AMENDED INVESTMENT ADVISORY AND SERVICE AGREEMENT
THIS AGREEMENT, dated and effective as of the 18th day of March, 1997
is made and entered into by and between AMERICAN VARIABLE INSURANCE SERIES, a
Massachusetts business trust, (hereinafter called the "Trust"), 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 Trust. 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 Fund.
2.
The Adviser agrees to provide supervision of the portfolio of the Trust
and to determine what securities or other property shall be purchased or sold
by the Trust, 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 Trust's status as a regulated investment company 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 Fund. 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 Trust, (ii) perform the
executive and related administrative functions of the Trust 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 Fund 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 Growth Fund: 0.69% of net assets;
Growth Fund: 0.60% on the first $30 million of net assets, plus 0.50% on net
assets from $30 million to $600 million, plus 0.45% on net assets from $600
million to $1.2 billion, plus 0.42% on net assets from $1.2 billion to $2.0
billion, plus 0.37% on net assets in excess of $2.0 billion;
Growth-Income Fund: 0.60% on the first $30 million of net assets, plus 0.50%
on net assets from $30 million to $600 million, 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 in excess of $2.5 billion;
International Fund: 0.90% on the first $60 million of net assets, plus 0.78%
on net assets from $60 million to $600 million, plus 0.60% on net assets from
$600 million to $1.2 billion, plus 0.48% on net assets from $1.2 billion to
$2.0 billion, plus 0.465% on net assets in excess of $2.0 billion;
Asset Allocation Fund: 0.60% on the first $30 million of net assets, plus
0.50% on net assets from $30 million to $600 million, plus 0.42% on net assets
in excess of $600 million;
U.S. Government Securities Fund: 0.60% on the first $30 million of net assets,
plus 0.50% on net assets from $30 million to $600 million, plus 0.40% on net
assets in excess of $600 million;
Bond Fund: 0.60% on the first $30 million of net assets, plus 0.50% on net
assets in excess of $30 million;
High-Yield Bond Fund: 0.60% on the first $30 million of net assets, plus 0.50%
on net assets from $30 million to $600 million, plus 0.46% on net assets in
excess of $600 million; and
Cash Management Fund: 0.50% on the first $100 million of net assets, plus
0.42% on net assets from $100 million to $400 million, plus 0.38% on net assets
in excess of $400 million.
The advisory fee shall be accrued daily at 1/365th of the applicable
annual rate set forth above. The net asset value of the Trust 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 each Fund, except the
International Fund's annual ordinary net operating expenses 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
November 30, 1995. 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, 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 Trust, 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.
AMERICAN VARIABLE INSURANCE SERIES
By
Xxxxx X. Xxxxxxxxxx, President
By
Xxxx X. Xxxxxx, Secretary
CAPITAL RESEARCH AND MANAGEMENT COMPANY
By
Xxxx X. Xxxxx, Xx., Senior Vice President
By
Xxxxxxx X. Xxxxxx, Secretary
