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EXHIBIT 5.(a)
AMENDED AND RESTATED
INVESTMENT ADVISORY CONTRACT
THIS CONTRACT is entered into this 14th day of March, 1990, by and
between the ANCHOR PATHWAY FUND, a Massachusetts business trust, (the "Trust"),
and CAPITAL RESEARCH AND MANAGEMENT COMPANY, a Delaware corporation, (the
"Adviser") and amends, restates and supersedes in their entirety the Investment
Advisory Contracts between the Trust and the Adviser dated September 22, 1988
and March 31, 1989. The parties agree as follows:
1.
The Trust is authorized to issue shares in separate series, with each
series representing interests in a separate portfolio of securities and other
assets, and offers shares of seven series, which are the Growth Series, the
International Series, the Growth-Income Series, the High-Yield Bond Series, the
Asset Allocation Series, the U.S. Government/AAA-Rated Securities Series and
the Cash Management Series (the "Series").
2.
The Trust hereby employs the Adviser to furnish advice to the Trust
with respect to the investment and reinvestment of the assets of each Series
of the Trust. The Adviser hereby accepts such employment and agrees to render
the services and to assume the obligations 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 or the Series.
3.
The Adviser shall provide supervision of the portfolios of the Series
and determine what securities or other property shall be purchased or sold by
the Series, giving due consideration to the investment objectives and policies
of the Series as expressed in the Trust's Declaration of Trust, By-Laws,
Registration Statement under the Investment Company Act of 1940 (the "1940
Act"), Registration Statement under the Securities Act of 1933 (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 "Code") and the regulations
thereunder and the status of variable contracts under the diversification
requirements set forth in section 817(h) of the Code and the regulations
thereunder.
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
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securities for the Series. With respect to such transactions and consistent
with applicable laws and regulations, the Adviser may place orders with
broker-dealer firms which have sold shares of other mutual funds advised by the
Adviser or insurance contracts or policies for which the Trust, or any mutual
fund managed by the Adviser, serves as the underlying investment or which
furnish statistical and other information or services. Neither receipt by the
Adviser of any such statistical and other information or services, nor any
consideration given to sales of shares of mutual funds or insurance contracts
or policies in selecting broker-dealer firms, shall be deemed to give rise to
any requirements for abatement of the advisory fee payable pursuant to section
6 hereof.
4.
Except to the extent expressly assumed by the Adviser herein, and as
provided in paragraph 5 below, the Trust shall pay all costs and expenses in
connection with its operations not expressly assumed by the Adviser. Without
limiting the generality of the foregoing, such costs and expenses to be
incurred by the Trust shall include the following: registration and filing
fees with Federal and state agencies, Blue Sky expenses, if any, expenses of
shareholders' meetings, the expense of reports to existing shareholders,
expenses of printing and mailing proxies and prospectuses, insurance premiums,
legal and auditing fees; dividend disbursement expenses; the expense of the
issuance, transfer, and redemption of Trust shares; custodian fees; printing and
preparation of registration statements; taxes; compensation of Trustees who are
not interested persons of the Trust; association dues; and costs of stationery,
forms and certificates prepared exclusively for the Trust.
5.
Anchor Investment Adviser, Inc. (the "Business Manager") has agreed to
pay the expenses incurred in connection with the organization of the Trust, and
its registration as an investment company under the 1940 Act and all fees and
expenses incurred on its behalf, including fees of legal counsel to the Trust
which would otherwise be required to be paid by the Trust and which are
incurred by the Trust prior to the initial effective date of its Registration
Statement under the 1933 Act and the 1940 Act, except for the costs of any
share certificates and transfer agent fees and costs. The agreement of the
Business Manager with respect to the payment of certain Trust expenses is
contained in the Business Management Agreements(s) between the Trust and the
Business Manager.
6.
The Trust shall pay to the Adviser on or before the tenth (10th) day of
each month, as a fee in compensation for the
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services rendered by the Adviser during the preceding month, the sum of the
following amounts:
(a) 0.36% per annum of the first $30,000,000 of each Series'
average daily net assets for each Series of the Trust other than the
International Series during the month (0.66% per annum of the first
$60,000,000 for the International Series).
