Exhibit d.(1)
INVESTMENT ADVISORY AGREEMENT
This AGREEMENT made as of this 1st day of January, 2002, as amended effective
August 2, 2004, by and between THE VARIABLE ANNUITY LIFE INSURANCE COMPANY,
hereinafter referred to as the "ADVISER," and VALIC COMPANY I, hereinafter
referred to as "VC I."
The ADVISER and VC I recognize the following:
(a) The ADVISER is a life insurance company organized under Chapter
3 of the Texas Insurance Code and an investment adviser registered
under the Investment Advisers Act of 1940.
(b) VC I is an investment company organized under the general
corporation laws of Maryland, as a series type of investment company
issuing separate classes (or series) of stock and is registered as
an open-end, management investment company under the Investment
Company Act of 1940 (the "1940 Act"). The 1940 Act prohibits any
person from acting as an investment adviser of a registered
investment company except pursuant to a written contract.
(c) VC I currently consists of twenty-two portfolios ("Funds"):
Asset Allocation Fund
Blue Chip Growth Fund
Capital Conservation Fund
Core Equity Fund
Government Securities Fund
Growth & Income Fund
Health Sciences Fund
Income & Growth Fund
International Equities Fund
International Government Bond Fund
International Growth I Fund
Large Cap Growth Fund
Mid Cap Index Fund
Money Market I Fund
Nasdaq-100(R) Index Fund
Opportunities Fund
Science & Technology Fund
Small Cap Fund
Small Cap Index Fund
Social Awareness Fund
Stock Index Fund
Value Fund
In accordance with VC I's Articles of Incorporation (the "Articles")
and Bylaws, new Funds may be added to VC I upon approval of VC I's
Board of Directors without approval of VC I's shareholders. This
Agreement will apply only to the Fund(s) and any other Fund as may
be added or deleted by amendment to the attached Schedule A
("Covered Funds").
The ADVISER and VC I AGREE AS FOLLOWS:
1. SERVICES RENDERED AND EXPENSES PAID BY ADVISER
The ADVISER, subject to the control, direction, and supervision of VC I's
Board of Directors and in conformity with the 1940 Act, all applicable
laws and regulations thereunder, all other applicable federal and state
laws and regulations, including 817(b) of the Internal Revenue Code of
1986, as amended (the "Code"),
VC I's Articles, Bylaws, registration statements, prospectus and stated
investment objectives, policies and restrictions shall:
(a) manage the investment and reinvestment of the assets of the
Covered Funds including, for example, the evaluation of pertinent
economic, statistical, financial, and other data, the determination
of the industries and companies to be represented in each Covered
Fund's portfolio, and the formulation and implementation of
investment programs.
(b) maintain a trading desk and place all orders for the purchase
and sale of portfolio investments for each Covered Fund's account
with brokers or dealers selected by the ADVISER, or arrange for any
other entity to provide a trading desk and to place orders with
brokers and dealers selected by the ADVISER, subject to the
ADVISER's control, direction, and supervision.
(c) furnish to the Covered Funds office space, facilities, equipment
and personnel adequate to provide the services described above and
pay the compensation to VC I's Directors and officers who are
interested persons of the ADVISER.
In performing the services described in paragraph (b) above, the ADVISER
shall use its best efforts to obtain for the Covered Funds the most
favorable overall price and execution. The ADVISER shall also use its best
efforts to obtain for the Covered Funds any tender and exchange offer
solicitation fees, other fees, and similar payments available in
connection with the portfolio transactions of the Covered Funds. Subject
to prior authorization by VC I's Board of Directors of appropriate
policies and procedures, the ADVISER may cause the Covered Funds to pay to
a broker a commission, for effecting a portfolio transaction, in excess of
the commission another broker would have charged for effecting the same
transaction, if the first broker provided brokerage and/or research
services, including statistical data, to the ADVISER. 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 acting
according to such authorization.
The ADVISER shall maintain records adequately demonstrating compliance
with its obligations under this Agreement and report periodically to VC
I's Board of Directors regarding the performance of services under this
Agreement.
