus 0.48% on net assets from $500 million
to
$1.0 billion, plus 0.44% on net assets in excess of $1.0 billion;
Global
Growth
Fund:
0.69% on the
first $600 million of net assets, plus 0.59% on net assets from $600 million
to
$1.2 billion, plus 0.53% on net assets from $1.2 billion to $2.0 billion,
plus
0.50% on net assets from $2.0 billion to $3.0 billion, plus 0.48% on net
assets
in excess of $3.0 billion;
Global
Small
Capitalization Fund:
0.80%
on the first
$600 million of net assets, plus 0.74% on net assets from $600 million to
$1.0
billion, plus 0.70% on net assets from $1.0 billion to $2.0 billion, plus
0.67% on net assets from $2.0 billion to $3.0 billion; plus 0.65 on net assets
in excess of $3.0 billion;
International
Fund:
0.69% on the
first $500 million of net assets, plus 0.59% on net assets from $500 million
to
$1.0 billion, plus 0.53% on net assets from $1.0 billion to $1.5 billion,
plus
0.50% on net assets from $1.5 billion to $2.5 billion, plus 0.48% on net
assets
from $2.5 billion to $4.0 billion, plus 0.47% on net assets from $4.0 billion
to
$6.5 billion, plus 0.46% on net assets from $6.5 billion to $10.5 billion,
plus
0.45% on net assets from $10.5 billion to $17 billion, plus 0.44% on net
assets
from $17 billion to $21 billion, plus 0.43% on net assets in excess of $21
billion;
New
World
Fund:
0.85%
on the first
$500 million of net assets, plus 0.77% on net assets from $500 million to
$1.0
billion, plus 0.71% on
net assets
from $1.0 billion to $1.5 billion; plus 0.66 on net assets in excess of $1.5
billion;
Global
Bond
Fund:
0.57% on all
assets;
U.S.
Government
Securities Fund:
0.46% on the
first $600 million of net assets, plus 0.40% on net assets from $600 million
to
$1.0 billion, plus 0.36% on net assets from $1.0 billion to $2.0 billion,
plus
0.34% on net assets in excess of $2.0 billion; and
Cash
Management
Fund:
0.32% on all
assets.
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 December 31, 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
Global Discovery Fund, Global Growth Fund, Global Small Capitalization Fund,
International Fund, New World Fund, Global Bond Fund, U.S. Government/AAA-Rated
Securities Fund and Cash Management 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.,
Vice Chairman
By
Xxxxxxx
X. Xxxxxx,
Secretary
THIS
AGREEMENT, dated and effective as of the 1st day of July, 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 Global
Discovery Fund, Global Growth Fund, Global Small Capitalization Fund,
International Fund, New World Fund, Global Bond Fund, U.S. Government/AAA-Rated
Securities Fund and Cash Management 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:
Global
Discovery Fund:
0.58% on
the first $500 million of net assets, plus 0.48% on net assets from $500
million
to $1.0 billion, plus 0.44% on net assets in excess of $1.0
billion;
Global
Growth Fund:
0.69% on
the first $600 million of net assets, plus 0.59% on net assets from $600
million
to $1.2 billion, plus 0.53% on net assets from $1.2 billion to $2.0 billion,
plus 0.50% on net assets from $2.0 billion to $3.0 billion, plus 0.48%
on net
assets in excess of $3.0 billion;
Global
Small Capitalization Fund:
0.80%
on the first $600 million of net assets, plus 0.74% on net assets from
$600
million to $1.0 billion, plus 0.70% on net assets from $1.0 billion to $2.0
billion, plus 0.67% on
net assets from $2.0 billion to $3.0 billion; plus 0.65 on net assets in
excess
of $3.0 billion;
International
Fund:
0.69% on
the first $500 million of net assets, plus 0.59% on net assets from $500
million
to $1.0 billion, plus 0.53% on net assets from $1.0 billion to $1.5 billion,
plus 0.50% on net assets from $1.5 billion to $2.5 billion, plus 0.48%
on net
assets from $2.5 billion to $4.0 billion, plus 0.47% on net assets from
$4.0
billion to $6.5 billion, plus 0.46% on net assets from $6.5 billion to
$10.5
billion, plus 0.45% on net assets from $10.5 billion to $17 billion, plus
0.44%
on net assets from $17 billion to $21 billion, plus 0.43% on net assets
in
excess of $21 billion;
New
World
Fund:
0.85% on
the first $500 million of net assets, plus 0.77% on net assets from $500
million
to $1.0 billion, plus 0.71% on net assets in excess of $1.0
billion;
Global
Bond Fund:
0.57%
on
all assets;
U.S.
Government Securities Fund:
0.46% on
the first $600 million of net assets, plus 0.40% on net assets from $600
million
to $1.0 billion, plus 0.36% on net assets from $1.0 billion to $2.0 billion,
plus 0.34% on net assets in excess of $2.0 billion; and
Cash
Management Fund:
0.32% on
all assets.
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
December 31, 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 Global Discovery Fund, Global Growth Fund, Global Small Capitalization
Fund,
International Fund, New World Fund, Global Bond Fund, U.S. Government/AAA-Rated
Securities Fund and Cash Management 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., Vice Chairman
By
Xxxxxxx
X.
Xxxxxx, Secretary