(b) 0.30% per annum of each Series' average daily net assets for
each Series of the Trust other than the International Series in excess
of $30,000,000 during the month (0.58% per annum of assets in excess of
$60,000,000 for the International Series).
The Adviser's fee shall be accrued daily at 1/365th of the applicable
annual rate set forth above. The net assets of the Series shall be determined
in the manner and on the dates set forth in the prospectus of the Trust and, on
days on which the net assets are not determined, shall be as of the last
preceding day on which the net assets shall have been determined.
Upon any termination of this Contract 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.
7.
Nothing contained in this Contract 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 businesses or in
other related or unrelated business.
8.
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.
9.
The Trust has heretofore, or shall promptly, and from time to time
furnish to the Adviser the following: (a) Declaration of Trust; (b) By-laws;
(c) Minutes of all shareholder meetings; (d) Minutes of all Board of Trustees
meetings; (e) Registration Statements filed under the 1933 Act and the 1940
Act; (f) all
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periodic reports filed with the Securities and Exchange Commission; and (g) all
amendments, subsidiary documents, interpretations, additions or deletions
relating to any of the documents describe in this paragraph.
Until notification and delivery of any of the foregoing by the Trust to
the Adviser, the Adviser may rely upon the documents theretofore furnished to
it.
10.
This Contract shall continue in effect until September 21, 1991.
Thereafter, this Contract may be renewed from year to year with respect to
each Series by mutual consent, provided that such renewal shall be specifically
approved at least annually (i) by the Trustees of the Trust by vote cast in
person at a meeting called for the purpose of voting on such renewal, or by
the vote of a majority of the outstanding voting securities (as defined by
the 0000 Xxx) of each Series with respect to which renewal is to be effected,
and (ii) by a majority of the non-interested Trustees by vote cast in person
at a meeting called for the purpose of voting on such renewal. Any approval
of this Contract or the renewal thereof with respect to a Series by the vote
of a majority of the outstanding voting securities of that Series, or by the
Trustees of the Trust which shall include a majority of the non-interested
Trustees, shall be effective to continue this Contract with respect to that
Series notwithstanding (a) that this Contract or the renewal thereof has not
been so approved as to any other Series or (b) that this Contract or the
renewal thereof has not been approved by the vote of a majority of the
outstanding voting securities of the Trust as a whole.
11.
The obligations of the Trust under this Contract 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 or each Series for the satisfaction of any
liability in respect of the Trust or such Series under this Contract 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 Contract may be terminated at any time as to a Series (or the
Trust), without payment of any penalty, by the Trustees or by the vote of a
majority of the outstanding voting securities (as defined in the 0000 Xxx) of
such Series (or the Trust) on sixty (60) days' written notice to the Adviser.
Similarly, the Adviser may terminate this Contact without penalty on like
notice to the Trust provided, however, that this Contract may not be terminated
by the Adviser unless another investment advisory
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agreement has been approved by the Trust in accordance with the 1940 Act, or
after six months' written notice, whichever is earlier. This Contract shall
automatically terminate in the event of its assignment (as defined in the 1940
Act).
13.
The Adviser shall report to the Board of Trustees of the Trust, or to
any committee or officers of the Trust acting pursuant to the authority of the
Board, at such times and in such detail as shall be reasonable and as the Board
may deem appropriate in order to enable the Trust to determine that the
investment policies of each Series are being observed and implemented and that
the obligations of the Adviser under this Contract are being fulfilled. Any
investment program undertaken by the Adviser pursuant to this Contract and any
other activities undertaken by the Adviser on behalf of the Trust shall at all
times be subject to any directives of the Board of Trustees or any duly
constituted committee or officer of the Trust acting pursuant to the authority
of the Board of Trustees.
14.