Except as otherwise agreed, or as otherwise provided herein, the ADVISER
shall bear the expense of discharging its responsibilities hereunder and
VC I shall pay, or arrange for others to pay, all its expenses other than
those which part 2 of this Agreement expressly states are payable to the
ADVISER. Expenses payable by VC I include, but are not limited to, (i)
interest and taxes; (ii) brokerage commissions and other expenses of
purchasing and selling portfolio investments; (iii) compensation of its
Directors and officers other than those persons who are interested persons
of the ADVISER; (iv) fees of outside counsel to and of independent
auditors of VC I selected by the Board of Directors; (v) fees for
accounting services; (vi) custodial, registration, and transfer agency
fees; (vii) expenses related to the repurchase or redemption of its shares
including expenses related to a program of periodic repurchases or
redemptions; (viii) expenses related to issuance of its shares against
payment therefor by, or on behalf of, the subscribers thereto; (ix) fees
and related expenses of registering and qualifying VC I and its shares for
distribution under state and federal securities laws; (x) expenses of
printing and mailing to existing shareholders of registration statements,
prospectuses, reports, notices and proxy solicitation materials of VC I;
(xi) all other expenses incidental to holding meetings of VC I's
shareholders including proxy solicitations therefor; (xii) expenses for
servicing shareholder accounts; (xiii) insurance premiums for fidelity
coverage and errors and omissions insurance; (xiv) dues for VC I's
membership in trade associations approved by the Board of Directors; and
(xv) such non-recurring expenses as may arise, including those associated
with actions, suits, or proceedings to which VC I is a party and the legal
obligation which VC I may have to indemnify its officers, Directors and
employees with respect thereto. VC I shall allocate the foregoing expenses
among the Covered Funds and, to the extent that any of the foregoing
expenses are allocated between the Covered Funds and any other Funds or
entities, such allocations shall be made pursuant to methods approved by
the Board of Directors.
2. COMPENSATION OF ADVISER
VC I shall pay to the ADVISER, as compensation for the services rendered,
facilities furnished and expenses paid by the ADVISER, a monthly fee based
on each Covered Fund's average monthly net asset value computed for each
Covered Fund as provided for in the fee schedule attached hereto as
Schedule A. Schedule A may be amended from time to time, provided that
amendments are made in conformity with applicable laws and regulations and
the Articles and Bylaws of VC I. Any change in Schedule A pertaining to
any existing or new Fund shall not be deemed to affect the interest of any
other Fund and shall not require the approval of shareholders of any other
Fund.
The average monthly net asset value shall be determined by taking the mean
average of all of the determinations of net asset value, made in the
manner provided in VC I's Articles, for each business day during a given
calendar month. VC I shall pay this fee for each calendar month as soon as
practicable after the end of that month.
The ADVISER shall promptly reduce its monthly fee by the amount of any
commissions, tender and exchange offer solicitation fees, other fees, or
similar payments received by the ADVISER, or any affiliated person of the
ADVISER, in connection with any Covered Fund's portfolio transactions,
less the amount of any direct expenses incurred by the ADVISER, or any
affiliated person of the ADVISER, in obtaining such commissions, fees, or
payments.
If the ADVISER serves for less than a whole month, the foregoing
compensation shall be prorated.
3. SCOPE OF ADVISER'S DUTIES
The ADVISER, and any person controlling, controlled by or under common
control with the ADVISER, shall remain free to provide similar investment
advisory services to other persons or engage in any other business or
activity which does not impair the services which the ADVISER renders to
the Covered Funds.
Except as otherwise required by the 1940 Act, any of the shareholders,
Directors, officers and employees of VC I may be a shareholder, director,
officer or employee of, or be otherwise interested in, the ADVISER, and in
any person controlling, controlled by or under common control with the
ADVISER; and the ADVISER, and any person controlling, controlled by or
under common control with the ADVISER, may have an interest in VC I.
The ADVISER shall not be liable to VC I, or to any shareholder in VC I,
for any act or omission in rendering services under this Agreement, or for
any losses sustained in the purchase, holding, or sale of any portfolio
security, so long as there has been no willful misfeasance, bad faith,
negligence, or reckless disregard of obligations or duties on the part of
the ADVISER.
The ADVISER may from time to time employ or associate with itself any
person or persons believed to be particularly fitted to assist in its
performance of services under this Agreement, provided that any such
person who serves or acts as an investment adviser separate from the
ADVISER will do so pursuant to a sub-advisory agreement as provided in the
following paragraph. The compensation of any such persons will be paid by
the ADVISER, and no obligation will be incurred by, or on behalf of, VC I
with respect to them.
Notwithstanding any other provision of this Agreement, VC I hereby
authorizes the ADVISER to employ an investment sub-adviser for any one or
more of the Covered Funds for the purpose of providing investment
management services with respect to such Covered Funds, provided that (a)
the compensation to be paid to such investment sub-adviser shall be the
sole responsibility of the ADVISER, (b) the duties and responsibilities of
the investment sub-adviser shall be as set forth in a sub-advisory
agreement including the ADVISER and the investment sub-adviser as parties,
(c) such sub-advisory agreement shall be adopted and approved in
conformity with applicable laws and regulations, and (d) such sub-advisory
agreement may be terminated at any time, on not more than 60 days' written
notice, by the ADVISER on notice to the sub-adviser and VC I, by the
sub-adviser on notice to the ADVISER and VC I, and by VC I's Board of
Directors or by a majority vote of the Covered Fund's outstanding voting
securities on notice to the sub-adviser and the ADVISER.
4. DURATION OF AGREEMENT
This Agreement shall become effective as to the Covered Funds set forth on
Schedule A on the date hereof and as to any other Funds on the date of the
Amendment to Schedule A adding such Fund in accordance with this
Agreement. Unless sooner terminated as provided herein, this Agreement
shall continue in effect for two years from the effective date. Thereafter
this Agreement shall continue in effect, but with respect to any Covered
Fund, subject to the termination provisions and all other terms and
conditions hereof, only so long as such continuance is approved at least
annually by the vote of a majority of the VC I 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,
and by a vote a majority of the VC I Board of Directors or a majority of a
Covered Fund's outstanding voting securities.
This Agreement shall automatically terminate in the event of its
assignment. This Agreement may be terminated, without the payment of any
penalty, as to any Covered Fund at any time by VC I's Board of Directors
or by vote of a majority of that Fund's outstanding voting securities, on
30-60 days' prior written notice to the ADVISER, or by the ADVISER, on not
more than 60 days' nor less than 30 days' written notice, or upon such
shorter notice as may be mutually agreed upon.
5. APPLICABILITY OF FEDERAL SECURITIES LAWS
This Agreement shall be interpreted in accordance with applicable federal
securities laws and regulations, including definitions therein and such
exemptions as may be granted to the ADVISER or VC I by the Securities and
Exchange Commission (the "Commission") or such interpretive positions as
may be taken by the Commission or its staff. To the extent that the
applicable law of the State of Texas, or any of the provisions herein,
conflict with applicable provisions of the federal securities laws, the
latter shall control.
6. MISCELLANEOUS PROVISIONS
For the purposes of this Agreement, the terms "affiliated person,"
"assignment," "interested person," and "majority of outstanding voting
securities" shall have their respective meanings defined in the 1940 Act
and the Rules and Regulations thereunder, subject, however, to such
exemptions as may be granted to either the ADVISER or VC I by the
Commission, or such interpretive positions as may be taken by the
Commission or its staff, under the 1940 Act, and the term "brokerage and
research services" shall have the meaning given in the Securities Exchange
Act of 1934 and the Rules and Regulations thereunder.
The parties hereto have each caused this Agreement to be signed in duplicate on
its behalf by its duly authorized officer on the above date.
VALIC COMPANY I
By: /s/ Xxxx X. Xxxxxx
---------------------------------
Name:
Title:
ATTEST:
/s/ Xxx Xxxxxxxx
---------------------------------
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
By: /s/ Xxxx Xxxxxxxxx
---------------------------------
Name:
Title:
ATTEST:
/s/ Xxx Xxxxxxxx
---------------------------------
VALIC COMPANY I
SCHEDULE A
to Investment Advisory Agreement
(Effective August 2, 2004)
Annual Fee computed at the following annual rate, based on average monthly net
assets value and payable monthly:
Asset Allocation Fund 0.50%
Blue Chip Growth Fund 0.80%
Capital Conservation Fund 0.50%
Core Equity Fund 0.80%
Government Securities Fund 0.50%
Growth and Income Fund 0.75%
Health Sciences Fund 1.00%
Income & Growth Fund 0.77%
International Equities Fund 0.35% on the first $500 million
0.25% on assets over $500 million
International Government Bond Fund 0.50%
International Growth I Fund 0.95%
Large Cap Growth Fund 0.85%
Mid Cap Index Fund 0.35% on the first $500 million
0.25% on assets over $500 million
Money Market I Fund 0.50%
Nasdaq-100(R)Index Fund 0.40%
Opportunities Fund 0.95%
Science & Technology Fund 0.90%
Small Cap Fund 0.90%
Small Cap Index Fund 0.35% on the first $500 million
0.25% on assets over $500 million
Social Awareness Fund 0.50%
Stock Index Fund 0.35% on the first $500 million
0.25% on assets over $500 million
Value Fund 0.78%