The Trust is responsible for maintaining and preserving for such period
or periods as the Securities and Exchange Commission may prescribe by rules and
regulations, such accounts, books and other documents as constitute the records
forming the basis for all reports, including financial statements required to
be filed pursuant to the 1940 Act and for the Trust auditor's certification
relating thereto. The Trust and the Adviser agree that in furtherance of the
recordkeeping responsibilities upon the Trust under Section 31 of the 1940 Act
and the rules thereunder, the Adviser will maintain the following records and
ledgers and will preserve the following records in the form and for the period
prescribed in Rule 31a-2 of the 1940 for each Series:
(a) Journals (or other records of original entry) containing an
itemized daily record in detail of all purchases and sales of
securities. Such records shall show for each such transaction the
name and quantity of securities, the unit and aggregate purchase or
sale price, commission paid, the market on which effected, the
trade date, the settlement date, and the name of the person through or
from whom purchased or received or to whom sold or delivered.
(b) Records of securities borrowed and securities loaned.
(c) Records of monies borrowed and loaned (together with a record
of the collateral therefor and substitutions in such collateral).
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(d) Records for each transaction in portfolio securities
indicating the broker-dealer, bank or other person with or through
which such transactions are effected, including details as to the date
of the purchase or sale, the quantity and unit and aggregate price of
such securities, and the commission or other compensation paid to such
persons. Purchases or sales effected during the same day at the same
price may be aggregated.
(e) A record of each brokerage order given by or on behalf of
each Series for, or in connection with, the purchase or sale of
securities, whether executed or unexecuted. Such record shall include
the name of the broker, the terms and conditions of the order and of
any modification or cancellation thereof, the time of entry or
cancellation, the price at which executed, and the time of receipt
of report of execution. The record shall indicate the name of the
person who placed the order on behalf of each Series.
(f) A record of all other portfolio purchases or sales showing
details comparable to those prescribed in paragraph (e) above.
(g) A record for each fiscal quarter, which shall be completed
within ten days after the end of such quarter, showing specifically the
basis or bases upon which the allocation of orders for the purchase and
sale of portfolio securities to named brokers or dealers and the
division of brokerage commissions or other compensation on such
purchase and sale orders among named persons were made during such
quarter for each Series. The record shall indicate the consideration
given to (i) sales of shares of the Trust by brokers or dealers,
(ii) the supplying of services or benefits by brokers or underwriter
or any persons affiliated therewith, and (iii) any other considerations
other than the technical qualifications of the brokers and dealers as
such. The record shall show the nature of the services or benefits
make available, and shall describe in detail the application of any
general or specific formula or other determinant used in arriving at
such allocation of purchase and sale orders and such division of
brokerage commissions or other compensation. The record shall also
include the identities of the persons responsible for the determination
of such allocation and such division of brokerage commissions or other
compensation.
(h) A record in the form of an appropriate memorandum identifying
the person or persons, committees, or groups authorizing the purchase
or sale of portfolio securities. Where an authorization is made by a
committee or group, a record shall be kept of the names of its members
who participated in the authorization. There shall be retained as part
of the record required by this paragraph any
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memorandum, recommendation, or instruction supporting or authorizing
the purchase or sale of portfolio securities.
The Adviser and the Trust agree that all accounts, books and other
records maintained and preserved by each as required hereby shall be subject at
any time, and from time to time, to such reasonable periodic, special and other
examinations by the Securities and Exchange Commission, the Trust's auditors,
the Trust or any representative of the Trust, or any governmental agency or
other instrumentality having regulatory authority over the Trust. It is
expressly understood and agreed that the books and records maintained by the
Adviser on behalf of each Series shall, at all times, remain the property of
the Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed in duplicate originals by their officers thereunto duly authorized, as
of the day and year first above written.
ANCHOR PATHWAY FUND
By: /S/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx,
Chairman and Chief Executive Officer
Attest:
/S/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Vice President
and Secretary
CAPITAL RESEARCH AND MANAGEMENT COMPANY
By: /S/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx, Vice Chairman
Attest:
/S/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Vice President
and Secretary
